American Apartment Owners Association

Apartment Marketing Ideas & Tips

Thu, 01/18/2018 - 6:19am

Posted on Jan 18, 2018

If your tenants gave notice today, would you be able to find someone to move in to your vacant unit right away? Or, would it be difficult to fill the vacancy quickly? Savvy landlords know that the best way to find tenants for their rental property is to market their properties so interested applicants come to them. Use these apartment marketing ideas to attract tenants and reduce vacancies.

Stage for Photos 

Photos sell most apartment listings — what do your unit photos say about your vacant unit? If you’ve got generic photos of blank rooms, it can be difficult for renters to imagine themselves in your unit. Work with a home stager who will bring in furniture, art and knick-knacks for a photo or video shoot. This one-time expense is well worth it when you know you’ll have attractive photos you can post to your website and re-use every time you need to rent out the apartment.

When staging the interior of an apartment, don’t forget to spruce up the outside, too. Tenants will want to see pictures of common areas and grounds. By cleaning up before the photo shoot, you can ensure a consistent impression — inside and out.

Create a Website

One of the best apartment marketing ideas that many forget about is creating a website. Let a website advertise your property year-round, generating a steady stream of leads for your rental unit. If you own multiple properties, you can create a comprehensive website that shows all the properties you own.

Then, use location-specific keywords to drive traffic to your website. Tenants searching for apartments in your city will be more likely to find your website when it’s keyword-rich.

Place applications, prospective tenant information, and high-quality photos and videos on your website. These components will help make it easy for interested parties to view basic information, complete an application and get in touch. Even if you don’t have units available to rent, it never hurts to have completed applications on hand — you never know what could happen.

Advertise on Social Media

Social media is an easy way to get your listings seen, whether you use your own website or post on apartment search websites, such as Craigslist. To make social media posts effective, use hashtags that renters might look for to find available apartments, such as #realestate or #forrent.

Use your social media profiles to feature your apartment listing and share details that might draw views — such as a snapshot of your swimming pool ready for the season.

Involve the Community

This time-tested way of marketing rental property still works, so spread word in your community to increase leads. Post flyers on community bulletin boards advertising your open units. Network with other property managers and business owners you know; they might know someone in need of an apartment like yours. If you have a good relationship with existing tenants, ask them for referrals.

As long as your requests aren’t violating the Fair Housing Act — for instance, by specifying a preferred demographic — there’s nothing wrong with using your local network to drive traffic to open units.

For more property management marketing tips and landlord tenant advice, become a member of American Apartment Owners Association. AAOA members get discounts on supplies, tenant screening, educational webinars and more.

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

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Apartment Hunting Mistakes To Avoid

Fri, 01/12/2018 - 4:57am

Posted on Jan 12, 2018

Choosing an apartment is one of the most important decisions you can make — at least for the duration of your lease. Yet many renters commit one or more apartment search mistakes when seeking their next rental unit. Below, learn what not to do when apartment hunting to find an apartment you’ll be happy you took.

Exceeding your budget 

Conventional apartment hunting tips recommend your rent costs represent no more than one-third of your monthly income. Exceeding either this limit or your personal budget for affordable rent can be a costly mistake. The more you pay in rent, the less you have to cover life’s little emergencies, such as new brakes for the car you use to commute to work.

Many apartment hunters are tempted to stretch their budgets when they find a place they love. To curb this impulse, keep emotions out of your apartment search. This is a very important apartment hunting mistake to avoid, as going over your budget could potentially cause issues in the future.

Making assumptions

Don’t assume something is true unless you get independent verification from the landlord or property manager that your hunch is correct. When making assumptions, you risk being disappointed after you sign the lease if your impression was wrong.

Moving too quickly …. or too slowly

If the rental market is tight where you live, there may be few available properties that fit your needs. This stress could make you overeager to commit to the first reasonable apartment you see without thinking the details through. Always take a step back to evaluate whether something is a fit before you commit.

Instead of moving too fast, some renters move too slow because they take too long in the decision-making phase. By the time they’re ready to sign a lease, the landlord may have found another tenant. If you can’t decide whether something is a good fit, it’s probably not right for you.

Not thinking about your commute

If you commute for work, how will your commute be affected by your new apartment? Use a GPS to check the commute time from an apartment to your job, then back again. Check around the time you leave for work to get realistic figures for your commute. If you don’t check, you risk winding up with a lengthy commute, which impacts your quality of life.

Skimming the lease

While many landlords use a boilerplate lease template — including many who belong to American Apartment Owners Association and use the member forms library — some have custom clauses within the lease that affect your use of the apartment. If you skim the lease, you won’t fully take in something that could affect you for the duration of the lease. Take the time to read the lease, and ask the landlord or property manager to explain any legal terms you do not understand. Don’t let someone pressure you into signing the lease on the spot; make sure you understand what you’re agreeing to before you sign. The lease is a legally binding contract, so this is key.

With these apartment search tips in mind, you can avoid selecting an apartment that does not meet your needs or budget while increasing your satisfaction with the apartment you find.

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

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Retention Through Maintenance Relationships

Thu, 01/11/2018 - 1:59pm

When hiring or training a maintenance technician, we naturally tend to focus on the hard skills. But HVAC certification and experience in fixing plumbing, electrical and drywall issues are only a part of the puzzle in today’s customer-centric environment.

Today’s resident wants more than a skilled technician that replaces the faucet quickly—they want a skilled technician with a friendly smile and a positive attitude. If they don’t get it, they’ll find somewhere else to live.

As a greater number of tasks like paying rent and submitting service requests are automated, residents are even interacting with the leasing team on fewer occasions. That means a greater amount of customer service and the ability to influence the resident renewal decision is put on your maintenance team, which has traditionally been left out of the customer service training sessions.

“Daily interactions between residents and maintenance technicians, from a nice chat while repairing a broken dishwasher to saying ‘hi’ as friends in passing, are what truly drive customer loyalty and increase resident retention,” said Kevin Villont, vice president of construction and maintenance at JVM Realty Corp.

A lot of results and reviews come through maintenance. Not just from the perspective of timeliness and efficiency of work, but also how polite, clean and friendly the maintenance tech was while providing service. This underscores the magnitude of resident-maintenance relationships.

Here are some ways multifamily operators can prepare maintenance staffs to build meaningful relationships with residents:

SEEK MAINTENANCE TECHNICIANS WHO FIT COMPANY CULTURE

The number one step in creating a quality maintenance team is getting the right people on board. This can be a two-pronged approach, with an objective and subjective component.

The objective nuts and bolts part deals with hiring someone who understands and can execute the duties and responsibilities of the position, and will pass a maintenance exam. The subjective part is looking into how the maintenance tech would fit in with and adopt company culture and fundamentals. Every company is different, but ideally you’ll hire someone who cannot only perform the roles of the job, but will also adhere to the company’s core values.

Someone with the personality to connect with and engage residents in a friendly and professional manner is also important. It’s not easy to find this skill set in the maintenance world, but holding out until you do will go a long way to improving the customer service scores of your community.

HOLD DEDICATED CUSTOMER SERVICE TRAINING IMMEDIATELY UPON HIRE

Training new maintenance hires on the core fundamentals and values of your company is a big component of equipping them with the knowledge and skills to perform well in their roles.

“At JVM, we have a director of training who provides a customer service course with our maintenance technicians within 90 days of starting,” Villont said. “The maintenance technicians learn all about customer service protocol and how to treat residents.” 

Customer service training, when it comes to residents, is a great way to educate maintenance techs on service etiquette, from being kind, respectful and polite to residents, to leaving the apartment clean and following up with residents on how satisfied they are with the completed work.

HARNESS TECH TOOLS TO EMPOWER ASSOCIATES

Apartment software has streamlined communication with residents and optimized the speed and efficiency in which maintenance requests are executed. By utilizing property and resident management software and the insights it provides, maintenance techs can easily manage work orders and gain valuable resident information from the community data.

PREPARE FOR REFERRALS, CRISIS MANAGEMENT

Occasionally a resident will seek out a maintenance technician for an issue that is outside that tech’s expertise. Preparing maintenance techs on how to steer residents to more qualified coworkers who can assist will go a long way when it comes to that resident feeling heard and supported.

Maintenance teams should also be trained specifically for emergency and crisis duties so they know how to act accordingly and can help residents should anything come up. 

UTILIZE ONLINE REVIEWS TO IMPROVE MAINTENANCE

Online reviews, whether positive or negative, present unparalleled opportunities to get a glimpse into the community from the resident’s perspective. SatisFacts and Google ratings are tools that can be used to provide an overview of how the customer views the maintenance staff.

“Residents will sometimes address maintenance technicians by name in a review, which is often a solid indicator that the maintenance team is interacting well with residents and developing good relationships,” Villont said.

As technology evolves, so should the way companies provide customer service to residents.

Whether a resident feels cared for and supported at their apartment community is dependent on the relationships they have formed with maintenance teams. These maintenance-resident bonds are a weighty piece of the resident retention equation. Without innovative resident and property management technology in place, maintenance teams would struggle providing the commendable customer service that residents expect in the digital age.

 

Source: multihousingnews.com

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Tenants Have Frozen Pipes Do I Have To Pay To Fix?

Thu, 01/11/2018 - 1:54pm

 

Dear Landlord Hank:  Tenants Have Frozen Pipes Do I Have To Pay To Fix?

If a tenant has frozen pipes and calls the landlord or property manager to come fix the issue, who is supposed to pay for the maintenance? Each week veteran landlord and property manager Hank Rossi answers questions from other landlords and property managers around the country about their rentals. Here is this week’s question

Dear Landlord Hank:

We just had pipes freeze for the first time in one of our rentals this week. Tenants called to report, so I sent a guy who handles our maintenance out to thaw the pipes, but who should pay for this maintenance call? Seems tenants should have been proactive but we had nothing in the lease saying so. Whose fault is this? How do you handle this issue?

-Landlady Eileen

Dear Landlady Eileen,

This is a tricky one.

I don’t know where your rental property is located. Do you have severe winters every year or is this a freezing weather unusual?

Are the tenants warm weather transplants that have no knowledge of cold weather problems or should they be expected to know how to handle these temps and effects on water and pipes?

Where did the freeze occur and could it have been avoided if tenants kept the heat on and water dripping with cabinet doors open (so warm air can circulate more easily to pipes under sinks)?

Notes On Tenants’ Doors About Avoiding Frozen Pipes

We don’t have this situation occur in Florida but we do every winter in Georgia.

Make sure tenants are aware of freezing weather and put notes on doors with instructions to keep the heat on, drip water and keep kitchen base cabinet and vanity cabinet door open.

I also go through those instructions with tenants upon move in.

I want them to understand that dripping the water doesn’t mean turning it on full force.

If tenants knew of potential freezing they should bear cost of frozen pipes

In my opinion, if tenants should have known of the potential for freezing pipes and how to handle this situation and chose not to do so or did so inadequately, then they should bear the cost of repair.

Source: realestateinvestingtoday.com

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How rent control can exacerbate inequality

Thu, 01/11/2018 - 1:51pm

Rent-control policies are a cause célèbre advocated by progressive politicians such as New York City Mayor Bill de Blasio and U.K. Labour Party leader Jeremy Corbyn. But evidence from San Francisco shows that these laws aren’t all they’re cracked up to be.

While people who manage to secure a rent-controlled home will benefit substantially in the long run, these policies can cause landlords to make choices that can exacerbate income inequality, a new working paper from researchers at Stanford University found. The report examined the fallout from a successful 1994 ballot initiative in San Francisco that created rent control protections for small multifamily buildings built before 1980. Here is what the researchers found:

  • People who lived in homes that became subject to rent control rules were between 10% and 20% more likely to remain at that address, versus people who weren’t in rent-controlled units.
  • The economic benefit to people living in rent-controlled units averaged between $2,300 and $6,660 per person each year.
  • Meanwhile, landlords were 10% more likely to convert their building into condos if it became rent controlled. Overall, the rental supply in San Francisco dropped by 6% following the expansion of rent control.
  • Rents throughout the city increased by 5.1% as a result — the researchers calculated the total cost to tenants from rent hikes to be $2.9 billion, nearly half of which was paid by residents who moved to San Francisco following the establishment of rent control.

Given the negative repercussions of rent control policies, the researchers argued that other approaches to affordable housing that don’t inherently punish landlords might be more effective, such as creating a tax credit for rent.

Rent deregulation in Cambridge had other benefits

  • Improved public safety following rent deregulation represented an economic benefit to the city of between $10 million and $22 million.
  • Deregulation led to $2 billion-worth of property value appreciation between 1994 and 2005, findings that are supported by previous research by the newly-minted Nobel laureate Richard Thaler.

Cambridge represents a strong test subject for studying the impact of rent deregulation, according to the paper, which was distributed by the National Bureau of Economic Research. The city’s rent control policy was eliminated following the success of a statewide referendum in 1994. Nearly 60% of Cambridge’s voter’s opposed the referendum, indicating strong support for rent control at the time.

Only a third of Cambridge’s residential units were subject to rent control rules, and the ordinance only applied to buildings constructed before 1969. As a result, many of the buildings affected by the change were concentrated in the same neighborhoods, which allowed researchers to determine better the effect deregulation had. The researchers also compared their findings against the nationwide decrease in crime and to other potential causes of the lower crime rate, including proximity to public transit and public housing.

Rent control regulations are rare across the country

Only four states (California, Maryland, New Jersey and New York) and the District of Columbia have rent-control laws on the books either state-wide or at the municipal level, according to the National Multifamily Housing Council, a trade organization representing the apartment industry.

In another nine states, there are no rent control laws on the books — nor are there laws preempting rent control ordinances. The remaining 37 states either have state laws preempting rent control ordinances at the local level or require local governments to get approval from state legislatures to enact such provisions.

Even though rent control laws are rare, more cities across the country have been exploring them, likely a reflection of soaring housing costs nationwide. Voters have succeeded in putting referenda on the ballots in cities like Glendale, Calif., Newark, N.J., and Portland, Maine, that would create or strengthen rent control laws. And activists in cities like Minneapolis and Seattle are pushing for rents to be regulated, even though their state governments have been rent control ordinances.

A recent poll also found that a 55% majority of voters in California’s Orange and San Diego counties supported rent control policies, according to the Orange County Register.

Other studies show that rent control likely doesn’t work

While rent-control policies are aimed at keeping housing affordable, it often has the reverse effect in practice.

There is evidence that renters pay more in rent-controlled cities, according to the Urban Institute, a Washington, D.C., think-tank. These policies generally raise the rents in uncontrolled apartments. “Given the current research, there seems to be little one can say in favor of rent control,” wrote Peter Tatian, a senior fellow in the Urban Institute’s Metropolitan Housing and Communities Policy Center.

One theory for the increase in property values: Studies have shown that the construction of new rental units decreased in many cities after they implemented rent-control regulations, according to the National Multifamily Housing Council. Consequently, the supply of rental properties may not grow to accommodate increased demand in these cities. Many people will remain in rent-controlled apartments and pass them along to family or friends, meaning that fewer vacancies come up. That leaves people looking for housing with fewer options.

Studies have also found that rent-controlled apartment buildings are kept in worse conditions, a reflection of negligence on the part of landlords and tenants alike.

And further research has also shown that the end of rent control in Cambridge, Mass., led to a significant reduction in crime — and the improved public safety alone represented an economic benefit of between $10 million and $22 million, according to a working paper by researchers from the Massachusetts Institute of Technology.

 

Source: marketwatch.com

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Investors Expect 2018 to be Another Solid Year for Apartment Sales

Thu, 01/11/2018 - 1:48pm

Investors are looking forward to another strong year for apartment sales.

“Going forward, there is a bit of renewed optimism… and we are still at an elevated level when it comes to transaction volume,” says John Sebree, first vice president and national director of the national multi-housing group for Marcus & Millichap.

Investors bought fewer apartment properties in 2017 than they had the year before—but 2016 was a record-breaking year for apartment sales. The total dollar volume of apartment sales in 2017 was still greater than the historical average. And with apartment properties still desirable and yields and interest rates still relatively attractive, 2018 seems poised to match it.

“There is still a hunger for yield by investors,” says Jim Costello, senior vice president for Real Capital Analytics (RCA). “I don’t see 2018 as being that much different.”

Large volume of sales, relatively

Sales of apartment properties started slowly in 2017, partly because of uncertainty about policy after the presidential election and partly because the huge volume of deals that closed in 2015 and 2016 is naturally hard to match. Investors bought $12.5 billion in apartment properties in 2017 (as of November) in the U.S., according to the latest data from Real Capital Analytics (RCA). That’s down 7 percent from the same period in 2016.

Investors closed 2017 on a roll, partially making up for the year’s slow start. The volume of properties sold in November was the second largest of any November in history behind only 2016, according to RCA.

In 2018, investors are expected to buy and sell apartment properties in roughly the same total dollar volume as 2017. “It’s not going up a lot, though it’s not going to drop either,” says Sebree.

Investors may also be more eager to buy and sell apartment buildings now that Congress has passed its first major reform of the federal tax code since the 1980s. Tax reform didn’t change much for the apartment business, but could have created major changes. Now that it has passed, apartment experts have less uncertainty about the future.

“It eliminates some concerns, and as a result we may see more owners coming to the market,” says Sebree.

Cap rates stay low

Experts do think that cap rates for apartment properties are finally now about as low as they are likely to get. But they are unlikely to rise much either, even though interest rates are likely to rise in 2018—especially now that federal tax reform has passed.

Interest rates will continue to rise. The Federal Reserve has already raised its short-term benchmarks rates and is planning more 25-basis-point increases over the coming year, especially if inflation begins to rise after tax reform. “Tax reform is a huge fiscal stimulus. The Fed is going to have to respond with some higher rates,” says Costello.

Rising interest rates usually push cap rates higher, as investors eventually demand higher yields from their investments to make up for their higher cost of capital. But the effect is not immediate. In the short term, cap rate are likely to stay low.

“Property is a hedge against inflation. Investors want to lock in an interest rate at a low number,” says Sebree.

Investors turn to smaller markets and lower properties

More than half (55 percent) of the apartments properties bought and sold for more than $1 million in 2017 priced were located in secondary and tertiary markets. That’s up from 42 percent in 2010.

“You have got a lot of money looking for yield,” says Sebree. Because of all this additional investment, the average cap rate for apartment properties has fallen to about 6 percent in secondary and tertiary markets, down from about 8 percent in 2010. At the same time, the cap rate for apartment properties in prime markets has stayed in the 4 percent range. The difference in cap rates between apartment properties in primary markets and properties in secondary and tertiary markets is now about 190 basis points, down from 370 basis points in 2012, according to Marcus & Millichap.

“The cap rates in preferred markets really haven’t changed as much—they were already at such low levels,” says Sebree.

The cap rate for class-B and class-C apartment properties in all markets has also fallen on average to about 5 percent from about 7 percent in 2010.

 

Source: nreionline.com

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How You Should Market Your Real Estate Based Business Digitally

Thu, 01/11/2018 - 1:45pm

The world of real estate marketing has changed immensely over the past decade. It seems like everyone is an expert when it comes to homes because of Zillow’s price calculator and easy to use platform. The days of purchasing ad space on bus benches or billboards being wildly successful are over. The most important part of marketing when it comes to real estate has become that of digital marketing. Not marketing in a digital fashion can have your real estate firm falling behind the competition when it comes to sales closed. The following are ways that you should market digitally to get the highest return on the money invested in the marketing strategy.

Create Useful Content The company website should have a blog where your staff and other contributors can write articles that will be of use to site visitors. These do not have to be articles as it could be a podcast or even an interactive piece of content. The useful content will help showcase the knowledge that the company has and can help develop a relationship with regular readers. Answering common problems in an easy to understand way can help develop your real estate firm as a thought leader in the industry. This will lead to sales as helping people understand something like the mortgage process will build trust that your firm will be able to help with these tough to understand parts of the home buying process.

Partner With Real Estate Aggregators People flock to sites like Zillow and Trulia when they are looking at homes they potentially want to buy. Often times you can contact an agent directly through the site as they have partnered with the site. These are leads of people that can be qualified through a simple credit check. There will be some leads of people that simply cannot afford to buy a home just yet but it is important to follow up with these people in 6 months to a year. There are some people who have the credit score but lack the down payment so keep these leads as they will be valuable to return to.

Local SEO is Important Local SEO is important in the real estate business as it will help you rank at the top of Google for a specific area. People searching for Colorado land for sale would see that the Spanish Peaks Land Company deals with these types of deals. Most people will not navigate to the 2nd page of search results so ranking on the first page could not be more important. Optimize your website and content to help garner the search engine rankings that you desire. The wrong layout or slow loading pages can hurt a website’s ranking as it stresses user-friendly sites.

Website Layout Should Be Made For Mobile Every year there is more mobile traffic than ever before so optimizing your site for mobile devices is necessary. This can help your SEO as well as reduce the number of people that leave the site as it is annoying to navigate on their phone. The layout should put your contact information at the top of the site so a call or email can be done rather than having someone fill out a boring contact form. Keep media on other pages besides the homepage to decrease loading times.

As you can see it is important to think about the details when it comes to your digital marketing. Set up a strategy that will give you a favorable return on your investment and track everything. One variable can make a huge difference so knowing which variables impact sales the most could be the most important data gathered. Optimize your digital marketing approach and watch your sales skyrocket!

Source: realtybiznew.com

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Home prices are set to soar in 2018

Thu, 01/11/2018 - 9:45am

 

  • Sales prices jumped 7 percent annually in November.
  • Low supply and high demand are fueling the gains and neither of those is expected to ease up anytime soon.

The temperature may be frigid across much of the nation, yet home prices are sizzling and sellers are in the hot seat.

Sales prices jumped 7 percent annually in November.

That is the third straight month at that pace, far higher than the price gains in the first half of 2017. Low supply and high demand are fueling the spurt and neither of those is expected to ease up anytime soon.

Supply is actually falling even more now, and a strengthening economy is pushing demand. This will have potential buyers out early this year, trying to get a jump on the spring market.

“Rising home prices are good news for home sellers, but add to the challenges that home buyers face,” said Frank Nothaft, chief economist at CoreLogic, in the report. Nothaft said the limited supply is the worst at the lower end, and will hit the growing number of first-time buyers hardest.

Half the homes are overvalued

The largest metropolitan areas are seeing the biggest gains.

In the nation’s top 50 markets, half of the housing stock is now considered overvalued, based on market fundamentals, like income and employment. This is defined as an overvalued housing market as one in which home prices are at least 10 percent higher than the long-term, sustainable level.

Las Vegas led the November report as not only being overvalued, but showing a double-digit annual price gain of 11 percent.

San Francisco was not far behind at 9 percent, and Denver came in third at 8 percent.

Las Vegas and Denver are both considered overvalued, but San Francisco is not, as incomes in the tech capital far exceed the national level.

Of the nation’s 10 major markets with the biggest price gains, seven are overvalued. These include Washington, D.C., Houston and Miami. Boston and Chicago are still seeing price gains but are considered at value.

Without a significant jump in home construction, prices will remain high and likely move higher. Mortgage rates could also move slightly higher, and new tax policy limiting mortgage and property tax deductions, is hitting homeowners in some states hard.

All will combine to make housing less and less affordable in the new year.

Source: cnbc.com

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8 Steps to Take Before Listing Your Investment Property for Sale

Thu, 01/11/2018 - 9:43am

Presenting a strong, solid property is the best way to a fast, lucrative sale. But before you plant a sign in the yard, you’ve got some work to do. From assessing the state of the property and cleaning it up and getting it ready to list to speaking to your tenants so they aren’t blindsided by the sale and gathering up all the pertinent information about the property and any tenants, the work you do before the sale directly impacts how much money you make at closing.

Ready? Let’s get started!

8 Steps to Take Before Listing Your Investment Property for Sale 1. Assess the true state of your property.

A visual inspection isn’t going to be enough. A full inspection—performed by a licensed home inspector—will give you a more accurate look at the state of the property. Your buyer is going to have an inspection and will ask you to repair or give a repair credit for anything major. (In a slower market, they’ll ask for most minor things, too.) Don’t give them ammunition for price reduction or closing concession requests. Know what’s going on in your property ahead of time so you can make the repairs you’ll be asked to make anyway.

If your home inspection report turns up little or nothing, you can present it to potential buyers as a “pre-inspected home,” further providing proof that the property is a solid investment.

2. Make necessary repairs.

Once you have an inspection report, you can see what the buyers will see when they receive their inspection report. Addressing the big issues before the buyers even see the home can help bring in a higher selling price because the property presents itself as solid, so buyers aren’t asking for larger-than-necessary repair concessions—or worse, canceling the contract because they have no confidence in the property!

You can also choose not to make repairs and instead note the issue and report that these items will be sold as-is. This brings a lower upfront offer price, but you have less unknowns surrounding the inspection.

3. Clean, clean, clean.

The outside of the property needs to look great. So does the inside of the property, but if you’ve got tenants, you’ll need to coordinate with—and probably incentivize—them to clean it and keep it clean. A clean property sells faster (and for more money) than one that is less-than-tidy. Now, this may seem like a no-brainer bit of advice, but I am continually astonished by the utterly disgusting manner in which people live. You will be leaps and bounds ahead of the pack if you just have a clean home.

If you’re selling a property you have recently rehabbed, one good, deep cleaning followed by periodic maintenance through closing will suffice. Contract with a cleaning service to come in once a week to freshen up the property. If no one is living there, the cost should be minimal. You can even contract with them to clean the home after it’s sold and the new owners have moved in. An added incentive to the buyers and a bonus to the cleaning company. It’s always a great idea to be on good terms with a cleaning company!

4. Coordinate with your tenants.

If you’re selling a rental, you need to have your tenants on the same page. If you have a contentious relationship with your tenants, this is going to be just one more challenge, and you may find that waiting until their lease has expired and they’ve moved out is a better time to sell.

If you have a good relationship with your tenants, sit down with them and tell them you are selling the property. Ask if they’d like to buy it. (This doesn’t happen frequently but it’s worth asking them first.) Ask them what times would work best for their schedule to show the property to potential buyers. Also, ask what times would NOT work for their schedule, and share these with your agent – and ask them to include this in the Agent Remarks, a private section in most MLS systems.

Consider having the tenants themselves coordinate showings with the showing company. This reduces your hassle by not having to make multiple phone calls to confirm with the tenants. However, be alert and ask the showing company to report declined showings. One showing that doesn’t fit into the tenants’ schedule isn’t a big deal, but if they’re declining most showings, you could be losing sales and not even know it.

5. Find a great agent.

Residential agents can list any type of residential property—but that doesn’t mean that all agents are good at selling residential investment property. If you don’t already have a great investor-minded agent, start looking for one right now. Go to local investor meet ups and ask fellow investors who they recommend, but find someone who understands your needs—and the needs of your tenants.

6. Have excellent pictures taken.

Again, if you’re selling a rental, you’ll need to coordinate with your tenants to have pictures taken of the property. Offer to hire a cleaning crew to come in and clean their home for them, so your pictures present the home in the best light. Make sure the photographer takes pictures without fancy lenses or weird angles, so you convey the true home.

7. Gather up your documents.

Go through your records and gather up anything pertinent to the property, from repair receipts and warranties to tenant screening information, rent records, and security deposits. Ask your tenant to fill out an estoppel certificate—a testament to how much they pay in rent, when it’s due, and how much security deposit they have given you. If you have move-in documentation, provide a copy to both the tenant (as a reminder of the state of the home when they moved in) and the new landlord.

8. Remember why you’re selling.

You’re selling your property for any number of reasons: to cash in equity, move up in property size, or even to get out of the game altogether. Advanced preparation can make the entire sales process go smoother and be finalized faster. Follow these tips for a great selling experience.

 

Source: biggerpockets.com

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Trulia’s Hottest Real Estate Markets to Watch in ’18

Thu, 01/11/2018 - 9:41am
See which cities are making the cut this year.

If you’re thinking about where to move next, you’re probably considering a wide array of factors like work, family, and the start of a new chapter. Every home purchase is also a huge investment—possibly the biggest you’ll make in your life. Looking at the markets poised for growth can ensure your new home is also a good investment. To help, Trulia looked at the 100 most populated metros in the country, then used five key metrics to determine the 10 real estate markets with the highest growth potential in 2018: strong job growth, affordability, low vacancy rates, home search rates on Trulia.com, and a high population of young households (you can find our full methodology below). It may surprise you—it did us—to learn that Texas and Ohio are home to more than one fast-growing city. See where else made the cut below

1. Grand Rapids, MI

On the mighty banks of the Grand River, Michigan’s second-largest city is at the top of our list largely due to its strong employment growth, which is up 2.5 percent year-over-year. Grand Rapids also has a relatively low vacancy rate (ranked 16th overall) and a high share of households with residents 35 years and under (22 percent). A full two-thirds of Grand Rapids’ residents own homes, and the median home sale price is a friendly $163,750. Living here means enjoying the waterfront, the Frederik Meijer Gardens & Sculpture Park, and the Grand Rapids Art Museum, which spotlights Michigan’s artists. A bubbling brew scene doesn’t hurt either.

2. Nashville, TN

Next on our list is Nashville, also known as Music City. But you don’t have to be in the band to love it here. Home of the famous “Grand Ole Opry,” residents in Nashville are always down for a good time. Need more evidence? Just walk through The Gulch, a trendy Art Deco-inspired neighborhood. Not surprisingly, Tennessee’s capital has a high share of households under 35 years old (23 percent) and the strongest job growth in the country (3.1 percent year-over-year), luring people from all corners of the nation to relocate. But taking the top spot in job growth may come at a price: affordability, where Nashville is ranked 58th overall.

3. Raleigh, NC

North Carolina’s capital, Raleigh, is known for the bright minds of North Carolina State University and the Research Triangle (together with Durham and Chapel Hill). But it’s also beloved for its wealth of culinary and cultural cornerstones, like the Oakwood historic district, designated on the National Register of Historic Places, where homes date back to the 1800s. This City of Oaks made our list due to its strength in two categories: job growth (ranked 3rd overall) and low vacancy rate (ranked 15th overall). Its popularity, though, leaves the city lagging in affordability—the median sales price in North Carolina’s second most popular city is $250,000—where it ranks 43rd overall.

4. El Paso, TX

This Southwestern city on the Rio Grande is loved for its incredible Tex-Mex cuisine, a wealth of locations for outdoors lovers to explore, and a rich downtown artist community and farmers market. Major employers in El Paso range from the US military to the University of Texas at El Paso, healthcare corporations to major retailers. The average price of a home here is just $186,611, and it’s a hot market for the social young and single set: the median age is 33, and 24 percent of residents are single. You’ll find many of them moving to the up-and-coming Mission Hills neighborhood. “The fantastic weather, developing downtown area, and affordable price range of housing speak to younger buyers as well as just about everyone,” says Laura Baca, an area real estate agent.

5. San Antonio, TX

San Antonio is known for its River Walk, an oasis of cypress-lined paved paths and lush landscapes where locals and visitors alike go to relax. But the city is bustling, too. In 2017, job growth rose 2.2 percent, and the national homeownership rate increased significantly for the first time in more than 10 years. In fact, homeowners make up two-thirds of the city’s population, at 65 percent. San Antonio’s top employers are a mix of military, city, and school districts, as well as private and public businesses, making this 300-year-old city flush with new job opportunities. These trends are expected to continue into 2018, with homeownership outpacing renting for the indefinite future.

6. Fort Worth, TX

This city of cowboys and culture is a hot destination in the Lone Star state, welcoming 8.8 million visitors annually. Fort Worth is comprised of seven primary entertainment districts, each offering dining, shopping, entertainment, and cultural amenities—offering mass appeal for a new generation of residents, allowing the city to lay claim to the youngest population of any major metro in Texas. It’s only 17 miles from the DFW International Airport, ensuring personal and business travel is extremely convenient. The city also has an impressive percentage of homeowners (68 percent), and with popular employers such as Lockheed Martin Aeronautics, American Airlines, the Naval Air Station, and city and school district offices, it’s a solid place to set down roots.

7. Austin, TX

Capital city Austin, with its legendary live music, burgeoning restaurant scene, cool culture, and vibrant community is a draw for everyone—even those who aren’t coming to listen to tunes in the Live Music Capital of the World. Austin’s also a university town, and many folks stay on after school. The national homeownership rate ticked up both for households under 35, as well as those aged 35-44, with the former showing a substantial increase from 34 percent in 2016 to 35 percent in the second quarter of 2017. Though home buying among millennials is likely to be sluggish in the short-run, the long-run potential for this generation to support housing consumption in the United States is big.

8. Columbus, OH

Big things are happening in Columbus, Ohio’s capital and most populous city. It’s booming, and not just in population. There are 33 acres of new riverfront parkland in downtown, cultural institutions are adding to their offerings, neighborhoods are bursting with new places to eat and shop, and the innovative food scene gives residents plenty of options. Trends in Columbus show a 12 percent year-over-year rise in median home sales price, and even with the upward trajectory, the average home comes in at just $159,900. “Our urban areas are booming with renovation and new build projects, and our suburbs maintain their investment values very well,” says Cheryl Chapin, an area real estate agent. “We have a lot of areas across the city that are walkable, have great dining and shopping, yet they’re close to downtown amenities.”

9. Madison, WI

Madison is Wisconsin’s second-largest city and state capital. It’s also home to the state government and the University of Wisconsin-Madison, the city’s largest employers. The town’s amassed a treasure chest of kudos, from most-walkable and best road-biking city, to most vegetarian-friendly, LGBTQ-friendly, and environmentally friendly city, too. Of the places on this list, Madison has the highest percentage of college-educated residents (60 percent). The up-and-coming Tenney-Lapham neighborhood houses lots of young families and hosts a popular annual art walk.

10. Cincinnati, OH

Resting along the banks of the Ohio River, the vibrant Cincinnati region spans portions of three states: Ohio, Kentucky, and Indiana. The third-largest city in Ohio has dedicated homeowners, with 63 percent of the population owning homes and its home sales price slowly growing, up 4 percent year-over-year. Cincinnati’s popular Over-the-Rhine district, which includes Findlay Market and food and craft vendors, is a favorite place for locals to spent the weekend, as is Cincinnati Zoo and Botanical Garde.

Source: trulia.com

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What the 20 Most Popular Home Renovations Are Really Worth in 2018

Thu, 01/11/2018 - 9:31am

Planning to remodel your kitchen, add a master suite, or undertake some other pricey home renovation in 2018? Watch out—not all of these home improvements pay off like they did in the past, according to Remodeling magazine’s latest Cost vs. Value Report.

For this much-referenced annual report, now in its 31st year, researchers pinpointed the average return on investment of 20 popular home renovations by canvassing contractors nationwide on how much these upgrades cost to complete, then compared that with how much real estate agents estimated these features would boost a home’s market price (in other words, their value).

And the news isn’t so good for homeowners looking to remodel on a massive scale: The report found that in 2018, Americans should expect to make back only about 56% of the money they spend on renovations. That’s down from 64% the previous two years.

What gives?

“This year, the most expensive projects didn’t have much of a gain,” says Craig Webb, editor of Remodeling and manager of the report. “I think it’s because real estate professionals think we’re getting close to a peak in market prices. So consequently, spending a lot of money does not automatically mean your house will just ride the escalator up and be worth a lot more.”

Current events could also play a role. New tax laws curtailing the deductibility of mortgage interest and local property taxes might be dampening real estate agents’ confidence that piling on the improvements will pay off. Plus, recent wildfires, mudslides, and other natural disasters have created what Webb calls “a freight train of extraordinary demand” on materials and labor that is bound to jack up renovation costs all round, leading to thinner margins on their return.

But it’s not all doom and gloom. As usual, this year’s report found that the ROI varied widely by project. A new garage door, for instance, essentially pays for itself, earning you a whopping 98.3% of your money back, making this the best value of the whole bunch. And the worst? Installing a back patio, which will recoup only 48% of your expenses.

Check the chart below for a full rundown of the top renovations, including how much they cost, their value at resale, and the percentage you’ll recoup. And if you’re looking for some general pointers, here’s one: If you’re going to shell out money, do it where everyone will notice—on the front of your house.

“Curb appeal projects tend to have high paybacks than inside-the-house projects,” Webb continues. “Any real estate professional will tell you curb appeal matters a lot, and these numbers prove it.”

This explains why garage doors top this list, followed closely by manufactured stone veneer (which offers a 97% ROI) and wood decks (83%).

Another golden rule of renovation?

“It’s better to replace or repair than add and remodel,” says Webb. In other words, go ahead and fix that frayed siding or replace the roof before you add a master suite or overhaul the kitchen.

Mostly, keep in mind that if your tastes are, ahem, unique, that could lead to trouble if you’re expecting home buyers to swoon over the same things.

“You may spend gobs of money on what you think is the perfect kitchen remodel,” Webb says. “But if your idea is to have something from the 1970s with avocado ovens, the next person could walk in and say, ‘That’s ugly. I don’t care that you spent $75,000 on that—let’s tear it out anyway.'”

Top 20 remodeling projects and their ROI ROI for home renovations

Source: realtor.com

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Real Estate Investor Taxes What You Need To Know

Thu, 01/11/2018 - 9:28am

The new tax laws do not appear to have a short term negative impact for investors. In fact it’s more likely a near term boom for investors. For one thing, if the now defunct homeowner mortgage interest deduction discourages new homebuyers, they’ll have to rent which has to be good for investors in apartments and single-family rentals. According to the Urban-Brookings Tax Policy Center mortgages and the capital gains exclusion apply to personal property, not the business of real estate investment. In fact, investors (businesses) are still able to deduct mortgage interest as a cost of conducting business (along with all of the normal and customary expenses).

There is a possibility the loss of the mortgage interest deduction could hamper fix and flip investors. But that’s unlikely considering the low inventory and pent up buyer demand. However, this isn’t likely to be universal in an industry that is all about location. Low to moderate cost markets are dominated by personal incomes that will benefit from the higher standard deduction and will no longer benefit by itemizing, which is typically triggered by mortgage interest and property tax deductions. The higher standard deduction will offset the loss of itemized deductions. However, there is the chance that the higher standard deduction will demotivate potential buyers that don’t take advantage of the long term investing that homeownership offers.

It’s the high income and high cost real estate markets that won’t benefit much from the higher standard deduction. High end markets could also suffer as a consequence of caps on mortgage interest deductibility and severe reductions in the deductibility of state, property, and local taxes.

Of general interest to real estate investors are changes to taxation of pass through business entities such as LLCs and S corporations. You’ll need an accountant to get this all straight but pass through entities will receive more favorable tax treatment. This should especially help the profitability of real estate and manufacturing businesses.

Longer term, these tax changes will have several unpredictable consequences. This tax package is designed to front load the U.S. economy. Historically, slow and steady growth has shown more sustainable prosperity that doesn’t overheat the economy. Too fast of growth results in a substantial increase in the demand for borrowed money. History also demonstrates that high borrower demand drives higher interest rates, which is never good for the real estate industry. Chances are interest rates will increase enough late in 2018 and into 2019 to significantly hamper real estate investing and the industry as a whole. Certainly the markets that are already hot won’t be sustainable if significant inflation is added to the mix.

The politics of the economy are far from finished. There was zero support by the Democrats for this tax bill. Whether the democrats return to power in 2018 or later, they will return to power at some time. Tax bills and policies are reversible. No one knows what that will bring.

The aging population also plays heavily into this complex mix. As was seen as a result of the Regan and George W. Bush tax cuts at the upper income levels, it doesn’t result in sustainable economic growth that off sets the predictable growth in the budget deficit. Unaddressed senior entitlements (hampered by the deficit) to Medicare and Social Security will continue dragging on the economy and tax policies.

Source: realtybiznews.com

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3 Tips to Prepare Your Property For Freezing Temperatures

Thu, 01/11/2018 - 9:22am

The bite of cold winter air and freezing temperatures can have a lasting impact on your property’s landscape. Hard and moderate freezes can damage the foliage and roots systems of plants, bushes and grass, and in extreme cases lead to plant loss that requires a capital expense to rejuvenate the landscape before the spring.

The best defense against freezing weather is some common practices that, if applied correctly, will help ensure your landscape survives freezing temperatures:

1. Irrigate before the temperatures drop

Watering plants, trees – even grass – before temperatures drop below 32 degrees is among the first lines of defense. According to the University of Florida IFAS Extension, well-watered soil will provide its own internal heating system to protect plants. Wet soil absorbs more solar radiation than dry soil, thus radiating heat during the night when temps are typically at their lowest.

In the process, water provides a barrier between the root system and cold air. The moisture fills the numerous air pockets in the ground and prevents freezing air from penetrating the roots. The cold may damage the foliage—this is evident by wilting leaves and stems—but the roots are insulated and survive under brief freezing conditions.

To ensure the landscape gets plenty of water, run the irrigation system through its normal cycle as close to the freeze event as possible. Watering too soon will allow the water to leach the soil beyond the root zone and expose the plant to the cold.

Irrigate about 10-15 minutes on each spray station and 30 minutes per rotary station for best results.

A word of caution: Once you’ve watered prior to the cold weather event, be sure and turn off the double-check valve on the sprinkler system. Also, make sure there is no residual water on sidewalks, driveways or other areas that can freeze and make for a dangerous situation for residents and staff.

As a general rule, frequent watering is not necessary in the winter months unless there just hasn’t been sufficient moisture. Water evaporates less in the winter and therefore isn’t needed as much, like in the summer and spring growing seasons. But strategically watering before a freeze can provide a layer of protection for the landscape.

2. Bring potted plants inside

Planter pots are more prone to freezing because they are elevated and don’t have the natural heat within the ground for protection. Plants susceptible to freezing should be moved to a protected area, like a maintenance shed or empty garage, even in outdoor areas protected from harsh winds.

Bringing some plants inside the office or in indoor common areas may add a little extra foliage to the atmosphere. Just remember that climate-controlled conditions dry out the air and plants may need to be watered during their stay.

3. Cover plants and be smart about it

Can’t bring plants indoors? Covering may be an option, but there are some misconceptions on best practices. Depending on where you live, covering certain types of plants may or may not be necessary. First, know what types of plants you’re dealing with and whether they need to be covered. Your local county extension office can provide the right information.

If it’s necessary to cover plants, be very aware that they need oxygen and sunlight. Coverage in plastic is a good insulator but prolonged periods under wrap can suffocate the plant. The most common mistake that people make is leaving the plant covered throughout the winter, resulting in a dead or severely damaged plant.

Light fabrics like bed sheets or burlap are good choices and don’t add as much weight to the plant if it gets wet plus allows the plant to breathe. Like plastic, however, they can prevent sufficient oxygen from getting to the plant if left in place for extended periods of time.

There are a number of commercial products available to cover plants that are designed to protect but reduce the risk of suffocation. Some are made from fiberglass and look like a little dome that fits over the plant. These are a little more attractive than hanging a sheet over a bush.

But, again, be smart. Temperature swings, like in the Southwest when the high may reach 50 during the day yet get below freezing at night, call for a little extra attention. Covers may need to come off during the day but go back on at night to the plant isn’t damaged.

Protecting a property’s investment in landscaping often is necessary when winter weather is on the scene. Taking a few simple steps before temperatures drop and keeping an eye on things during a freeze is best to prevent long-term damage to plants, bushes and other plant life around the community.

 

Source: propertymanagementinsider.com

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Move-In Prep: Tips for Landlords Preparing to Welcome a New Tenant

Tue, 01/09/2018 - 4:25pm

Move-In Prep: Tips for Landlords Preparing to Welcome a New Tenant

A quick search on the Internet for moving tips provides a plethora of information from moving day checklists, mishaps to avoid, and moving how-to’s, but what you will find is that a majority of this information pertains to the tenants. However, as a landlord or property manager, you know from first-hand experience that there is much to be done when preparing a space for a new tenant. So, wouldn’t it be helpful if there were some advice catered specifically to you? Well, the following tips will help you prepare for your new tenant so you can welcome them with open arms.

Inspect it Thoroughly

Before a tenant moves in, it is up to you to inspect the property to ensure it is up to your standards and make any necessary fixes or improvements before move-in day. An inspection is more than a walkthrough – it’s a thorough inspection of the space to enable to you to take stock of the current status of the space so you can hold the appropriate party accountable as well as limit the likelihood of a security deposit disagreement. To make sure you have all your bases covered, use a move-in checklist to ensure you don’t miss anything, as you’ll need to check out everything from the walls and floors, to small details such as light fixtures, outlets, window screens, and bathroom caulking. Consider taking photographs of the unit to be used should there be a dispute over charges. Have the tenant sign off on the inspection, and make sure all parties have a copy. Keep in mind that the inspection doesn’t stop on move-in day. It is a good idea to check in regularly with the tenant to check for damages, illegal activity, and safety issues, as well as address any repairs or tenant concerns.

Keep It Clean

Whether or not someone lived in the space previously, a clean-smelling environment is a welcoming environment. Before move-in, give the space a deep clean including mopping, sweeping, vacuuming, washing windows, scrubbing bathrooms, and dusting in all those hard to reach places. If dirt and grime have stained walls and windows, now would be a good time for a fresh coat of paint. While you are in cleaning mode, have an exterminator come in and spray for bugs and pests so that you can let your tenant know you went the extra mile to ensure that their new home is safe and clean. Speaking of safety, make sure the necessities such as electric and plumbing are in good working order well in advance of move-in day.

Take Your Welcome to the Next Level

Moving into a new place is an exciting experience, but it is also filled with unknowns, questions, and maybe even a little bit of anxiety. To ease some of the move-in stress, send your new tenant a welcome letter via snail mail or email a few weeks before move-in day and include important information such as how to turn utilities on, where to go to pick up keys, parking information, and contact information. If you really want to go above and beyond, provide your new tenant with information on moving truck rental information so that they can quickly and easily find reviews and costs. Be sure to also detail the best place to load and unload to avoid blocking traffic and cut down on move-in exhaustion from long treks carrying armfuls of stuff. Consider surprising your tenant with a move-in day welcome basket with items such as snacks, drinks, toiletries, and suggestions for fun things to do or good places to eat nearby (coupons wouldn’t hurt either).

Securing a new tenant is exciting, and the new cash flow is certainly a bonus. However, don’t let all the excitement cloud your most important priority – a happy tenant. Make sure the space has been thoroughly inspected and cleaned, and provide your tenant with all the necessary information for a happy and stress-free move-in day.

 

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Housing Outlook 2018: 6 Predictions From The Experts

Mon, 01/08/2018 - 9:11am

In 2017 Americans learned to expect the unexpected, whether it be politics, weather or housing. Driven by record low inventory, little about the housing market went as forecast last year. “We thought there would be some things to take the pressure off,” reflects Skylar Olsen, senior economist at home search site Zillow. Interest rates would rise. Construction would pick up. Price growth would moderate. “That did not happen at any impactful level.”

Instead the market got hotter: inventory tightened, prices rose, mortgage rates barely budged and, though new home construction picked up at the end of the year, it was not at the starter price points where new inventory is needed most. Like the soaring stock market, the housing market often seemed disconnected from the tumult in Washington and natural disasters elsewhere. Observes Javier Vivas, director of economic research for Realtor.com: “We saw the economic growth and the economic momentum function as an override for a lot of external forces.”

With few clear signs of supply relief and the impact of the new tax law still being digested, reading the housing tea leaves is particularly challenging this year, but here are six things experts expect to happen:

1. The pace of sales will slow early in the year—but not for long.

Several provisions in the tax bill signed into law by President Trump last month will directly impact housing. These include changes to the mortgage interest deduction and to property tax deductions. Other changes will impact how much money people have, requiring decisions on how to spend it. Experts anticipate households will take some time to do the math on how the tax plan impacts them and the value of their home before making any big moves. Nevertheless underlying demand should remain strong after the best year for wage growth since the recession. Pent up demand from renters who have been unable to find suitable homes to buy also means the lid won’t stay on for long.

2. Inventory will continue to be a drag.

A crippling lack of inventory remained the defining trait of the housing market in 2017. At the start experts believed the crunch that characterized 2016 would bottom out; instead it grew worse. According to Zillow, housing inventory declined 10.5% in the 12 months ending in November. Data from brokerage Redfin shows that in November 2017 there were 653,347 homes for sale across the country. In November 2010 there were 967,604. Low inventory, says Olsen, “drove all the dynamics that we saw, from bidding war in the hottest U.S. housing markets, to the incredibly fast home value appreciation” across the country.

Looking to 2018, the general consensus is that inventory will pick up slightly. The biggest reason for this modest optimism is that the current situation is unsustainable. Prices cannot rise faster than wages forever. Plus, life events will eventually force reluctant sellers off the sidelines. Home search site Trulia found that 31% of Americans believe 2018 will be a better year then 2017 to sell a home, far more than the 14% who this it will be worse. (Though only 6% of homeowners say they plan to sell.) Another positive signal? New construction has started to swing away from apartments, typically built to rent, to single-family homes, which are built to own.

However, it has become clear that the typical assumption that demand and strong prices will entice construction are not holding true this cycle. There are structural reasons builders aren’t building: the high cost of land, skilled labor and building material, lack of buildable space and local regulations against density. Recently, however, builder sentiment has been brighter than consumer sentiment.

For a sign of how bad things have gotten, Nela Richardson, chief economist at Redfin, points to the aftermath of hurricanes and wildfires that wreaked havoc last year. Following those tragedies construction resources went to the places where it was needed most. This was necessary, but it “flat lined growth” elsewhere, says Richardson. Meanwhile, in the debate about the tax plan lawmakers indicated inventory woes are not top of mind, suggesting no policy relief on the horizon.

3. Price growth will slow—but not stop.

National home prices have climbed for 23 consecutive months. From January through October 2017 the Case-Shiller U.S. National Home Price Index increased 5.92%, on track for the biggest gains since 2013 when the market was finally recovering from the bust. The hottest markets last year were western cities like Seattle and Las Vegas where closing prices rose 12.7% and 10.2% respectively. Experts say prices will continue their march higher in 2018, but the rate of increases will slow. “Underlying the rising prices for both new and existing homes are low interest rates, low unemployment and continuing economic growth. Some of these favorable factors may shift in 2018,” noted David Blitzer, head of the Index Committee at S&P in the most recent release of the monthly reading.

4. The rent versus buy equation could tilt toward renting in costly markets.

Thanks to the new tax law, it just got more expensive to own a home in high tax and high price places. For some people the changes, combined with rising prices, may mean renting makes more financial sense than buying. “Since home prices are rising faster than wages, salaries, and inflation, some areas could see potential home buyers compelled to look at renting” particularly in expensive West Coast cities, noted Blitzer.

“We begin 2018 with a frigid cloud of uncertainty surrounding the impact of the new tax bill that restricts State and Local tax deductions, both very high in states such as New York, New Jersey, Connecticut, California and Illinois,” noted Leonard Steinberg, president of brokerage Compass, in an e-mail with his quarterly report on the New York’s luxury market. “Will uncertainty lead the consumer to become a society of renters with diminished incentives to buy?” He thinks not.

Nevertheless, high rents and student debt loads have also made it difficult for young households to save up a down payment even if they can afford the monthly mortgage. Moreover, with prices rising so fast even a small increase in mortgage rates can put people over the edge on affordability. (Also read: Millennials Get A New Way To Clear The Down Payment Hurdle To Homeownership)

5. Mortgage rates will hover around 4%.

In December the Federal Reserve bumped short term interest rates 25 basis points to between 1.25% and 1.50%. Historically, movement from the Fed has had a corresponding effect on mortgage rates, but three hikes in 2017 and two in 2016 only moved the cost of a home loan slightly higher, casting doubt on just how much of a difference the three hikes Fed policy makers have projected for 2018 will have on housing.

Experts tend to agree mortgage rates will finish the year between 4% and 4.5%. That’s a touch higher than the rates for most of 2017 but still historically low. What they disagree on is how we’ll get there. Ralph McLaughlin, chief economist at Trulia, for example, expects a slow and steady rise. Greg McBride, chief financial analyst at Bankrate.com, anticipates volatility with rates “dipping below 4% at least once, spiking above 4.5% and closing the year around 4.5%.”

6. Millennial demand for housing will keep climbing.

After a decade of decline the homeownership rate finally ticked up in 2017. By the third quarter, 63.9% of households were occupied by owners–up from a low of 62.9% in the second quarter of 2016. McLaughlin says 2017 will be remembered as “the year the bleeding stopped and the healing started.” As Millennials age this trend is expected to continue. The generation of adults born after 1980 were slow to enter the housing market, but as a growing share of them get married and have kids they are buying homes at rates equal to their parents. In fact, single millennials are more likely to own a home than prior generations of singles.

 

Source: forbes.com

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Trump Administration Postpones an Obama Fair-Housing Rule

Mon, 01/08/2018 - 8:45am

Undermining another Obama-era initiative, the Trump administration plans to delay enforcement of a federal housing rule that requires communities to address patterns of racial residential segregation.

The Department of Housing and Urban Development, in a notice to be published Friday in the Federal Register, says it will suspend until 2020 the requirement that communities analyze their housing segregation and submit plans to reverse it, as a condition of receiving billions of federal dollars in block grants and housing aid. The notice tells cities already at work on the detailed plans required by the rule that they no longer need to submit them, and the department says it will stop reviewing plans that have already been filed.

The move does not repeal the 2015 rule, a product of years of pressure from civil rights groups and review by the Obama administration. HUD argues that it is trying to respond to cities that have struggled with the rule’s requirements, delaying it for several years while the agency further invests in the tools communities use to assess their housing patterns.

“Early in this administration, HUD embarked upon a top-to-bottom review of the department’s rules and regulations,” the agency said in a statement. “As part of this regulatory review, HUD asked the public to offer comment on those rules that might be excessively burdensome or unclear. What we heard convinced us that the Assessment of Fair Housing tool for local governments wasn’t working well.”

But advocates say the notice effectively strangles the federal government’s first major commitment in decades to address racial inequality in housing, burying it in calls for more analysis and preparation. Diane Yentel, president of the National Low Income Housing Coalition, called the move misguided and shortsighted.

“It’s terrible news,” said Gustavo Velasquez, who was the assistant secretary for fair housing and equal opportunity at HUD during the final three years of the Obama administration. “I am concerned, though, that this is not actually the worst news.”

During the delay, he fears that the Trump administration will entirely undo the rule, which has been a goal of many Republicans in Congress ever since it was adopted. Critics of the rule — including Ben Carson, before he became HUD secretary — argue that it amounts to an aggressive intrusion by the federal government into some of the most intimate decisions local citizens and communities make: about where to live, who lives next door and how to design their neighborhoods. Since joining the agency, Mr. Carson has said that he wants to “reinterpret” the rule.

HUD’s notice argues that a delay is necessary because local communities need more technical assistance from the agency and have struggled to figure out how to measure their progress toward affirming fair housing. The agency notes that among the first 49 assessments submitted, about a third were initially returned by HUD as unacceptable. But the system was designed to include that kind of back and forth, former HUD officials said.

Sara Pratt, a former deputy assistant secretary for fair housing at the agency, said HUD had provided consultants and a hotline that jurisdictions could call for help. Many of the communities that fell short on their assessments had simply failed to follow HUD’s road map, said Ms. Pratt, who left the department in November 2015 and now works as a civil rights lawyer in private practice.

“It’s like having a teacher in a classroom saying, ‘Too many people aren’t passing the test, so I’m just going to change the test,’ ” she said.

What worries her most, she said, is that HUD will allow cities to revert to prior standards for assessing fair housing. Under the old system, many cities submitted assessments that were of poor quality and lacked basic data, she said.

Ben Metcalf, director of the California Department of Housing and Community Development, said the 2015 rule had spurred local and statement governments to understand their housing patterns and make smarter policy decisions around them.

Some cities, like Philadelphia, have already finished their assessments.

Paul Chrystie, a spokesman for Philadelphia’s Division of Housing and Community Development, said the process was critical in getting comments from the community and from a range of sectors — like education, transportation and banking. One important thing they learned was that residents did not want to move from their distressed neighborhoods, but wanted to see them improved, he said. That led to programs to expand pre-K and to improve libraries, parks and recreation centers, he said.

New York City is scheduled to begin the community outreach for its review this year. “We’re confident in the approach New York City is taking,” Leila Bozorg, the deputy commissioner of neighborhood strategies for the city’s Department of Housing Preservation and Development, said in a statement. “This will include working closely with a diverse group of experts, practitioners and advocates and hearing directly from New Yorkers about their housing needs and how where they live impacts their life.”

The Obama rule was devised to address unfinished business of the 1968 Fair Housing Act, which forbids discrimination in the housing market based on race, color, religion, sex and national origin. The original language of the law also required communities to “affirmatively further” fair housing — to, in effect, promote desegregation in addition to prohibiting discrimination.

The federal government never fully enforced that element of the law, however. And 50 years after the Fair Housing Act was passed, many communities have made little progress toward desegregation, while some programs funded with federal support have had the effect of reinforcing segregation.

The 2015 rule — the “affirmatively furthering fair housing rule” — required communities to analyze policies that contribute to segregation. These might include locating low-income housing projects only in black neighborhoods, or barring multifamily housing from neighborhoods with good schools. The rule broadly required analysis of housing opportunities available not just to minorities, but also to the disabled, the poor and other disadvantaged groups.

The new HUD notice reiterates that local communities still have a legal obligation to further fair housing, and to pledge that they’re doing so. But a reversion to the policies in place before the 2015 rule makes critics fear that the government will go back to a time when it turned a blind eye to segregation, giving taxpayer dollars to communities actively thwarting a central goal of the Fair Housing Act.

“It says ‘segregate as usual,’ ” said Myron Orfield, a law professor at the University of Minnesota.

The 2015 rule was imperfect, he said, but it also amounted to the federal government’s first major effort to strengthen civil rights around housing since the Lyndon Johnson era.

“Residential segregation is at the heart of racial inequality in the country,” Mr. Orfield said. “All of the disparities in the U.S. — in education, in income, wealth, employment, health — between the races are all fundamentally linked to residential segregation. There’s no real way to deal with disparities between black and white people without dealing with this.”

Source: nytimes.com

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How You Should Market Your Real Estate Based Business Digitally

Mon, 01/08/2018 - 8:39am

The world of real estate marketing has changed immensely over the past decade. It seems like everyone is an expert when it comes to homes because of Zillow’s price calculator and easy to use platform. The days of purchasing ad space on bus benches or billboards being wildly successful are over. The most important part of marketing when it comes to real estate has become that of digital marketing. Not marketing in a digital fashion can have your real estate firm falling behind the competition when it comes to sales closed. The following are ways that you should market digitally to get the highest return on the money invested in the marketing strategy.

Create Useful Content The company website should have a blog where your staff and other contributors can write articles that will be of use to site visitors. These do not have to be articles as it could be a podcast or even an interactive piece of content. The useful content will help showcase the knowledge that the company has and can help develop a relationship with regular readers. Answering common problems in an easy to understand way can help develop your real estate firm as a thought leader in the industry. This will lead to sales as helping people understand something like the mortgage process will build trust that your firm will be able to help with these tough to understand parts of the home buying process.

Partner With Real Estate Aggregators People flock to sites like Zillow and Trulia when they are looking at homes they potentially want to buy. Often times you can contact an agent directly through the site as they have partnered with the site. These are leads of people that can be qualified through a simple credit check. There will be some leads of people that simply cannot afford to buy a home just yet but it is important to follow up with these people in 6 months to a year. There are some people who have the credit score but lack the down payment so keep these leads as they will be valuable to return to.

Local SEO is Important Local SEO is important in the real estate business as it will help you rank at the top of Google for a specific area. People searching for Colorado land for sale would see that the Spanish Peaks Land Company deals with these types of deals. Most people will not navigate to the 2nd page of search results so ranking on the first page could not be more important. Optimize your website and content to help garner the search engine rankings that you desire. The wrong layout or slow loading pages can hurt a website’s ranking as it stresses user-friendly sites.

Website Layout Should Be Made For Mobile Every year there is more mobile traffic than ever before so optimizing your site for mobile devices is necessary. This can help your SEO as well as reduce the amount of people that leave the site as it is annoying to navigate on their phone. The layout should put your contact information at the top of the site so a call or email can be done rather than having someone fill out a boring contact form. Keep media on other pages besides the homepage to decrease loading times.

As you can see it is important to think about the details when it comes to your digital marketing. Set up a strategy that will give you a favorable return on your investment and track everything. One variable can make a huge difference so knowing which variables impact sales the most could be the most important data gathered. Optimize your digital marketing approach and watch your sales skyrocket!

 

Source: realtybiznews.com

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4 Useful Winter Maintenance Tips for Landlords

Mon, 01/08/2018 - 8:37am

For most of us, the spring and summer seasons were over as swiftly as they came, which made the arrival of winter a bit unsettling. Preparing for winter, in general, is never easy because there are so many different circumstances to consider like snow, the bitterness of the cold, etc. As a landlord, winter months are specifically concerning due to these circumstances, which have the potential to leave room for damages and repairs, certainly nothing fun to deal with on the end of the landlord or the tenant.

Preventable damages to a home during the winter months can be easily avoided through a few quick and easy checkups if you know the right things to look for. Are you a property manager or landlord unsure of how to prepare your property for the harsh winter months? Looking for some easy ways to ensure the protection of your property and the safety of your tenants? Check out my four tips on simple winter maintenance that will guarantee you and your tenants a smooth and stress-free winter.

1.Keeping the Cold Out: If you own a property in a location where winters are bitter and intensely cold, one of the top things to consider is how to keep the cold out of your property and keep the inside of it both warm but in an inexpensive way. There are a couple ways that can help you lower the heat/electric bill but still keep your property warm, which include:

  • Invest in a Draft Stopper/Door Sweep: We all know the power of the draft that comes through underneath the door leading inside from the outside. Though it seems like a small part of your property, drafts from just one door can lower the temperature inside, forcing either you or the tenant to crank up the heat. This leaves you with a heating bill that makes you want to pull your hair out, so in the future check to see if there are strong drafts by doors and invest in a stopper, they are inexpensive and work very well!
  • Check Windows: Another way for unnecessary cold air to enter the house is through unsealed/closed windows. According to Erin Eberlin of the Balance, “especially in older windows, it is not uncommon for the top portion of the window to creep down, leaving a slight gap for air to come in. You simply have to unlock the window and push the top portion of the window up and the bottom portion of the window down to make sure it is properly closed.” Not only will this ensure the safety of your tenants by confirming that the windows close property but it also is another simple way to cut down your heating bill!

2. Water Heater Blanket: Another concern during the chilly winter months is to have nice hot water to not only shower/bathe in, but also to use for cooking purposes. Taking cold showers during the winter in frigid temperatures is certainly not pleasant. As a way to preserve hot water and to keep your heating/electric bill low, invest in a water heater blanket to help insulate the hot water and keep your bill from going through the roof. Not only are these inexpensive, but you can also buy them at just about any hardware store, making it convenient and easy to access.

3. Seal Driveway/Sidewalk/Parking Lot: No one wants to deal with driving on top of a cracked hardtop during the winter. Ice can form due to the deep cracks, which can not only be a safety hazard for tenants, but it can also cause damage to your property, forcing you to make repairs. According to Jennifer Maughan of RentPrep.com, “What was a small crack in the fall can turn into an eyesore or a safety hazard by spring. Use a concrete sealer manufactured for just this purpose to stop the process.” Not only is this a simple task, but it also will guarantee the safety of your tenants and the success of your property as well!

4. Check for Small Holes/Openings: Animals and pests, just like us humans, want to get as close to warmth as possible during the chilly winter months. Many times, properties like your own may, unfortunately, be the victim of these pests as they can gain access to the home through small holes and openings that unless you look for, would otherwise not notice. Eberlin notes, “You will want to look for gaps around any pipes that are entering the property. You should also check for any gaps under entrance doors or garage doors. An adult mouse can slip through a gap as small as a quarter of an inch and a baby mouse can fit through even smaller holes.”

Though the winter months can be difficult, especially as an owner of a property, these few tips will not only keep your tenants happy but they will also save you money and help you run a great property!

 

Source: rent.uloop.com

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Solving the Decline of Pet-Friendly Areas with Xeriscaping

Mon, 01/08/2018 - 8:33am

Pet-friendly communities continue to be a desirable amenity, as well as a leash to bring in new apartment residents and retain others. Industry experts agree that a grassy park or designated area for dogs to stretch their legs, have a catch with their owner or do their business helps lease units and can command increased revenue.

Dog parks—often outfitted with cushy grass or synthetic turf, plants, trees and even doggie obstacle courses—are aimed at renters who are among the estimated 43.3 million dog-owning households in a hound-friendly revolution in the U.S. Since 2007, the number of households owning dogs has risen by more than 300,000, according to the American Veterinary Medical Foundation. And it’s no longer a lifestyle desired by those who own a backyard. A recent multifamily industry report says that 72 percent of apartment renters are interested in a place for their dog to mark its territory. Bathing stations and pet daycare are high on the list, too.

But most property managers and owners will tell you that dog parks require a little TLC, usually up to the maintenance crew or landscape contractor. In addition to leaning on residents to pick up the poop, onsite staff or landscape companies must keep the area clean by washing away what’s left behind and sprucing up beaten down areas where dogs romp and dig.

Otherwise, the area can look tattered and smell.

Now that dog parks have seemingly enjoyed a good romp in recent years to attract residents, some multifamily operators are facing damage control issues from the wear and tear of dogs and their unsavory habits. Chris Lee, president of Dallas/Fort Worth-based Earthworks, says dead grass and wilted plants are diminishing the overall look of properties, and replanting isn’t always a prudent solution.

The problem is exacerbated on smaller, mid-rise urban and suburban communities where grass is at a premium. The wear and tear is painfully obvious when even the smallest area of grass stands out amid the concrete and steel that consume most of a city block.

Synthetic turf has made maintenance easier but not immune to the pitfalls of dogs being dogs. And for every dig or hike and squat on the surface, tree or plant, the area takes a hit. Urine is as agitating to a doggie designated area as a full moon to a baying hound.

“It used to be an uptown problem, now it’s everywhere with more mid-rises popping up on smaller pieces of land,” says Lee, whose company is working with properties to spruce up pet areas. “We’ve tried everything including over irrigating, and there’s not a lot you can do about the smell. With synthetic turfs, the problem is the smell. On a hot summer day it will make your eyes water.”

Earthworks is taking a page out of drought landscaping to preserve community appearances while dogs do their thing. The company has reworked damaged pet areas with the xeriscaping technique of using rock and decomposed granite instead of grass and turf.

The concept is perfect for communities that don’t have much space or struggle at maintaining consistent grass growth even before the dogs are let loose. Xeriscaping works well along former strips of grass between walkways and the building and looks natural with a blend of native plants and larger rocks, Lee says. Other grassy areas are left intact providing contrast with the pet-designated areas.

“Xeriscaping doesn’t have to be bland,” he said. “The area can be colorful, it’s just going to have decomposed granite or rock for the surface. Otherwise, traditional landscapes will be destroyed.”

CityGate Group, which manages 31 properties in the Dallas/Fort Worth area, switched to xeriscaping in October after the grass at one community was riddled with brown spots caused by dog urine and poor drainage. Grass was removed and decomposed granite packed into pet areas, while a low spot got a river rock treatment. A boulder or two was set to add variety.

Regional Manager Nicole McQuarry, who was familiar with xeriscaping while living in Arizona, said the community now has a nice, attractive amenity that didn’t drag down the bottom line. She couldn’t resist visiting the property multiple times as work progressed.

“I kept going out there to see it because I hadn’t done it before, and it looks fantastic,” she said. “When I was walking up there were two residents in the dog park with two little dogs, and the dogs were running around all over the place. I asked the residents if they liked the improvements and they said they loved them. This is a really good option.”

Lee said xeriscaping not only provides a clean, maintenance free area but also is environmentally friendly. Because many municipalities continue to restrict water usage, reducing watering to irrigate struggling grass makes sense.

The area, however, still must be maintained but can be cleansed by running normal irrigation cycles, as odd as that may seem to some residents.

“It’s counter intuitive to water rocks,” Lee said with a laugh, “but in this case it’s necessary. We’ll set it up on the same schedule as the rest of the sprinklers. It manages the look of the area and certainly the smell.”

The key, Lee says, is blending traditional landscape techniques with xeriscaping so the design looks planned. Adding multiple xeriscaped areas, whether used for pets or not, creates uniformity. McQuarry says that she converted a picnic area that was bare because of the huge trees at one property to rock and decomposed granite.

“It looks beautiful.”

Converting grass areas to xeriscaping is a one-time investment that beats replacing ruined grass and plants, which can run into some serious capital dollars, Lee says. Plus, properties avoid the progression of damage that can occur so the area always looks well-maintained with regular maintenance and resident poop-scooping.

“The whole thing is your curb appeal, even if it’s inside the property,” he said. “If you have big patches of burned up grass, that’s not visually pleasing.”

Nor is a smelly dog park that won’t leave even our four-legged friends howling for joy.

 

Source: propertymanagementinsider.com

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Airbnb wins legal case against big property landlord Aimco

Thu, 01/04/2018 - 9:38am

A Californian judge has dismissed a lawsuit filed against the property rental provider Airbnb, which claimed that it was deliberately incentivizing people to breach their property leases.

That lawsuit was filed by Apartment Investment & Management Company last February in both California and Florida. Aimco was seeking monetary damages and also a court order to stop Airbnb from allowing people to breach their leases. The company’s main issue with Airbnb is that it allows for people with “unvetted personal histories” together with “no vested interest in maintaining a peaceful community atmosphere”, to temporarily inhabit their buildings.

Aimco went further, filing a motion for a preliminary injunction against Airbnb to halt its operations at four properties in Southern California.

However, Airbnb argued that Aimco’s attempt to ban subleasing wasn’t legal under Californian law. It also said that it could not be held responsible for the conduct of Aimco’s tenants and guests. Citing the Communications Decency Act’s protection of website operators from liability for the content people post on their sites.

In turn, Aimco said that Airbnb is an information content provider, and therefore legally responsible for the content that appears on its site. But the judge in the case ruled otherwise, saying Airbnb is not an information content provider as it only hosts content rather than creating it.

“This conduct does not make Airbnb an information content provider,” U.S. District Judge Dolly M. Gee said in her ruling. “As stated above, an information content provider is statutorily defined as “any person or entity that is responsible, in whole or in part, for the creation or development of information provided through the Internet or any other interactive computer service.”

Naturally, Airbnb appeared to be pleased with the judge’s decision.

“The partnerships we have established with landlords have made it clear that home sharing can be a win-win situation for everyone,” a company spokesperson said. “The Friendly Buildings Program allows tenants to leverage their greatest expense to make extra money and can create new economic opportunities for landlords. We are excited to have many such partnerships in place and we continue to see tremendous interest from forward-looking landlords and developers who understand that home sharing is going to be part of the solution, especially for Millennials who are facing historic debt.”

Aimco still has an active lawsuit against Airbnb in Florida that should be resolved later this year.

Source: realtybiznews.com

 

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