Rental Housing Journal On-Site August 2017

Rental Housing Journal On-Site

August 2017

3. Housing Sentiment Dips 4. Over-Automated Recruitment Processes Can Leave Job Candidates Frustrated 5. My Multifamily Investing Philosophy and How I Do It 6. Amazon Launches Delivery Locker Product For Apartment Buildings

7. Seattle Tightens Rental Inspection Rules On Landlords 8. Dear Maintenance Men - Faucets, Storage and Vacancies 9. Housing Supply and Demand Factors 11. 7 Questions and Answers On Canine Liability Insurance

12.Apartment Pet DNA Testing Expands to “Travel Dog” Concept 14. Why Every Property Manager Should

Attend Local Trade Shows 17. 6 Signs You Might Be Breaking the Law 21. The Latest Property Perk Every Renter Looks Forw

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

Security Deposits and Everything You Need to Know About Them

Unprecedented Demand Staving Off Apartment Market Slowdown Sacramento, Phoenix, Las Vegas, Raleigh-Durham and Jacksonville Named Top 5 Markets for Multifamily Investment

T

en-X Commercial, the nation's leading online real estate digital marketplace, today released its latest U.S. Multifamily Market Outlook, including the top five "Buy" and "Sell" markets for multifamily real estate assets. The report shows that while fundamentals have begun to soften, demand across the apartment market remains strong due to positive demographic trends that continue pushing millennials and other Americans to forgo homeownership in favor of renting.

www.appfolio.com

S

ecurity deposits.

Every professional property management company requires them but some property managers don’t know the full legal picture. While it’s commonly understood that normal wear-andtear is acceptable, 26% of renters have reported that their security deposit has been withheld at some point during their life as a tenant. So what types of violations are more than a quarter of renters being cited for?

Security deposit laws are complicated and vary from state to state.

Normal wear-and-tear isn’t always easy to identify. Typically, disputes between a tenant and property manager are settled in court if the tenant thinks the basis of a withheld security deposit is simply normal aging.

In Wisconsin, for example, laws prohibit property managers from retaining deposit funds to cover carpet cleaning. However, a separate fee can be required after the renter surrenders the apartment. Collecting that fee may require a lawsuit or a trip to small claims court.

continued on page 13

Rising Rents Lead to Increased Homeless Population If New York metro rents grow five percent, 3,000 more people will be forced into homelessness

R

ising rents in the nation's booming urban areas are creating crisis levels of homelessness that will continue or even accelerate as rents rise, Zillow® research has found. The connection between homelessness and increasing rents is especially strong in places that are already facing rapidly growing homeless populations: New York, Los Angeles, Washington, D.C. and Seattle.

A five percent increase in New York rents over the next year would force almost 3,000 more people into homelessness, according to a new

Professional Publishing Inc., PO Box 6244 Beaverton, OR 97007

P A I D

Sound Publishing Inc 98204

PRSRT STD US Postage

continued on page 17

continued on page 20 Advertise in Rental Housing Journal On-Site

Text REALESTATE-ROI to 44222

Circulated to over 20,000 apartment owners, on-site and maintenance personnel monthly.

to receive a digital copy of this year's

Call 503-221-1260

Real Estate Opportunities in Investing (ROI) Finding Investing Success in Today's Housing Market

Rental Housing Journal On-Site

2

Rental Housing Journal On-Site ¡ August 2017

Rental Housing Journal On-Site

Housing Sentiment Dips as High Home Prices Weigh on Buyers and Economic Conditions Weigh on Sellers

T

he Fannie Mae Home Purchase Sentiment Index® (HPSI) decreased 1.5 percentage points in July to 86.8, after matching its alltime high in June. The decline can be attributed to decreases in three of the six HPSI components. The net share who reported that now is a good time to buy a home fell 7 percentage points, with the share who say it's a bad time to buy reaching a new survey high and the share who say it's a good time to buy reaching a new survey low. The net share of those who say it is a good time to sell a home decreased by 11 percentage points, following June's survey high.

Americans also expressed a greater sense of job security, with the net share who say they are not concerned about losing their job rising by 9 percentage points.

Additionally, consumers continued to express that their current household income is not significantly higher than it was 12 months ago, with that component falling an additional percentage point in July. Finally, the net share of Americans who expect home prices to go up also increased by 1 percentage point this month, following last month's upward trend.

The decline in selling sentiment was the biggest drag on the index, followed by the drop in buying sentiment.

Underlying data showed that economic conditions weighed on the former.

Among consumers who believe now is a bad time to sell, the share citing economic conditions as a primary reason posted a sharp rise. Nearly half of consumers who say now is a bad time to buy cited rising prices as a primary concern—a survey high.

"It's clear that high home prices are a growing challenge helping to send buying sentiment to a record low," said Doug Duncan, senior vice president and chief economist at Fannie Mae. "However, we find the notable decline in selling sentiment surprising. If it persists, this month's decrease in optimism regarding the direction of the economy, which appears to coincide with rising uncertainty regarding the outlook for pro-growth legislation this year, could weigh on overall housing sentiment in the second half of the year."

HOME PURCHASE SENTIMENT INDEX – COMPONENT HIGHLIGHTS Fannie Mae's 2017 Home Purchase Sentiment Index (HPSI) decreased in July by 1.5 percentage points to 86.8.

The HPSI is up 0.3 percentage points compared with the same time last year.

The net share of Americans who say it is a good time to buy a home fell 7 percentage points to 23%, reaching a new survey low, with the share who say it's a bad time to buy and the share who say it's a good time to buy reaching a new survey high and low, respectively.

The net percentage of those who say it is a good time to sell decreased by 11 percentage points to 28% after reaching a survey high in June.

The net share of Americans who say that home prices will go up increased by 1 percentage point in July to 47%,

Free Kitchen Food Waste containers for Multifamily Properties in Seattle Let me clean those plates for you.

following the upward trend from last month.

The net share of those who say mortgage rates will go down over the next twelve months remained the same at -49%.

The net share of Americans who say they are not concerned about losing their job rose by 9 percentage points to 75%, reversing the decrease from last month.

The net share of Americans who say their household income is significantly higher than it was 12 months ago continued to decrease, falling 1 percentage point in July to 16%.

ABOUT FANNIE MAE'S HOME PURCHASE SENTIMENT INDEX The Home Purchase Sentiment Index (HPSI) distills information about consumers' home purchase sentiment from Fannie Mae's National Housing Survey® (NHS) into a single number. The HPSI reflects consumers' current views and forward-looking expectations of housing market conditions and complements existing data sources to inform housing-related analysis and decision making. The HPSI is constructed from answers to six NHS questions that solicit consumers' evaluations of housing market conditions and address topics continued on page 16

Do you manage or work at a multifamily property in Seattle?

Are you interested in improving the recycling and composting program at your building?

• Join Seattle Public Utilities (SPU) for a recycling and food waste workshop.

• Properties with a SPU solid waste account can receive free kitchen food

waste containers for every unit (unless property

has previously received free containers).

WORKSHOP DETAILS WHEN: September 22nd 10:00 AM – 12:30 PM WHERE: Pacific Tower, 1200 12th Ave S, Seattle HOW: Call 206-733-9068 or send a message to AskEvelyn@seattle.gov to register *Registration required. Open only to properties served by Seattle Public Utilities. Service area is shown in map.

Rental Housing Journal On-Site · August 2017

3

Rental Housing Journal On-Site

Over-Automated Recruitment Processes Can Leave Job Candidates Frustrated

M

ost job candidates find value in technology but they are frustrated when it supersedes the human aspect of the job search and hiring process, according to a new study.

In fact, 82 percent of respondents agree they are often frustrated with an overly automated job search experience, according to a release from Randstad.

The issue is around the role technology should play in the job search and hiring process.

95 percent of workers agree technology should be used to aid the recruitment experience, not replace it.

87 percent of respondents agree technology has made the job search process more impersonal.

Potential employees judge a company by the recruitment and hiring experience "Employers today, and in the future, will be judged by the experience they create for prospective new hires," Linda Galipeau, CEO Randstad North America, said in the release.

"Job candidates are empowered to provide instant feedback on employers, rating a company's candidate experience just as they would rate a movie or a product. In a tightening labor market, companies cannot afford to lose potential talent due to a poor hiring experience.

“And in a technology-driven world of talent, it's not only about how a company markets itself, but what others say about the company that has a positive impact on employer branding," she said.

Human interaction drives positive and negative impressions of potential employers by job candidates Job seekers have become increasingly savvy about what makes a great candidate experience and what leaves them with a less-than-favorable impression.

The study findings reinforce anecdotal evidence from Randstad's recruiters, who have witnessed candidates' desire for greater human interaction, despite their self-reported belief that technology has made the job search process more effective.

4

For example, beyond the overall job offer, the top two aspects of the respondents' last job search that contributed to a positive impression of a potential employer centered on personal interaction.

Respondents named "the degree of personal, human interaction during the process.”

"The recruiter/hiring manager I worked with," as having most influenced their positive impression.

What created negative impressions of potential employers?

While 91 percent of workers agreed technology has made the job search process significantly more effective, there are negative aspects as well.

Respondents named "the length of the hiring process" and "the communication level throughout the selection process," as the top two aspects of job searching that created a negative impression of a potential employer.

That impression has lasting effects, as the survey found one-third of workers who had a negative experience during the job search process will never reapply to the organization, nor refer a friend or family member to the company.

About the survey Research findings are based on an OmniPulse survey fielded by national polling firm Research Now on behalf of Randstad US. The survey was fielded between June 19th, 2017 and June 23rd, 2017. It included 1,200 respondents over the age of 18, and a nationally representative sample balanced on age, gender and region.

About Randstad Randstad North America is a wholly owned subsidiary of Randstad Holding nv, a € 20.7 billion global provider of HR services. Through its unique approach of delivering HR innovation with human interaction at the center, Randstad secures and manages a workforce of more than 100,000 people for thousands of clients each week. The company employs more than 6,500 recruiting experts through approximately 1,100 offices and client-dedicated locations.

Rental Housing Journal On-Site · August 2017

Rental Housing Journal On-Site

My Multifamily Investing Philosophy and How I Do It This month we introduce a new blogger, Vinney Chopra, with many years of experience in multifamily investing who is dedicated to education and teaching others what he has learned in more than 35 years of real estate investing.

By Vinney Chopra

I

want to discuss with you my investing strategies, my philosophy, and how I got started in real estate investing..

When I started out investing in real estate, I used to believe in single-family homes. I started buying them about 30 years ago. I also bought a multifamily home back then.

As I became more exposed to the knowledge and the specific benefits of commercial real estate, it really changed my thinking process. When I got to know more about multifamily investing - or what you may call apartment investing - it really started to make sense to me.

We are still in the trails of the recession that ended a couple of years ago. However, the sector that really got some good numbers and where lenders were giving money out and financing after the crash of 2008 and 2009 was the multifamily sector.

That one sector came out quickly from the recession compared to

the hotels, offices and so forth. The financing compared to other sectors was much better for multifamily.

Over 13 years ago my wife said, “You are into real estate investing, motivational speaking and other things, why don’t you take an exam for real estate California broker license?”

I am not a real estate agent. My wife had a license and worked for a nice company. I took the broker’s exam, I passed it on the first try, and that was very exciting to me. Real estate is very invigorating and that is why I founded a university named www. multifamilysyndicationacademy.com.

I hope it is a place where you can learn a lot of great techniques, ideas and experiences of mine that you can apply right away to multifamily investing.

I prefer multifamily investing to many sectors for many reasons One of the biggest reasons I prefer this sector, is there is less risk in multifamily investing in apartment buildings.

Rental Housing Journal On-Site · August 2017

For example, if you own a home and a tenant leaves, you have 100 percent vacancy. If you own five homes and two tenants leave, that is a 40 percent vacancy.

However, that does not happen in multifamily investing in an apartment building.

In a 50-unit building, if two tenants leave and 48 other tenants are left behind, that is an occupancy rate of 96 percent. The other tenants are able to pay for all the expenses, the mortgage, the insurance and all other things. The vacancy has much less effect with the multifamily property.

The economics of scale are great. For example, in maintenance, if you must replace the roof on 50 single-family homes across town and in different cities that is a chore. Compare that to changing the roof of 50 apartments, which may be six or eight buildings, that is six or eight roofs. It can be changed at one location. In addition, the maintenance team does not have

to run around to the different singlefamily homes scattered around town.

They can all be taken care of in a local area.

For property management, in multifamily apartments the managers can take care of so many different families at one time. The maintenance person can also fix things without traveling all over town.

The third reason I like multifamily investing is the pooling of money together. The syndication part of it. By pooling money together, you can buy bigger assets, bigger apartments and get more of them. That is where the syndication part of it comes in. Also, the depreciation of the complex along with the leverage of loan makes it a very sound investment.

What kinds of markets do I really consider a great market?

I find emerging markets are the best to follow. continued on page 22

5

Rental Housing Journal On-Site

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.

Just ship to your home address

Always open 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.

A RHAWA membership suited just for you!

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

Advertise in Rental Housing Journal On-Site Circulated to over 20,000 apartment owners, on-site and maintenance personnel monthly.

Call 503-221-1260 for more information 6

Rental Housing Journal On-Site · August 2017

Rental Housing Journal On-Site

T

Seattle Tightens Rental Inspection Rules On Landlords

he Seattle City Council has tightened rental inspection rules giving less notice to landlords before an inspection, according to reports.

The changes reduce the amount of advance notice landlords get that their building will be inspected from two months to 10 days. They will receive a 60-day notice of a pending inspection, but no specifics on which apartments will be inspected.

The city’s Rental Registration and Inspection Code requires landlords to register all rental housing units in Seattle, from single-family houses to large apartment buildings. The ordinance requires that all registered rental properties be inspected at least once every 10 years. The owner must hire a qualified rental housing inspector or City inspector to do the inspections The RRIO is used to require landlords to register their buildings with the city.

The city then randomly inspects those buildings to make sure they're up to housing codes, meaning they meet basic standards: working heating systems, no rat and roach infestations, no leaks, and so on. But the inspection program has significant shortcomings.

The changes, led by Council Members Lisa Herbold and Rob Johnson, will also increase the number of apartments

to Maykovich. Meanwhile, about 42 percent of Seattle residents—or 280,600 people—are renters.

The city council could continue to strengthen the inspection ordinance, but "if there's no enforcement or tenants don’t know what their rights are, then it doesn’t matter," Maykovich says.

In the council meeting Monday, Council Member Rob Johnson promised to "continue to do work in this fall's budget in order to make sure that we're adequately funding the department to continue to do their work."

Resources: Seattle City Council Strengthens Failing Rental Inspection Program

city staff will look at during random inspections and, if one apartment fails inspection, will require that city inspectors look at more units in the same building.

New rental inspection rules Currently landlords can hire private inspectors rather than allowing city staff on their property and they do not have to turn over those private inspectors' reports to the city. The new rules will require that buildings that fail inspections turn over those reports.

"We were excited that these amendments passed and it definitely

does signal that the council is taking tenant rights issues seriously," Xochitl Maykovich, political organizer at the nonprofit Washington CAN, which organized tenants in a building with multiple code violations and lobbied the council for the changes, told thestranger.com. "But where we will really see that dedication will be in the budget."

Maykovich says the city should hire more inspectors and do more proactive outreach to educate tenants about their rights. Currently, about 14 city staff inspect apartments, according

Rental Registration And Inspection Ordinance

Advertise in Rental Housing Journal On-Site Circulated to over 20,000 apartment owners, on-site and maintenance personnel monthly.

Call 503-221-1260 for more information

Rental Housing Journal On-Site · August 2017

7

Rental Housing Journal On-Site

DEAR MAINTENANCE MEN

By Jerry L'Ecuyer & Frank Alvarez

Faucets, Storage and Vacancies Dear Maintenance Men: When the bathroom faucet was new, turning off the hot or cold water knobs would cut the flow of water immediately.

Two years later, upon turning them off, the faucet weeps a bit of water. Is this a sign the knob isn’t working? Can a clogged spout screen be fixed? With all these problems, do I need to buy an entire new fixture?

Paul

Dear Paul: Most types of faucets are repairable with standard tools and a rebuild kit.

Note the brand and style of the faucet and find a corresponding repair kit at the local plumbing supply house or home improvement center.

Repair kits often come with the specialized tool you may need to repair the faucet.

The faucet screen can be cleaned and is housed in a removable assemble at the end of the spout. These can be spun off and the screens cleaned and replaced.

Keep in mind the cost of repairs may rival the cost of replacement. If the cost of repair is more than fifty percent of the cost of replacement, we recommend the faucet be replaced with new modern fixture.

Dear Maintenance Men: How can I add more storage to my utilitarian type bathrooms?

The residents complain that they need to store their toilet paper in the hallway!

Please list a few suggestions on what to do?

Robert Dear Denise: Dear Robert: It does seem bathrooms are sometimes designed as an afterthought. Sink, toilet, bath and that is it. A modern bathroom will take into consideration the need for storage, electrical devises, personal hygiene etc. The first item that comes to mind is installing a bath sink cabinet. An old style cabinet might only have a set of doors under the sink.

We find this is not adequate and a cabinet should have drawers along with access to under the sink. The drawers can store hair dryers, and all manner of personal bath items. A unique system we like utilizes the space between the studs in the wall. Cabinet doors or mirrors can be used to cover storage in the walls. The wall storage is perfect for toilet paper, rolled up towels, tooth brushes, and most other small items.

Install multiple towel racks on the back of the bathroom door for additional towel storage. The space above the toilet can easily accommodate an overhead cabinet for larger items. Reversing the swing of the bathroom door from inward to outward will greatly increase the usable room and make the bathroom appear larger.

Dear Maintenance Men: It is currently summer time and that is when we get the most vacancies. How do I keep my residents from moving?

Denise

Often residents relocate during the summer months due to a change in schools their kids attend. They want to be close or within walking distance.

The other more problematic reason is poor maintenance service.

According to the 2011 national resident study, "Getting Inside the Head of the Online Renter," the number one factor in a resident's decision to renew a lease is "Quality of Maintenance Services."

Additionally, the current SatisFacts Insite® Index for Work Orders indicates that 18% of all service requests are not completed right the first time. And of those, only one-third of residents received notification that there would be a delay in completing the request.

What the above means is poor maintenance service can lead to higher vacancies. It does not matter if you have 10 units or 100 units; maintenance is a critical tool in the physical well-being of your property and the happiness of your residents. Think of it this way. A service call and parts may cost $250 to service a broken washing machine or water heater, resulting in a satisfied resident. However, a resident having to live with a broken washing machine or intermittent hot water may elect to move rather than dealing with the hassle of calling in repeated service requests. That resident vacating will now cost the owner thousands of dollars

in loss rent and rehab work to bring the unit back to rent ready condition.

Good maintenance is a year round tool to keeping your investment healthy and your residents paying the rent month after month.

Questions, Questions, Questions!

We need more of them!!! To be see your question in print, please send your them to: Frankie@BuffaloMaintenance.com Thank you!

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 Frank Alvarez is licensed contractor and 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 as well as being Chairman of the Product Service Counsel. Frank can be reached at (714) 956-8371 Frankie@BuffaloMaintenance.com For more info please go to: www.BuffaloMaintenance.com Jerry L'Ecuyer is a licensed contractor & real estate broker. He is currently on the Board of Directors and Past President 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.

EXPERIENCE RHAWA

YOUR SCREENING SOLUTION  Learn more about your tenant screening options at: RHAwa.org | Products + Services | Tenant Screening *RHAWA’s Tenant Screening department does its due diligence to make sure that its in compliance with any mandated regulations. Must have an active RHAWA membership and be Full Credit Certified.

8

Rental Housing Journal On-Site · August 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

Housing Supply and Demand Factors

R

esearch shows that demand for apartments is on the rise.

Whether it's young professionals, couples, families or aging empty nesters, the supply of rental housing needs to keep up with that growing demand.

Our area is experiencing fundamental shifts in housing dynamics, as more people are moving away from buying houses and choosing to live in apartments instead. Population growth and a higher propensity to rent will create a pressing need for more apartments.

As our population grows, this puts a strain on the existing housing supply. The more people who move to our area, the more housing we need to accommodate those residents. A variety of housing options will be needed to meet these diverse needs.

We simply need to build more housing.

Apartment demand is growing and the industry needs to keep up. However, producing enough new apartments to meet demand requires new development approaches, more incentives and fewer local restrictions.

Changing demographics, robust inmigration and fewer home purchases are resulting in an increased need for new rental housing in Washington state and the Puget Sound region.

Washington is expected to need 137,015 new apartments by 2030 to keep up with local demand, according to a new study by Hoyt Advisory Services, commissioned by the National Multifamily Housing Council (NMHC) and the National Apartment Association (NAA).

The study found that, nationally, 4.6 million new apartments are needed by 2030. This growth would increase economic activity in Washington and across the country. However, many local policies which make it difficult to build housing are limiting the housing industry’s ability to meet that growing demand.

It’s important to note that: • Washington will need all types of apartments and at all price points.

• Washington is ranked #7 out of the 50 states in terms of projected apartment demand by 2030.

In the Seattle area: • An average of 5,884 investmentgrade units were built annually between 2011 and 2016, according to data from Axiometrics.

Seattle will need to average 7,016 new units (5+ properties) per year in the coming years to meet the expected demand.

• Seattle is ranked #11 out of 50 metro areas in terms of projected apartment demand.

• Seattle ranks #7 out of 50 metro areas in terms of hardest cities to add necessary new apartments.

• Seattle apartment developers, owners and property managers and their residents contribute $15.5 billion to the local economy annually.

More conducive public policy is needed to address the anticipated consumer demand for quality housing.

We will need to reduce unnecessary fees and make it easier to build new apartments to meet that demand for housing in our state, which would boost our state economy in the coming years.

Over the last three decades, regulatory barriers to apartment construction have increased significantly, most notably at the local level. The time and complexity to add new rental housing has increased.

Barriers to new construction of housing at all price points includes the high cost of land near job centers, materials and labor cost increases, as well as regulatory fees and policies such as inclusionary zoning, impact fees and mandatory affordable housing.

Increased ill-conceived regulations adversely impacting the rental industry at the local level continue to diminish, not enhance, housing affordability as they bring disincentives to keeping housing affordable in the market.

According to the Joint Center for Housing Studies of Harvard University, in their recently published State of the Nation’s Housing report, the housing sector is poised to become an important engine of economic growth.

However, despite the relatively strong increase in multifamily construction, supply is still falling short of demand,

Rental Housing Journal On-Site · August 2017

housing, which remains in increasingly high demand, fueling ongoing concerns about the market’s ability to meet the housing needs of lower-income households.

The uncertainty of federal funding for low-income housing is concerning, and could widen the already substantial gap between demand for and supply of affordable (low-income) housing.

The rental housing industry remains committed to meeting the needs of renter households by providing safe, affordable, quality housing for the diverse population now seeking rental homes as a lifestyle choice.

A strong partnership with state and local policymakers to develop a wide range of incentives and options to address the growing need for housing is imperative, and will only become more so in the future.

and affordability pressures remain a growing concern.

“Even with multifamily construction at its highest level in two decades, additions to the rental supply have not kept pace with swelling demand. As a result, rents have climbed across the board”, according to the study.

The renter share of U.S. households now stands at a 50-year high, yet the national rental vacancy rate dipped to a 30-year low.

Especially concerning is the diminishing supply of low cost rental

For more information, feel free to contact the Washington Multi-Family Housing Association at 425-656-9077 or go to www.wmfha.org.

11th Annual Chili Cook-Off Charity Event

Saturday October 28, 2017 11:30am-3:00pm

Tukwila Community Center 12424 42nd Ave S Tukwila, WA 98188 $15 Adults | Kids 12 & Under are FREE Proceeds Benefitting The Domestic Abuse Women’s Network

Fall Fun For Everyone!

Admission Includes: • Lots of CHILI to sample (of course!)

• Hot Dogs, Hot and Cold Beverages • Espresso, hot drinks and Italian sodas • Great DJ and Music • Kid Zone with Arts, Crafts, Face Painting, Trick or Treating • Appearances by Blue Thunder Drum Corps and the SeaGals!

• Awards for the Chili Competitors • Awards for Kids Costumes • One Complimentary Raffle Ticket

Presented in Partnership with

To Purchase Tickets or Register to Compete, visit WWW.WMFHA.ORG 9

Rental Housing Journal On-Site

Homegrown, boldly roasted internet

Bring the Gig Life to your building.

Don’t settle for “good enough” internet for your residents. Give them the best in speed, reliability, and service with Gigabit Internet from Wave G. Wave G delivers symmetrical download and upload speeds of up to 1,000 Mbps, no data caps, and flat-rate pricing. Now that’s a bold internet experience to start your day.

Get in touch with us today to find out how you can bring the Gig Life to your building.

No contract

No cap

No catch

Gigabit. Internet. Speed.

$80/M $80/Month New customers get their 1st month FREE*

1-855-971-1325

gowave.com/G

*Residential offers, available for new customers only. Expires 4/15/17. Free trial offer valid for one month only of Gigabit Internet service at no charge. Not valid with other offers.

Serviceable areas only. Prices subject to change. Certain restrictions and additional fees may apply. Call for complete details.

10

Rental Housing Journal On-Site · August 2017

Rental Housing Journal On-Site

D

7 Questions and Answers On Canine Liability Insurance

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.

Jazz the Schnauzer “I started working on this pet insurance and canine liability issue in the summer of 2010 doing a research paper. 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 managers and tenants. So she put together a list of seven of the most

Tenant Screening 44 Less...

Tenant Screening Less...

“Screen Your Tenants Online Anytime” “Screen Your Tenants Online Anytime” (FREE (FREE Membership Available) (FREE Membership Membership Available) Available)

“Low-Cost •• Fast •• Easy •• Tenant Screening” “Low-Cost Fast Easy Tenant Screening” “Low-Cost • Fast • Easy • Tenant Screening” You can save money by becoming a “Volume Discount Member” You You can can save save money money by by becoming becoming aa “Volume “Volume Discount Discount Member” Member” • •• •• •

You Receive All This: You Receive All This: You Receive• All This:Score National Credit Report FICO

National National National National National

Credit Report Eviction Report Credit Report Eviction Report Eviction Eviction Report Report

•• •• •

FICO Score Tenant Qualifier FICO Score Tenant Qualifier Tenant Tenant Qualifier Qualifier

99

$$$

99 99

With Your “Volume Discount With Your “Volume Discount With Discount Membership” You Receive All With Your Your “Volume “Volume Discount You Receive All Membership” You All of the Above Reports For Only Membership” You Receive Receive All of the Above Reports For Only of the Above Reports For Only ofIf the Above Reports For Only you do more than 16 credit and eviction reports a year,

Report Report Report Report

30+ Years 30+ Years Serving 30+ Years 30+ Years Serving Housing Serving Serving Housing Providers Housing Housing Providers Providers

If youour do more than 16 creditMembership” and evictionisreports “Volume Discount for you.aa year, If do than 16 and If you youour do more more thanDiscount 16 credit creditMembership” and eviction evictionisreports reports a year, year, “Volume for you. our “Volume Discount Membership” is for you. our “Volume Discount Membership” is for you.

• You will save $4.95 on every eviction/credit report $4.95 on every eviction/credit report •• You will save $9.00 with the recommended 4report Star Tenant Screening Report $4.95 on every eviction/credit will save $4.95 on every eviction/credit report •• You You will save $4.95 on every eviction/credit report You will save $9.00 with the recommended 4 Tenant Screening Report Volume Discount Membership is only $77 a year •• You will save $9.00 with the recommended 44 Star Star Tenant Screening Report will save $9.00 with the recommended Star Tenant Screening Report •• You You will save $9.00 with the recommended 4 Star Tenant Screening Report Volume Discount Membership is only $77 a year Free Non-Discount Membership Available Volume Discount Discount Membership Membership is is only only $77 $77 aa year year ••• Volume Discount Membership isAvailable only $77 a year •• Volume Free Non-Discount Non-Discount Membership Membership Available •• Free Free Free Non-Discount Non-Discount Membership Membership Available Available

To Register or Start Your Free Membership To Register or Start Your Free Membership To Register or Start Your Free Membership Go To www.tenantscreening4less.com To Register or Start Your Free Membership Go To www.tenantscreening4less.com Go To www.tenantscreening4less.com Go To www.tenantscreening4less.com 888-802-7020

888-802-7020 888-802-7020 888-802-7020

Rental Housing Journal On-Site · August 2017

asked questions about pet insurance and canine liability insurance.

1. Can a landlord or property manager require that tenants buy canine liability insurance?

What about service dogs, emotional support dogs and therapy dogs?

Answer: 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.

2. How much does it cost a year?

Answer: Each dog is rated as an individual so it varies, small dogs could be under $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.

3. Can a landlord or property manager buy a canine liability policy to cover the whole apartment complex and all dogs in it?

Answer: 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.

4. How many people with dogs in apartment complexes have canine liability insurance?

Answer: 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.

5. Can you insure all breeds and types of dogs?

Answer: Yes, but I do not insure wolf hybrids as they are not considered a "dog."

6. Can you insure a dog that has bitten someone in the past?

Answer: 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.

7. What important advice do you have for landlords and property managers?

Answer: 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 ...continued on page 18 11

Rental Housing Journal On-Site

Apartment Pet DNA Testing Expands to “Travel Dog” Concept Pet friendly apartments have turned to pet DNA testing to help keep common areas clear of dog poop. It has worked for many apartment complexes.

By John Triplett, Rental Housing Journal

T

he company that started pet DNA testing for apartment buildings, PooPrints, has recently launched the Travel Dog membership program that allows pet owners to register their pets in the DNA World Pet Registry using a simple DNA sample, according to a release.

“We are now looking to broaden the concept because we keep getting inquiries due to the success of the PooPrints DNA testing program. We are also receiving inquiries from cities and towns because they have heard about it and are looking for ways to promote responsible dog ownership,” David Woody, director of business development for BioPet Labs, told Rental Housing Journal.

However if a city was trying to require PooPrints, he said he was not sure how well that would work because “a typical city that requires pet registration is only going to get about 10 percent of the people to register their dogs, so from a compliance stand point it doesn’t really work.”

“So that is why Travel Dog is a voluntary program for the actual dog owner, because what we have been seeing is that they are losing access to places they can take their dogs,” Woody said which is one reason the new program was started.

From the apartment and condo standpoint, it can be difficult to find rental condos that are pet friendly.

Woody said if a pet owner can show

Great rates for Seattle apartment building owners.

they have their pet DNA on file, that can help show the condo owner that they are a responsible pet owner. That is not the sole reason. But at least that gives the dog owner a little more ammunition to show the apartment or condo landlord or owner – who might consider being pet friendly - that they are a responsible pet owner.

“From the multifamily industry overall in the United States we do have

the PooPrints program,” he said, but again there are situations where with condos and apartments, dog owners have to make the rental housing owners more comfortable with being pet friendly.” So Travel Dog could be a step in that direction.

Looking to promote responsible dog ownership through pet DNA testing “We are looking to promote responsible dog and pet ownership as a whole,” Woody said. “We want to give dog owners a way to be proactive” which they can do with Travel Dog. “We key in on the environmental side because we see article after article,” of pet owners being denied access to areas due to pet waste. “We saw there was a large dog park in Colorado that shut down due to pet waste,” he said. “Dog owners had been visiting this park for years, and the dog owners basically said we will DNA our dogs – we can show we are responsible and we are not causing this problem.” ...continued on page 19

KURKOV SOFTWASH

ROOF & EXTERIOR CLEANING NO PRESSURE WASHING BIODEGRADABLE LONG LASTING RESULTS

Bringing you low fees, great rates, and local market expertise.

How did Chase become the nation’s leader in multifamily lending? With great rates, low fees and a deep understanding of the local market— in communities just like yours. If you have a 5 or more unit apartment building to purchase or refinance, call us today to learn how we can put our resources to work for you.

LO W F E ES | G R EAT RAT ES | S T R E A M L I N ED P RO CESS

Contact Todd Sechrist, Client Manager at (206) 500-4634 or todd.sechrist@chase.com Credit is subject to approval. Rates and programs are subject to change; certain restrictions apply. Terms and conditions subject to commitment letter. Products and services provided by JPMorgan Chase Bank, N.A. #1 claim based on 2016 FDIC data. ©2017 JPMorgan Chase & Co. All rights reserved. Chase is a marketing name for certain businesses of JPMorgan Chase & Co. and JPMorgan Chase Bank, N.A., Member FDIC. 299302

12

paul@kurkov.com 253­732­2382

KurkovSoftwash.com Rental Housing Journal On-Site · August 2017

Rental Housing Journal On-Site

Unprecedented Demand Staving Off ...continued from page 1 The report pinpoints Sacramento, Calif., Phoenix, Las Vegas, RaleighDurham, N.C., and Jacksonville, Fla., as the five markets where investors should consider buying multifamily properties.

Favorable demographic trends are on full display in these regions, where employment stands at record or nearrecord levels, and a combination of high demand and light supply pipelines are bolstering rent levels.

The Ten-X analysis also identifies New York City, San Francisco, San Jose, Calif., Washington, D.C., and Oakland, Calif., as markets where investors may consider selling multifamily assets.

These mostly major markets seeing an onslaught of new supply pushing up vacancies and rents may already have reached their peaks, leaving them vulnerable to diminished returns for investors.

Completions across the apartment sector slackened in the first quarter after a record 2016, totaling just 39,000 units. Absorption marched in sync with completions, however, with figures in the first quarter clocking in well below 2016 rates. Ten-X projects the absorption rate to improve during 2017, though hardly enough to absorb the 330,000 new units that will be completed over the course of the year.

Vacancies rose by 10 bps to 4.3 percent in the first quarter, remaining flat over the last year. While apartment vacancy has plateaued in most markets, the supply pipeline is unevenly distributed throughout the country, making certain markets more vulnerable to rising vacancies. On a national level,

the massive influx of new supply is expected to increase the vacancy rate to 5 percent by 2018 before declining demand pushes it to 6.2 percent by 2020 during a modeled economic downturn.

Stalling vacancy rates have also harmed rent growth around the country. Seasonally adjusted effective rents rose just 0.4 percent during the first quarter, according to REIS. Annual growth, meanwhile, has cooled to just 3 percent year-over-year – a marked deceleration from the robust increases the sector enjoyed earlier in the cycle.

Other discouraging fundamentals include the decline of deal volume to a three-year quarterly low of just below $27 billion. Multifamily cap rates stood flat in the first quarter at 5.2 percent after a rise in late 2016.

Despite uneven fundamentals, several demographic trends continue to prop up the multifamily market.

Household formations remained steady at a healthy pace of around 1.6 million in 2016. A solid labor market continues to drive absorption, as debtridden millennials increasingly delay marriage and homeownership in favor of renting. As youth employment and wages continue to rise, the 31 percent of 18- to- 34-year-olds currently living at home should be drawn into the market, creating a key demand source that has yet to be fully tapped.

"The current state of the multifamily sector is a perfect example of the timehonored notion that 'demographics is destiny.' While softening fundamentals indicate that the sector is poised for a slowdown, that shift has yet to arrive in

earnest," said Ten-X Chief Economist Peter Muoio. "While many large metro areas are increasingly exposed to both cyclical risk and massive oversupply, the overall market is being sustained by significant societal shifts that is driving strong, sustained demand. As long as gainfully employed millennials and other Americans continue to choose renting over homeownership, a majority of multifamily investors can be confident that rents will continue to rise."

The Multifamily Sector's Top Five 'Buy' Markets: Sacramento Rents in California's capital are growing at a breakneck pace, as a modest supply pipeline has kept vacancies at near-record lows. The market is further boosted by consistent gains in overall employment, which, driven by robust increases in the government sector, posted growth in the mid-1-percent range over the last year. The city's population also jumped 1.3 percent in 2016, outpacing the national average.

Sacramento's overall market strength is expected to help it weather the Ten-X recession downturn scenario in 20192020, with solid gains in NOI projected to continue during that span.

Phoenix Effective rents in Phoenix have increased 4.6 percent over the last year, and Ten-X Research forecasts rents to jump by more than 5 percent through 2018. Much of the growth can be attributed to tightening availability, as vacancies remain in the mid-4-percent range despite a healthy supply pipeline.

Employment in the city is at an all-time peak despite slowing growth in several key sectors, while population increases remain at healthy levels. Even with a cooldown in rents under the Ten-X recession downturn scenario, investors should continue to see healthy returns through 2019-2020.

Las Vegas Las Vegas' multifamily market is being bolstered by steady population growth and employment that has reached an all-time peak despite recent softening in the leisure/hospitality segment. The city enjoys a favorable supply-demand dynamic, as vacancies are expected to decrease from the mid3 percent range to roughly 2.6 percent by the end of 2018. With rents at record highs, Ten-X Research projects stellar 5.1-percent average annual NOI growth over the next two years. Tight vacancies and solid rent growth should keep NOI gains in the mid-2-percent range during the expected downturn in 2019 and 2020.

Raleigh-Durham Thanks to a strong and outsized professional/business services sector, total employment in Raleigh-Durham is now 14 percent above its prerecession peak. Regional population is also growing at more than twice the national rate, helping to drive torrid annual rent growth of between 4 and 5 percent for multifamily properties.

Although a recent influx of supply has kept vacancies in the 5-percent range, Ten-X Research expects local demand ...continued on page 23

Take your Laundry Room from Resource Drain to

Profit Center

Keep your laundry rooms running smoothly and profitably with WASH. With WASH managing your laundry rooms, you’ll get: • • • • • • • •

Regular reporting so you can stay on top of laundry room usage and profitability.

24/7 live answers to service calls.

Electronic card systems for easy payment.

Quick response to service calls — typically within 12 business hours.

FIXLAUNDRY mobile app and online service portal.

ENERGY STAR-rated machines and green practices that focus on conservation.

Online laundry monitoring to see if machines are available or laundry is done.

Six-month, no obligation trial on all new laundry room leases.

The bottom line is that when your laundry room contract comes up for renewal, we want you to switch to WASH. WASH offers superior laundry equipment, and service and support that is unparalleled in the industry.

800.777.1484 | www.washlaundry.com/profit Rental Housing Journal On-Site · August 2017 WS17-098 ProfitCenter 10x7_5.indd 1

13

5/16/17 4:26 PM

Rental Housing Journal On-Site

P

Why Every Property Manager Should Attend Local Trade Shows

roperty managers spend a large portion of their time monitoring the fiscal aspects of their business.

Whether they’re keeping a close eye on rent ratios or fine-tuning marketing strategies, it’s likely that they’re funneling the majority of their time and resources into the daily grind.

When was the last time you got away from the office to reimagine your business and focus on the future?

Trade shows clue you into trends and emerging technology in the property management field that may catapult your properties to the top of competition ladder.

Check out our top 4 reasons why you should be sign up for one today: They offer experiences you cannot get online.

It’s easy to get an idea of what’s happening in the housing market by reading trade journals and industry blogs – and we highly recommend it. However, nothing compares to immersing yourself in an environment that’s solely dedicated to your industry and the many factors affecting your business. Take advantage of the wide variety of interactive displays and product demonstrations available to you that will help you visualize the

modernization of your properties.

It’s likely that you’ll also be given the opportunity to test drive any features you might be considering so you can feel good about making the right decision for your property management company.

You can connect with owners, investors, and renters.

It’s easy to spend the majority of your time within the four walls of an office.

However, attending a trade show is the best and easiest way to connect with those in your field. Spending a few days or even a few hours visiting exhibitions and booths is a great way to meet people who could represent potential partnerships. So be sure to listen to the voices around you. Don’t be afraid to start a discussion with other attendees.

Capitalize on the energy and culture that encourages random conversations that could lead to a long-term win.

They give you an opportunity to expand your marketing reach.

Whether you are going as a first-timer interested in simply taking it all in or you’ll be manning a booth and passing out brochures, you have an opportunity to connect with people from all around the industry. Contractors, investors, interior designers, buyers, sellers, software engineers, commercial

developers, marketers, plumbers, local reporters, and national influencers all migrate to this type of event. Attendance is a chance to put your best foot forward so be sure to introduce yourself to people who might offer good insight.

Successful property management takes a village so it’s a good idea to learn from those who occupy a different space in the property management bubble.

surrounding you and your industry peers.

For more information on upcoming trade shows and the latest in property management topics, visit National Association of Residential Property Managers and the National Apartment Association.

Events spark your imagination and drive innovation.

There are a myriad of benefits for those who choose to partake in the full experience of a trade show. However, if you’re less inclined to make it a more business-focused trip, go for the fun of it. You’ll find futuristic exhibits, fresh designs, and the latest in technology to help you enhance productivity in the office. Even without a formal agenda or purpose, you’re likely to walk away with a fresh perspective that will help reinvigorate your business in the long run. Be sure to take along a stack of business cards for those conversations you think might materialize into a good business opportunity. If your goal is simply to peruse, do so in full confidence knowing that a little time away is a good thing. It’s at these types of events that you’re reminded of the supportive and exciting community

Experience

matters.

Put our expertise to work on your next multifamily or commercial deal. Whether an initial purchase or a refinance transaction, we offer a wide variety of options to suit your needs: • • • •

• • • •

Hybrid and adjustable rate programs Fixed terms of 3-20 years Zero loan fee option 12 MAT index available for multifamily loans

Non-recourse option As low as 1.15x debt service coverage Interest only option Loan amounts up to $15,000,000

Call us today to see what we can do for you.

Bob McGrouther Income Property Loan Officer 425.739.0021 bmcgrouther@lbsavings.com

Tiana Jackson Loan Associate 425.739.0023 tjackson@lbsavings.com

lutherburbanksavings.com

Financing for apartment buildings, mixed-use and commercial properties. Loans subject to credit approval. ©2017 Luther Burbank Savings

14

Rental Housing Journal On-Site · August 2017

Rental Housing Journal On-Site

253-565-2488 Rental Housing Journal On-Site ¡ August 2017

15

Rental Housing Journal On-Site

Housing Sentiment Dips

...continued from page 3

that are related to their home purchase decisions. The questions ask consumers whether they think that it is a good or bad time to buy or to sell a house, what direction they expect home prices and mortgage interest rates to move, how concerned they are about losing their jobs, and whether their incomes are higher than they were a year earlier.

ABOUT FANNIE MAE'S NATIONAL HOUSING SURVEY The most detailed consumer attitudinal survey of its kind, Fannie Mae's National Housing Survey (NHS) polled 1,000 Americans via live telephone interview to assess their attitudes toward owning and renting a home, home and rental price changes, homeownership distress, the economy, household finances, and overall consumer confidence. Homeowners and renters are asked more than 100 questions used to track attitudinal shifts, six of which are used to construct the HPSI (findings are compared with the same survey conducted monthly beginning June 2010). As cell phones have become common and many households no longer have landline phones, the NHS contacts 60 percent of respondents via their cell phones (as of October 2014). For more information, please see the Technical Notes. Fannie Mae conducts this survey and shares monthly and quarterly results so that we may help industry partners and market participants target our collective efforts to stabilize the housing market in the near-term, and provide support in the future. The July 2017 National Housing Survey was conducted between July 1,

41

2017 and July 23, 2017. Most of the data collection occurred during the first two weeks of this period. Interviews were conducted by Penn Schoen Berland, in coordination with Fannie Mae.

DETAILED HPSI & NHS FINDINGS For detailed findings from the July 2017 Home Purchase Sentiment Index and National Housing Survey, as well as a brief HPSI overview and detailed white paper, technical notes on the NHS methodology, and questions asked of respondents associated with each monthly indicator, please visit the Surveys page on fanniemae.com.

Also available on the site are in-depth special topic studies, which provide a detailed assessment of combined data results from three monthly studies of NHS results.

To receive e-mail updates with other housing market research from Fannie Mae's Economic & Strategic Research Group, please click here.

Fannie Mae helps make the 30-year fixed-rate mortgage and affordable rental housing possible for millions of Americans. We partner with lenders to create housing opportunities for families across the country. We are driving positive changes in housing finance to make the home buying process easier, while reducing costs and risk. To learn more, visit fanniemae. com and follow us on twitter.com/fanniemae.

SOURCE Fannie Mae Related Links http://www.fanniemae.com

Security Deposits ...continued from page 1 Renters in Washington are obligated to return their apartment or rented home to the same condition as they rented it in, excluding normal wear-andtear. This means they’re the responsible party for carpet cleaning, unless they paid a non-refundable cleaning charge when the lease was created.

In states like Massachusetts, certain disputes require the property manager to return the security deposit (and accrued interest) within 30 days of the move out date, and then file a separate small claims or civil suit for damages.

Cover all the bases.

Avoid unnecessary legal challenges by conducting the initial leasing process with diligence. Start by researching local, state, and federal laws that govern real estate rental practices in your area.

Consult with a real estate attorney if you aren’t confident you have all the information needed to establish deposit amounts and settle a tenant’s lawful termination of the lease. From there, create a policy that protects your company and your assets.

Go the extra mile during the leasing process.

Prior to allowing a renter to move in, schedule at least 30 minutes for both the renter and company representative to conduct a joint property inspection. Be sure to take notes – and take pictures – of any damage to floors, walls, windows, interior and exterior doors, appliances (inside and outside), fixtures, furniture, patio/balcony, stairs, and any other structural components. Make sure both

parties sign and date an inspections form certifying its accuracy.

Additionally, consider initiating a follow up inspection a few days after the tenant moves in. Many tenants find an issue only a few days after they move in – maybe the dishwasher doesn’t drain properly or there is a missing patch of carpet in the bedroom closet. Simply send an email and ask if the tenant has noticed anything else after moving in that they consider prior damage, and ask them to return inquiry confirmation via email or written notice. The response is necessary because there have been lawsuits where a tenant claims they found damage after moving in. This will avoid a he-said/she-said kind of argument that may drag you to court.

Make the exit professional and legal.

Do a preliminary walk through a few days before move-out with the renter in attendance. This gives the renter a chance to return the property to movein ready condition. Then conduct the final apartment inspection as quickly as possible, before any make-ready begins.

Utilize photos, with dates included, for documentation purposes as you prepare an itemized security deposit statement. Be sure to include a complete explanation for any funds withheld.

These tips will help you avoid unnecessary lawsuits and ensure that you stay within the laws governing your security deposit policies. Knowing statutory limits and being prepared is wiser than trying to defend yourself without the proper backup.

Increase Your Laundry Room Capacity by as much as 50% And Save Up To 50% on Utility Costs

Coin • Card Rent • Lease

HAINSWORTH LAUNDRY COMPANY

Life’s Good

16

Toll Free: (800) 526-0955 www.hainsworth.biz

Rental Housing Journal On-Site · August 2017

Rental Housing Journal On-Site

6 Signs You Might Be Breaking the Law

By Christina Burch, www.appfolio.com

C

ertainly, local laws that govern residential rentals vary greatly across the country. However, there are certain actions that some landlords think are fine but actually break the law in many American cities and towns. Complying with these laws helps protect all parties involved in a rental transaction so it’s wise to consult a legal professional, and brush up on a well-respected ethical code for property managers.

6 Property Manager Actions That Could Break the Law To protect property managers, and renters, consider these common activities that could be illegal: Dropping in: Tenants have the right to enjoy their privacy. If property managers need to stop by for routine inspections, maintenance, or repairs, they must usually offer notice. As stated in the landlord-tenant law, a property manager must seek a tenant’s consent to enter because they’ve surrendered possession of the premises over to the renter upon signing the rental agreement. If a tenant happens to be home, they may waive their right to get advance notice, but property managers should not just use their keys to stop by at any time and without prior warning.

Asking certain personal information during an application: Certainly, landlords can qualify tenants based upon their income,

credit history, and job status. At the same time, property managers aren’t allowed to ask about personal matters.

For instance, It’s not legal to fish for information about religion or place of origin, even in personal conversations.

Focus on asking questions that reflect the applicant’s ability to afford the property and uphold lease terms.

Increasing the rent in the middle of the lease: Property managers reserve the right to increase the rent with a new lease or renewal. At the same time, they may not increase rent in the middle of the lease term. If both parties agree, it might be possible to modify the lease because of some property improvement or additional services.

Evicting renters because of a sale: Property owners usually reserve the right to sell a property whenever they

choose. However, this sales transaction can’t violate the tenant’s lease. Sellers have to make the sure the new owners will keep tenants in place until their lease ends or find someway to buy the tenants out of their lease.

Not providing a Certificate of Occupancy: Certain types of rental units might not prompt tenants to ask to see a CO. For instance, few renters of established apartment complexes probably bother to ask. On the other hand, renters might want to make sure that a garage apartment or basement room will provide them with a home that will provide them with a legal, safe, and comfortable dwelling. Both property managers and tenants can protect themselves by making sure that the unit has been maintained up to the standards of local codes.

Charging too much for a rental deposit: Some states don’t allow landlords to charge more than the price of rent for one month; however, some states have different limits or no limits at all. It’s possible to argue that these rules might protect tenants, but it’s also possible to argue that limits may keep property managers from giving potential renters with poor credit a chance. In any case, property managers need to be careful that they comply with local rules.

It’s important to recognize that your property management practices are a crucial element of your business. Not only does compliance protect renters, it also protects managers and owners against expensive penalties, potential liability, and a bad reputation. All parties involved in a rental agreement should learn about local laws and pay attention to red flags. It’ll benefit your business as much as it does yourself.

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 On-Site · August 2017

17

Rental Housing Journal On-Site

7 Questions and Answers ...continued from page 12 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,” she said.

She said some commercial liability policies are starting to take canine liability insurance out of those policies so owners, landlords and property managers should check.

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.

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 consideredby 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 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.

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 About Debbie Turner: 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.

Advertise in Rental Housing Journal On-Site Circulated to over 6,000 apartment owners, on-site and maintenance personnel monthly.

Call 503-221-1260 for more information www.rentalhousingjournal.com 18

Rental Housing Journal On-Site · August 2017

Rental Housing Journal On-Site

Apartment Pet DNA Testing ...continued from page 12 Woody said another problem is that sometimes dog owners will bag the poop, and then drop the poop bag beside a trail or even leave it next to a garbage can, instead of putting it inside he said. This all causes dog owners to start to lose their access to areas.

“Every time we turn around we are seeing, for environmental reasons, dog owners are starting to lose their access to areas,” he said.

“Frankly that could be an apartment building as well,” he said.

“On the PooPrints side, we are in about 2,500 apartment buildings. We have tenants that go from one PooPrints property to another,” and they can transfer their world pet registry to the new apartment building, if it is pet friendly.

Dog waste problems in Colorado parks The Denver Post reported earlier this year that for the second time in five months, the Railyard Dog Park in downtown Denver was closed because of piles of dog poop not picked up by pet owners. “Once it gets to the point where it’s unsanitary, we have to close it,” Yolanda Quesada, director of communications for Denver Parks and Recreation, told the newspaper.

Another dog park in Evergreen, Colorado, Elk Meadow, was closed permanently, partly because Jefferson County Open Space officials had declared high levels of E. coli from dog waste. That, plus parking problems, forced them to permanently close Elk Meadow Dog Park.

harmful organisms like E. coli, Leptospira, and roundworms. These organisms can be contracted by other dogs, wildlife, and even children.

Bacteria from dog poop can wash into rivers and streams when it rains.

City Code also requires that all poop must be picked up and disposed of into the proper receptacle. Violation of either leash or scoop laws will result in a fine of up to $150.”

Resources: What pollutes the urban Mississippi? Lawns, dogs and lots of pavement runoff

Dog waste environmental problem not new "The dog waste problem is not new, especially as a source of water pollution. The U.S. Environmental Protection Agency classifies dog waste as a major pollutant and most recently the University of Minnesota found dog waste is the third largest pollutant of the Mississippi River," J Retinger, President BioPet Laboratories, said in a release.

"What is new, is that the strong human animal bond is creating dramatic growth in dog ownership, especially in urban areas. The result is a true dog waste crisis meaning many dog owners are banned from bringing their dogs to parks, beaches and even cemeteries. In extreme cases, such as Colorado's Evergreen Dog Park, permanent closures are occurring."

Travel Dog is a membership club for responsible dog owners that will serve as a global brand representing responsible pet ownership and concern for the environment through pet DNA

Rental Housing Journal On-Site · August 2017

testing, according to the release.

Each Travel Dog member registered through pet DNA testing, receives an exclusive Travel Dog tag and is registered in BioPet's 250,000 member DNA World Pet Registry. Travel Dog membership also enables each owner's dog to be recognized by pet friendly hotels, restaurants, attractions, and other businesses. Through the Travel Dog logo these businesses will display to pet owners that they are pet friendly.

A percentage of Travel Dog sales are donated to animal welfare causes, according to the release.

"Cities and counties also benefit from BioPet's Travel Dog and DNA World Pet Registry™ as they provide the basis and infrastructure for developing dog waste control programs," added Retinger.

Portland can fine dog owners up to $150 According to Portland’s Parks and Recreation Department, “Dog poop is essentially raw sewage; it contains

Piles of poop shut down Railyard Dog Park in Denver — again Popular Evergreen off-leash dog park closing for good despite efforts to save it Seattle people, dogs and parks plan Frequently Asked Questions about dogs in Portland's parks The Scoop On How Pet DNA Testing Fixes Your Apartment Poop Problem Why Are Some Property Managers Not Solving Pet Poop Problems?

About Biopet Laboratories BioPet Laboratories is an international biotechnology company specializing in animal genetics. The company's full-service laboratory provides comprehensive DNA analysis, reporting, research and product development. BioPet Laboratories' mission is to promote responsible pet ownership, provide pet waste management solutions and to improve public facility access enabling owners to take their pets anywhere. For more information about BioPet Laboratories or its DNA-based pet products, contact us at www. biopetlabs.com or call (865) 546-2862.

19

Rental Housing Journal On-Site

Rising Rent ..continued from page 1 analysis from Zillowi. In Los Angeles, the homeless population would grow by roughly 2,000, and Seattle would see its homeless population increase by nearly 260. While the connection between the rising cost of housing and homelessness is generally accepted, Zillow's statistical analysis is the first to forecast for each city how many people will be pushed into homelessness as rents increase over time.

Relying solely on the number of homeless people counted during a onenight survey is an imperfect method.

Previous research has found that as few as 59 percent of unsheltered homeless people are included in a given countii.

Weather, the number of volunteers and even the count methodology can Metropolitan Area Atlanta Baltimore Boston Charlotte Chicago Dallas Denver Detroit Houston Los Angeles Miami Minneapolis New York Philadelphia Phoenix Pittsburgh Portland, OR Riverside San Diego San Francisco Seattle St. Louis Tampa Washington, D.C.

change from year to year, affecting the accuracy of the count. This new research predicts the total number of people experiencing homelessness, expanding on the counted number.

Rents are at record highs across the country, and income growth did not keep pace as rents grew, making paying the rent increasingly unaffordable.

Seattle and Portland, Ore. have declared states of emergencyiii in response to the number of people experiencing homelessness. The median rent payment in Los Angeles requires 49 percent of the typical household income, leaving little opportunity to save in case of an unexpected medical bill, or loss of a job – events which could push a family into homelessnessiv.

Counted Number of Homeless People, 2016v 4,546 3,488 6,240 1,818 6,841 3,810 5,728 2,612 4,031 46,874 4,235 3,056 73,523 6,112 5,702 1,156 3,914 2,165 8,669 6,996 10,730 1,713 1,817 8,350

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

"We've seen so much pressure in rental housing markets that it's created a rental affordability crisis that has spilled over into a homelessness crisis at lower income levels," said Zillow Senior Economist Dr. Skylar Olsen. "Often, the rental demand in these markets isn't being met with a sufficient supply. There are several cities grappling with this problem, but there is no one-size-fits-all solution for everyone. This report puts a number on the link between rising rents and homelessness, highlighting the very real human impact that rent increases are having across the country."

Homelessness rates in New York, Los Angeles, Washington, D.C. and Seattle increased by at least four percent between 2011 and 2016, and these cities

Estimated Total Number of Homeless People, 2016 5,447 4,088 6,418 2,139 7,614 3,866 6,320 2,872 5,032 59,508 4,624 3,359 76,411 6,281 6,918 1,318 4,674 3,207 11,149 8,752 12,240 1,879 3,090 8,498

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, Inc. (NASDAQ: Z and ZG), and headquartered in Seattle.

Zillow is a registered trademark of Zillow, Inc. i Zillow worked with a postdoctoral researcher in the Department of Statistics at the

have a strong relationship between rising rents and growing homeless populations. Philadelphia, Chicago, Minneapolis, Detroit, and Pittsburgh also show a significant connection between rising rents and homelessness rates.

Not all markets in this analysis have a strong relationship between rents and the number of people experiencing homelessness, indicating that they have found a way to interrupt the trend.

Even as rents have risen in Houston and Tampa, for example, the homeless population in each city fell. Other cities where the homelessness rates also fell include Chicago, Phoenix, St. Louis, San Diego, Portland, Detroit, Baltimore, Atlanta, Charlotte, and Riverside.

Estimated Additional Homeless People with a 5% Increase in Rent 83 79 128 68 189 77 73 106 120 1,993 109 131 2,982 147 135 75 55 110 184 68 258 57 69 224

University of Washington for this analysis. ii https://www.ncbi.nlm.nih.gov/pmc/articles/ PMC2446453/

Estimated Total Number of Homeless People, 2017 5,605 4,121 6,557 2,249 7,641 4,019 6,457 2,898 5,224 61,398 4,701 3,531 76,341 6,345 7,162 1,375 4,807 3,352 11,455 8,815 12,763 1,926 3,204 8,703 Zillow

continuums of care were matched with the corresponding metropolitan areas.

iii http://www.pewtrusts.org/en/researchand-analysis/blogs/stateline/2015/11/11/ cities-states-turn-to-emergency-declarationsto-tackle-homeless-crisis iv https://www.zillow.com/research/q1-2017housing-affordability-15563/ v Counts come from the U.S. Department of Housing and Urban Development. HUD

NAME ADDRESS CITY

STATE

ZIP

E-MAIL ADDRESS

I am an: OWNER Publisher Will Johnson – will@propubinc.com Designer/Editor Kristin Flores – kristin@propubinc.com

Advertising Sales Will Johnson – will@propubinc.com Terry Hokenson – terry@propubinc.com Larry Surratt – larry@propubinc.com

Rental Housing Journal On-Site 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 © 2015 All rights reserved.

20

INVESTOR

PROPERTY MANAGER

*Print subscriptions $25/year $15 each additional market

I would like: Editions: VISA

VENDOR

OTHER

$8 each additional market

PRINT

E-MAIL

ARIZONA SALEM/EUGENE, OR

COLORADO SEATTLE/TACOMA

PORTLAND, OR UTAH

MASTER CARD

CARD NUMBER NAME ON CARD BILLING ADDRESS

EXP.

CVV

OR MAIL A CHECK TO: Rental Housing Journal PO Box 6244 Beaverton, OR 97007

Rental Housing Journal On-Site · August 2017

Rental Housing Journal On-Site

The Latest Property Perk Every Renter Looks For

By Rachel Jeffrson, www.appfolio.com

H

ave you ever been in a grocery store or at a sporting event and there was zero cell service? That feeling you get when you are separated from your friends and family and can’t send them a text, or check on a major developing news story—it’s frustrating and sometimes scary, right? Now imagine you are a renter and this was your experience every day from within your own home.

In the past, a renter’s only real requirement for a place to live was basic utilities: water, electricity, heat. Today, property managers need to provide another utility in order to attract renters; cell phone service has become a necessity that tenants demand and expect. If today’s renters can’t access the internet or make calls from their living rooms, they are not likely to choose your property over one that does.

Some renters are very proactive about checking connectivity before they rent a home or apartment. According to the New York Times, tech-addicted renters are likely to stop by to check the number of bars of cell phone reception before they make a decision to sign a lease. Landlords with properties that can’t offer good connections are likely to struggle attracting and retaining renters.

Wireless Connectivity as a Basic Utility In the U.S., internet users use their cell phones and tablets to connect to the internet more than they use desktop computers. Even some people who use traditional computers still want to connect to the internet wirelessly. And many people don’t know what a landline is and only use their cell phone as their primary form of communication.

At the same time, many builders construct new apartment or condo complexes out of concrete, steel, and eco-friendly glass. These materials might make the buildings strong, safe, and energy efficient. However, they

might also block cell phone signals.

Certainly, people want to live in secure and comfortable buildings; however, they also want to text and browse the internet from their smart phones.

Fixing Wireless Connectivity Problems in Residential and Commercial Buildings To solve this problem, building owners have turned to communications companies for solutions.

Communication companies can visit to analyze parts of the building where signals are weak and strong. Once the technicians diagnose the problem, they can use fiber cables and antennas to strengthen the weak signals without

interfering with places where reception is already strong. Unless you offer free wi-fi, landlords can’t usually control which providers that their customers use. Because of this, the communications company has to make sure that their solutions work for all local providers and not just one or a select few.

Tenants are likely to turn away from rental units that can’t offer them good connectivity. Once the problems with communication get remediated, landlords can turn the negative into a positive. Today’s renters keep their cell phones and tablets with them almost all of the time. When a property manager can advertise the building’s great reception, they are likely to have a selling point that can set them apart from competition. Obviously, this building feature will appeal to young adults. However, it’s also likely to draw in families with kids that need to do homework, older adults, and the majority of people who rely upon their smart phones in every aspect of their lives.

#starttoday

Seattle

Bellevue

206-633-1700 • 425-453-4003 Mention this ad and receive...

$50 OFF

24/7 Emergency Service

ASK ABOUT SPECIAL PRICING Serving Greater Seattle for 50 Years!

Seattle • Bellevue • Renton • Lynnwood Lic. No. BESTPGL973CD

Best Plumbing in Seattle since 1968

4129 Stone Way N. • www.bestplumbing.com

SERVICE

Faucet/Fixture Repairs Water Line Replacement Water Heater/Boiler Services & Installation

DRAIN CLEANING Residential & Commercial Service Commercial Hydro Jetter We Keep Your Tenants Happy

SEWER REPAIR

TV Sewer Inspection System Commercial Hydro Jetter/Pipe Locating Trenchless Sewer Replacement Rental Housing Journal On-Site · August 2017

Asphalt Repair | Concrete Repair | Striping | Sealcoat $$$ IT’S BUDGET SEASON $$$

START NEXT YEAR’S PROJECT TODAY!

(206) 760-8600 admin@p3nw.com 21

Rental Housing Journal On-Site

My Multifamily Investing Philosophy...continued from page 5 If you follow the market where there is an increase of jobs and the demand for jobs, you will not go wrong. Watch to see if the employers, or the big box chains are moving into that part of town or that city.

The emerging market is one that is in the path of progress where more businesses are moving - north, south, east or west. Local agencies are showing up. There is exciting growth in these statistics. That is the place to go. We moved into one market that has served us really well in my company.

We have seen some assets gaining 60 to 100 percent in value in 18 to 36 months. That is quite remarkable. We are very happy with these results.

What are the guidelines we look for emerging markets?

Here is what we look for: • Stable industries • Large businesses • Presence of service industries • New jobs • Appealing lifestyle • High potential of renters vs. home owners • Stable capital • Universities in the market • Big box retail shopping hubs and health clubs Most of these big box retail and shopping hubs do a lot of research before they come to town.

They are investing large sums of money into that part of the city or town. If that is happening, we know that things are going to move in the right direction. They are waiting for

22

many people to come to that area to buy their goods. That is great indicator for emerging market.

Of course, the airports, infrastructure, roads, transportation and utilities all need to be there.

So, what else do I really consider when we do successful execution of syndication and buying of assets and so forth?

My philosophy is to talk to the seller’s broker always!

For commercial real estate, do not involve the buyer’s broker at all. It just complicates things. You do not get the real answers and we cannot really bind with the seller.

Make sure there is a story behind the asset One key thing is to make sure you know the story behind the asset.

Why is the owner selling the asset?

What is the time line?

How soon do they want to sell it and so on?

What kind of renovations have been done in the last three years?

How much money was spent?

What was done with that money?

What interior or exterior of multifamily or commercial real estate did they really improve on?

How old are the appliances, the roofs and the boilers?

In addition, when was the last insurance claim that was done on the property?

Definitely ask the broker for market comparisons on the rent.

Where are we going to take the assets in the next three to seven years?

What is the exit strategy? You always want to buy with the exit strategy already formed.

The most realistic answer comes straight from the horse’s mouth, because if it the listing or the seller broker they whack you in-between. I do believe in having a real estate attorney.

Maybe a friend or a confidant that is a team member. Someone who could really look through all the contracts and guide you along.

These negotiations are more straight forward if you are dealing with a selling broker. They like us too because they are getting commissions from both sides. I also like to ask what might be the minimum that the seller might expect. Also what is the time line? For example, if there is a deadline I like to know that so negotiations can begin correct timely manner.

We also want to make the job easy for the brokers, lenders, inspectors and investors.

That helps us build great relationships and a great reputation. If a good reputation precedes you, you will be able to get more people investing in your multifamily investing deals.

Remember the good people like the brokers, attorneys, managers, banks, lenders, and investors are the team members who really make our business. We want to make sure that they see us as easy people to work with.

We have talked about how to build a great team. If you do business and

it is easy, straight forward and with integrity, then investors will like to work with you.

You want to make working with you easy for them. Maintaining good relationships in multifamily syndication is a big key to success.

About the author: Vinney Chopra is the Founder and CEO of Moneil Investment Group and President of Ideal Investments Group.

His latest accomplishments include acquiring 12 multifamily assets in the last 28 months worth $132 million. His last two syndications were sold out in just a few hours, and one in 36 hours raising $4.7 million and another one $6 million in eight hours. Between the two syndication companies he founded, Vinney’s team acquired and managed over $236 million worth of assets. He is a mechanical engineer.

After graduating from The George Washington University and finishing his Master’s in Business Administration in Marketing, he shifted his focus to marketing and motivation. He was a professional fundraising consultant and motivational speaker for more than 35 years. Vinney and his wife started their real estate investments in 1983. He currently owns single-family homes and multifamily units in Texas, California, Atlanta, Arizona and India. Many times, people call him “Mr. Enthusiasm” or “Mr. Smiles.” He likes to bring great value to everyone he comes in touch with.

Rental Housing Journal On-Site · August 2017

Rental Housing Journal On-Site

Unprecedented Demand Staving Off ...continued from page 13 to stay resilient during the 2019-2020 recession downturn scenario, giving the area one of the brightest apartment outlooks in the nation.

Jacksonville Jacksonville's apartment sector is being boosted by strong demographics, with the market's population expanding at three times the national rate.

Employment has seen a similar increase, with thriving education/healthcare and professional/business services sectors anchoring the region's strong economy.

According to REIS, effective rents are enjoying solid growth in the mid-3 percent range. A manageable supply pipeline will allow vacancies to fall to a cycle-low 4.3 percent by year's end, according to Ten-X projections, while NOI growth should hover around 5 percent this year before falling to the mid-3 percent range through 2020.

The Multifamily Sector's Top Five 'Sell' Markets: New York City New York City is suffering from an unprecedented supply boom of market-rate apartments following the completion of nearly 10,000 units since early 2016. Another 40,000 marketrate units are due to deliver by the end of 2018, which should drive vacancies above 11 percent. Though metro employment is at an all-time high, the pace of job growth has cooled, and the city's population is growing at its slowest rate since 2007. Effective rents have already begun to contract, and will decline by 2.7 percent annually through 2020. NOI will march in lockstep with

rents, declining by an annual average of 4.5 percent in the same timeframe.

San Francisco Multifamily completions have outpaced absorption in San Francisco every year since 2014, leading to a steadily rising vacancy rate. Rents weakened last year in response to increasing availability. While the city's unemployment ranks well below the national average, the pace of employment growth has slowed from the upper-4-percent range in early 2016 to the mid-2-percent range in 2017, due in large part to a slowdown in the city's critical information sector. According to Ten-X projections, the region is likely to face annual NOI declines of roughly 4.7 percent through 2020.

San Jose Slackening demand and a surge of new supply have dampened multifamily prospects in the Silicon Valley hub of San Jose, pushing vacancies up to the low-4-percent range. While the area's information sector remains strong, overall job growth has cooled significantly. Unemployment is tight at roughly 3.4 percent, though a slowdown in population growth is limiting the potential for future expansion.

Effective rents, which saw meteoric growth earlier this cycle, have seen dramatically slowed expansion, and rents are expected to begin contracting in 2018, as vacancies climb above 7 percent. The region is expected to see annual NOI declines averaging 3 percent from 2017-2020.

Washington, D.C.

In a market where government accounts for three of every 10 jobs, uncertainties about federal hiring have all but put employment growth on hold. While unemployment exceeds the national average, D.C. demographics are booming, with the city experiencing population growth of 1.6 percent in 2016. Trouble for the market is looming in the form of a supply surge that will introduce some 12,000 new apartments by the end of 2018. Ten-X forecasts that demand will be unable to keep up with incoming supply, pushing vacancies above 9 percent by the close of 2020, and stagnating NOIs for multifamily investors.

residential and commercial properties totaling almost $48 billion. Leveraging desktop and mobile technology, Ten-X allows people to safely and easily complete real estate transactions online. Ten-X is headquartered in Irvine and Silicon Valley, Calif., and has offices in key markets nationwide. Investors in the company include CapitalG (formerly Google Capital) and Stone Point Capital. For more information, visit Ten-X.com.

SOURCE Ten-X Commercial Related Links http://www.Ten-X.com

Oakland Employment levels are at an all-time peak in Oakland, propelled mainly by the professional/business services and education/healthcare sectors. While population growth in Oakland exceeds the national average, the market is subject to negative spillover effects from declines in San Francisco's information industry. Apartment vacancies remain low at 3.4 percent, but that figure represents a 40-basis-point increase in the last year. Under the Ten-X 20192020 downturn scenario, completions are forecasted to heavily outweigh demand and trigger rent contractions.

Modest NOI gains in 2018 are projected to give way to average declines of 4.4 percent per annum in 2019 and 2020.

About Ten-X Ten-X is the nation's leading online real estate transaction marketplace and the parent to Ten-X Homes, Ten-X Commercial and Auction. com. To date, the company has sold 292,000+

you time, energy and money. Get started today.

It’s easy: 1. Call a program representative at 1-866-997-9767 or to schedule a free email on-site energy assessment.

2. An energy specialist will highlight specific free in-unit measures and identify additional low cost opportunities.

We also provide referrals to pre-screened contractors from our Contractor Alliance Network.

3. Schedule your direct install appointment and contractor bids for high priority energy efficiency improvements.

The savings start here.

Schedule your free appointment today.

Rental Housing Journal On-Site · August 2017

23

Rental Housing Journal On-Site

Need Staffing?

Don’t take chances with staffing! Our temps are tested, trained, experienced, and fully insured!

Serving The Pacific Northwest Since

Hiring, Training, and Placing the Property Management Leaders of Tomorrow

Daily • Weekly • Monthly • Permanent Temporary On-Site Staff

Managers • Leasing Agents • Maintenance • Grounds Keepers

Greater Seattle-Tacoma Area (425) 456-3663

Greater Portland-Vancouver Area (503) 644-8233

Greater Denver-Boulder Area (720) 822-0117

www.apartmentadvantage.com 24

Rental Housing Journal On-Site · August 2017