Yardi Says Multifamily Rents up 2.4% through April

According to the latest Yardi Matrix, U.S. multifamily rents rose $4 to $1,377 in April to a level, which they point out, is the market’s best performance since last spring.  Year over year, rents are up 2.4% through April and is within the 2.5% growth range that the market has averaged since early ’17.

“The big picture is that even though the occupancy rate is dropping slowly closer to the historical average, the market is in a healthy position for the long term. Demand is expected to remain high, while overall housing stock is growing at roughly the same number as new households.”

Click here to read the full report at Yardi.

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Landlord Hank: How Do You Handle Evictions?

Dear Landlord Hank: How Do You Handle Evictions?

How do you handle evictions which can be a sometimes messy part of our business? Veteran landlord and property manager Hank Rossi answers questions from other landlords and property managers around the country about their rentals.

Dear Landlord Hank,

How do you handle evictions? Is there an easier way? Unfortunately, we just had to do the first one in 10 years and had to show up at the rental with the sheriff, plus tenant left a bunch of stuff which we now have to clean out and store.

-Ellen

Dear Landlady Ellen,

Evictions are a messy part of the business, but sometimes it has to be done.

The key, in my opinion, to lessening the chance that you will have to evict, is to do extensive tenant screening.  We check credit, criminal, residential history (5-year minimum), employment history and income verification (2-year minimum), sexual predator/offender, terror watch list, and common sense.

10 years of no evictions means you are doing something right

Still, that doesn’t mean you won’t have to evict, but 10 years of no evictions means you are doing something right.

Do not let the process frighten you or make you slow to initiate.

The state laws vary, so become very conversant with your state laws to avoid any associated missteps. You want to go right by the book.

Refer to your lease to see when rent is due, when it is late and when to evict.

I always try to talk to my tenants first to see why the rent is late.  Sometimes it has been mailed, and they don’t know I didn’t receive it (There are some legitimate excuses for late rent).

Reach out to tenants if you can

However, other times, tenants do not respond to calls, texts and/or emails.

This reaching out by the landlord should be a one-day event. I never extend this outreach beyond one day. If tenant lost their phone, a notice on their door should bring their attention to this dire circumstance.

Make sure you give a three-business day notice (to cure-or “pay rent”) if required in your state (holidays and weekends don’t count). Then file immediately.

In some areas you can file on line. If not, go to the court house and bring all your info with you, including all tenant contact info, the amount the tenant owes in rent, late fee, etc.

Read and complete the forms, pay the filing fee, and then cease all contact with the tenant. Do NOT accept any rent after you have filed unless the tenant pays the rent, late fee and your cost for filing the eviction, AND provides a reason this happened and assurance it won’t happen again.

The court will send a copy of the filing to the tenant showing the amount owed, and the tenant can submit an answer to the court either accepting the debt or denying it and providing their justification for the dispute.

You can hire an attorney to take care of it for you

You can hire an attorney to take care of this for you, but find one who specializes in landlord-tenant relations.

I have never used an attorney and have never lost a case. I don’t like people trying to steal from me (by not paying what they owe to live in a nice home), and I don’t mind standing up for myself.

This would be too stressful for some people, in which case an attorney would be a great choice.

After you go to court, if you are really in the right and the tenants did not pay the rent for some reason other than deficiencies in the rental, the judge often will give the tenants a week to leave. You will have to get the writ of possession from the court and take it to the sheriffs office for service to tenants (another fee is due for service).

The sheriff will schedule an appointment with you for the eviction

The sheriff will schedule an appointment with you for the eviction. You are not required to notify the tenants when the eviction is taking place.

The sheriff will arrive and force the tenants to leave the property.  You are responsible for providing able bodied workers to cart the tenants’ belongings to the curb. Bring boxes, dollies, etc., because it all has to go.

After you are finished, make sure you CHANGE THE LOCKS on the door to prevent the tenants from reentering the property.  Make certain windows and doors are locked.

This is a painful process for all involved, but continue to treat the tenants with respect and proceed in a professional manner. You probably won’t know why they are not paying the rent, but whatever their reason, you aren’t a charity.

The easiest way to handle this is through an attorney and a company that moves tenants belongings to the curb. You will still have to consult with the attorney, provide your lease and tenant accounting for rent owed, and pay for these services.

Good luck, but you have a great record in this business so far.

Hopefully, you’ll have no more evictions.

Sincerely,

Hank Rossi

Editor’s note: Be sure to do your due-diligence and take the time to know & understand your state & local laws pertaining to evictions.  Your local REIA can be a great resource.

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Foreclosure Starts Increase as Storm-Related Cases are Filed

In Black Knight’s “First Look” for March, 2018 they report that as 2017’s hurricane impact shifts away from delinquencies, foreclosure starts rose by nearly 12%  – mostly in the hurricane-impacted areas of Florida & Texas.  However, overall, active foreclosure inventory continues to shrink, falling by 10k loans in March to its lowest level since late 2006.  Black Knight derives their mortgage performance statistics from its loan-level database representing the majority of the national mortgage market.

Key takeaways:

  • Nationally, there was a decline of 65,000 in serious delinquencies
  • Serious delinquencies attributable to Hurricanes Harvey and Irma saw a reduction of 19,500 loans
  • However, as the hurricane impact shifts away from delinquencies, foreclosure starts rose by 12%
  • More than two-thirds of that increase came from hurricane-affected areas of Texas and Florida

Click here to read the full report on BlackKnightInc.com.

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Zillow is Now Getting Into the Home Flipping Business

Photo: Zillow

Last year we posted about Zillow getting into the “instant offers” business where potential sellers submit their property address and get no-obligation offers from “qualified” investors. Their program has been going for about a year in Las Vegas and Orlando but recently they announced that Phoenix was being added to the mix.  Now, the Wall Street Journal is reporting (provided by MarketWatch) thatZillow is getting into the home flipping business.  According to the report,  Zillow will purchase homes in Las Vegas and Phoenix, renovate and flip them within 90 days.  There goes the neighborhood….

Click here to read more at MarketWatch.com.

Click here to read the release about their expansion into Phoenix.

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Subprime Mortgages Making a Comeback with New Name

Yes, you read that headline right….subprime mortgages are making a comeback and they have a new name;  “nonprime.”  Realty Check’s Diana Olick is reporting that although the subprime mortgage industry vanished after the so-called Great Recession it is now being reinvented as the “nonprime” market.  In addition, she reports that Carrington Mortgage is now offering mortgages to borrowers with “less-than-perfect credit” and that demand from both borrowers & investors is exceeding expectations.  Indeed…..things might get weird, again…buckle up.

“California-based Carrington Mortgage Services, a midsized lender, just announced an expansion into the space, offering loans to borrowers, “with less-than-perfect credit.” Carrington will originate and service the loans, but it will also securitize them for sale to investors.”

Click here to read the full story on CNBC’s Realty Check.

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Property Taxes by U.S. County

U.S. Property Taxes Levied on Single Family Homes in 2017 increased 6% to More Than $293 Billion,according to a recent report by ATTOM Data Solutions.  The conclusion was part of their annual property tax analysis covering more than 86 million single family homes across the U.S.  It shows that, in 2017, property taxes levied on single family homes totaled $293.4 billion.  This figures is 6% higher than 2016 and averages out to nearly $4k per home (an effective rate of 1.17%).  ATTOM’s report analyzed property tax data collected from county tax assessor offices nationwide at the state, metro and county levels along with estimated market values of single family homes calculated using an automated valuation model (AVM). The effective tax rate was the average annual property tax expressed as a percentage of the average estimated market value of homes in each geographic area.

Key takeaways:

  • Average Property Tax Was $3,399, Up 3% and Effective Tax Rate of 1.17%
  • Highest Effective Tax Rates in New Jersey, Illinois, Vermont, Texas, New Hampshire
  • Average Property Taxes Nearly Twice as High in Politically Blue Counties as in Red Counties

Click on the map to view it interactively.

Click here to read the full report at attomdata.com.

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Are Rising Home Prices Pushing Borrowers Deeper in Debt?

BY  ON APRIL 12, 2018

Are rising home prices making homeownership more difficult for many potential buyers?  According to a recent article in the Wall Street Journal (reprinted on Realtor.com), roughly one in five conventional mortgage loans made this past winter went to borrowers spending more than 45% of their monthly incomes on mortgage payments and other debts, the highest proportion since the housing crisis.  In addition, they report economists are saying rising debt levels are a symptom of a market where home prices are sharply rising in relation to incomes, which they blame on a lack of supply.

“Economists warn that lenders must tread carefully in making credit more available, given the role easy mortgages played in creating the last housing bubble. The share of new buyers with debt-to-income levels in the 46% to 50% range remains well below the peak of just under 37% registered in 2007, but is nearing the levels of 2004-05, the years leading up to the bubble, CoreLogic data show.”

The Wall Street Journal

Click here to read the full story on Realtor.com.

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Nearly 8% of Millennials Rely on Family to Help Pay for Housing

BY  ON APRIL 11, 2018

We’ve had numerous posts about millennials, that generation born between 1982-2004.  It’s a fast moving demographic with a set of rules seemingly all their own.  With that in mind, a new report from ApartmentList.com found that 7.9% of non-student millennials receive help from parents with their monthly rent, and 17.1% expect help with a down payment when purchasing a home.  They got their numbers from over 13k respondents to a survey they conduct annually.  They also cited a recent USA Today/Bank of America poll where 40% of millennials received help from parents with everyday expenses, including rent, child care, phone bills and car payments.  Indeed….

“…Millennials face a housing market where rent and home prices have risen faster than incomes for decades. In cities such as Denver and Seattle, rents increased by over 70 percent from 2005 to 2016, and starter homes are in high demand but short supply. In order to keep up with rent and home prices, many millennials receive financial support from families…”

Click here to read the full report on ApartmentList.com.

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Top 10 Affordable Small Towns

Logansport, Indiana (www.cityoflogansport.org)

Everybody loves a “small town,” right?  The charm, the people, you name it.  A lot of those notions are pure romanticized imagination but there are some aspects of small towns that make them attractive and therefore a great place to live and invest.  The folks over at Realtor.com put pen to paper and sent their folks out to find the best small towns in America where you can find affordable, good-looking housing, safe communities and fun things to do.   They looked at over 500 U.S. cities with populations between 10k-50k and came up with rankings based on items which  include:  median home price, unemployment rate, crime rate, overall housing costs and unique things (food, culture, activities, etc).  Indeed…

Here are Realtor.com’s top 10 “affordable” small towns:

  1. Logansport, IN
  2. Mexico, MO
  3. Guymon, OK
  4. Defiance, OH
  5. Albert Lea, MN
  6. Emporia, KS
  7. Lexington, NE
  8. Shewano, WI
  9. Dumas, TX
  10. Spencer, IA

Click here to read the full story on Realtor.com.

 

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Nearly 60k Tear-Down Housing Starts in 2017

According to the NAHB’s Eye on Housing Blog, nearly 6.8% of single-family homes started (close to 60k) in 2017 qualified as “tear-down starts.”  While this estimated number is down 10.2% from 2016, it is significant because of an ongoing shortage of new entry-level housing, more and more homes that might be considered starter are being knocked down due to the increased value in land.  A tear-down start is defined as a home built on a site where a previous structure or evidence of a previous structure was present before the new home was started.

“Between 2016 and 2017, the number of single-family tear-down starts remained relatively constant in the Midwest and South Census regions, nearly doubled in the Northeast, and declined by nearly 75 percent in the West (after increasing by more than 200 percent the year before).”

Click here to read the full report on the NAHB’s Eye on Housing.

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