Amy Hedgecock to be the National Association of REALTORS 2019 Chair of Single Family Investment Management. Says Hedgecock: “I am honored to take on a leadership role with the newly formed Single-Family Investment Management Committee. I hope to work with my fellow REALTORS® and our colleagues in the Institute of Real Estate Management to ensure that we are identifying areas of advocacy and education in this field that may have been overlooked. While there are some comparisons to multifamily management, single-family property management is its own unique animal, and we need to make sure that our members who are involved in this area of real estate are as educated and prepared as they can be. Additionally, having the opportunity to educate fellow REALTORS® on the benefit of investing in single-family rental homes is a great way to help them achieve their own financial growth!”
NC REALTORS President, and Owner of Fowler & Fowler, REALTORS, Amy Hedgecock weighs in on the residential real estate market in this Greater Wilmington Business Journal article. http://www.wilmingtonbiz.com/insights/insightful_discussions/a_look_at_the_region%E2%80%99s_residential_real_estate_market/2105
Just when the signs were pointing to a slowing rental market, landlords are finding that demand is warranting higher prices. Rents are posting the highest annual growth rates since the end of 2016, according to a new analysis of 250 of the largest U.S. cities by RentCafe, a nationwide listing service for the apartment sector. Rents are up 3.2 percent year over year, and the national average rent was $1,377 in April.
Rental costs rose in 84 percent of the nation’s 250 largest cities in April, and dropped in only 2 percent of cities compared to a year ago.
The 20 fastest growing rents are in small cities. Five cities posted double-digit annual growth in April for rental prices: Odessa, Texas (35.6%); Midland, Texas (32.6%); Yonkers, N.Y. (11.5%); Reno, Nev. (10.8%); and Hollywood, Fla. (10.6%).
On the other end, the cities seeing the slowest year-over-year rent changes in April were: Norman, Okla. (-2.5%); Lubbock, Texas (-2.5%); New Orleans (-2.2%); Brownsville, Texas (-1.7%); and Hillsboro, Ore. (-1.6%). Some bigger cities are seeing rents decline or stagnate, such as in New York; Baltimore; Washington, D.C.; Portland, Ore.; and Austin, Texas.
“Housing supply, rent stabilization, and affordable rents are of critical interest nationwide,” says Doug Ressler, director of business intelligence at Yardi Matrix. “Continued rent activity is expected specifically in 22 states and the District of Columbia, which have built too little housing to keep up with economic growth in the 15 years since 2000, and have resulted in a total shortage of 7.3 million units (based on research by Up for Growth National Coalition). A key driver in the changing rental markets will be the individual or families’ cost of living and the percentage required for housing.”
Source: “April Rents Rev Up for the Rental Season With the Highest Annual Increase in 16 Months,” RentCafe Blog (May 3, 2018)
House Rentals Outpace Apartment Boom
The multifamily sector has seen a frenzy of apartment construction over the last decade, but it’s single-family homes that were the fastest growing type of rental between 2007 and 2016, according to a new study by RentCafe. Over the last decade, single-family rentals rose by 31 percent, while the multifamily sector grew by 14 percent. In net gain, the growth makes up 3.6 million units versus 3.2 million units added, respectively.
Single-family rentals tend to be more common in suburban settings, but they’ve also surged in popularity in the nation’s denser urban cores. In 22 of the 30 largest U.S. cities analyzed, single-family rentals expanded at a faster rate than apartments between 2007 and 2016. Phoenix led this pack with a 77 percent gain in single-family rentals, followed by Boston (63%) and Fort Worth, Texas (60%).
Los Angeles, however, boasts the largest existing single-family rental housing stock, followed by Philadelphia, Houston, and Phoenix, all with more than 100,000 homes for rent.
“While everyone’s been waiting for homeownership to fully regain its pre-crisis strength, single-family rental homes have become ‘Plan B’ for those anxious to break out of their apartments [but are unable to] buy a house yet, or have lost their homes to foreclosure, short sale, or financial setbacks,” RentCafe notes about the analysis on its blog.
Slightly more than half of the total number of single-family home rentals are occupied by families. Single-family rentals tend to cost, on average, about $1,000 more in monthly rent than an apartment.
Despite this growth, apartments still dominate rental housing stock, RentCafe notes: “There’s still a long way to go: As of 2016, the U.S. Census counted a total of 15 million single-family rentals versus 26 million apartments.”
Source: “Single-Family Rentals Increased Faster Than Apartments in 22 of 30 Big Cities, Led by Phoenix,” RentCafe Blog (April 2, 2018)
We have always encouraged our residents to purchase a Renters Insurance Policy. Each home is covered with a Hazard Policy paid for by the property owner, but tenant’s items are NOT covered by this type of policy. In the event of a fire, flood, or break-in a tenant may loose all of their items with little recourse. In multi-family situations, it can be especially tragic because fire and smoke damage can spread quickly to many units.
We are proud to announce that it is now much easier for our residents to purchase Renter’s Insurance. They can do so through a link on their Fowler & Fowler, REALTORS Tenant Portal.
Tenants in single and multi-family properties can now purchase a renters insurance policy with Roost Renters Insurance through their Online Portal. Tenants are not required to purchase a policy with Roost, but we’ve provided a simple and convenient option if they don’t already have a policy.
Renters insurance covers the tenant’s personal property (including laptops, furniture, electronics, appliances, clothes, bikes, etc.) if they’re damaged or stolen.
Renters Insurance covers items lost or damaged in events such as:*
Weather related: Fire, wind, snow, hail, lightning, freezing, ice
Non-Weather related: theft, vandalism, malicious mischief
*Please refer to your tenant’s actual policy for a complete list of losses that are covered and not covered. Some categories of personal property coverage have a maximum dollar limit. Actual coverage options and prices may vary by state and location.
Additional Coverage Options (options vary by state):
Water backup of sewer and drains (included by default, tenant cannot opt out)
Other additional coverage options offered based on tenant’s location
Liability Coverage: Renters insurance includes $100,000 in liability coverage for the named insured.
For more information on this new feature https://help.appfolio.com/s/article/Renters-Insurance#faqs
Or sign in through your tenant portal at www.Fowler-Fowler.com
Fowler & Fowler, REALTORS President, Amy Hedgecock, has been named 2018 Vice Chair of the Single-Family Investment Management Committee for the National Association of REALTORS. The charge of the committee is to monitor issues and trends in single-family property management, and identify areas where advocacy and education is needed with respect to the ownership and management of single-family rental properties.
According to the American Community Survey, the number of renters in single-family detached homes increased by 3.2 million between 2004 and 2013, accounting for nearly half of the gain in rentals- lifting the single-family share from 31 percent to 35 percent.
Amy is proud to be a part of the National Association of REALTORS team that will help advocate for single family property investors. Way to go, Amy!
4 Issues to Watch for Property Managers
Correction: In an earlier version, quotes by Tyler Craddock of the National Association of Residential Property Managers were mistakenly attributed to an NAR staffer. The story has been corrected.
It’s a changing landscape for landlords and tenants. Property management and policy experts speaking at the REALTORS® Legislative Meetings & Trade Expo in Washington, D.C., offered attendees of the Property Management Forum guidance on handling four hot-button issues.
Can You Negotiate Service Animal Requests?
The need to accommodate service animals, once a relatively rare issue for property managers, has become increasingly common. Under guidelines from the Department of Housing and Urban Development and the Americans With Disabilities Act, property managers must make a reasonable accommodation for tenants who request a service or comfort animal, regardless of their building’s pet policy.
But what if a tenant’s request is problematic for the unit? “When someone comes to you with a [doctor’s] note that says, ‘I’m entitled to 40 cats,’ you can negotiate [that],” said Tyler Craddock, government affairs director of the National Association of Residential Property Managers. “You can have that conversation, saying, ‘This is a one-bedroom efficiency unit, and I don’t think we can accommodate 40 cats there. Is there another way we can accommodate this?’”
Paul Dizmang, chair of the Property Management Forum, advised attendees to call their local or state HUD office if they have questions.
Fraudulent service animal requests are becoming an increasing concern, Dizmang said. “In five minutes, you can go online and get a doctor’s note to certify a service animal.”
Disability rights groups around the country are starting to look at cases where tenants obtain online certification for a service animal, which is trained to perform a specific task, when the need is not legitimate, said Megan Booth, senior policy representative at the National Association of REALTORS®. She added that NAR is working with the National Fair Housing Alliance to get more specific HUD and ADA guidance on this issue.
Combating Rent Control
“Rents are high in many areas, and citizens are going to their state legislatures and asking for answers,” said Beth Wanless, senior manager of government affairs with the Institute of Real Estate Management. “Many lawmakers say rent control is a good solution. It’s actually a terrible idea.”
Wanless explained that rent control does not incentivize developers to build new projects because rent caps lower their profits. The effect, she said, is fewer and lower-quality affordable housing units. “Legislators think rent control will allow for more affordable housing for vulnerable citizens, but it actually creates a black market,” she said. Property managers also have less incentive to maintain rent-controlled properties because they won’t make enough money to pay for routine building maintenance and repairs, she added.
NAR and IREM oppose rent-control policies.
Marijuana Policies for Residential, Commercial Properties
The majority of the debate around marijuana laws and real estate has focused on residential property. Property managers who oversee apartment complexes should be advised that in the 28 states that have legalized medical marijuana use—eight of which have also approved recreational use—they cannot deny a tenant with a medical need the right to use pot on their properties, Booth said. However, they can regulate the smoking of marijuana. Lease agreements should explicitly state the methods of marijuana use—whether it’s through smoking, oils, edibles, or other means—that are acceptable on the premises.
But 17 states also allow the growing of marijuana on private property, which could raise risks for not only residential property managers but also those who manage industrial and retail properties. “If you cover utilities as part of your lease agreement, be aware that a single marijuana plant can take a gallon of water a day and 17 hours of light,” Booth said. “That can get expensive.”
When it comes to grow houses, which are typically housed in industrial warehouses, and retail pot dispensaries in shopping centers, property managers should be cognizant that even though their state may allow such operations, federal law still classifies marijuana as an illegal substance. That means the properties are vulnerable to federal raids and seizures, Booth said. She also cautioned that pot dispensary owners, who legally must deal only in cash, will have to pay rent in cash—and that could raise alarms about money laundering from federal officials.
How Far Can You Go With Criminal Background Checks?
Craddock warned attendees that if their leasing policies disallow tenants who have committed a felony, it could have a disparate impact on a certain group of people—which is a violation of fair housing law. Unfortunately, he noted, HUD guidelines on this issue are vague, and the agency will likely tell property managers to follow guidance set forth by courts in their area. “Our members just want to know what they need to do to follow the law,” Craddock added.
HUD does say that property managers cannot consider arrest records when considering tenant applications, and only convictions related to threats to property or other tenants are relevant when choosing who to rent to, Booth said. “You have to look at the nature of the crime, the severity, the age of the [prospective tenant] at the time of the crime, and how much time has passed since conviction,” she said. She suggested that property managers consider only the last seven years of a prospective tenant’s criminal history.
She also advised looking at work history and doing a credit check on prospective tenants before conducting a criminal background check. “If there’s nothing there, it [may indicate] they’ve spent time in prison recently,” Booth said. When denying tenants based on their criminal background, she added, property managers should be honest about that and give them an opportunity to explain their situation.
The City of High Point announced that they will be building a stadium in the location of the old High Point Enterprise building. They will also be supporting a development area around the stadium which should include a children’s museum as well as restaurants and shopping. More information on this project can be found here: https://www.highpointnc.gov/1993/Downtown-Mixed-Use-Area-Plan
This has spurred at least one of our clients to take a good look at their property and they were inspired to start a remodel of their apartment building – the Greenbriar – located on Lindsay Ave. We have been working with them on getting the units ready, and the entire process has been very exciting.
The units themselves are 1 bedroom, 1 bath. But the closet space is ridiculously good! We’re talking walk-in closet, plus a wall of closets in the bedroom. Each unit has an exposed brick wall in the bedroom, which adds a touch of texture and unique character to the apartment. Additionally, there is a wall of windows in the living room and bedroom.
We decided to take advantage of the tremendous amount of natural light and open the wall between the kitchen and the living room. We made it a half-wall with a bar top, this will allow residents to take advantage of the bar area for table seating. The kitchens have been updated with beautiful stone counter-tops. and a textured back splash.
We have 1st floor and 2nd floor units available. The upstairs apartments have wood-look, laminate flooring. We made sure to add sound-reducing padding under the laminate, so as to reduce the amount of noise for the downstairs residents. The downstairs units have been returned to their original look with freshly polished and sealed, luxurious terrazzo flooring.
We are rapidly closing in on the interior remodel. One apartment is completed and two more should be ready soon. But the owner isn’t stopping there.
Additional plans include: adding controlled access doors to the exterior doors that lead to the common hallways. Once installed, we will issue every resident an electronic device that will allow them to unlock the door. We hope that the residents will find value in this added safety feature.
We have contacted award winning muralist Brian Davis with Brian Studios to add some “flare” to the yellow panels that surround the building.
Starting next year, we will begin to upgrade the landscaping.
And finally, we have contacted Emerywood Laundry regarding a laundry delivery service. The
plan is that they will come once a week and residents can have them pick up their laundry for same day service. For obvious reasons, this service will not be available until the controlled access doors are installed.
We are excited to help add to the downtown “experience” and hope that the new residents to the updated Greenbriar Apartments will enjoy the new look and feel of this vibrant apartment community.
Recently we asked our residents to Start The Year Off With Some Green! Anyone who had a zero dollar account balance with us as of January 10th would be entered to win one of two $100 VISA Gift Cards!
We held the drawing on Friday the 13th – Hey, it has to be lucky for someone, right?
Our winners have been contacted!
This year Fowler & Fowler, REALTORS is celebrating our 40th Anniversary! We will be having other drawings throughout the year and other exciting events!
Wednesday evening the gals from Fowler & Fowler, REALTORS headed to the bowling alley. Our mission? To help raise funds with the Charles Scott Memorial Bowl-a-thon and have a lot of FUN!
The Institute of Real Estate Management (IREM) Chapter 56 has been hosting the Charles Scott Memorial Bowl-a-thon for several years now. All monies raised go to support the Greensboro Urban Ministry and help families in need.
This year IREM was able to raise over $650! We were all very happy to be a part of this event!
We learned, however, we will not be quitting our day jobs and rushing out to become professional bowlers.