American Apartment Owners Association

There’s an ‘arms race’ to lure renters, and it now involves pet spas and beer gardens

Wed, 06/13/2018 - 4:22pm

A spa for your dog. Golf and boxing simulators in the gym. Private bars with wine storage for residents. A 24-hour concierge.

The list of amenities in some new Charlotte apartment buildings sounds more like what you’d expect in a high-end resort than a rental unit where you might live for a year or two. But with a record number of high-end apartments under construction, buildings are turning to their amenities to stand out and try to lure renters.

“It’s been an arms race, especially with the high level of supply and competition,” said Chad Hagler, a developer with Woodfield Investments, who’s opening the 455-unit Links Rea Farms apartments on Providence Road this year. “Everyone is trying to outdo one another.”

The amount of amenities considered necessary in a new, upscale building has increased vastly over the past two decades.

It’s no longer enough to have a pool and a gym with a few treadmills. Now, the bare minimum typically includes a saltwater pool with lounge chairs, a “pet spa” with grooming stations for dogs and cats, some kind of beer garden or community kitchen, high-end gym equipment like a yoga room and a concierge for packages and arranging services.

Some go even beyond that: Continuum 115 in Mooresville has a boat for residents to check out and cruise on Lake Norman.

All that added luxury can add up to increased rents. The average rent for an apartment in Charlotte is up about 6 percent from a year ago, at $1,142 a month. In 2013, the average was $842, meaning rent has jumped by more than a third in the past five years.

It’s tough to pin down how much swankier amenities add to the rent for individual apartments, since development costs can vary dramatically. But developers and property managers interviewed by the Observer said the effect isn’t insignificant.

Hagler said the first apartment building he developed in Charlotte, Elizabeth Square, had about 4,000 square feet of amenity space when it opened in 2007. His most recent, Links Rea Farms, has about 15,000 square feet.

“It’s an incredible amount of space, and those spaces are expensive to build,” said Hagler. But, he said, it’s worth it to draw new residents. “It’s your front door, it’s your marketing window.”

Not only are the added costs for building multimillion-dollar amenities packages rolled into the rent, but upscale amenities cost more to operate in the long term.

For example, a 24-hour concierge service requires hiring several shifts to work around the clock. Maintaining multiple courtyards, swimming pools and gyms full of high-end digital equipment necessitates more staff. And many apartments now contract with third-party vendors who organize social events for residents, such as beer tastings and food truck rallies.

“It’s more expensive from an operational standpoint,” said Marcie Williams, president of apartment management company Rivergate KW Residential, which manages high-end apartments in Charlotte. “The residents expect to be more entertained, and they want the amenities 24/7.”

Some changes have been driven by new technology.

For example, the dominance of Amazon Prime, which recently passed 100 million members, means apartments are now receiving hundreds or even thousands of packages a week. And meal delivery services like Blue Apron mean that apartments have to find a refrigerated space to store dozens of boxes with perishables.

“Every community we have now is doing 24-hour package rooms,” said David Ravin, CEO of developer Northwood Ravin. The company is building luxury apartments in two uptown towers and at Providence and Fairview roads. Its buildings also include private bars — staffed with bartenders — for residents, along with a sauna, steam room, massage room and golf simulator.

Amenities that once would have been considered over-the-top have become expected by many renters, said Phil Brosseau, vice chairman at real estate firm CBRE. Brosseau said the growing number of apartment dwellers includes more “renters by choice” who could probably afford to buy.

“They want the experience,” Brosseau said, and luxury amenities are an essential part.

With more than 50 new residents a day in Charlotte, many are young professionals moving from other cities who may be used to even more expensive urban markets like New York or San Francisco. That means luxury apartments in Charlotte might seem like a steal, said Lawrence Yun, chief economist and senior vice president at the National Association of Realtors.

“New residents (like these) are not hesitating to occupy a luxurious apartment in Charlotte,” Yun said. Charlotte’s vacancy rate bears that out, at less than 7 percent citywide.

Cost vs. Chic

Not all residents want the amenities, however.

“I prefer no amenities. My fiance and I toured probably every apartment complex in South End and South Park, and they upcharge for rent,” said Rob Brooks, a resident of Park Avenue Condos in South End. The couple decided to rent a unit at the condos to avoid the higher price tag of amenity-laden apartments.

While his condo has a swimming pool, Brooks said he doesn’t use it much. His membership at the Y makes a swanky fitness room unnecessary, and his lack of a pet eliminates the need for a dog park or pet spa.

“We didn’t want any of that extra stuff.” Brooks said. “It’s not important to us.”

Other residents consider extensive amenities to be a selling point of apartment life.

“I think that’s the only reason I’m still in an apartment complex,” said Alanea Kriete, of the amenities offered at her apartment in Post South End.

Still, when naming the amenities she uses the most, Kriete stuck to the standbys: the pool, the gym and the gated courtyards, where she likes to spend time with her dog outside. She admitted to rarely using what the apartment’s website describes as the “resident lounge” with an entertaining kitchen, an Xbox gaming station and a movie lounge.

Those looking for fewer frills may be priced out of the market as extensive amenity packages become the norm among city apartments, said Brosseau. But ultimately he believes the trend is a “testament to the durability” of Charlotte’s real estate market.

Yun pointed out that such durability is dependent on other factors.

“It is very aggressive building that is taking place in Charlotte,” Yun said.

As long as the influx of high-earning new Charlotteans continues, so will the aggressive construction of apartments that attempt to meet new residents’ ever-rising expectations, Yun said.

“We’ve just found our clientele expect the full package,” said Ravin, the developer. “They just want everything right there.”

 

Source: charlotteobserver.com

 

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What happens to concessions when it’s time to renew a lease?

Mon, 06/11/2018 - 6:39pm

Rental concessions may be sky high across the city, but tenants shouldn’t count on getting them renewed once their lease is up. Given the private nature of the negotiations, landlords are usually reluctant to extend free months beyond the initial lease, according to several industry players.

While statistics on how often landlords stop or renew concessions once a tenant’s initial lease ends are hard to come by, owners of rental properties have a psychological advantage, said StreetEasy’s senior economist Grant Long.

“From a landlord’s perspective, the intention is obviously to [maintain] the legal rent level or to even raise the rate if possible, and by keeping that free month in there, they preserve some of that negotiating leverage,” Long said.

If a tenant signs a 14-month lease for $2,700 with the first two months free, for instance, the net effective rent is closer to $2,300 per month. But by the time the tenant is ready to renew the lease, he or she will have already been paying $2,700 per month for a year. So, if the landlord simply renews the lease at $2,700 per month without any additional free months, it can seem like nothing has really changed.

But several factors could work in a tenant’s favor — ranging from the building’s vacancy rate to the amount of housing supply in the surrounding neighborhood.

“Renters are more educated than they have been in the past. There are lots of resources out there,” Long said. “A lot of renters are going to feel empowered to ask for more going into renewal negotiations.”

New buildings typically have a turnover rate of between 20 and 30 percent from their first to second years, said Citi Habitats’ David Maundrell. But it can be tough to pin down how much of this is due to concessions running out versus people relocating because of other changes in their lives, he added.

Maundrell framed concessions as one of the best ways for tenants to find a good deal on an apartment, given that they are unlikely to find a similar apartment with notably cheaper rent. “No one lowers rent anymore,” he said.

Concessions hit record highs in Brooklyn and Queens in April, per Douglas Elliman, with 65.1 percent of new deals in Northwest Queens including them and 51 percent of new deals in Brooklyn including them — marking the first time the borough has cracked the 50 percent mark. In Manhattan, 44.3 percent of new leases in April included concessions.

These unprecedented highs could lead to changes in what landlords decide to offer on lease renewals going forward, according to sources. Landlords tend to be more willing to offer lower rents when they are not publicly advertising them, Long said.

Elliman broker and senior vice president Matthew Villetto described the reliance on concessions as a “slippery slope” and said it can be hard for landlords to stop using them once they start. He noted that he’s marketing buildings in Brooklyn and Long Island City where the building owners refuse to give out free rent on lease renewals — a strategy that he said has been working so far. Instead, those landlords are negotiating with tenants on other issues like fees for using building amenities.

“People just want to feel like they’re getting something, so sometimes that comes into play,” Villetto said, “but we’ve been very successful in taking a hard stance on not giving free rent on renewals.”

He added that a neighborhood’s housing stock plays a huge role in the amount of leverage tenants have. He cited Midtown West as one area where landlords don’t always have an upper hand due to the supply of rental apartments.

“That free rent may come into play on second-generation leases where the tenants decide to stay, and even if it goes back on the market, they’re probably going to be giving a month free at least,” Villetto said.

In general, New Yorkers are very likely to experience rent increases and also very willing to move. A recent StreetEasy survey found that 64 percent of residents have seen their rents go up in the last three years, and 59 percent of residents younger than 45 plan to move in the next year.

And given how many buildings are now offering rental concessions, if a landlord won’t include free months on a lease renewal, some tenants will to simply move to a different building where they can sign another new lease and get another deal with concessions.

“If there are a lot of concessions in the marketplace, some tenants are just going to hop around and try to get two more months free,” Villetto said.

Maundrell said that while it’s still common for concessions to end after the first year, the market has shifted more in favor of tenants overall. In previous cycles, many New York City landlords would knock off concessions and jack up rent once the initial lease ended. That happens less often these days, he said, due to the continual increase in gross rents and apartment inventory.

Maundrell said landlords will also consider whether they would be able to get more money for their units on the open market when deciding whether to extend concessions or not — even when factoring in the month of rent they would likely lose while looking for new occupants.

“You do have situations where a landlord would give a concession to keep someone in the building. It comes down to the math,” he said. “It’s a complete case by case situation. It’s not like when we do a new rollout of a rental building, where you give guaranteed a month or two months free.”

Source: therealdeal.com

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Single-Family Rentals: From Crisis-Era Bargains to Thriving Market

Mon, 06/11/2018 - 6:33pm

Ten years removed from the financial crisis, the single-family rental (SFR) market has seen explosive growth. With mortgages at the center of the crisis, the resulting spike in foreclosure rates and housing prices challenged homeownership as the status quo. The crash brought an outpouring of demand into the rental markets. From 2005 to 2015, more than 8 million new rental housing units were built to accommodate that demand, according to Harvard University’s Joint Center for Housing Studies.

REITs and other institutional investors first entered the SFR arena during the heart of the crisis. The business strategy at the onset was simple: Purchase distressed assets and wait for the prices to increase, converting properties into rentals to supply the newly ignited demand in the meantime.

As the housing market recovers, demand for rental properties has not subsided. Riding the wave of that demand, SFR REITs have built a sustainable business model. Smaller landlords still outnumber corporate SFR investors by a wide margin, but REITs have carved out a small share of the market. According to Seeking Alpha, 130,000 of the 16 million SFR units are REIT-owned.

The SFR market comprises a small—but mighty and expanding—segment of today’s overall REIT landscape. Blackstone’s successful debut of Invitation Homes in 2017 granted further legitimacy to a REIT sector still in its infancy. As the fifth listed SFR REIT, Invitation Homes raised $1.54 billion—the largest amount raised by a REIT across all sectors in three years. With rental demand forecasted to continue, SFR REITs are well-positioned for the future.

WHAT’S TIPPING THE SCALES FROM HOMEOWNERSHIP TO RENTALS?

Millennials are often identified as key drivers in the shift from owning to renting, and the data supports that claim: Nearly two-thirds of Millennials lived in rental properties in 2016. However, a strictly generational lens obscures the full story. Many of those younger renters reside in apartments in large cities versus single-family rental homes more commonly found in markets like Atlanta, the outskirts of Los Angeles and Phoenix.

A recent analysis published in Seeking Alpha reveals that the majority (58 percent) of SFR residents are between 35 and 64 years old—predominantly Generation Xers. Additional research suggests income levels might be the common variable. A U.S. Census survey reveals that about half of American renters are cost-burdened—rent accounts for more than 30 percent of their income.

THE PATH FORWARD FOR SFR REITS

With just a fraction of the nation’s SFR homes under institutional investors’ ownership, opportunities for REITs to further expand into this space are vast. In their early years, SFR REITs prioritized growth, primarily through acquisitions of pools of foreclosed properties and consolidation. Invitation Homes became the largest SFR company following a 2017 merger with Starwood Waypoint Homes—a REIT already the product of a merger two years earlier.

While juggling the day-to-day balance of keeping vacancies low and rents competitive, some players in the SFR space are expanding their purview beyond property management. American Homes for Rent, for instance, is actively engaged in bringing new supply online through partnerships and subsidiaries with developers specialized in ‘build-to-rent’ properties. Overall new ‘build-to-rent’ properties increased by six percent between 2016 and 2017, according to the National Real Estate Investor, a gesture to market confidence in future demand.

What’s next for corporate SFR investors? REITs are emerging from their growth-phase and breaking new ground to cement their place in the SFR industry.

 

Source: cpexecutive.com

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How I Underwrite Rental Applications to Mitigate High-Risk Tenants

Mon, 06/11/2018 - 6:31pm

My partner and I have acquired and leased hundreds of rental units. As co-owner at my organization, I still have the final say on approving rental applicants. As much as I want to delegate the task, I am aware it is of pretty high value. Having a great tenant in your property is crucial. A troubled one who is constantly late on payments and complaining about dings on the refrigerator can be a headache. A troubled tenant can eat up your cash flow if they’re not paying and you have to evict and replace them.

Leasing Agent

I have an in-house leasing agent who handles collecting the paperwork and necessary documentation from rental applicants. The needed documents include the most recent three pay stubs or current lease and bank statements (if self-employed). Once all this is submitted, the agent starts the underwriting process. Be sure to obtain all the necessary documentation from the prospect. It is important that you have a clear picture of the prospect’s history to verify they are qualified to pay rent to you properly. If they are not willing to provide all the information, then move on.

Our Criteria

Criteria for screening tenants can vary depending on what class of property you’re in. For example, with a C class property, you may allow 600 credit score tenants, and with an A class requires a minimum score of 700. I am mostly dealing with the working class. These professionals tend to have just an OK credit score. That is the reason why they are paying $700 to $800 in rent. I run their credit to make sure there are no outstanding balances from utility companies or judgments from landlords.

Screen your tenant today with the American Apartment Owners Association, starting at $19.95 for a credit report and score!

My tenants must produce gross 3x the monthly rent. This is by far the most important factor in approving a tenant. If they don’t have that, they must have a co-signer who does. Additional criteria include having no prior evictions within seven years of the date they’re applying for the home, having at least one year on the job (or proof of prior job stability), and having no felonies within the past five years.

Stick to It

It is always best to remain objective when underwriting rental applicants. If they do not make enough income or have been at their job for only two months, then you simply have to move on. You want to stick to your criteria because you want to treat every applicant the same.

Final Approval

I am an optimistic person, but I’ve seen some interesting stuff in my days of underwriting tenants. I was almost fooled by tenants having a friend pose as their landlord and submitting fraudulent pay stubs. When I get the file from the leasing agent, I look for red flags that may have been missed, such as fraudulent pay stubs. Then I start taking a look at income, landlord references, income, etc.

To date, I have not had to evict a single tenant I placed, and I plan to keep it that way.

 

Source: biggerpockets.com

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If you rent out your vacation house, don’t forget to give the IRS a cut

Mon, 06/11/2018 - 6:23pm
  • Generally speaking, renting out your house (or a room) for 14 days or fewer in a year is tax-free. However, you also don’t get to deduct expenses incurred from the rental.
  • The new tax law creates a 20 percent deduction for pass-through business income, which means part-time landlords could qualify for the tax break.
  • Expenses such as repairs, mortgage interest, property taxes and utilities are deductible on a prorated basis that’s tied to the number of days you rented out the property.

With the summer travel season heating up, many vacation-home owners get to look forward to some extra income from renting out their slice of paradise.

These part-time landlords need to remember that in many cases, the Internal Revenue Service expects to hear about that extra cash.

Generally speaking, if you rent your vacation home for fewer than 14 days out of the year, the income you earn is tax-free.

 “In that event, you don’t get any deductions, but you also don’t pay tax on the income,” said Stephen Fishman, author of “Tax Guide for Short-Term Rentals.”

If your rental days are above the 14-day threshold, you need to report the income. The good news is that you also get some tax breaks to reduce the amount you pay taxes on.

For starters, the new tax law that took effect this year allows a 20 percent deduction for so-called pass-through businesses. For the vast majority of people who rent their property, income from that activity is “passed through” to the owner’s (or owners’) individual tax return.

This means there’s a chance you could qualify for that 20 percent write-off on net rental income, as long your total income is below $157,500 ($315,000 for married couples who file joint tax returns). The deduction starts phasing out at that level and disappears altogether for incomes above $207,500 ($415,000 for joint filers).

However, consult with a tax advisor before assuming you qualify for that 20 percent break.

You also get to deduct a variety of expenses related to your rental activity. Costs such as local licensing, fees you pay to online platforms, advertising and marketing are all associated business costs that could be deductible.

Other expenses — repairs, mortgage interest, property taxes, utilities — are deductible on a prorated basis tied to the number of days you rented your home out.

For example, if you rent your house for 20 percent of the year, or 73 days, you can deduct 20 percent of expenses related to the house (i.e., utilities).

Some part-time landlords might just rent a room in their home instead of a whole house. In that case, the same expenses are deductible, but to a lesser degree.

“If you ever get audited, they can check your bank records and other records. The evidence is there.”-Stephen Fishman, Author of “Tax Guide for Short-Term Rentals”

Say the room takes up 25 percent of the space in your home. You could deduct 25 percent of expenses allocated to those days. (Using the example above: You could deduct a quarter of that 20 percent total.)

Fishman cautions that while it might be tempting to avoid reporting your rental income to the IRS, you’re breaking the law if you don’t.

“If you ever get audited, they can check your bank records and other records,” Fishman said. “The evidence is there.”

Source: cnbc.com

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Residential Landlords’ Guide to Assistance Animals

Mon, 06/11/2018 - 6:20pm

News reports recently have included much discussion about The Air Carrier Access Act and FAA regulations governing assistance animals on airplanes.  The Fair Housing Act (FHA) applies to landlords to accommodate tenants with assistance animals.

Adopted in 1968, Congress amended the FHA in 1988 to prohibit housing discrimination based upon disability. Under the FHA, landlords must provide reasonable accommodations to disabled individuals. This includes allowing those individuals to use assistance animals.

Assistance Animals are Not the Same as Pets

Unlike pets, assistance animals either provide specific services or emotional support for disabled individuals. Examples include guide dogs for the visually impaired, service dogs trained to alert individuals about an impending seizure or hypoglycemic episode, alert dogs for the hearing impaired, and emotional support animals that reduce symptoms of a disability.

Landlords should treat all tenant requests for disability accommodation, including requests for assistance animals, the same. Specifically, landlords should evaluate the following:

  1. Whether the tenant has a disability.
  2. Does the animal provide tasks, services, or assistance or emotional support to the tenant?
  3. Do the animal’s tasks, services, or assistance alleviate at least one symptom of the tenant’s disability?

If the answer to all of the questions is yes, then the landlord generally must allow the assistance animal at no additional charge. If the answer to either question is no, then the landlord may exclude the animal.

When Can a Landlord Ask for Documentation of the Need for an Assistance Animal?

Under the FHA, a disability is a physical or mental impairment that substantially limits at least one major life activity. If the tenant’s disability is not readily apparent, the landlord may request that the tenant provide documentation of the disability. Examples include a letter from a licensed physician or mental health provider. Landlords may not ask for documentation if the tenant’s disability is obvious. Landlords also may not ask for documentation if the landlord already knows about the tenant’s disability. Making a request, under those circumstances, might itself, be harassment or disability discrimination.

Likewise, if the need for the assistance animal is not readily apparent, the landlord may request that the tenant documentation supporting that need. That documentation might be a letter from a licensed physician or mental health professional.

Landlords may not charge a pet deposit or additional pet fee or “pet rent” for assistance animals. However, landlords can make tenants pay for damage caused by their assistance animals. Landlords also may not exclude an assistance animal based upon species, size, or breed restrictions they impose on pets.

When Can a Landlord Deny a Request for an Assistance Animal?

A landlord, however, may deny a specific assistance animal if it poses a direct threat to the health or safety of others or would cause substantial physical damage to the property. Landlords may not make assumptions about an animal based upon its size or breed or experience with other animals. Rather, the decision must be based upon evidence specific to the animal in question.

For instance, if a particular animal has repeatedly caused major damage to the carpet in the rental unit or common areas, it might be excluded because it has caused damage to the property. Likewise, an animal that has bitten a resident, or barks and disturbs other residents for hours on end every night might be excluded. Before excluding a specific animal, the landlord attempt to find another reasonable accommodation. Only if there is no reasonable alternative that would reduce or eliminate these risks may the landlord exclude the animal.

The FHA applies to most, but not all, residential landlords. “Fair Housing Act Primer for Multifamily Owners,” discusses residential landlords’ obligations under the FHA. The article also describes the exceptions to the FHA.

Landlords may be subject to additional requirements regarding assistance animals. Certain common areas of apartment buildings are subject to the Americans with Disabilities Act. And landlords that receive HUD subsidies have additional requirements.  State and local laws may impose greater obligations than the FHA.

Landlords should consult their state or local fair housing office, apartment association, or a real estate attorney for information to learn what laws apply to their particular properties.

 

Source: realtybiznews.com

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As hurricane season starts, potential for coastal property damage tops $1.6 trillion

Mon, 06/11/2018 - 6:17pm

New reports this week put the potential for costly damage from the 2018 hurricane season into stark perspective, and underscore the continued risk of building or rebuilding homes in areas threatened by storm damage.

According to new analysis by CoreLogic, more than 6.9 million homes in the United States are at risk of hurricane storm surge damage, which represents $1.6 trillion in potential reconstruction costs. That potential price tag increased 6.6 percent year-over-year due to higher regional construction costs, equipment, and labor costs.

At the same time, per new data on coastal flooding, rising sea levels and changing weather patterns will make flooding even more common. According to the 2017 State of High Tide Flooding and a 2018 Outlook by the National Oceanic and Atmospheric Administration, last year saw a record-breaking level of high tide flooding. Due to sea level rise, the national average frequency of high-tide flooding is double what it was 30 years ago, exacerbating the potential for damage from hurricanes and tropical storms.

The increasing value of property at risk from storm damage puts increasing strain on flood insurance and the National Flood Insurance Program, which will expire in the middle of this year’s hurricane season if there’s no congressional action.

In 2016, the chief economist for Freddie Mac, a government enterprise that supports the mortgage market, wrote that increased coastal flooding and storm surges will eventually get so bad that homeowners, unable to sell waterlogged property, will ditch their homes and mortgages, triggering a housing crisis. Already, some coastal real estate professionals see beachfront real estate becoming harder to sell, due in part to perceived risk.

Risk varies by region. The Atlantic coast contains 3.9 million at-risk homes with a reconstructed home value (RCV) of roughly $1 trillion, a $30 billion increase from last year. On the Gulf Coast, the 3 million at-risk homes have an estimated RCV of $609 billion, a $16 billion increase from 2017.

The placement and power of a storm play a great role in determining its eventual impact. Even a low-intensity storm hitting Miami—with 788,000 at-risk homes and an RCV of more than $156 billion, the city with the most potential for costly reconstruction—would do more damage than a high-intensity storm making landfall along a sparsely inhabited coastline.

Last year, the United States suffered the most billion-dollar natural disasters in its history, as a warming climate creates record-breaking numbers of extreme weather events. The two largest storms, Harvey and Irma, are estimated to have cost between $40 billion-$59 billion and $29 billion-$46 billion respectively, according to Realtor.com.

These estimates represent worst-case scenarios from particularly devastating Category 5 hurricanes (the NOAA predicts average hurricane activity this season). The tables below differentiate risk based on location and storm intensity.

Homes with Hurricane Storm Surge Risk by StateStateExtremeVery HighHighModerateLow*Florida351,0931,064,6741,752,6032,292,7912,774,175Louisiana72,256207,442624,521747,111817,480Texas39,109117,558253,947384,944543,847New Jersey95,659278,539382,065471,353N/ANew York75,238224,558347,236462,380N/AVirginia26,96094,378246,824366,478409,129South Carolina35,934126,997209,026294,239347,030North Carolina32,28295,286160,831210,233259,718Massachusetts11,04846,558102,189157,898N/AGeorgia8,88750,409105,735141,518152,559

The low risk category refers to Category 5 hurricanes, which are not common along the northeastern Atlantic Coast. States in that region are designated as N/A for this category due to the extremely low probability of a Category 5 storm affecting these areas. CoreLogicReconstruction Cost Value of At Risk Homes by StateStateExtremeVery HighHighModerateLow*Florida$68,993,319,371$214,615,495,959$353,434,047,211$458,546,265,943$552,417,823,248New York$29,069,437,198$92,192,934,548$142,653,686,948$190,523,945,573N/ALouisiana$15,058,006,592$44,361,573,373$141,431,122,080$169,398,148,734$186,089,070,917New Jersey$27,210,934,630$83,140,546,592$116,378,523,825$146,074,429,226N/ATexas$6,544,802,706$20,281,149,088$46,590,193,249$73,689,714,628$103,257,560,067Virginia$6,889,209,422$23,532,519,915$57,147,551,590$84,231,366,445$95,057,016,309South Carolina$10,365,743,962$33,689,536,077$52,352,428,765$70,363,340,488$80,775,388,252North Carolina$6,502,998,590$19,557,292,731$33,348,232,464$43,887,698,767$54,356,018,315Massachusetts$2,980,187,240$13,363,727,998$29,309,257,327$46,442,774,460N/AGeorgia$2,740,063,841$13,213,068,236$24,703,010,004$31,744,968,374$33,763,709,156

The low risk category refers to Category 5 hurricanes, which are not common along the northeastern Atlantic Coast. States in that region are designated as N/A for this category due to the extremely low probability of a Category 5 storm affecting these areas. CoreLogicSource: curbed.com

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10 Things to Include/Outline in a Lease

Thu, 06/07/2018 - 4:32pm

Developing a lease isn’t an easy task. It requires a lot of your time and energy, and even then it’s possible you’ve forgotten some pivotal information. For that reason, it’s all the more important that you understand what details absolutely need to be outlined in your lease.

When it comes to renters, consider the fact that many are renting for the first time, and every detail truly needs to be spelled out for them. When you look at your lease that way, it’s imperative that you include all vital information. In order to help you get started when it comes to the more important details, here are ten things to include/outline in a lease.

1. All Relevant Dates

Any time you draft a lease, it’s important to outline the relevant dates, all of them. This includes the move-in date(s), the move-out date(s), the length of time the lease is for and even the dates when you can resign your lease are (as well as the deadline). Also, though this is typically an item due at signing, you should always mention when the security deposit is due as well as how long it takes to process these payments to avoid any late fees etc.

Essentially, any information as far as dates that are pertinent to your renters go, they should be clearly outlined in a lease to avoid any confusion on their end as well as to have written proof that the renters were notified well in advance regarding all dates pertinent to the lease.

If there are any additional dates of note (i.e. dates when first month and last month of rent are due) make sure you clearly indicate those in your lease as well. Basically, if there’s a date they need to know about, those are items that you need to clearly outline in a lease.

2. Subletting Information

Subletting an apartment is stressful for college students, but oftentimes extremely necessary. Most leases run from fall to fall, but students attend school from fall to summer in most circumstances. For this reason, they are left with the options to pay their lease and stay on campus, to pay their lease while returning home for the summer, or to sublet their apartment while they stay home for the summer.

Again, many students are renting for the first time, so it stands to reason they would also be subletting for the first time. Therefore, something essential to outline in a lease is any subletting information relevant to your renters. This includes, but is not limited to, who is liable for what, how those payments work, whether or not subletting is done through the main office or on their own, and if subletting is even an option available to them. (If your office doesn’t allow subletting, you may also want to include relevant information related to summer rent – i.e. what a student is supposed to do if they are returning home for the summer but still paying rent. Is there any upkeep that needs to be done in the apartment? If so, make sure they are aware of this information well in advance, otherwise, their plans may not work out with how your lease is outlined.)

For some, subletting rules are a deterrent from signing a lease; while you may lose out on the rent from that individual, it’s better than taking advantage of them by leaving out pertinent information that could have been outlined in a lease. So, make sure that all rules related to subletting are clearly stated to avoid any confusion and harm to your renters.

3. Emergency Details

Nobody likes to think about it, but there are instances of emergencies. This could be, but isn’t limited to, fire, break-in, gas leaks, campus shooters, etc. There are so many variables here, but being prepared for any one of them is a good first step, whether or not an emergency actually presents itself.

If there are any details that a renter would need to know, such as a location to take shelter during a tornado siren or a protocol to follow if there is a break-in, make sure you outline this in your lease. Again, this doesn’t necessarily mean that anything will happen, but, as they say, better safe than sorry when it comes to the safety of you and your renters.

Also important is to include a number to call in case of emergency (i.e. gas leaks) and when it’s important to notify authorities. While it’s always a safe bet to alert the police or fire department, outlining this information can prevent unnecessary calls when there is an easier series of steps for your renters to take. Many renters are unfamiliar with such circumstances so, again, it’s much better to be safe than sorry.

4. Maintenance Details

It’s very likely your renters will need to reach out to maintenance at least once during their lease. For others, the outreach to maintenance may be more common. When you develop your lease, maintenance schedules and contact information are very important to outline in a lease. Whether you’re simply including the contact information for your maintenance people, the emergency contact information or a basic timeframe of expected response for maintenance requests, this is all relevant information that your renters should be equipped with from the start.

I recommend speaking with the maintenance department, determining the best course of action for working together and outlining those details in the lease. This provides students with a general idea of what to expect when something breaks or goes wrong in an apartment.

As a side note, you should also outline in your lease what move-in day looks like from a maintenance perspective. Typically, they are provided with a checklist and required to document any aspects of the apartment that aren’t working, so let them know what this looks like and what to document to avoid charges later on. It should also be mentioned that maintenance is typically busy this day, so requests are handled on a first come first serve basis (or in another manner if applicable.)

5. Cleaning Specifications

Typically, before an individual moves into their new apartment, there is a certain amount of cleaning that needs to be done. For many landlords, this work is outsourced and charged in the last month’s rent of the previous owners. However, in many cases, there are additional costs that aren’t specified in the lease and come as a surprise when they are deducted from the security deposit. Getting ahead of this confusion and clearly letting your renters know what costs for cleaning entail is in your best interest.

Repeat customers are big for business, so negatively impacting your current renters doesn’t make sense. For this reason, let them know what costs to expect when you outline in a lease what these costs would be.

Let them know the charges for paint, for additional cleaning, for damages etc. You don’t need to provide specifics on every item, but essentially give them an outline of what to expect should there be any damage to the apartment.

Infographic Via Canva

6. Rent Details

Rent details are obviously essential to outline in a lease. This comes down to what your student is going to be paying monthly to live in their apartment. This also includes any additional costs they may not have considered in apartment hunting.

For example, if they plan to pay by credit card, is there an associated fee? Can they pay by check? Do they have to drop the check off at the leasing office every month, or can they mail it in? Can they pay cash? What happens when their rent is late? Is there a late fee? Is there a grace period? Does the fee increase after a certain number of days?

There are countless details to include here, and it’s all information that they will need to know, guaranteed. Think of all the questions you’ve gotten as a landlord and include their answers in your lease, as this is the best way to ensure you’ve included all the information they need.

7. Additional Rules

Let’s be honest, there are always rules. Some are unspoken, but additional rules are something to definitely outline in a lease.

For instance, do you allow pets? If not, what happens when a family member visits with a pet? Are there any areas students aren’t allowed in an apartment complex? What are the repercussions? Is there a rule for having guests? Is there a length of time before they need to leave?

These are all rules that may not necessarily be understood without being clearly written out, so I recommend clearly defining them in your lease to avoid any questions when it comes time for reprimanding your renters.

8. Additional Fees

Stating additional fees in your lease is imperative. Is there a charge for owning a pet? Is it a per-pet charge? Is there a laundry charge? What about charges for parking?

Any additional fees are imperative to outline in a lease. Basically, if there is an extra charge for something, you definitely need to state that in your lease. Additional costs should never be hidden – always state everything upfront, very clearly to avoid any problems when it comes to payment later on.

The more upfront you can be with your renters, the more likely they are to return or recommend your complex to another student. So, in other words, it’s in your best interest.

9. On-Site Resources

Most apartment complexes have a variety of on-site resources that are available to their renters, but many renters aren’t aware of these resources. For this reason, it’s a good idea to mention the available resources to your renters and include them when you outline your lease.

For instance, if you have a fitness or recreation center, that’s something to outline in a lease. You should also include any laundry facilities, parking garages, cafeterias etc. that you have available to your renters.

Many students look for these on-site resources, and they are often large perks to signing a lease, so including these details is a great idea to show all available options to your student so they feel they are getting the most out of their lease.

10. Office Availability

Last, but definitely not least, it’s important to provide your renters with your office availability. This might not be the first thing that comes to mind when thinking about drafting a lease, but it’s definitely information you should outline in a lease.
Like it or not, there are going to be a large number of times in which your renters need to get a hold of you. Sometimes, it’s related to quick questions that can be answered on the phone, and other times, they need to come into the office to speak with one of your leasing agents about changes to their lease etc. No matter the circumstances, you should always list your office availability in a lease.

This includes your contact number (both the main office and individual contact information), perhaps a link to the website for an FAQ section, your office hours and any other emergency contact information not previously listed in your lease. It’s important that your renters always have someone they can contact, so the more information you provide in your lease to that end, the better off you are and the more comfortable they (and their parents) will feel.

While this is by no means the entirety of the information required in a lease, this is a good starting point as far as items to outline in a lease go. Again, there will be plenty of information pertinent to your complex alone, and other information that you may need to leave out, but make sure you develop some form of outline to begin with to ensure you’re not missing any relevant information.

When it comes to including information to outline in a lease, more is always better, as you would much rather provide them with too much information than not enough. So don’t be afraid of being wordy, it’s not going to do you any harm!

Use these items to outline in a lease in order to develop yours and good luck drafting your lease!

 

Source: rent.uloop.com

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HUD proposal could lead to low-income tenants paying higher rents

Thu, 06/07/2018 - 4:31pm

The U.S. Department of Housing and Urban Development has unveiled a plan that could raise rents for millions of people who get federal housing assistance. The U.S. Congress has begun deliberating the proposal, and that has people who get assistance from HUD waiting anxiously to find out whether changes are coming and what that might mean for them.

Currently, most people who receive housing assistance pay 30 percent of their adjusted income toward rent – that’s their annual income, minus certain deductions that HUD allows. One of HUD’s proposals is to raise the baseline rent to 35 percent of residents’ gross income, meaning no deductions are factored in. HUD also wants to give housing authorities across the nation the power to impose new work requirements on residents. The proposal still requires congressional approval. HUD Secretary Ben Carson says the changes would create a simpler, more transparent way of calculating rents.

 

Source: marketplace.org

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Tips for Renting Out Your Home on Airbnb

Thu, 06/07/2018 - 4:30pm

I’m going on vacation and want to rent out my home on Airbnb. What do I need to know?

ARenting out your home while you’re away sounds like an easy way to make money (and may even help pay for your vacation). But you need to make sure your rental is legal, you have the right insurance and you’re paying all the taxes due.

Before posting your ad, ask your condo association, homeowners association or co-op board if short-term rentals (often defined as less than 30 consecutive days) are allowed. Then search your local government website for restrictions that may complicate your plans. Your municipality may have a short-term rental office, or you may need to call your city or county to clarify the rules.

Jumping through hoops. You may need to register your unit with the city, pay for a license, submit floor plans, undergo an inspection or notify your neighbors. Some cities also set limits on the number of guests who can occupy your home at once, the maximum number of days you can rent your home each year, or the minimum number of days that you must live in your home each year in order to dabble in short-term rentals.

“There is no blanket regulatory policy that governs short-term rentals,” says Matt Kiessling, vice president of short-term rental policy for the Travel Technology Association. Airbnb summarizes laws for more than 50 localities on its site.

You also want to protect yourself from damage or theft in your home and the potential for liability claims. Discuss your plans with your homeowners insurer and be upfront about how often you hope to rent out your home. Increasingly, insurers are paying attention to this kind of activity and working out a solution with clients when possible. Your insurer may be comfortable allowing “incidental” rentals through Airbnb (meaning you still treat your home like a primary residence and only rent it out on occasion each year), or it may sell an add-on that covers short-term rentals, such as Allstate’s HostAdvantage ($50 per year to cover $10,000 of personal property per rental period).

Although Airbnb includes liability and damage protection for its hosts, “I wouldn’t want to rely on Airbnb rebuilding my home if it burned down and we don’t know why,” says Spencer Houldin, president of Ericson Insurance Advisors in Washington Depot, Conn. “I’d rather have my homeowners carrier accept the risk.”

Don’t forget taxes. Keep a log of your rental days, as well as receipts for your expenses. You may need to collect occupancy, sales or lodging taxes for your city, county or state. Airbnb takes care of this in a number of locales. You can find more information about tax rates and links to the relevant authorities in dozens of regions by searching “occupancy taxes” in Airbnb’s “help” section.

You also need to pay income taxes on your rental earnings if you rent out your home for more than 14 days out of the year. Homeowners who rent through Airbnb without providing hotel-like services, such as meals or daily cleaning, will report short-term rental income on Schedule E rather than Schedule C, says Mike D’Avolio, staff program manager at Intuit.

On Schedule E, you can deduct expenses that directly relate to the rental, such as host service fees or bedding only used by your paying guests, as well as a portion of expenses that are attributable to guest use (such as a fresh paint job and utilities). This allocation is based on the number of days you rented your property during the year, so if you rent out your home for 30 days in 2018, you can deduct roughly one-twelfth of shared expenses.

 

Source: kiplinger.com

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Trump’s steel and aluminum tariffs may increase costs for home buyers and renters

Thu, 06/07/2018 - 4:28pm

A can of soda and a six-pack of beer may become more expensive thanks to the Trump administration’s proposed tariffs on steel and aluminum imports. And housing could cost more too.

The White House announced on Thursday that it will impose tariffs on steel and aluminum imports from Canada, Mexico and the European Union starting Friday. Home builders slammed the plan when the tariffs of 25% on steel imports and 10% on aluminum were announced in March. “This announcement by the president could not have come at a worse time,” Randy Noel, chairman of the National Association of Home Builders (NAHB) and a home builder and real-estate developer from LaPlace, La., said in a statement.

“Tariffs hurt consumers and harm housing affordability,” he said.

The tariffs on steel and aluminum likely will have an impact on new home prices if the cost of those materials increases in the U.S. But that effect will likely be more muted because new homes typically have more wood than metal, said Aaron Terrazas, senior economist at real-estate website Zillow. Whereas buying lumber represents one-third of the cost of building a new home, steel and aluminum contribute to between 0.5% and 1% of a home’s cost.

New apartment buildings and condos will be hardest hit

There are exceptions to that rule, however. Unlike with single-family homes, however, apartment and condo buildings require a significantly more steel and aluminum in their construction than they do lumber. “You’ll see more price pressure in the multifamily space,” Terrazas said. And those costs may get passed onto both buyers and renters.

And home-building activity had begun to pick up in recent months. Therefore, there’s less potential for an inventory slowdown. “The supply situation isn’t quite as dire,” Terrazas said. “The concern is more the supply at the right price point, and adding to construction costs will only make it harder to build at an affordable price point.”

Lumber tariffs from Canada had a bigger impact

In November, the Department of Commerce imposed a 20.83% tariff on shipments of softwood lumber from Canada. While the move was forecast to spur new jobs and increase domestic lumber production, it caused the price of lumber to jump nearly 15%. “Those costs have largely been passed along to consumers, and you’ve seen new home prices touch new highs,” Terrazas said.

It added $6,000 to $10,000 to the cost of a median-priced home, he said. By contrast, the NAHB estimated that the cost of an average multifamily unit would increase by just $478.

But the cost of new homes isn’t the only way tariffs have an effect on single-family housing. The Canadian lumber duty was also projected to reduce investment in single-family structures by $1.1 billion, according to the NAHB. If a similar reduction were to now occur because of these new tariffs, that could slow new home building. Inventory constraints could be further exacerbated and fuel even more competition for homes.

 

Source: marketwatch.com

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Rental property investors: here’s where to buy to maximize ROI

Thu, 06/07/2018 - 4:09pm
Where to buy rentals

Though average rental investors can expect a yield of about 8 percent on each home in their portfolio, in some cities, those returns are almost doubled. According to recent data, investors in Kansas City and Pittsburgh can make 14 percent or more.

Kansas City is king

According to the most recent Canary Rental Index, rental property investors in Kansas City, Missouri-Kansas, see the biggest annual gross yields out of all major metros in the U.S. Investors in the city rake in 14.1 percent on each property.

Pittsburgh ranked at No. 1 for highest gross yields at 14 percent, while Memphis, Tennessee, took No. 3. Memphis investors see yields of 13.3 percent.

Other cities to also post above-10 percent gross yields were Birmingham, Alabama; Buffalo, New York; Cleveland, Ohio; Indianapolis; Rochester, New York; St. Louis; and Oklahoma City, Oklahoma. The average gross yield for rental property investors is 7.7 percent, according to the Index.

Lowest ROI cities

The metro with the lowest yields for rental property investors was San Jose-Sunnyvale-Santa Clara, California, where the average ROI clocks in at just 2.8 percent.

Additionally, nearby San Diego and Sacramento had similarly low ROIs. Las Vegas and Seattle also had gross yields under 5 percent, while New York City investors see a mere 5 percent ROI on rental properties.

Other cities that also came in under the national average ROI for rental properties included: Providence, Rhode Island; Boston; Washington, D.C.; Phoenix; Portland, Oregon; Minneapolis; Denver; Raleigh, North Carolina;  Riverside, California; Nashville; Miami and Orlando, Florida; and Hartford, Connecticut.

All three of the Lone Star State’s major metros Dallas, Austin and Houston — also showed below-average yields for rental investors.

Get today’s mortgage rates

Are you looking to boost your portfolio with a rental property in one of these high-ROI cities? Then shop around and see what mortgage rates you qualify for today.

 

Source: themortgagereports.com

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Notice To Perform Or Quit

Thu, 06/07/2018 - 12:36pm

Posted on Jan 4, 2018

What Is a Notice to Perform or Quit?

A notice to perform or quit is delivered to a tenant when he or she is in violation of the rental agreement. This form advises the tenant to perform a covenant or cure the specific breaches of the rental agreement within a certain time frame. Below, find out what a notice to perform or quit should say and what you need to know before you serve tenants with this notice.

What a Quit Notice Letter Should Say

The quit notice letter explains that the renters are in violation of the lease. With such an important issue, it is necessary to be clear, so these forms have space for you to indicate which clause or clauses have been broken, how tenants can fix the violation, and when they must fix it.
The notice issues a time frame by which renters must fix the violation. Some states set laws that manage a specific time frame be given to the tenants, so it’s critical that you check your state’s laws before committing to a time frame for repair.

The notice explains that renters who do not fix the issue by the given date will face action by the landlord. You might take action to evict the renters and retake the property by issuing a formal notice to quit, or make your own repairs to the property and seek damages from the tenant to cover your costs.

This form provides you with a quick and easy way to remediate problems when something has gone wrong that can be fixed. For instance, many landlords use this form when a renter has invited an illegal subletter, adopted a pet in violation of the lease, or has failed to perform agreed-upon maintenance.

Renters who receive your form have two options: They can take action to correct the violation within the specified time frame, or they can vacate the apartment by the time frame. Thus, renters can perform the neglected maintenance, turn in the pet to the animal shelter, or leave the apartment — if that’s their preference.

States often dictate the way you must serve the tenant with the form, so be sure to check whether you must deliver it in-person, mail it, have it served by a constable, post it to the apartment door, or serve it in a combination of methods. If you fail to serve this document properly, you effectively give your tenant more time to comply with the lease as the document is only enforceable when it’s properly served.

Why Use American Apartment Owners Association’s Forms?

American Apartment Owners Association maintains a comprehensive library of landlord forms — including the notice to perform or quit form. Our forms could not be easier to use, and some of these forms are free to members. Using templated forms also assures that you are being fair to all tenants.

Get access today to save time and decrease stress. Click here to order your form, so you can let tenants who have violated the lease know, and offer them a chance to rectify the issue before asking them to leave.

Disclaimer: All content provided here-in is subject to AAOA’s Terms of Use.

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Service Animals and Small Business: What You Need to Know

Mon, 06/04/2018 - 10:50am

Businesses from airlines to restaurants to taxis are finding themselves in hot water due to their lack of understanding the rules governing service and emotional support animals.

It’s important that organizations – and especially, small businesses – know when and how to accommodate people with service animals to ensure that everyone has the safest and most pleasant experience with your company as possible.

Service Animals

According to the Department of Justice, service animals are classified, as a dog – and vary rarely, a miniature horse – that has been “individually trained to do work or perform tasks for an individual with a disability. The work task(s) performed by the dog must be directly related to the person’s disability.” A service dog can be trained to assist an owner with a disability with any number of task from helping someone who is blind navigate walking streets to picking up items for someone with acute arthritis to activating a life-alert button for someone who has epilepsy.

Service animals are not required to wear any type of vest or carry certification, so they may not always be easy to identify by just looking at them. Businesses can ask if a dog is a service animal and what work task they have been trained to perform, if it is not obvious. However, they are not allowed to demand any verification for the dog or inquire about their handler’s disability.

Service dogs are also protected under the Americans with Disabilities Act(ADA) and can accompany their handler to any public place – including office buildings, coffee shops and airplanes, provided they are under control and not a threat to others. Under the ADA, businesses must make “reasonable modifications” of their policies to accommodate trained service dogs. Companies can be fined for violating the rights of people with service animals.

A good way for businesses to think about service animals is as an extension of their owners. The dogs are trained to help their handlers with tasks they may be unable to perform alone. As such, businesses are not allowed to subject service dogs to any fees or restrictions that might apply to regular pets – such as cleaning or transportation fees. Hotels must also allow service dogs and their owners to stay in any room, not just “pet-only” rooms. Essentially, if a human is allowed somewhere, service animals are likely allowed there, too.

Emotional Support Animals

The rules become a bit more challenging around emotional support animals – also known as therapy animals. Emotional support and service animals are not one in the same. The role of an emotional support animal is to provide comfort to its owner and it is not trained to do any specific task. Any animal from a dog to cat or a bird or guinea pig can be considered an emotional support animal and are not covered under the ADA. These animals are considered effective in helping those who suffer from anxiety, depression or even PTSD.

To qualify, owners must receive an approval letter from a mental health professional that the animal provides a therapeutic benefit, and be able to provide that letter if a business requests it. Emotional support animals are allowed in the cabins of airlines at no extra charge and in any rental that falls under the Fair Housing Act, but that is the extent of what federal law requires.

Local laws vary for therapy animals, so it is best to check on the rules in your area before establishing your company policy. For instance, California has more extensive legislation protecting emotional support animals, but New York City isn’t so generous. For instance, in New York employers and landlords must make reasonable accommodations for support animals if you have proper documentation, but they can reject the animal if it poses a threat to the health or safety of others, or if the animal poses a danger of substantial property damage.

California creates three types of support animals with separate rules. The definition of a service dog and an emotional support animal are the same. But a psychiatric service dog is a dog trained to help a person with a mental disability. The tasks it is trained to do is waking someone with clinical depression and making them get out of bed, responding to a panic attack, or alerting an owner to erratic behavior if someone has a bipolar disorder. The protections for this level match those of a regular service dog.

If you do ever encounter a service dog or emotional support animal that is out of control – barking loudly, misbehaving or endangering the safety of other customers – it is perfectly acceptable to ask its owner to bring the animal under control. It is also acceptable to ask them to remove the animal if they are unable to control it. Just as you wouldn’t be expected to allow a human to behave erratically in your place of business, you are not expected to allow a service dog or therapy animal to act that way, either.

 

Source: businessnewsdaily.com

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Home Improvement Projects That Will Last Long Periods Of Time

Mon, 06/04/2018 - 9:56am

Thinking of remodeling your home? Before you splurge on a finished basement or a new kitchen, make sure you choose a home improvement project that will add to your home’s lifetime value. Check out Remodeling Magazine’s Cost vs. Value report for projects with the highest ROI. Three home improvement projects we like:

Get a New Roof

Although adding a new roof isn’t as exciting as a major kitchen remodel or a new deck, this improvement can significantly improve the appearance of your home — and, it boasts a national average ROI of 71 percent, according to the Remodeling Magazine report. Champion Home Exteriors offers lifetime shingles with advanced protection technology. The special shingles are specially constructed with materials that cause less harm to the environment than traditional types, and the lifetime shingles offer superior protection to your home as well. Plus, Champion Home Exteriors offers shingles in a variety of colors, from modern gray shades to light tan tones, to perfectly complement your home’s style and its color.

Change Out Your Front Door

The door is the focal point of your home. It’s the first thing that guests and visitors see when they come to your house. Adding a new door to your home can significantly boost its curb appeal, too; in fact, if you’re planning to eventually sell your home, the Remodeling Magazine report found that a steel front door can recoup 101 percent of the project’s total cost when it comes time to sell.

However, if you plan to spend a little more time in your home and you’re not looking to sell, you can enjoy the perks of having a steel door. One example: Steel doors make your home more energy-efficient, Energy.gov reports. Most steel doors have a magnetic weatherstripping that seals up nicely when the door is closed, which can help to keep your energy use down. A steel door is also easily customizable, so if you decide to repaint your home a new color in the future, you can simply paint the door to complement the new exterior color.

Install New Flooring

Wood flooring can last up to a century. It’s classic and can fit a wide range of different styles and designs, from modern to historic homes. Keeping wood floors like new doesn’t take much work, either. A little elbow grease and the right cleaning solutions are all that it takes. By taking extra precaution you can preserve the floor’s integrity, too. Decorate with runners and rugs to and consider using soft felt covers on the legs of your furniture to keep them from scratching the wood floor. This addition can also increase the overall value of your property. If you’re looking to sell your home, buyers are attracted to this improvement. If not, 50 years from now, you can still be enjoying your wood floors.

 

Source: housingwire.com

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National rents slow despite rapid rent growth in smaller cities

Mon, 06/04/2018 - 9:53am

National average rents grew by 2% year-over-year to $1,381 in May, the slowest start to a year since 2010, and an indicator that though still growing the multifamily market is slowing.

Much of this growth is concentrated in the top 20 cities by number of apartments, according to a report from RentCafé, an apartment news and analysis site, using Yardi Matrix data. RentCafé compiled this report from the Yardi Matrix rent data on 250 cities in the U.S. Yardi Matrix is a software platform that tracks industry data for equity, bankers, underwriters and a number of other users. What this data tells us is that what researchers have been predicting is coming true: the multifamily market is settling into a slow growth phase, and most of the multifamily market is consolidating around high opportunity job nodes.

Manhattan, Austin, Washington D.C. and Chicago remained about the same as last year. Orlando, Tampa, Las Vegas, Denver, Phoenix, Houston, Los Angeles and Jacksonville saw 4% to 6% growth. Atlanta, San Antonio, Seattle, Indianapolis and Dallas saw 2% to 3% growth YoY (see chart below).

(Courtesy of RentCafé and Yardi Matrix)

Another trend RentCafé reports is rapid growth taking place in smaller cities as job growth and affordability bring them new residents. This is driving up their historically lower rents and bringing the affordability problems typically reserved for big cities with them. Cities like Midland and Odessa, Yonkers, Reno and Hollywood, FL saw the biggest gains in rent growth in May.

“One of the main reasons the fastest growing rents in the country are in small cities is due to population mobility. If the ‘value of work’ undergoes dramatic change and there is significant wage growth, the result will be an increase in mobility.” Yardi Matrix Director of Business Intelligence Doug Ressler said, according to the report.

“However, individual salary and wages have and continue to experience only modest increases. Housing demand due to population growth in the secondary and tertiary markets combined with lack of housing stocks shows greater gains than urban cores due in part to decreased mobility,” he added.

Source: housingwire.com

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Why Millennials Are Poised To Be The Next Wave Of Single Family Rental Investors

Mon, 06/04/2018 - 9:47am

How does real estate stack up against the stock market? Aside from perks like tax benefits and appreciation, a RealtyShares study found that real estate has historically outperformed the stock market approximately 2-to-1 when it comes to returns. Real estate is attractive to those left wary from the Great Recession because it’s one of the only real investments. Investors are often drawn to the tangibility and control that real estate offers.

Millennials are fast becoming the largest generation in America. This generation has the power to reshape the economy as we know it. Paying witness to the economic crash, they’ve set their sights on real estate as a viable, sustainable investment choice more than any other generation. RealtyShares found that millennials are the only demographic to prefer real estate over stocks and other investment options. The Responsible Investment Association released a study showing millennials are twice as likely as baby boomers to be interested in investments that provide a solution to social or economic problems.

Millennials also have significantly more desire to invest in responsible and impactful assets. Because real estate investments provide housing to another person or family in need, they fit well with the types of investments millennials are drawn to. And because millennials are saddled with debt — on average $37,172 — they have prioritized paying off their debts and shied away from becoming over-leveraged. Goldman Sachs Global Investment Researcher Lindsay Drucker Mann said on an episode of the firm’s podcast that while there are categories in which millennials spend freely, on a whole, they tend to be “more conservative” about their debts and balances.

While it may be a surprise given the stereotypes surrounding the millennial generation, research from the National Association of Realtors found that millennials continue to be the largest group of homebuyers, representing 65% of all first-time homebuyers last year. According to TD Bank, two-thirds of the generation are saving for a down payment. And they’re excited about the opportunities found in real estate investing. According to RealtyShares, 55% of millennials are enthusiastic about investing in real estate, though 83% wish the process were easier, an encouraging statistic for turnkey firms geared toward simplifying the real estate investment process. Also encouraging, 54% of millennials are interested in investing in real estate outside of their primary residence, significantly higher than the 55+ demographic. And 7% of renters are currently investing in real estate other than their primary residence, a trend likely to continue.

Realtor.com evaluated the cities millennials would like to live in, and expensive metros like Seattle and San Francisco made the top-10 list. Savvy millennials with the desire to invest in real estate without sacrificing their own city living may choose to buy in outside geographies like Dallas or Philadelphia, where home prices are more affordable and anticipated returns are higher, while they continue renting in their desired locations.

Lenders and real estate agents are starting to see a shift in strategy as well. No longer does a buyer contact their local agent to find a home; they start online via a web search, and many times they engage with a lender first. Savvy real estate firms are now going after the referral from the lender. A prime example of this is Loan Depot’s Mello Home and Quicken Loans’s In-House Realty Service, which connect pre-approved homebuyers with verified real estate agents in their local market. This top-of-the-funnel strategy is geared toward the tech-savvy millennial, and it is only a matter of time before it influences the investment lending market. Our firm is taking a similar approach, rolling out an aggressive real estate agent referral program and working with lenders nationally.

The Drive to Modernize the Industry

With a focus on establishing themselves in their careers, millennials are more financially savvy after surviving the crash of the Great Recession. They are waiting longer to get married and have become more socially aware and reluctant when it comes to procreation. Combined with a prowess unlike any other generation, millennials have a tight grasp on technology and know how to leverage it in nearly every aspect of their lives. Their unique connectivity and real-time demand for information and services have already begun to turn traditional business models on their heads. Businesses have taken note of the new generation, recognizing the need to adapt or be left behind.

Native to the digital age, millennial investors are armed with all the tools needed to learn where to invest and what key metrics to analyze when evaluating prospective rental properties. They can leverage technology to facilitate the transaction, even remotely, and then leave it to the professionals to handle the management and operations after the sale. Resources like Zillow, RentRange and HouseCanary have emerged, making it easier than ever to obtain the data necessary to make informed decisions. With easily available data, investors can make informed decisions about where to invest.

Other online platforms such as Roofstock, Own America and HomeUnion have entered the market, delocalizing real estate investing by making it easy for investors to transact in top-performing rental markets across the country, regardless of their own geography. This is new to the investment space and has closed the geographical investing gap. Living in a market that is not investor-friendly is no longer the barrier it has long been for the small investor. We solve this issue by having a centrally managed property management company in which there is a consistent level of service and one point of contact across multiple geographies. You can now buy investments in different markets and not worry about dealing with different property managers.

One thing is certain: Millennials are entering into their peak spending years, and their actions are not to be ignored. Meaningful opportunities are available to both millennial investors and the service providers in the space. In continuing to make investing easier and more accessible, all parties can benefit.

 

Source: forbes.com

The post Why Millennials Are Poised To Be The Next Wave Of Single Family Rental Investors appeared first on AAOA.

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Decrease delinquency to 3% or less by reporting rental payment history

Fri, 06/01/2018 - 11:59am

Let’s face it, as a property manager you have a couple of primary goals: Keep vacancies low and make sure you’re renting to great tenants. Unfortunately, no matter what you do, not all of the people who want to rent from you will end up being great tenants. You can screen them, interview them, even check their credit—but there’s a problem. Their rental payment history, which would be a great predictor of potential problems, is rarely if ever, included in their credit history.

You can change that.

In recent years, the credit bureaus have opened up the option to report rental payments as an additional way to measure creditworthiness. As a landlord or property manager, wouldn’t it be great to be able to see that the last few years of rental payments were on time? Wouldn’t it be great to see any delinquencies and at the very least be able to ask about them during an interview? Wouldn’t it be great to know if they still owed money to a previous landlord? At least you’d know something about their history of actually paying the rent. Granted, seeing that they pay other bills on time—or don’t, might help you as you’re deciding who to rent to…or who not to…But the one thing that matters to you, probably more than anything else, is being able to count on that rent being paid on time, month in and month out.

And it’s easy to do.

In order for rental payment data to be available to you in a credit screening, somebody has to report it. The good news is: you can, and it’s easier than you think.

Manage your properties.

Rental Payment Reporting (RPR) provides owners, landlords and property managers with a program that motivates residents who might otherwise pay late to prioritize their rent payment.

At the same time this program will increase your net operating income by decreasing delinquencies and collection costs. In some instances, we have been able to decrease delinquency from 8.7 to 2.7%. The RPR program can also help you reduce current costs of collections because the individual’s record is already being reported to the bureau.

Reporting rental payments helps improve the way property managers reduce the risk of leasing to a risky tenant by making it easier to identify high-quality residents. Not only are payments reported, on-time or late, but also if someone moved out with money owing. As someone who may have already rented to a less than great tenant, wouldn’t you have liked to have some visibility into their last few years of rental history?

This is all fine and good. Anytime you can reduce costs and increase revenue makes great business sense. Now, what if you could frame it up in such a way that your residents looked at it as a positive thing? Well you can…

Your residents will love the program too because it helps them build credit.

Typically, within less than a month of reporting rent payments, your residents see a 20-80 point increase in their score. For them, that could translate into a lower interest rate on a credit card or an auto loan. All for reporting a payment they’re already making—their rent. I’m not sure how familiar you are with the credit bureaus or how credit scores work, but here’s the thing…There aren’t very many things a consumer can do to bump up their credit scores by 20-80 points in a month. Typically, a credit repair program or specialist is going to take 3-6 months or longer—and could cost hundreds or even thousands of dollars.

Over 100 million Americans struggle with their credit. Some have no credit and most often are denied access to traditional financial products. Rental Payment Reporting was founded to address this huge problem and provide a sustainable and simple way for renters to establish and build credit history through their largest monthly payment—their rent. We work with owners, landlords and property managers to report these payments on a monthly basis. For those who are paying their rent on time, they will see a positive impact on their credit scores.

As a property manager offering this service to your residents you will look like a hero. You’ll be helping them build credit (and save money) for pennies on the dollar when compared to other alternatives—and you’ll be making your job easier when it comes to managing delinquencies and collections.

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

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

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Thu, 05/31/2018 - 8:29am

When you are reviewing your screening policies to avoid any discriminatory effects, especially criminal history, be sure to avoid your gut feelings. The Grace Hill training tip of the week focuses on tenant screening and the right way to do it especially when checking criminal history.

The National Fair Housing Alliance’s recent publication, Making Every Neighborhood a Place of Opportunity: 2018 Fair Housing Trends Report  is full of useful information about the state of fair housing in our nation, 50 years after the passage of the Fair Housing Act.

Remember to review your screening policies to avoid any appearance of discrimination.

How to use criminal history

One of the things in the National Fair Housing Alliance publications is the highlighting of the U.S. Department of Housing and Urban Development’s (HUD) guidance on how to use criminal history if you are a housing provider.

“In 2015, HUD’s Office of Public and Indian Housing issued a notice that prohibits Public Housing Authorities and owners of federally-assisted housing from applying blanket exclusions of applicants with an arrest record in their housing decision.

“In 2016, HUD’s Office of General Counsel issued guidance on how the Fair Housing Act applies to the use of criminal history by housing providers and, specifically, how the discriminatory effects and disparate treatment methods of proof apply to fair housing cases in situations when a housing provider justifies an adverse housing decision based on someone’s criminal record.

In issuing this important policy guidance, HUD has helped provide housing stability for people with criminal records, a critical step toward the successful reintegration of people with criminal records into society.”

Here are a few practical tips to ensure your screening policies are in line with HUD guidance

7 Ways To Stay Out Of Trouble When Checking Criminal History

Keep these tips in mind at all times

Everyone involved in the leasing process should be trained in screening policies. Everyone should consistently follow these policies, rather than make decisions based on assumptions or gut feelings.

  1. Do not deny an application based solely on an arrest record. An arrest is not the same as a conviction.
  2. Do not automatically exclude applicants just because they have a criminal history.
  3. Consider criminal history only after the applicant’s other qualifications are verified. If you do need to consider criminal history, conduct an individualized assessment that looks at several factors.
  4. The nature and severity of the crime.
  5. The time since the arrest or conviction.
  6. The applicant’s recent rental history.
  7. The applicant’s rehabilitation efforts.

When consistently applied, policies that follow these guidelines are less likely to have a discriminatory effect.  Take time to review your applicant screening policies and procedures, particularly those relating to background checks, with your supervisor and legal counsel today.

 

Source: rentalhousingjournal.com

The post appeared first on AAOA.

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How to Use Hospitality Elements in Multifamily Design

Thu, 05/31/2018 - 7:51am

Everyone likes to travel in style, and hotel designers know how to make getaway spaces feel luxurious. Seattle-based architecture firm Degen & Degen specializes in hospitality design, including hotels, resorts, and other other facilities designed for public accommodation.

The company recently worked with AvalonBay Communities on the design of AVA NoMa, a 438-unit property in Washington, D.C., to bring the popular elements of hotel design to the project, especially in the community’s 20,000 square feet of amenity space.

Erin Brodhead, principal of interior design, and Anita Degen, managing principal, spoke with MFE about how the hottest hospitality elements can be incorporated into multifamily living.

What aspects of hospitality spaces are currently popular, and why?  Collectively, our generation is lifestyle-savvy and seeks to find not only a home but an experience that will reflect their personality and who they strive to be. When a guest walks into a hotel lobby, a carefully curated experience begins. This experience strives to evoke a sense of place, comfort, and, depending on the location, will project adventure, relaxation, escape, etcetera. With that being said, hotel communal spaces such as the lobby, fitness center, rooftop lounge, and work lounge are being incorporated into multifamily communities to not only provide added value to the resident but to encourage community and a sought-after elevated lifestyle.

How can a designer incorporate these elements of hospitality into residential design at multifamily communities in both the units and common spaces?  Hotel guest rooms are small, temporary living quarters, [while the hotel’s] public spaces deliver social interaction and unique experiences. Similarly, as apartment units get smaller, elevating the amenities is a way to economize overall square footage while still giving the resident more. For example, a smaller apartment is reasonable if the property provides a fully outfitted pet spa, workspace, or entertainment space with a chefs kitchen.

What multifamily amenities are most popular among residents right now?  A large fitness center is key. Residents are seeking quality [fitness] spaces with state-of-the-art equipment and technology, such as Fitness On Demand and meeting space for virtual trainers. Having a rooftop lounge is also a very hot amenity with renters. It’s used as a space for hosting parties, impressing friends, and boasting a view if their apartment unit is limited. We’ve also seen an increased desire for 24-hour concierge service and enhanced security measures.

How do these amenity spaces reflect the kind of lifestyle today’s renters want in their apartment building?  It’s about lifestyle. For example, at a property positioned for students and first-time renters, active social spaces take precedence, whereas a property catering to professionals or starter families might focus more on open workspaces or outdoor living. Individual units are influenced by creative use of space, with elements such as barn doors or a kitchen island as opposed to a traditional dining room.

The rental market is highly competitive today. Given the right location and connectivity with the neighborhood community, developers then rely on market research to select the amenities that will target the ideal renter.

With prospective residents being more design-savvy today, it’s more important than ever to provide a level of design that reflects their needs.

 

Source: multifamilyexecutive.com

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