American Apartment Owners Association

These 4 colors can be the kiss of death when selling your home

Mon, 03/13/2017 - 10:06pm

A fresh coat of paint is a fairly inexpensive way to refresh the look of your home; the average exterior paint job costs about $2,600, while interior paint costs $1,660, according to Home Advisor. But choose the wrong shade and you could wind up regretting it later. Paint your home with a weird color either inside or out and buyers might turn up their noses, even though repainting is a relatively easy fix.

Fears of hurting a home’s selling price are likely one reason why many homeowners play it safe when it comes to paint colors, especially for a house’s exterior (restrictive HOA rules, which affect 20% of Americans, might be another). Favorite exterior color combinations include white and gray, beige and taupe, and slate and black, according to the 2013 National Home Color Survey.

Neutrals also win inside the home. Hot interior paint colors for 2016 include grays and shades of white, along with natural-looking greens. The love for neutral or natural shades extends to buyers. When Zillow Digs analyzed photos of 50,000 recently sold homes, they found those with rooms painted in certain colors tended to command higher selling prices than expected. Homes with creamy yellow or wheat-colored kitchens, light green or khaki bedrooms, dove or light gray living rooms, and mauve or lavender dining rooms sold for $1,100 to $1,300 more than properties decorated with less popular colors.

“A fresh coat of paint is an easy and affordable way to improve a home’s appearance before listing,” Svenja Gudell, Zillow chief economist, said. “However, to get the biggest bang for your buck, stick with colors that have mass appeal so you attract as many potential buyers to your listing as possible. Warm neutrals like yellow or light gray are stylish and clean, signaling that the home is well cared for, or that previous owners had an eye for design that may translate to other areas within the house.

Light grays and yellows may have been popular with buyers, but they had a much cooler reaction to other colors. Some of the interior paint colors they disliked might surprise you. Before you grab the paintbrush, check out this list of the four worst colors to paint your home.

1. Off-white or eggshell

Shades of white might seem like a safe bet when you’re at the home improvement store, but they aren’t guaranteed to be a big hit with buyers. Homes with off-white or eggshell kitchens sold for $82 less than Zillow estimated they would. Instead, people loved kitchens with a coat of wheat yellow paint on the walls, which boosted a home’s selling price by $1,360.

You don’t have to give up gallery-white walls entirely, though. Painting a room white isn’t always a bad choice, especially if the space has great natural light, according to designer Emily Henderson. But if a space is small or dark (like some kitchens), white walls can make a room look “dead” and “flat.”

2. Dark brown

Dark brown walls didn’t resonate with buyers in Zillow’s study. Bedrooms painted dark brown sold for $236 less than expected, while using the same shade in a bathroom lowered the selling price by $469. The color is so disliked by some people that the Australian government considered using it on cigarette packaging to make smoking less appealing, according to the Sydney Morning Herald. (They went with a brownish olive green instead.)

3. Terracotta

It’s not quite as jarring as traffic cone orange, but even a more muted terracotta shade could depress your home’s selling price. Homes with living rooms painted the same shade as an inexpensive flower pot sold for $793 less than Zillow’s estimated price. Light gray was the preferred color in that room.

The negative reaction to orange walls isn’t too surprising, considering surveys have found it’s one of the least-liked colors in the world. (Blue is the most popular color by far, followed by red and green.)

4. Slate gray

Gray is trendy color right now, but all grays aren’t created equal. While dove or light gray was a hit in living rooms, helping to boost a home’s selling price by $1,104, dark gray was a dud. Paint your home’s dining room a slate color and you could lose $1,112 when it comes time to sell. Instead, buyers favored shades of mauve, eggplant, and lavender in the dining room.

 

Source: marketwatch.com

The post These 4 colors can be the kiss of death when selling your home appeared first on AAOA.

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10 Rental Property Tax Deductions Landlords Love: Did You Take Them All?

Mon, 03/13/2017 - 10:03pm

Whether you rent out a place or room to a tenant full time or just for a few weeks while you’re away on vacation, you already know it’s a great way to make money. But did you know it can also save you cash at tax time? That’s right, being even a part-time landlord comes with tons of rental property tax deductions you’ll want to take advantage of. Pass them up, and you’re essentially throwing wads of moolah out the window.

“You could be losing hundreds, if not thousands, of dollars in deductions,” says St. Petersburg, FL, Realtor® Lisa Cahill, a CPA and former tax manager.

One caveat, though: If you rent out part or all of your primary residence to others for fewer than 15 days out of the year, you can’t deduct any expenses. But on the other hand, you don’t have to report the money as rental income (meaning it’s tax-free).

However, if you rented out all or part of your home for 15 days or more in 2016, make sure you claim these tax deductions from Uncle Sam when you file before the deadline this year.

1. Rental service fees

If you found a tenant using a rental or home-sharing service like Airbnb, VRBO, or HomeAway, you paid the company a fee. Airbnb, for example, takes a 3% cut of whatever guests pay. But guess what? You can deduct that (annoying) fee as a business expense.

“Any fees that you paid directly as the host are tax-deductible,” says Lisa Greene-Lewis, CPA and tax expert at TurboTax. This is true even if it came off the top and never hit your bank account. In addition to this fee, you can deduct value-added tax, which may have been taken off the top, too.

2. Advertising fees

If you had trouble finding a renter, you may have paid for advertising outside of what was offered by the rental service. If so, that money is tax-deductible. Roommate-matching websites like Roommates.com, for instance, charge hosts a fee in order to read messages received from other members. (A 30-day membership is $20.)

3. Utilities

Yes, your electric, heating, and water bills are also deductible, even if you live with your tenant. In the latter case, you’d just deduct a portion.

“How much you can deduct is based on the square footage of the space you rent out,” explains Greene-Lewis. So if a tenant is renting 1,500 square feet of the total 4,500 square feet, including living quarters and common areas, you’re allowed to deduct for one-third (1,500/4,500) of the utilities that you paid.

Tax deductions for vacation homes, meanwhile, are based on how many days the house is rented out compared with how many days you used it personally. For example, if the house is rented out for 90 days and used personally for 30 days a year for a total of 120 days, then you would be able to deduct 75% (90/120) of the utility costs.

4. Cleaning, gardening, and maintenance

“Whether you clean the house yourself or pay a professional cleaning service, the money is tax-deductible,” says Greene-Lewis. This includes cleaning supplies, which can add up, as well as gardening, lawn mowing, and other maintenance fees.

5. Repairs and painting

“If you have a handyman come to repair a window or repaint a room, those costs are deductible,” says Cahill. If you rent out a room in a home you live in and pay for whole-house maintenance, such as a furnace tuneup or a roof replacement, a part of that cost will be deductible as well, depending on the square footage devoted to your rental.

6. Property taxes

Property taxes work the same way: You can write off the portion of your property taxes equal to the portion of your home being rented out. These can be deducted either as personal expenses on Schedule A or deducted as rental expenses, says Cahill. (Here’s help on how to calculate your property taxes.)

7. Property insurance

If you need to pay more insurance on your home because you have renters present, you can deduct the extra cost. And even if your property insurance fees haven’t increased, you can still write off a portion of the expense as a business expense.

8. Furniture, linens, and food

If you buy new furniture for the space being rented out or provide renters with household items such as linens, curtains, and shower supplies, you can claim a tax deduction for those costs. Ditto for any food or drinks that you provide guests.

9. Municipality services

Some expenses paid to the local government, such as fees for trash and snow removal, are also tax-deductible.

10. Structural improvements

You can deduct the cost—or the interest paid on a loan, if you don’t pay cash—of structural improvements (like new roofing) made to the property if they apply to the rented area. (Depending on the project, you may also be able to snag a home improvement deduction.) However, these costs will need to be depreciated over time—meaning you won’t get all of the money back upfront, but will have to divvy it up over the life of the loan.

 

Source: realtor.com

The post 10 Rental Property Tax Deductions Landlords Love: Did You Take Them All? appeared first on AAOA.

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Full List: How Renters Fare In America’s Hottest Cities

Mon, 03/13/2017 - 10:01pm

Every year Forbes partners with Marcus & Millichap, a commercial brokerage and real estate research firm, to compile lists of the best and worst American cities for renters. For 46 cities with the most investor interest Marcus & Millichap provides data on rental prices, vacancy rates and affordability, which go into our ranking. They also give us info on employment and average mortgage payments in each city for context. Here we’ve compiled that data for all 46 cities, in alphabetical order.

Atlanta

4Q 2016 Monthly Apartment Rent: $1,062

Y-O-Y % Change in Apartment Rent: 5.5%

4Q 2016 Average Apartment Vacancy Rate: 4.7%

4Q 2016 Median Household Income: $62,825

Apartment Rent as Share of Household Income: 20%

4Q 2016 Monthly Mortgage Payment: $1,120

2016 Employment Growth: 2.7%

Austin

4Q 2016 Monthly Apartment Rent: $1,184

Y-O-Y % Change in Apartment Rent: 2.9%

4Q 2016 Average Apartment Vacancy Rate: 5.2%

4Q 2016 Median Household Income: $67,564

Apartment Rent as Share of Household Income: 21%

4Q 2016 Monthly Mortgage Payment: $1,910

2016 Employment Growth: 1.9%

Baltimore

4Q 2016 Monthly Apartment Rent: $1,256

Y-O-Y % Change in Apartment Rent: 1.9%

4Q 2016 Average Apartment Vacancy Rate: 4.6%

4Q 2016 Median Household Income: $75,434

Apartment Rent as Share of Household Income: 20%

4Q 2016 Monthly Mortgage Payment: $1,490

2016 Employment Growth: 1.8%

Boston

4Q 2016 Monthly Apartment Rent: $1,925

Y-O-Y % Change in Apartment Rent: 3.7%

4Q 2016 Average Apartment Vacancy Rate: 3.1%

4Q 2016 Median Household Income: $82,376

Apartment Rent as Share of Household Income: 28%

4Q 2016 Monthly Mortgage Payment: $2,428

2016 Employment Growth: 2.3%

Charlotte

4Q 2016 Monthly Apartment Rent: $1,008

Y-O-Y % Change in Apartment Rent: 4.1%

4Q 2016 Average Apartment Vacancy Rate: 4.5%

4Q 2016 Median Household Income: $57,030

Apartment Rent as Share of Household Income: 21%

4Q 2016 Monthly Mortgage Payment: $1,202

2016 Employment Growth: 1.7%

Chicago

4Q 2016 Monthly Apartment Rent: $1,361

Y-O-Y % Change in Apartment Rent: 4.0%

4Q 2016 Average Apartment Vacancy Rate: 4.6%

4Q 2016 Median Household Income: $66,762

Apartment Rent as Share of Household Income: 24%

4Q 2016 Monthly Mortgage Payment: $1,597

2016 Employment Growth: 0.7%

Cincinnati

4Q 2016 Monthly Apartment Rent: $885

Y-O-Y % Change in Apartment Rent: 5.7%

4Q 2016 Average Apartment Vacancy Rate: 3.7%

4Q 2016 Median Household Income: $59,805

Apartment Rent as Share of Household Income: 18%

4Q 2016 Monthly Mortgage Payment: $1,007

2016 Employment Growth: 2.0%

Cleveland

4Q 2016 Monthly Apartment Rent: $861

Y-O-Y % Change in Apartment Rent: 2.7%

4Q 2016 Average Apartment Vacancy Rate: 3.3%

4Q 2016 Median Household Income: $53,899

Apartment Rent as Share of Household Income: 19%

4Q 2016 Monthly Mortgage Payment: $889

2016 Employment Growth: 1.2%

Columbus

4Q 2016 Monthly Apartment Rent: $847

Y-O-Y % Change in Apartment Rent: 3.0%

4Q 2016 Average Apartment Vacancy Rate: 3.7%

4Q 2016 Median Household Income: $61,347

Apartment Rent as Share of Household Income: 17%

4Q 2016 Monthly Mortgage Payment: $1,125

2016 Employment Growth: 1.8%

Dallas-Fort Worth

4Q 2016 Monthly Apartment Rent: $1,028

Y-O-Y % Change in Apartment Rent: 4.7%

4Q 2016 Average Apartment Vacancy Rate: 4.0%

4Q 2016 Median Household Income: $61,586

Apartment Rent as Share of Household Income: 20%

4Q 2016 Monthly Mortgage Payment: $1,579

2016 Employment Growth: 3.3%

Denver

4Q 2016 Monthly Apartment Rent: $1,355

Y-O-Y % Change in Apartment Rent: 3.4%

4Q 2016 Average Apartment Vacancy Rate: 4.8%

4Q 2016 Median Household Income: $73,961

Apartment Rent as Share of Household Income: 22%

4Q 2016 Monthly Mortgage Payment: $2,046

2016 Employment Growth: 3.4%

Detroit

4Q 2016 Monthly Apartment Rent: $904

Y-O-Y % Change in Apartment Rent: 5.0%

4Q 2016 Average Apartment Vacancy Rate: 2.5%

4Q 2016 Median Household Income: $57,727

Apartment Rent as Share of Household Income: 19%

4Q 2016 Monthly Mortgage Payment: $1,023

2016 Employment Growth: 1.8%

Fort Lauderdale

4Q 2016 Monthly Apartment Rent: $1,445

Y-O-Y % Change in Apartment Rent: 1.3%

4Q 2016 Average Apartment Vacancy Rate: 3.9%

4Q 2016 Median Household Income: $56,510

Apartment Rent as Share of Household Income: 31%

4Q 2016 Monthly Mortgage Payment: $1,749

2016 Employment Growth: 3.7%

Houston

4Q 2016 Monthly Apartment Rent: $1,018

Y-O-Y % Change in Apartment Rent: 0.4%

4Q 2016 Average Apartment Vacancy Rate: 6.8%

4Q 2016 Median Household Income: $60,591

Apartment Rent as Share of Household Income: 20%

4Q 2016 Monthly Mortgage Payment: $1,488

2016 Employment Growth: 0.5%

Indianapolis

4Q 2016 Monthly Apartment Rent: $806

Y-O-Y % Change in Apartment Rent: 2.5%

4Q 2016 Average Apartment Vacancy Rate: 5.6%

4Q 2016 Median Household Income: $58,518

Apartment Rent as Share of Household Income: 17%

4Q 2016 Monthly Mortgage Payment: $960

2016 Employment Growth: 2.0%

Jacksonville

4Q 2016 Monthly Apartment Rent: $909

Y-O-Y % Change in Apartment Rent: 3.2%

4Q 2016 Average Apartment Vacancy Rate: 4.3%

4Q 2016 Median Household Income: $56,123

Apartment Rent as Share of Household Income: 19%

4Q 2016 Monthly Mortgage Payment: $1,367

2016 Employment Growth: 3.0%

Kansas City

4Q 2016 Monthly Apartment Rent: $866

Y-O-Y % Change in Apartment Rent: 2.7%

4Q 2016 Average Apartment Vacancy Rate: 5.0%

4Q 2016 Median Household Income: $63,121

Apartment Rent as Share of Household Income: 16%

4Q 2016 Monthly Mortgage Payment: $1,184

2016 Employment Growth: 1.3%

Las Vegas

4Q 2016 Monthly Apartment Rent: $886

Y-O-Y % Change in Apartment Rent: 7.0%

4Q 2016 Average Apartment Vacancy Rate: 4.1%

4Q 2016 Median Household Income: $52,645

Apartment Rent as Share of Household Income: 20%

4Q 2016 Monthly Mortgage Payment: $1,393

2016 Employment Growth: 2.6%

Los Angeles

4Q 2016 Monthly Apartment Rent: $1,938

Y-O-Y % Change in Apartment Rent: 2.4%

4Q 2016 Average Apartment Vacancy Rate: 2.9%

4Q 2016 Median Household Income: $62,311

Apartment Rent as Share of Household Income: 37%

4Q 2016 Monthly Mortgage Payment: $2,692

2016 Employment Growth: 1.4%

Louisville

4Q 2016 Monthly Apartment Rent: $825

Y-O-Y % Change in Apartment Rent: 5.9%

4Q 2016 Average Apartment Vacancy Rate: 4.1%

4Q 2016 Median Household Income: $55,732

Apartment Rent as Share of Household Income: 18%

4Q 2016 Monthly Mortgage Payment: $1,015

2016 Employment Growth: 1.7%

Manhattan

4Q 2016 Monthly Apartment Rent: $3,497

Y-O-Y % Change in Apartment Rent: 1.3%

4Q 2016 Average Apartment Vacancy Rate: 2.7%

4Q 2016 Median Household Income: $77,670

Apartment Rent as Share of Household Income: 54%

4Q 2016 Monthly Mortgage Payment: $9,612

2016 Employment Growth: 1.6%

Miami

4Q 2016 Monthly Apartment Rent: $1,386

Y-O-Y % Change in Apartment Rent: 6.6%

4Q 2016 Average Apartment Vacancy Rate: 2.2%

4Q 2016 Median Household Income: $45,738

Apartment Rent as Share of Household Income: 36%

4Q 2016 Monthly Mortgage Payment: $1,984

2016 Employment Growth: 1.9%

Milwaukee

4Q 2016 Monthly Apartment Rent: $1,005

Y-O-Y % Change in Apartment Rent: 4.1%

4Q 2016 Average Apartment Vacancy Rate: 3.2%

4Q 2016 Median Household Income: $59,366

Apartment Rent as Share of Household Income: 20%

4Q 2016 Monthly Mortgage Payment: $1,486

2016 Employment Growth: -0.2%

Minneapolis-St. Paul

4Q 2016 Monthly Apartment Rent: $1,146

Y-O-Y % Change in Apartment Rent: 4.4%

4Q 2016 Average Apartment Vacancy Rate: 2.3%

4Q 2016 Median Household Income: $73,012

Apartment Rent as Share of Household Income: 19%

4Q 2016 Monthly Mortgage Payment: $1,432

2016 Employment Growth: 1.5%

Nashville

4Q 2016 Monthly Apartment Rent: $1,104

Y-O-Y % Change in Apartment Rent: 7.1%

4Q 2016 Average Apartment Vacancy Rate: 4.2%

4Q 2016 Median Household Income: $62,339

Apartment Rent as Share of Household Income: 21%

4Q 2016 Monthly Mortgage Payment: $1,277

2016 Employment Growth: 3.1%

Northern New Jersey

4Q 2016 Monthly Apartment Rent: $1,765

Y-O-Y % Change in Apartment Rent: 3.2%

4Q 2016 Average Apartment Vacancy Rate: 3.7%

4Q 2016 Median Household Income: $74,169

Apartment Rent as Share of Household Income: 29%

4Q 2016 Monthly Mortgage Payment: $2,196

2016 Employment Growth: 0.9%

Oakland

4Q 2016 Monthly Apartment Rent: $2,066

Y-O-Y % Change in Apartment Rent: 3.4%

4Q 2016 Average Apartment Vacancy Rate: 3.3%

4Q 2016 Median Household Income: $86,526

Apartment Rent as Share of Household Income: 29%

4Q 2016 Monthly Mortgage Payment: $3,583

2016 Employment Growth: 2.7%

Orange County

4Q 2016 Monthly Apartment Rent: $1,896

Y-O-Y % Change in Apartment Rent: 4.5%

4Q 2016 Average Apartment Vacancy Rate: 3.2%

4Q 2016 Median Household Income: $81,675

Apartment Rent as Share of Household Income: 28%

4Q 2016 Monthly Mortgage Payment: $3,850

2016 Employment Growth: 2.0%

Orlando

4Q 2016 Monthly Apartment Rent: $1,095

Y-O-Y % Change in Apartment Rent: 4.8%

4Q 2016 Average Apartment Vacancy Rate: 3.3%

4Q 2016 Median Household Income: $53,771

Apartment Rent as Share of Household Income: 24%

4Q 2016 Monthly Mortgage Payment: $1,439

2016 Employment Growth: 4.2%

Philadelphia

4Q 2016 Monthly Apartment Rent: $1,235

Y-O-Y % Change in Apartment Rent: 4.3%

4Q 2016 Average Apartment Vacancy Rate: 3.9%

4Q 2016 Median Household Income: $71,056

Apartment Rent as Share of Household Income: 21%

4Q 2016 Monthly Mortgage Payment: $1,415

2016 Employment Growth: 1.6%

Phoenix

4Q 2016 Monthly Apartment Rent: $935

Y-O-Y % Change in Apartment Rent: 6.3%

4Q 2016 Average Apartment Vacancy Rate: 4.4%

4Q 2016 Median Household Income: $59,231

Apartment Rent as Share of Household Income: 19%

4Q 2016 Monthly Mortgage Payment: $1,327

2016 Employment Growth: 1.5%

Pittsburgh

4Q 2016 Monthly Apartment Rent: $1,023

Y-O-Y % Change in Apartment Rent: -1.3%

4Q 2016 Average Apartment Vacancy Rate: 5.4%

4Q 2016 Median Household Income: $58,058

Apartment Rent as Share of Household Income: 21%

4Q 2016 Monthly Mortgage Payment: $971

2016 Employment Growth: 0.3%

Portland

4Q 2016 Monthly Apartment Rent: $1,252

Y-O-Y % Change in Apartment Rent: 7.7%

4Q 2016 Average Apartment Vacancy Rate: 4.2%

4Q 2016 Median Household Income: $66,871

Apartment Rent as Share of Household Income: 22%

4Q 2016 Monthly Mortgage Payment: $2,005

2016 Employment Growth: 2.6%

Raleigh-Durham-Chapel Hill

4Q 2016 Monthly Apartment Rent: $1,045

Y-O-Y % Change in Apartment Rent: 4.2%

4Q 2016 Average Apartment Vacancy Rate: 4.8%

4Q 2016 Median Household Income: $64,579

Apartment Rent as Share of Household Income: 19%

4Q 2016 Monthly Mortgage Payment: $1,425

2016 Employment Growth: 2.6%

Riverside-San Bernardino

4Q 2016 Monthly Apartment Rent: $1,321

Y-O-Y % Change in Apartment Rent: 6.8%

4Q 2016 Average Apartment Vacancy Rate: 3.2%

4Q 2016 Median Household Income: $58,081

Apartment Rent as Share of Household Income: 27%

4Q 2016 Monthly Mortgage Payment: $1,742

2016 Employment Growth: 3.0%

Sacramento

4Q 2016 Monthly Apartment Rent: $1,235

Y-O-Y % Change in Apartment Rent: 10.0%

4Q 2016 Average Apartment Vacancy Rate: 2.6%

4Q 2016 Median Household Income: $66,105

Apartment Rent as Share of Household Income: 22%

4Q 2016 Monthly Mortgage Payment: $1,785

2016 Employment Growth: 3.2%

Salt Lake City

4Q 2016 Monthly Apartment Rent: $989

Y-O-Y % Change in Apartment Rent: 8.4%

4Q 2016 Average Apartment Vacancy Rate: 3.2%

4Q 2016 Median Household Income: $69,326

Apartment Rent as Share of Household Income: 17%

4Q 2016 Monthly Mortgage Payment: $1,468

2016 Employment Growth: 3.4%

San Antonio

4Q 2016 Monthly Apartment Rent: $910

Y-O-Y % Change in Apartment Rent: 1.7%

4Q 2016 Average Apartment Vacancy Rate: 5.7%

4Q 2016 Median Household Income: $55,056

Apartment Rent as Share of Household Income: 20%

4Q 2016 Monthly Mortgage Payment: $1,468

2016 Employment Growth: 2.2%

San Diego

4Q 2016 Monthly Apartment Rent: $1,748

Y-O-Y % Change in Apartment Rent: 4.8%

4Q 2016 Average Apartment Vacancy Rate: 3.1%

4Q 2016 Median Household Income: $70,580

Apartment Rent as Share of Household Income: 30%

4Q 2016 Monthly Mortgage Payment: $3,087

2016 Employment Growth: 2.0%

San Francisco

4Q 2016 Monthly Apartment Rent: $2,982

Y-O-Y % Change in Apartment Rent: -0.2%

4Q 2016 Average Apartment Vacancy Rate: 3.7%

4Q 2016 Median Household Income: $104,558

Apartment Rent as Share of Household Income: 34%

4Q 2016 Monthly Mortgage Payment: $5,522

2016 Employment Growth: 1.5%

San Jose

4Q 2016 Monthly Apartment Rent: $2,444

Y-O-Y % Change in Apartment Rent: -1.2%

4Q 2016 Average Apartment Vacancy Rate: 3.8%

4Q 2016 Median Household Income: $108,106

Apartment Rent as Share of Household Income: 27%

4Q 2016 Monthly Mortgage Payment: $5,341

2016 Employment Growth: 3.5%

Seattle-Tacoma

4Q 2016 Monthly Apartment Rent: $1,456

Y-O-Y % Change in Apartment Rent: 7.4%

4Q 2016 Average Apartment Vacancy Rate: 3.4%

4Q 2016 Median Household Income: $79,758

Apartment Rent as Share of Household Income: 22%

4Q 2016 Monthly Mortgage Payment: $2,341

2016 Employment Growth: 3.5

St. Louis

4Q 2016 Monthly Apartment Rent: $829

Y-O-Y % Change in Apartment Rent: -1.9%

4Q 2016 Average Apartment Vacancy Rate: 4.6%

4Q 2016 Median Household Income: $58,855

Apartment Rent as Share of Household Income: 17%

4Q 2016 Monthly Mortgage Payment: $1,005

2016 Employment Growth: 2.8%

Tampa

4Q 2016 Monthly Apartment Rent: $1,054

Y-O-Y % Change in Apartment Rent: 4.0%

4Q 2016 Average Apartment Vacancy Rate: 4.0%

4Q 2016 Median Household Income: $51,490

Apartment Rent as Share of Household Income: 25%

4Q 2016 Monthly Mortgage Payment: $1,307

2016 Employment Growth: 2.1%

Washington, D.C.

4Q 2016 Monthly Apartment Rent: $1,616

Y-O-Y % Change in Apartment Rent: 1.1%

4Q 2016 Average Apartment Vacancy Rate: 3.8%

4Q 2016 Median Household Income: $97,338

Apartment Rent as Share of Household Income: 20%

4Q 2016 Monthly Mortgage Payment: $2,036

2016 Employment Growth: 2.1%

West Palm Beach

4Q 2016 Monthly Apartment Rent: $1,443

Y-O-Y % Change in Apartment Rent: 0.4%

4Q 2016 Average Apartment Vacancy Rate: 4.4%

4Q 2016 Median Household Income: $59,844

Apartment Rent as Share of Household Income: 29%

4Q 2016 Monthly Mortgage Payment: $1,832

2016 Employment Growth: 1.3%

United States

4Q 2016 Monthly Apartment Rent: $1,284

Y-O-Y % Change in Apartment Rent: 3.3%

4Q 2016 Average Apartment Vacancy Rate: 3.9%

4Q 2016 Median Household Income: $57,737

Apartment Rent as Share of Household Income: 27%

4Q 2016 Monthly Mortgage Payment: $1,439

2016 Employment Growth: 1.6%

 

Source: forbes.com

The post Full List: How Renters Fare In America’s Hottest Cities appeared first on AAOA.

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Time Management Tips And Tricks For Busy Property Managers

Mon, 03/13/2017 - 1:13pm

If you own multiple properties or rent several units, keeping up with all of your tenants can be difficult. Are you struggling to stay on top of property management? Let our time management tips and tricks help you increase efficiency and responsiveness while decreasing stress.

Ways to Be an Efficient Landlord or Property Manager
  1. Draw up a list of what needs to be done. Before you get organized, write a list of what needs to be completed at all properties. It can feel overwhelming to list everything, but you’ll soon use your master list to get organized. Group like with like: For example, if you realize that three units need electrical work done, it makes sense to bring in an electrician to complete the work once rather than make three separate appointments. By scheduling all the work at once, you can save money and time.
  1. Use a calendar. Now that you have a thorough understanding of what needs to be done, put tasks on your calendar. Tackle time-sensitive items first, then schedule minor or ongoing tasks. Allocate one day each week or month for items that repeat, such as landscaping properties or holding an open house. Once duties are scheduled across the month, you’ll find it easier to accommodate landlord duties in your daily life. In general, people are most productive in the morning. Spend your morning completing the tasks you need to do, then spend the afternoon visiting properties or handling on-site repairs.
  1. Use automated tools to make managing tasks easier. Some tasks can be set up once, then automated on whatever schedule makes sense. Take social media, for example. If Twitter and Facebook are important to your property management marketing, spend an hour coming up with social media posts. Then, schedule these posts using an automation tool and enjoy regular marketing without the effort. Automation also saves time by curbing distraction. It’s too easy to get distracted on social media. You may visit Twitter to post a quick tweet about your upcoming open house, only to find yourself scrolling through celebrity posts for 20 minutes.
  1. Outsource what you don’t want to do. Property management tips often suggest building a team for good reason. It’s helpful to have others who can assist you in keeping properties looking their best. If you’ve been trying to run your properties alone, it might be time to hire an assistant or outsource the tasks that you do not want to do. Consider hiring a landscaping firm to maintain curb appeal or retaining a handyman who can quickly make minor repairs at your properties.
How Organizing Advice for Landlords Benefits You

There are many benefits to increasing your efficiency and reliability. When you aren’t having to market properties, your to-do list will decrease, and so will stress. Staying organized helps you remain responsive when tenants need something, which increases their satisfaction. If tenants see you as reliable and proactive, they will be more likely to renew their lease.

Even if getting organized decreases your workload in the long run, it can feel overwhelming to change the way you manage rentals, especially if you’ve employed the same landlord routines for several years. Implement these tips for property managers one by one to find success.

Disclaimer: The information provided herein is for advisory purposes only and AAOA takes no responsibility for its accuracy. AAOA recommends you consult with an attorney familiar with current federal, state and local laws.

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Rental Properties Can Make Good Investments, but They Come with Risk

Thu, 03/09/2017 - 10:55pm

Maybe your financial house is in order. Your debt is manageable or paid off. You have an emergency fund and now you’re looking for ways to grow your wealth. Or, perhaps you’re not there yet, but as you build toward stability you’re planning ahead by learning about different investments options. While investment can take many forms, perhaps you may have considered becoming a landlord.

Rent prices tend to rise over time, providing an inflation-protected income into your retirement years. You also might be able to cash in big later if the unit’s value increases.

It doesn’t always work out that way, though. Perhaps you’ve heard the horror stories of landlords left with a trashed property after evicting a tenant. Or even worse, losing their property and savings in a natural disaster.

In between the extremes of easy, hands-off income and total ruin are the everyday concerns, benefits and risks that most landlords face. Filling empty rentals and managing a property can feel like a part-time job, but the extra income could be more than worth it. Be honest. If you’re not up for the work or risk of a fluctuating housing market, that’s okay. When you are, educate yourself and put in the time to do it right to protect your investment.

A few risks you could face as a landlord. If you’ll need to borrow money to purchase a rental property you should be aware that investment property mortgages tend to be a little more difficult and costly to secure than primary residence mortgages. It can also be harder to take cash out of investment properties — either with a cash-out refinance or a home equity line of credit. In other words, you might not have easy access to the money during an emergency and if you can’t make a mortgage payment, your life’s savings could be on the line.

Owning a rental property outright can be risky as well. Especially if you’re placing a significant amount of your savings in a single investment, the lack of diversification could put you in a precarious situation.

Those aren’t the only risks you could face when owning a rental.

  • Finding and keeping good tenants. Landlords learn from experience that it’s worth leaving their rental empty for a month or two rather than take on tenants who are likely to cause problems later. They’ll have to cover expenses without the rent income, but that’s often better than dealing with tenants who can’t pay rent and going through the eviction process. Worse are tenants whose security deposit doesn’t cover the carnage they leave behind. Many landlords pay for professional tenant screening reports or credit reports and call applicants’ references before offering a lease.
  • There are a variety of free contract templates online but if you decide to use one, do some research to be sure that the template you selected complies with federal, state and local laws. You may want to hire a landlord-tenant attorney to help you draft a template lease agreement. Also discuss how you can legally screen applicants, renters’ rights and common problems landlords face with the attorney. You want to clearly understand what laws apply to you and how to act in a fair and legal manner.
  • Covering your expenses. Even with a steady income stream, you could wind up losing money on your rental property. Between taxes, insurance, repairs, maintenance and mortgage payments the monthly and one-off costs can quickly stack up. When your rent is too high you’ll have trouble attracting tenants, but if it’s too low you might not be able to cover your expenses.
  • Choosing a property with a good capitalization rate (discussed below) can help you hedge against this risk. However, if the housing and rental markets drop, you could still get stuck choosing between losing money each month or selling the property at a loss.
  • The time or cost of managing a rental property. Becoming a landlord is often far from a hands-off job. When the phone rings in the middle of the night because the roof is leaking or the water heater breaks you’ll need to figure out how to solve the problem.
  • You may be able to hire a property management company to take on this work for you. They often charge about 8 to 12 percent of your rental income or a flat monthly fee. Depending on your contract, the cost of labor might not be included, and you’ll often pay for supplies that the company uses for maintenance or repairs.

Set yourself up for financial success. What separates the successes from the sorrow-filled landlords? Luck certainly comes into play, but you can also take steps to get started on the right foot.

If you’re looking to purchase an investment property, first try to determine its capitalization rate, or cap rate. This is the estimated annual return you could make on your investment. To calculate the cap rate, divide the annual net income by the property’s purchase price.

Your net income will be your rental income, which you can approximate based on rental prices for similar properties in the area, minus your costs, such as maintenance, upgrades, vacancies and emergencies. Try to understand the tax implications of owning a rental property before assuming your costs. Many deductions, including the cost of supplies and mileage for rental-related driving, might be new to you if you haven’t run a business before. Mortgage interest and depreciation could also drastically lower your tax bill.

Cap rates tend to change depending on the area and type of property. Regardless of what’s considered “good” in your area, you can use this formula to compare different investment opportunities.

Bottom line: Many people focus on the positives of owning investment property. An extra income and potential to build equity with their tenants’ money seems too good to be true, and it just might be. If you’re going to be successful, you should acknowledge the risks that come with the territory and plan accordingly.

Source: huffingtonpost.com

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Apartment Building Developers Pin Their Hopes on Millennials

Thu, 03/09/2017 - 10:53pm

Developers still hope that Millennials will help fill the slowly growing number of vacant apartments across the United States. They might be right.

More than a million Millennials still live at home—less than a few years ago, but still a substantial number, including some who are likely to eventually rent apartments. “There’s potential upside in demand there,” says Ron Witten, founder of Witten Advisors, an advisory firm that focuses on the apartment sector.

The strong demand for apartments continues to surprise, so that even though the vacancy level is rising, it has done so very slowly so far. Developers have started construction on a large number of new apartments, but they are restrained by banks that are not eager to lend on new construction projects.

The result is a rental market that may be roughly in balance, as the vacancy rate creeps higher. “We don’t see much in the way of downward pressure on rents, but right now it is hard to underwrite significant pops in rent,” says Ben Sayles, director in the Boston office of capital services provider HFF.

Rent surprise

Over the last few years, demand for apartments—especially from Millennials—has filled apartment units almost as quickly as developers have been able to build them. Rents increased quickly as a result. “Nobody—developers, brokers, lenders, investors—could have foreseen this tremendous run-up in rents,” says Sayles. “Today’s effective rents are generally well ahead of what was underwritten two years ago.”

Millions of Millennials finally started looking for rental units in recent years, after putting off starting their own households during the Great Recession and the slow economic recovery. Between 2008 and 2014, the slowdown resulted in 5.1 million fewer households forming than normal, according to data and analysis from Freddie Mac.

Even this far into the recovery, there are still about 1.5 million more young people living at home than usual, says Witten.

The current slow, steady job growth could draw more of these young people off the couch and into rental apartments. The economy added 2.2 million jobs in 2016. That’s less than the 3 million and 2.7 million jobs added in 2014 and 2015, respectively, but still above the historical average. The labor force participation rate was still just 62.7 percent as of December 2016, which is only marginally higher than a year prior and lower than the post-recession average of 63.6 percent. The difference could potentially represent millions of new workers—and new households.

Household formation could also see another bump as Millennials reach their next life milestone. There are roughly 10 million Millennials who are 26 to 27 years old right now—historically the average age when people get married.

“There is no telling how this current cohort will behave,” says HFF’s Sayles. “If they decide to marry around 26 or 27, then we’ll see an increase in household formation. If they delay marriage, household formation is likely to remain flat.”

The long-term outlook: two years from today

So far, the percentage of vacant apartments has stayed well below 5 percent on average nationwide, though it has crept upwards into the mid-4-percent range, according to leading data firms.

The long-term trends of demographics and supply may keep the apartment market roughly in balance as long as two years into the future, when apartment projects planned today are likely to finally open.

Witten Advisors continues to forecast a relatively healthy apartment market two years from now. “Our outlook has remained about the same—slower rent growth, but still above average in most markets, as more supply opens,” says Witten. “The markets generally don’t have an oversupply problem, but many do have a supply concentration problem, with many new projects in the same neighborhoods leasing up simultaneously and softening rents in the short term.”

 

Source: nreionline.com

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Dallas crowned one of the best real estate investment markets for 2017

Thu, 03/09/2017 - 10:50pm

Rent is a huge topic in Dallas right now, mainly because it just keeps going up. While that’s not great news for renters, it’s excellent for those doing the renting, and HomeUnion concurs.

The online real estate investment management firm recently released its 2017 National Single-Family Rental Research (SFR) Report, and Dallas-Fort Worth comes off quite favorably. The study ranks 31 metro areas on factors including “investment opportunities for 2017, yields, rental demand, investment home prices, and capital markets conditions.” Put in plain English: If you can swing it, now would be a smart time to buy a rental property in DFW.

That’s because our stellar job growth (105,000 new jobs are expected for 2017, a 2.9 percent increase) is doing its part to encourage the formation of new households, most of which will not immediately enter the ownership pool. Couple that will an expected 3.5 percent increase in rent and a vacancy rate that’s expected to drop to 6.7 percent, and suddenly it’s a great time to be a landlord.

The study breaks it down even further, pointing out that “Unlike many investment markets, investors in Dallas are moving up the quality scale, while traditional buyers are moving in the opposite direction. With strong price growth, first-time buyers are being priced out of the market, though stable job gains will keep those would-be homeowners renting in similar neighborhoods. With cap rates above 6 percent and strong fundamentals, investors should reap short- and long-term gains.”

All these factors put DFW at No. 9 on the list, with data that is strikingly similar to that of No. 1 Atlanta. What keeps ATL at the top is its manageable entry prices for investors and a vacancy rate that’s predicted to end 2017 at 5.1 percent, in addition to predictably healthy job growth.

 

Source: dallas.culturemap.com

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Why discounting rent is for amateurs

Thu, 03/09/2017 - 10:29pm

First month free. Free TV with purchase. Don’t Pay until…..

You see these types of discounts in ads everywhere these days. You also see these types of businesses that promote like this come and go and there’s a reason.1 They trade in commodities.

Commodities are items that have little value and are typically traded or bought for the lowest cost. Trading in commodities is not good business for the simple reason that you are tied into the lowest price. The lowest price doesn’t give you margin for error or more importantly for profits.

As a landlord, if you start offering discounts on rents to attract tenants, you’re turning your property into a commodity rather than a valuable asset. Yes, you have to be competitive, you can’t price yourself out of the market, but as a long term strategy, you want to be a leader rather than following the pack off the cliff.

Discounts are the easy way out and once you start offering them, they become expected. If you’re a retail store, maybe that’s to be expected, but to really succeed you don’t want to be the next Walmart or Target, set your sights higher and become a premium brand.

If you’re following some of my systems and tips, you know it’s important to be a professional and to treat your landlording like a business. If you become an educated landlord, one of the areas you need to look at is the condition of your properties and how they appear to prospective tenants.

We learned a long long time ago that if you spend a little extra initially to get the property better than your competitors it pays you back in increased rent, longer staying tenants and tenants that take better care of your properties. And here’s why..

The Argument For Increased Rent

If you do any tours of competing properties, even if this just involves reviewing other ads and photos of properties in your area, they all tend to be the same. Picture of the kitchen, picture of a bedroom, picture of a living room and some bad writing offering a price and maybe a few details.

Occasionally though, a few stand out. Usually they’re priced higher, the pictures look more professional, and the advertising copy looks polished. You want to be the landlord who is renting out that property for several reasons.

By looking more professional and by charging higher rent, you’re automatically going to push many of the less desirable tenants away. If they have a poor track record of paying rent, they understand a professional landlord will be screening them more thoroughly and they won’t even qualify. If the rent is higher, they understand they won’t be able to afford it and they will be cash strapped. And if the advertising copy comes off as professional it will also help to discourage them from even inquiring.

You move from quantity to quality and what you are looking for is quality tenants.

If you ever rented (I rented for years until my wife and I could afford our first house), you probably looked at a lot of properties before you found the right one. We personally couldn’t believe the condition of some of the properties that landlords thought were rentable. I still hear this from tenants when I question them how their search for a rental is going.

Once you did find the right one though, you had to have it. And it didn’t matter if it was an extra $100 a month, it stood out in your mind over the previous properties and it became even more valuable in your view point. This is the type of property you want and the mindset you want to instill in tenants that view your property.

Now, to get to this level, you may have to spend a few extra thousand dollars initially for extra renovations or updates, but this not only helps increase the overall value of your property, but that extra $75 per month, or perhaps $200 per month of extra income in a great property, sure helps increase your cash flow.

The Bonus’s of Better Properties

The extra cash flow isn’t the only bonus. If you have a better property, tenants tend to stay longer because it is such a great place to live. They actually become much more hesitant to leave as they don’t want to give up a  great property.

This translates into less tenant turnover and longer periods between vacancies. Which simply means more money going into your bank account for longer periods of time and that helps ensure you continue to be a successful landlord.

These tenants that are also willing to pay extra to live in this great property, also tend to take better care of it. If they truly take pride in where they live, they want to make sure it looks great and they keep it that way. You’ll end up with fewer repairs after tenants vacate, less work for when the turnover eventually takes place and if there are any issues with the property like leaky taps, these types of tenants will let you know immediately, rather than finding out after repairs become more expensive.

Unfortunately I can’t guarantee every tenant will be a success using this strategy, but in combination with other strategies, it sets you up for success.

So let’s recap some of the strategies that can help make this work for you.

Buy rental properties in rental heavy neighborhoods. This gives you a much larger tenant base to choose from. You start with quantity and narrow it down to quality.

Renovate your properties to help them stand out from competitors. This makes your properties memorable and helps you receive premium rents.

Write better ads with better pictures. Stand out from the crowd and get people appreciating your property and it’s value rather than looking for a commodity.

Don’t discount your rents to attract tenants. Tenants that are attracted to discounted rental units will also leave quickly if they can get a better deal. Don’t be a commodity, create an environment where tenants want to come home to.

 

Source: theeducatedlandlord.com

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Airbnb vows to give its landlords a louder voice

Thu, 03/09/2017 - 10:06pm

SAN FRANCISCO — Airbnb on Tuesday unveiled new initiatives designed to give a louder voice to the group that keeps the startup in business — the landlords renting their homes through the online platform.

Addressing a group of 50 landlords at the company’s San Francisco headquarters, Airbnb CEO Brian Chesky promised to open some company board meetings to landlords, hold quarterly Q&A sessions over Facebook Live, create a “Host Advisory Council” and send periodic email updates.

“There is going to be a new commitment to listening so we can learn what you want and continue to do new things for you,” Chesky told the group of landlords, many of whom were from San Francisco.

Chesky’s differentiated Airbnb from other tech companies, portraying the $30 billion startup as a community of landlords and guests rather than a profit-driven machine. He also emphasized that unlike other companies that are gearing up to use artificial intelligence to replace workers, Airbnb always will be built around humans.

Chris Lehane, head of global policy and public affairs, also acknowledged another reason Airbnb may want to keep its landlords happy — they play a key role in the company’s efforts to lobby local governments and fight the “historic power of the hotel industry.”

Chesky said Tuesday he will add “head of community” to his CEO title, which he called an “expansion of accountability” — meaning he intends to be just as accountable to his landlord community as he is to his employees. He said he planned to kick off a world tour Tuesday afternoon to meet hosts from different countries and hear their feedback, hitting cities including London, New York, Delhi and Cape Town.

In addition, Airbnb on Tuesday launched its Host Advisory Council, a group created to bring landlord feedback directly to the company’s leaders. Chesky promised to bring landlords from that group to one Airbnb board meeting a year, giving them an opportunity to voice concerns to the company’s investors.

“I want to make sure that when we’re making a decision that affects the community,” Chesky said, “that we’re doing it for the community, not to the community.”

To some Airbnb hosts, the move is an attempt to fix a broken communication chain between Airbnb’s landlords and its management.

“They’re terrible at receiving feedback and implementing meaningful change,” said 48-year-old Adrian Santos, who rents three rooms in his San Francisco apartment on the Airbnb platform.

Santos would like to see the company improve the way its algorithms calculate the best price for a listing, and the way they track how much money landlords make and how often they rent their rooms.

Alex Nigg, who rents his San Francisco home on Airbnb when he’s out of town, called the new initiatives an “excellent idea.”

“The hosts are the lifeblood of the company,” said Nigg, who also founded Properly, a startup that helps Airbnb hosts schedule cleanings between rentals. “And ultimately we are the face of the company. So I think it’s really critical for Airbnb to hear the voice of the hosts loudly.”

 

Source: mercurynews.com

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The Landlord Business: How to Earn a Living from Rental Properties

Thu, 03/09/2017 - 10:03pm

There are approximately 28.1 million real estate investors in the United States. More than that, real estate income is one of the top three sources of income for individuals who have a net worth of more than $25 million. Making the decision to become a landlord may be one of the best decisions you can make to increase your financial wealth and security. Ideally, you will grow your rental income so that you are a full-time landlord with your lifestyle supported entirely by your rental properties. With this in mind, you may want to know how landlords make money off of their properties.

A Monthly Income Stream

A rental property produces income through the tenants’ monthly rental payments. Ideally, the gross rental payments for the entire property will pay for the full mortgage payment each month as well as for taxes, insurance, utilities, repairs and more. In the best case, there will also be a net profit that the landlord can benefit from. However, in order to accomplish this goal, a few things need to fall into place. First, you need to structure your real estate financing so that the payment is low enough to generate a net profit. Second, you need to keep the property occupancy high. Vacancy can erode away your profitability. Third, property repairs and maintenance should be affordable. Buying a property that is already in great condition is a smart idea. You will need to properly maintain the building to protect your investment and to build equity. This is also important for keeping occupancy high. Some landlords keep maintenance costs under control by doing some of the work themselves. Investing in a single home may not generate enough money for you to quit your day job. However, investing in multiple single family homes or in an apartment complex may yield a significant financial return for you to live on. Keep in mind that there are tax benefits associated with real estate investing that allows you to keep more of your net profit in your pocket.

Real Estate Sales Income

Another way you can benefit financially from a rental property is when you sell the property. Many real estate investment loans require you to place 25 to 30 percent or more of the sales price as a down payment. With each passing month, equity will grow through the mortgage payments paid for by your tenants’ rental payments as well as through property appreciation. Keep in mind that real estate values can decline, so there is some risk associated with this. However, while there are ups and downs in most markets, most properties will appreciate if you hold onto them long enough. This source of real estate income will not be realized until you apply for a cash out refinance loan or until you sell the property.

Create an All Bills Paid Environment

Another idea is to create an all bills paid environment for your tenants. This requires you to have the property master-metered instead of using a water or electric sub meter for every unit. However, a master meter doesn’t let you single out the tenants that use more utilities than others. With a master meter all utility bills will come to you, and you will be responsible for paying them for your tenants. Generally, you can charge your tenants higher monthly rent because utilities are included in the rent. However, in order to make a true profit from this, the property should be water and energy efficient. You may consider making some upgrades to the property in these areas to enhance your ability to generate a profit.

Your profits as a landlord will be higher when you manage your properties and tenants on your own. This is because hiring a property manager can erode away your profits. However, if you invest in a large enough property, you may have to commit full-time hours to this task. If your goal is to enjoy the financial benefits associated with being a real estate investor without the time and stress associated with daily property management, you may consider adjusting your investment and operating figures to account for hiring a full-time property manager to assist with your properties and tenants.

 

Source: groundreport.com

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Evaluating Rental Returns on Investment Properties

Thu, 03/09/2017 - 10:00pm

Maybe you’re looking at the first building block of your real estate empire. Or perhaps you’re in good financial shape and just want to purchase a home that can earn you a little passive income. Whatever the case, you’ve found yourself in the market for your first investment property.

When you buy an investment property, you may want to use the rental income in order to help you qualify for the monthly mortgage. If that’s the case, in addition to regular forms that evaluate the fair market value of the property itself, an appraiser will also evaluate how much a property could be rented for on the open market.

To understand this requirement better, we’ll go over some basic factors affecting a regular appraisal. Once you have this foundation, we’ll get into how fair market rental is calculated.

Appraisal Basics

The first part of an appraisal on a rental property covers the same territory as any other appraisal: putting a value on the house. The specific guidelines the appraiser has to follow depend on the type of home you’re getting. But that said, the framework remains pretty much the same, so let’s cover the major property value guidelines.

Let’s say you’re looking at a property that has three two-bedroom units. Your appraiser will look for sales of similar three-unit properties in your area to help determine the fair market value of the home you’re looking at. These are called comparables. They help the appraiser determine a reasonable sales price in the current market conditions.

Once this basic appraisal is in place, the appraiser can turn their attention to what a fair monthly rental payment would look like based on the market. Let’s take a look at how that process works.

Determining Rental Value

Determining rental value starts much the same way as the traditional appraisal. The forms that the appraiser fills out for single-family and multi-family properties are different, but as with a regular appraisal, the building blocks are the same. The appraiser has to find comparable properties in your area and include information about the lease as well as the monthly rental price of each comparable property, minus the cost of any utilities and furniture. This gives the appraiser an adjusted monthly rent. Once this baseline is established, it’s adjusted up or down to account for factors that make your property different, such as these:

  • Location/view considerations
  • Design and appeal of the property
  • Age and condition
  • Room count and square footage
  • Special features, like a basement

For multi-unit properties, there’s a form that, although not identical, takes into account many of the same factors.

If you happen to be buying your investment property through a conventional mortgage from Freddie Mac, the appraiser will fill out an operating income statement with you. In addition to discussing the rental income you’ll make every month, this includes a projection of your annual expenses for things like utilities and upkeep. Upkeep includes the cost for repairs, replacing any appliances, etc.

Jessica Romero is a director of staff appraisal operations at Title Source. She says appraisers are mainly concerned with how much money you’ll see coming in.

“The most important factor on multi-family investment properties is cash flow,” Romero says. “Any investor is interested in what the cash flow looks like on a potential investment property. The appraiser is often charged with performing a cash flow analysis which breaks down how strong of an investment that property would be for the investor.”

Using Rent for Your Mortgage Payment

In addition to the rental appraisal, there are a couple more documents you need to have ready for your lender:

  • Two years of tax returns
  • The 12-month lease agreement

Whatever you charge for rent, you can only use 75% of that money to qualify for your new mortgage payment. The rest is a vacancy factor, which accounts for the time it takes to find new renters if your current renters move.

 

Source: quickenloans.com

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AirBnB Warnings

Thu, 03/09/2017 - 10:41am

CBS News recently reported that AirBnB hosted 80 million guests worldwide in 2016.  As they disrupt the hospitality industry, AirBnB and its competitive websites encourage homeowners and tenants to offer their spare bedroom, guest house or private home to strangers for short term rentals.  Although for many this has been an opportunity to make extra money, it is not without its cautionary tales.  The risks regarding the personal safety of both a guest and host have been well documented but the potential financial implications have barely been mentioned.

For example, a homeowner that decides to host a stranger for a nightly fee, may be running afoul of local zoning laws, ignoring mortgage provisions and putting their insurance coverage at risk.  A tenant that is allowing a guest to share their apartment is probably breaching a lease agreement.  Don’t expect the home sharing websites to warn you about these, and other, potential pitfalls.   It is up to you, the host to be sure you have not breached any laws or conditions that may put you at financial risk.

If you have an “owner occupied” mortgage on your home or condominium, there is very good chance that renting all or part of the property is a violation and could trigger a default.  If you are considering refinancing, you may be asked if you rent or plan to rent the property.  If the reply is yes, you may find it more difficult to refinance or be charged a higher interest rate.

If you are considering jumping into the home sharing market, you must first check your homeowners insurance policy.  According to the Insurance Information Institute different insurers have different provisions but all want advance notice of your intention.  Some will insist you purchase an endorsement or rider to your existing policy that allows for tenants.  According to Allstate Insurance, damage caused by a paying guest and/or losses of property and injury will probably not be covered by a standard homeowners insurance policy.  The bottom line, check with your carrier prior to turning the keys over to a paying guest.

Around the country, local communities have passed a variety of laws restricting or limiting a homeowner or a tenant’s right to offer to share their home.  Typically, this has been a reaction to local zoning laws, rent control laws or protest from neighbors and most vociferously the established hotel industry that has pressured local politicians.  It is critical that you are aware of changes in ordinances in your town before you  embark on renting out your home.

A large number of hosts are also tenants renting out a spare bedroom.  Some of these tenants may be yours. Generally, it is a breach of a rental agreement or lease to add additional occupants without advance consent of the landlord.  In the event a tenant opts to host someone without advance notice to the landlord, there may be a cause for eviction.  Worse yet, there is a possibility that the tenant on the lease moves out leaving the guest in your building as a squatter.  Be aware of any new faces that may be living in your property and take aggressive steps to police the situation.

In general, home sharing is a thriving industry that has helped a lot of people increase their income with few issues.  As the industry grows, the lenders, insurers and local communities will become more aware of the risks posed.  Understand the exposure and be prepared.

 

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Renters Vs. Landlords: Who Wins In 2017?

Mon, 03/06/2017 - 10:57pm

The answer to the question of who is coming out ahead in the apartment market – renters or landlords – has been fairly clear for a while now. Renters have rarely caught a break since many major markets began to recover from the Great Recession in 2010.

That may change in 2017.

The recovery years of 2010-2016 saw rent growth rise 150 basis points (bps) above the long-term average, and renters only began to see relief from continual price hikes toward the end of last year. This year promises to show further declines in some markets where rents have risen the most.

Axiometrics

U.S. Occupancy and Rent Growth since 1998.

Though apartment renting is not a zero sum game, slower rent growth in 2017 is expected to benefit renters more than landlords. Nationally, during the last six years, the average annual rent increase was about $516. It’s expected to lower to about $347 in 2017, reflecting about $168 in savings annually.

Ranking the Markets

The table below shows the top 10 metros with the largest expected savings in apartment rent during 2017 compared to the last six years. The projected savings for each market was calculated by subtracting the annual change for 2017 from the average annual change in rent from 2010-2016. Out of the 54 major U.S. metros analyzed, some 36 showed annual savings ranging from $8 to $2,647, with average decreases of about $360 from the average 2010-2016 price.

Also included in the analysis was a calculation of change in elasticity, which is a measure of how sensitive consumers are to price changes. In this case, greater or lesser degrees of elasticity reflect how renters react to changes in rent. Generally, housing is an inelastic product, which means that the change in price doesn’t substantially affect the quantity demanded.

However, whether a rent increase is considered a hardship or a rent decrease is considered a win for renters depends on the perspective of residents in each market. Where renters are less sensitive to change, the savings or increase may be a minor factor in their housing decisions.

For this analysis, the long-term average for elasticity was calculated and compared with 2017’s figure. If the elasticity value in 2017 is less than the historical average, it is said that renters are getting less sensitive to changes in rent and vice versa.

Trends by Market

Bay Area: San Francisco, San Jose and Oakland, lead the pack for most savings in 2017. San Jose renters stand to pay $2,647 less a year compared to the 2010-2016 average rent, and annual savings will be $2,638 and $1,647 in San Francisco and Oakland, respectively, this year. These markets saw a substantial increase in rent during the last six years, often producing double-digit rent growth that was not sustainable over the long term. The positive change in elasticity value in 2017, compared to the long-term history, points to renters in these markets getting more sensitive to increases in price. The impact of new supply, combined with moderating job growth compared to the last six years, will lead to softer rent growth throughout 2017.

New York: Though New York renters stand to see substantially smaller savings than their counterparts on the opposite coast — about $630 a year — the positive elasticity value for the market indicates that they are more than ready for the decrease. Decelerating job growth and an increase in new supply in 2017 is expected to keep rent growth low this year.

Houston: Houston saw a larger impact on job growth from the drop in oil and gas prices, and continued weak employment numbers may be one reason that Houston renters show the highest sensitivity to price on this list. Houston residents will save about $509 this year, about half a month’s rent relative to the average effective rent in 2016. Though job growth is expected to pick up this year, it will most likely remain well below the metro’s capacity, keeping rent levels lower.

Denver: The Denver market’s performance slowed significantly last year, as rent growth returned to more sustainable levels after being in double digits for most of 2015. That should yield a savings of about $502 a year for Denver renters in 2017. New supply coming to market ramped up in 2012 and still has not slowed, with 3.6% inventory growth expected this year. Weaker job growth this year will mean that the new supply is absorbed at a slower pace, which will continue to keep rent growth at lower levels.

Boston: As with many markets on this list, increased new supply and slowing job growth will equate to lower levels of rent growth in Boston in 2017. Rent growth in the market has been varied since the start of the recovery, but slowed in 2016. Renters should see an annual savings on rent of $441 this year, as compared to annual average rent increases over the past six years.

Seattle: Though Seattle has not achieved the rent growth highs of the Bay Area markets, it also has not seen the same lows in the past year. While rent growth has recently dipped into the negative in Oakland, San Jose and San Francisco, the Seattle market’s performance in 2016 was still strong. Though renters in Seattle will see smaller savings than in other West Coast markets, about $407 a year, they will still get some relief from the rent hikes of recent times.

Portland: The combination of slowing job growth and increased new supply has also caused rent growth to decelerate in Portland, returning to more sustainable levels than the double-digit gains experienced in 2015 and early 2016. Portland renters will see about $356 in savings this year, though the lack of change in elasticity value in the market indicates less sensitivity to rent increases, as renters here may be getting used to paying higher rents than the long-term average.

Austin: Austin was among the markets experiencing the strongest job growth on this list, though that metric dropped in 2016 and will continue to moderate this year. With rent growth responding to the drop in demand caused by moderating job growth, Austin renters will see a break of about $323 in apartment rents. However, the negative change in elasticity value shows that renters in this market are much less sensitive to price changes than their counterparts in other markets. This may reflect the savings that Austin transplants are already seeing over their previous homes in more expensive coastal markets.

No matter how sensitive renters are to the change in price, there’s no disputing that having extra money in their pockets after rents are due will be a welcome change from the boom recovery years.

Source: forbes.com

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Room for Rent: Exploring Rental Vacancy Rates in Urban, Suburban and Rural America

Mon, 03/06/2017 - 10:13pm
  • The rental vacancy rate fell to historic lows in the nation’s urban communities in 2016 according to the U.S. Census Bureau, while remaining stubbornly high in more-rural areas.
  • Rental vacancy rates overall remain low, but eased somewhat in Northern California the Northeast and parts of Florida.

Rental vacancy rates in the country’s largest cities reached historic lows in 2016, even as rental vacancies remained stubbornly high in the nation’s rural communities, according to the U.S. Census Bureau.[1]

For much of the past three decades, the rental vacancy rate in urban communities was the highest in the nation. But it has declined sharply over the past five years, falling to just 6.7 percent in 2016, the lowest rate on record by more than a percentage point. The rental vacancy rate in suburban communities has also declined sharply in recent years, and now is roughly in line with series lows record in the early 1990s. By contrast, the rental vacancy rate in rural communities steadily climbed throughout the 1990s and early 2000s, and remains stubbornly high (figure 1).

In 2016, rental vacancy rates fell most in the Great Lakes region, the South and Southern California, and increased the most in New England, South Florida and Northern California (figure 2). Among the 75 markets covered, Cincinnati and Toledo, Ohio, experienced the largest drops in the rental vacancy rate; Charleston and Oklahoma City saw the largest increases. In the pricey and competitive Bay Area, the rental vacancy rate in San Francisco was unchanged, and increased by one percentage point in San Jose.

Despite some improvement in select markets last year, overall rental vacancy rates remain low, especially in booming costal markets. San Diego, Los Angeles, Seattle and San Francisco reported the lowest rental vacancy rates in 2016; Birmingham, Greensboro, Charleston and Little Rock reported the highest rental vacancy rates.

 

[1] These data, part of the Census Bureau’s quarterly Housing Vacancies and Homeownership Survey (HVS), were released as an annual series allowing finer-grained analysis.

 

Source: zillow.com

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The 4 Types of Subtenants

Mon, 03/06/2017 - 10:09pm

When it comes to college housing, the term “sublease” is often thrown around in conversation. You may have signed up for an apartment for a 12-month lease, but find that you won’t need to inhabit the apartment during summer, spring, or winter break.

Instead of paying for a space you aren’t even going to use, you can sublease the apartment to another in need of temporary housing and avoid paying for the unused housing in full. However, just like like any college scenario, there are the “horror stories” of subleasing and the subtenants you can sublease your living space to including the following.

The “I temporarily live here so technically everything is temporarily mine” Subtenant

Depending on when you sublease your apartment, you may or may not have most — if not all — of your furniture and personal belongings in your apartment when you sublease it. While you want to be able to trust your subtenant and believe that they won’t do wrong to any of your belongings, you shouldn’t put full faith in your subtenants.

If you leave any of your belongings in the apartment, like cooking utensils, your subtenant can take it as a sign that they can use it freely as they are already using your living space as their own. Using your cooking utensils may not seem like a big deal for everyone, but they may mistreat your belongings, forgetting to wash them until days after using them.

You won’t be there to keep constant watch on your subtenant and to make sure that they don’t use your belongings without asking. Make sure to set guidelines on what the subtenant can and cannot use — if they can borrow bedding, cookware, etc. However, you cannot guarantee that they will adhere to all of the rules you set prior to the sublease.

The “I swear I’ll have the rent tomorrow” Subtenant

As trustworthy as a subtenant might be when you agree to sublease your apartment to them when it comes to actually collecting rent from them on a deadline, they may fail to get you the rent money in time. If it’s a one-time payment, this isn’t going to be an issue for you, but if you are subleasing over the course of several months, you’ll have to rely on your subtenant to give you rent money on time so that you can make timely payments.

While you aren’t necessarily living in the space, you are still responsible for making sure the rent is paid each month, so be ready to keep your subtenants in check when it comes to paying their share of the rent.

The “It’s just going to be a few people” Subtenant

You may be subletting your living space to a single person, but they may bring other people into your living space without letting you know about it. These extra guests may be a daily occurrence, if not nightly if you are not there to supervise the apartment. Instead, you might receive complaints from your other roommates about the subtenant’s tendency to have people over.

Likewise, some subtenants will take advantage of the living space they are in and throw a party. A party can lead to several things — broken furniture, ruined carpet or other flooring, and noise complaints. A subtenant may give you a heads-up prior to the actual party, but lie about what it will entail in order for you to agree to their plans.

If you know that your subtenant is planning on throwing a party, or several, going into the subleasing process, make sure to set guidelines on how the subtenant will pay for damages acquired through excessive partying by either raising the deposit or signing an agreement between you and the subtenant on paying for damages.

The “He doesn’t even shed” Subtenant

Whether it’s a small kitty or a large dog, having a furry friend in your living space seems enticing when you think of the comfort they can bring into your life. However, some people do not realize the true responsibilities that come with living with a pet full-time. Pets can shed all over furniture and flooring, chew or scratch at furniture, or use the apartment’s flooring as their personal bathroom if not trained or taken out regularly.

A subtenant may promise that their furry friend is fully house-trained and doesn’t shed, but more often than not, your subtenant can leave your apartment behind with damage done by their pet. When the subtenant hasn’t properly trained their pet, you can expect their pet to use your floor as a bathroom, leaving you to only hope that the subtenant is thorough in all of their cleaning.

If the pet doesn’t do well in confined places or gets bored easily, they can take out their stress or boredom on your furniture, if you left it behind during the sublease. The subtenant and their furry friend(s) can also leave behind an unwanted scent (for you or future renters) due to unattended litter boxes, pee pads, or other bathroom-related accidents.

 

Source: uloop.com

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7 Kitchen Upgrades Under $5K That Increase Home Values

Mon, 03/06/2017 - 10:05pm
Boost your kitchen’s appeal and home value without breaking the bank.

It’s likely you spend much of your time at home in your kitchen, cooking, entertaining friends over a glass (or two) of wine, or talking through your day with family. But there may come a day when you look around and notice that this well-loved space is starting to look a bit worn. Suddenly, your favorite gathering spot has become a place you rush guests through, and you’re concerned that potential future buyers will be turned off by its outdated appearance — especially if you’re in a luxury market, like Westport, CT.
There’s no need to shy away from kitchen upgrades, though. Here are the seven upgrades suggested by design experts and real estate agents on how to rehab your kitchen (and increase your home’s value) for less than $5,000.

7 kitchen upgrades to boost your home value
  1. Repaint your cabinets and change out hardware Estimated cost: $250 for hardware, $300 for paint Painting cabinets in a semigloss finish and adding new hardware are painless ways to give your kitchen a quick face-lift without breaking the bank. “One of our favorite tips for updating a kitchen is to swap out standard hardware,” says Marika Meyer of Marika Meyer Interiors LLC. “Hardware can change the feel of the space, making an out-of-date kitchen feel more modern, or noncustom cabinetry feel like an upgrade.” Try options like a recessed ring pull and traditional bin pull for stylish hardware that’s simultaneously timeless and trendy.
  2. Replace or add a backsplash Estimated cost: $2,000 Tired of doing dishes and looking at an old backsplash with yellowed grout? Renovate! Kathleen Hay, principal at Kathleen Hay Designs, suggests changing out what you have for new tile. “Consider changing a tile backsplash to a modern glass, mosaic tile, or a classic white subway tile, which never goes out of style,” says Hay. “It now comes in many sizes/shapes and can be laid in a herringbone or soldiered pattern for an updated and fresh look.” Neutral tones will make the kitchen feel bigger and brighter to you and potential buyers.
  3. Paint the Hardwood Floors Estimated cost: Varies depending on the size of your space; painting or restaining floors typically costs between $400 and $650 plus labor; ceramic tile starts around $900 plus installation costs You might think about the kitchen floor mainly when you’re mopping up a spill, but painting it is a quick way to give this key surface new life. “Flooring is a very important part of a kitchen remodel, and there is a dizzying array of options available to the homeowner,” says Jane Toland, principal at Tolhouse Design. “A simple floor color change is all that is needed, in say, a rich brown shade or a trendy gray stain.” Opt for enamel paint like Benjamin Moore’s Floor and Patio Latex enamel. If you’re cautious of making such a long-lasting commitment, many retailers sell pint-sized paint samples so you can test out a color before you decide. If you want to heighten the look of the kitchen even more, consider adding ceramic tile.
  4. Replace the lights Estimated cost: $75 to $250Good lighting is important for everyone and in every room. Jeffrey Osborne of Hark and Osborne Interior Design recommends sourcing “stylish yet affordable” pendant lights (he likes Schoolhouse Electric & Supply Co. Lighting) to hang above an island or countertop. Add undercabinet lighting to give the kitchen a higher-end look — or simply exchange the bulbs for LEDs in existing fixtures to cast the kitchen in a better light (and get some energy savings to boot).
  5. Install butcher-block or concrete countertops Estimated cost: Starting at $300 for concrete countertopsSince most of your time is probably spent in the kitchen at your countertop — eating, preparing food, planning the next party, etc – you want your surface to be durable, without over-spending. Search for remnant granite (pieces left over from other projects) or buy a butcher-block or even concrete countertop, which can be stained to match the space. “Go to a store that has reclaimed materials and grab a beautiful slab of wood or a commercial metal countertop to use as the accent on the island,” says Lisa DeStefano, founder and principal architect at DeStefano Architects. “Tile countertop can be fairly inexpensive, but the challenge is the grout and keeping it clean on what should be a sanitary surface.” Use more expensive materials, like granite or marble, on smaller spaces to give impact to the space, without a significantly higher price tag.
  6. Add a new kitchen sink Estimated cost: Starting at $299 for stainless steelA sink is one of the most important elements in a kitchen: choosing one that doubles as a centerpiece turns what seems to be a purely functional element into a showpiece. Interior designer Laura Umansky, president and creative director at Laura U Interior Design, says that a new sink, such as an apron-front farmhouse sink “feels custom and thoughtful” and gives potential buyers the perception that the home has a greater value.
  7. Put a hood on it Estimated cost: Starts at $599, plus laborMost potential buyers will see the kitchen in one quick scan, from the countertop and sink to the stove. Adding a functional stainless steel hood to the space is a great way to amplify the look of the kitchen and give it a fresh feel, even if you don’t put in a new stove. Hoods typically vent to the exterior, but don’t worry if adding new ductwork seems overdone. Instead, opt for a ductless range hood. The charcoal filters will have to be replaced every few months, but you will save a lot of money on ductwork. Interior designer Jeffrey Osborne recommends having an electrician come in to replace and install the hood for safety purposes. “An oversize hood creates the look of a ‘chef’s kitchen,’ which is usually only seen in luxury kitchens,” says Osborne, adding that it can immediately add thousands of dollars in value to the space.

Source: trulia.com

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How to find a quality tenant when renting out your home

Mon, 03/06/2017 - 10:00pm

Our son had been renting our home and just moved out. Now we have to find a renter. We are 75 and 85 years old and are afraid we don’t know enough about this to do it ourselves.

What are the advantages of using a Realtor vs. a rental management company to find a good renter? My husband is a retired engineer and has a list of maintenance people for the home we live in now, and we always managed the maintenance in the rental home. We are just afraid we won’t be able to run a classified ad and pick the right family or individual.

There is a lot of help for those looking to find tenants. A Realtor, real estate agent or rental management company can all work with you to find a renter for your rental home. We’re more concerned with you finding the right person to work with you than we are about the label given to the person.

If you go with a real estate agent or a real estate agent who is a Realtor, that agent can market the home, help with the vetting process and assist in completing the lease document. The same can go for a rental management company, but with the rental management company, they may want more money from you if you have them perform more of the management tasks.

The real estate agent’s job is generally done once the unit is rented and the lease is signed. The management company might continue on to collect rents and manage the relationship with the tenant and the owner. Depending on what you want and how you want to deal with the tenant, either way might work for you. Again, the real estate agent will collect a fee on the rental of the unit, and the management company may collect that same fee plus charge you an additional amount on a monthly basis for the management service.

Once you decide which way you prefer to go, you’ll need to find the person you like the most, that has experience with rentals in your area, and that you are comfortable working with. As you interview these people, you’ll want to know what they do to find quality people. You might want to speak with some of the real estate investors who are their clients and ask about the quality of tenants they’ve brought to the table over time. If the agent or management company doesn’t want to provide recommendations, you may want to look elsewhere.

Some real estate agents will present any person who wants to rent the home. Others will do that and will also prepare a form for the tenant to fill out and obtain a credit check on that person. Finally, others may do a more extensive search of that person through some credit reporting bureaus or agencies that perform searches on people.

You can expect to pay for these services, but it will ultimately be up to you to decide on the best tenant for your home. Remember, however, that you can’t discriminate based on race, color, religion, sex, handicap, familial status or national origin.

If leasing is too complicated or difficult for you to manage, the property manager option might be best for you, but you’ll need to make sure you have an attentive manager who will care for your property, look out for your best interests and maximize the income from the property. Otherwise, you could consider selling the property and investing the funds.

 

Source: washingtonpost.com

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What Is Pop-Up Staging? Budget-Friendly Home Staging at Its Best

Thu, 03/02/2017 - 10:57pm

In this HGTV-saturated era, most home sellers have heard of home staging, a practice of arranging furniture in your home to make it look as alluring as a photo spread in a design blog. But what is pop-up staging? Consider it the bargain alternative that uses fold-out “fake” furniture for a fraction of the price of actual home staging.

Pop-up staging has taken off in the past few years, because the benefits of traditional home staging are undeniable: According to industry data, staged homes sell 88% faster and for 20% more money, on average. Still, traditional staging is not cheap: Staging fees for a 2,000-square-foot home will typically run in the $7,000 range. One reason for this high cost is that the furniture takes up so much storage space between gigs.

“As a traditional home stager, I had acquired 30 homes’ worth of furniture,” explains Karen Nielson, adding that she (and by extension, her clients) had to pay to store it all in a warehouse, have it hauled in a moving truck to clients’ homes, then returned again to storage.

Hoping to curb these costs, Nielson founded Dandy Pack, a pop-up staging company which creates the illusion of furniture with cardboard boxes draped in slipcovers. Rather than using vast warehouses and moving trucks, Nielson can now fit a whole home’s worth of furniture in a car, and change the look of the pieces by changing the slipcovers. Plus, from a distance (or in listing photos), Nielson says, you can’t even tell it’s “fake.”

How much does pop-up staging cost?

A starter kit from Dandy Pack, which includes a bed, couch, ottoman, and chair, costs $1,031, which represents significant savings. Plus, for someone going the DIY route, pop-up staging has the advantage of being portable and easy to assemble; stagers say it would be simple to go from an empty house to fully staged in one day.

Beyond the cost and ease of setup, pop-up staging may trump traditional staging in another key way: by maintaining a neutral home decor style that won’t rub sellers the wrong way.

“Conventional staging with real furniture involves choosing a style—with its patterns, colors, art, and accessories,” says Douglas Pinter, an industrial designer behind inFormed Space, which rents out foldable “prop” furniture, delivered in two rolling bins. Cost: $1,899 to $2,199 for two months. Best of all, the white furniture gives people a sense of a room’s scale so they can imagine how a sofa would fit, without being overwhelmed by a shabby-chic aesthetic, for example, if that’s not their thing.

What are the downsides of pop-up staging?

While pop-up furniture may save you money, you do run the risk that certain buyers might be turned off when they realize the furniture is fake. Especially with top-of-the-market properties, buyers might wonder where else you’ve tried to cut corners to save a few bucks.

And depending on how much furniture you already own, the cost savings might not be that great. If you’ve got some great pieces already and a good eye, you might save more money staging with what you’ve got.

Still, if your home is empty, pop-up staging can save some serious coin. Plus, if you’re worried that the pop-up furniture doesn’t look natural, you can try a hybrid—i.e., mixing large faux pieces with smaller real pieces like end tables and accessories.

 

Source: realtor.com

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Questions You Cannot Ask a Prospective Tenant

Thu, 03/02/2017 - 10:52pm

When interviewing prospective tenants, you want to make sure you get the best tenant for your property, so naturally, you want to ask them as many questions as possible. You have to be careful however. There are many questions which you are legally not allowed to ask tenants. Learn what not to say when interviewing a prospective tenant.

1. Questions That Violate Fair Housing Laws

Never ask anything that could be interpreted as discrimination under the Federal Fair Housing Law or under your State’s Fair Housing Law.

The Federal Fair Housing Act protects seven classes: race, color, religion, sex, national origin, disability and familial status. In addition, many States have additional protected classes such as marital status and sexual orientation.

Examples of questions/statements that could violate the Federal Fair Housing Act:

Race:

  • What race are you?
  • Are you Chinese or Japanese?
  • You look Italian. You should consider renting in the next town over, there are a lot of pizza places around there.
  • You would love the area, a lot of minorities live here.

Color:

  • You have very dark skin, are you white or Hispanic?
  • You’re very pale, I don’t know if you’d fit in here.
  • You have dark skin, I don’t know if you’d feel comfortable in the neighborhood.

Religion:

  • I’m not Christian, so I don’t want you to put up any Christmas decorations in my building.
  • There aren’t a lot of temples around here, I don’t know if you’d fit in.
  • Are you Buddhist? Don’t go turning one of the rooms into one of those meditation places.

Sex (Includes Gender and Sexual Harassment):

  • Having someone who looks like you as a tenant would definitely make me check on the building more often.
  • I don’t feel safe renting to a woman on the first floor.

National Origin:

  • In what country were you born?
  • Where were your parents born?
  • What is your first language?
  • Are you disabled?
  • I don’t allow animals, so I will not allow your service dog.
  • Are you an alcoholic?

Familial Status:

  • I don’t rent to people with kids.
  • Are you pregnant? I don’t want a screaming baby disturbing the other tenants.

To be safe, you should also avoid questions about marital status, sexual orientation, source of income, age or any other possible protected class in your State.

  • Are you married?
  • Are you divorced?
  • Are you gay?
  • (To a man:) I think having your boyfriend visit will make the other tenants uncomfortable.
  • You’re going to have to pay a higher security deposit because your income is from unemployment and I’m afraid I might have to evict you in the future.
2. Have You Ever Been Arrested?

You cannot ask a prospective tenant if they have ever been arrested. There is a big difference between being arrested and being convicted of a crime. You can ask the prospective tenant if they have ever been convicted of a crime. This is something that can be readily discovered by running a background check. Keep in mind that in many states, such as California, you cannot discriminate against a person because they have been convicted of a crime.

The crime would have to influence their ability to be a good tenant, such as an illegal drug conviction or a history of violent offenses which could put other tenants at risk.

3. Any Question That Is Not Part of Your Normal Qualifying Standards

You must have the same qualifying standards for all prospective tenants. It you do not follow the exact same procedures for all tenants, you could be accused of discrimination. For example, while it is legal to perform credit checks on tenants as long as they consent to it, if you only perform credit checks on African American tenants, this would be considered discriminatory.

Another example would be if you asked people who were not necessarily well dressed questions about their eviction history or criminal convictions, but ignored such questions for people who were well dressed. This would also be discriminatory. You should set a list of questions that you will ask all prospective tenants to “qualify” them as potential tenants.

Source: thebalance.com

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Millennials Buying in the Suburbs

Thu, 03/02/2017 - 10:49pm
As the millennial generation ages into adulthood, they are choosing the suburbs over urban neighborhoods, skipping the traditional starter home and staying in the same city when they move.

SEATTLE, March 1, 2017 /PRNewswire/ — Almost half of millennial homeowners live in the suburbs, and the majority stay in the same city when they buy a home, revealing their home-buying preferences now that they are the largest generational group in the housing market.

According to the 2016 Zillow® Group Report on Consumer Housing Trendsi, millennials made up 42 percent of home buyers last year, more than any other generation, with most of them buying for the first time.

Millennials, those ages 18-34, associate homeownership with the American Dream and believe that buying a home is a good financial investment, even more so than Generation X and baby boomersiii. But until recently, they were delaying homeownership, and it was difficult to know where they would actually purchase homes when they started buying. The median age of a first-time home buyer is 33 years old, compared to 29 a generation ago.

Here are some key findings on millennial home-buying trends:

  • Almost 50 percent of millennial homeowners live in the suburbs, while 33 percent live in an urban neighborhood and just 20 percent live in a rural area.
  • Of the millennial buyers who moved in the past year, 64 percent stayed in the same city and just 7 percent moved to a different state.
  • When millennials become homeowners, they skip the traditional starter home by choosing larger properties with higher prices: They pay a median price of $217,000 for a home that is about 1,800 square feet, similar in size to what older generations buy.
  • Millennial home buyers share many preferences with their grandparents’ generation, both choosing homes with shared community amenities and considering townhouses at higher rates than other generations.

“Millennials have delayed home buying more than earlier generations, but don’t underestimate their impact on the housing market now that they’re buying,” said Jeremy Wacksman, Zillow Group chief marketing officer. “As members of this huge generation start moving into the next stage of life, expect the homeownership rate to tick up and suburbs to change to suit their urban tastes. We’re constantly learning about this young group of home buyers — we’re finding that they are more similar to older generations than many thought. Their views on community and homeownership are pretty traditional, and they don’t all fit the urban stereotype you might have in your head.”

Millennials make up almost 30 percent of the population in San Diego and Austin, Texas. Los Angeles, San Antonio and Columbus, Ohio also have large millennial populations, over 25 percent.

Source: zillow.mediaroom.com

 

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