Millennials are Fueling the Rental Economy
BY BRAD BECKETT ON NOVEMBER 1, 2019
Visual Capitalist reminds us that the spending habits of millennials have not only been reshaping the retail landscape but setting the tone for its future. They say they want anything, anywhere and anytime. That’s pretty intense, but it is reality. In that vein, today’s infographic looks at the top categories in which consumers rent and their potential long term impact on the economy. Happy Friday!!!
“Although the current market for rentals is still in its early stages, the sheer momentum that the industry has gained in the last year is enough to threaten even the largest retailers—forcing them to reconsider their own business models.”
Four Fall Projects to Tackle Now for Year-Round Property Protection
BY BRIAN AGUIRRE ON OCTOBER 31, 2019
Fire emergencies, unwanted intruders or even inadequate insulation can all pose threats to your property and its tenants. Fortunately, a mix of the right products, devices and technology can help you monitor a property and minimize risks to your investment. Here are four projects you can tackle this fall to better protect your investment year-round.
1. Don’t Let Fire Catch You Off-Guard
The average cost to repair fire and smoke damage is $4,000. This expense can skew much higher if a roof, kitchen cabinetry or other fixtures need replacing.
October is National Fire Prevention Month, and a good time to ensure your fire safety equipment – including smoke alarms, carbon monoxide detectors and fire extinguishers – are in good condition. It’s also a timely opportunity to consider upgrading to newer, “smarter” products that can better prepare you for unforeseen risks.
Most fires start in the kitchen, with electrical malfunctions and heating as two other leading causes. Smoke alarms provide early warnings, giving tenants time to evacuate and to alert firefighters. As a property owner, you can do three things to ensure your smoke alarms are working properly:
- First, replace the batteries every 12 months.
- Second, replace all smoke alarms after 10 years. Remember: toss at 10, then start again.
- Third, regularly make sure smoke alarms are clean and free from paint, dust or grease.
Installing smoke alarms on every level of your home, inside bedrooms and outside sleeping areas, is the first step to protect your home. Kidde is a top-rated brand for fire safety products. The Kidde smoke detector with ionization sensor is ideal for living areas, alerting you to fire hazards with ionization sensing alarms that may detect invisible fire particles even sooner than photoelectric alarms. Kidde also offers combo smoke and carbon monoxide detectors to provide double the protection in one product.
Fire extinguishers are also essential as they effectively put out 80 percent of fires. In the kitchen, be sure to install an extinguisher labeled “B” for use on flammable substances like gasoline, grease and oil. In addition to the kitchen, extinguishers should be strategically located throughout every level of the home, including the garage.
2. Secure the Outdoors
When it comes to protecting your property, “extra eyes” are a good idea. Take security to the next level with smart cameras, doorbells and even outdoor lighting systems. These products send real-time alerts to your mobile device if anything is detected – ensuring 24/7 surveillance no matter where you are.
Google Nest offers several smart cameras options, as well as smart doorbells, that can be part of a comprehensive security package. The Google Nest doorbell sends an alert when it detects motion at the door, and lets you speak with visitors through your mobile device. Ring also has a doorbell that sends an alert when someone is at the door, records footage of them and allows you to communicate via a two-way talk feature.
You can shine a light on security, too. Defiant offers energy-efficient LED motion-activated floodlights that double as HD security cameras and send alerts to a mobile device. For Pro customers, The Home Depot makes it easy to purchase exactly what you need with call-ahead ordering, online purchasing, in-store pick-up or even onsite delivery.
3. Good Fencing is a Good Investment
Adding value to a home can be as easy as installing a fence around your home. In addition to defining the property’s perimeters, providing privacy and improving home security, fences can increase your property value.
The Home Depot offers a selection of fencing options at bulk pricing when buying in large quantities and in-store associates can walk you through everything you need to know, from selecting the right type of fence to securing posts and attaching panels.
Need the right tools to install the fence? The Tool Rental Center is stocked with top brands to get the job done, including augers, post hole diggers, DeWalt hand tools and more.
4. Insulate for Comfort and Cost Savings
A well-insulated property carries numerous benefits. It can help minimize energy bills, provide a moisture barrier in damp areas, soundproof a home, and offer a safer structure in the event of a fire or carbon monoxide threat.
According to the U.S. Department of Energy, five areas of a home should be properly insulated: the attic, interior and exterior walls, floors, crawl spaces and the basement. Each could require a different type of insulation, and The Home Depot carries several varieties by Owens Corning to tackle every job.
You have a lot invested in your real estate properties, and the proper safety and security measures can give you the peace of mind that your investment is well protected. Whether you’re tackling these projects or any other property protection improvements, The Home Depot Pro is the go-to destination for landlords and real estate investors.
Designed by professionals for professionals, Pro Xtra is The Home Depot’s loyalty program that helps you save money, manage your spending and grow your business. In addition to the program’s standard benefits, National REIA members also receive a two percent annual rebate, 20 percent off paints and primers, volume pricing and more. It’s free to join so check it out and get started today.
U.S. Homeownership & Rental Vacancy Rates for Q3 2019
BY BRAD BECKETT ON OCTOBER 30, 2019
The U.S. government is reporting that the national vacancy rates in Q3 2019 were 6.8% for rental housing and 1.4% for homeowner housing. The national homeownership rate for Q3 2019 was 64.8%, which they report was not statistically different from one year ago. Approximately 87.8% of the housing units in the United States in Q3 2019 were occupied and 12.2% were vacant. Owner-occupied housing units made up 56.9% of total housing units, while renter-occupied units made up 30.9% of the inventory.
Click here to read the full release at the U.S. Census Bureau.
Top 10 Cities with the Youngest Residents
BY BRAD BECKETT ON OCTOBER 29, 2019
Where are the top cities in America with the most young people? That’s the question the folks at Realtor.com put pen to paper to find out. They combed through census data to come up with the top 10 cities with the lowest average resident age (one per state) of 30 or younger. Interestingly, these cities are almost all college towns with one exception.
“…there are a few places in America you can go to gain a more energetic and exuberant outlook on life. How do you pull this off? By surrounding yourself with young people, of course…Think of the fun you’ll have, the slang you’ll learn, the progressive attitudes you’ll be exposed to…”
The top 10 cities are:
- Provo, UT
- Stillwater, OK
- Jacksonville, NC (tied with Manhattan, KS)
- Manhattan, KS (tied with Jacksonville, NC)
- Ames, IA
- College Station, TX
- Mount Pleasant, MI
- Athens, OH
- Statesboro, GA
- Lafayette, IN
ABODO Says One-Bedroom Units Rebound in November
BY BRAD BECKETT ON NOVEMBER 6, 2019
National apartment listing site ABODO recently reported that the median nationwide rent price for one-bedroom units in November was $1,071. ABODO uses over 1 million listings across the United States to calculate the median 1-bedroom rent price by city, state, and nation and then track the month-over-month percentage change. To avoid small sample sizes, they restrict their analysis to cities meeting minimum population and property count thresholds. Be sure to check out their extensive city list.
Zombie Properties less than 3% of All Foreclosures
BY BRAD BECKETT ON NOVEMBER 5, 2019
According to the latest Vacant Property and Zombie Foreclosure Report, ATTOM Data is reporting that there were over 1.5 million (1,527,142) vacant single-family homes and condos in Q4 of 2019. In addition, the report says there were about 288,300 homes were in the process of foreclosure, with 8,535, or 2.96% sitting empty as “zombie” foreclosures.
“While pockets of zombie foreclosures remain, neighborhoods throughout the country are confronting fewer and fewer of the empty, decaying properties that were symbolic of the fallout from the housing market crash during the recession.” Said Todd Teta, chief product officer with ATTOM Data Solutions.
Opportunity Zones Show Potential for Small Businesses, Neighborhoods
BY STEVE CHABOT ON OCTOBER 24, 2019
As the ranking member of the House Committee on Small Business, I hear time and time again from small business owners who become entrepreneurs to achieve the American Dream. However, their continued success can create ripples far beyond their individual lives. When their businesses hire or expand facilities, they create jobs and drive the economy in their communities. A slate of successful businesses, combined with pro-business policies, can attract potential investors and entrepreneurs to the area and create a positive business ecosystem.
Unfortunately, not all communities – even within the same city – receive the same level of investment. Sometimes, the loss of a major employer or industry starts a cycle where vacant storefronts discourage new businesses and a lack of employment prompts some to move. This problem of low or underinvestment affects lots of places, from former coal towns to urban enclaves, and can cause a host of secondary social and economic issues.
Recently, I had the chance to discuss one possible solution with leaders from Cincinnati’s business community and representatives from several regional chambers of commerce, law firms and economic development agencies. That solution is opportunity zones.
Opportunity zones were established in the 2017 Tax Cuts and Jobs Act and intended to encourage investment in economically disadvantaged communities using select tax incentives. The zones are tracts of land that meet certain criteria for median income and poverty rate as established by previous tax provisions. A smaller number of zones can be contiguous to those who meet the income and poverty rate conditions. Governors nominated a limited number of these areas, and the U.S. Secretary of the Treasury officially designated them as opportunity zones.
To take advantage of the tax benefits, investors must create a Qualified Opportunity Fund that they use to invest in these areas. In return, capital gains tax is deferred for reinvested funds. Incentives improve as funds are held in the opportunity zone. After holding the investment for five and seven years, an investor’s capital gains tax liability can be reduced by 10% and 15%, respectively, and after 10 years, liability on new gains from the investment can be canceled altogether. This mechanism ensures that benefits can only be realized by committing to the community for a significant period.
That’s a lot of technical stuff, but the bottom line is that businesses sustain communities, and when they leave, it can be hard to reestablish a neighborhood. By creating benefits to settling in underserved areas, opportunity zones have the potential to revitalize areas across the country through public-private partnerships such as those we see in the city of Erie, Pennsylvania, and right here in Over-the-Rhine.
Of course, as with any new federal program, we must consider the impact on program participants, community stakeholders and the American taxpayer. Some recent articles have portrayed opportunity zones as a gimmick that will only benefit real estate developers. While I disagree with this characterization, I agree that there should be a strong focus on how small businesses can engage in and benefit from opportunity zones. Additionally, the rules and regulations of the program must be written so they are not unnecessarily burdensome to potential investors. At our roundtable, I had the chance to discuss these issues as well as potential solutions, and we certainly have a lot to consider as we continue to work on this issue at the federal level.
While other tax incentive programs have aimed to increase development in low-income areas, some have had mixed results, and many had restrictive requirements. Opportunity zones offer a more flexible approach that I believe has the potential to truly make a difference for our nation’s underserved communities.
Steve Chabot
Congressman Steve Chabot represents Ohio’s 1st District in the U.S. House of Representatives and is the ranking member of the House Committee on Small Business. He has proudly served Ohio’s First Congressional District for 20 years. A lifelong Cincinnatian, Steve previously served as a Cincinnati City Councilman and Hamilton County Commissioner for five years each prior to being elected to Congress in 1994.
Nonrevolving Debt is Surging
BY BRAD BECKETT ON OCTOBER 24, 2019
The NAHB’s Eye on Housing picked up on an interesting tidbit in the latest Federal Reserve G.19 Consumer Credit Report that shows rising trends in consumer credit, excluding loans secured by real estate, through August 2019. They point out that most of the increase in this period also owed to the closed-ended credit extended by the federal government, which is also the largest component of nonrevolving debt which they say manifests most prominently in the form of student loans – a long-established barrier to homeownership. Indeed…
“This month’s percentage increase in nonrevolving debt is the largest increase that has occurred since November 2017, when it had increased by 7.9% from the previous month. On a non-seasonally adjusted basis, this month’s flow of $36 billion to the previous month’s outstanding level of nonrevolving debt marks the greatest increase since August 2016.”
Click here to read the full report at the NAHB’s Eye on Housing.
Rents Grow & Vacancy Rates Shrink in Manufactured-Home Communities
BY BRAD BECKETT ON OCTOBER 23, 2019
A new study says that as the demand for workforce housing is growing, so too is the demand for renting in manufactured-home communities (MHC). Citing a recent study from Marcus & Millichap, the Scotsman Guide is reporting that this trend is being fueled by the relatively low price of renting in an MHC compared to the cost to rent an apartment. They say that as a result of this demand, vacancies within MHCs are decreasing, causing rents to rise. Indeed….A little Econ 101:
“The shrinking vacancy rate is boosting rent growth nationwide, Marcus & Millichap reported, with manufactured-housing units in the Southeast region posting the largest year-over-year rent increase this past July…”
Click here to read the full story at the Scotsmanguide.com.
Homeowners Tapping into the Auxiliary Dwelling Unit Trend
BY BRAD BECKETT ON OCTOBER 23, 2019
Recently we saw a garden shed apartment that was being rented out for over $1k per month, now we’ve learned from CNBC’s Diana Olick, that more & more homeowners are carving out revenue streams from their backyards by constructing auxiliary dwelling units (ADU). So, what is this new real estate investing trend and how exactly does it work?
