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Do more for your agents and you’ll reap the benefits

Inmannews - Mon, 11/27/2017 - 7:00pm
Paul Barbagelata of Barbagelata Real Estate Group and Jennifer Kjellgren of Intown Expert Realty have both cultivated an indie brokerage culture worth chatting about ...
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Connect/Reflect: Growth, strategy and what not to miss

Inmannews - Mon, 11/27/2017 - 5:31pm
Inman Connect New York is right around the corner, taking place at The Marriot Marquis Hotel in Times Square, January 22-26, 2018. With so much on the agenda for the event this time, how do you make sure you’re making the best use of your time, attending the right sessions, and leveraging all the networking opportunities? ...
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Coffee shop jokes about gentrification, ignites backlash

Inmannews - Mon, 11/27/2017 - 5:16pm
A trendy coffee shop in Five Points, one of Denver’s oldest neighborhoods, was roundly criticized for putting out signage that made light of gentrification ...
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3 Pitfalls to Avoid When Purchasing an Investment Property

American Apartment Owners Association - Mon, 11/27/2017 - 2:36pm

Contributed by: PropertyAdvantage

Becoming a real estate investor is easy — if you believe HGTV. All you need to do is find a property with a little disrepair, add some elbow grease, and you’ll be rich from the extra income. Unfortunately for us, cable television isn’t always accurate.

Many of the U.S.’s hottest housing markets have fully recovered from the housing market crash a decade ago, with prices reaching or surpassing 2007 levels. In Orange County, for example, homes sold for a median of $590,000 this summer; in Denver County, which surrounds Denver, Colo., the median price approached $320,000.

Rising prices can make real estate a winning investment. But with so much money on the line, it’s important to avoid mistakes and do your research.

Here are some common failures that will turn your investment into a money pit:

1. Choosing the Wrong Financing

Many purchasers of investment property can afford to pay cash, eliminating the need for a mortgage. But if you’re new to investing, you may not have hundreds of thousands of dollars on hand. If you need financing to complete your transaction, be careful to find a lender and a loan that works for you.

Many mortgages written in the mid-2000s were issued to people who thought they were making good investments but didn’t really have the means to pay them back. When the bubble burst, of course, millions of Americans lost homes.

Since then, mortgage regulations have gotten stricter — although some rules may be lifted under the current Republican-controlled Congress, some of whose leaders have expressed a desire to deregulate home loans. For now, though, it’s not nearly as easy to qualify for a mortgage as it was 15 years ago.

Borrowers must have good credit and often a down payment of 20 percent. Federally backed loans for first-time buyers and veterans offer smaller down payments or no down payments at all, but investors usually can’t qualify for these loans — they’re usually designed for primary residences.

Talk to a variety of lenders to make sure your financing works with your budget and investment plan. Study markets to find out where you can still be a competitive buyer if you can’t pay cash. If you take out a mortgage, make sure the interest rate and payments are reasonable enough that you can keep up with payments even if the rental remains empty or the flip sits on the market for a few extra months.

2. Skipping the Homework

Real estate agents will tell every buy that all real estate is local — state- and even city-level statistics paint broad pictures, but cities are composed of hundreds of micro-markets that vary from one street to the next.

Part of choosing the right home and the right financing is doing your homework on the neighborhood you’re entering. Before you purchase an investment property, understand how hot the local sales market is, what local rental rates are, how many residents rent or own, and what the culture of the neighborhood is like.

Once you’ve identified an investment-worthy neighborhood, and acquired the property, renovations begin. Remodeling, of course, costs money — often more than flippers have budgeted for. On top of construction costs, there are permit fees, inspections and ensuring compliance with tenant laws. If you choose to work with a real estate agent and stage the house for sale, or if you decide to work with a property manager to find tenants, those professionals charge fees as well.

Whether you’re undertaking this investment as a DIY project or paying professionals, make a careful, conservative budget with plenty of room for unforeseen expenses. In this world, failing to do your homework doesn’t just mean you fail a test — it could force you to take on additional debt or create cash flow problems that will follow you much longer than you want.

3. Thinking You Can Do It All Yourself

Many real estate investors get into the business thinking they can purchase, remodel, flip and rent a property themselves. (That’s what our favorite HGTV power couples do, right?)

It’s true that some investors can undertake some of the process themselves. But everyone is bound to have an area that requires expert assistance.

When you’re looking for good investments, you’ll likely need to work with a real estate agent, an appraiser, and a home inspector. You may also consider asking an attorney to look over some of your work.

Once you’ve found a property, you may know how to re-tile a kitchen and install light fixtures, but are you up to date with electrical codes? Do you know how to make sure the roof and foundation are safe? If the property isn’t approved by a home inspector at the end of the renovation process, it could set you back weeks and thousands of dollars.

When it’s time to sell or rent, you may be turned off by the idea of paying commission to a real estate agent — but what if they can sell your property three months faster? And you may think you can write a lease and manage tenants — but how familiar are you with tenant law and maintenance and repair compliance?

Feel free to take on the parts of the project you know you’re good at, but don’t be afraid to hire experts in areas in which you have less knowledge — plumbing, roofing, HVAC, landscaping, property management, whatever that may be. Doing things right the first time will almost always save you money.

The post 3 Pitfalls to Avoid When Purchasing an Investment Property appeared first on AAOA.

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Long-Term Lease or Vacation Rental? 3 Points to Consider for Your Property

American Apartment Owners Association - Mon, 11/27/2017 - 2:28pm

Contributed by: PropertyAdvantage

Everyone has that friend of a friend who converted their prime real-estate into a vacation-only rental and made lots of money.

“Leasing for a single season pays for the whole year!” is a common assertion property owners associate with vacation rentals. However, the reality is much more complicated.

Yes, vacation rentals can and do make money, in select markets and in highly-prized areas. But the stories of people making boatloads of money is overblown.

Some people make money, but many do not.

The problem with converting a property to short-term vacation rentals only is that you are still on the hook for all the costs, regardless if your unit is full or not.

Moreover, vacation properties are in highly-prized areas which subjects them to higher property taxes, high HOA fees, and other costs associated with being a prime property.

In general, short-term rentals, like hotel rooms, cost about 60 to 70 percent of revenue in operating costs. Conversely, a well-managed long-term lease will cost about 35 to 45 percent of revenue in operating costs.

Investors and real estate moguls in San Diego are catching on, and many of them flocked to acquire properties on the coast. Prized neighborhoods such as La Jolla, Del Mar and Solana Beach saw dozens of properties purchased, renovated, and resold for massive profit. One consistent theme you did not see, converting the properties into vacation rentals.

Arguably, La Jolla, Del Mar, and Solana Beach occupy some of the most sought-after beachfront property in the world and would, in theory, make excellent candidates for vacation properties.

Before you decide what to do with your investment property, consider these points.

Are Vacation Rentals Legal in Your City?

Short-term rentals, thanks to the rise of Airbnb and the shortage in housing, are under regulatory attack all over the country, including San Diego.

Earlier this year, the City Attorney issued a memorandum arguing that Airbnb and other short-term rentals be prohibited by the municipal code. Since that memorandum, the City has begun cracking down on short-term rentals from Pacific Beach to Solana Beach.

San Diego may be attractive for vacation rentals because it is one of the biggest Airbnb markets in the country, thanks to the weather, the beaches, its proximity to the border, and more. However, there are numerous risks that could endanger your property and subject you to fines and cost you thousands of dollars.

What are Your HOA Restrictions?

Neighbors don’t like living next to vacation rentals. Vacationers, unlike people who live there, do not take the same care with the property, the neighborhood and their neighbors. Vacationers are loud, more likely to damage the property and disrespect the continuity of the neighborhood because, frankly, they don’t live there and are on vacation.

As a result, many HOAs adopt strict restrictions on how you can lease your property. Many prohibit short-term rentals. Furthermore, violations could also spark significant HOA fines and possibly even a forced sale of the property.

What is Your Tolerance for Risk?

A higher potential income makes for higher risk, and vacation rentals are no exception.

If you rent to a long-term resident, you might have a handful of crises a year. When you rent only to vacationers, you could face a crisis every week or even more.

Vacationers may not care for the property as a resident would because they don’t have to live there. This doesn’t mean vacationers will trash the place. Instead, the higher turnover means maintenance and cleaning costs are higher. Every time a resident leaves, you’ll need to clean the unit and repair any damages.

Additionally, more people using the furnishings and appliances means you’ll need to replace them more often. Overall, a vacation rental is more time, more work, and more attention.

Finally, your income is chaotic. In good years, you could make a lot of money. In bad years, you could endure year-over-year losses. Vacation is one of the first things people cut back on when money is lean, therefore, your income stream is one of the first to get hit in an economic downturn.

On the other hand, people always need a place to live, regardless of the economic situation. A vacation rental might sound like a good idea but only to round out a well-developed investment portfolio, not to replace a long-term lease property.

Rather than converting your property to short-term vacation rentals, consider retaining the assistance of a property management company. A property management company can take care of the crises, run maintenance, collect lease payments and help you find reliable residents. Property management companies, unlike vacation rentals, save you time, stress and allow you to keep more of your money.

The post Long-Term Lease or Vacation Rental? 3 Points to Consider for Your Property appeared first on AAOA.

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4 Trends Shaping the Rental Housing Market in 2018

American Apartment Owners Association - Mon, 11/27/2017 - 1:54pm

Contributed by: PropertyAdvantage

Relentlessly rising rents and tight supply creating housing crisis conditions in many major cities dominated headlines in 2017.  But as we move into 2018, the rental market is showing signs of change.

Recent research from Zillow shows housing growth is starting to catch up with demand, meaning more opportunity for property owners. Changing demographics of renters will also benefit landlords and property managers in 2018 and beyond.

Let’s take a look at 4 trends that are shaping the rental market heading into 2018 and beyond.

1. Supply of Rental Units

Real estate market experts predict that three groups of people will drive demand for rental units in the coming years: young Millennials who are in prime renting age, older Millennials who are saving for a down payment, and aging Baby Boomers looking to downsize.

Additionally, most market analysts agree that currently, the short-term rental market is bearish due to a shortage of units. But that’s starting to change.

It often takes time for the housing market to catch up to built-up demand, but it is starting catch up. In 2017, apartment construction reached its highest level in the past 20 years. Many of these new apartments will be available in 2018, creating a greater supply for renters and an opportunity for property owners.

2. Slowdown of Rental Increases

The relentless shortage of housing has lead to dramatic increases in rental rates. However, market analysts predict that these dramatic price increases will likely slow in the coming years as housing becomes more available.

While vacancy rates remain historically low, these figures hide the true issues. Landlords, especially those who own units in the high-end market, are offering more concessions to keep units filled. These figures indicate that double-digit rent increase is likely to slow down in the coming years.

But, that does not mean that there aren’t opportunities for property owners. As the housing supply increases, prices will drop, allowing property owners to acquire more properties for rent at reduced prices.

3. Increased Ownership and Acquisition Opportunities

The lower property prices will allow older Millennials to purchase their first home, however, in the long-run, the demand for rentals is expected to increase. The reduction in prices is good for property owners looking to expand their portfolio and first-time homebuyers.

Most market experts agree that the long-term prospect for the rental market is that it is going to increase in demand. Millennials are only now earning sufficient income to leave their parents and start leasing their own places (especially younger Millennials). In fact, the economy is only now beginning to pick up enough heat to benefit this demographic.

4. Long-Term Increase of Rents

For example, rents have slowed in the high-end market but not in the low to mid-range rental market. Market experts believe that the disparity in price increases is due to the lack of development for low and mid-range units.

Therefore, there is an opportunity for property owners to fill that niche. Developers are focused on building fancy, multi-story residential towers that are fabulously expensive.

However, there are only so many six-figure earning Millennials to rent these units. The largest growth is expected in the low to mid-range market which is underserved.

For many property owners and investors, these shifting demographic trends represent a prime opportunity to fill in that service gap. As more boomers become renters and Millennials start looking for their own place, landlords will benefit from these shifting demographic trends.

 

 

The post 4 Trends Shaping the Rental Housing Market in 2018 appeared first on AAOA.

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Power struggle at Consumer Financial Protection Bureau draws concern from mortgage industry

Inmannews - Mon, 11/27/2017 - 10:24am
A battle for the soul of the Consumer Financial Protection Bureau (CFPB) played out Monday inside a federal building in Washington. The real estate industry watched with fascination as White House budget chief Mick Mulvaney sought to wrest power from the agency’s acting director ...
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How to Avoid the Common Pitfalls of Real Estate Investing

American Apartment Owners Association - Mon, 11/27/2017 - 9:06am

Learning to invest in real estate is just like any other business or career: It takes time to get good at it. Too many people get frustrated very easily and give up, and this is not only the case with real estate.

Study and learn as much as you can about the process, the industry and the areas in which you’re interested in investing. As I’ve watched clients create, as well as lose, rental real estate fortunes, I’ve learned common strategies that have helped more succeed with fewer mistakes. Here are six concepts I encourage you to consider when investing in rental properties:

1. Have a master rental property analysis spreadsheet.

Create an Excel spreadsheet to analyze any and all possible deals. That’s right — you’re not going to buy the first rental property you see this year. Start with the Fair Market Value (FMV), money down, improvements and mortgage/carrying cost — then move it through rental income, expenses and wrap it up with a cash-on-cash ROI figure. Run every property through the gauntlet of your spread­sheet. If, after putting the numbers into all the columns, the ROI isn’t good or it’s not in your favor, move on to the next property. Base your decision on the key factors generated by your spreadsheet. This is why you took fifth-grade math — embrace it.

2. Remember, you are buying “numbers.”

Too many investors get emotional about their purchase and even envision themselves living in the rental property they’re ana­lyzing. This is a terrible mistake. In these situations, the investor often over-improves the property, investing far too much time or capital and blowing their ROI out of the water. Don’t think your rental property needs granite counter­tops; instead, realize you aren’t buying a property, you’re buying numbers. What do your dollars get you in “dollars and cents?” Remember, it’s not about your personal wants and needs; it’s about how much you can make off the property. Pouring a lot more money into the property to get a higher rental rate can backfire.

3. Do your research.

Let me say that again: Do your research, then do it again. I see so many new investorsbuy the first rental they see. Take your time. Also, don’t look at a property as to “Why shouldn’t I get this?” Look at it as to “Why should I get this property?” Make the numbers prove it to you. Don’t assume you’re going to buy it unless you find something wrong with it.

4. Buy local if you can.

The words “if you can” are the key. Don’t get hyperfocused on buying local so you can check on the property. It’s far more important to buy quality rental properties (good bones, reputable location, ease of upkeep, etc.) rather than local. But, if you’re living in an area where there’s a strong rental market with legitimate returns on investment (that aren’t dependent on putting down a fortune), consider yourself lucky.

5. Learn to manage your property manager.

Unless you’re a full-time real estate investor and one tough SOB, get a property manager. If you don’t have the temperament to be tough and start eviction proceedings three days after a tenant is late, have a personal intervention with yourself. You may not be cut out to be a property manager even if the property is local. You may not have the time, skills or system to be your own property manager. Be a realist. Your time could be better spent looking for other rentals, doing the books or running your businessWith that said, always — and I mean always — have a budget in your rental property analysis for a property manager (approx­imately 10 percent of gross rents). Even if you have visions of grandeur and start managing, you want the budget to stick in a property manager.

6. Bundle.

I recently met with a client who had five properties in four states. They were great properties, but look at the inefficiency (and headaches) of registering an LLC in four states, doing four state tax returns, having four different prop­erty managers, four different trips to at least occasionally check on your rentals and four different rental markets to understand and follow. Perhaps when you have 25-plus rentals and can afford to make your full-time job managing your rentals and property managers, then you can tackle four or more markets. For now, purchase rental properties in just one or two markets, or “bundle” as it’s called. Using this type of bun­dling, your property managers can handle a few properties at the same time. You’ll also save travel time and expenses. Plus, you can familiarize yourself with a few good locations rath­er than having properties scattered all over the place. You can also be more efficient with your tax and legal planning and save a lot of time and money by bundling.

 

Source: entrepreneur.com

The post How to Avoid the Common Pitfalls of Real Estate Investing appeared first on AAOA.

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15 Minutes & $50 to Help Avoid the Nightmare House Investment

American Apartment Owners Association - Mon, 11/27/2017 - 9:05am

You’re a real estate investor, and you’re either doing a walk-through of a potential rental investment that’s ready to rent or a house that needs renovation and repair. Fix & flip investors are more attuned to being very observant about potential condition defects, but rental investors need to be so as well. It doesn’t matter if the home looks great, as you don’t want big problems to crop up after you have a tenant in the home.

It would be great if the problems that can bite you are as visible as the electrical outlet image above. However, this article is about hidden defects that can be quite costly if they’re not discovered before closing on a purchase. Even if you’re doing a fix & flip or fix to rental, not finding some defects will keep them out of your repair budget and cut profits or increase the costs to get a tenant into the unit.

Yes, you can have a contractor with whom you have a relationship come in and check out the house for you. You can also have an inspection contingency in the purchase agreement so you can have the home professionally inspected. However, what can you do in a preliminary walk-through to avoid some of the most common defects that are not necessarily visible?

Electrical Defects

Especially in older homes, sometimes the old two prong ungrounded receptacles were replaced with three prong grounded ones, but without a proper ground. Basically, it’s a visual fix that does nothing. Drop into Home Depot and spend around $5.00 for a small tester you can carry in your pocket.

Take the tester with you and plug it into receptacles in various rooms. With indicator lights, it will let you know if there are grounding problems. If you find issues, then it may be worth more detailed inspection by an electrician if the house still looks like a good buy, but at least you know to look.

Moisture Problems

A one-time expense of $30 to $50 at a home improvement store will buy you a digital materials moisture meter. It’s easy to use, selecting the type of material, wood, sheetrock, etc., and pressing the electrodes into the material to get a moisture reading.

The guide with the tester will let you know if there is excessive moisture in the material, a sign of possible major problems down the road. You don’t know at this point where the moisture is coming from, so checking for leaks in plumbing is a necessity. Failure to find and correct the underlying problem will definitely cause expensive corrective action down the road.

Some investors are picking up bargain foreclosures in storm-damaged areas, and renovating for profit or rental conversion. Moisture detection is extremely important in these situations, especially when there has been storm water intrusion.

Mold

Both of the previous defects have almost zero cost tests once you buy the inexpensive testers. Mold is a different matter, as other than visually seeing it, only lab tests can definitely state its existence and the type of mold.

Lowe’s sells a mold test kit for around $10. You take a test receptacle and attach it to a portable vacuum and gather dust around walls and under tubs and sinks around the home. Then you mail it to the lab. For a $40 fee, in around 7 days you get a report of whether mold exists and what type of mold is in the home. This is another very important test because mold remediation is extremely expensive, in some cases homes even being abandoned due to mold infestation. If you have the time, especially in storm-damaged areas, this is a test that can save you a fortune, especially if you avoid a tenant lawsuit over health problems.

Sure, you can hire professionals for all of this, but especially for the first two, you can take a couple of minutes during your walkthrough to see if you need to do more inspection.

Source: huffingtonpost.com

The post 15 Minutes & $50 to Help Avoid the Nightmare House Investment appeared first on AAOA.

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Townhouse Construction Growth Continues

American Apartment Owners Association - Mon, 11/27/2017 - 9:02am

According to NAHB analysis of the most recent Census data of Starts and Completions by Purpose and Design, townhouse construction starts continue to post gains.

Over the last four quarters ending with the third quarter of 2017, townhouse starts totaled 98,000, 4% higher than the four quarters prior. Townhouses, or single-family attached housing, represented 26,000 starts during the third quarter of 2017, 18% higher than the total during the third quarter of 2016.

Using a one-year moving average, the market share of new townhouses stands at 11.8% of all single-family starts. After a soft patch, the market share is rising again.

The peak market share of the last two decades for townhouse construction was set during the first quarter of 2008, when the share reached 14.6% of total single-family construction. This high point was set after a fairly consistent increase in the share beginning in the early 1990s.

Despite the drop in market share during the Great Recession, the share for townhouse construction is expected to increase in coming years – with occasional ups and downs. The long-run prospects for townhouse construction are positive given large numbers of homebuyers looking for medium density residential neighborhoods, such as urban villages that offer walkable environments and other amenities.

 

Source: eyeonhousing.com

The post Townhouse Construction Growth Continues appeared first on AAOA.

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Real estate daily market update: November 27, 2017

Inmannews - Mon, 11/27/2017 - 9:01am
All the latest real estate market news ...
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Preserving History Boosts Local Economies

American Apartment Owners Association - Mon, 11/27/2017 - 8:59am

Across the U.S., designated historic districts attract more business, jobs and tourists than nearby neighborhoods.

In San Antonio, history pays.

The city has 29 local historic districts, including the area around the Alamo. The designation protects a neighborhood with a high number of historic buildings or sites by restricting development and demolition.

“Our districts are not frozen in time. They’re vibrant and changing,” says Shanon Shea Miller, historic preservation officer for the city of San Antonio. “We just have the regulations in place to make sure they’re changing in a way that’s positive.”

San Antonio did a 2015 study showing that its historic districts not only generate more tourism dollars but also more construction jobs than other parts of the city. Continuing its historical preservation efforts, the city designated in September its most recent local historic district, an area known as East French Place with Craftsman bungalows built in 1922.

Homeowners sometimes scoff at strict regulations, but it’s precisely those rules that make local historic districts across the U.S. – from Greenwich Village in New York City to Savannah, Georgia – economically outperform other areas within the same city.

A neighborhood can obtain a historic designation at a federal or local level. The National Park Service maintains the National Register of Historic Places, a list of federally designated historic places worthy of preservation. If the federal government undertakes a project, such as building a highway, it must go through a process to consider any National Register sites in its path, says Tom Mayes, vice president and senior counsel at the nonprofit National Trust for Historic Preservation.

But local designations offer more protection, since that’s where most development happens. Different cities and municipalities have their own designations for local historic districts. Each locality’s definition and regulations are different, but the rules are usually stricter than that of the National Register.

“If I like what Greenwich Village looks like, the fact that it’s designated means that more of that fabric and character will remain,” says David Listokin, professor at Rutgers University’s Bloustein School of Planning and Public Policy.

Local historic districts can focus on the minute details, requiring a homeowner to get approval for an addition to a house or even the paint color. In San Antonio, a design commission reviews 2,400 cases a year in the city’s historic districts, which include about 10,000 properties, Miller says. The cases include new construction, demolitions and exterior modifications.

“[With the] National Register, tear down the house tomorrow and nobody can do anything about it,” says Donovan Rypkema, principal of PlaceEconomics, a Washington, D.C.-based historic preservation and economics consulting firm. “The only protection comes from those local districts.”

An area doesn’t need to be on the National Register in order to be a local historic district, and vice versa. Standards for local districts often grow out of national ones, but what constitutes a local historic district depends on the place. The age of the property plays a part, Listokin says.

“’Historic’ is often broadly defined,” he says. “It’s not ‘George Washington slept there’ necessarily, but looking at architectural achievement, cultural significance, et cetera.”

Protecting the character of a neighborhood can have economic benefits. No matter the region of the U.S. or the wealth within a neighborhood, rates of real estate appreciation in local historic districts outpaces comparable neighborhoods and the city as a whole, Rypkema says. Local districts’ property appreciation even outperforms those on the National Register.

“It’s almost counterintuitive, but it’s really because of the protections that a local district provides that the National Register does not provide,” he says. “The first response is, ‘Well, you’re going to have more regulations, ergo that’s going to hurt property values.’ In fact, in at least this instance, the opposite has been true. The reason is not that people pay a premium for the right to go and appear before some goofy preservation commission. It’s they’re paying the premium with the confidence that the lunatic across the street can’t do something to his property that has an adverse effect on my property.”

San Antonio has seen the effects. In 2013, the average price per square foot for a single-family home outside of the city’s historic districts was up about 68 percent from 15 years prior. Meanwhile, homes in historic districts had increased 139 percent, according to the 2015 report.

The downside to rising property values is that it can price out residents, so cities turn to property tax relief for a designated historic property and community land trusts to help properties stay affordable, Mayes says. Portland, Oregon, has a plan to manage the effects of gentrification. A community land trust exists in Greenville, South Carolina. And California has a tax abatement program for the restoration and preservation of historic buildings by private property owners.

Miller says in order to combat large real estate price increases, San Antonio’s historic districts offer local tax incentives for substantial rehabilitation and for owners to live in their property.

Besides property values, historic preservation can boost business.

The creative economy, especially independent businesses and startups, tends to flock to historic districts, Mayes says. These neighborhoods also have a higher proportion of women- and minority-owned businesses.

“Whenever you drive into a city, the cool place where a lot of people want to go is almost always a historic district where there’s a mix of businesses,” Mayes says.

Rypkema says many small companies want their building to reflect the character of their business. Historic districts make sure those buildings aren’t torn down.

“There’s this kind of qualitative character attraction of historic buildings that will attract the startup business, the new business,” he says. “That’s where the real kind of economic growth and employment growth is. It’s the little guys, not the giants. And if we can have a local economy that is fostering startup businesses and new businesses and small business expansion, that’s a real swing for that local economy. Often it’s those older and historic buildings that are the magnet for those kinds of businesses.”

That’s what happened to Gene Kansas when he searched for a location in Atlanta to open a shared workspace. He says the Southern Schoolbook Building, built in 1910, called to him.

“I came to the building and was like, ‘My God, this would be an incredible place for this concept,’” Kansas says.

The building is in Sweet Auburn, a district known for its history as a black commercial center and the birthplace of the Rev. Martin Luther King, Jr. Kansas moved his commercial real estate company into the space in April because he liked the neighborhood’s history. Constellations, the shared workspace where he serves as founder and president, will open there in May 2018.

“There’s the charm and the character of old buildings, which is incredibly nice from an aesthetic standpoint, but the real reason is the culture, the history and the consequence of Sweet Auburn in particular,” Kansas says. “You’re talking about the birthplace of the civil rights movement.”

Miller says historic preservation creates jobs, including in San Antonio. The rehabilitation and preservation of buildings is more labor intensive than new construction, leading to more money spent on workers rather than materials.

“People get paychecks and they go out and they get their hair cut and they buy groceries and they spend more money in the local economy,” she says. “Spending the new construction on materials doesn’t have the same economic impact.”

Local historic districts have a hand in preventing foreclosures on those buildings. The rate of foreclosures in these districts is one-third to half of the rates in the rest of a city, Rypkema says.

“It’s not that if I live in a historic district that I never get fired or never get divorced or never run up my credit card bill so much. That of course happens every place,” he says. “The difference is that there is a latent strength in demand for properties in those local districts that if I do get in financial trouble, I can get that property sold before I go into the foreclosure side.”

Local historic districts also lead to more money from tourists. Heritage tourists tend to stay longer, visit more places and spend more per day than tourists in general. For example, Charleston, South Carolina, which became the U.S.’s first local historic district in 1931, attracts tourism and the culinary sector, Mayes says. In Pittsburgh, the extra money that heritage tourists spend compared to other tourists leads to nearly $64 million per year in additional economic activity, according to a 2015 report from PlaceEconomics.

“There are plenty of places that have no historic districts, but a good heritage tourism business,” Rypkema says. “The issue is: Is that sustainable when the market decides that’s a nice, old four-story hotel, but we could use that site and build a 30-story hotel because we’ve got all these tourists coming in?”

Local historic districts also improve quality of life since they tend to be more walkable to schools and public transit, leading to less traffic, Miller says.

It is hard to define what makes up the character of a neighborhood, but residents, businesses and tourists alike often find it preserved in a local historic district – even if they aren’t aware of the designation.

“Very few people seek out the suburban mall to go on vacation. We seek out the authentic, local experience and what makes places unique,” Miller says. “A historic designation is a great tool for accomplishing that.”

Source: usnews.com

The post Preserving History Boosts Local Economies appeared first on AAOA.

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Baby boomers, like millennials, are flocking to rentals offering a ‘hands-free’ lifestyle

American Apartment Owners Association - Mon, 11/27/2017 - 8:52am
  • Baby boomers are the fastest-growing group of renters, Census figures show.
  • More than 5 million baby boomers are expected to rent their next home by 2020.
  • Many boomers want amenity-rich full-service buildings like millennials, brokers tell CNBC.

Russ Chung once lived in a sizable Midwest home, but he recently downsized to a luxury one-bedroom rental in Midtown Manhattan just blocks from Central Park.

Now, rather than mowing a lawn, the 60-year-old higher education administrator spends his free time visiting museums and taking in New York’s other cultural offerings.

“As you get older, there are only so many things you want to concentrate on. Apartment life lets you focus on things that matter and get rid of stuff that takes up a lot of time,” said Chung. His building’s concierge signs for his packages, and arranges for housecleaning.

Chung is one example of a subset of baby boomers who have become the fastest-growing group of renters across the nation. Since they tend to have more money to spend than their millennial counterparts, developers are actively figuring out how to lure them to into one of the luxury buildings sprouting up across the city.

Both boomers and millennials are flocking to areas like downtown Brooklyn, where a flurry of new full-services high-rises are springing up — and they sometimes compete over units, Citi Habitats agent Jason Burke told CNBC.

According to Burke, even though there is a glut of these new apartments, there is only a limited number in certain price ranges. Most people want to get in first when the developers are offering the best discounts, he said.

“The boomers are the biggest demographic that can afford it,” he said. “But tech levels everything. We’re seeing a lot of engineers come to New York, a lot of people in tech who don’t work from an office.”

“A lot of millennials are moving into brand-new rentals, and a lot of boomers are saying ‘That’s what’s I like too.'”-Phillip Salem, Triplemint

‘We chill, it’s a community’

Between 2009 and 2015, the number of renters aged 55 or above rose 28 percent, while those aged 34 or younger only increased 3 percent, according to Census data recently crunched by search engine RentCafe.

Meanwhile, more than 5 million baby boomers across the nation are expected to rent their next home by 2020, according to a 2016 analysis from Freddie Mac. Some boomers want to stay close to the neighborhoods they have lived in for decades; others are following their children to cities, experts said.

Like millennials, many boomers want amenity-rich apartments in good neighborhoods.

“You would think they would be buying and investing in property, but a lot of people like the convenience and ease of renting,” said Phillip Salem, an agent at real estate brokerage firm Triplemint.

“A lot of millennials are moving into brand-new rentals, and a lot of boomers are saying ‘That’s what’s I like too,'” he added.

Salem’s own Manhattan high-rise — with a gym, yoga studio and three outdoor lounges — is comprised of about 70 percent millennials and 30 percent baby boomers, the 30-year-old estimated.

“When I’m on the roof deck grilling, there are a lot of baby boomers,” Salem said. “They come and sit with us. We chill. It’s a community.”

Chris Bledsoe, co-founder of the national co-living brand Ollie, told CNBC that boomers account for one out of every four email inquiries.

Ollie offers an all-inclusive living experience in micro-unit studio apartments (under 400 square feet), or micro-suites where renters have private bedrooms while sharing kitchens, bathrooms and other common spaces. Roughly 80 percent of tenants in Ollie buildings are in their 20s and 30s, but just under 20 percent are over the age of 50 — and about a third of those are in their 60s, Bledsoe said.

In fact, Ollie renters only need to bring their toothbrushes. The units come with modern multipurpose furniture to make the most of small living spaces. A butler service called Hello Alfred sends home managers to pay weekly visits to water plants and make beds, while each building organizes social events like ski trips, whitewater river rafting and guacamole-making contests.

“I say millennial is a mindset not an age group,” he said. “Boomers are seeking something urban. They want cultural vibrancy, the theater. They want to be close to where their kids and grandkids are.”

A sign advertises an apartment for rent along a row of brownstone townhouses on June 24, 2016 in the Brooklyn borough of New York City.

Zach Ehrlich, of New York-based brokerage Mdrn. Residential, recently launched a concierge-like rental service called Stoop that offers short-term leases. It’s attracting interest among boomers looking for a “hands-free lifestyle” and to sample living in new places.

“There are a lot of seniors finding they want to have more flexibility,” Ehrlich said. “They also want to have some sociability, whether they lost a spouse or are separated or just don’t have a family unit.”

Wendy Sanders, a Long Island, New York-based broker with Douglas Elliman, said that downsizing boomers often sacrifice space to live in something that’s brand new.

“They’re looking for maintenance-free living. When the toilet overflows, they want someone to take care of it,” she said.

For Chung, whose job brought him to New York this spring while his wife spends more of her time in their 2,500-square-foot home in Ohio, it is important that he feels well cared for — yet not part of a senior residence, he said.

“As I’m getting older I’m stressed about this: If I fall down and hurt myself here, what do I need to do?” said Chung. “Why am I even worried? I’m going to pick up the phone and call the front desk. I just have to get to the phone.”

Source: cnbc.com

The post Baby boomers, like millennials, are flocking to rentals offering a ‘hands-free’ lifestyle appeared first on AAOA.

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