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Why we’re about to see an influx of international investors

Inmannews - Fri, 03/30/2018 - 3:00am
The U.S. is the largest market in the world in terms of international investment volume, and the number of transactions in the U.S. involving international buyers has increased in the past five years, with its share growing from 4.1 percent to 5 percent ...
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How the ‘farm-to-table’ real estate agent can save our industry

Inmannews - Fri, 03/30/2018 - 2:30am
One of the things drilled into my head as a college student in the economics department was the concept of the “cost-benefit analysis.” Simply put, this concept asks whether something is worth the price you pay for it. And when the answer is "no" -- meaning price exceeds value -- industries become ripe for disruption ...
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The pre-listing seller checklist every agent should use

Inmannews - Fri, 03/30/2018 - 2:15am
Preparing a home for sale requires both physical and psychological effort on the part of sellers. While the physical work is the most tiring, sellers can see progress and know that, even if they don't sell, they'll enjoy the benefits of their hard work ...
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Startup that uses A.I. to evaluate property values gets $3 million

Inmannews - Thu, 03/29/2018 - 4:17pm
"The real estate industry was slow to embrace new technologies," said Zipori, who founded Skyline AI with partners Or Hiltch, Iri Amirav and Amir Leitersdorf. "This is a really interesting time to change that." ...
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Broker Connect NY 18: ‘Disruptors, discounters, and doubters’

Inmannews - Thu, 03/29/2018 - 3:52pm
Joe Rand, author and broker-owner with Better Homes and Gardens Real Estate, discusses his new book, "Disruptors, Discounters, and Doubters" onstage at Broker Connect ...
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ICNY 18 Data: My MLS merger — did it really go as planned?

Inmannews - Thu, 03/29/2018 - 3:44pm
Hear the good, the bad and the ugly of merger mania as Bright MLS president and CEO Tom Phillips and CarolinaMLS CEO AnneMarie DeCatsye discuss their own mergers onstage at ICNY ...
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Rent is rising more slowly, easing strain on Americans

American Apartment Owners Association - Thu, 03/29/2018 - 3:18pm

Apartment rent increases slowed further in the first quarter, a development that, combined with faster wage growth, is expected to ease financial stresses for low- and middle-income households over the next couple of years.

Average rent rose 2.3% to $1,310 in the first three months of the year, according to RealPage, a real estate technology and analytics firm. That marks a decline from the fourth quarter’s 2.6% pace and the smallest yearly gain since the third quarter of 2010.

Rent increases have slowed steadily since peaking at 5.3% in the second half of 2015.

Equally significant is that apartment occupancy in the first quarter fell to 94.5%—a historically normal level—from 95.1% late last year and an average 95% from 2012 to 2017. During that period, tight apartment supplies and surging demand from Millennials pushed occupancy and rent higher.

“What we’re seeing is a return to more normal conditions,” says RealPage chief economist Greg Willett.

The price moderation can be traced to a massive wave of apartment construction the past few years. About 319,000 units were completed over the past 12 months and another 314,000 are expected the next year, Willett says, well above the normal pace of 250,000.

Renters won’t immediately feel the benefits. For several years, rent hikes have outpaced tepid annual wage growth averaging 2% to 2.5%. But pay increases picked up recently to 2.6%, Labor Department figures show, and many economists expect gains to approach 3% by the end of the year as the low unemployment rate forces employers to bid up for workers.

Over the next year or two, “Household income is going to go up faster than rent,” Willett says. “That’s a more comfortable situation.” He expects rent growth to stabilize at about 2.5% during that period.

In the first quarter, Las Vegas had the sharpest annual rent growth at 6.2%, followed by Orlando, Fla., at 6.1%, and Sacramento, Calif., at 5.5%.

 

Source: cnbc.com

The post Rent is rising more slowly, easing strain on Americans appeared first on AAOA.

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Book an online vacation rental? It’s up to you to make sure property is safe from gas leaks, fire hazard

American Apartment Owners Association - Thu, 03/29/2018 - 3:16pm

SAN FRANCISCO — Although online vacation rental companies are stepping up efforts to ensure properties are safe, the sprawling nature of that mushrooming marketplace means the burden still falls on renters to secure peace of mind.

That’s particularly sobering after an Iowa family of four died from gas asphyxiation at the condominium they had rented in Tulum, Mexico. A water heater was the source of a gas leak, according to a prosecutor in Mexico. The privately owned condo was listed by HomeAway and VRBO, which are owned by Expedia.

Although most platforms encourage smoke and carbon monoxide detectors and some even give them away to homeowners, consumers need to make sure a host property is following these safety precautions. Few rental sites ensure the property has installed them before the rental.

It “might just mean you show up at your holiday rental and start looking for smoke detectors and fire extinguishers, because really, it’s renter beware,” says John Simpson of advocacy group Consumer Watchdog.

“It’s tough for (companies) to really enforce these measures in private homes,” he notes. To really get things to change, “it may end up coming down to cities issuing homeowners rental permits based on inspections.”

Airbnb, HomeAway policies This undated family photo shows from left, Adrianna, Amy, Kevin and Sterling Sharp, of Creston, Iowa. The family was found dead in a Mexico condo Friday, March 23, 2018. They were vacationing in Mexico and were supposed to return to Iowa on March 21, 2018. (Photo: Provided by the family via The Des Moines Register)

In the case of HomeAway and other such sites with global reach,  hosts — those renting out their properties — commit to making sure homes and apartments meet local building rules.

“We require that owners and managers around the world agree to comply with local safety codes and regulations when listing their properties with us,” says HomeAway spokesperson Jordan Hoefar.

The company said it had removed the Tulum property from its site. “Our most heartfelt condolences go out to the loved ones of the Sharp family for their tragic loss,” it said in a statement.

Carbon monoxide is an odorless gas that can be emitted from faulty gas-, coal- or oil-burning devices such as stoves or water heaters. Symptoms can appear flu-like at first, including headaches and vomiting, but such poisoning can be deadly.

Airbnb, a tech start-up that popularized the private-rental trend, currently is providing 36,000 combination smoke/carbon monoxide detectors to hosts through its website, which notes that in the U.S. only 40% of homes have such a device, according to a 2013 U.S. census survey. All Airbnb hosts have to certify that they follow all local laws and regulations. Each listing says whether a property has a smoke detector, but the platform doesn’t mandate detectors.

The company also runs home safety workshops, such as a recent one in London, where local fire and emergency services brief hosts on best practices.

Airbnb says it has verified the best homes and hosts with their luxury option, Airbnb Plus. Buzz60

But short of a renter contacting Airbnb and HomeAway to complain, and taking action after the fact, the platforms generally don’t ensure a host is following their safety policies before the rental.

Airbnb does have one new category of property that are guaranteed to have smoke and carbon monoxide detectors. The new segment, Airbnb Plus, showcases thousands of homes and apartments — as opposed to the site’s millions of properties — that must meet a variety of luxury and safety standards.

“When booking, guests should always carefully read the listing description, amenities and reviews to ensure the home has the safety features that meet their needs,” said Nick Shapiro, Airbnb’s global head of trust and risk management.

Smaller companies are using different strategies to generate consumer trust. Paris Vacation Rentals, for example, owns its small pool of upscale Parisian apartments outright and shoulders all regulatory and safety responsibilities.

London-based onefinestay, which was bought by large European hotel group AccorHotels in 2016 for $169 million, manages a few thousand properties on a number of continents and gives AccorHotels a foot in the booming sharing economy that is cutting into more traditional options, such as resorts.

“We follow any applicable local regulation, for example in London, we require all hosts to have a valid Gas Safety Certificate prior to renting their home, and maintain a copy of this certificate on file,” says Javier Cedillo-Espin, CEO of onefinestay.

The accidental death of a family in a vacation rental certainly is horrific. But while such incidents do not appear to be carefully logged, anecdotal evidence suggests they are rare, says Douglas Quinby, analyst with travel industry research firm Phocuswright.

With 126 million private property rental unit nights logged in the U.S. in 2015, and 22 million trips with an average stay of five nights, odds remain in travelers’ favor, he says.

Says Quinby: “Most private homes that are put into a rental pool still have to meet building codes and are generally safe.”

Source: usatoday.com

The post Book an online vacation rental? It’s up to you to make sure property is safe from gas leaks, fire hazard appeared first on AAOA.

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The Appeal of Affordable Housing to For-Profit Investors

American Apartment Owners Association - Thu, 03/29/2018 - 3:12pm

For-profit investors continue buying up apartment properties with relatively low rents, including those originally built through government-subsidized affordable housing programs.

“There is growing investor interest in lower-price-point product, whether the properties are part of an affordable housing program or are just market-rate projects at the lower end of the price spectrum,” says Greg Willett, chief economist with RealPage, a provider of property management software.

Some of these investors are hoping to raise the rents, but many are satisfied to keep these apartments relatively affordable. That’s because affordable housing properties tend to produce consistent, steady income from rents. In many markets, they are fully-occupied, dependable performers and can often be safer investments than conventional, class-A apartment buildings.

“Given where we are in the current cycle, with pricing pushed so high for top-tier product, especially in coastal markets, return for those premium properties now isn’t necessarily greater than is achievable in the affordable-product niche,” says Willett.

Demand won’t drop for affordable housing

Multifamily investors have become more interested in affordable housing in recent years.

“There are an increasing number of for-profit buyers,” says Jeff Arrowsmith, senior director of affordable housing with real estate services firm CBRE. Apartment properties that have formal restrictions on how high their rents can rise because they are in affordable housing programs now account for roughly 20 to 25 percent of the apartment properties with more than 20 units that are bought and sold, according to CBRE data.

Lower-rent properties are attractive in part because demand for these apartments is very strong.

“The need for this more affordable housing has grown, partly because income growth has been so slow in this economic cycle, but also because some households who previously could afford middle-market product have been priced out of those communities as rents have climbed,” says Willett.

These has led to fully occupancies at these types of properties even in metropolitan areas where cheaper apartments have historically suffered from higher vacancies.

For example, the average percentage of occupied apartments at class-C properties is now around 95 percent in Dallas, up from the historical norm between 91 and 92 percent. In Atlanta, the percentage of occupied apartments at class-C market-rate properties averaged around 94 percent, up from a historical norm of about 90 percent, according to RealPage.

That’s partly because these apartments don’t have much competition. Development costs are now too high for builders to create new apartments with relatively low rents without help from the government’s affordable housing programs, and those programs have limits on how much new housing they can afford to build.

“The obvious appeal of investing in affordable housing is that future revenue growth should be very stable and predictable,” says Willett. “While you’re unlikely to hit a home run in return for an individual deal, risk is fairly low because resident demand is so strong and reliable.”

Affordable housing properties typically sold at cap rates averaging around 6.6 percent over the last year, according to CBRE. That’s only slightly higher than the current cap rate of 6.5 percent recorded for class-B and class-C apartment properties in 2017.

Affordable units lost in high-cost markets

Affordable housing advocates often worry that private investors may seek to sharply raise the rents once they buy these buildings. For example, many properties originally built with federal low-income housing tax credits (LIHTC) are now coming the end of their original 30-year agreement to keep the rents low.

What happens to these properties will largely depend on where they are located.

In many smaller markets, the highest rents that landlords are able to charge for renovated older apartments are often relatively low. So property owners have much less temptation to take the property out of the affordable housing programs, renovate it and raise the rents. “In tertiary markets, the affordable housing program rents are probably at market,” says Arrowsmith.

The situation is very different in the primary markets, where rents are often much higher. “In higher rent areas we are at risk of losing more units of affordable housing,” says Arrowsmith. “Owners are going to be incentivized where the market rates are higher to raise the rents and get the return.”

 

Source: nreionline.com

The post The Appeal of Affordable Housing to For-Profit Investors appeared first on AAOA.

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The secret weapon making agents more productive at LA brokerage JohnHart

Inmannews - Thu, 03/29/2018 - 2:26pm
JohnHart's agent liaisons do everything from prepare listing presentations, help with showings, communicate with the outside agent's transaction coordinator, prepare offers, process the counters, the list goes on ...
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Open Listings, the ‘no-agent’ instant offer platform, has a new iPhone app

Inmannews - Thu, 03/29/2018 - 2:20pm
The real estate hunting platform Open Listings has unveiled a new iPhone app. The company, which launched in 2015, functions as an online directory of residential properties in which users can make offers directly online without an agent (although it will connect customers with an agent if they want).  ...
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Opendoor raising $200 million at $2 billion valuation: report

Inmannews - Thu, 03/29/2018 - 12:46pm
The startup Opendoor, which lets prospective home sellers offload their properties quickly and entirely online for a guaranteed price derived by an algorithm, is in the process of raising $200 million at a $2 billion valuation, according to a report in The Wall Street Journal ...
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Spring Forward: Brian Copeland on delivering confident yet humble advice

Inmannews - Thu, 03/29/2018 - 10:59am
We recently had the opportunity to chat with Brian Copeland from Village Real Estate in Nashville and ask him about the specific tactics he uses to keep his business fresh, and his team successful ...
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mello Home CEO Chris Heller: ‘Our only competition is ourselves’

Inmannews - Thu, 03/29/2018 - 9:30am
After a career in real estate that culminated in rising to the top of Keller Williams, Chris Heller joined loanDepot to head up a new project. He talked to Inman about his plans for mello Home ...
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Compass recruits Douglas Elliman star David Dubin in hiring spree

Inmannews - Thu, 03/29/2018 - 8:50am
Dubin, a 12-year Corcoran veteran who most recently did business alongside brokers Oren and Tal Alexander as part of Douglas Elliman’s Alexander team, will join former Douglas Elliman broker Toni Haber and her seven-agent team ...
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Real estate daily market update: March 29, 2018

Inmannews - Thu, 03/29/2018 - 7:00am
All the latest real estate market news ...
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Tips For How To Increase Rent

American Apartment Owners Association - Thu, 03/29/2018 - 5:18am

For landlords, raising the rent can be a touchy subject. There are times when rent increases are necessary to keep up with rising costs of property ownership, yet a rent raise can spook renters from renewing their lease. There are ways to raise the rent while decreasing the sting for renters. If you can keep renters happy and protect your interests, your renters will be more likely to stay. 

How to Handle a Tenant Rent Increase

Savvy landlords are always keeping their rents in line with market rate by adjusting rent amounts every year. Tenants are less likely to balk at a slight rent increase ($50 or under) than they are when the rent goes up by hundreds of dollars overnight.

A good rule of thumb is to raise rents by 2 to 4 percent annually. For a $2,000 apartment, this works out to $40 to $80 — a number not likely to spook renters.

When you increase the rent by a small amount each year, you acclimate renters to this trend. If they don’t like it, they’ll leave. Otherwise, they will come to accept a small rent increase each year and will be much less likely to complain.

While you should strive to be competitive with market rates and recoup the costs of maintenance and mortgage payments, you will lose renters if you increase the rent by more than 8 percent in a year. This may be unavoidable if you’ve delayed a rent increase for several years. If that happens, start fresh with new tenants who can afford the higher rate. Then, commit to incremental raises each year so you don’t fall behind again.

If tenants try to negotiate with you, consider an incentive that benefits everyone. Rather than renewing their lease for 12 months at your higher rent rate, ask them to sign a two- or three-year lease at a number that splits the difference between the old rent and the new rent. They’ll be relieved they don’t have to pay as much, and you’ll enjoy stability for the foreseeable future.

Apartment turnover is a common time to lose money, as landlords often use the occasion to make property improvements, spend money advertising, and invest a larger amount of time in managing their property. The less often you turn over apartments, the more profitable every property is — even if you could be earning $25 or $50 more in rent.

Invest in Your Tenants

Always be cordial and responsive when you see or hear from your tenants. A smile and greeting go a long way in building a positive relationship. Most tenants have had shady landlords, so they appreciate renting from someone who cares about the property and his or her renters’ satisfaction. Even if they dislike a rent increase, tenants who have warm feelings toward their apartment and their landlord are more willing to pay a little more to maintain their quality of life than move out over a bit of cash.

For more tips on how to increase tenants’ rent without incurring turnover, access to landlord webinars, and discounts on property management, become an American Apartment Owners Association member. View all member benefits or join today.

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

 

The post Tips For How To Increase Rent appeared first on AAOA.

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The top residential real estate brokerage in the U.S. is still NRT

Inmannews - Thu, 03/29/2018 - 3:00am
The annual list ranks brokerages and residential real estate companies by transactions. To make the cut for this year's list, a firm had to close at least 1,899 transactions in 2017. ...
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Toor, the smart lockbox from ‘Shark Tank,’ is now shipping

Inmannews - Thu, 03/29/2018 - 3:00am
Developed by real estate agent and innovator Junior Desinor, the Toor smart lockbox received funding for manufacturing on Kickstarter back in 2016, then it earned Desinor a deal with Barbara Corcoran and Kevin O’Leary on ABC's Shark Tank ...
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7 smart ways to use your tax return to better your business

Inmannews - Thu, 03/29/2018 - 2:45am
Tax season is a hectic time of year for many real estate agents. Not only is the spring season heating up, but most agents also have to handle filing their taxes as an independent contractor ...
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