Rental Housing Journal Arizona
August 2017 - Vol. 9 Issue 8
2. Phoenix Apartment Rents Reach Record High Level; Vacancies Remain Low
6. Why is the Internet in Apartment Complexes So Bad?
3. Midyear Report – Suburban Office Challenging CBD
7. Majority of Rental Property & Investors are Small Entrepreneurs 10.Amazon Launches Delivery Locker Product for Apartment Buildings
WWW.RENTALHOUSINGJOURNAL.COM • PROFESSIONAL PUBLISHING, INC Monthly Circulation To More Than 7,000 Apartment Owners, Property Managers, On-Site & Maintenance Personnel
Q&A
Canine Liability Insurance
by John Triplett
D
ebbie Turner got into the canine liability insurance issue after she adopted a schnauzer, named Jazz, who had personality issues. She began to learn the different aspects of canine behavior so she could try and figure out why Jazz was so broken. Jazz led a long and healthy life and ultimately died of old age. “But somewhere it just hit me that the insurance industry is not underwriting the canine exposure," she said. She became interested in canine behavior and "found insurance companies just do not know how to underwrite this risk,” she said in an interview about what led her to start Dean Insurance Agency and the website dogbitequote.com. “I started working on this pet insurance and canine liability issue in the summer of 2010 doing a research paper. ...continued on page 8
Multifamily Market Will Hit Records in 2017 as Investors Return
W
est Coast markets will dominate the top 10 on gross income growth in 2017 for the multifamily market, led by Seattle, Sacramento, Tacoma, Portland and Colorado Springs, according to the Freddie Mac Multifamily Research Group’s mid-year outlook. Outlook authors Steve Guggenmos and Sara Hoffmann find that the multifamily market will continue to grow for the rest of 2017 and into 2018. Although the market will continue to moderate from cyclical highs, demand for rental housing units will remain steady. As a result, Freddie Mac is predicting that origination volume is likely to hit another record in 2017, reaching
T
between $270 and $280 billion, according to a release. Market uncertainty kept many multifamily investors on the sidelines in the first quarter of the year, but they are starting to return as interest rates moderate and the economy continues its steady upward trajectory. Multifamily performance, by most measures, remained near the historical average across the nation and in most markets in the first half of 2017. While results were mixed, the overall trend remained the same High levels of new supply, slowly increasing vacancy rates, and moderating rent growth. The rest of this year will bring more of the same. Some larger metropolitan areas that saw low-
er-than-expected performance in 2016 – such as San Francisco, New York City, and Boston – will continue to re-balance this year. Freddie Mac is predicting that originations will increase and set another record this year but will be lower than originally forecasted. Higher interest rates and market uncertainty kept more investors on the sidelines during the first quarter of the year. As interest rates stabilized and economic growth continued, investors have become more active Due to steady economic growth and strong demand for multifamily units, rent growth is expected to be similar ...continued on page 9
Apartments in Upscale Arizona Neighborhood Sell for $71 Million
he Arcadia Cove Apartments in Phoenix, acquired for about $40 million in 2013, have sold for $71.5 million, according to a release. The 432-unit complex was sold to BH Equities of Des Moines, Iowa, according to Bascom Arizona Ventures who completed the sale for $165,509 per unit. Arcadia Cove, built in 1996, is located at 2252 N. 44th St. Bascom made a substantial financial investment in renovations at Arcadia Cove. Exterior upgrades were performed on the pools and spas. Misters were added to the pool area, as were barbecue pits, outdoor television monitors and Wi-Fi connection, according to Bascom’s release on azbigmedia.com. Upgrades featured a fitness room, an Internet café, and a clubhouse with iPads stations. Interior upgrades included two-tone paint, new cabinetry, granite countertops, energy-saving stainless steel appliance packages, modern light fixtures, vinyl plank flooring, and ceilings fans.
Apartments brought up to modern design The amenities brought the community up to modern design, according to a release. The deal illustrates that Phoenix multifamily is trading for ever-higher sums, according to biznow.com. According to Colliers International, multifamily investment sales began 2017 at a strong clip, with more properties selling in the first three months of this year than in any first quarter since 2007. The median price from a multifamily asset in greater Phoenix has more than doubled since 2011. Arcadia Cove Luxury Apartments offer one-, two- and three-bedroom floor
Text REALESTATE-ROI to 44222 to receive a digital copy of this year's Real Estate Opportunities in Investing (ROI) Finding Investing Success in Today's Housing Market
plans and resort style amenities. The apartments are located near the Arcadia neighborhood in Phoenix bounded by 40th Street to 68th Street and Oak St. to Camelback Mountain. Arcadia contains well-kept homes on large lots which command relatively high property values. The central location is close to downtown Phoenix, Old Town Scottsdale, Arizona State University, the Phoenix Zoo and Sky Harbor Airport. Bascom was represented by Cindy and Brad Cooke of Colliers International.
...continued on page 9
Text 51WAYS to 44222
to receive the FREE e-book 51 Ways to Increase Your Rental Property Cash Flow (And 10 Ways to Ruin It)
Rental Housing Journal Arizona
Phoenix Apartment Rents Reach Record High Level; Vacancies Remain Low
T
Pete TeKampe • First Vice President Investments • Marcus & Millichap • Phoenix
he Phoenix apartment market in second quarter 2017 recorded the highest-ever average apartment rents in its history. Vacancies rose slightly from first quarter 2017 levels but remained near historic lows as newly constructed units entered the market. The percentage of communities offering concessions continued to decline in the midst of tightening rental market conditions. Rent Phoenix area apartment rents averaged $955 as of second quarter 2017 and this period marks the first time in history rents surpassed $950. One year earlier, average asking rents stood at $907 and in second quarter 2013, Phoenix area average rents stood at $760. The highest rent for the period occurred in the South Scottsdale submarket which recorded average rents of $1,252. This compares favorably to the area’s average of $1,205 in second quarter 2016. Since the beginning of 2016, the area added three projects comprising 566 units and there is currently one project of 356 units under construction in the submarket. Despite these additions to inventory, vacancies remained relatively low at 6.9 percent in second quarter 2017. The lowest rent in the Phoenix area in second quarter 2017 occurred in the West Central Phoenix submarket. Area rents stood at $628 for the period compared to $606 one year earlier. There were no new units added to the submar-
ket since 2016 and vacancies in the area were the lowest of all submarkets in second quarter 2017. The April 2017 issue of Rental Housing Journal predicted area rents would increase this year due to the area being bereft of new supply and the presence of low vacancies in the submarket. There are only 2,769 units in communities of at least 50 units in the submarket and the intensity of the demand for affordable workforce housing within proximity of jobs and transportation is driving vacancies to alltime lows. Submarket vacancy stood at 4 percent for the period and the market will experience a severe shortage of rental units for the foreseeable future. Vacancy Phoenix area vacancies as of second quarter 2017 stood at 7.4 percent. This is lower than the area’s vacancy of 7.6 percent recorded in second quarter 2016. The lowest vacancy was enjoyed by the West Central Phoenix submarket which recorded 4 percent in this category. This number represents a 110 basis point reduction in vacancy from what the area experienced in second quarter 2016. When the intense demand for the type and location of the rental housing that exists in this submarket is combined with the lack of new supply, rents of existing product are driven upward. West Central Phoenix will be one of the best performing submarkets in 2017 in terms of steady rent growth, low vacancy and low concessions. The highest vacancy occurred in the
Uptown/Central Phoenix submarket. As of second quarter 2017, submarket vacancy stood at 20.7 percent. However, this vacancy is weighted high due to the addition of 1,539 units in six projects since the beginning of 2016 which are still in lease up. New Construction The Phoenix metro area through second quarter 2017 added 3,509 units in sixteen projects. These additions to inventory were distributed among ten submarkets with the greatest number occurring in the Uptown/Central Phoenix submarket with 1,221 units in four projects. As of second quarter 2017, there were 52 projects comprising 13,623 units scheduled for- or under construction. North Tempe ranked first in this category with eight projects comprising 3,200 units scheduled-for or under construction. Valley wide though second quarter 2017, there were 1,131 two-bedroom two bathroom units built with an average square footage of 1,085 and an average asking rent of $1,708. There were 1,687 one bedroom one bathroom units built with an average square footage of 736 and an average asking rent of $1,232. Concessions Phoenix area concessions continued to decline through second quarter 2017. The percentage of communities offering concessions declined from 37 percent in second quarter 2016 to 33 percent in second quarter 2017, the lowest ever observed for the Phoenix area. The submarket with the highest conces-
sion ratio in second quarter 2017 was Southwest Mesa, with 51 percent of its communities offering any form of concession. The submarket with the lowest percentage of communities offering concessions for the period was Northwest/Southwest County in which zero properties offered concessions. Summary The Phoenix apartment market continues to show operational strength that is likely to continue for the nearand intermediate time frames. Second quarter 2017 was the 20th consecutive quarter of YOY asking rental rate increases, the 29th consecutive quarter of YOY concession ratio declines and the quarter with the highest-ever average rents. Fourteen submarkets recorded average asking rents greater than $1,000 and five submarkets recorded vacancies below 5 percent. New construction appears to enjoy healthy absorption and the submarkets with the lowest vacancy rates are generally populated with workforce housing units. The middleto lower end of the rental consumer base is facing a shortage of rental housing options that will intensify over the next twelve months. Pete TeKampe First Vice President Investments Marcus & Millichap ptekampe@marcusmillichap.com 602.687.6767 Direct *Sources: RealData Inc./Phoenix, Maricopa County, City of Phoenix, Peter E. TeKampe, P.C.
Text REALESTATE-ROI to 44222 to receive a digital copy of this year's
Real Estate Opportunities in Investing (ROI) Finding Investing Success in Today's Housing Market
2
Rental Housing Journal Arizona · August 2017
Rental Housing Journal Arizona
Midyear Report – Suburban Office Challenging CBD Often-Overlooked Investment Quietly Gathers Traction; Reinventing Suburban Office Sparks Refreshed Perspective
C
BD led office recovery. Central Business District office markets garnered attention during the recovery as a variety of large companies announced relocations to downtown areas. Notable leaders in this movement included United Airlines, which moved its headquarters to downtown Chicago, and Expedia, which relocated to the
Seattle waterfront from its suburban office location. As millennials entered the workforce, access to transportation, walkability and retail topped priority lists, further benefiting CBD office demand. This noteworthy shift sparked an urbanization trend and drove increased absorption of office space. Subsequently, CBD office rents
Key Observations CBD Improvement Tapering. While the CBD was quicker to recover from the Great Recession, improvements in office market fundamentals have begun to moderate. Vacancy remained fl at in 2016, while the pace of growth in asking rents slowed. Demographics Favor Suburban Demand. Nearly two thirds of households already reside in the suburbs, fostering demand for office space in suburban markets. Shorter commute times entice many workers to seek employment in suburban office locations.
Suburban Absorption Strong. Net absorption has maintained a vigorous pace over the last six years, pushing vacancy down nearly 250 basis points to 15 percent since 2011 and driving steady rent growth. ■ Cap Rates and Pricing Show Suburban Upside. First year returns up to 100 basis points higher in the suburbs. Additionally, peak-to-trough pricing signals additional room for improvement in the suburbs compared with urban assets.
Suburbs Evolve to Meet Millennial Tastes. Suburban companies are seeking spaces in prime locations to cater to the lifestyle that many young professionals enjoyed in CBD areas. As a result, many suburbs are transforming into their own urban environments with walkability, entertainment, and retail and dining options.
and vacancy were quicker to recover from the Great Recession than their suburban counterparts. Suburban office gathering momentum. Following the recession, many employers relocated to the urban core, capitalizing on reduced downtown office rents while reinforcing the trend toward urbanization. As the economic growth cycle gained momentum and office rents in core locations recovered, suburban office space once again became a more affordable alternative for many companies. Though lower costs catalyzed a shift in where companies located, tightening labor markets have reinforced the value of locating near the substantial suburban labor force featuring 70 percent of the millennial population. Though many millennials favor an urban live-work-play lifestyle, for many young adults, commute time is also a significant consideration. Evolutionary suburban office trends. The idea of working in an amenity-rich office location with walkable access to shopping, restaurants and other recreational activities remains attractive to many professionals and still favors urban office space. Numerous suburban office locations have become increas-
ingly competitive, however, by clustering in walkable villages featuring many of the amenities and services of urban environments. These locations are generally more affordable than their urban counterparts while remaining attractive to employees seeking a variety of offerings that are within walking distance. Many of these areas are located on transit lines, allowing employers to draw from a broad labor force outside the urban core. Investors shift focus. The urban core comprises approximately 31.6 percent of the total office space in major cities, but in the wake of the recession just 17.3 percent of the 2009 office transactions were in downtown areas. As the urbanization trend gathered momentum, sales of downtown office properties increased to comprise nearly one fourth of the deals in 2014. Since then, investors have once again begun to focus on suburban options, restraining downtown activity to 21.7 percent of 2016 office sales. The fl ow of capital reflects the convergence of opportunity, yield and perceptions of future growth, and it appears investors’ attention is once again moving beyond the core. ...continued on page 4
Advertise in Rental Housing Journal Arizona Circulated to over 10,000 apartment owners, on-site and maintenance personnel monthly
Call 503-221-1260 for more information w w w . rentalhousingjournal.com
Rental Housing Journal Arizona · August 2017
3
Rental Housing Journal Arizona
Midyear Report ..continued from page 3
Suburban Office Outlook Improving Demographics Will Shift Office Tenants and Investor Attention to the Suburbs Well-located suburban Office properties benefit from forward-looking demographics. In 2015, the majority of U.S. households, 64 percent, resided in the suburbs and that number should rise as urban millennials form families and move to larger living spaces in suburban locations. Many Office tenants are tapping into this larger workforce already located within the suburbs, enticing employees with shorter commute times and revamped Offices. Moving forward, attention should continue to shift to suburban Office space as market demographics improve and absorption remains steady. Suburbs Dominate Household Location, Attract Tenants Office tenants seeking to capitalize on the many workers living in the suburbs have fueled net absorption of suburban Office space. As a result of robust tenant demand, vacancy has fallen nearly 250 basis points during the course of the recovery to 15 percent in the first quarter of 2017. In an effort to recruit and retain these employees, suburban tenants have been scouring the market for quality available space in locations near retail and transportation options. Subsequently, suburban Office construction has heightened during the last two years but remains far below the completions recorded during the previous cyclical peak. Minimal completions and steady absorption signal the potential for further vacancy improvement. Healthy demand has also spurred rent growth with the average asking rent up 7 percent from the 2008 peak. Asking rent is roughly half of the average rent in urban Office space, motivating tenants who may have been priced out of the urban core to move to the suburbs. The lower costs and relatively more land available in the suburbs have also resulted in the creation of large campuses catered to professionals. Many of these campuses offer on-site amenities like gyms or day care centers. Additionally, the cost savings allow some companies to renovate existing spaces into modern Office concepts.
from peak cap rates to the high-5 percent span in March. Cap rates in suburban properties descended 150 basis points to the low-7 percent area during this same time. Higher returns in the suburbs and consistent tenant demand should create attractive yield dynamics, particularly for buyers attracted to value-add properties where increasing amenities and renovating spaces to cater to millennials’ tastes can increase marketable rents. While average first-year returns higher than CBD properties are garnering attention for suburban assets, peak-totrough pricing signals room for additional improvement. The average price per square foot for suburban assets is up 34 percent, while downtown properties are up 46 percent per square foot from trough to current peak. The lower prices in the suburbs provide potential opportunities for private investors who may have been priced out of core urban assets by institutional buyers. Additionally, as institutional foreign capital has typically gone to trophy CBD buildings, private foreign buyers are increasingly seeking out more affordable suburban properties.
Cap Rate Trends Show Upside Potential of Suburban Office Strengthening demand for Office properties compressed the average first-year returns in both suburban and core Office assets over the course of the recovery. Initial yields in CBD Office space fell about 240 basis points
Suburban Case Studies Suburban Office Landscape Changing to Meet Demands of New Workforce Office markets in the suburbs are transforming to meet the live-playwork lifestyle in order to secure and retain the next generation of talent. New projects often reflect the changes that millennials have brought to office and work culture. On-site amenities including access to recreational activities, healthcare clinics and day care centers have cropped up in many new suburban office developments, helping create the work-life balance desired by many professionals. Additionally, companies are targeting spaces with nearby access to dining, retail and entertainment, further generating the sense of community that young professionals value. Plano Texas Brings CBD Lifestyle to the Suburbs The evolution of suburban communities into amenity-rich environments is demonstrated in Plano, Texas. Located 40 minutes outside Dallas, Plano features numerous corporate headquarters including Toyota, Alliance Data, Frito- Lay, Pizza Hut and J.C. Penney. Residential and retail offerings, such as the Shops at Legacy, are available near these campuses to further augment a work-life balance. These types of shopping centers provide additional upscale dining and retail options to attract professionals in the area. Many corporations are also revamping their spaces. Toyota recently moved its North American Headquarters to Plano from Torrance, California. The new campus is built with collaboration, health and efficiency in mind. All departments are internally connected and collaborative areas comprise roughly half the workspace. Employees can choose to have standing desks, some on treadmills, and large community tables. The campus also has a wide range of amenities including various dining options, a jogging track, a rock-climbing wall and a two-story gym.
gion. Tempe is filled with several highrise residential developments that are within walking distance to local shops, dine-in establishments and events. For example, the Sixth Street Market is a Sunday morning pop-up that features shopping, art, brunch and yoga. Additionally, the light rail provides transportation to downtown Phoenix and Phoenix Sky Harbor International Airport. Other companies have taken notice of the success in downtown Tempe, including State Farm, which recently built its new regional headquarters here with young workers in mind. The campus features restaurants, a fitness center and an on-site primary-care doctor’s office. Additionally, break rooms that resemble coffee houses, wine bars, standing desks and conference rooms with 360-degree video-calling capabilities bring the collaborative environment young professionals desire. The company also recognizes the importance of a sense of community and hosts a free music festival every Thursday night in downtown Tempe called Beyond the Bricks.
Tempe Arizona Engages Millennials Tempe, a suburban college town east of Phoenix, Arizona, has a live-playwork environment that attracts millennials. Several large employers are there, including Honeywell and Freescale Semiconductor. Additionally, Insight, a b2b tech Fortune 500 company, has its headquarters within the city and JPMorgan is building a 67-acre campus. The area incorporates a large university, creating a recruiting pool for nearby companies targeting workers in the re...continued on page 5
Do you need help with content marketing, e-mail marketing or social media? 4
We can help! Inbound Marketing Certified
Contact us at
info@rentalhousingjournal.com Rental Housing Journal Arizona ¡ August 2017
Rental Housing Journal Arizona
Midyear Report ..continued from page 4
Contacts and Capital Markets Debt Funding Availability Remains High; Fed Pushes to Normalize Rates Monetary policy in transition. Despite the Fed raising its benchmark short-term rate three times in seven months and signaling another rise before the end of the year, long-term rates have remained stable. The yield on the 10-year U.S. Treasury bond remained in the low- to mid-2 percent range throughout the second quarter of 2017. The Federal Reserve wants to normalize monetary policy and, in addition to rate hikes, will likely start paring its balance sheet. Sound economy a balancing act for Fed. With unemployment hovering in the low-4 percent range, the lowest level since 2007, the Federal Reserve will remain vigilant regarding the possible rapid increase in inflation if wage growth takes off. Additionally, business confidence sits close to its all-time high. Businesses finally have the confidence to expand their footprint after years of tepid growth following the Great Recession. Office properties stand to gain significantly from this expansion with increased hiring adding to occupancy, in addition to expanding economic growth. The Fed, however, must now balance economic growth and job creation against wage growth and inflationary pressures. Underwriting discipline persists; ample debt capital remains. Overall, leverage on acquisition loans has continued to reflect disciplined underwriting, with LTVs typically ranging from 60 percent to 75 percent for most office properties. At the end of 2016, the combination of higher rates, conservative lender underwriting and fiscal policy uncertainty encouraged some investor caution that slowed deal fl ow, a trend that has extended into 2017. A potential easing of regulations on financial institutions, though, could liberate additional lending capacity and higher interest rates may also encourage additional lenders to participate.
By Catherine Zelkowski For information on national office real estate trends, contact: John Chang First Vice President Research Services Tel: (602) 707-9700 john.chang@marcusmillichap.com © Marcus & Millichap 2017 www.MarcusMillichap.com
to be a forecast of future events and this is not a guaranty regarding a future event. This is not intended to provide specific investment advice and should not be considered as investment advice. Sources: Marcus & Millichap Research Services; CoStar Group, Inc.; Federal Reserve; Moody’s Analytics; Real Capital Analytics; Standard & Poor’s; U.S. Bureau of Labor Statistics.
The information contained in this report was obtained from sources deemed to be reliable. Every effort was made to obtain accurate and complete information; however, no representation, warranty or guaranty, express or implied, may be made as to the accuracy or reliability of the information contained herein. This is not intended
Advertise in Rental Housing Journal Arizona
Circulated to over 10,000 apartment owners, on-site and maintenance personnel monthly
Call 503-221-1260 for more information
Rental Housing Journal Arizona · August 2017
5
Rental Housing Journal Arizona
Why is the Internet in Apartment Complexes So Bad?
An Educational Series for Apartment Owners: Part 1 “Modem Service” Can a Multifamily Internet System with WiFi Installation be the Ticket?
A
busy, always connected lifestyle demands the Internet. So much so the FCC, in a 2016 ruling, deemed the Internet a utility and it will be regulated as such. Regardless of government policy, the fact remains, access and experience are extremely important to consumers. Internet, as a utility, is an important distinction in today’s marketplace. Most Internet users experience a “Dirty City Water” Internet experience because it’s poorly maintained and rarely managed by monopolistic Internet Service providers (ISP’s ) – leaving a bad taste in the consumer’s mouth. Most agree the Industry needs improving; just as
6
there are quality options for drinking water in the market, there are quality options for Internet. A “Glacier Water” Internet experience stands apart from typical Internet offerings for the residents, simultaneously generating revenue, increasing brand loyalty and maximizing retention for an apartment owner. Comparing “Dirty City Water” to “Crystal Clean Glacier Water” is like comparing “best-effort” Cable Modem or DSL services (a.k.a. Modem Service) to a professionally managed, highly reliable, Fiber Backed Property-Wide WiFi service (a.k.a. Pure Internet). When a network is installed and managed correctly, the true essence of “Pure Internet” can be achieved; if not, the likely experience is the status-quo (or worse) that plagues American Internet services today. Most have always known they’re paying too much for an inconsistent, inferior service and it’s no secret “Big Box” Internet Service Providers (ISP’s) are often ranked last in customer surveys. What’s not as intuitive is why.
The 4 pillars to “Dirty City Water” (Modem Service) Pillar 1 - Bandwidth: Calculating Internet speeds are often misunderstood by consumers. The industry has done a fabulous job of masking what’s important in achieving true speeds and a pure Internet experience. A) Internet Speeds: Bad news! Buying more Mbps (Mega-
bits per Second) seemed the answer to faster Internet speeds but that’s not exactly true. Purchasing more Mbps buys capacity not speed. Speed, how we comprehend it, is perceived in distance; like with miles per hour (MPH). Contrary to most beliefs, Internet speed is more accurately expressed as latency. Lower the latency, increase webpage load times. Isn’t that what we are looking for? ...continued on page 11
Rental Housing Journal Arizona · August 2017
Rental Housing Journal Arizona
Majority of Rental Property Investors are Small Entrepreneurs
M
ost rental property investors and owners are small landlords who own five or fewer single-family rental housing units, according to a new study. The study showed that landlords and real estate investors lease 44 million rental households that house about 60 million people across the U.S., according to a release from Real Property Management. The study found this means there are about 10 million real estate investors representing 98 percent of all rental property owners and about 80 percent of all rental properties. “The single-family residential investment market has long been misunderstood and dismissed as only an option for those wealthy enough to use real estate investing as a business,” Bob Pifke, CMO of Property Management Business Solutions, LLC, the franchisor of Real Property Management, said in the release. “The results of this study have painted a clear picture that single-family res-
idential investors are becoming more and more serious, and that rental properties are being recognized as a mainstream asset for investors building a portfolio for retirement,” he said. Pike was referring to findings from The Iceberg Report, an annual report and analysis of the American single-family residential investment industry. Real Property Management was a primary sponsor of the study, which was created in partnership with 2020 REI. “With the Iceberg Report, we now have a better understanding of this unique market including who they are, what they are interested in, how and when they buy properties, and the impact of their investment activity,” Pike said. Rental property investors find property managers through referrals In addition, the findings show that personal referrals from family, friends, and real estate agents were the primary means by which more than half of rental property investors found a property manager – contrary to what most believe is internet-driven research and validation. There is an increasing level of sophistication amongst rental property investors and a higher level of financial acumen than previously thought, according to the study.
second only to apartments as rental housing The Real Property Management organization, along with other sponsors, uncovered the following key information through the administration of this research study: 1. Types of Structures of Renter Households. Out of the 43.7 million rental households, 15.2 million or 35 percent are single-family residences that represent 43 percent of rental residences. This segment of the rental industry is second only to apartment buildings. 2. First vs. Subsequent Investment Opportunities. The first rental property investors purchase is typically found with the help of others. Real estate agents are the leading source, followed by friends and real estate investment clubs. Real estate investment courses also play a major role. In contrast, subsequent investment property purchases involve a much greater variety of inputs including personal contacts and internet sources. Investors quickly learn how to leverage multiple information sources to build their portfolios. 3. Investor Location Preference. Two
thirds of rental property investments are made in the investor’s local area and 52 percent occur in the investor’s city or town. The role of national investors who have no location preference remains a small segment of the market. 4. Price for Residential Property. Most investors buy rental properties priced below both the average new or existing home price. Only one-third are willing to pay for housing above $275,000. 5. Intent of Property Acquisition. Property investors play an important role in upgrading and improving housing. Two thirds of properties are renovated after purchase, and nearly half of all property investments are turned into rentals. Only a third of investors are “flippers”, who plan to sell the property as-is or with renovations. 6. Property Management Preference. Doing it yourself and having a professional property manager is not a black and white decision for investors. Although half of investors handle all aspects of property management, 22 percent enlist the aid of a third party for some aspects of property management (primari...continued on page 9
Single-family residences
Do you need help with content marketing, e-mail marketing or social media?
We can help! Inbound Marketing Certified
Contact us at
info@rentalhousingjournal.com
Rental Housing Journal Arizona · August 2017
7
Rental Housing Journal Arizona
Q&A Canine Liability ...continued from page 1 When a friend read it and said, ‘That’s not a research paper that is an insurance policy.’ “For me this is a passion. As a child I saw my mother dump our family pet on the side of the road. I looked back and saw him trying to catch us. I can remember screaming and crying. I guess there were not a lot of options back them. I did rescue for 10 years. So my passion – I think I am still trying to save that dog that was dropped off by my mother in the wilderness. That is how it all came about," she told Rental Housing Journal in an interview. “Now I am saving pets every day all over the country,” Turner said because research shows the main reason pets end up in animal shelters is owners cannot find rental housing for themselves and their pets. Matthew Wildman, former pet retention manager for The Humane Society of the United States told Rental Housing Journal last year, “There is so much misinformation out there. Our position is allowing pets in rental housing is good for business. Hundreds of properties allow dogs and cats without restrictions on breed.” He said the number one reason animals are sent to shelters is because of rental situations where they cannot keep a pet. Turner said she gets a lot of questions from multifamily property owners, landlords, apartment property manag-
ers and tenants. So she put together a list of seven of the most asked questions about pet insurance and canine liability insurance. Q: Can a landlord or property manager require that tenants buy canine liability insurance? What about service dogs, emotional support dogs and therapy dogs? A: Generally but they cannot require it if the dogs are any of the labels that the Fair Housing Act protects, like seeing eye or emotional support. The key to a true service dog, is one who has been trained to do one thing to improve the life of the owner. If it is a service dog you are allowed to ask what the dog does? If it is a dog being used as any of the many titles now being used the landlord could agree to pay for the policy ( a reasonable accommodation) the policy would be in the owner's name but the landlord would still be named as an additional insured. I also think there may be different rules if there are less than four units. Q: How much does it cost a year? A: Each dog is rated as an individual so it varies, small dogs could be under 8
$200 annually a Cane Corso just rated out, he weighed 130 pounds, for the $50,000 insurance limit at around $650 including the fees and taxes. Q: Can a landlord or property manager buy a canine liability policy to cover the whole apartment complex and all dogs in it? A: Right now the only way is to require each dog owner to purchase a policy and add the Landlord as an additional insured, much the way typical renters insurance works. Q: How many people with dogs in apartment complexes have canine liability insurance? A: More every day, the lawsuits are no longer just about bites. If your dog scratches, trips or knocks someone over you are liable. Worst one yet was a child who knew the dog lived on a near-by property. The child approached the property knowing the dog would be there. The dog never left its property, but when the child turned to run, he broke his ankle to the tune of $175,000. Q: Can you insure all breeds and types of dogs? A: Yes, but I do not insure wolf hybrids as they are not considered a "dog." Q: Can you insure a dog that has bitten someone in the past? A: I review the applications individually when certain behavior histories come up. For example, if the dog has
killed another animal and the owner reached in to separate the dogs and was bitten, there is a surcharge but I would probably write the policy. Q: What important advice do you have for landlords and property managers? A: One of the most important things landlords should do is print out exactly what limit, $25,000, $50,000, $100,000, or $300,000 they want and the exact wording of the additional insured's information. Otherwise every tenant will buy $25,000 without an additional insured endorsement. We can change that but it can take several weeks to get the evidence from the insurance company. Also, all of these policies are not created equal I would urge the landlords to review the coverages. It is great to say you have insurance but quite another to find out when there is a claim that the policy was so narrowly defined that there is no coverage. Dogs are still animals and they can bite in certain situations Turner says she has found out a lot
from talking with animal control officers around the country. “Many people say, ‘oh my dog won’t bite, or my dog will lick you to death.’ There is a total innocence among dog owners that their dog won’t hurt or bite anyone for any reason. I had a trainer tell me his dogs were bullet proof. But they are still animals and given the right set of circumstances will bite. That is scary when people say their dog is bullet proof because means they do not have any concept their dog could bite,” Turner said. “I have written about 2,500 policies. The majority of the dogs insured are on the dangerous lists. I have very few little dogs. Turner can offer solutions for several different situations. “I tell landlords if they cannot get through my underwriting criteria, think twice about allowing that dog to come into the property”. Some commercial liability policies are starting to take canine liability insurance out of those policies so owners, landlords and property managers should check.
insured and they will have the coverage for $300 a year. That is a huge solution to a major problem. I have talked to people with true service dogs who have said they know they cannot be required to buy the insurance, but they like the idea anyway because they will be protected and the landlord will be protected so “ I am just going to buy it,’ they said. “ Turner thinks most people will buy the policies because of the difficulty of finding a place to rent with a pet. Education is a still a huge issue.
Insurance companies and dog breeds they insure can vary “I started doing the statistics on what is the likelihood that any given dog will injure a person. There are 83 million dogs, more than 400 million people, and about 400,000 got to the hospital in a year because of an injury from a dog. “It was difficult to convince the insurance companies that this would not have large loss ratios because they are positive that this is all about pit bulls and the list of dangerous dogs has grown from one or two to 10 or 15. But they are not the same for every company. “One company will declare a Weimaraner is a dangerous dog. No other company will declare it a dangerous dog. So what that tells me is they had a really bad claim with a Weimaraner. Now to fix it they are not going to insure any more Weimaraners. There is no logic in that, but I think that is the way this all ends up,” she said.
Debbie developed the Canine Liability Policy offering protection for dog owners in the event their dog(s) injures a person or another animal. Each dog is individually underwritten examining those characteristics that play a part in the propensity for dog biting. Policy limits range from $25,000-$300,000. Debbie also has the ability to include additional insureds if required. In stark contrast to other programs, Canine Liability insurance does not exclude any particular breed of dog; this approach is central to Debbie’s unique understanding of dog behavior that has turned underwriting this risk on its floppy ear. You can contact her at 800-721-3326 ext 101 and reach her at www.dogbitequote.com.
Canine liability and service dogs, emotional support dogs and therapy dogs “There are now a psychiatric care dogs and the things we are finding they can assist with grows by the day. Service dogs are considered by FHIA as a medical device. You cannot request a person with a service dog to do anything,” Turner said. “Landlords asked me how to do this. If they make it mandatory for tenants to buy canine liability insurance, most will be happy to do it because they are delighted to live there with their dog. There might be a small percentage that know they cannot be required to buy canine liability insurance in that case I have suggested – it says you have to make “reasonable accommodate” and I am writing pit bulls for $300 – would that be considered a “reasonable accommodation?” By a court? I am thinking so. “So I have suggested to landlords here is an option – if a tenant is resisting buying a policy go tell them what you would like to do is buy it on their behalf. It will be in their name and the landlord will be added as an additional
Resources: Pets and rental housing The Humane Society of the United States The Fair Housing Act And Assistance Animals Recommended Pet Policies For Apartments and Condominiums Problems And Solutions For Renting With Pets
Advertise in Rental Housing Journal Arizona Circulated to over 10,000 apartment owners, on-site and maintenance personnel monthly
Call 503-221-1260
for more information
Rental Housing Journal Arizona · August 2017
Rental Housing Journal Arizona
Upscale Arizona Neighborhood ..continued from page 1 Colorado investor buys Raintree Apartments in Tucson for $12 million In another Arizona multifamily sale, A Colorado investor has purchased the Raintree apartment community at 6450 E. Golf Links Rd. for $12,475,000. The company acquired the property as an expansion of its existing Arizona real estate portfolio, according to a release. Colorado-based SPL Real Estate and Management Company purchased the community from Summit Raintree, LLC, a Delaware limited liability company. Koskovich, Bill Hahn and Jesse Hudson of Colliers International in Greater Phoenix handled the sale transaction. “This property offers the abundance of on-site amenities that today’s tenants are seeking,” Trevor Koskovich, senior vice pres-
ident with Colliers International in Greater Phoenix, said in the release. “The quality of the property and its incredible location near Davis-Monthan Air Force Base position the asset for outstanding appreciation in value.” Raintree was built in 1983 and was 96 percent occupied at the time of the sale. Situated on 10.18 acres of land, the community features 20 two-story buildings of apartment homes. The property contains 364 units ranging from 327-square-foot studios to 928-square-foot two-bedroom apartments. Raintree offers a total of 145,456 square feet of space. The gated community provides residents with a swimming pool and spa, fitness center, basketball court, sand volleyball, racquetball court, dog park, jogging track, television lounge and 24hour laundry facility. Apartment units feature walk-in closets, pantry, vaulted
ceilings in upper units and dishwashers. Raintree is located in a popular area of Tucson, just north of Davis-Monthan Air Force Base. The area features a variety of shopping destinations and is surrounded by strong elementary schools and higher education institutions. Comcast recently announced the future hiring of 1,175 employees for its call center, just 20 minutes from Raintree. Colliers International Group Inc. (NASDAQ and TSX: CIGI) is an industry-leading global real estate services company with 15,000 skilled professionals operating in 68 countries. With an enterprising culture and significant employee ownership, Colliers professionals provide a full range of services to real estate occupiers, owners and investors worldwide. Services include strategic
advice and execution for property sales, leasing and finance; global corporate solutions; property, facility and project management; workplace solutions; appraisal, valuation and tax consulting; customized research; and thought leadership consulting. The Bascom Group, LLC is a private equity firm specializing in multifamily, commercial, non-performing loans, and real estate related investments and operating companies. Bascom sources value-add and distressed properties through foreclosure, bankruptcy, or short sales, and repositions them by adding extensive capital improvements, improving revenue, and reducing expenses using institutional-quality property management.
Will Hit Records in 2017 ..continued from page 1 to 2016 levels and vacancy rates will increase more slowly than initially forecast. However, the number of construction projects are expected to peak in 2017 or early 2018, which will push vacancy rates higher. Absorption of new units in some areas will take longer than in prior years, putting some downward pressure on rent growth. "In the first half of 2017 multifamily performance, by most measures, remained near the historical average in the majority of markets across the country," Steve Guggenmos, Freddie Mac Multifamily vice president of research and modeling, said in the release. Some larger metropolitan areas -such as San Francisco, New York City, Washington, D.C. and Miami -- saw significant construction in the past
year, which has pushed vacancy rates up and slowed rent growth. However, according to the Outlook, nearly twothirds of metros will end the year with vacancy rates below their historical averages. In these areas, demand continues to outpace supply, which allows rents to keep rising. West Coast Metros Still Tops In Multifamily Rent Growth West Coast metros still will dominate the top 10 list based on gross income growth in 2017, but more secondary markets from across the South are also poised for strong growth through the rest of the year,. As vacancy rates remain tighter in 2017 than expected at the beginning of the year, areas including Nashville, Dal-
las, and Raleigh/Durham are forecast to see stronger gross income growth. Looking beyond 2017, vacancy rates are expected to continue to trend up, but the economy’s overall performance will determine the impacts to rent growth. With good macroeconomic conditions, rent growth will continue near the current pace. However, any uncertainty about the economy’s well-being could change that. Guggenmos added, "All things considered, 2017 will be yet another good year for the multifamily market. And importantly, it will not be the market's last strong year. Strong demand, fueled by demographic changes and lifestyle preferences, will ensure the multifamily market's continued strength in the years ahead."
About Freddie Mac Multifamily Freddie Mac Multifamily is the nation's multifamily housing finance leader. Nearly 90 percent of the rental homes we fund are affordable to families with low to moderate incomes. Freddie Mac makes home possible for millions of families and individuals by providing mortgage capital to lenders. Since our creation by Congress in 1970, we've made housing more accessible and affordable for home buyers and renters in communities nationwide. We are building a better housing finance system for home buyers, renters, lenders and taxpayers. Learn more at FreddieMac.com.
Majority... Small Entrepreneurs ...continued from page 7 ly leasing vacancies), while 28 percent have a professional do all the property management work. 7. Most Frequent Rental Problems. The number one problem for rental property investors is unexpected maintenance. Since most investors have full time careers outside of property investing, unexpected maintenance issues interfere with work and family activities. Secondly, one in four investors frequently deal with late or delinquent rent collection, and tenant damage to property is the third most frequently reported rental problem for investors. The Iceberg Report is a new annual study designed to understand the behavior of the American single-family residential investment industry from Steve Murray of REAL Trends and Andrew Waite of NEXZUS Publishing Group, former publisher of Personal Real Estate Investor Magazine. The authors pioneered studying this market in 2007 when Murray, a real estate brokerage consultant, questioned Waite about the market impact of intentional investors on housing resales. At the time, investors were considered an irritant to traditional real estate agents, yet little had been done to quantify the amount of recurring business opportunity real estate investment offered the real estate
sales industry. After years of industry expansion, and no subsequent industry wide surveys, polls, or reports being published, the 2020 REI Group commissioned the authors of the previous reports to embark on this new format. Adding a qualitative aspect to the proven quantitate approach was a key factor to the mission of the project. To obtain the executive summary of the Iceberg Report, please visit https:// www.propertymanagementfranchise. com/iceberg-report/. Real Property Management is a franchise organization owned by Property Management Business Solutions, LLC, a privately held corporation based in Utah. With over 30 years of industry expertise, Real Property Management offices provide full-service residential property management for thousands of investors and rental home owners from more than 300 independently owned and operated locations throughout the United States and Canada. For more information about Real Property Management or property management services, please visit the following link: www.realpropertymgt.com. For information on franchising opportunities, please visit www.propertymanagementfranchise.com.
Rental Housing Journal Arizona · August 2017
9
Rental Housing Journal Arizona
Amazon Launches Delivery Locker Product for Apartment Buildings
A
mazon has launched a new delivery locker product, called “the Hub,” for apartment buildings so residents can securely receive bulky packages and pick them up at convenient times for the tenants, according to Amazon. Amazon is promoting the service saying, “It’s your package. Pick it up on your schedule.” The pitch to property managers to focus on residents Amazon is pitching the lockers to apartment owners and property managers saying, ”Your residents will thank you. “Accepting deliveries from all carriers, Hub by Amazon can free you and your staff from daily package management. It’s convenient and easy to use, making the Hub an amenity your residents will love. “Self-service delivery and trusted customer support come together to create a solution you can count on,” the company says. Hub by Amazon is your fast and easy way to receive packages from anyone, according to the company. 1. Just ship to your home address 2. Always open 3. Pick it up any time - The Hub keeps your package safe and sound Convenient - Located at your residence, making getting your packages a breeze. Configured for your apartment property
Indoor and outdoor Hubs are available, starting at 6’ wide. Choose from three neutral colors that blend seamlessly with your property, the company says. The Hub appears to be a development on a service that Amazon has been running for several years now called Amazon Lockers, parcel delivery lockers that are located in public places and retailers to make delivering and picking up Amazon parcels more efficient, according to techcrunch.com. Significantly, both the Lockers and now these Hubs underscore a bigger ambition that Amazon has to lock in a segment of the logistics and delivery chain that has largely been out of its hands: last-mile (and even more specifically last-feet) delivery. The company says on its website that “Hub by Amazon is a modular system that can be easily installed at a variety of properties.” The first module is the Starter Hub, a 6 ft. wide system with 42 compartments. The second module is the Expander Segment which you can use to add 23 more compartments. The modules link to each other to provide the right capacity for your property’s needs. See more details here. “All compartment sizes and layouts are pre-configured, so there’s no need to guess what type of compartments you’ll need,” the company says.
Publisher Will Johnson – will@propubinc.com
Advertising Sales Will Johnson – will@propubinc.com Terry Hokenson – terry@propubinc.com Designer/Editor Larry Surratt – larry@propubinc.com Steve Olsen – steve@propubinc.com Rental Housing Journal is a monthly publication published by Professional Publishing Inc., publishers of Real Estate Opportunities in Investing & Real Estate Investor Quarterly
www.rentalhousingjournal.com
The statements and representations made in advertising and news articles contained in this publication are those of the advertiser and authors and as such do not necessarily reflect the views or opinions of Professional Publishing, Inc. The inclusion of advertising in this publications does not, in any way, comport an endorsement of or support for the products or services offered. To request a reprint or reprint rights contact Professional Publishing Inc. PO Box 6244 Beaverton, OR 97007. (503) 221-1260 - (800) 398-6751 © 2017 All rights reserved.
10
Rental Housing Journal Arizona · August 2017
Rental Housing Journal Arizona
Internet... So Bad ...continued from page 10 Picture the Internet like a freeway; purchasing more Mbps buys you more lanes not a higher speed limit. Unknown by most, your lanes still move at the speed of your latency regardless of how many lanes you buy. Latency is something most ISP’s won’t discuss. They cannot control, manage or sell lower latencies effectively; instead they sell you more “slow lanes” of capacity. “What’s important to note here, and this confuses a lot of people, is that your internet isn’t any faster from 1 Mbps to 5 Mbps, or however much bandwidth your connection has. Your data is just transferred to you at a faster rate because more data can be sent at the same time. It’s more efficient, making your internet perceptually faster, not technically faster.” Your true Internet speed is the relationship between bandwidth (how much) and latency (how fast) – not just bandwidth alone. B) Over subscription: Modem Services are notorious for over subscription ratios that routinely surpass 100 to 1. Meaning, 100 people are sharing the same allocation of bandwidth on the same “Internet pipe”. There’s nothing inherently wrong with oversubscribing bandwidth; most people aren’t fully utilizing their bandwidth. Further, it increases the cost efficiencies of a network. However, when over subscriptions are high, it causes peak period slow-downs for end-users. One hundred (100) households with 5 devices or more, all sharing the same internet pipe, is simply too much. C) Symmetrical Speeds: Many forms of Internet, namely modem services, have asymmetrical speeds. This means higher downloads speeds than upload speeds. It’s common to see a 10-to-1 ratio. This can be a problem for live communication applications; like video streaming (e.g. Skype), VoIP or chat. If you are “... running any real-time applications like Microsoft Office365, VPN, VoIP, video conferencing, web conferencing, and/or you have a need for large file transfers, you will benefit from high speeds in both directions…” A growing number of businesses facilitate remote work from home. Hence, the virtual work force is rapidly growing; it’s imaginable to see a majority of the workforce working remotely in the future. D) Privacy: Make no mistake your Internet habits are being monitored, recorded and stored. With recent Internet laws being
passed, it’s now legal for ISP’s to collect and sell “ALL” of your browser history and other relevant data. IT professionals can dodge this; however, for the rest of us, prepare to share your online habits with your ISP.
Pillar 2 – Management: A) Dirty Data: Modem services are a WIDE OPEN pipe from the Internet to your home. This means that hackers have the ability to penetrate your network; the only obstacle is your $60 router from Best Buy, configured and managed by you. The “average Joe” is expected to configure their router in an attempt to protect against these professional hackers. Managing a network at this level is not for the faint at heart, yet we have been relegated to “figuring-it-out.” Millions of Americans are “on-their-own” which creates legitimate risks and concerns. B) Customer Support: Unfortunately support from most “Big Box” companies only exists to maintain THEIR wiring and equipment. If they confirm it’s not THEIR fault, you’re on your own. In some cases, you may find they offer expensive network support to help guide you through the perils. However, most ISP’s simply confirm the signal to your modem and don’t support it further. A perfect storm of bad equipment, bad wiring, monopolistic attitudes and profit-first philosophies fuel this lackluster and inept support experience. In the end, customer support falls short of par for most ISP’s. “…Without competition, there's no incentive for internet providers to improve infrastructure. These massive telecom companies create a bottleneck in the last mile of service by refusing to upgrade critical infrastructure. And they can charge exorbitant prices for the sub-par service while they're at it.” C) Best Effort Service: Unfortunately, most Americans are relegated to “Dirty City Water” because they have “best effort” modem service as their primary residential connection. Somehow the industry has thrived by offering lowest-common-dominator-services. They even named it similarly, “Best Effort.” The ISP is saying they will try their best to provide what you paid for. Only, there are no Internet-quality-police to hold them accountable. Worst yet, there’s often a monopoly or duopoly which creates very little incentive to improve quality of service and customer support. That’s why the industry’s biggest providers are
NAME ADDRESS CITY
STATE
ZIP
E-MAIL ADDRESS
I am an: OWNER
INVESTOR
PROPERTY MANAGER
*Print subscriptions $25/year $15 each additional market
I would like: Editions: VISA
VENDOR
OTHER
$8 each additional market
ARIZONA SALEM/EUGENE, OR
COLORADO SEATTLE/TACOMA
PORTLAND, OR UTAH
MASTER CARD
CARD NUMBER NAME ON CARD BILLING ADDRESS
EXP.
OR MAIL A CHECK TO: Rental Housing Journal PO Box 6244 Beaverton, OR 97007
Rental Housing Journal Arizona · August 2017
CVV
routinely voted the most hated in the U.S. Security: You are on your own in terms of security. Relying on virus protection or your operating systems firewalls can certainly help stop certain types of online threats. However, you are still in grave danger from hackers. Without professional management the network is left with a “Mom and Pop” security environment that lamely attempts to thwart determined threats. A study by CNET.com stated… “… all [14 top home routers] had critical security vulnerabilities that could be exploited by a "remote adversary" and could lead to unauthorized remote control of the router.”
Pillar 3 – Design/Configuration: A) WiFi Installation & Design: In a small space it may appear like WiFi design doesn’t really matter – there isn’t enough square footage to cause coverage issues, right? Not exactly, the WiFi radio frequencies (RF) from neighboring routers are all fighting for the same limited air space, with zero synergy. This is compounded in a multifamily environment; more WiFi interference means slower connections and decreased security, effectively creating a hodge-podge design that is counter-productive to “Pure Internet”. B) Configuration: Configuring a home router may seem intuitive if you know the basics. However, your home network is inherently disadvantaged because of the limited-feature-set found in a home router. They usually don’t include enterprise firewalls, bandwidth shaping, black lists and interference mitigation. The lack of features vastly limits proper security. Even if an enterprise router was used, the weakest link is still the novice home network engineer. A BBC article titled “How easy is it to hack a home network?” puts novice configurations and home networking blunders into perspective. “I found out just how severely compromised my home network was in a very creepy fashion. I was on the phone when the web-connected camera sitting on the window sill next to me started moving. The lens crept round until it pointed right at me. I knew that the attackers were on the other end watching what I was doing, and potentially, listening to the conversation.” Pillar 4 – Equipment & Wiring: A) Competition: It’s all about the bottom line, thus your local ISP plans on using their antiquated wiring infrastructure for as long as possible. Most ISP’s enjoy monopolistic environments. They won’t ordinarily upgrade unless there are extenuating forces. For example, in Google Fiber territories, local ISP’s magically upgraded their fiber infrastructure to compete. Googles expansion has since come to a halt. Google knows if they expand to new cities the local incumbents will simply ramp-up services in that area. Atlanta is the perfect example -- 99% of the country is not so fortunate to have a turf war driving down prices and forcing fiber upgrades. With little to no competition there’s no incentive to upgrade wiring and cannibalize profits. Unless something changes, most of America will have to wait for fiber -hunker down and get used to antiquat-
ed wiring for decades. B) Antiquated Delivery: Bandwidth delivered over coaxial or copper wire is outdated, and, by association, the entire delivery process has technological bottlenecks. Your delivery is only as strong as the weakest link. Even with fiber-to-the-home (FTTH), your bottleneck may still be the wiring inside the home, fiber media convertor, router or modem. There are many places the delivery could be bottlenecked when dealing with old wiring. “Most of America's telecommunications infrastructure relies on outdated technology, and it runs over the same copper cables invented by Alexander Graham Bell over 100 years ago. This copper infrastructure—made up of "twisted pair" and coaxial cables—was originally designed to carry telephone and video services. The internet wasn't built to handle streaming video or audio.” C) Over-the-Counter Routers: Most people either rent a modem/ router or buy one and, while over-thecounter WiFi equipment is priced to sell, it does not provide premium technology. Bigger living spaces can experience dead spots and most turn to mesh equipment, repeaters or other consumer grade “Whole-Home WiFi Solutions”. These types of solutions commonly relay the WiFi signal, which slows speeds around 50% per hop. Internet is only as fast as the weakest link. Next to bandwidth, equipment is the most common area that contributes to bad Internet experiences.
Underserved/Overpriced: The typical Internet connection “sucks” and is overpriced. The average cost of residential Internet is around $75. Additionally, most pay $10 a month to rent their modem. The cost of Internet is not necessarily more than other utilities but definitely comes with the lowest quality and reliability. It is as essential as running water, but has all the problems of a do-it-your-self environment. Other utilities don’t pose the same dynamics. For most, the water pressure doesn’t drop every time neighbors run a bath. We pay $75+ for an essential utility service; we want the service to work – no headaches or training involved. From an antiquated infrastructure to user-error the entire experience is often a nightmare. Next month: Part II How to Fix Slow Internet for Residents, Generate Revenue and Ditch the “Cable Guys” With a Multifamily Internet Service Fiber Stream is a provider of futuristic high speed Internet and TV services. Fiber Stream’s target markets include Apartments, HOA'S, MDU's, and senior living communities. Headquartered in Phoenix, Arizona, Fiber Stream is a nationwide "Full Service" Internet provider, offering Fiber to the Unit (FTTU), Fiber-Backed Property-Wide Wi-Fi, Gigabit Internet, Managed Wi-Fi solutions and IPTV. Fiber Stream developed one of the first Revenue Generating Internet Systems of its kind. For more information, visit www.FiberStreamWiFi.com or call 1-888-644-9434.
11
Rental Housing Journal Arizona
The AMA Crowd You Know & Love is Online
Introducing Arizona’s first online community for multifamily professionals! Kick your multifamily career into overdrive with incredible features including a members-only AMA Forum to chat with your customers and colleagues, a database of articles written by industry rockstars, an up-to-date multifamily job board, AMA event listings and more...
REGISTER TODAY: AZMULTIHOUSINGFRIENDS.COM MULTIHOUSING FRIENDS IS AN AFFINITY PARTNER OF THE ARIZONA MULTIHOUSING ASSOCIATION
12
Rental Housing Journal Arizona · August 2017