American Apartment Owners Association

Seven ways to attract high-quality residents to your apartment community

Mon, 07/16/2018 - 10:07am

One of the main factors that will make or break your apartment budget is the quality of resident you attract. A high-quality resident is someone who pays rent on time, treats the unit and apartment community as if it were their own home and is courteous to the neighbors. High-quality residents not only make your life easier, they make you and your passive investors more money in the long run.

Sure, low-quality residents can help you increase your occupancy rate in the short-term. But they will negatively impact other important financial factors longer term. Low-quality residents lead to higher turnover costs, both due to more frequent turnovers and more expensive, lengthier turns. They also lead to more expenses associated with evictions, higher bad debt (i.e., uncollected debt after a resident moves out) and a higher amount of delinquent rent.

Therefore, the successful apartment syndicator or property manager will proactively implement procedures with the purpose of attracting the best-qualified residents in the area. This approach minimizes the number of low-quality leads and maximizes the higher-quality ones, which has a positive feedback effect: Attract high-quality residents to your apartment and they refer your apartment to others, which brings in more of the same caliber.

As a result of building a portfolio of over $300,000,000 in apartment communities, I have identified seven market strategies that attract these high-quality residents.

1. Maximize Internet Advertising

According to Zillow’s 2017 Consumer Housing Group Trends Report, online tools are the No. 1 way that renters are searching for their home (87%), followed by referrals from a friend, relative or neighbor (57%). Therefore, an online presence for your apartment community is a must. This starts with having a URL and website for the apartment community.

Next, all of your “for rent” units should be listed on a variety of online real estate and apartment listing services, with the most effective ones being Apartments.com, Craigslist, Realtor.com, Trulia and Apartmentfinder.com. You should also market your listings on social media, including Facebook, Twitter and Pinterest.

To optimize your rental listing, make sure it includes a clear and accurate description of the unit and the community, highlighting the major selling points. Invest the few hundred dollars into having professional pictures taken.

2. Hire Locators

A locator is an apartment rental agency that helps prospective residents find their ideal apartment community based on their specific needs. Therefore, locators can be great resources for finding high-quality residents.

To find apartment locators in your market, Google “apartment locators in (city name).” Then, reach out and offer them a commission of the first month’s rent for providing you with a converted lead. (Fifty percent commission is standard).

Once you’ve hired a locator, provide them with weekly email and phone call updates on your current unit availability.

3. Target Local Businesses And Employers

Use the current resident demographic data, which you should have collected on initial rental applications, and the surrounding job hubs to create a list of target businesses, employers and schools in the area. You can also add local tax preparation offices, bus stops and train stations to your list.

Print out and drop off flyers, business cards, price sheets, floorplans and site maps to your targets, always asking for permission first.

Additionally, you can send a small gift (e.g., a gift card, gift basket, wine, toolkit, etc.) to your current residents who are employed at the business on your target list. Thank them for their residency and ask if they are willing to refer the apartment community to their colleagues at work.

4. Build A Referral Program

As established, 57% of renters find a home through referrals. To capitalize on this, you should create a referral program and offer a fee to any current resident who refers someone to the apartment community. A fee of $300 paid 30 days after the execution of the new lease is standard.

To advertise the referral program, deliver notes to your residents’ doors and send out friendly emails with the details of the referral program on a monthly basis.

5. Financially Incentivize Your Leasing Staff

Most apartment owners or property management companies offer their leasing staff a small bonus for each new move-in, with $50 being the standard. In addition, you can set monthly move-in or occupancy goals and offer a larger bonus, like a $100 to $250 gift card, if they hit the specified target.

6. Hold Resident Appreciation Parties

To promote resident satisfaction and retention, host monthly resident appreciation parties. These can be as small as providing a small breakfast or wine night in a common area on a monthly basis. Another idea is to host timely or holiday-themed events, like a Valentine’s Day card-making event, holiday gift-wrapping party, back-to-school barbecue or a Halloween costume contest.

7. Encourage And Monitor Online Reviews

The online rating of your apartment community will probably be the first thing that a prospective resident will look at during their apartment search. Organic reviews are great, but you should also implement strategies to increase the number of reviews.

One strategy is to ask a resident for a review after fulfilling a maintenance request. Only use this strategy for minor maintenance requests that were addressed in a timely fashion. Another strategy is to have a laptop station set up during the monthly resident appreciation parties, which the residents can use to write a review before they leave.

All seven of these strategies have been proven to attract the highest quality residents to an apartment community and are beneficial to your bottom-line. Do not wait to come up with a marketing plan until after you close on an apartment deal. This is something that should be created prior to close so that you can account for the expenses in your underwriting.

 

Source: forbes.com

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The housing shortage may be turning, warning of a price bubble

Mon, 07/16/2018 - 9:58am
  • The supply of homes for sale in the second quarter of this year, the all-important spring market, rose at three times the rate of last year, according to Trulia
  • The supply of homes for sale is still down 5.3 percent compared to a year ago.
  • Historically, prices lag sales by a few months, and sales have been slowing this year in most major markets.

The most competitive, tightest housing market in decades may finally be loosening its grip, and that could put pressure on overheated home prices. The supply of homes for sale in the second quarter of 2018, the all-important spring market, rose at three times the rate of the same period in 2017, according to Trulia, a real estate listing and research company.

The inventory jump was the largest quarterly improvement in three years and could be signaling a slight thaw in today’s housing market. But it is just a start.

“This seasonal inventory jump wasn’t enough to offset the historical year-over-year downward trend that has continued over 14 consecutive quarters,” according to Alexandra Lee, a housing data analyst for Trulia’s economics research team.

The supply of homes for sale is still down 5.3 percent compared with a year ago. Still, all real estate is local, and some markets are seeing greater relief. Thirty of the nation’s 100 largest cities, including New York City, Miami and Los Angeles, now have more supply than a year ago.

Vicious circle

Of course, the increase is a double-edged sword. Supplies are increasing because sales are slowing, and sales are slowing because prices are so high. In New York City, the median household must spend 65 percent of its income to buy a home, according to Trulia. In Los Angeles, it takes 59 percent.

“Among these unaffordable metros, San Diego posted the largest inventory growth—22 percent year-over-year,” wrote Lee. “Compare that with the same quarter last year, when that Southern California metro registered a 28 percent inventory decrease.”

Historically, prices lag sales by a few months, and sales have been slowing this year in most major markets. This housing cycle, however, has so far been unique. The drop in sales is due to the tight supply, and that just pushes prices higher. The tight supply is due to very high demand and still below-normal construction, as the market continues to recover from the worst housing crash in history almost a decade ago.

Home sales in Southern California fell in May by 3.4 percent annually, according to CoreLogic, but the median price of a home sold in May was up more than 8 percent to a record $530,000. This even with the slightly increased inventory.

“With inventory tight and affordability worsening, the number of Southern California homes sold has fallen on a year-over-year basis during three of the last five months,” said Andrew LePage, a CoreLogic analyst. “Total sales during the first five months of this year fell about 2 percent from the same period last year, reflecting limited inventory particularly in more affordable price ranges.”

Charlotte buyers’ challenge

The disparity is even more striking in Charlotte, North Carolina, a very hot market fueled by big job growth and an influx of retiring baby boomers. Home sales fell nearly 12 percent in June annually but the median price of a home sold was still nearly 3 percent higher, according to the Charlotte Regional Realtor Association. Homes were also selling, on average, eight days faster than a year ago.

“Even though the Charlotte region is wedged into a solid seller’s market, incredibly low supply coupled with higher prices and rising mortgage rates are presenting challenges to buyers,” wrote 2018 Charlotte Regional Realtor Association/CarolinaMLS President Jason Gentry in a release. “However, home sales are still occurring across the region, as buyers continue to seek homes outside Charlotte’s city limits.”

Inventory in Charlotte did rise 1 percent compared with a year ago, but supplies are still quite low.

While homebuilders are slowly ramping up production, they are doing so largely in the move-up and luxury market. Sales of newly built homes have been rising in Southern California, easing the inventory shortage somewhat, but not enough.

“New-home sales continue to run well below historically normal levels, with the sales through May of this year 37 percent below the average number sold during that five-month period over the past three decades,” noted LePage. “Also, most of the new homes sold this year were aimed at mid-market to high-end buyers, with almost two-thirds selling for $500,000 or more and 15 percent selling for less than $400,000.”

Mortgage applications to purchase a newly built home plummeted nearly 9 percent in June compared with June 2017, according to the Mortgage Bankers Association. This suggests lower new home sales going forward, despite higher prices.

Source: cnbc.com

 

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15 surprising real estate trends impacting 2018

Mon, 07/16/2018 - 9:53am

This year has been one of twists and turns for the real estate market. As with every real estate year, the market can shift in an instant. For this reason, real estate professionals need to keep their eyes open for the next up-and-coming trend to hit the market and cause a stir.

Knowing in advance what to expect in terms of market trends for the real estate industry will not only give you an edge over your competition, but can help you serve your customers better. You’ll be ready and able to implement, react to or inform about the ways the market shifting for the rest of the year — both good or bad.

Fifteen members of Forbes Real Estate Council share what real estate trends or market shifts they have been most surprised to see so far in 2018, from blockchain advancements to the return of co-ops, rising home prices and more.

1. Technology Advancements

The advancement of technological innovation in the real estate industry has been changing rapidly and all agents should adapt to this to maximize exposure for their listings. Companies like Redfin, Zillow, Trulia and Homesnap have been changing the way sellers and buyers perceive the market and it is crucial for agents to quickly adapt to this new reality. – Alex Chieng, A & L Real Estate Team

2. Blockchain

Not to belabor the already highly-trending topic of blockchain changing the world, but this is the reality of our industry. Blockchain-based applications are changing the way buyers, sellers and investors interact with each other and the properties they have interests in. Welcome to an new world of unleashed liquidity, transparency and disintermediation. The real estate world is rapidly changing and we must do so too, or we will fall by the wayside. – Garratt Hasenstab, The Mountain Life Companies

3. Return Of The Co-Ops

For the past several years in Manhattan, we’ve seen the downtown new development condo market take a big bite out of the co-op resale market. Now that there are so many new (and more expensive) projects, we’re seeing buyers actually return uptown to purchase co-ops because the prices are more moderate in comparison. What hasn’t changed is that some of the boards remain difficult to pass. – Elizabeth Ann Stribling-Kivlan, stribling.com

4. Home Prices Still Rising

The NYC real estate market indicates that home prices might rise more slowly in the months ahead. During the years 2012-2015, we saw 12%-15% growth. We didn’t have any surprises this year. Average home price growth over the last few decades is somewhere between 5% and 10% per year. So, perhaps what we are seeing here is a normalization within the Manhattan real estate market. – Elliot Bogod, Broadway Realty

 5. Softening Cap Rates

Fully stabilized, non-value-add properties have softening cap rates — as much as 25 basis points. This is due to flatter rent projections, volatile interest rates, and, in Cook County, IL, rising property taxes. – Lee Kiser, Kiser Group

6. Continued Dive In Retail Assets

We all know online sales are killing malls, but we’ve seen few attempts at adaptive reuse. Many of these struggling retail locations have excellent economics for multifamily redevelopment. I’m shocked we haven’t seen more mall-to-multifamily conversions. – Marc Rutzen, Enodo Inc

7. Millennials Buying Homes

I’ve seen article after article saying millennials do not want to buy a home or cannot afford it, yet homeownership for this age group is on the rise. Fortunately, this age group is still a significant portion of the luxury rental market, and the baby boomers who just sold their houses are an increasing renter base. – Susan Tjarksen, KIG CRE LLC

8. Steady Stream Of New Construction

The top trend I’ve seen so far has been a steady stream of new construction, which is keeping rent prices mostly in check for 2018. A stable pipeline of new buildings means we’ll see the impact of lower rent growth but still above long-term averages when it comes to rent across the U.S. – Nathaniel Kunes,AppFolio Inc.

9. Low Available Inventory

The drought of available inventory has been the most surprising trend, by far. Whether the underlying reasons are demographic, economic, regulatory (i.e., zoning) or a combination thereof, we just aren’t seeing as many homes hit the market as we should. Agents have to do a better job in prompting inventory and explaining the current seller’s market to homeowners. – Ari Afshar, Compass

10. Social Community Management

A clear trend that has emerged is the importance of online presence and branding. Real-time management of your online presence has become even more important than predicted and can impact your business if it isn’t diligently managed. So, too, is the influence of Gen Z in the marketplace. We have already seen their influence in how real estate is designed and marketed, and this will only grow. – Diane Batayeh, Village Green

11. Lack Of Transparency

What surprises me is the overwhelming lack of transparency and hidden agendas of the industry. We have an abundance of technology that could serve consumers in extraordinary ways, but the old guard remains steadfast in their fight to protect themselves. – Joshua Hunt, TRELORA

12. Texas Exploding With Investment Opportunities

I might be biased, being born and raised in Texas, but as a licensed agent/broker since 1996, I can confidently say that the growth all over the state is unbelievable. Regardless of the other markets in the U.S., Texas is in this bubble of growth with many large corporate headquarters relocating here, the oil/gas industry growth, etc. It’s a great time to be in real estate here. As they say, ”Everything is bigger in Texas,” and I have to agree. – Angela Yaun, Day Realty Group

13. Profit Taking In Affluent Markets

One of the trends that we have seen is profit taking by investors and homeowners in several of the key markets we follow. These listings have usually started 15-20% above market and slowly work themselves back, seeking an elevated pricing floor. What we have yet to learn is whether this profit taking is working to establish a new pricing floor for the overall market. – Blake Plumley, Capital Pursuits LLC

14. Visual Marketing Trends Soaring

We are seeing a huge uptick in agents recognizing the value in using professionals for all their visual marketing needs — virtual staging, drone video and photography, virtual tours, interactive floor plans and more. Hiring the pros to help will continue to be less of a “nice to have” and more of a “must have” for agents, homeowners and home seekers alike. – Brian Balduf, VHT Studios

15. Rise Of The Single-Family Rental Asset Class

A total of 3.6 million single-family rental homes (SFR) have been added from 2006-2016. The SFR industry has risen to the challenge to escape a “mom-and-pop” dominated market. As the demand from more sophisticated renters who choose not to rent increases, so does the demand from the sophisticated investor requiring a higher level of service. The institutionalization of the asset class is real. – Noel Christopher,Renters Warehouse

Source: forbes.com

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Single-family homes and the American dream

Mon, 07/16/2018 - 9:41am

Living in a detached single-family home in the suburbs remains a top homeownership dream for American homebuyers across all age groups, according to Zillow’s latest Housing Aspirations Report. The report, which surveyed aspiring homeowners across 20 metros found that around 64 percent of the respondents agreed that owning a home was a “key to a higher social status and necessary to live the American Dream.”

The report revealed that 70 percent of respondents felt that homeownership increased one’s standing in the community. If there were no money or budget constraints, 94 percent of the respondents said they would own a home. the current rate of homeownership is at 64 percent in the U.S. today, Zillow said, making money “clearly an object for many would-be homeowners who are currently renting.”

Looking at the type of homes they wished to live in, the report found that 82 percent of the respondents preferred living in a single-family home. However, 9 percent of young adults said that they would choose an attached single-family home. Ten percent of those surveyed said that they preferred living in a condo or a co-op and only 7 percent of Americans preferred living in a townhome.

Despite single-family homes topping the list of ideal abodes across the country, cities like New York, Miami, Chicago, and Tampa had a higher share of respondents who were willing to “embrace denser living arrangements,” the report said. In these cities, 12 percent or more respondents identified condos, co-ops, or apartments as their ideal housing type.

Suburbs topped the list of locations where these aspiring homeowners would like to settle down, the report revealed, with 56 percent of the respondents across race and ethnicity saying they preferred living in a suburban area, followed by 26 percent who preferred the urban areas. The report also indicated that the desire to live in an urban area was higher among Hispanics and Asians.

While respondents in Philadelphia, Detroit, and Boston were most likely to prefer the suburbs, those hailing from Miami, San Jose, and San Francisco were more likely to choose an urban living area to call home.

The American Dream though is evolving, the report said, with young adults having slightly different preferences such as renting, living in a townhome, urban communities, and good access to public transit.

 

Source: themreport.com

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Important tips for investing in student accommodation

Mon, 07/16/2018 - 9:36am

Property investors need to consider student apartments because they can bring in a really good return over a long period of time. Right now, off-campus accommodations for students are a part of a fast growing sector as the number of tenants interested is growing. However, this does not mean that you can buy anything and expect success. If you are interested in student accommodation investments, the following tips will help you make good choices.

Area Safety The number one concern that students and parents have is security. It is really important that you check area safety when you want to make a purchase. Also, analyze security provisions for the specific building or complex. Preferably, this should include CCTV and even advanced features like biometric access control.

Areas that are safe are preferred by guardians and students. More students will be interested in staying there so interaction options will be higher than with alternatives. Many investors are interested in features like clubhouses, gyms, games rooms, swimming pool and basically recreational facilities. However, the main features that should be in place are safety related.

Internet Connectivity
Modern students want to be connected. If you want to rent a property and it does not have reliable, fast internet connection, there is a good possibility many student renters will be put off. Besides WiFi access, the considered property also needs to provide very good cell phone signal and should be DSTV-ready.

Statistics show that 90% of all students these days have smartphones and often use them to communicate. This includes making calls and accessing the internet. If the apartment/house you buy is in an area with a poor signal, you can be sure you will have problems renting.

Apartment Layout One thing many investors do not realize is that flat layout is of high importance for students. The two areas that are of particular interest are the bedroom and the kitchen. The stereotype states that students live on take-away food. This is incorrect. Most students actually want to have a kitchen that is clean and reasonably sized, featuring plenty of storage space and preparation space.

Another thing that should be mentioned is that students do prefer the open plan living areas but they do want bedrooms to be private spaces. That is especially the case when sharing with others.

Property Management Dealing directly with landlords is not something that is desired by students when thinking about all the things that happen on a day-to-day basis. Calling the landlord if a replacement is needed for an appliance is definitely not convenient. Because of this, property management needs to be taken into account. You want to be sure that you can use the services of highly respectable management companies.

Conclusions The bottom line is you need to be careful with student accommodations. It is really hard to find something that is perfect if research is not properly done. You need to consider all the things mentioned above and actually talk to students in order to understand what they really want.

 

Source: realtybiznews.com

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Think carefully before taking on an investment rental property

Mon, 07/16/2018 - 9:29am

In this house-flipping, fixer-upper housing market, it seems to be more and more common to hear of people buying a second property and renting it out as a source of secondary or passive income.

Even if the rental-to-be is listed low, how can you know if the payoff will be worth the investment? Start by asking yourself these questions.

What is the timeline from renovation to renters?

Rental properties are rarely turnkey. Once you figure the time and expenses you invest into the renovation, you may be waiting a while before you break even and even longer to turn a profit — assuming, of course, your tenants are ideal, and you don’t have to put that money back into repairs or maintenance.

How much time can I commit to caring for a second home?

Being a landlord is a 24/7 gig. From midnight calls to midday delays for big unexpected repairs, you assume responsibility for the majority of issues that arise in your rental property.

Can you accept the risk?

The potential reward of leasing is high, but the risk is arguably just as high. From permanent damage to negligence to late- or non-payment, tenants are always a wild card.

While it’s highly possible you can have a thorough vetting process and find yourself landlord to perfect tenants, you need to account for worst-case scenario when it comes to calculating this risk.

Do you understand tenants’ rights?

Tenant rights differ from state to state, but by-and-large, the laws that are in favor of tenants over property owner could mean big risk to you if you don’t fully understand them before putting ink to paper. For instance, in Kansas a tenant can violate the lease twice before being given 30 days notice to move out— and only after that 30 days can a landlord file for eviction.

In the end, is the rental payment you’re receiving worth the time and energy you’re about to invest? If you are a people person who thrives in changing environments, loves projects, and is handy around the house then this may be just the task for you.

But if you’re more interested in low-maintenance ways to stretch your income, there are many other opportunities to do so. Next week, I’ll explore some of your options and opportunities for finding a “side hustle” that’s perfect for you.

Source: kansascity.com

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Leveraging Rental Payment Reporting As A Marketing Tool

Fri, 07/13/2018 - 3:21pm

In our previous article we talked about using rental payment reporting as a way to reduce delinquencies while increasing your net operating income. Today, we’d like to show you how you can frame up our program in a way that helps you market your properties to potential renters. In a nutshell, you can highlight the fact that you report to the bureaus and attract higher quality applicants who are looking to improve their credit scores.

Benefits of reporting rental history

Yes, reporting rental payment history is a way to keep tenants accountable and paying on time. It’s also a way to provide better visibility into a renter’s payment history, if prior property managers have been reporting. Our program is a way for you to give credit where credit is due, reinforcing timely payment behaviors while reducing your risks of delinquencies, defaults and evictions. While all of those things benefit you as a property manager, future tenants you’re marketing to may see reporting their rental payment history as potentially negative.

So today, let’s focus on how you market to potential tenants, and how you can frame rental payment reporting up as a positive aspect that sets your property apart from others.

As a property manager, you want to keep vacancies low. You want to rent to responsible tenants. You screen them, check their credit and ask for references. You do these things to try to find the best quality residents and reduce the risk of delinquencies and the possibility of  evictions. Now, some tenants may not care much about late payments and delinquencies showing up on their credit reports. Higher quality applicants ARE concerned with their credit scores. For them, the things that show up on their credit reports DO matter. They know that a higher score can mean a better interest rate on their credit cards, and that improving their credit score can mean a better loan at an auto dealer.

Highlighting rental payment reporting

So in your marketing materials, let them know that you report rental payment information to the credit bureaus. Highlight the fact that their on-time payments will lead to improvements to their credit scores. For those tenants who are concerned with their credit scores, this transparency will be a selling point to them. And for you, it will be an extra way to screen potential residents.

Let me leave you with a few examples:

Whether you advertise vacancies online or in print, try leading with that information in your headline, like this:

Improve your credit by paying your rent on time

or

Pay your rent on time? Get credit with the bureaus here

or

Bump up your credit score by paying your rent on time. Ask us how!

or

Build your credit while you rent here!

As an alternative, mention something about rental reporting or credit score improvement in your description of the property. At this time, odds are good that your ad will be the only one mentioning anything about improving credit scores. That’s just the thing to pique the curiosity of  the type of tenant who cares about the things that show up on their credit report.

So, set your properties apart from others by appealing to those higher quality tenants. Let them know there’s an added benefit if they rent from you. Focus on the positive aspects to encourage them to rent from you, pay on time, and bump their credit scores up. And if you need more ideas on how to leverage our program as a marketing tool, we’d be happy to brainstorm with you as we get you set up.

Find out more at www.rentalpaymentreporting.com or contact Dave Haldi at 888-657-2484 and mention that you’re an AAOA member!

Dave Haldi is CEO of Trade Line Credit Solutions. The company’s Rental Payment Reporting service gives property owners and managers a new tool to incentive timely rent payments, while helping residents build credit.

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Justify Higher Rents with Ultrafast Broadband Speeds Students Want

Fri, 07/13/2018 - 9:58am

Are you an MDU (multi-dwelling unit) owner in a college or university city or town? Are you trying to increase rental and occupancy rates? Then, you probably know the one must-have item for student tenants is ultrafast broadband access. If you are like many building owners, delivering this ultrafast speed has appeared too cost prohibitive or disruptive. Fortunately, a new technology, called Gfast, is coming to the rescue.

Gfast is a new broadband technology from the International Telecommunication Union (ITU) – a part of the United Nations. It’s the first new gigabit broadband technology to run over existing copper wires in apartment buildings.

Until recently, apartment owners had to rely on delivery of fiber to the home in order to offer tenants ultrafast broadband speeds exceeding 500 Mbps. Fiber installation often gets rejected as an option because it’s messy and disruptive. Now Gfast technology can deliver broadband access at up to one gigabit over traditional copper wires or coax wires, which are already in most apartment buildings. These speeds are nearly 100x higher than what most consumers have access to today and will keep even the most demanding students happy and renting.

Gfast is quickly becoming a popular technology.

In countries like England, Gfast is already available to over one million consumers. In the U.S.,

AT&T launched Gfast to 22 markets and will expand that number in 2018. In February 2018, AT&T showcased delivery of Gfast broadband to Boston apartment dwellers with speeds up to 500Mbps and a path to even higher speeds. Other big and small internet service providers (ISPs) are also offering Gfast solutions.

Gfast can be installed in existing wiring closets using existing copper wires – so no drilling is needed. First, your service provider brings fiber to your wiring closet (or the telco interface on the edge of the building). Then, they connect to the existing copper lines inside the wiring closet. Once that’s done, they give the user a modem that runs inside the tenant’s residence. That’s it. No drilling. No noise. No disruptions. Typically, all apartments can be connected in hours, not weeks or months. The other good news is that Gfast is much cheaper to deploy than fiber. This results in lower prices for consumers, too.

This is all great news for apartment owners who want to make low-budget, but high-impact improvements to student-rented properties to create higher demand and rent. Young adults consume data at a very high rate and expect fast internet speeds across all their devices. In a four-person apartment, there could be as many as 10-12 connected devices – smartphones, tablets, laptops and gaming systems – with many in use at the same time. Without the ability to offer ultrafast broadband speeds, apartment owners are at a disadvantage and may not get the higher rents they desire.

Installing Gfast through AT&T and other telcos such as CenturyLink and Windstream is simple and makes good use of existing telecom infrastructure in buildings, while bringing tenants the blazing fast speeds they really want.

 

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Assistance Animals Are Not Pets–Repeat–Assistance Animals Are Not Pets

Fri, 07/13/2018 - 9:51am

“I didn’t know” is not an acceptable defense if you face a discrimination charge, so the Grace Hill training tip of the week focuses on repeating advice that assistance animals are not pets when it comes to leasing your rentals.

By Ellen Clark

The typical story goes like this, where a prospective renter provides documentation from her doctor showing she needs an assistance animal because of her disability and she is told by a leasing agent that the owner does not allow pets.

One of the most common accommodation requests is to have an animal that would otherwise be restricted by a community’s rules.

In these cases, it is important to understand that service and assistance animals are not pets. Rather, they provide an important service to people with disabilities. You must know how to handle these accommodation requests in compliance with the law.

So in the example above, HUD recently announced a conciliation agreement between two Nevada real estate companies and a prospective resident to resolve a claim that the companies denied the prospective resident’s request to have an assistance animal live with her in her apartment home. Read the agreement here.

After the prospective tenant was told the owner did not allow pets because hardwood floors had recently been installed, at that point, the prospective resident did not continue trying to lease the apartment.

 Apartments must pay $6,000 under the agreement involving assistance animal

Under the agreement, the two companies must pay the prospective resident $6,000, take fair housing training and adopt policies that handle reasonable accommodation requests on a timely way and maintain records related to the accommodation requests.

Remember, to remove barriers that people with disabilities often face when searching for and living in rental homes, it may be necessary to make changes to community rules, policies, procedures, or services.

These kinds of changes are called reasonable accommodations. If the requests are reasonable and would not cause undue hardship to your community’s business operations, fair housing laws require you to make accommodations for people with disabilities.

Here are some important points to remember about assistance animals
  • Stay up to date on the guidelines for reviewing assistance animal accommodation requests

Under the FHA and Section 504, individuals with a disability may be entitled to an assistance animal as a reasonable accommodation in housing that otherwise restricts or prohibits animals. Assistance animals include service, companion, and emotional support animals. Assistance animals may be any type of animal, and no training is required.

  • There are strict guidelines for what you may ask a person requesting a reasonable accommodation. Not following them puts you at risk of committing disability discrimination.
  • Never ask for specifics about a person’s disability. All that’s required is reliable documentation of a disability and that the animal provides disability-related assistance or emotional support.
  • If you doubt the credibility of documentation related to an accommodation request, you can ask for more information. Be sure to proceed carefully and consult your legal counsel.

If you have doubts about how to proceed with any request related to assistance animals, reach out to your supervisor or legal counsel for help.  Not doing so may cost you and your company dearly.

 

Source: rentalhousingjournal.com

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The hottest housing market in the US is up 13% and now may be headed for a crash

Thu, 07/12/2018 - 9:14am
  • Home prices in Washington state rose nearly 4 percent in the first quarter, the most in the nation, and more than 13 percent from one year ago.
  • Strong job growth and tight supplies have fueled the housing market, leading some to fear that it is a bubble.
  • Experts say the housing market is vulnerable to rising interest rates, job losses due to tariffs and local policies against development.

Seattle-area real estate agent Jerry Martin said he first entered the business in 1977, which means he remembers the days of double-digit mortgage rates and multiple booms and busts. That includes the bubble in 2006 and 2007 and the historic collapse that followed. None of that, he said, quite compares to the “craziness” that has been going on lately.

“It would not be unreasonable for a three-bedroom, one-and-three-quarter bath, 1,500-square-foot home to go on the market and within the hour or two you’re looking at multiple offers,” he told CNBC. “We’ve had situations where 20, 30 offers were coming in on a piece of property.”

The Washington state housing market is the hottest in the country. Prices increased nearly 4 percent in the first quarter, according to the Federal Housing Finance Agency, the largest jump in the nation. They are up nearly 13 percent from one year ago. That compares to just under a 7 percent increase over last year nationwide. But inventory — the supply of homes on the market — has not come even close to meeting that demand.

The situation is especially critical in the Puget Sound area around Seattle, which has added nearly 55,000 jobs in the last year alone, thanks to hiring at big employers like Amazon, Microsoft and Boeing. Combine the resulting surge in population with a slow pace of construction and you get a classic crunch.

“A good, healthy market in any area is probably four to six months of inventory. Within the last two or three months, we were, in our primary markets, with about two to three weeks of inventory,” said Martin, a Re/Max agent and the president of Washington Realtors, which represents about half of the real estate brokers in the state.

Martin said the crunch has eased a bit in recent weeks with the start of the peak selling season. Still, like just about every real estate agent, buyer, seller, homeowner and renter in the region, he worries about where the market is headed next and how much longer the boom will last.

The demand for housing has hit nearly every sector — rental apartments, condominiums, as well as single-family homes. Seattle workers are being forced to look farther and farther from the city to find a place to live.

“It can’t continue. It just can’t continue, because where is the end?” he said.

An even bigger question is how the boom will end. Will it be a soft landing? Or is Washington setting itself up for a crash?

A real estate bubble ready to pop

James Young, director of the Washington Center for Real Estate Research at the University of Washington, said that as long as there is real demand for property, the market can continue to grow.

“A bubble happens when you have the prices going up without the demand going up,” he said. “You’ve still got demand going up in Washington, so I don’t see a huge issue here.”

In its quarterly report on the Washington housing market for the first three months of 2018, the center put statewide inventory at a little more than five weeks, which it called a “slight imbalance.” The report said around 113,000 units sold in the first quarter, a 5.1 percent increase from the same period a year ago.

But Young cautioned that the market can change quickly.

“If demand were to disappear tomorrow, there’s a lot of construction going on out there,” he said. “I’m not sure housing prices would crash or anything, but it’s one of those things that you always have to be mindful of.”

Young said one of the biggest risks to the market involves local policies.

The real estate market got a big scare in May when the Seattle City Council approved a so-called head tax of $275 per employee at companies with more than $20 million in revenue. The tax would have raised about $47 million per year to help ease the city’s homeless crisis. But when Amazon — widely seen as the main target of the tax — threatened to stop further growth in the city as a result, the council backed down and repealed the tax.

But Young worries that additional measures will be coming down the line, similar to the head tax, targeting both supply and demand.

“You’ve got other sorts of policies and things that have been floated out there in terms of big employers. You’ve got a lot of different economic attitudes and economic positions toward developers,” he said. “There’s lot of regulatory issues that constrict the supply.”

Developers, meanwhile, are trying to forecast demand three years down the road — the time it takes to plan and build a project. If they get it wrong and overbuild, “that’s where your crashes occur,” Young said.

Martin, meanwhile, worries about events far from Washington state.

“If jobs are lost based on tariffs, or if we have these trade wars going back and forth, people are going to be skittish, because they don’t know if they’re going to have a job tomorrow,” he said.

Also a concern: interest rates, which are on the rise as the economy heats up. A 30-year fixed-rate mortgage in Washington averaged 4.4 percent last week, according to Bankrate.com. They were under 4 percent a year ago.

Higher rates make homes even less affordable than they are now, and that could price some buyers out of the market.

Stress points in the market

At the same time, some moderation might be welcome in a market that is moving too fast for anyone’s good — “buyers and sellers alike,” Martin said.

Not only are buyers being forced to chase after soaring prices, but sellers are forced to navigate so many competing offers in such a short period of time that they cannot always tell whether they are getting a fair price. And then the sellers become buyers in the same stressful market.

“The baby boomers that want to downsize, they can’t find an affordable house within the state,” he said.

The stress is also affecting everyone else in the process.

“Let me include the real estate brokers as well,” he said as they try to manage expectations on both sides of the deal.

Even real estate appraisers face challenges as they try to value properties based on comparable sales in the neighborhood at a time when comparisons are changing almost by the minute.

Martin said the situation started to improve in May, as inventory finally expanded to levels not seen since 2008. In retrospect that expansion was one of the first signs of the crash. The hope is that this time it is just a badly needed breather.

“Who knows what may happen government-wise, economy-wise or anything else,” he said. “I really wish I had a crystal ball.”

Source: cnbc.com

 

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How to Hire a Property Manager: Tips to Find the Right Pro

Thu, 07/12/2018 - 9:11am

If you’re wondering how to hire a property manager, you have no doubt heard how this professional can be a boon to landlords who want to outsource the nitty-gritty details of running a rental property. But finding a good property manager can be challenging, since the quality level and services they provide really do run the gamut.

The key to hiring the right property manager for you is to draft a detailed job description and ask the right questions during the interview process. Here’s how to do that, so you can find the perfect pro who will save you headaches rather than create new ones.

In an ideal world, “if you choose the right manager, it should make your life more peaceful and more profitable,” says Kimberly Smith, author of “Making Money With Rental Properties,” which is part of the Idiot’s Guides series.

Some property managers will have connections that will help fill your vacant properties with good tenants who pay on time and never cause a ruckus. Furthermore, a skilled property manager can do everything from marketing to rental collection to handling day-to-day maintenance issues.

“The right property manager will be able to deliver more efficient management and, in some cases, less expensive services,” Smith notes. In other words, paying a good property manager can actually save you money.

“For example, if they are managing 10 properties in one area, they can contract to have all HVAC systems serviced seasonally and get a volume discount,” she explains.

How to hire a property manager: Ask for recommendations and references

Most employers check employee references before extending an offer, and hiring a property manager should entail the same steps.

When Brady Hanna, president of Mill Creek Home Buyers in Kansas City, KS, first got into real estate investment, he was busy, exhausted, and overwhelmed. He went with the first property management company he found, and it was a huge mistake. Hanna learned the hard way what happens when you don’t ask around.

“They ended up filling my vacant unit, but as I scaled up and added several more properties, their communication was terrible,” Hanna says. “It was like pulling teeth to get information out of them. Sometimes I couldn’t reach a live person when I called, and several months in a row my rental income was paid significantly late and there were always excuses from the management company as to why.”

Hanna fired the company and then asked other local real estate investors for recommendations. That’s how he found the company he uses and trusts today.

“I would estimate that only roughly 20% of all property managers are great, so you want to find that out ahead of time instead of learning the hard way like I did,” Hanna says.

How much do property managers make?

Property managers are paid in a variety of ways, so you need to come to an agreement with your manager based on your individual needs.

Hanna provides this guide for reference: “When filling vacant units, they will typically charge half to one full month’s rent for marketing and filling your unit. Then on the ongoing management, the fee is usually anywhere between 7% to 10% of the rent collected. Some property managers will also charge an up-charge on maintenance items as well.”

Check the property manager’s qualifications

“A property manager that is acting on your behalf to lease and manage your property must assume fiduciary responsibility and needs to be a licensed real estate agent,” Smith says.

Other requirements vary from state to state, but you can call the nonprofit National Property Management Association to find out what the rules are for your area. For example, some states require HOA management licenses or property management licenses.

Lay out clear expectations

Generally, a property manager’s job is to manage the rental process from start to finish. That means “if the property is vacant, they will hire contractors to get it rent-ready at the owner’s expense, take pictures of the property, market it for rent, screen applicants, handle the showings of the property, fill it with a tenant, collect rent, and handle all maintenance requests as well,” Hanna says.

If tenants aren’t paying, it’s typically a property manager’s job to file for evictions and work with attorneys to collect back rent.

But there is no standard property management job description, which means it’s up to you to outline exactly what you are looking for from the get-go, Smith says. Do you want the start-to-finish management? Or are you looking to split the duties? This needs to be spelled out from Day 1.

Questions to ask a property manager

Not sure how to ascertain whether or not a manager can do the job you need? Hanna suggests asking the following questions:

  • What is your process for screening applicants?
  • How long does it typically take you to fill vacant units?
  • How many units are you currently managing?
  • How big is your staff?
  • What is your process for maintenance requests?
  • What is your process when a tenant doesn’t pay rent on time?
  • Have you filed evictions before? If so, how do you do that?

A good property manager should readily have answers to these questions—and if not, that’s a red flag. Remember, the whole point is for the pro to make your landlord duties easier, and part of that is simply establishing clear communication and a comfortable rapport.

 

Source: realtor.com

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More Homeowners Turning to Short-Term Rentals as Investment Strategy

Thu, 07/12/2018 - 9:07am

About a quarter of all vacation and investment property owners rented those properties out as short-term rentals in 2017, and nearly a third plan to do so in 2018. According to a new report from the National Association of Realtors (NAR), nearly half (45%) of investment buyers report they plan to generate investment income through renting instead of flipping or price appreciation. Short-term renting may be a good way to do it.

“Our data at Mashvisor confirms that in many locations, especially tourist destinations like California and Florida, short-term renting is the optimal rental strategy,” observed Daniela Andreevska, the real estate rental data firm’s content marketing director. “Vacation homes seem to be the future of real estate investing as more and more travelers opt for this option instead of staying at hotels,” she added. STRs may generate more rental income and, as a result, higher returns on investment (ROI) thanks to nightly rental rates (vs. long-term leases), “not to mention the fact you can use your short-term rental property for your own vacation,” Andreevska said.

Who Is Buying and Where

According to the same NAR report, about a third of vacation buyers purchased properties for STRs in a “resort” area, while the same percentage of investors purchased a property in a suburb or subdivision. This indicates that many of the new STR investors may be new to the real estate investing sector entirely, especially in light of reports that about nearly three-quarters of the vacation-home-buying population believe “now is a good time to buy.”

Potential STR Pitfalls

With a new investor population in the mix, however, STR investors must be aware of the potential pitfalls associated with this type of investment. For example, buyers considering purchasing their STR using a self-directed retirement account may encounter unexpected complications associated with using the home personally or managing the rental in any way. Even more prevalent are instances of individuals purchasing such a property, then finding their plans for renting it out short-term via popular platforms like Airbnb thwarted by local regulations and an antagonistic hotel lobby.

“One thing investors should keep in mind is the legality of renting out on a short-term basis [in any given location],” warned Andreevska. “Before deciding to buy a vacation home to rent out, make sure to do due diligence research of not only the existing laws on short-term rentals, but also whether any significant change might be expected in the near future.”

 

Source: thinkrealty.com

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Apartment Renters Now Expect Sustainable Design Features in Their Units

Thu, 07/12/2018 - 9:03am

Sustainable design features including energy efficiency and good indoor air quality are now becoming so common that they are almost taken for granted.

“What used to be exceptional is now everyday,” says Dave Borsos, vice president of capital markets for the National Multifamily Housing Council (NMHC), a multifamily industry advocacy group.

Today, new apartment units almost always include some green features. And the owners of older buildings often incorporate sustainable design component in their plans to renovate and refinance existing properties. For example, nearly half (42 percent) of overall multifamily financing provided by Fannie Mae in 2017 qualified for its Green Rewards program, which offers lower interest rates to apartment properties that have earned green building certifications or pledge to cut their energy use by 25 percent or more through renovations.

At the same time, apartment renters have come to expect green building features like good indoor air quality and energy efficiency, making them more of a requirement in many markets. “For new buildings, it’s kind of what people do today,” says Borsos.

Renters take green features for granted

Apartment renters’ interest in sustainable design is still strong enough to translate into real money for property owners. They are willing to pay an extra $27.21 a month in rent to live in buildings that have green certifications—that works out to more than $300 a year per apartment in extra income, according to the “2017 NMHC/Kingsley Renter Preferences Report.” The report uses surveys of 269,000 renters about which factors guide their decisions on where they want to live.

Roughly two-thirds (61 percent) of renters said that they were “interested” or “very interested” in living in apartment buildings that have earned a certification for energy efficiency or sustainable design in 2017, according to the report. That’s a majority of those surveyed, but it’s still less than the three-quarters of renters (75 percent) who said they were interested in such features in 2015. The same is true for buildings that recycle (which interested 75 percent of renters in 2017 vs. 80 percent in 2015), and buildings that have sustainability initiatives (65 percent vs. 73 percent).

The cost of incorporating many green features in apartment properties has also dropped to be roughly comparable to conventional construction. “There is no cost difference any more—green has become standard practice,” says Borsos.

For example, energy efficient light bulbs used to be considerably more expensive than conventional lights, and quality of light created by the fixtures was often noticeably different from the warm glow created by incandescent bulbs. Today those differences have largely vanished. “The cost to replace is not the light bulb, but the cost to get the ‘cherry picker’ out there,” says Borsos. “From a maintaining a building and the return of investments, it makes a lot of sense.”

Green features are commonplace for Fannie Mae borrowers

In 2017, Fannie Mae provided $27.6 billion in financing to apartment properties that qualified for its Green Rewards program. That’s close to half of Fannie Mae’s total $67 billion in multifamily financing activity.

Fannie Mae’s Green Rewards program often slices roughly a fifth to a third of a percentage point off the interest rates offered to apartment borrowers. Fannie Mae and Freddie Mac offer the discount on all of their loans to qualifying properties, from short-term rehab loans to permanent financing.

Lenders are making programs like Green Rewards work for all of the borrowers, not just the few that have made green building a mission. “We are looking to be easier for the smaller owner,” says Chrissa Pagitsas, director of the green financing business for Fannie Mae. “The people that haven’t done green yet are going to be the harder ones to reach.”

Source: nreionline.com

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5 Social Media Tips for Attracting New Student Renters

Thu, 07/12/2018 - 8:55am

For those of you looking to bring more student renters your way, you’re probably wondering how you can do so. After all, it’s one thing to say you want x number of new student renters by a certain time. It’s another thing to have a concrete strategy in place to realistically attract those potential renters.

One smart strategy you can use is to take advantage of social media. With many prospective student renters getting a majority of their information through the Internet, it only makes sense to meet them where they already are. That way, you’ll be able to more effectively market your rentals to a larger audience and hopefully attract more potential renters.

Even if you’re not the most technologically savvy, there are definitely some fairly quick and easy ways you can market your rentals on social media. Read on for a few tips as to how you can best use social media to your advantage.

1. Make your presence known.

Just in general, having some sort of presence on social media is a smart idea for advancing yourself professionally — in this case, for marketing your rentals. So if you don’t yet have any kind of social media specifically for your rentals, that may be the first thing you want to do. Many college students tend to be pretty active on Facebook, Instagram, Twitter, and Snapchat. While you certainly don’t have to create an account for every single one of these social media handles, you may want to choose at least one or two for starters.

2. Know what to post.

If you’re advertising your rental properties to college students, keep in mind what kinds of places they’re typically looking for. Most students won’t be looking for huge spaces and they probably won’t be able to afford any places with sky-high prices. That being said, on social media you might want to emphasize some of the cheaper rentals you have on hand, so that they catch the eye of prospective renters who just happen to be scrolling through.

3. Be concise and informative.

When offering information about your rental property, make sure you convey the most important things clearly and concisely. People looking at rentals online don’t want to spend extra time slogging through an unnecessarily lengthy description of the rental property; instead, they often tend to quickly scan the information, maybe look at some photos of the place, and then make a decision probably in less than a minute.

To keep these potential renters’ attention from slipping out of your grasp, make sure you present the rental information in a snappy, easy-to-read manner; you want to make the process as simple as you can for your customers. Make sure to include the most essential information: location of the rental property, number of bedrooms and bathrooms, amenities, and price. Usually, this amount of information will be enough for potential renters to either get hooked on what you have to offer or move on.

4. Make your social media sites look aesthetically appealing.

This doesn’t mean you have to suddenly be great at graphic design. Instead, you can make your social media site more aesthetic simply by including a few visuals with images and videos. Putting up photos of the rental space can go a long way in helping prospective renters to decide if they like the space or not. Including videos might also be a good idea, perhaps if you want to have a more interactive, thorough presentation of the rental space so that renters can get a better idea of what the entire place looks like.

5. Be both welcoming and professional.

While you do want to be concise in relaying the necessary information, you also want to sound warm and inviting. Prospective renters are sure to appreciate someone who can communicate clearly and welcome them into the community. That means you also want to avoid falling into the trap of sounding overly professional and, consequently, a bit robotic.

To overcome these potential issues, one option is to post on social media about relevant and fun activities and events going on in the neighborhood. College students like to know about fun things they can do in the area where they’ll be staying. To keep them interested, post about local events (e.g. street fairs, block parties, sports games) so that they have an idea of what kind of community they’ll be living in.

Making your rental properties stand out on social media doesn’t have to be difficult. Instead, there are a number of small yet effective steps you can take to really get your rentals out there. In the process, you can certainly find ways to market your rentals in a fun and engaging way to attract as many student renters as you want.

Source: rent.uloop.com

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The Dream on Hold: 3.6 Million Fewer Families with Kids Own a Home Compared to 10 Years Prior

Tue, 07/10/2018 - 9:05am

The big fallout during the housing crisis followed by air-tight lending rules, an alarming shortage of entry-level homes, and skyrocketing home prices are the main items on a long list of reasons fewer and fewer young families have a home to their name. The number of families with minor children who own their home has decreased by almost 3.6 million in one decade (2006-2016), while the number of families with children living in rentals has increased by 1.9 million over the same period of time, according to U.S. Census Bureau estimates.

As of 2016 (the most current Census estimates), 14.3 million households with minor children rent in the U.S. (up from 12.4 million in 2006), representing 33% of all renter households. By comparison, there are 22.1 million families with minor children that own their home (down from 25.7 million in 2006), representing 29% of owner households.

In the big scheme of things, 10 years is just a blip on the radar. These statistics show the tremendous effects of this relatively short but eventful period of time on American families. These 3.6 million fewer owner households are families who lost their homes in foreclosures or otherwise, they are young families who are unable to overcome the current financial barriers to become homeowners, and they are also homeowners whose children grew up and no longer fall into this category. Additionally, there are other contributing factors. The birthrate in the U.S. is declining, people are having children later in life, and the cost of raising a child has soared.

In the 10-year period between 2006 and 2016, renters with children in the U.S. have increased by 16%, while homeownership has decreased by 14% for the same demographic. The rise of renting and the decline of ownership among families with children is not only confirmed in all 30 largest U.S. metropolitan areas, but it’s also very prominent in many of them.

Most large metros see a surge in renting families with children and a drop in homeowner families

Using U.S. Census data, we analyzed the changes that occurred between 2006 and 2016 in the number of renter and owner households with minor children in each of the nation’s 30 largest metropolitan areas. This approach provides a more complete picture of the type of housing in which American families with kids reside, regardless of whether they choose to live in the city or in the suburbs.

One of the things that stood out in our research was the fact that the highest jumps in renting families happened in Southern metropolitan areas: Charlotte, Atlanta, Phoenix, Houston, and Miami. At the top of the list is the Greater Charlotte Area in North Carolina, with a 73% surge in families with kids who rent their home, and an increase of 21% in homeowner families with kids. Second is Atlanta metro, which saw a 51% jump in the number of renter families and an 11% drop in homeowner families. The third on the list is Phoenix metro, where renting families increased by 42% while those who own their home decreased by 12%.

On the flip side, the smallest changes in renter families were in Pittsburgh metro, where the number of renter-occupied households with children stagnated over the 10-year period, while the number of owner families went down by 13%. In Los Angeles-Long Beach-Anaheim metro there was a modest 5% rise in renter families and a big 22% dip in owner families. In New York metro, the number of renter families increased by 8% and the number of owner families decreased by 13%.

The metro areas of Detroit, Riverside, Miami, Las Vegas, and Los Angeles lost the most homeowner families with children, registering decreases of more than 20%. Only 4 metro areas saw increases in the number of homeowners with children: Charlotte 21%, Houston 5%, San Antonio 3%, and Dallas-Fort Worth 1%, but still lower than the increases in their renter counterparts.

In terms of numerical changes, Houston metro saw the largest increase in renter families with children among the 30 largest metros, 107,000 households, while Los Angeles metro saw the largest decrease in homeowner families with children, 188,000 households. For specific numerical and percentage changes, look up metro areas in the table below:

Changes in the Number of Households with Minor Children and Real Estate Prices in the 30 Largest U.S. MetrosShow 102550100 entriesSearch:Metro/MarketNet change in owners with childrenNet change in renters with children% change in owners with children% change in renters with children% change in single-family home prices (5-year)% change in rent prices (5-year)Charlotte33,00048,00021%73%43%30%Atlanta-54,00098,000-11%51%57%40%Phoenix-40,00070,000-12%42%45%39%Houston28,000107,0005%41%30%25%Minneapolis-29,00033,000-8%40%48%14%Miami-97,00088,000-23%40%60%33%Washington, D.C.-7,00072,000-1%38%11%11%Orlando-21,00034,000-12%36%62%37%Dallas-Fort Worth4,000101,0001%36%45%31%Tampa-38,00033,000-18%33%60%34%Showing 1 to 10 of 31 entriesPreviousNext

*10-Year Changes in Owner vs Renter Households with Minor Children 2006-2016 (U.S. Census)
*5-Year Changes in Average Rent Prices April 2013 – April 2018 (Yardi Matrix)
*5-Year Changes in Median Single-Family Home Sale Price April 2013 – April 2018 (Redfin)

Single-family home prices increased 75% faster than rents in the last 5 years

At the confluence of forces that prevent families from buying homes and compel them to rent, the cost of housing is probably the strongest force. Which is why next we looked at how much the price of single-family homes for sale and the price of rent have changed in the last few years. According to data provided by Redfin, a national real estate brokerage, the national median price of a single-family home has increased by 35% in the past 5 years, 75% faster than rents. During the exact same period of time, the national average rent has increased by 20%, according to data provided by our sister division Yardi Matrix, an apartment intelligence provider.

As evidenced in the last 2 columns in the table above, in 29 of the 30 largest metros the prices of single-family homes have outpaced rents between 2013 and 2018. The widest difference in price changes buy vs rent is the Detroit-Warren-Dearborn area, where single-family home prices went up 155% and rents only 12%. In the notoriously expensive San Francisco-Oakland-Hayward area rents went up by 39% in 5 years, while single-family home prices shot up twice as fast, by 80%, according to Redfin data. Housing in Seattle-Tacoma-Bellevue followed a similar path, 79% up for single-family home prices and 45% up for rents. Many other markets saw a spectacular rebound in prices for single-family houses in the past 5 years: Las Vegas 74%, Portland 62%, Orlando 62%, Denver 61%, Tampa 60%, and Miami 60%, making it extremely difficult for families with children to keep up with this pace.

With fewer families with children buying homes, demand for family-sized rental housing is high

As the price to purchase a single-family home is going up fast, and new home construction is plugging along slowly, families with children are looking elsewhere for housing options. One increasingly popular option is renting a house. Single-family rentals are in high demand among various demographics, including families with kids, and they have increased in number by 3.6 million units in one decade. The multifamily industry is also doing a pretty good job of keeping up with the increased demand for larger-sized apartments. The number of family-sized apartments (with 2 bedrooms or more) increased by more 1.1 million new units since 2006 in large-scale buildings (50 units or more) alone. Add to these numbers rental apartments located in smaller-sized buildings, and you have what looks like a generous stock of rental housing available for families.

Yardi Matrix apartment data shows that nationally more than half (52%) of the apartments built between 2006 and 2016 are family-sized (2 bedrooms or larger). 41% are 2-bedroom apartments, 9% are 3-bedroom apartments and 2% have 4 bedrooms or more. Metropolitan Miami, Phoenix, Riverside, Charlotte, Orlando, and San Diego — which have some of the highest net gains in renter households with kids in the country — are building over 54% of the new apartments as 2-bedroom units or larger. Generally, the metro areas that saw the largest numerical increases in renter families with children have built a fair share of family-sized apartments.

Apartment construction by number of bedrooms in the 30 largest metros (2006-2016)Show 102550100 entriesSearch:Metro/MarketStudios1 bedroom2 bedrooms3 bedrooms4 bedroomsFamily-sized apts. (2,3,4 beds)Riverside0%36%48%14%2%64%Detroit1%35%43%16%5%64%Orlando2%35%46%14%4%63%Tampa2%36%46%13%3%62%Miami1%37%45%15%1%62%Cincinnati1%39%45%9%6%60%San Diego8%33%43%14%2%59%Las Vegas2%39%50%9%0%59%Phoenix3%42%44%9%2%55%Sacramento6%39%38%14%3%55%Showing 1 to 10 of 31 entriesPreviousNext

 

Methodology

Demographics data and terminology source: U.S. Census Bureau, American Community Survey – 2006 and 2016 1-year estimates. The changes in the number of households represent estimates of numerical and percentage increases or decreases from 2006 to 2016. Numbers may be rounded to the nearest hundred or the nearest thousand. 

Single-family home sale price source: Redfin, a national real estate brokerage. Home price data represents the percentage increase or decrease in the median single-family home sale price from April 2013 to April 2018. Redfin’s defined metro areas may not be geographically identical to U.S. Census metropolitan areas (MSA –  metropolitan statistical area are defined as per Census Bureau’s MAF/TIGER database). 

Rent price source: Yardi Matrix, a Yardi apartment information service.  Rent data represents the percentage increase or decrease in the average rent price in apartment buildings of 50 or more rental units from April 2013 to April 2018. Yardi Matrix markets may not be geographically identical to U.S. Census metropolitan areas (MSA –  metropolitan statistical area are defined as per Census Bureau’s MAF/TIGER database). 

A rental or rental unit is defined as a renter-occupied housing unit. Renter households or families with minor children are renter-occupied housing units with related children of the householder under the age of 18. Owner households or families with minor children are owner-occupied housing units with related children of the householder under 18. 

 

Source: rentcafe.com

The post The Dream on Hold: 3.6 Million Fewer Families with Kids Own a Home Compared to 10 Years Prior appeared first on AAOA.

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Here’s How To Start Catering To Boomer Renters — And Why It’s A Must

Mon, 07/09/2018 - 11:04am

When we talk about renting, we often make the assumption that it’s a young person’s game. The accepted narrative of American life is that you rent until you’ve got enough money for a down payment, then you buy a home and you’re a homeowner until you die.

The reality is different — and has been for a while.

For decades now, aging adults have been selling their homes and moving into assisted living facilities or nursing homes as they come to need help with daily living activities. In the last few years, though, an important shift has happened: Aging baby boomers in peak health are ditching their houses for rental properties in unprecedented numbers.

Since 2015, the tax code has changed, making homeownership less advantageous from a tax perspective — one more push toward renting for those waffling as they downsize. Crucially, boomers turning to rental properties tend to be wealthier than younger renters — after all, they’ve had much longer to grow their assets. That can be very good news for landlords.

What Boomer Renters Want

Whether you’re looking to keep properties full or expand your rental portfolio, a shift toward boomers renting could have a major impact on your revenue. Here are a few ways to tweak your offerings to appeal to the boomer demographic.

• Emphasize your maintenance services. Moving to a rental means boomers are freed from lawn mowing, appliance repair, worrying about plumbing issues and the many other headaches that come with owning a home. While younger renters may take these services for granted, emphasizing the extent to which you maintain the property and speed with which you respond when something goes wrong can help win over a renter who has owned a home.

• Highlight your building’s security. Especially as they enter retirement, boomer renters may be looking forward to traveling more. Whether they’re out of town to visit grandkids, staying in a second home or seeing the world, they’ll be happy to know the lights will be on and you’ll be mowing the lawn for however long they’re gone.

• Err on the side of luxury. Anecdotal evidence suggests boomers who are shifting to rentals prefer properties with more amenities. And even for those looking for a simpler home, keep in mind that, if they’ve owned a home in the past, they’re likely used to having their own laundry and parking in a covered garage. Your properties will better appeal to the boomer demographic when they include in-unit washer-dryers and covered parking nearby.

• Offer subtle, elegant support features. Boomer renters likely want to find a long-term home, which is good news for everyone. You can help make that a reality by offering support features in your properties that will enable them (and their visiting friends) to remain independent for years: hand bars in the shower, excellent lighting in all areas, lever door handles rather than knobs, non-slip tape on indoor and outdoor stairs and elevators or chairlifts when possible. Realistically, you’re probably not going to add an elevator to an existing building. But if you’re looking at buying an elevator building or a unit in a building with an elevator, remember that it can be a major boon for older renters.

• Highlight your location. While suburban locations have seen an increase in boomer renters in the last few years, almost a third of rental applicants in urban areas are over 60. Calling out the proximity of your property to must-haves like grocery stores, gyms and shopping districts can emphasize the property’s appeal. And if the property is near public transit, be sure to mention as much: older renters will appreciate the ability to get around if they choose to stop driving at night, in bad weather or completely.

For the next 11 years, . While many of them will opt to stay in their current homes, trends suggest that a sizable group will be looking for comfortable places to rent. As you consider your next property acquisition, keeping this group in mind could yield significant rewards.

 

Source: forbes.com

The post Here’s How To Start Catering To Boomer Renters — And Why It’s A Must appeared first on AAOA.

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Don’t Rent Out Your Home on Airbnb Before You Read This

Mon, 07/09/2018 - 10:55am

You’d be hard-pressed these days to find any homeowners who haven’t considered renting out their home on Airbnb or a similar site—it’s certainly tempting to make extra cash on a room that’s just sitting empty. And if you’re out of town this summer anyway, why not have someone basically pay you to housesit?

But listing your home on Airbnb isn’t quite as easy as snapping some photos and posting them online. Many cities across the globe have regulated the short-term lodging service in order to keep guests and homeowners safe and honest. Navigating these rules might seem daunting, but we’ve broken down the basics that first-timers need to know right here—a beginner’s guide to hosting on Airbnb.

1. Follow hosting etiquette

Airbnb has a list of hosting standards that cover everything from communication to cleanliness, explains Shannon Hyde, the global operations manager at GuestReady, an Airbnb management company with locations across the globe.

Think you can just offer up a bed and be done with it? Nope. You need to make sure you’ve provided essential items such as toilet paper, soap, and linens for each booked guest.

And even though your plans might change, you’ll want to avoid canceling on your guests at any time.

While these aren’t “rules” in the sense that they’re enforceable or come with penalties for violating them, they will have a major impact on the success of your hosting endeavor.

2. Safety is your responsibility

If you’re a U.S.-based host, you’ll also want to take a close look at Airbnb’s guide to responsible hosting in the United States. You’ll need to do your due diligence to prepare guests for emergency situations (e.g., providing a first-aid kit and a list of emergency numbers that includes the nearest hospital), and stay up to code when it comes to smoke and carbon monoxide detectors.

3. Permits might be required

This hosting thing doesn’t come without its costs to you. That’s only fair, right? As Airbnb notes, most cities require hosts to apply (and usually pay a fee) for permits or registrations in order to legally rent out their home—even if it’s just for a few days. Don’t even think about skirting this.

“Ensure you look up any permitting, zoning, safety, and health regulations that may apply,” the service’s site notes, directing users to explore the specific government agencies that regulate the use of property in their particular town or city.

For example, in Minneapolis, it’s the Housing and Fire Inspections department; in San Francisco, it’s the Office of Short-Term Rentals.

4. There’s a limit to how long you can host

Have a guesthouse or second property that you want to make a permanent Airbnb offering? Before you fancy yourself Scrooge McDuck swimming in a pond of money, know this: There are usually rules on how long you can rent out your house.

While each city is different, Stephen Fishman, a lawyer who specializes in tax and business law, says you should verify the following information:

  • How many days a year homeowners are allowed to rent to short-term guests?
  • How many consecutive days homeowners can rent to short-term guests?

Why does it matter? In some cities and states, guests who stay in a home for a certain number of consecutive days are able to be considered tenants. That means that you’d have to go through a complicated eviction process in the event they don’t want to leave—in other words, you could have a squatter nightmare on your hands.

If you don’t comply with your city’s regulations, you could also face hefty fines. Just last year, a woman in Trump Tower was fined $1,000 for violating New York’s recent ban on short-term rentals.

Avoid the hassle by finding the cutoff date in your jurisdiction—and don’t let anyone stay longer than that. No exceptions.

5. HOA and co-op rules might apply

Like cities, homeowners associations and co-ops take a different approach to regulating short-term rentals. Some places might have no rules at all, while others can ban subleasing altogether.

Even if your community doesn’t have specific rules regarding short-term rentals, there are often clauses regarding following local regulations and zoning laws. That means hosts can be on the hook—not only with the city but also with their HOA—if they don’t follow the law.

6. Rental income has to be reported…

Any profits you earn from renting out your home are subject to income tax. Before tax time rolls around, make sure you do your homework about how to report rental income.

One big thing to know: If you’re a U.S. citizen, you’re subject to income tax—even if your property is located outside the U.S. If you’re from outside the U.S. but have a U.S.-based property? Well, you’ll pay taxes on that, too.

7. … but deductions are available

Anything you buy for your rental listing is deductible—even the hosting fees you pay to Airbnb. If you put together a bundle of soaps and shampoos for guests, set out coffee and juice in the morning, or buy extra linens, all of those things can be written off your taxes.

You can even deduct a portion of the depreciation of your home, which is based on the number of days each year the property is rented out and whether or not it’s the whole home or just a room or two.

You can also write off any necessary repairs to keep your rental up to snuff. The key is documenting everything.

“It’s important to track everything and keep all of your receipts, even if it’s just in a spreadsheet or something like that,” Fishman says. “People can get in trouble if they don’t have records.”

Since tax law is always changing, consult a professional to make sure you’re taking advantage of all possible tax breaks—and not breaking the law.

 

Source: realtor.com

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Department of Justice rescinds housing discrimination guidance

Mon, 07/09/2018 - 10:52am

The Department of Justice recently announced it will repeal 24 guidance documents on a wide range of issues, including housing discrimination, according to the American Civil Liberties Union.

These guidance documents highlighted the serious implications and illegality of discrimination and encouraged individuals to report violations.

The Department of Justice recently announced it will repeal 24 guidance documents on a wide range of issues, including housing discrimination, according to the American Civil Liberties Union.

These guidance documents highlighted the serious implications and illegality of discrimination and encouraged individuals to report violations.

Laws preventing ethnic or cultural backgrounds deterring opportunity and federal protections based on nation of origin are among the information that is scheduled to be rescinded.

“This is another attack by Sessions and President Trump on people of color,” National Political Director of the American Civil Liberties Union Faiz Shakir said. “Our chief law enforcement officer is dismantling structures that prevent racial discrimination in education, in housing and in ensuring fair treatment of juveniles in our criminal justice system.”

The Department of Justice’s plans to repeal housing guidance documents have not been the only blow to the housing industry.

The Department of Housing and Urban Development announced it would provide $37 million to fund a plan by more than 150 fair housing organizations to fight against discrimination. However, HUD killed the essential Local Government Assessment Tool, a computer program that allowed local governments to submit relevant housing data that helped them meet fair housing obligations.

The city of New York announced a lawsuit against HUD, claiming the repeal of the Obama-era fair housing rule violated civil rights.

Notably, several stories of racial discrimination in the housing market have also become pending legal cases as well.

In June, the National Fair Housing Alliance, a group of 19 fair housing organizations and two homeowners from Maryland filed a lawsuit against Bank of America and Safeguard Properties Management for alleged fair housing violations.

The lawsuit claims that defendants intentionally failed to provide routine exterior maintenance and marketing for Bank of America-owned homes in African American and Latino neighborhoods across 37 metro areas.

However, homes in predominantly white working- and middle-class neighborhoods are far more likely to be upkept, according to the NFHA.

The ACLU also announced a lawsuit against Faribault, Minnesota, claiming the city’s Crime-Free Housing Program disproportionately effects members of the minority community.

The program permits police to order the eviction of all members of a household if any member or guest is thought to be engaging in criminal behavior, and evictions can take place even if no one is arrested, prosecuted or found guilty. Additionally, the program asks landlords to refuse potential tenants with a criminal history.

The ACLU holds the Crime-Free Housing Program in violation of the Fair Housing Act and the Equal Protection Clause of the Fourteenth Amendment, because 9% of Faribault’s population is black and a whopping 90% are renters.

Sadly, housing discrimination is a reality in this country. The repealing of guidance documents by the Department of Justice could make an ongoing problem even worse.

“It’s a shameful move but let there be no mistake — it doesn’t change the law, or the mandate for federal agencies to uphold the Constitution,” Shakir continued. “The ACLU will continue to fight for equality under the law and to protect all civil rights, even as the Justice Department won’t.”

Source: housingwire.com

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Homes With Central Air Command $5,486 More on Average

Mon, 07/09/2018 - 10:42am
  • Nationally, 66.1 percent of homes listed for sale and sold over the past year have central air conditioning, selling for 2.5 percent — or $5,486 — more than comparable homes without central air. In Las Vegas, the share is 99.1 percent.
  • Buyers in hot and humid major metros in the midwest and southwest — places like San Antonio, Cincinnati, and Detroit — are willing to pay upwards of a 5.5 percent premium for central air conditioning.
  • Renters put an even higher premium on central air conditioning, possibly because fewer rental listings — 54.7 percent — advertise it and because they’re not able to add central air to rentals themselves.

Home buyers prefer central air conditioning to outdoor home features like patios or decks.

Air conditioning was listed as a required feature by 62 percent of buyers, while a private outdoor space was deemed essential by 48 percent of buyers, according to the 2017 Zillow Group Consumer Housing Trends Report.

We decided to quantify that preference and found that home buyers paid 2.5 percent more for homes with central air conditioning, on average, over the past year. That’s a premium of $5,486 for the typical (median-valued) home.

The central air premium topped 5 percent in five major metros with sizzling San Antonio, Texas, leading at 5.8 percent, which comes to $10,757. Next are metros with somewhat cooler climates — Cincinnati at 5.7 percent ($9,092), Detroit at 5.5 percent ($8,470) and Indianapolis at 5.4 percent ($8,180). They’re followed by the desert metro of Las Vegas, where buyers paid a premium of 5.2 percent or $13,620 to be cool. Because central air is so prevalent in the Midwest and Southwest, homes without air conditioning are unusual, which is part of the reason the premium in these areas is so high.

In some large, expensive West Coast markets such as Seattle, San Jose, and Los Angeles, cool air commands virtually no premium, likely because highly competitive local market conditions swamp the value premium for amenities such as central air.

Nationally, 66.1 percent of homes listed for sale and sold over the past year have central air. That share tops 90 percent in seven major metros, topped by Las Vegas with 99.1 percent.

 

Renters put an even higher premium on air conditioning, possibly because fewer rental listings — 54.7 percent — have it. The national premium for central air conditioning in a rental is 2.8 percent, or $40 for the median-valued rental.

New York tops the list, with a premium of 11.6 percent or $275 a month. It’s followed by metros with hot climates: Las Vegas (10.4 percent or $135), Phoenix (10.3 percent or $141), San Antonio (8.1 percent or $108) and Houston (7.6 percent or $117).

Methodology

We compared homes with and without central air conditioning that were listed for rent, or listed for sale and sold, from June 1, 2017, to May 31, 2018. We controlled for variables that can affect the value of a home such as the number bedrooms and bathrooms, square footage, age of the home, and location.

Source: zillow.com

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U.S. Experiences First Monthly Rent Increase of 2018

Mon, 07/09/2018 - 10:36am

Have 2018 rent price decreases found the bottom? Has the six-month downward trend finally been stopped?

While one month’s stats don’t define a new rent pricing era, the national median prices of both one-bedroom and two-bedroom units showed modest July increases. Though one-bedroom apartments are still down a substantial 3.63 percent for 2018 thus far, the median July price nudged upward to $1,008, from the previous month’s $1005.

Two-bedroom units increased even more, shaving the cumulative 2018 decrease from 2.71 percent to 1.91 percent as the median July price rose from $1220 to $1230.

1-Bedroom Apartments

This month 10 cities posted increases of 4.5 percent to 6.4 percent. Baltimore, MD And Orlando, FL led the pack with over 6 percent rises and Columbus, OH and Lexington, KY, two municipalities that rounded out the top ten, both had substantial increases of over 4.5 percent.

This is a significant difference from June where the small number of cities with increases in rent price were considered outliers.

Cities with rent prices on the decline posted a more severe range with Little Rock, AR reporting a huge 9.8 percent decline from June.

The next largest decline in 1-bedroom rent price was seen in Columbus, GA, though that city’s decline was less than half of Little Rock’s at 4.1 percent.

Fargo, ND, St. Paul, MN, Jacksonville FL, Durham, NC and Cleveland, OH all reported the same 2.9 percent price drop.

2-Bedroom Apartments

Following the slight upward national trend, the top ten 2-bedroom increasers rose an average of 4.63 percent with Syracuse, NY at the top with a 6.8 percent increase, and Scottsdale, AZ at the bottom posting a more modest but still significant 3.0 percent rise.

Detroit, MI logged a hefty 6.1 percent price increase and even low-priced Green Bay, WI — where a mere $700 could secure a 2-bedroom apartment in June — showed drastic 3.1 percent increase to $722 this July.

Even cities with prices on the decline showed some stability and tightening as the 10 biggest decreasing cities ranged from both Fort Worth, TX and Fargo, ND with eye-opening 4.4 percent losses, to Durham, NC that clocked in with a 1.7 percent fall from $1,210 in June to $1,189 in July.

The rest of the decliners were tightly grouped, falling 2.2 to 3.2 percent.

Rent Report Recap: Where We Stand

June capped a 6-month slide that looked like it might continue into July. This didn’t exactly happen as both national 1-bedroom and 2-bedroom unit averages stopped the decline and nudged upward.

While there are pockets of both strength and weakness, if inflationary pressures persist and the economy stays afloat, landlords may breathe a sigh of relief, and tenants may start to worry.

It’s clear that August rent figures will be very interesting.

 

Source: abodo.com

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