American Apartment Owners Association
Warm weather is on the way, but it brings increased pest activity from insects, arachnids and other annoying invertebrates. It’s easier to prevent nuisance bugs from establishing an infestation, but if they’ve already invaded your facility, don’t panic. Get to know the most common springtime pests and determine how to deal with them with these tips.Common Springtime Pests
Three key types of pests stay mostly dormant over the winter and emerge in spring, says Jim Fredericks, Chief Entomologist and Vice President of Technical and Regulatory Affairs for the National Pest Management Association: ants, termites and flies. All three lay low when the temperature dips under 50 degrees F. and resurface when the weather is dependably warmer, especially after rainstorms.
“Ants are the No. 1 nuisance pest in the United States,” Fredericks explains. “They don’t completely die out during the cooler months but might be outside of the structure in mulch or landscaping, hiding under rocks or inside using insulation to stay warm.”
Termites can destroy wood in structures year-round but are typically more visible during spring when they emerge to mate and start new colonies, Fredericks says. Flies typically remain dormant all winter but are able to move again and invade structures as temperatures start to rise. “Termite infestations, particularly subterranean termites, build shelter tubes that come out by the building’s foundation. It’s basically a thin mud tube that extends out of the ground a foot or so into the structure. That’s one sure sign of termites,” adds Gene Chafe, General Manager for Senske Services, a landscape maintenance and pest control provider.
Cockroaches and bedbugs are active all year because they’re most active indoors but should still be covered for in spring pest management activities, Fredericks says.Proactive Steps to Prevent Infestations
The best thing to do is have an integrated pest management program in place that anticipates pests common to your area, inspects accordingly and takes action proactively, Chafe says. Pest management providers can inspect your property on a weekly or monthly basis and identify emerging outbreaks and conditions that encourage infestations, such as moist wood that can attract carpenter ants or leaves blown up against the foundation that provide nesting areas.
In addition to implementing a smart pest management strategy, make sure any screened windows are in good repair to keep flies out. Move garbage cans or designated refuse areas away from the building if possible and keep your compactor room or trash chute clean. Seal entry points and install door sweeps to keep out ants.
Outside, Chafe recommends inspecting your irrigation system while it’s running to check for standing water. Prune bushes 18-24 inches away from the structure and trim trees so that they don’t touch the building. Consider thinner ground cover, as thicker plantings can hide ground-nesting rats and other invaders, Chafe adds.How to Expel Intruders
Once an infestation has settled in, you need to call in a pest control professional to sort it out before it gets even worse. Practitioners of integrated pest management will start with the least toxic methods to control the population, says Chafe.
Don’t try to take care of the infestation yourself, Fredericks warns. Different insects require different treatments and using the wrong one could backfire. He also suggests checking out the pest guide at pestworld.org to learn more about the habits, habitats and potential threats posed by different species.
When purchasing their first rental properties, many investors believe that the assets will effortlessly bring in money. However, they soon discover the hard way, that owning rental units attract a myriad of costs, which can significantly dent the amount of rental income. It is, therefore, important for a rental property investor to understand what these associated costs are, and how to best avoid or keep them in check.
Unscrupulous or untrustworthy contractors
As a landlord, you will have to work with contractors to grow and excel your rental investments. Some of these partners are property management companies, real estate agents, attorneys, accountants, as well as, service and repair contractors. Enlisting and retaining the services of these professionals naturally requires money, which ideally, should come from the rental property.
Hence, it is important that you get reasonably priced partners and contractors, who understand that for them to get their pay, your business needs to flourish. As such, their primary concern should not only be to get paid, but rather to help you grow your rental investments.
Problematic renters As ironic as it may sound, even though a tenant is supposed to give you income if you get a wrong one you might just realize that a large chunk of the rent goes to waste. For instance, the tenant might make you waste precious time to demand the rent each time it is due or compel you to spend countless hours mediating conflicts between him or her and other tenants. Similarly, you might incur costs evicting the tenant or fighting off legal suits filed by the renter.
A straightforward and economical way for you to avoid such costly inconveniences is to put in place a thorough tenant screening procedure to help you identify and qualify high-quality renters, who will pay the rent promptly.
Property maintenance One of the pains of a landlord is ensuring that the property is rent-ready and in the perfect habitable condition possible. While maintaining and servicing the rental units can be smooth and manageable, at times the cost can spiral out of control, more so, if the property is old and severely worn out. In such a case you might have to finance endless and costly repairs before the building becomes habitable.
If you wish to control such losses, make sure you carry out careful property inspection to evaluate the condition of the property before purchasing it. Moreover, only hire reliable, competent and affordable service or maintenance technicians, who will give the right solution. Lastly, inform your tenants through the rental agreement that they will be liable for certain types of property damages.
Insurance costs It makes perfect business sense for a property owner to protect his or her investment against any possible event. The challenge, however, sets in when the insurer considers the owner as an investor instead of the primary occupant. As a result, the owner has no option but to settle for the costly special landlord insurance coverage, whose premium averages about twenty-five percent more than the regular homeowners’ policy. Not only does this bite a huge chunk of the rental income, but it gets complicated if the resident terminates the lease before the full term, and the house goes for long without getting a new occupant.
A prudent way of managing such costs is to factor in the insurance premiums in the monthly rent and doing all you can to keep your renters happy so that they stay to the end of the lease. Furthermore, have in place effective measures that guarantee you always have prospective tenants who are ready to move in, immediately when the units become vacant.
Increased taxes Most states and municipalities have homestead exemptions where they offer tax breaks to owners who live in their properties. In contrast, however, they impose heavy tax burdens on the investment properties. Naturally, the tax burden will have an impact on the amount of rental income a landlord gets from his or her investment. Fortunately, there are other costs related to the rental properties which can entitle you to tax breaks. Talking to an experienced and credible rental property taxation expert can help you to identify such perks.
Miscellaneous Damages Another common yet difficult to predict cost are those that occur in the middle of another activity. For instance, a window could break during property maintenance or an AC unit could get damaged during servicing. Since it is practically impossible to foretell if and when you will incur such expenses, it becomes relatively difficult to keep the costs in check. Nonetheless, you can try to be extra careful when handling the repairs, and only let someone with the right experience and competence manage the repairs. If you hire a maintenance or service specialist, go for one who has adequate insurance coverage and offers service warranties.
Conclusion Most first-time rental property investors hardly think about the hidden costs associated with their investment until after they have purchased the units. Even though by then it might be too late to reverse the investment decision, it is still possible to keep those pesky costs in check. You only need to know what expenses are denting your income and take the necessary reactive measures to control them. Still, taking the time to assess and evaluate the property before purchasing it remains the best way to keep most of these hidden costs at bay.
The post Hidden Costs That Can Diminish Your Rental Property Profits appeared first on AAOA.
Question: A month ago, I signed a one-year lease when I met with the onsite manager at the community’s rental office. I paid the deposit and first month’s rent. The manager took the lease agreement with him, saying he would have the owner sign it and return a copy to me.
I have called him and texted him to ask for a copy, but he is not answering me. Do I have to continue to pay rent?
Answer: Yes. The vast majority of rental agreements are in writing for a simple reason — the terms are clear to everyone.
California Civil Code section 1962(4) specifically states that the agent must provide a copy of the written rental agreement or lease to the tenant within 15 days of its execution by the tenant.
Even though you contacted the manager several times, you should send a formal letter and copy your manager’s supervisor or the owner. Make sure to keep a copy of your letter for your files.
Also, once each calendar year after that, upon request by the tenant, the owner or owner’s agent is required to provide an additional copy to the tenant within 15 days of the request. Your property manager’s failure to comply with this requirement does not relieve you of your obligation to pay rent, but that failure may be a defense in an eviction action filed by the landlord based on a claim that you have breached a term of the lease.
If the owner or owner’s agent claims that the rental agreement is missing from their file, they must furnish you with a written statement indicating that fact and including the following: name, address and telephone number of the person to whom rent is to be paid and the form in which rent payments are to be made to that person. The onsite manager, as well as the owner, is responsible for providing you with a copy of the signed rental agreement under California Civil Code section 1962(d).
Keep asking in writing for a copy and keep paying your rent. If the landlord ultimately files an eviction action because he wants to replace you with a new tenant, you will have some proof that you believe there is a lease and that you have been asking for a copy of it.
However, if you don’t pay your rent on time, the landlord can evict you from the property.
The post A missing lease agreement in California is not a reason to withhold rent appeared first on AAOA.
Transgender and gender-nonconforming individuals face pervasive housing discrimination, according to a recent study. It’s worse than researchers expected, and the people being discriminated against may not even know it.
Researchers at the Suffolk University Law School Housing Discrimination Testing Program in Boston used a pretty straightforward test to determine this. A trans or gender-nonconforming person would respond to a housing rental ad, and then another individual who had similar characteristics but was not trans would go see the same unit. Researchers compared their treatment.
When trying to rent an apartment, the first group received discriminatory treatment 61 percent of the time, the study found.
To make sure the person showing the apartment knew a prospective tenant was transgender, testers were trained to bring up their identity casually, like sharing that their legal name would be different for a credit check.
Thirty-three teams of two people, who worked separately and did not meet, participated in these “matched paired housing discrimination tests” from December 2015 to June 2016, checking out apartments identified in a randomized listing search for studios and one-bedrooms in the Boston area. Testers answered a long list of questions about the experience, like whether they were offered an application or shown other available units. There were major differences in some answers.
Trans and gender-nonconforming individuals were 21 percent less likely to be offered a financial incentive to rent, and 9 percent more likely to be quoted a higher price. They were 12 percent more likely to be told negative comments about the apartment or neighborhood, and 27 percent less likely to be shown extra facilities, like a laundry room or pool.
In one pairing, a tester was told the security deposit would cost four times more than the price offered to the control subject.
“It’s really shocking to see that people are being quoted a higher rental price. That’s just wrong,” study author Jamie Langowski, clinical fellow and assistant director of Suffolk’s Housing Discrimination Testing Program, told The Huffington Post.
It’s legal to discriminate against LGBTQ people in most states. Massachusetts and 19 other states, however, outlaw gender identity-based housing discrimination.
The study adds to evidence that the housing industry, which has a long history of now-outlawed forms of discrimination, allows bias against LGBTQ individuals to flourish, even in states where it’s illegal. A National Center for Transgender Equality survey of trans individuals in 2015 found that 23 percent experienced housing discrimination in the previous year.
None of the testers in the Boston study were explicitly prevented from renting, and some of the individual differences seem minor ― like a control tester being told the kitchen would be freshly painted before moving in, while the other individual was not. But they stacked up to a clear pattern of discriminatory treatment, said Langowski and coauthor William Berman, law professor and director of the testing program.
Part of the problem is that it can be “discrimination with a smile,” Langowski said, so potential renters may be unaware of mistreatment.
Berman and Langowski argue that their study demonstrates the need for federal law preventing housing discrimination based on gender identity.
But under President Donald Trump, there’s already been a rollback of LGBTQ legal protections. Trump signed legislation this week that weakens rules protecting lesbian, gay, bisexual, transgender and queer federal contractors from discrimination. Earlier this month, the administration withdrew a policy that prevented schools from discriminating against transgender students.
With a flurry of discriminatory legislation under consideration and an uptick in hate crimes against transgender individuals, housing discrimination ― widespread, but often subtle ― might not be advocates’ biggest concern. But Berman argued it’s nevertheless an urgent issue.
“There are significant consequences if you lose the ability to live where you want to live only because of who you are,” Berman said. “It affects every part of your life. It affects your ability to have economic opportunities, like commute or proximity to work, health, proximity to health care, education … so even if you don’t know it, you’ve lost a very significant opportunity.”
Berman and Langowski acknowledged that 33 pairs is a small sample size, but said it’s still the largest study of its kind and produced statistically significant results. The research was conducted in partnership with the city of Boston and funded by a grant from the U.S. Department of Housing and Development.
Fair housing programs ― some of which root out discrimination based on race, age, disability and sex around the country through similar paired tests ― don’t appear to be at risk in Trump’s proposed budget cuts to HUD, though some organizations are worried that they will no longer be a priority.
“Are we concerned when we see budgets that require significant cuts? Absolutely,” Berman said, “because the work is important and we want to see it continue.”
The post The Subtle Ways Landlords Keep Out Transgender Renters appeared first on AAOA.
There are a number of flooring choices out there on the market, and it may be hard to pinpoint which flooring type is best for a new build. But some products are winning over buyers more than others for the benefits offered. Remodeling contributor Kacey Bradley presents four flooring trends that homeowners love right now.
1. Hardwood Floors, Where Gray is Still King Hardwood floors, and similar wood-like floors, are a classic choice only gaining more popularity. The primary preference is for gray-toned wide planks, without too much sheen on the finish. However, the going-green trend is gaining on gray flooring. As green trends increase, demand for wood flooring is likely to shift toward locally-sourced and sustainable materials.
2. Luxury Vinyl is No Contradiction, it’s a Hit Echoing the wood floor and sustainability trends, luxury vinyl is no contradiction, though it sounds like it. According to the World Floor Covering Association, it’s the quickest growing area of the industry in the last two years. Amazing photo technology has developed that makes it possible to very closely mimic wood grain. Clients and their guests will have to do a double take to tell the difference. Luxury vinyl may be done in plank or tile, but plank is the more popular choice, with many pros and a few cons. The luxury plank vinyl is water- and moisture-resistant and may be glued in place. It’s also low maintenance, fiberglass reinforced, antistatic, affordable, and provides a natural look.
3. Stone Flooring is Durable and Timeless Stone is as old as the Earth itself and was used to build countless beautiful buildings over the course of history. Today, stone is one of the top flooring trends that homeowners consider for a floor remodel, due to its low maintenance, customization, sense of luxury, and the fact that it’s long-lasting. Stone flooring is primarily popular in kitchens, and the stats prove this: transform the kitchen, and the client can expect as much as a 7% increase in home value.
4. Recycled Carpets Reclaim the Floor Continuing the sustainability trend, recycled carpets—where old carpeting and plastics are recycled into fresh and clean carpeting for client homes—are popular. Since 2002, it’s estimated that 3.6 billion pounds of old carpet have been recycled.
Remodelers may encourage homeowners to recycle their old carpet for an upcycled upgrade from a carpet reclamation center. Remember, it’s bold color that clients are loving. Regardless of which trend the client is interested in, this idea will also improve the sustainability practices of remodeling businesses.
In addition to a floor that looks great, clients also deserve a floor that will stand the test of time, scrapes, moisture, and everyday wear and tear. Hardwood, luxury vinyl, stone, and reclaimed carpet each offer a unique set of pros and cons the remodeler will need to help the client navigate.
Keep in mind the importance of sustainability trends and practices as you speak with your client, and remember to always put their best interests first.
Believe it or not, effectively screening tenants can help you to eliminate as much as 95% of rental problems. That said, for those of you who find it difficult to relax when experiencing vacancies, then you’d probably want your property to get rented as soon as possible, right? Well, familiarize yourself with these tips to ensure that you’ll be able to screen the tenants properly.
5 Ways to Screen for Future Tenants:
1. An Application Form Can Do Wonders Before anything else, make sure that your prospective tenant would complete an application form. Don’t worry; if you have never written one before, there are a lot of rental application form examples from the local real estate association. Likewise, you can also create one using a Microsoft Office template and you’re good to go.
The application form should cover everything necessary regarding the rental property and the policies the tenant should obey. For best results, make sure that the application form contains financial information, personal information, and employment information. It should also state that a criminal history report, background check, or credit check can be requested, and the tenant would give full authorization in case it’s needed.
Pay attention to the following:
– Current income: The income of your prospective tenant should be enough to cover the rent and other living expenses.
– Current and previous employers: It’s important for you to have an idea how long the tenant has been at their current job, and if he or she has been switching jobs every couple of months.
– Financial information: Credit cards, bank accounts, balances, and minimum monthly payments could help you get a better picture if your tenant would be able to pay the monthly rent on time.
2. How Much Do You Earn Every Month? Don’t be afraid to ask this question as it will help you determine if the prospective tenant is indeed capable of renting your property. As a landlord, you obviously want a tenant who earns regularly and would have enough to settle his monthly bills. For example, if the monthly rent is $2,000, then you’d want a tenant that earns more than $2,500 every month.
However, you should also keep in mind that the monthly income wouldn’t be able to tell the whole story either. That’s why additional information, such as how much debt they have, will help you determine if they can really pay or not. By running a credit card check, you’ll know how much debt they have.
3. Ask If They Will Have a Security Deposit and First Month’s Rent Ready When They Move-In Their answer to this question would indicate their current financial situation. Wherein, if your prospective tenant doesn’t have enough money ready, and would request if it’s possible to pay the security deposit after a week of moving in, then this should raise a red flag. You have to think carefully if they can even afford paying the monthly rent. You don’t want to start a tenant relationship with your tenant being indebted to you from the start.
Furthermore, as much as possible, don’t allow a tenant to move-in if they haven’t paid the whole amount yet. Never negotiate or make exceptions, no matter what. Always require your new tenants to settle in full before moving in.
4. How Many People Would Be Living in the Apartment? Ideally, you wouldn’t want more than 2 people occupying a bedroom. Likewise, the fewer people in the apartment, the less damage it’s going to bring on the property. Aside from that, a lot of municipalities and fire department also have a limit on the number of people that can reside an apartment.
5. Ask Your Tenant If He Has Ever Been Evicted Before Although there are possibilities that your prospective tenant won’t be 100% honest, it’s still worth trying. Basically, directly asking the tenant whether they have been evicted before could also be beneficial for them as they will be able to explain why it happened. Keep in mind, even good folk’s fall on hard times, and don’t let the eviction fully disqualify them. However, you should also be wise enough and weigh if you really should give them a shot.
Finally Finding a great tenant isn’t as easy as it may sound. However, with the help of a screening process, you’ll be able to learn more about your prospect and it’ll also help you avoid any problems in the long run.
The post How to Successfully Screen Tenants For Your Investment Property appeared first on AAOA.
The US apartment market remains overdeveloped, with supply outpacing what prospective renters are asking for, especially in the most expensive segment of the market.
US apartment occupancy slipped to 94.5% in the first quarter from 95.1% last fall, according to the apartment-data provider Axiometrics. Properties completed in late 2016 and 2017 are “scrambling” to find their initial residents, especially in the luxury market, the firm said in a report Thursday.
Over the past two quarters, demand for apartments was more than 100,000 short of the number of units that were available.
“Apartment markets are still solid, but we knew that this would be a year when apartment supply would outpace demand,” Jay Denton, vice president of RealPage’s Axiometrics business, told Business Insider. The company estimates that new deliveries would average 102,000 units per quarter for the rest of this year, compared to 82,000 in late 2016 and early 2017.
Two things are driving the current oversupply. The first is that the first and fourth quarters tend to be seasonally weaker because some people put off apartment hunting until the weather is warmer. The other reason is that the housing market has recovered to a point where it is difficult for apartment owners to maintain the level of occupancy they had in the past.
“This year’s deliveries will provide relief from previous product shortages in much of the country,” said Greg Willett, RealPage’s chief economist. “Still, it would be surprising if overall demand kept pace with completions for the remainder of 2017, and there are clearly some individual neighborhoods becoming overbuilt in the luxury product segment.”
Some new properties are offering concessions like a month of free rent to encourage lease signings. This is common when buildings are going through the initial leasing phase. But Denton added that New York, for example, is seeing more concessions being offered compared to a few years ago even for apartments that are not brand new.
Some of the fastest-growing markets for rents have not seen rapid enough economic recoveries to return construction to aggressive levels, RealPage said. Also, demand for apartments in the low-to-mid price range continues to be strong, keeping rents elevated.
This chart shows the markets where rents increased the most in Q1.
The post America is building more apartments than renters want appeared first on AAOA.
How many millennials does it take to screw in a light bulb?
None, if they live in one of Rane Property Management’s apartment or townhouse complexes in the region.
That’s because the father-and-son development team of Anthony and Nicholas Cutaia has carved out a niche by marketing many of their rental properties to millennials and other young professionals who want a high level of services and amenities.
Tenants can call management if a light bulb goes out, and someone will come over to replace it.
Forget about carrying laundry down to the basement or a laundromat, because every apartment has its own washer and dryer.
Rane even sends someone around to pick up the garbage, so that tenants don’t have to lug it out to a trash bin.
“I’m capable of changing a light bulb,” said Liz Callahan, 30, who works with members of her generation as program manager for the Buffalo Niagara Partnership’s BN360 young professionals group. “If I had the option to not climb a ladder and change a light bulb, would I? Probably.”
To be sure, there are other property management companies that offer high-end services and amenities. And the services Rane provides are reflected in the rents the company charges, which range from $1,080 for an 805-square-foot one-bedroom apartment on Grand Island up to $2,230 for a 1,653-square-foot three-bedroom, two-bath townhouse in East Amherst.
But the Cutaias said the apartments and townhouses appeal to their target audience. And they had better, because Rane keeps building more.
Rane Property Management has $150 million in apartments and townhouses under construction or nearing completion in Amherst, Grand Island, Hamburg and Lancaster, Anthony Cutaia said.
“We can’t get to the level where we put too much into the unit. We keep making them like a house,” said Anthony Cutaia, Rane’s president. “It seems like every little feature we add, people are willing to pay for it.”
Cutaia said he grew up in the development business in the Toronto area. He came to this country in the early 1980s and is an American citizen now.
Rane’s first project here was Dockside Village, a complex along Transit Road just north of Wolcott and Dann roads, which opened in 2006.
The Cutaias work with a group of about a dozen investors to provide the financing for their various projects. Further, Cutaia said, they are partners with Morgan Communities of Rochester on about half of their projects.
The projects underway or soon to finish include:
- Clifton Heights in Hamburg, where the clubhouse is set to open in June and the entire project should be finished by June 2018.
- An expansion at Dockside Village, where Rane is adding 244 units to the existing 276 units at the complex, almost doubling its size to 520 total. The work started four months ago and pre-rental of the new units has begun. People should be able to start moving in starting in mid-summer, and the last of the 18 new buildings should be finished within 18 months.
- Fairways at Lancaster, which boasts 76 upscale villa-style apartments for seniors. The project, which should finish up by May, was built on the former nine-hole Harris Hill Golf Course in Bowmansville. Rane initially planned 250 apartments at the site, but after running into opposition from neighbors, scaled back the development to the townhouses. Rane left three holes of the golf course for residents to play.
- Heron Pointe, on Grand Island, where Rane is building 232 apartments in 20 buildings. Work started about six months ago and should wrap up within 12 months. The first 40 or so residents already have moved in, and the clubhouse is open. A pool and cabana area will open by summer.
- Lockwood Villas, Amherst, located on Sweet Home Road, near Dodge Road, has 69 units of townhouse-style apartments that should be finished by June.
That doesn’t count Rane’s proposed development of two, five-story buildings in northwest Amherst, on Niagara Falls Boulevard, near the former Evergreen Golf Course. The buildings would have retail and garage parking on their first floors and a total of 152 apartments on their upper floors.
That project has a price tag of $15 million to $18 million, Cutaia said.
“We have investors who believe in us, and we put up a lot of our own capital as well, and away we go,” Cutaia said.
A number of developers offer upscale apartments with expensive design touches and attractive amenities within their complexes. Rane does that, too, but it really tries to win over its 20- and 30-something tenants with a focus on attentive service.
Cutaia said tenants can call building management, leave the old light bulb on the counter, and someone will come over to change it.
As for garbage, he said, tenants don’t like having to drag their refuse across the parking lot to a trash bin. So management provides them with containers, tenants put the garbage-filled containers out in the hallway between 6 p.m. and 8 p.m. and someone comes by in the morning to pick it up. That’s in the newer, larger complexes with elevators, and Cutaia calls it “trash valet.” For the townhouse-style units, with attached garages, tenants can wheel their trash right out to the street for pickup.
“I don’t know how to put this politically correct, but millennials don’t want a lot of heavy lifting,” Cutaia said. “They like to be serviced, so we service the heck out of them.”
The properties also offer 24-hour emergency service, so if a smoke alarm goes off, an employee will come right away.
Cutaia showed off Heron Pointe, which is partly completed, to a reporter last week. The clubhouse features a fitness center, a theater room with a large-screen TV and a bar area that can be rented out, though residents must provide their own alcohol. It opens up on the soon-to-open 46-foot, salt-filter pool and cabana area, with a gas grill. It also will have a playground for children and a dog park for pets.
Empty nesters, and snowbirds, also like the townhouse setup without the hassle of owning a home.
Those features and services don’t come cheap, however. Many of the rents Rane charges are higher than a monthly mortgage payment in the area. Cutaia said once property taxes are factored in, the costs are closer.
The difference between the millennials who seek out Rane’s properties in the suburbs and the young professionals who want to live downtown, or in the Elmwood Village, Cutaia said, is Rane’s millennials are slightly older and more likely to be in a steady relationship, or to be married with a child. “It’s the transition time,” he said.
Callahan, the Buffalo Niagara Partnership’s employee, said she soon will move into The School Lofts @ Abbott, the former St. Thomas of Aquinas School in South Buffalo, which Karl Frizlen converted into apartments. Callahan said she appreciated that she won’t have to lug her laundry to her parents’ house, a laundromat or to the basement because her apartment will have its own washer and dryer.
The millennials she works with through BN360 are working 40 hours a week, some of them have families, some are trying to get startup businesses going and others are involved in sports, so a chance to outsource a task such as housework is appealing.
“I think if you look at a lot of life hacking and time management articles, it’s not about being lazy, it’s just about priorities and using your time more efficiently,” Callahan said.
The post In these apartments, millennials don’t even have to change light bulbs appeared first on AAOA.
Investing in real estate is glamorized on television and in the media. Having attended a “no money down” seminar or watched one of the many beautiful reveals on HGTV’s “Property Brothers,” you might be tempted to rush into the real estate market. Before spending a dime, learn to identify and avoid real estate investing mistakes.
NOT UNDERSTANDING YOUR CREATIVE FINANCE OR ADJUSTABLE-RATE LOAN
Not knowing the limits of your loan payments can cost you thousands of dollars. Interest rates are at their lowest level in decades. If a seller offers a “creative finance” deal or the lender recommends an adjustable-rate mortgage, tread carefully. Depending on the terms of the loan, your payment might increase when interest rates rise, which is expected to happen throughout this year and beyond.
IGNORING THE DOWNSIDE OF YOUR REIT INVESTMENT
Many investors enjoy the juicy dividend payments associated with investing in real estate investment companies or trusts, commonly called REITs. Yet, like all investments, the price you pay for a real estate investment trust will fluctuate. Be aware that both the dividend payment and value of your REIT investment can go up and down. As with any investment, it’s important to understand what you are buying before you invest in a REIT fund.
FORGETTING THAT INVESTING IN PROPERTY IS HIGHLY ILLIQUID
Real estate investing isn’t the same as investing in the stock market. You can buy or sell a stock or fund online in minutes, with the click of a mouse — that’s not the case when investing in real estate. Large transaction costs are common in the real estate industry. Buying and selling rental properties or buying a home involves many steps and a lot of time.
THINKING THAT FLIPPING HOUSES IS A QUICK WAY TO MAKE MONEY
Don’t believe what you see on HGTV: Flipping houses doesn’t happen in one hour. If you’re hankering to flip residential real estate, read some real estate investing books first. Buying a property at auction frequently requires an all-cash purchase, and you don’t even get to view the inside of the house. If you overpay, you won’t make a profit.
Whether you’re seeking to buy rental properties, industrial real estate or even retail real estate, it’s easy for costs to get out of hand. Always overestimate — rather than underestimate — the costs. Real estate management is expensive and includes closing costs, fees, commissions, insurance, repairs, maintenance and carrying costs. When a tenant suddenly moves out, you face a month or more without rent.
Jake Walker is doing a lot better financially than most of us are at 25 years old. Since he tells us he’s already maxing out his 401(k) and saving money in a Roth IRA, adding real estate to his retirement portfolio could be a smart move.
“I think it’s a really smart idea to look at real estate as an income-producing pension replacement,” said Maggie Kirchhoff, a CFP at a Colorado- based firm called Business & Personal Finance.
She’s seeing more Millennial clients looking at rental property as an option and became a landlord herself to add diversity to her portfolio.
As you’ve probably guessed, there are some downfalls to investing in real estate. If you don’t already have your own emergency fund and stock investments in some traditional retirement accounts like Walker does, you’re probably not ready for a rental property. (And becoming a landlord may never be for you.)
But there are still ways to make real estate a part of your investment strategy.
Here’s what financial planning experts have to say:
Why it could be a good idea:
1. The more kinds of investments you have, the better.
Diversification is important, especially when you’re saving for something so far into the future. You invest in a variety of stocks because when one sector falls, others hopefully don’t. And you invest in bonds because they aren’t as volatile as stocks, and tend to move in the opposite direction. Diversification reduces the risk of losing a big chunk of money at once.
“Real estate is great for adding diversity to your portfolio. It’s tied to the market like anything, but it’s not going to be correlated the way stocks and bonds are,” said Angela Coleman, a CFP at the Kentucky-based Unified Trust Company.
She said not to expect property value or rent to ever jump significantly. While that sometimes happens, steady growth over time is more likely.
‘ll get from charging rent.
In the beginning, you won’t see a lot of this money. First, you have to cover your mortgage payments. Then you have to pay for things like insurance, taxes and any homeowner fees. Expect those three expenses to take up at least 25% of the rent, Coleman said.
And don’t forget about the cost of any maintenance the property needs or gaps between tenants. She suggests putting aside some money from the rent to build an emergency fund.
But hopefully you’ll have paid off the mortgage in 30 years and by the time you retire. If you choose to continue renting out the home, you’re looking at a stream of income. Or you could choose to live in the home or sell it altogether.
Why it might not be for you:
1. Surprises. You never know when the AC might break, the roof could leak, or a pest problem could turn up.
2. Becoming a landlord can be a lot of work. “There’s always the worry that you can’t find a quality tenant. Finding tenants, processing their applications and running background checks is definitely time consuming,” Kirchhoff said.
You could hire a management company to do that work, but that will eat up even more of your rental income.
3. It’s a big commitment. You’re not tied to contributing to your 401(k), IRA or mutual fund. But that’s not the case with a rental property, said Coleman. You must pay the mortgage, taxes and insurance. And if the roof leaks, you have to fix it.
If you decide to invest in rental property:
1. Build an emergency fund separate from your personal savings. Save at least the amount of the highest deductible on your insurance policy, Coleman said.
2. Do your research. There are different laws in different states that landlords have to follow, Kirchhoff said.
3. Be prepared to put at least 20% down when buying a property you’re going to rent.
If it’s not for you:
Maybe renting out a house or apartment is more responsibility than you’re willing to take on right now. Or you may live in an area where property is just too expensive. You can still make real estate a part of your retirement savings by investing in Real Estate Investment Trusts, or REITs.
“It could be a good idea to invest in an exchange-traded REIT for someone who can’t quite jump in on owning property yet,” Kirchhoff said.
REITs are funds that invest in variety of real estate, including residential and commercial, or mortgages. An exchange-traded REIT trades just like a stock so you can invest in one through an IRA or other retirement account. While it shouldn’t make up the bulk of your investments, adding a small percentage of real estate funds adds another level of diversity to your portfolio. But it won’t, of course, generate cash flow like you’d expect to see from a rental property.
Mold problems can be incredibly expensive to repair, sometimes requiring entire rooms being torn down to the studs. Certain types of mold can cause illnesses from skin irritation to obstructive lung disease. What is truly frightening about mold is how easily it grows. One study from the University of Arizona showed that 100% of the homes it tested showed positive for mold (1). 100%! If mold is so pervasive, how do we prevent it?
Mold Audit Your Property: Start by doing an audit of your property for hazards. Do you notice any of the following?
- Flood prone areas
- Carpeting in moisture prone areas
- Water stains
- Condensation build up on windows
- Poorly ventilated kitchens or bathrooms
- Clogged & broken gutters
Look into the best fix for your problem(s). While some solutions can be simple, some may require more complexity and cost.
Air Out: Moisture builds and accumulates in moist areas when there is insufficient airflow or ventilation. Make sure that you open windows in unoccupied properties regularly. Install high functioning fans and stove hoods to stem mold growth in the kitchen, laundry room and bathrooms. You may even consider adding dehumidifiers into your properties.
Keep Water Away: It’s important to remember that buildings are susceptible to mold growth from the outside in. Think about where water accumulates around the perimeter and then direct it away. Use flexible extensions on the end of downspouts and alter ground cover choices. Remember to keep gutters clean to avoid pooling water at the roofline.
Your Plumbing: While it is true that some leaks can be spotted and easily fixed throughout your home, many cannot. This is because much of plumbing systems remain unseen behind walls and underfoot. Major mold growth occurs frequently in properties with leaks that have been unaddressed for long periods, as the first warning sign is often a water stain or worse. Consider installing a leak detection system like AquaTrip.
AquaTrip is a permanently installed system that constantly monitors the entirety of a building’s plumbing. AquaTrip saves money by curbing potential water damage, reducing excessive water bills and controlling the potential for mold overgrowth. You can learn more about AquaTrip by visiting buyaquatrip.com or call 1-844-4-AQATRP to find out how you can join the Pilot Program for savings up to 50% off!
Golden State Flow Management (GSFM) is the exclusive distributor of AquaTrip leak detection systems in the United States. In bringing AquaTrip to market, we bring with us our twenty years of experience in the conservation, management and optimization of water and its revenue. We are proud of our legacy of providing superb service and collaboration to our clients. AquaTrip gives us a unique opportunity to leverage that experience within a larger market and to offer the property management industry a truly innovative and useful product.
(1) Company, T. C. (n.d.). Indoor Mold Pervasive in U.S. Homes, According to Study Presented at Allergy and Asthma Meeting. Retrieved December 07, 2016, from
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Wondering what stylish homes will look like next year? According to Pantone, the color authority turned trend forecaster, homeowners in the know will be flashing some fringe and going geometric and iridescent in 2018.
This week at the International Home and Housewares Show in Chicago, Leatrice Eiseman, executive director of the Pantone Color Institute, introduced the home decor fads that will be all the rage next year.
And we’re inclined to listen up, because the folks at Pantone—which used to predict only the Color of the Year, then branched out into seasonal color forecasts and now more general home design trends—seem to know what they’re talking about.
Case in point? They hit it on the nose with at least one of their two predictions for 2016’s Colors of the Year, Rose Quartz, a ubiquitous light pink shade whose iterations nicknamed “Tumblr pink” or “millennial pink” have invaded fashion, interiors, and graphic design. Just this week, New York Magazine reported on “Why Millennial Pink Refuses to Go Away.”
So what’s the next big thing, Pantone? Here are the six home trends that it predicts will rise to the top, and the shades that are sure to be hot in the coming year. A variety of experts also share tips on how to incorporate these trends into your home.Geometric patterns
There are so many ways you can incorporate geometry into your decor; it’s one of the most approachable trends of the bunch.
“We’ll see geometrics in everything from tile on backsplashes to wallpaper to wall art,” says interior designer Larina Kase of Philadelphia. Focus on a single accent wall, or really go for it by wallpapering your entire dining room or bathroom. You can also start small with pillows or throws in geometric prints.Typography
Pillows with words, framed art saying “EAT” … the typography trend is still around and going strong.
“Messaging on home goods has been popular for some time now,” says Homepolish interior designer Michelle Gage. “It’ll become increasingly popular, given the way we all communicate on social media. It will remain more of a complement to a room’s story and live on in smaller finishing touches like pillows and art.”Wood treatments
The presence of technology, especially a year from now, will have us craving natural elements like wood more than ever. Kase expects to see wood in unexpected places like ceilings and as accent walls.
“Utilitarian pieces such as lamps and pots for plants are great places for natural wood. Hand-carved wood bowls offer a natural, simple yet powerful element,” she adds.Fringe
“Fringe is going to be a hot home trend,” says Gage. We’re currently seeing it in decorative throw pillows and blankets, but Gage says to keep your eye out for this trend on small furniture pieces like footstools and ottomans.
“I wouldn’t be surprised if we started to see it on curtains. I could also get behind some fringe light fixtures!” she says.Metallics
Another trend that’s ramping up now and is destined to carry over until next year is that of metallics anchoring a room. Kase says metallics may take a more dominant role, with furnishings like coffee tables and dining tables. Try offsetting a traditional upholstered sofa with an all-metal side table.
“Hand-painted metallic elements on fabrics and art will add an artistic flair,” says Kase.
Interior designer Annie Elliot also adds that metallic fabrics are no longer risky.
“Most rooms need a bit of sparkle, and a pillow laced with gold thread can be just the way to achieve it,” she says. “We’re seeing shine via metallic and pearlescent accessories such as pillows, lamps, and even small side tables.”
This is by far the most futuristic look of the group.
“The iridescent trend is one of our favorites,” says Lizzie Grover, creative director of Hutch, an interior design resource for millennials. “We love to admire all of the iridescent tables and decorative pieces.” (For example, this side table from ABC Home & Carpet.)
“Unfortunately this trend is still pretty under the radar and expensive,” she adds. “Wait for this trend to get more affordable before you indulge.”
For now, fill a bathroom wall or backsplash with iridescent tile, or let smaller accessories like a side table, clock, or pillow shine.
“There won’t be any escaping this trend,” says Gage. “It’ll be the new take on Lucite, which had its moment.” She sees this updated look showing up in coffee and side tables.Intense colors
Of course, the authority on color had something to say about the shades that are sure to be hot in the coming year.
“Intense colors seem to be a natural application of our intense lifestyles and thought processes these days,” says Eiseman. She distilled the color trends into eight groups, one of which is called TECH-nique, a palette that supposedly pays homage to technology. Colors include bright blue, green, fuchsia, and purple, which are complemented by iridescent tones of turquoise and hot pink, white, and frosted almond.
The county offering the highest returns from single-family rental properties so far in 2017: Clayton, Ga., in the Atlanta metro area. That’s according to the first-quarter 2017 Single Family Rental Market report, released by ATTOM Data Solutions. Researchers analyzed single-family returns in 375 U.S. counties, each with populations of at least 100,000, and more than 6,000 U.S. ZIP codes with a population of 2,500 or more.
Other counties offering some of the highest annual gross rental yields in the nation on single-family properties are Baltimore City, Md.; Bibb County, Ga., in the Macon metro area; Monroe County, Pa., in the East Stroudsburg metro area; and Saginaw County, Mich., the report showed.
Among counties with populations of at least 1 million, these areas were offering the highest gross rental yields: Wayne County, Mich., in the Detroit metro area; Cuyahoga County, Ohio, in the Cleveland metro area; Allegheny County, Pa., in the Pittsburgh metro area; Philadelphia County, Pa.; and Franklin County, Ohio, in the Columbus metro area.
The average annual gross rental yield among the 375 counties tracked was 9 percent in 2017. To compute it, ATTOM Data Solutions divided the annualized gross rent income by the median purchase price of single-family homes.
“While good returns on single-family rentals are hard to come by in high-priced coastal markets and in some other housing hot spots such as Denver and parts of Dallas, Austin, and Nashville, solid returns on single-family rentals will continue to be available in many parts of the Southeast, Rust Belt, and Midwest for investors purchasing in 2017,” says Daren Blomquist, senior vice president at ATTOM Data Solutions. “And single-family rentals should continue to yield strong returns in many parts of the country going forward given the market undercurrents of low rent-ready housing inventory and low homeownership rates.”
Blomquist notes that average fair-market rents rose in 2017 in 86 percent of the markets his team analyzed, even while average wage growth outpaced rent growth in 67 percent of markets—“a recipe for sustainable growth in the rental market.”Source: realtormag.realtor.com
If you’re obsessed with HGTV, remodeling and regularly use phrases like “reclaimed wood” and “farmhouse feel,” you’ve probably kicked around the idea of buying investment property. The popular TV niche has given birth to a group of people who are motivated to improve their incomes with do-it-yourself projects and tenants in tow.
While it may seem simple and fulfilling on the small screen, buying rental property carries the same risks as purchasing your primary home. The following questions are some you’ll want to answer as you consider possible investment strategies.1. What are your financial goals?
Are you hoping to earn extra monthly income, or do you view rental property as an attractive long-term investment? Being clear about your expectations is crucial to nailing down whether investment property is a wise choice. According to Mark Ferguson, Realtor, real estate investor and voice of InvestFourMore.com, many buyers fail to think beyond square footage.
“The biggest mistakes I see are investing in a property that loses money while hoping for appreciation, paying all cash for properties when you don’t have to and trying to manage (properties) yourself without skills or time,” Ferguson said.
It’s a good idea to make a list of short- and long-term goals as well as deal-breakers for any investment you choose. Creating rules will help you stay focused.2. Can you afford extra expenses?
Maintaining rental property takes work and extra cash, and while it’s tempting to focus on the best-case scenario, you shouldn’t discount the hefty expense of rental property taxes, association dues, management, maintenance and repairs. It’s possible to cut expenses by taking on a few handy projects yourself, but it won’t eclipse the costs entirely.
It’s wise to build a reserve fund in anticipation of your property’s needs according to Scott Trench, real estate broker and vice president of operations at BiggerPockets.com. “If you have $10,000, or even $20,000-plus in a bank account set aside for reserves, you can buy your way out of many problems associated with small rental properties,” Trench said.
With that in mind, you may want to consider building an emergency fund for your business investments in addition to your personal savings account. Separating your expenses is necessary for tax purposes, and you’ll need two accounts to maintain personal and professional independence.3. Which real estate market is right for you?
Although analysts predict a healthy rental market in 2017, value is still subjective, and you might consider looking outside your ZIP code to see if there are better buying options elsewhere.
“Certain metropolitan areas are most attractive to the country’s largest population groups—millennials and boomers — and are growing much faster than others,” said Alex Cohen, commercial specialist for CORE, a real estate brokerage firm based in New York City.
“Some of these markets have relatively low land and housing construction costs like Dallas and Houston. But other markets, particularly on the coasts, have much higher land and construction costs, which means less housing will be built in these metros,” Cohen said. “The flip side of this phenomenon is that in these housing-supply-constrained markets, values of homes and rents are likely to rise faster than in the rest of the country.”
While some experts suggest buying in up-and-coming locations, others swear that a good deal can lead to better returns and the ability to expand. “My 16 rentals have increased my net worth by over $1 million dollars through appreciation and buying cheap to begin with,” Ferguson said.
It’s a good idea to research all your options — from foreclosures to new construction — to determine which property could produce the best income and overall bang for your buck. Don’t be afraid to venture beyond your own backyard.4. Are your finances & credit In good shape?
If you are a homeowner, you may feel like a pro when it comes to applying for a mortgage, closing the deal and upgrading your property. While you may have some valuable experience, buying investment property comes with its own set of rules. Unlike purchasing your primary home, most rental mortgages require a larger down payment with a few exceptions.
“The way to minimize the additional costs — particularly higher down payment requirements of an investment property — is to take out an FHA loan, for which a down payment of as low as 3.5% of the purchase price may be possible,” Cohen said. “FHA loans are available to investors in properties with up to four units, as long as the borrower’s primary residence will be one of the apartment units.”
Not familiar with the Federal Housing Administration? You can find our full explainer on FHA loans here.
If you don’t plan to live in the rental property, you’ll need to secure a standard mortgage loan with a host of federal requirements that include financial reserves based on property value and the number of rentals you own, assets required to close and creditworthiness.
The latter requirement is perhaps the most important factor in securing an affordable investment. A high score will help you find the best interest rates and save money long before you decide to buy a rental home. It’s a good idea to order free copies of your TransUnion, Experian and Equifax reports from AnnualCreditReport.com to review your information. Highlight any negative items or errors that may be affecting your scores and consult with an expert about the best way to take action. You can also view two of your credit scores for free, updated every 14 days, on Credit.com.
Remember, whether you’re hitting up the housing market to invest or find your dream home, there are plenty of things you’ll want to do to get ready ahead of your search. Fortunately, we got a 50-step checklist for house hunters right here.
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What do millennials want, anyway? Marketing execs all over the country have been tripping over themselves for years to find the answer. After all, as America’s largest and youngest adult generation, millennials have an insane amount of collective purchasing power, the power to move markets according to their whims—and the ability to do so for decades to come.
As a group, they’re also somewhat elusive. Are they aimless or driven? Apathetic or activist? IPhone or Android? Taco Bell or Chipotle?
Well, here’s something we do know: In ever-increasing numbers, they’re home buyers. In fact, they’re the biggest group of ’em in the nation. Sure, they’re devotees of the borrowers’ economy—eagerly sharing bikes, music, rides, vacation places, you name it—but like most generations before them, they’re hungry for home ownership. Buyers under 36 now make up the biggest chunk of Americans signing on the line that is dotted: 34% of all home buyers, according to the National Association of Realtors®. And they make up 64% of first-time home buyers (even though they only account for 13% of the population).
“There are some very specific things you see millennials looking for in a community right now,” says Jason Dorsey, chief strategy officer for the Center for Generational Kinetics, a marketing firm in Austin, TX. On the list of must-haves: supershort commutes, and amenities like parks, cultural centers, and restaurants. And yeah, maybe even some really fun stuff to do on a Thursday night. That’s because many of these 25- to 34-year-olds are delaying marriage and even a serious career, and want to enjoy the single life, he says.
As Dorsey points out, they also face an UberXL load of unique financial challenges: “College debt, thinner credit history, less savings—and all at a time when home prices have gone up. For many millennials, it’s much harder to buy houses.” On their path to ownership, they’re very much on the prowl for a bargain.
So what are the places that pique millennials’ interest? The realtor.com economic data team analyzed the 60 largest U.S. cities and how much millennials were checking out listings in those areas, compared with the national average, from August 2016 to February 2017.
Ready? Let’s take a closer look at these millennial magnets.1. Salt Lake City, UT
Median home price: $360,000
Percentage of income needed to buy a home*: 30%
Unemployment rate: 2.9%
Salt Lake City has a lot more going for it than Mormons, the first KFC franchise (1952), and a big, briny body of water (the Great Salt Lake). There’s also a burgeoning tech scene that lures young people to companies like Adobe and Electronic Arts. In fact, the city has come to be known as “Silicon Slopes,” with homes at one-third of Silicon Valley prices and plenty of sweet skiing and boarding a short ride away.
Even those outside the tech biz have a good chance of snagging a nice gig—Salt Lake has the lowest unemployment rate of all the markets on our list, at 2.9%, well below the national unemployment rate of 4.7%.
And if your dream job hasn’t yet kicked in, there are plenty of cheap, fun things to do.
“This is an extremely livable, affordable city, especially for those that are just starting out,” says Brook Bernier, a Realtor with Equity Real Estate.
Adventure awaits in SLC’s many bike lanes and mountain bike trails. There’s even a Bike Prom (a costumed bike rally party) and Tour de Brewtah, which combines two of the (clichéd, but true) great loves of millennials: bikes and micro-brewed beers. The weekly farmers market even offers valet bike parking.
Millennial lure: SLC may be known as a conservative place, but it was named the “Gayest City in the USA” in 2012 by the LGBT magazine the Advocate. It was ranked eighth last year.2. Miami, FL
Median home price: $370,000
Percentage of income needed to buy a home: 49%
Unemployment rate: 5.1%
It’s not just sun birds or aging boomers who flock to Florida in droves, fleeing cold weather. So do millennials! The sunshine is nice, but young folk are attracted to a hopping scene with relatively affordable homes and decent job opportunities. Many find employment in tourism, international trading, and construction—the entire region is enjoying a building boom.
It’s not all work and no play, though. While the South Beach is known for its club scene, events like Calle Ocho Festival, Carnaval Miami, and Art Basel Miami turn the entire city into a party. In addition to numerous art galleries and music venues, the Adrienne Arsht Center was opened in 2006 as the country’s second-largest performing arts center (after NYC’s Metropolitan Opera House).
Up-and-coming neighborhoods like Little Haiti and North Miami are getting fresh interest from young buyers, says Realtor Giovanna Calimano, of Yes Real Estate.
“A lot of these areas are developing little by little,” she says. “They’re hot because the houses there right now aren’t overpriced. People can live there while the communities are still developing and improving.”
Millennial lure: Beach culture—fun, sexy, and cheap (or, actually, free). What’s not to love?3. Orlando, FL
Median home price: $279,000
Percentage of income needed to buy a home: 34%
Unemployment rate: 4.4%
There’s much more to Orlando than theme parks, oversized mice, and sleepy time-shares overlooking golf courses. In fact, this fast-growing metro is getting a lot of serious attention from young people.
“You’ve got the best of both worlds,” says Realtor Lorisa Motko of Charles Rutenberg Realty. “You’ve got the beaches 45 minutes in any direction, and you have plenty of entertainment and nightlife for millennials.”
New mixed-use developments designed to appeal to both city-loving millennials and baby boomers (hey, what happened to Gen Xers, anyway?), many of which are pedestrian- and bicycle-friendly. Thornton Park, just east of downtown, has also become popular among younger homeowners seeking a unique historic neighborhood with cobbled streets and lined with bungalows.
The Orlando metro area leads Florida in job creation, and added 54,600 jobs in January, according to the Florida Department of Economic Opportunity.
Millennial lure: Orlando was the birthplace of the megastar boy bands, ‘NSync and the Backstreet Boys, which dominated the airwaves back in the ’90s. And, in case you hadn’t heard, the ’90s are cool again … with millennials. Go figure.4. Seattle, WA
Median home price: $455,000
Percentage of income needed to buy a home: 36%
Unemployment rate: 4.2%
Seattle checks off quite a few items on the millennial home buyer’s list: well-paid jobs (at Amazon, Microsoft, and Costco) quality coffeehouses around almost every corner, more than 50 bike trails, and some of the country’s best tree-lined streets.
It’s also a welcoming place for nonconforming young people. The city had one of the nation’s biggest turnouts for the Women’s March on Jan. 21, hometown titan Starbucks announced a plan to hire refugees, and it’s the first major U.S. metro to approve a $15 minimum wage.
“Seattle is hip, it’s current, it’s progressive,” says Chris Bajuk, a broker at HomeSmart. “We’re at the leading edge of social and technology trends.”
Millennial lure: The upscale marijuana shop Vela (it’s legal here!), with gleaming counters and an on-site processing lab, was labeled “the Louis Vuitton of weed stores” by none other than Snoop Dogg.5. Houston, TX
Median home price: $310,000
Percentage of income needed to buy a home: 36%
Unemployment rate: 5.4%
Good news for broke millennials: A paycheck in Houston stretches further than in other metros. Houston has the second-highest pay on our list, at $62,300, after adjusting for the cost of living, trailing only San Jose, according to Forbes. Plus, Texas is one of the only seven states with no income tax.
Granted, you may well find yourself fighting through Houston traffic, but several master-planned communities in the suburbs mix residential homes with businesses, so you may not even need to head downtown.
“Restaurants, bars, shops—it almost feels like an urban setting. It’s a very neat trend that’s going to take off,” says Cheri Fama, president of John Daugherty Realtors.
Millennial lure: One of Houston’s more eccentric tourist attractions is the Beer Can House—the odd brainchild of retired upholsterer John Milkovisch, who covered his home with more than 50,000 flattened cans, bottles, and caps.6. Los Angeles, CA
Median home price: $672,000
Percentage of income needed to buy a home: 64%
Unemployment rate: 4.7%
Los Angeles is still “La La Land” for young people dreaming of a Hollywood career, waiting for that life-changing phone call while writing in a café, waiting tables, or driving for Lyft.
“Yes, a lot of people who want to break into the business still come here,” says Gwen Lane, a 33-year-old millennial who runs the blog The LA Girl. “For creatives, it’s such a good place to be.”
But a more recent arrival, the tech industry, is also making itself known—especially the stretch of ocean-adjacent Westside known as “Silicon Beach.” Here you’ll find the parent company of Snapchat; virtual reality hardware/software producer Oculus; and a major outpost of Google.
And despite a median home price of $672,000, there are still pockets of L.A. that are affordable. Northeast neighborhoods like Highland Park and Atwater Village, once dismissed as the boonies, are now among the trendiest choices for laying down roots. Downtown L.A. is vibrant again, and the newly expanded metro system offers options for getting around without a car. For even lower price tags, South Los Angeles is worth considering—the area is going through major changes, with new outdoor plazas, a farmers market, public gardens, and more than 1,000 apartments and condos.
Millennial lure: The Whiskey a Go Go, once the hometown club of the Doors, is still one of the country’s best joints to see up-and-coming bands.7. Buffalo, NY
Median home price: $158,000
Percentage of income needed to buy a home: 23%
Unemployment rate: 5.6%
Buffalo’s inexpensive housing—the median home price is only $158,000—is particularly attractive to young people carrying mounds of college debt. Jobs are flowing in, too. Elon Musk’s SolarCity factory alone, a solar energy equipment supplier, promises 3,000 jobs.
“It’s a city where young people can make their presence felt, whereas in large cities like New York, it’s hard to make an impact,” says E. Frits Abell, chief operating officer of Green Machines, an eco-friendly machine manufacturer in Buffalo.
“Buffalo has a very conducive environment for entrepreneurs … people are also involved in charities, spend time fixing neighbors’ homes, or volunteer with refugee communities to make a positive social impact here.”
Among cities of similar size, Buffalo has a remarkable selection of cultural attractions. And after extensive renovation over the last decade or so, Buffalo has turned its waterfront into a recreation zone for skating and curling.
Millennial lure: Buffalo’s Turkey Trot is the oldest annual public footrace in the nation. The 8K run was first held all the way back in 1896.8. Albany, NY
Median home price: $250,000
Percentage of income needed to buy a home: 27%
Unemployment rate: 4.5%
Albany, one of America’s first cities, is embracing a shining new future. Faded industrial districts in North Albany have become thriving enclaves, with colorful street life. The historic downtown of the state capital has witnessed a resurgence, with enough bars, hotels, and restaurants to justify a hipster’s guide to downtown.
“Albany is kicking it with the micro-brewery and cider business,” says Bill Pettit, a landscape painter who has lived in Albany since 1988. Pettit works with local art galleries and aspiring young artists for 1st Friday, a monthly event disseminating arts and culture throughout the city.
Albany has six colleges, including the State University of New York at Albany. Until recently, graduates vamoosed for better jobs, but now that the city has rebranded itself as a budding tech hub, many choose to stay. Companies like IBM and GlobalFoundries have set up research centers here, and the city is expected to fill 1,180 new software jobs by 2020, according to the New York Department of Labor.
Millennial lure: There’s a surprisingly vibrant local indie band scene here. Really.9. San Francisco, CA
Median home price: $849,000
Percentage of income needed to buy a home: 56%
Unemployment rate: 3.7%
The old adage goes, “San Francisco is a place where young people come to retire.” It’s less true today, given that the cost of living is freakishly high—median rent for a one-bedroom is $3,270, and the median price of a home is $849,000. Now the city is filling up with ambitious young tech folks who aren’t retiring anytime soon.
The young vibe is found in hoodies, ping-pong tables, and beer-stocked fridges in the offices of Airbnb, Pinterest, and lesser-known startups. It’s also present at company IPO parties or 20-something meetups in warehouse-turned-event spaces like the Folsom Street Foundry.
The whole city is basically a giant adult playground. Visit the Academy of Sciences with a drink in your hand during NightLife Thursdays, lie in Dolores Park on a sunny summer day and consider buying a marijuana-laced lollipop, or join a citywide scavenger hunt with your friends.
“It’s the best city ever for young designers,” says Lisa Zhang, 26, who studies interactive design at Academy of Art University. “I see inspiration everywhere, on streets, at bus stations. … I can’t imagine myself living anywhere else.”
Millennial lure: Everything.10. San Jose, CA
Median home price: $950,000
Percentage of income needed to buy a home: 53%
Unemployment rate: 3.7%
Yes, housing prices in Silicon Valley are insane. With a median price of $950,000, a down payment in the San Jose metro market could buy you an entire house in much of the United States.
Perhaps the generous paychecks of Valley tech companies provide some justification. Year after year, ambitious young engineers come to work for companies like Apple, Cisco, and Netflix, and claim enviable perks such as taking their pets to work and free, chef-prepared lunches. San Jose was recently ranked the happiest city to work in by Forbes. (Until recently, we at realtor.com had our headquarters there, and we’re pretty darn happy!)
Tech entrepreneurs have good prospects here, “Silicon Valley is the new Wall Street,” says Realtor Manu Changotra of MaxReal. “Young people come here to do cutting-edge work that’s not available anywhere in the country.”
A nearly endless supply of California sunshine and plenty of outdoor activities—a 30-minute drive can take you to nearby beaches and nature preserves—balance out the fast-paced work life.
Millennial lure: Downtown excitement? Endless suburban-like California sprawl? This city has it all.
* Percentage of income needed to buy a home is based on the median income of each metro.
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Real estate has been a volatile market over the last decade, leaving many people wary of investing in residential and commercial properties. As a result, would-be investors are looking at the market differently and using new strategies to achieve success.
Technology has been a major factor in that shift, empowering investors to research their options remotely, compare and contrast different investment strategies through online tools and ultimately make transactions with limited professional help. Here are three trends that are helping to bring new investors to the space.1. Data-driven investing.
As big data becomes more useful for the public, the real estate industry has been looking for ways to gather and present information that will help drive purchasing behavior. Bill Lyons is the founder and CEO of Revestor, a real estate search engine that provides data to help evaluate investment properties. “In the past, real estate investors needed access to the MLS, rental income data, expenses like HOA fees, occupancy rate, insurance, taxes, mortgage calculators and the sale price of homes sold nearby,” Lyons explains. “Then they would have needed to input all of those numbers into a spreadsheet to analyze the potential value of a property. Now you can do all of that with a few simple steps online.”
While data has been a hot consumer trend in other industries, real estate has been slow to catch on. In most industries, big data adds immense value, increases revenue and pushes the industry forward. In the case of real estate, however, professionals have less motivation to make big data available to the public because it infringes on their expert knowledge and value to the consumer.
But that is likely more perception than reality. Data-driven investing shouldn’t replace real estate professionals — it should help them become more specialized. “It allows investors to quickly analyze investments from a buy-and-hold perspective, utilizing a long-term rental or short-term rental strategy, or from a fix-and-flip perspective,” Lyons says. “Realtors can then market these investments to their existing databases and new prospective clients.”
Realtors empowered by a more comprehensive set of data can spend less time researching and more time selling.2. Short-term rentals bringing new investors to the table.
As apps such as Airbnb and VRBO continue to grow in popularity, more and more people are looking to invest in short-term rental properties. Some experts are critical of short-term rental properties as investments because they operate differently than traditional holdings. Akira Mori, a Tokyo-based real estate expert, offers a different point of view. “In my experience, in the real estate business, past success stories are generally not applicable to new situations,” Mori says. “We must continually reinvent ourselves, responding to changing times with innovative new business models.”
Millennials are a group of potential investors that have begun to reinvent the real estate market. They are hesitant to purchase real estate because of the market fluctuations they lived through while they were young. But millennials are avid users of services such as Airbnb and consequently are drawn to investing in the same way. Since they are the generation that has driven the growth of the short-term rental market online, they have experiential knowledge of the industry.
A study from NAH revealed that 48 percent of millennials want to buy a home in the near future, but 53 percent of them would struggle with financing due to student debt. If provided with the data on potential returns, millennials may be willing to invest in a short-term rental property more than a traditional home.3. Untapped potential.
The success of residential-driven applications demonstrates how much the industry can grow if it leverages technology to open up the market to new consumers. A report from the Federal Reserve shows that real estate is by far the largest asset for the United States, coming in at $40 trillion. There is enormous potential for entrepreneurs to create financial freedom by tapping into that market.
The key is leveraging technology in such a way that helps them consider all the factors involved so they can avoid purchasing a property that does not turn a profit. Additionally, the industry needs to continue to drive technological innovation by opening up the same kind of information and access for commercial investment properties.
Real estate has undergone a lot of change in recent years, so it’s important to leverage new tools to find the investment that fits your long-term financial strategy best. As Lyons explains, “Do your research, know your numbers and be a sniper! Once you know an area, and a strategy in that area, get razor-sharp focused and the opportunities will come. Make use of all the data you can, whether it’s local rent, occupancy rates, seasonality, etc. Most importantly: Know what your exit strategy is.”
Data is no longer exclusive to professionals, but it can be accessed online by those looking to evaluate investments. Real estate technology is enabling more people to become real estate entrepreneurs, which will help drive growth in a traditionally boom-and-bust industry.
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House flipping is hot again, with investors flipping property at the fastest pace in a decade. Yet behind their walls, that picture-perfect dream home could conceal a nightmare.
A flipped house is one that has been sold at least twice within one year. Real estate site Trulia said more than six percent of last year’s home sales were flips—the most since before the financial crisis.
With flipped property soaring in popularity again, so are the risks associated with buying a lemon, experts say.
“What you have to watch out for is if a house has been totally renovated, everything , not just the kitchen or a bathroom, but the whole house, “Frank Lesh, executive director of the American Society of Home Inspectors, told CNBC’s “On the Money” in an interview.
“That’s a good sign that it was probably flipped fairly quickly,” he warned.
In the speed to fix-up a house and re-sell it at a profit, corners could be cut. Work could be completed without required permits, or Lesh said, appliances or lighting could be installed without “proper connections in the electrical panel.”
In especially hot property markets, fixer-uppers that mask flaws are more prevalent, he said. “Because people are trying to turn around houses very quickly and if a market is hot, sometimes people forego the home inspection and that is never a good idea,” Lesh added.
Some quick turnover homes have only had cosmetic fixes that mask mechanical or structural issues that even trained eyes may not be able to catch.
“There are a lot of things that a home inspector can do but there’s just some that we can’t,” Lesh acknowledged.
“A home inspection is done over a few hours’ time period. So that’s sort of like taking a photograph of a moving train. We see it today, right now. So we can’t predict what’s going to happen.”-Frank Lesh, executive director, ASHI
According to ASHI—which since 1976 has represented 8000 certified and vetted inspectors— a home Inspection is a professional, written opinion of a home. It is based on a visual evaluation and operational testing of the systems and components to determine current condition.
Still, even some details can get past an expert.
“Keep in mind that a home inspection is done over a few hours’ time period. So that’s sort of like taking a photograph of a moving train,” Lesh said. “We see it today, right now. So we can’t predict what’s going to happen.”
Lesh said a home inspector could very easily “tell if an electrical outlet wasn’t installed properly,” but wiring can be trickier. “We can’t see behind walls,” he added.
Meanwhile, plumbing can be an even bigger problem for homeowners. Lesh told CNBC that sometimes, “slow problems that you may not see, like a small leak behind a wall because it wasn’t taped properly, could become a problem that an inspector just wouldn’t be able to see.”
During an inspection, there’s a limit to what an inspector can do, he explained.
“Although we run the water in the bathtub and the shower, we don’t get in the shower or in the tub and actually sit in there or stand in there. So it’s hard for us to actually live in the house, but we’re there for a few hours so we try to check it out as thoroughly as we can,” Lesh said.
In stressing the importance of a home inspection, Lesh added that “everybody should know that your house does not have a ‘check engine’ light. It’s not a car.”
Unless an expert can really dig into the home’s nooks and crannies, ” You’re just not going to know what you’re getting.”
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The real estate market is heating up again after the devastation of the great recession, particularly in retirement meccas like the Carolinas, Florida, Texas and Arizona. Much of the activity comes from retirees selling their family homes in the north and moving to the sunbelt. But a significant portion is also due to retirees and pre-retirees buying a second home at the beach or somewhere else in the sun. They might be anticipating the place where they will eventually move full time. If they can afford it, some people keep their main residence, but also want a retreat where they can get away from the world.
For some people, having a second home is part of the retirement dream. You stay in your hometown with friends and family, but also have a small bungalow at the beach or a condo in the sunshine. If you’re going to vacation in the same spot every year, it could be cheaper to own than to rent, but this isn’t always the case. And money is not the only issue. Here are some pros and cons to consider beforeyou purchase a second home:
Pro: You can use the property whenever you want. If you own the property, you can enjoy it at your leisure. You no longer have to spend countless hours rooting through hotel sites or home-share sites searching for something you can afford at the time you want to go.
Con: You’re tied down to one place. If you own a condo in Florida, then you’re probably going to Florida for vacations, whether you want to or not. Unless you have very deep pockets, it’s hard to justify – much less afford– an alternate vacation to Europe, Mexico or anywhere else.
Pro: There’s pride of ownership. Many people enjoy the feeling of owning their vacation spot, rather than renting, just like it feels good to own your own home instead of living in an apartment. In addition, as owner, you can invite your friends and family to join you on vacation, or let them use it by themselves when you’re not there.
Con: As the owner, you’re responsible when something goes wrong. Again, just like owning your own home, you are the one who has to step up when a window gets broken, the roof springs a leak or the refrigerator gives up. Also, you may be held liable if someone gets hurt falling down stairs or slipping in the shower.
Pro: You might make money renting out your second home. In many retirement meccas there is an active rental market, usually bringing in premium rents during the high season. The internet provides accessible opportunities to rent your place at your own discretion. And some vacation developments offer rental and management programs for the benefit of the owners, relieving you of that responsibility.
Con: Renting out your second home is a lot of work. If you use a management company to rent your unit, it will take a substantial cut of your revenue, depending on the services offered. If you do it yourself, then you’ve just bought yourself a second job.
Pro: You can make the property your own. You can decorate your vacation home the way you want and keep it nice. Plus, you can leave your stuff there, including beach chairs, sports equipment, extra clothes and other paraphernalia. You don’t have to jam your car full of stuff or pay fees for extra baggage on the airline each time you visit.
Buying a second home is a complex decision that requires careful thought. So keep in mind these three tips from second home owners:
Factor in how often you will visit. It might pay off to own if you spend at least three months each year in your second home. For example, a retiree from New York might spend every winter in Florida. However, if you will only have a week or two each year to vacation there, you will probably be better off renting.
Pick a retreat that is close to home. If you want your property to be a rental, select a place near your home, or no more than an hour’s drive away. That way you can stay on top of repairs and keep an eye on the local real estate market.
Consider who will maintain the property. It’s not easy to maintain two properties that are in different states. However, you could buy your second home in a resort community with a management company that will take care of rentals and repairs. You may not make a profit renting out your second home after the management company takes a substantial cut, but you might break even, which helps to defray the costs of owning a second home. You just might end up with a free vacation.
A new study from Penn’s Social Impact of the Arts project found that cultural resources in lower-income neighborhoods are “significantly” linked to better schooling, health, and security.
“Going to a museum won’t cause you to lose weight or reduce your chances of being mugged, but communities with cultural resources do better,” Mark Stern, lead researcher of the project and professor of social welfare and history, said in a statement. “Our research clearly demonstrated that sections of the City are doing well on a number of dimensions of well-being, in spite of significant economic challenges.”
The study, which was funded by the New York Community Trust and the Surdna Foundation, looked at how New York’s “neighborhood cultural ecosystem” improved the lives of the city’s residents. The research controlled for economic well-being, race, and ethnicity, and found that creative nonprofits and for-profits, news outlets, bookstores, artists and other cultural centers led to:
- 14% decrease in cases of child abuse and neglect
- 5% decrease in obesity
- 18% increase in kids scoring in the top stratum on English and math exams
- 18% decrease in the serious crime rate
“This research confirms and builds on what we’ve seen about the power of art to shape communities and improve lives,” Kerry McCarthy, director of thriving communities at The New York Community Trust, said in a statement. “Our grant-making boosts the arts in neighborhoods that need it most, so we are thrilled to use the findings to hone this strategy.”
The trust plans to use the study in its grant-making, while NYC’s Department of Cultural Affairs will use it to help design a cultural plan for the city. The research was conducted from 2014 to 2016. You can read the study here.
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Detroit was once known as a city where a working-class family could afford to own a home. Now it’s a city of renters.
Just 49 percent of Motor City households were homeowners in 2015, down from 55 percent in 2009 and the lowest percentage in more than 50 years. Detroit isn’t alone, of course: The rate of U.S. home ownership fell steadily for a decade as the foreclosure crisis turned millions of owners into renters and tight housing markets made it hard for renters to buy homes. Demographic shifts—millennials (finally) moving out of their parents basements, for instance, or a rising Hispanic population—further fed the renter pool.
Fifty-two of the 100 largest U.S. cities were majority-renter in 2015, according to U.S. Census Bureau data compiled for Bloomberg by real estate brokerage Redfin. Twenty-one of those cities have shifted to renter-domination since 2009. These include such hot housing markets as Denver and San Diego and lukewarm locales, such as Detroit and Baltimore, better known for vacant homes than residential development.
While U.S. home ownership ticked up in the second half of 2016, there are reasons to think the trend toward renting will continue. A 2015 report from the Urban Institute predicted that rentership would keep rising through 2030, thanks to demographic trends that include aging baby boomers who downsize into rentals.
In the shorter term, housing market dynamics will also play a role. Fewer than 1 million homes were on the market in the first quarter of 2017, the lowest number since Trulia began recording inventory data in 2012. The shortage makes it harder for renters to buy. Meanwhile, rental landlords, including large Wall Street players and mom-and-pop investors, continue to plow cash into single-family homes.
Those shifts are likely to present new challenges for cities unequipped to handle high rental populations. Detroit Future City, a nonprofit that highlighted Detroit’s shift in a report earlier this month, argues that the city needs an intentional strategy for dealing with the rising population of such households.
That could include providing new protections for renters or creating resources to help landlords keep properties in good repair. On a grander scale, the Center for Budget Policy & Priorities, a Washington-based research institute, published a proposal this month calling for a new tax credit for low-wage workers, seniors, and people for disabilities.
Most low-income families don’t rent by choice, said Nela Richardson, chief economist at Redfin. And plenty of higher-income households rent because they can’t afford to buy. “We don’t have enough affordable supply in either rental or for-sale markets,” said Richardson, adding that cities interested in promoting renter-friendly policies can rethink their zoning policies to encourage more construction.
At an even more basic level, city leaders should check old assumptions about the role renter households play in their communities, said Andrew Jakabovics, vice president for policy development at Enterprise Community Partners, an affordable housing nonprofit.
Homeowners have traditionally been regarded as more engaged, with more at stake in the long-term prospects of their neighborhood, Jakabovics said. That view can unfairly shortchange renters.
“It goes a long way just to make sure you’re valuing renters and making sure voices are heard when it’s time to allocate resources to schools or parks or transit lines,” he said.
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