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Can I Ask Prospective Tenant To Visit Their Current Residence?

By
Hank Rossi
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Can you ask a prospective tenant to visit their current residence is the question this week for Ask Landlord Hank.

Can you ask a prospective tenant to visit their current residence is the question this week for Ask Landlord Hank. Remember Hank is not an attorney and is not offering legal advice. If you have a question for him please fill out his form below.

Hello Hank:

Can I legally ask to meet a prospective tenant to visit at their current residence ?

I think it would be enlightening to see how they maintain their present residence before they move into mine.

-Kathy

Hello Landlady Kathy,

Most landlords rarely ask this question.

But, if the prospective tenant is Ok with you visiting their current residence this would give you a good idea of how they maintain a property and there are no legal prohibitions that I’m aware of regarding a visit.

Sincerely,

Hank Rossi

www.rentsrq.com

Each week I answer questions from landlords and property managers across the country in my “Dear Landlord Hank” blog in the digital magazine Rental Housing Journal.    https://rentalhousingjournal.com/asklandlordhank/

Can I ask a prospective tenant to visit their current residence?
Landlord Hank says, “if the prospective tenant is Ok with you visiting their current residence this would give you a good idea of how they maintain a property.”

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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NOI Drivers to Combat Rent Growth Decline Part 2: Revenue Recovery

By
By The Editors
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operators are finding ways to combat rent growth decline focusing on resident renewals and identifying new NOI strategies

As year-over-year rent growth slows, operators are finding ways to combat the rent growth decline focusing on resident renewals and identifying new NOI strategies so here are some examples.

By Kevin Juhasz

A historic period of rent growth ended last year, subsequently followed by several months of decline that have carried into 2023.

According to the latest update from the Apartment List National Rent Report, year-over-year rent growth continues to decelerate and is projected to decline further in the coming months. Those headwinds pose a significant challenge to multifamily owner/operators, and their response to eroding market factors could dictate their portfolio performance for the foreseeable future.

While the typical industry reaction is to cut costs and batten down the hatches, inflation rates continue to limit the efficacy of expense reductions. Cutting staff and services can trim budgets but it also impairs resident retention efforts. Operators are finding that focusing on resident renewals and identifying new NOI strategies within day-to-day operations better positions them to weather the storm.

Here are other ways owner/operators can increase NOI in a potentially stagnant, inflationary period in 2023. In addition to developing new revenue sources, operators are increasingly seeking opportunities to limit revenue loss on the back end of leases.

Maximizing Rent Collection

According to the latest Household Pulse Survey from the Census Department, more than 8 million renters were not current on their rent payments at the beginning of 2023. While delinquency is always a concern in the industry, renters are at an even higher risk of becoming delinquent during an inflationary period or a recession.

Many operators are turning to rent payment innovation to proactively mitigate delinquencies, increase collections and position residents to successfully pay rent on time – no matter what’s happening in the economy. The most effective rent payment platforms allow renters to set up automated, customized payment schedules that align with their income and support them in sustainably paying on time and catching up on arrears. This comprehensive payment methodology caters to residents, but ultimately gears operators with a long-term tactic to maximize rental income and improve their NOI.

According to internal data from Circa, an innovative payment technology company, operators that extend a comprehensive payment platform to their residents experience a 17.5% increase in on-time payments at their communities.

“Many aspects of rental housing are customized for residents, but one area that operators can make a notable improvement to NOI is by extending that customized experience to rent,” said Leslie Hyman, CEO and co-founder of Circa. “When renters can customize their largest monthly payment on an automated schedule, it sets operators up to maximize rental income and recoup any losses. It’s an additional security tactic operators utilize to improve both their NOI and asset value.”

Eviction Optimization

The rental industry files eviction proceedings on about 2.5 percent of units every year. While that number is small when viewed as a percentage, it can be overwhelming when looking at actual units. Even when things go well dealing with delinquent residents, the task can be overwhelming for property teams and managers. It’s when challenges arise that costs for even a single eviction can balloon quickly.

The smallest of errors or a missed deadline can result in a judge pushing an eviction back another 30 days or more. That’s additional rental income that may be lost, additional fees to re-file and additional costs for legal counsel. Add to that the fact that leasing teams chasing delinquencies are directing a lesser amount of effort into growing a community and its NOI. It’s easier than you might believe to introduce a mistake or miss a deadline, and it’s not necessarily the fault of the onsite teams.

“Evictions don’t just vary from state to state; you have different things going on at the county and municipal levels, as well,” explained Larry Bellack, Executive Vice President of Possession Partner. “The Los Angeles City Council recently moved to end eviction moratoriums, but the Los Angeles County Council is considering extending them to June 2023, and not all communities in the city are required to follow the county moratorium. With so many government entities making so many different decisions that apply differently to communities in the same area, it’s a monumental challenge to keep track and an invitation to error and increased costs.”

Some of the costs can be avoided with the implementation of a third-party eviction management system that can automate much of the process to meet deadlines and employ a team of experts trained to track and fully understand the frequent changes to eviction laws and regulations

Security Deposit Replacement

Operators are also realizing the benefits of optimized claims by replacing traditional security deposits and surety bonds with lease insurance. The deposit refund and claims process often prevents property teams from effectively turning the page on former residents, leading to bad debt and unnecessary vacancy.

Lease insurance replaces prohibitive upfront deposits with a modest monthly fee, streamlining the application and move-in process but more importantly expediting claims on the back end.

“Historically, security deposits have always presented a financial barrier to residency. Lease insurance eliminates that upfront expense for prospective renters who otherwise meet qualifications,” said Ed Wolff, president of LeaseLock. “That creates opportunities for renters and a much larger prospect pool for operators. It also erases the friction that often accompanies security deposit conversations at move-out. Without security deposits to manage or dispute, departing residents can move on without looking over their shoulders and management teams are protected from bad debt.”

Lease insurance technology helps operators start the claims process earlier to speed up the rate of return on that revenue by absorbing account balances at move-out. Claim returns are processed in roughly a week, establishing reliable back-end revenue capture and boosting NOI. Property teams simply need to close out the final account statement to initiate claims immediately through the native receivables process.

Whether managing an eviction or debt recovery, these processes are time-consuming and contentious. Lease insurance eases the burden of claims management for on-site teams and allows overstretched associates to focus on leasing and customer service. By removing security deposits from the equation, it also eliminates any brand damage stemming from the negative reviews that frequently accompany deposit refund disputes.

About the author:

Kevin Juhasz is a content manager for LinnellTaylor  Marketing and a writer, editor, and storyteller.

NOI Drivers Combat Rent Growth Decline: New Revenue Streams- Part One

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Leveraging Federal, State, and Utility Incentives to Fund Solar

By
By The Editors
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The business case to fund solar for multifamily affordable housing is the best it’s ever been with the Inflation Reduction Act

By Ravi Malhotra
Tax Credit Advisor

The business case for solar-for-multifamily affordable housing is the best it’s ever been with the Inflation Reduction Act (IRA) and Bipartisan Infrastructure Law (BIL).

Multifamily properties can leverage Solar Photovoltaic (PV) (and energy storage) to cut utility bills and/or bridge financing gaps.

The business case to fund solar for multifamily affordable housing is the best it’s ever been with the Inflation Reduction Act

The IRA increases the baseline Solar Investment Tax Credit (ITC) to 30 percent and offers bonus ITC for various conditions.

For example, multifamily properties can receive a 20 percent bonus ITC if they share over 50 percent of utility savings with their tenants. ITCs can be braided with other credits (e.g., Low-Income Housing Tax Credits, 45L, 179D, etc.) and incentives (e.g., utility rebates or Solar Renewable Energy Credits (SRECs)). Further, they can be transferred to third parties and nonprofits can claim them as cash from the U.S. Treasury Department. Though, cashing out is uncommon—it was last done during the American Recovery and Reinvestment Act period—it is a game changer for nonprofits who can cash out the value of ITC (they lose the value of accelerated depreciation but gain full value for ITC). The transferability is also valuable for both nonprofit and for-profit developers since the multifamily property does not have much of a tax liability to monetize the ITC. The ability to ‘sell’ to investors opens solar up for many more properties. The downside is that most ITC investors want volume, not one project, so the aggregation of projects to meet investor volume requirements becomes important.

There is also the possibility of deploying solar using the ~$3.2 billion in funding allocated to the Weatherization Assistance Program (WAP) through the BIL, as, in contrast to standard WAP, these funds allow for solar. Solar is treated like any other efficiency measure and evaluated on the savings-to-investment ratio, and it must meet the average cost-per-unit rules. However, you can only avail yourself of these resources if your state allows multifamily projects.

The business case to fund solar for multifamily affordable housing is the best it’s ever been with the Inflation Reduction Act

So, how does solar save on utility costs and/or help bridge a funding gap?

Say you invest $1 million in solar for your multifamily property, it should generate at least $64,000 in utility bill savings, which at a debt-service coverage ratio (DSCR) of 1.15 gives you $55,652 in extra cash for financing, and at a 6.5 percent debt constant, yields $856,187 in additional debt for the project. Additionally, the $1 million solar investment increases the tax basis by $1 million, thus providing ~$810,000 in nine percent LIHTC value (or ~$360,000 in four percent LIHTC value) plus ~$270,000 for the solar 30 percent ITC. Add the modified accelerated cost recovery system (MACRS) depreciation, utility rebates, SREC value and WAP grants, and your solar can be at no cost, plus you get additional debt for your project. Furthermore, you can transfer the tenant’s utility savings into rent through a utility allowance adjustment to support additional debt.

This is all good news, but only if your state allows you to create a shared solar project via community solar law or virtual net metering (VNM). Both allow you to allocate the energy generated from your solar project to your tenants and house meters, without having to create individual solar systems for each meter (besides the higher costs of such a solution, it has other downsides that impact financial viability significantly). And unfortunately, a master-metered property has other issues, such as utility rate structures that impact the viability of solar for those projects. That is to say: the devil is in the details, but again, the business case for solar-for-multifamily affordable housing is the best it’s ever been – especially if you have a LIHTC project or other opportunities to braid the solar ITC with other incentives and are in a solar-friendly state.

The Opportunity to Increase Energy Efficiency in Rentals

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Multifamily Fundamentals Strong But Mild Recession Predicted

By
John Triplett
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Multifamily fundamentals have been holding up better than expected through the first quarter, but there is still a looming mild recession

Multifamily fundamentals have been holding up better than expected through the first quarter, but there is still a looming mild recession expected later this year, Yardi Matrix experts explained in a recent Multifamily National Outlook For Spring 2023 webinar.

“Things are quite a bit more nuanced and more variables in play than there have been as we go through this on-going adjustment in this post covid world,” Jeff Adler, Vice President, Yardi Matrix said.

“The current investment environment requires increased creativity to find potential investable opportunities, which Yardi Matrix is designed to do,” said the presenters, Adler and Paul Fiorilla Editorial Director, Yardi Matrix.

Macroeconomic Update

  • U.S. economic growth slowed in the first quarter, with GDP growth falling to 1.1 percent, further deceleration to come.
  • The Fed is still in a tightening cycle, but will slow the pace of rate increases soon, as there is a less than one-year lag to actions
  • Inflationary pressures have started to cool, but remain elevated due to underlying price pressures
  • De-globalization continues
  • The SVB/Signature/Credit Suisse/First Republic banking crisis is a natural consequence of financial tightening.
  • The labor market is tight, but showing signs of weakness at the upper end, w/ no consensus on immigration policy.
  • U.S. economy is slowing, yield curve (10 year- three month) is inverted, mild recession very likely in second half of 2023.

How Does Multifamily Fit into This?

  • Multifamily fundamentals have been strong, but we expect deceleration within a seasonal uptick.
  • Market rotation occurring, with rent-by-necessity less impacted by new supply.
  • Affordability is still a key concern, with little political will to resolve and significantly more regulatory risk.
  • Demographic trends will keep the labor market tight, and entrenchment of hybrid work has tilted consumer budgets toward housing.
  • Construction financing is in short supply, and deliveries could be significantly reduced in 2025.
  • The supply shortage of U.S. housing is likely to last 5-10 years, supporting continued rent growth and capital appreciation.
  • The bid/ask spread for acquisitions remains very wide, with initial pre-distress and distress emerging.
  • Transactions have, and will, slow over the next 18 months until inflation moderates and interest rates come down.

Multifamily Outlook Highlights

Yardi Matrix says multifamily rent growth, occupancy, demand remain strong, but less than 2021 and 2022 as “deceleration” occurs.

Reasons for rent deceleration:

No. 1 – Post-pandemic migration is slowing, but a major reset has occurred

  • Return to “normal” migration to Sunbelt markets, i.e. Southeast, FL, TX, Mountain West
  • Intra-state migration slowing to secondary metros such as Sacramento, Inland Empire
  • Resort Towns will remain beneficiaries of the 20 percent of office employees fully remote
  • Gateway rebound led by young workers, retirees, immigrants
  • “Work from Office” varies by industry and function, but hybrid dominates
  • Growth highest in suburbs of major markets

No. 2 – Household growth is slowing

  • 2020/21 boom in households from job, wage growth, stimulus and pent-up demand
  • Job growth slowing, consumer excess savings ebbing from $2.7 trillion peak, now ~$1T

No. 3– Supply growth, especially in high-demand metros in Texas, Southeast

  • 1 million units U/C nationally, but starts are waning as financing dries up
  • 400,000 to 450,000 deliveries in 2023-24, slowdown in following years

See the full report from Yardi Matrix here.

About Yardi Matrix

Yardi Matrix researches and reports on multifamily, office and self-storage properties across the United States, serving the needs of a variety of industry professionals. Yardi Matrix Multifamily provides accurate data on 18+ million units, covering more than 90 percent of the U.S. population. Contact the company at (480) 663-1149.

Remote Work Wipes Out Decade Of Super Commuters Growth

By
By The Editors
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Super commuters have declined as the recent proliferation of remote work and hybrid jobs reversed the trend, economist Chris Salviati writes.

Super commuters have declined as the recent proliferation of remote and hybrid jobs has reversed this trend, Apartment List’s economist Chris Salviati writes.

Today there are 1.5 million fewer super commuters than in 2019, and the metros with the largest concentrations of remote work have seen the largest improvements in commute times.

As of 2021 – the most recent data currently available from the Census Bureau’s American Community Survey – the number of super commuters had fallen back to 3.1 million, 4 percent fewer than there were in 2010. In 2019, super commuters comprised 3 percent of the American workforce, but as of 2021, that figure has fallen by one-third to 2 percent.

Highlights of the report:

  • After increasing from 3.2 million in 2010 to 4.6 million in 2019, the number of “super commuters” who travel 90 minutes or more each way to work has fallen back to 3.1 million as of 2021, driven by the widespread adoption of remote work. 2 percent of the U.S. workforce are super commuters, down from 3 percent in 2019.
  • Despite the improvements, there remain significant populations of super commuters in and around the nation’s most expensive markets, especially the San Francisco Bay Area and the region surrounding New York City. Stockton, CA – on the outskirts of the Bay Area – has the nation’s highest super commuting rate at 7.4 percent.
  • Super commuting has historically been most common among high earners, but that gap is closing. The super commuting rate for six-figure earners fell from 4.4 percent in 2019 to 2.2 percent in 2021, while the rate for workers earning less than $25K fell from 2.1 percent to 1.7 percent.
  • Workers who rely on public transit to get to work are more than three times as likely to be super commuters as those who commute by car; 6.8 percent of all transit riders were super commuters in 2021, compared to 2.1 percent of drivers.

Super commuters have declined as the recent proliferation of remote work and hybrid jobs reversed the trend, economist Chris Salviati writes.

Housing affordability still driving super commuters

The report concludes that, the rise of remote work has led to a corresponding drop off in commuting. And no commute category has dropped off faster than lengthy super commutes of 90 minutes or more.

“From 2019 to 2021, the number of super commuters in the U.S. fell by 1.5 million, erasing a full decade of expansion during which the super commuter population was growing at triple the rate of the overall workforce.

“But even as the burden of super commuting has been somewhat ameliorated, the underlying cause of the trend has not. Acute housing affordability crises are still driving workers away from the nation’s most expensive cities, but more of them are now working remotely rather than bearing arduous commutes to downtown offices.

In fact, remote work has the potential to accelerate migration to the far-flung exurbs of large metros.

Top 20 Metros With Highest Rate Of Super Commuters

Super commuters have declined as the recent proliferation of remote work and hybrid jobs reversed the trend, economist Chris Salviati writes.

Read the full report from Apartment List here.

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Are You Prepared for Fair Housing Testing?

By
By The Editors
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It is crucial to be prepared for fair housing testing when a tester comes to call so here are some tips to help you pass with flying colors.

It is crucial to be prepared for fair housing testing when a tester comes to call so here are some tips to help you pass with flying colors.

By The Fair Housing Institute

Fair housing testing is an essential tool for ensuring that property owners and managers comply with fair housing laws. The practice involves sending testers, who pose as potential renters, to assess whether landlords and property managers are engaging in discriminatory practices.

As a landlord or property manager, it’s crucial to be prepared for when a tester comes to call. In this article, we’ll explore who can be a tester and the common methods they employ. We’ll also share tips to help ensure that you don’t fail your fair housing test.

Who Can Be a Tester and Where Can They Test?

Testers can come from various backgrounds and organizations. They can work for state fair housing departments, private fair housing advocacy groups, or the Department of Justice. Regardless of who they work for, their goal is to ascertain whether landlords and property managers are following the law and are fair housing compliant.

Testers use leading questions to target known trouble spots within the industry. Vague or leading questions should immediately set off warning bells in your mind that you are talking to a tester. You need to be sure that you are not saying or doing anything that could be interpreted as a violation.

Where might you come across a tester?

Essentially, any place a potential renter would cross paths with a leasing agent can be a testing ground. Testers employ all forms of contact, including phone, email, social media outlets, and on-site visits. By far, though, the phone is the most widely used as it is the most cost- and time-efficient.

Let’s consider two common topics used by telephone testers.

What Are Your Pet Policies?

One of the most common topics used in testing is about animals or pets.

Testers will give just enough information to see how you or your staff respond. For example, a person calls in and says they are interested in your property but want to make sure their dog would be allowed, and the dog is a German Shepherd. It’s essential to note that the person said “their dog,” not “their pet.”

By assuming that the dog is a pet and wouldn’t pass your breed restriction policy, you could be setting yourself up for a fair housing complaint.

Best practices dictate that pet policies can be discussed as long as assistance-animal policies are also shared. Along with that, it is always a good policy to encourage the person to come in and fill out an application, as that is what will genuinely determine eligibility.

Is Your Property Accessible?

Another common question during fair housing testing is about accessibility.

Consider this scenario, a person calls in and asks if the property is accessible because they require the use of mobility aids. It’s crucial to note that even if a property is not very accessible, and you have the best of intentions, you should never disclose this information and should avoid recommending more accessible properties.

This can appear as discrimination and steering, which are violations of fair housing laws.

The correct response is to encourage them to visit the property’s website to see more images and arrange for a tour if they wish. You should never discourage a potential renter from coming in to take a tour or fill out an application under any circumstances.

Tips to Help Ensure You Pass Your Fair Housing Test

Educate yourself and your team: Proper training is key to ensuring fair housing compliance. It’s essential to educate yourself and your team on fair housing laws, including federal, state, and local laws. Make sure you are familiar with protected classes and any exemptions that may apply to your property.

Have clear policies and procedures: Develop clear policies and procedures for renting your property, including pet policies and assistance-animal policies. Make sure they are easily accessible to anyone who needs them.

Document everything: Document everything, including conversations with potential renters and any decisions you make regarding their eligibility. This documentation can be helpful in case of a fair complaint.

These are just a few topics that can come up during a fair housing test, but anything related to fair housing can be utilized. Regardless of whether you agree with testing and the tactics testers are legally allowed to use, fair housing training is key to ensuring fair housing compliance.
About the author:

In 2005, The Fair Housing Institute was founded as a company with one goal: to provide educational and entertaining fair-housing compliance training at an affordable price at the click of a button.

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4 Steps To Fight Mold and Mildew In Rentals

By
By The Editors
-

Here are 4 steps to fight mold and mildew in your rentals and reasons you must act quickly at the first signs of mold or mildew.

By Eli Secor

Surface mildew or mold is not terrible if it is dealt with promptly, however, the longer it is left the more it will damage finishes.

It can also pose a health risk as many people are allergic to mold, leading to costly repairs and tenants needing to move out of the unit while repairs are made.

When mold and mildew issues arise the first thing to do is to make sure that there are no problems with the building itself. A few of the most common causes are roof leaks, plumbing leaks, crawl space moisture, and lack of proper ventilation. For the sake of their renter’s health and their investment in the property, landlords must act quickly to repair any kind of water issues in the building.

If the tenant is creating a moisture problem in their rental unit, however, it is important for landlords to have good clauses within their leases that deal with mildew and mold. Such clauses hold tenants responsible for preventing such growth.

If tenants do not hold up their end of the deal, landlords may need to issue a comply or vacate notice.

4 Steps To Fight Mold And Mildew In Rentals

Here are our tips to prevent mildew and mold:

  1. Take care of ventilation in the building, including bathroom and kitchen fans. You can also install moisture-detecting switches to turn fans on when moisture levels become elevated.
  2. In places where it is wet often, landlords should provide tenants with information regarding what mold is, how it occurs, and what to do about it. Tenants should also be given another form to say that it is their responsibility to take care of mildew and mold problems, and to notify the landlord if one is occurring.
  3. Send out reminders at the start of winter reminding tenants about ventilating units. When it’s cold out, tenants may have the tendency to close the windows, but forget to turn on the fans.
  4. Be proactive in preventing leaks. Check roofs and windows for leakage regularly, replace water heaters according to the manufacturer’s instructions, install high quality fans that vent outdoors, and install leak detectors under your sinks, just to name a few measures landlords can take.

Key Takeaway

Be proactive. Avoid leaks by replacing equipment when instructed and installing moisture detectors where it is possible. Additionally, send your tenants reminders and tips and tricks regarding mold and mildew prevention. If mold and mildew start to occur, it can become a big, costly project.

Get a head start and make sure that you prevent it from happening in the first place.

About the author:

Eli Secor started LandlordGurus.com with long-time friend and fellow landlord Chris Lee. After many a discussion about how to manage various tricky rental property issues, they decided to share their experiences and expertise with other independent landlords.  Along the way they are finding new answers and new tools, which they also share.

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Rental Property Maintenance Checklist, Part One: Plumbing

rental property maintenance plumbing and water heater secured with straps in earthquake prone areas of the country

3 Common Plumbing Emergencies In Rental Properties And What To Do

Rental Property Maintenance: 6 Items to Troubleshoot in Your Crawl Spaces

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Part 2 – Rental Property Maintenance: Security, Pest Control, & Exteriors

National Multifamily Rents Up Slightly In April

By
John Triplett
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Multifamily rents were up slightly in April “but less than previous years and in line with our forecast deceleration,” Yardi Matrix writes

Multifamily rents were up slightly in April “but less than previous years and in line with our forecast deceleration,” Yardi Matrix writes in the April report.

“Demand remains stable despite the slowing economy and tighter loan underwriting standards that will likely increase distress,” Yardi Matrix writes.

Highlights of the April Multifamily Rents Report

  • The multifamily market continues to display resilience in the face of headwinds, as rents increased for the second straight month in April. The average U.S. asking rent rose $5 in April to $1,709, while year-over-year growth decelerated to 3.2 percent, down 80 basis points from March.
  • Rent growth is broadly positive nationally, but regional differences are emerging. High-demand Sun Belt metros are feeling the impact of reduced affordability and robust deliveries, while primary metros have less supply growth and some benefit from rebounding immigration.
  • Single-family unit rents hit a new all-time high of $2,089 in April, but year-over-year rates once again decelerated, dropping 60 basis points to 2.3 percent. Occupancy rates decreased in March to 95.5 percent, but have stabilized after peaking at 97.0 percent in 2021.

“Early indications at the start of the spring confirm our forecast for moderate rent growth in 2023,” the report says.

While demand for rentals have been supported by a strong job market and strong consumer spending, it is unclear how long those conditions will continue.

Other factors that will impact rents and rent growth:

  • Economic growth is likely to ebb in coming quarters
  • A slowdown in housing sales and construction due to higher interest rates
  • Dwindling post-pandemic consumer savings
  • A squeeze on credit as banks try to de-risk loan portfolios
  • The reduction of the Federal Reserve’s balance sheet

Yardi Matrix says as affordability remains a major factor for tenants rent growth will likely be increasingly concentrated in renter-by-necessity properties (5.1 percent year-over-year, 0.3 percent trailing three months) relative to luxury lifestyle properties (1.5 percent year-over-year, 0.1 percent trailing three months).

Lease Renewal Rents Persist At High Rates

Renewal rent growth nationally was unchanged in February, remaining high at 9.4 percent year-over-year.

Renewals represent the increases for tenants that are rolling over existing leases, which typically lag growth in asking rents of vacant units. U.S. asking rent growth dipped to 3.2 percent year-over-year through April, “so renewal rents will eventually decline, as well.

Renewal lease rates persisting so high is an indication of the outsize increases for new leases and the lack of supply, as tenants that wish to move into units with a lower rate have limited options,” Yardi Matrix says.

Lease renewals plus multifamily rents were up slightly in April “but less than previous years and in line with our forecast deceleration,” Yardi Matrix writes

Read the full report from Yardi Matrix here.

About Yardi Matrix

Yardi Matrix researches and reports on multifamily, office and self-storage properties across the United States, serving the needs of a variety of industry professionals. Yardi Matrix Multifamily provides accurate data on 18+ million units, covering more than 90 percent of the U.S. population. Contact the company at (480) 663-1149.

9 Alarming Signs of an Electrical Problem in Your Rental Property

By
By The Editors
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How often do you check for whether there’s an electrical problem in your rental property or whether you need electrical supplies?

How often do you check for whether there’s an electrical problem in your rental property? Or whether you need some electric supplies?

By Jeson Pitt

Most people don’t  check until they face an electric failure. But that’s the wrong practice.

Both landlords and tenants must keep checking circuit breakers and wiring from time to time, especially while renting or taking a property on rent. But what exactly do you need to check?

9 Prime Indicators of an Impending Electric Problem in Your Rental Property

Here are nine tell-tale signs that you need to call an electrician or order new electrical products for your rental property.

1. Frequent Tripping of Circuit Breaker

The job of a circuit breaker is to shut down the power when it detects a power surge. This way, it prevents your electric equipment and your life from electrical hazards. So when your circuit breaker trips regularly instead of occasionally, there can be some underlying electric problem or fault in your property.

2. Wiring Appearing to be Chewed up or Frayed

If the wiring looks chewed up or frayed, you must replace it, as it’s an electric hazard. Many factors like a rodent infestation or improper installation can lead to the wiring appearing to be chewed or frayed. Contact someone who can provide quality electric supplies and proper installation.

3. Warm Power Outlets

Another primary indicator of an electric problem in your property is warm or hot power outlets. Vibrating outlets and outlet sparks are also some warning signs. In this condition, also you need someone to fix the wiring and procure high-quality electric products to replace outlets and wiring.

4. Unexplained Burning Smell

Do you sniff a burning smell but can’t pinpoint its origin? There are high chances that the odor is coming from the wiring inside the walls. The wires can be damaged due to an electric spark or fire. Switch off all power outlets if you see smoke. This can happen while using equipment that demands high power.

5. Sparking Outlets Appearing Discolored

Any signs of warping, scorching, or discoloration of the power outlets indicate a serious electrical problem. The damaged wires behind the outlets are probably releasing the heat. Don’t delay calling a professional if you see sparks coming out of an outlet.

6. Light Switches and Outlets Going Out of Order

If your light switches or outlets often stop working, there is definitely an electrical problem in your rental. It can be either loose wiring or burnt wiring behind the walls. Call a professional to find out which one it is. Keep all outlets switched off till then for safety reasons.

7. Flickering or Dimming Lights

Buzzing, dimming, and flickering lights trouble you mostly when there is a power surge. That means the wiring of your rental is not capable of handling the electric equipment you are using. You need a reliable source of electric supplies to fetch new wires and outlets.

8. Noise Coming Out of Electrical Panels

When your wires get overloaded, you can hear crackling and humming sounds from the electrical panel. This sound comes only when you plug a device into the outlet. This electric problem happens due to damage to the wire or aging of the wire.

9. Outdated Wiring

When you witness all these signs of trouble, you might want to check the relevance of your wiring. Outdated wiring goes through a lot of wear and tear. It’s often been used beyond its lifespan. To avoid more electrical problems, update the wiring in accordance with modern electrical devices.

In Conclusion

It’s crucial to run proper electrical checks before moving tenants into a rental home for the safety. Check as to whether circuit breakers, wires, outlets, etc., need any replacement. If you spot any of these nine signs of an electrical problem in your rental property, call a professional right away to inspect. Better safe than sorry!

About the author: Jeson Pitt works with the marketing department of D&F Liquidators and regularly writes to share his knowledge while enlightening people about electrical products and solving their electrical dilemmas.

 

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What You Should Know About ‘Steering’ Housing Prospects

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By The Editors
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What you should know about

What you should know about “steering” housing prospects and the Fair Housing Act even if you have the best of intentions to help a prospective tenant.

By The Fair Housing Institute

The Fair Housing Act makes it illegal for a housing provider to attempt to influence or steer where a prospect lives due to the prospect’s race, color, religion, national origin, sex, familial status, or disabilities—otherwise known as protected categories.

An important point to remember is while the Fair Housing Act is applicable in all states, some states have additional protected categories. For example, in addition to the seven categories listed above, California’s fair housing law also protects prospects on the basis of their citizenship, immigration status, primary language, age, sexual orientation, gender identity and expression, genetic information, marital status, source of income, and military or veteran status.

Not being knowledgeable of your state’s particular laws or additional protected categories can leave you open to complaints and violations.

What is Steering?

The two elements of a steering violation are 1) an effort to influence a prospect’s choice of a house or apartment; 2) the housing provider’s effort is related to the prospect’s protected category. Notably, this “effort to influence” does not have to be malicious or result in injury to the prospect in order to establish illegal steering. In other words, all steering is illegal even when it is well-intentioned.

There are many fair housing cases involving a housing provider who had the best of intentions and was just “looking out,” so to speak, for the prospect’s best interests.  The general rule is that it is up to the applicants to determine where they want to live. Any efforts by a housing provider to encourage, discourage, or redirect a prospect based on any of the protected categories will be viewed as illegal acts of steering and are prohibited by the Fair Housing Act.

Examples of Steering

  • “Since you have several children, our experience has shown that we will have fewer complaints from neighbors if you live on the first floor.”
  • “That area of the property is viewed as our ‘quiet’ area, so you should choose an apartment in a different area closer to other young families.”
  • “This property has a lot of Latino residents, so you should fit right in.”
  • “I assume from the last name you are Jewish, like me. I have a vacant apartment that is next door to another Jewish family. Would you like to see it?”
  • “The only available unit we have is on the second floor, so since I see you use a wheelchair, I can put you on a waitlist for a first-floor unit.”

How To Handle Questions That Could Lead To Steering

It is common and helpful when a prospect shares what they are looking for in a home and their specific preferences with the leasing agent. However, if a prospect starts asking questions regarding the property, such as “What kind of people live here?” (looking for a breakdown of race), or “My church is close by, are there many of my denomination living here?” these types of questions should not be answered!

Regardless of the prospect’s motivation, answering questions like these could have either an encouraging or discouraging effect and are based on protected categories, making it illegal steering. Another point to keep in mind is that it is also considered steering if a housing provider attempts to protect the prospect from one or more of the neighbors who are known to be prejudiced against people in the prospect’s protected category. Housing should be determined based only upon availability and any preferences provided by the applicant, unless those preferences are based on protected categories.

 Another more subtle pitfall can be in discussing local schools. For families with school-age children, the local schools are often a topic of discussion. The National Association of Realtors recommends that agents use caution when answering questions about the local schools, as this can be a method for describing the surrounding community’s racial and national origin characteristics. To avoid inadvertently steering prospects, housing providers should only discuss the schools’ known facts, not include their personal opinions. It may be helpful to maintain a list of resources containing factual information about the local schools. When the topic of local schools is raised, you can refer the prospect to your list of websites instead of offering your personal opinions.

Policies and Best Practices When Showing Vacancies

Having a clear policy as to the way vacancies are shown can help avoid any appearance of steering. One best practice is to show the units that have been vacant the longest. If your policy is to show units based on the prospect’s answers to interview questions, it is a good idea to keep notes or guest cards describing the areas of the community the prospect requested and the reasons for their preferences. This way, if a claim of steering is ever made, you have documentation to prove exactly what happened.

Steering – The Final Takeaway

It is part of every property’s job to lease vacant units. Using sales techniques like showcasing amenities or brand-new appliances is the right way to encourage a prospect to lease an apartment or house. The efforts to influence a prospect’s choice of a home should never include consideration of either the prospects’ or the existing residents’ protected categories. Proper training is essential for every employee to understand what steering is and how to avoid it.

About the author:

In 2005, The Fair Housing Institute was founded as a company with one goal: to provide educational and entertaining fair-housing compliance training at an affordable price at the click of a button.

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