American Apartment Owners Association

Technology as a Game-Changer for Vacation Rental Managers

Thu, 11/02/2017 - 10:54am

Automation is something every business owner can benefit from, especially if you generate income from real estate rentals. Using automation software is a no-brainer for setting up efficient business processes, which will you to save time and grow your small business.

Hosts and companies with several accounts and listings can’t rely on Excel spreadsheets and can’t afford mistakes caused by human error. With vacation rental management software, you should have no problem keeping up with every aspect of renting out your property.

There is a variety of different automation software programs out there specifically designed for this purpose. Before selecting a tool that will suit your needs, you need to make a list of business operations you want to automate. Here are some general features that regular vacation rental software can offer.

1. Automated Communication with Guests

Usually, a person who is interested in your rental property will have a variety of questions they need an answer. Getting a rental management software program with tools that can help you see and respond to these queries is a must. Failing to respond to the questions or concerns a prospective guest has can lead to a disaster.

You want to make sure you respond quickly and correctly to these questions so that the prospective guest knows that you are serious about customer service. This is when an automated and messaging function can come very handy. With this automation function, messages are sent instantly based on triggers. No matter how many accounts and listings you have, decent vacation rental software will allow you to manage all the communication within a single inbox.

2. Multi Calendar Synchronization with Different Platforms

The majority of hosts and vacation rental companies are more likely to feature their property on several platforms like Airbnb, VRBO, and Booking.com. A vacation rental software program usually allows you to synchronize the calendars from all the platforms and manage bookings directly from one multi-calendar. This helps you to avoid double bookings by being able to manage all reservations on a single dashboard.

3. Team management

A team management feature is especially relevant for vacation rental companies. Vacation rental management usually involves several people. Using a software program should be easy for all of them. The software you choose should include a collaboration feature that is easy to use for all of your team members. Some advanced software such as AirGMS allows you to grant special access to each of your team members.

4. Managing Guest Reviews

Another important feature you need to look for in a rental management software program is the ability to manage the reviews you receive. Encouraging customers to leave a review of your property is a great way to attract new clients. With the right software program, keeping track of and automating your review process will be a breeze.

5. Auto notifications and mobile app

In the modern world, getting information at the speed of life is crucial. This is especially important if your business depends on fast replies and reactivity. The right vacation rental software is going to send you notifications whenever you get a booking or a message from a guest. This way you won’t miss any event. In the mobile age, it is also highly important that the software you choose is mobile friendly and has an app. You should look for this feature when trying to find the best software management program for your business.

Doing extensive research on the various rental management software programs on the market is the only way to ensure the right one is chosen. You can use the review platforms such as G2crowd to check out the reviews from other users and read about the functionality of each tool. Automation is key in the modern world, so, don’t underestimate its power. With a software program that can cover all of your needs, you can generate more income from your properties.

 

Source: forbes.com

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Urban Institute: Some cities might be close to a housing bubble

Thu, 11/02/2017 - 8:59am

As home prices continue to rise across the U.S., the dreaded “housing bubble” question begins to rise.

The Urban Institute released a report from its researchers Bing Bai and Edward Golding, who served as the head of Federal Housing Administration under President Barack Obama, that addresses just that.

The Urban Institute explained that in order to determine if the U.S. is in a housing bubble, knowing the reason for the price growth is critical.

“The critical question, however, is whether the recent appreciation is driven by fundamentals, such as growth in household income, or by pure speculation,” the report stated.

In order to determine the reason for the price growth, Urban Institute utilized its housing affordability index, which measures if the median household can afford a standard mortgage of a median-priced home.

The results? Overall, housing in the U.S. remains very much in the affordable range. In fact, the median household can afford a house that is $70,000 more expensive than the median home price today. In 2006, the median household could only afford a mortgage that was $22,000 more expensive than the median home price.

But this is nothing new. In fact, First American Financial Corp. releases its Real House Price Index every month, which examines affordability by comparing home prices against interest rates and income to determine the “real” value of a home.

The latest index found that in August, the real home prices actually decreased 0.4% from the previous month and that real home prices are now 38.4% below their housing boom peak in July 2006.

“As mortgage rates rise on the back of the last months’ FOMC decision to reduce its portfolio of bonds and supply remains constrained, affordability will continue to decline for those seeking to achieve the goal of homeownership,” First American Chief Economist Mark Fleming said. “Yet, while affordability is lower than a year ago, it remains high by historical standards. Only three states and the District of Columbia are less affordable today than they were in January 2000.”

The areas that could possibly cause concern include Hawaii, which is up 8.1% from January 2000, California which increased 5.7%, and Alaska, where home prices are up 4.6%. The District of Columbia is up 3.6% from that same time period.

The interactive map below shows several cities, mainly in California, also rose higher than their 2000 levels. A score of 100 marks the benchmark level in January 2000, with anything over 100 being cities or states that surpassed that level.

The Urban Institute saw similar results when it measured the top 37 largest metropolitan statistical areas to find which, if any, could be areas of concern for a real estate bubble using data from CoreLogic, the U.S. Census Bureau, the U.S. Bureau of Labor Statistics and Freddie Mac. Urban Institute’s researchers looked at the area’s real increase in home prices since their lowest point and the institute’s affordability measure.

The company added the rankings together and re-ranked the MSAs most likely to be in a bubble, calling it the “bubble watch” rank. The top 10 MSAs are ranked high on both home price growth and lack of affordability measures. But further down the list, the rank could be driven by one measure or the other.

Six metros stood out above the rest: the San Francisco area and the San Jose area tied for the top ranking in the institute’s bubble watch. The Miami area and Oakland, California areas tied for third place, and the Portland and Seattle areas tied for fifth place.

 

Source: housingwire.com

 

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What Do Apartment Renters Really Want in the U.S.?

Thu, 11/02/2017 - 8:37am

According to the recently released 2017 National Multifamily Housing Council / Kingsley Renter Preferences Report, U.S. apartment renters now want more shorter-term leasing options combined with added online reviews to make more informed decisions.

The NMHC report includes responses from more than 270,000 apartment renters across the U.S. to determine what apartment features and community amenities are most desirable, how renters are finding their apartments, and their top considerations for moving.

“Since 2011, the number of residents living in all rental housing has increased by an average of nearly 1.7 million every year, according to the Census Bureau. Demand for rentals continues to grow and this report provides unprecedented insight into how apartment renters search, what they expect to pay, and what they won’t rent without,” Rick Haughey, Vice President, Industry Technology Initiatives, National Multifamily Housing Council, said. “New findings in this year’s report include data on short-term rentals and the impact of online reviews when deciding which properties to visit.”

Short-term rentals are more important to younger renters

Nearly half of respondents under the age of 25 (49 percent) are interested in the opportunity to generate additional income through short-term rentals, such as Airbnb, compared to 15 percent of renters age 65 and over. Further, 32 percent of renters age 65 and over report they would not rent in a community that offered short-term rentals.

Online reviews are making an impact

More than three-quarters of the respondents (79 percent) reported that online opinion sites influenced their current leasing decision, with many (72 percent) noting such sites stopped them from visiting a community. The report also found that renters aren’t just looking at online reviews – they’re looking at how property managers respond. More than eighty percent of respondents (82 percent) noted they expect to see a response to at least negative, if not all, online reviews.

Renters reveal their top deal breakers

It’s not just a matter of what renters want – it’s also about what they can’t live without. The 2017 NMHC/Kingsley Renter Preferences Report captured the most important features and amenities for renters as well as which items renters really can’t forego. A sizeable portion of renters noted they won’t rent without the following features or amenities. The top five apartment features renters prioritize in terms of interest are:

  • Air conditioning (94 percent interested)–92 percent of these respondents won’t lease without.
  • High speed internet access (93 percent interested)–63 percent won’t lease without.
  • Soundproof walls (91 percent interested)–53 percent won’t lease without.
  • Washer / Dryer in unit (89 percent interested)–77 percent won’t lease without.
  • Dishwasher (88 percent interested)–86 percent won’t lease without.

When it comes to community amenities, apartment renters are most interested in:

  • Reliable cell reception (92 percent interested)–78 percent of these respondents won’t rent without.
  • Secure resident parking (88 percent interested)–71 percent won’t rent without.
  • Secure amenity access (84 percent interested)–49 percent won’t rent without.
  • Swimming pool (84 percent interested)–60 percent won’t rent without.
  • Fitness center (82 percent interested)–55 percent won’t rent without.

Source: worldpropertyjournal.com

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New! RentGuard Reimburses Landlords For Evictions, Legal Fees, and Damages Up to $10,000

Mon, 10/30/2017 - 3:08pm

Landlords nationwide can reduce their rental risk by using RentGuard to cover costs for evictions, legal fees, and damages up to $10,000. As of yesterday,  RentGuard Analyzer will be included with all tenant screening reports that include an eviction and credit report.  If eligible, you or your applicant will be able to purchase a RentGuard contract and providing you with the ultimate protection and elimination of risk.

“Up until now being a landlord meant potentially losing thousands on an eviction or damages. Even after screening a tenant you couldn’t guarantee that person would be reliable. Now RentGuard will almost completely eliminate these rental risks and give landlords peace of mind,”  says Robbie Cronrod, VP of AAOA.

RentGuard not only provides you with the safety net you’ve always wanted but helps you rent vacancies more quickly.  A RentGuard contract may even be used in lieu of a cosigner or to reduce the security deposit, helping you accommodate a tenant with questionable credit history or insufficient cash to move in.  Should a tenant default and/or damage your property, RentGuard would pay you the full judgment amount (including legal fees) up to the amount of the RentGuard contract, guaranteed.

RentGuard provides landlords with 12 months of protection and four coverage options – $2,500, $5,000, $7,500, and $10,000. Either the landlord or tenant can pay for RentGuard, starting at $299 annually for a $2,500 contract*. RentGuard covers all parties to the lease agreement, so if one applicant is approved, the other co-applicants will be covered as well as long as they are on the lease agreement and judgment.

This AAOA member benefit is great for all landlords looking for the peace of mind in knowing losses are now a thing of the past. Additionally, a Rent Guard contract has benefits built in for tenants too. Tenants with below average credit scores struggling to get approved in competitive rental markets can now find a new rental more easily. If at the end of the first year a tenant has maintained a good payment history, he is rewarded with a certificate of compliance that may help them obtain better loan rates on future purchases. All in all, a Rent Guard contract provides a win-win for both the landlord and tenant.

If you have questions about using RentGuard please call the AAOA team at (866) 579-2262 or visit

*additional terms and conditions apply

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Report: Salt Lake ranks No. 3 in U.S. for real estate investment

Mon, 10/30/2017 - 12:08pm

SALT LAKE CITY — Utah’s capital city has joined the ranks of the top cities in America for commercial real estate investment, a new report indicates.

This year’s top cities in the “Emerging Trends in Real Estate 2018,” released Thursday by financial services provider PricewaterhouseCoopers and the Urban Land Institute were led by top-rated Seattle, followed by Austin, Texas and Salt Lake City at No. 3.

It was the Utah capital’s first top 10 ranking in the annual report, making it the least populous city to ever break into the top 10.

“The growing interest in smaller cities by real estate investors is influenced by their relative affordability, coupled with a concentration of young, skilled workers,” said report co-author Mitch Roschelle. “The diverse, robust economies of these smaller cities make them very desirable to investors.”

Roschelle noted that Salt Lake City’s combination of job growth and an increasing number of young professionals within its worker population has worked in its favor. He also noted that the cost of doing business is 12 percent lower than the national average, making Salt Lake City even more attractive to investors.

“(They’re) growing a population of young folks, and they’re finding jobs. Employers are coming and they need employees,” Roschelle said. “They need space for the employees. They’re renting space and driving the rents up. This is all the virtuous cycle that cities look for in terms of growing and expanding their economy.”

The move toward higher investment in small metro areas like Salt Lake City is one that is likely to continue for the foreseeable future, he said.

“The trend of smaller markets displacing larger ones as investment hubs is setting a new course for urban development that is reshaping cities across the nation,” said ULI Global CEO Patrick Phillips. “These cities are positioning themselves as highly competitive, in terms of livability, employment offerings, and recreational and cultural amenities.”

A local analyst said Salt Lake City’s reputation for economic vitality has helped make it a sought-after locale for larger capital investors.

Historically Utah’s investment market has been dominated by local investors, with a portion coming from California, explained Eli Mills, senior vice president and investment specialist for the Salt Lake office of commercial real estate firm CBRE. This trend has changed significantly over the past three years to include a great deal of out-of-state and institutional buyers, he said.

Institutional investors are large organizations, such as banks, pension funds, labor unions, or insurance companies that make substantial investments on the stock exchange, Mills explained.

“Typically, institutional investors will only invest in markets where they see the potential for high returns and good future growth,” he said. “Utah has shifted from a market that national and global investors research for potential investment, but do nothing about to a market where they are increasingly, actively investing their money.”

 

Source: deseretnews.com

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Five Ways to Become a Better Landlord

Mon, 10/30/2017 - 12:06pm

It is in a landlord’s best interest to have long-term tenants who pay their rent on time and take great care of the landlord’s property. On average, a landlord spends between 20 and 40 hours to fill each vacancy. That includes advertising, showings, review of applications and execution of the lease agreement. Better landlords understand they are in business and act accordingly. Like with any other business, the owner must understand they are providing a product or service that must be attractive and beneficial to the customer. Here are some ways to become a better landlord:

  1. Make a good first impression – The better landlords recognize the importance of a good first impression. They invest their funds on the curbside appeal of their rental property and make it a priority to ensure their property has a fresh coat of interior paint and new carpet on a regular basis. Above all, these landlords make sure the property is clean and tidy when they show it to potential tenants.
  2. Better landlords understand the rental market and the desires of potential tenants – The current rental market in Flagstaff is driven by location and affordability, so in this type of rental market it is not always prudent to spend a fortune on kitchen and bathroom upgrades to increase your rent to make a profit. Make do with what you have regarding interior fixtures. Focus on making sure your property is safe, clean, attractive and that all appliances and systems (e.g. heating) are in good working order.
  3. Better landlords act professionally – It is very important to be on time for appointments and showings and to dress professionally. If your behavior and appearance do not reflect a sense of professionalism, quality tenants lose confidence quickly and are less likely to rent from you.
  4. Better landlords have a written application process – Quality tenants want to understand your application process because they value their time, strong credit and ability to pay rent. They want to be confident you will select the most qualified tenant to avoid wasting their time and energy in going through the process. Please keep in mind that without an application process, some applicants might perceive that they were the victim of discrimination if you choose not to rent to them.
  5. Better landlords have a professionally drafted lease agreement – Quality tenants read the lease agreement before they sign it. They want to understand the obligations of both the landlord and the tenant. A professionally drafted lease agreement will help keep you out of litigation. Have a local attorney draft a lease for you. Avoid using an online lease agreement. You always get what you pay for and it may cost you later!

Source: flagstaffbusinessnews.com

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LA still can’t decide how to regulate Airbnb

Mon, 10/30/2017 - 11:57am

Los Angeles is one of Airbnb’s top markets, but the city has yet to pass industry regulations more than two years after proposing them, highlighting the challenging road to consensus on an issue that has divided many groups.

After taking testimony from more than 50 people on Tuesday, the City Council’s Planning and Land Use Management Committee put off action on a proposal that would, among other things, cap rental days for listings advertised on online platforms like Airbnb to 180 days each.

Committee members, who raised their own concerns about the proposal, agreed to meet again in the coming weeks for further review.

Airbnb hosts have shown up by the hundreds in a series of a public hearings the city’s held on short-term rentals since last year. They’ve been met at each turn by members of the hotel industry, which views Airbnb as a rival and wants the proposed cap halved to 90 rental days.

Opponents also include renters and housing advocates who blame Airbnb for taking units out of the long-term rental market as well as homeowners from some of L.A’s wealthiest neighborhoods.

Robin Greenberg, president of the neighborhood council for hilly Bel Air and Beverly Crest, worries an Airbnb guest could start a brush fire with a flick of a cigarette.

“We do not want out-of-town guests without proper knowledge to come into our neighborhoods,” Greenberg told the council’s planning panel.

Airbnb hosts, on the other hand, testified a cap on rental days would hurt their livelihoods, and reduce how much L.A. collects in so-called transient occupancy taxes. A report released Tuesday by the Los Angeles Economic Development Corp. projects that Airbnb rentals will generate $39 million in taxes annually.

Noreen McClendon, an Airbnb supporter and head of Concerned Citizens of South Central Los Angeles, said homeowners are making up excuses when they link Airbnb to brush fires or complain that some rentals are party houses.

“Neighbors just don’t want people they don’t know in their neighborhood,” McClendon said.

As city officials hold off immediate action on new rules, the number of short-term rentals is growing rapidly. A city analysis shows their number have risen by 45 percent in the last 16 months to about 23,000 units.

Less than half are used frequently enough as short-term rentals that they could be considered as losses to the long-term rental market. While these type of units account for less than 1 percent of the housing stock, city planning staff acknowledged the speed with which short-term rentals are multiplying, especially in neighborhoods popular with tourists.

There is debate among council members themselves about how restrictive the regulations should be. Mitch Englander and Bob Blumenfield, both members of the council’s planning panel, expressed interest in allowing Angelenos to rent out vacation homes.  As currently proposed, hosts can only rent out units in their primary residence. Englander suggested that secondary homes be charged a higher registration fee or “fall under a citywide cap.”

Councilman Paul Koretz testified before the committee that allowing vacation home rentals would be a “mistake” but said if they are permitted, these units should be restricted to 90 rental days.

Meanwhile, both Koretz and Englander suggested that no limit on rental days was necessary for a listing in a host’s primary residence.

Source: scpr.org

 

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How Much Rent Should You Charge for a Sale Leaseback? Here’s How to Do the (Simple) Math

Mon, 10/30/2017 - 11:51am

A sale-leaseback allows a buyer to rent the property back to the sellers, letting them stay in the home for a predetermined amount of time after the closing. This situation is fairly common if the sellers haven’t bought a new home before their house sells, and need a place to live.

Accommodating the sellers with a leaseback can be a major bargaining chip for buyers looking to stand out from the pack in a competitive housing market. Before a leaseback begins, however, there are some important things to hammer out.

“The buyer and seller [must] agree ahead of time to the rental fee if any,” says Joy Fraser, a Realtor® with Colorado Luxury Houses in Denver. But the rental fee is just a part of the equation, she says.

You also need to agree ahead of time on “who will pay the utilities and insurance, the amount of any security deposit, who will maintain the property, the buyers’ access to the property, and the date when the seller will move out of the home,” Fraser says.

Now that you know what’s required to enter into a leaseback deal, it’s time to discuss the math to determine how much to charge for rent.

How to calculate the rent for a sale-leaseback

Typically, buyers determine the monthly rent by calculating the monthly cost to own the home. This usually includes the mortgage principal and interest, homeowners insurance, and property taxes, says Michele Lerner, author of “Homebuying: Tough Times, First Time, Any Time.”

Other fees such homeowners association dues can also be factored in when calculating your leaseback rent. You’ll then prorate the amount based on how long the seller will be renting your new home.

Lerner offers this simple example: “If your total monthly mortgage payment is $2,000 and your homeowner’s dues come to $100 per month, your daily rate is $70. If the sellers are staying in your home for two weeks, then you would charge them $980.”

Some sellers might balk at paying a rent that’s based on your costs, Lerner says, especially if they’ve lived there a long time and have a low or no mortgage payment. If that’s the case, buyers also have the option of using the current market rent to calculate the leaseback, which may work out in the seller’s favor.

Another option is not to charge the seller at all.

“If there are multiple offers for the home, a buyer can offer to let a seller stay in the home for free for a short amount of time,” Fraser explains. “It is just one additional negotiating point between the buyer and seller.”

One calculation you can’t skip

If you’re debating a long-term rental as a means of generating rental income, and your sellers just want to relieve themselves of the burden of owning a home, you need to talk to your lender before striking a deal. Why? A leaseback period typically cannot extend beyond 60 days.

“Your lender will have to approve you for a mortgage as an investor rather than an owner-occupant,” Lerner says. “Investor loans typically require a higher down payment and excellent credit.”

 

Source: forbes.com

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Why Your Property Isn’t Renting — And What You Can Actually Do About It

Mon, 10/30/2017 - 11:49am

One of the worst feelings as a landlord or property manager is watching a rental sit on the market week after week, month after month. Whether you are getting few to no leads or entirely unqualified leads, a property that remains vacant is costing you important profit.

While it can feel like an unsolvable puzzle when your rental sits vacant, the solution is likely well within your reach.

Following are six common reasons why your property isn’t renting and tactics for determining a solution.

1. Your rent price isn’t competitive.

An important aspect of leasing a property is pricing the rental accurately and competitively. Without an accurate price point, you might face a longer-than-normal vacancy.

First, do your own research on similar rentals in the area. Scour Craigslist, Zillow and other major rental listing websites. Create a document with the pricing of similar rentals in your area and find the average.

Another method when pricing your rental property is to purchase a rental comparison report. If you go this route, be sure to still do your own research into your rental property’s specific neighborhood.

While a price is simple to change, you should take the time to explore your other options prior to simply knocking dollars off the rent amount.

2. Your rental isn’t being seen.

One of the biggest mistakes new landlords will make is limiting how much effort they put into marketing their property.

Promotion should be far more than a sign in your yard. Over 50% of people living in rentals are under the age of 30, a demographic that turns to technology to find what they need. This means online marketing is key.

Not only should you be posting your rental across the web, you should also make sure your promotion is well written and paints the property in the best light possible. Include vital information, such as the following:

• Number of bedrooms and bathrooms.

• Square footage.

• Appliances included.

• Important policies.

• Cost of rent.

• Required deposit.

It is also important to include a gallery of photos with your listing. Take high-quality photos of each room when the property is clean and in good condition.

Often revamping your promotion of the property will be key in improving the amount of renter interest.

3. Your policies have restricted your market.

In highly competitive markets, your policies will play a huge role in how many people are interested in the rental. For example, if you need to set your property apart from others in the area, you might consider having a pet-friendly policy. By opening up the market to pet owners, you will see a drastic increase in the number of interested parties.

Consider your deposit amounts and lease terms as well. In a market where short-term rentals abound, you might need to adjust from a 12-month lease to a six-month lease or even change to month-to-month.

While you need to protect your property, you also need to weigh the cost of your vacancy against loosening your policies. Do your research and determine if your policies are actually costing you more than they are helping.

4. Your rental property isn’t appealing.

If you see a lot of interest in your property up front but after showing the space you see a decline in interest, it could be that the property itself at fault. Ask yourself what you would think about the property if you were seeing it for the first time. Consider everything from the curb appeal to the condition of the interior. Take time to repair items and invest in improvements.

Beyond appearances, consider what amenities other rentals in the area offer. Updated appliances can go a long way in not only garnering more interest in the property but also in keeping happy, long-term renters.

While improving the property is more costly than other items on this list, it can pay back over time if you invest wisely.

5. You are battling an oversaturated market.

In some cases, it can truly be the market you are in that is holding you back. Demand will play a role in how quickly you fill a vacancy.

While you cannot create a demand that does not exist, you can take into consideration the cycle of rentals in your area when creating lease policies. If, for example, you operate in a market influenced by the presence of a college, be sure you align your lease dates with the demand. Lock in tenants with a year-long lease that ends at the ideal time for you.

If you are already stuck in a dead spell of your market, consider tweaking some of the components mentioned above to secure a tenant. You might need to lower your price to get a tenant in mid-February, but you can sign a lease that ends in July so you can remarket with a higher price in the prime rental season.

6. Your rental isn’t in an ideal location.

Where your rental property is located will determine a lot about the tenants interested in the property. Of all the items on this list, this is the least possible thing to change. However, there are still a couple of valuable ideas to keep in mind.

First, learn from your mistakes. Be sure during the buying process that you truly understand the market for the specific area.

Next, if you own a property and realize the location is the main issue, recognize you will need to make up for it in other ways. For example, someone might be willing to be in a less desirable part of town if the property is dog-friendly with a fenced-in yard. Make the best of what you have by changing what you can.

The bottom line is that if your rental property sits vacant, you are losing money. Take the time to assess what you are doing wrong and have the humility to learn from your mistakes. Never leave the rental process up to chance. Landlording is far more than a hobby — it truly is a business.

 

Source: forbes.com

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How Much Would Winning Amazon HQ2 Drive Up Rents In Your City?

Thu, 10/26/2017 - 9:21am

Last month, when Amazon announced plans to open a second corporate headquarters, it invited city and state governments to compete for selection, unleashing provincial rivalries typically reserved for major sporting events.

Thursday marks the deadline to submit bids, and–if you go by local press–nearly every big city in America is contending for it, some offering huge tax breaks.

It’s easy to see the appeal. Over the next 10 to 15 years Amazon plans to hire up to 50,000 full-time employees at HQ2, paying each an average of $100,000 a year.

The company expects capital investment in the 8 million square foot project to exceed $5 billion. Moreover, it estimates that every dollar it invests in Seattle–its current home–generates an additional $1.40 for the city’s economy.

But it’s not all smiles. Seattle has led the nation in home-price growth for 10 consecutive months and rents there are among the fastest growing in the nation. Many blame Amazon and the tech ecosystem that has grown up around it. This led rental search site Apartment List to ask, how much would HQ2 add to rents in the metro it lands in?

The impact, it turns out, would vary widely from city to city.

At one end of the spectrum is Raleigh, N.C., where Apartment List estimates winning HQ2 could add as much as 2% to rent growth annually, costing renters up to $15,000 over a decade. Conversely, in Dallas, the impact could be as little as 0.2%, inflating rents by $2,000 in 10 years.

Apartment List looked at 15 metropolitan areas reportedly vying for the project, analyzing Census and Bureau of Labor Statistics data to determine the propensity and room to build new housing, market slack and the impact of an influx of high-earning residents.

For example, building permits are already a hot commodity in San Jose, Calif. Just one has been issued for every 3.2 jobs created in the last 10 years. The ratio could jump to 4.7 jobs per permit if Amazon moves there. Plus the capital of Silicon Valley already has the lowest vacancy rate of the cities analyzed.

As a result rents there could rise an additional 1% to 1.6%. But at $58,900, San Jose has the highest median income of the group. While cities like Baltimore or Pittsburgh are more able to build, a large number of workers earning more than the area median could lead to a more conspicuous price impact.

“Rents are already rising rapidly nation wide and half of renters are cost-burdened,” notes the report. “The fact that one company can have such noticeable impacts on the rental market, especially in metros with a constrained housing supply, is astounding.”

Check out the stats for all 15 metros:

Raleigh, N.C.

Median rent: $1,113

Vacancy rate: 8%

Median income: $36,320

Annual rent growth 2005-15: 3.2%

Estimated added rent growth: 1.5% to 2%

Pittsburgh

Median rent: $837

Vacancy: 11%

Median income: $36,210

Annual rent growth 2005-15: 3%

Estimated added rent growth: 1.2% to 1.6%

San Jose, Calif.

Median rent: $2,691

Vacancy: 4%

Median income: $58,900

Annual rent growth 2005-15: 5.1%

Estimated added rent growth: 1% to 1.6%

Baltimore

Median rent: $1,406

Vacancy: 10%

Median income: $41,560

Annual rent growth 2005-15: 4.2%

Estimated added rent growth: 1% to 1.3%

Detroit

Median rent: $998

Vacancy: 11%

Median income: $37,830

Annual rent growth 2005-15: 2.2%

Estimated added rent growth: 0.8% to 1.2%

Denver

Median rent: $1,480

Vacancy: 5%

Median income: $41,250

Annual rent growth 2005-15: 4.8%

Estimated added rent growth: 0.8% to 1.1%

Austin, Texas

Median rent: $1,386

Vacancy: 8%

Median income: $37,330

Annual rent growth 2005-15: 4.7%

Estimated added rent growth: 0.8% to 1%

Minneapolis

Median rent: $1,217

Vacancy: 5%

Median income: $41,880

Annual rent growth 2005-15: 2.8%

Estimated added rent growth: 0.7% to 1%

Philadelphia

Median rent: $1,253

Vacancy: 9%

Median income: $39,720

Annual rent growth 2005-15: 3.1%

Estimated added rent growth: 0.6% to 0.8%

Boston

Median rent: $1,969

Vacancy: 7%

Median income: $48,020

Annual rent growth 2005-15: 2.8%

Estimated added rent growth: 0.5% to 0.8%

Atlanta

Median rent: $1,160

Vacancy: 9%

Median income: $36,340

Annual rent growth 2005-15: 2.5%

Estimated added rent growth: 0.5% to 0.7%

Chicago

Median rent: $1,249

Vacancy: 9%

Median income: $38,250

Annual rent growth 2005-15: 2.6%

Estimated added rent growth: 0.4% to 0.6%

Los Angeles

Median rent: $1,807

Vacancy: 6%

Median income: $38,700

Annual rent growth 2005-15: 3.7%

Estimated added rent growth: 0.3% to 0.5%

Washington, DC

Median rent: $1,753

Vacancy: 6%

Median income: $50,690

Annual rent growth 2005-15: 4.2%

Estimated added rent growth: 0.3% to 0.5%

Dallas

Median rent: $1,202

Vacancy: 7%

Median income: $36,450

Annual rent growth 2005-15: 3.3%

Estimated added rent growth: 0.2% to 0.4%

 

Source: forbes.com

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Using Generational Preferences in Your Property Marketing Mix

Thu, 10/26/2017 - 9:13am

It probably comes as no surprise to you that communication preferences vary considerably across generations. This is largely a result of what communication method each generation grew up with and got used to. Understanding these differences can offer insights into working better with cross-generational colleagues or clients.

While there can be wide variation within generational groupings, and we shouldn’t fall into the trap of believing in rigid stereotypes, there is, however, enough of a pattern to generate some useful guidelines:

The Silent Generation, those born between years 1900 and 1945, are typically disengaged from technology. Their signature product is the automobile; for communication, they prefer face-to-face, letters and memos.

Baby boomers are those born between the years 1946 and 1964. Their signature generational product is the television. They are less formal in their communication than the Silent Generation, but still prefer doing business in person or via conversation on their cell phones.

Generation X, those born between 1965 and 1976, grew up during the advent of the personal computer. Their preferred mode and style of communication is direct and immediate; therefore, they will typically appreciate emails over phone calls and in-person meetings.

Millennials are complete digital natives for whom the signature product is the smartphone. They tend to prefer digital and informal methods of communication such as text, Twitter or Instagram. If something is important, though, they will appreciate an email or a voicemail that they can review later.

With these preferences in mind, when you are planning a property listing and marketing strategy for a seller, you will want to take into account the market economics (Is it a buyer’s or a seller’s market?) that the property is in—and the geographic and demographic realities of the area (What kind of buyers do you want or will you be able to attract?).

According to NAR’s Profile of Home Buyers and Sellers, for all of the generational groups described above, online search and real estate agents consistently ranked No. 1 and No. 2 as their most-used methods of finding a property. Furthermore, mobile apps, online video sites, yard signs, and open houses come in at the No. 3 through No. 6 spots for all the groups (but in a different order of preference for each). Other methods that don’t rank as high as these, but which can be reliable under the right circumstances, include: print newspaper ads, home builders and printed “home books.”

Based on this research, it’s safe to assume that technological and non-technological methods for finding and selling properties are being used in a blended, overlapping, or complementary way. The key when you are serving seller clients is to devise a marketing strategy for the property that has the right mix of marketing activities so that you minimize wasteful activities and maximize effective ones. You’ll need a different marketing toolkit for different homes and different markets and different circumstances.

Below is a comprehensive list of the marketing activities you may have at your disposal. The specific ones you choose to use, the way you (re)combine them, and the relative emphasis or resources you devote to each will have an impact on your success marketing the property within its particular market:

In many ways, coming up with a marketing plan is an act of creativity based on practical experience, much like creating a recipe of your own or building something without instructions. The more skilled you are, the more you will “just know” how.

Even if you already have a good feel for what might work, there is tremendous value to documenting and tracking your efforts over the long term, even down to the property level. In the same way that you should be tracking ROI (return on investment) for your own business prospecting (client acquisition) activities, you should also have an established process for tracking ROI for each of the different tools in your property marketing toolkit. Doing this will make clear and visible when and why you have success, so you can add this information to your base of experience.

There is nothing better than putting information and actions to paper so that you can see patterns emerge and see something that you didn’t even realize was there. All of this can help inform and add precision and cost-effectiveness to future marketing planning.

 

Source: rismedia.com

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Changing perceptions on renting could mean multifamily boom

Thu, 10/26/2017 - 9:05am

A growing demand for rental housing, driven by affordability concerns and changing attitudes toward renting, may be a boon to the multifamily space, according to new data from Freddie Mac.

An increasing number of renters consider renting a more affordable option than purchasing a home, according to Freddie Mac. And data released Wednesday indicates that a growing number of renters are satisfied with their current living situation. The number of renters who believe that renting is more affordable than owning has increased from 68% to 76% this year.

While it may be bad news for single-family homebuilders, the sudden love affair with rental could be a boon to the multifamily market, according to David Brinkman, executive vice president and head of Freddie Mac Multifamily.

“Our rental survey confirms what we’re seeing in the market – that a growing number of individuals across demographic groups view renting as more affordable and better suited to their current economic situation,” Brinkman said. “These changing perceptions, combined with rising rents and tightening supply of affordable housing, are likely to fuel continued multifamily market growth in the years ahead. More importantly, it makes our role – providing financing to meet the nation’s growing workforce housing need – even more important.”

The move toward renting isn’t simply about perceived affordability – perceptions about renting are changing. An increasing number of renters feel that renting is a good choice for them. More than half – 58% – feel that renting “fits (their) current lifestyle,” the survey found.

Renter satisfaction is also relatively high. About 60% of renters said they were satisfied with the overall experience of renting. And while 41% said that affordability was a major driver in their decision to rent, 33% said that buying a home simply wasn’t a priority.

 

Source: mpamag.com

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Cities Have a New Target for Ending Homelessness: Landlords

Thu, 10/26/2017 - 9:02am

Families wait years to get off the government’s waiting list for a rental voucher, sometimes while living in a homeless shelter. When they finally get that housing aid, they often struggle to find landlords willing to rent to them.

Most landlords screen out people who have a criminal background, poor credit or a history of evictions, making it difficult for voucher holders to find somewhere to live, even when they can afford rent. In fact, it’s common for people to lose their vouchers — which have expiration dates — after months of unsuccessful searching for a home.

To ease landlords’ worries and house more of the homeless, a growing number of cities are offering to reimburse landlords for certain losses — unpaid back rent or repairs for tenant-caused damages — that result from accepting applicants who have rental vouchers.

“Many, many communities are doing this, and it’s out of necessity,” says Elisha Harig-Blaine, who works on affordable housing issues at the National League of Cities. “They simply can’t get people placed into housing with these subsidies.”

This month, Boston and the District of Columbia announced their own “housing guarantee” or “risk mitigation” programs.

In Boston, the city will reimburse landlords for up to $10,000 in unpaid back rent or property damages that go beyond normal wear and tear. In D.C., a nonprofit is raising $500,000 in private funds to cover up to $5,000 in landlord costs per tenant. In both places, program staff will be available to address landlord complaints and provide case management for the tenants.

The question is, will that be enough to convince landlords to accept tenants who pay with rental vouchers?

In many of the cities that have these programs, affordable housing is hard to find, but renters with clean criminal and financial backgrounds are not.

“At the end of the day, real estate is a business. These landlords want to do the right thing, but we’re talking about their livelihood,” says Harig-Blaine, who has attended landlord recruitment events in nine communities across the country.

Landlords, he says, don’t want to deal with missed payments or other trouble that might come with renting to someone who was recently homeless.

Nevertheless, local officials in D.C. — which is getting 800 new residents every month and has some of the country’s highest rents — are optimistic.

“Rather than [renting] to the millennial who is just moving in from some other part of the country,” Neil Albert, president and executive director of the DowntownDC Business Improvement District, the nonprofit raising the money, told Governing. Albert thinks the risk funds will spur landlords to “weigh our needs and give equal consideration” to voucher holders.

There is no official number of landlord assistance programs, according to the U.S. Interagency Council on Homelessness, but they exist in Denver, Fargo, N.D.; Marin County, Calif.; Orlando, Fla.; Portland, Ore.; and Seattle-King County, Wash, which started one of the first almost a decade ago. Some states, such as Minnesota and Oregon, offer them as well.

Before launching its program, Boston researched them in other cities and found that participating landlords rarely had to use the risk funds, according to Boston’s Department of Neighborhood Development. Last year, in Seattle and King County, for example, participating landlords filed mitigation claims for only 15 percent of the renters covered by the program. Data on how many landlords participate in each city and how many people are housed through such programs, however, is not readily available.

D.C. officials, though, expect demand for the risk funds to be higher in their city.

“We think it will be a little different here in D.C. We think people will actually use this fund,” says Albert, adding that if it results in more units being rented to voucher-holders, then “that’s a great problem to have.”

One difference between the Boston and D.C. landlord programs is the funding and management structure. In Boston, the city is putting up the risk funds and managing its landlord relations on a two-year pilot basis. In D.C., a nonprofitbusiness improvement district is raising funds — mostly from developers — and a local housing nonprofit is administering the program. That’s because landlords and property managers in D.C. pushed for a privately managed fund that could provide reimbursements faster than a government agency, says Albert.

More than 5 million Americans receive some kind of rental voucher from the state or federal government, according to the Center on Budget and Policy Priorities. To qualify, a person or household must be below the federal poverty line or make less than 30 percent of the area median income. Because the program is not an entitlement, less than a quarter of all eligible families receive housing assistance, and many households wait years before a voucher becomes available.

Landlord assistance programs are trying to address a chicken-and-egg problem, says Laura Zeilinger, D.C.’s director of human services. Landlords want renters who have jobs and earn a steady income. But stable housing is usually the first step to helping people get and keep a job. She’s hoping that landlords in D.C. will waive income requirements in their applications.

“Housing is an important foundation for people to be able to work and to achieve their potential,” she says. “It’s a really difficult thing for people to do while living in a shelter environment.”

 

Source: governing.com

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By How Much Should You Raise the Rents at Your Apartment Building?

Thu, 10/26/2017 - 8:49am

Many renters have already been pushed to the limit financially. Another rent hike could force them to move out.

How high can landlords raise the rents at their apartment properties before they begin to lose tenants?

In the current market, many markets have very few apartment vacancies, and face little competition. That would usually be a sign to raise rents. But many renters have already been pushed to the limit financially. Another rent hike could force them to move in with roommates or their families—or simply to miss the next rent payment.

“A growing number of renters are spending less on non-essentials to make up for increasing rents,” says a spokesperson for the government agency Freddie Mac.

Fortunately, the data shows some clear patterns that can help landlords and property managers decide when—and by how much—to raise their rents.

More renters resist rent hikes and luxury renters have lots of choices

As rents rose sharply in recent years, more renters are looking for other options. “A growing number of renters are planning to move because of changes in rent,” says the Freddie Mac spokesperson. That percentage has jumped to 44 percent in March 2017, up from 34 percent the year before, according to a preview of Freddie Mac’s soon-to-be-released 2017 Renter Survey.

Managers of class-A apartment complexes can easily gauge the threat that their residents will move out by checking the local property listings.

These wealthy renters also have the most money to spend on the cost of moving. The renters at professionally-managed class-A+ apartments have an average income of more than $80,000 a year and spend only about 20 percent of that on rent, according to data from RealPage, based on an analysis of leases at properties managed using the RealPageproperty management software system.

Class-B renters have solid incomes and fewer choices

Owners of luxury apartments that are no longer brand new are in a much better position to raise their rents.

The people who live at professionally-managed, class-B properties earn more than $50,000 a year on average and spend less than 24 percent of that on rent, reports RealPage. These residents can generally afford rent increases without breaking the bank.

In addition, “Class-B apartments are typically priced far below newer product—and that’s more true today than ever before,” says Jay Parsons, vice president for MPF Research, a RealPage company, headquartered in Carrollton, Texas.

So property managers can increase their rents sharply and still offer much less expensive units than the new apartments available in their market, even if the new properties come with concessions or free rent.“There is potential for further rent growth, and we do expect class-B to drive overall apartment rent growth in the next few years,” says Parsons.

Renters stressed at professional-managed class-C and class-D buildings

The renters who live at professionally-managed class-C and -D properties are closer to the edge, financially.

These households earn less than $30,000 a year on average and pay roughly 30 percent of that income on their rent, according to data from properties managed with RealPage software. The incomes of these residents probably haven’t changed that much since they qualified to sign a lease and move in.

Class-C and -D property managers typically work hard to keep these residents.“Class-C units tend to sit vacant longer than an A or B unit, and turn costs eat up a bigger share of the revenue stream at a class-C property,” says Parsons. Higher turnover costs combined with a less transient renter base explain why retention rates tend to be highest at class-C properties.

“The risk of increased turnover will limit how much many property managers are willing to push rents,” says Parsons. “Class-C apartments are rarely able to sustain meaningful rent growth.”

Renters on the brink

The challenge is even more severe at the apartment properties that are typically not included in data sets of professionally-managed, “investment-grade” properties.

Millions of renters live at smaller apartment properties or single-family rental houses that don’t check the income or credit reports of potential residents. Many of these renters can’t show enough income to live at properties with professional managers and some may be near the breaking point financially.

There were 11.1 million renter households that paid more than half of their income on rent in 2015, the most recent year for which data is available. That’s an increase of 3.7 million since 2001, though since 2011 the number has stayed at a little over 11 million, according to the State of the Nation’s Housing 2017 report from the Joint Center for Housing Studies at Harvard University.

The owners of smaller rental properties may not have as much information on their residents as the owners of investment-grade properties typically gather. They should be even more careful as they raise their rents.

“If owners choose to aggressively push rents, they will face turnover. If they are overly aggressive, they may face prolonged vacancies, which in turn hurts their yield,” says John Chang, first vice president of research services for brokerage firm Marcus &Millichap.

 

Source: nreionline.com

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Aging baby boomers still want it all, including luxe urban apartment living

Thu, 10/26/2017 - 8:38am

Michael Gordon, VP of planning and development for a Boston real estate firm, has been counting down the days until a new high-end apartment and condo complex opens. The 92-unit projects boasts the kinds of amenities common in the current spree of high-end rentals going up in American cities: walk-in closets, full kitchens, more spacious layouts, numerous communal areas, concierge services, chauffeured car service, even an on-site movie theatre and two restaurants.

The key difference between Waterstone at the Circle and other expensive high-rises is the demographic of its clientele. The average move-in age of future Waterstone residents is 82.

“We’ve found that most seniors want to remain in the city,” Gordon says. “You’re seeing a trend where empty-nesters are downsizing and lots of new product are being built for them. They’ll want additional services when they’re 80.”

Opening in Boston’s Brighton neighborhood in January, Waterstone, which is being billed as an urban independent living community, represents a watershed in American demographics, senior life, and real estate development. Gordon’s firm Epoch Senior Living has made a big bet—he wouldn’t specify how much the building costs, but with rent starting at $7,000 a month, it’s safe to assume it’s quite a bit—that baby boomers’ golden years will be a golden opportunity (it already opened a similar project in Wellesley). As Americans live longer with more healthy, active lifestyles, senior housing is being rethought, redesigned, and, in this case, rebranded.

“They want walkability,” Gordon says of similar clients in other Epoch properties. “Go to their units at 3 in the afternoon and they’re empty. People are out and about. This is all about high-end, independent living.”

Waterstone goes online before the coming wave of older Americans crests. Gordon says many residents, at opening, will actually be the parents of younger baby boomers. Since the average baby boomer doesn’t turn 80 until 2026, the real growth in this market won’t occur for another decade.

The active, wealthy senior may be the new millennial

The number of senior renters has grown dramatically across all income levels—not just the high end of the market represented by Waterstone. According to a new analysis of U.S. Census Bureau data, they’re actually the fastest growing segment of the country’s rental population.

Between 2009 and 2015, the number of renters over 55 increased by 28 percent, compared to a 3 percent increase in renters 34 years or younger. Clearly, there are already a lot more younger people living in apartments. But the significant jump in seniors, representing 2.5 million more 55-plus renters, comes before the so-called “silver tsunami” hits, suggesting both lifestyle and demographic shifts are at play.

The study’s author, Nadia Balint, says the data points to rapid growth in highly educated, empty-nest baby boomers, driven by a number of factors: lifestyle changes, lingering financial challenges from the 2008 housing crash, and an inability to trade down in the ownership market due to a lack of affordable options.

“They were forced to downsize, or they’re simply finding out renting is a better choice for them at this point in their life,” says Balint. “But there are also more rental options on the market that appeal to this demographic, more mixed-use developments in suburban downtowns and transit oriented locations. They offer a more manageable, flexible lifestyle with fewer maintenance costs.”

Balint’s data shows the 55-plus renter population has grown most quickly in the areas one may expect: warmer, urban parts of the Sun Belt. Tampa, Florida, saw a 61 percent jump between 2009 and 2015, Phoenix saw a 59 percent rise, and Dallas recorded a 46 percent jump. For developers, the active, wealthy senior may be the new millennial.

Waterstone and other projects like it are betting on this niche, but profitable, market of rich urban seniors over 80. In Manhattan, the $246 million Maplewood Senior Living residence, a 23-story luxury high-rise offering 215 units and a farm-to-table restaurant, is meant to be the first of a line of branded high-rises called Inspir. But as they age, plenty of active boomers will also seek out urban or urban-style living without the hassle or overhead of ownership.

Today’s young seniors “don’t want to feel like they are tucked away in some suburb,” Traci Bild, head of Bild & Co., a Tampa healthcare consulting firm, told the Wall Street Journal. “If you are getting that younger resident who is not 80 yet, that’s someone who is going to want that urban environment and pay for it.”

“The Silver Tsunami” and an aging U.S.

Population trends suggest developers should be figuring out how to break ground now. The population has significantly aged in just the last few decades: The average age was 28 in the ’70s, says Balint, and today it is 37. According to Projections and Implications for Housing a Growing Population: Older Households 2015-2035, a 2016 report by the Harvard Joint Center for Housing Studies, the number of Americans over 80 will double in the next two decades, from 6 million to 12 million. Gordon says the average move-in age for a traditional senior rental property right now is 82.

One out of three U.S. households will be headed by someone over 65 by 2035. That’s 79 million Americans, many thinking of retirement—and renting—in a whole new light. The jump in the 80-plus population will be meteoric. This group will grow 18 percent between 2020 and 2025, and then rise a further 27 percent between 2025 and 2030.

Compare growth projections to the total stock of senior living units in the country, and it’s clear a building boom is needed. According to NIC MAP, a market data provider for the senior housing market, the current U.S. inventory breaks down as follows: 410,000 independent living units, 340,000 assisted living units, 85,000 memory care units offering services for those with Alzheimer’s and other conditions, and 150,000 skilled nursing care units providing round-the-clock care.

The market appears to be divided in a few different ways, with active lifestyle options for those 60 to 80 (witness the rise of themed retirement villages such as Margaritaville, which certainly aren’t selling a quiet, relaxed suburban lifestyle) and more assisted and supportive living for octogenarians and above. Balint says that many boomers looking for a more urban experience will seek out amenities designed to provide convenience and a comfortable place to live, offering opportunities for socializing so that residents can feel at home even though they’re renting. According to Jennifer Molinsky, a senior research assistant at the Harvard Joint Center for Housing Studies, the percentage of senior renters making $60,000 a year or more rose from 11 to 15 percent between 2006 and 2016.

Welltower, a development firm working on its own high-end senior urban developments, conducted an Aging in Cities Survey earlier this year that captured what a very profitable segment of this population wants: 8 out of 10 baby boomers who live in a city want to remain in the city when they are 80-plus years old, with the same percentage expressing openness to urban senior living communities. They want a home that offers access to high-quality health care, a connection to public transportation, neighborhood walkability, and proximity to family.

Looming senior housing divide

But as developers begin building in anticipation of a new segment of wealthy customers, another segment of the growing senior population, low-income renters, should be inspiring similar action within local and national government. A report compiled by the Center for Real Estate at MIT puts it into perspective: While a few dozen cities may be attracting active seniors back downtown, “the general trend in the United States is still toward increased suburbanization of the elderly population,” the report states. “We will have to confront the real estate issues posed by a growing suburban elderly population for years to come.”

One of these issues is a lack of affordability. According to Molinsky, the U.S. only serves about a third of adults 62 or older who qualify for housing and rental assistance. If this paltry response rate doesn’t improve by 2035, nearly 5 million eligible seniors won’t receive much-needed housing aid. In its recent report on senior housing, the center predicted a “near doubling of low-income renters and owners, many of whom will face housing cost burdens.”

It’s not just the most vulnerable at risk. For one, savings patterns today suggest less wealth for tomorrow’s seniors. A recent study from the George Washington University School of Business that spoke with 5,000 pre-retirees between the ages of 51 and 61 found that 60 percent have at least one source of long-term debt (26 percent have more than one), 30 percent lack any retirement account, 36 percent couldn’t come up with $2,000 for an unexpected emergency, and 45 percent reported spending less than they are earning. Molinsky says more and more older adults are carrying a combination of consumer, student, and housing debt into retirement, and many who are just about to retire lost substantial household wealth due to the Great Recession. Stories about older Americans working later in life tend to omit that these are usually already high-paying, white-collar professions, she says.

These issues fuel some disappointing predictions by the Social Security Administration’s MINT model (Modeling Incomes in the Near Term). The share of retirees who will lack sufficient income at age 67 to maintain pre-retirement income will increase in the future, and get worse over time. For the leading boomers (born between 1946 and 1955), 39 percent will have inadequate income, as opposed to 35 percent now. That figures rises to 41 percent for trailing boomers (born 1956 to 1965), and to 43 percent among generation X members (born 1966 to 1975).

Cutting back may not be problematic for well-off households, but that gets very difficult for lower-income households. That’s even more pronounced when taking into account owner versus renter households, and white households versus households of color, at a time when rental rates are rising. According to Harvard data, among households headed by non-Hispanic whites aged 65 and over, median net wealth in 2013 was $260,700, almost quadruple that of households headed by a person of color of the same age ($68,000). And the typical older-owner household has 42 times more wealth than a renter household.

This may be the most troubling aspect of the future of senior housing: the widening gap, and the potential lack of a pipeline for lower-income renters. Developers like Epoch, catering to a wealthier demographic, will build more urban, transit-oriented homes for some of tomorrow’s older adults, offering a closer connection to the cities they know, the social lives they crave, and the families they love. But without more action, a much wider swath of the population may find the hunt for affordable, convenient housing more of a challenge. Molinsky says she’s seeing some movement to address the enormity of the challenge. A federal tax credit for aging in place has been proposed, and many cities are supporting tax credits for retrofitting homes and changing building codes to improve accessibility, both means to increase the amount of affordable, attainable housing.

“The whole issue of housing for older adults is an issue we’re just beginning to wake up to,” says Molinsky. “Helping older adults who can’t afford housing is one of the trickiest possible issues.”

 

Source: cnbc.com

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How To Handle Disrespectful Tenants In Your Apartment Building

Thu, 10/26/2017 - 8:26am

Posted on Oct 26, 2017

How to deal with difficult tenants is a question we often hear. If you’ve got disrespectful tenants, the problem can spread through your apartment building, causing rancor with other renters. Get tips on how to handle disrespectful tenants and use your landlord tenant agreement to protect your property and your other renters’ peace of mind. 

When someone complains about a neighbor, gather facts and try to remain objective. If other tenants have documentation of the offense (say, videos of a tenant throwing a loud party), then you have more of a case against the renter than word of mouth. Even a written log stating dates, times and issues can bear weight, since tenants are often unaware how their behavior affects others in the building.

If the complaints arise from the same aggrieved neighbor, it could signal that your apartments need more soundproofing. By installing carpet in apartments, you can reduce the amount of noise that carries and maintain harmony.

When complaints rack up, it’s smart to step in, especially if different parties have complained. Before talking to your renter, check your lease for provisions related to noise. If the tenant signed a lease promising to comply with quiet hours, there’s more weight behind your request to change behaviors. Your municipal noise ordinance may be applicable here, too.

If the lease doesn’t enforce noise regulations, brainstorm ways to avoid the problem going forward. Respectful tenants should want to maintain harmony in their home, and may not mind altering their behavior for their neighbors. Using the example of the loud party, perhaps going forward, parties can follow quiet hours out of respect to others. Or perhaps tenants can give 48-hour notice to all other renters, so tenants who don’t want to be disturbed can make other plans for the evening.

There’s no one-size-fits-all solution. Approach the problem with a willingness to find a way forward. If there’s something you can do to fix complaint issues — such as installing carpets — follow through.

How to Prevent Disruptions With a Rental Lease Agreement

Add the following clauses in your rental lease agreement to protect peace and quiet:

  • Quiet Hours: Reduce noise complaints by mandating quiet hours, for instance from 11:00 p.m. to 7:00 a.m.
  • Quiet Enjoyment: A quiet enjoyment clause allows tenants “quiet enjoyment” of their unit, while preserving the right of others not to be disturbed by noise.
  • Consequences for Violation: Give your lease “teeth” by inserting a consequence for violation, such as a $100 fine for the first offense or eviction after three offenses.

To get a customizable landlord tenant agreement template that protects your interest and your tenants’ rights, become an American Apartment Owners Association member today.

 

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San Francisco landlords will pay $1M to evicted tenants

Mon, 10/23/2017 - 10:01am

SAN FRANCISCO (AP) — San Francisco landlords will pay more than $1 million to people left homeless after fire swept through their illegal warehouse apartments.

The San Francisco Chronicle reports that Albert Joseph and David Kimmel agreed to settle a lawsuit filed by eight tenants they evicted after fire damaged the Mission District warehouse in 2014.

The warehouse wasn’t zoned for residential use and the landlords said they were going to convert it back to commercial use.

Those evicted had to find new homes in one of the nation’s most expensive rental markets.

They sued for negligence and wrongful eviction, claiming the warehouse was rat-infested and had safety violations.

Their lawyer says the settlement could have implications for others evicted in a crackdown on illegal living spaces following last year’s deadly Oakland warehouse fire.

 

Source: sfgate.com

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Baltimore apartments aim to win over renters by appealing to their pets

Mon, 10/23/2017 - 9:49am

Laura Goodell and her fiance didn’t have a dog when they came to Baltimore a year ago for graduate school — yet. The Equitable Building’s rooftop dog run helped sell them on the apartments in a converted former office building.

“It was my hope we’d adopt,” Goodell said. “This kind of amenity isn’t something every building has.”

Asher, the four-year-old lab mix the couple adopted in May, seems to approve of the space to romp. On a recent post-workday trip to the run, he wagged his tail and stomped his paws, egging on Goodell to toss his favorite ball.

Apartments weren’t always so willing to accept pets, let alone roll out the AstroTurf for them. But with a crush of new apartments in Baltimore and more on the way, building managers competing for tenants can’t afford to pass on pets anymore.

Dog runs, relief areas, washing stations and treats at the door are becoming more common in large apartment projects as managers look to draw in new renters by winning over their pets.

The concierge desk at The Equitable displays a photo of one good boy pup or nice kitty as Pet of the Month. And yappy hours in the building’s penthouse are an exercise in doggie decadence, with treats and tennis balls galore.

“So many people expect it these days,” said Brian Roche, who manages the Bozzuto Group property. “If somebody was going to be starting a community or property, they’d definitely put themselves at a disadvantage if they didn’t allow pets.”

The trend is driven by — you guessed it — millennials.

About two-thirds of millennial households are rentals and millennials are the country’s biggest pet-owning demographic, with just over a third of pets in their care.

As the oldest millennials near the traditional family-building and home-buying age, apartment buildings are under even more pressure to up the ante on amenities that could convince them to stay.

“They’re really trying to provide a lifestyle for that group that is so appealing they’d really have to think about moving out to the suburbs,” said Rick Haughey, vice president of industry technology initiatives for the National Multifamily Housing Council, a trade association for apartment building managers.

A renter’s wish list is an ever-moving bull’s-eye, and managers must weigh whether the cost of adding an amenity will pay off before it goes out of fashion. But a culture shift to count pets as family members suggests that pet-friendly features are unlikely to go out of style anytime soon, building managers said.

“They’re like family,” said Stephen Gorn, president and CEO of Questar Properties. “It’s almost like saying to someone you can’t bring a part of your family to our building.”

Questar is developing a towering glass building overlooking the Inner Harbor known as 414 Light St. that will feature a dog park with built-in agility equipment and a full dog spa, with raised dog-washing basins and vending machines that distribute an array of treats. Questar sought out a Los Angeles artist to design the dog spa and liked her work so much they asked her to do the rest of the building’s interior design.

As pets in apartments shifts from a trend to a lifestyle, pets are increasingly influencing building designs.

The Time Group had planned to put a dog run behind its new Mount Vernon apartment complex, 520 Park. But after seeing how popular pet amenities were at the company’s 500 Park, right next door, the company made an 11th-hour decision — after the building already was under construction — to move the run to a more prominent space between the two buildings, said Dominic Wiker, development director at the Time Group.

Carpet, long an apartment staple because it is cheaper than hardwoods and can make sterile units feel homey, has no place at 2 Hopkins Plaza, where about 55 percent of residents have a pet. The 182-unit building passed on odor-absorbing fabrics in favor of indestructible (but not too slippery) composite flooring, said Elaine De Lude, vice president of LIVEbe, which manages the recently opened apartment project.

“It’s just the standard now for building a new building,” De Lude said. “If you’re trying to compete with that community that’s right next door, also brand new with all the bells and whistles, what are you competing on?”

Such features are an investment. The Equitable’s dog run, for example, was more work than laying a plot of artificial grass on the roof. It had to be built with proper drainage and requires routine maintenance, Roche said.

But developers increasingly find the investment pays off when it comes to attracting renters who don’t want to live without their pets.

After moving to Baltimore last year for his first job out of law school, Alex Stimac was ready for a new apartment and a new roommate — preferably one with four legs and fur. He chose 26 S. Calvert St. for its convenience and reasonable rent, but also because it allowed pets, he said.

“It was a selling point, if not a deal breaker,” said Stimac, 30.

Stimac moved into his new apartment May 15 of last year and on June 1 brought home Suttree, a one-and-a-half-year-old pug named for the title character of a Cormac McCarthy tale.

Unlike his namesake Cornelius Suttree, who gave up a life of luxury to become a fisherman, Suttree the pug lives large in downtown Baltimore. He goes for walks several times a day and likes to greet the other dogs residing in the building.

“He’s such a city dog,” Stimac quipped as Suttree pranced around with a gaggle of other pups in an artificial turf park opened by the Downtown Partnership of Baltimore across the street from his building.

Not all dogs have been welcomed at apartments.

A state law that made landlords responsible for dog-related incidents led many to enforce breed restrictions to keep out pit bulls, terriers and other breeds some consider more aggressive and potentially dangerous. The law was reversed a few years ago, but the restrictions remain in place at many buildings in the state, said Bailey Deacon, a spokeswoman for Baltimore Animal Rescue & Care Shelter.

As a result, hundreds of dogs are surrendered to BARCS by owners who are unable to take them to a new apartment, she said.

The restrictions, which are more common at large complexes, haven’t kept BARCS from getting thousands of dogs adopted, but, Deacon said, “if there were fewer places in the city that had breed restrictions we’d be able to place even more.”

Still, with more dogs moving in downtown, city planners see an opportunity to strengthen the neighborhood’s sense of community.

“Dogs force residents to get out of their units and interact,” said Kirby Fowler, president of the Downtown Partnership. “Dogs are part of the glue that creates a more interactive downtown.”

The Downtown Partnership organizes dog-friendly happy hours and has set up other small dog runs in unused corners of the city. A dog Census will be part of the organization’s next report on city dwellers.

There’s even a Facebook group, Downtown Neighbors & Dog Lovers, started by a downtown resident, that has grown to more than 70 members in five months.

“My sense is dogs are more important than cars for a lot of our renters,” Fowler said.

That rings true for Goodell, who takes Asher to the roof to play at least four times a day.

While he seems prepared to catch the ball for hours more, Goodell says it’s time to go. Asher leads the way to the elevator and down the hall to his eighth-floor home, with a tail-swishing swagger that says he is not only welcome here, but wanted.

Source: baltimoresun.com

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Amazon Strikes Locker Deal With Apartment Landlords

Mon, 10/23/2017 - 9:32am

Its no secret Amazon.com Inc. wants to control the delivery process—and toward that end, it has inked partnerships with some of the nation’s biggest landlords.

Citing a person familiar with the matter, The Wall Street Journal reported that Amazon has signed contracts with apartment owners and management companies covering more than 850,000 rental units around the country to install Amazon lockers in the buildings. The Seattle-based e-commerce giant will ultimately place the lockers in thousands of buildings, with many arriving before the holiday shopping season kicks off. Some of the national landlords the company is contracting with include AvalonBay Communities Inc., Equity Residential, Greystar and Bozzuto Group, reported the Journal. (See also: Unwrapping Amazon’s Logistics Moves.)

The move by the country’s biggest online retailer comes at a time when it is aiming to control more of the delivery process. Installing Amazon lockers where customers can pick up packages also makes a lot of sense for apartment building owners who continue to struggle with managing all the packages that are delivered each day. According to the Journal, the staff at the properties often spend several hours each day sorting through the mail in an environment where packages are piled up everywhere. The paper noted that many landlords cite the situation as one of the biggest problems they have to deal with.

Expanding Two-Day Shipping

The lockers will be accessible 24 hours a day and will accept packages from all carriers, not just Amazon’s. Residents will receive an alert and a code to open the locker when a package arrives at the fully automated system. The building owners have to pay an upfront cost of $10,000 to $20,000 but won’t have to pay a monthly fee. Most of the landlords plan to make the service free to their renters, noted the report.

This isn’t the first move Amazon has made in recent weeks to control more of the delivery process in the U.S. Pushing further into the territory of United Parcel Service Inc. and FedEx Corp., Bloomberg reported earlier this month that it is testing a delivery service aimed at making more products available for two-day free shipping. Citing people familiar with the plan, Bloomberg said the idea behind the new service is to reduce some of the congestion in the company’s warehouses, as well as provide more products that can be shipped quickly. Dubbed Seller Flex inside Amazon, under the program, Amazon will pick up third-party merchants packages from warehouses and handle delivery to customers. By doing that, Amazon not only controls more of the delivery process, but it can reduce costs with volume discounts and lower the overcrowding in its warehouses by keeping the products at the merchant’s own locations. What’s more, Seller Flex will provide Amazon will further insight into how its third-party merchants house their products and deliver them.

Source: investopedia.com

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The Complicated Risk Exposures of Property Managers and Investors

Mon, 10/23/2017 - 9:28am

What you hear on the radio and TV about “flipping,” renting, or managing residential or commercial properties and reality are two different worlds.

The lives of property managers and real estate investors are far more complicated than what’s seen on television. Every day, property managers and real estate investors face bedbug exposures, mold behind the dishwasher, tenant and vendor service issues, tenants without insurance, vetting contractors, insurance claims, property inspections, tax authorities, tenant harassment and discrimination claims, and more.

When I speak with both real estate investors and professional property management organizations and their members across the United States I see a lack of insurance knowledge associated with this industry, and observe that few have relationships with insurance agents who understand the exposures they face. And, like most insureds, property managers are no different than anyone else — price points drive the decision making, not proper insurance coverage placement.

Typical Insurance Scenario

Most property management companies have a business owners policy for their corporate coverages. In addition, some will purchase a third-party employment practices liability policy to protect against any professional liability exposure.

Many of the policies I have reviewed have very narrow tenant and third-party definitions, along with limited insurance protections for the property manager against discrimination or harassment claims, and against any alleged regulatory violation from the U.S. Department of Housing and Urban Development (HUD) or the Fair Credit Reporting Act.

I always advise existing and potential insureds to review their policies for exclusions and limitations, and to get their insurance questions answered in writing from their insurance agent. If the insurance agent refuses to do so, I tell them to find a new agent.

Property management firms often assume that by having their investor add the property management firm as an additional insured on the investor’s personal homeowners or commercial multi-family policy they can mitigate all their liability exposures related to the servicing of the individual property. I always ask them if they have read the homeowners or commercial policy and very few say they have. In those cases, they may be facing uninsured losses due to vacancy clauses, intentional acts or damage by the tenant, and “service animals” that could take down a moose.

In most cases, the property manager is responsible for tenant screening and placement of the tenant in the investor’s property, which leads to another potential financial exposure for the property manager. Many property management firms have the leasing tenant add the property management firm as an additional insured to their renter’s policy and most lease agreements now require a minimum liability limit of $100,000. Medical payments, property damage to others, additional living expenses, and contents coverage are not required or reviewed. The main problem with this is that almost 70 percent of all renters policies cancel prior to renewal, mostly due to non-payment.

If the renter’s insurance is cancelled and he or she has a kitchen fire or a third party files an injury claim, whose insurance responds to the loss? Does the property insurance company subrogate against the property manager’s insurance? Does the tenant file a claim against the owner of the property and the property manager for not keeping track of in force coverage during the term of the lease?

The good news is that there are insurance programs and insurance providers available to address and educate on these issues.

According to a recent Pricewaterhouse Coopers report, homeownership will continue to decline through 2025 while some 12.5 million net new households will be created, with half of these households renting. At a recent property managers conference one of their industry speakers said a third of the U.S. population rents today and by 2023 that number will grow another 45 percent. If true, then the property management market will also experience tremendous growth, and we as insurance professionals educated in this space have a great opportunity to grow with them.

 

Source: insurancejournal.com

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