American Apartment Owners Association

An Alternative Forum to the Courthouse Battle Zone – Private Arbitration

Thu, 09/28/2017 - 10:15am

By Nate Bernstein, Attorney at Law

LA Real Estate Law Group 

JUST “RENT A JUDGE”- A WISE BUT RATHER COSTLY APPROACH

Arbitration is a form of “alternative dispute resolution” sometimes referred to as (ADR), which is a technique for the resolution of disputes outside the courts.  The parties to a dispute refer the matter to arbitration for decision by one or more persons (the “arbitrators”, “arbiters” or “arbitral tribunal”), and agree to be bound by the arbitration decision (the “award”).    Arbitrators may be retired trial judges or experienced attorneys with certain specialized expertise.   A third party reviews the evidence in the case and imposes a decision that is legally binding on both sides and enforceable in the courts.  Sometimes, the parties may seek court approval of the arbitration decision so that the judgment can be enforced by the parties by use of the court system.

Arbitration is often used for the resolution of commercial disputes, particularly in the context of international commercial transactions.   Arbitration is frequently used in real estate transactions or to decide commission disputes between real estate agents.  In certain countries such as the United States, arbitration is also frequently employed in consumer disputes and employment matters, where arbitration may be mandated by the terms of employment or consumer contracts.

Arbitration can be either voluntary or mandatory (although mandatory arbitration is generally mandated  by a statute or by a contract that is voluntarily entered into, in which the parties agree to hold all existing or future disputes to arbitration, without necessarily knowing, specifically, what disputes will ever occur), and can be either binding or non-binding.    Sometimes parties are forced to choose arbitration when signing a contract- consider an automobile finance contract- you either agree to arbitration with the finance company or you don’t get the financing.   Non-binding arbitration is similar to mediation in that a decision cannot be imposed on the parties. However, the principal distinction is that whereas a mediator will try to help the parties find a middle ground on which to compromise and settle, the (non-binding) arbitrator remains totally removed from the settlement process and will only give a determination of liability and, if appropriate, an indication of the quantum of damages payable. By one definition arbitration is binding, and non-binding arbitration is therefore technically not formal arbitration.  By one school of thought, if you are going to pay for the cost of arbitration, why not make it binding and final- so the dispute is decided and its over!

Arbitration is a proceeding in which a dispute is resolved by an impartial adjudicator whose decision the parties to the dispute have agreed, or legislation has decreed, will be final and binding. There are limited rights of review and appeal of arbitration awards.  Sometimes the arbitration agreements will force parties to totally waive appeal rights.

I am not a huge fan of arbitration, but one of the advantages of the arbitration process is that you can hire an arbitrator who will apply and dedicate the time, resources and expertise to decide the matter.     The arbitrator is not being consumed by a 15 calendar caseload in the morning, and trials to be done in the afternoon. Large corporations prefer arbitration because they believe that arbitrators will be more conservative in their rulings, unlike progressive judges or run away jurors.  Large corporations want to keep issues away from juries.     One of the disadvantages of the arbitration route is the high cost of an arbitrator- which can be between $ 500.00 and $ 1000.00 per hour.  But for the right type of case, an arbitrator may be the best type of judge to decide the dispute.

THE BEACON OF HOPE AND LIGHT- THE MANDATORY SETTLEMENT CONFERENCE PROGRAM AT THE STANLEY MOSK COURTHOUSE PRESENTS A GREAT OPPORTUNITY AND PLATFORM FOR PARTIES TO SETTLE CASES.

Due to budget cuts, many smaller courthouses, like Torrance and Santa Monica superior courts, have cut their staff for referring parties to a free mediation settlement programs. Some of the mediation referral offices in many smaller courthouses are “closed,” and parties don’t have access to a panel of free mediators. Parties can hire private mediators if they are motivated to complete private mediation, and are willing to absorb and share the cost.

One of the beneficial components about the Stanley Mosk Courthouse is that the courthouse has a department devoted to completing settlement conferences and settling cases- Department 18 is the department of Judge Helen Bendix, and she runs the mandatory settlement conference program in order to get cases settled. Even before deciding an important law and motion matter or a trial, the Court can suggest for the parties to try to settle the issue or the entire case and may refer the matter to Department 18 for a mandatory settlement conference.   I have used the Mandatory Settlement Conference Program in many cases, and the program works well to settle cases.

The Los Angeles Superior Court’s Mandatory Settlement Conference (MSC) program is free of charge and staffed by experienced sitting civil judges, who devote their time exclusively to presiding over MSCs. The judges participating in the judicial MSC program and their locations are identified in the List of Settlement Officers on the court’s website.  LASuperiorCourt.org. The website is a very useful source of information, and dockets for cases are online in the “case summary” section.   The dockets are not updated every day but eventually are updated.   If you participated in private mediation, the parties would pay the private mediator an expensive hourly rate.   The judges in the MSC program located in the Stanley Mosk Courthouse are employees of the Court and the parties only have to pay for their own attorney time- this is a great deal and value!!

This program is available in general jurisdiction cases with represented parties from the independent calendar (IC) and Central Civil West (CCW) courtrooms. In addition, on an ad hoc basis, personal injury cases may be referred to the program on the eve of trial by the personal injury courts in the Stanley Mosk Courthouse or the asbestos master calendar court in CCW.

In order to access the Judicial MSC Program the IC, CCW, or PI courtroom must refer the parties to the program, the parties must complete the information requested in the Settlement Conference Intake Form and email that completed form to mscdept18@lacourt.org. If the parties have a preference for a particular MSC judge, they should so indicate on the intake form.

CONCLUSION- GOING TO COURT IS NOT THAT BAD OR IS IT!!

I hope this white paper provides transparent insight and unlocks the mystery of how judges actually decide pre-trial issues in downtown Los Angeles Superior Court- which is a rough and tumble environment.  Most judges perform a thorough analysis, want to get it right the first time, and want to do justice. Judges don’t want to get reversed on appeal, or be the subject of a written complaint of a party or an attorney to the Judicial Council of California or the Presiding Judge.   Most judges will not sanction parties or attorneys for a first time violation of rules and will encourage and enforce compliance with rules with an air of compassion.

Judges are human beings and may be persuaded or charmed by attractive attorneys or celebrity parties and their attorneys, and may curry favor to institutional parties such as banks, insurance companies, and large law firms whose clients can afford to appeal.  This is especially true in Los Angeles- where celebrities are frequently in court fighting over business issues or divorce issues.

Judges want the parties and their attorneys to walk out of the courtroom with a core belief that all sides had the time and space to present their cause in the motion papers and in oral argument, that the papers were read and considered carefully, that the latest law was applied to the facts of the case, that the law was followed, public policy concerns were addressed, that the attorneys were dealt with respect and courtesy, and nobody was railroaded through the system.     Alternatively, if the Stanley Mosk Building is not the right forum for your case, you can always do arbitration if your opponent agrees, and if you can afford to rent a judge.

Read Part I and Part II of this article.

Copyright 2017 Nate Bernstein, Attorney at Law. LA Real Estate Law Group. All Rights Reserved.

The author of this article, Nate Bernstein, Esq., is the Managing Counsel of LA Real Estate Law Group, and a member of the State Bar of California and his practice concentrates in the areas of complex real estate litigation, commercial litigation, employment law, and bankruptcy matters. The contact number is (818) 383-5759, and email is natebernstein44@gmail.com.  Nate Bernstein is a 22-year veteran Los Angeles real estate and business attorney and trial lawyer. Mr. Bernstein also has expertise on bankruptcy law, the federal bankruptcy court system, creditor’s rights and debtor’s bankruptcy options. He previously served as Vice President and In House trial counsel at Fidelity Title Insurance Company, a Fortune 500 company, and in house counsel at Denley Investment Management Company. Nate Bernstein created www.laquiettitleattorney.com, a leading educational resource on quiet title real estate litigation. Nate Bernstein is a local expert on real estate law and economic trends in the real estate and leasing market, business law, and bankruptcy law. Nate has personally litigated more than 40 major real estate trials, and has settled more than 200 complex real estate and business cases. 

Any statement, information, or image contained on any page of this article not a promise, representation, express warranty, or implied warranty, or guarantee about the outcome of a legal matter, and shall not be construed as being formal legal advice. All statements, information, and images are promotional. All legal matters are factually specific, laws change on a daily basis, and courts interpret laws differently. No express or implied attorney-client relationship shall be inferred from any statement, information, or image contained any pages of this website. No attorney-client relationship is formed until the client or the client’s representative, and the attorney signs a written retainer agreement.

The post An Alternative Forum to the Courthouse Battle Zone – Private Arbitration appeared first on AAOA.

Categories: RSS

How to Control Mosquitos Hanging Around Your Apartment Community

Thu, 09/28/2017 - 9:34am

Labor Day may signal the unofficial last day of summer, the final big opportunity for outdoor gatherings, but as cooler weather approaches the desire of your residents to chill on patios, decks and outside common areas doesn’t fade. If anything, more people will frequent conversational areas like fire pits and around the grill. The sad fact is, however, that mosquitos are going to be right there with them, especially in parts of the country recently affected by hurricanes Harvey and Irma. As a property manager, you will be tasked with thinking about ways to control mosquitos.

Mosquitos, which can be the bane of outdoor fun, typically hang around until a freeze. Numerous ways to control mosquitos in common areas are available, including citronella plantsand torches, water dunks.

On a larger scale, the grounds can be controlled through applying an insecticide through the sprinkler system. While effective, the treatment is sometimes restricted by city watering restrictions and resident traffic. Waiting until the middle of the night to treat when residents are unlikely to be outdoors may violate imposed watering times during drought.

Hiring a pest control specialist with a spray truck is another option, but accessibility to all parts of the property can be an issue, especially for apartments that have retention ponds, creeks or large water features throughout the property. The areas, while they may be off the beaten path of popular outdoor gathering spots, are often used as residents stroll or walk their dogs. Treating these areas are just as important as spraying the patio.

A mosquito-free community can be a big selling point for apartments, especially given the potential health issues resulting from bites. As of early September, West Nile virus infections in humans, most notably caused by mosquitos, have been reported in 37 states, according to the Centers for Disease Control and Prevention. The CDC reports 526 cases.

Backpack foggers/mist blowers provide effective on-the-spot treatment

Mosquito backpack foggers/mist blowers are perfect for on-the-spot treatment to help ensure complete coverage of the property. Treatments can often be done without interference of residents and provide a quick kill to young and adult mosquitos.

The backpacks, which are similar to leaf blowers, are portable and easy to manage, enough that they are a good option for in-property application by the maintenance team (a licensed operator is required but properties can certify appropriate personnel). Applications can be applied before special events or at problem areas, or as part of regular maintenance program.

A number of companies produce gas-powered backpack foggers/mist blowers. They strap on to the operator, who sprays the intended area using a short applicator and nozzle. Most are lightweight and can be prepped with an insecticide mixture and strapped on in just a matter of minutes. Plastic tanks hold three-to-five gallons of treatment.

The machines also double as blowers, which can be used to keep the grounds clean of debris. Several industrial equipment supply and lawn care specialists sell the units, which range from $200-$900. For about $350, and apartment maintenance team can be armed with an effective mister.

Treat areas hours leading up to a resident event without the hassle

The portable design of the backpacks enables apartment communities to douse foliage, common areas and structures more effectively than other treatments. The convenience of using the machines offers quick, easy application just about any time.

In the hours leading up to an outdoor resident event, the area can be thoroughly fogged and eliminate mosquitos and other insects. The need for burning citronella torches, which can be unpleasant for some, or keeping canned spray repellants on hand is reduced.

Also, a 60-day treatment schedule can be administered to coincide with daily walks of the grounds by the maintenance team.

Consider pin-point application of mosquito repellants using the mister/blower system. If you’d rather not manage treatment through the maintenance team, contact your landscaper. Chances are the company has the equipment or works with someone who does.

Either way, your property will improve control of mosquitos and help ensure that residents enjoy the outdoors now and any time of the year.

 

Source: propertymanagementinsider.com

The post How to Control Mosquitos Hanging Around Your Apartment Community appeared first on AAOA.

Categories: RSS

How to find a contractor after a hurricane

Thu, 09/28/2017 - 9:34am

Hurricanes Harvey, Irma and Maria have left thousands of homeowners across the U.S. scrambling to fix their properties and return to a sense of normalcy. Choosing the right contractor is just the first step in that long process.

Residents across the U.S. are still in the process of assessing the damage wrought by storms this hurricane season. In Texas and Louisiana, around 100,000 homes were affected by Hurricane Harvey and the flooding it caused, according to White House estimates. Hurricane Irma destroyed nearly 25% of the homes in the Florida Keys and damaged even more, according to the Federal Emergency Management Agency. The hurricane caused damage throughout the Sunshine State, as well as in coastal communities in Georgia and South Carolina. Residents of Puerto Rico and the U.S. Virgin Islands are still reeling from Hurricane Maria, having already been struck by Irma.

Given how devastating the recent spate of storms were, it’s likely that homeowners who don’t act soon could be left high and dry. “It’s going to be a big challenge rebuilding based on the number of houses affected,” said Scott Norman, executive director of the Texas Association of Builders. “In Texas, we had a labor shortage before the storm and that makes it a challenge.”

The first step most homeowners should take is to contact their insurance company, so that an adjustor can come out to assess the damage and to determine what funds they will receive. After that, consumers will need to find someone to make the repairs — and choosing the wrong company can be a costly mistake. Here’s what to look for when you hire a contractor after a major storm:

Demand for contractors and remodelers in the hardest-hit areas will far outpace the supply. As a result, the traditional rules of thumb when it comes to hiring a contractor may not apply.

Contractors in these areas may not choose to submit bids to people who they know are shopping around, said Dan Bawden, chairman of the National Association of Home Builders’ Remodelers Council. “It’s pure economics,” said Bawden, who is also president and CEO of Legal Eagle Contractors near Houston. “Am I going to do a ‘maybe bid’ or am I going to do ‘sure bids?’”

Instead of soliciting multiple bids, which usually involves the contractor assessing the property in person, Bawden said that homeowners should find a trusted contractor and have them work up a rough estimate for the cost of the project over the phone. Then, compare bids from additional contractors, before ultimately having one inspect their home and write a more formal bid.

Homeowners who would feel more comfortable having a contractor visit their property from the get-go still have options. Bawden suggested homeowners offer to pay a nominal fee for the contractor’s time as compensation that could be refunded if they ultimately hired them.

Determine whether the contractor is legitimate

Scams abound following major natural disasters. To find reputable companies, check with state or local homebuilders associations, plus the the National Association of Home Builders and the National Association of the Remodeling Industry. Additionally, consumers can check with local Better Business Bureaus or sites like Angie’s List to find ratings.

Next, homeowners should request to speak with previous customers or companies they subcontract with for references. If they choose not to provide this information, that’s a red flag, Norman said. Homeowners should also ask about how much hurricane-repair experience contractors have. Homes that were flooded will need to be dried out with dehumidifiers and other equipment, but less experienced contractors might not know that, Bawden said. “The marginally talented folks will put sheetrock and insulation up too soon, and then mold starts to come through the sheetrock two weeks later,” he added.

Finally, consumers should check that a contractor has general liability insurance, which covers damage to the property that could occur during the job. A contractor should be willing to have their insurance company provide their certificate directly to a homeowner as proof.

If possible, choose a local contractor

Choosing someone who is local is another safeguard against a potential scammer. Plus, some local governments in regions affected by major storms require that contractors have a license on file to be able to get the permits for construction work needed. “A local address shows stability,” Norman said.

But there are other practical reasons to hire local in situations like these. Many out-of-state contractors will travel to disaster areas seeking work. While these businesses could be legitimate and licensed, they won’t have established relationships with subcontractors or lumberyards in the area, which could make jobs move slower or cost more. Even if a contractor is based on the other side of town, that could mean additional travel time between their office and a consumer’s property, which translates to less time actually doing work on the home.

Never agree to pay for a project upfront or in large installments

A common scam following major storms is contractors who travel door-to-door offering discounted work. “Be very wary of anyone who says, ‘Pay today and you get a discount,’” Norman said. Many of these people will simply take a homeowner’s money and run.

Instead, experts said that work should be paid out over time as certain projects are completed, with contingencies built in to account for possible changes in the price of materials. For instance, the homeowner would pay 6% of the agreed-upon amount after the drywall has been installed. Bawden also recommended that homeowners should reserve a final payment until last-minute work is completed.

Look for a company that is good at communicating

Given the amount of time these projects will take, it’s important to get a sense of how good a contractor is at communicating. “Work with a contractor who’s good at communicating the good news and the bad — silence is the most frustrating of all,” Norman said.

Additionally, in many cases repairs will be akin to renovations. Consumers will need to make choices regarding paint color, tile, cabinetry, etc. And an honest contractor will help you make those decisions while keeping you within your budget.

 

Source: marketwatch.com

The post How to find a contractor after a hurricane appeared first on AAOA.

Categories: RSS

Lenders are easing standards, making it easier to obtain a mortgage

Thu, 09/28/2017 - 9:33am

Government-backed mortgage services Fannie Mae says that lenders are easing their standards for consumers to qualify for a mortgage. The finding is one of the highlights from its third-quarter 2017 Mortgage Lender Sentiment Survey, which reveals that lenders are making it easier for some borrowers due to the increased competition they’re facing.

Lenders who were surveyed by Fannie Mae reported easing their credit standards for all types of loans, including GSE-eligible, non-GSE-eligible, and government, over the last three months. Moreover, the number of lenders who say they will continue to ease standards in the next three months hit an all-time high of 18 percent.

That’s good news for thousands of borrowers who may have previously just failed to make the grade in past mortgage applications, experts say. “Lenders further eased home mortgage credit standards during the third quarter, continuing a trend that started in late 2016,” said Doug Duncan, senior vice president and chief economist of Fannie Mae. “In particular, both the net share of lenders reporting easing on GSE-eligible loans for the prior three months and the share expecting to ease standards on those loans over the next three months increased to survey highs. Lenders’ comments suggest that competitive pressure and more favorable guidelines for GSE loans have helped to bring about more easing of underwriting standards for those loans. We believe that GSE attempts to relieve repurchase concerns and expand credit for creditworthy borrowers have contributed to the easing trend.”

Fannie Mae also reports that the demand for home loans has declined in the last three months, with fewer homeowners choosing to refinance. This has caused a number of lenders to report negative net profit margins for several consecutive quarters.

“The share of lenders citing competition from other lenders as the key reason for a negative profit market outlook rose to a new survey high,” Duncan said.

Source: realtybiznews.com

The post Lenders are easing standards, making it easier to obtain a mortgage appeared first on AAOA.

Categories: RSS

5 Popular Home Trends by Region

Thu, 09/28/2017 - 9:32am

Growth in home renovations and remodels has been steady since 2012, and the Residential Remodeling Index predicts continued growth into the future. Many renovations are trending from coast to coast, such as installations to increase energy efficiency, sustainability and security. There are some, however, which are more popular in specific regions.

Indoor/Outdoor Living on the West Coast

Indoor/outdoor living areas are trending across the nation, but the West Coast carries the torch. The region’s climate practically begs you to incorporate the outdoors into your everyday activities.

  • An Open Wall – Remove the barrier between your yard and home by replacing an entire wall with glass doors, which can be opened and shut as-needed. You will find glass walls like this off of kitchens, family rooms and even bedrooms!
  • A Table Outside – Move your kitchen and dining area outside, right outside the home and covered for use in any weather. With an outdoor kitchen, you can enjoy nature and a fresh breeze while you cook, rather than being confined.

Basement Remodels in the Mountains

In the mountain region, more and more people are turning their basements into livable spaces. This is a fantastic way to add useful space, as well as value.

  • Family Den – Create a downstairs family area, complete with a bathroom, couches and a television for video gaming and movie nights.
  • Home Office – Shut yourself away from dishes in the sink, laundry on the floor and attention-hoarding animals.
  • Guest Living – Give your in-laws a space of their own when they visit so that you can all have your privacy, without tripping over air mattresses.

Accessibility in the South

In the south, homeowners are making modifications which will help them to age-in-place. When people think of accessibility renovations, they don’t often envision anything glamorous. However, your adaptations don’t have to be boring. The changes you make can enhance the aesthetic of your home if you thoughtfully choose materials and design.

  • Easy Navigation – Widen doorways and remove steps between rooms and at entryways, so that access is flat and easily navigated.
  • Easy Access – Install a bathroom right by the entryway and retrofit the kitchen and bathrooms for wheelchair or walker access.
  • A Touch of Luxury – Build a tiled walk-in shower with recessed shelves, a bench, ambient lighting and spa-like fixtures.Deck Additions in the Northeast

    In the Northeast, deck additions have one of the greatest returns on investment, and the residents have taken note. Having a deck can make your home more competitive in the market. If you’re renovating for yourself, it’s a great way to create an outdoor area for family gatherings and relaxation.

    • Entertain – Build your deck off the kitchen and outfit it with a table and chairs, to make hosting more seamless.
    • Unwind – Put your deck in a shaded corner and furnish it with comfy, weatherproof chairs for lounging. Consider installing an outdoor fireplace and a television.

    Bathroom Upgrades in the Midwest

    Midwesterners are remodeling their bathrooms, even though the return on investment isn’t as high as with many other projects. Bathroom renovations are often homeowners’ treat to themselves, as they turn their house into their dream home.

    • Mirror, Mirror – Choose a theme that reflects your personality. Trending styles are farmhouse, vintage and minimal.
    • The Works – Install a spa tub or shower jets, and splurge on heated flooring.

    These are some of the most popular remodels happening across the nation, as people craft their perfect home or prepare it to sell. Making renovations isn’t as simple as picking a project, however. You may be wondering how your neighbors have the resources to pursue such lofty endeavors. HomeAdvisor put out a True Cost Report which outlines several aspects of home improvement in 2017, including financing, which is a great resource on the year’s trends.

 

Source: realtytimes.com

The post 5 Popular Home Trends by Region appeared first on AAOA.

Categories: RSS

Big Data is the Property Manager’s Friend

Thu, 09/28/2017 - 9:28am

For the dwindling number of property managers who are not keeping up with the changes taking place around us, the rise of big data might seem like something out of George Orwell. This is especially true when you add in the ability of building systems to “talk” to each other, share information and respond in real time in what is mystically referred to as the Internet of Things.

But, for the sake of our survival, we must not only see the rise of big data as an inevitable part of the industry’s growth, but embrace it as a key tool in our ability to remain competitive and stay ahead of the ever-changing curve.

An understated Christopher Lee, president and CEO of CEL & Associates, wrote in his eye-opening book, Transformational Leadership that “Knowing the ‘inside’ of every deal, assembling real-time data on pricing, being able to aggregate and share information, and to gather proprietary data to facilitate a successful transaction will be powerful tools for real estate investors.” Indeed, and not just for investors, but for brokers and property managers as well.

This real-time knowledge and the ability to execute swiftly—based on up-to-the-minute analyses of property and market conditions—will be the key to success going forward. In this increasingly competitive business environment, big data will be your best friend. But it is a friend that also presents very specific challenges.

We live in a world that is increasingly driven by data. Your organization’s data strategy will drive your company’s success or failure. As one entrepreneur recently told me (it should be noted that she was a millennial): “We’re no longer in the business of real estate. We’re in the business of data.” You may balk at that. But therein lies some truth, and those who do not realize that big data drives better business decisions have sealed their fate.

Once again, to quote Chris Lee: “By 2020, according to Gartner Inc., information will be used to ‘reinvent, digitalize or eliminate’ 80 percent of the business processes and products from a decade earlier.”

There is a long-standing myth that real estate practitioners are essentially tech-averse. Yes, there are those of us who still cling to the spreadsheets of yesteryear. But for the majority the fact is that this is not a tech-averse industry at all. Rather, it is a nearly $15-trillion industry that has been woefully under-served by data providers.  That, happily, is changing. The focus on real estate by global tech and data companies has expanded steadily.

That expansion, of course, comes at a price. It has been years since we could consider data a proprietary offering. Companies such as CoStar, Real Capital Analytics and Xceligent have long since democratized and commoditized that process, and real estate companies, amidst cries of disintermediation, began banking on their ability to analyze that data as the differentiating competitive factor. Now it seems analysis too is becoming commoditized as big data providers increasingly target the general public. A direct analogy can be drawn between this movement of market analysis and the rise of crowdfunding sites on the financial side.

This, of course, is great news for the consumer, especially the consumer looking to cut corners by eliminating the real estate professional and saving some money on transaction fees.

But the real estate practitioner—not the data provider—is the one in the trenches every day. It behooves us all to stay on top of the progression of big data, embrace it and fold it into our culture, which means folding it into our way of thinking.

Happily, the practitioners have an edge. This remains a people business, a relationship business. And nowhere is that more true than in the property management field. Yes, big data is a prime disruptor of traditional approaches, as seen with the above-mentioned Internet of Things. We have the technology.

But more than ever, these are relationships powered by information. Which brings us, of course, to such resources as the 2017 editions of IREM’s Income/Expense Analysis Reports, which contain information critical to the thorough understanding of property performance within the context of local and national comparisons.

We have stated often in this space that property management in its best and highest iteration understands and informs the asset management role. To rise to that level, managers must think like owners, investors and asset managers. They must analyze and understand not just the operations of the assets in their charge, but indeed the operations of competitive assets, locally, regionally and even nationally, to ensure that their property is competitive.

Going forward, we must remain nimble in our analysis, using all the tools at our disposal if we are to maintain our status in the chain of value enhancement.

Source: nreionline.com

The post Big Data is the Property Manager’s Friend appeared first on AAOA.

Categories: RSS

Tax Bonuses Earned From Renting Out Second Homes

Thu, 09/28/2017 - 9:27am

While the charms of second or third homes are usually sized up in terms of mountain views or proximity to shorelines, the possibility of cutting carrying costs through rental income is an added attraction. Better yet: Owners of vacation properties—whether a pied-à-terre, a chalet, or even a yacht—can score significant tax savings on rental income if they organize their affairs properly.

But real estate tax rules are detailed, and it may require meticulous record-keeping to maximize tax benefits. “This isn’t something most taxpayers have shown to be very good at, and it can make life very unpleasant in an IRS audit,” says Jere Doyle, a senior wealth advisor at BNY Mellon.

The facts: Total mortgage interest up to $1.1 million is deductible on primary homes and one vacation home, combined. Mortgage interest isn’t deductible on third or more properties. Property taxes are deductible on all homes, no matter how many you own.

The tax implications of using your property for rental income depend primarily on how often you use the property personally, versus renting it out. The simplest scenario is the best: If you rent your property for 14 days or less, you get a tax freebie—the income doesn’t have to be reported to the Internal Revenue Service. “For Super Bowl weeks or major golf tournaments, if you want to rent your home for 14 days or less, that’s tax-free rental income, even if it’s $10,000 a week,” says Stephen White, regional leader of wealth planning at BMO Private Bank.

If you rent for more than 14 days, all rental income—including the first 14 days—must be reported. So carefully consider the value you’ll get from renting beyond 14 days. If you rent for, say, 21 days, your after-tax income may end up about equal to 14 days of tax-free income, Doyle says, adding that the record-keeping involved for the tax-filing process is onerous, and the headaches may not be worth it.

But if you collect rent for an entire season, income can be significant and well worth the tax-preparation process. To be able to claim deductions against rental income, you must allocate annual expenses related to the property between personal and rental use. Utilities, housekeeping, maintenance, and insurance are among the deductible expenses. If your annual expenses on a property are $40,000, and you rent your property for 60 days of the year and use it yourself for 40 days, you can deduct 60%, or $24,000 of expenses.

Any costs associated with using the home as a rental, such as for a property manager or for towels and sheets used only by renters, are fully deductible. If your expenses exceed rental income, you can only deduct the losses if you are actively involved in the business side of your vacation home. Otherwise, your losses are considered passive and can generally be deducted only against passive income, such as other rental income. But passive losses can be carried forward for years and used to offset capital gains when the property is sold.

Don’t claim that you’re actively involved simply because you raked your own leaves one day and replaced a broken windowpane. Active involvement means screening tenants, establishing rental terms, overseeing the rental periods, and more. The IRS may scrutinize wealthy homeowners who claim to be actively involved in their rental properties. “You don’t see many people with a net worth of $5 million or more placing ads and managing the rental aspects of their vacation homes,” Doyle says.

If you use your property for less than 10% of the period that you rent it out, the IRS will deem the property a rental business, and you can deduct all property expenses against rental income, without allocating between personal and business use. Losses are still passive, unless you’re active in the business. You can also get some benefits from depreciating the value of the property, but think this through. Every depreciation claim lowers your cost basis, which means higher capital-gains taxes if and when you sell the property. Keep in mind, too, that if family members use the property, it’s considered personal use—unless they pay a fair rent. “It’s critical to stick to business formalities, especially when involving family members,” says Todd Angkatavanich, a partner at Withersworldwide.

There are other taxes to consider: If you live on the coast but have a chalet in Colorado that you rent out, you must file a return in Colorado. “Many people aren’t aware of occupancy or sales taxes,” says BMO’s White. The rules vary state by state. There is no sales tax on beach rentals in Delaware. In Maine, on the other hand, if you rent your home for 15 to 27 days a year, you’ll owe a 9% sales tax on your rental income.

Upshot: When renting out your second home, it’s the details that can invite scrutiny from tax authorities—or help you squeeze out some attractive benefits.

 

Source: barrons.com

The post Tax Bonuses Earned From Renting Out Second Homes appeared first on AAOA.

Categories: RSS

Steps To Take In Reporting Bad Tenants

Thu, 09/28/2017 - 5:47am

Posted on Sep 28, 2017

One bad tenant can make your managed property a nightmare. If you’ve been struggling with a problematic renter, find out how to report bad tenants while staying on the right side of landlord tenant laws.

Talk to the Tenant First

When you have bad tenants, it’s natural to want to deal with them as little as possible. Be proactive and tell them you’ll be reporting any bad behavior, then define what you mean (e.g., violating a noise ordinance or paying the rent late).

Before approaching your renters, check the state laws regarding eviction, late rent payment or whatever your specific problem is. Laws vary state by state; when talking to your tenants, you want to make sure you’re presenting them with valid advice.

Keep Records and Take Action

After you talk with your tenants, start a log. Write down every instance of “bad behavior” and document the actions you took.

With past due rent payments, contact credit reporting bureaus. This can prompt tenants to pay to protect their credit score from a dip. If this action doesn’t get you the money you’re owed, seek the help of a debt collection company. Once you do this, you won’t have to spend your time asking renters for past-due rent; instead, you can focus on moving forward with evicting a tenant who won’t pay the rent.

Evict Bad Tenants

When evicting a tenant, you have to follow the law to the letter. You’ll need a valid reason for eviction, such as failure to pay the rent or damaging your property. If you’re not sure whether you have a valid case, consult with a landlord-tenant lawyer.

Since evictions can drag on in court, you might want to threaten your renters with eviction and give them one last chance to leave. Tell them that you’ll be suing them; if you win, you’ll be able to garnish their wages to pay back-due rent. Renters may opt to leave rather than go through eviction.

If they don’t leave, send them an eviction notice. Tape the notice to their door and send it via certified mail. You’ll need to wait a set time period after serving them the letter before you can file a lawsuit.

Learn more about landlord tenant laws in every state, and get help with an eviction, by becoming a member of American Apartment Owners Association. Members receive access to a database of landlord forms, including an eviction template. Customize the template, send it to tenants, and go through the legal process.

After you file, gather supporting documentation. You’ll present it in court, then a judge will find for one party. After that, your tenants must vacate by a set time period, and you’ll have your apartment back.

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

 

The post Steps To Take In Reporting Bad Tenants appeared first on AAOA.

Categories: RSS

How Investors Can Identify a Great Rental Property

Mon, 09/25/2017 - 12:01pm

The decision to become a landlord is certainly exciting – the search for a property, marketing for a tenant and potential to bring in money every month.

But before you go buying the first empty house you see – or worse, a house you didn’t even look at – know that your investment is better made when you’ve carefully run the numbers.

Even when you’re just renting out a single-family home or duplex, real estate investment isn’t as easy as it may seem. A smart investment requires a look at market rents, a calculation of income potential and consideration of additional costs to both prepare a property to rent and make long-term repairs.

That’s not to mention factoring in costs you would have to absorb if the property sat vacant for any period of time. Bryan M. Chavis, a property management consultant and author of “The Landlord Entrepreneur: Double Your Profits With Real Estate Property Management,” says the potential for failure is often overlooked by excited rookie investors.

“A lot of people get anxious to participate in a deal, so they’ll take on more risk than what is necessary or they’ll jump into a deal just because it’s listed or they feel it’s a good deal … and they’ll rush into an investment that doesn’t make sense,” Chavis says. “And that’s are where the mistakes are made.”

Every investment property requires a careful assessment of the value of the property, amount of debt you’ll take on, expected income and other operating costs. Those property-specific numbers are also dependent on the local rental industry. Here are four things to consider as you look for the right rental property.

Find the market and submarket. A property in your neighborhood may seem like the most convenient investment option, but that doesn’t mean it’ll be worth your time and money. You first need to identify the best market for your investment, plus the submarkets – often broken down into neighborhoods – where a rental property will be most fruitful.

If you’re planning to manage the property yourself, your local market makes the most sense. Now, narrow down submarkets based on where renters are more likely to search – for example, near public transportation or within easy access to highways. Regardless of the tools you use to find and purchase available properties, a more general search on a site like Zillow, Apartments.com or Rentpad could show you where rental properties are most common and at various price ranges.

“The process begins with evaluating a targeted area,” Chavis says.

An ultra-luxury neighborhood nestled far from downtown might leave you hard-pressed to find renters, but on a street where new renters are always moving in you might have found a submarket to focus on.

Off-campus student housing is an easy-to-identify type of rental property that excites investors. Woody R. Fincham, vice president and Virginia regional manager of appraisal company The Trice Group, resides in Charlottesville, Virginia, home of the University of Virginia, and says investors tend to keep much of their attention on properties within walking distance to campus because the increased demand allows for a higher rent.

“If they’re within walking distance of [University of Virginia grounds], that generally is a premium, so investors are generally looking for that,” Fincham says.

Weigh property class options. As you identify the submarket that will yield the most demand among renters, also consider the quality of the property you’d like to own based on what you can afford and what renters flock to.

Property classes are typically broken into three categories: A, B and C. Properties in Class A will be the top quality in that market, typically new and higher priced. Class B properties tend to be a bit older but well-maintained. Class C properties are older still, often in need of renovations and repairs and located outside the prime real estate locations.

Age, architectural style and renovation specifics can vary based on location. A Class A building in New York City isn’t going to compare with a Class A building in Huntsville, Alabama, simply because they attract two different types of residents.

You may be better off focusing your investment toward a Class B or C property, because while there may be some required work on the property, you avoid narrowing the pool of potential renters with an expensive rental rate.

“Typically investors are looking to buy low, and they’re usually looking to buy stuff that’s not in the best condition,” Fincham says.

For that reason, Chavis says, you’re also less likely to feel the negative effects when real estate trends shift. If you rent only to the super-wealthy, they have the flexibility to choose to buy a home fairly easily, which shrinks the demand for luxury rentals, compared to other renters, who rent for longer since they have to save up to become homeowners.

“I see a lot of risk and a lot of volatility in those [Class A] sectors – more so than do the B, C, middle-class demographic assets. I feel those are a tad bit more stable,” he says.

Know the most likely renter. Closely paired with the property class to buy is the renter most likely to be interested in becoming your tenant. That person is a key component into the kind of renovations and upkeep you’ll need to maintain the home.

For off-campus student housing, for example, landlords often don’t have to be as concerned with providing new appliances or newly painted walls as they would with a family recently relocated by a major corporation.

“Students are not as persnickety, per se, as the average consumer,” Fincham says.

When it comes to identifying the most likely renter, it helps to be familiar with the area. Arik Kislin, a real estate investor and developer and CEO of Linx Industries, says it’s important to have a solid grasp on the typical renter in a neighborhood, or at least work with someone who does. Not knowing the regional and ethnic makeup of a neighborhood like Jamaica, Queens, in New York, he says, could mean that people simply don’t want to do business with you because you’re viewed as an outsider.

“You don’t want to be the odd man out … because it’s not going to be accepted well,” Kislin says.

Plan for the worst-case scenario. Whether it’s a recession that hits or even an increase in homeownership rates, there’s a possibility you’ll have to lower rents at some point to attract renters. If the city or neighborhood you live in undergoes serious changes, your rental property may even sit vacant for months.

It’s important to know how long you’d be able to afford fronting the costs of a vacant rental space or how low you could make rental rates before you’re no longer profiting.

Even with the current rental climate in most markets, with high demand and rents outpacing affordability in places like San Francisco and New York, Chavis says landlords shouldn’t expect rents to continue to climb at the rate they have in recent years. Median rent for a one-bedroom apartment in San Francisco currently stands at $3,390, according to rental information company Zumper. While it’s a high rent to be sure, it hasn’t changed much going back to the same month in 2015, when the median rent reached $3,530, a new high after increasing more than 13.9 percent from the year before, per Zumper’s monthly national rent reports. With affordability being a significant problem in the Bay Area, landlords shouldn’t expect to see major increases in rent going forward, and they can even expect more dips.

“These high, ridiculous rents are going to eventually reach a ceiling … which could cause some problems and issues,” Chavis says.

As you weigh the potential profitability of a rental property, include the possible scenarios of a plateau in rental rates, decline in demand and the occasional big-ticket repair that could take money out of the bank rather than putting money in. They’re not the numbers you want to think about when you picture yourself as a landlord, but they’re the numbers that can keep you from taking on a bad investment.

Source: realestate.usnews.com

The post How Investors Can Identify a Great Rental Property appeared first on AAOA.

Categories: RSS

How America’s big new landlords faced their first housing disaster

Mon, 09/25/2017 - 11:52am

Hurricane Harvey tested the faith and perseverance of thousands of Houston homeowners, and it put an entirely new asset class of large institutional landlords to its first real test. Starwood Waypoint and American Homes 4 Rent collectively own about 6,000 single-family rental homes in the Houston area. Hundreds of them were damaged severely by the storm, and their tenants displaced.

“You have to prepare for everything,” said Charles Young, COO of Starwood Waypoint, standing in front of a Houston home that took in 4 feet of water. “You can’t imagine a storm like this, and it’s unique. It’s our first test.”

After the housing crash, institutional investors bought hundreds of thousands of single-family homes and turned them into lucrative rentals. They established management systems and national infrastructures to service thousands of individual renters. While some of the homes are concentrated in certain neighborhoods, the properties are spread across the city, and Houston is huge.

Starwood Waypoint, which is in the process of merging with Blackstone’s Invitation Homes, estimates about 140 of its homes in Houston were damaged, some very seriously. American Homes 4 Rent said 112 of its 3,200 homes sustained serious damage, and about half had at least some minor damage.

Finding the residents and assessing the damage had to happen quickly. For companies with so many properties, that might sound daunting, but apparently being bigger was better.

“We were able to use the scale of our platform, professionally managed across the country, and utilize our resources internally and externally to put together vendors. We put together a task force, we communicated, we used our technology and then we prepared,” said Young.

In some cases it was hard to find the renters, as they had evacuated. In others, the renters decided not to return. Both companies let those hardest hit out of their leases and returned security deposits. They also relocated some renters to other company properties.

“One of the benefits of the institutional single-family rental program is that we have an in-house maintenance team and a construction team, we’re in many cities across the country and have the ability to mobilize all those forces,” said David Singelyn, CEO of American Homes 4 Rent, which is based in California. “We planned prior to the hurricane hitting the city here in Houston. We were able to be in the city the second day with our crews and equipment that we sourced from other cities.”

Many of the homes had to be stripped to the studs and dried out. Starwood brought in about a dozen managers from out of state and already had a Houston-based staff of workers ready to begin the repairs. They also were able to bring in equipment from out of state, like fans and dehumidifiers. American Homes 4 Rent transferred drying equipment from Salt Lake City.

“Scale and technology makes an enormous difference,” said John Pearsall, a regional manager for Starwood Waypoint. “We’ve been able to attack the challenge of working with residents, from a relocation perspective to the actual demolition process to the production process in proportions that are geometrically far greater than we were able to do back in the early 2000s.”

Shonda Marie Lewis and her family had rented from American Homes for about nine months before the storm. She stayed as long as she could, but when the water rose to her waist, she evacuated. Within a day, she was getting calls and emails from her landlord.

“They were very organized, very professional, I received one call after the next, I couldn’t hardly keep up the names. They called me, they checked on us, they emailed us to make sure we were OK, even after hours,” said Lewis, who also described a company employee bringing them food and Gatorade to the house. She is now living in another company property that did not flood and intends to stay there.

Starwood Waypoint’s Young estimates the cost of Harvey to the company will be about $10 million in aggregate, but much of that is covered by insurance. Singelyn said the costs of both Harvey and Irma would be $10 million to $15 million, also largely covered by insurance.

Both companies have even more homes in Florida, but the damage there was quite different. Most of the work was cleaning up, not rebuilding homes from the inside.

As for lessons learned, both company executives said speed was key and improving technology would always be most important. And texting.

“We realized that text messaging is much more efficient when the home computers are down,” added Singelyn.

Source: cnbc.com

The post How America’s big new landlords faced their first housing disaster appeared first on AAOA.

Categories: RSS

Flip, Rent, or Hold: What’s the Best Path to Real Estate Riches?

Mon, 09/25/2017 - 11:48am

Maybe you’re addicted to those home-flipping shows on HGTV where glam couples buy grim shacks, spend 22 minutes smashing down walls and adding funky kitchen backsplashes, and then make tens of thousands selling the refurbished places on the open market. Or perhaps you’re jonesing for a steady stream of extra income and feel certain you’ve got what it takes to be a landlord.

Or just maybe you’re on the prowl for a hands-off way to make serious real estate money with financial investments that don’t require laying down new flooring or screening prospective tenants.

Whichever option floats your boat, you’ve got plenty of company. After the epic boom-and-bust of the speculative home-flipping market in the aughts, everyone again seems to be looking to make a quick buck by becoming a real estate investor. But these days, there are a dizzying variety of different takes on the once-simple idea of property investing—all requiring varying levels of blood, sweat, tears—and risks. Which one might be right for you?

That’s where we come in. The realtor.com® data team looked at the five big real estate investments that everyday Joes and Janes may want to consider. Then we broke down the typical returns (aka profits) investors have received over the past few years, along with the pros and cons of each.

(Rampant flipping, spurred by overbuilding and easy, subprime mortgage-fueled credit, was a prime contributor to the real estate crash and recent financial crisis. But today, thanks to much tighter credit and inventory levels, home flipping is no longer the American economy’s red, flashing “danger” sign.)

“Over the generations, real estate has proven itself to be a pretty good, time-tested investment,” says Eric Tyson, who co-authored “Real Estate Investing for Dummies.” “Like investing in the stock market, people who follow some basic principles and buy and hold over long periods of time should do fairly well.But, of course, there’s no guarantee.”

And that’s why the thrill-a-minute world of real estate investing isn’t for everyone—especially when life savings are involved.

“Real estate is very unpredictable,” says certified financial planner Jenna Rogers of Mission Wealth in Santa Barbara, CA. “A lot of people feel like you can’t lose money in homes, but that’s not really the case. “If there’s any kind of turmoil in the market, real estate usually gets hit really hard.”

OK, now that we’ve gotten that out of the way, let’s go shopping.

1. Home flipping: Not exactly like reality TV

First half of 2017 gross returns: 48.6%*
2014 gross returns: 45.8%
2012 gross returns: 44.8%

If the Property Brothers or Chip ’n’ Joanna can do it, why can’t you? Real estate reality TV has made the “fixer-upper” flipping market seem fun, very sexy—and mostly foolproof. But becoming a successful home flipper is a lot harder than it looks on television. And it isn’t always as wildly profitable as you might think.

The returns appear deceptively high, as they don’t account for hefty renovation costs, closing costs, property taxes and insurance. Flippers should figure that about 20% to 30% of their profits will go straight toward such expenses, say experts. The median returns above only reflect sale price gains—not net profits.

Newbie investors need to make sure they’re thoroughly familiar with a neighborhood before they consider buying a potential flip in it, says Charles Tassell, chief operating officer at the National Real Estate Investors Association, a Cincinnati-based investors group. This means looking at what kinds of homes are located nearby, what sort of shape they’re in, and how much they’ve sold for. Wannabe flippers should pay attention to the quality of local schools, transportation, and the job market—just as they would for their own home. Those are the things that can make or break a sale. And an investment.

A market where homes are still affordable but appreciating rapidly is ideal.

Like Pennsylvania! The highest flipping returns in the second quarter of the year were in Pittsburgh, at 146.6%; Baton Rouge, LA, at 120.3%; Philadelphia, at 114%; Harrisburg, PA, at 103.3%; and Cleveland, at 101.8%, according to the real estate data firm ATTOM Data Solutions. Those Rust Belt cities topped the list because they have plenty of cheaper, older homes that can be easily updated, and because housing prices there are rising as economies (slowly) improve.

Once they’ve settled on an area, flippers need to focus on the basic structure of prospective homes. Special attention should be paid to a home’s heating and cooling systems, foundation, and roof—the things that are most expensive to fix.

Then they need to create a realistic budget. Experts recommend setting aside 10% to 20% to cover any unknowns—like what’s inside the walls. Costly surprises are par for the course.

“The biggest hurdle of flipping is: The costs are never what they seem to be on HGTV,” says flipper and landlord April Crossley, co-owner of Crossley Properties in Reading, PA. She owns the business with her real estate agent husband, and they do 8 to 10 flips a year. “In fact, they’re always way more.”

Flippers are gambling that the housing market stays strong in their target area—at least long enough to resell their investment home.

“You’re constantly anticipating what the market will be doing 6 to 12 months in the future,” says Daren Blomquist, senior vice president at ATTOM. So if you miscalculate, and it drops, you could lose a lot of money.

2. Investment (rental) properties: You, too, could be a landlord

First half of 2017 returns: 13%*
Three-year returns: 9.9%
Five-year returns: 11.67%

Perhaps flipping homes, and all the varied costs and stressors associated with it, isn’t for you. But you’d still like to be a hands-on real estate investor. Why not consider buying investment (rental) properties?

One big advantage is the tax deduction folks get for their rental properties. They can write off their mortgage interest, property taxes, and operating expenses, as well as repairs.

Like home flippers, landlords-to-be should look at growing areas with new jobs moving in, says Steve Hovland, director of research at HomeUnion, an Irvine, CA–based company that helps smaller investors buy and manage properties.

“I’m very bullish on high-growth markets, like Texas, the Southeast, Arizona. You’re always going to have new renter demand,” he says. But coastal cities can be tough for aspiring property owners because they’re just too expensive.

The best markets for investors were Cleveland, which fetched a 11.5% yearly return; Cincinnati, at 9.8%; Columbia, SC, at 8.6%; Memphis, TN, at 8.5%; and Richmond, VA, at 8.2% in the first quarter of the year, according to HomeUnion. The worst were San Francisco, at 2.8%, and Silicon Valley’s San Jose, at 2.8%.

First-time investors may want to target middle-class neighborhoods near top-rated schools, where stability rules and tenants are more likely to hold steady jobs. These homes often require less maintenance—a boon to landlords who don’t live nearby.

“You’re always able to replace renters in nicer neighborhoods with good schools,” says Hovland.

Landlords who aren’t local or don’t want to deal with 3 a.m. calls about an overflowing toilet will want to consider hiring a property manager who will find tenants and coordinate (but not perform) maintenance. But that eats into profits, costing about 7% to 12% of the monthly rent.

And the payoff you get, as compared with flipping a home, isn’t in one lump sum, and isn’t always steady. For example, landlord and flipper Crossley rents out multiple single-family homes, duplexes, and apartments in the Reading, PA, area, and once had a couple stop paying their rent for six months after they went through a divorce. She had to eat those losses, as well as attorney fees, while she went through eviction court to get them out.

Landlords also need to have insurance on their properties and set up their rental companies to protect their personal assets, in case they get sued.

And like other investors, owners also run the risk that home prices—along with the rents they were counting on—could plunge.

“You have to be prepared for the worst. When something goes wrong in a tenant’s life, you’re the last person to get paid,” Crossley says.

3. U.S. REITs: Buying shares in real estate instead of companies

Year-to-date returns: 2.75%*
Three-year returns: 8.39%
Five-year returns: 9.79%

Those who’d like to own apartment and office buildings like a legit mogul but don’t have the bank balance to do so may want to turn to Real Estate Investment Trusts. Don’t worry if you’ve never heard of REITs. You don’t need a fancy finance degree to understand how they work.

Most REITs are publicly traded corporations that investors buy and sell shares in—just like stocks. Only instead of buying shares in Apple, you’re buying shares in real estate. Shares can range in price from just a few dollars to hundreds of bucks. Investors can buy into them on certain exchanges.

As with stocks, investors can make money by buying shares at a low price and selling them at a higher one, and by collecting quarterly dividends (payouts are made every three months).

There are two main kinds of publicly traded REITS. Equity REITs own rental properties ranging from homes to business space, and make money collecting income on them. Residential and commercial mortgage REITs allow investors to buy mortgage debt where investors profit from the interest.

Of all of the real estate investment trusts, data center REITs—where companies rent out space to store their network servers—had the highest one-year returns, at 29.79%, according to the National Association of Real Investment Trusts, a Washington, D.C.-based REIT trade group. It was followed by home financing mortgage REITs, which invest in bundles of home loans, at 25.57%.

The biggest losses were in the retail sector, as more shoppers make their purchases online. (Thanks, Amazon!) Big shopping malls, usually anchored by department stores, took the biggest one-year hits, at -26.78%, according to the association.

4. Crowdfunded real estate: Like Kickstarter for property

Year-to-date annualized returns: 8.72%*
Two-year returns: 8.89%

Crowdfunded real estate is like the younger, cooler cousin of REITs. Simply put, it allows ordinary folks to pool their money to invest in things like apartment complexes, office buildings, and shopping centers. It’s like a Kickstarter for buying real estate—instead of funding your college roommate’s feature-length documentary about Furries.

Previously available only to uber-wealthy accredited investors, crowdfunding only became open to the general public in March 2015. That’s when the government enacted new rules opening up the investments to folks without ginormous bank balances. So there isn’t much data available yet on how these investments perform over the long term.

While REITs can hold tens of thousands of properties and be worth billions of dollars, crowdfunding companies are often significantly smaller, holding just one or a handful of properties. And they often require a long-term commitment from investors.

As with REITs, the two main options in crowdfunded real estate investing are equity or debt.

Equity, the riskier of the two, involves investing in a fund connected to commercial or residential development. It makes money from the income the property generates and the increase in the value over time. The investment is usually tied up for about five to seven years. Debt is the loan used to get the project off the ground and continue to finance it through the life of the project.

Over time, accredited investors—the wealthier ones who have been in the investments the longest—typically receive anywhere from 11% to 45% annual returns on their equity crowdfunding investments, says Ian Ippolito, a retired investor who founded the website The Real Estate Crowdfunding Review. Since these types of investments have only recently been opened up to the masses, the annual returns for regular investors are about 8.2%. That’s expected to rise if all goes well when the property is sold five to seven years down the line.

But if the development doesn’t get fully built or doesn’t make any money, then investors may get nothing—and even lose their investment.

“These are long-term investments, so if you pull your money out early, there’s usually a financial penalty,” Ippolito says. That’s a big difference from REITs, which can be sold at any time. “Retirees who need the money soon probably should look elsewhere.”

Debt is a bit safer, but the payouts may not be as high.

5. Home appreciation: The investment you can live in

One-year appreciation: 10%*
Three-year appreciation: 26.7%
Five-year appreciation: 44.8%

Folks don’t need to flip homes or pour money into crowdfunded projects to make money as a real estate investor. Instead, they can search hard for the perfect home, get their finances in order, negotiate smartly, and close the deal for the best possible price.

And then live in it.

Real estate typically appreciates over time. That means that buyers who buy a home in a decent area and keep it in good shape should make money when they decide to sell. Depending on the market and the home, sometimes a lot of money. But they should plan on being in that home for at least five or so years, so they can build up enough equity in the home to net a profit once real estate agent fees and closing costs are accounted for.

“In general, buying a home is a good investment and a way to build wealth and equity over a lifetime,” says Joseph Kirchner, senior economist at realtor.com®. “[But] even if you’re buying it to live in the house for the next 30 years, it is always better to buy when prices are low.”

And as folks build equity in their home, through appreciation and paying down their mortgage debt, they can take out home equity loans or home equity lines of credit against their property.

But of course, just as with the other investments on this list, there are risks. The country could enter into a new recession, or there could be a local housing market crash if a big employer leaves the area. Or homes in your area could simply be overvalued.

However, when home prices fall, they do generally rebound—eventually.

“Good markets aren’t going to last forever,” says real estate investment author Tyson. “Even the best real estate markets go through slow periods.”

 

Source: realtor.com

The post Flip, Rent, or Hold: What’s the Best Path to Real Estate Riches? appeared first on AAOA.

Categories: RSS

Is Airbnb to blame for rising rents in hip college towns?

Mon, 09/25/2017 - 11:38am

It used to be that renting an apartment in Cambridge’s funky triple-deckers or two-family homes didn’t rival the cost of tuition at one of the city’s storied universities, Harvard and MIT.

Now, renting in Cambridge can feel like that — something critics say is made tougher by short-term rental websites like Airbnb, through which property owners can make more money renting out apartments or homes by the night instead of a yearlong lease.

The debate over services like Airbnb — often criticized for essentially turning apartments into hotel rooms, putting upward pressure on housing costs and driving out longer-term tenants who can’t afford rising rents — has raged for years in major cities. But it is also keenly felt in event-heavy college towns, particularly ones that also are tourist destinations or are near them, like Cambridge, next to Boston.

Jennifer McConnell, a high school Spanish teacher who rents out rooms in her Cambridge brownstone through Airbnb, said she’d otherwise have trouble covering her expenses.

“It’s been a game changer both financially, because it’s allowed me to stay in my home, but also emotionally because it’s filled up my home with guests,” said McConnell, whose guests included a woman from Germany who stayed for seven weeks while taking a graduate course at Harvard.

Short-term rentals have caused enough concern in Cambridge that the city council last month approved new regulations requiring people offering short-term rentals to live in the same building and undergo an inspection once every five years.

Picturesque Boulder, home to the University of Colorado, last year began requiring property owners to have a license to rent to visitors. Evanston, Illinois, a Chicago suburb that is home to Northwestern University, also has beefed up rules on rentals of less than 30 days.

Massachusetts Lodging Association President Paul Sacco hailed the Cambridge rules, saying they’re needed to prevent “illegal hotels” in the city.

Airbnb said it is not to blame for spiking housing costs. Only a small percentage of the Cambridge housing stock — about 140 homes or apartments — are rented through its website for more than 172 nights a year, it said. That’s Airbnb’s estimate for someone who is effectively doing short-term rental as a business.

Interest in renting rooms through Airbnb often jumps during graduation or a big football game, said Will Burns, public policy director for Airbnb.

Visiting scholars and families of college students also fill rooms. In Cambridge, an annual rowing event on the Charles River also creates demand.

In the past 12 months, Airbnb said, there have been 90,000 guest arrivals in Cambridge through its service in the city of about 110,000.

Kirsten Rulf, a 36-year-old research fellow at Harvard Law School, said she used Airbnb for two weeks in August 2015 before finding permanent housing. The small, furnished room in a larger apartment cost her $1,500 for 14 nights, she said.

“For me that was the best option, because hotels are super expensive, especially in August,” said Rulf, who hails from Mendig, Germany.

A tour of Airbnb’s website reveals how much of a draw colleges are — at least according to those trying to rent out rooms.

“Perfect spot to visit MIT, Harvard, BU (Boston University),” reads one ad. “The house is within walking distance to the Princeton University Campus,” reads another ad. A third boasts, “Great ‘shotgun’ style apartment on a nice street in New Haven which is a short ( 5min) walk to Yale.”

Some institutions, including Boston’s Emerson College, have even busted students for trying to rent out dorm rooms.

An agreement on graduate housing at Yale University states that while students are allowed to have guests for short visits, “Guests who pay rent and/or guests found through Airbnb or similar arrangements are prohibited.”

In Cambridge, the median rent has soared to a daunting $3,000 a month, according to real estate data provider Zillow. In Boston, which sees its population swell every September when students flock back, the median rent is $2,700.

According to Zillow, the median monthly rent in Evanston is nearly $1,700. The rent in Ithaca, New York — hub of the touristy Finger Lakes region and home to Cornell University — is about $1,600, according to the real estate firm Trulia.

A 2014 report by New York Attorney General Eric Schneiderman found “private short-term rentals displaced long-term housing in thousands of apartments” in New York City.

McConnell, the Cambridge resident who opens her home to Airbnb clients, said she’s OK with the city’s regulations but isn’t thrilled about the inspections. She said she also doesn’t fault Airbnb for the city’s soaring housing and rental costs.

“The middle class person has a hard time finding a place,” she said. “I don’t blame that on Airbnb. People couldn’t afford to rent those places anyway.”

Source: cbsnews.com

The post Is Airbnb to blame for rising rents in hip college towns? appeared first on AAOA.

Categories: RSS

Real estate investors look to cash in on Harvey-ravaged Houston

Mon, 09/25/2017 - 11:30am

Some real estate executives in Texas are hoping to get rich quick with homes damaged by Hurricane Harvey.

Longtime investor Ray Sasser detailed the strategy at a real estate conference in Houston this month: Buy up to 50 flooded homes for a fraction of what they’re worth, fix them and flip them for a hefty profit, Reuters reported.

He said he first tried the strategy after Tropical Storm Allison flooded the city in 2001 — purchasing homes for almost half of their pre-storm value, spending about 15 percent on repairs, and selling many of them at full value a year later.

The quick success of the plan was actually surprising to him, according to the outlet.

“This can’t be true,” Sasser said.

While Harvey-hit homes in the Houston area may be a riskier investment than houses damaged by Allison, investors are nevertheless rushing in to snatch up the flooded homes.

A Houston market manager for brokerage and online listings firm Redfin said agents are getting about four times the number of calls they usually get from investors.

“You have people with millions of dollars to work with,” Tara Waggoner said.

“They want to go in, pay cash, get the discount and fix it up to sell.”

She said the calls range from individuals looking to buy homes or groups of 10 or more people pooling their money and going on a home-buying shopping spree.

Investor Brandyn Cottingham believes Harvey brought a world of opportunity to his business.

“In this business, you look for distressed property, and we’ve got tons of that right now,” Cottingham said.

While it may just look like a money-making opportunity for cavalier investors, long-time foreclosure broker Linda Muscarello warned investors on how to properly speak to flood victims about their destroyed homes.

She said it’s very important to nod and listen when talking to these owners and help them understand in a non-predatory way they may have unrealistic notions about keeping their home if they didn’t have flood insurance or their businesses were damaged.

If homeowners don’t expect to have a steady, long-term income, real estate experts suggest it’s better to just give the keys to someone else.

 

Source: nypost.com

The post Real estate investors look to cash in on Harvey-ravaged Houston appeared first on AAOA.

Categories: RSS

Student debt is delaying millennial homeownership by seven years

Mon, 09/25/2017 - 11:28am

Historically, Americans have bought a home by their early 30s, but today’s millennials are playing a waiting game because they’re saddled with so much student loan debt.

Millennials who don’t already own homes are delaying purchasing one for a median of seven years, according to a new joint study on millennial student debt from the National Association of Realtors and education financing nonprofit American Student Assistance.

Overall, 83% of non-home owners said they believe that student loan debt has delayed them from buying a home — and that figure is higher among older millennials (those born between 1980 and 1989) and people who have more than $70,000 in student loan debt. The report was based on the results of a survey of 2,203 student loan borrowers.

Most commonly, student debt is affecting people’s ability to save. Some 85% of respondents said they have not been able to save for a down payment because of their student loans. Additionally, nearly three-quarters of people said they’re putting off buying because their student debt makes them feel too financially insecure. More than half (52%) of respondents also said that they can’t qualify for a mortgage because of their debt-to-income ratio.

Historically, Americans have bought a home by their early 30s, but today’s millennials are playing a waiting game because they’re saddled with so much student loan debt.

Millennials who don’t already own homes are delaying purchasing one for a median of seven years, according to a new joint study on millennial student debt from the National Association of Realtors and education financing nonprofit American Student Assistance.

Overall, 83% of non-home owners said they believe that student loan debt has delayed them from buying a home — and that figure is higher among older millennials (those born between 1980 and 1989) and people who have more than $70,000 in student loan debt. The report was based on the results of a survey of 2,203 student loan borrowers.

Most commonly, student debt is affecting people’s ability to save. Some 85% of respondents said they have not been able to save for a down payment because of their student loans. Additionally, nearly three-quarters of people said they’re putting off buying because their student debt makes them feel too financially insecure. More than half (52%) of respondents also said that they can’t qualify for a mortgage because of their debt-to-income ratio.

 

Source: marketwatch.com

The post Student debt is delaying millennial homeownership by seven years appeared first on AAOA.

Categories: RSS

Landlords Settle Fair Housing Pet Discrimination Case For $72,000

Thu, 09/21/2017 - 10:27am

Northern California landlords have settled pet discrimination allegations that they and their agents discriminated against a female tenant with disabilities who requires an assistance animal, according to a release from the U.S. Department of Housing and Urban Development.

Fair Housing Advocates of Northern California(FHANC) filed a complaint alleging that the owner of the properties (Shultz Investment Co.), representatives of its management company (Greenbrae Management, Inc.) and its leasing agents discriminated against a resident who has a medical condition and required a service dog at the Bon Air Apartments in Greenbrae, California.

The fair housing group also claimed the woman, who had lived at the property for more than 15 years, was subjected to discriminatory statements and retaliation due to the presence of her assistance animal, including false accusations that the animal was disruptive, that it bit maintenance workers, and that it was not a service animal under California law, according to the release.

The woman’s Housing Assistance Program voucher was ultimately cancelled, forcing her to find housing elsewhere.

HUD investigation confirmed discriminatory statements by property managers

A subsequent HUD investigation corroborated the woman’s need for the dog and discovered written discriminatory statements made by the property managers, according to a HUD release.

HUD found no evidence indicating that the animal was disruptive or had bitten anyone.

“Landlords are required to provide a reasonable accommodation for individuals who require assistance animals,” Bryan Greene, HUD General Deputy Assistant Secretary for Fair Housing and Equal Opportunity, said in the release.

“HUD is committed to make certain that landlords meet this obligation under the nation’s fair housing laws.

Landlords will pay $72,000 in pet discrimination agreement

Under the Conciliation Agreement, the respondents will pay the woman $31,000; pay Fair Housing Advocates of Northern California $41,000; and develop and implement a reasonable accommodation and reasonable modification policy consistent with the Fair Housing Act.

The owners will also revise their standard lease to be consistent with the new accommodations policy; send a letter to current tenants notifying them of the new policy; and obtain fair housing training.

“On an ongoing basis, our agency receives many calls from people with disabilities who need reasonable accommodations,” Caroline Peattie, FHANC’s Executive Director, said in the release. “Many of those calls concern service and companion animals; both must receive the same consideration under fair housing law. When a person with a disability requests an accommodation, the housing providers may require documentation that there is a disability and that the request will address that need, but they are required to consider each request individually and engage in an interactive dialogue with the tenant.”

The Fair Housing Act prohibits housing providers from denying or limiting housing opportunities to persons with disabilities or imposing different rental terms and conditions. This includes refusing to make reasonable accommodations in policies or practices for people with disabilities.

In addition to the Fair Housing Act’s prohibition against discrimination based on disability, HUD provided guidance in April 2013 reaffirming that housing providers must provide reasonable accommodations to people with disabilities who require assistance animals.

Fair Housing Advocates of Northern California is a non-profit organization serving several Bay Area counties that provides free counseling, enforcement, mediation, and legal or administrative referrals to persons experiencing housing discrimination. Fair Housing Advocates of Northern California also offers foreclosure prevention services, pre-purchase education, seminars to help housing providers fully understand fair housing law, and education programs for tenants and the community at large. Fair Housing Advocates of Northern California is a HUD-Certified Housing Counseling Agency.

 

Source: rentalhousingjournal.com

The post Landlords Settle Fair Housing Pet Discrimination Case For $72,000 appeared first on AAOA.

Categories: RSS

Housing starts fall for second straight month

Thu, 09/21/2017 - 9:45am

U.S. homebuilding fell for a second straight month in August as a rebound in the construction of single-family houses was offset by persistent weakness in the volatile multifamily home segment.

The report from the Commerce Department on Tuesday also showed building permits racing to a seven-month high in August. However, permits for single-family homebuilding, which accounts for the largest share of the housing market, dropped.

The mixed report suggested housing could remain a drag on economic growth in the third quarter. Homebuilding has been treading water for much of this year amid shortages of land and skilled labor as well as rising costs of building materials.

Housing starts slipped 0.8 percent to a seasonally adjusted annual rate of 1.18 million units, the Commerce Department said.

Building permits surged 5.7 percent to a rate of 1.30 million units in August, the highest level since January.

The data suggested limited impact on permits from Hurricane Harvey, which lashed Texas in late August and caused unprecedented flooding in Houston. The Commerce Department said the response rate from areas affected by the storm “was not significantly lower.”

But homebuilding could slump further in September in the aftermath of Harvey and Hurricane Irma, which struck Florida. According to Census Bureau data, the areas in Texas and Florida that were devastated by the storms accounted for about 13 percent of permits issued in the nation last year.

Though activity could pick up as the hurricane-ravaged communities rebuild, the dearth of labor could curb the pace of increase in homebuilding. A survey Monday showed confidence among homebuilders fell in September amid concerns that the hurricanes could worsen the labor shortages and make building materials more expensive.

Economists had forecast housing starts rising to a 1.18 million-unit pace last month. Investment in homebuilding contracted in the second quarter at its steepest pace in nearly seven years. As a result, housing subtracted 0.26 percentage point from second-quarter gross domestic product.

Homebuilding rose 1.4 percent in August on a year-on-year basis. Despite the recent weakness, housing continues to be supported by a labor market that is near full employment. In addition, mortgage rates remain close to historic lows.

Single-family homebuilding jumped 1.6 percent to a rate of 851,000 units in August. Single-family permits, however, fell 1.5 percent to a 800,000-unit pace. With permits lagging starts, single-family homebuilding could decline in the months ahead. Groundbreaking on single-family housing projects has slowed since vaulting to near a 9-1/2-year high in February.

MIXED DATA Last month, single-family starts rose in the South and West, but fell in the Midwest and Northeast. Starts for the volatile multi-family housing segment tumbled 6.5 percent to a rate of 329,000 units. Multi-family permits vaulted 19.6 percent to a 500,000-unit pace in August.

The mixed data is unlikely to change expectations that the Federal Reserve will announce on Wednesday a plan to start unwinding its $4.2 trillion portfolio of Treasury bonds and mortgage-backed securities. Fed officials were scheduled to start a two-day meeting later on Tuesday.

The dollar was trading lower against basket of currencies, while prices for U.S. Treasuries rose. U.S. stock futures were slightly higher.

In a separate report on Tuesday, the Labor Department said import prices jumped 0.6 percent in August, the biggest gain since January, after dipping 0.1 percent in July.

In the 12 months through August, import prices surged 2.1 percent after rising 1.2 percent in July.

Last month, prices for imported petroleum raced 4.8 percent after slipping 0.4 percent in July. Import prices excluding petroleum rose 0.3 percent after dipping 0.1 percent the prior month. Import prices excluding petroleum increased 1.0 percent in the 12 months through August.

Import prices outside petroleum are rising as the dollar’s rally fades. The dollar has weakened 8.3 percent against the currencies of the United States’ main trading partners this year.

The report also showed export prices rose 0.6 percent in August after gaining 0.5 percent in July. They increased 2.3 percent year-on-year after rising 0.9 percent in August.

A third report from the Commerce Department showed the current account deficit, which measures the flow of goods, services, and investments into and out of the country, increased to $123.1 billion in the second quarter from $113.5 billion in the first quarter.

That was the highest level since the fourth quarter of 2008.

Source: cnbc.com

The post Housing starts fall for second straight month appeared first on AAOA.

Categories: RSS

Achieving Successful Affordable-Housing Management

Thu, 09/21/2017 - 9:42am

Being aware of the challenges, opportunities and pitfalls in affordable-housing property management is the key to profitability and success, NAR’s Megan Booth tells GlobeSt.com in this IREM Global Summit preview.

CHICAGO—Being aware of the challenges, opportunities and pitfalls in affordable-housing property management is the key to profitability and success, Megan Booth, senior policy representative for the National Association of Realtorsin Washington, DC, tells GlobeSt.com. Booth will be moderating the Affordable Housing Management panel session during IREM’s Global Summit here Oct. 10-13. We spoke with her about the session and what property managers need to know regarding affordable housing.

GlobeSt.com: What are the greatest challenges in affordable-housing property management?

Booth: Especially if property managers are managing federally assisted housing, they should know that the rules tend to change pretty frequently. HUD, Rural Housing Service (part of USDA) and even the IRS put out new regulations and guidance pretty regularly, so property managers have to be aware of and keep up with the new rules and guidelines that come out several times a year. Another challenge is tight budget constraints, including limits on rent increases and costs that are outside of their control such as utility costs. In affordable housing, they can’t make that up in the rent, so operating efficiently can be a challenge.

GlobeSt.com: Where are there untapped opportunities for property managers to add value to these properties?

Booth: One of my members termed it is the “senior tsunami.” As the Baby Boomers age, there are going to be a lot of seniors on fixed incomes who will need affordable housing. Some of what you do for seniors might be different than what you do for families. You may be able to hire or contract with service coordinators who can provide services for seniors such as food or health programs. Sometimes, HUD will allow service coordinators to be hired; this will be a growing market because there will be more and more seniors needing this type of housing. It’s important for people to be up to speed so these services can be in place as the need grows. For instance, you don’t want garden-style apartments for the elderly—they need buildings with elevators. This is a special-needs community and one that property managers should learn about now so that they’re ready for it.

GlobeSt.com: What are the pitfalls to be avoided in this realm?

Booth: One of the trickiest things, especially in programs with some sort of federal subsidy attached, is that administrations come and go, and there will be changes in how to fund these programs. You never know if funding is going to be cut for a program you’re using. One thing property managers can do is to share the properties with members of Congress: have them come visit the properties and the residents. If they can see them and the benefits they’re getting from these programs, it can help quite a bit.

GlobeSt.com: What else can attendees hope to gain from this session?

Booth: Many people in our industry don’t realize that IREM members manage almost 40% of federally assisted housing in the country. People think it’s really a specially-niche thing, and yes, there are a lot of technicalities to be aware of, but property-management companies are participating in it. Most communities have huge waitlists for affordable housing, so depending on where the government goes with some of these programs, they could be expanded or cut. For example, the LIHTC program legislation, if it passes, might expand the program and offer more ability for people to live in these properties, and hopefully they will have professional property managers there who know what they’re doing. You never know what’s going to happen, but this is not a niche that is going to go away.

 

Source: globest.com

The post Achieving Successful Affordable-Housing Management appeared first on AAOA.

Categories: RSS

HOMEOWNERS’ AND RENTERS’ INSURANCE UNDER MICROSCOPE FOR CUSTOMER SATISFACTION

Thu, 09/21/2017 - 9:36am

In the wake of devastating Hurricanes Harvey and Irma, customer satisfaction among U.S. homeowners and renters’ insurance will be squarely under a microscope the rest of this year and beyond.

According to the J.D. Power 2017 U.S. Home Insurance Study released Monday, the ability of insurers to maintain these high levels of customer satisfaction will be tested in the coming months amid the historic property losses and profit strains created by Hurricanes Harvey and Irma.

“Although property insurers have made great strides in overall customer satisfaction over the past several years, the areas where they consistently see the lowest satisfaction scores are price and direct customer service,” said Greg Hoeg, vice president of U.S. Insurance Operations at J.D. Power. “Those two areas, in particular, will be under enormous stress as insurers address losses from the recent hurricanes.”

What’s more, the study says that these challenges are amplified by the threat of disruption from a new crop of emerging “insurtech” innovators coming to market with lower premiums and state-of-the-art self-service web and mobile customer service technologies.

“However, traditional service providers are fighting back by partnering with smart home assistants like Amazon Echo and Google Home,” the study notes. “When used, these products increase customer engagement and lead to higher satisfaction by increasing awareness of best practices insurers execute but have low awareness due to limited interactions throughout the year.”

Here are some key study findings:

Record-high customer satisfaction among homeowners and renters: Overall customer satisfaction scores have reached an all-time high of 808 (on a 1,000-point scale) among homeowners and 834 among renters, driven by improvements in policy offerings.

Price and direct customer service interactions remain problem spots: Despite overall rising customer satisfaction scores, the two lowest-performing factors in the customer experience are price and direct interactions with insurance companies via call center, website or assisted online channels. However, multichannel interactions that include direct and live channels throughout the year produce the highest levels of customer satisfaction.

Many don’t completely understand policies and coverage: Overall satisfaction among home insurance customers who understand their policy and the details of what it covers is 92 points higher than among those who say they do not fully understand their coverage. Despite this huge effect on satisfaction, just 48 percent of customers say they completely understand their policy.

Insurtech innovators pose growing threat: Startup insurance industry innovators have raised more than $7.1 billion globally since 2012 to carve out a slice of the home insurance marketplace by offering lower premiums and technologically advanced self-service interactions. While overall awareness of these innovators is still low at just 5 percent of all property customers, awareness among Millennial1 customers is more than double that rate (11 percent). Among Millennials who are aware of these start-up businesses, nearly 30 percent say they “definitely will” or “probably will” purchase from one in the future.

Amica Mutual ranks highest in the homeowners’ insurance segment for a 16th consecutive year, with a score of 866. Shelter and COUNTRY Financial rank second and third with scores of 850 and 839, respectively.

Erie Insurance ranks highest in the renters’ insurance segment with a score of 862. American Family ranks second with a score of 844. State Farm ranks third with a score of 833.

The U.S. Home Insurance Study examines overall customer satisfaction with two distinct personal insurance product lines: Homeowners and renters. Satisfaction in the homeowners and renters’ insurance segments is measured by examining five factors: interaction; policy offerings; price; billing process and policy information; and claims. Satisfaction is calculated on a 1,000-point scale.

The study is based on responses from 15,909 online interviews conducted in June-July 2017.

 

Source: loyalty360.org

The post HOMEOWNERS’ AND RENTERS’ INSURANCE UNDER MICROSCOPE FOR CUSTOMER SATISFACTION appeared first on AAOA.

Categories: RSS

Do Designations Matter When Choosing A Commercial Real Estate Broker?

Thu, 09/21/2017 - 9:30am

Commercial real estate transactions are some of the most important deals that a person or business can make. Finding the right commercial real estate can make or break a business venture. That is why people want the best professional commercial real estate broker available to guide them through the process.

But how can you separate the best professional real estate brokers from the rest?

Degrees And Designations

Most other important professions have a degree or designation that any practitioner is required to have by law. Lawyers have the J.D., doctors the M.D., engineers the P.Eng and so on. Yet there are no professional designations that are required to practice as a commercial real estate broker.

Fortunately, commercial real estate broker associations have created professional designations that allow you to identify those practitioners who have gone above and beyond to become masters of their craft. While anyone who has met the necessary licensing requirements for their jurisdiction can become a commercial real estate broker, these professional designations help the best stand out from the rest and give you the peace of mind that you have found someone that you can trust to guide you through these important decisions.

What’s In A Degree Anyway?

A degree or professional designation signifies that the holder has the necessary education and experience to safely practice their profession. These designations are designed by professional associations to represent at least a bare minimum of knowledge and experience that every practitioner needs to do their job effectively and to a minimum standard of performance expected by their professional peers. Anyone who meets these standards can be relied upon to make the right decisions when practicing their craft.

Commercial real estate designations signify knowledge in relevant areas of law and finance, as well as the customs and ethics of the commercial real estate industry. These professional designations also signify a commitment to ongoing education and regular participation in the professional community and industry events.

Professional Designations In Commercial Real Estate

Two of the best designations for commercial real estate brokers are the CCIM and SIOR. Either of these designations signifies that you are working with a true professional with years of knowledge and experience in the industry.

The CCIM designation stands for Certified Commercial Investment Member. The CCIM pin signifies that the owner has successfully completed advanced courses in market and financial analysis, and has demonstrated significant experience in the commercial real estate industry. CCIM professionals are recognized as the leading experts in commercial real estate.

More than anything, a CCIM designation represents reliable expertise in market, financial and investment analysis, as well as negotiations. Courses for these central competencies are instructed by industry professionals, which ensures that all materials reflect the state of the contemporary industry. Using their real-world education, CCIM professionals can be relied on to guide their clients to:

• Minimize risks

• Enhance deal credibility

• Make appropriate decisions

• Close deals effectively

The other leading credential, an SIOR designation, is a professional achievement for those commercial real estate practitioners who have a strong history in fee-based services, brokerage or executive management.

The SIOR designation signifies:

• A specialist in office and/or industrial markets

• A transaction closer who is recognized by lenders, developers and investors

• A top producing professional who closes more than 30 transactions each year

• A top performer who meets SIOR’s exacting education, production and ethical requirements

An SIOR designation can be granted in one of the six specialist categories:

• Industrial

• Office

• Industrial & Office

• Sales Management

• Executive Management

• Advisory Services

 A Commercial Real Estate Professional Designation Is More Than Just A Title

The great thing about professional designations is that they provide buyers with the confidence that you can rely on that person for the latest and best professional advice. The designations are more than just a few years of coursework done many decades ago. These professional designations signify an ongoing commitment to staying informed about all relevant knowledge and practicing their craft to a high standard every single day.

When you need to make a commercial real estate transaction, trust the professionals and look for a commercial real estate broker designation that signifies the years of knowledge and experience that you can count on.

Source: forbes.com

The post Do Designations Matter When Choosing A Commercial Real Estate Broker? appeared first on AAOA.

Categories: RSS

Smart Apartments: The Future Of Resident Living

Thu, 09/21/2017 - 9:23am

The past 10 years have seen a boom in apartment living, with more and more people – especially millennials – choosing to live in upscale, luxurious apartment communities. These new residents are driving a demand for communities equipped with state-of-the-art, high-tech amenities that only the 21st century can offer.

At the forefront of these high-tech amenities is Smart Home technology (or the “Internet of Things”), which gives everyday household items the ability to be wirelessly controlled through your smartphone. With the tap of a finger, one can turn off a light, unlock a door or set a thermostat – from anywhere and at any time.

Bringing that Smart Home technology into the apartment space certainly appeals to owners and developers, who see the potential amenity as a way to increase ancillary income (by offering it for an additional monthly charge), increase energy savings and gain a competitive edge in a crowded market.

But even as the demand for ‘Smart Apartments’ increases, very few industry vendors have been able to provide a comprehensive solution to owners.

Why?

One of the first obstacles is scalability. Smart Home technology was originally designed for single-family homes. Apartment communities are multi-family homes, with hundreds of residents moving in and out each month as leases expire and renew. Building a solution that can be scaled to operate across any community, regardless of size, is vital. Managing that solution by providing property management with easy access and controls on a community-wide level is vital, as well.

Scaling a Smart Apartment solution also requires a strong network infrastructure to be in place. All Smart products rely on some sort of wireless network infrastructure to operate. Weak, unreliable networks can cause enormous headaches for owners and even compromise the service’s security.

Another obstacle for apartment owners is the overwhelming number of Smart products available. How to choose the best products to use?

Centralization is key to overcoming this obstacle. Owners don’t want residents to have to download multiple different smartphone Apps to control their apartment’s Smart products. Finding a solution that brings all those products together with the ability to be controlled under one easy-to-use smartphone App simplifies the user’s experience and creates a service any resident can use.

At Epproach, our experience in the industry gives us a unique perspective on these obstacles. For more than 10 years, we’ve provided Managed WiFi networks and customizable smartphone Apps to apartment communities. We manage and monitor more than 350 WiFi networks across the country, ensuring fast and reliable connections for residents 24-7, 365 days a year. We’ve provided branded smartphone Apps to over 150 communities as well, each outfitted with a comprehensive back-end management system.

By capitalizing on the lessons we learned as a managed technology provider, we have been able to transition a Smart Apartment service from theory to reality. In May, we partnered with Burns Management to open New York’s firstfully-outfitted Smart Apartment complex, Excelsior Park, located in Saratoga Springs. Each unit is equipped with Smart door locks and thermostats, controlled via our smartphone App.

One of the biggest surprises we’ve had at Excelsior Park is the demand from residents for the Smart Apartment solution. An incredible 97 percent of incoming residents opted-in to the new service, thereby providing the community’s owner with a substantial increase in revenue each month.

Although there are challenges to overcome, Smart Apartments are certainly in demand and on the brink of an exploding technology trend. The service is heralding the arrival of a new, high-tech living experience for the apartment resident.

Denver Hollingsworth currently serves as Epproach Communication’s Director of Marketing. After graduating from East Carolina University with a BS in Communication and a concentration in Journalism, Denver relocated to Wilmington, NC, to join the Epproach team. As Epproach has transitioned from a Managed WiFi vendor to a full-scale technology provider for the apartment industry, Denver has been responsible for all aspects of the company’s marketing, from nationwide ad campaigns and industry tradeshows to innovative social media engagement.

 

Source: wilmingtonbiz.com

The post Smart Apartments: The Future Of Resident Living appeared first on AAOA.

Categories: RSS

Pages