The times., 1899-07-12
PROFIT IN INVESTMENTS.
Some Fncts Regarding Recent De
yeIcpmcnts In the District.

seiepmcHfs In the DiSsrirt
The comparison between the eheapnsss
OF money in Washington at the present
time and the profit in real estate and build
Ing ventures is illustrated every day. muca
to the advantage OF the latter. The inter-
est rate to be obtained on money is less
than ever before in the history OF the Dis
trict Careful investments in real prop
crty at the present low prices will net
much better returns than any interest that
can be obtained on safe mortgages. And
this does not take into consideration the
fact that real estate values are certain to
advance handsomely in the coming months
Two instances that have occurred recently
in the business OF a prominent broker may
De noted The first was OF loan made on
+ street property at 3-4 per cent inter
est few days ago. The loan was for FIVE
Years and the mortgage included the priv
hege OF continuing 1t for a second Ave
years If desired. 1t has been suggested BY
many business men that the present
cheapness CT money is not likely to be a
permanent condition owing to the demand
that viii come with the revival OF busl-
, ness generally. hut such long time con-
tracts as this show that this belief is not
universal This broker has a large sum
which the owner is willing to lend for
D
a few days ago to take up $4,000 loan
now on piece Of + Street property at this
rate. The borrower is at present paying
41-2 per cent and the bank which holds
his notes has refused 10 surrender them
until It is due.
The second instance Is of large apart
ment house that is being erected in the
Northwest. The man who is making the
venture is conservative and cautious in
| his investments. Before he made a con-
| tract with the builders, even before he had
bought the building lot. he had made care
ful estimates of the minutest items In the
entire transaction. original cost, cost of
maintenance, and revenue to be obtained.
His figures are most interesting and most
encouraging.
The lot was paid for in cash and cost
$40. 0o0. The building is to be a seven
story modern apartment house, containing
thirty four apartments. 1t is to cost $780,
900. making the entire first outlay 800. 900.
A loan Of $4,000 was obtained at per
cent. The building is in fashionable To-
cality and 1t is not doubted that the apart
ments will be in demand at the rentals to
be charged.
The gross income on the building viii be
in excess of s12. 900 year, or 12 per cent
/ on the investment OF 500, geo. There is to
| be deducted from this $4,000 interest on
the loan. The taxes, insurance. and re-
pairs will be $4,000 more. or perhaps even
little in excess of that amount. The net
income on the building will thus be $1,000,
or per cent on the investment.
1t is known that this is not in any way
an exceptional case. as to the profitable
ness of apartment houses. The figures on
residence and business property. generally
speaking, would not make quite so good
a showing. but 3 and 6 per cent is not an
unreasonable estimate as to the net re-
turn on average residence property. espe-
cially on dwellings erected within the Tast
few years. In many instances the return
is much greater than this Modern office
buildings net handsome revenues also.
The gentleman referred to makes the
statement that he has been Obliged TO gay
very little if any more for his building
materials than he paid three years ago in
a similar venture His experience will be
an interesting one for comparison. 1t is
his opinion that while there is tendency to
squeeze figures up to investors unfamiliar
with prices, and who have not been recent
customers, it is quite possible for the
initiated to secure the cid rates. There
has been a small advance on bricks even
In his contracts The low interest rates
on mortgages are not the only striking
illustration of the present eheapness OF
money in the District. Washington banks
and trust companies are loaning money on
call in Baltimore and New York 70 an
extent that has never been attempted in
the past Three or four at least of these
institutions have very large sums of IDLE
funds in these cities all the time for call
loans. Their success has been gratifying
in a small way, but the fact that the busi-
ness has been found profitable is very
clear Indication Of the plethora OF money
here During the past week or more New
York has been making strenuous efforts
to obtain money from Boston, Philadel-
phia Washington, and other cities to
strengthen the reserve OF the New York
banks, which is lower than at any time
before in many years 1t is understood
that a large sum of Washington money
has been sent over this week.