The Latest Trend That’s Changing Student Housing

Written by Landlord Property Management Magazine on . Posted in Blog

By Ian Ritter | Shared post from the Hightower Blog

student housing next gen

Student housing facilities have changed a lot over the last several years. Tech-enabled, communal living spaces have replaced the stacked double rooms that once defined the college dorm.

But, the newest trend is that some student-housing developments are now adding retail and other property sectors to their project, effectively creating a mixed-use arena. This marriage makes sense because student housing has become more of a mainstream commercial real estate product type.

The reason for this change is a spike in undergraduate enrollment, which is attracting both developers and various retail  / restaurant tenants. According to the National Center for Education Statistics, between 2000 and 2010, undergraduate enrollment rates increased by 44 percent. And even more growth is projected. The organization sees a 14 percent increase from now until 2025 for full-time students, while part-time students are reportedly rising 15 percent.

The commercial real estate industry is taking notice.

How to go mixed-use

One recently announced example is in downtown Orlando, where the University of Central Florida’s new student housing complex is going up. The $90-million development, which will have between 14 and 15 stories with 600 to 700 units, will also include 10,000 square feet of retail. Meanwhile, also in downtown Orlando, Valencia College is planning a student housing facility, which will also have 50,000 square feet set aside for a restaurant and staging area for the school’s hospitality program.

This fall, a mixed-use student-housing project is set to open at Johns Hopkins University, in Baltimore. Below will be 30,000 square feet of retail and restaurants anchored by a CVS. Additional tenants include Honeygrow, a regional Northeast fast-casual chain that serves food with local ingredients, and a local ramen shop.

In downtown Greenvillle, N.C., the home of East Carolina University, mixed-use student housing is one of the centerpieces of Greenville 2020, a public-private partnership intended to shape the development future of that city. Part of the $1 billion in total investment, which includes public-transportation improvements, retail, restaurants and breweries includesCampus-Edge. That project will reportedly have 20,000 square feet of retail space underneath five stories of student housing.

These types of developments aren’t limited to housing strictly for students, but are going up where students are major tenants along with other renters. Boston, for example, has several universities scattered throughout its metro area. A development in the Downtown Crossing area looks to target both. A 72-story tower being proposed in Downtown Crossing, will be a mixture of residential and office, and developers Millennium Partners are banking on students taking up much of the apartment space in the building.

Still, not a perfect marriage

A recent Urban Land Institute (ULI) panel on student housing addressed the trend. J. Wesley Rogers, president and CEOLandmark Properties, said that putting retail under the housing units can provide a stronger yield for some assets. In Gainesville, Fla., for example, retail rents in one of the firm’s properties are commanding a strong $50 per square foot.

But Rogers warned that putting the two product types together doesn’t always work. For one thing, some municipalities won’t allow the combination due to zoning issues. Plus, Rogers pointed out, a good student-housing location doesn’t always mean a good retail location.

So, making every student-housing development a mixed-use scenario doesn’t necessarily make sense. But if it is in a dense area near a campus, or in an urban environment, where some universities are located, there isn’t much downside. Student housing in these locations not only has a built-in customer based above the asset, but college towns in many locales are similar to the 24-hour environments in big cities that retailers and restaurants increasingly crave.

ABOUT
Ian Ritter
Ian Ritter is the former Content Director for Connect Media, a Web site that covers commercial real estate nationally, with a focus on California. He is also the Online Content Manager engineering firm GRS Group and writes blogs about national industry trends. Formerly, Ian was the Retail Editor at GlobeSt.com, among other titles over nearly a decade, and was also an editor at the International Council of Shopping Centers publication “Shopping Centers Today.” He holds a Master’s degree in Journalism from Columbia University.

Six Reasons Why Investing in Multi-Family Housing is a Smart Move

Written by Landlord Property Management Magazine on . Posted in Blog

Shared post from cashflowdiary.com

mf investing

People ask me all the time if they should invest in Multi-Family Properties. If you’re one of them, my answer is ABSOLUTELY… but only if it fits your Investor Identity. The truth is though, that it has to be right for you. To help you understand that part, you first need to understand the many benefits.

Investing in multi-family properties is one of the most powerful investment strategies you can use to create astounding and consistent cashflow month after month. But that’s just one reason to invest in multi-family housing.

Here are six more:

1) Multiple Properties Under One Roof Means Easier Management

What’s more attractive… 12 single-family homes spread out across a city to manage, or 12 units under one roof? With the 12 individual properties, you may need more than one property manager; with the one building you only need one manager.

Now let’s say you have a 72-unit building. You still only need one manager on site or one property management company that will handle rent collection, tenant issues, and grounds and other management duties.

Finding a great property manager means you have to ask the right questions, and you always want to have a plan B in case the property manager or management company doesn’t work out.

Make sure you never have a single point of failure.

2) Forcing and Phasing Appreciation in Multi-Family Properties is Easier Compared to Single-Family Housing

Appreciation rarely just happens. You have to do specific things to force the value of a property up or phase in amenities and benefits to tenants which will push the appreciation up.

In single-family housing, you don’t have as many options with these activities, because there’s only so much you can do.

In a single-family home, you can slap some lipstick on the property to give it more curb appeal, or you can do a deeper rehab to make the property more functional. However, you are doing this to force the appreciation on ONE property only.

When you give your apartment building (or even a 4-plex or 8-plex) more curb appeal, fix things in the property that make it more appealing as a living space for tenants, add a nice laundry room or business to the property (if we’re talking about more than 12 doors), or revitalize a useless space to create something that is a benefit to tenants, and you will push up the value of the property exponentially. You will attract tenants to your building vs. another landlord’s building. That’s what you want. Plus, you’re creating more and steadier cashflow, because your tenants will want to stay.

3) You Can Create Even More Cashflow in The Multi-Family Property

This is pretty exciting stuff, because there are ways to create cashflow beyond rents. Take the last point, for example.

What if you add a nice laundry facility to the property? Say you have a one-bedroom unit or a studio apartment in your building that you know will only invite transient tenants. What can that space become that will generate even more income month after month?

A safe, clean, well-lit laundry room with decent coin-operated machines can be a great idea. It benefits the tenants who don’t have washers and dryers in their units and would normally have to lug their laundry to the nearby Laundromat. Why make them do that when they could have the laundry room on the property? They are using coins either way. Why not let them feed those coins into your machines? The cost of the machines will be covered quickly, and you can get great deals through bulk purchasing.

Make the space clean and safe. Consider adding a security camera to keep out any bad elements, and you have a winner. In fact, that’s called a win-win. You win; your tenants win. You’re creating a space that raises the quality of your tenants’ lives, which feels really good. (The laundry room is just ONE thing you can add. There are many more amenities to add that bring additional cashflow in a variety of ways.)

4) There Are Great Tax Breaks that Come with Investing in Multi-Family Properties

When you provide housing it’s a good thing. The government thinks so, too.

The city in which the property is located likes the idea, because you are helping the residents of that city by providing clean, safe, affordable housing to people who might not otherwise find it.

As a result, you can gain all sorts of tax incentives… also known as tax breaks. You can take a whole lot of deductions because this is a business. You are running a business of Real Estate Investing. You can depreciate all sorts of things in an apartment building or rental property, and that depreciation takes place over more than two decades… sometimes three decades, depending on whether the property is classified as residential or commercial. The size of the property and other factors dictate the classification.

The long and short of it is that when you invest in multi-family properties, you’ll want to get a very competent CPA and/or CFO to help you get as many deductions and tax incentives possible. It could be that you can even get government grants to offset upfront costs. The benefits on this side can be massive. You could end up paying zero property taxes. That would save you money in a big way, right?

5) Multi-Family Properties Hold Their Value

Once the property is rehabbed, and you’ve made it attractive to tenants, it will also attract other investors who will be interested in buying the property later (if you ever want to sell). You’ve put in place everything required to attract and retain tenants. That means steady cashflow, which is mighty appealing to investors.

You have to make sure to maintain your property so it retains its value over the long haul. The grounds must be kept up, minor repairs performed in your ongoing maintenance plan, and really good maintenance people must be in place. Find the best by asking the best questions. Do you due diligence on the people wanting to work for you.

You want maintenance people and grounds keepers who share your desire to provide clean, safe housing. That’s part of what they are responsible for… maintaining a good living space for the tenants. You need to learn the difference in workers’ mindsets. It’s a sure bet that theirs will reflect yours. You want motivated workers. Learn how to adequately motivate them to not just care for the property but also care about the people living there.

6) Investing in Multi-Family Housing Allows You to Change Lives

If you create a space where families can thrive, that’s a perk. You could go into Wal-Mart-type areas where you see lots of opportunities for improvement. In apartment buildings and smaller multi-family properties, you’ll see opportunity in the form of boarded-up windows, overgrowth of the grounds, graffiti, messed up swimming pools, filthy laundry rooms and dwellings that need a whole lot of help.

How good would it feel to get that property, rehab it, solve the problems, attract families that need clean, safe, affordable housing, and then positively impact whole zip codes? You can do exactly that if you have the commitment and the right teams in place to help you through the rehab process. You’ll need other team members, too, but you can learn what that looks like before you begin.

Obviously, investing in Wal-Mart-type areas isn’t for everyone. Fortunately, there are plenty of other levels in the multi-family investing space. You can find properties that fit your Investor Identity. Then you can affect change, and earn great cashflow at the same time. That’s a great accomplishment.

Knowing that you have the ability to change lives is something that makes you feel good.

Tax Alert! New Proposed IRC 2407 Regulations May Impact Your Estate Planning Strategy

Written by Landlord Property Management Magazine on . Posted in Blog

By Michael Trainotti

TaxAlert

It has been over two weeks since the U.S. Treasury Department issued on August 4, 2016 proposed regulations under Internal Revenue Code Section 2704 that, when finalized, may substantially increase your wealth transfer taxes by blocking a common estate planning strategy. The new regulations would only apply to individuals whose family assets are more than $5,450,00 or married couples above $10,900,000.

Some commentators believe that if they are finalized this would be the most significant change in the estate planning area since 1986.  You may have read that planning ahead is key. Since the new regulations will not be finalized until early next year, everyone who would be subject to estate taxes should strongly be thinking about making gifts this year based upon the planning example below that will not be available after the new regulations are finalized.

Historically, taxpayers could reduce the value of their taxable estates by placing assets in partnerships, LLCs or closely held corporations and claiming lack of marketability and/or lack of control discounts. These discounts typically reduced the value of the ownership interests by 25% to 45%.

Thus, for example, placing $10 million worth of assets inside a closely-held entity might reduce the value of the estate by $2.5 million to $4.5 million and, given the current 40% estate tax rate, reduce the estate tax payable by $1 million to $1.8 million.

The above example is also true for making current gifts or sale of assets that you believe will appreciate in value over your life expectancy.  Gifting or selling of assets freezes the value of your assets today and shifts the appreciation to other family members.  The sale concept is true for the sale of assets to children, especially if there is a sale to a grantor trust where there is no recognition of income or the assets sold has a high basis and no or little income tax is recognized.

I will be preparing an article shortly explaining in more detail some of the planning opportunities that can be key if the new regulations are finalized. I want to point out that there have already been comments that the proposed regulations in current form, if finalized, may violate the congressional legislative history of allowing discounts, ignoring state law provisions governing business entities and general valuation principals occurring daily in the marketplace.  If that is the case, legal challenges will be a certainty.

You should contact your advisor(s) regarding whether or not the new proposed regulations may have any impact on your family assets if they become finalized.

Don’t miss this Important Tax Article in the September 2016 Issue of Landlord Property Management Magazine!

Michael Trainotti, Inc., A Law Corp
400 Oceangate, Suite 520
Long Beach, CA 90802
Work: (562) 590-8621
Fax: (562) 590-8181
email: mike@trainottilaw.com
website: www.trainottilaw.com

The Landlord’s Guide to Property Safety

Written by Landlord Property Management Magazine on . Posted in Blog

By Brentnie Daggett

A pair of hands holding a small house. Real estate or insurance concept.

One of the most basic responsibilities for housing providers entails landlords and property managers maintaining safe and habitable living conditions for their tenants.

Most states have requirements to ensure that renters are provided with safe and livable homes. These basic rights, known as the implied warranty of habitability, originated as a result of court decisions in the late 1970’s and is the base structure on which all landlords should develop any safety checklists used.

So what exactly does this mean in terms of provisions? The property owner must ensure that: basic building structures are intact, common areas are safe and clean, there is reasonable access to cold and hot water, trash receptacles and pickup is available, living space is free of vermin and (in most states) that the space is safe from foreseeable theft or criminal intrusion.

Since safety is such a crucial aspect of managing rentals, utilizing a safety checklist will help you address any issues before they become a safety risk or a legal liability.

Indoor Safety Feature Check:

  • Gas Safety: annual safety check on each appliances, pipes or flues that utilize gas
  • Electrical Safety:
    • Ensure outlets are in working order and panels are secure. Do extra inspections during turnover to ensure past tenants did not make unauthorized electric alterations.
    • Check each light to ensure switches are working smoothly, delay could indicate a fire-hazard.
    • Inspect dryer vents, and ensure that exhaust is being released while the dryer is running. A blockage could cause a fire, and might need to be handled with a vacuum hose or by a professional.
  • Fire Safety:
    • Ensure all smoke and carbon monoxide alarms are in working order, double-check this during any routine maintenance, as some tenants will not change batteries or take batteries out.
    • Ensure tenants have access to fire escape routes
    • Supply fire extinguisher for residents (Depending on State/Local fire codes)
    • Unclog chimneys so that poor ventilation does not pose a health or fire risk.
  • Structural Safety:
    • Check that walls, stairs floors and other structure is sound.
    • Manage any environmental toxins (mold asbestos and lead paint) appropriately within the space.
    • Check for cracks or holes in the walls or ceilings that can lead or collapse, leaks, or infestations.
    • Check that doors close and open properly, difficulty evacuating through doors poses a fire hazard. Additionally, doors leading outside should have working locks that deter theft or intrusion.
  • Appliance Habitability:
    • Verify that all sinks, showers and toilets have proper water pressure and no leaks. Also, check your water heater’s temp and safety relief valve once a year to remove sediment buildup that can cause failure.
    • Have your HVAC system professionally inspected, and remind tenants to change air filters as this can prevent expensive repairs.
    • Verify that kitchen appliances work properly. Check for potential leaks, that burners ignite properly, and that the refrigerator stays at a proper temp.

Outdoor Safety Feature Check:

  • Walkway Safety:
    • Provide exterior light source(s) to ensure visibility and deter criminal activity.
    • Trim landscape to prevent overgrowth obstructing walkways and allowing for criminal hiding places.
    • Make sure all railings are secure and there are antislip or caution guards in place. Before every wet season do a routine check to ensure tenants will not slip or tumble when grabbing a failing railing.
  • Structure Safety:
    • Check for overgrown tree branches or roots that can cause structural damage, hire a professional to address an area, if need-be.
    • Hire a licensed professional inspect the roof for missing or loose shingles, even slight damage can lead to deterioration of the structure’s insulation, wood or drywall. This can make electrical, plumbing and HVAC systems vulnerable.

To ensure a safe property throughout tenancy, provide seasonal safety inspections and be sure to provide an easy way for tenants to submit maintenance requests so you can address them any health or safety concerns appropriately.

Always to respond to any requests in a timely manner and to take them seriously. This will ensure that you will not only be providing the legal habitability and safety requirements, but also encourages tenants to place a request before a minor issue becomes a major–and expensive–repair. If major repair is not addressed appropriately, some states allow tenants to withhold rent (or even sue).

Due to the serious nature of maintenance repairs in regards to safety, save yourself a sticky situation in the future and keep records of any safety inspections you perform. This paperwork will serve as legal documents in the event that anything happens to your rental, so be sure that you have electronic copies–particularly if your office is within your rental buildings. Your rental software should offer unlimited cloud-based storage for these documents, making them accessible in the event you need documentation of the properties condition in the future.

Author Bio

Brentnie Daggett HeadshotBrentnie Daggett

Brentnie is a writer and contributor for Rentec Direct, providers of management software and tenant screening services. Brentnie is always ready to share relevant industry news and tips for new and experienced landlords alike. To learn more about Brentnie and to discover more great tips for rental management visit www.rentecdirect.com.

Millennials Actually Like the Suburbs

Written by Landlord Property Management Magazine on . Posted in Blog

By Tierney Plumb | Shared Post from the Hightower Blog

millennials in the subs

For the past few years, the media has churned out a steady stream of stories describing how city-loving millennials are driving a re-urbanization of the U.S.

But not so fast. As it turns out, the white picket fence life is still desirable for the young age group, according to a new report from CBRE.

Census data shows domestic net migration out of cities and into suburbia. We chatted with the author of the report, CBRE director of research and analysis Darin Mellott.

By the numbers

The most recent annual data from 2014 shows that 2.8 million people moved from the suburbs to cities that year, but 4.6 million did the opposite. That means the death of suburbs isn’t nigh.

“This news is quite shocking to some people because of how much life that prevailing narrative that has taken on its own,” he said.

Millennials, or those mostly born between 1980 and 1995, make up the largest age group in the country and the biggest segment of the U.S. workforce. But census data does disagree with the media when it comes to where they actually live and where they have been moving to.

About 30% of millennials live within urban areas. The remaining balance doesn’t appear to be rushing to city centers; in 2014, 529,000 people between 25 and 29 moved from cities to suburbs, while only 426,000 did the reverse.

For the younger end of the spectrum (ages 20 to 24), the flow’s direction was even more pronounced, with 554,000 becoming city dwellers and 721,000 trading cities for ‘burbs (keep in mind some of that represented relocation into parents’ basements).

Among the oldest millennials and the tail end of Gen X, negative net migration was even more: 1.2 million people aged 30 to 44 moved from cities to suburbs, while 540,000 did the contrary.

So what do they want?

Space and an urban feel rank high on the list. A recent survey showed that 81% of young people (classified as millennials and those born in the late 1970s) want three bedrooms or more in their place.

That preference means suburbs would be the more likely pick when it comes down to family formation and affordability, he said. “It’s hard to afford a three-bedroom in Manhattan.”

In another study, nearly two-thirds of millennial-aged respondents self-identified as suburbanites or rural people.

Still, country mouse types aren’t everywhere. Millennials love urban perks, like access to public transit, shops, restaurants, and offices. Just because millennials appreciate city living doesn’t translate into demand for downtown real estate.

Suburbs can grow on younger demographics once injected with urban qualities.

In San Jose, for example, mini mixed-use developments like Santana Row have plunked down a myriad of restaurants, bars, and housing that replicate the environment found an hour north in San Francisco. Similar redevelopments on the outskirts, dubbed “hipsturbia” and “urban burbs,” are popping up more and more.

Why the increase? As millennials leave cities, they still crave certain amenities and more developers are reacting to that request, he said.

Western cities like Phoenix and LA are seeing pockets of strong suburban activity, he said, and that same phenomenon is occurring in suburbs of New York and New Jersey.  “Those pockets share common characteristics—that is suburban areas with urban qualities,” said Mellott.

Exceptions to the rule

Of course, the report doesn’t aim to make a blanket statement across the board about millennials and suburbia; keep in mind no two property markets are created equal, and each market has its own dynamics that play out on various levels and in unique ways,

And there are definitely downtown markets across the country that have outperformed—and will continue to outperform, in some cases—suburban markets.

For example, McDonald’s Corp. recently announced plans to move its headquarters from the suburbs to downtown Chicago.

“While we are continuing to suburbanize, that doesn’t mean dynamics are negative in cities,” Mellott said.

Some big firms are realizing that an urban setting is a big selling point when it comes to attracting and retaining new talent. And in San Francisco, Silicon Valley-based Facebook is considering adding a ton of square footage in San Francisco. And LinkedIn recently tacked on an entire office building in downtown San Francisco to appeal to city lovers.

While there’s some truth to the idea of the resurgent urban core, it is also fair to say the extinction of the suburbs and millennials’ love of cities have been “greatly exaggerated,” he concluded. His study aims to dispel erroneous thinking that millennials are anti-suburb.

“We are trying to form a more informed and intelligent conversation around these topics. Suburbs aren’t dying,” he said.

ABOUT
Tierney Plumb
Tierney Plumb is a former reporter for Bisnow San Franscio. She previously worked with the San Diego Daily Transcript and the Washington Business Journal.

Tips for Turning Your Properties Pet-Friendly

Written by Landlord Property Management Magazine on . Posted in Blog

Shared post by Appfolio

pet friendly apt_2

We all know the saying: a dog is a man’s best friend. There are plenty of reasons why—they are cute and fun, and they bring comfort and joy when you need it. If you are a property manager who has a furry friend, you probably understand this already. But even if you don’t have one or are not particularly fond of them, a pet could also be your business’s best friend.

Animals are assets in attracting potential residents and differentiating yourself from competitors. The most frequently asked question from renters is “Do you allow pets?” So while a renter’s dog might not be your cup of tea, it means a good deal to their owners and therefore should mean a lot to you.

As an example, allow me to take a quick moment and tell you how AppFolio utilizes dog friendliness to propel happiness and productivity in the workplace. Trust me, it directly relates to how you can take advantage of pet friendliness in your property management business.

A Dog Friendly AppFolio Boosts Employee Happiness

The dog friendly environment of AppFolio’s offices is one of the reasons why people love working here and why they feel like they have found a home upon joining the team. Welcoming a new dog keeps spirits high throughout the day. They unknowingly foster values beneficial for a productive and close knit community; employees will occasionally reach out to coworkers for dog care which cultivates a mindset of helping one another during and outside of work hours. And when you’re having a rough day, a five-minute break with a new puppy is all it takes to bring a smile. It’s important for companies to offer perks that enable employees to have both a successful personal life and also a professional one. Dog friendliness at AppFolio promotes a happy and social atmosphere, and these points can be easily transcribed from the AppFolio setting to the Property Manager setting.

Screen Shot 2016-08-15 at 9.07.25 AM Screen Shot 2016-08-15 at 9.07.03 AM 11403337_10153073807878924_6376389284413661031_n-2

How Can Property Managers Institute Dog Friendliness

Most people’s pets are like family to them, so being told that there’s no room for pets can be enough for an applicant to walk out the door. Alternatively, dog friendliness at a property can be very enticing for a potential renter. It can be the reason that your listing initially draws their eye, but can also play a part in what keeps the renter happy and feeling at home.

Making a shift towards dog friendliness (or pet friendliness in general—this is not exclusive to dogs!) can be difficult, but also incredibly rewarding for your business. One of the most common things property managers do is to simply have a “pet interview” where they sit down with the pet and their owner. This can be a great way to make renters feel more welcomed while also helping you stay knowledgeable about the pets living on your properties. Here are three more ways that can make your transition to pet friendliness a smooth one.

  1. Educate your residents about socially acceptable pet behavior. This might seem like common knowledge, but it can be helpful to set expectations when transitioning to a pet friendly community. Having pamphlets available and providing doggie bags gives dog owners and other residents all the tools they need to live in a collaborative and successful multifamily home. Educating your residents ensures that they are up to date about the acceptable pet behavior which helps keep everyone happy.
  2. Charge a fair fee for your additional service. Accepting pets can also be used as another avenue of collecting payments. You are providing an additional service: accommodating pets. As such, it is reasonable to introduce security deposits or additional fees for pets. It might also be worth considering putting limitations on the type and number of pets. You can make the dog friendliness aspect of your business worth your time and effort by putting rules, regulations, and fees in place.
  3. Host pet friendly events to promote resident mingling. One of the best ways to avoid conflicts between pet owners and non-owners, is to host social events that encourage co-mingling. People who love pets, but who don’t own one, are more inclined to forgive their infractions if they actually know the pet. This is also a good way to introduce new members into your housing community, and  it helps both pet owners and their neighbors feel more comfortable and friendly with each other. You can use the pet friendliness of your business to bring together residents and foster a more inclusive and social community, which will in turn improve the face and feel of your business.

While pets can sometimes be a nuisance, the reality is that there are a significant number of dog owners looking to rent properties. In a 2015 All Property Management Research Report, 65% of households had pets and 42% had more than one pet.

AppFolio recently surveyed over 200 property management customers and 78% of respondents allow pets of some kind. While you can certainly set the rules—small dogs only, no cats, etc.—the number of renters who are also pet owners is too high to ignore, and catering to their specific needs or at least making them feel welcome is a great way of expanding your business.

appfolio Appfolio | Company Website | LinkedIn Connect |

AppFolio, Inc. develops Property Management Software that helps businesses improve their workflow so they save time and make more money.  Appfolio submits articles & blogs including topics of Resident Retention, Improved Owner Communication, Time Management, and more.

 

As the apartment rent rocket slows its climb, portfolios turn to Google for higher revenue.

Written by Landlord Property Management Magazine on . Posted in Blog

By Matt Easton is EVP of MultiFamily Traffic 

apartmentSEO

Regional Manager Mark Hunter found a way to stand out from all of the other properties rushing to lease apartments in Austin’s hippest neighborhood: he is using SEO and Google AdWords to skip the line and get instant access to qualified potential residents willing to sign a lease with him today without a special offer like free rent or a lower lease rate.

“I found myself questioning why my community website did not appear on Google by itself for the top keywords luxury renters in Austin were searching for,” said Hunter, whose property went from 82% occupancy to 100% with a wait list in just 120 days using SEO and AdWords from MultiFamily Traffic. “We decided we weren’t happy only being visible to Austin renters in the cattle-call of Internet Listing Services and that it was time for us to stand out and attract renters willing to sign a lease today without a concession.”

Apartment managers are having to take digital marketing and apartment SEO more seriously as weaknesses are starting to show up in the boom that has sent apartment rent rates skyrocketing for the last five years all across America. Now with many cities like New York, Dallas, San Francisco and Denver starting to build a surplus of new apartment units, rents are beginning to slow and leasing units is becoming increasingly more difficult without solid online visibility.

Over the last five years, many community developers have decided to concentrate much of new construction on luxury communities in an effort to help them achieve the profits needed to cover the added expenses of staff salaries and rising cost of land to build on. With many new properties featuring trendy locations, rooftop pools and fire pits, managers like Mark Hunter will have to work harder to find renters.

“We found that once we started to rank the community at the top of Google search results, renters called our leasing office before anyone else”, said Hunter. “By being the first property a renter visits, I don’t have to be saying “me too” as the prospect mentions amenities they have already seen somewhere else. The best part about SEO is that I get the first at bat and when those renters that visit us before any other property and sign a lease, I can avoid a price war with my neighbors.”

So if you are as concerned as many operators are that your units will not be able to fetch premium rents and you won’t keep occupancy at 100% what can you do to get Google working for you?

98% of all leases start with a search online. It can be on a phone a tablet or a PC or Mac it doesn’t matter; if your property is not in the search results it may as well not exist. So then why are renters calling you if you are not in the search results? The answer is, you are – you just happen to show up via a surrogate like an apartment listing service. ILS’s like Apartments.com are fantastic but as Mark Hunter put it “a cattle call is not the best place to get the highest rent”.

ILS’s are great but by nature they make you compete with other properties.  If you want the highest rents and 100% occupancy you don’t want to compete you want to DOMINATE YOUR SPACE that means when someone even thinks about an apartment in your city your property company comes up! Working with the right apartment SEO and certified Google AdWords specialist can help you ensure that your community dominates as renters look for an apartment. If they come to you before they ever use an ILS you want have to compete in the cattle call.

The first step is knowing what the top searched keywords are in your city and where your website ranks for them. Multifamily Traffic has a dedicated research team that performs this as a free service for anyone. You can call that team directly and have your research back free of charge in less than 1 hour in most cases. They are available at 888-683-5885.

The next step is looking for a partner that can drive renters to you without asking you to make changes to your website or overcharging you for the work they do. There are many SEO providers that charge thousands per month for a mixed bag of results. You want to work with a firm that understands the industry and can guarantee results for a price you can fit in your budget.

Once you get your property to the top of the search results you will hear the results in the form of hundreds of calls to the leasing office. Make sure your staff is ready to follow up quickly. If you wait to set an appointment the renter is likely to go back to square one and look at an ILS placing both you and themselves right back in the “cattle call”.

MattEaston_BloggerAbout the author:

Matt Easton is EVP of MultiFamily Traffic the leading apartment SEO and digital marketing provider. MultiFamily Traffic works with 500 communities across the U.S resulting in thousands of leases signed every day. Matt can be reached at 303-803-7372 or www.MultiFamilyTraffic.com

5 Crazy Marketing Tactics That Actually Attract Student Renters

Written by Landlord Property Management Magazine on . Posted in Blog

Shared Post by Appfolio

If you currently manage a student housing portfolio then you probably notice that you have to go the extra mile to be the hottest property around, as most students are just hoping for a room with a bed. This means you might have to employ some more creative marketing tactics to max out your student housing.

Here are a few unconventional ideas on how to fill your properties on and off campus this year.

mobile_smart_phones_millennials

Hit the Road with Mobile Marketing

Some student housing property managers have taken to the road with a rather ingenious way to attract attention—a rent bus.

If the student housing pool in your area is particularly competitive, standing out is an absolute must. That’s why Haven Campus Communities decided to take their marketing to the streets with an old food truck that they tricked out to be a mobile leasing station. Parking at sporting events or around campus, students are invited inside the bus to check out floor plans, photos, and even apply for an apartment on the spot.

Talk about driving demand! When taking your business to the streets, mobility and cloud functionality is key—property management software can help you streamline these processes.

Throw a Pool Party

If the property you are trying to fill has a shared pool, what better way to attract new renters than to throw a pool party? Spread the word across campus using flyers, an email blast, or social media. Invite local DJs or bands to play at your party. If your property has grills, use those to offer your prospects free food while they splash around. Throwing a huge party is a great way to show renters that your properties will keep the good times rolling…All they need to do is apply.

Offer Free Food (Who Can Say “No” to Free Food?)

If you want to draw a crowd, free food is always the way to go. No matter where you may be promoting your properties, if you bring food people will come. Consider hiring a food truck for the day and bringing it to a student housing event or local beer and wine festival. Hungry students (and prospective renters) will never refuse an application if it comes with free tacos!

Be a Renter Superfan

Students have a wide variety of interests. College students have the highest attendance rate of sporting events and music festivals than any other age group in the country—and where there are large gatherings of students, there is an opportunity to market!

If you have a marketing team, get them to help you design cool paper collateral to hand out at festivals, concerts, or sports games; Millennials and younger generations think of quality creative work as a sign of professionalism, and a fresh poster or postcard design is one of the best ways to leave a positive impression in a student’s mind.

Many events also need local sponsors to help bring their projects to life. Sponsor a local event and get permission to set up a booth where attendees can speak to you in person about your properties. To sweeten the pot, you can even provide a little free swag like a fanny pack or water bottle that displays your company brand while providing a service to your prospects.

Get Creative with Incentives (Loan-a-bike systems, public transportation included in rent, etc.)

In college towns or large universities where student housing is competitive, most students know that they can be picky about where they want to live while also staying within their price range. You can make your properties more attractive on a financial level by providing creative yet practical incentives for your renters when they sign.

As an example, Chicago is a diverse city filled with many different types of higher learning institutions; it is also very large and can be difficult and expensive to navigate. Divvy is a local a bike loan service that allows students to pick up a bike in one of their many locations and drop it off when they are finished. At only $75/ year per student, this could be a great signing incentive that would provide real value to students without breaking their bank or yours.

While students need to get around, they also need places to go. Many large universities will offer season passes to sporting events to their students at a discount; try to strike the same deal for your property, then run a promotion offering free season passes to the first 100 students that sign a lease with you. Most students will reason that they were going to buy the tickets anyway, so they might as well get them for free.


Remember, young renters are not always financially stable on their own, so a big piece of the marketing puzzle is about including their parents in the rental decision. Your marketing can be fun and adventurous so long as it also shows professionalism and makes fiscal sense to the real decision maker.

Along the same lines, you may also want to consider accepting cosigners for your student housing portfolio. Not only is it financially safer for you and your renters, it helps create a sense of responsibility and ownership in young adults without forcing them to sign a lease completely on their own. Allowing cosigners will help you fill vacancies faster and assume less risk.

These are just a few of many wacky ways to capture a college student’s attention, don’t be afraid to get a little more edgy when it comes to marketing to a younger crowd. Who knows? You might discover new ways to market to your larger portfolio in the process.

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AppFolio, Inc. develops Property Management Software that helps businesses improve their workflow so they save time and make more money.  Appfolio submits articles & blogs including topics of Resident Retention, Improved Owner Communication, Time Management, and more.

Investors Poised to Capitalize on Multifamily Real Estate Market

Written by Landlord Property Management Magazine on . Posted in Blog

Shared post from wealthmanagement.com

apartment buildings

As volatility remains ever-present and investors search for yield, where do you turn? Alternative investment vehicles seem to be growing exponentially and investors and advisors remain at the forefront of the allocation debate.

One asset class has remained tried and true: real estate, more specifically, multifamily real estate. Value-add strategies in the multifamily space remain steadfast, even during the most trying of economic conditions, and is one of the best hard, non-correlated assets acting as a hedge against inflation. Furthermore, value-add enables investors to be flexible by offering lower holding periods, often around three years, and managers have agility to allocate based on evolving demographic and economic indicators.

While REITs seem to hog the spotlight in real estate, they are simply too correlated with the general market and interest rates to offer diversification. Of all the real estate streams, multifamily is perhaps the best place to generate absolute returns based on national trends that signal high occupancy, high rental demand and low supply. Let’s examine:

Surplus renter demand outpacing supply

U.S. renters are driven by two groups, lifestyle renters and primary renters priced out of homeownership. Lifestyle renters, 69 percent of whom are married with no children below age 18, can afford a home but opt to rent due to its ease and capital preservation. Public opinion polls reveal homeownership is no longer a central tenet of “the American dream” as maintaining an owned residence is expensive, labor-intensive and many folks would rather enjoy amenities apartment communities offer. The lifestyle renter cohort emerged as a definitive renter following the housing bubble of the Great Recession.

Prime renters, (between ages 20-34) or millennials, lead a mobile lifestyle to follow the job market. This encourages renting as it offers young people the greatest flexibility or liquidity to find a better opportunity elsewhere. The mobility desire is reinforced by the difficult consequences of the recession, forcing this somewhat nomadic demographic to search for jobs away from their cities of origin. The prime renter age cohort is growing at its fastest rate on record as the children of baby boomers come of age. This record pace of growth is projected to increase prime renters age cohort by 500,000 persons per year through 2023.

Student debt is also afflicting prime renters at record levels, having increased nearly three times since 2004 for those under 30. This prolongs their attachment to rental properties or drives some to reside with family. More than one in five Americans with student loans are at least three months behind on a payment. Today, the percentage of prime renters living with parents is at the highest level since 1967, when these statistics were first collected. Even if those living at home attain employment or improved jobs, they will naturally emerge as renters because the barrier to entry for home buying remains tall. Home buying events are also being delayed, lengthening one’s status as a renter. The decision to marry and to have children are now at the oldest ages on record.

Yet construction of new apartments to meet the demand has failed to keep pace, resulting in today’s high occupancy rates, averaging 95.2 percent as of June 2016 according to Axiometrics. Axiometrics also reports multifamily permits issued in the trailing 12 months of 381,000 units, which compares favorably to the aforementioned growth in the prime renter age cohort, resulting in continued high occupancy levels coupled with above-average rental growth rates. Additionally, home ownership rates have yet to find a bottom almost a decade following their peak. Each 1 percent decline in the home ownership rate is estimated to represent nearly 1.1 million new renters, according to Census Bureau statistics.

Millennials pick suburbs over urban centers

The most opportunistic multifamily investments are not in the nation’s biggest cities of New York, Los Angeles or Washington, D.C. Rather, they are often in suburban areas in the South and Midwest, buoyed by business-friendly policies that have opened new jobs for millennials. Enhanced business environments have led to the relocation of major corporate headquarters such as Toyota, away from traditional Californian urban cores, to Texas, for example. Other key markets with thriving suburban economies include North Miami Beach, Orlando, Florida’s Gulf Coast, Dallas and Denver. New and sustainable jobs are emerging in the tech, corporate and financial services industries. These higher wages will allow young people to rent higher-quality apartments all the while having a multiplier effect on the local economy.

How to make the most of multifamily investing?

Multifamily properties, especially those in the middle market, provide a combination of significant yield and absolute returns in these increasingly volatile times. For advisors and clients, this can be an attractive avenue to achieve a steady return stream as traditional fixed-income allocations provide low to negative yields. In addition, value-add multifamily investing offers the prospect of capital appreciation, which is expected to result in absolute double-digit returns per year, while U.S. public equities are reaching record levels of volatility. Only managers that follow an agile strategy, use deep macro research and maintain local operator relationships can unearth properties that are poised to benefit from both demographics and local economic dynamics that drive value.

 

Tax Rules For Renting To A Relative

Written by Landlord Property Management Magazine on . Posted in Blog

Shared post from forbes.com

renting to family

AARP calls young adults moving back in with their parents “the new normal.” Although the U.S. economy has come a long way since the financial crisis, more young adults in this country are living with their parents than at any time since 1940. Some return home after being on their own for a while, some never left at all.

Recently, I met with clients who were in just such a situation. Their adult daughter returned to the family home after college. She is employed, but her job doesn’t pay enough to afford the life she’s enjoying in her parents’ home. Rather than downgrade to something in her price range, she wanted to stay put.

Her parents had a better idea. Financially stable with a paid-off mortgage, they would purchase a home for dear daughter to live in. The daughter could rent from her parents at a reduced rate, and the parents could deduct expenses of the rental property their tax return. Win/win?

Possibly not, since special rules apply when renting property to family members. Anyone unaware of these rules can find themselves taking a double tax hit when their rental deductions are disallowed while rental income is taxed.

To deduct the costs associated with a rental property, you first have to determine how the IRS will classify the property in light of Section 280A. The house may be considered a rental property, a vacation home, or a personal residence.

Rental Property

A rental property is rented during the year and used by the owner for personal purposes less than the greater of 14 days or 10% of the number of days during the tax year that the unit was rented at fair rental value.

If a home qualifies as a rental property, expenses including mortgage interest, real estate taxes, homeowner association dues, utilities, and maintenance expenses can be used to offset rental income. If total expenses exceed rental income, the expenses may even generate a net loss.

Vacation Home

When a home is mixed-use, it may be rented and used by the owner for personal purposes for more than the greater of 14 days or 10% of the number of days during the tax year that the unit is rented at fair rental value.

When a vacation home is rented, expenses such as mortgage interest, real estate taxes, etc. are allocated between rental and personal use. Rental expenses may only be deducted to the extent of rental income generated by the property. In other words, they can reduce your taxable rental income to zero, but never generate a loss.

Personal Residence

When a home is rented for fewer than 14 days during the tax year, the home is considered a personal residence. Mortgage interest and real estate taxes may be deducted as itemized deductions on Schedule A, and the owner is not required to report rental income.

When you rent a home to a relative, such as a spouse, child, grandchild, parent, grandparent, or sibling, any day rented at less than the fair rental price is considered a personal use day. To avoid having the rental days considered personal days, the property must be rented at fair market rates and be the renter’s principal residence.

The issue, in this case, is that the parents want to offer dear daughter a bargain, charging her less than fair rental value. If they go this route, they will have to allocate expenses between personal and rental expenses. All of the days the home is rented to the daughter at less than fair rental value are considered personal days, so the rental portion is zero. They would have to include all of the rental income received from their daughter in taxable income, but none of the rental expenses would be deductible, other than mortgage interest and real estate taxes, which would be deductible as itemized deductions on Schedule A.

Is Rent-Free Better?
What if these parents wanted to be really generous and allow their daughter to live in the home rent-free? The parents could still deduct mortgage interest and real estate taxes on Schedule A, but they might run into gift tax issues.

If the daughter lives in the residence rent-free, the parents could be treated as having made a gift to their daughter equal to the fair rental value of the home. For 2016, the annual gift exclusion is $14,000. If the fair rental value of the home is greater than $1,167 per month, or the parents give any other gifts to their daughter that push them over the $14,000 threshold, they would be required to file a gift tax return. In some parts of the country, this may not be an issue, but this client is located in Scottsdale, Arizona where the average one-bedroom apartment rents for $1,225 a month.
In the end, if these parents want to help their daughter out, they should charge a fair market rate of rent, determined by looking at comparable rentals in the area. That determination of fair market rate should be documented in case they are ever audited by the IRS.

Ideally, the parents should also formalize the agreement by signing a lease detailing the terms of the agreement including rent amount, when rent is due, and any other rules they want to be followed on their property. In a perfect world, renting a home to a family member would be seen as a blessing and their daughter will be respectful of the property. However, not everyone, even dear daughter, is an ideal tenant.