American Apartment Owners Association

Farmhouse sinks can help add 30% to your home’s asking price

Mon, 05/07/2018 - 9:33am

Homeowners whose properties feature farmhouse finishes may have HGTV to thank for the premium when it’s time to sell.

Farmhouse- and craftsman-inspired features now garner as high as a 34% premium among buyers shopping for entry-level homes, according to a recent report from Zillow Group ZG, +4.40%   subsidiary RealEstate.com. Researchers nicknamed it the “Chip & Joanna Gaines Effect,” after the stars of the HGTV series “Fixer Upper,” which popularized rustic details in interior design. The report was based an analysis of millions of starter-home listings.

An entry-level home listing that featured the word “craftsman” sold for a 34% premium relative to comparable listings without that detail. Other phrases that also led to a higher sales price included coffered ceiling (29%), clawfoot tub (29%), farmhouse sink (26%), wainscoting (26%) and barn doors (23%). Amid all these farmhouse attractions, however, one non-rustic feature received the biggest sale premium: Solar panels, which attracted a 40% premium for starter-homes.

Of course, the analysis did not isolate homes for just one feature, so one listing could include multiple attributes, such as farmhouse sinks and exposed beams, that make it more desirable for prospective buyers. Moreover, the presence of one of these popular keywords or phrases in a home listing may act as a signal to buyers that other features that aren’t described will be to their liking. They could also belong to homes that are older and, in the buyer’s eyes, have more durability and character.

Home featureSales premium among entry-level homesSolar panels40%Craftsman34%Coffered ceiling29%Clawfoot tub29%Mid-century28%In-law28%landscape/path/outdoor/deck lighting26%Exposed beam or ceiling26%Farmhouse sink26%Wainscot26%Fire pit25%Central Vacuum25%Pergola25%Mudroom24%Tankless water heater24%Playroom23%Heated floor or radiant heat23%Exposed brick23%Quartz23%Home theater23%Barn door23%Shaker cabinet23%Gas furnace23%Outdoor kitchen23%Hardwood22%Jacuzzi tub21%Outdoor fireplace or pit21%Picket fence21%Butcher block20%

And while the rustic charm of these features prevailed at the lower end of the market, more luxurious upgrades carried more importance among buyers overall. For instance, home listings descriptions mentioning steam showers and professional appliances sold for 29% more than their expected value, according to a separate report from Zillow.

That report analyzed listings for roughly 4 million homes that sold between January 2016 and December 2017 to determine the effect that certain upgrades had on the final selling prices versus the data used to determine the home’s “Zestimate” when included in the property’s description. The analysis controlled for factors such as the property’s size and age and the prevalence of upgrades in a given market.

Most of the upgrades Zillow identified fell into a few categories: Spa-like amenities, cooking-oriented features and, yes, craftsman or farmhouse-style finishes. Upgrades such as Carrara marble and solar panels also helped boost a home’s final sales price.

And precisely how new features are described does make a difference. The phrase “hardwood floors” only prompted a 10% premium, while “herringbone patterned floors” netted a 21% higher sales price. “While everyone has different style preferences, when it’s time to sell, being specific and strategic with your home’s listing description can have a big financial payoff,” Jeremy Wacksman, chief marketing officer at Zillow ZG, +4.48% said.

Mentioning features like these won’t just add to the property’s final selling price—it can also help it move off the market faster. Homes that highlighted “exposed brick” in their listings sold two weeks faster than those that didn’t. Other phrases that helped homes sell faster by more than 10 days include “open shelving,” “mid-century” and “subway tile,” according to Zillow.

Some home improvements such as new carpeting made no noticeable difference to a home’s final sales price. But other improvements will inherently increase a home’s value. Adding a new bathroom will boost the property’s value by nearly $46,000 on average, while a new roof will add roughly $14,000, according to an analysis from Remodeling Magazine.

But homeowners generally won’t see a 100% return on their investment for the remodeling projects they take on. Remodeling Magazine found that replacing a garage door offers the best ROI for homeowners at 98.3%.

Quality and taste will also factor into how much of a boost a home improvement project will lend to the property’s value. A fresh coat of paint is always advisable — but if a homeowner repaints their master bedroom a shade of blue rather than white, they will add $5,400 to the final selling price.

Source: marketwatch.com

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Why long-term tenants are worth their weight in gold

Mon, 05/07/2018 - 9:23am

The name of the game in any investment market is to maximise returns with some investors having a short-term investment horizon while others look more long-term. When renting out property to tenants there is a temptation to squeeze that extra few pounds per month which all goes towards paying off finance costs. Is this wrong?

PLAY THE LONG-TERM GAME

There are many reasons why you should look towards the long-term when renting out property and price your rental demands accordingly. Placing yourself at the top end of the rental value market in your area could put you in a very difficult position if rents start to soften. Initially, if you are priced towards the higher end then you will need to reduce your rental demands to a greater extent than those who were perhaps more competitive before the market softened.

COST OF REPLACING A TENANT

If you have the chance of a 5% rental yield over a 7% rental yield then surely it is a no-brainer? However, what happens if your turnover of tenants increases dramatically on the higher less competitive rental yield and you have periods of vacancy? There are a number of factors to take into consideration when experiencing relatively high turnover of tenants which include:

PERIODS OF VACANCY

Every day that your property is vacant is costing you money, you will still be paying the bills, you will still be paying your mortgage but your income will reduce immediately. If you are looking to apply for finance to increase your property portfolio in the future, then periods of vacancy do not look good on your cash flow projections.

ADVERTISING FOR NEW TENANTS

Many people seem to overlook the cost of advertising for new tenants which can soon mount up if you have a relatively high turnover of tenants. Even just a couple of hundred pounds three or four times a year can soon start to eat into your rental income and that is before we even consider the periods of vacancy covered above.

REDECORATING YOUR PROPERTY

In the vast majority of cases, when a new tenant moves into a property the landlord will “spruce it up a little” to make it look as attractive as possible. There is a cost to redecorating, perhaps replacing worn out furniture and carpets and this comes out of your rental income. The less frequently you are forced to redecorate your property the greater the cost savings and better your return.

KNOW YOUR TENANT

We live in an age where the likes of AirBNB encourage short-term letting arrangements at relatively high rents. You don’t know your tenant, there is no relationship and as such no long-term commitment on either side. If you have a family or a couple living in your property they will likely look to make roots in the short to medium term giving you some longevity on your investment. While some people suggest it is wrong to get to know your tenants this does help to avoid misunderstandings, solve problems as quickly as possible and in many cases offer assistance in times of short-term cash flow problems.

CONCLUSION

Those who look to maximise their rental income in the short term may do very well, they may have relatively high occupancy rates but the vast majority of landlords with this type of outlook tend to struggle with periods of vacancy. As we all know, a vacant property is not earning any income and is effectively a dead property when it comes to investment returns. Ensure your rental rates are competitive, build up a rapport with your tenants from a distance and you will be able to plan well into the future with a constant rental income.

 

Source: propertyforum.com

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US housing prices skyrocket for homeowners and renters alike

Mon, 05/07/2018 - 9:20am

Since the crash of 2008, both home ownership and renting have been getting steadily more expensive, with median house prices rising to levels surpassing pre-crisis levels, while the ballooning private equity megalandlords pushed prices for renters to never-seen levels, using an eviction mill that saw more Americans thrown out of their homes than at any time in history to keep renters paying.

The one bright spot in all this was that interest rates have stayed low since they were effectively zeroed out during the crash, which meant that people who could scrounge the capital for a downpayment could end up paying less to stay in their more-expensive homes than purchases of cheaper, pre-2008 homes.

This was in contrast to the plight of renters, who, in the pre-crash years, had a much better housing-to-income ratio, which vanished after the mass evictions following the crash, creating more competition for rental housing even as private equity landlords were snapping up foreclosed houses in bulk, cornering local markets and cranking up rents.

The latest installment in Angry Bear’s “Gimme shelter” series shows that the party is over for middle-class homeowners, whose monthly costs are finally catching up with the unsustainable costs borne by renters, as house prices continue to mount and interest rates start to rise.

Last year, when I first posted this metric, the monthly payment for the median house wasn’t extreme at all, but rather very moderate in terms of the long term range.

* Going back to 1988, the median mortgage payment was slightly over 40% of median monthly household income. This fell back under 28% at the end of 1998 before rising to 32% in 2000.

* After falling briefly, at the peak of the housing bubble in 2005 it had risen to 31.4%, and actually reached a secondary peak in Q2 of 2006 of just over 35% of median monthly income.

* At the bottom of the bust at the end of 2011 it made a new low of 23%.

* As of Q2 of last year, the median monthly mortgage payment was still less than 24% of median household income.

* BUT, with the increase in both house prices of over 5% YoY, and the increase in mortgage interest rates to 4.28% as of Q1 2018, that has now risen to 29.5%

Mortgage payments for new buyers in 2018 and not nearly so moderate as they had been earlier in this expansion. But they are not yet at the extremes they were in 2005 and 2006.

Gimme shelter Q1 2018 update: rents and house prices all at or near new extremes [Newdealdemocrat/Angry Bear]

Source: boingboing.net

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April Rents Rev Up for the Rental Season with Highest Annual Increase in 16 Months

Fri, 05/04/2018 - 12:33pm
Key takeaways:
  • The national average rent was $1,377 in April 2018, having increased by 3.2 percent year over year, and by 0.3 percent ($4) month over month, according to data from Yardi Matrix.
  • Rents increased in 84 percent of the nation’s biggest 250 cities in April, were unchanged in 14 percent of cities, and dropped in 2 percent of cities compared to April 2017
  • The top 20 fastest growing rents in the country are in small cities, including Reno, NV, Boise, ID, and Orlando, FL. 
  • Among the largest U.S. cities, Las Vegas, Denver, and Detroit had the fastest rising prices in April, while rents in New York, Baltimore, and DC stopped rising. 

Rents in all unit sizes pick up steam in April

Increasing demand across the board has caused one, two, and three-bedroom apartment rents to go up by 3.3% compared to prices in April 2017, while studio apartment rents were up by 2.9% year over year. In April 2018, the average rent for a studio apartment in the U.S. was $1,216, the average rent for a one-bedroom apartment was $1,241. The cost of a two-bedroom apartment was $1,454, and a three-bedroom unit was renting for $1,682 on average.

Bedroom TypeAverage RentChange M-o-MChange Y-o-YStudio$1,2160.2%2.9%1 Bed$1,2410.3%3.3%2 Beds$1,4540.3%3.3%3 Beds$1,6820.4%3.3%National rents rev up with a 3.2% annual increase; 5 cities post double-digit growth

The national average rent in April saw the highest year-over-year increase since the end of 2016, a 3.2% uptick compared to the same time last year, reaching $1,377/month. Month-over-month, national rents grew by 0.3%, or $4, compared to March, revving up as we approach the start line of 2018’s peak rental season.

The highest annual rent increases in April were in Odessa, TX (up 35.6% y-o-y), Midland, TX (32.6%), followed by Yonkers, NY (11.5%), Reno, NV (10.8%), and newcomer to the top 5 Hollywood, FL (10.6%). The average monthly rent in Odessa is now $1,273, in Midland $1,467, in Yonkers, NY $1,922, in Reno, NV $1,164 and in Hollywood, FL $1,425. Renters in Lancaster, CA, Greeley, CO, and Boise, ID also saw high rent increases above 8%. In total, rents rose in 84% of the nation’s 250 largest cities in April.

Rent prices in Norman, OK, Lubbock, TX, New Orleans, LA, Brownsville, TX, Hillsboro, OR, and Alexandria, VA are down compared to April last year. Many big cities are seeing rents decline or stagnate as well, including New York, Baltimore, Washington, DC, Portland, OR and Austin, TX. The average rent in Austin, TX exceeded $1,300/month in April, in Portland the average apartment rent was $1,454/month, while apartments in Washington, DC cost $2,070/month on average.

No significant fluctuation in prices was noticed in Chicago, Philadelphia, San Francisco, Cleveland, Newark and St. Louis, where apartment rents grew slower than 2% over the year, although that may change in the upcoming months as activity starts to pick up.

Large cities: Las Vegas, Denver, Detroit apartments see highest price jumps

With a 6% increase over the year, Las Vegas rents rose the most among the largest U.S. cities, reaching $979/month in April, as the local housing market is rebounding. Denver remains one of the hottest cities for renters in the U.S., with apartments renting for $1,559/month, 5.8% more expensive than they were one year prior. Rental housing in Detroit is making a comeback after years in the slump. Apartments in Detroit saw the third highest yearly increase in prices among big cities, 5.4%, reaching just $1,015/month, still well below the national average.

Also poised for an active rental season are Phoenix and San Diego, with 5% and 4.6% year-over-year increases in April. Jacksonville, Charlotte, Los Angeles and Houston apartment rents rose by more than 4%, while Columbus, Fort Worth, Dallas and Seattle rents were more moderate, between 3-4%.

Rents in Brooklyn and Manhattan apartments continue sliding, by -1% and -0.2%, with the average price in Manhattan $4,063/month and in Brooklyn $2,688. Meanwhile, Baltimore apartments stagnate around $1,200/month, as the market is cooling down. Monthly rents in DC, Portland, Austin, San Francisco, El Paso and Oklahoma City have been steady for the month, growing by less than 1.5%.

Mid-size cities: Sacramento rents cool down but still lead

If the price of rent in Sacramento was growing by 7.2% as of last month, it cooled down to 6% in April, still the highest year over year increase among mid-sized cities, stopping just shy of $1,300/month. Stockton, CA’s more affordable rental housing is also heated, with a year over year growth of 5.8%, and an average rent $1,100 per month, which is low by California standards.

Tampa, FL renters are also feeling the heat before the start of the summer, with rent increases of 5.7% over the year and a monthly average rent that’s starting to rival Southeast Florida prices, at $1,254. Central California’s Fresno saw a 5.1% jump in rents in April, breaking the $1,000/month mark. Rents for apartments in Kansas City, MO and Arlington, TX increased by 5%, while Minneapolis, Oakland, Atlanta and Miami saw more moderate increases.

At the other end of the spectrum are New Orleans, Tulsa, Wichita, Virginia Beach and Raleigh, where rents are growing the slowest in the mid-size city category. The average rent in New Orleans was $1,088 in April, in Virginia Beach, $1,183, and in Raleigh $1,112.

Small cities see the top 20 most sizeable rent increases in April

At the top of the list reigns the Midland-Odessa area, with prices up by 35.6% and 32.6% year over year. Odessa apartments now cost $1,273 on average, while Midland rents cost $1,467/month. Yonkers, NY rents have been skyrocketing over the last few months, growing again by 11.5% over the year, approaching the $2,000 mark. Renters in Reno continue to struggle with a 10.8% annual increase, now paying $1,164/month on average. Apartments in Hollywood, FL are seeing an uptick in demand, pushing rents in the small town located south of Fort Lauderdale up by 10.6%, reaching $1,425/month in April, from $1,288 one year ago.

At the bottom of the list sit Norman, OK (-2.5%), Lubbock, TX (-2.5%, less than last month’s -4.3% decrease), Brownsville, TX (-1.7%), Hillsboro, OR (-1.6%), and Alexandria, VA (-1.1%). Rents were sluggish in Baton Rouge, LA, Bellevue, WA, Mobile, AL, Hampton, VA, and College Station, TX. Moderate increases of about 3% were seen around the country in Durham, NC, Spokane, WA, Burbank, CA, Augusta, GA, and Wilmington, DE, to name a few.

Top 10 Lowest Rents in April 2018CityStateAverage RentWichitaKS$633TulsaOK$668BrownsvilleTX$685ToledoOH$696KilleenTX$697IndependenceMO$723AmarilloTX$723DaytonOH$728Oklahoma CityOK$729Fort WayneIN$741Top 10 Highest Rents in April 2018CityStateAverage RentManhattanNY$4,063San FranciscoCA$3,442BostonMA$3,255San MateoCA$3,160CambridgeMA$3,020Jersey CityNJ$2,841SunnyvaleCA$2,805Santa ClaraCA$2,782BrooklynNY$2,688San JoseCA$2,669

Manhattan, NYC has the most expensive rents in the country, with an average rent of $4,063 as of April. San Francisco is the second most expensive for renters, with apartments going for $3,442/month on average. Renting in Boston, MA is the third most expensive in the U.S, at $3,255 per month. Also in the top 10 priciest cities for renting are San Mateo, CA, Cambridge, MA, Jersey City, NJ, Sunnyvale, CA, Santa Clara, CA, Brooklyn, NY and San Jose, CA.

Apartments in Wichita are the cheapest of the 250 cities surveyed in April, with an average rent of $633/month, increasing just 1% year over year. The second most affordable is Tulsa, OK, with an average rent of $668, only 0.5% more than the previous year, followed by Brownsville, TX where apartments cost $685 on average, after a decline of -1.7% year over year. Also among the 10 most affordable cities for renters are Toledo, OH, Killeen, TX, Independence, MO, Amarillo, TX, Dayton, OH, Oklahoma City, OK and Fort Wayne, IN, all with prices under $750/month.

 

Source: rentcafe.com

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Are AAOA Members Screening Tenants Properly?

Fri, 05/04/2018 - 12:28pm

How do you screen your prospective tenants? Here are at AAOA we were curious to find out what our members are doing in addition to running a credit and background check. We received 1,100 survey entries, the results may surprise you!

Question 1: When screening a tenant, do you ask to see paycheck stubs?

Why this question matters: The life blood of your rental property is the income derived from tenants. Although you shouldn’t discriminate as to the type of income the tenant gets, you should verify that the income source exists.

If the tenant claims to be employed, we highly suggest collecting paycheck stubs. You never know if they are being dishonest about how much they make or what their employment status is. This is a CRUCIAL factor when determining whether they can afford rent. The higher their debt to income ratio the higher the risk of a tenant defaulting on rent.

The results:  Most landlords do collect paycheck stubs but 37% take their prospective tenant’s word for it.

YES62.8%NO37.2%

 

Question 2: When screening a tenant, do you ask to see their Social Security Card?

Why this question matters: A social security card remains the best form of identification showing the state in which it was issued and the tenant’s legal name. Most importantly, should your tenant skip town and leave owing you rent, you will have a MUCH higher chance of collecting that debt through a collection agency if you have a social security number. In many cases you can also use the social to trace the tenant’s new whereabouts to serve them a court summons as well.

PLEASE NOTE: A tenant can give you a fake social and it still may pull up a credit and background check if they’ve used that social security number consistently over many years.

The results: The majority of landlords are not collecting a social security card. If you want us to verify a social for you without collecting a social security card, we suggest ordering an SSN Fraud Verifier.

YES32.8%NO67.2%

 

Question 3: When screening a tenant, do you ask to see their driver’s license?

Why this question matters: Like a social, a driver’s license can also provide identification, date of birth, and their most recent address. These pieces of information are crucial when conducting a criminal and eviction background search.

The results: Most landlords ask to see a driver’s license. We suggest asking for both a driver’s license and social security card to make sure everything matches up.

YES80.2%NO19.8%

 

Frequently we get calls from landlords who have rented to tenants without requiring any tenant documentation to verify employment, references, or their identity. Taking the time to create tenant files that are correct and current can save you incalculable thousands in the future. This is especially true when a tenant skips town, leaves owing you rent, or gives you incorrect information making it hard for you to find criminal or eviction records.

Remember, tenant screening is MORE than just running a credit and background check.

Maintaining a current and correct tenant file is a simple way to protect your valuable investment.  Tenancies change, lives change, and circumstances can occur that may turn a long term tenant into a potential collection problem.

 

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How to Tell if Tenants Are Getting Rowdy? One Landlord Found a Solution.

Wed, 05/02/2018 - 12:54pm

Dave Krauss had a successful Airbnb rental business until one weekend in 2014. A renter supposedly looking for a quiet break with her boyfriend ended up having a two-day “mini-Coachella style rager” at Mr. Krauss’s condo, he says.

It wasn’t until two days after she checked out that he discovered what had happened. Fourteen angry neighbors had filed noise complaints, and a cease-and-desist letter forced him to sell the investment property at a $30,000 loss.

“It had sullied my reputation. I slept fine that weekend. My neighbors didn’t,” he says.

Mr. Krauss vowed to never let it happen again. If he could get a simple notification when a disturbance started, rather than be the last to find out, he could head off potential problems.

Then, early in 2015, he met Andrew Schulz, an electrical engineer, who was teaching a class on building custom smart-home technology at the Dallas Entrepreneur Center. Mr. Krauss told him he didn’t want to be his student but would like to hire him to solve his problem. They went to lunch and discussed the design criteria for a system that would ultimately become what the company calls a “smoke detector for noise.”

“We still have the back-of-the-napkin sketches to this day,” says Mr. Krauss.

Here’s how the technology works: Sensors are secured to wall outlets in areas where renters are likely to create noise, most often the living room. The gadgets capture data on sound volume that is turned into a noise score accessible by the property manager from anywhere.

To see if there was a need for such an invention, Mr. Krauss attended a conference for professional vacation rental managers in the fall of 2015. When he told one attendee about his NoiseAware tool, she told him of having to deal with neighbors filing complaints weekend after weekend against renters who would get loud when drinking wine outdoors.

“We never looked back,” says Mr. Krauss.

NoiseAware customers are given options to set an appropriate risk threshold for their property. If the threshold is breached, they are notified immediately via text so that they can prevent potential noise issues.

In 2016, NoiseAware says, the company raised $1 million in a round of angel financing from a group that included former HomeAway Chief Operating Officer Tom Hale. The company says it is currently closing a new round of financing. It won’t disclose specific revenue but says that sales last year were eight times the 2016 figure, and its product protects more than 3,000 properties.

 

Source: wsj.com

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Worried about the next bear market? Real estate may be your best investment. Really.

Wed, 05/02/2018 - 11:48am

Real estate may be one of your best investments during the next bear market for stocks.

And by real estate, I mean your home or other residential properties.

That’s important to remember, not just because we often overlook our house when focusing on our holdings, but also because the recent volatility in markets has many investors on edge.

Most investors harbor a deep mistrust of real estate, given their experiences during the financial crisis and bear market a decade ago. During the big downturn from late 2007 to early 2009, the Standard & Poor’s 500 stock index fell 57%, and residential real estate — as measured by the S&P CoreLogic Case-Shiller national home price index — lost 18%. And since most people with property have a mortgage, actual losses from real estate during that downturn often were much greater.

Yet real estate’s performance during the Great Recession is the exception rather than the rule. Consider the 19 bear markets since 1952 other than the one between 2007 and 2009: The Case-Shiller index shows increases in all but one, and in the one in which it fell, it declined by just 0.4%. Even including the Great Recession, Case-Shiller shows an annualized average increase of 4.6% for all stock bear markets since 1950.

To be sure, since long-term Treasury bonds did even better than Case-Shiller in these 20 stock bear markets, gaining an average of 6.2% annualized, you might wonder if bonds are an even better hedge against bear markets. Today’s low interest rates make it unlikely Treasury bonds will perform as well in the next bear.

This especially will be the case if the next big downturn is accompanied by a flare-up of inflation. That’s because inflation is bad for bonds and, at least historically, good for real estate.

Gray Cardiff, editor of the Sound Advice newsletter, has another reason to believe it is important to shift some of your holdings away from stocks into real estate. Cardiff’s is one of the few newsletters whose model portfolios have beaten the market over the long term, according to the Hulbert Financial Digest’s performance monitoring. Over the last 20 years, for example, his newsletter’s model portfolio has beaten the dividend-adjusted Standard & Poor’s 500 by 1.3 annualized percentage points.

Cardiff points out that, relative to stocks, real estate is undervalued. In fact, based on data back to 1896, he says that, when compared with stocks, real estate has rarely been cheaper.

The last time the ratio was higher than today was during the Internet bubble. In the bear market that accompanied the bursting of that bubble, during which the S&P 500 lost nearly 50%, the Case-Shiller home price index rose more than 20%.

Unfortunately, there’s no easy or straightforward way for you to invest in residential real estate as an asset class. Most of us invest in real estate by owning our home or another specific property, and there are myriad factors affecting an individual property’s value that are independent of how the real estate category performs nationwide.

Cardiff recommends real estate investment trusts (REITs) as a way of gaining real estate exposure. However, he says you have to be on our guard against REITs that are profitable today only because interest rates are so low.

Three REITs that his analysis suggests will be profitable even if rates rise markedly from current levels are Hersha Hospitality Trust (HT); RLJ Lodging Trust (RLJ) and Third Avenue Real Estate Value Investor (TVRVX).

 

Source: usatoday.com

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What renters and landlords need to know about the new D.C. TOPA law

Wed, 05/02/2018 - 11:36am

The Tenant Opportunity to Purchase Act, better known as TOPA, was enacted more than 30 years ago by the D.C. Council. It was designed to protect renters from being kicked out of their homes by landlords who wanted to sell their property to make more money.

Depending on which side you were on, TOPA was either “tenant capitalism” or “pure blackmail.” The reason for the schism was how the law was applied.

When renters of single-family homes, which include condos and co-ops, were notified that their landlord intended to sell, they would sometimes demand lots of money to release their TOPA rights.

Last month, the D.C. Council sought to remedy this problem. It passed a bill that, to a large extent, eliminated TOPA from single-family dwellings. The council relied, in part, on a study that showed from Oct. 26, 2009, through Aug. 15, 2015, out of 398 TOPA offers only 19 were successful. In other words, although landlords complied with TOPA, less than 5 percent of renters ended up buying their home. The law is awaiting Mayor Muriel E. Bowser’s signature. Once she signs it, there will be a 30-day period of congressional review before it becomes final.

In simple terms, the new law abolishes TOPA as it applies to single-family dwellings, which includes condominiums and co-ops. Accessory dwelling units (ADU), such as basements or garage apartments separate from a main home but with their own bathrooms, kitchens and entrances, are exempt from the law, even if there are renters in the main house and the ADU.

Under the new law, renters will still have to be notified of their landlord’s intent to sell. But unlike the TOPA notice, it does not trigger a right to purchase. A notice also must be provided to D.C.’s Office of the Tenant Advocate.

The law differs for renters who are 62 or older or have a disability. For those tenants who signed a lease to occupy a single-family dwelling before Dec. 31, 2017, and occupied it by Jan. 15, 2018, a modified TOPA still exists. They must respond within 20 days after receiving notice the landlord intends to sell. If the tenant wants to buy the property, he would have 25 days to negotiate a sales contract, and closing must take place 45 days thereafter. However, if a lender needs more time, the tenant can have an additional 30 days in which to get lender approval and take title.

The D.C. Council was sensitive to the concerns of the real estate industry — and many homeowners — that tenants were flipping (assigning) their rights to speculators for large sums of money and also delaying closing. The new law is clear: The only consideration an elderly or disabled tenant can receive for selling his tenant rights is the “right to immediately use and occupy the tenant’s unit for a period of 12 months following the sale and at the same rent charged at the date of the offer.”

Before the law, TOPA covered single-family properties, properties with two to four units and buildings with five or more units.

The latter two remain in place. Renters in those properties still have the right to purchase their property under TOPA, although those who live in a building with more than five units must be represented by a formal tenant association. The time-frames in which the tenants (or their association) must respond vary. For example, if you live in a building with two to four units, all renters must express an interest in buying to trigger TOPA. If not everyone is interested or if 15 days elapse since the TOPA notice was given by the owner, any tenant can assert his right to buy his home, but he must do so within seven days thereafter.

The tenant (or tenants) have 90 days to negotiate a contract to buy, and if a contract is entered into, the buyer has another 90 days to go to closing. If a lending institution notifies the tenants in writing that it needs more time, the settlement can be extended for another 30 days.

The TOPA process involving buildings with more than five units is even more complex. After the tenants receive a TOPA notice, they have 45 days to form a tenant organization with the legal capacity to hold property. They then have 120 days to enter into a contract, and another 120 days to take title. Once again, if a lender needs more time, the landlord must extend the deadline in accordance with the lender’s estimate of how long it needs.

Since its enactment, TOPA has been the subject of hundreds of lawsuits, some brought by landlords and others by tenants. I suspect that litigation will continue when it comes to buildings that still fall under the TOPA regulations. It is too soon to tell how the new law will affect renters and landlords of single-family properties.

 

Source: washingtonpost.com

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Newark to Provide Free Legal for Renters Facing Eviction

Wed, 05/02/2018 - 11:31am

NEWARK, N.J. (AP) — Newark is planning to follow New York’s lead and provide free legal services for low-income and vulnerable tenants facing eviction.

Newark Mayor Ras Baraka and New York Mayor Bill de Blasio announced the proposed ordinance on Tuesday. Last year, De Blasio signed a law making New York the first city in the country to guarantee low-income residents the right to representation in eviction cases.

“These are working people, folks who struggle to make ends meet, and before were defenseless if that eviction notice came,” de Blasio said. “That eviction notice was a death sentence for their home, the vast majority of the time.”

Baraka said he wants to begin Newark’s program in September, and initially focus on providing services for the disabled, elderly and people who have entered the U.S. illegally.

He said the program eventually will cost Newark between $750,000 and $1 million, but that while the city is raising the money it will use the services of law firms that have agreed to work on a pro bono basis.

Baraka didn’t specify how the money would be raised to pay for the program.

“We will find a way to raise the dollars to get this done,” he said.

Baraka estimated that approximately half of the 40,000 annual eviction cases filed in Essex County involve low- and moderate-income Newark residents.

Source: usnews.com

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This Is the Room One-Third of Americans Would Renovate First, According to a New Study

Wed, 05/02/2018 - 11:27am

Every year, thousands of people buy new homes in the spring. Homes listed in the spring—especially in May—can be snapped off the market more quickly and for more money at this time of year as people buy their first homes, upsize, downsize, or switch locations before summer arrives.

To mark the season in which so many people are settling into new homes (and preparing to make updates to them), The Home Depot is celebrating New Homeowners Day (May 1) with a look at the specifics behind these home improvement plans.

According to the Home Depot–commissioned survey of 1,000 new U.S. homeowners, almost one-third (32 percent) want their homes to look updated without the hassle of a major renovation. Only 26 percent are interested in taking on the hard work and endless renovations a fixer-upper entails, and a small proportion (14 percent) only want to make minimal changes, without any of the stress a renovation brings.

When it comes to planning home projects, 33 percent of new homeowners are most likely to start with the kitchen—a smart decision, considering an updated kitchen can give your home’s value a major boost. Bathrooms were the next pick, with 27 percent tackling this room first.

For 62 percent of new homeowners, the most important factor in the decision to start a home improvement project was cost. At the same time, one of the top motivations for starting a new project was adding value and upgrading a home, in which case the cost of renovating is more of an investment. The other major motivator was the hope of turning a new house into a “home,” or customizing it to better suit the new owner(s).

Whether you’re a new homeowner or you’ve been in your house for years, now may be the time to take on a new home update—you just have to decide where to start.

Source: realsimple.com

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How To Keep Your Rental Business Afloat

Mon, 04/30/2018 - 5:00pm

Running your own business is difficult even when times are good; when things take a turn for the worse, keeping your business afloat can seem impossible. The economy might have experienced a sudden dip, neighborhood competition may be on the rise, or perhaps you’re having a hard time retaining tenants in your real estate rental business. Whatever the case, you’re looking for help on how to keep your business in operation before it sinks into the red—and you’ve came to the right place. We’re here to offer our best advice on how to keep your rental business in business by using these top strategies for getting more money out of your rental property.

Decrease Vacancy

Every day your rental property or apartment unit sits vacant is a direct loss of profit, which makes decreasing vacancy priority number one. In order to make money and stay in business, you need to find renters—as soon as possible. Don’t wait until the property is vacant to post an ad; create a property listing immediately once you’ve learned about the intended move. Sites like Craigslist are a free resource, but consider paying a small fee to list on services such as Apartments.com. You could attract more serious renters who are willing to pay to access the best listings, meaning they’re more likely to stay long-term.

Another way to incentivize renters is to offer certain perks and bonuses that your competitors don’t offer. Selling points include a first month of free rent, on-site laundry facilities, assigned parking spaces, and pet-friendly properties. If your property doesn’t have a to-die for kitchen or prime location, be sure to market it as the best deal in town.

Reduce Turnover

In your quest to rapidly fill empty rentals, don’t let the need for speed force you to allow just anyone through the door. Screening your applicants is an essential part of the rental process which cannot be glossed over or rushed past. Failing to perform criminal background check for tenants can be dangerous for both yourself and any other renters if an incident occurs—which you could possibly be held accountable for. Having to evict someone over suspicious behavior or criminal activity will result in profit loss through vacancy, cleaning services, and recruitment costs. Worse yet, if said tenant disputes an eviction and remains in the unit while refusing the pay rent, it can take the courts a significant amount of time to have him or her possibly removed, resulting in expensive legal fees on top of a loss of profit. Never fail to check a potential tenant’s references, rental history, income statement, credit score, and background report.

To retain your (good!) tenants and keep turnover to a minimum, be sure to diligently follow through on repair requests, relay any relevant property information, and make yourself available to your tenants without being overwhelming.

Raise Rent (Strategically)

There’s no shame in raising the price of your rental property if you need to stay in order to stay in business, as long as it’s done so fairly and within reason. If you’ve had a tenant around long-term, it’s not unfair to slightly raise their rent to reach it closer to the new market value. Remember that moving costs tenants money as well, and if their current rental offers a better value than a new rental, security deposit, and moving expenses, you’ll still have the upper hand. Having the respect of your tenants and explaining the reason behind the rent raise (such as offsetting HOA fees, wanting to upgrade the property, etc.) doesn’t hurt, either.

Be sure to research rental prices in your area to avoid setting an arbitrary price by using sites such as Rentometer. Some states impose fair housing laws which prohibit increasing rent beyond reasonable rates, but you may find that you have enough room to increase your revenue a small amount each year (1%-3%) while still remaining competitive.

 

Source: sustainablebusinessforum.com

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These Are the 15 Worst Places to Buy a Vacation Rental Home

Mon, 04/30/2018 - 4:57pm

Thinking about buying a home in your favorite vacation destination? For some buyers, this can be a smart investment move as a study by Rented shows some places provide a pretty sweet return on your investment.

However, buyer beware. Some of the hottest vacation spots actually provide the lowest returns. Researchers believe tough regulations, high prices, and killer property taxes may hamper a vacation homeowner’s ability to get a decent return on rental income.

Rented compared real estate price, local rental rates, insurance, taxes, maintenance costs, and overall destination popularity to assign an ROI score from 0 to 100 for each location. Which destinations performed the worst? You’ll be scratching your head about No. 1.

15. Honolulu, Hawaii
  • ROI score: 18.6

The average short-term rental income on a home in Honolulu is about $39,047, according to Rented. The median home value in Honolulu is about $662,636, according to Zillow with home values rising 2.9% year over year.

14. Nantucket, Massachusetts
  • ROI score: 17.9

Although the estimated short-term rental income is about $111,691, Zillow reports the median home value on the charming island is a staggering $1,520,692. Values have risen 5.6% since last year making this an expensive purchase.

Next: You might catch mega-producer James Cameron hanging out here.

13. Crested Butte, Colorado
  • ROI score: 17.2

One reason gorgeous Crested Butte makes the list is because home values have skyrocketed by 27.6% since last year, according to Zillow. Median home value is about $682,578 and you can get an estimated average of $53,225 in short-term rental income.

12. Beaver Creek, Colorado
  • ROI score: 15.9

The median home value in Beaver Creek is about $725,000, according to Berkshire Hathaway Home Services. Estimated short-term rental income is approximately $95,016, which makes owning a vacation rental home in this highly desirable ski destination pretty pricey.

11. Long Island, New York
  • ROI score: 14.8

Long Island is a large span of land, which also includes the exclusive Hamptons area. Generally, median home values on Long Island are about $383,869, according to Zillow. And you can expect to see short-term rental income around $13,226.

But, go to the tip of the island and hit the Hamptons, Montauk area and you are looking at median home values up to $1,293,800.

10. Oklahoma City, Oklahoma
  • ROI score: 14.8

Homes in Oklahoma City are relatively affordable as the median home value is $126,566, according to Zillow. Although values increased 4.2% since last year, values are still lower than the national average of $213,146. Short-term rental income is an estimated $22,693.

9. Ponte Vedra, Florida
  • ROI score: 14.2

Located outside of Jacksonville, Zillow reports that the Ponte Vedra market is ice cold, making it a buyer’s market. Median home values are $498,659, up about 8% since last year. Now might be the time to house hunt as Zillow anticipates market values will rise another 4.3% within the next year. Estimated short-term rental income is about $14,223.

8. New York, New York
  • ROI score: 12.8

Prices vary depending upon whether you are purchasing a vacation home in Manhattan, a nearby borough, or elsewhere in the state. General median home values in New York are $299,093 and prices rose 13.8% since last year, Zillow reports.

However, digging deeper, the median home value in the metro area, including the city is $431,570 with prices rising 10% since last year, according to Zillow. While the general New York market appears to be healthy, Zillow reports the metro area is cold, which could be a boon for buyers. Short-term rental income, specifically in the metro area is about $68,505.

7. Baltimore, Maryland
  • ROI score: 12.5

This market is cold, according to Zillow with median home values at $108,844. Although values rose by 24.2% and are expected to rise again next year by 11.4%, it is going to be tough to generate decent short-term rental value. Rented estimates rental income to be about $7,916.

Next: Tom Cruise loves to relax here.

6. Telluride, Colorado
  • ROI score: 12.1

Home values are pretty high in Telluride as the median home value is about $784,830 according to Zillow. Values rose 12.9% since last year and homeowners can possibly earn an estimated $75,464 in short-term rental income.

5. Park City, Utah
  • ROI score: 11.9

Median home values actually declined slightly in Park City, although values stand at about $679,189, according to Zillow. Estimated short-term rental income is about $28,909.

4. Naples, Florida
  • ROI score: 11.6

Homes are pretty pricey in the Naples vacation area, with Zillow reporting the median home value being $808,091. This value represents homes located in the typical vacation area, however the Naples market has a general median home value of $290,737. Estimated short-term rental income, most likely from the vacation home market is about $31,562.

3. Martha’s Vineyard, Massachusetts
  • ROI score: 10.2

Median home values on Martha’s Vineyard can vary from $781,885 in the Vineyard Haven metro area to $871,701 in Edgartown. However, other areas on the island, like Chilmark, command an even higher median value of $1,575,603. On average, the estimated short-term rental income is about $34,175, however certain areas on the Vineyard may produce a higher rental return.

2. Palo Alto, California
  • ROI score: 10

Median home value alone may scare most buyers from the market as Zillow estimates values to be $3,336,418. Values rose 18.6% from last year and are anticipated to increase 9.2% next year. Although short-term rental income is estimated to be about $75,826, it may not be enough if you are paying $3 million for your crib.

Next: Who’s who of stars converge here every winter.

1. Aspen, Colorado
  • ROI score: 9.9

The very worst place for a vacation return on investment is Aspen. While you can get top short-term rental dollar at $93,122, Zillow’s median home value in this area is $1,359,558.

 

Source: cheatsheet.com

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Evicted Over $49: What Happens When Seattle’s Poorest Tenants Can’t Make Rent

Mon, 04/30/2018 - 4:50pm

Dominick Andrus fell behind on rent. The two-week “pay or vacate” notice landed on his apartment door in February. He owed $155.20.

For others, it’s been less: $49, $50, $95.

Andrus lives in a beige seven-story Capitol Hill apartment building owned and operated by the Seattle Housing Authority (SHA). He spent three years waiting for a space in Seattle’s rare public housing. Now that he’s there, he lives precariously. Partially blind since birth, Andrus lives off of Social Security and food stamps. He readily admits that he’s missed rent before, sometimes because of unexpected bills. This time, he says, his food stamps disbursement decreased and he fell behind. When he did get the money together to pay his rent in March, SHA had already filed a case against him in King County Superior Court.

“They were giving me an option. ‘You can move out if you want to,'” Andrus says. “I have no place to live.”

Eviction is a destabilizing experience for anyone, but the stakes for those in public housing are particularly high. SHA and the King County Housing Authority (KCHA) primarily serve people making $28,800 or less for a family of four. Rent is usually set at 30 percent of income. Because of that, public housing tenants can face eviction for financial sums that appear surprisingly small but can quickly become insurmountable.

Weighing a potential eviction, Andrus speaks in quick, clipped sentences, eager to get the conversation over with. “It’s been stressful,” he says. “I’m trying not to think about it.”

Andrus is one of hundreds of public housing tenants in Seattle who have faced possible eviction in the last five years. During that time period, SHA initiated evictions against tenants 473 times, according to a review of court records. Last year, that worked out to an average of two eviction cases filed per week. SHA operates about 8,000 housing units. In comparison, KCHA filed 84 eviction cases for its 3,700 units of low-income subsidized housing. (KCHA also owns thousands of units of higher income housing, where separate property management companies handle evictions.)

Public housing tenants represent a unique corner of Seattle’s affordability crisis. With rents based off of income, tenants sometimes pay as little as $100 a month. In the private market, meanwhile, the median Seattle renter now pays $1,448. The city has joined the list of the five most expensive big cities for renters. Nearly half of renters here are cost-burdened, meaning they pay more than 30 percent of their income on rent, and 22 percent spend more than half their income on rent.

For those lucky enough to sign a lease with Seattle Housing Authority, getting kicked out can be financially disastrous.

The ripple effects of eviction are particularly severe in public housing cases. Back rent, legal fees, and other charges add up quickly. One tenant who fell behind $95 ended up owing the housing authority nearly $2,000. Nonpayment of those debts can effectively lock tenants out of both private and public housing. Meanwhile, legal representation, which can improve outcomes for tenants facing eviction, is hard to come by in housing court. The volunteer attorneys who take on eviction cases operate on a shoestring budget.

For all these reasons, advocates say Seattle should work more with tenants who can’t make rent. Otherwise, many will wind up on the street.

“You’re essentially resigning these people to homelessness,” says Xochitl Maykovich, a tenant organizer with the Washington Community Action Network. “And you’re resigning people who are already vulnerable.”

***

Andrus’s case ended with good news, for now. SHA cut a deal requiring him to pay his rent and follow on-site rules. Other cases end with less favorable outcomes.

Over five years, about 56 percent of SHA’s 473 eviction cases resulted in a sheriff’s order evicting the tenants. Among KCHA cases, about 71 percent resulted in evictions. The rest had their cases dismissed or settled. In those cases, some reached an agreement to pay rent. But other times tenants agreed to leave willingly, meaning they were still left to find housing.

By number of units, Seattle’s public housing is dwarfed by that in larger cities like New York. Yet, while some tenant advocates in Seattle are questioning public housing evictions, New York’s housing authority faces the opposite criticism.

Last year, New York City inspectors criticized the city’s housing authority for not evicting enough tenants.

New York City Housing Authority operates 176,066 public housing apartments. The agency began eviction proceedings against 942 people in 2014, but evicted only 45 of them, a 40 percent drop from 2011, according to media reports. In 2017, SHA filed 111 eviction cases with 54 ending in eviction, according to court records.

Edmund Witter, managing attorney at King County’s Housing Justice Project, knows both housing authorities well. He moved to Seattle from New York, where he also represented tenants. Witter says he’s been shocked at what he’s seen in Washington.

The laws and legal culture in New York are far more favorable to tenants than in Washington, Witter claims. He says New York judges and lawyers were more willing to give tenants time to catch up on rent before evicting them. And in Seattle, he argues SHA is particularly aggressive.

“[The idea that] the tenant needs to learn something from, god forbid, being poor—that’s in the culture here,” Witter says. “That’s a problem in the SHA culture. It’s a problem in the court system.”

***

Getting behind on small amounts of rent can quickly snowball for public housing tenants, court records show. While some tenants were evicted after falling six or more months behind on rent or for alleged misbehavior, other cases began with small sums.

By the time SHA evicted one tenant last summer for owing one month’s $49 rent, she owed another $400 in late fees, eviction and process server fees, and more. Another tenant faced eviction after failing to pay $95 in rent. She ended up owing more than 15 times that. By the time she was evicted, the tenant owed $350 for attorney fees, $133 for a sheriff’s fee, and nearly $1,000 in sundry charges including utility charges, late fees, and eviction and process server fees.

Last fall, SHA filed a case against a 20-year-old mother of two who the agency said was behind on rent by $255. SHA sought more than $1,400, including $444 in back rent, $350 in attorney fees, and a $133 sheriff’s fee. When the woman wrote to the court asking the court to dismiss the judgment, she said she missed her court date because she was on medications for the flu and bronchitis and was disoriented. Two months later, SHA agreed to allow her to stay. By that time, she owed a total of $2,761. A nonprofit helped her pay.

Late last year, SHA prepared to evict another tenant after he failed to pay two months of $226 rent. When a process server arrived to issue the eviction notice, there was no answer. The server realized there had been a fire in the unit, and a neighbor said the man had not been living there since the fire, according to court documents. SHA then amended its legal filings to hold him liable for $100,000 in damages to the apartment. The court has since dismissed the case.

KCHA uses outside counsel to pursue evictions. SHA has a lawyer on-staff. Yet both agencies charge hundreds of dollars in attorney fees.

Those fees can have lasting effects for tenants. Eviction proceedings, whether they’re eventually settled or result in eviction, will almost always show up on a tenant’s screening report the next time they apply for private or public housing. The debt follows them, too. It can hurt their ability to receive housing assistance in the future.

Federal law allows housing authorities to consider past evictions when accepting new tenants. The US Department of Housing and Urban Development also requires housing authorities to report debts tenants owe. Other housing authorities can see those debts when considering new tenants. SHA’s admission policies state the agency will not accept tenants who have outstanding debt to any housing authority unless they are up to date on a repayment plan.

When the sheriff’s deputies told Sarah Stewart she had five minutes to leave her Green Lake apartment, she grabbed her medications, her laptop, and her laundry basket because she knew it had one of her work uniforms in it. She carried those belongings to her 1998 Honda CR-V and has been spending most nights in her car ever since.

Stewart spent months battling with SHA before her eviction in March. She says the agency miscalculated her rent based on her income and unfairly increased her rent after she’d already signed a lease. SHA disputes Stewart’s claim and in court records has argued it accurately based her rent off her income.

Stewart has a degenerative chronic illness that prevents her from working full-time. She makes about $1,100 a month. In court documents, SHA claims Stewart failed to pay two months of rent. After she signed an agreement to repay the back rent, she still did not make her rent, according to the documents. SHA issued Stewart an eviction notice in October. After months of volleying in court, Stewart finally prepared for eviction in March. Now she spends her days working, visiting meal programs and other social services, and sorting through the belongings she hurriedly moved into a storage unit. Between back rent, attorney fees, and the fee for the sheriff to evict her, Stewart now owes SHA nearly $2,500. Until she agrees to pay that, Stewart will have difficulty accessing other types of subsidized housing.

For now, she looks each night for a safe place to park, usually settling in Ballard. She’s met other people sleeping in vehicles after losing their homes or struggling to pay high medical bills, she says. “There are definitely a lot of others out there like me.”

***

In an SHA-owned Central District town house, Kimberly Mustafa is worried about eviction, and not for the first time. Mustafa moved to Seattle with her ex-husband, but says she left him because he was violent toward her. She now lives in SHA housing with her 17-year-old daughter, primarily off Social Security. Her check arrives on the second Wednesday of every month. That means her rent, which is due at the start of the month, is often late. Court records filed by SHA say Mustafa has demonstrated a “habitual failure to pay rent” and failed to make payments according to an agreement she made with the agency last year. According to those records, she owes $1,683 in rent and $1,726 in sundry charges, plus to-be-determined legal fees. She has now signed an agreement to leave the property by June 30.

“I never imagined a world like this for me,” Mustafa says. She says she’s seen neighbors, including one family with four kids, end up homeless after SHA evicted them. They showed up at her door, and she let them stay the night.

Mustafa, like other tenants in her situation, sought help on the third floor of the King County Courthouse in downtown Seattle. There, tenants stream into the office of the Housing Justice Project (HJP), a largely volunteer-run program that provides legal assistance for tenants. Unlike criminal cases, eviction proceedings do not trigger the right to an attorney.

Lawyers and legal aides squeeze past each other to make copies and consult managing attorney Edmund Witter on legal strategy. In the hallway, tenants gather on long wooden benches at one end of the hall, tapping on cell phones and clutching folders of paperwork. At the other end of the hallway, landlords wait with their attorneys.

Housing Justice Project lawyers hurry back and forth between the two sides, trying to negotiate agreements preventing tenants from losing their housing. They either strike a deal or make their case to a judge. Most of the lawyers are volunteers, meaning tenants almost always have a different lawyer for each step of the process, rather than one lawyer representing them throughout their case. Between two clinics in Seattle and Kent, HJP has three paid lawyers on staff. Another 70 to 80 lawyers volunteer for the project, handling nearly 2,000 eviction cases a year. The organization operates on a $350,000 budget. Although some other regional cities kick in funding and about half of HJP’s clients live in Seattle, the project gets no funding from the City of Seattle, Witter says.

A lack of legal representation can set tenants up for failure from the start. A nonscientific review of cases in Chicago found that tenants with legal representation were able to buy more time before being evicted. In New York, tenants were 77 percent less likely to be evicted when they had legal representation. Late last year, New York became the first city to grant low-income tenants a right to counsel. A report from New York City’s Independent Budget Office found that giving poor tenants free lawyers during evictions and foreclosures could cost the city between $173 million and $276 million a year, while simultaneously saving $143 million a year in homeless shelter costs.

Seattle has taken only small steps to legally equip poor tenants facing eviction. Last year, Seattle City Council member Lisa Herbold led an effort to fund a pilot program to help low-income incarcerated people access legal aid to avoid eviction and other issues. The program paired civil lawyers with public defenders to help them address “collateral consequences” of their underlying conviction. The council has since expanded the program to allow civil attorneys to directly represent clients.

Eviction is almost entirely ignored in the Housing Affordability and Livability Agenda, one of the city’s driving housing plans. In 2016, Seattle’s Human Services Department spent about $5.2 million on eviction prevention and tenant services. However, a consultant’s report on how the city spends homelessness funding warned against spending money on people facing eviction as a form of homelessness prevention. “Since most people do not become homeless straight from an eviction,” the authors wrote, the city should focus its spending on people who are already homeless or facing an imminent threat of ending up on the streets, rather than people who’ve received an eviction notice.

Mark Chattin, director of legal services at the Legal Action Center, would not comment specifically on SHA, but he said debt can drag renters down for years. The Legal Action Center focuses on preventing evictions before tenants end up in court. The organization provides legal assistance, help paying off debts, and other services. Chattin says it has historically been difficult to find much public funding for eviction prevention, as government officials instead prioritize people who are already homeless. “We could solve this problem,” he says.

***

As some tenants struggle to hold on to their public housing, thousands more wait for a chance to move in.

SHA and other agencies have encountered huge demand in recent years, with thousands of people on waiting lists for public housing.

Against the backdrop of that demand and the city’s worsening homelessness crisis, SHA and KCHA representatives say they view eviction as a last resort.

“Obviously, advocates are trying to paint SHA in some way as punitive,” SHA spokesperson Kerry Coughlin says. “It just defies logic. It’s not in our mission to do that.”

Bill Cook, director of property management for KCHA, says his agency has worked to change the way its property managers think about eviction. KCHA used to have “old-school property managers [who thought that] if someone breaks the rules… they’re gone.” In the last decade, Cook says, the agency has spent more time evaluating each case to send the message that evictions won’t be rubber-stamped. SHA staff said they offer tenants payment plans and connections to assistance programs if they fall behind on their rent.

Witter and his predecessor at the Housing Justice Project, Rory O’Sullivan, dispute that characterization. They say SHA is quick to take tenants to court and particularly unforgiving once there. Witter cited a recent KCHA case to illustrate the difference in leniency between SHA and a nearby agency. A tenant with schizophrenia faced potential eviction for refusing to let management staff into his apartment to kill bedbugs. KCHA connected with the tenant’s family to help convince him to allow them inside. The tenant got to stay. (In a separate interview, KCHA staff also referenced this case as an example of their help for tenants.)

“They’re willing to sort of work with this,” Witter says of KCHA. “They don’t want to put him out on the streets. And he is a bigger high-needs case than anyone I’ve seen at an SHA building.”

In some cases, Witter says SHA has opposed efforts to help tenants get housing in the future after they’ve been evicted. Thanks to a statewide law passed in 2016, Washington tenants can now seek “orders of limited dissemination,” which prevents eviction records from appearing on screening reports in order to make it easier to get housing.

Courts can issue these orders if the tenant wasn’t actually evicted, if they prevailed in court, or when “other good cause exists.” Landlords, including SHA, can argue against the orders, granting them a tremendous say in how easy it will be for the tenant to find new housing.

Records show King County Superior Court judges have issued orders blocking eviction records from screening reports in only a handful of public housing cases. Witter says SHA opposes the orders more often than is apparent in court records because these negotiations don’t always happen in writing. If tenants can’t pay SHA what they owe, lawyers will try to negotiate with SHA to buy them more time before having to move out. In that process, they will sometimes ask for these orders of limited dissemination. But SHA is often “adamantly opposed to these orders,” Witter says.

James Fearn, SHA’s general counsel, says there’s debate within his organization about whether to argue against these orders at all.

“There are people who very much favor resisting them when there has been an eviction of a person who was what we felt to be a threat to other residents,” Fearn says. “Then there are people who say never under any circumstance, that SHA houses poor people and it should never take a position where it could prevent a poor person from being housed.”

The issue cuts to the heart of SHA’s dual role as both a landlord and a service organization.

“SHA is predominantly a landlord,” Fearn says.

SHA’s mission statement says the organization’s goal is to “enhance the Seattle community by creating and sustaining decent, safe, and affordable living environments that foster stability and increase self-sufficiency for people with low incomes.”

“I hold them to a different standard,” Witter says, emphasizing that SHA is a public agency. “Their behavior is supposed to be a little bit more equitable.”

 

Source: thestranger.com

The post Evicted Over $49: What Happens When Seattle’s Poorest Tenants Can’t Make Rent appeared first on AAOA.

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4 Landlord Mistakes That Almost Cost Me My Marriage—and the Lessons I Learned

Mon, 04/30/2018 - 4:41pm

It wasn’t the Yorkie that did his business all over the hardwood floors. It wasn’t the squatter, or the tenant who thought lightbulbs for his personal lamp were included in his rent.

I can’t remember exactly what it was that pushed me over the edge, but after 12 years and numerous missteps in owning and renting out four properties with my husband, John, I knew we had to get out.

Over that time, we learned that property management is a massive endeavor for a couple—one that has the potential to intrude into all areas of your life, including your marriage.

“A rental property is like any other business, so partners need to be in agreement that it can work for their family,” says Josh Hetherington, a licensed marriage and family therapist with Chicago Center for Relationship Counseling’s Northside location. “Can the couple afford whatever happens financially, logistically, and emotionally?”

I sure wish we had talked to Hetherington before we bought our first property. Ultimately, we got out of the rental game, deciding that it wasn’t healthy for our finances or our relationship.

The silver lining here is that our landlording misadventures weren’t a total loss. Those years spent bickering with my husband and dealing with crazy tenants actually taught me some valuable lessons about property management—and marriage. So if you’re contemplating buying and renting out a property with your significant other, don’t make the same blunders we did.

1. We overlooked major details

When a tenant allowed her boyfriend to move in, we didn’t rush to get him on the lease. Eventually, she vanished in the night, but the boyfriend remained as a nonpaying squatter. It was an epic failure on our part. Fortunately, we were able to convince him to leave without taking formal legal action.

Lesson learned: Landlords must commit to detail, especially when it comes to lease agreements. A detailed lease will help clarify and protect all parties involved, says Carrie Tangorra, an agent with First Weber Realty in Monroe, WI, who has owned rental properties.

Attention to detail, of course, is also important in a marriage, from squaring away the mundane but crucial details of insurance policies to drawing up a will and to discussing where you’ll spend the holidays. I learned that John and I had overlooked a lot of these important details, despite the fact that we had young children. It’s amazing we didn’t have more calamities than we did.

2. I wasn’t all in

The rentals were John’s idea, and I went along reluctantly. And when the going got tough, I bailed—at least emotionally. I still helped my husband with the day-to-day tasks, but did so from my first-class seat on the self-pity train. My resentment grew the day I had to shovel 6 inches of snow from the rental’s sidewalk, because my husband, who was off at work, had let the tenant off the hook for snow removal.

Lesson learned: Make sure you are both invested from the start.

“When one person in a couple is ambivalent about a choice that involves shared resources, time, and money, there will almost always be ongoing conflicts about it,” Hetherington says.

Managing residential property is a huge undertaking. There are bills to pay, tenants’ backgrounds to check, clogged pipes to fix. It’s a big job, even for two people, and especially when you have other full-time employment. Both partners need to be ready to pitch in.

3. We didn’t clearly define our roles

Ours was a loose arrangement: John would take care of property maintenance and I would handle paperwork. But we left tenant management—arguably the most challenging part of being a landlord—out of our equation. So every time we needed to talk to a tenant, we tried to palm it off on the other. That led to frustration all around.

Lesson learned: When you manage property with another person, know who’s doing what—and hold each other accountable. “If the landlords have a clear conversation about division of labor around tenant management, things will go much smoother,” says Hetherington.

I learned that we had equally blurred lines regarding roles in our marriage. We had the same loose arrangement in our personal life: John took care of home repairs and the yard, and I took care of, well, everything else. By not clarifying our duties in our personal lives, I ended up feeling overworked and under-appreciated. It was a recipe for discontent.

4. We weren’t realistic about finances

A vacant unit is the easiest way to lose money.  So we sometimes wound up leasing to questionable tenants instead of letting the apartment sit empty. Big mistake. Some of those bad tenants caused damage that far exceeded their security deposits.

Lesson learned: In addition to the mortgage and property taxes, “include a budget item for down-time (vacancies) and overall maintenance of the property,” says Tangorra. Budget for any potential setback, including natural disasters, replacing the appliances or flooring, landfill costs, and legal fees.

And be realistic about repair and maintenance costs as well. When the hardwood floors in one of our units became scuffed-up and unsightly, I favored slapping down cheap carpeting, while John saw the value in spending the money to restore them. If we had only been able to compromise—like restoring the hardwood floors in the front rooms and replacing the carpeting in the bedroom—things might have gone more smoothly.

I eventually learned that the power of compromise was also lacking in my marriage: We seem to function better when it isn’t my way or my husband’s way, but instead embraces an outlook that includes the best of both points of view.

Ultimately, John agreed the rentals were more than we wanted to handle as a couple. Fortunately, our finances survived. And our marriage did, too.

Source: realtor.com

 

 

The post 4 Landlord Mistakes That Almost Cost Me My Marriage—and the Lessons I Learned appeared first on AAOA.

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What People Value In Property Management Companies

Mon, 04/30/2018 - 4:39pm

The right property management company in real estate can be the key to your success. There are a few things that you should look at while researching a property management company; finding which properties a company has acquired already, experience and time in the industry, client and association referrals, and licensing/certifications are just a few things that are important to start with when starting your research.

A property management’s reputation should be held at a high standard when choosing the right company to move forward with. The way a management company conducts business in the past and present will reflect the type of business they conduct. Another factor to consider is the tenants, no one wants troublesome tenants that could cause potential problems. Going along with a company’s reputation is their experience in this industry, handling properties with the upmost respect will show their dedication and work ethic. Lastly, clear policies and procedures are important when having set regulations to keep you and the company informed from the very beginning.

Resource: 

Source: realtybiznews.com

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