Posts Tagged ‘Landlords’

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.


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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.

5 Strategies of Successful Landlords

Written by Landlord Property Management Magazine on . Posted in Blog

It’s no coincidence that successful landlords use the best management strategies. In fact, there’s a direct correlation between these five good habits and the profitability of your rental business:

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1. Quick response to repair requests.

Can a leaky faucet lead to late rent payments? Believe it or not, the two are connected. Landlords who fail to respond quickly to repair requests or fail to maintain the property will find that, over time, tenants lose respect.  That leads to more problem tenants. After all, if you don’t care about it, why should they?

Quick repairs show a high level of customer service, and will lead to better tenant retention, a/k/a profits.

In addition, this habit lowers cost, and protects the value of the property.

And, in the event of an eviction, the good repair record will thwart a bad tenant’s attempt to delay, garner sympathy,  or try to offset unpaid rent.

2. Respect tenant privacy.

High on the list of tenant “don’t likes” is the landlord who drops in unannounced. These landlords face high turnover, and even costly lawsuits for breach of lease or invasion of privacy.

Except for emergencies, you’ll need to provide notice of visits, and you’ll need to have a reason
to be there.

Follow the law and set a good example for your tenants. In return, you will have happy tenants who behave, and who refer their friends to the property.

Making your tenants’ security a priority, whether it’s diligently re-keying locks,3. Focus on tenant security.

maintaining outdoor lighting, clearing weather off sidewalks, monitoring visitor access, or running criminal background checks, will pay off by attracting — and retaining — the best tenants.

4. Stay in touch

It is impossible to build a good relationship with your business customers — your tenants – if you do not communicate regularly. Create a flow of routine communications, like e-newsletters, a website or social media pages, sending rentreceipts and monthly invoices, providing a suggestion box — anything that proves you are present and accounted for.

By building rapport, you will be the first to hear complaints so they can be quickly resolved.  You will find out about maintenance issues, or problem tenants.  You also can generate more tenant referrals and fill vacancies more efficiently.

5. Strive to give back the deposit.

Some landlords believe that there is little risk of losing money over property damage,  so long as they charge a high deposit.

Because security deposits are so strictly regulated, it is impossible to make withholding deposits into a profit center.  Where damage does occur, often the deposit doesn’t come close to covering the full cost.

But if you set your sights on returning the money, you’ll be sure to set management policies that encourage a unit to be returned clean and ready for the next tenant. That means spelling out the tenant’s obligations in the lease agreement, checking up on the property throughout the term of the lease, and doing a preliminary walk-through about four weeks before the tenant moves out. You’ll have their forwarding address, because they’ll want their money back. Then, you’ll ask the tenant to do a formal walk-through with you at move out.

If tenants believes it is realistic they’ll get their deposit back, they are far more likely to get all of their stuff out and clean the unit on the needed time line. You don’t lose any of your own money by returning the deposit, and you get the property back in move-in condition. It’s the ultimate win-win.


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. 

 

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