RSS

Should real estate agents FSBO their own home?

Inmannews - Thu, 10/12/2017 - 11:00am
As a real estate agent, you work hard to buy and sell homes for your clients every day. When it’s time to put your own house on the market, there’s no one more qualified than you to handle it, right ...
Categories: RSS

House-Flipping Horror Stories That Will Make You Very, Very Afraid

American Apartment Owners Association - Thu, 10/12/2017 - 10:51am

These days, it seems like everyone wants to make a fortune flipping houses—and it’s not hard to see why. Reality TV makes rehabbing look like a fun, quick, and easy route to big, big profits.

Reality check: As any pro can tell you, this is not always the case. To set the record straight, we asked industry experts to share their more traumatic house-flipping horror stories, and the lessons they learned on those jobs.

Read on for some of the scariest real estate nightmares you’ll ever hear. Remember to keep the lights on!

The case of the missing cabinets. And dishwasher. And fridge.

“One of the worst flips I have experienced involved being burglarized three times. I was rehabbing a corner unit in a low-income neighborhood. We were almost finished with the rehab when we noticed the cabinets had been stolen off of the walls. A few days later, the dishwasher was gone. Two days after that, the refrigerator was missing, too!

“We found the culprit when pulling up to the property early one morning and seeing our refrigerator sitting in the neighbor’s front yard. After going over there to confront the buyer, we found him installing our cabinets into his kitchen. We recognized him: He’d posed as a contractor to give us an initial renovation estimate. We didn’t take his bid, but on his way out he broke the handle on the garage door to prevent it from locking. After that he started using the garage to enter and take whatever he wanted.” – Carol Sankar of Carol Sankar Enterprises, Charlotte, NC

Lesson learned: “Today, we have cameras, alarms, and have started working in areas where there is a consistent police presence,” adds Sankar.

When flipping, it’s important to put safety in place to protect your investment. As in the case of Sankar’s broken handle, it’s also a good idea to regularly check your doors and windows for signs of tampering.

———

Here’s what happens when you hook up a toilet to the kitchen sink

“In one of the first houses we ever flipped, we used the cheapest contractors we could find instead of the most qualified. I came to regret that decision while hosting our first open house when a prospective home buyer visited the restroom and found out the hard way that the bathroom pipes had actually been rerouted to the kitchen sink. When he flushed the toilet, its contents started spewing out of the kitchen faucet. It doesn’t get more horrifying than that!” – Allen Shayanfekr, CEO & co-founder of Sharestates, Rockville Centre, NY

Lesson learned: When hiring a contractor, the cheapest route can be risky—and can result in higher expenses when you have to repair shoddy work. Use the most qualified workers for the job. Read reviews, ask to see photos of comparable projects they’ve completed, contact references, and verify that the contractor has been licensed according to your state’s requirements. And factor this expense into your original budget; that way you know you have the cash and won’t feel forced to cut corners.

———

What happens when workers go AWOL

“We were working on a property that was going to be a home run of a flip. I bid the work out to a project manager and everything went smoothly, at least until the floors went in. I eventually noticed that part of the floor was uneven, so I asked the manager to fix it. Instead, he had his team just continue. By the time I checked again, he’d laid down all the flooring with no corrections, then walked off the job, leaving us with a huge mess to fix.” – Andrew Thomas Greer of Andrew Thomas Greer Real Estate, San Diego, CA

Lesson learned: When flipping houses and hiring help, it’s always wise to visit the property often to keep an eye on how things look. As soon as you spot a problem, make sure it gets dealt with. Setting up a payment schedule with the project manager before starting the work will help you protect your asset and give contractors an incentive to keep working until the job is done.

———

A flip is never finished until it’s finished

“Two weeks out from closing, the temperature unexpectedly plunged to below freezing—and since the heat wasn’t turned on in time, a pipe burst in the home and 4 feet of water filled the basement. The damage was extensive; we had to replace the water heater and furnace and bring in water damage specialists to save the hardwood floors. Needless to say, we had to postpone the closing.” – Mark Ainley, GC Realty Investments in Bartlett, IL.

Lesson learned: Don’t mentally put a property on the back burner because it’s on its way to closing. Assign someone to visit the property regularly to make sure that everything remains in working order, especially in conditions where it’s inadvisable to leave a property unattended, such as cold temperatures or heavy rains.

 

Source: realtor.com

The post House-Flipping Horror Stories That Will Make You Very, Very Afraid appeared first on AAOA.

Categories: RSS

The 5 Biggest Mistakes Real Estate Investors Make and How to Avoid Them

American Apartment Owners Association - Thu, 10/12/2017 - 10:41am

Real estate has always been one of the great equalizers in wealth creation in the U.S. As a tangible asset with generally low barriers to entry, people from all walks of life and income levels have succeeded in building real estate empires.

The numerous success stories coupled with the potential for lofty returns make the asset class tantalizing, but taking the plunge into real estate investing is not something to be taken lightly. Investors breaking into real estate should conduct a substantial amount of research and diligence before getting started to help safeguard against rookie mistakes.

In the modern age of information, access to a variety of resources is plentiful. The old adage that “failure is the key to success” may be avoided on a personal level by learning from the experiences of other investors to make smarter decisions going forward.

While there’s no denying that experience is a great way to learn, you can leverage a number of resources to avoid common mistakes. Here are five of the most common mistakes made by new investors and how to avoid them in your next deal.

Limiting yourself to a specific market. When it comes time to choose where to invest, your home market may feel like the safest place to start because it’s familiar, but that doesn’t necessarily mean it is the best option. Opportunity doesn’t have borders, and that should always be a consideration as you look for your next investment.

For example: It’s tough for someone living in an expensive metro area like New York or Los Angeles to find long-term rentals in their immediate area that generate strong yields, let alone get over the high barrier to entry from a price perspective. There are dozens of other markets across the country that are displaying economic stability, strong housing demand and high returns, so why eliminate those markets from contention?

Advances in technology, data and services have been a critical development in allowing investors to research and enter markets across the nation as they search for better investment opportunities.

Thanks to the institutional investors that have entered the single-family residential sector, there are now a growing number of national and regional service providers that provide resources to small investors in a way that historically didn’t exist.

Accessing these service providers across the country offers investors transparency and clarity into opportunities outside of their home markets, empowering them to transact in top-performing investment markets and feel secure in their team and decisions.

Over- or under-renovating. Understanding the level of renovations a rental property needs is key to a successful deal. Real estate investors should aim to renovate to the level of local market condition and realize that renovations can vary from neighborhood to neighborhood, even in the same city.

Regardless of the condition of the property, understanding the scope of the renovation is a bespoke analysis that requires focus. Investors may find themselves in a difficult situation when they renovate beyond what the market dictates. If all the homes in an area have tile countertops, adding granite countertops probably wouldn’t be a worthy investment as it wouldn’t cater to the typical renter or owner in that neighborhood. This could limit the return on investment by only having a marginal impact on the rental rate or sale price.

You may avoid over- or under-renovating by simply talking to your team of local professionals, including a real estate agent, property manager, contractor, etc. They are market experts and should be able to help you decide on worthy improvements.

You can also tour other houses in the area when possible or use online resources to see photos and scope out the local competition. Doing your diligence before initiating any renovation projects may boost your returns and protect you against wasting time and money on the wrong renovations.

Not understanding how debt works. Real estate investors typically use debt for two reasons:

  1. To expand their buying power. Rather than spending $100,000 of equity on a single property, financing can allow that same $100,000 to go further by spreading it out among several properties with a smaller down payment on each property.
  2. To improve returns. If an investor is able to obtain debt at a lower interest rate than the net yield of investment, the levered return of the investment is higher than if it was paid for with cash.

Both functions of leverage may be very attractive, but obtaining debt does not come without its risks, which is what novice investors should be wary of.

Less experienced investors may take on expensive debt that charges a higher interest rate than the investment yields. In that situation, you will experience negative cash flow, as the net income of the real estate investment is less than the monthly debt service. Now you’re forced to take money out of pocket to make up for this shortfall in order to keep the loan current and avoid defaulting.

The best way to avoid this scenario is to crunch the numbers of a deal and confidently know that the property will generate enough revenue to cover the loan amount. It’s also important to have a deep understanding of the costs and expenses that will be included in the operation and maintenance of the property.

Doing everything yourself. Most investors take on their first few deals as a part-time opportunity in addition to their primary profession and try to tackle the investment without any outside help. Given the lack of time available coupled with general inexperience investing, it’s not surprising how often people fail when employing this strategy.

It can be a challenge to stay on top of all the moving pieces involved in a real estate investment when it is your full-time profession, so what chance do you have if you’re only dedicating a few hours per week to a property?

Starting a real estate investment without focus or the right resources can put even the best deal in a bad position. Instead, before getting started make sure to have a clear scope of work, a strong understanding of what a property requires and someone assigned to complete each task.

Managing the project proactively rather than reactively can be a saving grace in real estate investments. It allows for you to assemble the right team who will be able to help keep your investment goals on track. Again, don’t reinvent the wheel. Leverage the experts you have at your disposal who can provide you with support.

Not saving for repairs and maintenance: The final common mistake that investors make is not having realistic expectations as far as maintenance costs and capital expenditures. Most sophisticated investors will set aside at least 2 percent of the value of the property into a reserve account on an annual basis for these potential costs.

Novices tend to set nothing aside and are in a tough situation when a major repair is needed or when replacing a critical component, as they don’t have the capital necessary to complete the work. Remember, everything in your investment has a lifespan and will need to be replaced eventually.

The best place to start when taking on any type of new project is with preparation. By knowing the most common pitfalls and having a plan in place to avoid them, new investors can find success in real estate investing.

Whether flipping houses or purchasing long-term buy-and-hold rental properties, investors who do their diligence are much more likely to find repeat success. While no deal is perfect and everyone is bound to make a mistake or two, those who learn from them and set up processes to avoid making them again in the future put themselves in a position to succeed going forward.

Source: realestate.usnews.com

The post The 5 Biggest Mistakes Real Estate Investors Make and How to Avoid Them appeared first on AAOA.

Categories: RSS

Guide: Renting-To-Own For Landlords And Tenants

American Apartment Owners Association - Thu, 10/12/2017 - 10:32am

Posted on Oct 12, 2017

While there are many benefits of being a landlord, the time may come when you want to sell. Rent-to-own is one approach to help you sell your home — especially if your investment property won’t stand out in a crowded real estate market. Learn what rent-to-own homes are, as well as their benefits and disadvantages.

What Is a Rent-to-Own Home?

A rent-to-own home allows qualified tenants to rent for a lease term with the option to buy your home at the end of the lease. In terms of how to rent-to-own a home, it takes a special lease agreement outlining the terms and conditions.

Renters need to put down a type of deposit, called an option fee. The option fee, which ranges from 2 to 7 percent of the home’s value, is not refundable if the tenant decides not to purchase the home.

Once you enter into a rent-to-own home agreement, you’re locked into it. If you receive another offer for your home while you have rent-to-own tenants, you cannot accept it. Before you decide to offer your home under a rent-to-home agreement, look at the full benefits of rent-to-own as well as the disadvantages.

Rent-to-Own Benefits

If you want to sell your house but haven’t been able to, rent-to-own can solve your problem.

If you moved but weren’t able to sell your home before the move, you might be carrying two mortgages. Renting out the home you no longer live in can help cover your mortgage payments so you can make those monthly payments on time, meeting your financial obligations and maintaining good credit.

When your tenants are considering buying the home, they may be more likely to take care of the property. Even if they don’t buy the home at lease end, your home should still look good.

For tenants, rent-to-own can be an attractive way to become homeowners, with a little time and money. Tenants with bad credit, who may be unable to qualify for a mortgage, can delay the mortgage application process and improve their credit during the lease period. When the lease ends, they should be able to apply for a mortgage and buy the home.

Rent-to-Own Disadvantages

Tenants aren’t obligated to buy with a rent-to-own lease, so at the end of the lease, you could be stuck with a house you need to sell. Or, you could wind up with a tenant who breaks the lease or causes property damage, then declines to buy the home.

If home values go up, you cannot revisit the agreement and increase the price of your home. You could wind up selling your home for less than you otherwise would had you rented the house and waited for the market to improve.

For tenants, rent-to-own results in rent above market rate as well as “rent credits,” extra money that’s put toward the down payment. If you decide not to buy the home, you’ll lose rent credits and the option fee.

Rent-to-own isn’t right for everyone, but it might be exactly what you need. To learn more about rent-to-own and other topics affecting landlords, and to receive the lowest price on landlord-tenant formsjoin American Apartment Owners Association.

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

 

The post Guide: Renting-To-Own For Landlords And Tenants appeared first on AAOA.

Categories: RSS

As California burns, here’s what you need to know about fire insurance

American Apartment Owners Association - Thu, 10/12/2017 - 10:30am

Most homeowners insurance policies cover fire damage. But heads-up: That’s not the whole story.

If you live in a high-risk area, such as near a canyon, you may need to pay more for additional coverage.

And if, God forbid, a fire has devastated whole communities, such as what we’re seeing now in Northern California, your home-replacement dollars could be stretched thin as costs soar for everything from materials to labor.

“All those commercials about insurance companies offering peace of mind when things like this happen — those are just ads,” said Amy Bach, executive director of United Policyholders, a San Francisco-based advocacy group.

“In reality, insurance policies are written by teams of lawyers, and it can be rough for homeowners,” she said.

Most homeowners insurance covers both your home and all property within. More than 90% of homeowners buy coverage, according to recent estimates, and as many as 40% of renters purchase insurance for their belongings.

After the recent drought turned California into a huge pile of kindling, insurers racked up billions of dollars in fire-related claims. Some, such as Allstate, stopped writing new policies. Others, such as Farmers and State Farm, became choosier about homes they’d cover.

The insurance industry says it’s ready to handle claims from the fires now raging statewide.

“Insurers will 100% be there for homeowners,” said Nicole Ganley, a spokeswoman for the western region of the Property Casualty Insurers Assn. of America, a trade group. “Insurers are moving very quickly to help policyholders.”

Be that as it may, coverage may not always be easy to obtain.

Homeowners in high-risk areas who can’t find coverage in the open market may have to turn to a state-sponsored program called the California FAIR plan. FAIR covers up to $1.5 million for a structure and its contents, which in some cases won’t be enough for full replacement of a lost home and property.

If there’s one takeaway from the blazes now causing widespread damage in the Golden State, it’s for homeowners and renters to make sure their coverage is up to date — and that nothing sneaky has made its way into your policy.

Narbeh Shirvanian, a Glendale lawyer who handles fire-related claims, said it’s not unheard of for an insurer to change the terms of a policy during the renewal process.

“It might be disclosed,” he said. “But let’s be honest, nobody really reads all this stuff.”

As a result, you may find that you’re shouldering more of the risk than you originally thought.

Shirvanian also warned of seemingly arbitrary responses to fire claims. If a structure burns down, then all legitimate insurance claims will be honored.

But what if there’s a wildfire nearby and your home is impacted by smoke and ash? Will your homeowners coverage pay for the cleanup?

“We’re seeing issues with smoke and ash damaging homes and insurance companies playing games,” Shirvanian said. “One year they do one thing, one year they do something else.”

It’s very important as the economy recovers from the Great Recession to be mindful of rising property values. Yes, that’s great from a maybe-I’ll-sell perspective. From a fire perspective, it can be a whole other thing.

Replacement costs you locked in for your insurance policy may no longer reflect current conditions, meaning you may have to reach into your own pocket to make yourself whole.

Also, widespread fire damage will be felt in the market in the form of rising costs for materials such as wood and concrete, and almost certainly higher labor costs as contractors take advantage of supply-and-demand situations.

A smart idea is to pay a little extra for what’s known as an extended replacement cost endorsement. This is basically additional coverage intended to accommodate at least a portion of any unexpected cost increases.

You can also purchase additional coverage for code upgrades. For example, the rules might have changed for electrical systems or insulation since your house was built. Code-upgrade insurance will protect you from so-called betterments that your basic policy might not address.

“Insurance companies have had enough experience with fires in California to do a good job of resolving claims,” said Bach at United Policyholders. “But that’s still not always the case.”

I strongly advise homeowners and renters to take their smartphones and walk around their homes shooting a video of their belongings. This can provide helpful evidence if an insurer disputes, say, that you owned a state-of-the-art home-theater setup.

If you have to evacuate, save all receipts. Many homeowners policies include so-called ALE coverage, as in “additional living expenses,” which will include costs such as hotel rooms, food and rentals.

For more info, you can reach out to the state Department of Insurance via their consumer hotline: (800) 927-4357.

 

Source: latimes.com

The post As California burns, here’s what you need to know about fire insurance appeared first on AAOA.

Categories: RSS

Who is the next disruptor in the vacation rental industry?

American Apartment Owners Association - Thu, 10/12/2017 - 10:19am

Travelers have been staying in vacation homes for centuries, but it wasn’t until the emergence and disruption of VRBO.com and Airbnb that the industry became a mainstream lodging alternative. According to Phocuswright, 32 percent of U.S. travelers reported staying in a private home in 2015, up from 8 percent in 2010. This triple-digit growth has attracted attention from the entire travel sector, as evidenced at the Skift Global Forumlast week in New York, during which every hotelier and OTA CEO addressed the subject of vacation rentals.

Vacation rental managers and homeowners have been battling—and, arguably, profiting from—disruption for the last eighteen years.

When VRBO.com was founded in 1999, homeowners in traditional vacation destinations (beach, mountain, lake, and theme park-oriented locations) found a marketing channel to reach a mass audience of travelers and no longer relied on professional property managers for bookings. In 2008, Airbnb was created, and by 2011, the company had become a global powerhouse initiating a cultural shift in travel and a marketplace for shared lodging options and privately-owned urban accommodations.

Since then, the vacation rental industry has experienced fast growth and consolidation with Expedia, Priceline, Airbnb, and TripAdvisor taking early leads by acquiring vacation rental channels and competing for market share in this rapidly-evolving travel sector. In addition, metasearch platforms and multi-destination vacation rental management companies are emerging and expanding, backed by millions of dollars in venture capital funding, with hopes of creating big-brand names for privately-owned accommodations.

Even with consolidation, the vacation rental industry is ripe for disruption.

Consumers still find it incredibly difficult to search for and book vacation rentals. Moreover, homeowners and managers experience friction using the latest marketing channels, property managers are challenged with scaling operations across destinations, and the industry has yet to adopt standards that rival the hotel and cruise industries.

Consequently, hoteliers, OTAs, and investors are chasing the next source of disruption in the fast-growing industry.

Where are the gaps and friction? In all phases of the transaction between the homeowner and the traveler, friction, gaps, imbalanced distribution of profits, and struggles with managing customer expectations still exist in the sector. Challenges and potential areas of disruption include:

  • Marketing Dependence
  • Booking Path Optimization
  • Brand Recognition
  • Scalability of Property Management Services
  • Standardization to Meet Customer Expectations
MARKETING DEPENDENCE

Vacation rentals are largely privately owned and managed by local companies which possess little brand recognition. As a result, these owners and managers have been increasingly forced to rely on online marketplaces as a primary source of bookings, and the expense of using these channels in rising.

However, while vacation rental managers and homeowners are dependent on OTAs, OTAs are dependent on Google.

According to Skift, “Combined, Priceline and Expedia likely spent $5.8 billion on digital advertising in 2016… Assuming that a few percentage points of spend is on Facebook and a few is on other channels, we can estimate that around 70 percent of Expedia and Priceline digital ad spend went to Google. This would amount to just over $4 billion in 2016; this includes both AdWords and the much smaller metasearch part of Google.”

This spending on digital advertising translated to 33 percent of gross profit for the two travel giants.

Google travel executive Oliver Heckmann told Bloomberg that he has the tricky job of keeping online travel agents happy while building increasingly competitive services for consumers. These advertisers need Google as much as the Alphabet Inc. unit needs them, but he’s always mending fences.

“If I look at the industry, everybody is sort of collaborating and competing with each other,” he said, while dismissing concern about a larger threat from Google. “I want to get a margarita every time I have to clarify that misunderstanding.”

The current level of marketing dependence in the industry points to potential disruption. Vacation rental suppliers are spending 20-25 percent of their profits on digital marketing channels (including OTAs), and OTAs are spending a third of their profits on digital marketing.

If a new player can find a way to insert itself between search engines and bookings for vacation rentals, there is a significant margin up for grabs.

BOOKING PATH OPTIMIZATION

The vacation rental industry has not yet identified the best booking path for individually-owned vacation homes.

OTAs are forcing a booking path that mirrors the hotel booking process. However, in contrast to hotels, vacation rentals are a “considered purchase” (Defined as a more complex buying decision with a high degree of financial and emotional risk which requires more investigation and comparison prior to a transaction than booking a hotel).

OTAs have implemented processes over the last year to eliminate contact between the traveler and the homeowner or manager. These actions have caused an uproar among vacation rental owners and managers as the new process fundamentally changes how vacation rentals are sold.

On one hand, as a “considered purchase,” the rental traveler has more questions when booking a multi-bedroom home for a multi-night vacation than they do when booking a standardized hotel room; and owners and managers have a need to talk to customers to set expectations and convey critical information about the property.

On the other hand, many homeowners and managers are slow to respond to requests for information causing anxiety and difficulty for travelers. Each owner or manager who does not respond immediately to an email, chat, or phone call pushes the entire vacation rental industry further into the hands of OTAs.

The difference in the booking path between vacation rentals and hotels presents a challenge that, to date, has not found a solution.

 

BRAND RECOGNITION

OTAs have created a booking path that mirrors hotels—with one notable exception. OTAs still prominently display the hotel brand, while they have removed the brand name for vacation rentals.

Airbnb, Expedia-owned HomeAway, Priceline, and TripAdvisor have proactively taken bold steps to insert themselves between travelers and the homeowner or manager by masking customer information, becoming the merchant of record, and eliminating any mention of the brand name or homeowner.

The idea of creating a big-brand global name for vacation rentals was first attempted by ResortQuest. Through many iterations, the idea proved to be unsuccessful at the time.

Alex Nigg noted in his article, Fighting 800 lb Gorillas, in the fall issue of VRM Intel Magazine, “Simon Lehmann, formerly of Phocuswright, at VRMA (Europe) in Amsterdam, said building a brand is an exercise in futility for a VRM. If he is correct, day-to-day operational management of properties will become the key competitive advantage of property managers.”

The fact that no company has been able to build a sustainable, recognizable brand in vacation rentals does not mean it is impossible.

 

SCALABILITY IN PROPERTY MANAGEMENT

Several multi-destination property management companies are raising funds and attempting to consolidate supply into managed brands. These companies have the objective of decreasing the cost of management by implementing technology solutions and scaling processes. However, the vacation rental industry is difficult to scale. As evidenced by reviews, these companies are challenged with maintaining a high level of quality and cleanliness while scaling operations for several identifiable reasons.

First, these new companies are more willing to add inventory to their portfolios that other local companies have declined to service. Business development employees are incentivized by adding homes, not adding quality homes. As a result, the base level of quality is difficult to manage. Second, the multi-destination management companies are focused on technology and—at least in the short-term—are struggling to accomplish automation without sacrificing quality and service. In time, automated solutions will improve and adapt; but the process has been slow, and learning curve is steep. For example, a number of multi-destination companies sought to replace housekeeping inspectors with mobile photos taken by contracted housekeepers. Most soon discovered that mobile photos cannot replace an inspector in gauging cleanliness.

Scaling services for successful vacation rental management has not been perfected, and opportunities for disruption continue to exist in developing multi-destination processes that decrease expenses, maintain quality, and encourage guest loyalty.

 

STANDARDIZATION TO MEET CUSTOMER EXPECTATIONS

The vacation rental industry has struggled to adopt meaningful standards for accommodations. In some vacation rental destinations in the US, homeowners still require guests to bring their own sheets. In many others—including some of the largest property management companies—linens are being washed in the home between stays by housekeepers without any attention to laundry safety standards. In kitchens, many homeowners leave food in cabinets and refrigerators and cleaning supplies in easy reach of children. The industry also does not having any exit postings or safety instructions, which make it vulnerable to regulations and attacks by hotel advocates and lobbyists. This lack of standardization offers an opportunity for industry disruption that has the potential to make or break the sector.

 

WHO WILL DISRUPT THE INDUSTRY?

In spite of the many challenges facing the industry, vacation rentals as a mainstream lodging alternative are here to stay. Where there is friction in the booking process, challenges with scaling operations, a lack of a strong brand, needless marketing spending, and a need for standardization, many opportunities exist to disrupt the sector. The one thing we can say with certainty, the evolving story of vacation rentals continues, and there is ample room for new players and solutions we have yet to discover.

 

Source: vrmintel.com

The post Who is the next disruptor in the vacation rental industry? appeared first on AAOA.

Categories: RSS

The Real Word: Two agents discuss dress code and Stop Zillow

Inmannews - Thu, 10/12/2017 - 2:37am
Watch Byron Lazine and Nicole White give a real estate agent’s perspective on industry-related topics. This week, they discuss how agents should dress, continue their take on Greg Hague’s Stop Zillow campaign and close it up with new agent tips ...
Categories: RSS

Is it a real estate agent’s ethical duty to authenticate buyers?

Inmannews - Thu, 10/12/2017 - 2:30am
Two people walk into a master bedroom. They appear to be in their early 30s and well-dressed. As the woman begins to rifle through the dresser draws, the man takes to the nightstand ...
Categories: RSS

When business is sluggish: 10 to-dos for the slow season

Inmannews - Thu, 10/12/2017 - 2:15am
No matter how great of a year it's been, inevitably, business will slow down at some point, due to weather, holidays or the market. What's an agent to do with all that free time ...
Categories: RSS

5 MLS hangups dragging real estate down

Inmannews - Thu, 10/12/2017 - 2:00am
“There has never been a better time for MLSs to support their subscribers in preparing for the future,” said Denee Evans, CEO of CMLS in the release of her organization's 2017 Best Practices Survey Report ...
Categories: RSS

Buy a house already: How to get millennial renters off the fence

Inmannews - Thu, 10/12/2017 - 2:00am
If you’re having trouble turning members of America’s rental generation into homeowners, Linda Liberatore has one suggestion that might make a huge difference: sell millennials on homeownership.  ...
Categories: RSS

SoFi aims to raise $100K for employee wildfire relief

Inmannews - Wed, 10/11/2017 - 3:59pm
SoFi employees are among the thousands who have lost homes as wildfires rage on in Northern California, but their coworkers aren't going to leave them hanging.  ...
Categories: RSS

10 Simple Tips on Dealing with Difficult Tenants

American Apartment Owners Association - Wed, 10/11/2017 - 3:54pm

Managing Difficult Tenants and Preventing Tenant Lawsuits if Possible And Other Asset Protection Safeguards

By Nate Bernstein, Attorney at Law

LA Real Estate Law Group 

Use psychology and positive energetic communication rather than brute force and intimidation.  

  1.   Sometimes the tenant’s problem and grievance has escalated because they cannot reach a manager or owner by phone and they are playing phone tag.   The issue is one of poor customer service.   If the problem cannot be resolved on the phone,  have you or your manager set up an in person sit down meeting with the tenant and let both sides state their concerns and grievances.  Show some empathy for the tenant.   Avoid name calling, confrontation, shouting, and personal attacks.  Sometimes a tenant just wants an in person meeting to be heard and to vent-  which may in fact diffuse the situation.

 

  1.  Follow up the in person meeting with a written plan of action- either what management will do or what the tenant has to do with a realistic estimated time frame.    The written plan of action can be in the form of an email or a letter.   If you make a promise in a letter, please make sure you fulfill that promise with action.

 

  1.   Many issues can be resolved with a well drafted rental agreement or lease agreement, addenda, and apartment rules.  In addition to the basic lease agreement- there should be an addendum that addresses-    Issues such as what types of pets can a resident have ?  What is the policy on comfort animals ?   How many parking spaces does a resident get  ?    Does a resident have an assigned space ?    What is the policy on barbecuing from the tenant’s deck  ?   Don’t forget that bed bug addendum !!  I will leave it to your imagination to address areas of conflict for common areas or in apartment units.

 

  1.   Enforcement of house rules and regulations should be consistent- if you give out one assigned parking place to a single tenant- don’t give out 2 parking places to another single tenant.

 

  1.   If you have a smaller rental operation that does not have an in house maintenance staff- you should have your trade and repair contractor’s information handy and on speed dial.  The basic ones are plumber, painter, air conditioning- heating repair, pest control, handy person, and appliance repair.  A handy person who is a “jack of all trades” is invaluable but can remedy many problems in the unit.  The tenant will really appreciate a fast response from you when they need basic repairs that  affect the habitability of the unit.    Use porch.com to get leads for trade persons such as plumbers.

 

  1.  Sometimes if the property manager cannot resolve the problem by an email, phone call, or in person meeting, an attorney letter can be an effective tool to calm the tenant down, call for an enforcement of rules and get a plan of action in place.   The attorney can also offer formal mediation as a solution, and see if the tenant wants that approach.  The attorney letter can provide an important disciplinary function to deal with certain tenants, but not all.

 

  1.   Sometimes a recitation of black letter law- a local ordinance or state law or even a case that is directly on point from the California Supreme Court can show a tenant that you know the laws and you are in compliance, and can prevent a lot of arguments.

 

  1. If you have tried the in person meeting, and other tenants are complaining about a situation, you can also serve a “Three Day Notice to Perform Covenant or Quit” that addresses a rental agreement violation.   Before you do this its important to document the facts of the problem- who, what, where, how, when, and have the contact information from witnesses, such as other tenants.   These other tenants can testify at trial against the problem tenant, and is key for having corroborating witnesses.   The notice should also track local rent control ordinance requirements.

 

  1.  Have a policy whereby tenants purchase a renter’s insurance policy.  At least offer this as an option.   This type of insurance can pay for a loss for damage to a tenant’s personal property, and can provide a fund to pay for losses that the landlord can avoid.

 

  1.     Due the aggressive advertising practices of personal injury attorneys on television and billboards- tenants have plaintiff’s lawyers on speed dial.  You have to be prepared for this type of claim.   Have current liability insurance in place with high limits and broad coverage- any tenant, whether injured or not, can sue you or your company virtually for any reason- it does not mean that the case has merit.   If the claim or loss is covered under the insurance policy, the insurance carrier will have to defend the lawsuit, and indemnify you up to the policy limits.

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

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

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

The post 10 Simple Tips on Dealing with Difficult Tenants appeared first on AAOA.

Categories: RSS

Fires leave thousands homeless in wine country

Inmannews - Wed, 10/11/2017 - 3:23pm
Agents have been fielding calls from the suddenly homeless looking for solutions -- whether it be buying a house where rentals are scarce or up and moving ...
Categories: RSS

How to sell or merge your real estate company

Inmannews - Wed, 10/11/2017 - 3:00pm
Emotions, lawyers and agent objections can make a rollercoaster out of mergers and acquisitions, but there are ways to execute a flawless transaction ...
Categories: RSS

Prime real estate: Amazon now delivers tiny houses

Inmannews - Wed, 10/11/2017 - 2:05pm
Got a pesky post-college millennial living at home who just won't let you be an empty nester? Or what about a parent who doesn't want to live with you, but can't live alone? Amazon and MODS International have the answer for you, and it's just in time for Christmas ...
Categories: RSS

Expect another Fed rate hike in December

Inmannews - Wed, 10/11/2017 - 8:34am
As anticipated, the hurricanes have turned the usual flow of economic data into a game of pick-up sticks, a meaningless tangle. The market reaction has been to ignore the new data, assume the economy is on-trend, and focus on other stuff that may be trend-changers ...
Categories: RSS

Trick or treat: 7 scary good Halloween marketing hacks

Inmannews - Wed, 10/11/2017 - 2:45am
Don't be a ghoul this Halloween and overlook one of the best marketing opportunities of the year for real estate agents. Here are some fresh ideas and hacks that'll make an impact and assure your remembrance after trick-or-treating fades to black ...
Categories: RSS

Stumped on blogging ideas? Let Google help

Inmannews - Wed, 10/11/2017 - 2:15am
The question isn’t whether you need to blog -- it’s what you need to blog about. Blogging demonstrates industry expertise, increases your network and improves overall ranking of your site ...
Categories: RSS

Looking for fresh meat? 5 ways to use LinkedIn to recruit

Inmannews - Wed, 10/11/2017 - 2:00am
As real estate agents begin their careers, they search for the brokerage or team that fits their needs, sometimes scouring the internet for months before initiating any meetings. When changing brokerages, agents often follow a similar process.  ...
Categories: RSS

Pages

Subscribe to Rental Housing Journal aggregator - RSS