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6 Ways To To Rid Smoke Smells From Rental Units

How to Remove Smoke Smells From a Rental Unit

Here are 6 ways to rid smoke smells from your rental units because sometimes despite a landlord’s best screening efforts and a property manager’s rules against smoking, you can still end up needing to remove smoke smells from a rental unit. Maybe you have no-smoking rules, and your tenant did not smoke, but had guests in the rental unit who did, so here are some ideas.

By Holly Welles

Your tenants just moved out, and instead of leaving a clean, fresh apartment behind, they’ve left a unit that reeks of cigarette smoke. The smell permeates every corner of the property and now poses a health hazard to neighbors and future residents.

Property managers may be discouraged by the damage that lingering smoke creates. Not only will it cost resources to repair, but it can delay apartment showings for new tenants. Fortunately, there are various ways to remove smoke smells and make an apartment or home livable again. Here are the critical moves to take.

1. Air It Out

The first course of action should be to open all the windows and doors and air out the unit. Portable fans on opposite ends of the apartment will push out stale air while simultaneously pulling in the fresh breeze. Allow them to run all day, if possible.

Landlords might also hang several bags of activated charcoal around the property to absorb odors. Expedite the process by using a few air purifiers as well.

2. Deodorize Carpets To Remove Smoke Smells

Remove smoke smells from carpets with baking soda. Sprinkle the white powder over the stinkiest areas and allow it to sit for a few hours before vacuuming.

This deodorizing method is generally safe for all carpets. However, it may not be strong enough to eliminate more stubborn fumes. In this case, property managers should hire a professional dry cleaner or replace the carpeting altogether.

3. Mop Hard Floors

Next, tackle hardwood and tile floors. Sweep the surface to remove dust and dirt. Then, apply a disinfectant and mop it up using warm, soapy water. Water should be replaced periodically so stinky ash and residue aren’t spread around the floors.

If a mop doesn’t do the trick, steam the floors to melt the tar and oils from smoke molecules. Otherwise, a professional cleaner might be needed.

4. Replace the HVAC Filter

Each unit’s HVAC filter should be changed every few months. However, after a smoker’s lease is up in your rental unit, replacing the filter becomes an absolute necessity.

Switching out the filter is simple, relatively affordable and will help eliminate odors left from cigarette smoke. Plus, it will allow the entire system to work more efficiently and effectively improve the unit’s air quality.

5. Scrub the Walls

The stale stench of ash and cigarettes can cling to the walls, too. In some cases, tar may even harden on the walls and discolor them. Remove both soot and foul smells by scrubbing walls down with a solution of white vinegar and warm water. Landlords can also use a mixture of ammonia and water, allowing it to sit for a few minutes before rinsing the walls.

For tougher stains, try trisodium phosphate (TSP). This is a cleaning product that is mixed into hot water, which you can then apply with a sponge or brush. It contains about 75 percent TSP and 25 percent sodium carbonate. This compound degreases the tars in cigarette smoke, making them easier to remove. If this method doesn’t work, priming and repainting might be necessary.

A note: Phosphates and phosphate detergents are banned in several states, because as they make their way into bodies of water, they can increase algae and bacteria growth, which reduces the amount of oxygen other wildlife may need. If you’re in an area where TSP is banned, look for low-phosphate substitutes, like Seventh Generation, Simple Green, Clorox’s Green Works, or Orange Power Cleaner.

6. Call a Professional Remediation Service

Sometimes, smoke damage is so severe that the stench has infiltrated every nook and crevice of the property. If this happens to be the case, it’s best to call in a professional. They’ll use stronger chemicals and industrial cleaning methods that a typical consumer simply can’t find elsewhere.

While hiring a professional cleaner may sound expensive, it’s best to think of it as an investment in the property’s success. After all, prospective tenants appreciate units that smell fresh and clean.

Guard Against Future Smoke Damage

Landlords can prevent further damage and smoke smells by screening potential renters before allowing them to sign a contract. They might also include a no-smoking clause in the lease agreement for the rental unit. Outline fines and additional cleaning fees to discourage guests from disregarding the rules.

By acting preemptively, property managers can avoid another situation where they have to remove smoke smells,  and keep both current and future tenants happy and healthy.

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Will You Be Ready When the Eviction Moratorium Ends?

Everything Landlords Should Know About Emotional Support Animals

No Guns In My Apartments: Can A Landlord Say That And Put It In A Lease?

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U.S. Supreme Court Declines Landlords Appeal To End CDC Eviction Moratorium

CDC Extends Eviction Moratorium For The Last Time

The U.S Supreme Court in a 5-4 decision declined an appeal from landlords to end the CDC Eviction Moratorium.

The court action will leave the eviction ban in place until the end of July.

Chief Justice John Roberts and Justice Brett Kavanaugh joined the court’s three liberals in the majority. Kavanaugh cast the pivotal vote, saying he was letting the ban stay in effect even though he thought the CDC had exceeded its power.

“Because the CDC plans to end the moratorium in only a few weeks, on July 31, and because those few weeks will allow for additional and more orderly distribution of the congressionally appropriated rental assistance funds, I vote at this time to deny the application,” Kavanaugh wrote.

Dr. Rochelle Walensky, the director of the Centers for Disease Control and Prevention (CDC),  earlier signed an extension to the eviction moratorium further preventing the eviction of tenants who are unable to make rental payments, according to a release. The moratorium that was scheduled to expire on June 30, 2021 is now extended through July 31, 2021.

This is intended to be the final extension of the moratorium, the CDC said.

“The COVID-19 pandemic has presented a historic threat to the nation’s public health. Keeping people in their homes and out of crowded or congregate settings — like homeless shelters — by preventing evictions is a key step in helping to stop the spread of COVID-19,” the CDC said in the release.

Counter: Targeted relief works better than an eviction moratorium

The National Multifamily Housing Council (NMHC) said in a release that the “nationwide, one-size-fits-all, federal eviction moratorium is out of step with the significant progress made in controlling COVID-19 and restoring the economy.”

The NMHC said that “the pandemic has already shown that targeted, efficient relief works.

“As we transition away from unsustainable moratoriums, we remain committed to implementing workable solutions for renters facing housing instability and helping the country recover. NMHC looks forward to working with the administration on proactive, comprehensive solutions and highlighting the efforts our members have undertaken over the last year to support and assist their residents,” the organization said in the release.

Previously the council released a set of ideas, called industry principles, that it said offer proactive and practical steps housing providers can take to work hand-in-hand with residents and “demonstrate the good faith with which property owners and managers have supported their residents.”

Oregon Approves 60-day Eviction Pause for Renters to Pay

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Will You Be Ready When the Eviction Moratorium Ends?

Everything Landlords Should Know About Emotional Support Animals

No Guns In My Apartments: Can A Landlord Say That And Put It In A Lease?

Can I Say “No Pot In My Apartments” When It’s Legal In My State?

Potential Pitfalls of NNN Properties and a Savvy Alternative

Potential Pitfalls of NNN Properties and a Savvy Alternative and DST investing and 1031

By Chay Lapin
President of Kay Properties and Investments

  • NNN properties seem like passive investments but actually require regular management.
  • Overconcentration is a key risk when it comes to investing in NNN properties.
  • DSTs (Delaware Statutory Trusts) provide an alternative way to invest in NNN properties.
  • Diversification and true passivity are unique advantages of DST investments.

Frequently investors are seeking out reduced management and or passive real estate investments. Real estate owners are simply tired of the three T’s (Tenants, Trash, Toilets) and are looking for alternative options to consider.

One option that a lot of investors are being sold by their real estate brokers are Net Leased properties, which are commonly known as “triple net leases” (or “NNN”). Some Net Lease properties can be nearly 100% passive. Investors will want to carefully understand how the unique net lease is set up, as some leases may actually have active management responsibilities for building upkeep. A client will also want to keep a monthly check in to make sure that the tenant is abiding by their net lease structure and that they are actually paying the various bills (e.g. Common area expenses, Property Taxes and Insurance). It is not uncommon for a large corporation to have a glitch and be late paying property taxes, and this could affect your building if not caught in an appropriate time frame.

If an investor is going to be placing their entire 1031 exchange proceeds or cash allocation in one net lease property, there are key points that an investor should understand prior to investing:

  • Concentration Risk – Placing all of your eggs into one basket
  • Tenant bankruptcies and restructuring – Lease Rejection
  • Store Closures – “Dark Stores”
  • 1031 exchange closing risk
  • Asset and property management responsibilities – unpaid tenant taxes, collecting reimbursements, refinancing, lease term burn off and value erosion, lease renewal and negotiations, legal expenses, insurance issues, etc.

Another option for investors that are looking for a 100% passive investment is a DST (Delaware statutory Trust). A DST is an entity that can hold investment real estate structured to take 1031 Exchange monies and after tax dollar investments. DST properties can be used as opposed
to NNN properties but still providing access to net lease type properties (FedEx, Amazon, Walgreens, CVS and many others).

  • Potential Diversification – Don’t put all your eggs into one basket! It is important to note however that diversification does not guarantee protection against losses or guarantee profits.
  • You can close potentially on a DST in 2-3 days – helps to potentially reduce 1031 exchange
    closing risk.
  • Non-recourse financing with DSTs as opposed to partial and full recourse with NNN
    properties.
  • Back up – Use a DST as a backup ID in case your NNN deal falls apart.
  • DST as a home for leftover funds to cover your exchange and avoid boot.
  • Professional asset and property management in place.

DST examples:

DST # 1
A portfolio of 15 corporate backed FedEx distribution facilities, Walgreens pharmacies and CVS pharmacies located throughout the country.

DST # 2
A portfolio of 20 single tenant net leased properties to tenants such as CVS, Tractor Supply, McDonald’s, Advanced Auto Parts, Auto Zone, DaVita Dialysis, Dollar General and Dunkin Doughnuts.

DST # 3
A single tenant VA Medical Hospital on a 20 year lease with the General Services Administration (GSA) – The United States Government

Potentially protect yourself and your family by investing in multiple DST’s. This allows your 1031 equity to be diversified over 100 to 300 million dollars worth of institutional quality real estate,  instead of buying one 1-3 million dollar net lease property and having to actively manage it yourself.

About Kay Properties and www.kpi1031.com

Kay Properties is a national Delaware Statutory Trust (DST) investment firm. The www.kpi1031.com platform provides access to the marketplace of DSTs from over 25 different sponsor companies, custom DSTs only available to Kay clients, independent advice on DST sponsor companies, full due diligence and vetting on each DST (typically 20-40 DSTs) and a DST secondary market. Kay Properties team members collectively have over 115 years of real estate experience, are licensed in all 50 states, and have participated in over $21 Billion of DST 1031 investments.

This material does not constitute an offer to sell nor a solicitation of an offer to buy any security. Such offers can be made only by the confidential Private Placement Memorandum (the “Memorandum”). Please read the entire Memorandum paying special attention to the risk section prior investing. IRC Section 1031, IRC Section 1033 and IRC Section 721 are complex tax codes therefore you should consult your tax or legal professional for details regarding your situation. There are material risks associated with investing in real estate securities including illiquidity, vacancies, general market conditions and competition, lack of operating history, interest rate risks, general risks of owning/operating commercial and multifamily properties, financing risks, potential adverse tax consequences, general economic risks, development risks and long hold periods. There is a risk of loss of the entire investment principal. Past performance is not a guarantee of future results. Potential cash flow, potential returns and potential appreciation are not guaranteed. Securities offered through Growth Capital Services. Member FINRA/SIPC. Kay Properties and Investments, LLC and Growth Capital Services are separate entities.

6 Reasons To Sell The Income Property You Love And How To Avoid Taxes When You Do

How To Find Tenants During COVID-19

LeaseUp

By Leaseup
A PATH Initiative

Rental markets across the United States have been upended by the COVID-19 pandemic. The struggling economy has shown signs of slow recovery, but renters remain unemployed with months of unpaid back rent.

However, an innovative program in Los Angeles County provides stability and support to property owners by matching those who have vacant units with tenants who need housing. Powered by PATH and backed by Los Angeles Homeless Services Authority (LAHSA), LeaseUp has worked with more than 600 property owners and managers across South California since 2018.

The majority of LeaseUp tenants use government subsidies, like Section 8, to cover a significant portion of rent. While government-backed housing subsidies offer a solution to the monthly rent check quandary, signing onto this kind of agreement with tenants can raise a variety of concerns among property owners and managers. See how LeaseUp addresses these questions head on.

Consistent Rental Collections

Property owners and managers can count on LeaseUp for monthly checks at a fair market rate. Unlike open-market tenants, LeaseUp’s tenants have secured income through their government-backed housing programs.

Dedicated Support

Upon entering the program, every property owner or manager is assigned their own dedicated housing specialist. LeaseUp offers 24/7 concierge support, which includes handling inquiries and scheduling viewings, assistance with applicant paperwork, and mediation if any issues arise with tenants.

Protection Against Property Damage

One of the great benefits of working with LeaseUp is protection for property managers and owners. LeaseUp can cover property damage and unpaid rent up to $10,000 after the security deposit (covered by the agency responsible for rent) has been applied.

Tenant Support

LeaseUp tenants have been carefully vetted by experienced service providers, and all tenants must be enrolled in a program that provides relevant supportive services. Prior to move-in, tenants meet with supportive services to discuss their specific needs. From there, tenants are connected to resources, such as job training, healthcare, mental health counseling or addiction treatment, and education.

Interested in applying? LeaseUp is open to property owners and managers throughout Southern California. The program works with properties of all sizes, including empty rooms and ADUs. In other words, it’s a great way to transform your extra space into a mortgage payment.

Sign up at Leaseupla.org today to see if you’re eligible to participate.

LeaseUp is a PATH initiative that partners with property owners and managers to fill vacancies and help people at risk of homelessness stay housed. By providing an easy-to-use online listings portal, consistent support, and financial incentives, we ensure a smooth, streamlined process for property owners and managers, service providers, and people seeking housing.

*Please note that leaseupla.com is a commercial real estate company and is in no way affiliated with LeaseUp powered by PATH.

What Is A More Affordable Apartment Smart-Home Technology?

What Is A More Affordable Apartment Smart-Home Technology?

The nation’s largest third-party operator is testing a more affordable apartment smart home technology to integrate with other systems.

By Paul Bergeron

Smart-home technology is generating greater efficiencies for apartment residents and their communities’ onsite teams alike. Innovation in this space has created a surplus of providers with a variety of solutions and price points.

Given all the options, multifamily C-suites wonder: If only the decision on which provider to choose was made more efficient.

The global rental-housing company Greystar has both recognized the necessity of offering competent smart-home technology and has discovered an interesting option in a growing field of emerging providers, said Andrew Livingstone, its executive managing director.

“The pandemic created a large shift in how we operate, and it moved us forward a decade,” Livingstone said. “It changed how we think about operating apartments. It forced us, out of necessity, to think more futuristically, given the circumstances.

“It firmly created opportunities in apartment-access technology, making how we enter our apartment homes a fundamental cornerstone. We’re seeing unprecedented changes with access given recent transactions involving companies that offer this and their valuations.”

Livingstone said access and smart-home technology are now an “absolute must-have,” not a “nice-to-have:” “It won’t just be in some apartment buildings; it has to be in all the buildings, he said.”

There are several players in smart-home tech technology – but there is not a clear winner, he said.

“It’s an exciting time as brands continue to innovate their services to establish themselves as leaders in this space,” he said.

Greystar is working with owners who want to try this, Livingstone said. Greystar has been the largest third-party management company in the country for 11 years running, “and right now we know that we do not have as much of this technology in our portfolio as we would like.”

Livingstone said his team realizes it needs to evolve to serve the needs of its residents, clients “and the ever-changing times we live in.”

For example, “We need to find out what smart-home technology platforms integrate best with the various components (thermostats, lights, window blinds, etc.,” he said. “What kind of battery life these systems have; what kind of after-hours service we can provide; and most importantly, how this technology can facilitate greater convenience for prospects wanting self-guided tours?”

iApartments was chosen to deliver smart-home technology to 2Bayshore, a 367-unit community built in 2015 and one of the premier buildings in the Tampa commercial business district, a popular neighborhood for young professionals.

No IoT Dedicated Wi-Fi Networks Necessary

The breakthrough aspect of the technology is that each unit is equipped with the proprietary 4-in-1 smart-hub thermostat designed for 24/7 connectivity. The system allows communities to have smart-home technology without the property (or its owners) having to invest in dedicated IoT Wi-Fi networks, which can cost from $600 to $1,000 per door.

2Bayshore’s system’s ability to provide smart-home technology access through the apartment home’s thermostat gives each unit water-leak detection and additional plug-ins for lighting and other connected devices.

“These are the things our residents want,” Livingstone said.

2Bayshore retrofitted with an enterprise smart-home platform in a move to help it compete with amenities offered at nearby new apartment developments. With existing apartment communities playing catch-up in this way, cost and intrusion have become key factors.

Installation at 2Bayshore did not require high-voltage power or Wi-Fi infrastructure, so the transition was of minimal disruption to residents, and without any damage to the physical structure.

“Many of our clients don’t have the capital or budget to invest in an intelligent apartment program,” Livingstone said. “Those kinds of networks can be expensive, and we’re finding this system works really well out-of-the box. I’ve seen it in action. I’ve spoken to our onsite teams. This checks all the boxes without having to make additional Wi-Fi investments.”

Calculating Net Operating Income

Company founder Dave Magrisso has more than 20 years’ experience in multifamily onsite products; he  played the lead role in one of our industry’s first amenities as a service (AaaS) – Valet Waste (now Valet Living) – and understands how additive features and services represent value to residents and property owners. It’s an economic model he used during due diligence on smart-home technology installation benefits.

Magrisso shows that a 350- to 400-unit garden-style community could potentially bring $118,000 in additional annual net operating income (NOI) based on a $35 per month smart-home rent premium. This would increase the overall asset’s net value by roughly $2.3 million based on a five-percent cap rate.

Furthermore, using $2,200 per month as the average rent, this will could create an estimated $150,000 total increase in NOI based on modest numbers of new leases signed because of the amenity and improved retention rates.

Why Water-Leak Alerts are Crucial

Like many communities, 2Bayshore is mostly made of concrete, and concrete can present moisture issues. As part of 2Bayshore’s smart-home package, three wireless smart water sensors were placed around the residence, plus a built-in humidity sensor was placed in the thermostat, which automatically sends emergency alerts to both the resident and maintenance team when these sensors detect water or moisture.

These sensors discover slow leaks, giving 2Bayshore a preventative solution instead a reactive one.

Installing leak-detection alert systems in apartment communities (they are required in some markets) has resulted in less wear-and-tear on the apartment home and reduced maintenance work orders.

The system’s float-switch alert is saving maintenance technicians 30 minutes per HVAC system repair event, and is helping to decrease overall work orders related to clogged HVAC drains. (Clogged HVAC drains represent approximately 80 percent of HVAC-related work orders at communities.)

2Bayshore residents also can access their smart-home system’s energy management capabilities by controlling their home temperatures from anywhere through an app on their phone.

Once inside the apartment, residents experience a lifestyle upgrade by using their smart wall plugs to control things such as lights, coffee makers and personal devices.

Cutting Costs by Not Cutting Keys

That resident app also is the key to activating the community’s smart-lock access for renters or to generate temporary guest codes for deliveries and other common services such as dog-walkers or package delivery.

Physical keys are not only out of date, but can easily be replicated and used to enter the property without consent. Common places to find a key (under the mat, under the flower pot, inside the fake rock, or lock boxes) may be unsightly or not allowed on some properties.

The access system also has helped 2Bayshore save on expenses and staff time. The company was able to cancel a current contract to manage its key tracking, saving it $2,940 per year along with eight team hours per month needed to cut keys.

There are times when onsite teams need access to every unit in a community, such as during fire inspections. In that case, at 2Bayshore, it required 367 keys to be pulled to ensure easy access into each unit. There are security issues with tracking the keys, and knowing that keys are easily copied creates a significant liability for the management team.

Needing to access various apartments approximately 150 times per month, the smart-access system saves its onsite team roughly 456 hours per year in service time.

Livingstone said as he continues to implement these technologies at more communities, and the onsite teams work with it more, “we are able to provide valuable feedback that helps smart-home technology providers improve the quality of their offerings.”

About the author:

What Is A More Affordable Apartment Smart-Home Technology?
Paul Bergeron

Paul Bergeron has been reporting on the apartment industry since 2002 and served 20 years as editor-in-chief for the National Apartment Association’s UNITS magazine. He currently is editor of his LinkedIn media platform, Thought Leadership Today, and can be reached at pbergeron333@gmail.com.

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Will You Be Ready When the Eviction Moratorium Ends?

Everything Landlords Should Know About Emotional Support Animals

No Guns In My Apartments: Can A Landlord Say That And Put It In A Lease?

Can I Say “No Pot In My Apartments” When It’s Legal In My State?

Landlord Hank: How Can You Help Out a Tenant with Bad Credit?

Landlord Hank: How Can You Help Out a Tenant with Bad Credit?

How can you help out a tenant with bad credit is is the question this week for Ask Landlord Hank. Remember Hank is not an attorney and he is not offering legal advice. If you have a question for him please fill out the form below.

Dear Landlord Hank,

My daughter and I have relocated to Lubbock, Texas, for her job. We have been having a hard time finding a place to rent because her credit score is low; while mine is decent, I don’t make three times the rent. Is there anything someone can do for a person in this situation? Miranda

Hi, Miranda,

Owners of rental property are very concerned now about tenants being able to pay the rent, as so many people have been harmed by the pandemic, with loss of jobs and the closing of so many businesses.

You want to make yourselves look like a good bet to a landlord.

You want to be the candidates about whom the owners won’t have to worry about being able to pay the rent. If your daughter has poor credit, which means she hasn’t paid her bills, you can offer to pay the last month’s rent up front so the owner will feel more comfortable.

You can point to your great rental history (if you have that).

You can try to rent something that is a third of your gross income. Or you may need to ask someone to co-sign for you, so the owner has one more person with good credit to rely on for rent. This could be a challenge for you as you are asking an owner to take a risk on you and your daughter when your daughter has shown that she is not a good risk.

Best of luck.

Sincerely,

Hank Rossi

How can you help out a tenant with bad credit?
Landlord Hank says for a tenant with bad credit, “you may need to ask someone to co-sign for you, so the owner has one more person with good credit to rely on for rent.”

Ask Landlord Hank Your Question

Ask veteran landlord and property manager Hank Rossi your questions from tenant screening to leases to pets and more! He provides answers each week to landlords.

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Do I Have to Paint and Replace Flooring for a Long-Term Tenant?

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Everything Landlords Should Know About Emotional Support Animals

No Guns In My Apartments: Can A Landlord Say That And Put It In A Lease?

Can I Say “No Pot In My Apartments” When It’s Legal In My State?

HUD Declares ‘A New Day,’ Proposes Changes To Rules Governing Discriminatory Effects

HUD Declares ‘A New Day,’ Proposes Changes To Rules Governing Discriminatory Effects

HUD is proposing changes to the rules governing Fair Housing Act discriminatory effects and asking for a return to 2013 rules, dropping changes put in during the Trump administration, according to a release.

The rules being proposed advocate going back under the 2013 rule, where HUD says “the discriminatory-effects framework was straightforward: A policy that had a discriminatory effect on a protected class was unlawful if it did not serve a substantial, legitimate, nondiscriminatory interest or if a less discriminatory alternative could also serve that interest.”

Then the rule change in 2020 under the Trump administration “complicated that analysis by adding new pleading requirements, new proof requirements, and new defenses, all of which made it harder to establish that a policy violates the Fair Housing Act. HUD now proposes to return to the 2013 rule’s straightforward analysis,” according to the release.

U.S. Department of Housing and Urban Development (HUD) Secretary Marcia L. Fudge said the proposed rule is entitled “Restoring HUD’s Discriminatory Effects Standard.” The publication proposes to rescind the department’s 2020 disparate-impact rule and restore the 2013 discriminatory-effects rule. HUD states that it believes the 2013 rule is “more consistent with decades of case law and better effectuates the act’s broad remedial purpose of eradicating unnecessary discriminatory practices from the housing market.”

Secretary Emphasizes Lifting Barriers to Diverse Communities

“We must acknowledge that discrimination in housing continues today and that individuals, including people of color and those with disabilities, continue to be denied equal access to rental housing and homeownership,” Fudge said in the release. “It is a new day at HUD-and our department is working to lift barriers to housing and promote diverse, inclusive communities across the country.”

She said the proposed rule change involving the discriminatory-effects rule “is the latest step HUD is taking to fulfill its duty to ensure more fair and equitable housing.”

The Fair Housing Act prohibits discrimination in housing and housing-related services because of race, color, religion, national origin, sex, familial status, and disability.

The discriminatory effects doctrine is a tool for addressing policies that cause systemic inequality in housing. It has long been used to challenge policies that unnecessarily exclude people from housing opportunities, including zoning requirements, lending and property insurance policies, and criminal records policies.

“Accordingly, having a workable discriminatory-effects standard is vital for the accomplishment of the Biden-Harris Administration’s policy goal of a housing market that is free from both intentional discrimination and policies and practices that have unjustified discriminatory effects,” HUD said in the release.

HUD’s 2013 discriminatory-effects rule codified long-standing case law for adjudication of Fair Housing Act cases under the discriminator- effects doctrine, for cases filed administratively with HUD and for federal court actions brought by private plaintiffs.

The public will have 60 days to file comments on the rule change.

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Will You Be Ready When the Eviction Moratorium Ends?

Everything Landlords Should Know About Emotional Support Animals

No Guns In My Apartments: Can A Landlord Say That And Put It In A Lease?

Can I Say “No Pot In My Apartments” When It’s Legal In My State?

Why Forming a Joint Venture Is a Great Way to Invest in Single-Family Rentals

Why Forming a Joint Venture(JV) Is a Great Way to Invest in Single-Family Rentals (SFR)

By Vincent Deorio

From small private entities to large, publicly traded institutions, it seems as if everyone is getting into the single-family rentals (SFR) investment business.

As the competition for acquiring quality rental housing increases and inventory continues to dwindle, SFR investing remains challenging unless a company finds the right investment partner or partners. Finding the right partner can be done by creating a joint venture (JV), a business arrangement in which two or more parties agree to pool their resources to accomplish a specific task. In virtually any type of economy, a great way to invest in SFR housing at scale is to create a joint venture.

Forming a JV, or a fund to invest in single-family rentals, can bring many benefits to all parties involved, not to mention the residents of the properties. Combining the resources of two or more companies in a JV partnership, typically results in faster growth for all of the entities. While one company may be responsible for putting forth more debt and/or equity capital than the other or others, that investment will likely pay off in multiples. That growth can manifest itself in a variety of ways, including the ability to target new markets for acquisitions, the ability to increase the number of properties on a company’s radar screen, and much more.

Faster growth has enabled property owners and operators to focus more on the resident experience, and to make it one of their top priorities. As a result, resident benefits have become increasingly prevalent. Rapid expansion may also provide the partner with greater leverage to renovate properties with environmentally-friendly features and amenities, for instance, or to develop cutting-edge, tech-enabled properties for residents who work from home every day.

Atlas Real Estate recently executed a $1 billion JV with DivcoWest to acquire and renovate SFR nationwide. This JV enables us to achieve scale at a much faster rate than we would have been able to without a JV partner. Before we achieve our desired scale, we need to ensure that our processes are locked in, otherwise, the inefficiencies will be exacerbated. Our mission statement at Atlas is to “uplift humanity through real estate,” and we believe that we will have a positive influence on the communities and residents we serve throughout the United States. .

Not All of a JV’s Benefits Are Monetary-Related

In addition to being able to grow faster with an infusion of both equity and debt capital, there are other advantages to forming a JV. As an example, throughout Atlas’ history, our JV partners have many connections in the real estate industry, and creating a fund allows us to tap into those resources. In addition, the risks and costs involved in a JV structure are allocated among all parties. Therefore, the liability does not fall solely on one company; it’s diversified. Savvy companies structure JV agreements so that only a portion of a company’s business is associated with the risk.

While a JV does not bind two or more companies together for perpetuity, the relationship can turn into a long-term one, filled with even more investment opportunities in the future. If the JV achieves its goal, the entities can add additional phases and monetary funds to invest in, renovate or develop additional properties, for example. The right JV partnership can open many doors and even result in massive expansion for a company.

JV Investment Partnerships Have Grown Exponentially

For many reasons, joint-venture structures are increasing in popularity, even among companies that aren’t traditional single-family rentals players. In today’s tight market, companies seeking to accumulate a large portfolio of properties need to have capital at the ready. Most companies, however, cannot fund a portfolio acquisition alone, thus they require a partner to make it work. Increasingly, entities outside of the SFR industry are deploying capital into JVs because of the significant upside this type of investment opportunity brings.

Across the country, SFR homes are filling a void that starter homes held for previous generations. As a result, professional operators in the residential and commercial sector are eager to place their money in such a promising sector. A recent Trepp report states that 2020 was the most active year for SFR securitizations on record, with new issuance topping $8.3 billion — a whopping growth of 99% from 2019. Through April 2021, there were more than $3.1 billion of newly securitized SFR CMBS, keeping 2021 on pace to break a new record. According to The Altus Group, institutional SFR operators acquired between 55,000 and 65,000 single-family homes last year, with 2021 expected to net upwards of 70,000.

Find the Right Partner

Finding the right partner should be a methodical, well-thought-out process since it’s the most important step in creating a successful JV. Not putting enough effort in this step could make or break the entire process. There are many potential partners out there, but it may be difficult to find one on the same page, or to find one with shared values. Begin by interviewing different partners to see who aligns the closest. Two of the most critical questions to ask during the diligence process are: 1) Does this potential partner have reputable leaders on their team? 2) Is this potential partner a cultural fit? Make sure to understand—and clearly establish—non-negotiable items when commencing these conversations.

Examine each partner’s business goals and values to ensure that they are complementary. Reach out to other companies, investors, and employees that this potential partner has worked with in the past to provide better insight into how they run their business. Get to know the leaders personally, and find out what makes them tick. What are their hobbies, dreams and passions? Uncover their professional and personal value systems, as well. Then, run through scenarios to determine how they would react to stress, if they would remain calm under pressure, how communicative they are, their level of loyalty and reliability, etc. A partner that responds favorably to these scenarios is a good partner to trust in a JV relationship.

Some Considerations to Ponder Before Executing a JV

While the terms of each real estate JV are structured differently, here are some general considerations to make before entering into a partnership:

  • Identify all of the parties involved. (A JV can consist of more than two partners).
  • Clearly set forth the goal of the JV and how it will achieve those goals operationally. For instance, if the goal of the JV is to purchase and renovate single-family homes, what is the geography/location of these rentals, what technology will be used to achieve the goal, etc.
  • Determine the amount of capital and/or resources each party will contribute to the JV.
  • Establish the terms, such as the amount of debt or equity capital each partner will front
  • Determine the upfront contributions each entity will make and understand the ownership split
  • How the JV will be managed, controlled and operated and by whom.
  • What will happen once the deal is complete/exit options.

As with any relationship or partnership, there are risks associated with forming a JV. Both companies should be on the same page, and possess the same vision and goals at all times. Trouble begins when the objectives are unclear, the lines of communication are poor, or differing sets of expectations exist. If a JV doesn’t work, that can put strain on other parts of a firm’s business. The clashing of cultures and imbalance of workloads can lead to disagreements and rifts within the partnership. A JV requires significant work and time to develop, and in many cases, it can take years to agree upon the terms of a deal.

With home prices at peak levels and inventory at a minimum, forming a joint venture is a great way to invest in properties. When making a pitch to a prospective partner, be persistent, memorable, and personalized. In the real estate industry, a partner could be looming just around the corner. Who knows when a business associate, longtime mentor or even a competitor could approach with an offer to form a fund, so always be prepared for that possibility to arise. Although the single-family rentals investment sector is a huge, $3.8 trillion industry, it’s still a very small world.

About the author:

Why Forming a Joint Venture Is a Great Way to Invest in Single-Family Rentals

Vincent Deorio is the Vice President of Corporate Development at Atlas Real Estate. Contact him at vincent.deorio@realatlas.com, or (303) 902-4785.

 

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Oregon Approves 60-day Eviction Pause for Renters to Pay

Oregon Approves 60-day Eviction Pause for Renters to Pay and landlords to get paid as well

The Oregon Senate has passed a bill now headed for the governor’s signature which provides 60-day eviction pause for those awaiting rental assistance, according to a release.

The bill is intended to also ensure landlords who are awaiting payment of past-due rent will receive it.

Earlier this session, the Senate passed a bill that extended the grace period for repayment of rent accrued during the eviction moratorium until February 28, 2022. Now, the recently passed Senate bill adding the eviction pause provision “furthers those protections by ensuring a tenant cannot be evicted within 60 days of filing for rental assistance. Additionally, the Landlord Compensation Fund will retroactively and prospectively reimburse successful applicants at an increased rate of 100 percent of unpaid rent accrued due to the COVID-19 pandemic,” the Senate said in a release.

Additionally, the first wave of federal emergency rental assistance was passed by Congress in December 2020. Following passage, the latest guidance on distribution of those funds was delayed until May 2021. Due to this, applicants have had limited time to access funds before the eviction moratorium closes

“While some feel as though life is getting back to normal, others are still struggling due to this wholly unequal recession. Lower-income and vulnerable Oregonians are taking much longer to recover,” said Senator Kayse Jama (D-East Portland) in the release. “The Legislature has worked incredibly hard to keep Oregonians housed throughout this crisis. It would be wrong to let a lapse in timelines cause Oregonians to face eviction or insurmountable debt.”

The eviction pause bill gives renters a 60-day pause on being evicted, as long as they can prove they’re one of more than 10,000 Oregonians waiting on rental assistance. While renters have until Feb. 28, 2022 to pay past-due rent from April 2020 through the end of June 2021, they’ll be required to start paying monthly rent in July.

The state is currently rushing to push out approximately $500 million in rental assistance and compensation for landlords. But technical glitches, an unprecedented number of applications for rent assistance, and staffing capacity within the Oregon Housing and Community Services department and its partner agencies, have caused significant delays, according to Oregon Public Broadcasting.

“Disparities that already existed were deepened by the pandemic. With Senate Bill 278 we have an opportunity to prevent further exacerbation of those disparities and increase opportunities for health and future success for Oregonians struggling to get by,” added Senator Jama. “When we end this session and spend more time with our communities, every legislator wants to see those communities benefiting from the work of the Legislature. Senate Bill 278 will do just that.”

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What Are the 3 Most Important Things to Tenants Post-Pandemic?

What Are the 3 Most Important Things to Tenants Post-Pandemic?

Tenants are thinking a little differently now post-pandemic, so what are the 3 most important things to tenants and what  things in rentals are they are looking for these days?

By Justin Becker

There is no argument that the best tenants are the ones who pay rent on time, have long-term leases, and respect the properties they occupy. As a landlord, the key to your success is retaining the current tenants and attracting new ones.

Unfortunately, the COVID-19 pandemic has made it hard for most landlords to get the best tenants, making the real-estate industry more competitive. If you want to have a high chance of getting the best tenants now, or in the post-pandemic period, then you should consider the features highlighted below.

Whether you are improving your current property or purchasing a new one, we have listed the three most important things every tenant wants in a rental property. These features will not only assist you in attracting new tenants, but also help you find the best tenants in the industry.

No. 1 – Location and Security

Just as it is for a business, location can greatly influence your real-estate revenue. For instance, the best tenants in the industry want to rent an apartment or house that is closer to their place of work, restaurants, community parks, and grocery stores.

These clients focus more on the quality of lifestyle. They are willing to overlook certain desirable aspects and pay more money, as long as the property is located in a great neighborhood.

For instance, tenants would prefer to live in a place where they could take an hour or less to commute to work. Tenants also find it desirable to settle in a place where they can easily buy dinner when they don’t want to get in the kitchen and cook.

Another example is that there are many growing families that would love to settle in a good school district. This is the top priority for tenants who have young school-going children. Even for tenants who don’t have children yet, a good school district is still perceived as a predictor of the quality of the neighborhood. This is, therefore, a factor that’ll always be on the mind of a tenant who is looking for a long-term home.

The good thing about having a house or apartment complex in a desirable location is that you can charge higher rent, and no tenant would complain.

Another thing, which goes hand-in-hand with location, is safety and security. A safe environment and neighborhood is one of the greatest motivators for the majority of tenants. If tenants are worried that their homes or cars will be broken into, it may not be easy for them to sleep at night.

As a landlord or property-management professional, it’s important that you research the crime statistics of a certain area before investing in a property. If you don’t, you might find yourself buying a property in a dangerous location that won’t attract tenants.

If you already have a rental property, it would also help if you add an alarm system, or any other security feature, to make your tenants feel safe. Remember, the goal here is to keep the existing tenants comfortable, as well as to attract new ones.

No. 2 – Move-In Ready Conditions

move in ready conditions are among What Are the 3 Most Important Things to Tenants Post-Pandemic
Be sure you rental is move-in ready and looks great for prospective tenants as that is among the 3 most important things tenants want post-pandemic.

This is one area that many landlords don’t take seriously. However, if done correctly, there is a high chance that you can attract some of the best tenants around.

Repairs, both in common areas and units, are annoying and disruptive to tenants. If your property needs, for example, carpeting, cleaning, or painting, it might turn off excellent potential tenants. It’s therefore important that before you show off the apartment to prospective tenants, you clean it and make all of the necessary repairs.

If the tenants see the property in a poor state, it may create a poor impression of the property in their mind, and thus they will lose interest. Another disadvantage is that they may set it in their mind that this is how they should also treat the property.

You want to avoid giving your potential tenants such an impression. A move-in-ready unit sets the standard that every tenant should maintain the property in high regard, all while keeping everything clean and neat.

Another important step in getting your property in move-in ready condition is to include important appliances in the apartment, and make sure they are working properly. As much as homeowners are willing to pay for certain appliances and their upkeep, tenants who are renting the property usually aren’t.

Tenants do like nice appliances that they can take pride in, and thus take proper care of them, but most  don’t want to buy costly and large items that they may not require in their next rental unit. This means that if you decide to provide new appliances for your tenants, it’s less likely that they will be damaged.

For instance, tenants would be willing to pay higher rates for 1 bedroom apartments if they are sure that the landlord will provide laundry machines/facilities as part of the rent. Every tenant recognizes that washing their clothes at a local laundromat can be very expensive. An in-unit washer/dryer, or even community machines, could therefore be ideal in such a scenario.

No. 3- Excellent Amenities

Excellent amenities are without question the top priority on the list of many tenants. When it comes to amenities, there are several things that landlords should keep in mind.

Ample parking is one of the most important amenities that every landlord can provide for their tenants. No tenant wants to drive around for long minutes while searching for a parking spot, especially when they have melting ice cream or a bundle of groceries in their car.

As a landlord, you should look to purchase properties in suburban areas since there are many parking spaces on the streets; parking can be a challenge in an urban environment. If you don’t have enough parking spaces, you should give your tenants directions to any decent parking garage nearby.

If you happen to offer parking spaces, you should outline rules related to them in the lease agreement. It’s also important that you post signs that notify everyone of these rules. Finally, you must enforce the rules to ensure that no unauthorized user accesses the parking spaces.

Another amenity that tenants prefer are apartments that have adequate storage space and open floor plans. This might mean offering an extra closet in the bedroom, or eliminating an unnecessary wall.

Alternatively, you can offer a storage unit outside of the house, maybe within an outdoor storage shed or basement. Tenants prefer landlords who offer them an option to store seasonal belongings such as skis and bikes, as well as their large belongings. This offers them enough space to move around their rental and entertain guests. In the end, this creates an enjoyable living experience.

A private balcony or back yard could also be a wonderful addition and can be attractive to new prospects, especially to urban dwellers. It also can be an amenity that makes your property stand out from the rest of the neighborhood.

You’ll attract more tenants to your property if you can offer space for them to enjoy some fresh air and sunshine. You’re even more likely to charge a higher rent for it.

Most Important Things To Tenants Conclusion

Whether you own apartments, manufactured housing units or stick-built homes, you must include the above three amenities to attract the best tenants to your rental property.

Apart from just ensuring that you have provided the best amenities and best location, you should always aim to be a good landlord to your tenants. Maintain a good landlord-tenant relationship by always attending to their needs as best you can.

We hope that you become a successful landlord or property management professional, especially in the post-pandemic era.

About the author:

Justin Becker is a property owner in the state of Michigan and has a passion for managing communities. He owns apartment complexes and mobile-home communities, and has been writing his own blogs for his properties for several years.

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