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Zillow expands solar energy scores to 84 million homes

Inmannews - Mon, 10/16/2017 - 1:08pm
Zillow is introducing the idea of rooftop solar to millions of consumers and real estate professionals who might otherwise be unaware of its value. ...
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Most MLSs ‘not sure’ if they’ll work with Upstream

Inmannews - Mon, 10/16/2017 - 11:00am
The vast majority of MLSs either need more information about the project before giving their support or flat-out aren't interested in participating ...
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Rent or buy? Top cities for owning, renting and sharing

Inmannews - Mon, 10/16/2017 - 9:03am
In today's market, renters and buyers often find themselves in the same boat, wading through issues with availability and affordability in their respective markets. This uncertain real estate environment leads to the question renters inevitably find themselves asking: "Is it financially smart to jump into homeownership, or should I stay where I am?" ...
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Nine Pitfalls To Avoid When Getting New Tenants

American Apartment Owners Association - Mon, 10/16/2017 - 8:19am

Written by C. Gabriel Lewis

Over the years I have learned a lot about searching for new tenants.  When I purchased my first rental property I had to learn the hard way about what it takes to find good tenants and starting off on the right foot.  Below are nine things you can do to avoid some major headaches when it comes to dealing with rental prospects:

  1. Never take them just at their word.  I cannot tell you how many times I’ve had folks lie to me with a smile.  Some are even good at it to the point they should be professional actors and actresses.  Have them fill out an application and get copies of ID’s and pay stubs.  This would be a good start in verifying if they are being truthful or not.
  2. Never accept work in lieu of rent payment or deposit.  I have found this is one of the most likely to go sour with landlord/tenant relationships.  They will either not do the work, or worse, do the work to poor standards.  This will especially get tricky if you have to evict them later.
  3. Never show a property to a family member or friend.  Yes we live in a busy world, yes they even may be out of town or offshore, but there is NEVER a substitute for the person who will actually move in and pay the rent.  Parents are notorious for this when searching places to live for their kids. Unless they are paying the rent and deposit, don’t waste your time showing it to them or their friends or loved ones.   Ultimately it needs to be a relationship between you and the actual person living there…no exceptions.
  4. Never leave any adult names off of the lease agreement.  If there are two adults moving in, make sure there are two names on the lease.  If there are four, then four names on the lease, etc.  If they say that the other person doesn’t “need” to be on the lease or “comes in from time to time”, then you may want to kill the deal right there.  This is common for those who are trying to sneak in a relative or friend with a checkered past.
  5. Never accept money after signing the lease.  The old saying about money talks and you know what walks is true to form with regards to making sure you get all of the money before or at lease signing.  I learned early in my real estate career that folks don’t always follow through with their word and I was left “holding the bag” with a now-vacated apartment and no money.  To make things worse, I had to file an eviction to get them out which added to my loss of lease and more money out of pocket for court costs.
  6. Never accept a personal check for the security deposit.  You may find this hard to believe but there are folks out there who don’t care if you lose money.  I remember having a gentleman pay a $1000 deposit only to stop payment on it when he changed his mind.  Unfortunately, I had yet to deposit it and when I did, I didn’t get a notice from my bank until ten days later.  Needless to say, it cost me almost a full month’s worth of rent.  Try getting them to pay using a cashier’s check or money order.
  7. Never wait for your tenants to switch over the utilities.  Out of sight, out of mind.  It may not be intentional but tenants will milk every megawatt of power you leave on for them.  Tell them at lease signing the utilities will be shut off the next day (or two if you are feeling nice) and immediately call your local utility company and schedule the shut off after lease signing.  If the tenants do what you told them to do then they will have no interruption of services.  If they didn’t do what you told them to do, shame on them.
  8. Never make empty promises or threats.  Credibility is key when dealing with tenants.  If they feel you are not being truthful or worse, that they can push you around, it will be a long lease period for you.  If you say no pets allowed, make sure you don’t allow pets.  If you say the home will be ready by a certain date, make sure it’s ready by that certain date.  If you follow through with your word, tenants will respect and trust you.
  9. Never hold a property without a full deposit.  Even if they are the “perfect family” do not fall into the habit of holding a property for someone who wants it.  I always tell folks it’s on a first come first serve basis.  If they really want it, or better yet have the means to pay, they will do so.  Do not enable folks to take advantage of you.

Gabriel Lewis is a real estate agent specializing in residential and association management. He is the owner and broker of Titan Realestate Services, LLC located southwest Louisiana and has been assisting homeowners for the last ten years.  He can be contacted via email at cgabriellewis@cox.net.

The post Nine Pitfalls To Avoid When Getting New Tenants appeared first on AAOA.

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Colleges Where It’s Cheaper to Buy a Condo Than Rent a Dorm

American Apartment Owners Association - Mon, 10/16/2017 - 8:02am

A college education has become more and more unaffordable over the years, with tuition increasing 9 percent between 2011 and 2016. But it’s not just skyrocketing tuition that’s hitting students hard; there are the additional expenses of books, meal plans and the big one—housing. Dorm rooms in the U.S. range in cost from $232 to $1,817 per month, with a median monthly price of $705. It’s a hefty price tag for a college student and it led us to wonder, are there cities where students (or their parents) are better off buying real estate?

It may not make sense in cities like San Francisco where the price for a dorm ($926 per month) is minuscule compared to the high cost of rentals and real estate; the average mortgage on an SF condo is $5,279 per month. But can relief from soaring college costs can be found in more affordable cities?

To find out, we compared the monthly dorm rate at 195 U.S. public colleges with the median monthly mortgage on a condo in each of those cities. We found that at 47 colleges it’s actually more cost-effective for students or their parents to buy a condo instead of rent a room on campus.

We ranked the colleges by enrollment to narrow down the list to the 15 most popular colleges. Because these schools have more students and thus a larger pool of new students looking for housing each year, we determined they would be the best places for investment opportunities.

Rank College City Monthly Mortgage Cost Monthly Dorm Cost Cost Difference 1 University of Arizona Tucson, AZ $545 $811 $266 2 Georgia State University Atlanta, GA $1,116 $1,139 $23 3 University of South Carolina-Columbia Columbia, SC $511 $671 $160 4 Kent State University at Kent Kent, OH $664 $751 $87 5 Louisiana State University and Agricultural & Mechanical College Baton Rouge, LA $731 $837 $105 6 University at Buffalo Buffalo, NY $650 $866 $217 7 University of Kentucky Lexington, KY $730 $876 $146 8 University of Oklahoma-Norman Campus Norman, OK $470 $752 $282 9 The University of Texas at El Paso El Paso, TX $441 $546 $105 10 The University of Texas at Dallas Richardson, TX $693 $769 $76 11 University of Akron Akron, OH $733 $780 $47 12 University of Delaware Newark, DE $605 $813 $208 13 University of North Carolina at Greensboro Greensboro, NC $487 $715 $228 14 Sam Houston State University Huntsville, TX $427 $570 $143 15 Miami University-Oxford Oxford, OH $489 $831 $342

Misty Hurley, a Redfin real estate agent in Tucson, wasn’t surprised to see The University of Arizona at the top of the list.

“I’ve had lots of parents contact me after comparing the cost of renting versus buying a home for their college student,” she said. “They’re often coming from places like Washington D.C., Los Angeles or Seattle, where home prices are much higher. The median sale price in Tucson is $195,000, so well below the national median sale price of $293,000 that Redfin reported in August.”

The downside, she says, is inventory is getting tighter in the city and college students (and their parents) are likely to face multiple offer situations, especially for homes under $200,000.

Rounding out the top five list was Georgia State University, the University of South Carolina, Kent State University and Louisiana State University, all of which are in cities with median home prices below the national average.

In addition to saving on monthly housing costs in these cities, there are other perks to purchasing real estate.

“Homeownership can be a great way to build wealth,” said Hurley. “Students will build equity that they can one day use as a down payment on a move-up home or to pay off student loans. If they choose not to sell right away, they’ll have a piece of property that’s ripe for renting, as there are always new college students looking for rentals.”

Owning a property can also be a great way for college students to get involved with the community and feel like they’re really a part of the city, she says.

There are certain considerations students and their families should keep in mind when deciding to purchase real estate–such as the initial down payment, which was not accounted for in this analysis, the maintenance required to keep up a home and other costs like HOA fees. To find out what a mortgage payment will be on a particular home, scroll down to Redfin’s payment calculator on any home listing.

Methodology

On-campus housing cost data was pulled from the National Center for Education Statistics. We looked only at U.S. public institutions that grant Bachelor’s degrees and that have full-time, first-time undergraduates. We then compared that list to cities where we have condo price data, which left us with 196 public institutions. To calculate the average monthly mortgage, we assumed 20% down, a four percent interest rate on a 30 year fixed mortgage, 1.125 percent annual property taxes plus $70 for homeowner’s insurance.

 

Source: redfin.com

The post Colleges Where It’s Cheaper to Buy a Condo Than Rent a Dorm appeared first on AAOA.

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Careful With That Investment: 20 Housing Markets With Slowing Job Growth

American Apartment Owners Association - Mon, 10/16/2017 - 7:57am

Close-up of a pensive female face

There are two parts to a successful real estate investment: buying your property and keeping a close eye on it.

If you invested in rental property, you’ll want to keep a particularly sharp eye on the health of the local economy because that links directly to the rental income you’ll receive.

A slowing economy doesn’t necessarily mean you need to take any action. There are limits to what you can do, after all, and a slowdown is often just temporary. Taking the drastic step of selling your investment shouldn’t be considered every time the government puts out a new number ― a lot of those numbers end up being revised anyway, and what do they really measure?

But in the longer term, your income is in fact affected by how many people have jobs in the local economy and how many are moving into the area ― or out. Rents themselves are closely related to income, but the number of people with the right income for your property can change drastically if jobs are scarce.

Because local economies change, you need to have a plan to accommodate the changes that can take place. Maybe your plan is to just sit tight during a downturn, hoping it’s only temporary. Or maybe you took cycles into account when you first made your investment, anticipating periods of higher and lower income. Or maybe you have a complete exit plan with specific triggers. Whatever the plan is, the most important thing is to have one ― and then to monitor your market to see how the current situation fits with your plan.

The national economy has been on a slow downward trend for a couple of years, so it’s not surprising that some local markets have slowed down fairly sharply; others aren’t slowing at all. We’re not yet at a point where many markets are actually contracting ― losing jobs ― but I won’t be surprised if we start to see some of that in 2018.

My company, Local Market Monitor, has sifted through 320 local markets to identify 20 where a significant slowing in growth has taken place.

Local Market Monitor, Inc.

20 Markets That Are Slowing Down

These markets are still adding jobs, but at a much lower pace than last year. This is often ― but not always ― the prelude to stagnation in the local job market or to an outright loss of jobs. As we’ve seen many times before, a poor job situation may be temporary, followed by renewed growth. But it can also signal a longer, even chronic, period of decline that will affect the value of your investment.

Of particular concern is that many of these markets were, until now, adding jobs at a good clip ― usually a spur to housing construction. A larger housing inventory may be coming online just when demand starts falling. You’ll see that home prices have been rising in most of the 20 markets. This will continue; there isn’t a crash just around the corner. But it’s time to be sure that you have a plan for a period of lower income from your property in these markets so you’ll be ready if it happens.

 

Source: forbes.com

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8 Proven Ways to Make Money in Real Estate

American Apartment Owners Association - Mon, 10/16/2017 - 7:51am
Real estate has produced more wealth than any other industry in the history of time. However, people still remain skeptical about entering into the fray. Most think that they need to start with some sort of capital. That’s clearly not true. The one magic power you do need is to be able to find the money. And we’re often not talking much to open up escrow. If you know what you’re doing, then you can make money in real estate even if you’re just starting out.

Don’t think so? Take the story of Kent Clothier for example. Clothier opened his first escrow for $500. All he did was find a distressed home and a motivated buyer and brought them together. Today, he flips over 1,000 properties and manages 5,000 through his company, Memphis Invest. Dean Graziosi, another one of the most successful real estate investors in the world, has a similar story.

Graziosi grew up in a trailer park. He lived in a bathroom for a year with his dad when he was 12-years old. He had no advantages. No startup capital. No help from anyone. But somehow, he managed to make money in real estate and owns well over 400 properties in his portfolio today. There are plenty of other examples of this as well. The point? You don’t need a lot of starting capital to make money in the real estate industry. But you do need the knowledge and the know-how.

Most people think that it’s easier to make money online than it is to make serious coin in real estate. Well, both are difficult if you don’t know what you’re doing. But when you get a lay of the land and you understand the path forward, you can make strides. Now, here’s what you don’t need to generate an income in the property market, which likely will shatter any limiting beliefs you might currently have about the subject.

You don’t need credit: Even if you have poor credit, there are ways forward if you’re committed enough. Several of the methods discussed in this piece don’t rely on credit whatsoever. In fact, many successful real estate investors such as Justin Colby, Kent Clothier and Dean Graziosi, got rich in real estate while starting with no credit or even poor credit.

You don’t need significant capital: You don’t need capital to make money in real estate beyond a few hundred dollars to open escrow. Of course, this means going for the lower-priced homes or distressed properties and flipping contracts. It also means finding hard-money lenders or other investors that can help you push deals through. This could even apply for home renovations as long as you’re good at finding the money.

You don’t need major assets: There’s another misconception that you need to put up major assets in order to secure a contract or purchase a piece of property. You don’t need this either. You do need to understand how creative financing works. Most people simply stop dead in their tracks because they have this belief about what they need in order to get started.

How to make a living investing in real estate.

When it comes to real estate income, there are two ways to generate cash. You can generate passive income by buying and holding. And you can also generate an active income by flipping contracts, doing renovations or adding value in another area such as putting together property development deals. It might all seem overwhelming at first, but it’s certainly not, especially when you get a lay of the land.

Now, when most people think about making money in the real estate sector, they ask the following types of questions:

How can I invest in real estate with no money? The answer? You can utilize a variety of methods that includes any of the following:

  • Seller financing through lease options
  • Trading fixed assets such as cars, jewelry and so on
  • Taking over someone else’s mortgage payments who might be in a distressed situation
  • Bringing in an investment partner with cash
  • Borrowing from a bank or getting a hard money loan
  • Taking out a home equity line of credit
  • Utilizing a peer-to-peer lending network

How does a real estate investment work? The answer? Real estate investing works on the concept of cash flow, which means that your income has to exceed your outgoing expenses. This is known as a positive cash flow. Now, this can work for both long-term residential and commercial rentals just as well as it will work for short-term vacation rentals.

Is it good to invest in real estate?Absolutely. This is one of the sources (aside from being a business owner) that has generated the most wealth in our history.

What is a wholesale deal in real estate? Wholesale is akin to flipping properties. Except, you never take ownership of the home when you flip real estate contracts. You can learn the specific strategies for doing this from REWW, one of the largest data aggregators for the wholesale flipping market.

With that being said, there are 8 primary strategies for generating a real income in real estate. Whether you can earn a passive income or active income depends on the strategy that you implement.

1. Long-term residential rentals

One of the most common methods for making money in real estate is to leverage long-term buy-and-hold residential rentals. People will always need a place to live. Plain and simple. This means getting involved with rental properties. You need to do the proper amount of due diligence to source your property by keeping three principles in your mind: location, location, location.

Yes, you’ve heard it before, but location is everything when it comes to real estate. Not only does this apply for actually an increased asset value over time, but also in your ability to quickly rent that property to a long-term tenant. When you’re considering long-term residential rentals, look for a great location. That’s more important than the current state of the property itself. In fact, run-down homes in great locations are one of the best investments you can make.

This involves a more traditional approach to making money in the real estate market. It means buying a property with some cash on hand to make a down payment, and actually holding that property for the long term. Now, depending on your personal situation, you can easily grab that property for a very low down payment or even no down payment. That’s especially true if this is a pre-existing, income-producing property.

If there’s positive cash flow in a residential rental, then it makes a great investment. However, you’ll likely not find that too easily, unless the current owner is unloading for personal reasons due to a divorce or other need to liquidate that property that necessitates having some cash on hand.

2. Lease options

Lease options are a great way to get involved in real estate without having to put up a significant amount of capital or even have great credit at the outset. You’re leasing with an option to buy. This tends to work well when the real estate market is climbing because you’re creating a pre-set price that you can later purchase the property at.

If, for example, the property market climbs substantially, you can buy that property at a discount. You could also potentially turn around and sell your rights for that purchase to someone else. The clear bet here is on the bull market in real estate. As long as this is an option you can exercise and not something set in stone that says you have to purchase at the end of the lease regardless, then you can just about guarantee you’ll turn a profit.

3. Home-renovation flips

The fix-and-flip culture has exploded. Thanks to the popularity of home renovation shows, we’re now experiencing a massive boom in the traditional renovation flip market. While there’s certainly a lot of money to be made here, navigating these waters in the beginning can be tricky. When you lack the knowledge or the experience, you could find yourself on the losing end if you don’t select the right home.

Matt Larson has flipped more than 2,000 homes in Iowa and Illinois. Over the course of that time, he’s learned some lessons on what to look for and what not to look for when flipping a home with a renovation. His advice? Go after the ugliest homes in the nicest neighborhoods. That’s where the real value is. But the other difficulty here is not only finding those homes when you’re not well-networked with real estate agents, but also understanding your after-repair value.

How much will the home be worth once you’ve invested in fixes and repairs? To accurately determine that you need a strong relationship with a general contractor and actually tour the property on-site. While buying site-unseen at an auction might seem alluring, unless you really know what you’re doing, you could lose your shirt. But making money on a home-renovation flip, as long as you understand the underlying costs and potential value, is rather straightforward.

John and Julie Wakefield, a husband-and-wife flipping team who’ve done hundreds of flips, say something similar along the same lines. They advise not to bite off more than you can chew. And more importantly. You should look for creative ways to help others. Success as a real estate investor has as much to do with how creatively you can solve problems as it does how well you can crunch the numbers.

4. Contract flipping

One way that you can make money from real estate without having to put up very much capital or credit is to flip contracts. All you have to do is find a distressed seller and a motivated buyer and bring them all together. While locating a distressed seller might seem difficult, Clothier has systemized the entire process for doing this. The trick with contract flipping is to identify the distressed seller and locate a ready-to-go buyer.

By bringing these parties together, you’ve cut out the need to go hunting for a buyer after you’ve entered a contract. That situation presents more risk. Instead, by locating the sellers and the buyers beforehand, you can easily enter into a contract with the confidence that you won’t get stuck having to close escrow on the property.

To do this, you have to be able to identify either vacant homes or homes that are behind on their mortgages. That’s the tricky part. You’re effectively trying to find distressed sellers. But homes that are already vacant are primed for an opportunity like this.

5. Short sales

Short sales occur when the current owner of their home is behind on their mortgage, but the property hasn’t yet entered into foreclosure. In order for this to happen, all parties have to agree to the transaction since the property is being sold off for less than is owed on the existing mortgages. This is a great opportunity to make a quick profit without investing into lengthy renovations.

However, succeeding with short sales or any other default-type auctions, is often tricky. You usually need to pay for the homes outright in cash and sometimes that has to happen sight-unseen. Short sales are better than auctions because you get a chance to check out the home and enter into a negotiation process. Unless you’re a seasoned investor, jumping in without an inspection and complete review could be risky.

Short sales take time. But, they can be well worth the wait. The potential return on a short sale can be instantaneous. Tens of thousands to hundreds of thousands of dollars can materialize as soon as the property purchase goes through. That’s because the bank is engulfed in a bad investment. But don’t expect to steal the property. You’ll have to negotiate a relatively fair price. Depending on how badly the bank wants to unload that property, it could sit around and wait for another buyer, so don’t try to low-ball too far.

6. Vacation rentals

Vacation rentals present a lucrative path to profits in the real estate marketplace. Not only can you make some side hustle income from vacation rentals, but you could potentially make a significant amount of money and build up a substantial passive income stream if you’re in a highly-trafficked tourist locale. Places like Los Angles, Miami and other tourist hot-beds are well known for having high demand for these short-term rentals.

I’ve long been a firm believe in the vacation rental market. The best part? You don’t even need to own the properties to make money. Two of the world’s most successful property management companies that specialize vacation rentals like Joe Poulin’s, Luxury Retreats or Michael Joseph’s, Invited Home, don’t actually own the homes. But they do provide a high-end consumer experience.

How do you participate? Leverage existing relationships with owners in your area. Network with others. Build bonds. Create systems. Ensure the upmost satisfaction and go above and beyond for anyone staying at the homes you’ll manage. And see how you can help to take some of the time and stress off of the present owners’ existing rental businesses. Or, if you have a property, list it on a site like AirBnB, HomeAway, or FlipKey before managing vacation rentals for other owners.

7. Hard-money lending

Hard-money lenders provide short-term loans to people that normally wouldn’t qualify for those loans. Now, in order to participate in hard-money lending, you’ll need some capital behind you. These are loans that are often at high interest rates because they’re for very brief periods. To get your first deal done, you could turn to a hard money lender. If you have a “sure thing,” and you lack the capital, this is your best bet.

However, you could also become a hard money lender. Now, that means you’ll need some capital. And this likely isn’t going to be the first way you start out making money in real estate. But as you build your network, your capital and a solid portfolio of deals, you could provide these bridge loans and make a great rate of return.

Even if you lack an enormous amount of capital, as long as you can successful identify the right deals, provide a small amount of money and generate a high success rate, you can easily find investors to come on board. The interest rates here make sense. There’s more risk, but also far more reward. It’s a way to keep your cash fairly liquid and generate a nice profit in the short term without having to wait years and years for those returns to materialize.

8. Commercial real estate

One of the great opportunities in real estate for making a considerable amount of money is to invest in commercial real estate. Commercial real estate developers focus not only on flipping properties, but also in developing them, adding value to them to increase their net incomes through rehab or renovation and upgrades, but also through consulting on projects that might take more seasoned real estate investors to see to fruition.

Ali Safavid, founder of 5209 Investments, one of the largest commercial real estate developers on the West Coast of the United States says that commercial real estate is one of the most lucrative sources for both income and profits in the real estate market. As long as you can find ways to add value to the exchange, investing in commercial real estate can be one of the largest income generators you’ll find.

People always need office space and retail to run their businesses. These physical locations are bread and butter in the real estate niche. As you grow, you can find ways to open up shopping malls, develop large scale buildings, and more. But you have to start somewhere.

Source: entrepreneur.com

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Ahead Of Super Bowl, City Leaders Debate Short-Term Rental Regulations

American Apartment Owners Association - Mon, 10/16/2017 - 7:51am

MINNEAPOLIS (WCCO) — In just more than 3 months, the Twin Cities will host millions of visitors for the Super Bowl and new regulations may be in place for those looking for a place to stay on websites like Airbnb.

On Tuesday’s meeting, Minneapolis city council members gave a first round approval to the new proposed regulations.

It would require hosts to get a license through the city and pay a $46 fee to list their home. Companies like Airbnb and VRBO would have to pay a $5,000 dollars to do business in the city.

Over in St. Paul, council members are set to vote on similar regulations on Wednesday afternoon.

Folks renting out their homes would have to pay a $70 annual fee and businesses would pay $7,000 for a short-term rental platform license.

Leaders in both cities agree services like these are needed, along with some regulation.

“Let’s not forget Airbnb and VRBO, they are already taking in customersand clients, so all we are doing is making sure we have a baseline of safety and making sure a new and innovative business can function,” said Minneapolis Ward 3 Council Member Jacob Frey.

“Here in St. Paul, we have tons of hotels and a bunch of great places to stay. Unfortunately, we don’t have enough hotel rooms to accommodate everyone that will be here for this great Super Bowl, so Airbnb, Expedia, VRBO…it’s a great added addition,” said St. Paul Ward 3 Council Member Chris Tolbert.

The City of St. Paul is also considering adding parking restrictions to homes that are being rented out.

St. Paul city council members are set to cast their final votes on the regulations on Wednesday.

In Minneapolis, council members will vote at their meeting on October 20th.

There could be some final tweaks to the rules before everything is said and done.

Airbnb released a statement Wednesday:

“Airbnb and our hosts are thankful to Minneapolis and Saint Paul policymakers for continuing to address this complex issue in good faith. We want to partner with them on commonsense and fair regulations.”

 

Source: minnesota.cbslocal.com

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Apartments Rents Are Growing the Most in Former Housing Crash Cities

American Apartment Owners Association - Mon, 10/16/2017 - 7:45am
Apartment rents continue to grow more slowly than before. The cities where rents grew the most in 2016 are still top cities for rent growth this year, but their lead is getting smaller.

“A year ago there was a pretty big spread between Houston, which had rent growth of about 1 percent, and Sacramento, which was much larger –nearly 12 percent,” says Jay Denton, senior vice president with data firm Axiometrics.

Today, no major metro areas have annual rent growth of more than 10 percent. Rents are still growing the most in markets with new jobs and relatively few new apartments. Many of those markets are cities and towns that were hit hard by the housing crash. These are often places that have been growing in population. In addition, apartment developers have built relatively few new units in housing crash cities like Sacramento, Calif., and Las Vegas, creating less competition for apartment properties.

Rents grew just 2.2 percent on average in the U.S. over the 12 months that ended in the third quarter, according to a survey of 121 markets by research firm Yardi Matrix. That’s the slowest rate of increase since April 2011.

However, rents are still growing on average. “We don’t believe it’s time to turn out the lights on the expansion in the multifamily sector,” according to Yardi. “Job growth and social and demographic trends foretell strong demand for the next few years.”

Meanwhile, the markets where rents grew the most quickly 2016 have slowed down the most in rent growth in 2017. For example, Sacramento still boasts the strongest rent growth in the United States. But its lead is shrinking. Apartment rents in Sacramento grew by 6.9 percent over the 12 months that ended in the third quarter 2017, according to Axiometrics. During the same period a year before rents rose by nearly 12 percent.

Part of the reason for the limited rent growth in Sacramento is that while the city’s population is growing quickly, much of the net migration is from immigrants who are taking relatively low-wage jobs. “You see service workers. Their salary and wages are quite low, but they are renting,” says Douglas Ressler, director of business intelligence for Yardi Matrix. These workers are not able to pay double-digit rent increases year after year. Sacramento also benefits from an influx of people priced out of the San Francisco Bay Area.

Yet the high rents in Sacramento are also supported by the relative lack of new construction. Until recently, developers had built relatively few new apartment communities in Sacramento. Developers built a huge number of new homes there during the housing boom, which took years to be absorbed after the crash. “Because of the oversupply of housing, some of the hottest markets in the last real estate cycle took the longest to recover,” says Denton.

Local zoning restrictions also make it difficult to build apartments in many parts of the Sacramento area. Many jurisdictions explicitly favor single-family houses, says Ressler.

Another housing crash city, Las Vegas, experienced the second fastest growth in apartment rents. Apartment rents in Vegas grew by 5.8 percent over the 12 months that ended in the third quarter 2017, according to Axiometrics. “Las Vegas had a longer, deeper downturn than the rest of the real estate market,” says Denton. “It is just at a different place in its real estate cycle. Other markets have had a lot of construction.”

Developers have finally begun to put new product on the market—3,500 new apartments will open in 2017, according to Axiometrics. These new apartments are already slowing down the pace of rent growth in the city. However, the apartment market in Las Vegas is likely to remain healthy. In 2018 developers will only open 1,700 new apartments, while the city is creating about 30,000 new jobs a year.

The rest of the list of markets where rents are growing the most quickly is crowded with cities that suffered deeply in the housing crash. Orlando, Fla., is number three on the list. Average apartment rents grew by 4.8 percent there over the 12 months that ended in the third quarter, according to Axiometrics. San Diego is number five, with rent growth of 4.5 percent.  Jacksonville, Fla., is number six, with rent growth of 4.4 percent.

 

Source: nreionline.com

The post Apartments Rents Are Growing the Most in Former Housing Crash Cities appeared first on AAOA.

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