Home Blog Page 95

Renter Preferences Survey Shows Residents Desire More Space

By
John Triplett
-
Renter Preferences Survey Shows Residents Desire More Space

A new renter preferences survey says residents are reporting a great desire for more space, better amenities and in-home creature comforts as the pandemic caused residents to evaluate their housing needs.

The 2022 Renter Preferences Survey Report from the National Multifamily Housing Council (NMHC) and Grace Hill included 221,000 renters living in 4,564 communities nationwide, with data available in 79 markets.

The report provides a look at the home features and community amenities that renters say they cannot live without, how much they are willing to pay and what matters during their home search.

Space is a priority for residents

The report says the pandemic lockdowns led to a strong desire for additional space. While tenants regularly seek lower rents, the survey said 28 percent of renters who said they intend to move to a different rental community when their lease expires cited “additional living space” as a reason, up from just 19 percent two years ago.

This was the third-most-common reason for wanting to move after “seeking lower rent” (49 percent of renters) and “seeking better community amenities” (29 percent).

Most important amenities now desired

Renters have a great desire—and are willing to pay a premium in additional monthly rent—for certain amenities. The top ones are with additional monthly premium:

  • Washer/dryer in-unit (92 percent of renters interested / $54.73 monthly premium);
  • Air conditioning (91 percent / $54.73);
  • Soundproof walls (90 percent / $46.21);
  • High-speed Internet access (89 percent; $47.93); and
  • Walk-in closet (88 percent; $43.46).

Also, when asked which types of rental homes renters considered during their last home search, the majority said traditional apartment homes (57 percent). However, townhomes and single-family rentals were also in the mix at 23 percent and 19 percent of responses, respectively, “supporting the desire for more space and validating industry and investor eyes on these property types,” the report said.

“The pandemic caused many renters to reevaluate their housing priorities, with a striking example being one-quarter of all moves we tracked were specific to changes in teleworking,”  Sarah Yaussi, vice president, business strategy, NMHC, said in a release.

“Whether it’s digital nomads looking to join a flexible membership club, pet amenities dog owners won’t rent without or the insatiable appetite for more packages, the NMHC/Grace Hill Renter Preferences Survey reveals all that has changed since 2019. And what we’ve seen overall are renters reporting a great desire for more space, better amenities and in-home creature comforts,” Yaussi said.

Renter Preferences Very Specific In Some Markets

  • A gear wall, for home storage and organization, is a sought-after home feature in Honolulu, where 45 percent of renters say they are interested or won’t rent without one.
  • Rental dwellers in Savannah, Ga. show the least interest (11 percent) in a gear wall but show more interest than any other market in a makerspace/DIY room (39 percent).
  • More interest in hot tubs in Boulder, Colo. (70 percent) than in Philadelphia (41 percent).
  • Covered parking is more important in Minneapolis (80 percent) than in Gainesville, Fla. (47 percent).

“It’s important to note that, beyond national trends, there are several market-level nuances affecting renter preferences,” said Kendall Pretzer, CEO of Grace Hill, in the release.

“National data paints an overall picture for the industry, but it is vital for operators to keep a finger on the pulse of each individual market in their portfolios. Trends vary by region, by state and by municipality and may stray significantly from national averages. A program that regularly polls prospects and solicits resident feedback is essential to successfully meeting renter preferences and expectations,” Pretzer said.

Sign Up For Our Weekly Newsletter And Get Rental Property And Apartment News And Helpful, Useful Content Each Week.

* indicates required

Student Housing Leasing Surpasses Pre-Pandemic Levels

By
John Triplett
-
Student Housing Leasing Surpasses Pre-Pandemic Levels

The student-housing industry has largely recovered from the pandemic as student housing leasing has passed pre-pandemic levels despite news of decreased enrollments, according to the latest report from Yardi Matrix.

The preleasing period for the fall 2021 term ended stronger than in 2019, and leasing is off to another hot start for the upcoming fall term, at 26.7 percent as of November.

Annual rent growth is also nearing pre-pandemic levels, at 2.2 percent as of December, just below 2019 levels of 2.4 percent rent growth.

Yardi Matrix says all of the Power Five conferences are experiencing growth in preleasing for the upcoming fall term compared to the previous year, particularly the Big Ten conference. Universities in the Big Ten had the highest percentage preleased (40.0 percent) and the highest prelease growth (18.7 percent) as of November.

Also, universities with the most annual prelease growth as of November tend to be bigger schools—of the top 20 universities with the most prelease growth, the average total enrollment was more than 30,000 students.

Student Housing Leasing Surpasses Pre-Pandemic Levels
Student Housing Leasing Surpasses Pre-Pandemic Levels

  • The 200 universities included, called the Yardi 200, showed strong rent growth in pre-leasing for fall 2022.
  • The average rent per bedroom at Yardi 200 universities for the fall 2022 school year was $791 as of December. “This is the highest average rent for off-campus dedicated student housing we’ve seen in years and $2 over the previous month’s high-water mark,” Yardi Matrix said in the report.
  • The average rent per bedroom as of December represents a 2.2 percent increase over the previous year and a 0.3 percent increase over the previous month. That’s up from December 2020’s 0.9 percent annual rent growth and a bit below 2019’s annual rent growth of 2.4 percent. Nonetheless, it’s a positive sign for the industry to see rent growth inching toward pre-pandemic levels.

Sign Up For Our Weekly Newsletter And Get Rental Property And Apartment News And Helpful, Useful Content Each Week.

* indicates required

Rent Prices Turn a Corner as Rent Growth Slows

By
John Triplett
-
Rent Prices Turn a Corner as Rent Growth Slows

Across the nation, rent prices fell 0.2 percent last month, representing the country’s first measurable price decline since 2020 rent growth records, according to the January report from Apartment List.

Last year was a period of tremendous rent growth, with prices rising nearly 18 percent in less than a year, so while prices remain high they may have turned a corner.

Apartment List economists Chris Salviati, Igor Popov, Rob Warnock, and Lilla Szini write that, “Sixty-one of the nation’s 100 largest cities saw rents fall this month, indicating a widespread rental market cooldown.

“In particular, Seattle and San Francisco both landed in the top five for largest month-over-month declines, signaling that these pricey tech hubs may be entering a second phase of COVID-related rental market softness.  More broadly, our national vacancy index ticked up again for the fourth straight month, as we enter 2022 amid an easing of the tight market conditions that characterized 2021.”

While this is the time of year to see typical rent growth slowing, the report says the current slowdown is coming after 2021’s unprecedented price increases.

For example, in December of 2021 rent growth fell in line with pre-pandemic trends – rents also fell by 0.3 percent in December 2019, and by 0.2 percent in December 2018.

The Vacancy Index Is Trending Up

strong rent growth also shows vacancies increasing

After bottoming out at 3.8 percent in August 2021, Apartment List writes, “Our vacancy index has ticked up slightly for four consecutive months and stands at 4.3 percent at the end of the year.

“Although the recent vacancy increase has been modest and gradual, it represents an important inflection point, signaling that tightness in the rental market is finally beginning to ease.

“If our vacancy rate continues this trend in the coming months, it’s likely that rent growth will also continue to cool.”

Affordability Still an Issue In Rent Prices

Affordability is still an issue in rent growth and rent prices

The report says it’s important to bear in mind just how much affordability has dissipated in 2021; 99 of the nation’s 100 largest cities saw rents jump more than 10 percent over the year, and the national median apartment cost eclipsed $1,300 for the first time ever. So despite a recent cool-down, many American renters will remain burdened throughout 2022 by historically high housing costs.

Sign Up For Our Weekly Newsletter And Get Rental Property And Apartment News And Helpful, Useful Content Each Week.

* indicates required

Are Your Fair Housing Policies and Procedures Up to Date?

By
By The Editors
-
Are Your Fair Housing Policies and Procedures Up to Date?

By The Fair Housing Institute

It’s a new year and the perfect time to review your company’s fair housing policies and procedures. Laws and best practices are constantly changing, so you need to be sure that you are up to date and fair-housing compliant. In this article, we will review why all property management companies need fair housing policies and procedures, helpful resources that are available, and why ongoing training is so important.

Policies and Procedures – Not Just for Large Companies

Whether you have five or 5,000 properties, you need to have a written fair housing policy as well as a reference list of your procedures. Given that we do see high employee turnover in our industry, these become even more of a crucial resource and training tool. Each new employee needs to be familiar and have full access if they are going to be effective in their position. Having these policies and procedures ensure that everyone is consistent in their behavior.

Along with this, a regular review to ensure that everything is up to date will provide a strong basis for a defense in the event a fair housing violation is claimed.

Resources To Create or Update Your Fair Housing Policies/Procedures

Believe it or not, your policies and procedures do not need to be lengthy or complicated. In fact, just the opposite. They need to be clear, concise, and easy to understand. A good place to start is with your company’s fair housing attorney. They can help build policies and procedures specific to your company’s needs. If you do not have access to a fair housing lawyer you can tap into your local housing association,  as it usually will have templates available to members. Also, the internet can be used as a resource for research and development.

In addition, you want to be sure that your policies and procedures include specific things like reasonable accommodation requests, verification, pet policies, and so on. Basically, anything the Fair Housing Act requires needs to be included.

Whichever avenue you decide to use, having your fair housing policies and procedures ready and available in the event a fair housing complaint is filed is prudent, as this is almost always the first thing asked for during an investigation, and you need to be prepared.

Communicate Policies and Procedures to Your Employees

You should have a policy notebook where all the policies of all types are located. And in that notebook, a specific place for your fair housing policies and procedures, along with a list of designations of authority on who can make which decisions. This can serve as a written point of reference for your employees to use when needed.

Also, training, especially when something has changed or been updated, needs to happen consistently. Having regular training and practice sessions can help your staff build the skills required to handle any fair housing situation that may arise.

Last year we saw some significant changes to laws that will directly affect how we do business. Your policies, procedures, and training need to follow suit so that your company is always fair-housing compliant.

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.

Keeping Your Communications Compliant with Fair Housing

Sign Up For Our Weekly Newsletter And Get Rental Housing and Apartment News And Helpful, Useful Content Each Week.

* indicates required

Emotional Support Animals and the Fair Housing Act

Portland Rents Continue To Decline For Second Month

By
John Triplett
-
Portland rents have declined 1.1 percent over the past month, according to the latest report from Apartment List.

Portland rents have declined 1.1 percent over the past month, according to the latest report from Apartment List.

This is the second straight month that the city has seen rent decreases after the last increase in October of last year.

Still Portland rents are up by 9.5 percent in comparison to the same time last year.

Rents also declining across the Portland metro

In Beaverton, rents also declined 1.1 percent over the past month and like Portland they were down for second month in a row.

Median rents in Beaverton are $1,494 for a one-bedroom apartment and $1,814 for a two-bedroom while median rents in Portland are  $1,205 for a one-bedroom apartment and $1,405 for a two-bedroom.

In Lake Oswego, rents have been declining for the past four months.

Median rents in Lake Oswego are $1,748 for a one-bedroom apartment and $2,068 for a two-bedroom.

Some potential seasonality in rent cool down

Across the nation, rent prices fell 0.2 percent last month, representing the country’s first measurable price decline since 2020 rent growth records, according to the January report from Apartment List.

Last year was a period of tremendous rent growth, with prices rising nearly 18 percent in less than a year, so while prices remain high they may have turned a corner.

Apartment List economists Chris Salviati, Igor Popov, Rob Warnock, and Lilla Szini write that, “Sixty-one of the nation’s 100 largest cities saw rents fall this month, indicating a widespread rental market cooldown.

While this is the time of year to see typical rent growth slowing, the report says the current slowdown is coming after 2021’s unprecedented price increases.

Sign Up For Our Weekly Newsletter And Get Rental Property And Apartment News And Helpful, Useful Content Each Week.

* indicates required

“In a Time of Crisis Life isn’t about waiting for the storm to pass, it’s about learning how to dance in the rain”

By
By The Editors
-
Rothchild Capital Finance “In a Time of Crisis Life isn’t about waiting for the storm to pass, it’s about learning how to dance in the rain”

Gary Williams and Gary Shelton
Rothchild Capital Solutions of Illinois LLC
Rothchild Capital Markets of Charlotte

While no U.S. industry was left untouched by the pandemic, the commercial real estate industry, particularly the CRE special use property and multi-family markets, have experienced some of the most dramatic losses. As a result, many CRE owners and investors have found themselves facing depleted cash reserves, empty business books and cash flow projections that can no longer be supported.

Rothchild Capital Solutions of Illinois, a commercial real estate investment firm and private niche lender with two loan niche products we developed from the structure of “Senior Secured Debt” and Mezzanine” RCS real estate Preferred Equity “a private label product” that can used as HARD preferred equity (more like debt) and or Soft Preferred Equity (more like equity) from special use project development, financial pivot and stabilization.

“Early in my career I learned a very valuable lesson, that all investments and the risk that arise from them share the same key elements,” Williams said. “The people who face the greatest risks don’t understand the importance of measuring debt vs. equity, use unsupported financial theories, avoid thoughtful risk mitigation with market speculation to create asset valuations.”

Understand the importance of the finance leverage ratios measurement test

 The federal reserves have set the table for several finance options to be considered during this crisis including loan modification and government guarantee — or SBA — loans. Williams said that for building owners and investors, the unanswered question is will they qualify for these loans and, if not, what other options are available.

Williams said that when assessing loans, the capital stack is the most important thing investors need to understand and consider.

“Many new investors have trouble assessing risk and making investment decisions, particularly when it comes to their capital stack,” Shelton & Williams said “Mezzanine, equity and preferred equity will have to take on a new approach with longer terms at play and much lower leverage.”

He recommended packaging mezz, equity and/or preferred equity into five, seven, or eight-year terms under a JVP structure to mitigate some of unforeseen economic bumps in the road.

 Avoid using unsupported financial theories

 Monetary and financial stability are of central importance to the functioning of any market economy be it commercial real estate or others. They provide the base for rational decision making. In the absence of this creates damaging uncertainties that can and often leads to failed projects and bank/lender losses.

Credit risk, or default risk, is the risk that someone will not be able to meet a financial obligation. Lenders face default risk that a borrower will not be able to make a monthly loan payment on time. Similarly, leased property includes a risk that tenants will not be able to make timely lease payments as expected. In these cases, sponsor/borrower financial accountability is key. Sponsor/borrower skin-in-the game, default reserves and lower leverage ratio will help migrate some of these risks.

Always include thoughtful financial risk mitigation strategies

 In the real estate securities market, you need to stay informed with reliable news and intelligence always at-hand, and have clarity on analysis, global trends, and financial, operational, and asset-level detail. RCS has Created a customized model for faster, more in-depth analysis and update them automatically with the latest information from Global Market Intelligence. Develop peer analysis models, create company tear sheets, analyze financial performance.

 Don’t make asset valuations based on market speculation with an unsupported opinion

 Williams said that his X years of experience at Rothchild Capital Solutions of Illinois has taught him that transactions that are highly leveraged without a supporting balance sheet are often problematic.

Speculative investors tend to make decisions more often based on technical analysis of market price action rather than on fundamental analysis. The difference between the two, a quick overview:

 

Rothchild Capital finance “In a Time of Crisis Life isn’t about waiting for the storm to pass, it’s about learning how to dance in the rain”

Investing vs. Speculating:

Investors and traders take on calculated risk as they attempt to profit from transactions they make in the markets. The level of risk undertaken in the transactions is the main difference between investing and speculating.

The primary difference between investing and speculating is the amount of risk undertaken. High-risk speculation is typically akin to gambling, whereas lower risk investing uses a basis of fundamentals and analysis.

Speculating is the act of putting money into financial endeavors with a high probability of failure. Speculating seeks abnormally high returns from bets that can go one way or the other. While speculating is likened to gambling.

  • The main difference between speculating and investing is the amount of risk involved.
  • Investors try to generate a satisfactory return on their capital by taking on an average or below-average amount of risk.
  • Speculators are seeking to make abnormally high returns from bets that can go one way or the other.
  • Speculative traders often utilize futures, options, and short selling trading strategies.

“When it comes to the pandemic, many questions remain unanswered: Will the market return to normal soon? Will equity investment bottom out? Will banks and or new construction financing continue?” Williams said. “The truth is, there’s no quick fix, but if investors avoid common mistakes and focus on making smart moves, we may be one step closer to a better tomorrow.”

About the authors:

Gary Williams, Rothchild Capital Solutions of Illinois LLC, g@rothchildcapital.com

Gary Shelton, Rothchild Capital Markets of Charlotte, shelton@rothchildcapital.com

 

Financing The Niche with RE Preferred Equity

 

Multifamily Had A Record Year In 2021; What’s in Store for 2022?

By
John Triplett
-
Multifamily Had A Record Year In 2021; What’s in Store for Rent Growth for 2022? Yardi Matrix

Multifamily rent growth had a record year in 2021, with many factors contributing to the unprecedented growth that led to the average asking rent growing by $190 during the year, according to Yardi Matrix.

Expectations for 2022 continue strong for multifamily but not at the level of 2021, as rents cooled near the end of the year.

“The multifamily market closed the book on 2021 with strong performance, a good end to a year that featured robust demand and record annual rent growth. Although a repeat of 2021 is not likely, many of the trends that led to the stellar performance remain intact,” Yardi Matrix writes in the report.

Highlights of the multifamily report:

  • “U.S. multifamily rents rose modestly in December, increasing by $2 to a record $1,594, closing the book on an extraordinary year in which asking rents rose by 13.5 percent year-over-year. Rent growth in 2021 was more than double any previous year recorded by Matrix.
  • “Although we expect rent growth to decelerate in 2022, it should be a strong year nonetheless by historical standards, closer to the 5 percent annual increases recorded in the middle of the past decade. Demand for apartments remains robust, and the national occupancy rate has been at or near record highs for the last six months.
  • “Single-family rentals also remain in high demand, with the national occupancy rate up 0.4 percent year-over-year through December. Single-family rental asking rents rose 13.8 percent in 2021,” the report says.

Multifamily Had A Record Year In 2021; What’s in Store for Rent Growth 2022? Yardi Matrix

The report says the economy should remain strong based on higher wages, the continued opening up of the economy, easing of supply-chain issues and the wealth built up by some consumers during the pandemic.

At the same time, inflation and a new wave of COVID-19 may keep the growth to a moderate level.

“Consumers’ financial health should continue to feed growth of new households, while the rapid increase in home prices will funnel much of that demand to multifamily and single-family rentals,” the report says.

“The pandemic continues to affect commerce and travel, and the future of migration remains unknown, but clearly the shift to the South and West will endure.”

Get the full report here.

 About Yardi Matrix:

Multifamily Had A Record Year In 2021; What’s in Store for 2022?

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

 

Sign Up For Our Weekly Newsletter And Get Rental Property And Apartment News And Helpful, Useful Content Each Week.

* indicates required

What Can Housing Providers Facing a Challenging 2022 Do?

By
By The Editors
-
What Can Housing Providers Facing a Challenging 2022 Do?

The industry is being reshaped by political forces with little thought given to supply and affordability of housing so what can Oregon housing providers and others do in 2022?

Michael Havlik, CPM®
Deputy Executive Director
Multifamily NW

As housing providers ring in the New Year, it is apparent that that the fallout of the COVID-19 public health emergency will have long-lasting and widespread impact on our industry.

While unemployment is at record lows, many of you are struggling to hire and retain employees. Further, many are straining to operate in a legal environment that has been altered multiple times in a single year.

Housing-related responses to the COVID-19 pandemic were arbitrary, often misrepresented, and made communications between housing providers and residents nearly impossible during a pandemic when it was never more critical. Our concern for the operating environment facing housing providers cannot be understated.

With these immediate priorities dominating our thoughts, it can be difficult to see the broader landscape of challenges to housing providers. The industry is being reshaped by political forces with little thought given to supply and affordability of housing, The toxic attitudes expressed toward housing providers at our state- and local-level governing bodies are clearly designed to drive housing providers away from participating in the civic process, and away from the profession of providing housing.

Now, after what has felt like a nonstop series of special sessions, emergency board meetings and regular legislative sessions, the six-week 2022 Oregon legislative session is quickly approaching. We do not know if lawmakers will hold fast to a commitment to refrain from making major changes to ORS Chapter 90, or if we will see an avalanche of bills targeting the rental industry as we have during each legislative session of recent memory.

What do we recommend that Housing Providers do?

  • Contact your representative: Your representative needs to know what you are experiencing, and you need to know what they are thinking. Make this the year you contact them more than once with personal stories about the impact of existing laws and the consequences of proposed legislation. Your elected leaders can only hear you if you are communicating. Click here to find your legislators: https://www.oregonlegislature.gov/findyourlegislator/leg-districts.html.
  • Stay informed: Keeping updated on elections and proposed legislation, through your industry association, will be key in 2022. Be sure to pay attention to local races, ballot measures and local rulemaking as well. Those regulations often have a negative impact on the industry. Frequently, ideas implemented at the local level are viewed as proven to work and get adopted at the state level.
  • Vote: How have your interests been represented over the past three years? The people we vote into office matter. Are they experienced, well-rounded, collaborative and fair? Do they have the temperament to study issues deeply and vote consistent with their constituency, or will they simply fall in line with an influential party leader? Register to vote at Oregonvotes.org. April 26th is the registration deadline for the May 17th election.

This is the year to get involved. The Oregon legislative session begins next month. We all need Oregon housing providers to get prepared.

As we’ve been reminded repeatedly, “You’re either at the table, or you’re on the menu.”

About the author:

As the deputy executive director for Multifamily NW, Michael brings 29 years of industry experience in market rate and affordable housing.   A native Oregonian, Michael obtained his undergrad degree from the University of Portland, and an MBA from the University of Notre Dame. He is a licensed principal broker in Oregon, and a Certified Property Manager®.  He served as past president of Multifamily NW in 2003 and was nominated for the ACE Award’s Regional Property Manager of the Year in 2015.

Failed State Software For Emergency Rental Assistance Hurting Families

Sign Up For Our Weekly Newsletter And Get Apartment News And Helpful, Useful Content Each Week.

* indicates required

Your Short-Term Rentals Can Generate 6x Gains

By
By The Editors
-
Your Short-Term Rentals Can Generate 6x Gains

As you look at your rental property portfolio heading into 2022 says veteran real estate property owner and manager David Pickron, consider short-term rentals because short-term rentals can generate up to six times the amount of revenue as a long-term hold.

By David Pickron

Rarely in life can the quick version of anything ever compete with the more time-intensive “real deal.”  Think of any instant food and you will quickly realize that I’m telling the truth.  The same had held true for real estate investments for at least the last century… but times, they are a changin’.  As you look at your portfolio it may be time to consider transitioning some of your long-term holdings into short-term rentals, and here is why: Short-term rentals can generate up to six times the amount of revenue as a long-term hold.  My average long-term hold properties cash flow at around $200 per month; my short-term rentals cash flow just over $1,200 per month.  Does that get your attention?

As you consider transitioning from long-term to short-term rentals, you should examine the following factors to help ensure that the changeover is successful: location, needs, and saturation.

Location important factor for short-term rentals

The old mantra of “location, location, location” in relation to real estate has endured because it is true.  For short-term rentals, it may even be more important.  A friend of mine recently converted his 5,000-square-foot custom home in a regular residential neighborhood in Phoenix into a short-term rental.

In his mind, he was already cashing the checks after he listed the home on the popular short-term rental sites.  But there was a big problem: there was no draw for potential renters to come to the property, as it wasn’t near any major attractions.  That property quickly turned back into his full-time residence, having never once been used as a rental.  Having an attraction or destination near your property makes it ripe for transition to short-term.  Whether it is near other resort properties, mountain towns, beachside escapes, or national parks, having a natural draw for people to come to the area instantly makes it an eligible property.  Obviously, warm places in the winter and cooler places in the summer create demand when people are looking for an escape.  If you have an extensive portfolio or are just looking to purchase your first investment property, make location a key component of your research process.

Consider the needs of any short-term rentals clients

Depending on the location of your property, the needs of your potential renters need to be paramount in your conversion decision.

I have several properties that are located near a cancer-treatment center.  When I originally purchased those properties, I did not know there would be a severe need for this type of property because the treatment center hadn’t even been built.  My curiosity got the best of me when this facility was built, and I called to inquire if they ever had patients with short-term housing needs.  It was after this conversation that I decided to convert these units into what they are today.  Most of those renters in these properties are in town for several weeks or months at a time receiving treatment for life-threatening illnesses, and insurance companies are reimbursing their housing expenses.  In this case, my short-term rentals cost thousands less than costly overnight hospital stays.  These tenants have very specific needs, whether it be accessible facilities or high cleanliness standards.  I have prepared those properties with those specific needs in mind and can market them as such.

In other areas, I have properties that are more vacation-oriented, with access to golf courses, hiking trails and other recreational opportunities.  Those homes are equipped to help my renters have the best experience while on the property, with helpful hints on where to play, where to relax and where to eat.  There is an obvious expense to preparing properties to meet the needs of potential short-term renters, but those expenses are recouped quickly with satisfied renters who rebook and share their experiences with others.

Make your rental property stand out if in a booming area

While it may seem too easy to look at a booming area where everyone is converting to short-term rentals and think it would be great to ride the same wave, you would be right.  Markets with a lot of short-term rentals are strong for this very reason and should give you the confidence to at least try your hand.  Competition should ignite your creativity, so if you do decide to convert your property in a saturated area it is critical to find a way to make your property stand out.

Maybe it’s time to complete those upgrades you’ve been putting off.  Or you may need to commit some extra marketing dollars to make sure your property has that “it” factor that makes it more desirable.  If being in a saturated market scares you, maybe you look to create a more rural opportunity experience.  I have a friend that has taken a five-acre rural property and created an “Old West” type of experience for their guests, and there is a massive waiting list of people who want to spend their time and money there.  There is no perfect formula for determining how many is too many short-term rentals in an area, but with effort and your expert insight you can successfully make the jump.

A few other items to consider:

  • Always check with your homeowners association (HOA)  before you even start down the road to see what the rules are in regard to a short-term rental property.  I’ve heard too many horror stories about owners spending time and money to prepare a property only to have it shut down by their HOA.
  • There is no reason to fear the managing/cleaning/scheduling of the property.  This is the No. 1 thing I hear from investors, but it really is a non-factor.  In short-term, your renter pays the cleaning fee.  You just need to find a cleaning crew you can depend on.  Take their bid, add $50.00 to it to pay for toilet paper, paper towels, and other disposable goods.  A well-paid cleaner is more than happy to go the extra mile for you when needed.

While I am not advocating you run out and convert your entire portfolio today, I do recommend you run through your portfolio to determine which, if any, of your properties are ideal for creating a 6x return over what you are getting now with short-term rentals.

It may take a little trial and error to get it right, but with considerable returns on the line, now may be your time to shine in the short-term rental market.  If there were such a thing as “instant” housing, short-term rentals would likely fall into that category, and – unlike everything else – can turn out to be better than the original.

About the author

David Pickron is president of Rent Perfect, a private investigator, and a fellow landlord who manages several short- and long-term rentals.  Subscribe to his weekly Rent Perfect Podcast (available on YouTube, Spotify, and Apple Podcasts) to stay up to date on the latest industry news and for expert tips on how to manage your properties.

Short-term rentals are something to consider for your short-term rental property portfolio
David Pickron

3 Tips to Keep You Out of Landlord Rehab

Sign Up For Our Newsletter And Get Weekly Rental Property And Apartment News And Helpful, Useful Content Each Week.

* indicates required

 

Are You 10 Out Of 10 In Collecting Rent?

Lasting Damage: Reporting Tenants To Credit Bureaus is a Powerful, Effective Option

By
By The Editors
-
When tenants become problem payors you have a couple of options including reporting tenants to credit bureaus

When tenants become problem payors you have a couple of options including reporting tenants to credit bureaus.

By Datalinx

An unfortunate reality of property management is the inevitability of dealing with slow-pay and no-pay tenants. Even though a tenant may pass your initial creditworthiness processes at application time, it’s impossible to predict if circumstances or intentions will change and the tenant will become a problem payor. When that happens, you have a couple of options.

Sure, letters, increasingly serious notices, personal visits, and stern phone calls are always the first steps to collecting, but what happens when those don’t work? Many property managers turn to collection agencies, but more and more are opting to report delinquent payment histories to the big credit agencies using credit reporting services like Datalinx.

Some property management organizations assume that credit reporting isn’t an option for them; either they think their reports will be too small to be accepted, don’t think they qualify as a creditor, or simply don’t know where to start. Companies like Datalinx acknowledged these issues, and since 2001 has been refining the process to make reporting to the big credit bureaus easy and affordable, which in turn makes this a very powerful and effective solution.

Do They Care About Credit?                   

For some consumers, credit scores are simply not an issue. Either they have no need to apply for credit, or they have simply decimated their credit score to what they think is a point of no return. Fortunately, those types of tenants probably wouldn’t have made it through your application process to begin with.

However, most people do care about their credit, and understand the impact a negative item will have on their future. Today, credit card companies, banks, and free credit monitoring apps provide credit scores to customers on a regular basis, indicating that more and more consumers are concerned about protecting their record.

Sometimes, simply notifying the customer that you now report missed or late payments to the four major credit bureaus will motivate them to pay on time. It certainly never hurts to remind them of your ability to report this information. Often tenants are under the false impression that rent payments are not reportable for credit bureau purposes. However, services like Datalinx now offer property owners and managers the ability to report all payment histories, whether positive or negative. Informing your tenants that this is your practice and intention can make a big difference in the timeliness of payments, dues, and more.

Long-term effects

One of the questions consumers are most curious about when it comes to credit reporting is how long information—especially negative information—will remain on their report. No one wants one missed payment or short-term collection account to negatively impact personal credit decisions for decades. Unfortunately, some tenants don’t give you any other option than to turn to alternative measures for recovering debt.

Generally speaking, negative information remains on a consumer credit report for about seven years according to Equifax, one of the major credit bureaus. Negative items can include late or missed payments, accounts that have been sent to collections agencies, situations when payments have not been paid as agreed, liens, or even bankruptcies. Seven years can be a very long time, especially when an individual applies for auto loans, new rental agreements, mortgages, or even certain jobs.

Each of these negative items not only will be listed as a red flag on a full credit report but will also drastically decrease an individual’s credit score. While some employers or organizations will listen to a consumer’s explanations or consider subsequent repayments of these debts, most simply cannot bend the rules to accept a score or report outside their established credit parameters.

As a property manager, adding this knowledge to your arsenal helps you not only educate past-due customers as to the long-term effects of their payment behaviors, but also helps you prepare new tenants with the consequences of late payments to your organization. In this case, knowledge is definitely power.

Why not consider a collection agency?

A professional collections firm is certainly an option to consider, but when considering cost and long-term impact, there are significant differences between collections and credit reporting. With a collections agency, the property owner or manager pays the agency a set fee or percentage of the amount collected from the tenant. The account is subsequently charged-off the books of the property owner or manager as a loss.

What does this mean for the consumer? First, the collection agency will report the account to the credit bureaus, and the debt will appear as a collection on the tenant’s credit report, instantly impacting their credit score. And, of course, this will be a negative item on the credit report for seven years from the date of the first missed payment. If the tenant makes payments to the collection agency and pays the balance in full (usually including a fee from the collection agency), the agency will report this information as well. Paying a collections account may have a lesser impact on a credit score, but the item will still be reflected on the report.

There is another important, but often overlooked, aspect of this process. When an account is reported to the bureaus as a collection, it can never be anything but that—a collection. Datalinx recommends another alternative: consider foregoing the collection agency and reporting the past due account to the bureaus as delinquent, especially in cases where you believe the relationship with the tenant is repairable.

Why? A delinquent, or late, payment has a less negative impact on a tenant’s credit report than a collection, especially when the delinquent account is subsequently paid in full. Offering this option to a tenant also gives you as the property owner or manager leverage to urge the tenant to pay to avoid a much more detrimental impact on their credit. You lose that leverage when you turn over an account to a collections agency.

Credit is King…or Perhaps the Ace

With a credit reporting service like Datalinx in your rental or leasing toolbox, you hold the proverbial ace in the hole when it comes to persuading your tenants to pay on time. For those who care about their credit score, reports of consistent, on-time payments is an unexpected bonus to help them increase credit scores and build a solid, long-term history. This may be the impetus needed to nudge those on-the-fence individuals to pay closer to their due date instead of waiting until the last possible minute. And for the others, your Datalinx account allows you to report negative items while maintaining leverage to collect past due funds—without paying fees to a collection agency.

With Datalinx, you hold all the cards.

Please visit our website at www.datalinxllc.com, or contact us at support@datalinxllc.com or (425) 780-4530 if you have any questions or need our assistance.

1...949596...202Page 95 of 202
© 2026 rentalhousingjournal.com. All Rights Reserved. Website by Web Publisher PRO