Should You Repair or Replace? Choosing Wise Renovations for Rental Propeties

Written by Landlord Property Management Magazine on . Posted in Blog

repair_replace_balanceRental property renovations open the doors for financial rewards through potential rental or selling price increases. However, deciding which renovations to undertake that will ultimately reap the most benefits can be complex. Interestingly, there’s a lot of advice offered by real estate professionals about which renovations are most worthwhile for investors, and these experts know what improvements renters really want.

Even more interesting – they know how to get the most bang for your buck when it comes to making wise property renovations, understanding the correlation between curb appeal and rental rates, how to choose remodeling projects that preserve equity and the integrity of the property.

Still Turning and Burning your Property? Don’t Get Burned Yourself

More property investors are realizing the benefits of treating their rental homes more like “their home” as opposed to another “unit.” Even scaled down renovations and remodeling projects can help increase equity and help you maintain a top-notch resident base. Investing in major projects is just that – major – so keep in mind that even minor improvements can make a tremendous long-term difference for both renters and owners.

However, some major projects cannot be ignored, and this is when treating it as a home comes into play for investors. One major roofing failure can spell disaster, put residents out of their home, and you temporarily out of income – facing a huge repair bill. Itemize your “to do” list according to importance, putting preserving the integrity of your dwelling on top of the list. Everything else you should evaluate by cost, the improvement’s potential lifespan, and consider any applicable tax credits and return on investment.

Cleaning, Cleaning, Cleaning – The #1 Return on Investment for Rental Properties

That’s right – a clean home is a desirable home. Those appliances don’t have to be top condition or modern, just clean! Carpets and flooring don’t need to be replaced when a good shampooing or deep cleaning may make them look brand new again.

Consider that the lifespan of carpeting averages about 11 years, according Old House Web’s experts, but wood flooring and many types of tile can last a lifetime. If replacement is imminent, consider upgrading to resilient and lovely Terrazzo tile or a natural, eco-friendly wood. If there are only a few flaws, chips, scratches, or imperfections that can be resolved with spot replacements or partial refinishing, then the cost-effective solution is clear!

Interior and Exterior Painting

Curb appeal extends to the interiors in the eyes of a renter; after all, they have to see those walls every day. If you’ve rented to a smoker or the same resident for many years, you’re likely justified in going with a complete overhaul with interior paint. However, you might be able to get away with a few walls here and again, but it’s such an inexpensive renovation, it’s best to refresh everything for your new charge.

Kitchens and Bathrooms – To Renovate or Resurface?

These two improvements are known for their tremendous return on investment; however, they are also known for their high initial investment. Contractor and remodeling experts are promoting the benefits of resurfacing over replacements. Resurfacing bathtubs, showers, and cabinetry are far more cost efficient projects than replacing them, particularly if they are in decent condition. The pros at Old House Web estimate that acrylic baths have a 15-year lifespan, so estimate “how much life” your major fixtures and appliances have left before considering costly replacements.

Final Considerations in Remodeling Rental Properties

Your budget, how much time you have, and the condition of your property certainly play a role in your remodeling decisions; however, as a wise investor you have to know when to “turn and burn” and when to take your time and renovate units as though you were living there. You’ll see happier residents and may even get some recommendations through your efforts of being a responsible and caring landlord.


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.

Cozy launches Cozy Credit Reports and Experian Collaboration

Written by Landlord Property Management Magazine on . Posted in Blog

SAN FRANCISCO and PORTLAND, OR – February 4, 2014

Cozy, the company that makes renting easy for everyone, announced Cozy Credit Reports as a result of its collaboration with Experian, the leading global information services company. Cozy Credit Reports marks a true advancement in the the security and privacy of credit reports, as well as how credit data is purchased, controlled and used in the residential rental process by leveraging the Experian ConnectSM platform.

FOR RENTERS

SECURITY, PRIVACY & CONTROL

With Cozy Credit Reports renters never have to share their Social Security Number with a potential landlord again.

THE END OF APPLICATION FEES

Application fees are a thing of the past with Cozy Credit Reports. If a Cozy landlord ever requires a credit report as part of the application, the renter runs their own report, receives the results and can choose to share them with the potential landlord. If a landlord doesn’t require a credit report, there’s nothing to pay. All Cozy landlords are required to verify their identity to see a tenant’s credit report.

FOR LANDLORDS

One of the largest burdens for landlords is handling, storing and disposing of sensitive tenant information during and after the application process. Cozy Credit Reports alleviate that burden and save time, hassle and money.

At the click of a button, a landlord can request a prospective tenant’s credit report. The renter pays for his or her own credit report, is instantly identity verified by Experian , and maintains control of his or her sensitive information. Once the tenant shares the report with the landlord, the credit data the landlord needs for prospective tenants comes directly from Experian in real time , and is the most accurate, up-to-date data in the industry. All Cozy landlords are required to verify their identity before viewing a tenant’s credit report.

Learn more at www.cozy.co/credit-reports.

Collaborating with Experian

Regarding the collaboration, Cozy CEO Gino Zahnd said, “We’ve been working with Experian for 18 months to completely rethink how the rental application process should work. With our design leadership, they have been an incredibly supportive development partner. The Experian Connect team understands the important role credit plays in this industry and is providing a new way to empower both landlords and renters. With Cozy Credit Reports, this is a significant step forward for Cozy and for the Experian Connect platform, which is powering Cozy’s smoother and more efficient process.

Click Below to Preview Sample Reports:

Cozy-Tenant-Report Cozy-Landlord-Report

CozyCo_logo

About Cozy | www.cozy.co
Cozy makes renting easy for both landlords and renters. With elegant products for rent payments, rental applications and tenant screening, Cozy is the best way for small landlords and renters to get things done.

Founded in March 2012 and based in Portland, Oregon, Cozy’s mission is to radically change the rental real estate experience with a focus on beautifully designed products, transparency, privacy, and total control of one’s personal information.

Media contact:  press@cozy.co

Survey Says! A Glimpse into PayLease’s 2nd Annual Market Survey

Written by Landlord Property Management Magazine on . Posted in Blog

market_survey_infographic_blog

You may have heard that PayLease recently published our 2013 Market Survey about online payment usage in the property management industry. If you aren’t familiar with our survey, once a year we enlist New Heights Research to survey hundreds of HOA and multifamily firms nationwide about their usage of electronic payments. Firms participating in the survey are asked to indicate their portfolio type, the number of residential units under management, and if they offer residents online payment options.

This year’s survey revealed some interesting finds. So if you haven’t already downloaded a copy of the survey, here’s a preview of the results.

One of our favorite findings from the survey is the acceptance of online payments among all portfolio types has risen since 2012. Here’s the percentage of firms in the property management industry that offer electronic payment options:

  • All property management companies: 60%
  • HOA firms: 69%
  • Multifamily firms: 54%

The property management industry as a whole increased its usage of online payments by 7%, going from 53% in 2012, to 60% in 2013. More HOAs accept online payments, but multifamily firms added these solutions at a much higher rate. Multifamily firms increased their usage of online payments by 8%, going from 46% in 2012 to 54% in 2013. HOAs increased online payment solutions 4%, from 65% in 2012 to 69% in 2013.

This is just a glimpse of what is covered in our market survey. We also reveal and provide analysis on:

  • Acceptance of online payments by homes/units under management HOAs and multifamily
  • Percentage of firms who switched online payment providers
  • Percentage of companies that implemented online payments
  • Percentage of companies that added new payment methods to an existing solution
  • Our predictions for trends in 2014

To download a complimentary copy of the 2013 Market Survey, click here.

Why Do Evictions Take So Long?

Written by Landlord Property Management Magazine on . Posted in Blog

eviction_noticeIt seems easy. Your renter is a deadbeat, and you want them out of your property. So why does it take so long to evict a tenant?

Unlike signing a lease agreement, a legal process so informal sometimes it’s done online, an eviction is a court process. A process that can be as acrimonious as a divorce.

Tenants are afforded legal rights that, when abused, can be used to delay the eviction for months.

First, the tenant has the right to contest the grounds for the eviction. The landlord will claim that the lease was broken, or a law was violated. Either way, the judge must be convinced that there is good cause to boot the tenant. If the judge grows sympathetic to the tenant, they may continue to live in your rental unit.

To begin the eviction process, notice must be given to the tenant — even if they disappeared or are refusing to accept service of the notice. If there is the slightest defect in the notice, it’s thrown out. A new one must be served, and the clock reset.

After being notified of the pending court case, the tenant has the right to challenge the eviction. While that commonly consists of a sweeping denial of whatever they are accused of doing, the tenant also can raise defenses at this time. That means challenges to the habitability of the unit, failure to make repairs or unfair treatment. Often, this is the first time any of these complaints have come to light.

If the tenant has made a reasonable-sounding denial, the landlord must then go to court and prove each aspect of the eviction claim. Without sufficient documentation, that won’t happen.

If you’re successful, the order you receive is just that — an order for the tenant to vacate. Now come the logistics. That order must be served, and a move-out date and time scheduled with the local sheriff’s office. More time spent.

Many courts separate out the eviction order process from any claim for unpaid rent or damage to the property. The logic is to speed up the eviction, but the effect is more time and money spent returning to court to pursue a judgment against the deadbeat tenant.

And finally, if money is owed, it must be collected.

If all that has you wondering how to avoid these consequences, then you’ll understand why some landlords negotiate the return of the rental unit by offering some incentive for the bad tenant to vacate — cash for keys. Maybe that sounds like giving in to a ransom demand, but from a purely business standpoint, it may be cheaper in the long run.

An important precaution is to run a tenant check, including a prior eviction report, on each applicant.

It should be clear just how important it is to have the right landlord forms, so your lease is airtight when you need it, and your rental application contains the clues that will lead a collection specialist to the money that is owned to you.

Lastly, keeping contemporaneous records on all applicants and tenants is the only way to protect yourself if you do wind up going to court.


logo_aaoa American Apartment Owners Association | Company Website 

Rental property management can be very demanding. Our job is to make this day-to-day property management process smoother. AAOA provides a host of services ranging from tenant screening to landlord rental application forms and contractor directory to apartment financing. 

Multifamily Leasing Trends | Advantages and Disadvantages of Using a Call Center for Leasing Apartments

Written by Landlord Property Management Magazine on . Posted in Blog

Happy call center employees with headsetApartment owners, multifamily executives, and property managers are busier today than ever. Unfortunately, there are still only 24 hours in any given day at last check. This leaves many multifamily executives looking for ways to streamline some of the responsibilities within their businesses in order to have the time and focus to take care of other important job functions.

Using call centers for leasing apartments is one way to do this. However, there are a few distinct pros and cons to keep in mind before deciding if you want to take your business in this direction.

Advantages of Using a Call Center for Leasing Apartments

Businesses today are continuously seeking cost-effective alternatives to the old way of doing things. And multifamily investors and executives are no different. Using a call center for leasing apartments offers the multifamily executive an alternative solution with marked benefits.

Specialization. Leasing agents wear many hats within their respective apartment communities. Many of these hats take them out of the office — and away from telephones serving people who are hot prospects looking for apartments now, or those who are already members of the apartment community. On the other hand, call center agents specialize in their roles, which can be a huge advantage. Call center agents have one responsibility, primarily. While they certainly answer prospective tenant questions, their main goal is to “soft sell” the apartment community they represent — and they become experts at doing so.

Free up valuable time. Multifamily Executive recommends hiring call center leasing agents to free up your valuable time, or that of your staff, to handle other on-site needs, such as taking care of existing tenants and prospects. In addition, someone else handles the training of call center staff members. This means you’re not dedicating valuable time bringing another team member up-to-speed and can devote your time and attention to your core competencies and pursuits that can bring in additional revenue, such as marketing and market research.

Preference of prospective tenants. People like to hear the voice of another person on the line rather than a recorded message or busy signal. Call center leasing agents are a lot more than additional staff members to pick up the slack when business picks up. They’re the warm body on the other end of the phone that prospective tenant callers respond to. They’re a live person who can answer questions, point out benefits, and add depth to your existing leasing team — even if they never set foot on the actual properties they’re helping sell.

Avoids missing prospective tenants. Call center leasing specialists also play an important, if not vital role, by ensuring that important calls and prospects aren’t missed before they roll over into voicemail. Many, if not most, people hang up when calls go into voicemail. Call centers are able to capitalize on these leads even if the lead calls after hours or calls at a time when an on-site staff member is unable to answer the phone.

Availability. The bottom line is that call center agents are simply available at times when it’s not always cost-effective to have an employee on hand waiting on the phone to ring. The world doesn’t operate on bankers’ hours anymore. If you truly want to make a lasting impression with prospective tenants, have a live person answer the call when tenants that work night shifts call in.

Cost. Investing in call center leasing agents can save apartment owners money over hiring full-time staff members and investing in infrastructure, equipment, warm bodies, and phone lines to do the job call center leasing agents do.

Disadvantages of Using a Call Center for Leasing Apartments

Call center leasing is not without its considerations. Take a look at some of the drawbacks of using a call center for leasing apartments.

Cost. The biggest of which, according to Multifamily Executive,  is the cost. For some smaller apartment communities, it’s simply too prohibitive to have on-site staff and off-site call center staff as well. However, many call centers have created packages with different price points to mitigate this so that it’s easier for even small communities and to bear the costs.

Transparency.  There may come a time when a prospective tenant asks to see the person they’ve spoken with on the phone. And some consumers may be disappointed they aren’t able to meet with the leasing agents they’ve spoken with on the phone when they visit the apartments.This lack of transparency can be a drawback, however there are ways around it. Simply train your team to inform them that the person they spoke with on the phone is an important part of your team that works off-site in a different facility.

Communication Issues. If call center agents have an accent, as might be the case if your call center for leasing apartment is outsourced out of the country, prospective tenants may have trouble understanding what is being said to them. You can circumvent this by carefully screening the company that you outsource this task to.

Lack of dedication and focus. When call center work for leasing apartments is outsourced to a third party provider who may have other client companies, outsourced call center agents may not be fully dedicated or focused on your company. In other words, their dedication and attention can be divided among a number of client companies.

Quality of calls. While not always the case, outsourcing call center for leasing apartments can lead to lower quality of calls, particularly when calls are not monitored and improvements are not made to underperforming call center agents. In the long run, poor prospective tenant satisfaction from calls responded to by call center agents can lead to reduced revenue opportunities. Be sure to hire a call center for leasing apartment that monitors calls, provides reviews to its workers, and takes pride in quality.

Do Call Center Leasing Agents Help to Generate Revenue?

In instances where staff members are missing a large volume of calls regularly, call center leasing agents absolutely do generate revenue, first and foremost, by freeing up the time of on-site leasing agents to seal the deal, reports Multi Housing News. They also help by setting more appointments simply because the call center is available after hours and at times when on-site staff members are busy seeing to other needs. Call center leasing agents allow multifamily owners to increase revenue by renting more apartments, streamline marketing endeavors (cutting expenses as a result), and increase profits with greater efficiency.

That said, there are drawbacks, like those listed above, along with the benefits. Weigh the pros and cons to decide whether investing in a call center for leasing apartments is a cost effective move for your apartment leasing needs.

Are you using a leasing call center? Do you have something to contribute to the conversation? Please feel free to leave your valuable comments in the section below.


JustinAlanis Justin Alanis | Company Website | LinkedIn Connect |

Justin Alanis is the Co-Founder and CEO of Rentlytics Inc.  Rentlytics is based in San Francisco, CA providing deep analytics for apartment property owners and managers. View and analyze property operational and financial metrics more effectively and identify issues.

It’s a Landlord’s World Now

Written by Landlord Property Management Magazine on . Posted in Blog

Apartment Building

Another report – this time the Securitization Weekly Overview from Bank of America-Merrill Lynch (BAC) – is forecasting a shift away from single-family home purchases to a rental market.

Granted, this is not the first time a report predicting multifamily growth has hit in the past few months, but it does reiterate a common theme – investors are betting on multifamily more often.

Just last week, HousingWire reported that more younger Americans are expected to pile into the multifamily market after spending years in their parents houses or sharing apartments with roommates.

But this younger crowd, while keen on homeownership, apparently lacks the momentum, due to job constraints and a general inability to obtain a mortgage.

It’s something Chris Flanagan, MBS/ABS Strategist with Bank of America-Merrill Lynch and MBS Strategist Justin Borst also recognized in their newly published research.

“The December housing starts report provided some confirmation of the theme we discussed last week, which was that it appears as if a structural shift away from getting a mortgage and buying a single-family home to just being a renter is underway,” the pair said.

Such a transition is expected to subdue the possibility of dramatic changes in the single-family mortgage-backed securities market.

Flanagan and Borst note that “this shift should work to keep supply of single-family MBS at what may be surprisingly low levels well into the future. We also noted that we think this shift gives the Fed ample cover to taper its MBS purchases without much impact to mortgage rates, since gross supply of MBS may be shrinking more quickly than the Fed plans to taper.”

When comparing multifamily production today to the pre-housing crisis era, it is clear a major shift is taking place. BofA-Merrill Lynch notes that pre-crisis, the multifamily share of housing production hovered at roughly 20%, or one in five home starts.

Jump years ahead to today, and the latest multifamily share of production is up 33% and accounts for one in three homes.

The same analysts concede that with this higher multifamily share trend remaining for years now, a new “equilibrium” has apparently been reached.

The trend prompted Resource Real Estate, a firm led by CEO Alan Feldman, to announce last year that it will continue to try and serve the income-bracket stretching from $30,000 to $70,000 a year by refurbishing older apartment complexes for this growing segment.

“We touch real estate two main ways, we put equity capital towards investing, and we lend across a number of asset classes,” Feldman told HousingWire last summer.

By December, his firm was still employing this strategy, noting the forgotten middle-class is trending even more towards renting.

It’s a common theme that the numbers from BofA-Merrill Lynch seem to confirm for now.


Kerri_1212

Kerri Ann Panchuk

Kerri Ann Panchuk is the Online Editor of HousingWire.com, and regular contributor to HousingWire magazine. Kerri joined HousingWire as a Reporter in early 2011 and since earned a law degree from Southern Methodist University. She previously worked at the Dallas Business Journal.

Choosing the Right Vendor(s)

Written by Landlord Property Management Magazine on . Posted in Blog

Chossing Vendors

Picture this – you have a large project on the horizon and you know you will need third-party assistance in order to complete it.   How do you determine who your vendor partners will be to ensure a successful project?

First, it is important to understand your short and long term goals and basic scope of work so you can best communicate to those that will be supplying you a proposal.  Next, create an RFP (request for proposal).  Remember, it does not have to be fancy or extremely elaborate. The goal is to ensure all vendors are bidding on the same scope of work.  Apple to apple comparisons related to pricing, timing, value and potential warranty included.

You can always ask for suggestions or examples of work in the RFP.  This will allow your potential vendors to share their expertise and creative ideas that may elevate your project and potentially exceed your expectations.  Once you receive the RFP responses – look to see who responded on-time, who took the time to follow your specific instructions for submission, and who went above and beyond in their response.  These simple checkpoints will tell a lot about who may be the best match for your project.  There are excellent vendor options out there and there is no reason to settle.  Always follow your company guidelines on insurance requirements, reference checking and best practices to protect your asset when choosing such vendors.

Once you have narrowed down your choice, invite your chosen vendor to the site for a walk-through and a deeper discussion related to the scope of work and goals for the project.  This will let you know if your communication style and personality is a good match.  Now it is time to award the assignment.  Do this immediately upon the selection process and notify those that will not be participating, and thank them for their time.  If you are sincere, let them know you will consider them for future projects.  Proceed to contract and begin the project.

Communication is key throughout the process, be sure you are available for any potential questions and set the tone and expectations so everyone remains on the same page.   If your selected vendor meets or exceeds your expectations be sure to tell them and thank them for a job well done, and pay them according to your agreed contract.  Celebrate your successful project!


MultifamilyZone_logo MultifamilyZone.com | Company Website |

The mission at MultifamilyZone is to assist multifamily professionals in finding the products and services to help them achieve top competitive positioning.  Through an engaging and interactive website, we will provide current information on a wide-range of qualified, pre-screened vendor partners.  As wll, we spotlight industry news and trends to become a primary resource for all things property management.

Supply and Demand, Lease Your Apartment Today!

Written by Landlord Property Management Magazine on . Posted in Blog

Our apartments are vacant now!  We need move ins now!  Leases signed now!  Commitments now!

First consider, is the leasing team able to challenge the move in date? Ask the question of “When do you plan to move?” “Are your plans flexible?”

imageThis is similar to hotel and airline reservations. Plan to travel on Thursday, but the deal is better if reservations are booked to fly on Wednesday. Or apply a retail application, the best selection is available by shopping early. Waiting for sales, will offer lower prices, but the selection of sizes and color options becomes limited.

If an applicant has a “MUST HAVE” list, the ability to meet the “demands” is lessened as the supply of vacant apartments decreases with other leases. Use this criteria to create a sense of urgency. Popularity of apartments on the top floor, ground floor walk outs, or end units will limit their availability.

How effective is the staff in creating a sense of urgency? “I can see how excited you are about this apartment, waiting might mean this apartment won’t be available, is your move in date flexible?”

imageDepending on the volume of vacant apartments, there may be a variety of possible closing tools. Every day that passes between the visit date, and the pre-lease or move in date allows the opportunity for an individual to choose another location. Getting a lease signed closes that door, it may involve a few days of free rent, but in return is the commitment of a year lease.

If the property has a large volume of vacants, it may be difficult to embrace the sense of urgency. Using a hot list, where the leasing staff only “sees” the units available to be leased that week, not an entire inventory of vacant apartment homes, can limit the information to prevent leasing units not ready or future availability. On the hot list, the supply will reflect two or three apartments of each unit type. This information allows the leasing staff to be absolutely focused on a limited supply, “This is the only apartment available with a ground floor walk out.”

image

Without challenging the anticipated move in date, the prospect walks out the door to continue their search for a home.

  • The move in special ends Friday
  • The limited supply of the apartment that meets expectations
  • Desired building or location on the property

Use these criteria to narrow down the supply of apartments, the economics of supply and demand can assist in creating a sense of urgency to close a lease commitment.


Lori_Hammond Lori Hammond | Company Website | LinkedIn Connect |

Lori has 30+ years’ experience in the Property Management Industry, working with both market rate and affordable housing.  Lori has been privileged to work with some tremendous industry leaders during employment tenures with Oxford Management, NHP Management, AIMCO, Alliance Residential, Boston Capital, The Sterling Group, P.K. Housing and currently Management Resources Development.

 

Rental Owners’ Rights Under Fire

Written by Landlord Property Management Magazine on . Posted in Blog

apartment for rentThis week, landlords and real estate agents joined forces to challenge a San Francisco law that would strip the rights of rental property owners.

The San Francisco Apartment Association, Coalition for Better Housing and the San Francisco Association of REALTORS® filed the suit challenging the legality of recently-enacted laws known as the Avalos Ellis Act and Merger Prohibition Legislation.

This legislation prohibits owners of multi-unit buildings from combining units in a building for ten years following an Ellis Act eviction – a law that allows owners to take rentals out of service — or for five years following an owner-move in eviction.

According to the SFAA, on a practical level, the legislation prevents families who own a building from creating a home that meets their needs. For example, the legislation prevents a family from combining two small units into a larger one to provide a home for a growing family. Couples with young children often find themselves in need of additional space they did not anticipate when they purchased a rental building, yet SFAA claims that the legislation punishes them.

Only 2 percent of new housing built in San Francisco since 2001 are single-family homes that provide adequate space for families, often with multiple generations living together, according to SFAA. The group attributes the lack of adequate housing to meet the needs of families has contributed San Francisco losing 5,278 people younger than 18 between 2000 and 2010, according to the census.

Others agree. “The San Francisco Association of REALTORS® supports the rights of private property owners for the free use of their property as their needs suit them. This legislation only exacerbates the problems families face in finding adequate housing and drives out the families that have created the diversity we want and celebrate in our city,” said Walt Baczkowski, CEO of the San Francisco Association of Realtors.

Because so few single family homes are being constructed, families rely on improving buildings they own, including tenancies in common to add living space. This legislation prohibits them from creating the home they need in a building they own.

“Families are fleeing San Francisco due to a multitude of reasons that include a lack of adequate space for growing families that often include multiple generations. This legislation exacerbates that problem by punishing and limiting options for families who simply seek to create a home that meets the needs of their family,” stated Janan New, Executive Director of the San Francisco Apartment Association. “This legislation punishes hard working families, while doing little to protect renters.”

The lawsuit claims that the legislation is pre-empted by the Ellis Act, which allows building owners to take a building off the rental market and convert those units to condominiums or single-family homes. Building owners already are required to give occupants up to one year advance notice and provide relocation fees of $5,210 per tenant, up to a maximum of $15,632, plus $3,473 additional for tenants who are senior or disabled.

“My clients are seeking relief from this just-passed legislation which unfairly takes away the right of individuals and families who simply want to create a home for themselves and their family in a building they own,” stated Jim Parrinello, attorney for the plaintiffs.

Best Bang for Your Buck: Remodeling Costs vs. Value

Written by Landlord Property Management Magazine on . Posted in Blog

Apartment Unit UpgradeWinter’s the best time to plan for the upcoming remodeling season.

When it comes putting your hard-earned money to work for you, The National Association of Realtors®  2014 Remodeling Cost vs. Value Report proves it pays to focus on curb appeal.

A home’s curb appeal is crucial because it can be the first thing buyers — and tenants — notice about a home.

“With many factors to consider such as cost and time, deciding what remodeling projects to undertake can be a difficult decision for homeowners,” said National Association of Realtors® President Steve Brown, co-owner of Irongate, Inc., Realtors® in Dayton, Ohio. “Realtors® know what home features are important to buyers in their area, but a home’s curb appeal is always critical since it’s the first impression for potential buyers. That’s why exterior replacement projects offer the greatest bang for the buck. Projects such as entry door, siding and window replacements can recoup homeowners more than 78 percent of costs upon resale.”

Eight of the top 10 most cost-effective projects nationally, in terms of value recouped, are exterior projects. Realtors® judged a steel entry door replacement as the project expected to return the most money, with an estimated 96.6 percent of costs recouped upon resale. The steel entry door replacement is consistently the least expensive project in the annual Cost vs. Value Report, costing little more than $1,100 on average.

deckingA wood deck addition came in second with an estimated 87.4 percent of costs recouped upon resale. Two different siding replacement projects also landed in the top 10, including fiber-cement siding, expected to return 87 percent of costs, and vinyl siding, expected to return 78.2 percent of costs. Out of the top 10 projects, the fiber-cement siding replacement project improved the most since last year, with costs recouped increasing by more than 15 percent.

Two garage door replacements were also in the top 10; a midrange garage door replacement is expected to return 83.7 percent while an upscale garage door replacement follows closely at 82.9 percent of costs recouped. Rounding out the top exterior remodeling projects were two window replacements; a wood window replacement is estimated to recoup 79.3 percent of costs and a vinyl window replacement is estimated to recoup 78.7 percent of costs.

According to the report, two interior remodeling projects in particular can recoup substantial value at resale. An attic bedroom is ranked fourth and is expected to return 84.3 percent of costs; nationally, the average cost for the project is just above $49,000. The second interior remodeling project in the top 10 is the minor kitchen remodel. The project landed at number seven and is estimated to recoup 82.7 percent of costs. Nationally, the average cost for the project is just under $19,000.

The improvement project likely to return the least is the home office remodel, estimated to recoup 48.9 percent.

For the report, Realtors® provided their insights into local markets and buyer home preferences within those markets. For 2014, the national average cost-value ratio stands at 66.1 percent, a jump of 5.5 points over last year and the largest increase since 2005, when the ratio increased 6.1 points to reach a high of 86.7 percent. For the second consecutive year, Cost vs. Value data shows that the value of remodeling is up for all 35 projects included in the survey.

apartment unit_1

Additionally, for the first time in four years, improved resale value of residential housing had more of an influence in the cost-value ratio than construction costs. A modest 2.2 percent increase in average national construction costs was more than offset by an 11.5 percent improvement in average national resale value.

The 2014 Remodeling Cost vs. Value Report compares construction costs with resale values for 35 midrange and upscale remodeling projects comprising additions, remodels and replacements in 100 markets across the country. Data are grouped in nine U.S. regions, following the divisions established by the U.S. Census Bureau. This is the 16th consecutive year that the report, which is produced by Remodeling magazine publisher Hanley Wood, LLC, was completed in cooperation with NAR.

“Every neighborhood is different and the desirability and resale value of a particular remodeling project varies by region and metro area. Before undertaking a remodeling project, homeowners should consult a Realtor® as they are the best resource when deciding what projects will provide the most return upon resale,” said Brown. “Realtors® have a unique understanding of local markets, home features and buyer preferences and know that there are a variety of factors that affect a home’s value, such as location, condition of surrounding properties and regional economic climate.”

improvinghousingmarketSeven of the nine regions covered in the report outperformed the national average, a distinct improvement over 2013, when just four regions performed better than average. Once again, the Pacific region, consisting of Alaska, California, Hawaii, Oregon and Washington, led the nation with an average cost-value ratio of 88 percent, due mainly to strong resale values. The next best performing region was West South Central with 76.4 percent, followed by three regions tied at 74.6 percent: South Atlantic, which improved from 63.7 percent in 2013, New England, which improved from 56.2 percent in 2013, and East North Central, which improved from 54.8 percent in 2013.

To read the full project descriptions and access national and regional project data, visit www.costvsvalue.com.

“Cost vs. Value” is a registered trademark of Hanley Wood, LLC.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1 million members involved in all aspects of the residential and commercial real estate industries.