At Colliers, we have extensive experience in residential properties. At the moment, we are experiencing a great demand for residential properties – a wide range of investors want to place funds in the residential segment. This demand has ensured that residential properties have increased in value in 2012.
According to IPD Danish Property Index, residential properties outperformed offices, retail and industrial and logistic properties in 2012.
- Demand: increasing urbanization results in rising rent levels
- Return: residential properties will typically trade at the highest factor; i.e. it has the lowest expected return the first year. This is partly due to high demand, as well as residential properties generally being the type of property with the lowest risk, primarily due to the low vacancy risk
- Inflation: inflation rules signify that increases in costs can generally be passed on to tenants. Thus, inflation will therefore generally be offset by higher revenues.
- Investment: investing in residential properties is considered low risk, primarily because of low vacancy. The risk of investing in residential properties consists primarily in the fact that the investor is forced to sell at an inopportune time; typically if the rental income diminished or is lost, or if maintenance and/or financial costs increase.
If you are interested in selling or buying a rental property, please contact Colliers – we have extensive expertise in the sale and rental of properties.