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Daily market update: September 28, 2017

Inmannews - Thu, 09/28/2017 - 2:24pm
Mortgage rates plus all the latest real estate market news ...
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5 “Must Knows” Before Hiring A Property Management Company

American Apartment Owners Association - Thu, 09/28/2017 - 1:37pm

Contributed by: PropertyAdvantage

Congratulations! You are taking your first steps into becoming a property owner. New property owners can proceed in one of two ways: they can manage properties themselves, or they can hire property management companies. Running the show yourself enables you to keep a larger share of the income. However, it requires a substantial investment of your time; time that would be better spent working, securing another rental property, and with your family.

A management company allows you to earn the income from your properties with minimal effort on your part. A management company will earn its keep by leasing your property, managing your residents, securing new residents, and handling maintenance. The property management company is your conduit from your residents to you – it is important that you hire the best company with the most experienced property managers to help your tenants and day-to-day management.

The San Diego rental market is unique. There are high numbers of students concentrated in La Jolla, central San Diego, and downtown. A substantial portion of San Diegans are transplants from other states and central and northern areas in California. Moreover, many residents are accustomed to certain amenities such as parking and dishwashers. Understanding the character of San Diego, the people who live here, and the quirks in each neighborhood are critical to building a successful property rental business.

Your property management company should come equipped with this knowledge and the capability to leverage it to your benefit. To help identify competent property management companies, here is a list of five things to consider:

1. History and Reputation

Research the company. Does it publish a blog? How long has it been in the real estate industry? Ask for a list of the properties they manage, and ask if you can contact a few of their clients as references. A solid full-service property management company should have years of experience (to indicate that they can navigate the ups and downs of the real estate market), a broad portfolio indicating it knows how to lease in a variety of different locales, and a solid reputation.

Everything is recorded and shared these days. Spend a few weeks researching a few different management services. You can start with Yelp, Angie’s List, and the San Diego Union-Tribune. However, don’t overlook the endorsements of current and former clients, no one knows a company better than someone who used to do business with it.

2. Services Plans and Rates

Familiarize yourself with the service and payment plans. How does the management service expect to be paid? There are numerous methods of payment including set percentages, profit sharing, and fixed monthly rates. You can also negotiate bonuses if they secure new residents quickly and multipliers if they can retain residents long-term.

Finally, what services do they offer? Do they provide maintenance, client concierge, and marketing? Do these services cost more or are they included? Use this information to compare and contrast companies and what you need for your investment property.

3. Cooperation with Residential Property Owners

You are the one ultimately responsible because it is your property. You don’t want to get into bed with a company that will ignore your concerns, “junk” your emails, or delete your texts. Ask the company about its communication policy with their rental owners. As the references to their experiences, how did they like the company’s responsiveness?

Preferably, the company should have a set policy and procedure for responding to client concerns. Some companies use a native messaging, and email system and others provide you with a point of contact.

Clear communication is key for all parties involved with residential property management. Professional property management companies will give you the peace of mind you need as a landlord.

4. How does the company market your property?

Don’t just rely on vague techniques or technologies. Ask how the company will help you directly. What will the property management company to get your property onto the market and with a reliable tenant in as short as time as possible. Does it work with real estate agents? What listing services does it use? Does it have its listing service?

How do the managers at this company identify residents? What processes will it use to weed out potentially troublesome residents? A troublesome resident can tie up your rental property for months (it takes about six months for unlawful detainer actions to complete). Therefore, the best strategy is to avoid those problems altogether. Hiring a professional property management company is an easy way to ensure that the day-to-day operation of your rental property is accounted for.

5. Cooperation with Residents

Similar to communication with property owners, what procedures and policies will the property management company use to communicate with your residents? Does it have a set policy and procedure? Is there a messaging system? Unhappy tenants can damage your property and are harder to retain.

You want a property management company that is committed to customer service to you and your residents. Ask for specifics, what will they do for your investment property or how will your property fit into their overall operations?

 

 

The post 5 “Must Knows” Before Hiring A Property Management Company appeared first on AAOA.

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Trump lifts shipping rules to aid in Puerto Rico hurricane recovery

Inmannews - Thu, 09/28/2017 - 1:05pm
The U.S. real estate community was united today in welcoming President Donald Trump's decision to waive the Jones Act, effective for 10 days, to aid in Puerto Rico's recovery from Hurricane Maria.  ...
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An Alternative Forum to the Courthouse Battle Zone – Private Arbitration

American Apartment Owners Association - Thu, 09/28/2017 - 10:15am

By Nate Bernstein, Attorney at Law

LA Real Estate Law Group 

JUST “RENT A JUDGE”- A WISE BUT RATHER COSTLY APPROACH

Arbitration is a form of “alternative dispute resolution” sometimes referred to as (ADR), which is a technique for the resolution of disputes outside the courts.  The parties to a dispute refer the matter to arbitration for decision by one or more persons (the “arbitrators”, “arbiters” or “arbitral tribunal”), and agree to be bound by the arbitration decision (the “award”).    Arbitrators may be retired trial judges or experienced attorneys with certain specialized expertise.   A third party reviews the evidence in the case and imposes a decision that is legally binding on both sides and enforceable in the courts.  Sometimes, the parties may seek court approval of the arbitration decision so that the judgment can be enforced by the parties by use of the court system.

Arbitration is often used for the resolution of commercial disputes, particularly in the context of international commercial transactions.   Arbitration is frequently used in real estate transactions or to decide commission disputes between real estate agents.  In certain countries such as the United States, arbitration is also frequently employed in consumer disputes and employment matters, where arbitration may be mandated by the terms of employment or consumer contracts.

Arbitration can be either voluntary or mandatory (although mandatory arbitration is generally mandated  by a statute or by a contract that is voluntarily entered into, in which the parties agree to hold all existing or future disputes to arbitration, without necessarily knowing, specifically, what disputes will ever occur), and can be either binding or non-binding.    Sometimes parties are forced to choose arbitration when signing a contract- consider an automobile finance contract- you either agree to arbitration with the finance company or you don’t get the financing.   Non-binding arbitration is similar to mediation in that a decision cannot be imposed on the parties. However, the principal distinction is that whereas a mediator will try to help the parties find a middle ground on which to compromise and settle, the (non-binding) arbitrator remains totally removed from the settlement process and will only give a determination of liability and, if appropriate, an indication of the quantum of damages payable. By one definition arbitration is binding, and non-binding arbitration is therefore technically not formal arbitration.  By one school of thought, if you are going to pay for the cost of arbitration, why not make it binding and final- so the dispute is decided and its over!

Arbitration is a proceeding in which a dispute is resolved by an impartial adjudicator whose decision the parties to the dispute have agreed, or legislation has decreed, will be final and binding. There are limited rights of review and appeal of arbitration awards.  Sometimes the arbitration agreements will force parties to totally waive appeal rights.

I am not a huge fan of arbitration, but one of the advantages of the arbitration process is that you can hire an arbitrator who will apply and dedicate the time, resources and expertise to decide the matter.     The arbitrator is not being consumed by a 15 calendar caseload in the morning, and trials to be done in the afternoon. Large corporations prefer arbitration because they believe that arbitrators will be more conservative in their rulings, unlike progressive judges or run away jurors.  Large corporations want to keep issues away from juries.     One of the disadvantages of the arbitration route is the high cost of an arbitrator- which can be between $ 500.00 and $ 1000.00 per hour.  But for the right type of case, an arbitrator may be the best type of judge to decide the dispute.

THE BEACON OF HOPE AND LIGHT- THE MANDATORY SETTLEMENT CONFERENCE PROGRAM AT THE STANLEY MOSK COURTHOUSE PRESENTS A GREAT OPPORTUNITY AND PLATFORM FOR PARTIES TO SETTLE CASES.

Due to budget cuts, many smaller courthouses, like Torrance and Santa Monica superior courts, have cut their staff for referring parties to a free mediation settlement programs. Some of the mediation referral offices in many smaller courthouses are “closed,” and parties don’t have access to a panel of free mediators. Parties can hire private mediators if they are motivated to complete private mediation, and are willing to absorb and share the cost.

One of the beneficial components about the Stanley Mosk Courthouse is that the courthouse has a department devoted to completing settlement conferences and settling cases- Department 18 is the department of Judge Helen Bendix, and she runs the mandatory settlement conference program in order to get cases settled. Even before deciding an important law and motion matter or a trial, the Court can suggest for the parties to try to settle the issue or the entire case and may refer the matter to Department 18 for a mandatory settlement conference.   I have used the Mandatory Settlement Conference Program in many cases, and the program works well to settle cases.

The Los Angeles Superior Court’s Mandatory Settlement Conference (MSC) program is free of charge and staffed by experienced sitting civil judges, who devote their time exclusively to presiding over MSCs. The judges participating in the judicial MSC program and their locations are identified in the List of Settlement Officers on the court’s website.  LASuperiorCourt.org. The website is a very useful source of information, and dockets for cases are online in the “case summary” section.   The dockets are not updated every day but eventually are updated.   If you participated in private mediation, the parties would pay the private mediator an expensive hourly rate.   The judges in the MSC program located in the Stanley Mosk Courthouse are employees of the Court and the parties only have to pay for their own attorney time- this is a great deal and value!!

This program is available in general jurisdiction cases with represented parties from the independent calendar (IC) and Central Civil West (CCW) courtrooms. In addition, on an ad hoc basis, personal injury cases may be referred to the program on the eve of trial by the personal injury courts in the Stanley Mosk Courthouse or the asbestos master calendar court in CCW.

In order to access the Judicial MSC Program the IC, CCW, or PI courtroom must refer the parties to the program, the parties must complete the information requested in the Settlement Conference Intake Form and email that completed form to mscdept18@lacourt.org. If the parties have a preference for a particular MSC judge, they should so indicate on the intake form.

CONCLUSION- GOING TO COURT IS NOT THAT BAD OR IS IT!!

I hope this white paper provides transparent insight and unlocks the mystery of how judges actually decide pre-trial issues in downtown Los Angeles Superior Court- which is a rough and tumble environment.  Most judges perform a thorough analysis, want to get it right the first time, and want to do justice. Judges don’t want to get reversed on appeal, or be the subject of a written complaint of a party or an attorney to the Judicial Council of California or the Presiding Judge.   Most judges will not sanction parties or attorneys for a first time violation of rules and will encourage and enforce compliance with rules with an air of compassion.

Judges are human beings and may be persuaded or charmed by attractive attorneys or celebrity parties and their attorneys, and may curry favor to institutional parties such as banks, insurance companies, and large law firms whose clients can afford to appeal.  This is especially true in Los Angeles- where celebrities are frequently in court fighting over business issues or divorce issues.

Judges want the parties and their attorneys to walk out of the courtroom with a core belief that all sides had the time and space to present their cause in the motion papers and in oral argument, that the papers were read and considered carefully, that the latest law was applied to the facts of the case, that the law was followed, public policy concerns were addressed, that the attorneys were dealt with respect and courtesy, and nobody was railroaded through the system.     Alternatively, if the Stanley Mosk Building is not the right forum for your case, you can always do arbitration if your opponent agrees, and if you can afford to rent a judge.

Read Part I and Part II of this article.

Copyright 2017 Nate Bernstein, Attorney at Law. LA Real Estate Law Group. All Rights Reserved.

The author of this article, Nate Bernstein, Esq., is the Managing Counsel of LA Real Estate Law Group, and a member of the State Bar of California and his practice concentrates in the areas of complex real estate litigation, commercial litigation, employment law, and bankruptcy matters. The contact number is (818) 383-5759, and email is natebernstein44@gmail.com.  Nate Bernstein is a 22-year veteran Los Angeles real estate and business attorney and trial lawyer. Mr. Bernstein also has expertise on bankruptcy law, the federal bankruptcy court system, creditor’s rights and debtor’s bankruptcy options. He previously served as Vice President and In House trial counsel at Fidelity Title Insurance Company, a Fortune 500 company, and in house counsel at Denley Investment Management Company. Nate Bernstein created www.laquiettitleattorney.com, a leading educational resource on quiet title real estate litigation. Nate Bernstein is a local expert on real estate law and economic trends in the real estate and leasing market, business law, and bankruptcy law. Nate has personally litigated more than 40 major real estate trials, and has settled more than 200 complex real estate and business cases. 

Any statement, information, or image contained on any page of this article not a promise, representation, express warranty, or implied warranty, or guarantee about the outcome of a legal matter, and shall not be construed as being formal legal advice. All statements, information, and images are promotional. All legal matters are factually specific, laws change on a daily basis, and courts interpret laws differently. No express or implied attorney-client relationship shall be inferred from any statement, information, or image contained any pages of this website. No attorney-client relationship is formed until the client or the client’s representative, and the attorney signs a written retainer agreement.

The post An Alternative Forum to the Courthouse Battle Zone – Private Arbitration appeared first on AAOA.

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How to Control Mosquitos Hanging Around Your Apartment Community

American Apartment Owners Association - Thu, 09/28/2017 - 9:34am

Labor Day may signal the unofficial last day of summer, the final big opportunity for outdoor gatherings, but as cooler weather approaches the desire of your residents to chill on patios, decks and outside common areas doesn’t fade. If anything, more people will frequent conversational areas like fire pits and around the grill. The sad fact is, however, that mosquitos are going to be right there with them, especially in parts of the country recently affected by hurricanes Harvey and Irma. As a property manager, you will be tasked with thinking about ways to control mosquitos.

Mosquitos, which can be the bane of outdoor fun, typically hang around until a freeze. Numerous ways to control mosquitos in common areas are available, including citronella plantsand torches, water dunks.

On a larger scale, the grounds can be controlled through applying an insecticide through the sprinkler system. While effective, the treatment is sometimes restricted by city watering restrictions and resident traffic. Waiting until the middle of the night to treat when residents are unlikely to be outdoors may violate imposed watering times during drought.

Hiring a pest control specialist with a spray truck is another option, but accessibility to all parts of the property can be an issue, especially for apartments that have retention ponds, creeks or large water features throughout the property. The areas, while they may be off the beaten path of popular outdoor gathering spots, are often used as residents stroll or walk their dogs. Treating these areas are just as important as spraying the patio.

A mosquito-free community can be a big selling point for apartments, especially given the potential health issues resulting from bites. As of early September, West Nile virus infections in humans, most notably caused by mosquitos, have been reported in 37 states, according to the Centers for Disease Control and Prevention. The CDC reports 526 cases.

Backpack foggers/mist blowers provide effective on-the-spot treatment

Mosquito backpack foggers/mist blowers are perfect for on-the-spot treatment to help ensure complete coverage of the property. Treatments can often be done without interference of residents and provide a quick kill to young and adult mosquitos.

The backpacks, which are similar to leaf blowers, are portable and easy to manage, enough that they are a good option for in-property application by the maintenance team (a licensed operator is required but properties can certify appropriate personnel). Applications can be applied before special events or at problem areas, or as part of regular maintenance program.

A number of companies produce gas-powered backpack foggers/mist blowers. They strap on to the operator, who sprays the intended area using a short applicator and nozzle. Most are lightweight and can be prepped with an insecticide mixture and strapped on in just a matter of minutes. Plastic tanks hold three-to-five gallons of treatment.

The machines also double as blowers, which can be used to keep the grounds clean of debris. Several industrial equipment supply and lawn care specialists sell the units, which range from $200-$900. For about $350, and apartment maintenance team can be armed with an effective mister.

Treat areas hours leading up to a resident event without the hassle

The portable design of the backpacks enables apartment communities to douse foliage, common areas and structures more effectively than other treatments. The convenience of using the machines offers quick, easy application just about any time.

In the hours leading up to an outdoor resident event, the area can be thoroughly fogged and eliminate mosquitos and other insects. The need for burning citronella torches, which can be unpleasant for some, or keeping canned spray repellants on hand is reduced.

Also, a 60-day treatment schedule can be administered to coincide with daily walks of the grounds by the maintenance team.

Consider pin-point application of mosquito repellants using the mister/blower system. If you’d rather not manage treatment through the maintenance team, contact your landscaper. Chances are the company has the equipment or works with someone who does.

Either way, your property will improve control of mosquitos and help ensure that residents enjoy the outdoors now and any time of the year.

 

Source: propertymanagementinsider.com

The post How to Control Mosquitos Hanging Around Your Apartment Community appeared first on AAOA.

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How to find a contractor after a hurricane

American Apartment Owners Association - Thu, 09/28/2017 - 9:34am

Hurricanes Harvey, Irma and Maria have left thousands of homeowners across the U.S. scrambling to fix their properties and return to a sense of normalcy. Choosing the right contractor is just the first step in that long process.

Residents across the U.S. are still in the process of assessing the damage wrought by storms this hurricane season. In Texas and Louisiana, around 100,000 homes were affected by Hurricane Harvey and the flooding it caused, according to White House estimates. Hurricane Irma destroyed nearly 25% of the homes in the Florida Keys and damaged even more, according to the Federal Emergency Management Agency. The hurricane caused damage throughout the Sunshine State, as well as in coastal communities in Georgia and South Carolina. Residents of Puerto Rico and the U.S. Virgin Islands are still reeling from Hurricane Maria, having already been struck by Irma.

Given how devastating the recent spate of storms were, it’s likely that homeowners who don’t act soon could be left high and dry. “It’s going to be a big challenge rebuilding based on the number of houses affected,” said Scott Norman, executive director of the Texas Association of Builders. “In Texas, we had a labor shortage before the storm and that makes it a challenge.”

The first step most homeowners should take is to contact their insurance company, so that an adjustor can come out to assess the damage and to determine what funds they will receive. After that, consumers will need to find someone to make the repairs — and choosing the wrong company can be a costly mistake. Here’s what to look for when you hire a contractor after a major storm:

Demand for contractors and remodelers in the hardest-hit areas will far outpace the supply. As a result, the traditional rules of thumb when it comes to hiring a contractor may not apply.

Contractors in these areas may not choose to submit bids to people who they know are shopping around, said Dan Bawden, chairman of the National Association of Home Builders’ Remodelers Council. “It’s pure economics,” said Bawden, who is also president and CEO of Legal Eagle Contractors near Houston. “Am I going to do a ‘maybe bid’ or am I going to do ‘sure bids?’”

Instead of soliciting multiple bids, which usually involves the contractor assessing the property in person, Bawden said that homeowners should find a trusted contractor and have them work up a rough estimate for the cost of the project over the phone. Then, compare bids from additional contractors, before ultimately having one inspect their home and write a more formal bid.

Homeowners who would feel more comfortable having a contractor visit their property from the get-go still have options. Bawden suggested homeowners offer to pay a nominal fee for the contractor’s time as compensation that could be refunded if they ultimately hired them.

Determine whether the contractor is legitimate

Scams abound following major natural disasters. To find reputable companies, check with state or local homebuilders associations, plus the the National Association of Home Builders and the National Association of the Remodeling Industry. Additionally, consumers can check with local Better Business Bureaus or sites like Angie’s List to find ratings.

Next, homeowners should request to speak with previous customers or companies they subcontract with for references. If they choose not to provide this information, that’s a red flag, Norman said. Homeowners should also ask about how much hurricane-repair experience contractors have. Homes that were flooded will need to be dried out with dehumidifiers and other equipment, but less experienced contractors might not know that, Bawden said. “The marginally talented folks will put sheetrock and insulation up too soon, and then mold starts to come through the sheetrock two weeks later,” he added.

Finally, consumers should check that a contractor has general liability insurance, which covers damage to the property that could occur during the job. A contractor should be willing to have their insurance company provide their certificate directly to a homeowner as proof.

If possible, choose a local contractor

Choosing someone who is local is another safeguard against a potential scammer. Plus, some local governments in regions affected by major storms require that contractors have a license on file to be able to get the permits for construction work needed. “A local address shows stability,” Norman said.

But there are other practical reasons to hire local in situations like these. Many out-of-state contractors will travel to disaster areas seeking work. While these businesses could be legitimate and licensed, they won’t have established relationships with subcontractors or lumberyards in the area, which could make jobs move slower or cost more. Even if a contractor is based on the other side of town, that could mean additional travel time between their office and a consumer’s property, which translates to less time actually doing work on the home.

Never agree to pay for a project upfront or in large installments

A common scam following major storms is contractors who travel door-to-door offering discounted work. “Be very wary of anyone who says, ‘Pay today and you get a discount,’” Norman said. Many of these people will simply take a homeowner’s money and run.

Instead, experts said that work should be paid out over time as certain projects are completed, with contingencies built in to account for possible changes in the price of materials. For instance, the homeowner would pay 6% of the agreed-upon amount after the drywall has been installed. Bawden also recommended that homeowners should reserve a final payment until last-minute work is completed.

Look for a company that is good at communicating

Given the amount of time these projects will take, it’s important to get a sense of how good a contractor is at communicating. “Work with a contractor who’s good at communicating the good news and the bad — silence is the most frustrating of all,” Norman said.

Additionally, in many cases repairs will be akin to renovations. Consumers will need to make choices regarding paint color, tile, cabinetry, etc. And an honest contractor will help you make those decisions while keeping you within your budget.

 

Source: marketwatch.com

The post How to find a contractor after a hurricane appeared first on AAOA.

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Lenders are easing standards, making it easier to obtain a mortgage

American Apartment Owners Association - Thu, 09/28/2017 - 9:33am

Government-backed mortgage services Fannie Mae says that lenders are easing their standards for consumers to qualify for a mortgage. The finding is one of the highlights from its third-quarter 2017 Mortgage Lender Sentiment Survey, which reveals that lenders are making it easier for some borrowers due to the increased competition they’re facing.

Lenders who were surveyed by Fannie Mae reported easing their credit standards for all types of loans, including GSE-eligible, non-GSE-eligible, and government, over the last three months. Moreover, the number of lenders who say they will continue to ease standards in the next three months hit an all-time high of 18 percent.

That’s good news for thousands of borrowers who may have previously just failed to make the grade in past mortgage applications, experts say. “Lenders further eased home mortgage credit standards during the third quarter, continuing a trend that started in late 2016,” said Doug Duncan, senior vice president and chief economist of Fannie Mae. “In particular, both the net share of lenders reporting easing on GSE-eligible loans for the prior three months and the share expecting to ease standards on those loans over the next three months increased to survey highs. Lenders’ comments suggest that competitive pressure and more favorable guidelines for GSE loans have helped to bring about more easing of underwriting standards for those loans. We believe that GSE attempts to relieve repurchase concerns and expand credit for creditworthy borrowers have contributed to the easing trend.”

Fannie Mae also reports that the demand for home loans has declined in the last three months, with fewer homeowners choosing to refinance. This has caused a number of lenders to report negative net profit margins for several consecutive quarters.

“The share of lenders citing competition from other lenders as the key reason for a negative profit market outlook rose to a new survey high,” Duncan said.

Source: realtybiznews.com

The post Lenders are easing standards, making it easier to obtain a mortgage appeared first on AAOA.

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5 Popular Home Trends by Region

American Apartment Owners Association - Thu, 09/28/2017 - 9:32am

Growth in home renovations and remodels has been steady since 2012, and the Residential Remodeling Index predicts continued growth into the future. Many renovations are trending from coast to coast, such as installations to increase energy efficiency, sustainability and security. There are some, however, which are more popular in specific regions.

Indoor/Outdoor Living on the West Coast

Indoor/outdoor living areas are trending across the nation, but the West Coast carries the torch. The region’s climate practically begs you to incorporate the outdoors into your everyday activities.

  • An Open Wall – Remove the barrier between your yard and home by replacing an entire wall with glass doors, which can be opened and shut as-needed. You will find glass walls like this off of kitchens, family rooms and even bedrooms!
  • A Table Outside – Move your kitchen and dining area outside, right outside the home and covered for use in any weather. With an outdoor kitchen, you can enjoy nature and a fresh breeze while you cook, rather than being confined.

Basement Remodels in the Mountains

In the mountain region, more and more people are turning their basements into livable spaces. This is a fantastic way to add useful space, as well as value.

  • Family Den – Create a downstairs family area, complete with a bathroom, couches and a television for video gaming and movie nights.
  • Home Office – Shut yourself away from dishes in the sink, laundry on the floor and attention-hoarding animals.
  • Guest Living – Give your in-laws a space of their own when they visit so that you can all have your privacy, without tripping over air mattresses.

Accessibility in the South

In the south, homeowners are making modifications which will help them to age-in-place. When people think of accessibility renovations, they don’t often envision anything glamorous. However, your adaptations don’t have to be boring. The changes you make can enhance the aesthetic of your home if you thoughtfully choose materials and design.

  • Easy Navigation – Widen doorways and remove steps between rooms and at entryways, so that access is flat and easily navigated.
  • Easy Access – Install a bathroom right by the entryway and retrofit the kitchen and bathrooms for wheelchair or walker access.
  • A Touch of Luxury – Build a tiled walk-in shower with recessed shelves, a bench, ambient lighting and spa-like fixtures.Deck Additions in the Northeast

    In the Northeast, deck additions have one of the greatest returns on investment, and the residents have taken note. Having a deck can make your home more competitive in the market. If you’re renovating for yourself, it’s a great way to create an outdoor area for family gatherings and relaxation.

    • Entertain – Build your deck off the kitchen and outfit it with a table and chairs, to make hosting more seamless.
    • Unwind – Put your deck in a shaded corner and furnish it with comfy, weatherproof chairs for lounging. Consider installing an outdoor fireplace and a television.

    Bathroom Upgrades in the Midwest

    Midwesterners are remodeling their bathrooms, even though the return on investment isn’t as high as with many other projects. Bathroom renovations are often homeowners’ treat to themselves, as they turn their house into their dream home.

    • Mirror, Mirror – Choose a theme that reflects your personality. Trending styles are farmhouse, vintage and minimal.
    • The Works – Install a spa tub or shower jets, and splurge on heated flooring.

    These are some of the most popular remodels happening across the nation, as people craft their perfect home or prepare it to sell. Making renovations isn’t as simple as picking a project, however. You may be wondering how your neighbors have the resources to pursue such lofty endeavors. HomeAdvisor put out a True Cost Report which outlines several aspects of home improvement in 2017, including financing, which is a great resource on the year’s trends.

 

Source: realtytimes.com

The post 5 Popular Home Trends by Region appeared first on AAOA.

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Big Data is the Property Manager’s Friend

American Apartment Owners Association - Thu, 09/28/2017 - 9:28am

For the dwindling number of property managers who are not keeping up with the changes taking place around us, the rise of big data might seem like something out of George Orwell. This is especially true when you add in the ability of building systems to “talk” to each other, share information and respond in real time in what is mystically referred to as the Internet of Things.

But, for the sake of our survival, we must not only see the rise of big data as an inevitable part of the industry’s growth, but embrace it as a key tool in our ability to remain competitive and stay ahead of the ever-changing curve.

An understated Christopher Lee, president and CEO of CEL & Associates, wrote in his eye-opening book, Transformational Leadership that “Knowing the ‘inside’ of every deal, assembling real-time data on pricing, being able to aggregate and share information, and to gather proprietary data to facilitate a successful transaction will be powerful tools for real estate investors.” Indeed, and not just for investors, but for brokers and property managers as well.

This real-time knowledge and the ability to execute swiftly—based on up-to-the-minute analyses of property and market conditions—will be the key to success going forward. In this increasingly competitive business environment, big data will be your best friend. But it is a friend that also presents very specific challenges.

We live in a world that is increasingly driven by data. Your organization’s data strategy will drive your company’s success or failure. As one entrepreneur recently told me (it should be noted that she was a millennial): “We’re no longer in the business of real estate. We’re in the business of data.” You may balk at that. But therein lies some truth, and those who do not realize that big data drives better business decisions have sealed their fate.

Once again, to quote Chris Lee: “By 2020, according to Gartner Inc., information will be used to ‘reinvent, digitalize or eliminate’ 80 percent of the business processes and products from a decade earlier.”

There is a long-standing myth that real estate practitioners are essentially tech-averse. Yes, there are those of us who still cling to the spreadsheets of yesteryear. But for the majority the fact is that this is not a tech-averse industry at all. Rather, it is a nearly $15-trillion industry that has been woefully under-served by data providers.  That, happily, is changing. The focus on real estate by global tech and data companies has expanded steadily.

That expansion, of course, comes at a price. It has been years since we could consider data a proprietary offering. Companies such as CoStar, Real Capital Analytics and Xceligent have long since democratized and commoditized that process, and real estate companies, amidst cries of disintermediation, began banking on their ability to analyze that data as the differentiating competitive factor. Now it seems analysis too is becoming commoditized as big data providers increasingly target the general public. A direct analogy can be drawn between this movement of market analysis and the rise of crowdfunding sites on the financial side.

This, of course, is great news for the consumer, especially the consumer looking to cut corners by eliminating the real estate professional and saving some money on transaction fees.

But the real estate practitioner—not the data provider—is the one in the trenches every day. It behooves us all to stay on top of the progression of big data, embrace it and fold it into our culture, which means folding it into our way of thinking.

Happily, the practitioners have an edge. This remains a people business, a relationship business. And nowhere is that more true than in the property management field. Yes, big data is a prime disruptor of traditional approaches, as seen with the above-mentioned Internet of Things. We have the technology.

But more than ever, these are relationships powered by information. Which brings us, of course, to such resources as the 2017 editions of IREM’s Income/Expense Analysis Reports, which contain information critical to the thorough understanding of property performance within the context of local and national comparisons.

We have stated often in this space that property management in its best and highest iteration understands and informs the asset management role. To rise to that level, managers must think like owners, investors and asset managers. They must analyze and understand not just the operations of the assets in their charge, but indeed the operations of competitive assets, locally, regionally and even nationally, to ensure that their property is competitive.

Going forward, we must remain nimble in our analysis, using all the tools at our disposal if we are to maintain our status in the chain of value enhancement.

Source: nreionline.com

The post Big Data is the Property Manager’s Friend appeared first on AAOA.

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Tax Bonuses Earned From Renting Out Second Homes

American Apartment Owners Association - Thu, 09/28/2017 - 9:27am

While the charms of second or third homes are usually sized up in terms of mountain views or proximity to shorelines, the possibility of cutting carrying costs through rental income is an added attraction. Better yet: Owners of vacation properties—whether a pied-à-terre, a chalet, or even a yacht—can score significant tax savings on rental income if they organize their affairs properly.

But real estate tax rules are detailed, and it may require meticulous record-keeping to maximize tax benefits. “This isn’t something most taxpayers have shown to be very good at, and it can make life very unpleasant in an IRS audit,” says Jere Doyle, a senior wealth advisor at BNY Mellon.

The facts: Total mortgage interest up to $1.1 million is deductible on primary homes and one vacation home, combined. Mortgage interest isn’t deductible on third or more properties. Property taxes are deductible on all homes, no matter how many you own.

The tax implications of using your property for rental income depend primarily on how often you use the property personally, versus renting it out. The simplest scenario is the best: If you rent your property for 14 days or less, you get a tax freebie—the income doesn’t have to be reported to the Internal Revenue Service. “For Super Bowl weeks or major golf tournaments, if you want to rent your home for 14 days or less, that’s tax-free rental income, even if it’s $10,000 a week,” says Stephen White, regional leader of wealth planning at BMO Private Bank.

If you rent for more than 14 days, all rental income—including the first 14 days—must be reported. So carefully consider the value you’ll get from renting beyond 14 days. If you rent for, say, 21 days, your after-tax income may end up about equal to 14 days of tax-free income, Doyle says, adding that the record-keeping involved for the tax-filing process is onerous, and the headaches may not be worth it.

But if you collect rent for an entire season, income can be significant and well worth the tax-preparation process. To be able to claim deductions against rental income, you must allocate annual expenses related to the property between personal and rental use. Utilities, housekeeping, maintenance, and insurance are among the deductible expenses. If your annual expenses on a property are $40,000, and you rent your property for 60 days of the year and use it yourself for 40 days, you can deduct 60%, or $24,000 of expenses.

Any costs associated with using the home as a rental, such as for a property manager or for towels and sheets used only by renters, are fully deductible. If your expenses exceed rental income, you can only deduct the losses if you are actively involved in the business side of your vacation home. Otherwise, your losses are considered passive and can generally be deducted only against passive income, such as other rental income. But passive losses can be carried forward for years and used to offset capital gains when the property is sold.

Don’t claim that you’re actively involved simply because you raked your own leaves one day and replaced a broken windowpane. Active involvement means screening tenants, establishing rental terms, overseeing the rental periods, and more. The IRS may scrutinize wealthy homeowners who claim to be actively involved in their rental properties. “You don’t see many people with a net worth of $5 million or more placing ads and managing the rental aspects of their vacation homes,” Doyle says.

If you use your property for less than 10% of the period that you rent it out, the IRS will deem the property a rental business, and you can deduct all property expenses against rental income, without allocating between personal and business use. Losses are still passive, unless you’re active in the business. You can also get some benefits from depreciating the value of the property, but think this through. Every depreciation claim lowers your cost basis, which means higher capital-gains taxes if and when you sell the property. Keep in mind, too, that if family members use the property, it’s considered personal use—unless they pay a fair rent. “It’s critical to stick to business formalities, especially when involving family members,” says Todd Angkatavanich, a partner at Withersworldwide.

There are other taxes to consider: If you live on the coast but have a chalet in Colorado that you rent out, you must file a return in Colorado. “Many people aren’t aware of occupancy or sales taxes,” says BMO’s White. The rules vary state by state. There is no sales tax on beach rentals in Delaware. In Maine, on the other hand, if you rent your home for 15 to 27 days a year, you’ll owe a 9% sales tax on your rental income.

Upshot: When renting out your second home, it’s the details that can invite scrutiny from tax authorities—or help you squeeze out some attractive benefits.

 

Source: barrons.com

The post Tax Bonuses Earned From Renting Out Second Homes appeared first on AAOA.

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Ditching dorms for homes in big college towns

Inmannews - Thu, 09/28/2017 - 8:52am
Student loan debt can be attributed to more than just courses and books: The cost of dorm room living can run as high as $8,887 to $21,804 per year, and it’s only going up in some campuses ...
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Playboy Mansion expected to go up in value

Inmannews - Thu, 09/28/2017 - 7:44am
Playboy founder Hugh Hefner died at 91-years-old on Wednesday, his company confirmed. As the tributes and debates over Hefner’s legacy continue, the new owner of the iconic Playboy Mansion in the tony Holmby Hills neighborhood of Southern California could enjoy a windfall in the property’s value ...
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Steps To Take In Reporting Bad Tenants

American Apartment Owners Association - Thu, 09/28/2017 - 5:47am

Posted on Sep 28, 2017

One bad tenant can make your managed property a nightmare. If you’ve been struggling with a problematic renter, find out how to report bad tenants while staying on the right side of landlord tenant laws.

Talk to the Tenant First

When you have bad tenants, it’s natural to want to deal with them as little as possible. Be proactive and tell them you’ll be reporting any bad behavior, then define what you mean (e.g., violating a noise ordinance or paying the rent late).

Before approaching your renters, check the state laws regarding eviction, late rent payment or whatever your specific problem is. Laws vary state by state; when talking to your tenants, you want to make sure you’re presenting them with valid advice.

Keep Records and Take Action

After you talk with your tenants, start a log. Write down every instance of “bad behavior” and document the actions you took.

With past due rent payments, contact credit reporting bureaus. This can prompt tenants to pay to protect their credit score from a dip. If this action doesn’t get you the money you’re owed, seek the help of a debt collection company. Once you do this, you won’t have to spend your time asking renters for past-due rent; instead, you can focus on moving forward with evicting a tenant who won’t pay the rent.

Evict Bad Tenants

When evicting a tenant, you have to follow the law to the letter. You’ll need a valid reason for eviction, such as failure to pay the rent or damaging your property. If you’re not sure whether you have a valid case, consult with a landlord-tenant lawyer.

Since evictions can drag on in court, you might want to threaten your renters with eviction and give them one last chance to leave. Tell them that you’ll be suing them; if you win, you’ll be able to garnish their wages to pay back-due rent. Renters may opt to leave rather than go through eviction.

If they don’t leave, send them an eviction notice. Tape the notice to their door and send it via certified mail. You’ll need to wait a set time period after serving them the letter before you can file a lawsuit.

Learn more about landlord tenant laws in every state, and get help with an eviction, by becoming a member of American Apartment Owners Association. Members receive access to a database of landlord forms, including an eviction template. Customize the template, send it to tenants, and go through the legal process.

After you file, gather supporting documentation. You’ll present it in court, then a judge will find for one party. After that, your tenants must vacate by a set time period, and you’ll have your apartment back.

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

 

The post Steps To Take In Reporting Bad Tenants appeared first on AAOA.

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Crazy Sh*t In Real Estate: Young, hungry and learning

Inmannews - Thu, 09/28/2017 - 3:00am
Clients often hesitate to work with a real estate agent who looks young and inexperienced. Alex Milshteyn, who was 18 at the time, confused a client when he showed up for a listing appointment. When he explained who he was, she promptly showed him to the door and never looked back ...
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New home search tool uses bots to match your style

Inmannews - Thu, 09/28/2017 - 3:00am
When homebuyers begin their search, they're not necessarily thinking most about price, size and bedroom count, said Creed Smith, a Denver-area broker and real estate technologist ...
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Agents resist being replaced, not new technology

Inmannews - Thu, 09/28/2017 - 2:45am
Fear of change seems to be an almost universal part of the human experience. Part of it is fear of the unknown. Some people are more afraid of it than others ...
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The Real Word: Two agents weigh in on Stop Zillow and iPhone X

Inmannews - Thu, 09/28/2017 - 2:30am
In this video, Byron Lazine and Nicole White give a real estate agent’s perspective on real estate news topics. This week, they discuss whether the iPhone X is for every agent and take on Greg Hague’s Stop Zillow campaign ...
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Don’t give up: 10 ways to convince reluctant buyers

Inmannews - Thu, 09/28/2017 - 2:15am
Calling buyer leads is a daunting task. People are often resistant to being on the phone and will say whatever it takes to hang up. And they definitely don't want to be sold to ...
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Heads up: 5 things a first-time homebuyer should know

Inmannews - Thu, 09/28/2017 - 1:00am
Renting offers the safe haven of having a landlord and not having to worry about damage, repairs, paying off your 30-year loan or yard work. But being a homeowner has the allure of the American dream, building equity and wealth and owning something of your own ...
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How one agent’s vanishing act became an entrepreneur’s fuel

Inmannews - Wed, 09/27/2017 - 3:19pm
Alex Doubet is CEO and founder of Door, a Dallas-based brokerage that charges consumers a flat rate of $5,000 per side. The idea for his startup, which launched in 2015, sparked from a conversation with his mom, who in his mid-20s told him a story that he couldn't shake ...
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