Rental Housing Journal On-Site April 2017 by Professional Publishing, Inc

Rental Housing Journal On-Site

April 2017

3. The Informed Investor - Why Use 1031 IRC Exchanges? 5. Where Are the Nation's Young Homebuyers Now? 6. U.S. Homeowners Give Record High Satisfaction Scores to Their Insurers 7. Top Regret for Home Buyers is Not Prepping Soon Enough

8. Consumer Survery Indentifies Home Shoppers' Preferences in 2017 9. National Government Affairs Update 11. Dear Maintenance Men - Rehabbing Rentals, Fencing and Smokers 12. Down Payment Holding Back Renters From Buying a Home

13. How to Improve Your Tenant Selection Screening 14. 5 Qualities and Habits of Great Property Managers 17. Moving From a Home With Two Bedrooms to Three Costs $450 Extra a Month

www.rentalhousingjournal.com • Professional Publishing, Inc 17,000 Papers Mailed Monthly To Puget Sound Apartment Owners, Property Managers & Maintenance Personnel Published in association with Washington Association, IREM & Washington Multifamily Housing Association

Spring Seattle Renters Need Biggest Income Cleaning Tips Boost to Keep Up with Rising Rents and Tricks for U.S. renters would need a raise of about $168 a year in 2017 Homeowners just to keep up with expected rent increases over the next 12 months as rental affordability concerns persist

R I

t is springtime: the time to open the windows, let in some fresh air and clean the house from top to bottom. This month's The Best, NoSweat Ways to Spring Clean Your Home spotlight from Houselogic.com, the comprehensive website for homeowners from the National Association of Realtors®, features six articles helping homeowners get and keep their homes clean. Here are a few tips from HouseLogic on how to freshen up a home this spring as quickly, simply and cheaply as possible.

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Minimalist Home Countertops You Can't Detect These 4 Odors, But Your Guests Can. When a smell is a constant presence in a home, it is easy to become 'noseblind' to it, but continued on page 10

enters in Seattle, Los Angeles, and Boston need the biggest income increases in 2017 to keep up with rising rents, according to a new Zillow analysisi. In each of these metros, renters need their annual incomes to be at least $1,000 higher next year to have the same amount of money left over after paying rent. Nationally, annual incomes would need to rise just $168 for renters to keep up with rising rents in the next year alone – an increase that comes on top of nearly five years of rising rents putting a dent in paychecks across the country. These income increases will only maintain the current amount of left over cash after paying rent. In several major metros, the share of income needed to pay rent already surpasses the general rule of not spending more than 30 percent of income on housing. In nearly all large markets, the median rent requires a larger share of income

than it did before the housing bubble and bust. Housing affordability is still a significant issue for renters, who have experienced rising rents for years. In some markets, the median rent requires more than 40 percent of the typical household income. However, rent appreciation is slowing, and rents are predicted to rise just 1 percent over the next year. "For a long time now, renters have faced an affordability crisis when it comes to housing, and renters in some hot markets will still need significant raises just to keep up with rising rents," said Zillow Chief Economist Dr. Svenja Gudell. "Incomes have a ways to go to bring rental affordability closer to historical levels, but recent gains are being met with slowing rent appreciation, a welcome sign for renters."

Top Five Markets Needing the Biggest Annual Income Increase to Keep Up with Rising Rents Annual Income Metro Increase 1. Seattle $1,248 2. Los Angeles $1,152 3. Boston $1,140 4. Sacramento, Calif. $792 5. Orlando, Fla. $672 Not all rental markets are expected to see as strong of rent appreciation. Renters in the Bay Area, Chicago, and Houston, for example, do not need their incomes to grow to have the same amount of money left over after paying rent. Income growth in these markets will provide some much needed relief for renters in terms of housing affordability. continued on page 20

Homes in Short Supply as Home Shopping Season Kicks Off

here are 3 percent fewer homes on the market than a year ago, with the median home value hitting its highest point since June 2007, according to Zillow's February Real Estate Market Reports Home values across the country are up 7 percent since last February, with 3 percent fewer homes to choose from than a year ago, making for another competitive home shopping season. The

median U.S. home value is $195,700, according to the February Zillow® Real Estate Market Reportsi, the highest value since June 2007. Tampa, Fla., Seattle, Dallas and Orlando, Fla. reported the highest year-over-year home value appreciation among the 35 largest metros across the country, all growing in the doubledigits. In Tampa, home values rose almost 12 percent to a median home

value of $182,100. Home values in both Seattle and Dallas are up 11 percent since last February. High buyer demand coupled with fewer homes for sale is driving home values higher in many of these markets -- there are 5 percent fewer homes to choose from than a year ago in Tampa and 11 percent fewer in Orlando. continued on page 19

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The Informed Investor – Why Use IRC 1031 Exchanges? Roger W. Bowlin | Real Estate Transition Solutions, LLC What constitutes a “Like-Kind Exchange?” 1031 exchanges are a popular tool among real estate investors since they can be utilized in a variety of situations – all of which allow for tax deferral. Internal Revenue Code § 1031 states: “No gain or loss shall be recognized on the exchange of property held for productive use in a trade or business or for investment if such property is exchanged solely for property of like kind which is to be held either for productive use in a trade or business or for investment.” Confusion surrounding the definition of the term “like-kind” is common. Some investors assume the criteria for establishing a like-kind exchange is both rigid and narrow, however that is not the case. Instead, the IRS focuses their definition of like-kind on the nature or character of the property, rather than its grade or quality. Simply put, real property must be exchanged for real property. All real property held for productive use in business, trade or for investment purposes is qualified as real property for exchange purposes. It should be noted that there are a few exceptions to this rule, such as if the property is held by a real estate developer whose business is the acquisition and development

of property – in this situation the real property would be classified as inventory or “stock in trade.” As mentioned earlier, the definition of “like-kind” is indifferent to both grade or quality of the real property. This means that investment real estate of any type or class can be exchanged for one another: The flexibility included within the IRC allows investors to pursue opportunities with their real estate exchange proceeds outside of the space in which they have previously experienced appreciation. Often, we work with investors who feel there is not sufficient opportunity

in a recently owned property-type or geographic market to warrant both the market-risk and time consuming management of their current holding. When this situation presents itself, we seek to identify the investor’s financial objectives and strategize as to how to achieve those objectives. Propertytype and geographic diversification can be satisfied through identifying replacement properties that often fall within the following four categories, all of which possess unique attributes that can serve to satisfy an investor’s needs – a sampling of which are included below:

Direct Ownership

Management Active daily management

Potential Cash Flow Generally low

NNN Direct Ownership

Passive management

Reasonable cash flow

Value-Add Co-Ownership

No management

Generally none

Delaware Statutory Trust (DST)

No management

Generally strog cash flow

Potential Appreciation Opportunity for appreciation if purchased properly Opportunity for appreciation if purchased properly Considerable opportunity for appreciation, note also higher risk Minimal opportunity for appreciation

Diversification Difficult to diversify beyond city in which investor lives Diversification is possible; however properties tend to be expensive Diversification is possible; however properties tend to be expensive Diversification is very possible due to ability to purchase $25k-50k “units,” for example continued on page 23

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Rental Housing Journal On-Site · April 2017

Rental Housing Journal On-Site

Where Are the Nation's Young Homebuyers Now? Pittsburgh, DC and Des Moines

illennials in Pittsburgh, Washington D.C., and Des Moines, are pursuing home ownership more than their counterparts in any of the nation's 100 largest cities, according to a new study by LendingTree®, the nation's leading online loan marketplace. These young homebuyers are at the forefront of a growing nationwide trend of young buyers returning to the housing market. LendingTree analyzed mortgage requests and offers for borrowers aged 35 years and under between August 1, 2016 and February 1, 2017, along with requests from the total population of mortgage-seekers based on the location of the property to be mortgaged. The city rankings are generated from the percentage of total purchase mortgage requests received by LendingTree from borrowers in the millennial generation. Pittsburgh, PA tops the list with 48.4% of all purchase mortgage requests coming from millennials, followed by Washington, D.C. (46.8%) and Des Moines, IA. (46.4%). The average loan amount requested by young borrowers in those cities are $201,921, $381,110 and $173,439, respectively. On average, 36.1% of all mortgage

requests through LendingTree between August 1, 2016 and February 1, 2017 come from consumers 35 years and younger. This is a slight increase from the same period last year, where 34.24% of loan requests came from millennials. The average loan amount requested from this age group is $175,180, compared to an average of $191,157 for those over 35. "Thanks to a stronger jobs market and overall economy, the 35-andunder crowd is growing up," said Doug Lebda, CEO of LendingTree.

"Although millennials have been slow to the real estate market, the appeal of homeownership remains strong, and we're beginning to see more activity with this generation. Rising home prices and high student loan debt are still affecting the purchase power of millennials, but as more student debt is repaid and the jobs market improves, we're likely going to see more young buyers in this spring home buying season than in previous years." While San Francisco millennials once again signed on for the highest

average mortgage loan amount in the country ($528,761), the city also sees a relatively large percent of home loan requests coming from millennials (44.3%), underscoring the fact that San Francisco is home to both an abundance of top-earning young professionals and extremely high housing costs. Millennials in Ohio are seeking the most affordable mortgages, with Toledo, Akron, Lakewood and Dayton claiming four of the top ten cities with the lowest average mortgage amounts for the age group. On the other hand, California is host to four of the ten cities with the highest average mortgage amount: San Francisco, San Jose, Los Angeles and San Diego. The chart below ranks the top ten cities with the highest percentage of purchase mortgage requests submitted by consumers no older than 35 years of age:

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Rental Housing Journal On-Site · April 2017

Rental Housing Journal On-Site

U.S. Homeowners Give Record High Satisfaction Scores To Their Insurers

bout one of every 15 U.S. homeowners insurance policyholders files a claim each year and these claimants are now giving insurers their highest ever satisfaction ratings, according to the Insurance Information Institute (I.I.I.). The J.D. Power 2017 U.S. Property Claims Satisfaction Study gives U.S. home insurers a record score of 859 (on a 1,000-point scale). The industry's cumulative score stood at 846 in 2016. Five factors are considered when assessing policyholder satisfaction: settlement; first notice of loss; estimation process; service interaction; and repair process. "Insurers are the nation's economic first responders and, as such, are continually working to improve how they help Americans recover their lives and businesses in the wake of tragedy and catastrophe," said Sean Kevelighan, president and chief executive officer (CEO) of the Insurance Information Institute (I.I.I.). "This year's J.D. Power and Associates survey results are a clear reflection that the industry's hard work and dedication are delivering the intended results." These all-time high claims satisfaction scores are even more remarkable given that incurred losses and loss-adjustment expenses for U.S.

water-related and other complex claims that take a long time to settle and that cause significant lifestyle disruption. J.D. Power noted, "Insurers that manage to get the settlement process and customer interaction equation right in these types of disruptive and often catastrophic scenarios are those that raise the bar for the industry." The study is based on more than 6,600 responses from homeowner's insurance customers, and was fielded between January and November 2016.

property/casualty (P/C) insurers grew by 7.6 percent year-over-year when comparing the first nine months of 2016 to the first nine months of 2015, according to an analysis developed by Dr. Steven Weisbart, the I.I.I.'s chief economist. Incurred losses reflect the dollar amount of a home insurer's claim payout whereas a loss adjustment expense is the sum an insurer pays for investigating and settling claims, including the cost of defending a lawsuit in court. Moreover, Dr. Weisbart noted, catastrophe-related claims through the first nine months of 2016 were already at their highest level since 2012—the year of Superstorm Sandy—and the fourth quarter of 2016 pushed those numbers even higher after insured

claim payouts from October 2016's Hurricane Matthew. The federal government agreed that 2016 was a volatile, and costly one, estimating 15 separate weather and climate events last year caused more than $1 billion in economic losses, not all of them insured, according to the National Oceanic and Atmospheric Administration (NOAA). "Property and casualty insurers have redoubled their efforts to improve the settlement process and fine-tune their customer interactions, efforts that have been clearly recognized and appreciated by homeowners who experienced significant losses this past year," J.D. Power said. The study also noted opportunities for improvement, most notably in

The I.I.I. has a full library of educational videos on its You Tube Channel. Information about I.I.I. mobile apps can be found here. The I.i.i. Is A Nonprofit, Communications Organization Supported By The Insurance Industry. Insurance Information Institute, 110 William Street, New York, NY 10038; (212) 346-5500; www.iii.org http://www.facebook.com/ InsuranceInformationInstitute http://twitter.com/iiiorg http://www.linkedin.com/company/ insurance-information-institute http://www.youtube.com/iiivideo https://plus.google. com/113369356227754162778 SOURCE Insurance Information Institute -http://www.iii.org

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Proud to be a one-stop shop for rental housing providers + managers, we offer: rental forms, tenant screening services, classes, a resource helpline, and effective government advocacy. Belong today – joinRHA.com  Learn more about membership at: RHAwa.org | Membership | Benefits + Services

Rental Housing Journal On-Site · April 2017

Rental Housing Journal On-Site

Top Regret for Home Buyers and Sellers is Not Prepping Soon Enough With the 2017 home shopping season approaching, Zillow reveals data-driven tips for buyers and sellers this spring

he spring home-buying season is gearing up to be one of the most competitive in recent history, as the shortage of for-sale homes is keeping inventory tight and prices high. Buyers and sellers hoping to be successful this spring should start the process early, according to the 2016 Zillow Group Report on Consumer Housing Trends. Of over 13,000 U.S. residents surveyed, the number one regret for both buyers and sellers was not starting their home search or prepping their home to sell soon enough. U.S. home values across the nation are up 7.2 percent over the past year, and there are three percent fewer homes to choose from than a year ago, according to the January Zillow® Real Estate Market Reports.i "This spring, both buyers and sellers should be prepared for fast-moving sales, intense negotiations, and even bidding wars," said Jeremy Wacksman, Zillow Group chief marketing officer. "Home shoppers and sellers are motivated to become more strategic and

knowledgeable about what's happening in their neighborhood. Understanding whether you are in a buyer's or a seller's environment will help you manage your expectations and will give you insight into what you're going to need to bring to the table in order to close the deal." The Zillow Group Report on Consumer Housing Trends reveal strategies for how to buy and sell in today's highly competitive market.

than repeat buyers (39% vs 26%). Before you meet with a lender to determine how much mortgage you'll be approved for, take a good look at your individual finances and spending preferences to determine the monthly payment range that you feel you can comfortably afford. Use Zillow's mortgage calculator to help with you with the math.

Buyers: • Keep your options open. More than half (52 percent) of buyers said they also considered renting, and more than one third (37 percent) of first-time buyers seriously considered continuing to rent. Savvy shoppers will have a Plan B in place, hoping to buy if it works out, but willing to sign a lease for a home if they don't make a deal by the time they need to move. • Be realistic with your budget. Once you set it, stick to it: firsttime home buyers are more likely to exceed their budget

• Get your financing squared away early. Plan to meet a few lenders four to six months ahead of when you're planning to buy to ensure you can make a competitive offer quickly when you find your dream home. The majority (82 percent) of buyers get preapproved, with 77 percent getting pre-approval from a lender before finding a home on which they are interested in placing an offer.

Rental Housing Journal On-Site · April 2017

• Find an agent with a winning track record. Take the time to find an agent who has expertise in fast negotiation, leveraging

escalation clauses, and winning bidding wars. Only 46 percent of buyers got the first home on which they made an offer, demonstrating that competition is now part of the process. Use search tools, like Zillow's Agent Finder, to choose an agent based on sales and listing activity, area of expertise and reputation. • Communication is key. Make sure your preferred method – and frequency – of communication matches that of your agent. One third (33 percent) of all buyers preferred phones call with their agent over emailing (21 percent) or texting (15 percent). Buyers can use the agent reviews on Zillow to learn more about prospective agents and their clients' experiences.

Sellers: • Start Early & Be Strategic. Sellers consider putting their home ...continued on page 14

Rental Housing Journal On-Site

Consumer Survey Identifies Home Shoppers' Preferences in 2017

Topping Buyers' Lists: Three-Bedroom, Two-Bathroom, Ranch-style Homes with a Large Backyard, Updated Kitchen and Garage

anch-style homes, large backyards and updated kitchens top shoppers' wish lists this spring, according to realtor.com®'s home buyer survey. More than half of home seekers are looking for a three-bedroom home, while 75 percent of shoppers are considering a two-bathroom home. Realtor.com® is a leading online real estate destination operated by News Corp [NASDAQ: NWS, NWSA]; [ASX: NWS, NWSLV] subsidiary Move, Inc. The survey, based on March data from shoppers on realtor.com®, provides insight into home buying trends in 2017 by analyzing what features shoppers are looking for this spring and summer the peak home buying seasons. "The insights from our most recent consumer survey provide a glimpse into what buyers are looking at today," said Sarah Staley, housing expert for realtor. com®. "While we often think of dream homes as being big and bold, that's not what we're hearing from potential buyers today. These insights can help guide potential sellers in deciding which rooms or features to invest in before listing their homes." Following are key findings of the realtor.com® home buyer survey. Complete survey findings can be viewed at http://research.realtor.com/ spring-home-shoppers.

Large backyards, garages and updated kitchens top list of most searched attributes All age groups are looking for some combination of a backyard, garage and updated kitchen. Unsurprisingly younger homebuyers who are more likely to have young children in the house are particularly excited about finding a large yard. These age groups are also most interested in living in a good school district. The least-searched features were a guesthouse, mother-inlaw suite, solar panels and a "man cave." Ranch-style homes and kitchens rule in 2017 Ranch homes led shoppers' rankings of desired home styles by far, with 42 percent of shoppers looking for a ranch home. No other style of home broke 29 percent, although contemporary came close with 28 percent, followed by Craftsman and Colonial styles. Eighty percent of shoppers ranked the kitchen as one of their three favorite rooms in their home. Kitchens were followed by master bedroom (49 percent) and living room (42 percent) among most age groups. Although, shoppers over 55 years old preferred garages over living rooms. Privacy ranks as shoppers' top goal for buying, largely driven by buyers over age 45

Most shoppers cite privacy as their top goal when searching for a home. Shoppers want to have a space that is solely their own. This preference can be attributed to mostly buyers between 45 and 64 years old, for whom privacy tends to beat out other preferences such as stability, family needs and financial investment.

Millennial shoppers cite family needs as the primary reason for entering the housing market As millennial buyers prioritize family needs, it is no surprise that most millennials cited life events like increasing family size and getting married or moving in with a partner as their primary triggers for finding a new home. Shoppers age 35-44 are also focused on family needs. Most of this group cited better school districts or changing family circumstances as their primary reasons for purchasing a new home. Shoppers over age 45 are looking to downsize, as all age groups above 45 cited planning for retirement as their primary motive for finding a new house.

shoppers age, however, that number declines and single-family homes are a clear preference. The older the age group is, the less likely they are to consider a townhouse and the more likely they are to prefer a single-family home.

About realtor.com®

Realtor.com® is the trusted resource for home buyers, sellers and dreamers, offering the most comprehensive source of for-sale properties, among competing national sites, and the information, tools and professional expertise to help people move confidently through every step of their home journey. It pioneered the world of digital real estate 20 years ago, and today helps make all things home simple, efficient and enjoyable. Realtor.com® is operated by News Corp [NASDAQ: NWS, NWSA] [ASX: NWS, NWSLV] subsidiary Move, Inc. under a perpetual license from the National Association of REALTORS.® For more information, visit realtor.com®. Media Contact: Realtor.com® Lexie Puckett Holbert – lexie.puckett@move. com http://www.realtor.com

Desire for single-family home rises with age Among younger buyers, many of whom are buying starter homes, 40 percent of shoppers were looking for townhouses and row houses. As

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Rental Housing Journal On-Site · April 2017

711 Powell Ave. SW, Suite 101 Renton, WA 98057 (425) 656-9077 • (425) 656-9087 (fax) admin@wmfha.org

Executive Director - Jim Wiard Board President - Becky Sanders Vice President - Sheri Druckman Treasurer - Laura McGuire Secretary – Melissa Downs Vice President of Suppliers Council - Rob Pendleton Immediate Past President - Brett Stevens

National Government Affairs Update

he Washington Multi-Family Housing Association has become the go-to source for local, regional, state and national legislative information that affects our industry. Representing 1,400 members and nearly 200,000 rental homes in the state, WMFHA is a powerful voice for the industry. In addition, as the Washington State affiliate of the National Apartment Association, we have opportunities to become involved on various issues throughout the country. Policies emanating from both Washington, D.C. and our state capitol will play a key role in either assisting or hindering our industry from being able to continue to provide affordable, safe and decent housing to America’s workforce and to help create vibrant communities. Government action or inaction on issues can impact the day-to-day management of apartments by raising costs, adding liability risk and creating ambiguities. A burdensome regulatory environment can also increase expenses, raising rents, and acts as a disincentive to invest in affordable housing solutions. WMFHA’s mission is to support and lead legislative regulatory policy both locally and nationally that promotes and preserves quality rental housing for all.

Together with NAA, WMFHA invests in political capital, or how well we, together, influence decisionmaking with the resources we use to advocate and encourage Congress to address the long-term needs of the apartment industry. The federal, state and local policy issues impacting the apartment industry are numerous and wideranging, and affect how property owners and managers provide safe, affordable housing to 37 million Americans. The myriad of issues includes energy efficiency, bed bugs, building codes, tax reform, fair housing, screening policies and more. Overarching

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these complex issues is the need for Congress to create a balanced housing policy that recognizes the critical role of apartments in providing shelter for Americans. The apartment sector is an industry that helps today’s renters live in a home that’s just right for them and plays a vital role in the nation’s economic strength. The surge in apartment housing demand has outstripped new supply. We stand ready to meet the growing demand for rental housing, but need public policies that don’t impede our ability to do so. In March, WMFHA staff and key members traveled to Washington D.C. to join with NAA to work on issues

important to our industry, and to meet individually with our state’s members of Congress to educate them on our industry and how we can work together. Grassroots advocacy efforts in our nation’s capitol included discussing sensible tax reform that promotes economic growth and investment in rental housing without unfairly burdening apartment owners and residents relative to other asset classes. Congress has released a blueprint for tax reform that would significantly alter the taxation of multifamily real estate. Lawmakers are calling for reform of the nation’s tax code to foster economic competitiveness and economic growth. Tax reform has the capacity to fundamentally reshape the multifamily industry as it did after the passage of the last comprehensive tax reform law – the Tax Reform Act of 1986. Apartment firms pay tax when they build, operate and sell properties, or transfer communities to their heirs. Below are some key tax provisions that we advocated to our members of Congress in D.C. in March: • Congress must not reduce corporate tax rates at the expense of flow-through entities, where earnings are passed through to the partners who pay taxes continued on page 22

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Spring Cleaning Tips and Tricks ...continued from page 1 that doesn't mean visitors won't have their olfactory senses offended by any unpleasant scents to which the homeowner has become accustomed. Look at HouseLogic's suggestions for eliminating some of the most common smelly offenders, including using an onion to deodorize a musty room. 8 Storage Tips to Help You Clean Better, Clean Faster. For many homeowners, cleaning the house – the WHOLE house – is a bit of a drag and usually takes much longer than expected. However, with the proper organization, the job can be done quickly and with minimal headaches. Check out HouseLogic's tips for organizing cleaning supplies,

including using a shoe caddy as a cheap, convenient way to store products out of sight behind a door. 10 Clever Uses for Hydrogen Peroxide. Hydrogen peroxide is cheap, non-toxic and the Swiss Army knife of cleaning supplies. HouseLogic lays out just 10 of the many cleaning uses for H2O2, including spraying a hydrogen peroxide-water mixture on plants to ward off fungus. 8 Tips and Tricks to Keep Your Home Cleaner Longer. How can homeowners make their spring-cleaning efforts last into summer and fall? By following HouseLogic's list of tips to keep a home clean with less effort and with less frequency, such as using rain repellent

with tips such as borrowing instead of buying one-time use items. These suggestions can help homeowners save money and decrease clutter.

designed for cars to eliminate soap scum buildup in the shower. The Dirty Places in Your Home Your Guests See – But You Don't. Sometimes a home's harshest critics are not the ones who live there. Guests look at a home with fresh eyes and often notice the dust bunnies and cobwebs that homeowners miss. HouseLogic asked a cleaning expert to share the top seven spots that often go uncleaned, such as the refrigerator icemaker to keep it from absorbing food odors. How to Achieve am Minimalist Home. This month's spotlight also features a comprehensive infographic on how to live like a minimalist and achieve an organized, clutter-free home

For more information on making a home spick and span, visit HouseLogic.com. HouseLogic is a free source of information that helps consumers make smart, confident decisions about all aspects of home ownership. Made possible by Realtors®, the site helps owners get the most value and enjoyment from their existing home and helps buyers and sellers make the best deal possible. The National Association of Realtors®, "The Voice for Real Estate," is America's largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries. Information about NAR is available at www. nar.realtor. This and other news releases are posted in the "News, Blogs and Videos" tab on the website.

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Rental Housing Journal On-Site · April 2017

Rental Housing Journal On-Site

DEAR MAINTENANCE MEN By Jerry L'Ecuyer & Frank Alvarez

Rehabbing Rentals, Fencing and Smokers Dear Maintenance Men: I have just finished rehabbing a rental unit. I replaced counter tops, cabinets, baseboards and so on. Even though the unit is freshly painted with new carpets, the unit still looks unfinished. The base boards don’t always follow the wall contours exactly and the cabinets also have small gaps where they meet the wall. What can I do to make my work look professional?

Julia Dear Julia: We are going to let you in on a “professional” secret and it is called painter’s caulk! Painter’s caulk typically comes in a tube and is applied with a caulking gun. Run a small bead of caulk along the baseboard and with your finger push the caulk between the wall and the gap you are trying to fill. Using a damp sponge or rag, wipe up any excess caulk. Painter’s caulk can be used to hide a multitude of installation sins. Almost anywhere two dissimilar materials meet; painter’s caulk can help

hide the transition. Painter’s caulk is not limited to just baseboard, use it to make cabinets and door trim look custom installed. Fill nail holes without making a big flat spot on your wall. If you have ever tried to mate two pieces of trim or coving at a 45 degree angle and your cuts are not quite square, use painter’s caulk and no one will know. All gaps will magically disappear.

Dear Maintenance Men: My building has redwood fencing and patio decks. Both the fencing and decks are in good condition, however the “red” in the wood has faded with exposure to the weather. The wood looks grey now. How can I bring back the redwood look back without buying new wood?

Josh Dear Josh: A Redwood deck or fence may be young and fit, but they do tend to grey prematurely. Luckily, the solution is not too hard. There is a chemical called

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oxalic acid which will help give the wood its youth and vitality back again. Most hardware stores will stock a product called cedar and redwood cleaner/ brightener. It may be under the brand name of “Olympic Cedar and Redwood Deck Brightener” Be sure your deck or fence is clean before treatment by using a TSP and water solution. (TSP is a heavy duty powder cleaning solution available at any hardware store or supermarket.) After cleaning, be sure to read the deck brightener product’s instructions before use. For safety and wear gloves and goggles. Mix the product’s solution with water into a pump up sprayer. Wet the deck or fence with the solution and using a nylon brush or broom, scrub the wood evenly, working harder on stained areas. Let the solution stand for about thirty minutes and rinse off with a strong stream of water. Let dry and the wood should look brighter. It might not look brand new, but it will look much better.

Dear Maintenance Men: My current vacancy was long occupied by a heavy smoker. Every surface is sticky with brown nicotine and the smell of smoke is overwhelming. How do I get rid of the smell and keep it from coming back?

George Dear George: Cigarette smell is very hard to remove even after painting and cleaning the carpets. Chances are if the resident was long term, the carpets, drapes or blinds will need to be replaced. Remove the carpets, pad and tack strips. The tack strips are wood and can absorb and release the smell of smoke, urine etc. Thoroughly clean the floors with soapy water mixed with bleach. After cleaning the floors, it is not a bad idea to paint or use a primer to coat the flooring. One of the best ways to remove the nicotine residue from the walls is using old-

fashioned elbow grease! Again, wash the walls with soapy water using a brush or rag. Adding TSP (a powdered cleaning solution available at most hardware stores) or using a degreasing agent will help in the cleaning. If you have flat ceilings, wash them too. If you have “acoustical” or “pop-corn” type ceiling, that’s a problem. By its nature, acoustical ceiling material cannot be cleaned. Encapsulating the acoustical ceiling with spray paint may solve the problem. You will need a primer coat and a minimum of two coats of paint. If the smell is still present, give it another coat of paint and let the unit air as much as possible. Don’t forget to wash the windows and window frames. You will be amazed at how clean the aluminum or vinyl windows will look after a good cleaning.

Bio:

If you need maintenance work or consultation for your building or project, please feel free to contact us. We are available throughout Southern California. For an appointment please call Buffalo Maintenance, Inc. at 714 956-8371 Jerry L'Ecuyer is a licensed contractor & real estate broker. He is currently on the Board of Directors and Past Chairman of the Education Committee of the Apartment Association of Orange County. Jerry has been involved with apartments as a professional since 1988. Frank Alvarez is the Operations Director and co-owner of Buffalo Maintenance, Inc. He has been involved with apartment maintenance & construction for over 20 years. He is also a lecturer & educational instructor and Co-Chair of the Education Committee of the Apartment Association of Orange County and Chair of the Education Committee at Southern Cities Apartment Association. Frank can be reached at (714) 956-8371 Frankie@BuffaloMaintenance. com For more info please go to: www.BuffaloMaintenance.com

paul@kurkov.com 2537322382 KurkovSoftwash.com Rental Housing Journal On-Site · April 2017

Rental Housing Journal On-Site

Down Payment Holding Back Renters from Buying a Home Almost 70 percent of renters in 20 U.S. metros say coming up with the down payment is holding them back from homeownership

ven though a mortgage payment is more affordable than a rent payment on a monthly basisi, renters say they can't buy a home due to the pricey down payment, according to the first Zillow® Housing Aspirations Report™ (ZHAR)ii. Almost 70 percent of renters surveyed cite the down payment as a greater barrier to homeownership than debt, job security and qualifying for a mortgageiii. Just over half of renters cite qualifying for a mortgage as a barrier to homeownership, and half say debt is holding them back. Almost 40 percent of renters say job security is keeping them from buying a home. The U.S. homeownership rate is near an all-time low and has been falling since 2004, although members of the largest generation of Americans -millennials -- are coming of age and

starting to think about buying a home and settling down. Rents are also at record highs, costing almost 50 percent of the median income in some cities. Making a monthly mortgage payment is cheaper than a monthly rent payment in all but two of the 35 largest U.S. metrosiv, but first renters need to save enough money for a down payment. The Zillow Housing Aspirations Report, a semi-annual survey sponsored by Zillow and conducted by IPSOS, asks 10,000 renters and homeowners in 20 metros across the country about their views on homeownership and their personal housing expectations going forward.

Here are some highlights from the report: Over half (63 percent) of renters are confident that they will be able to afford a home someday, with 25 percent

planning on buying in the next three to five years. Millennial renters are more confident than any other generation that they will be able to afford a home someday, with 34 percent planning on buying in three to five years. Almost a quarter (22 percent) said they plan to buy in one to two years and 2 percent of millennial renters said they never plan on buying a home. The majority of respondents (66 percent) believe owning a home is necessary to live The American Dream, and 72 percent believe owning a home increases your standing in the local community -- millennials believe these two statements more than any other generation. With home values across the country at their highest point since June 2007, cobbling together a 20-percent down

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payment on a home costs more than two-thirds of the U.S. median household annual incomev. In pricier markets like San Jose and Los Angeles, buyers must come up with more than 180 percent of the median annual income, making a home purchase out of reach for many aspiring homeowners. "With home values close to record highs, it's no surprise renters are concerned about coming up with enough money to buy a home," said Zillow Chief Economist Dr. Svenja Gudell. "Rising rents are also a factor -- it's extremely difficult to save when you're paying record-high rents. While it is possible to put down as little as 3 percent on a home, the trade-off is a higher interest rate and costly private mortgage insurance, a financial tradeoff that may make sense for some buyers. But with interest rates rising in 2017, it's important to remember that a lower interest rate can save buyers thousands of dollars over the life of their loan. For those trying to save for a down payment, it's important to set realistic goals and realize it may take a few years. Also, consider working with a reputable financial advisor to help set a budget that works for you." San Jose, San Diego and Los Angeles had the greatest share of renters say affording the down payment is the number one barrier to owning, at over 72 percent. Women (72 percent) were more likely than men (62 percent) to select the down payment as the top barrier to homeownership. One-third of buyers used more than one source of funds for their down payment, including gifts and loans from family, according to the Zillow Group Report on Consumer Housing Trendsvi. Over half of buyers saved by setting aside a little money at a time. Mortgage rates on Zillow ended the month of March at 3.94 percent, down from a high of 4.13 percent in the middle of the monthvii. Home shoppers can use the Zillow Affordability Calculator to see how varying loan amounts and down payments will impact monthly payments and the lifetime balance of their mortgage. Perceived Barriers to Homeownership in the U.S., Among Renters Barrier

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Rental Housing Journal On-Site · April 2017

Rental Housing Journal On-Site

253-565-2488 Rental Housing Journal On-Site Âˇ April 2017

Rental Housing Journal On-Site

By Landlord Hank

How To Improve Your Tenant Selection and Screening

was very proudly showing my very first rental property, which had been extensively renovated, to a nicely groomed and mannered young woman. She arrived for her tour, on time, in a newer vehicle, praising the property and saying she'd love to rent it. I fancied myself as astute and a good judge of character so I thought I'd skip the tenant screening step. I had her fill out an application and pay the fee. I told applicant I would let her know later in the day. As I thought more about not screening this tenant I decided to reconsider. I did screen her and found out she was in the process of eviction and hadn't paid rent in three months! So do not learn the hard way. Here are some questions and answers to help. Question: The landlord/investor has the property ready to rent-everything has been repaired and works properly, the unit is clean and looks great, inside and out. You have shown the property to a tenant prospect that seems to fit your criteria and can move in quickly. So what is the next step? Answer: This step is CRITICAL and if this step is not handled properly, the landlord will know first-hand why the landlord role is not for everyone. Tenant screening begins with your personal assessment of the prospective tenant and prospect’s family.

• Are prospects clean and well groomed?

• Date of birth

• Are kids bouncing off the walls, etc?

• Signed authorization for you to run credit and background checks

• Is the car they drove up in falling apart and filthy? Or nice? • Would you want to live next to these people? The application is the key that unlocks the real truth to how this prospect conducts life and relationships. Submitted with the application are driver’s license copy or photo ID so you know the people you are checking out are the people that are applying for your apartment, and not a brother or a friend of the real applicant using someone else's information, social security number, etc. You also want verification of income. Preferably you want the last two years tax returns, or bank statements for last three months and pay stubs from work.

The application will request the following: • Biographical information, name, current and previous addresses • Contact information – not just the tenant but others such as relatives and emergency contacts • Social security number

• Work history

Your application fee should pay for this screening process. There are screening companies that will handle this process and send you a summary. Or, you can set up with a company to run credit and background checks and you as landlord can check work and residential history by calling references. All adults must be screened and on the lease.

Calling the previous landlord So if you decide that you, as the landlord, will verify residential/ employment history, here is what you do next: Your first phone call should be to the current landlord. If it starts with someone answering the phone “Hello,” then questions immediately arise in your mind as to who is answering this phone as it does not sound like a professional landlord. Is it really a landlord or owner of a rental property and this is their only rental? Or, is this the applicant’s best friend or relative? When this has happened to me, I tell them my name and say the applicant is using them as a reference and how does

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this person know that applicant? I don't tell them applicant is looking to rent from me, etc. Sometimes I hear that the applicant is this "landlord’s" (again, is it really a landlord?) relative or friend and they are staying with them or other times the person answering the phone says that applicant used to, or still does, rent from them.

What to ask when you get on the phone with previous landlord At this point, I ask if they would be willing to answer some questions concerning the applicant. Sometimes I must send the prospective tenant’s signed application which contains authorization for release of information. The questions I want answered are: • Rent amount paid to this landlord • Term of occupancy • Payment history • Notice of termination of lease given (usually 30-60 days) • Any damage to property • Any unauthorized guests or pets • Eligibility for renting to this person again • Anything else this landlord thinks I should know? ...continued on page 22

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Rental Housing Journal On-Site · April 2017

Rental Housing Journal On-Site

5 Qualities and Habits of Great Property Managers By Marc Courtenay, www.propertymanager.com

ometimes life is what happens while we’re making other plans. Other times life feels like it’s in the palm of our hands waiting for our decisions about what we want to make happen next. Maybe that’s the way our lives are supposed to feel. One of the things I know for sure is that you can learn a great deal about successful property management by watching those who are adroit at it. One of my “pet projects” is studying the habits, qualities and characteristics of highly successful property managers. Through the years I’ve discovered some consistencies they all seem to share. The first is what I call “brilliance”. I don’t mean they’re extra smart nor have an unusually high Intelligence Quota (IQ). Their “brilliance” shines in their daily approach to their work. Like this article implies, they’ve learned from other brilliant managers and they’ve applied what they’ve learned. They’re willing to take the time to study the characteristics and successes of others. The second quality, one that becomes habitual, is that great property managers have an extraordinary amount of curiosity. Since they are, either by nature or self-discipline, observant professionals, they keep their

eyes and ears wide open for better ways to accomplish. They’re not afraid to ask questions, do research, and delegate to others the task of finding solutions. They’re obsessed with growing and evolving. They seem to innately know that something that they don’t know is holding them back from reaching their full potential. They’ll go to seminars, join associations, listen to selfimprovement CDs and watch DVDs. As the father of Self-Actualization, Abraham Maslow, would say, “They must become all that they must be!” Humility is a key quality and component of their character. They’re not driven by their egos and they don’t care a hoot about becoming arrogant. They like achieving abundance and success, but they’re not compelled by an insatiable appetite for wealth and power. With their humility comes a sense of altruism and a desire to know they are making a positive contribution to society. They derive great satisfaction in serving the needs of their clients and residents. They strive for excellence without being perfectionists. Perfectionism will drive you to distraction! Wanting to be their “personal best” and to challenge themselves away from mediocrity and

complacency describes these high achievers. They learn from their results. To gain more understanding about the qualities and characteristics of outstanding property managers, I encourage you to read a book (or listen to the audio version) like “Good to Great” by author Jim Collins. Property Managers are in many ways similar to companies and corporations. Why do some stay stuck, implode or wither why others “make the leap” from being good to becoming great. “How can good companies, mediocre companies, even bad companies achieve enduring greatness?” When that question is answered, it can almost always be applied to individuals and partnerships. “For years, this question preyed on the mind of Jim Collins. Are there companies that defy gravity and convert long-term mediocrity or worse into long-term superiority? And if so, what are the universal distinguishing characteristics that cause a company to [become] great?” After an intensive 5 year study Collins and his team of researchers found some amazing similarities. Those in the property management industry can benefit from insights and

ideas that articles like this one or a book like “Good to Great” offers. Knowledge and awareness will provide the power and the “fuel” to help propel you to the next level of personal growth and rewarding achievements.

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Rental Housing Journal On-Site · April 2017

Rental Housing Journal On-Site

Down Payment Holding Back Renters ..continued from page 12 Metropolitan Area United States New York/Northern New Jersey Los Angeles-Long Beach-Anaheim, CA Chicago, IL Dallas-Fort Worth, TX Philadelphia, PA Washington, DC Miami-Fort Lauderdale, FL Atlanta, GA Boston, MA San Francisco, CA Detroit, MI Phoenix, AZ Seattle, WA Minneapolis-St Paul, MN San Diego, CA St. Louis, MO Tampa, FL Denver, CO Las Vegas, NV San Jose, CA IPSOS is a registered trademark of IPSOS S.A. i In the U.S., the monthly median mortgage payment takes 15.8 percent of the median monthly income while the monthly median rent payment takes 29.2 percent of the median monthly income. ii The Zillow Housing Aspirations Report is computed from an IPSOS poll which combines sample of 10,000 U.S. adults from 20 U.S. corebased statistical area (CBSA) metropolitans (Atlanta, Boston, Chicago, Dallas, Denver, Detroit, Los Angeles, Las Vegas, Miami, Minneapolis, New York, Philadelphia, Phoenix, St. Louis, San Diego, San Francisco, San Jose,

Top Three Perceived Barriers to Homeownership Among Renters Number 1 Barrier Number 2 Barrier Affording Down Payment - 67.9% Qualifying for Mortgage - 53.2% Affording Down Payment - 56.2% Qualifying for Mortgage - 48.9% Affording Down Payment - 72.2% Qualifying for Mortgage - 55.0% Affording Down Payment - 69.7% Qualifying for Mortgage - 52.5% Affording Down Payment - 65.6% Qualifying for Mortgage - 54.9% Affording Down Payment - 67.5% Debt - 54.6% Affording Down Payment - 70.6% Qualifying for Mortgage - 58.0% Affording Down Payment - 64.7% Qualifying for Mortgage - 54.6% Affording Down Payment - 62.3% Debt - 54.9% Affording Down Payment - 71.5% Qualifying for Mortgage - 53.7% Affording Down Payment - 69.0% Qualifying for Mortgage - 55.5% Affording Down Payment - 67.6% Debt - 52.7% Affording Down Payment - 69.2% Qualifying for Mortgage - 59.9% Affording Down Payment - 66.0% Qualifying for Mortgage - 52.8% Affording Down Payment - 69.4% Debt - 53.0% Affording Down Payment - 72.9% Debt - 54.4% Affording Down Payment - 70.4% Debt - 53.5% Affording Down Payment - 70.3% Qualifying for Mortgage - 56.6% Affording Down Payment - 65.7% Qualifying for Mortgage - 52.4% Affording Down Payment - 63.0% Qualifying for Mortgage - 54.8% Affording Down Payment - 73.9% Qualifying for Mortgage - 48.4% Seattle, Tampa, and Washington, D.C.) age 18+, surveyed online in English. The survey has a credibility interval of plus or minus 1.1 percentage points for all respondents from the 20 U.S. metropolitans and approximately 5.0 percentage points for an individual U.S. metropolitan. Post-hoc weights were made to the population characteristics on gender, age, region, and race and ethnicity. This version of the survey was conducted March 1st – 15th, 2017. For more information about conducting research intended for public release or Ipsos' online polling methodology, please visit the Public Opinion Polling and Communication page.

iii Renters surveyed said coming up with a down payment is a greater barrier than qualifying for a mortgage, debt, job security, not being in a position to settle down and low inventory of homes. iv San Jose and Miami are the only metros among the largest 35 U.S. metros where a mortgage payment takes up more income than a rental payment.

Number 3 Barrier Debt - 50.0% Debt - 47.7% Debt - 43.7% Debt - 50.6% Debt - 52.5% Qualifying for Mortgage - 49.3% Debt - 53.0% Debt - 45.4% Qualifying for Mortgage - 51.3% Debt - 43.5% Debt - 49.8% Qualifying for Mortgage - 49.9% Debt - 51.9% Debt - 48.1% Qualifying for Mortgage - 50.1% Qualifying for Mortgage - 50.7% Qualifying for Mortgage - 53.2% Debt - 51.8% Debt - 51.4% Debt - 48.8% Debt - 43.7% their homes – how they search for them, pay for them, maintain and improve them, and what frustrations and aspirations color their decisions. vii Rates for a 30-year fixed mortgage. High of 4.13 percent was hit on March 14, 2017. SOURCE Zillow - http://www.zillow.com

v Zillow release on down payment costs here. vi The first annual Zillow Group Report is the largest-ever survey of U.S. home buyers, sellers, owners and renters, and asked more than 13,000 U.S. residents aged 18 to 75 about

Rental Housing Journal On-Site · April 2017

Rental Housing Journal On-Site

Moving from a Home with Two Bedrooms to Three Costs $450 Extra a Month Depending on where you live, a little extra space could increase your monthly mortgage payment by 50 percent, according to Zillow's new Cost of Moving Up Analysis

pgrading to a larger home comes with a premium in most major metros. Nationally, families can expect to spend $447 extra a month moving to a three-bedroom home from one with two bedrooms, according to Zillow's Cost of Moving Up Analysis[i]. That equates to a 50 percent increase in their monthly mortgage payment. U.S. families most often seek a threebedroom home with 2.5 bathrooms. However, more than a third (36 percent) of these buyers go over budget on their home purchase, according to the Zillow Group Consumer Trends Report. To help buyers better prepare this homeshopping season, Zillow identified how much extra move-up buyers could expect to spend on their mortgage if they were to upgrade to a similar home with just one extra bed or bath. In many coastal markets, moving from a two to a three-bedroom home costs around $500 extra each month. However, in hot markets like San Francisco and San Jose, families can expect to nearly double their monthly mortgage payment, with the premium on moving up exceeding $1,600. Move-up buyers in the Midwest will see their dollars stretch further. Families in Chicago, Cincinnati and

St. Louis can expect to spend just $150 more on their mortgage when upgrading from a two to a threebedroom home. Cleveland offers the lowest premium out of all the metros analyzed, with move up buyers paying just $74 extra a month to upgrade to a three bedroom. Bathroom count can also impact a home's price. Nationally, upgrading to a house with the same number of bedrooms, but with one extra bathroom can cost buyers between $386 and $838 extra a month, depending on the home size. Given this premium, adding an extra bathroom to an existing home may be a cost-effective option for some families. "While deciding whether to move is a personal choice, understanding how certain characteristics like size, location, or number of beds and baths, can impact a home's price can be hugely important when determining if a particular home is the right fit for you and your family," says Dr. Svenja Gudell, Zillow chief economist. "Even though many families may be prepared to spend extra for a larger home, just how much more may come as a surprise, especially for those living in coastal markets." continued on page 18

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Moving From a Home ...continued from page 17 Monthly Increase to Mortgage Payment (Dollars) Metropolitan Area

1-bed to 2-bed

2-bed to 3-bed

3-bed to 4-bed

2-bed, 1-bath 3-bed, 1-bath to 2-bath to2-bath3bed,

2-bath to 3-bath

4-bed, 2-bath to 3-bath

4-bed, 3-bath to 4-bath

United States

$ 192

$ 447

$ 614

$ 386

$ 434

$ 549

$ 588

$ 838

Los Angeles-Long Beach-Anaheim, CA

$ 826

$ 1,033

$ 1,253

Chicago, IL

$ 15

$ 144

$ 253

$ 948

$ 963

$ 1,161

$ 1,247

$ 1,647

$ 68

$ 105

$ 125

$ 157

$ 320

Dallas-Fort Worth, TX

$ 44

$ 365

$ 550

$ 308

$ 383

$ 538

$ 588

$ 657

Philadelphia, PA

N/A

$ 77

$ 301

$ 105

$ 119

$ 105

$ 122

$ 312

Houston, TX

$ 47

$ 272

$ 417

$ 217

$ 242

$ 389

$ 455

$ 486

Washington, DC

$ 101

$ 429

$ 647

$ 341

$ 435

$ 425

$ 441

$ 628

Miami-Fort Lauderdale, FL

$ 269

$ 599

$ 760

$ 315

$ 495

$ 742

$ 771

$ 1,281

Atlanta, GA

N/A

$ 187

$ 360

$ 110

$ 195

$ 217

$ 228

$ 442

Boston, MA

$ 368

$ 512

$ 736

$ 497

$ 509

$ 634

$ 698

$ 893

San Francisco, CA

$ 1,210

$ 1,660

$ 2,006

$ 1,460

$ 1,598

$ 1,888

$ 2,034

$ 2,545

Detroit, MI

$ 50

$ 280

$ 392

$ 234

$ 264

$ 320

$ 351

$ 524

Riverside, CA

$ 449

$ 595

$ 663

$ 561

$ 594

$ 688

$ 647

$ 1,053

Phoenix, AZ

$ 176

$ 332

$ 478

$ 231

$ 313

$ 469

$ 468

$ 761

Seattle, WA

$ 395

$ 574

$ 771

$ 585

$ 621

$ 733

$ 778

$ 1,306

Minneapolis-St Paul, MN

$ 85

$ 252

$ 310

$ 206

$ 223

$ 404

$ 443

$ 428

San Diego, CA

$ 798

$ 928

$ 998

$ 771

$ 791

$ 962

$ 988

$ 1,368

St. Louis, MO

$ 23

$ 155

$ 301

$ 121

$ 156

$ 185

$ 231

$ 322

Tampa, FL

$ 206

$ 323

$ 455

$ 230

$ 314

$ 481

$ 516

$ 771

Baltimore, MD

N/A

$ 105

$ 289

$ 34

$ 116

$ 115

$ 169

$ 247

Denver, CO

$ 329

$ 601

$ 795

$ 654

$ 638

$ 703

$ 786

$ 920

Pittsburgh, PA

$ 95

$ 198

$ 318

$ 185

$ 231

$ 301

$ 380

$ 411

Portland, OR

$ 319

$ 497

$ 648

$ 505

$ 511

$ 595

$ 607

$ 1,049

Charlotte, NC

N/A

$ 224

$ 427

$ 169

$ 190

$ 298

$ 310

$ 574

Sacramento, CA

$ 358

$ 501

$ 700

$ 478

$ 535

$ 752

$ 711

$ 1,106

San Antonio, TX

N/A

$ 198

$ 280

$ 173

$ 208

$ 295

$ 303

$ 430

Orlando, FL

$ 134

$ 287

$ 408

$ 196

$ 311

$ 419

$ 403

$ 580

Cincinnati, OH

$ 48

$ 151

$ 297

$ 172

$ 183

$ 213

$ 238

$ 333

Cleveland, OH

$ 74

$ 177

$ 140

$ 115

$ 167

$ 212

$ 332

Kansas City, MO

N/A

$ 112

$ 218

$ 140

$ 116

$ 130

$ 194

$ 288

Las Vegas, NV

$ 162

$ 357

$ 476

$ 291

$ 329

$ 429

$ 473

$ 993

Columbus, OH

$ 51

$ 180

$ 278

$ 177

$ 218

$ 227

$ 259

$ 449

Indianapolis, IN

N/A

$ 103

$ 191

$ 123

$ 109

$ 281

$ 216

$ 398

San Jose, CA

$ 1,791

$ 2,224

$ 2,552

$ 1,853

$ 2,156

$ 2,568

$ 2,704

$ 3,264

Austin, TX

$ 78

$ 372

$ 560

$ 344

$ 444

$ 457

$ 525

$ 681

Zillow® is the leading real estate and rental marketplace dedicated to empowering consumers with data, inspiration and knowledge around the place they call home, and connecting them with the best local professionals who can help. Zillow serves the full lifecycle of owning and living in a home: buying, selling, renting, financing and more. In addition to Zillow.com®, Zillow operates the most popular suite of mobile real estate apps, with more than two dozen apps across all major platforms. Launched in 2006, Zillow is owned and operated by Zillow Group (NASDAQ: Z and ZG) and headquartered in Seattle.

Census Bureau, American Community Survey, the typical household with small children owns their home for seven years. To determine the additional monthly costs associated with upgrading, we compared the mortgage payment of a median-valued home purchased in 2009 with that of a median-valued home with one extra bedroom purchased in 2016. We performed the analysis on the ZIP-code level, then aggregated up to the metropolitan level to control for differences in home values based on location.v

Zillow and Zillow.com are registered trademarks of Zillow, Inc. [i] Zillow analyzed the cost of upgrading by comparing the mortgage payments of singlefamily homes. According to data from the U.S.

Rental Housing Journal On-Site · April 2017

Rental Housing Journal On-Site

Homes in Short Supply ...continued from page 1 Across the country there are 3 percent fewer homes on the market than a year ago and many places with rapidly rising home values have inventory shortages in the double-digits. In Seattle, for example, home values are up 11 percent but the selection of homes down 10.5 percent. Millennials will have a big impact on this year's home shopping season as they start aging into homeownership, especially in booming job markets that are attractive to young homebuyers. "Low inventory, strong demand and tough competition will be the defining characteristics of this year's home shopping season," said Zillow Chief

Economist Dr. Svenja Gudell. "Even though interest rates are rising, buyers are eager to start their home search. If you're a prospective buyer about to enter the market, keep in mind that it's rare to get the first home you make an offer on, and homes in particularly hot markets frequently sell for over asking price. Buyers should give themselves enough time to get their finances in order and find a real estate agent they know and trust before jumping into the market." National median rent across the nation is up 1.2 percent since last February, to a median payment of $1,406 per month. Seattle, Portland and

Metropolitan Area United States New York/Northern New Jersey Los Angeles-Long Beach-Anaheim, CA Chicago, IL Dallas-Fort Worth, TX Philadelphia, PA Houston, TX Washington, DC Miami-Fort Lauderdale, FL Atlanta, GA Boston, MA San Francisco, CA Detroit, MI Riverside, CA Phoenix, AZ Seattle, WA Minneapolis-St Paul, MN San Diego, CA St. Louis, MO Tampa, FL Baltimore, MD Denver, CO Pittsburgh, PA Portland, OR Charlotte, NC Sacramento, CA San Antonio, TX Orlando, FL Cincinnati, OH Cleveland, OH Kansas City, MO Las Vegas, NV Columbus, OH Indianapolis, IN San Jose, CA Austin, TX Zillow® is the leading real estate and rental marketplace dedicated to empowering consumers with data, inspiration and knowledge around the place they call home, and connecting them with the best local professionals who can help. In addition, Zillow operates an industry-leading economics and analytics bureau led by Zillow's Chief Economist Dr. Svenja Gudell. Dr. Gudell and her team of economists and data analysts produce extensive housing data and research covering more than 450 markets at Zillow Real Estate Research. Zillow also sponsors the quarterly Zillow Home Price Expectations Survey, which asks more than 100 leading economists, real estate experts and

Zillow Home Value Index (ZHVI) $195,700 $407,600 $599,400 $207,500 $203,400 $215,400 $175,200 $382,400 $248,600 $175,200 $416,100 $839,600 $137,500 $321,400 $231,700 $420,200 $239,700 $529,200 $149,900 $182,100 $259,000 $359,100 $135,600 $358,700 $169,500 $357,700 $158,100 $201,900 $150,500 $132,100 $154,600 $217,800 $161,000 $137,100 $979,400 $264,800

Year-over-Year ZHVIChange 6.9% 7.0% 6.4% 6.4% 11.1% 4.6% 4.5% 3.9% 8.9% 7.6% 6.4% 4.5% 10.0% 6.7% 6.3% 11.2% 7.1% 5.4% 7.1% 11.6% 4.2% 9.3% 5.3% 9.2% 7.0% 7.7% 6.0% 10.4% 6.4% 4.9% 5.5% 10.1% 4.5% 5.3% 3.9% 7.0%

investment and market strategists to predict the path of the Zillow Home Value Index over the next five years. Zillow also sponsors the bi-annual Zillow Housing Confidence Index (ZHCI) which measures consumer confidence in local housing markets, both currently and over time. Launched in 2006, Zillow is owned and operated by Zillow Group (NASDAQ: Z and ZG), and headquartered in Seattle. Zillow and Zestimate are registered trademarks of Zillow, Inc. i The Zillow Real Estate Market Reports are a monthly overview of the national and local real estate markets. The reports are compiled by Zillow Real Estate Research. For

Rental Housing Journal On-Site · April 2017

Sacramento, Calif. reported the highest year-over-year rent appreciation among the 35 largest U.S. housing markets. Rents in Seattle are up 7 percent to a Zillow Rent Indexii (ZRI) of $2,100. Rents in both Portland and Sacramento are up 5 percent. Minneapolis, Cincinnati and Detroit reported the greatest drop in inventory since last February. In Minneapolis, there are 18 percent fewer homes on the market than a year ago, and 15 percent fewer in Cincinnati. In February, mortgage ratesiii on Zillow ended at 3.89 percent, down from a high of 4.01 percent at the start of the month. The month low was 3.86 Zillow Rent Index (ZRI) $1,406 $2,391 $2,642 $1,619 $1,565 $1,568 $1,547 $2,114 $1,854 $1,335 $2,342 $3,354 $1,175 $1,754 $1,309 $2,100 $1,566 $2,452 $1,132 $1,347 $1,720 $1,998 $1,068 $1,804 $1,248 $1,709 $1,323 $1,396 $1,254 $1,141 $1,251 $1,247 $1,293 $1,184 $3,449 $1,694

percentiv. Zillow's real-time mortgage rates are based on thousands of custom mortgage quotes submitted daily to anonymous borrowers on the Zillow Mortgages site and reflect the most recent changes in the market. Purchase mortgage requests on Zillow are up 7 percent compared to this time last year, indicating that borrowers are moving forward with plans to buy a home amidst rising interest rates. On the other hand, the refinance market is more rate-sensitive, and refinance requests on Zillow are down 69 percent compared to this time last year.

Year-over-Year ZRI Change 1.2% -0.7% 4.8% -1.5% 3.4% 0.4% -2.2% -0.1% 0.2% 3.7% 4.0% 0.1% 2.3% 2.9% 3.3% 7.2% 3.8% 4.3% 0.3% 2.9% -0.2% 1.4% -3.8% 5.4% 1.5% 5.2% 1.6% 3.4% 2.2% 1.2% 2.2% 2.0% 1.3% -0.2% -0.7% 0.0%

more information, visit www.zillow.com/ research/. The data in Zillow's Real Estate Market Reports are aggregated from public sources by a number of data providers for 928 metropolitan and micropolitan areas dating back to 1996. Mortgage and home loan data are typically recorded in each county and publicly available through a county recorder's office. All current monthly data at the national, state, metro, city, ZIP code and neighborhood level can be accessed at www. zillow.com/local-info/ and www.zillow.com/ research/data.

Year-over-Year Inventory Change -2.6% -7.0% -1.8% -7.5% 4.1% -7.3% 3.1% -8.5% 16.2% 2.8% -11.8% 6.4% -14.4% -10.5% 6.2% -10.5% -18.0% -4.4% -8.0% -5.4% -12.1% 12.1% -4.0% 10.1% -7.5% -4.4% 16.4% -10.6% -14.9% -2.1% -10.4% 23.3% -13.0% -10.3% -0.9% 24.0%

day, and includes the value of all single-family residences, condominiums, cooperatives and apartments in Zillow's database, regardless of whether they are currently listed for rent. It is expressed in dollars. iii

Rates for a 30-year fixed mortgage.

Month high occurred on February 21, while the month low occurred on February 3rd. iv

http://www.zillow.com

ii The Zillow Rent Index (ZRI) is the median Rent Zestimate® (estimated monthly rental price) for a given geographic area on a given

Rental Housing Journal On-Site

Nation's Young Homebuyers ...continued from page 5 RANK

City

Millennial % Of Total Requests

1 2 3 4 5 6 7 8 9 10

Pittsburgh, PA Washington, DC Des Moines, IA Boston, MA Saint Louis, MO Minneapolis, MN Cincinnati, OH Chicago, IL San Francisco, CA Omaha, NE

48.4% 46.8% 46.4% 45.8% 44.8% 44.7% 44.6% 44.4% 44.3% 44.3%

To download the full chart, please visit LendingTree's press room: https://www.lendingtree.com/press-room/ press-releases About LendingTree LendingTree (NASDAQ: TREE) is the nation's leading online loan marketplace, empowering consumers as they comparison-shop across

Millennial Avg Mortgage Amount $201,921.20 $381,109.72 $173,439.39 $410,504.06 $189,499.26 $226,158.13 $173,904.70 $273,375.89 $528,760.74 $192,215.45

Millennial Avg Monthly Payment $991.60 $1,855.50 $868.30 $1,988.85 $950.81 $1,109.16 $882.24 $1,351.78 $2,614.03 $956.71

a full suite of loan and credit-based offerings. LendingTree provides an online marketplace which connects consumers with multiple lenders that compete for their business, as well as an array of online tools and information to help consumers find the best loan. Since inception, LendingTree has facilitated more than 65 million loan requests. LendingTree provides free monthly credit scores through

Millennial Avg Down Payment $33,963.72 $83,461.28 $25,878.79 $88,876.65 $32,242.21 $40,572.73 $25,575.72 $59,480.14 $160,400.55 $29,637.38

Total Avg Mortgage Amount $213,236.55 $394,768.74 $186,074.07 $399,061.78 $215,774.46 $230,035.47 $190,127.95 $263,723.87 $497,802.92 $211,689.19

My LendingTree and access to its network of over 450 lenders offering home loans, personal loans, credit cards, student loans, business loans, home equity loans/lines of credit, auto loans and more. LendingTree, LLC is a subsidiary of LendingTree, Inc. For more information go to www.lendingtree.com, dial 800-555-TREE, like our Facebook page and/or follow us on Twitter @LendingTree.

Total Avg Monthly Payment $1,044.47 $1,919.24 $929.38 $1,939.79 $1,077.11 $1,138.59 $954.05 $1,306.82 $2,452.78 $1,045.44

Total Avg Down Payment $47,766.16 $97,201.74 $42,554.23 $100,112.71 $49,657.54 $47,100.00 $37,213.88 $61,906.75 $144,979.96 $42,510.95

Megan Greuling Megan.Greuling@LendingTree.com 704-943-8208 http://www.lendingtree.com

Seattle Renters Need ...continued from page 1 Metropolitan Area

Zillow Rent Index (February 2017)

Forecasted Zillow Rent Index (February 2018)

Annual Income Increase Needed to Maintain Current Disposable Income After Paying Rent

Annual Income Percent Change Needed to Maintain Current Disposable Income After Paying Rent

United States

$1,406

$1,420

$168

0.3%

New York/Northern New Jersey

$2,391

$2,382

0.0%

Los Angeles-Long Beach-Anaheim, CA

$2,642

$2,738

$1,152

2.0%

Chicago, IL

$1,619

$1,603

0.0%

Dallas-Fort Worth, TX

$1,565

$1,609

$528

0.9%

Philadelphia, PA

$1,568

$1,593

$300

0.5%

Houston, TX

$1,547

$1,540

0.0%

Washington, DC

$2,114

$2,140

$312

0.5%

Miami-Fort Lauderdale, FL

$1,854

$1,879

$300

0.6%

Atlanta, GA

$1,335

$1,334

0.0%

Boston, MA

$2,342

$2,437

$1,140

1.7%

San Francisco, CA

$3,354

$3,240

0.0%

Detroit, MI

$1,175

$1,184

$108

0.2%

Riverside, CA

$1,754

$1,792

$456

1.1%

Phoenix, AZ

$1,309

$1,346

$444

0.9%

Seattle, WA

$2,100

$2,204

$1,248

1.8%

Minneapolis-St Paul, MN

$1,566

$1,606

$480

0.8%

San Diego, CA

$2,452

$2,506

$648

1.2%

St. Louis, MO

$1,132

$1,118

0.0%

Tampa, FL

$1,347

$1,373

$312

0.7%

Baltimore, MD

$1,720

$1,705

0.0%

Denver, CO

$1,998

$2,043

$540

0.9%

Pittsburgh, PA

$1,068

$1,049

0.0%

Portland, OR

$1,804

$1,859

$660

1.2%

Charlotte, NC

$1,248

$1,280

$384

0.7%

Sacramento, CA

$1,709

$1,775

$792

1.5%

San Antonio, TX

$1,323

$1,330

$84

0.2%

Orlando, FL

$1,396

$1,452

$672

1.6%

Cincinnati, OH

$1,254

$1,299

$540

1.1%

Cleveland, OH

$1,141

$1,136

0.0%

Kansas City, MO

$1,251

$1,280

$348

0.7%

Las Vegas, NV

$1,247

$1,258

$132

0.3%

Columbus, OH

$1,293

$1,315

$264

0.5%

Indianapolis, IN

$1,184

$1,161

0.0%

San Jose, CA

$3,449

$3,421

0.0%

Austin, TX

$1,694

$1,706

$144

0.3%

ZillowÂŽ is the leading real estate and rental marketplace dedicated to empowering consumers with data, inspiration and knowledge around the place they call home, and connecting them with the best local professionals who can help. In addition, Zillow operates an industry-leading economics and analytics bureau led by Zillow's Chief Economist Dr. Svenja Gudell. Dr. Gudell and her team of economists and data analysts produce extensive housing data and research covering more than 450 markets at Zillow

Real Estate Research. Zillow also sponsors the quarterly Zillow Home Price Expectations Survey, which asks more than 100 leading economists, real estate experts and investment and market strategists to predict the path of the Zillow Home Value Index over the next five years. Launched in 2006, Zillow is owned and operated by Zillow Group (NASDAQ: Z and ZG), and headquartered in Seattle. Zillow is a registered trademark of Zillow, Inc. i Zillow computed the dollar value associated

with our 12-month-ahead rent forecasts (February 2017 to February 2018) across major housing markets and then compared these dollar values to average wage and salary income in each market as reported for 2016Q3 in the Bureau of Labor Statistics' Quarterly Census of Employment and Wages. We then calculated the annual percent increase in incomes necessary to cover expected rent growth over the next 12 months. We assume that the entire paycheck increase will go to housing costs with no increases in other costs.

It does not account for taxes or rising costs of other items such as food, healthcare or energy. For markets where we forecast an aggregate rent decline over the next 12 months, we force the necessary paycheck increase to zero.

Rental Housing Journal On-Site Âˇ April 2017

Rental Housing Journal On-Site

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Rental Housing Journal On-Site · April 2017

10/25/16 4:45 PM

711 Powell Ave. SW, Suite 101 Renton, WA 98057 (425) 656-9077 • (425) 656-9087 (fax) admin@wmfha.org

National Government ...continued from page 9 on their share of earnings on their individual tax returns. • Tax reform should recognize the current value of like-kind exchanges (such as the 1031 exchange) and retain incentives to invest in real estate. • Tax reform should recognize the key role that debt financing plays in real estate development and maintain the business interest tax deduction. • Cost recovery and depreciation rules play a critical role in our ability to create new jobs. • Current tax law properly treats carried interest as a capital gain and should not be changed. • Reductions in the corporate tax rate have serious implications for the Low-Income Housing Tax Credit program, the major financing incentive for development of low-income housing. Undermining this public-private partnership would exacerbate the shortage of affordable rental homes. Much is at stake for the apartment industry. As the multifamily housing industry matures and becomes more sophisticated, it is more critical that

we meet the growing rental demand across the country and locally, creating millions of jobs and making homes affordable to more renters. To get there, we need new public policies that support the multifamily housing industry and that don’t make it harder for renters and their families to find the housing that makes sense for them and their community. Addressing the growing shortage of quality affordable housing for Americans is a top industry priority. Today regulatory barriers, limited financing, and compliance and construction costs inhibit the private sector from constructing, rehabilitating and operating apartments at rents in line with incomes. WMFHA looks forward to continuing to serve our elected officials and policymakers. To get involved in the future of the industry and improve your success, call us at 425-656-9077 or go to www.wmfha.org.

Improve Your Tenant Selection ...continued from page 14 Now what do you do as a landlord? You have the information you want but can you trust that information? In this situation, I've immediately called the tenant and asked for clarification of this rental situation and asked: • Is this landlord a family member or friend? • Please send me a copy of your lease to this property now. Can the prospect come up with a lease? Then I move on to next residential history to see if this one be verified or not? If not, then I don't feel comfortable renting to this applicant and they are rejected and we move on. You must feel comfortable with the new tenants. You must be satisfied that they make enough money to pay the rent AND have enough left to live on. Also that their history shows they will take care of your property, pay rent and not disturb others. Their credit history demonstrates that they pay their responsibilities, and that they aren't a violent criminal. This is the most important step in the entire process of renting your property. Do this like it is important because the tenant relationship governs, for the most part, your landlording experience for the next year. If you rent to a reasonable, responsible tenant and you are a good landlord, this experience should be very rewarding. How long should screening process take? Usually about 24- to 48 hours depending upon responsiveness of tenants references.

Seattle

Keep up communication with prospective tenants Let tenants know your progress so they know you are working on getting them clearance and what or who is the hold up. Perhaps the prospective tenant provided an incorrect or old email address or phone number, etc. Don't learn the hard way! Find a tenant you are comfortable with after you have reviewed their background and credit history, or keep looking. Never settle for someone you don’t feel good about just to get the rent coming in. If you settle, the first months’ rent may be all you receive! One final thought, do not let a prospective tenants rush to move in change the vetting protocol. If tenants can’t wait for normal procedures to transpire, that is normally a bad sign (like sheriff is at the door with eviction crew, etc). About the author: “I started in real estate as a child watching my father take care of our family rentals- maintenance, tenant relations, etc , in small town Ohio. As I grew, I was occasionally Dad’s assistant. In the mid-90s I decided to get into the rental business on my own, as a sideline. In 2001, I retired from my profession and only managed my own investments, for the next 10 years. Six years ago, my sister, working as a rental agent/property manager in Sarasota, Florida convinced me to try the Florida lifestyle. I gave it a try and never looked back. A few years ago we started our own real estate brokerage. We focus on property management and leasing. I continue to manage my real estate portfolio here in Florida and Atlanta. “ Visit Hank’s website here.

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Rental Housing Journal On-Site · April 2017

Rental Housing Journal On-Site

Top Regrets for Home Buyers ...continued from page 7 on the market for five months before they list it. But the top seller regret is that they wished they spent more time prepping for the sale. Many cities have a magic window in the spring when homes have a higher likelihood of selling quickly for more money. • Work with an agent from the start. The vast majority (90 percent) of sellers who sold quickly and for more than list price worked with an agent, and two out of three (58 percent) began working with an agent at the very beginning of their selling journey. • Pay attention to your online curb appeal. The majority of buyers begin their search online. Sellers who sold their home for more than list price made imagery and home information available online: 48 percent had professional photos taken of the home, 30 percent shot video footage and 21 percent even shot drone footage. Zillow's video walk-throughs gives sellers an easy way to show home features that are hard to capture in photos.

The Informed Investor ...continued from page 3

• Don't be afraid to try again. In many markets, nearly half of listing views occur in the first week the home is on the market. Twenty-six percent of those who sold above list price took their home off the market once to adjust the sales price, opting to start anew rather than letting the home languish on the market with minimal activity. The full 200-page Zillow Group Report on Consumer Housing Trends, which is free and available to the public, can be accessed here: www.zillowgroupreport.com The Zillow Real Estate Market Reports are a monthly overview of the national and local real estate markets. The reports are compiled by Zillow Real Estate Research. For more information, visit www.zillow.com/research/. The data in Zillow's Real Estate Market Reports are aggregated from public sources by a number of data providers for 928 metropolitan and micropolitan areas dating back to 1996. Mortgage and home loan data are typically recorded in each county and publicly available through a county recorder's office. All current monthly data at the national, state, metro, city, ZIP code and neighborhood level can be accessed at www.zillow.com/local-info/ and www.zillow.com/research/data. i

http://www.zillow.com

• Home improvements can be a worthwhile investment. Sellers who fetched above list price tackled home improvement before listing their home, being 50 percent more likely to take on a large project like modifying an existing home plan and 20 percent more likely to renovate a kitchen than the average seller.

Of the four exchange proceed placement approaches above, I believe the Delaware Statutory Trust (DST) is often considered the most versatile. A Delaware Statutory Trust is a legal entity created with the intent of owning real property, in which each owner has a “beneficial interest” for federal income tax purposes and is treated as owning an undivided fractional interest in the property. DSTs are one of the few ownership structures in which an investor can exchange into, without having previously held their property in the same structure (see next month’s article entitled “Property Co-Ownership and 1031 Exchanges” for further detail). Like all real estate ownership structures, Delaware Statutory Trusts have unique characteristics that may not make them suitable for all real estate investors, however due to the fact that a “unit” of the trust can be purchased by an accredited investor for as low as $25k, a portfolio of DST holdings can be easily constructed using 1031 exchange proceeds – resulting in both geographical and property type diversification. In summary, the definition of a “likekind exchange” as established by the IRS is quite broad. When considering a tax-deferred exchange, be sure to evaluate all your options in order to find the solution that best addresses your short and long-term financial objectives. Roger W. Bowlin, President of Real Estate Transition Solutions, LLC, provides exit strategy analysis, execution and income and equity

replacement options for investment property owners. If you have an issue or a concern relating to your investment property ownership, please email him at: RWBowlin@RE-Transition.com or call (206) 755-7068. The information herein has been prepared for educational purposes only and does not constitute an offer to purchase or sell securitized real estate investments. DST 1031 properties are only available to accredited investors (generally described as having a net worth of over $1 million dollars exclusive of primary residence) and accredited entities only. There are risks associated with investing in real estate and Delaware Statutory Trust (DST) properties including, but not limited to, loss of entire investment principal, declining market values, tenant vacancies and illiquidity. Potential cash flows are not guaranteed and could be lower than anticipated. Diversification does not guarantee profits or guarantee protection against losses. Because investors situations and objectives vary this information is not intended to indicate suitability for any particular investor. This material is not to be interpreted as tax or legal advice. Please speak with your own tax and legal advisors for advice/guidance regarding your particular situation. Securities offered through Concorde Investment Services, LLC (CIS), member FINRA/SIPC. Advisory services through Concorde Asset Management, LLC (CAM), an SEC registered investment adviser. R.W.Bowlin Investment Solutions is independent of CIS and CAM.

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Rental Housing Journal On-Site · April 2017

Rental Housing Journal On-Site

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Rental Housing Journal On-Site · April 2017