Download Assessed Values of rentals and landlords

Value of Landlord Houses and
Rentals
BRET BAUMGART
Hypothesis
Landlords live in homes with higher property values
than the rentals they own.
Research Methods
 I used the Eau Claire city assessment website to find the
values of the rentals in an area with a high concentration
of student housing. Then I looked up the owners address
listed with the rental to find the value of the owner’s
home. Ten rentals had higher values than their owner’s
homes possibly due to the rentals having multiple units
likely being larger structures and therefore increasing the
value of the rental. These instances are not included in
the graphs.
 No landlord is used more then once in this project. If I
were to do this project again I would also use landlords
who owned multiple homes in the area more than once to
strengthen the project with another research aspect.
Data
 The scatter plot shows the ratios between the values
of the owners homes and their rentals. The equation
indicates around 21% of the findings fit a pattern.
Assessed Value Rental
y = 0.278x + 56963
R² = 0.2184
100000
400000
300000
Rental Value
250000
200000
150000
100000
50000
0
0
200000
300000
Owner Home Value
500000
Data
 Most owners did not have more than a $100,000
difference between the homes they lived in and their
rentals. However, there were a few exceptions.
Landlord Home Values and
the Value Differences
Between Homes and Rentals
500000
400000
300000
200000
100000
0
-100000
-200000
-300000
Additional Research
 An Article on the Real Estate Bloggers website titled
“Student Housing: A Great Niche Real Estate
Investment” claims that the quality of student housing
does not have to be great to keep rent prices high with
only the additional upkeep expenses for students being
higher than normal. This way landlords can make money
off the property while keeping property values relatively
low.
 Landlords can also receive property tax breaks due to
“depreciation” which is a tax break that takes into
account wear on a structure due to age. This helps
Landlords maintain positive profit margins on their
rentals.
Additional research
 Around 80 million people are expected to turn 18
over the next decade. Also more young people are
deciding to go to college. These factors create a high
demand for student housing making it a popular way
for landlords to make money.
Conclusion
 The research did support the hypothesis that
landlords own homes of greater value than the
property they rent out. The exceptions to the
hypothesis are mostly structures with multiple units
making the building more expensive but also making
it able to create greater revenue.
Sources
 City of Eau Claire assessment data base
 http://www.therealestateblogger.com/%20/housing-
general/student-housing-a-great-niche-realestateinvestment “Student Housing: A Great Niche Real Estate
Investment. Tom Royce, February 4, 2007
 http://realestate.about.com/od/knowthemath/at/rent_d
epreciate.htm “Know the Math” James Kimmons
 http://realtytimes.com/rtpages/20060703_housingshor
tage.htm “Student Housing Shortage Creates
Opportunities for Real Estate Investor”, Phoebe
Chonchua