TIGHTEST DFW APARTMENT MARKET IN DECADE

Provided By TAMU Recon Center


Dallas-Fort Worth’s robust economy is generating new households, creating the tightest apartment conditions in over a decade and facilitating healthy rent growth.

According to Marcus & Millichap's Apartment Research Market Report for third quarter 2012, employment gains in the Metroplex will approach 3 percent this year, more than the national rate of 1.7 percent.

"With business booming, job seekers will flock to the area from some late-recovery markets in the Midwest and the West Coast," notes the report. "As a result, leverage in lease negotiations will remain firmly on the side of apartment operators through the end of the year, spurring strong revenue gains.

"Some headwinds are forming, however. Year over year, home sales are up 20 percent, an indication that more renters are transitioning into single-family homes. Foreclosure activity, meanwhile, is up more than 10 percent from second quarter 2011, mitigating attrition from apartments to the housing market. As foreclosure activity begins to abate and new construction accelerates next year, apartment operators may have to react quickly with concession offerings to maintain tight occupancies."

Is Professional Property Management Right for You?

Provided By Realty Times

Whether you're a reluctant landlord --- renting out a property that you can't or don't want to sell in this market --- or an investor considering adding rental properties to your portfolio for the first time, you're likely considering whether you want to try and manage your rentals yourself, or whether you should hire a professional property manager. Here are a few factors to consider:

Distance

The first thing to consider is how close the rental property is to your own residence. If it's right around the corner, you'll have an easy time keeping an eye on the place, and you'll stand a better chance of being able to handle any needed repairs or emergency situations in a timely manner. On the other hand, if you live more than a 30-minute drive away, you're likely setting yourself up for a lot of scheduling difficulties if you try to manage the property on your own.

Time

Once you've rented your house to a responsible tenant, managing a rental property is not the kind of job that will require regular long hours. However, certain phases of the rental cycle will require quite a bit of your time. Getting a house ready to rent, marketing and showing the property, screening tenants, and getting all the proper paperwork in order can be time-consuming. Once you've placed a tenant, you'll need to be on-call in case repairs are needed. You'll need to ensure that rent is paid on time each month and keep accurate records of income and expenses for tax purposes. If you end up with problem tenant, chances are that many hours will be spent resolving the issues he or she presents you with.

Expertise

Professional property managers manage rentals systematically, using best practices that they've honed in the course of managing hundreds, if not thousands, of properties over the course of their careers. They have the market expertise to get top dollar for any given rental, and they know how to market properties to quickly find good tenants. They know how to structure leases to protect the property owner, how to work within Fair Housing laws, and how evictions need to be carried out. They have teams in place who can quickly respond to any issues that arise, including relationships with a variety of local service providers. If you're planning to manage rentals yourself for any length of time, these are all capabilities you'll need to be prepared to develop.

Finances

Property managers typically charge a one-time fee to get a property leased, then 8-12% of monthly rent for ongoing management. Many novice rental owners are reluctant to part with this kind of cash, especially if they already expect profit margins to be tight. However, it's important to consider that professional property managers can often command higher rents, reduce vacancy rates, address inexpensive problems before they become expensive ones, and provide many other cost efficiencies. When you realize that each month of vacancy costs about 8.3% of your total rental profits for a given year, it's easy to see how a professional property manager can easily earn his or her fee and then some---all while freeing you to pursue other revenue-generating activities.

In short, while it's easy to become the owner of a rental property, it's not always easy to manage one. If you want to enjoy the benefits of owning a rental without the time-consuming responsibilities that come with operating it, professional property management may be right for you.

Visit AllPropertyManagement.com to learn more about property management, then find a property manager in your area.

700,000 homeowners no longer underwater on mortgages

Provided By CNN

Thanks to improving home prices, fewer mortgage borrowers owe more on their homes than they are worth.

More than 700,000 homeowners were no longer underwater on their homes during the first quarter, according to CoreLogic.

According to the report, 11.4 million -- or 23.7% -- of mortgage borrowers were underwater on their homes at the end of March. That's down from the 12.1 million, or 25.2%, of borrowers who were underwater three months earlier.

"This is a meaningful improvement that is driven by quickly improving outlooks in some of the hardest hit markets," said Mark Fleming, CoreLogic's chief economist.

Home price rebounds, a better balance of supply and demand and fewer distressed sales all helped to reduce the number of people who were underwater during the quarter, he said.

Another 1.9 million homeowners were only 5% underwater on their homes during the quarter, suggesting that if home prices continue to climb, they too can soon breathe a sigh of relief.

When mortgage borrowers have equity in their homes, they're less likely to fall into foreclosure since they have the home's value to tap if they run into a rough financial patch.

"While the overall stagnating economic recovery will likely slow [the] housing market recovery in the second half of this year, reducing the number of underwater households is an important step toward reducing future mortgage default risk," said Fleming.

Home prices had fallen steadily since the housing crisis began and are still down about 34% since they peaked in mid-2006, according to the S&P/Case-Shiller home price index.

Now, however, some of the markets that recorded the steepest price drops have been enjoying a rebound. Phoenix, for example, has seen prices climb by 8.6% over the 12 months ended April 30, according to Case-Shiller. That was enough to move many homeowners back into positive territory

HOA Noise Ploys

Provided By Realty Times

Noise is a common complaint in common wall communities. That new and beautiful hardwood floor in Unit 2A is Unit 1A’s worse nightmare. Suddenly, a normally soft shoed neighbor sounds like a flamenco dancer at full crescendo. While new construction usually provides an extra measure of sound protection, older construction is often woefully inadequate. Is there anything the board can do besides turn a deaf ear? Since construction related noise complaints are bound to be heard again and again, the board should indeed be proactive and there are a number of things it can do. Here are some ploys to deal with noise.

Quiet Hours Policy. Have a formal policy that promotes a quiet environment. Quiet hours like 9 pm to 9 am Monday through Friday and 10 pm to 10 am Saturday - Sunday are reasonable. In defining what noise is, rather than get into specifics like stereos and barking dogs, something like “any sound disruption that significantly interrupts sleep and the quiet enjoyment of the neighbors” works best.

Dealing with Complaints. The board should not get involved in noise complaints unless several documented attempts have been made by the affected parties to resolve the issues. They need to recite the nature of the disturbances, frequency, dates, times, action taken by the complainant and response from the noise maker. Do not circumvent this step by accepting requests to intercede prematurely. In most cases, neighbors dealing directly with neighbors will solve the problem.

Accept only the hard and documented cases. And never intercede in events that normally would be handled by the police (domestic disturbances and other violent activity). Also, frequency of the disturbance is a critical element. There is a big difference between two complaints over a six month period and two within a week. A repeat disturbance within no more than two weeks is a reasonable standard.

Call in the Experts. If there is a flaw in the building sound design, it isn’t necessarily fatal. There are a variety of corrections varying from lifestyle changes to architectural modifications. To help sort them out, hire a qualified architect or engineer to analyze the problem and provide a list of solutions that can be shared with owners. Those should include modifications made by both noise senders and receivers. A soundproofed ceiling may be more expedient than expecting the upstairs neighbor to rip up the oak floor. Most neighbors do not want to be a pain and will follow the recommendations.

Set Architectural Standards. In the interest of community peace and quiet, the board does have the authority to establish reasonable standards for architectural design. While this generally applies to exterior appearance, structural components that impact the neighbors, like floor surfaces, can also be included. For example, any owner that wants hardwood flooring should be required to install a sound proofing material under or over it to reduce or eliminate sound transmission. Let remodeling owners know the requirements before the floor is installed.

Facilitate the Upgrade. One of the real advantages of homeowner associations is group buying power. If there is a building wide problem, even if it exists within the units, the owners can join together by way of the HOA to address the problem as a whole rather than sending individual owners off on their own. By joining together, the whole problem is solved at the same time and at a volume discount.

Fines. Fining is usually a last resort solution for hard cases. The noise fine policy should lay out a series of increasing penalties like first disturbance, a written warning; second, $25 fine; third, a $50 fine; fourth, a $100 fine...make the penalty enough to get their attention but not so outrageous that a judge would spank the board for being dictatorial.

Right of Appeal. All notices of violation and fines should be in writing and include an appeal process. That ensures a record of the event and no misunderstanding of the issues. Fines should be billed and collected just like regular assessments. If not paid, follow the normal collection routine.

Defensive Action. Sometimes a good defense is the best offense. Some noise complaints are the result of over sensitivity or mismatched schedules like a swing shift worker trying to sleep during the day. In such cases, it makes more sense that the complainer take defensive action rather than expect unreasonable changes from the neighbor. Using "white noise" like a box fan or fountain can drown out many noise problems and cost little.

Noise can be a vexing issue, especially when the offender is insensitive. The board can reduce widespread complaints by enacting noise reduction standards and providing proactive solutions. Using these creative noise ploys in your community, peace and quiet will soon be heard loud and clear.

Buying a Condo

Provided By Realty Times

Buying and living in a condominium community has both benefits and drawbacks. This is why purchasing a unit in the right community for you is so important.

Condo communities can be as different as night and day. Some have strict rules, while others are lax in their enforcement.

Additionally, there are always variances in the costs associated with certain communities. Some have large monthly HOA fees. Others are minimal.

What sort of questions should you be asking your real estate agent and the local condo board? Let's find out.

First, you should find out about the financial health of the community. You'll want to see if there are adequate funds in reserve. A reserve fund is held for large future repairs, such as replacing roofs, drives, sidewalks, and pools. The condo board must be charging an adequate amount every month to keep this reserve fund in pace with inflation.

If a board hasn't been doing their due diligence you may be slapped with a big bill when a future repair needs to be made. This could range from the a few hundred to thousands of dollars.

Does this community allow you to rent out a unit? Sometime down the road you may find yourself wanting to move or rent out your unit, even to family. Many communities are very renter friendly and this will be no problem. Others strictly prohibit non-owner occupied units.

You'll also want to ask what the percentage of tenant-occupied units is. Is this a mostly rental-based community? This can bring with it the usual complaints of rentals. There may be less upkeep, more noise, and less of a sense of permanent community.

Along this same line of thought you should ask what the turnover rate is. Are residents settling in for years (an indication they like it there) or is this a community that sees people come and go?

Is the condo board involved in any sort of litigation at the moment, meaning are they being sued by a former resident? Conversely, is there any litigation they are pursuing against any current or past residents? These kinds of questions can give you a real feel for the tone of the community.

Finally, be sure to ask about the bylaws and restrictions of the property. You may have your heart set on having a garden or doing your own landscaping. The condo board may have other ideas. What if you want to make certain upgrades or improvements to your unit? Is this allowed? Be sure to ask for a copy of these bylaws and then have a professional look them over.

Living in a condo can be a wonderful experience. They can be tidy and low maintenance as well as a great social hub. Just be sure to do a little research when you're in the market to buy to be sure you purchase in the perfect community for you.