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Renter residents flock to Long Island City

February 4th, 2012

Multi-Housing News reports that Long Island City has attracted enough residents in the past six or seven months to decrease the area apartment vacancy rate from 3.5 to 2 percent, according to a report from brokerage and marketing firm Modern Spaces.

Many of the new residents are first-timers, according to the report. Modern Spaces president Eric Benaim told the source that residents weer likely drawn by the variety of cultural attractions and restaurants, noting that the neighborhood hosts many galleries and museums.

The report suggests that the location is also good for many commuters, suggesting short travel times to get to work from the area are an appealing characteristic for the neighborhood’s new renters.

Additional rental properties are planned to open in the near future, while a number of businesses have opened in recent years to meet residents’ needs. Similarly commuter-friendly areas may be strong investment opportunities, especially with the help of property management companies in operating a rental residence.

Overall, the report indicates 2011 was a good year for the area, partly due to the rising rents in other parts of the city.

New York apartment transactions up

February 3rd, 2012

Continued solid growth in market and stabilized rents is causing apartment industry stakeholders in New York to predict that the trend of high apartment building sales will be ongoing in 2012, The New York Post reports.

Real estate investment trusts and others increased their buying activity. A number of large apartment sales marked 2011, according to the source.

“Sellers chose to take advantage of a low interest rate environment, which exerted downward pressure on cap rates, driving prices up,” chairman Robert Knakal of Massey Knakal Realty Services told the source. “There were nine multi-family sales over $100 million last year as institutional capital came back into the market in a big way.”

He stated the trend was unsurprising, citing “extraordinarily low” vacancy rates in
the city’s multifamily housing. At the same time, executive vice president Paul Leibowitz of Coldwell Banker Real Estate told the source that the past year was influenced by a large, pent-up supply. Based on expectations that rental fundamentals will remain strong, he predicts more significant transactions this year.

Those purchasing these buildings may have need of property management services. Similarly, owners of single-family homes and other residential properties may be able to tap into the strong demand by renting their properties, which are less likely to find buyers in the current housing market.

Real Estate Rental Business Growing, Adding Jobs

January 27th, 2012

rental business growing

The multifamily sector has strong prospects for growth and job creation, according to the National Apartment Association Education Institute (NAAEI).

With a growing number of Americans renting, the demand for property managers is rising rapidly. Investors have been drawn in by the industry’s strong fundamentals, according to the NAAEI.

Overseeing rental properties can require a mix of customer service, management, maintenance, accounting and other expertise to create an effective team, the NAAEI notes. The most recent data from the Census Bureau indicates that about 35 percent of the nation’s households are renters already, a number which most experts expect to rise over the coming decade.

In 2004, only about 31 percent of households rented. The NAAEI considers this change and momentum a promising sign for the rental sector of the real estate industry.

Rental property services can help an investor get the most out of his or her property, and the growth of the sector is likely to attract many who are seeking employment, given the status of the rest of the economy.

Fix Housing, Fix the Economy…

October 25th, 2011

There are two factors that are currently plaguing the housing market and ultimately hampering the economy as a whole. The first is clearly an excess in supply of owner-occupied housing. Excess supply leads to a reduction in housing values as there is underutilized capacity. Second, there is a serious problem with “negative equity” in the homes that are currently owned. This is the classic case of the underwater mortgage that is so prevalent in America right now. Peter Orszag, former CBO and OMB Director in the Obama Administration, says, “Dealing with excess inventory by shifting vacant properties into the rental market would help to stabilize prices and thereby mitigate, to some degree, the negative equity issue.”

A novel way to stimulate demand for home purchases proposed by Kyle Jividien of Alamo Appraisal Group in San Antonio and economist William Wheaton of MIT among others would be to “provide a tax write-off to investors who buy vacant houses and rent them out.” The catch here is that investors would have to hold on to the properties as rentals for an extended period of time. Fostering this kind of investor behavior will most likely spur demand for the rental market and encourage the use of professional property managers. This type of creativity that seeks to incentivize investors is what the economy needs right now.

You can read more about this here: Peter Orszag’s article on Bloomberg.

Noteworthy Trends in the Rental Arena

October 21st, 2011

Here is a recent article from DSnews.com regarding the multifamily sector. There are several interesting facts about the overall trend of the rental market in this piece. Below are a few noteworthy points that deserve mention:

There has been a reversal in homeownership trends, and as this rate falls, demand for rental properties increases. As a result, apartment vacancy rates have declined and rates for rentals have increased.

Vacancy rates among professionally managed buildings are at their lowest levels since 2007.

Freddie Mac’s chief economist Frank Nothaft states, “The improvement in the economics of apartment management has prompted an increase in structure values, property sales, and new construction for larger buildings.”

Decline in homeownership has been greatest among the under-30 demographic.

An increased demand for apartments has pushed up the price of rents since the recessionary period of 2008-2009.

(Image sourced from DSnews.com)

“Homeownership Decline Spells Good News for Rental Market”

October 17th, 2011

2010 census data released last Thursday highlights an important trend in the rate of homeownership not seen since the Great Depression. Patrick Newport, an economist with IHS Global Insight said, “The changes now taking place are mind-boggling: The housing market has completely crashed and attitudes toward housing are shifting from owning to renting. While 10 years ago owning a home was the American Dream, I’m not sure a lot of people still think that way.” (See the full related article here: Hope Yen of the Associated Press)

The question to ask now is, “What does this mean for the rental market in the short to medium-term?” For starters, the existing national level of homeownership rests at 65% vs. 35% for rentals. Given that Americans will likely be facing the burden of a harsher economic environment comprised of prolonged unemployment, decreased government involvement in housing, and limited credit with tougher lending standards, we can safely assume that the 35% share for rentals will increase over the coming years.

Based on this, we at All Property Management foresee an increased demand for rental properties that will lead to a demand for professional management services. With economists predicting conversion to rental properties rather than sales as a way to stabilize the housing industry and position it for future growth, All Property Management is well positioned to address what will be an increasing need to access professional property managers.

Shocking Housing Market Reality

June 8th, 2011

Image via Wikipedia

The idea that the housing market has taken a steady decline has sunk in, and for most, is an acceptable reality. However, there are still areas that are being affected by the housing market crisis, and the visual reminder is in the value that is continually dropping in homes across the United States. While this may present a fantastic buyer’s market, it does mean that homes are no longer the high priority asset that most want, simply because they are not guaranteed to hold the value they once did.

Arizona Shocker

Arizona is home to beautiful lakes, tranquil desert settings, and some of the most opulent homes in the country. The Scottsdale, Tempe, Estonia, and surrounding areas are considered some of the most high end that the fine state of Arizona has to offer. Homes sold in these areas, pre 2008, for an average of $2.8 million for the higher echelon real estate. Today these homes sell for an average of $800,000.00.

The issue for many of the larger homes, not just in the case of Arizona, but of the entire U.S., is that rural areas are simply no longer sustainable for those that have to either commute via plane, or cannot find work close to home. The reality is that the cities are seeing much growth, comparatively speaking, while further outreaching suburbs are still seeing decline.

Way Back When…

There was a time when people would be able to support their homes through their work regardless of where they lived. If they had rural homes, they were farmers or produced some kind of product for independent sustainability. Today’s society is completely dependent on work of another kind, and when that work is no longer close to home, people will leave those areas. This is the case with Arizona.

Negotiating In Today?s Real Estate Market

May 23rd, 2011

There is always a business strategy involved when making a home purchase. For those that are savvy enough to finagle great deals on a new home, they understand what it takes to get the absolutely best deal possible. For the rest of the group of buyers they enlist the help of real estate agents, a project manager, or another entity that can help steer the sale or purchase of a home. There are some key types of negotiating tactics that these professionals use to help get the best overall price for their clients, and they are simple concepts that make a big difference.

Buy Low, Sell High

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The theory behind investments is to always buy at the cheapest possible rate, and then sell at the highest possible time. This is how many have made their millions. When it comes to the purchase of a home in today’s real estate market, the idea of buying low is an absolute. The housing prices are the lowest they have been in nearly 30 years, thus making this the ultimate buyer?s market. The key is driving down the price until the buyer feels confident about their purchase. Some of the ways to do this include:

Bidding
Placing an offer twice as low as what is realistic, knowing that the seller will counter offer
Submitting offers with banks on potential short sales

Buyers Are Winning

With the housing market taking the slump that is has, many banks are holding onto foreclosed properties that are not selling. This means that the property taxes, and lack of repayment are sitting on the bank?s books. This means that sellers, especially banks, are desperate to clear properties off of their list. Buyers can take full advantage of this allowing them to submit ridiculous bids for homes, and being awarded them.

Investing in Real Estate? Now is a Good Time

May 18th, 2011

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If you decide to invest in real estate, there are plenty of ways in which you can do that. You may want to consider getting into the market now, too, because prices are low and interest rates are still far below where they used to be. Consider whether you want to buy something for yourself, or whether you want to purchase something that will be used by others – like a house, apartment or commercial building that you’ll be renting out. Either way, this can be a great time to get into the market and start buying properties that you can fix up to use and/or resell later when the market improves.

There are some specific things that you should look for when you’re investing in real estate. Getting a home inspection is critical, because you want to make sure that any home or other building that you buy is in good shape and worth the price that you’re paying for it. If you buy something that’s a lemon, you could end up spending thousands of dollars to fix it and you may never get your investment back when you sell it later on. Renting it out can be difficult, too, if you need to fix it up or it doesn’t have much to offer to a prospective tenant.

If you buy properties that you’re going to rent out, you can handle them yourself or get a property manager to deal with them. No matter which option you choose, buying a good property that you really like and that will be popular with others is a sure way to keep you happy and keep your property rented. Once it has been inspected and you know that you’re paying a good price for it, you can move forward with your purchase and enjoy your new investment.

Sub Prime No More

May 13th, 2011

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The days of subprime lending have drawn to a close. Being that this type of lending was the cause of the collapse of the housing market, banks and lending institutions do not even entertain the idea of lending in a subprime fashion. Today, buyers have to meet the qualifications for both credit and income, usually of a median FICO of 750. This has caused a major stall in the sale of homes because the lack of subprime lending simply eliminates nearly 40% of potential buyers.

Debt to Income Blow Out

People had grown accustomed to living beyond their means, and this includes the accumulation of debt. During subprime lending, borrowers could have their mortgage payment take approximately 43% of their gross income, while leaving the rest to deal with bills and other expenses. When looking at the net income of borrowers, the new mortgage payment would take about 60% of their income. The strain was overwhelming for most, thus the huge foreclosure rate that is present today. Banks will consider buyers that have an average of 10% to 15% debt from their gross income, and not allowing them to max out in mortgage bills beyond 35% of their gross income.

Ideal for a Mortgage

The ideal buyer for a mortgage should not have more than 35% used on credit cards, and little to no debt on their credit. The reason for this is that many companies are shy about their lending in this shaky housing market. This means that many buyers are looking for homes that they can easily afford. This has made smaller homes, apartments and condominiums very appealing to today’s buyers. The perfect mortgage scenario for people is to keep their payment within the 25% of their net income.