research questions:research questions: what motivates a person to purchase an investment property...
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Real Estate:Property Investing in Minocqua, Wisconsin
Kyle StubblefieldUniversity of Wisconsin – StoutBusiness AdministrationJuniorFaculty Advisor: Dr. Fassil Fanta
Research Questions:
What motivates a person to purchase an investment property in Minocqua, WI?
Why would they choose to invest here rather than other parts of the United States?
How would I go about finding a property in Minocqua, Wisconsin?
Background - Minocqua
Minocqua, WI “Island City”
Northwest Corner of Oneida County
Gained Township Status on March 13, 1889
Supported by Logging in early years
Source: Minocqua Chamber of Commerce
Background - Minocqua
Population 4,453
Population nearly quadruples during the summer months
45 Lakes within Township of Minocqua
One of the largest concentration of freshwater bodies in the world 3,200 lakes, streams, and ponds
Supported by mainly by tourism industry
Endless outdoor recreational opportunities
Source: Minocqua Chamber of Commerce
Income Producing (Rental)
Offices, Retail, Industrial, and Leased Residential
Tenants pay rent
Good investment for cash-on-cash return
Most commonly held property
Good return on investment = 5% without capital appreciation
Non-Income Producing
Houses, Vacation properties, or vacant commercial buildings
Capital Appreciation
Must have income to support investment
Important Considerations
Pricing
Renovation
Maintenance
Location
Vacancy Issue
Pricing
Most Important Factor
Income producing (Rental)
Realtor (Purchase & Rental Price)
Rental Market Research
Property Management Services (Northwoods Property Management)
Non-Income Producing
Realtor & Self-Educated
Renovation
Costly and Time Consuming
Obtaining Permits dependent on type of renovation
Zoning Laws – Residential, Commercial, Business, Waterfront, Off-water
Chapter NR115 of Wisconsin State Legislature
Inhibits the building on structures on waterfront locations
Source: State of Wisconsin
Maintenance
Costly and Time Consuming
Increase properties value
Property Management
Convenient, but costly!
Location
“Location, Location, Location”
Main differences
Townships: Minocqua lower mill rate
On-water Property
Average Sale Price: $330,986
Off-water
Average Sale Price: $126,653
Source: Interfacexpress: Greater Northwoods Multiple Listing Service
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000330,986
126,653
Lakefront and Off-Water Average Home Sales
Lakefront Average Sale PriceOff-Water Average Sale Price
Source: Interfacexpress: Greater Northwoods Mul-tiple Listing Service
Sale Price Averages
1 6 11 16 21 26 31 36 41 46 51 56 61 66 71 76 81 86 91 960
50,000100,000150,000200,000250,000300,000350,000400,000450,000500,000550,000600,000650,000700,000750,000800,000850,000900,000950,000
1,000,000
Lakefront Home Sales VS Off-Water Sales
Lakefront PropertyLinear (Lakefront Property)Off-Water PropertyLinear (Off-Water Property)
Source: Interfacexpress: Greater Northwoods Multiple Listing Service
Real Estate Market
Vacancy Issues
32,300 Housing Units in Oneida County
12,300 units or 41%
Used for seasonal, recreational, or occasional use
Source: Oneida County Workforce Profile
Economic Analysis:Employment
State of Wisconsin added 122,000 private sector jobs since 2010
Oneida County:
16,452 people employed in 2013
412 Jobs added in 2013
Two largest industries: Leisure and Hospitalities and Trade, Transportation, and Utilities
Source: Oneida County Workforce Profile
Employment
Economic Analysis: Wages
Wisconsin Average Annual Wage: $41,985
Oneida County Average Annual Wage: $33,502
20% Lower than Statewide Average
Between 2011 – 2012 Average Annual Wages Grew by 2.4%
Relatively low average wages are largely a result of as lower cost of living
Source: Oneida County Workforce Profile
Wages
Wages
Real Estate Market Analysis
319 Active Listings
22 Active O/C (Offer Contingency)
203 Properties sold
Total Property Valuation= $1.5 Billion
(January 1, 2014 – May 3, 2014)
Sources: 1) Interfacexpress: Greater Northwoods Multiple Listing Service2) Town of Minocqua
Real Estate Market Analysis
Lowest median price in 2011 at $115,000
Median Price in 2013: $120,000
Price increase of 4.3% from 2011 – 2013.
Median Price 2014: $125,000
Price increase in 2014: ~4%
Source: Interfacexpress: Greater Northwoods Multiple Listing Service
Real Estate Market
Conclusion
What motivates a person to purchase an investment property in Minocqua, WI?
Why would they choose to invest here rather than other parts of the United States?
How would I go about finding a property in Minocqua, Wisconsin?