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Compass acquires Chicago indie brokerage The Hudson Company

Inmannews - Mon, 06/25/2018 - 1:00pm
Compass has added another brokerage to its ever-expanding portfolio, bringing its total agent count in Chicago to over 350.
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Instagram’s new hour-long IGTV videos are perfect for real estate

Inmannews - Mon, 06/25/2018 - 11:01am
Long known for photos and minute-log videos, Instagram will now let its users put up videos that are up to an hour in length.
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Top 5 Mistakes Landlords Make with Their Investment Properties

American Apartment Owners Association - Mon, 06/25/2018 - 10:04am

Managing an investment property is no easy task. It may sound like big money, but if you are not prepared it can turn into a huge money pit. As a landlord, you have a big responsibility to the property as well as the tenants. One small misstep could end up costing you valuable time, energy, and money. That is why you must make sure you do your homework before jumping in. Do as much research as possible. If you look up the latest real estate trends in the area or ask a local expert, you will be able to find enough information to help you make the best decisions when it comes to your investment property. Unfortunately, many landlords want to get started so quickly that they do not think before they invest. Here are the top five mistakes that landlords make with their investment properties:

1.Choosing the Wrong Tenants

This is one of the biggest mistakes you can make as a landlord. If you are renting your property out to a stranger, you must take the extra steps needed to make sure you get the best possible tenants in your property. If you do not know them very well, there are certain precautions you can take. Have them prepare the following:

a) Application Form: Have prospective tenants complete a written application form. This will include standard renter’s information such as names, numbers, employer, previous residences, income, etc. Each adult who will be living in the property would need to fill one of these forms out and minors can be added as well. They would sign that all the information they provide is accurate to the best of their knowledge.

b) Credit and Background Checks: Tenant screening is a great way to see how financially stable your prospective renter is. Credit reports often show if someone has been late on payments and the amount of debt they already have. A background check is very important, not just for your peace of mind, but also in consideration of the neighborhood. You would not want to rent the property out to a convicted criminal. It would compromise the safety of the area and could also bring down the property values.

c) Referrals: Asking for referrals from past landlords and current employer is a great way to go the extra mile in finding the perfect tenant. If the applicants have not be great renters in the past, then they probably would not move forward with their application if referrals are needed. A referral from an employer would also give you confidence that the tenant is gainfullyemployed and able to make a monthly payment.

2. Failing to Create a Thorough Lease Agreement

Creating a good lease agreement is where part of your research will come in handy. Many landlords will print the first form they see on the internet. Unfortunately, this form could be outdated and only relevant for a certain location. Make sure to find an application that has all your stipulations and current local regulations spelled out. Some tenants will comb through the entirety of the agreement to try to catch something that the landlord missed to exploit it. For this reason, it is very important that you create a thorough lease agreement. Be sure to add any rules specific to your property in an addendums section.

3. Lack of Communication

If you make yourself unavailable to your tenants, you are doing them and yourself a disservice. Your office should always be open and you should always be available by phone. Sometimes, home emergencies will come up and your tenants will need your ‘okay’ or your help to get the issues resolved. It can range from something small, like a door coming off its hinges, to something huge, like a flood or leak in the plumbing. The sooner you can get back to your tenants, the better for them and you. The longer you let an issue go, the more difficult it will be to fix a problem and the more resentment your renter could have for you. You want to make sure that your tenants have a good experience so that they are not criticalof you to future renters. This is especially important this day and age where you can review anything and anyone on the internet.

4. Setting the Rental Rate Too Low or Too High

Make sure you are setting the rental rate within the correct range for the property’s age and location. There is such a thing as setting the price too high and too low. If the rent is too high for the area or for how old the property is, no one will want to live there. The longer your home sits unoccupied, the more money you are losing each day. In the same vein, you do not want to set the rent too low. You may be able to get someone into the home quicker, but you could be leaving a lot of money on the table. The whole point in taking on an investment property is to make money. The best thing you can do is look at other rental properties in the area. Try to stick within the range of rental pricing you see in the neighborhood.

5. Delaying Eviction Process

If you do find yourself in the position of having to evict a tenant, try to get the process started as soon as possible. You can expect it to take about 30 days from start to finish, but many times, it is delayed because tenants will come up with excuses. As soon as you can tell there is a real issue, you should begin the process. The longer you wait to get it rolling, the longer it will take. The longer it takes, the more money you will be losing. It is important to note that the tenant is still legally obligated to pay the back rent owed to you. However, if a tenant has opted not to pay rent up until this point, you may be out of luck trying to collect it from them in the future.

Being a landlord is a tough role! If you avoid these common mistakes that most people make with their investment properties, you should have an easier go at it. The main thing to remember is that the more research and preparation you put into renting out your property, the more return you will see on your investment.

 

Source: realtybiznews.com

The post Top 5 Mistakes Landlords Make with Their Investment Properties appeared first on AAOA.

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The ‘Fixer Upper’ fallacy: 9 reasons real estate professionals want you to stop watching HGTV

American Apartment Owners Association - Mon, 06/25/2018 - 10:02am

It’s a four-letter phenomenon that Americans can’t imagine life without. But when HGTV debuted nearly 25 years ago, the idea of turning on the TV and being entertained by a bathroom renovation was ludicrous. Today, however, TV execs see home and garden improvement shows like “Property Brothers,” “Fixer Upper,” and “Love It or List It” as lucrative.

Unfortunately, their popularity comes at the expense of real estate professionals. Unlike viewers, these critics know firsthand that what makes for good reality TV can make for bad reality out in the real world.

Here are nine reasons the experts want you to turn off HGTV — now.

Knocking down walls isn’t that easy

Soap operas have kissing scenes and action movies have car chases. On HGTV, there’s usually always a scene where a wall or two get knocked down. That’s OK on shows like “Good Bones,” but in real life, walls are often the last thing you want to touch.

“When someone buys a ’90s-era home which was built quickly and on the cheap, we can’t rip out walls,” says Teris Pantazes, a licensed contractor in Baltimore, and manager of EFynch. “It’s important for a home to have good bones. I have been in this business for a long time but I’m not an engineer. I still have customers question me and I see them waste tons of money to verify what I already told them.”

Transactions, and transformations, take a LOT of time  

“The No. 1 problem with real estate television shows is that they significantly shorten the amount of time that almost anything takes, for the purposes of advancing the narrative,” explains Kevin Deselms. The Hollywood film-editor-turned-Colorado-Realtor®, says this gives his clients unreasonable expectations for timelines. For example, on “House Hunters” — which has been publicly called out for misleading viewers — prospective buyers only view three houses. That, and a lot of editing, is how home purchases happen in less than 30 minutes. (TLC’s hit show “Trading Spaces” practically invented the 48-hour room transformation, but the show also caught a lot of flak for leaving homeowners with things like shoddy work, wet paint and unfinished flooring.)

Negotiations don’t typically go down in coffee shops

“I wish clients would stop watching HGTV so I can stop explaining that negotiations occur over a couple of days through emails, not on the phone in a coffee shop,” says Evan Roberts, a real estate agent and founder of Dependable Homebuyers. The typical televised scenario that takes a matter of seconds (there’s no such thing as phone tag on TV) is very misleading, he says. “Buyers should expect that the sellers are busy living their lives as well.”

Obtaining permits requires way more patience

Jeffrey A. Hensel at North Coast Financial, Inc. has been providing “fix and flip loans” to real estate investors looking for quick profits. For years, he’s had to preach the virtue of patience to these same clients. “HGTV shows sometimes discuss the need for permits, but they don’t often show how this process can slow down the entire project,” says Hensel. According to him, waiting for approval to move forward can easily increase the remodel time (and the budget) by 50 percent.

Producers create unnecessary drama

Do most shoppers wear GoPros when looking for window treatments or measuring hardware for their cabinets? No. That’s probably because they know friends, family and even themselves, would fall asleep watching those videos.

“Clients who are HGTV fans typically expect the same excitement, surprises and flair that they see on TV,” says Sacha Ferrandi. But according to the CEO of Source Capital Funding, Inc., which finances a lot of home renovations, it’s important for professionals to ease clients’ minds — and limit all that the drama — for the sake of both parties. In real life, where you have to work on top of managing your home renovation or house hunt, the less stress, the better.

Real estate can ruin relationships

Whether they’re the homeowners or the show’s hosts, happy spouses are everywhere on HGTV. That’s why it was such a shock last year when “Flip or Flop’s” hosts, Tarek and Christina El Moussa, announced their split. But to Sissy Lappin, founder of ListingDoor, it came as no surprise.

“The fastest way to end up divorced other than having an affair is to renovate,” swears Lappin. “You will not be smiling like Chip and Joanna, drinking lemonade with chocolate chip cookies. You will be pulling each other’s hair out like the ‘Real Housewives of New Jersey.’”

Sellers don’t care about your renovation budget.They care about the comps in the neighborhood.

“The worst precedent set by HGTV is in their show ‘Property Brothers,’ where the agent frequently tells buyers that they should make an offer significantly below list price to account for their desired renovation budget,” says Jeff Miller, a Maryland-based real estate agent with AE Home Group. “The truth is, the only thing that matters is what other homes in the neighborhood have sold for.”

HGTV worships false budgets

Most viewers already know this, and several articles including this Twitter rant recap have been written about it. After all, it doesn’t take a math genius to figure out that most Americans don’t have $1 million laying around for a second home, and the kind of kitchen a $5,000 renovation gets you won’t include granite countertops and a smart fridge that sends its inventory to your phone. For more practical numbers, Gwyn Donohue, Executive Director of the National Association of Home Builders, recommends watching “Today’s Homewowner with Danny Lipford.”

Bigger renovations don’t always equal bigger ROIs

“HGTV shows like to feature flips with full kitchen and bath remodels because the before-and-after shots make for more compelling viewing,” says Bobby Montagne, CEO of Walnut Street Finance, who also counts himself a fan of “This Old House” because it’s more slowly-paced. “In fact, aspiring fix-and-flippers are often better off doing small-scale renovations that just need carpet, paint and some freshening up, especially for their first projects.” Montagne says smaller budgets, less room for error, and less time on the job often equal the ROI winning combination.

 

Source: foxnews.com

The post The ‘Fixer Upper’ fallacy: 9 reasons real estate professionals want you to stop watching HGTV appeared first on AAOA.

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2-Bedroom Rental Housing Is ‘Out of Reach’

American Apartment Owners Association - Mon, 06/25/2018 - 9:52am

A worker making federal minimum wage of $7.25 for 40 hours a week is unable to afford a two-bedroom rental anywhere in the country, according to a recent study.

In its 2018 edition of its “Out of Reach: The High Cost of Housing,” the National Low Income Housing Coalition looked at the wages necessary to afford rental housing in all 50 U.S. states and the District of Columbia. The annual report uses the national housing wage, which is the estimated full-time hourly wage a household must earn to afford a rental home at the U.S. Department of Housing and Urban Development’s fair market rent. According to HUD, affordability is defined as spending no more than 30 percent of gross household income on housing costs. This housing wage is $22.10 per hour nationally for a two-bedroom rental, which is up from the $21.21 per hour national housing wage in last year’s report.

When considering the federal minimum wage of $7.25, the study finds that people earning minimum wage would have to work 122 hours per week for every week of the year or work three full-time jobs in order to afford a modest, two-bedroom rental. Within the states, housing wages range from $13.84 in Arkansas to $36.13 in Hawaii. The figures are particularly high in certain metropolitan areas such as San Francisco, where the housing wage is $60.02 per hour, or Honolulu, where you would need to earn $39.06 per hour.

A graphic titled, “2018 2-Bedroom Rental Housing Wages,” from the report “Out of Reach: The High Cost of Housing,” by the National Low Income Housing Coalition.
(NATIONAL LOW INCOME HOUSING COALITION)

Renters nationally make an average of $16.88 an hour, the report estimates. Thus, the discrepancy between wages and rent is not limited to minimum-wage workers but it affects low-wage earners more: “Seventy-one percent of extremely low income renters spend more than half of their incomes on housing, leaving them few resources for other necessities and putting them at risk of losing their homes given the difficulty of sustaining their rent payments.”

Downsizing to a smaller place does not help a lot in terms of affordability, as the national housing wage for a one-bedroom rental is $17.90 per hour. Out of more than 3,000 counties nationwide, in just 22 of them can someone working full time at minimum wage afford a one-bedroom rental at fair market rent. These counties are located in states where the minimum wage is higher than the federal standard of $7.25.

The study also noted that the demand for affordable housing grew in the past 10 years, due to demographic shifts and the Great Recession, leading to fewer properties available to renters. “Between 2005 and 2016, the number of renters increased by nearly 10 million households to a record 43.3 million,” according to the study. Also, most of the new rental construction has been toward the higher end of the housing market, leaving medium- and low-income customers without options.

Sen. Bernie Sanders (I-Vt.), who prefaced the report, wrote: “In America today, nearly 11 million families pay more than half of their limited incomes toward rent and utilities.” His recommendation: “(W)e must start to close the housing-wage gap by raising the minimum wage to at least $15 an hour – so that no full-time worker lives in poverty.”

Source: usnews.com

The post 2-Bedroom Rental Housing Is ‘Out of Reach’ appeared first on AAOA.

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CFPB ends investigation into Zillow co-advertising

Inmannews - Mon, 06/25/2018 - 9:49am
The CFPB ended its investigation into whether Zillow violated an anti-kickback law with a co-marketing program for agents and lenders.
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Home Affordability in U.S. at Decade Low in 2018

American Apartment Owners Association - Mon, 06/25/2018 - 9:46am
According to ATTOM Data Solutions Q2 2018 U.S. Home Affordability Report, U.S. home prices in the first quarter were at the least affordable level since Q3 2008.

The report calculates an affordability index based on percentage of income needed to buy a median-priced home relative to historic averages, with an index above 100 indicating median home prices are more affordable than the historic average, and an index below 100 indicating median home prices are less affordable than the historic average.

Nationwide, the Q2 2018 home affordability index of 95 was down from an index of 102 in the previous quarter and an index of 103 in Q2 2017 to the lowest level since Q3 2008, when the index was 86.

“Slowing home price appreciation in the second quarter was not enough to counteract an 11 percent increase in mortgage rates compared to a year ago, resulting in the worst home affordability we’ve seen in nearly 10 years,” said Daren Blomquist, senior vice president at ATTOM Data Solutions. “Meanwhile home price appreciation continued to outpace wage growth, speeding up the affordability treadmill for prospective homebuyers even without the rise in mortgage rates.”

Home prices rising faster than wages in 64 percent of local markets Nationwide the median home price of $245,000 in Q2 2018 was up 4.7 percent from a year, down from 7.4 percent appreciation in the first quarter but still above the average weekly wage growth of 3.3 percent. Since bottoming out in Q1 2012, median home prices nationwide have increased 75 percent while average weekly wages have increased 13 percent during the same period.

Annual growth in median home prices outpaced average wage growth in 275 of the 432 counties analyzed in the report (64 percent), including Los Angeles County, California; Maricopa County (Phoenix), Arizona; San Diego County, California; Orange County, California; and Miami-Dade County, Florida.

Lowest home affordability indexes in Flint, Denver, Santa Fe, Nashville

Counties with the lowest home affordability indexes in Q2 2018 were Genesee County (Flint), Michigan (70); Denver County, Colorado (72); Adams County (Denver area), Colorado (73); Santa Fe County, New Mexico (73); and Wilson County (Nashville area), Tennessee (75).

Among 40 counties with a population of at least 1 million, those with the lowest home affordability indexes in Q2 2018 were Travis County (Austin), Texas (77); Alameda County (San Francisco area), California (81); Santa Clara County (San Jose), California (82); Oakland County (Detroit area), Michigan (82); and San Francisco County, California (83).

Highest share of income needed to buy a home in Bay Area, Brooklyn

Nationwide an average wage earner would need to spend 31.2 percent of his or her income to buy a median-priced home in Q2 2018, above the historic average of 29.6 percent.

Counties with median home prices requiring the highest share of average wage earner income were Marin County (San Francisco area), California (133.2 percent); Kings County (Brooklyn), New York (123.1 percent); Santa Cruz County, California (121.5 percent); Monterey County (Salinas), California (100.3 percent); and San Francisco County, California (97.2 percent).

Counties with median home prices requiring the lowest share of average wage earner income were Wayne County (Detroit), Michigan (13.5 percent); Clayton County, Georgia (13.7 percent); Rock Island (Quad Cities), Illinois (15.8 percent); Saginaw County, Michigan (16.4 percent); and Richmond County (Augusta), Georgia (16.4 percent).

Median home prices not affordable for average wage earners in 75 percent of local markets

An average wage earner would not qualify to buy a median-priced home in 326 of the 432 counties (75 percent) analyzed in the report based on a 3 percent down payment and a maximum front-end debt-to-income ratio of 28 percent.

Counties where an average wage earner could not afford to buy a median-priced home in Q2 2018 included Los Angeles County, California; Cook County (Chicago), Illinois; Maricopa County (Phoenix), Arizona; San Diego County, California; and Orange County, California.

Source: worldpropertyjournal.com

The post Home Affordability in U.S. at Decade Low in 2018 appeared first on AAOA.

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How to Know You’re Ready to Invest in Real Estate

American Apartment Owners Association - Mon, 06/25/2018 - 9:43am

Now might be the perfect time to begin investing in real estate but how can you ever be sure? The answer is that you can never be absolutely sure. Investing outside of a FDIC insured account always has risk. However, some risks are higher than others are. Risk with any investment is highly dependent on your knowledge of the market and how you prepare yourself to enter the market. Watching a late night informational about a get rich quick scheme won’t prepare you to manage a real estate portfolio.

There are things you want to do and know before making your investment move.

  1. Active or passive income? Do you want to actively rehab and flip houses or be a hands-on landlord? Maybe a hands-off turnkey rental or REIT is more suitable to your time commitment, investment knowledge, and lifestyle. Making the decision to be active of passive helps narrow the investment strategies you should pursue.
  2. Your personal finances are in order. Regardless what the late night informationals tell you, you will need to invest at least some money. It doesn’t have to be a huge investment but no one going to give you a free lunch. As soon as you take control of a property, you need to have reserve funds to cover emergencies and vacancies or you risk never being able to turn a profit. But first, you need to be able to cover all of your own financial needs. You’re best off being able to cover your basic needs, some wants, and have a decent savings account (in addition to your initial investment funds).
  3. You’ve done your homework. You don’t need to know everything there is to know about real estate investing (it changes constantly anyway). But you should have a broad overview of the many investing strategies available to you. And then you should acquire a detailed knowledge of the strategy you intend to begin with. You can read articles, read books, take courses, or work alongside of a mentor. There are many ways to gain the knowledge you need before making your first investment.
  4. Understand the economy. You need to understand how both the macro economy and the micro economy you will be investing in matches up with your strategy, financial capability, and investing goals. Most beginning investors do best in a stable economy like the one we have now. An economy when almost everyone has a dependable income, vacancies are low, houses are selling quickly, and borrowed money is in ample supply. However, if you are financially prepared there are big profits to be made by investing in a down market. When distressed sales are common, high vacancies drive down the purchase cost of apartment buildings, and related factors. Highly successful investors like Warren Buffet made their fortunes by investing in down markets. But you must be capable of riding out the financial storm.
  5. You’ve researched your target market. Your specific investment strategy will determine much of what you need to know about the location you intend to invest in. But there is some general information you need to fully understand. For landlords, this means understanding both tenants and competitors. Know what the going rent rate is in the neighborhood, how stable incomes are, the last time rents were raised, security deposit amounts, along with vacancy and crime rates. More detailed information should include planned infrastructure projects, and trends such as retail businesses opening or going out of business.
  6. Know your own capabilities and limitations. This goes beyond your financial capabilities. You need good negotiations skills. You should have an understanding of the insurance needs appropriate for you investment property. If you’ll be rehabbing, you need the right construction skills, ability to manage contractors, or both. It’s best to take an inventory of all capabilities you currently have as well as those you could improve on.

The market is and always will be changing. Along with being prepared as a new investor, you need to stay informed of new developments such as the new tax laws that took effect this year. It’s also good to have plans for the future. Have a plan “B” in case your first one doesn’t work out. Stay tuned to the market so you are ahead of major changes.  Have a plan for when an unexpected great investment opportunity presents itself. Succeeding as a real estate investor has been accomplished by millions but is never by accident.

 

Source: realtybiznew.com

The post How to Know You’re Ready to Invest in Real Estate appeared first on AAOA.

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A peek into the magical realm of Disney’s real estate ventures

Inmannews - Mon, 06/25/2018 - 8:24am
For decades, the Disney name has been synonymous with breathtaking animation, captivating storytelling and all the magic that childhood dreams are made of, and now that Disney has forayed into real estate, the magic of those dreams has become a reality. Let's take a quick trip through the magical world of Disney real estate.
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Most Americans still not catching on to sharing services like Airbnb

Inmannews - Mon, 06/25/2018 - 7:56am
Even as home-sharing services such as Airbnb grow in popularity, most Americans are still not turning to them for travel plans.
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NYS legislative session ends without title insurance regulation reform

Inmannews - Mon, 06/25/2018 - 7:27am
A New York State Senate bill to reform regulations that oversee the title insurance industry passed with broad bipartisan support this week, but a sister bill had not made it out of committee in the New York State Assembly, by the end of this year’s legislative session on Thursday morning.
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New home sales climb 6.7% after last month’s drop

Inmannews - Mon, 06/25/2018 - 7:09am
New home sales climbed 6.7 percent month-over-month to a seasonally adjusted total of 689,000 in May.
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Connect the ICSF Sessions: Free education and networking at Open Connect

Inmannews - Mon, 06/25/2018 - 6:56am
What's Open Connect? Some of the best real estate education, networking and programming, available to anybody who wants to attend, for free.
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Learn the secrets of brokerage success from 15 badass women brokers

Inmannews - Mon, 06/25/2018 - 3:00am
What does it take to run a successful real estate brokerage in today’s highly competitive marketplace? It comes down to 15 key factors.
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6 tips for creating a personal brand that’ll stand the test of time

Inmannews - Mon, 06/25/2018 - 2:15am
Survival in real estate is all about providing value. This very idea has been the topic of discussion for real estate agents and brokers on many levels lately as we evaluate the future of our business. Here are six key ways to brand yourself as an agent while working for a larger brokerage. 
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Re/Max Integra fires up new version of company resource suite, Launchpad

Inmannews - Mon, 06/25/2018 - 2:10am
Re/Max Integra's Launchpad is a single sign-on solution that connects agents to all of the tools used in business.
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Lesson learned: How to create an atmosphere of accountability

Inmannews - Mon, 06/25/2018 - 2:00am
Florida luxury Realtors Chad and Sandy Neumann bring high style and market expertise to their growing business, and the results speak for themselves. How did they develop the habits that help them flourish? With a little help from their friends — and mentors.
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Take control of your schedule and make more money

Inmannews - Mon, 06/25/2018 - 1:00am
My coach recently asked me a great question. “Tom, are you managing your time powerfully?” she asked. This question really got me thinking. You can’t get more than 24 hours every day. But you can get more from those 24 hours.
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Miami realtor found guilty of extorting high profile rivals

Inmannews - Fri, 06/22/2018 - 4:46pm
A jury found South Beach realtor Kevin Tomlinson guilty on extortion charges after he accused of illegally demanding $800,000 from from rivals The Jills.
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White House wants to privatize Fannie Mae and Freddie Mac

Inmannews - Fri, 06/22/2018 - 2:34pm
The Trump administration is proposing a sweeping reform of how the federal government supports housing finance by calling for the full privatization of mortgage-backed securities giants Fannie Mae and Freddie Mac.
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