CT Real Estate Today - February 2022 Edition

In This Month’s Edition Here’s What Experts Are Watching In Connecticut’s 2022 Residential Real Estate Market

Gov. Lamont Delivers ‘State of the State’ Address On the First Day of 2022 Legislative Session

Sample Criteria For Accepting Or Rejecting A Rental Applicant

8 Important Legal Tips for Landlords and Property Owners

February 2022

Published by:

Table of Contents Publisher’s Message A Message From Bob DeCosmo, President Of CTPOA

News And Views From The Capitol Gov. Lamont Delivers ’State Of The State’ Address On The First Day of 2022 Legislative Session

Realtor Report Here’s What Experts Are Watching In Connecticut’s 2022 Residential Real Estate Market

Insurance Insights 2022 Outlook For Home Insurance Buyers

Property Management Tips & Tricks How Will Inflation Affect Property Managers’ Portfolios In 2022

Helping Property Owners Since 1994

Published by: CTPOA

Financially Speaking The Snowball Effect Of Rent Inflation: Some Predictions For The Year Ahead

Get Energy Efficient Resolve To Cutting Your Energy Costs In 2022 With These 7 Tips

The Legal Corner 8 Important Legal Tips For Landlords And Property Owners

Vendor Spotlight

CTPOA’s Mission: Educate our members on the Best Practices.

Increase profitability.

Provide access to Core Services.

Advocate for Property Owner Rights.

Meet Our Team:

Pillar To Post Home Inspections The Miranda Team, One Call Will Handle It All

Carmine DeCosmo

The Intelligent Investor

Melissa DeCosmo

Mindy Jensen And More Experts Predict These Will Be The Best Real Estate Investments In 2022

Tenant Screening Tips & Tricks Sample Criteria For Accepting Or Rejecting A Rental Applicant

Bob DeCosmo

Paul Jenney

Chelsea Sayegh

PO Box 4795 Waterbury, CT 06704 800-369-6153 info@ctpoa.com

By Bob DeCosmo Advocate For Property Owner Rights The 2022 Legislative session kicked off on February bulk of affordable housing in the country and if they 9th and there are troubles for rental housing

fail and go “out-of-business” their units will be taken

providers.

over by larger operations that will not have the

The agenda released at the February 10th Housing Committee Meeting (shown on the next pages)

same pride of ownership, and this can destabilize neighborhoods.

include proposals for: rent control, storage fees of

To fight these proposals, it's important to make your

evicted tenant’s possessions, rental commissions,

concerns known to your local Legislators this year.

summary process cases, eviction records, criminal

Most Legislators know little about providing rental

records and more.

housing or selling property, and would benefit from

These proposals will harm both landlords and tenants, and are not in the best interest for the State of Connecticut. Unfortunately, many of the proposals are being advanced by people who are

hearing real life stories and experiences. We are asking our members to contact and get to know their local legislators. They do not hear from us nearly as often as they need to!

not experienced in the daily operations of rental

We hope you will engage your Legislators on these

housing and are advocates, most with law degrees

issues when the time comes to speak against these

that have no real knowledge of the “street level”

proposals when they have their public hearing.

operations, and just push for their political leanings.

Please follow CTPOA on Facebook for frequent

The policies will no doubt have a disproportional

updates on important Legislative matters as they

negative impact on the “Mom and Pop” landlords

arise, and we would appreciate you joining CTPOA

who supply most of the rental housing in the

if you are not already a member, you can click here

industry. Mom and Pop owners also provide the

to become a member today!

04 / Publisher’s Message

Gov. Lamont Delivers ‘State of the State’ Address On The First Day of 2022 Legislative Session By: Fox Staff, from fox61.com The 2022 Connecticut state Legislative Session starts Wednesday, and, as custom, the governor gave a State of the State address.

into law by Lamont.

This year's Opening Day activities are expected to happen in the Capitol.

However, public hearings and most committee meetings will be held by

During the speech, Gov. Ned Lamont

video conference at least until the end

laid legislative priorities for the

of February.

session, which include property tax reform and gun safety legislation.

Last year, due to the pandemic,

Lamont gave his address in a prerecorded video, in which he called on the legislature to consider legalizing recreational marijuana and expanding sports betting. Both measures were

Pictured Above: Connecticut

passed by the legislature and signed

governor Ned Lamont

08 / News & Views From The Capitol

Senate President Martin Looney and seats to the Republicans' 13 seats House Speaker Matt Ritter said the

and a 96-53 advantage in the

remote-only policies will be reviewed House. Two House seats are vacant again at the end of the month.

and due to be filled by special

Senate Republican Leader Kevin

elections. Democrats have held a

Kelly criticized the plan, calling it

majority in both chambers since the

“more governing in the dark.” GOP

early 1990s, with the exception of

lawmakers have pushed over the

the 2017-2018 sessions, when an 18

past year for the legislature to open

-18 tie in the Senate provided

the Capitol complex to the public

Republicans enough leverage

again, saying it restricts public

to pass significant reforms in a

interaction with lawmakers.

bipartisan budget.

The House and the Senate are both

Two-year budgets are passed in odd

scheduled to 'gavel in' at 10 a.m. on

-numbered (non-election) years, per

Wednesday, and the governor is

the state Constitution. With no

expected to address the entire

budget to pass, this year is a "short

General Assembly in person at

session", beginning Feb. 9 and

around noon.

adjourning May 4. That gives

Republicans in the House and Senate are expected to propose bills

related to crime and juvenile justice

lawmakers 12 weeks to get the business of the people done.

You can find out who is representing

issues, as well as refinements to last you at the legislature, and their year's budget and pandemic

contact information, on the

restrictions.

Connecticut General Assembly's

Democrats have large majorities in

website.

both chambers, with 23 Senate 09 / News & Views From The Capitol

Here’s What Experts Are Watching In Connecticut’s 2022 Residential Real Estate Market By: Ginny Monk, from ctinsider.com As 2022 begins, experts are closely tracking the number of houses available for sale in Connecticut in their evaluations of the upcoming year’s market.

Otherwise, we’re going to be just dragging along.”

After months of heightened sales as people moved into Connecticut from New York City and others

It’s not the only factor likely to affect the market this sought additional space through homeownership, year — interest rates, supply chain issues and the

inventory of residential real estate is running low in

spread of COVID-19 could impact demand,

the state.

construction and the type of houses people are interested in.

While the Connecticut market typically has about six months’ supply of inventory, it’s shrunk to two in

Real estate agents and other experts will also keep recent months. The months supply of inventory in an eye on other measures to determine the

real estate is the number of months it would take to

market’s health: Average days on market, selling

sell the current amount of houses in a given

price and number of units selling, for example.

market.

But several Connecticut experts agreed

The shortage is across all price points, said

that inventory will likely be one of the most

Tammy Felenstein, president of the Connecticut

important indicators to watch in the new year.

Association of Realtors.

“It’s the lowest inventory that I can remember

“If we see a huge influx of inventory, and there’s

historically in our marketplaces,” said Candace

more for buyers to choose from, it’s going to

Adams, president and chief executive officer of

equalize the market,” Felenstein said. “But if we

Berkshire Hathaway HomeServices for New

continue in an inventory shortage, it’s going to

England, New York and the Hudson Valley. “We

continue in a sellers market.”

need to figure out a way to get sellers to sell.

10 / Realtor Report

The state’s overall housing shortage has been

“If mortgage rates rise, the cost of servicing

exacerbated by long-standing policies such as

one’s mortgage increases,” Marks said. “You

restrictive zoning laws that limit the

may have less disposable income.”

development of multi-family housing, advocates have said.

And through the pandemic, supply chain issues and labor shortages have made it more difficult to build housing of any kind, said Shelly Tretter Lynch, a real estate agent with Compass who works largely in the Greenwich area.

Difficulty obtaining construction materials also means buyers are less willing to purchase fixeruppers, said Brian Marks, executive director of the Entrepreneurship and Innovation Program at

The interest rate will likely have minimal impact on the luxury market, Tretter Lynch said.

the University of New Haven’s Economics and

Increases to the interest rate are likely to slightly

Business Analytics Department.

dampen demand overall, an effect that will be

The heightened interest in newly built homes has meant that many have sold based on site plans or architectural drawings, Tretter Lynch said.

It seems likely that the Federal Reserve Board will raise interest rates in 2022, although it may be a few months as COVID-19 cases rise, Marks said.

“What’s going to happen with interest rates, that to me is one of the key components here with

the residential real estate market,” Marks said.

Rates have been historically low throughout the pandemic, but Marks said the Fed has been signaling that it may increase those rates soon to combat recent inflation. While the Fed’s interest rates don’t dictate mortgage rates, they do have a strong influence.

more pronounced if the changes are drastic, Marks said. But with the high levels of demand

they’ve seen lately, real estate agents still think it’ll be higher than pre-pandemic.

“Interest rates will affect demand, but not absorption,” Berkshire-Hathaway’s Adams said.

“There’s twice the demand that there is inventory right now.”

Economists at the National Association of Realtors are predicting fairly stable demand

through 2022 and a continued sellers market, Felenstein said.

“All of the projections from economists that we connect with tell us that 2022 is going to be a stable year,” she said. “The demand is going to continue for housing, that interest rates are possibly going to be going up along with inflation.”

11 / Realtor Report

2022 Outlook For Home Insurance Buyers By: Jason Metz, from forbes.com We hoped for a return to normalcy in 2021. And inflation caused a 15-year high in home while many of us resumed visiting with family

construction backlog. A demand for new homes

and friends, traveling and going back to the

and renovation projects has resulted in

office, the pandemic has had an enduring

increased costs.

influence on certain aspects of our lives beyond

our physical and mental health.

On the surface, that may not mean much to

you. After all, if you’re not planning on building

For instance, supply chain disruptions and

a new home or have a renovation project in the

inflation appear to be nasty Covid side effects

works, you might think a hiccup in the

that are expected to linger at least through the

construction business doesn’t affect you.

early part of 2022.

But when a disaster like a hurricane or wildfire

If you’re a homeowner, you might wonder how

hits a region, the increased demand for repairs

this affects your bottom line. Here’s a look at

often causes a temporary spike in rebuilding

how current trends are reshaping

costs. These costs could be compounded even

the homeowners insurance landscape.

further with supply chain disruptions in 2022.

Supply Chain Bottlenecks Could

Suddenly the coverage amount you bought for

Impact Home Insurance Claims

your house may be inadequate. If a disaster hits and you have to rebuild your house, you’re

There was a serious logjam for home builders

on the hook for any amount that’s over your

in 2021. A perfect storm of pandemic-induced

homeowners insurance limit.

supply chain disruptions, labor shortages and

12 / Insurance Insights

“Because of supply chain issues, tight

coverage pays to replace your damaged items

material and labor markets, and inflation, it

with new items. If you currently have actual

pays to think about buying increased

cash value coverage, you’ll get reimbursed

protection when it comes to home insurance,”

only for the depreciated value of items.

says Greg Pannhausen, head of Countrywide Homeowners Product for Farmers Insurance.

Do a home inventory to assess whether your current level of personal property coverage is

Another way to handle unexpected spikes in

sufficient. Remember, this coverage is for all

local construction costs is extended or

your furniture, clothes, decorations and

guaranteed replacement cost coverage, if

random belongings.

your insurer offers them. These coverage types give you some extra cushion if there’s a rise in construction costs.

Inflation Can Intensify the Pain of

Insurance Industry Takes a More Active Role in Combating Climate Change

Replacing Belongings

The insurance industry is going to take a

The annual rate of inflation from November

impact its customers. The National

2020 to November 2021 was about 6.8%,

Association of Insurance Commissioners

according to the U.S. Bureau of Labor

(NAIC) and state regulators released a report

Statistics (BLS). But thanks to supply chain

on how insurers can better manage climate-

harder look at how climate change disasters

issues and production bottlenecks, the cost of related risks, including insurance availability some goods has inflated by more than double and affordability, as well as consumer that figure.

education and outreach.

For example, the cost of living room, kitchen

The Consumer Federation of America, the

and dining room furniture has increased by

Center for Economic Justice, the Maryland

about 14% nationally from November 2020 to

Consumer Rights Coalition and Consumer

November 2021, according to the BLS.

Federation of California has asked the

Because home insurance covers your

Federal Insurance Office (FIO) to take a more

belongings, you’ll want to be sure you have

active leadership role. This would entail

enough personal property coverage for the

guiding the insurance industry to a “net zero”

cost of replacing them if they’re damaged or

emissions goal and also increase protections

destroyed:

for policyholders who face disasters,

Make sure you have replacement cost coverage on your homeowners policy. This

decreased availability of home insurance and higher insurance costs.

13 / Insurance Insights

The group wrote in a letter to the FIO that

Flood insurance is now a must-have in many

insurers are in position to rethink underwriting

areas and no longer a coverage splurge that

decisions for industries that contribute to

can be easily disregarded.

climate change, such as coal-powered plants and oil pipelines.

And the wildfire season is practically year-round now. Climate change is considered a key driver

If your home is at risk for disasters, it’s a good

of this trend, according to the California

idea to reevaluate your home insurance right

Department of Forestry and Fire Protection.

away. For example, human-induced climate

Warmer spring and summer temperatures,

change is likely fueling more powerful

reduced snowpack and earlier spring snowmelt

hurricanes, according to ScienceBrief, an

have created longer and more intense dry

assessment of 90 peer-reviewed scientific

seasons.

articles and republished by the National Oceanic Atmospheric Administration (NOAA).

The need for homeowners in many areas to have a hurricane insurance plan is greater than ever before.

The NOAA recently bumped up the definition of an “average” Atlantic hurricane season from 12 to 14 named storms. The 2021 hurricane season concluded with 21 named storms, which followed a record breaking 2020 Atlantic hurricane season of 30 named storms.

In California, more than 3 million acres have burned in 2021. This follows the 2020 wildfire season, which was considered the worst on record and saw more than 5 million acres burned in California, Oregon and Washington.

Homeowners secure wildfire insurance through a standard home insurance policy, which covers fire damage due to wildfires, kitchen fires and other accidents. If you own a home, it’s smart to evaluate your policy to make sure your current levels of coverage are sufficient if disaster strikes.

14 / Insurance Insights

For More Information Visit Our Website: landlordcollections.net Give Us A Call: (800)-369-6153

How Will Inflation Affect Property Managers’ Portfolios In 2022 By: Laurie Mega, from buildium.com Consumer price inflation rose to 7% in

The Bad News

December 2021, the first time it’s been that high since 1982. Compounded by nationwide

Let’s start with the negative effects property

labor and supply shortages, prices for

managers may encounter as a result of rising

everything from fuel to building materials to

inflation, and how they can mitigate those

groceries have risen dramatically.

effects.

As a result, consumers are changing their

Labor and Supplies

buying habits, companies are scrambling to attract enough workers, and first-time homebuyers are reconsidering their house hunts.

Like most other U.S. consumers, property managers may have already noticed higher prices for supplies. The cost of repair parts, cleaning supplies, and office equipment have

But for property managers and owners, it’s not

all gone up, leaving property management

all bad news. While the cost of labor and

companies searching for lower-cost

supplies is rising, so is the demand for rental

alternatives, or scrapping purchases altogether.

properties. With the right knowledge and strategy, property managers can offset some of these costs and even find opportunities for growth.

Labor shortages are compounding the problem.

Property managers and their vendors are having a hard time filling vacant spots on their maintenance, groundskeeping, and

16 / Property Management Tools & Tips

construction teams. As a result, the cost of

owners proactively, helping them find ways to

labor has gone up as employers try to attract

save money to offset their overhead.

talent with higher salaries and better benefits.

Work timelines have extended, as well. Repair and renovation projects that would have maybe taken a few weeks two years ago, are now being pushed out by months.

New Builds Investors are slowly building again, but the price tag to do so remains high. The price of housing materials is up 19 percent from December 2020. According to CNBC, the cost

Vendors who are paying higher salaries will

of lumber, which slipped a bit over the

likely pass costs on to the property managers

summer, is up again due to new tariffs on

who hire them. That leaves property

Canada and western wildfires.

managers little choice: they will either have to cut services and amenities, delay non-

Meanwhile, the labor shortage continues to hit the construction sector hard. The National

essential work, or raise rent prices.

Association of Home Builders predicts the

Taxes and Insurance

industry will need 2.2 million workers over the

As inflation rises, so does the value of rental

next three years to meet demands.

properties. While on its face, that seems like

Property owners and investors may have to

good news, property taxes and insurance,

delay or cancel new projects, which could

which are assessed by the value of a

shrink the number of properties in need of

property, will most likely rise, as well.

management services in a given area.

As costs go up, owners may have to raise rent However, this is a good opportunity to focus or cut costs to stay within their budget.

on current properties to look for new ways to

Property managers would do well to work with generate revenue through fees, while also offering added value to residents. For example, sales from online retailers have steadily risen over the course of the pandemic, according to the U.S. Census Bureau. If your residents are receiving more packages, there may be an opportunity to provide package lockers for a fee.

17 / Property Management Tools & Tips

The Good News There is a silver lining to this cloud, however, beginning with the currently slow rate of new building. While fewer rental properties may make it difficult to grow your portfolio, fewer

Reserve has indicated they will raise interest rates for the first time since 2018, and they’ll likely raise them four times this year. That will make mortgages more costly.

homes for sale means more renters on the

All of those factors may put off first-time home

horizon.

buyers, at least for the time being. They’ll be

Fewer Homebuyers Means More Renters Building, particularly of single-family homes, is supposed to restart slowly in 2022. In the meantime, the rental market will likely remain hot for three reasons:

more likely to look for rental opportunities until the market cools down and interest rates level out.

This has all the earmarks of an owner’s market, giving them the opportunity to offset their own costs with higher rent and low vacancy rates.

1. Low inventory and high demand will

continue to drive the price of homes up.

2. Inflation will also contribute to higher price tags on new homes as the spending power of the dollar weakens. Higher taxes on properties caused by inflation may also put off potential home buyers.

3. To get a handle on inflation, the Federal

18 / Property Management Tools & Tips

Fewer Available Rental Units Will

year. It was up 12% compared to the year

Drive Up Rates

before,” he said. “This is for new incoming renters. And so, you know, while the overall

During the pandemic, many renters stayed

kind of tone on rentals has been fairly

put, afraid to make a move in a time of

negative through the pandemic, the reality is

instability. That drove vacancy rates down to

the data has pointed to a much more

just 5.8% nationally, according to the US

favorable story, where market rate rentals

Census Bureau.

have really benefited from deep-pocketed

Property managers and property management renters, who are in stronger financial shape than ever.” service providers have noticed the trend, as

well. “It’s been a remarkable year-and-a-half for apartment demand, and really, demand for

Appreciation Offsets Inflation

all types of housing,” Jay Parsons, VP, Head

The average national rate of appreciation on

of Economics & Industry Principals

real estate is between 3% and 5%, YoY.

at RealPage, told Yahoo! News in January.

However, more desirable locations can see

“And so with that tightness across the board, it appreciation rates much higher than that. For example, Boston, MA has experienced an doesn’t look like you’re going to see tremendously more availability in 2022.”

Couple that with the possible increased

average appreciation rate of 7.6% over the last 10 years.

demand for rentals, and you have the

So, if an owner bought a single-family rental

makings of an owner’s market with an

unit in the Greater Boston Area last year for

opportunity to raise rents.

$200,000. The current price of the unit would be worth $215,200. If you calculated the cost

More Affluent Renters

of the unit by simply looking at inflation, it

We’ve talked about the rising costs of living

would be about $216,000.

and doing business. But there is another,

While there is still a difference of $800,

more positive, impact inflation and labor

remember that owners are also collecting rent

shortages are having on workers themselves:

on those properties, which offsets inflation, as

incomes are increasing.

well.

According to Forbes, average income should

But the news isn’t all bad, and there is room

increase by 3.3% in 2022, which means

for growth, with a little creative thinking. The

raising rents may not affect vacancy rates.

key is to look for ways to cut unnecessary

Parsons agrees. “We saw [that] the average

costs while increasing rents and fees where

apartment renter made about $70,000 last

you can.

19 / Property Management Tools & Tips

The Snowball Effect Of Rent Inflation: Some Predictions for the Year Ahead By: Yaron Shaarmir, from forbes.com In 2021, the real estate market saw a historic rise in property tax, increasing property owners’ costs and home and rent prices throughout the U.S., leading

leaving landlords with no choice but to raise prices.

many to ask if rent prices will continue to skyrocket

This cycle fuels rent inflation, causing rent to rise

in 2022. As I argue here, rent must go up!

still further, which could increase property tax

In recent months, all we have heard about in the

substantially.

business world is the rise in prices and wages.

Costs are up, with supply chain

When expenses rise, prices must follow. In real

disruptions set to continue into 2022.

estate investments, the primary costs are insurance, labor and taxes (property tax), which

In recent months, prices have gone up drastically

have all gone up in 2021, as well as debt, given that across the board. Food, energy, cars, semiconductors, materials — everything has been interest rates are expected to go up next year.

With home prices increasing, property taxes are rising substantially.

Investment activity in real estate and migration to the suburbs has increased due to Covid-19, which has created an upsurge in home and rent prices over the last 18 months. According to the National Association of Realtors (NAR), home prices rose in 99% of the 183 markets NAR tracked in Q2 2021, with 78% seeing double-digit spikes in appreciation.

As home prices rise significantly, so does the

20 / Financially Speaking

subject to price increases. In November, the National Federation of Independent Business (NFIB) found that 59% of small business owners had raised their average selling prices, the highest reading since October 1979, at the tail-end of the Great Inflation of the 1970s. The NFIB report from June concludes, “The incidence of price hikes on Main Street is clearly on the rise as owners pass on rising labor and operating costs to their customers.”

Wages are up, with no end in sight for

ongoing Covid-19 pandemic and inflation, insurance

labor shortages.

companies’ costs have gone up. Everything covered under a standard property insurance policy is now

U.S. labor costs have climbed significantly as the

substantially more expensive. With soaring

economy recovers momentum following its

construction costs and a damaged product supply

pandemic-induced slowdown. Workers are hard to

chain, plus backlogs at major ports, all home repairs

find, forcing companies to boost wages and

cost a lot more. It is therefore unsurprising for

benefits. Amid a severe worker shortage, the bureau insurers to predict that the losses they are currently of labor statistics (BLS) data shows wages facing will be converted into insurance premium surged 1.5% in Q3 of 2021, the highest increase

increases for homeowners next year and for the

since the department began tracking 20 years ago.

foreseeable future.

According to the Labor Department, the Employment Cost Index, the broadest measure of labor costs, surged 3.7% for the 12-month period ending in September 2021.

Major employers have shared concerns about the

FEMA’s new flood risk rating methodology, “Risk Rating 2.0,” will increase many flood insurance policy premiums, particularly in places like Florida, which is facing rising sea levels and climate change.

possible effects of the trend of hiring difficulties.

Conclusion

According to an October Reuters article, “Domino’s

Housing (shelter) is the single largest component of

Pizza cited a shortage of drivers as it reported

the Consumer Price Index. Via their impact on rents,

recently a rare fall in U.S. sales, and FedEx Corp

higher house prices affect inflation, but with a

also cited higher labor costs in September when it

lag. Research from economists at the Federal cut its full-year forecast.” Similarly, Amazon reported Reserve Bank of Dallas supports my conclusions, in October that it expected supply chain and labor forecasting that “rent inflation” will accelerate in issues to cost it “billions” in Q4.

2022 and 2023 at the highest rates in more than 30

Insurance rates will continue rising.

years.

The Washington Post recently found that home insurance policy premiums have risen an average of 4% in 2021, due to “rising material costs, supply chain disruptions and climate change.” In 2020, extreme weather drove a 40% increase in catastrophe losses, according to a study from LexisNexis Risk Solutions, and the National Oceanic and Atmospheric Administration reported in October 2021 that 18 weather disaster events costing at least $1 billion each had hit the U.S. so far that year — a rough few years for homeowners.

I predict we will see rent growth continue in 2022 and 2023 due to rising labor costs, property tax hikes, insurance costs and limited supply in many markets in the near future. The suppression of rent

payments during the pandemic also contributes to this outcome, as landlords have borne a disproportionate economic burden. So, there will be significant upward pressure on rents, which will only accelerate with the rise of wages and production in 2022, until most supply chain and labor force disruptions fade and there is a return to normal operations and lower inflation pressures.

As a result of these disasters, compounded by the

21 / Financially Speaking

Resolve To Cut Your Energy Costs In 2022 With These Seven Tips By: Petri Plumbing & Heating, from prnewswire.com 1.

Turn down the thermostat. Depending on the season, the ideal house

temperature is typically between 68- and 78-degrees Fahrenheit. Setting your thermostat on 68 degrees in the winter and 78 degrees in the summer is recommended.

2.

Weatherproof the house. By making sure the insulation is adequate,

installing storm windows, adding door draft stoppers and weatherstripping and fixing any leaks or cracks around doors and windows, homeowners can save on energy bills.

3.

Purchase a smart thermostat. Smart thermostats use AI technology to

"learn" the best ways to heat and cool a home and allow homeowners to

control energy use from their cellphones. These devices save hundreds on energy costs throughout the year.

4.

Lower the water heater temperature. Heated water requires more

energy. Setting the water heater to 120 degrees Fahrenheit will be warm enough to take a hot shower while still keeping bacteria from developing in the water heater.

22 / Get Energy Efficient

5. Keep maintenance schedules. Having yearly checkups on a home's plumbing, water heater and furnace can identify future issues that might result in driving up energy cost.

Homeowners should sign up with a local heating and plumbing company to perform yearly maintenance to keep their systems in ideal working order. Many home services company usually have plans that provide routine maintenance checkups and discounts to members.

6. Replace windows and the furnace with newer energy-efficient versions. Newer windows now have glass that reduces the effect sunlight has on a home's temperature while newer furnaces are now built to heat using less energy. The initial cost my hit the wallet but will save thousands on energy bills in the long run.

7. Run the dishwasher and washing machine only when there is a full load.

Since these appliances use both electricity and water, they can drive up costs.

Waiting until they are fully loaded is a great way to ensure they are not being run too often.

Petri Plumbing & Heating, Inc., a family-owned home service company serving Brooklyn and Manhattan for more than 100 years, says 2022 should be the year homeowners resolve to cut their energy costs while also helping lower the impact on the environment.

"We want to encourage homeowners, renters and business owners to explore energy-saving options," said Michael Petri, owner of Petri Plumbing & Heating.

"The cost of heating and cooling your home increased 33% in 2021. These tips should help offset those increases."

23 / Get Energy Efficient

8 Important Legal Tips for Landlords and Property Owners By: Liran Koren, from luxurypropertycare.com Lawsuits are everywhere and they can happen to anyone — including you.

evidence.

This includes all landlord-tenant communication

Rental properties are a lucrative investment but including emails, text messages, call logs, and they come with the risk of litigation. Aside from

the like. Whenever you’re discussing important

making sure that your property is “rent-ready”,

matters with your tenant (e.g. late rental

you should also make sure that you’re prepared payment fees, eviction, etc.), it’s best to stick to to defend yourself in case you’re facing legal action.

Below, let’s take a look at eight things you can do to prevent nasty lawsuits:

#1 Keep Records of Everything And by everything, we mean everything. As a property owner, you should keep records of rent receipts, work orders, eviction notices, and more. Proper documentation can protect you when you’re faced with legal issues. To avoid pointing fingers, you should hold on to pertinent documents that may be considered as

24 / The Legal Corner

written modes of communication.

#2 Understand Data Privacy Laws Although the US doesn’t have federal-level data privacy laws unlike the UK’s General Data Protection Regulation (GDPR), the US does

have state-level statutes such as the Californian Consumer Privacy Act (CCPA) and the Hawaii Consumer Privacy Protection Act (SB 418). These laws provide consumers with greater control over their personal data, such as their names, addresses, phone numbers, and more.

The state of Florida does not yet have laws

want. Tenants have the right to utilize their

governing data privacy, but there have been

rented space without the interference of their

talks about introducing a law that is similar to

landlord. This is called the right to the “quiet

the CCPA.

enjoyment” of their home. As a general rule,

Data privacy laws apply to all landlords and property managers that collect personal information from their tenants. This includes

you may enter the property only when the tenant has given you permission.

There are, however, exceptions to the rule.

the information found in the rental application. You may enter the rental unit without notifying

#3 Require Renters Insurance A property owner’s typical landlord insurance won’t cover the costs of replacing the tenant’s belongings in the event that they

your tenant when: •

There is an emergency (e.g. gas leak, fire,

flood) •

The is reasonable cause to believe that

get destroyed or stolen. It also won’t cover the the tenant has abandoned the property tenant’s medical expenses should they get injured on the property.

To protect yourself from lawsuits, consider requiring your renters to obtain renters

•

The tenant has been absent from the

property for an “extended absence”

#5 Require a Security Deposit

insurance. Not only does it protect your

A security deposit is a fee that a tenant has to

tenant’s personal property, but it also guards

pay on top of the first month’s rent. It is a

you in the event that your tenant decides to

refundable amount that the tenant can get

sue.

back when they move out. Its purpose is to

Keep in mind that including this clause in the rental agreement may be prohibited in certain states. Be sure to check with your property

manager to ensure that your requirements are within the law.

#4 Don’t Enter the Unit Without Notice

protect you, the landlord, in the event that the tenant damages the property or fails to satisfy their financial obligations (e.g. rent payments and utilities).

The law does not require landlords to collect a security deposit from their tenants, however, it would be in your best interest to do so. If you decide to require a security deposit, keep in

You may own the rental property, but the

mind that some states have set a cap on the

moment that it is rented out, you lose the

maximum amount that you can collect.

ability to walk inside the home whenever you

25 / The Legal Corner

#6 Keep Your Security Deposit in a

•

Separate Account

amenities, etc. to tenants of protected classes

Failing to provide the same services,

Landlord-tenant laws vary by state when it comes If a prospective tenant sues you for discrimination and if the Department of Housing and Urban to where the security deposit should be stored.

Generally, you shouldn’t store your tenant’s

Development (HUD) investigates the claim, you

security deposit in your personal bank account

may want to consult an attorney. The penalty for

since it yields interest.

first-time offenders can be as high as

In Florida, you should keep your tenant’s security deposit as a surety bond, in a dedicated bank account, or a non-interest-yielding bank account.

It’s worth mentioning that security deposits stored in an interest-yielding bank account must be returned to the tenant along with the accrued interest.

$16,000 excluding attorney’s fees, damages, etc.

#8 File Your Taxes Accurately Filing your taxes is a skill you need to master if you’re planning on becoming a landlord. If you intentionally submit a false report of your annual income or claim unfounded tax deductions, you may soon be getting a visit from the Internal

#7 Follow the Fair Housing Act

Revenue Service (IRS).

As a landlord, you should know the Fair Housing

However, if you made an innocent mistake, you

Act (FHA) by heart. The FHA protects “protected

should file an amended tax return as soon as

classes” by prohibiting discriminatory acts in

possible. You shouldn’t let the period for filing

housing, such as:

lapse.

•

Remember, if you purposely attempted to evade

Refusing to rent the property due to race,

religion, national origin, etc.

•

Having preferences regarding the type of

tenant/s (e.g. “whites only” and “families only”

your taxes, you may face a maximum fine of $100,000. It’s best to hire a property management company that has its own team of attorneys and accountants to ensure that you don’t violate the law.

26 / The Legal Corner

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opportunity for our team of Licensed Home Inspectors to demonstrate our commitment to being the foremost home inspection company in New Haven County. Consistently the TOP 3 comments from clients and real estate agents are Efficiency, Professionalism, and Courtesy.

We encourage our clients to participate in the process to instill confidence in homeownership.

We take education to the next level. Our inspectors are licensed in Connecticut and Certified Home Inspectors by Internachi, which exceeds the Connecticut standards for home inspections.

Our home inspectors annually double the continuing education required by the state of Connecticut.

28 / Vendor Spotlight

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29 / Vendor Spotlight

Mindy Jensen and More Experts Predict These Will be the Best Real Estate Investments in 2022 By: Jaime Catmull, from gobankingrates.com Real estate investments have the potential to pay

rates are still ridiculously low, making these

off big — but they can also end up costing you big if investments a good, long-term choice using you choose the wrong property. And although there are no guarantees when it comes to investing, certain types of real estate have more potential than

others when it comes to netting you a healthy ROI. Given the current real estate market, knowing where to invest your money is key. I spoke to top real estate investing experts to get their predictions

leverage to lock in low-cost financing for 30 years.”

Short-Term Rentals “Short-term rentals are also a great option, so long as you’re buying in areas with established shortterm rental policies and a healthy, existing shortterm market, like vacation spots,” Jensen said.

for the best types of real estate investments for

However, avoid investing in short-term rentals in

2022.

areas with more ambiguous laws and policies

Long-Term Rentals Mindy Jensen, co-host of the “BiggerPockets

Money” podcast and the co-author of “First-Time Home Buyer, The Complete Playbook To Avoiding Rookie Mistakes,” said that she is “still bullish on long-term rentals.”

regarding this type of property.

“Cities that have ambiguous laws can change those laws, and your rental can go from excellent cash flow to complete dud with the changing laws,” Jensen said.

Medium-Term Rentals

“In cash-flowing markets, they are still cash-flowing, “Medium-term rentals are starting to fill the gaps and in appreciating markets, they are still

between the long-term and short-term markets,”

appreciating,” she said. “While the Fed has

Jensen said. “In many cities where they have

indicated they will raise rates three times this year,

created strict short-term rental laws, they allow

30 / The Intelligent Investor

medium-term rentals — furnished rentals for

investing where no one is looking. Every state

longer stays.”

has growing neighborhoods — find them and

Medium-term rentals are gaining in popularity thanks to the rise of remote jobs.

“In this gig economy, there are digital nomads who can work from anywhere there’s a Wi-Fi connection and choose to travel for fun, as well as people who travel extensively for their job (like

invest there. In the midwest, you can find singlefamily homes for under $150,000 in growth neighborhoods that will rent for $1,500 a month or more.”

Residential Properties in Metropolitan Areas

travel nurses) who don’t want to stay in a hotel

Kevin Swanson, CFP, CEO of Potentia Wealth,

for an extended time,” Jensen said. “These

believes that many people who left large cities

rentals are the best of both worlds — providing

will return in the coming years as employers

the higher rental rate of a furnished rental while

reopen their offices. That’s why he said that now

still complying with local rental laws.”

is the time to buy properties in these areas.

Single or Multifamily Homes in

“For our clients looking for real estate

Neighborhoods With Growth Potential

opportunities in today’s market, we are looking to

Jaspreet Singh, founder of Minority Mindset, said the best real estate investments to make this year are residential properties in areas with growing demand for rental homes.

larger metropolitan cities that have shown softness in this pandemic market and are urging them to move quickly,” he said. “As the pandemic wains, we believe many companies will require

their employees to come back to the office and

“Inflation is turning America into a renter nation,”

demand will increase for housing close to

he said. “As housing costs go up, more

corporate headquarters, creating an arbitrage

Americans will choose to rent rather than own. As opportunity in the real estate market.” inflation destroys the value of the dollar, real But investors need to act quickly to get the best estate will continue to appreciate, and rent prices deals. will continue going up. If you own the asset, you benefit from inflation.”

Singh said to focus specifically on buying rental

properties in neighborhoods with growth potential.

“In Portland, Oregon, a client found a new condo complex that had just completed construction and

began selling units three months before the pandemic began. The complex had to reduce its prices by nearly 50% in order to get units sold in

“A growth neighborhood is one where you have a 2020 and 2021,” Swanson said. “Along with this growing population, growing business and buying opportunity, we have low interest rates, growing demand,” he said. “Florida, Texas and

which we expect to disappear over the next two

Arizona are the most obvious, but they’re also the years as the Fed deals with persistently high most expensive. You’ll find better deals if you’re inflation rates.”

31 / The Intelligent Investor

Sample Criteria For Accepting Or Rejecting A Rental Applicant By: Paul Jenney, Compliance Officer with TenantTracks This is not intended to Replace Legal

5. Any records of criminal activity that that

Advice, we suggest you consult your

property owner would deem puts the

own attorney when creating your tenant

property, its owner or other residents at

selection criteria

risk, including, but not limited to, sex

1. All information on the application is correct; any factual errors are an automatic rejection.

offences, violations of the US Patriot Act covered by the Office of Foreign Asset Control or other international judicial authorities, arson, domestic violence, any

2. The application is signed and dated and other crimes of violence, weapons has authorized the property owner to violations, etc. Criminal records may be conduct a background check.

reported indefinitely under the FACTA

3. Any criminal record of drug dealing, drug update of 2003.

trafficking, manufacture, or distribution are

6. Eviction History. How long ago is

an automatic rejection.

acceptable? How many evictions? The

4. Any record of prostitution, illegal

reason for the eviction? The FCRA only

gambling, or any other crime that would

allows TenantTracks to report eviction

violate State laws regarding illegal use of a

records for seven (7) years. (Create your

rental property are an automatic rejection.

own policy and stick with it)

32 / Tenant Screening Tips & Tricks

7. Landlord History. TenantTracks may

the rental market tanks and you lower

only report information obtained from

your score requirement to attract more

owners and management companies for

potential renters (and accept more risk)

seven (7) years including notices to quit,

and vice versa, if you get more

noise issues, cash for keys, etc. How

applicants, you raise the score

many? How recent?...again; (Create your requirement. own policy and stick with it)

9a. If you are accredited to receive a full

7a. Landlord References. If they are a

credit report, then how many thirty (30),

career renter, I would ask for the last

sixty (60), ninety (90) day late-payments

three at minimal, and then call the second do you allow? How many collection two. They have nothing to lose by giving

accounts? How many charged off

the truth, but grill them about the

accounts (unpaid debt)

information, last addresses they gave on that application (might be hiding something), and did they pay the rent on time/in full/how many late-payments, any problems. This may seem like

10. IF employed, how long should they have been there? Can you independently confirm this? I recommend calling the HR

Department and faxing/emailing a release to provide you with the information, as an

“Landlording 101”, but this is helpful information on how they will perform as your tenants.

alternative you can ask for a copy of the applicant’s last tax return, if not employed, ask for proof of income.

8. If your property is carpeted, do they own a vacuum cleaner? It's a strange criterion, but you want to protect your

investment so it IS a fair question to ask.

9. Credit History. What is the minimum

Have a potential tenant you need screened? Visit tenanttracks.com for all your tenant screening needs!

Vantage Score to be accepted? This will vary by property. We recommend that the criteria is signed and dated and can be updated as market conditions change e.g.

Know Who You Are Renting To!

33 / Tenant Screening Tips & Tricks

What’s Happening Near You? The Statewide Events and Meetings calendar is a resource for local landlords and property owners to meet up, network and grow your real estate opportunities.

Get Involved, Stay Informed.

February 2022 Sun

Mon

Tue

Wed

Thu

Fri

Sat

1

2

3

4

5

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ECAR

CTPOA

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CTREIA

CTREIA

28

Events & Meetings & Networking

Eastern CT Association of Realtors (ECAR)

CT Property Owners Alliance (CTPOA)

CT Real Es Investor (CTREIA

Next Meeting: Feb. 16th

Next Meeting: Feb. 17th

Next Meeting: Feb

Time: 5:30 PM - 7:30 PM

Time: 11:00 AM

Time: 5:45 PM - 9:0

Where: Filomena’s 262 Boston Post Road Waterford, CT 06385

Where: Zoom Webinar

Where: Sheraton Ro 100 Capital Blvd.

Rocky Hill, CT 0606

Contact: 800-369-6153

About: From setting up important tenant screening About: REALTOR / Builder criteria to making sure your Blend! Join us for an rental decision leaves no exciting evening with ECAR question of discrimination, and the Home Builders & this webinar is a mustRemodeling Association. attend for all landlords, Connect, engage, expand property managers and your network!

REALTORS in New England.

Register here!

Contact: 860-892-2595

Register here for FREE.

Contact: 860-265-4

About: Main monthl meeting with Carlos an immigrant from Mozambique, the Ow CEO of Parkville Management. Carlo and manages 250+ units. Come listen to inspiring story and g educated on how to in this game!

Register here!

state rs A)

CT Real Estate Investors (CTREIA)

b. 21st

Next Meeting: Feb. 22nd

00 PM

Time: 5:45 PM - 9:00 PM

ocky Hill Where: Keller Williams Prestige 67 2777 Summer St. Suite 700 Stamford, CT 06905 4414

ly Mouta,

Contact: 860-265-4414

About: Fairfield County main monthly meeting with wner and Ed Mathews. Come and hear Ed speak on how to os owns raise capital for your real rental estate investing business. o his Register here! get success

Have An Event Or Meeting You Want Advertised In Next Months Edition?

Email Us the information and we’ll be glad to include it in the January edition of our E-Magazine!

Email: info@ctpoa.com Or give us a call: 800-369-6153

P. (800)369-6153

F. (888)900-9773

E. info@ctpoa.com

www.ctpoa.com

CT Real Estate Today allows you to hit your target audience for all things real estate.

Contact us at info@ctpoa.com

ADVERTISE WITH US!

Becom

V

The Conne composed o REALTORS improve the bu

Follo

me a CTPOA Member!

Visit: https://ctpoa.com/

ecticut Property Owners Alliance is of experienced property managers, S and landlords working together to usiness conditions for rental property owners.

ow CTPOA: https://www.facebook.com/CTPOA/

About Us Advocates For Property Owners The Connecticut Property Owners Alliance is composed of experienced property managers, realtors and landlords working together to improve the business conditions for rental property owners. The Alliance saves its members money on essential real estate services, reviews and testifies on pending legislation & law changes and offers its members workshops and meetings on topics that impact landlords.

Why The Property Owners Alliance Was Formed The Alliance strives to ensure your success in real estate by: •

Saving you money on essential real estate services

•

Informing you of law changes impacting your business

•

Providing workshops and meetings to help you become a better educated and prosperous rental property owner.