E-Renter News

We know plenty of landlords who could be considered the original environmentalists. You know the type: they re-use fixtures, cabinets, carpeting, paint, and flooring in any way they can. They used to be considered “cheap,” but their way has always been better for the environment.

And now, “green” people are a whole section of the demographic landscape. Many landlords are specifically appealing to them, knowing that these folks tend to vote with their dollars. They will choose a place to rent based on its greenness.

If you’d like to borrow a few tricks from green landlords, and appeal to environmentalist renters, here’s five things you can do:

1. Re-use as much as you can. Keep usable fixtures and materials out of the landfill. It’s perfectly fine to let prospective tenants know that you recycle and re-use. Most of your environmentalist renters are shopping at thrift stores, anyway—they’re accustomed to used merchandise.
2. Host a "stuff swap" every six months or so. Allow tenants to display things they no longer need or want, and pick up the same from their neighbors. Offer to take leftovers to Goodwill, the Salvation Army, or other charity re-selling organization.
3. Install bike storage. More and more folks are turning to bikes as an alternate (or even their only) form of transportation. Don’t make them lug their bikes up several flights of stairs or chain them to light poles. Providing bike racks is the way to go—and if you remove a parking space or two to accommodate bikes, even better!
4. Switch to a green lawn maintenance company. Chemicals and pesticides are no good around kids and pets—and the groundwater and streams can benefit from fewer fertilizers.
5. Provide opportunities to recycle. You can probably order bins and even composting containers from your waste disposal service company. People will recycle if given the opportunity--and it might even cut your garbage pick-up bill.
6. Reduce water use. Replace water-wasting toilets with new reduced-flow models, install aerators on faucets, and switch to low-flow shower heads.

RentBits.com recently conducted a survey of over 1,000 renters. The results show few surprises, but it’s good to know what your tenants—and potential tenants expect!

First, an astounding 72% of renters start searching for their new rental home or apartment online. If you’re not advertising with the online rental search engines, Craigslist.com, and your local news site’s online classifieds, you’re probably missing the majority of your market. And do advertise on as many as you can. 93% of searchers look at 2 sites, and 25% search on more than 10 sites.

And not only do they start the search through Google or Bing or Yahoo’s search engines, rather than going straight to the rental site or Craigslist, they are using specific keyword phrases. For example, a typical rental housing search will begin with the person entering “St. Louis apartment pets $650.” So make sure your ad headline includes what people are searching for. Don’t use “For Rent” or “Apartment For Rent” as your headline.

Price and location continue to be the most important factors to potential tenants. Then they look for photos, lease terms, deposit amount, whether pets are allowed, and if there is a washer and dryer included. Be sure to include plenty of photos of your rental unit—especially the bathrooms, kitchen, and closets. Multiple photos keep people on the site longer and get more attention. They also get more click-throughs, where instead of leaving the site, the user takes action, like asking for more information.

Be responsive—potential tenants expect a response to their inquiry—whether made by telephone or online—within 24 hours.

Houses are more in demand than apartments, according to 83% of respondents. It could be because of the many foreclosed homeowners who are back in the rental market. With more apartment inventory than ever, that’s not the best news for apartment property owners and managers!

As more and more landlords and property managers turn to the web for advertising their vacant properties for lease, it’s helpful to know all your options. Here’s one you might not have seen yet: RentShout.com.

Rather than aggregating Craigslist.org,local online classifieds, and other For Rent site ads into a directory, RentShout turns the “funnel” around. When you advertise your rental on RentShout, it “shouts it out” to multiple rental websites and search directories, as well as video and social networking portals.

RentShout even creates optimized videos of your rental properties, using images you upload. The videos are then posted to your listing page, as well as popular video sites that your possible tenants may be on already, like YouTube, vimeo, and viddler.

Whether you own one single family rental house, or manage 25 apartment buildings, you can advertise on RentShout and see your listing on 60+ sites. Users also have access to detailed tracking reports, helping them capture leads and create more effective ads. Every listing has its own url, as well as a unique telephone number (that is forwarded to your designated phone)—so tracking is more effective. The urls also include buttons for one-click sharing to Twitter and Facebook.

For apartment communities, RentShout offers Community Web Pages, which offer complete information on an apartment community, amenities, location, and floor plans. It also allows property managers to advertise individual apartments that are available for rent. Contact forms make it easy to respond to interested potential tenants!

RentShout says every tenant searches the web differently, so having your listings across as many different types of websites and search engines as possible helps maximize your exposure. They may be right. You might want to check out RentShout for yourself!

The tough rental market that began the last quarter of 2008 might be over soon. Some markets are showing rent increases, and most are showing signs of stabilization. This is good news for rental property owners and managers. As the rental market recovers, when can landlords start recovering, too—by raising rents and cutting perks?

That answer depends on your market. If it’s still hurting, like in Las Vegas, San Jose, or San Francisco, you might need to hold off on trying to recoup your recent losses. In other markets, it’s best to do your homework before raising rents. Check out the rents and vacancy rates in your area. Talk to other landlords and property managers. Spend a little time making phone calls or email inquiries and be willing to share information with others in the rental business.

Whether or not a landlord should raise rents or cut perks also depends on your financial picture. If you’ve had to cut rents to fill vacancies, or just to jump-start cash flow, it might be a good time to look hard at your bottom line. If the balance sheet shows an unhealthy situation, it doesn’t make sense to continue on—especially if an increase can help stop the bleeding. Some rental businesses can absorb losses for a short time, but most cannot—and none can suffer negative cash flow forever.

If it’s time to raise rent, let your tenants know before their lease is up. Offer a renewal at the new rate, and then start the negotiation process. If you’re dealing with a good tenant, be flexible—and if they refuse the increase, talk about other ways to renew the lease to your advantage. Ask them to pay the cable or another perk you might have thrown in during the existing lease negotiations.

Be flexible. It’s easier and less costly to keep a good tenant for another year than to repaint, repair damages, and find another good tenant. But if you ask for a higher rent that is within your local market’s asking rents, and the tenant refuses to pay, you might need to let them go. Replacing a lower-paying tenant with a higher-paying one could be better for your bottom line.

Meet Demand and Reduce Costs

Landlords everywhere are discovering the joy of implementing non-smoking policies in their rental properties. Imagine countertops and vanities free of smoke burns; carpets with no melted fibers; walls without nicotine stains. And the lack of cigarette odors! Why wouldn’t a landlord prohibit smoking in all rentals?

Check out these numbers from a recent survey of renters:

• Three-quarters would rather live in a smoking-restricted building, "other things being equal."
• 52% would even pay extra rent to live in a smoking-restricted building.
• 42% would feel uncomfortable renting a unit next door to a smoker.
• Three-quarters say it's okay for landlords to prohibit smoking inside rental units to keep secondhand smoke from drifting into other units.
• Only 26% currently live in a building with smoking restrictions.
• More than a third of renters in multi-unit buildings are regularly exposed to a neighbor's secondhand smoke.
• Most renters don't smoke and many smokers smoke outside their units.
• Three-quarters of renters don't smoke at all.
• 19% of renters smoke daily—but only 11% of renters smoke inside on a regular basis.

Smoking is down across the United States—so it only makes sense that most of your potential tenants don’t smoke, and don’t want to deal with a previous tenant’s left-behind smells and stains. Smoke gets into carpets, drapes, and walls—and no matter how much cleaning you do when a smoker moves out, the smell lingers on.

When you implement a no-smoking policy, the expense and trouble of eliminating cigarette odors vanishes. You’ll save on paint and cleaning.

Smoking damages rental units. Burn marks in carpet; nicotine stains on counters where smokers “rest” their cigarettes; holes in vinyl flooring where a cinder landed. Fixing the damage is expensive and time-consuming. Who needs it?

A no-smoking policy means less replacing of carpet, vinyl flooring, and countertops.

Smoking is a danger to other tenants. While no laws specifically protect tenants from others’ second-hand smoke, if a tenant or their child suffers from asthma or other respiratory disease, they might qualify for protection under the Fair Housing Act. This could trigger legal action against the landlord. It’s easy to eliminate this possible liability.

A smoke-free building keeps all of your tenants safe from second-hand smoke.

Smoke-free housing is in demand. Just as hotels and rental car companies meet non-smokers’ demands with smoke-free rooms and cars, so can landlords meet this demand—and rise above the competition. In this difficult rental market, landlords need every advantage they can get to entice tenants to sign a lease. A large market wants smoke-free housing—and you can provide it to them.

No-smoking polices are legal. Smokers are not a protected class, and nobody has a “right” to smoke—it’s not like disabled tenants, who have a right to access, for example.

Remember—restricting smoking in your rental housing not only keeps your expenses down, it’s good for your tenants’ health. And that makes it a winner for everyone!

Source: Smoke-Free Housing Project

Depending on where you live and own rental property, you might be thinking the rental market may never rise from its current valley of lower rents, higher inventories, and less-qualified tenants.

But fear not—the tide may be turning, finally. Here’s why:

• The economy is improving. Job losses have stabilized and unemployment is steady. Earnings are up at several major U.S. companies, and retailers have seen increased sales. Even oil prices are rising again—another positive indicator.
• Demand will increase. The 20 – to – 34 age group, made up largely of renters, will grow by 5 million over the next decade, according to reports from real estate investment firms.
• Sharing housing will decrease. When the job market improves, renters will move back out of mom and dad’s house or away from sharing apartments with friends.
• Landlord concessions are drying up: More desirable neighborhoods in New York City, which has been experiencing a renter’s market, are seeing an end to landlord concessions like free rent and WIFI. Where property owners were paying broker’s fees to entice new tenants, the tenants are again paying the fees. And two months’ free rent has become two weeks’ free rent.
• Developers are getting back into the development business in more stable markets (as in, not Las Vegas, Phoenix, and parts of California). Real Estate Investment Trusts (REITs) are expected to start $1 billion in new multifamily projects, a huge increase over 2009. It seems they are betting that by the time the projects are completed in 2011 and 2012, the recovery and demand will match new supply.

While all these signs point to long-term, not near-term, improvements, they might add up to a reason for cautious optimism for stressed-out landlords and property managers!

In some good-for-a-change housing market news, S&P/Case-Shiller reports that 2009 home prices actually increased in several of 20 metropolitan areas studied. Overall, prices dropped 2.5 percent, mostly because of hard-hit areas like Las Vegas, Tampa, and Detroit, where prices declined 20.6 percent, 11 percent and 10 percent respectively.

But in San Francisco, Dallas and San Diego, prices rose by 4.8%, 3% and 2.7%. Overall, there is an indication that year-over-year declines in some markets are reversing, which may mean the market is beginning to show signs of stabilization. In fact, Las Vegas actually showed an increase in home prices in December, 2009—the first such increase in three years.

Do these price reversals mean the economy is finally on a rebound? Maybe not. With unemployment still high, and all indications pointing to a slow recovery in the job market, we probably should not plan on rapid home value appreciation and another housing boom any time soon. More likely the government’s involvement through the home buyer tax credit and buying up mortgage-backed securities is bolstering the housing market.

What does this mean to investment property owners and buyers? Is now a good time to get back into the market? There is no single answer to that question; like most investment questions, it’s best to ask your professional financial advisor. The experts say that while mortgage rates won’t stay this low forever, we’ve probably seen the last of the housing market buy/flip mentality for a while. We should all put our “buy before the price doubles” mentality on the shelf. At least for now!

In a word, yes! Here are a few reasons why:

Right now might be the best time in years to buy—in certain markets. But crunching the numbers becomes more important than ever—if real estate prices have dropped, has employment dropped, too? How far have rents fallen? Will you be able to rent a newly purchased property for enough to cover your P&I, insurance, repairs, taxes and other expenses? Even if real estate is 20% or 30% down from the heights of 2006-2007, you still need to make sure the numbers will work. A bargain is not a bargain if you can’t rent it. But in some markets, bargain real estate can work for the right buyer.

Real estate builds wealth—when purchased at the right time and for the right reasons. This means not buying with the expectation of great appreciation—one reason for the high rate of foreclosures we’re seeing now. Steady month-over-month profit that grows over the years you own the investment pays off with less risk than the expectation of making a big payout when you sell.

More people are moving from homeownership to renting. Americans are re-examining the idea that everyone “must” own a home. For plenty of folks, that dream turned out to be nothing short of a nightmare. Many former homeowners will be renters for a long time to come, both because of the bad experience they’ve had and because of foreclosure’s subsequent hit to their credit scores.

Depreciation expenses are valuable to landlords. Each year, rental property owners may deduct depreciation, or the annualized loss in property value from their income taxes (please see your tax professional for advice and legal limitations and regulations). Even if the value of your property increases, you still get this annualized deduction.

Real estate does appreciate over time—in most cases. Even in the hardest hit areas of the U.S., the long-term picture shows that real estate values do go up. If you are planning to get rich quickly, real estate may not be the right investment for you. But for the long term, it’s a great investment for many landlords.

Please consult your legal and financial professional advisors regarding investment and legal issues. This is not to be considered legal or investment advice.

Many Former Homeoners Moving Back to Rental Housing

The fourth quarter of 2009 saw U.S. homeownership fall to the lowest point in nearly ten years. While pending sales of existing homes ticked up 1%, the National Association of Realtors saw reason to hope that the real estate market is steadying.

Still, the number of Americans owning their home reached a low not seen since 2000, when the percentage stood at 67.3%—exactly where it was in the fourth quarter of 2009.

Some experts see the decline as a positive shift away from recent years, when homeownership was considered attainable by everyone, regardless of credit history, income, employment status, or ability to repay a mortgage. The current mess in the housing industry, overbuilding by construction companies, and entire financial industry collapse of late 2008 is blamed in part on “creative” mortgages to feed the homeownership frenzy.

That frenzy peaked with a high of 69% in 2004 when the combination of low interest rates and easy credit moved families out of rental housing and into houses of their own. Fast-forward to 2007 through 2009, for the results of the bubble: nearly four million homes lost to foreclosure.

The homeownership rate would likely have fallen farther, without the federal first-time buyer tax credit boosting sales. The credit is scheduled to run thorugh April 2010.

The news signals that homeowners are moving back to alternative housing situations: while some are moving in with family, many others are becoming renters—again.

Some Tips to Help Fill Vacancies

Smart landlords know that when the rental market shifts, the usual ways of doing things won’t always work. Being flexible helps, but tapping into your creativity is what will set you and your vacant rentals apart from the competition.

Staging is a tactic real estate agents swear by to help gain an edge. Staging is simply adding a few well-placed accessories to a vacant unit to make it look homey in photos and to prospective tenants. The idea is to make the rental look warm and inviting, so the tenants can imagine themselves living there.

Staging has been shown to decrease the time to fill a rental, and can even help increase its value in the mind of the tenant. Here’s how to stage a home or apartment:

1. First, make certain that the unit is spotless. If walls are dirty, scrub them thoroughly. Carpet should be professionally cleaned. Wood floors should only look old and well-used in a period home. Otherwise, dings, scratches, and worn spots should be repaired.  Bathrooms and kitchens should especially shine.
2. Fresh paint is almost always a must when preparing for a new tenant. If you paint your own properties, do an impeccable job—otherwise, call a pro. And of course, a neutral color is best. Warm white or ivory are good choices. Stark white can look cold.
3. Get rid of odors. Nobody wants to live with the previous tenant’s dog or cat smell, or their stale cigarette smoke. Often a fresh coat of paint will eliminate odors.
4. Before taking photos or showing the unit to prospective tenants, bring in a few personal touches. Either use items you already own or invest in the following:
   • One large and one small interior potted plant
   • An exterior potted plant if there’s a porch to place it on
   • Neutral wall art for the living room
   • A few candles
   • New kitchen towels and coffee mugs
   • Throw rugs
   • An overstuffed chair or two
   • Lamps
   • Side table
   • Books
5. In the living room and bedroom: Arrange a large plant, a chair, side table, lamp and rug in a grouping in both the living room and a bedroom. Add a stack of books, a small plant, or a candle to the table for a nice touch. Hang the art in the living room. Make sure the proportion is correct for the size of the wall. Keep it neutral with a modern piece.
6. Kitchen: Stack a couple of new folded kitchen towels on the countertop. Add two colorful matching coffee mugs to brighten things up. Add a throw rug in front of the sink.
7. Bathroom: Place a small potted plant on the vanity and a candle on the edge of the bathtub.  A small stack of new, white towels will make it look like a spa.
8. Exterior: Trim shrubs and branches, cut the grass, pick up trash and perform and repairs or touch-up paint that is needed. Place a large outdoor potted plant near the door.

Even a small effort to make your rental property look warm and inviting can help your prospective tenants want to live there--instead of the home or apartment down the street!