Cleveland is one of the markets where investors stand to make big gains from buying foreclosures on the cheap and renting them to people who can’t afford to — or don’t want to — buy a house, according to this story from Bloomberg Businessweek.
Investors who can take advantage of a paradox of the housing market — home prices remain low while the cost to rent is high — stand to make a lot of money this year. The magazine says the market for foreclosures could reach above $100 billion during this year alone, according to a new report from real estate data firm CoreLogic.
“The firm states that in Florida and the Midwest — including the West Palm Beach, Cleveland, and Chicago metro areas — investors can recoup the costs from buying foreclosures in less than a year,” the magazine reports.
Investors who have access to enough capital to scoop up foreclosures “can earn more than 8% returns — not shabby in this era of near-record-low interest rates,” Bloomberg Businessweek reports.
Such activity could boost local economies, the magazine notes.
“Morgan Stanley estimates that cleaning up and repairing rental properties could create as many as 800,000 new jobs and that maintaining the properties could add 1 million more,” according to Bloomberg Businessweek. “That would mean housing could return to its customary role of lifting the economy, rather than dragging it down.”
It’s a long way to November
You might not yet be obsessed with the Sherrod Brown/Josh Mandel Senate race, but The Wall Street Journal is.
The newspaper weighs in today with a story and video on the race, which figures to be critical to Democrats’ efforts to retain control of the Senate. (Too bad the story’s writer, David Feith, keeps mispronouncing Sen. Brown’s first name.)
The story notes that polls generally have Sen. Brown ahead, though it noted the Mandel camp “is touting an end-of-March Rasmussen poll of likely voters that had the race tied.”
One thing is clear: The race will be expensive.
“Both campaigns are flush — Mr. Brown raised $2.4 million in the first quarter and has $6.3 million in the bank; Mr. Mandel raised $2 million and has $5.3 million in the bank — and both are expected to attract major outside support, with Mr. Brown drawing on labor unions and Mr. Mandel on groups such as Crossroads GPS,” the newspaper reports.
Starting with a long, Feb. 4 profile of Mr. Mandel, The Journal has run a total of 10 stories or videos that mention the Ohio state treasurer.
A new chapter, but an uncertain ending
Neil Van Uum, a Cleveland native who owned the Joseph-Beth bookstore chain that was forced to close stores at Shaker Square and Legacy Village, is still trying to make a go of things in the tough retail books business.
The (Memphis) Commercial Appeal catches up with Mr. Van Uum, who owns The Booksellers at Laurelwood in East Memphis, in the wake of a Justice Department antitrust lawsuit last week alleging that book publishers and Apple conspired to raise e-book prices to $12.99 to $14.99. Experts say the action could open the door for Amazon.com to lower the price of such digital books to $9.99 — the price the online retail giant used to create a dominant position in the market for its Kindle e-reader.
“It’ll be very tough if that goes through,” Mr. Van Uum says. “In the mind of the consumer, it will be more erosion for what a book is worth.”
Mr. Van Uum “managed to save the East Memphis bookstore — formerly Davis-Kidd Booksellers — from liquidators a year ago after the chain it was part of, Joseph-Beth Booksellers, went bankrupt,” the newspaper reports. He subsequently has invested $500,000 in the East Memphis store.
Business, though, could be better as its first anniversary approaches.
“It’s just going OK,” Van Uum tells the Commercial Appeal. “We need to be doing more in sales. “Admittedly, it’s a big store. Big footprint. We’re working pretty hard. I’d be lying if I said it’s not a bit of a struggle.”
He’s concerned that more of the store’s customers are going digital.
“The e-book and Kindle are what hurts us,” he said. “The best readers shop here. One by one, they start buying Kindles.”