Valley ( Eugene, Salem, Corvallis , OR ) RHJ February 2018 by Professional Publishing, Inc

February 2018

Rental Housing Journal Valley

2. How to Make Apartment Move-In Easier for Tenants and Managers 3. RHAO President’s Message 7. Dear Maintenance Men:

EUGENE · SALEM ·ALBANY · CORVALLIS WWW.RENTALHOUSINGJOURNAL.COM • PROFESSIONAL PUBLISHING, INC

Pest Preventative Maintenance Steps for Rental Housing

Regulatory Changes Bring Uncertainty to Portland’s Apartment Market Marcus & Millichap

P T

he maintenance check up this week, provided by Keepe, asks whether you are taking the pest preventative maintenance you need in your rental housing to protect your investment and your tenants. From mice to ants and cockroaches, pest infestations can cause serious property damage and traumatize tenants, significantly worsening their perception of their living conditions. Property managers need to be aware of what draws pests to rental homes and adopt simple pest preventive maintenance steps that can protect properties and tenants.

7 Types of Pest Preventative Maintenance Steps

No. 1 - To avoid any and all infestations, it is fundamental to regularly inspect properties for cracks, crevices and any kind of openings that would allow unwanted critters to access indoor spaces. This includes checking open vents and drainage pipes. No. 2 - Pests need a source of moisture to survive, so it is adequate to minimize the presence of standing water by regularly checking whether pipes, AC units, gutters or downspouts leak or allow water to accumulate; scheduling seasonal maintenance and timely repairs for those systems is ideal. No. 3 - Clogged and debris-filled gutters can make for a cozy hiding spot: making sure that gutters are regularly cleaned avoids this issue. No. 4 - Regular trimming of trees and plants located next to windows and entryways can prevent branches from allowing pests to gain access to them. ...continued on page 8 Professional Publishing Inc., PO Box 6244 Beaverton, OR 97007

olicy change could exacerbate housing shortage. A moderating pace of completions and persistent rental demand will keep vacancy low in 2018. The rate has remained below 4.5 percent for eight years, pushing rent up to record levels. The shortage of units, particularly for low- and moderate-

income households, led the city of Portland to pass the inclusionary zoning policy that required builders to set aside some units for low-income residents. The city estimates 23,000 units are needed to meet the need for low- to moderateincome housing. Many developers fear that the required affordable rentals will not generate enough returns to offset the cost. A surge in multi-housing permitting before the policy could bring thousands

of new market-rate units to the metro but builders may decide to hold off on these projects. Slowing completions in 2018 coupled with strong tenant demand will push down vacancy and drive a respectable increase in rent growth. Range of opportunities entice investors. Low vacancy and steady economic growth will maintain investor interest in ...continued on page 6

New Tax Law Holds Favorable Prospects for Commercial Real Estate Potential to Boost Space Demand and Capital Flows Marcus & Millichap

ew tax law retains key provisions for real estate investors. The highly anticipated tax reform recently signed into law by President Trump retained numerous key commercial real estate provisions. The1031 tax-deferred exchange, the mortgage interest deduction for investment real estate and asset depreciation had few material changes. This consistency in tax law will enable investors to move forward with most of their existing investment strategies. That said, there are many provisions in the new tax law that will have a more nuanced effect on the sector, and these more subtle adjustments could create significant new opportunities for real estate investors.

Finalization of tax rules to reduce uncertainty. Over the last year, elevat-

ed uncertainty generated by the range of potential government policy changes, including tax laws, caused many investors to move to the sidelines. A more cautious outlook pervaded the industry as investors awaited clarity on taxes, fiscal policy and a change in Federal Reserve leader-

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ship. This perspective could begin to ease as the implications of the new tax law firm up and investors better understand how the new rules will affect their investments. The new tax plan offers generous tax cuts to corporations and pass-through entities such as Limited Liability Companies(LLCs), and investors may see the new

tax rules as an opportunity to reconfigure their portfolios. The new tax structure will apply to 2018 income for tax filings in 2019.

Reduced taxes on pass-through entities may boost capital flows. Per...continued on page 4

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Rental Housing Journal Valley

How to Make Apartment Move-In Easier for Tenants and Managers By John Triplett

in apartment move are:

he apartment move-in process can often frustrate both tenants and property managers as it is not just the physical move-in. It is all the processes that need to be done before that moving truck ever shows up. Landlords and property managers know that tenant communication is one of their biggest challenges. Technology can improve that communication, including digital tools that improve the move-in experience. Millennials especially appreciate easy-to-use technology from apartment management. “The issue for the resident is the average American takes 10 to 15 hours to just deal with the actual process of moving,” said Ash Bell, vice president and executive director of property management for moving website Updater.com, in an interview with Rental Housing Journal. “And it is not only the physical move, but the process of moving. Think of all the things from utilities, to forwarding the mail and the businesses you interact with on a day-in-day-out basis. All those companies need to be notified of your new address. You need to turn off utilities at your current place and turn them on at your new place. If you’re moving into an apartment that requires renter’s insurance, you need to get that renter’s insurance to protect your assets,” Bell said. And the list goes on. “You need to book a moving company. You need to reserve an elevator if you’re moving into a class A property in the city. There are just hundreds of tasks that a person needs to deal with when they look at moving,” Bell said.

Communication is key to solving apartment move-in issues

“Single-family management is the same as multifamily as far as some of the movein problems,” Bell said. With larger multifamily properties, “maybe they have it on more of a mass scale because they may have a 400-unit property that has people moving in every day, where with a 50-unit property the likelihood is that we only have one or two moves a month. But it’s still all of the same issues. “There’s just a lot that every stakeholder in running a property encounters when it comes to moving,” Bell said. And it is what he looked at in developing the technology. Three moving stakeholders in multifamily: • The resident

• Change of address • Utility changes

• Local offers where they can save money

Reducing frustration for the property management team

• The site team • The ownership “Those are the only three stakeholders so any time you look at processes or technology, you have to filter through those three stakeholders. If it brings value to any one of them, it’s something you should consider. If it brings value to all three, you’ve got to do it,” Bell said.

An apartment move-in customer service tool

Vikki Sherman, senior director of marketing at Fairfield Residential said, “I think it’s a challenging time in a customer’s life, so we really approach the move-in process in particular, as well as the move out, in the eyes of the customer. We’re trying to make their lives easier, simpler, better, the whole process improved, so that they have a good experience when they’ve got a lot of other things happening. “Oftentimes there’s a big life event that is preceding the move, kind of causing a move, whether it’s an addition to the family, a marriage, a divorce, something big in their life that’s happening. So the move has different nuances depending on that, right? It could be a very happy occasion. It could be a sad occasion, and so, in essence, we just want to make sure that we’re offering them something and making that transition a smooth one, and a positive one for them. “The benefits from the property management side of a tool like Updater is, it’s very easy for us to onboard, and implement, and be able to quickly provide the extra level of service to our customer,” she said regarding her company which manages 44,000 units across the country. “In 2017, Fairfield averaged about 1,500 move-ins per month across our portfolio.” “Updater is very quick. They do a lot of the heavy lifting. The email invitation for the resident to use the service is automated, so it’s not anything manual that the

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property manager needs to do, yet they’re able to give this time-saving tool to a future resident,” Sherman said. Jennifer Staciokas, senior vice president at Pinnacle, seconded what Sherman said about the customer service aspect, “I would say it’s saving more time for the renter than it is for the property manager. For the property manager, the value to them is that it’s an added amenity that they can offer to their renters to make their move-in seamless. She said the property managers are “making sure that they’re letting their clients, as customers, know, ‘Hey, you’re going to be receiving an email. This is the benefit that you’re going to receive from it, and this is what you should do to utilize that service,” Staciokas said.

How many tenants use Updater when it is offered?

Staciokas said Pinnacle saw more than 9,000 moves last November (they have 165,000 units) and invited a total of 9,799 residents to use the tool. She said about 70 percent of the tenants adopted and used at least some features of Updater. Sherman said that overall they have seen about an 80 percent adoption rate of the tool in their properties. “We actually see really good usage of the tool,” Sherman said. “I don’t have the official open rate for a whole year but I would say in the last 90 days, we’ve seen about 80 percent of those emails get opened, which is an incredible open rate to begin with. We see about 60 percent of those invites be accepted. Meaning, someone opens it, they read the content, they say, ‘Yes, I’m interested in this tool.’ Then, the actual usage ends up being at about 50 percent, which is great. I mean, it’s hard to get a customer’s attention during that busy time. “You know, the really fun thing about Updater is, they give you a dashboard. So you can really kind of quantify the results. We find that residents are using about half of the services offered within the Updater tool because there’s things like connecting with utilities, there’s changing your address, there’s sharing your move digitally on social media, there’s moving services. “So when we quantify the tools that our residents are using, and the number of residents over the last 90 days, our residents have saved over 3,000 hours. If they had to manually change their address, if they had to call all these utility companies, they would have spent quite a bit more time,” Sherman said.

Three top items most tenants use

“Our customers, today, are expecting things to be frictionless. They like things to be easy. They like things to be quick. They’re used to doing things online. The ability to offer a customer what they want and need I think definitely reduces frustration for a property management team,” Sherman said. “We’re meeting the demands of today’s customer and it is also a feel-good, right? You’re saving your new resident time. You’re making their move-in experience better. Ultimately, you’re improving the satisfaction with the process. “Once you have happier customers, you yourself are able to focus on the things to make better next. I definitely think it reduces some frustration on the property manager side, in that aspect. “On the customer side, I think our industry certainly has a reputation for doing things in an old-school manner. This is one more way that we are meeting that demand of the tech-savvy customer who finds doing things on paper in a manual process to be not in their normal day-today experience, right? “They’re shopping online. They’re having food delivered to their house. They’re doing all these things in a digital world, so it makes sense that not only can they lease online, and pay rent online, but they can coordinate some of their move-in details, as well,” Sherman said.

Updater integrated with many companies

Bell said Updater is integrated with all of the major property management software companies. And Updater white labels (allows apartments to put their own brand) the service so the apartment community gets the credit and it can fit with core property management tools. “We’re doing all the heavy lifting. The property gets all the credit,” Bell said. He said having a good move-in process helps tenant retention and “statistics have shown that move-in experience - how things go during that time - increases the likelihood that they will renew. “Why waste all those dollars that you deal with from a marketing standpoint to get somebody attracted to your property and ruin it with a really bad move-in experience? If you give them a great moving experience, you’re helping there,” Bell said.

A sales tool for the property

Bell said Updater can serve as a sales tool for the property. “So if I were a leasing associate and I were taking you on a tour of apartments, I would let you know as I’m showing you a model unit,” Bell said. “I’m showing you the workout facility and the pool, and also say, ‘One of the things that we want to let you know is we understand that moving can be very time consuming and stressful. So one of the things that we do, is we provide a free moving concierge, digital

Rental Housing Journal Valley · February 2018

Rental Housing Journal Valley

President: Ron Garcia • Vice President: Phil Owen President Elect: Mark Passannante • Past President: John Sage Secretary: Lynne Whitney • Treasurer: Sandra Landis • Office Manager: Cari Pierce

RHAO President’s Message

Decency and Dignity or Disrespect and Drama? Ron Garcia, RHA Oregon President

ast month at the January dinner meeting, RHA Oregon had former newscaster Kelley Day speak. Kelley has spent her career in front of the TV cameras and is a consummate professional. It was great to have her share her insights and experiences on how to present a story in its best light. These days that seems to be getting more difficult. There is a new rancor now being substituted for communication over the cures to Portland’s housing crisis. As rental property owners, it’s no longer enough to provide quality housing. We all need to learn to be better story tellers. Let’s start off with a couple of observations: Portland is one of the world’s 10 most livable cities according to a recent list in Metropolis Magazine. Portland ranks alongside with Helsinki, Copenhagen, Sydney and Singapore. Additionally, Oregon is one of the fastest growing states in America, and it recently ranked # 2 for in-bound moving vans nationwide. There is no question that we need to come together to solve our housing needs. Yet Landlords are stunned that the govern-

ment would interfere with contractual clauses that allow for the simple termination of an agreement. They are outraged that their income could be arbitrarily capped with no regard to the free market, (no matter how low they’ve been voluntarily kept for years past). They are flabbergasted to learn they must pay thousands of dollars for Tenant relocations. Tenants are also in conflict. Those that live in comfortable and affordable homes may not want to rock the boat. Many live with the anxiety that their safe haven could all come to an end with a single notice. Others personally feel the hardships of the rising economy around them, and have been forced to find substitute housing; to become roommates; move to less desirable locations. For them, that rental property is the center of their life… it’s not ‘‘just a business that should earn a profit’’. Meanwhile, however, tenant / landlord court cases are rife with accusations from both sides for unwonted damage and neglect left by the ravages and lack of care of that other party. So I ask myself: What’s a professional property owner to do? Without owners willing and able to invest in properties we have no inventory. And without tenants willing and able to

Rental Housing Journal Valley · February 2018

pay market rents we have no incentive to build more housing. Has our industry devolved into nothing more than crisis management trying to ward off government restrictions, collections and lawsuits? I often rely on basic rules to solve problems. One rule is what I call the ‘‘zipper theory of life’’: When a zipper disconnects, the solution is to move the clasp back to the point of separation and start over. How far back do landlords and tenants need to go in order to re-group? Let’s consider the term ‘‘Landlord’’, a title that itself is stuck in the past. Who wants to be ‘‘lorded’’ over by a profiteer? We should re-brand ourselves as ‘‘Rental Property Providers.’’ We should ensure that our properties are safe and comfortably livable. We should make an effort to consider the needs ofour clientele ---because without good renters our properties soon become derelict. Tenants ought to consider their obligations as well. Normal wear and tear shouldn’t be an excuse to allow mold to grow, grease to build up, yards to grow out of control or smoke detector batteries that save lives to expire. Good Tenants respect and thrive in their homes and value Good Property Owners.

10520 NE Weidler, Portland, OR 97220 (503) 254-4723 • Fax (503) 254-4821 info@rhaoregon.com • www.rhaoregon.org

As I move the zipper back further in time, I found a connection from the oldest book in print, the Bible: ‘‘Put away from you all bitterness and wrath and anger and wrangling and slander, together with all malice, and be kind to one another.’’ (Ephesians 4:31-32) Perhaps we can be encouraged with the fact that for thousands of years there has always been hope that people can overcome conflicts with decency and dignity in place of disrespect and drama. Those are the stories that should be really worth telling. •

Rental Housing Journal Valley

New Tax Law ...continued from 1 haps more important than the modest changes to the core commercial real estate tax rules that investors have been most focused on is the reduction of taxes on pass through entities. Owners of these types of companies will enjoy a 20percent deduction on passthrough income, though there are several restrictions that will apply to this deduction. This favorable tax treatment will encourage investors to

increasingly focus on after-tax yields when comparing their investment alternatives. On an after-tax basis,commercial real estate could offer a much stronger risk-adjusted return than options such as dividend stocks and bonds. This could entice additional passive capital to flow to the sector through syndicates, partnerships and other pass through funds. This influx of capital,should it manifest, could

place downward pressure on cap rates.

Tax-induced behavior changes will be meaningful. In addition to the direct

behavior. At the same time, the elimination of the personal mandate of the Affordable Care Act (Obamacare) could impact long-term demand for healthcare real estate. The new rules could also spark increased consumption spending and more business investment into infrastructure.

Executive Summary

■ 1031 Exchange: Tax-deferred exchanges have been retained for real estate. ■ Business Interest Deduction: Interest on real estate loans remains deductible for real estate investments, but using this deduction will lengthen the depreciation period for real estate assets. ■ Depreciation: Depreciation timeline remains unchanged if mortgage interest is not taken. If the mortgage interest deduction is used, then the depreciation time-line for commercial properties increases from 39 years to 40 years and for residential properties it rises from 27.5 years to 30 years. ■ Carried Interest: The hold time of deduction has been raised to pass-through advantages, but taxpayers received a reduction partment demand assets increases from one year to $24,000 for married couples some new investors will enter to their taxable income that likely to rise. three years to treat earnings as capiThe previous tax effectively offset a portion ($12,000 for individuals), and the market with direct acquital gains. rules created an economic of the housing payment. as a result the threshold home sitions. The additional capital price to benefit from itemized will undoubtedly fl ow across The threshold home price to ■ Pass-Through Income: Business incentive to purchase a home deductions has increased to a variety of property types inreceive this benefit naturally owners receive a 20 percent deducthrough itemized deductions. the $400,000 range for married cluding apartments, self-stordepended on interest rates tion on qualified income generatIf the mortgage interest and ed by pass-through entities such as property taxes exceeded the and local property tax rates couples. Because the threshold age facilities, and retail, office LLCs, but there are some restricold standard deduction of but was in the $200,000 range has increased well above the and industrial buildings, but tions. For taxpayers earning over $12,700 for married couples for married couples. Under median home price in most a segment that could attract a there will likely be a disproportionate $157,500 (single filers) and $315,000 Taxmetros, Law Changes to Reshape Behavior, share of the ($6,350 for individuals) then the new tax law, the standard modest reduction of first-time investment is single-tenant (married couples), deduction is limHold Implications for Investment Real Estate home buyers, lifting apartment net-lease properties. These ited to greater of 50 percent of the Apartment demand likely to rise. The previous tax rules created an economic demand. assets, often occupied by New Tax Law Savings taxpayer’s share of aggregate W-2 incentive to purchase a home through itemized deductions. If the on mortgage high-credit tenants long interest wages paid by the business or 25 perMarried Single Long-term prospects of and property taxes exceeded the old standard deduction of $12,700 for married $30 leases, afford passive inveshealthcare estate then soft-taxpayers received a reduction to their taxablecent of the taxpayer’s share of aggrecouples ($6,350 forreal individuals) tors compelling yields that gate W-2 wages paid by the business income effectively offset a of portion $20 en.that The elimination the of the housing payment. The threshold home could be structured to benefit plus 2.5 percent of the unadjusted pricepersonal to receivemandate, this benefiat provision naturally depended on interest rates and local property from the new pass-through basis of all qualified property (structax rates but was in the Care $200,000 range for married couples. Under the new tax law, $10 of the Affordable Act that tax rules. In addition, because tures but not land). the standard been raised to $24,000 for married couples ($12,000 requireddeduction people tohas have health these types of properties gen$0 for individuals), and as a result the threshold home price to benefit from itemized ■ Corporate Tax Rate: Maximum tax insurance, will reduce the toerally minimal mandeductions has increased to the $400,000 rangerequire for married couples. Because the rate reduced from 35 percent to 21 tal number of insured by 13 $-10 $0 $50 $150 $250 $350 $450 $550 $650 $750 threshold has increased well above the median home most metros, agement andprice are in available in there percent. Generous expensing and million people reduction over the ofnext will likely be a modest first-time homebuyers, lifting apartment a wide range of price points,demand. Taxable Income (Thousands) depreciation rules on capital expen10 years. As a result, about 5 they are well positioned for ditures over short-term. percentprospects fewer people will have real estate soften. The elimination of the Long-term of healthcare passive investors. ■ Individual Tax Rate: Significant personal mandate, a provision of the Affordable Care Act that required people to health insurance compared Expanded expensing restructuring of personal taxes. havewith healththe insurance, reduce the total number of insured by 13 million people numberwillthat would over have the next 10 years. As a result, about 5 percent fewer people will have health Still uses seven tax brackets, but the been insured if the per- rules benefit niche real esinsurance compared with the number that would have been insured if the personal income span of each bracket has sonal mandate were retained. tate. Changes to the Section New Tax Law Makes Real Estate mandate were retained. This will modestly reduce the future demand for healthchanged and the marginal rates have This will modestly reduce the 179 depreciation rules will Yields Even More Compelling care, implying a slight downshift in demand for healthcare real estate compared with generally been lowered. Standard Apartment future demand for healthcare, favor several niche real estate projections with the personal mandate. Nonetheless, the aging population will still ST-Retail deduction has been increased and investments. thenot reviimplying a for slight down services shift over Retail increase demand healthcare the next 10Under years, just as much as Self-Storage several deductions have been elimisions, business inhave demand for healthcare real mandate would occurred with the personal in place. owners will be Office nated or restricted. Industrial estate compared with projec- able to fully expense up to $1 All Equity REIT Dividend ■ Estate Tax: Doubles exclusion to $11 million of depreciable tangitionsliquidity with thecould personal Market rise; mannet-leased properties positioned favorably. 10-Year Treasury S&P 500 Avg. Dividend The date. newly introduced 20 percent deduction incomeproperty from pass-through million for single filers and $22 milble on personal used to entities Nonetheless, the aging AAA Bonds could invigorate investment in real estate. On an after-tax basis, the yields offered lion for married couples. furnish lodgings. This change population will still increase Baa Bonds Money Market by the sector will be even more compelling than under the previous tax structures. demand for healthcare ser- will allow investors with in0% 2% 4% 6% 8% New capital could enter commercial real estate through syndicators and investvices over the next 10 years, vestments such as hospitality, This report is not intended and should not be Average Yield (Cap Rate)* ment funds that are structured to capitalize on the pass-through advantages, but considered tax or investment advice. It projust not as much as would have student housing and seniors some new investors will enter the market with direct acquisitions. The additional vides an interpretation of the potential effects housing to deduct the full occurred with the personal capital will undoubtedly flow across a variety of property types including apartments, of the new tax law on the commercial real escost of furniture placed sermandate in place. self-storage facilities, and retail, office and industrial buildings, but in a segment that market. A tax accountant should be contate at their properties rathernet-lease could attract a disproportionate share ofvice the investment is single-tenant Market liquidity could sulted for guidance on specific tax rules. depreciating them over properties. These assets, often occupiedthan tenants on long leases, afrise; net-leased properties by high-credit ford passive investors compelling yields that could be structured to benefi multiple years. The rules alsot from the U.S. Commercial Real Estate favorably. The because these types of properties generally new positioned pass-through tax rules. In addition, extend to roofs, heating, venInvestment Trends newly introduced 20 and percent require minimal management are available in aand widesecurity range of price points, they tilation systems 60 deduction from are well positionedonfor income passive investors. in non-residential property. pass-through entities could This provision is largely tar45 Expanded expensing rules in benefi invigorate investment realt niche real estate. Changes to the Section getedreal toward businesses, 179 depreciation rulesafter-tax will favor basis, several niche estatesmall investments. Under the reestate. On an so expense the deduction phases out as 30 visions, business owners will be able to fully up to $1 million of depreciable the yields offered by the sectangible personal property used to furnishbusiness lodgings.investment This change purchaswill allow investors tor will be even more compel15 es exceed with investments such as hospitality, student housing$2.5 and million. seniors housing to deduct ling than under the previous the full cost of furniture placed in service at their properties rather than depreciating New 0 themtax overstructures. multiple years. Thecapital rules also extend to roofs, heating, ventilation and 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17** could enter commercial security systems in non-residentialreal property. This provision is largely targeted toward through smallestate businesses, so the syndicators deduction phases out as business investment purchases and$2.5 investment exceed million. funds that are * As of December 28, 2017 structured to capitalize on the ** Trailing 12-months through 3Q ...continued on page 5 effect the new tax law will have on commercial real estate investments,indirect effects could be equally important. The increased standard deduction and limits on local property and income tax deductions could significantly alter housing demand and

Tax Law Changes to Reshape Behavior, Hold Implications for Investment Real Estate

Total Transactions (000s)

Tax Savings (Thousands)

Rental Housing Journal Valley · February 2018

Rental Housing Journal Valley

Tax Reform: 2017 Tax Law Vs. 2018 Tax Cuts and Jobs Act Provision

Old Tax Law (2017)

Tax Cuts and Jobs Act (provisions effective beginning 2018)

Like-Kind Exchanges

Available under current law for property held for investment

Retained for real property only (real estate).

Business Interest Deductibility

Fully deductible for all businesses

Fully deductible for real estate businesses with some exceptions. Limits on interest deductibility apply to firms outside of real estate with exception for businesses with average annual gross receipts of less than $25 million over past three years.

Depreciation of Buildings

Residential 27.5 years, nonresidential 39 years

If the mortgage interest deduction is used, then the depreciation timeline for commercial properties increases to 40 years and for residential properties it rises to 30 years.

Carried Interest

Taxed at capital gains rates if held at least a year

Taxed at capital gains rates if held at least three years.

Business Tax Flow-through entity: Maximum rate of 39.6% REIT dividend maximum Rates rate of 39.6% Corporation: Maximum Rate of 35%

Flow-through entity: 20 percent deduction available for qualified pass-through income with some exceptions. REIT dividends eligible for 20 percent deduction. Corporation: Maximum rate of 21 percent. Flow-through entity deduction sunset after 2025. Corporate rate cut permanent.

Active Losses

Fully deductible against active income

Deduction of net active pass-through losses against wage or portfolio income limited to $500,000 (married filers) and $250,000 (single filers). Disallowed losses may be carried forward as part of a taxpayer’s net operating loss. Provision effective through 2025.

Individual Tax Rates

Seven brackets ranging from 10 percent to 39.6 percent; highest rate effective at $418,400 (single filers)/$470,700 (married filers).

Seven tax brackets ranging from 10 percent to 37 percent. Highest rate effective at $500,000 (single filers)/$600,000 (married filers). Rate structure expires after 2025.

Standard Deduction

Single: $6,350, Married: $12,700

Single: $12,000, Married: $24,000.

State and Local Taxes (SALT)

State and Local Taxes (SALT) deductible. Available deduction declines for income above $266,700 (single), $320,000 (married).

$10,000 limit on deduction of state and local taxes including property tax and either income tax or sales tax.

Mortgage Interest Deduction (personal)

Deduct interest for primary or secondary residence up to $500,000 (single) or $1,000,000 (married). Home Equity Line of Credit deductible up to $100,000

Deduct interest for primary or secondary residence up to $750,000. Home Equity Line of Credit no longer deductible. Loans prior to Dec. 16, 2017, grandfathered.

Estate Tax

$5.49 million ($10.98 million per couple) exclusion, 40 percent rate, and stepped-up basis for inherited assets

Exclusion doubled. Stepped-up basis retained. Provision after 2025 and tax reverts to current law exemption amount indexed for inflation.

New Tax Law Offers Prospects of Economic Lift

conomy starts 2018 with formidable tailwind. The U.S. economy closed 2017 in a particularly strong position, having added jobs continuously for a record 86 months. Unemployment has settled in the low-4 percent

range, supporting stronger wage growth, and there are a near-record 6.0 million job openings awaiting qualified workers. Consumer and business confidence continue to hover near decade-high levels, invigorating retail sales

Core Inflation Rate / Wage Growth

U.S. Core Inflation vs. Wage Growth Core Inflation

Wage Growth

8% 6% 4% 2% 0% 01

17*

10-Year Treasury vs. 2-Year Treasury Yield Spread Tightens 10-Year Treasury

2-Year Treasury

50 pbs

200 pbs

280 pbs

Rate

200 pbs

2% 0%

04 05 06 07 08 09 10 11 12 13 14 15 16 17**

* Through 3Q ** Through December 29

Rental Housing Journal Valley · February 2018

growth and corporate investment into infrastructure. The new tax rules could reinforce many of these trends through the many tax incentives that were created.

Corporate tax reductions likely to boost economy. Al-

will take time, as most workers will see only a modest change in their tax withholding in each paycheck, but in aggregate, it should boost consumption, the primary driver of economic growth in the U.S.

Housing market slowdown though there is considerable debateTax regarding much of the could offset growth. New Law how Offers Prospects of Economic LiftThe recorporate tax savings will filter structuring of the tax rules will Economy starts 2018 with formidable The on U.S.the economy closed through to workers and the broad- tailwind. likely weigh owner-occu2017er ineconomy, a particularly strong position, continuously for a several provisions of having pied added housingjobs market, particularly record months. Unemployment in thewith low-4elevated percenthome range,pricsupthe86 new tax law should sparkhas in-settled in states porting stronger wage growth, and there are a near-record 6.0 million job opencreased corporate investment. es and property taxes. The new tax ingsAccelerated awaiting qualifidepreciation ed workers. Consumer andaffects business confi dence and law home sales in continue several to hover near decade-high levels, invigorating retail sales growth and corporate expensing rules should encour- ways: The increased standard deinvestment into infrastructure. The new taxduction rules could manyrestrain of these age companies to increase investwillreinforce modestly trends through the many tax incentives that were created. ments into plants and equipment, first-time home buyers, while limwhile reduced tax rates on the itations on the deduction of state Corporate tax reductions likely to boost economy. Although there is considrepatriation of overseas holdings and local property taxes will weigh erable debate regarding how much of the corporate tax savings will filter through should spark an influx of cap- on upper echelon housing, particto workers and the broader economy, several provisions of the new tax law ital coming back into the U.S.. ularly in California and states in should spark increased corporate investment. Accelerated depreciation and exThough this capital may the Northeast. The introduction pensing rulesmuch shouldofencourage companies to increase investments into plants be used for stock buybacks and of a lower limit on mortgageholdings interand equipment, while reduced tax rates on the repatriation of overseas dividends, the increased liquidity est deductibility, now $750,000 should spark an influx of capital coming back into the U.S.. Though much of inthis should spark and and stead of $1 million, will also liquidity weigh capital may be usedconsumption for stock buybacks dividends, the increased support economic growth. The economic on higher-priced home sales. Since should spark consumption and support growth. The natural risk crerisk by the inflow recession, the pressure. housing market atednatural by the infl owcreated of so much capital will bethe rising inflationary of so much capital will be rising has contributed about 3 percent to inflationary growth, of Lower personalpressure. tax rates should boosteconomic consumption. The about actual half tax savings that fl ow through to individual tax payers will naturally vary depending on the sector’s contribution levels ofa Lower personal tax rates wide range of variables, but the consensusthe is that most people willthe seenew at least early 2000s. Under tax should boost consumption. a modest reduction in taxes. This will increase discretionary income that should housing’s contribution will The actual tax savings that fl ow law,time, translate to increased retail sales. This will take as most workers will see only weaken. through to individual payers inlikely a modest change in their taxtax withholding each paycheck, but in aggregate, to keep a watchful eye. Theit willboost naturally vary depending ondriverFed should consumption, the primary of economic growth in the U.S. a wide range of variables, but the increased liquidity and consumption levels created by the new tax consensus is that most people Housing market slowdown couldwill offset growth. The restructuring of the tax have the potential to raise inleast a modest in law rulessee willatlikely weigh on thereduction owner-occupied housing market, particularly in states flationary pressure. The Federal This will increase discre-taxes. The new tax withtaxes. elevated home prices and property law affects home sales Reserve raised its benchmark rate tionary income that should trans-deduction will modestly restrain first-time in several ways: The increased standard three times last year and most late to increased retail sales. homebuyers, while limitations on theThis deduction of state and local property antaxticipate inanCalifornia additional three inrate es will weigh on upper echelon housing, particularly and states the Northeast. The introduction of a lower limit on mortgage interest deductibility, now $750,000 instead of $1 million, will also weigh on higher-priced home sales. Since the recession, the housing market has contributed about 3 percent to economic growth, about half of the sector’s contribution levels of the early 2000s. Under the

increases in 2018. The Fed will also likely continue its efforts to reduce its balance sheet by allowing assets acquired during its quantitative easing efforts to mature. Through this process, the Fed will make an effort to put upward pressure on long-term interest rates. The central bank will vigilantly watch for liquidity-sparked inflation. Prepared and edited by John Chang First Vice President, National Director Marcus & Millichap Research Services Tel: (602) 707-9700 john.chang@marcusmillichap. com © Marcus & Millichap 2018 www. MarcusMillichap.com The information contained in this report was obtained from sources deemed to be reliable. Every effort was made to obtain accurate and complete information; however, no representation, warranty or guarantee, express or implied, may be made as to the accuracy or reliability of the information contained herein. No representation, warranty or guarantee, express or implied may be made as to the accuracy or reliability of the information contained herein. This is not intended to be a forecast of future events and this is not a guaranty regarding a future event. This is not intended to provide specific investment or tax advice and should not be considered as investment or tax advice. Sources: Marcus & Millichap Research Services; BLS, CoStar Group, Inc., Federal Reserve, Moody’s Investors Service, NMHC, Real Capital Analytics, Standard & Poor’s, U.S. House of Representatives, U.S. Senate, U.S. Internal Revenue Service, U.S. Bureau of Economic Analysis, policyuncertainty.com

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Portland

Rental Housing Journal Valley

Employment Trends

0% 14

17*

18**

Quarterly Completions vs. Absorption

Units (thousands)

0 -1 05

Rate

8% 4% 0% 16

17*

18**

24%

$150

19%

$100

14%

$50

4% 13

17*

* Estimate; ** Forecast; � Through 3Q;  Trailing 12-month average Sources: CoStar Group, Inc.; MPF Research; Real Capital Analytics

Total Nonfarm Jobs (thousands)

19%

�

Price Growth

$200

Year-over-Year Growth

Average Price per Unit (thousands)

Sales Trends Sales

Total Nonfarm Jobs (thousands)



ing Updater?

Bell said the company has many of the top industry leaders deployed. “We have 30 of the National Multifamily Housing Council (NMHC) top 50 fully deployed. I have another couple that are in partial deployment, meaning they’re doing it in phases. “We are all over the place from a standpoint of size, we can have anybody. Obviously as the NMHC top 50 goes, typically so goes the market. But we have some of the largest single-family providers in this space. We have some of the smallest single-family providers. We have people like

Units (thousands) Rate

Units (thousands)

to you. “The average size I would say is probably average size in the industry, which is “ ‘It’sVacancy going to help with sorting the the will Net you absorption of 5,500 apartments outpace com2018 Market Forecast to 7,000-unit portfolios. But again, $100 mail, booking truck,vacancy getting 14% pletions, lowering to 3.9 5,000-, percent. Last year, va40 bps a moving 44down NMI Rank Portland ascends one spot in the NMI amid tight vacancancy ticked up 10 basis points. we have people that have two properties, those utilities turned on, getting the rent9%gains. 5,$50 up 1 place cy and improving rent er’s insurance required, notifying busi- and we have single-family companies as Rent Strong demand for rentals will spur rent growth. The $0 4% long asperthey’re utilizing one of the single Employment Hiring above the national rate of growth nesseswill ofpersist your this newaverage address. Yourent name it, $1,400 effective will reach month this up 6.0% 13 14 15 16 17* year; employers add 22,000 jobs you’re in 2018.going to be able up 1.9% family property to handle it within year, building on a 5.5 percent gain recorded in 2017. management providers Updater. And that’s just how much we we integrate with.” Roughly half of all completions will be in Investment Central and East Employment growth and tight vacancy generate new Construction for our residents,’ “Bell said. Bell said the site has features specific to 4,800 units Portland. In 2017, of the 6,700 care apartments delivered, housing demand, potentially pushing valuations higher * Estimate; ** Forecast; Through 3Q; Trailing 12-month average Sources: CoStar Group, Inc.; MPF Research; Capital Analytics 440 wereReal affordable housing units, providing little relief to in assets near major employment property managers and others specific to hubs. Cost of Updater to the property the shortage of low-income housing. residents. The site sorts them by login. “So In terms of the cost of Updater.com to residents see something different when Vacancy Net absorption of 5,500 apartments will outpace comthe property, Staciokas said, “Using the they log in than the property manager,” pletions, lowering vacancy to 3.9 percent. Last year, va44down 40 bps cancy ticked up 10 basis points. app is a time-saver, and it’s really viewed he said. as an amenity to make a seamless and Updater, based in New York City, has Strong demand for rentals will spur rent growth. The for the renter. Rent successful move-in just under 100 employees. “A lot of people up 6.0% average effective rent will reach $1,400 per month this “I had inseveral year, building on a 5.5 percent gain recorded 2017. meetings with Updater often say with startups, “Are they going to before we decided to move forward. To be around, are they going to be here five Investment Employment growth and tight vacancy new a no-brainer decision, me, it generate was really years from now?” Bell said. “Well, absohousing demand, potentially pushing valuations higher because it was low-cost for a high-value lutely yes we are. We’re a very stable comin assets near major employment hubs. amenity, which is going to translate into pany. But I think the biggest thing that I potentially more rentals moving forwould want to stress is that we’re really ward,” Staciokas said. excited about some of the features that are coming down the pipeline.” What size are the properties us$150

Year-over-Year Growth

12%

Total Nonfarm Jobs (thousands) Average Price per Unit (thousands)

Rent Growth

16%

Make Apartment Move-In Easier

and proposed changes for retrofitting unreinforced masonryConstruction buildings (URM). Roughly half of all completions will be in Central and East Investment growth andutitight vacancy The URM requirements prompt some owners to listmoving their 4,800 assets. New in- Portland. Salesmay Trends thatdelivered, have a Employment few properties that concierge to everyInone of our 2017, of theres6,700 myself apartments units � housing demand, potentially pushing va * Estimate; ** Forecast; Through 3Q;  Trailing 12-month average vestors may find Sales it worthwhile make the improvements as many of these Priceto Growth our platform,” idents thatGroup, move in here, and it’sAnalytics our giftunits,lize 440 wereReal affordable housing providing little relief to Bell said. Sources: CoStar Inc.; MPF Research; Capital in assets near major employment hubs. $200 properties are in desirable areas.24% apartment the shortage of low-income housing.

Vacancy and Rents Vacancy

Year-over-Year Growth

Completions Net Absorption Research Services 4545 E. Shea Boulevard, Suite 201 Phoenix, AZ 85028 (602) 687-6700 www.Mar3 cusMillichap.com Offices Throughout the U.S. 2 and Canada Marcus & Millichap is not affiliated with, sponsored by, or endorsed by any commer1

Net Absorption

creasing 2 The shortage of units, particularly for low- and moderate-income h than oth the city of Portland to pass the inclusionary zoning policy that requ where a 1 Roughly half of20all completions will be in2%Central and East In 2017, of the set aside somePortland. units for low-income residents. The city estimates 2 continue Construction 4,800 units 6,700 apartments delivered, 440 were affordable housing units, providing little needed 0to meet the need for low- to moderate-income housing. 10 1% band M ca Portland relief to the shortage of low-income housing. fear that the required affordable rentals will not generate enough for asser -1 0 0% the cost. A surge in multi-housing permitting before the policy co tentially 05 07 09 11 13 15 17 14 15 16 17* 18** sands of new market-rate units to the metro but builders may Regulatory Changes Bring Uncertainty tiondecid crite projects. Slowinglowering completions vacancy in 2018 coupled strong Net absorption of 5,500 Apartment apartmentsMarket will out pacethese completions, to withand prot To Portland’s Vacancy down 40 bps push down vacancy a respectable increase inThe rentUR gr Employment Trends 3.9 percent. Last year,Completions vacancyvs.ticked up 10 basiswillpoints. Vacancyand anddrive Rents Quarterly Absorption vestors Vacancy Rent Growth Absolute Change Y-O-Y % Change Completions Net Absorption Policy change could exacerbate housing shortage. A moderating pace of Range of opportunities entice investors. Low vacancyapartme and st completions and persistent rental demand will keep vacancy low16% in 2018. The rate 3 40 4% ic growth will maintain investor interest in Portland. Out-of-state Strong demand for rentals will spur rent growth. The effective rent will has remained below 4.5 percent for eight years, pushing rent up average to record levels. creasingly Rent30up 6.0% 12% competing with local investors for yields up to 100 basi 2 month 3% The shortage of units, this particularly low- and moderate-income households, led recorded in 2017. reach $1,400 per year,forbuilding on a 5.5 percent gain 2018 than other West Coast markets. Properties directly east of the W the city of Portland to pass the inclusionary zoning policy that required builders to 8% where above-average rent growth has persisted for the previous 1 20 2% N set aside some units for low-income residents. The city estimates 23,000 units are continue to garner investors’ attention. Here, initial yields in the 5, u 4% needed to meet the need for lowto moderate-income housing. Many developers 0 10 1% Employment growth and tight vacancy generate band newcan housing potentially be found, demand, below the market average of 5.5 percent. S Investment fear that the required affordable rentals will not generate enough returns to offset pushing valuations higher in assets near major employment hubs. for assets has vaulted property valuations above the previousEm cy 0% -1 A surge in multi-housing permitting before the policy could bring thou0 0% the cost. tentially moderating sales velocity as17*buyers18** become more selec 14 15 16 14 15 16 17* 18** 05 07 09 11 13 15 17 sands of new market-rate units to the metro but builders may decide to hold off on Regulatory Changes Bring Uncertainty tion criteria. Additional risk factors include the tightening of lendin these projects. Slowing completions in 2018 coupled with strong tenant demand and proposed changes for retrofitting unreinforced masonryCon bu To Portland’s Apartment Market will push down vacancy and drive a respectable increase in rent growth. Salesmay Trends Quarterly Completions vs. Absorption The URM requirements prompt some owners to list their 4a Vacancy and Rents Priceto Growth vestors may find Sales it worthwhile make the improvements as Completions Net Absorption Vacancy Rent Growth Policy change could exacerbate housing shortage. Range A moderating pace of of opportunities entice investors. Low vacancy and$200 steady economapartment properties are in desirable areas.24% completions and persistent rental demand will keep vacancy low in 2018. The rate 3 16% will maintain investor interest in Portland. Out-of-state buyers are inic growth has remained below 4.5 percent for eight years, pushing rent up to record levels.with local investors for yields up to 100 basis $150 points higher 19% creasingly competing 2 12% The shortage of units, particularly for low- and moderate-income households, led markets. Properties directly east of 2018 Market Forecast than other West Coast the Willamette River, $100 14% the city of Portland to pass the inclusionary zoning policy that required builders torent growth has persisted for the previous dow where above-average two years, will 1 8% NMI Rank Portland ascends one spot in the NMI am set aside some units for low-income residents. The city estimates 23,000 units investors’ are continue to garner attention. Here, initial yields in the$50 high-4 percent 9%gains. 5, up 1 place cy and improving rent needed 0to meet the need for low- to moderate-income housing. 4% band Many can bedevelopers found, below the market average of 5.5 percent. Strong demand fear that the required affordable rentals will not generate enough returns to offset $0 4% for assets has vaulted property valuations above the previous cycle’s peak, po-1 0% above the17* national rate of growth Employment 14 Hiring the cost. A surge in multi-housing permitting before the policy could bring thou16 tentially moderating sales velocity as17*buyers18** become more selective 13 in acquisi- 15 05 07 09 11 13 15 17 14 15 16 year; employers add 22,000 jobs in 2018 1.9% sands of new market-rate units to the metro but builders may to Additional hold off on risk factors include the tightening of lendingup tiondecide criteria. requirements these projects. Slowing completions in 2018 coupled withand strong tenant demand proposed changes for retrofitting unreinforced masonry buildings (URM). Roughly half of all completions will be in In C Construction will push down vacancy a respectable increase inThe rentURM growth. requirements prompt some owners to list their assets. New inVacancyand anddrive Rents Salesmay Trends Portland. In12-month 2017,average of the 6,700 apartm 4,800 units � Through  Trailing * Estimate; ** Forecast; 3Q; may findor it any worthwhile make the improvements as many of these Research; Real Capital Analytics Vacancy identified Rent Growth Sales Priceto Growth cial tenant or lessee in this advertise- vestors or subsidiaries, agent, product, service, or Sources: CoStar Group, Inc.; MPF 440 were affordable housing units, providi Range of opportunities entice investors. Low vacancyapartment and steady econom-are in desirable areas. $200 properties 24%and is ment. The presence of any corporation’s logo or commercial listing of Marcus & Millichap, 16% the shortage of low-income housing. ic growth will maintain investor interest in Portland. Out-of-state buyers are inname is not intended tolocal indicate or for imply affilsolely included for informational purposes only. 2018 Marcus & Millichap. All Rights Reserved. creasingly competing with investors yields up to 100 basis points higher $150 19% 12% iation with, or Coast sponsorship endorsement Marcus &Market Millichap is a service mark of Marcus & 2018 Forecast Net absorption of 5,500 apartments will Vacancy than other West markets.orProperties directlyby, east of the Willamette River, 44down 40 bps $100 14%Inc., © pletions, lowering vacancy • to 3.9 percent said corporation Marcus & Millichap, its affiliates Millichap Real Estate Investment Services, 8% where above-average rent growth has persisted for the previous two years, will NMI Rank Portland ascends one spot in the NMI amid tight vacancancy ticked up 10 basis points. continue to garner investors’ attention. Here, initial yields in the high-4 percent cy and improving rent 5,$50 up 1 place 9%gains. 4% band can be found, below the market average of 5.5 percent. Strong demand Strong demand for rentals will spur ren Rent for assets cycle’s peak, po- Hiring above the national $0 4% 0% has vaulted property valuations above the previousEmployment rate of growth will persist this up 6.0% average effective rent will reach $1,400 p 13 14 15 16 17* tentially moderating sales velocity as buyers become more selective in acquisi14 15 16 17* 18** year; employers add 22,000 jobs in 2018. up 1.9% building ...continuedyear, from 2 on a 5.5 percent gain record tion criteria. Additional risk factors include the tightening of lending requirements 30

Average Price per Unit (thousands)

Completions

Rate

Y-O-Y % Change Policy change could exacerbateadd housing shortage. Range A mode Hiring above the national rate of growth will persist this year; employers 3 completions and persistent rental demand will keep vacancy low in 40 4% ic growt 22,000 jobs in 2018. has remained below 4.5 percent for eight years, pushing rent up t Absolute Change

Average Price per Unit (thousands)

Employment up 1.9%

Employment Trends

Units (thousands)

Portland ascends one spot in the NMI amid

Rate

Year-over-Year Growth

Year-over-Year Change

Total Nonfarm Jobs (thousands)

Y-O-Y % Change

NMI Rank 5, up 1 place

Year-over-Year Change

Employment Trends

2018 Market Forecast Portland

Year-over-Year Change

Portland. Out-of-state buyers are increasingly competing with local investors for yields up to 100 basis points higher than other West Coast markets. Properties directly east of the Willamette River, where above-average rent growth has persisted for the previous two years, will continue to garner investors’ attention. Here, initial yields in the high-4 percent band can be found, below the market average of 5.5 percent. Strong demand for assets has vaulted property valuations above the previous cycle’s peak, potentially moderating sales velocity as buyers become more selective in acquisition criteria. Additional risk factors include the tightening of lending requirements and proposed changes for retrofitting unreinforced masonry buildings (URM). The URM requirements may prompt some owners to list their assets. New investors may find it worthwhile to make the improvements as Portlandproperties are in many of these apartment desirable areas.

Policy c complet has rem 30 3% The sho the city 20 2% set aside needed 10 1% fear that 0 0% the cost 14 15 16 17* 18** sands o Bring tight Regulatory vacancy andChanges improving rent Uncertainty gains. these pr To Portland’s Apartment Market will push  Quarterly Completions vs. Absorption Absolute Change

Year-over-Year Change

Uncertainty to Portland's Apartment Market ...continued from 1

Absolute Change

Regu To Po

The nation’s leading moving app for property management companies. The company works with real estate brokerages, mortgage lenders, student housing, and others to streamline the move-in and out process. The company describes its tool as “Turbo Tax for moving,” helping with all the tasks involved in a move. Updater works with over half of the NMHC Top 50 Managers and Owners, including full rollouts with Greystar, Fairfield, Pinnacle, Avalon Bay and Village Green, among others. The company was named NMHC’s Apartment Innovator of the Year in 2015, #3 Best Place to Work in NYC according to Crain’s in 2016, and Most Innovative Tech Company of the Year by the American Business Awards in 2016 and 2015.

•

Rental Housing Journal Valley · February 2018

Rental Housing Journal Valley

Dear Maintenance Men: By Jerry L’Ecuyer & Frank Alvarez Dear Maintenance Men: One of the maintenance chores I do are caulking and sealing shower/tub fixture flanges and shower walls. My problem is getting the caulking to dry before a resident uses the shower. Any Suggestions? David Dear David: A lot of people will say: “Just tell the resident not to use the shower till the caulking is dry”. Well it doesn’t work and by the time you are driving away from the building, your resident is already taking a shower and your fresh caulking is washing down the drain. Your caulk should cure at least 24 hours before use. Water based latex caulking is easy to use, but very susceptible to water until it is cured. Try using a silicone or polyurethane based caulking for doing tubs, showers, toilets, sinks or other wet locations. It tends to set quickly and will repel water during its cure time. Another solution we have found works well with very busy showers is to remove all the fixtures, including the shower head & arm, valve handles and tub spout, before caulking. (A bit extreme, but effective) We then plug the shower head and tub spout with a capped pipe. Then caulk the tub/shower. We come back 24 hours later and reinstall all the fixtures. One more thought; if you have sliding

shower doors for your tub, check the bottom track. If it is loose, do not caulk until the track is removed, cleaned and dried. Reinstall the track with new adhesive caulk to hold it down and caulk the edges to keep the water out. Dear Maintenance Men: My building gets hit by graffiti on a regular basis. How can I stop this curse? Jim Dear Jim: We understand. Our company maintains several properties that attract graffiti like a magnet. There are several solutions that may help. 1. Painting over graffiti as quickly as possible will help deter future vandalism. We recommend painting over the same

day or within 24 hours of the graffiti appearing on your property. Graffiti vandals like to advertise. By removing the graffiti quickly, the less recognition the vandals will receive, thus making your building less attractive to graffiti taggers. 2. Install lighting in areas prone to graffiti. Motion activated lights also work well to deter vandals. (If you have a sense of humor, install motion activated water sprinklers.) 3. Planting vines or bushes along a wall or the side of the building is a good longterm solution. As the landscape grows, it will make it more difficult to graffiti your walls. 4. Use an anti graffiti paint. The graffiti will easily wash or wipe off making repainting a thing of the past. Dear Maintenance Men: I have a resident who is complaining the garbage disposal smells. I have tried running lemon slices and ice cubes to clean the disposal unit. It works for a short time, but the smell comes back. What steps do you recommend for resolving this problem? Barbra

Text REALESTATE-ROI to 44222

Dear Barbra: The smell may come from a number of places. 1: The first and easiest to check is the rubber splash guard that keeps things from falling into the disposal. Remove the rubber splash guard and turn it inside out. Clean out the debris that have collected and wash with soap and water.

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2: Use a small toilet type bush with soap and scrub the inside of the garbage disposal. This will remove any slime buildup. (For safety reasons, shut the garbage disposal off at the breaker or pull the plug.) 3: Remove the drain trap and clean out any sludge. Many times the horizontal pipe between the trap and the wall may have hard deposits coating the inside of the pipe. The deposits will collect food and debris that may slow the drains considerably. 4: If you have a dishwasher, check the drain line leading from the air-gap or dishwasher to the garbage disposal. It may be full of sludge that will cause a smell to come through the air-gap located next to the faucet. Clean or replace any pipes with deposits or sludge. Check both drain lines for the above problems. 5: Now if you wish, run the garbage disposal with a few slices of lemon and it should smell good and stay that way. Once in a while, throw some ice cubes in the garbage disposal unit to help scrape away any debris. Note: If you would like to see your maintenance question in the “Dear Maintenance Men:” column, please send in your questions to: DearMaintenanceMen@gmail.com 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 CoChair 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.

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Rental Housing Journal Valley

7 Pest Preventative Steps ...continued from 1 No. 5 - All pests are naturally drawn to food, both inside of homes and as found outside in trash cans and disposal areas. Investing in trash cans and bins made of heavy, tough materials that have tight, sealable lids works best for keeping pests from identifying a property as an attractive, food-secure nesting place. Heavy-duty containers also make it difficult for raccoons and possums to force their way into garbage storage areas. No. 6 - Some pests can utilize chimneys as access points and nest in attics and roofs. Having a professional install wiring or screens on chimney gaps can block access. No. 7 - It is fundamental to encourage tenants to be mindful about safe food storage and disposal of organic material. Inside the home, food should be properly stored inside tight containers and fridges. Garbage should be disposed of in a timely manner.

The lineup of unwanted potential pests Ants

Ants are drawn to foods that most humans tend to consume fairly regularly: meat, starches and sweets. While most types of ants nest and live outside, they can easily detect nearby food sources and once found, they return regularly. In fact, ants release a chemical designed to guide them back to the newly found food source, which also indicates this to other ants in the colony. Infestations can easily get out of hand once the thousands of specimens from a certain colony learn where to go for food, which also increases the likelihood of indoor nesting.

Cockroaches

Cockroaches are nocturnal creatures, which makes them much more difficult to spot. Experts warn that in most instances, spotting a first cockroach is likely an indication of an entire colony having nested within the property. Aside from their unpleasant appearance, cockroach activity can severely affect the health of tenants

as their droppings and cast-off skins are known to aggravate asthma, allergies and other breathing conditions. This is a pest preventative maintenance step you should take seriously.

5 REASONS TOTOUSE RENTEGRATION REASONS

Mice/Rodents Just as for ants and cockroaches, food is the main culprit for attracting mice to human homes. Mice represent a serious threat for the safety of tenants as they can carry fleas and diseases that can be severely harmful to humans, such as meningitis. Tenants can be easily exposed to these harms as mice contaminate spaces with their fur and droppings. Mice can take over properties quickly because of their year-round, rapid breeding. Their presence can be quite destructive due to their chewing abilities, which can damage furniture, wiring, and even walls.

Raccoons and Possums

Due to their considerably larger size, those pests are better able to defend themselves once they encounter humans and they feel trapped and threatened. For this same reason, they can endanger pets, especially cats and smaller dogs. Raccoons and possums can also carry rabies, which makes them that much more pressing to invest in proper pest preventative maintenance measures. Summary: These simple 7 pest preventative maintenance steps can save you a lot of headaches and keep your tenants happy and avoid over-reacting over pests in their rental housing.,

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tion.com is an easy to use, database driven software. Most form fields are auto 4. Management Database - Rentepopulated from the database. The modgration.com is an easy to use, database ules are all integrated and work together. driven software. Most form arerentFor example, a customer can fields use the autofunction populated the all database. The roll to from identify delinquencies, mod- fees, ules are integrated andforms workwith apply andall create eviction together. For example, a customer a few simple clicks of the mouse. can use the rent- roll function to identify allValue delinquencies, apply fees,management and cre5. - Large property ate eviction forms with a few simple companies that use Rentegration.com Color Standards for National Tenant N clicks of the mouse. for only forms generation will save time • Logos areover providedother on the CDmethods. in all three forms: and money 5. Value - Large property manage- Mid all black, reversed to white, or in PMS 280 Blue/PMS 7543 Gray spot or 4/colo and small size property managers and Please see belowthat for specific examples. ment companies useuseRentegraindependent rental owners can manage tion.com onlyareforms • No for other colors acceptablegeneration for use for the logo. their entire business at a fraction of the will save over other • Notime alteringand of the money logo is allowed. If you have a special circumstance that requ cost of other and provided onand the CD, please callforms. NTN NATIONAL HEADQUARTERS 1.800.228.0 methods. Midsoftware small size proper• Logos should be put over a busy background. ty managers andnotindependent rental owners can manage their entire business at a fraction ofBLACK the cost of other WHITE (with software and forms.

STATE SPECIFIC FORMS FOR

ARIZONA, CALIFORNIA, COLORADO, Exclusive Industry Partner of INDIANA, KENTUCKY, NEW JERSEY, NEW YORK, OREGON, PENNSYLVANIA, TEXAS, UTAH, WASHINGTON & MORE. Blue PMS 280/Gray and PMS 7543 Exclusive Industry Partner State specific rental leaseof:

OR-RTG-20 Oregon

CHECK-IN/CHECK-OUT CONDITION

REPORT

TENANT(S): __________________ __________________ OR-RTG-24 Oregon ADDRESS: ____________________________________ ______________________________ ____________UNIT: ______________ CITY: ___________________________________ STATE: ________ ZIP: _________________

PET AGREEMENT Rating Scale

= (E)Excellent (VG) Very Good

TENANT INFORMATION

(G)Good (F)Fair (P)Poor

IN Out TENANT(S): ____________________________________________________ DATE:________ LIVING AREAS ADDRESS: ____________________________________________________ UNIT: _________ KITCHEN CITY: _________________________________________ STATE: __________ ZIP: _________ Walls

Out

BEDROOM 3

Walls

DESCRIPTION OF PET(S) Windows

Stove/Racks

Blinds/Drapes

Light Fixtures

Dishwasher Counter Tops

Doors/Woodwork

Locks

______________________

________ STATE:

________ UNIT: _________ __________ ZIP: _________

48-HOUR NOTICE OF ENTRY

Windows

Rods

Pursuant to RCW 59.18.150, this is your WA-RTG-20 Washington 48 hour entering the dwelling notice that your

landlord or their agents unit and ______________________ premises located at (Address) will be CHECK-IN/CHE ______________________ CK-OUT CONDIT ION REPORT______________________ ___________

Floor

Carpet/Vinyl/Wood 3) Type _______________ Breed _______________ Size ______ Age __ Weight ___ Color ____ Name ________ Disposal Vaccinations: Yes____ No____ License Number: ______________

AGREEMENT

___________ ______________________ Out CITY: ______________________ ________ DATE:________ ___________

Blinds/Drapes

Ice Trays

2) Type _______________ Breed _______________ Size ______ Age __ Weight ___ Color ____ Name ________ Vaccinations: Yes____ No____ Floor License Number: ______________ Shelves/Drawer

Additional Security Deposit Required:$

WA-RTG-40 Washington

48-HOUR NOTICE OF ENTRY

TENANT(S): ___________ ______________________ ADDRESS:

Walls

Refrigerator 1) Type _______________ Breed _______________ Size ______ Age __ Weight ___ Color ____ Name ________ Vaccinations: Yes____ No____ Rods License Number: ______________

Light Fixtures

TENANT(S): __________ between the hours of ____________________ (Date) and Doors/Woodwork ADDRESS: . ____________________ ____________________ (Time) ________________ (Time) ____________________ CITY: Locks____________________ The entry ________UN will occur for the following __________ _____ STATE: ________purpose:IT: ______________ ___________ Rating CeilingsScale = (E)Excellent ZIP: _________________ ______________________ (VG) Very Good___________ ______________________ ___________ (G)Good ___________ (F)Fair (P)Poor Electric Outlets IN ______________________ _______________________ Out LIVING AREAS ______________________ In Out _ KITCHEN In Out Walls

Cabinets Tenant(s) Tenant(s) certify that the above pet(s) are the only pet(s) on the premises. Ceilings understands that the additional pet(s) are not permitted unless the landlord gives ten Sink ant(s) written permission. Tenant(s) agree to keep the above-listed pets in the premises Electrical Outlets subject to the following terms and conditions: Floor Garbage Cans

Windows 1) The pet(s) shall be on a leash or otherwise under tenant’s control when it is outside the

Antenna/Cable tenant’s dwelling TV unit. Blinds/Drapes 2) Tenant(s) shall promptly pick up all pet waste from the premises promptly. Fireplace 3) Tenant(s) are responsible for the conduct of their pet(s) at all times. 4) Tenant(s) are liable for all damages caused by their pet(s). Cleanliness 5) Tenant(s) shall pay the additional security deposit listed above and/or their rental agreement as a condition to keeping the pet(s) listed above. 6) Tenant(s) shall notBEDROOM allow their pets to cause any sort of disturbance or injury to the 1 BEDROOM 2 other tenants, guests, landlord or any other persons lawfully on the premises. Walls 7) Tenant(s) shall immediately report to landlord any type of damage Walls or injury caused by their pet. Windows 8) This agreement is incorporated into and shall become part of Windows the rental agreement exe Blinds/Drapes -cuted between the parties. Failure by tenant to comply with any part of this agreement Blinds/Drapes shall constitute a material breach of the rental agreement.

BEDROOM 3

Walls

Landlord

Windows

BATH ROOM

Walls

Stove/Racks

Blinds/Drapes

Towel Bars

Phone

Windows

Refrigerator

Rods

Method Ice Traysof Service:

Sink & Vanity

Floor

Toilet

Tub/Shower

Blinds/Drapes

Personal Service:

Post and Mail:

Rods

Shelves/Drawer

* Add one additional

Carpet/Vinyl/Wo

Disposal

Light Fixtures

Floor day for compliance

if served by post

and mail.

www.Rentegration.com 503-933-6437

_____________________________ Floor Landlord

Light Fixtures

Doors/Woodwork

Fan (Exhaust) Doors/Woodwor k

Rods

Locks

Ceilings

Counter Tops

Cabinets

Locks

Ceilings

Sink

Electric Outlets

Garbage Cans

Smoke Detectors

Windows

Services

Blinds/Drapes

Fireplace Plumbing

BATH ROOM

Cleanliness Heating

Ceilings

Towel Bars

Electricity

Electric Outlets

sales@rentegration.com

Doors/Woodwork

Floor

TV Antenna/Cable Essential

Doors/Woodwork

Floor Locks

Electric Outlets Ceilings

Light Outlets Electrical Fixtures

______________________________ Floor Tenant ______________________________ Light Fixtures Tenant

Light Fixtures

Dishwasher

Sink & Vanity

BEDROOM 1

Hot Water

Toilet

BEDROOM 2

Walls

SOLD Smoke Detectors

Blinds/Drapes

may be reproduced without written

permission.

Blinds/Drapes

Rods

Fan (Exhaust)

of this form may Floor be reproduced without

Rods

Floor

Light Fixtures

Electric Outlets

Doors/Woodwork

Locks

Ceilings

Electrical Outlets

Electric Outlets

Smoke Detectors

Essential Services

Plumbing

Heating

Electricity

Hot Water

Smoke Detectors

written permission.

Light Fixtures

Doors/Woodwork

Locks

Ceilings

Smoke Detectors

Tub/Shower

Walls

Windows

of this form may

be reproduced without

UNACCEPTABLE COLOR USAGE

written permission.

DO NOT change the color

DO NOT alter in any way

MISSOURI APTS SALEM

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Rods

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503.390.6060 gabe@smicre.com www.smicre.com Rental Housing Journal Valley · February 2018