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How Investors Can Identify a Great Rental Property

The decision to become a landlord is certainly exciting – the search for a property, marketing for a tenant and potential to bring in money every month.

But before you go buying the first empty house you see – or worse, a house you didn’t even look at – know that your investment is better made when you’ve carefully run the numbers.

Even when you’re just renting out a single-family home or duplex, real estate investment isn’t as easy as it may seem. A smart investment requires a look at market rents, a calculation of income potential and consideration of additional costs to both prepare a property to rent and make long-term repairs.

That’s not to mention factoring in costs you would have to absorb if the property sat vacant for any period of time. Bryan M. Chavis, a property management consultant and author of “The Landlord Entrepreneur: Double Your Profits With Real Estate Property Management,” says the potential for failure is often overlooked by excited rookie investors.

“A lot of people get anxious to participate in a deal, so they’ll take on more risk than what is necessary or they’ll jump into a deal just because it’s listed or they feel it’s a good deal … and they’ll rush into an investment that doesn’t make sense,” Chavis says. “And that’s are where the mistakes are made.”

Every investment property requires a careful assessment of the value of the property, amount of debt you’ll take on, expected income and other operating costs. Those property-specific numbers are also dependent on the local rental industry. Here are four things to consider as you look for the right rental property.

Find the market and submarket. A property in your neighborhood may seem like the most convenient investment option, but that doesn’t mean it’ll be worth your time and money. You first need to identify the best market for your investment, plus the submarkets – often broken down into neighborhoods – where a rental property will be most fruitful.

If you’re planning to manage the property yourself, your local market makes the most sense. Now, narrow down submarkets based on where renters are more likely to search – for example, near public transportation or within easy access to highways. Regardless of the tools you use to find and purchase available properties, a more general search on a site like Zillow, Apartments.com or Rentpad could show you where rental properties are most common and at various price ranges.

“The process begins with evaluating a targeted area,” Chavis says.

An ultra-luxury neighborhood nestled far from downtown might leave you hard-pressed to find renters, but on a street where new renters are always moving in you might have found a submarket to focus on.

Off-campus student housing is an easy-to-identify type of rental property that excites investors. Woody R. Fincham, vice president and Virginia regional manager of appraisal company The Trice Group, resides in Charlottesville, Virginia, home of the University of Virginia, and says investors tend to keep much of their attention on properties within walking distance to campus because the increased demand allows for a higher rent.

“If they’re within walking distance of [University of Virginia grounds], that generally is a premium, so investors are generally looking for that,” Fincham says.

Weigh property class options. As you identify the submarket that will yield the most demand among renters, also consider the quality of the property you’d like to own based on what you can afford and what renters flock to.

Property classes are typically broken into three categories: A, B and C. Properties in Class A will be the top quality in that market, typically new and higher priced. Class B properties tend to be a bit older but well-maintained. Class C properties are older still, often in need of renovations and repairs and located outside the prime real estate locations.

Age, architectural style and renovation specifics can vary based on location. A Class A building in New York City isn’t going to compare with a Class A building in Huntsville, Alabama, simply because they attract two different types of residents.

You may be better off focusing your investment toward a Class B or C property, because while there may be some required work on the property, you avoid narrowing the pool of potential renters with an expensive rental rate.

“Typically investors are looking to buy low, and they’re usually looking to buy stuff that’s not in the best condition,” Fincham says.

For that reason, Chavis says, you’re also less likely to feel the negative effects when real estate trends shift. If you rent only to the super-wealthy, they have the flexibility to choose to buy a home fairly easily, which shrinks the demand for luxury rentals, compared to other renters, who rent for longer since they have to save up to become homeowners.

“I see a lot of risk and a lot of volatility in those [Class A] sectors – more so than do the B, C, middle-class demographic assets. I feel those are a tad bit more stable,” he says.

Know the most likely renter. Closely paired with the property class to buy is the renter most likely to be interested in becoming your tenant. That person is a key component into the kind of renovations and upkeep you’ll need to maintain the home.

For off-campus student housing, for example, landlords often don’t have to be as concerned with providing new appliances or newly painted walls as they would with a family recently relocated by a major corporation.

“Students are not as persnickety, per se, as the average consumer,” Fincham says.

When it comes to identifying the most likely renter, it helps to be familiar with the area. Arik Kislin, a real estate investor and developer and CEO of Linx Industries, says it’s important to have a solid grasp on the typical renter in a neighborhood, or at least work with someone who does. Not knowing the regional and ethnic makeup of a neighborhood like Jamaica, Queens, in New York, he says, could mean that people simply don’t want to do business with you because you’re viewed as an outsider.

“You don’t want to be the odd man out … because it’s not going to be accepted well,” Kislin says.

Plan for the worst-case scenario. Whether it’s a recession that hits or even an increase in homeownership rates, there’s a possibility you’ll have to lower rents at some point to attract renters. If the city or neighborhood you live in undergoes serious changes, your rental property may even sit vacant for months.

It’s important to know how long you’d be able to afford fronting the costs of a vacant rental space or how low you could make rental rates before you’re no longer profiting.

Even with the current rental climate in most markets, with high demand and rents outpacing affordability in places like San Francisco and New York, Chavis says landlords shouldn’t expect rents to continue to climb at the rate they have in recent years. Median rent for a one-bedroom apartment in San Francisco currently stands at $3,390, according to rental information company Zumper. While it’s a high rent to be sure, it hasn’t changed much going back to the same month in 2015, when the median rent reached $3,530, a new high after increasing more than 13.9 percent from the year before, per Zumper’s monthly national rent reports. With affordability being a significant problem in the Bay Area, landlords shouldn’t expect to see major increases in rent going forward, and they can even expect more dips.

“These high, ridiculous rents are going to eventually reach a ceiling … which could cause some problems and issues,” Chavis says.

As you weigh the potential profitability of a rental property, include the possible scenarios of a plateau in rental rates, decline in demand and the occasional big-ticket repair that could take money out of the bank rather than putting money in. They’re not the numbers you want to think about when you picture yourself as a landlord, but they’re the numbers that can keep you from taking on a bad investment.

Source: realestate.usnews.com

The post How Investors Can Identify a Great Rental Property appeared first on AAOA.

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How America’s big new landlords faced their first housing disaster

Hurricane Harvey tested the faith and perseverance of thousands of Houston homeowners, and it put an entirely new asset class of large institutional landlords to its first real test. Starwood Waypoint and American Homes 4 Rent collectively own about 6,000 single-family rental homes in the Houston area. Hundreds of them were damaged severely by the storm, and their tenants displaced.

“You have to prepare for everything,” said Charles Young, COO of Starwood Waypoint, standing in front of a Houston home that took in 4 feet of water. “You can’t imagine a storm like this, and it’s unique. It’s our first test.”

After the housing crash, institutional investors bought hundreds of thousands of single-family homes and turned them into lucrative rentals. They established management systems and national infrastructures to service thousands of individual renters. While some of the homes are concentrated in certain neighborhoods, the properties are spread across the city, and Houston is huge.

Starwood Waypoint, which is in the process of merging with Blackstone’s Invitation Homes, estimates about 140 of its homes in Houston were damaged, some very seriously. American Homes 4 Rent said 112 of its 3,200 homes sustained serious damage, and about half had at least some minor damage.

Finding the residents and assessing the damage had to happen quickly. For companies with so many properties, that might sound daunting, but apparently being bigger was better.

“We were able to use the scale of our platform, professionally managed across the country, and utilize our resources internally and externally to put together vendors. We put together a task force, we communicated, we used our technology and then we prepared,” said Young.

In some cases it was hard to find the renters, as they had evacuated. In others, the renters decided not to return. Both companies let those hardest hit out of their leases and returned security deposits. They also relocated some renters to other company properties.

“One of the benefits of the institutional single-family rental program is that we have an in-house maintenance team and a construction team, we’re in many cities across the country and have the ability to mobilize all those forces,” said David Singelyn, CEO of American Homes 4 Rent, which is based in California. “We planned prior to the hurricane hitting the city here in Houston. We were able to be in the city the second day with our crews and equipment that we sourced from other cities.”

Many of the homes had to be stripped to the studs and dried out. Starwood brought in about a dozen managers from out of state and already had a Houston-based staff of workers ready to begin the repairs. They also were able to bring in equipment from out of state, like fans and dehumidifiers. American Homes 4 Rent transferred drying equipment from Salt Lake City.

“Scale and technology makes an enormous difference,” said John Pearsall, a regional manager for Starwood Waypoint. “We’ve been able to attack the challenge of working with residents, from a relocation perspective to the actual demolition process to the production process in proportions that are geometrically far greater than we were able to do back in the early 2000s.”

Shonda Marie Lewis and her family had rented from American Homes for about nine months before the storm. She stayed as long as she could, but when the water rose to her waist, she evacuated. Within a day, she was getting calls and emails from her landlord.

“They were very organized, very professional, I received one call after the next, I couldn’t hardly keep up the names. They called me, they checked on us, they emailed us to make sure we were OK, even after hours,” said Lewis, who also described a company employee bringing them food and Gatorade to the house. She is now living in another company property that did not flood and intends to stay there.

Starwood Waypoint’s Young estimates the cost of Harvey to the company will be about $10 million in aggregate, but much of that is covered by insurance. Singelyn said the costs of both Harvey and Irma would be $10 million to $15 million, also largely covered by insurance.

Both companies have even more homes in Florida, but the damage there was quite different. Most of the work was cleaning up, not rebuilding homes from the inside.

As for lessons learned, both company executives said speed was key and improving technology would always be most important. And texting.

“We realized that text messaging is much more efficient when the home computers are down,” added Singelyn.

Source: cnbc.com

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Flip, Rent, or Hold: What’s the Best Path to Real Estate Riches?

Maybe you’re addicted to those home-flipping shows on HGTV where glam couples buy grim shacks, spend 22 minutes smashing down walls and adding funky kitchen backsplashes, and then make tens of thousands selling the refurbished places on the open market. Or perhaps you’re jonesing for a steady stream of extra income and feel certain you’ve got what it takes to be a landlord.

Or just maybe you’re on the prowl for a hands-off way to make serious real estate money with financial investments that don’t require laying down new flooring or screening prospective tenants.

Whichever option floats your boat, you’ve got plenty of company. After the epic boom-and-bust of the speculative home-flipping market in the aughts, everyone again seems to be looking to make a quick buck by becoming a real estate investor. But these days, there are a dizzying variety of different takes on the once-simple idea of property investing—all requiring varying levels of blood, sweat, tears—and risks. Which one might be right for you?

That’s where we come in. The realtor.com® data team looked at the five big real estate investments that everyday Joes and Janes may want to consider. Then we broke down the typical returns (aka profits) investors have received over the past few years, along with the pros and cons of each.

(Rampant flipping, spurred by overbuilding and easy, subprime mortgage-fueled credit, was a prime contributor to the real estate crash and recent financial crisis. But today, thanks to much tighter credit and inventory levels, home flipping is no longer the American economy’s red, flashing “danger” sign.)

“Over the generations, real estate has proven itself to be a pretty good, time-tested investment,” says Eric Tyson, who co-authored “Real Estate Investing for Dummies.” “Like investing in the stock market, people who follow some basic principles and buy and hold over long periods of time should do fairly well.But, of course, there’s no guarantee.”

And that’s why the thrill-a-minute world of real estate investing isn’t for everyone—especially when life savings are involved.

“Real estate is very unpredictable,” says certified financial planner Jenna Rogers of Mission Wealth in Santa Barbara, CA. “A lot of people feel like you can’t lose money in homes, but that’s not really the case. “If there’s any kind of turmoil in the market, real estate usually gets hit really hard.”

OK, now that we’ve gotten that out of the way, let’s go shopping.

1. Home flipping: Not exactly like reality TV

First half of 2017 gross returns: 48.6%*
2014 gross returns: 45.8%
2012 gross returns: 44.8%

If the Property Brothers or Chip ’n’ Joanna can do it, why can’t you? Real estate reality TV has made the “fixer-upper” flipping market seem fun, very sexy—and mostly foolproof. But becoming a successful home flipper is a lot harder than it looks on television. And it isn’t always as wildly profitable as you might think.

The returns appear deceptively high, as they don’t account for hefty renovation costs, closing costs, property taxes and insurance. Flippers should figure that about 20% to 30% of their profits will go straight toward such expenses, say experts. The median returns above only reflect sale price gains—not net profits.

Newbie investors need to make sure they’re thoroughly familiar with a neighborhood before they consider buying a potential flip in it, says Charles Tassell, chief operating officer at the National Real Estate Investors Association, a Cincinnati-based investors group. This means looking at what kinds of homes are located nearby, what sort of shape they’re in, and how much they’ve sold for. Wannabe flippers should pay attention to the quality of local schools, transportation, and the job market—just as they would for their own home. Those are the things that can make or break a sale. And an investment.

A market where homes are still affordable but appreciating rapidly is ideal.

Like Pennsylvania! The highest flipping returns in the second quarter of the year were in Pittsburgh, at 146.6%; Baton Rouge, LA, at 120.3%; Philadelphia, at 114%; Harrisburg, PA, at 103.3%; and Cleveland, at 101.8%, according to the real estate data firm ATTOM Data Solutions. Those Rust Belt cities topped the list because they have plenty of cheaper, older homes that can be easily updated, and because housing prices there are rising as economies (slowly) improve.

Once they’ve settled on an area, flippers need to focus on the basic structure of prospective homes. Special attention should be paid to a home’s heating and cooling systems, foundation, and roof—the things that are most expensive to fix.

Then they need to create a realistic budget. Experts recommend setting aside 10% to 20% to cover any unknowns—like what’s inside the walls. Costly surprises are par for the course.

“The biggest hurdle of flipping is: The costs are never what they seem to be on HGTV,” says flipper and landlord April Crossley, co-owner of Crossley Properties in Reading, PA. She owns the business with her real estate agent husband, and they do 8 to 10 flips a year. “In fact, they’re always way more.”

Flippers are gambling that the housing market stays strong in their target area—at least long enough to resell their investment home.

“You’re constantly anticipating what the market will be doing 6 to 12 months in the future,” says Daren Blomquist, senior vice president at ATTOM. So if you miscalculate, and it drops, you could lose a lot of money.

2. Investment (rental) properties: You, too, could be a landlord

First half of 2017 returns: 13%*
Three-year returns: 9.9%
Five-year returns: 11.67%

Perhaps flipping homes, and all the varied costs and stressors associated with it, isn’t for you. But you’d still like to be a hands-on real estate investor. Why not consider buying investment (rental) properties?

One big advantage is the tax deduction folks get for their rental properties. They can write off their mortgage interest, property taxes, and operating expenses, as well as repairs.

Like home flippers, landlords-to-be should look at growing areas with new jobs moving in, says Steve Hovland, director of research at HomeUnion, an Irvine, CA–based company that helps smaller investors buy and manage properties.

“I’m very bullish on high-growth markets, like Texas, the Southeast, Arizona. You’re always going to have new renter demand,” he says. But coastal cities can be tough for aspiring property owners because they’re just too expensive.

The best markets for investors were Cleveland, which fetched a 11.5% yearly return; Cincinnati, at 9.8%; Columbia, SC, at 8.6%; Memphis, TN, at 8.5%; and Richmond, VA, at 8.2% in the first quarter of the year, according to HomeUnion. The worst were San Francisco, at 2.8%, and Silicon Valley’s San Jose, at 2.8%.

First-time investors may want to target middle-class neighborhoods near top-rated schools, where stability rules and tenants are more likely to hold steady jobs. These homes often require less maintenance—a boon to landlords who don’t live nearby.

“You’re always able to replace renters in nicer neighborhoods with good schools,” says Hovland.

Landlords who aren’t local or don’t want to deal with 3 a.m. calls about an overflowing toilet will want to consider hiring a property manager who will find tenants and coordinate (but not perform) maintenance. But that eats into profits, costing about 7% to 12% of the monthly rent.

And the payoff you get, as compared with flipping a home, isn’t in one lump sum, and isn’t always steady. For example, landlord and flipper Crossley rents out multiple single-family homes, duplexes, and apartments in the Reading, PA, area, and once had a couple stop paying their rent for six months after they went through a divorce. She had to eat those losses, as well as attorney fees, while she went through eviction court to get them out.

Landlords also need to have insurance on their properties and set up their rental companies to protect their personal assets, in case they get sued.

And like other investors, owners also run the risk that home prices—along with the rents they were counting on—could plunge.

“You have to be prepared for the worst. When something goes wrong in a tenant’s life, you’re the last person to get paid,” Crossley says.

3. U.S. REITs: Buying shares in real estate instead of companies

Year-to-date returns: 2.75%*
Three-year returns: 8.39%
Five-year returns: 9.79%

Those who’d like to own apartment and office buildings like a legit mogul but don’t have the bank balance to do so may want to turn to Real Estate Investment Trusts. Don’t worry if you’ve never heard of REITs. You don’t need a fancy finance degree to understand how they work.

Most REITs are publicly traded corporations that investors buy and sell shares in—just like stocks. Only instead of buying shares in Apple, you’re buying shares in real estate. Shares can range in price from just a few dollars to hundreds of bucks. Investors can buy into them on certain exchanges.

As with stocks, investors can make money by buying shares at a low price and selling them at a higher one, and by collecting quarterly dividends (payouts are made every three months).

There are two main kinds of publicly traded REITS. Equity REITs own rental properties ranging from homes to business space, and make money collecting income on them. Residential and commercial mortgage REITs allow investors to buy mortgage debt where investors profit from the interest.

Of all of the real estate investment trusts, data center REITs—where companies rent out space to store their network servers—had the highest one-year returns, at 29.79%, according to the National Association of Real Investment Trusts, a Washington, D.C.-based REIT trade group. It was followed by home financing mortgage REITs, which invest in bundles of home loans, at 25.57%.

The biggest losses were in the retail sector, as more shoppers make their purchases online. (Thanks, Amazon!) Big shopping malls, usually anchored by department stores, took the biggest one-year hits, at -26.78%, according to the association.

4. Crowdfunded real estate: Like Kickstarter for property

Year-to-date annualized returns: 8.72%*
Two-year returns: 8.89%

Crowdfunded real estate is like the younger, cooler cousin of REITs. Simply put, it allows ordinary folks to pool their money to invest in things like apartment complexes, office buildings, and shopping centers. It’s like a Kickstarter for buying real estate—instead of funding your college roommate’s feature-length documentary about Furries.

Previously available only to uber-wealthy accredited investors, crowdfunding only became open to the general public in March 2015. That’s when the government enacted new rules opening up the investments to folks without ginormous bank balances. So there isn’t much data available yet on how these investments perform over the long term.

While REITs can hold tens of thousands of properties and be worth billions of dollars, crowdfunding companies are often significantly smaller, holding just one or a handful of properties. And they often require a long-term commitment from investors.

As with REITs, the two main options in crowdfunded real estate investing are equity or debt.

Equity, the riskier of the two, involves investing in a fund connected to commercial or residential development. It makes money from the income the property generates and the increase in the value over time. The investment is usually tied up for about five to seven years. Debt is the loan used to get the project off the ground and continue to finance it through the life of the project.

Over time, accredited investors—the wealthier ones who have been in the investments the longest—typically receive anywhere from 11% to 45% annual returns on their equity crowdfunding investments, says Ian Ippolito, a retired investor who founded the website The Real Estate Crowdfunding Review. Since these types of investments have only recently been opened up to the masses, the annual returns for regular investors are about 8.2%. That’s expected to rise if all goes well when the property is sold five to seven years down the line.

But if the development doesn’t get fully built or doesn’t make any money, then investors may get nothing—and even lose their investment.

“These are long-term investments, so if you pull your money out early, there’s usually a financial penalty,” Ippolito says. That’s a big difference from REITs, which can be sold at any time. “Retirees who need the money soon probably should look elsewhere.”

Debt is a bit safer, but the payouts may not be as high.

5. Home appreciation: The investment you can live in

One-year appreciation: 10%*
Three-year appreciation: 26.7%
Five-year appreciation: 44.8%

Folks don’t need to flip homes or pour money into crowdfunded projects to make money as a real estate investor. Instead, they can search hard for the perfect home, get their finances in order, negotiate smartly, and close the deal for the best possible price.

And then live in it.

Real estate typically appreciates over time. That means that buyers who buy a home in a decent area and keep it in good shape should make money when they decide to sell. Depending on the market and the home, sometimes a lot of money. But they should plan on being in that home for at least five or so years, so they can build up enough equity in the home to net a profit once real estate agent fees and closing costs are accounted for.

“In general, buying a home is a good investment and a way to build wealth and equity over a lifetime,” says Joseph Kirchner, senior economist at realtor.com®. “[But] even if you’re buying it to live in the house for the next 30 years, it is always better to buy when prices are low.”

And as folks build equity in their home, through appreciation and paying down their mortgage debt, they can take out home equity loans or home equity lines of credit against their property.

But of course, just as with the other investments on this list, there are risks. The country could enter into a new recession, or there could be a local housing market crash if a big employer leaves the area. Or homes in your area could simply be overvalued.

However, when home prices fall, they do generally rebound—eventually.

“Good markets aren’t going to last forever,” says real estate investment author Tyson. “Even the best real estate markets go through slow periods.”

 

Source: realtor.com

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Is Airbnb to blame for rising rents in hip college towns?

It used to be that renting an apartment in Cambridge’s funky triple-deckers or two-family homes didn’t rival the cost of tuition at one of the city’s storied universities, Harvard and MIT.

Now, renting in Cambridge can feel like that — something critics say is made tougher by short-term rental websites like Airbnb, through which property owners can make more money renting out apartments or homes by the night instead of a yearlong lease.

The debate over services like Airbnb — often criticized for essentially turning apartments into hotel rooms, putting upward pressure on housing costs and driving out longer-term tenants who can’t afford rising rents — has raged for years in major cities. But it is also keenly felt in event-heavy college towns, particularly ones that also are tourist destinations or are near them, like Cambridge, next to Boston.

Jennifer McConnell, a high school Spanish teacher who rents out rooms in her Cambridge brownstone through Airbnb, said she’d otherwise have trouble covering her expenses.

“It’s been a game changer both financially, because it’s allowed me to stay in my home, but also emotionally because it’s filled up my home with guests,” said McConnell, whose guests included a woman from Germany who stayed for seven weeks while taking a graduate course at Harvard.

Short-term rentals have caused enough concern in Cambridge that the city council last month approved new regulations requiring people offering short-term rentals to live in the same building and undergo an inspection once every five years.

Picturesque Boulder, home to the University of Colorado, last year began requiring property owners to have a license to rent to visitors. Evanston, Illinois, a Chicago suburb that is home to Northwestern University, also has beefed up rules on rentals of less than 30 days.

Massachusetts Lodging Association President Paul Sacco hailed the Cambridge rules, saying they’re needed to prevent “illegal hotels” in the city.

Airbnb said it is not to blame for spiking housing costs. Only a small percentage of the Cambridge housing stock — about 140 homes or apartments — are rented through its website for more than 172 nights a year, it said. That’s Airbnb’s estimate for someone who is effectively doing short-term rental as a business.

Interest in renting rooms through Airbnb often jumps during graduation or a big football game, said Will Burns, public policy director for Airbnb.

Visiting scholars and families of college students also fill rooms. In Cambridge, an annual rowing event on the Charles River also creates demand.

In the past 12 months, Airbnb said, there have been 90,000 guest arrivals in Cambridge through its service in the city of about 110,000.

Kirsten Rulf, a 36-year-old research fellow at Harvard Law School, said she used Airbnb for two weeks in August 2015 before finding permanent housing. The small, furnished room in a larger apartment cost her $1,500 for 14 nights, she said.

“For me that was the best option, because hotels are super expensive, especially in August,” said Rulf, who hails from Mendig, Germany.

A tour of Airbnb’s website reveals how much of a draw colleges are — at least according to those trying to rent out rooms.

“Perfect spot to visit MIT, Harvard, BU (Boston University),” reads one ad. “The house is within walking distance to the Princeton University Campus,” reads another ad. A third boasts, “Great ‘shotgun’ style apartment on a nice street in New Haven which is a short ( 5min) walk to Yale.”

Some institutions, including Boston’s Emerson College, have even busted students for trying to rent out dorm rooms.

An agreement on graduate housing at Yale University states that while students are allowed to have guests for short visits, “Guests who pay rent and/or guests found through Airbnb or similar arrangements are prohibited.”

In Cambridge, the median rent has soared to a daunting $3,000 a month, according to real estate data provider Zillow. In Boston, which sees its population swell every September when students flock back, the median rent is $2,700.

According to Zillow, the median monthly rent in Evanston is nearly $1,700. The rent in Ithaca, New York — hub of the touristy Finger Lakes region and home to Cornell University — is about $1,600, according to the real estate firm Trulia.

A 2014 report by New York Attorney General Eric Schneiderman found “private short-term rentals displaced long-term housing in thousands of apartments” in New York City.

McConnell, the Cambridge resident who opens her home to Airbnb clients, said she’s OK with the city’s regulations but isn’t thrilled about the inspections. She said she also doesn’t fault Airbnb for the city’s soaring housing and rental costs.

“The middle class person has a hard time finding a place,” she said. “I don’t blame that on Airbnb. People couldn’t afford to rent those places anyway.”

Source: cbsnews.com

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Real estate investors look to cash in on Harvey-ravaged Houston

Some real estate executives in Texas are hoping to get rich quick with homes damaged by Hurricane Harvey.

Longtime investor Ray Sasser detailed the strategy at a real estate conference in Houston this month: Buy up to 50 flooded homes for a fraction of what they’re worth, fix them and flip them for a hefty profit, Reuters reported.

He said he first tried the strategy after Tropical Storm Allison flooded the city in 2001 — purchasing homes for almost half of their pre-storm value, spending about 15 percent on repairs, and selling many of them at full value a year later.

The quick success of the plan was actually surprising to him, according to the outlet.

“This can’t be true,” Sasser said.

While Harvey-hit homes in the Houston area may be a riskier investment than houses damaged by Allison, investors are nevertheless rushing in to snatch up the flooded homes.

A Houston market manager for brokerage and online listings firm Redfin said agents are getting about four times the number of calls they usually get from investors.

“You have people with millions of dollars to work with,” Tara Waggoner said.

“They want to go in, pay cash, get the discount and fix it up to sell.”

She said the calls range from individuals looking to buy homes or groups of 10 or more people pooling their money and going on a home-buying shopping spree.

Investor Brandyn Cottingham believes Harvey brought a world of opportunity to his business.

“In this business, you look for distressed property, and we’ve got tons of that right now,” Cottingham said.

While it may just look like a money-making opportunity for cavalier investors, long-time foreclosure broker Linda Muscarello warned investors on how to properly speak to flood victims about their destroyed homes.

She said it’s very important to nod and listen when talking to these owners and help them understand in a non-predatory way they may have unrealistic notions about keeping their home if they didn’t have flood insurance or their businesses were damaged.

If homeowners don’t expect to have a steady, long-term income, real estate experts suggest it’s better to just give the keys to someone else.

 

Source: nypost.com

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Student debt is delaying millennial homeownership by seven years

Historically, Americans have bought a home by their early 30s, but today’s millennials are playing a waiting game because they’re saddled with so much student loan debt.

Millennials who don’t already own homes are delaying purchasing one for a median of seven years, according to a new joint study on millennial student debt from the National Association of Realtors and education financing nonprofit American Student Assistance.

Overall, 83% of non-home owners said they believe that student loan debt has delayed them from buying a home — and that figure is higher among older millennials (those born between 1980 and 1989) and people who have more than $70,000 in student loan debt. The report was based on the results of a survey of 2,203 student loan borrowers.

Most commonly, student debt is affecting people’s ability to save. Some 85% of respondents said they have not been able to save for a down payment because of their student loans. Additionally, nearly three-quarters of people said they’re putting off buying because their student debt makes them feel too financially insecure. More than half (52%) of respondents also said that they can’t qualify for a mortgage because of their debt-to-income ratio.

Historically, Americans have bought a home by their early 30s, but today’s millennials are playing a waiting game because they’re saddled with so much student loan debt.

Millennials who don’t already own homes are delaying purchasing one for a median of seven years, according to a new joint study on millennial student debt from the National Association of Realtors and education financing nonprofit American Student Assistance.

Overall, 83% of non-home owners said they believe that student loan debt has delayed them from buying a home — and that figure is higher among older millennials (those born between 1980 and 1989) and people who have more than $70,000 in student loan debt. The report was based on the results of a survey of 2,203 student loan borrowers.

Most commonly, student debt is affecting people’s ability to save. Some 85% of respondents said they have not been able to save for a down payment because of their student loans. Additionally, nearly three-quarters of people said they’re putting off buying because their student debt makes them feel too financially insecure. More than half (52%) of respondents also said that they can’t qualify for a mortgage because of their debt-to-income ratio.

 

Source: marketwatch.com

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Landlords Settle Fair Housing Pet Discrimination Case For $72,000

American Apartment Owners Association - Thu, 09/21/2017 - 10:27am

Northern California landlords have settled pet discrimination allegations that they and their agents discriminated against a female tenant with disabilities who requires an assistance animal, according to a release from the U.S. Department of Housing and Urban Development.

Fair Housing Advocates of Northern California(FHANC) filed a complaint alleging that the owner of the properties (Shultz Investment Co.), representatives of its management company (Greenbrae Management, Inc.) and its leasing agents discriminated against a resident who has a medical condition and required a service dog at the Bon Air Apartments in Greenbrae, California.

The fair housing group also claimed the woman, who had lived at the property for more than 15 years, was subjected to discriminatory statements and retaliation due to the presence of her assistance animal, including false accusations that the animal was disruptive, that it bit maintenance workers, and that it was not a service animal under California law, according to the release.

The woman’s Housing Assistance Program voucher was ultimately cancelled, forcing her to find housing elsewhere.

HUD investigation confirmed discriminatory statements by property managers

A subsequent HUD investigation corroborated the woman’s need for the dog and discovered written discriminatory statements made by the property managers, according to a HUD release.

HUD found no evidence indicating that the animal was disruptive or had bitten anyone.

“Landlords are required to provide a reasonable accommodation for individuals who require assistance animals,” Bryan Greene, HUD General Deputy Assistant Secretary for Fair Housing and Equal Opportunity, said in the release.

“HUD is committed to make certain that landlords meet this obligation under the nation’s fair housing laws.

Landlords will pay $72,000 in pet discrimination agreement

Under the Conciliation Agreement, the respondents will pay the woman $31,000; pay Fair Housing Advocates of Northern California $41,000; and develop and implement a reasonable accommodation and reasonable modification policy consistent with the Fair Housing Act.

The owners will also revise their standard lease to be consistent with the new accommodations policy; send a letter to current tenants notifying them of the new policy; and obtain fair housing training.

“On an ongoing basis, our agency receives many calls from people with disabilities who need reasonable accommodations,” Caroline Peattie, FHANC’s Executive Director, said in the release. “Many of those calls concern service and companion animals; both must receive the same consideration under fair housing law. When a person with a disability requests an accommodation, the housing providers may require documentation that there is a disability and that the request will address that need, but they are required to consider each request individually and engage in an interactive dialogue with the tenant.”

The Fair Housing Act prohibits housing providers from denying or limiting housing opportunities to persons with disabilities or imposing different rental terms and conditions. This includes refusing to make reasonable accommodations in policies or practices for people with disabilities.

In addition to the Fair Housing Act’s prohibition against discrimination based on disability, HUD provided guidance in April 2013 reaffirming that housing providers must provide reasonable accommodations to people with disabilities who require assistance animals.

Fair Housing Advocates of Northern California is a non-profit organization serving several Bay Area counties that provides free counseling, enforcement, mediation, and legal or administrative referrals to persons experiencing housing discrimination. Fair Housing Advocates of Northern California also offers foreclosure prevention services, pre-purchase education, seminars to help housing providers fully understand fair housing law, and education programs for tenants and the community at large. Fair Housing Advocates of Northern California is a HUD-Certified Housing Counseling Agency.

 

Source: rentalhousingjournal.com

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Housing starts fall for second straight month

American Apartment Owners Association - Thu, 09/21/2017 - 9:45am

U.S. homebuilding fell for a second straight month in August as a rebound in the construction of single-family houses was offset by persistent weakness in the volatile multifamily home segment.

The report from the Commerce Department on Tuesday also showed building permits racing to a seven-month high in August. However, permits for single-family homebuilding, which accounts for the largest share of the housing market, dropped.

The mixed report suggested housing could remain a drag on economic growth in the third quarter. Homebuilding has been treading water for much of this year amid shortages of land and skilled labor as well as rising costs of building materials.

Housing starts slipped 0.8 percent to a seasonally adjusted annual rate of 1.18 million units, the Commerce Department said.

Building permits surged 5.7 percent to a rate of 1.30 million units in August, the highest level since January.

The data suggested limited impact on permits from Hurricane Harvey, which lashed Texas in late August and caused unprecedented flooding in Houston. The Commerce Department said the response rate from areas affected by the storm “was not significantly lower.”

But homebuilding could slump further in September in the aftermath of Harvey and Hurricane Irma, which struck Florida. According to Census Bureau data, the areas in Texas and Florida that were devastated by the storms accounted for about 13 percent of permits issued in the nation last year.

Though activity could pick up as the hurricane-ravaged communities rebuild, the dearth of labor could curb the pace of increase in homebuilding. A survey Monday showed confidence among homebuilders fell in September amid concerns that the hurricanes could worsen the labor shortages and make building materials more expensive.

Economists had forecast housing starts rising to a 1.18 million-unit pace last month. Investment in homebuilding contracted in the second quarter at its steepest pace in nearly seven years. As a result, housing subtracted 0.26 percentage point from second-quarter gross domestic product.

Homebuilding rose 1.4 percent in August on a year-on-year basis. Despite the recent weakness, housing continues to be supported by a labor market that is near full employment. In addition, mortgage rates remain close to historic lows.

Single-family homebuilding jumped 1.6 percent to a rate of 851,000 units in August. Single-family permits, however, fell 1.5 percent to a 800,000-unit pace. With permits lagging starts, single-family homebuilding could decline in the months ahead. Groundbreaking on single-family housing projects has slowed since vaulting to near a 9-1/2-year high in February.

MIXED DATA Last month, single-family starts rose in the South and West, but fell in the Midwest and Northeast. Starts for the volatile multi-family housing segment tumbled 6.5 percent to a rate of 329,000 units. Multi-family permits vaulted 19.6 percent to a 500,000-unit pace in August.

The mixed data is unlikely to change expectations that the Federal Reserve will announce on Wednesday a plan to start unwinding its $4.2 trillion portfolio of Treasury bonds and mortgage-backed securities. Fed officials were scheduled to start a two-day meeting later on Tuesday.

The dollar was trading lower against basket of currencies, while prices for U.S. Treasuries rose. U.S. stock futures were slightly higher.

In a separate report on Tuesday, the Labor Department said import prices jumped 0.6 percent in August, the biggest gain since January, after dipping 0.1 percent in July.

In the 12 months through August, import prices surged 2.1 percent after rising 1.2 percent in July.

Last month, prices for imported petroleum raced 4.8 percent after slipping 0.4 percent in July. Import prices excluding petroleum rose 0.3 percent after dipping 0.1 percent the prior month. Import prices excluding petroleum increased 1.0 percent in the 12 months through August.

Import prices outside petroleum are rising as the dollar’s rally fades. The dollar has weakened 8.3 percent against the currencies of the United States’ main trading partners this year.

The report also showed export prices rose 0.6 percent in August after gaining 0.5 percent in July. They increased 2.3 percent year-on-year after rising 0.9 percent in August.

A third report from the Commerce Department showed the current account deficit, which measures the flow of goods, services, and investments into and out of the country, increased to $123.1 billion in the second quarter from $113.5 billion in the first quarter.

That was the highest level since the fourth quarter of 2008.

Source: cnbc.com

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Achieving Successful Affordable-Housing Management

American Apartment Owners Association - Thu, 09/21/2017 - 9:42am

Being aware of the challenges, opportunities and pitfalls in affordable-housing property management is the key to profitability and success, NAR’s Megan Booth tells GlobeSt.com in this IREM Global Summit preview.

CHICAGO—Being aware of the challenges, opportunities and pitfalls in affordable-housing property management is the key to profitability and success, Megan Booth, senior policy representative for the National Association of Realtorsin Washington, DC, tells GlobeSt.com. Booth will be moderating the Affordable Housing Management panel session during IREM’s Global Summit here Oct. 10-13. We spoke with her about the session and what property managers need to know regarding affordable housing.

GlobeSt.com: What are the greatest challenges in affordable-housing property management?

Booth: Especially if property managers are managing federally assisted housing, they should know that the rules tend to change pretty frequently. HUD, Rural Housing Service (part of USDA) and even the IRS put out new regulations and guidance pretty regularly, so property managers have to be aware of and keep up with the new rules and guidelines that come out several times a year. Another challenge is tight budget constraints, including limits on rent increases and costs that are outside of their control such as utility costs. In affordable housing, they can’t make that up in the rent, so operating efficiently can be a challenge.

GlobeSt.com: Where are there untapped opportunities for property managers to add value to these properties?

Booth: One of my members termed it is the “senior tsunami.” As the Baby Boomers age, there are going to be a lot of seniors on fixed incomes who will need affordable housing. Some of what you do for seniors might be different than what you do for families. You may be able to hire or contract with service coordinators who can provide services for seniors such as food or health programs. Sometimes, HUD will allow service coordinators to be hired; this will be a growing market because there will be more and more seniors needing this type of housing. It’s important for people to be up to speed so these services can be in place as the need grows. For instance, you don’t want garden-style apartments for the elderly—they need buildings with elevators. This is a special-needs community and one that property managers should learn about now so that they’re ready for it.

GlobeSt.com: What are the pitfalls to be avoided in this realm?

Booth: One of the trickiest things, especially in programs with some sort of federal subsidy attached, is that administrations come and go, and there will be changes in how to fund these programs. You never know if funding is going to be cut for a program you’re using. One thing property managers can do is to share the properties with members of Congress: have them come visit the properties and the residents. If they can see them and the benefits they’re getting from these programs, it can help quite a bit.

GlobeSt.com: What else can attendees hope to gain from this session?

Booth: Many people in our industry don’t realize that IREM members manage almost 40% of federally assisted housing in the country. People think it’s really a specially-niche thing, and yes, there are a lot of technicalities to be aware of, but property-management companies are participating in it. Most communities have huge waitlists for affordable housing, so depending on where the government goes with some of these programs, they could be expanded or cut. For example, the LIHTC program legislation, if it passes, might expand the program and offer more ability for people to live in these properties, and hopefully they will have professional property managers there who know what they’re doing. You never know what’s going to happen, but this is not a niche that is going to go away.

 

Source: globest.com

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HOMEOWNERS’ AND RENTERS’ INSURANCE UNDER MICROSCOPE FOR CUSTOMER SATISFACTION

American Apartment Owners Association - Thu, 09/21/2017 - 9:36am

In the wake of devastating Hurricanes Harvey and Irma, customer satisfaction among U.S. homeowners and renters’ insurance will be squarely under a microscope the rest of this year and beyond.

According to the J.D. Power 2017 U.S. Home Insurance Study released Monday, the ability of insurers to maintain these high levels of customer satisfaction will be tested in the coming months amid the historic property losses and profit strains created by Hurricanes Harvey and Irma.

“Although property insurers have made great strides in overall customer satisfaction over the past several years, the areas where they consistently see the lowest satisfaction scores are price and direct customer service,” said Greg Hoeg, vice president of U.S. Insurance Operations at J.D. Power. “Those two areas, in particular, will be under enormous stress as insurers address losses from the recent hurricanes.”

What’s more, the study says that these challenges are amplified by the threat of disruption from a new crop of emerging “insurtech” innovators coming to market with lower premiums and state-of-the-art self-service web and mobile customer service technologies.

“However, traditional service providers are fighting back by partnering with smart home assistants like Amazon Echo and Google Home,” the study notes. “When used, these products increase customer engagement and lead to higher satisfaction by increasing awareness of best practices insurers execute but have low awareness due to limited interactions throughout the year.”

Here are some key study findings:

Record-high customer satisfaction among homeowners and renters: Overall customer satisfaction scores have reached an all-time high of 808 (on a 1,000-point scale) among homeowners and 834 among renters, driven by improvements in policy offerings.

Price and direct customer service interactions remain problem spots: Despite overall rising customer satisfaction scores, the two lowest-performing factors in the customer experience are price and direct interactions with insurance companies via call center, website or assisted online channels. However, multichannel interactions that include direct and live channels throughout the year produce the highest levels of customer satisfaction.

Many don’t completely understand policies and coverage: Overall satisfaction among home insurance customers who understand their policy and the details of what it covers is 92 points higher than among those who say they do not fully understand their coverage. Despite this huge effect on satisfaction, just 48 percent of customers say they completely understand their policy.

Insurtech innovators pose growing threat: Startup insurance industry innovators have raised more than $7.1 billion globally since 2012 to carve out a slice of the home insurance marketplace by offering lower premiums and technologically advanced self-service interactions. While overall awareness of these innovators is still low at just 5 percent of all property customers, awareness among Millennial1 customers is more than double that rate (11 percent). Among Millennials who are aware of these start-up businesses, nearly 30 percent say they “definitely will” or “probably will” purchase from one in the future.

Amica Mutual ranks highest in the homeowners’ insurance segment for a 16th consecutive year, with a score of 866. Shelter and COUNTRY Financial rank second and third with scores of 850 and 839, respectively.

Erie Insurance ranks highest in the renters’ insurance segment with a score of 862. American Family ranks second with a score of 844. State Farm ranks third with a score of 833.

The U.S. Home Insurance Study examines overall customer satisfaction with two distinct personal insurance product lines: Homeowners and renters. Satisfaction in the homeowners and renters’ insurance segments is measured by examining five factors: interaction; policy offerings; price; billing process and policy information; and claims. Satisfaction is calculated on a 1,000-point scale.

The study is based on responses from 15,909 online interviews conducted in June-July 2017.

 

Source: loyalty360.org

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Do Designations Matter When Choosing A Commercial Real Estate Broker?

American Apartment Owners Association - Thu, 09/21/2017 - 9:30am

Commercial real estate transactions are some of the most important deals that a person or business can make. Finding the right commercial real estate can make or break a business venture. That is why people want the best professional commercial real estate broker available to guide them through the process.

But how can you separate the best professional real estate brokers from the rest?

Degrees And Designations

Most other important professions have a degree or designation that any practitioner is required to have by law. Lawyers have the J.D., doctors the M.D., engineers the P.Eng and so on. Yet there are no professional designations that are required to practice as a commercial real estate broker.

Fortunately, commercial real estate broker associations have created professional designations that allow you to identify those practitioners who have gone above and beyond to become masters of their craft. While anyone who has met the necessary licensing requirements for their jurisdiction can become a commercial real estate broker, these professional designations help the best stand out from the rest and give you the peace of mind that you have found someone that you can trust to guide you through these important decisions.

What’s In A Degree Anyway?

A degree or professional designation signifies that the holder has the necessary education and experience to safely practice their profession. These designations are designed by professional associations to represent at least a bare minimum of knowledge and experience that every practitioner needs to do their job effectively and to a minimum standard of performance expected by their professional peers. Anyone who meets these standards can be relied upon to make the right decisions when practicing their craft.

Commercial real estate designations signify knowledge in relevant areas of law and finance, as well as the customs and ethics of the commercial real estate industry. These professional designations also signify a commitment to ongoing education and regular participation in the professional community and industry events.

Professional Designations In Commercial Real Estate

Two of the best designations for commercial real estate brokers are the CCIM and SIOR. Either of these designations signifies that you are working with a true professional with years of knowledge and experience in the industry.

The CCIM designation stands for Certified Commercial Investment Member. The CCIM pin signifies that the owner has successfully completed advanced courses in market and financial analysis, and has demonstrated significant experience in the commercial real estate industry. CCIM professionals are recognized as the leading experts in commercial real estate.

More than anything, a CCIM designation represents reliable expertise in market, financial and investment analysis, as well as negotiations. Courses for these central competencies are instructed by industry professionals, which ensures that all materials reflect the state of the contemporary industry. Using their real-world education, CCIM professionals can be relied on to guide their clients to:

• Minimize risks

• Enhance deal credibility

• Make appropriate decisions

• Close deals effectively

The other leading credential, an SIOR designation, is a professional achievement for those commercial real estate practitioners who have a strong history in fee-based services, brokerage or executive management.

The SIOR designation signifies:

• A specialist in office and/or industrial markets

• A transaction closer who is recognized by lenders, developers and investors

• A top producing professional who closes more than 30 transactions each year

• A top performer who meets SIOR’s exacting education, production and ethical requirements

An SIOR designation can be granted in one of the six specialist categories:

• Industrial

• Office

• Industrial & Office

• Sales Management

• Executive Management

• Advisory Services

 A Commercial Real Estate Professional Designation Is More Than Just A Title

The great thing about professional designations is that they provide buyers with the confidence that you can rely on that person for the latest and best professional advice. The designations are more than just a few years of coursework done many decades ago. These professional designations signify an ongoing commitment to staying informed about all relevant knowledge and practicing their craft to a high standard every single day.

When you need to make a commercial real estate transaction, trust the professionals and look for a commercial real estate broker designation that signifies the years of knowledge and experience that you can count on.

Source: forbes.com

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Smart Apartments: The Future Of Resident Living

American Apartment Owners Association - Thu, 09/21/2017 - 9:23am

The past 10 years have seen a boom in apartment living, with more and more people – especially millennials – choosing to live in upscale, luxurious apartment communities. These new residents are driving a demand for communities equipped with state-of-the-art, high-tech amenities that only the 21st century can offer.

At the forefront of these high-tech amenities is Smart Home technology (or the “Internet of Things”), which gives everyday household items the ability to be wirelessly controlled through your smartphone. With the tap of a finger, one can turn off a light, unlock a door or set a thermostat – from anywhere and at any time.

Bringing that Smart Home technology into the apartment space certainly appeals to owners and developers, who see the potential amenity as a way to increase ancillary income (by offering it for an additional monthly charge), increase energy savings and gain a competitive edge in a crowded market.

But even as the demand for ‘Smart Apartments’ increases, very few industry vendors have been able to provide a comprehensive solution to owners.

Why?

One of the first obstacles is scalability. Smart Home technology was originally designed for single-family homes. Apartment communities are multi-family homes, with hundreds of residents moving in and out each month as leases expire and renew. Building a solution that can be scaled to operate across any community, regardless of size, is vital. Managing that solution by providing property management with easy access and controls on a community-wide level is vital, as well.

Scaling a Smart Apartment solution also requires a strong network infrastructure to be in place. All Smart products rely on some sort of wireless network infrastructure to operate. Weak, unreliable networks can cause enormous headaches for owners and even compromise the service’s security.

Another obstacle for apartment owners is the overwhelming number of Smart products available. How to choose the best products to use?

Centralization is key to overcoming this obstacle. Owners don’t want residents to have to download multiple different smartphone Apps to control their apartment’s Smart products. Finding a solution that brings all those products together with the ability to be controlled under one easy-to-use smartphone App simplifies the user’s experience and creates a service any resident can use.

At Epproach, our experience in the industry gives us a unique perspective on these obstacles. For more than 10 years, we’ve provided Managed WiFi networks and customizable smartphone Apps to apartment communities. We manage and monitor more than 350 WiFi networks across the country, ensuring fast and reliable connections for residents 24-7, 365 days a year. We’ve provided branded smartphone Apps to over 150 communities as well, each outfitted with a comprehensive back-end management system.

By capitalizing on the lessons we learned as a managed technology provider, we have been able to transition a Smart Apartment service from theory to reality. In May, we partnered with Burns Management to open New York’s firstfully-outfitted Smart Apartment complex, Excelsior Park, located in Saratoga Springs. Each unit is equipped with Smart door locks and thermostats, controlled via our smartphone App.

One of the biggest surprises we’ve had at Excelsior Park is the demand from residents for the Smart Apartment solution. An incredible 97 percent of incoming residents opted-in to the new service, thereby providing the community’s owner with a substantial increase in revenue each month.

Although there are challenges to overcome, Smart Apartments are certainly in demand and on the brink of an exploding technology trend. The service is heralding the arrival of a new, high-tech living experience for the apartment resident.

Denver Hollingsworth currently serves as Epproach Communication’s Director of Marketing. After graduating from East Carolina University with a BS in Communication and a concentration in Journalism, Denver relocated to Wilmington, NC, to join the Epproach team. As Epproach has transitioned from a Managed WiFi vendor to a full-scale technology provider for the apartment industry, Denver has been responsible for all aspects of the company’s marketing, from nationwide ad campaigns and industry tradeshows to innovative social media engagement.

 

Source: wilmingtonbiz.com

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8 Legal Mistakes Landlords Make And How To Avoid Them

American Apartment Owners Association - Thu, 09/21/2017 - 6:43am

Posted on Sep 21, 2017

Whether you are a first-time landlord or have been managing properties for several years, you might not know all the rules. Review the following eight mistakes landlords make to avoid a serious legal misstep:

  1. Fair Housing Act violations: The Fair Housing Act prohibits landlords from discriminating against applicants by race, class, gender, disability and other variables. To avoid allegations of discrimination, screen all applicants the same way and use an application that features no discriminating questions, such as that offered by American Apartment Owners Association.
  2. Illegal lease clauses: A landlord cannot include clauses in the lease that violate state or federal laws. For instance, you cannot place a clause in the lease where tenants waive their right to sue you, their landlord. Such a clause would be illegal, and would void the whole lease were it to be included. If you’re concerned about accidentally including something illegal, then it’s wise to download a customizable lease template that has been vetted for legality.
  3. Not disclosing to renters: If someone recently died in the apartment, there was mold, or there is known lead paint in the apartment, you must disclose this information to renters.
  4. Entering apartment without giving notice: When the unit is occupied, you cannot enter whenever you want, even to make requested repairs. Provide tenants with 24-hour notice — except in cases of emergency — to avoid violating this law.
  5. Failure or refusal to make repairs: As a landlord, you are responsible for keeping an apartment habitable by providing electricity, plumbing, heating, clean water, and a sound roof and floor. While it’s your tenants’ responsibility to pay the utility bills, you must make repairs to these systems should something go wrong. If you don’t make a timely repair, renters have the right to pay for the repair and withhold that amount in rent.
  6. Mishandling security deposit: The security deposit covers accidental or purposeful damage to the premises, but it does not cover normal wear and tear. Failure to return the security deposit or mishandling of the deposit (such as using it to pay for damages within “normal wear and tear”) could land you in court.
  7. Not keeping the premises safe: As a landlord, you must keep the rental safe for tenants and inform tenants and visitors of any known hazards, such as a dangerous stairwell. If someone is injured on a known hazard, which you did not repair, you are legally liable.
  8. Not using the eviction process: If you try to evict a tenant without following the law, it will backfire.

Want to stay up to date with legal requirements for landlords? Join American Apartment Owners Association to receive first-time landlord advice and downloadable landlord-tenant forms.

Disclaimer:  All content provided here-in is subject to AAOA’s Terms of Use.

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The secret every real estate leader knows but doesn’t talk about

Inmannews - Wed, 09/20/2017 - 3:31pm
"I'm talking about the failures today. That's my job and that's what I'm going to do. And by the end of this talk, I'm going to challenge all of you guys to talk about failures so we can learn together." This is what Vija Williams of Keller Williams Realty said on the Inman Stage before telling her own story of disengagement, burning out, failing and getting back up again. Watch to learn what happened to her and her team, and learn how to avoid going through the same.  ...
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Keller Williams branch fires agent over controversial Facebook post

Inmannews - Wed, 09/20/2017 - 2:55pm
South Dakota Republican State Rep. Lynne Hix-DiSanto, who also worked as a licensed real estate agent, has been fired from Keller Williams Realty Black Hills over a Sept. 7 Facebook post of a meme that depicted protestors being hit by a car ...
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Meet the new COO of Sotheby’s International Realty

Inmannews - Wed, 09/20/2017 - 9:59am
Julie Leonhardt LaTorre has traversed from U.S. coast to coast building up a diverse resume ...
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Existing-home sales can’t catch a break

Inmannews - Wed, 09/20/2017 - 8:21am
Existing-home sales have continued to deteriorate in the face of a continued housing shortage, quickly rising home prices, and added stress due to Hurricanes Harvey and Irma ...
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How to create a lifetime client funnel

Inmannews - Wed, 09/20/2017 - 3:00am
In this video, Chris Haddon and Jason Balin discuss how a client funnel works and how real estate agent can use it to create lifetime clients.  ...
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You can now link dotloop to ‘Zip Your Flyer’ (because manual entry sucks)

Inmannews - Wed, 09/20/2017 - 2:45am
Real estate technology companies are looking for every possible avenue to access new customers. One way is by connecting with colleagues who already have a lot of them ...
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Your email marketing could be so much better: 4 hacks

Inmannews - Wed, 09/20/2017 - 2:15am
With so many different marketing options available to connect with buyers and sellers, it can be tough to figure out where to down double. Email is often overlooked as old school or unimportant, but oh contraire, email still rules! ...
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