Archive | June, 2011

What the New Michigan Tax Law Might Mean for the States Real Estate Market

16 Jun

Governor Snyder’s changes to Michigan’s tax system are now the law. Supporters of the new law like, Business Leaders of

Rick Snyder

Michigan President and CEO, Doug Rothwell, said in a news release that “with simpler, fairer tax structure, Michigan can be more competitive and, as a result grow jobs.” The Legislature passed the bills at the end of May this year. As first reported by Crain’s Business Detroit,  the legislation enacted a business-tax cut of about $1.7 billion, ending the Michigan Business Tax and replacing it with a 6 percent income tax on “C” corporations. All other business entities — such as sole proprietorships, limited-liability companies and other individually owned businesses — would pay only individual income tax. Those entities currently pay both MBT and individual income taxes.

So, what might this news also mean for the Real Estate market and property investors here in Michigan?

Building for lease on Washington St, Royal Oak, MI

As those in the Real Estate world know, when companies grow in employee size and increase their revenues through cost savings they often times grow into larger business spaces as well. So the Real Estate hopefuls in Michigan may benefit by keeping a close watch on the many existing, available commercial spaces that may start to fill over the course of the next year, as the new Michigan tax law begins paying off for business owners.

According to large real estate search sites like cityfeet.com, there are currently over 4,600 commercial properties for lease or sale in Oakland County, Michigan alone.

Sources:

http://www.crainsdetroit.com/article/20110525/FREE/110529937/snyders-changes-to-michigans-tax-system-now-are-the-law#

http://www.cityfeet.com/Commercial/Search/

Measuring the Value of Eco-friendly Property Rehabs

12 Jun

There is a growing school of thought on the value of rehabbing properties to make them more eco-friendly and sustainable. Rehabbing a property to meet some of the latest green/eco friendly standards may help give property owners a great primary selling point. In addition, green rehab projects may also help stimulate new pockets of real estate growth and help communities come together for common eco-friendly causes within cities that are in need of revitalization.


Initially, the rehab costs associated with eco-friendly materials are higher than standard materials used but they also give owners the ability to ask more on resale, from the increasing numbers of buyers that are becoming interested in eco-friendly properties that are both environmentally friendly and healthy to live in. With a growing number of properties on the market it might not be a bad idea to have unique, environmentally conscious features that can help a property stand out in the crowd as well.
There are many things a property investor can do to rehab an existing property with sustainable and eco-friendly features, it just depends on your budget, your target market and how far you want to take it. Here is a list of some of the things that can be done to make a property more sustainable and eco-friendly:

  • Compact fluorescent lighting
  • Solar powered outside light fixtures
  • Cedar wood for studs, decks, joists, etc. (pressure treated wood contains pesticides)
  • Solar hot water heater or on demand tanks
  • Low flow faucet fixtures and toilets
  • Non-VOC (volatile organic chemicals) paint, caulks and sealants Energy efficient appliances
  • Reverse osmosis household water filtration system
  • Recycled tile, bamboo or cork wood flooring with non-toxic underlayment, or natural fiber Carpeting
  • Greywater recycling or rain water collection system for plumbing
  • Insulated Panels
  • Natural insulation’s that are more chemically safe than average types of housing insulation
  • Solar Panels
  • Geo-thermal heat pump
  • Wind generators

“Green” building materials may not make a huge difference in the final selling price, but the right buyer is more apt to choose a property with green materials. A property owner is apt to get the most money from green assets that offer the most serious cost saving benefits to the buyer. For example, a buyer may not pay more for recycled tile but will pay for  expensive system features like- a geo-thermal heat pump that significantly lowers heat costs or a home wind generator that significantly lowers electrical costs.
For property investors new to sustainability and green projects, LEED construction is a good example of a rating system that is used for commercial building projects to rate how environmentally friendly a project is. Points are awarded for items on the building such as a rain water collection system, and also for the construction process -such as sorting trash to be recycled during construction. LEED for Homes has taken this program from commercial projects to residential. Projects are rated bronze, silver, gold and platinum, based on the number of points earned.
Rehabbing a property to meet some of the latest green/eco friendly standards may help give property owners a great primary selling point.

There are many things a property investor can do to rehab an existing property with sustainable, eco-friendly features, it just depends on your budget and how far you want to take it. The more value the new green features add to buyers the more they will be willing to pay.
In addition, green rehab projects may also help stimulate new pockets of real estate growth and help communities come together for common eco-friendly causes within cities that are in need of revitalization. Right now in Michigan the number of companies and networks that specialize in the field is growing.

Resources:
http://www.usgbc.org/ShowFile.aspx?DocumentID=1095, http://www.hinmancompany.com/sustainability.php