VALLEY
Professional Publishing, Inc www.TheLandlordTimes.com
Vol. 17 Issue 4
April 2013
EUGENE • SALEM • ALBANY • CORVALLIS
MONTHLY CIRCULATION TO MORE THAN 5,000 APARTMENT OWNERS, PROPERTY MANAGERS, ON-SITE & MAINTENANCE PERSONNEL Published in association with: METRO Multifamily Housing Association & Rental Owners Association
Salem Housing Authority Okayed To "Tap Into Private Capital" To Preserve & Improve Public Housing Under New Groundbreaking HUD Initiative The Housing Authority of the City of Salem, Oregon public housing authority is among 68 housing authorities nationwide chosen to participate in a groundbreaking strategy to tap private capital in order to preserve and upgrade their public housing inventory as part of HUD's new Rental Assistance Demonstration (RAD) initiative. HUD's RAD initiative, approved by Congress as part of HUD's fiscal year 2012 budget, will preserve and strengthen 82 public housing units at the Robert Lindsey Tower that is owned and operated by the Salem by generating private capital to address backlogs in maintenance needs. Nationally, RAD is expected generContinued on page 6
Submitted by Portland Chimney & Masonry, Inc.
6 Questions with Darrel Dickson The Landlord Times recently caught up with apartment owner, broker and real estate entrepreneur Darrel Dickson about multifamily industry trends, the economy and real estate investment and management best practices. The Landlord Times: What about the industry has changed most since you started your career? Darrel Dickson: When I started in the business in 1987 interest rates were substantially higher than what they are today. Right now interest rates on 30 year amortization on a Market rate deal are about four and a half percent fixed for ten years. When I got started in the business it was in the 7-8% range for a ten year fixed rate loan. Therefore, if you can find an apartment building that is well priced you have a chance to
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Manufactured Fireplaces: Repair or Replace?
make greater cash flow. There is a large demand to receive a stable return on investment from investors. Many are starved for cash flow. Currently, investors are getting almost nothing on bank certificates of deposits. When I started in this business interest rates on bank certificates of deposits were much higher. The returns through CDs at banks are currently close to zero. Investors can receive 5 to 10% steady cash flow in through owning apartment building. Investors will seek to deploy capital aggressively in the real estate considering the sustained low treasury rates that are available. TLT: What do you perceive for the economy in the next year so? How will this affect the industry? DD: Powerful demographic and economic trends will continue to strengthen the apartment market. The apartment market is in the fourth year of an increasing demand for
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rental units. The US vacancy rates was at 4.3% in 2012, which is resulting in a projected 4-5% rent growth nationally in 2013. The oldest echo boomers turn 28 years old and have created a significant number of new households. Additionally, over the next few years approximately 1.2 million to 1.6 million immigrants will arrive annually through 2017. The unique demographics of increased Echo boomers as well as new immigrants looking for new rentals will put pressure on vacancy notwithstanding the increase in supply of rental units. Between 2005 and 2010 the number of 20 to 34-year-olds living with parents increased 600%. As the job market improves these young singles living with parents will be looking to exit from living with their mom and dad and get an apartment. TLT: The economy is clearly one of the most important topics of conversation and concerns. How is the economy affecting the multifamily rental housing industry today? DD: The home ownership percentages since 2006 in the United States are as follows: 2006: 68.9%, 2007: 67.8%, 2008: Continued on page 7
Many of your units, especially apartments and condominiums, are equipped with Manufactured Fireplaces. Over time, various parts of these Manufactured Fireplaces will wear out. Most commonly the interior fireplace area called the firebox. The firebox consists of the back wall panel, two side wall panels and the floor panel. When the Manufactured Fireplace is cleaned and inspected by a Certified Chimney Sweep and if cracks or holes are noted in the panels, these panels should be replaced soon after by the Chimney Sweep as a follow up service. The Manufactured Fireplaces are basically appliances and it is vital to their longevity to provide routine maintenance and part replacement as needed. If they are left to deteriorate or are not repaired, replacement of the Continued on page 6
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PRESIDENT'S MESSAGE Page 4
A MESSAGE FROM YOUR PRESIDENT …