Posts Tagged ‘rental home managment’
Own Your Own PROPERTY MANAGEMENT FRANCHISE
Our franchise system was specifically developed to alleviate the biggest hassles of
being a property manager: maintenance/repair headaches and difficult rent collection
Executive Home Rentals offers an exciting business opportunity at an affordable startup price, with the ability to be open for business in about 60 days. As a real estate agent, you already have the license you need to be a property manager. Executive Home Rentals has a total of 24 franchise territories in Colorado to award to qualified real estate professionals. We are now in the process of accepting applications for all Colorado territories.
WE MAKE PROPERTY MANAGEMENT SIMPLE BY PROVIDING OUR FRANCHISEES:
- All property maintenance and repair – handled 24/7 by our Executive
- Maintenance Division (no liability or expense for the franchisee)
- Convenient, monthly electronic fund transfers (EFT) which automatically collect and disburse rents (from tenants and to owners)
- Comprehensive training – initially and ongoing Our EHR property management software which takes care of all accounting, homeowner statements, maintenance work orders, etc.
- Exclusive territories
- Access to our local and national vendors to manage and promote your properties
Executive Home Rentals has 25+ years experience in the property management and home rental business. We are looking for qualified real estate professionals to join our team as Executive Home Rentals Franchise Owners.
The average rate on the 30-year fixed mortgage dropped to the lowest since records have been kept, creating a tempting target for people to refinance their homes.
Freddie Mac said Thursday the average rate on the 30-year fixed mortgage hit 3.87 percent, down from 3.98 percent the prior week. That’s below the previous record of 3.88 hit two weeks ago.
The average on the 15-year fixed mortgage fell to 3.14 percent, also a record low. Records for mortgage rates
date back to the 1950s.
Mortgage rates tend to track the yield on the 10-year Treasury note, which fell below 1.9 percent this week.
Mortgage rates have hovered near 4 percent for the past three months, and have perhaps contributed to a slight improvement in the housing market. But many homeowners remain underwater and the pipeline of foreclosures continues to be huge, putting heavy pressure on housing prices.
High unemployment and scant wage gains have made it harder for many people to qualify for loans. Many don’t want to sink money into a home that they fear could lose value over the next few years.
Sales of previously occupied homes were dismal last year. New-home sales in 2011 were the worst on records going back half a century.
Builders are hopeful that the low rates could boost sales next year. But so far, they have had a minimal impact.
Mortgage applications have risen slightly over the past four weeks, according to the Mortgage Bankers Association. But they are coming off extremely low levels.
To calculate the average rates, Freddie Mac surveys lenders across the country Monday through Wednesday of each week.
The average rates don’t include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.
The average fee for the 30-year loan rose to 0.8 from 0.7; the average on the 15-year fixed mortgage was unchanged at 0.8.
For the five-year adjustable loan, the average rate fell to 2.80 percent from 2.85 percent. The average on the one-year adjustable loan rose to 2.76 percent from 2.74 percent.
The average fee on the five-year adjustable loan rose was unchanged at 0.7; the average on the one-year adjustable
The Associated Press contributed to this report.
By Ronald D. Orol, MarketWatch
WASHINGTON (MarketWatch) — Matt Martin, CEO of Matt Martin Real Estate Management, is eagerly awaiting the introduction of a program that the Obama administration hopes will transform foreclosed properties into rehabilitated rental units and kick-start the economy.
He says he’s not alone. “There is a large chunk of capital, billions of dollars, sitting on the sidelines waiting to see what kind of program the government comes up with,” Martin said.
At issue is a Federal Housing Finance Agency push to develop a program that is expected to use government financing or guarantees to attract investors to buy up big regional or national pools of foreclosed properties currently owned by government seized housing giants Fannie Mae and Freddie Mac. The plan would be to convert these properties into rentals, a market that has strengthened recently. See story from August on foreclosure-to-rental program
Some analysts say President Barack Obama may discuss the initiative at his State of the Union Tuesday, with a focus on how to convert empty homes into productive engines of the economy. Read State of Union preview.
So far, the FHFA has received over 4,000 comments on how it should go about developing the program from a wide variety of groups including Martin and investors such as Fortress Investment Group FIG -0.14% , Chelsea Investment Corp. and the Association of Mortgage Investors.
The FHFA noted that most respondents suggested strategies that involved renting properties for some time. The agency added that many respondents “demonstrated their technical and financial capability to engage in large-scale transactions” with Fannie, Freddie and FHA.
The number of foreclosed properties is big and growing. Fannie Mae, Freddie Mac as well as the Federal Housing Administration currently have about 200,000 foreclosed properties on their books. However, Bank of America Merrill Lynch predicts that Fannie, Freddie and FHA will need to sell 3.4 million foreclosed properties in the future. Banks also have thousands of foreclosures on their books, and regulators are seeking to ease efforts to rent those out.
Federal Reserve Chairman Ben Bernanke says that as of the end of the second quarter of 2011, there were 2 million vacant homes for sale, with about 500,000 units owned by banks or the two mortgage giants.
Most observers agree that a big enough program to make a difference and bring in sufficient investors will require “seller financing” provided by or guaranteed by Fannie Mae and Freddie Mac. Regulators are working on the details and expected to release at least a pilot program shortly.
Proponents of the effort say that a strong program could transform blighted neighborhoods, boost the price of homes and stimulate the economy. However, even they agree that it will take time, and it is unclear whether policymakers can create enough incentives to entice investors to participate on a large scale.
Ralph Axel, analyst at Bank of America Merrill Lynch in New York, said the effort will not have an impact on the economy unless policymakers are successful at making it work on a grand scale.
“There are a lot of foreclosures hitting the market in the coming years, and if they can take this foreclosure supply and remove it from stagnant inventory it will help in a lot of ways, such as improving home prices overall,” Axel said.
Separately, the Federal Reserve is making a push to encourage banks to rent out foreclosed properties they own. Existing statutes and regulations do not prohibit financial institutions from renting out their foreclosed properties, but regulators encourage sales instead of rentals. To counter that, Bernanke recently said the agency may soon provide guidance that could encourage rentals of foreclosed properties. Read more on Fed’s housing white paper.
Meanwhile, numerous approaches to entice investors are under consideration for Fannie- and Freddie-owned vacant homes. One approach Axel argues regulators could consider is to have Fannie and Freddie make a loan to investors to buy and rehabilitate foreclosed properties.
Another strategy could be to have banks make loans to investors and have Fannie and Freddie guarantee those loans so that if the investors fail the banks don’t take the hit, Fannie and Freddie do. In this scenario, Axel envisions that investors will put up at least 20% of the investment cost on the property.
The properties could later be sold, after a minimum multi-year rental period, with investors potentially sharing profits with Fannie and Freddie or the government to compensate for the financing guarantee, Axel added.
Property management firms are chomping at the bit to manage new rentals picked up by investors. Rick Sharga, executive vice president of Carrington Mortgage Services, said the Santa Ana Calif.-based firm is raising money to buy foreclosed properties from Fannie and Freddie and convert them into investor-owned properties.
Currently, Carrington manages property, runs a field service group that conducts repairs and rehabilitates properties and manages rental units for about 3,000 tenants, many of whom happen to be renters in foreclosed properties owned by Fannie and Freddie. This experience, he adds, situates Carrington to manage rentals in a new program.
He said there is a delicate formula that will attract investors to buy and rehab properties. That said, he agrees that there is lots of cash on the sidelines waiting to get back in.
“You have to have adequate rental cash flow to deliver returns for investors every year, even though they are banking on long-term profit from home-price appreciation,” Sharga said.
While selling off foreclosed properties is one of Matt Martin Real Estate’s specialties, the Arlington, Va.-based firm also conducts property due diligences and manages rental units. Last year, Matt Martin sold 12,000 foreclosed homes owned by the FHA and this year he expects to sell at least 15,000.
Martin noted that there are many complications that could throw a wrench in the works. He said that many of the foreclosed properties are tied up in mortgage-backed securities, and any efforts to rent them out instead of selling them would need the approval of the trust.
Having big banks rent properties raises other problems, Martin said. Banks may struggle with the additional liabilities or risks associated with being a landlord, Martin noted. He said that even if regulators provide guidance to convince banks it’s acceptable to rent foreclosed properties they own, the institutions will have other issues.
“Does a bank want the reputational risk of turning into a landlord? Does a large servicer want that? It won’t look good if the heater goes out and dog dies,” Martin said.
The housing sector will likely take incremental steps forward in 2012, though total originations will fall on fewer refinances, according to economists at Fannie Mae.
The second half of the year should outpace the first six months in terms of growth, though fiscal policy and political uncertainty in Washington will likely drive consumer and business activity, the mortgage giant said.
Chief Economist Doug Duncan said positive consumer activity and challenges in housing and the global economy will equate to moderate growth for the year.
“We’re entering 2012 with decent momentum, especially on the employment side, which is fostering positive household and consumer behavior,” Duncan said in a release. “Unfortunately, we expect this momentum to slow as we move through the first half of the year.”
The report released Friday forecast total home sales to increase 3.5% to about 4.74 million in 2012 from 2011 with another 5% gain in 2013 to nearly 5 million. New home sales could jump 10.4% for 2012.
The Federal Housing Finance Agency home sales price index, excluding refinances, could dip 1.1% for 2012 from a year before, according to the forecast. Economists predicted the 2011 index would finish 4.6% lower than 2010.
Mortgage originations as dollar volume could see a decline as well in 2012, largely on a steep drop in refinances. The Fannie report said total originations will fall to $1.01 trillion in 2012 from a predicted final 2011 tally of $1.36 trillion. Economists expected refinancing to plummet to $540 billion from $894 billion.
Purchase mortgages, however, will rise to $471 billion in 2012 from a estimated 2011 total of $464, according to the report.
Total single-family outstanding mortgage debt will likely drop 1.3% to $10.14 trillion in 2012.
For the U.S. economy as a whole, Fannie researchers predicted real GDP would increase 3.3% in the fourth quarter to finish the year at 1.7% growth. Economists forecast 2.3% GDP growth for 2012 and 2013.
Write to Andrew Scoggin.
Follow him on Twitter @ascoggin.
Once you have invested in a rental property, the responsibility of maintaining and running the property can quickly become overwhelming. For many landlords, the logical solution is to hire a property management company to oversee their rental property. But is this the right decision for you? Here are several issues to consider.
- Do you have what it takes to run a rental property? If this is your first foray into property management, you could find yourself in over your head. Collecting rent may sound easy, but in reality, it can be more like a painful extraction. If you are not familiar with rent collection, you can quickly find that your tenants are taking advantage of your inexperience. In addition to rent collection, day-to-day maintenance of a rental property can be tiring. If you are not operating your property as a full-time job, you may not have the time to address tenant concerns and repairs in a timely manner. This may make hiring a property management company an excellent choice.
- Where is your rental property located? If you have purchased a rental property near your home or place of business, you’ll be able to keep an eye on the property. However, if your rental property is far away, you’ll be loath to travel to it to deal with the inevitable problems that arise. If you’re unable to check on the property on a regular basis and handle any issues that may arise, finding a local property management company can mitigate these concerns.
- Does the property need frequent visits, repairs, or attention? If your rental property is a veritable money pit, you can find yourself spending more time there than at your regular job. If you’re getting constant requests for repairs to a property, having someone who can devote the majority of their time to your property is very helpful. The more units you have, the more you can benefit from a professional maintenance worker or property management company.
- What services do you need? If you’re looking for a small amount of assistance, such as monthly rent collection, a full-service agency may be too much for your needs. Since you’ll need to budget in the fees charged by a property management company, this will cut into your profit margin. Therefore, instead of hiring a full-service company, you may be better served by a part-time property manager or specialist who can handle the most frequent problems. On the other hand, if you do need a complete solution, make sure that the company can provide you with all the services you require. For example, if you need someone who is capable of light maintenance work in addition to rent collection, keep this in mind while you shop for a property management company.
- Is the company trustworthy and friendly? Before hiring a property management company, do thorough research to ensure that it is reputable. If you are an absentee landlord, this is extremely important. You will be relying on this company to collect rent and represent you and you interests. Check references and talk to other landlords who have worked with this company. Make sure the representative of the property management company is level-headed and diplomatic. Just one bad interaction between tenant and rent collector can destroy goodwill that can take years to restore.
The stars are aligned to make 2012 an extraordinary year for rental income. The decline in homeownership is translating into rising rents and the multifamily apartment sector, though booming today, was late catching the wave. If it weren’t for the new investor-driven single family rentals in many markets, rents would be zooming even higher than they already are.
The New Normal in Homeownership Creates Demand
Changing attitudes towards homeownership have been pushing up rental demand since 2004, before the housing bust. The number of homeowner households declined by 805,000 from 2006 to 2010 and the number of renters rose steadily for six consecutive years, increasing 3.9 million during that period, according to Census data. The net increase of in 2012 alone was 1.4 million new rental households, a 1.5 percent decline in the national homeownership rate and a 4 percent rise in the number of tenants.
Much of the rental demand is from younger households that are postponing or even canceling homeownership in favor of renting. The decline in the homeownership rate has been sharpest for those household heads under 30 years of age. Owner rates have fallen by 4.4 percent (to 21.9 percent) for those under 25 years of age and by 7.0 percent (to 34.7 percent) for those aged 25 to 29 years, according to Freddie Mac.
Multifamily Struggles to Keep Up
Multifamily rental housing can’t keep up with the demand. Census Bureau reported that third quarter vacancies for rental housing were only 9.2 percent, 1.4 points lower than a year ago and .5 percent below the first quarter. We haven’t seen a 9.2 percent vacancy rate since 2003. A Reis Inc. survey of professionally managed buildings in metropolitan markets found vacancy rates stood at 5.9 percent during the third quarter, the lowest since 2007 for that class of apartment.
Apartment developers and investors are a conservative lot and they took a wait-and-see attitude towards the rapid and dramatic changes in the rental market. Now, however, things are popping. In November starts of residential developments with two or more units saw a 25.3 percent increase from the previous month , the construction of apartments, town houses and other multifamily developments, evidence that rising demand for rental housing has encouraged developers to begin building again. Newly issued building permits, a gauge of future construction, climbed 5.7 percent in November from a month earlier to an annual rate of 681,000, a 24.3 percent increase from November 2010 and the highest rate since March 2010. The overwhelming majority are for multifamily units.
Even so, developers can’t keep up. Two-thirds of developers surveyed in the third quarter by the National Multifamily Housing Council said construction activity is underway, and 20 percent are breaking ground on new projects at a rapid clip. The other 47 percent reported an increase in pre-construction activities-acquiring land, lining up financing, getting building permits-but not much actual construction yet. Yet even with this increased activity, more than half (54 percent) think new development remains considerably below demand.
Single Family Fills the Void
In the dorky world of real estate economics, single family rentals are the newest kid on the block. Just recently have databases serving the residential investor tracked single family apart from multifamily, but it’s very clear that in many markets today single family rentals are taking up the slack. From 2005 to 2010, single-family rentals grew at 21 percent versus just a 4 percent increase in total housing units, according to Zelman Associates.
Single family demand is closely linked to foreclosure activity in the hardest hit markets as families displaced by foreclosure prefer to rent a single family home rather than crowd into an apartment. In hot foreclosure markets attractive to investors, such as Nevada, Arizona and Florida, single-family rental units have increased 48 percent, while apartment units were virtually unchanged. According to the Census Bureau, since 2004 there are 3.60 million homes built for sale that are being utilized as rental today.
2012 Rental Outlook
The national median rental rate rose to $1,004 in the third quarter, up from $981 in the third quarter of 2010, according to Reis Inc. Although overall rent growth will vary greatly by metro, on a national median rent increase will come in somewhere between 2.5 to 4.0 percent for 2011, depending on whose data you use.
However, 2012 could be even better. Fannie Mae is currently projecting that average asking rents on a national basis could experience an annualized increase of between 2.0 percent and 3.0 percent. Others are less conservative. The National Association of Realtors forecasts multifamily rents to rise 3.5 percent next year. Axiometrics’ research forecasts a national rental growth rate of 5.5 percent. Christina Aragon, Director of Marketing and Customer Insights at Rent.com, predicts the vacancy rate will hover at a only 5 percent and rents will explode. Now, Aragon expects rents to spike 7 percent or so in each of the next two years.
As we all know, there is no such thing as a “national” real estate market. Numbers like those cited above are merely estimates of national medians across hundreds of local markets. Relying on a national real estate forecast to predict prices or rents in your market is like using a national weather forecast to tell you whether it will rain in your backyard this afternoon. The big picture may or may not be relevant to your market situation.
Local Market Rental Outlooks
However, the good news is that many of the hottest markets for investors, rents are going to the most. Increases will likely top the 10 percent mark annually for the next couple of years, according to John Burns Real Estate Consulting quoted in CNNMoney. In San Diego, rents will rise more than 31 percent by 2015 and in Boston, they may jump between 25 percent and 30 percent. Seattle rents will climb 4.5 percent next year and 6 percent in 2013.
A number of metro areas have actually had double-digit effective rent growth. High-density, west coast metro areas such as San Francisco with 14.8 percent and San Jose with 11.7 percent year-over-year effective rent growth rates are not totally unexpected. Charlotte with 7.2 percent rent growth; Miami with 5.6 percent; and even Denver with 6.6 percent effective rent increases, are less predictable examples. Axiometrics expects San Jose, San Francisco, and Austin to remain among the top 10 markets in effective rent growth in 2012 and Las Vegas is expected to become one of the most improved markets in 2012.
Local economies, especially jobs, will drive local demand. Over the next three years, Local Market Monitor expects rents to rise 18 percent in Houston, 15 percent in Grand Rapids, 25 percent in Rochester, 16 percent in Dallas and 19 percent in Tulsa.
Landlords increasing rents by 2 to 4 percent this year may find tenants won’t be surprised. Consumers expect home rental prices to increase by 3.2 percent over the next year, according to a recent Fannie Mae survey. Some 41 percent said rents will increase next year, 48 percent expect rents to stay the same and only 6 percent expect them to fall. The November numbers showed a slight retreat from October, when 43 expected rents to rise and 47 expected them to stay the same.
“Most Americans expect no improvement in their personal financial situation in the next 12 months and will likely remain wary about undertaking the significant financial obligation associated with homeownership until their view of their income, expenses, and job security heads in a more positive direction,” said Doug Duncan, vice president and chief economist of Fannie Mae.
By Steve Cook, Bigger Pockets Blog, December 28th, 2011
Executive Home Rentals Property Management System was developed to eliminate the the two biggest hassles of being a property manager: Maintenance & Repair and Rent Collection.
Maintenance & Repair:
- All property maintenance and repair requests are handled 24/7 by our Customer Service Representatives
- Maintenance and repair vendors are thoroughly screened and managed by our Maintenance Division Experts with no liability or expense for the franchise
- All maintenance billing and accounting issue are managed by our Business Services team
Rent Collection:
- Convenient monthly electronic fund transfers that automatically collect and disburse rents from tenants to owners
- All financial accounting and homeowner statements managed by our Business Services team
After half a decade of withering sales and slumping prices, there are strong and diverse signs that the single-family housing market is poised for a rebound. In some metropolitan areas, the market has bottomed, with both sales and prices on the rise and foreclosures on the decline.
Industry analysts and players cite a number of reasons – some traditional (employment), others unique to the post-credit bubble era (foreclosures) Â - for the long-awaited sea change. An analysis of industry and government data also support the forecast.
Proponents admit that the nascent rebound could easily be derailed, but stress that after years of government efforts to support sales and prices as well as the volatile impact of foreclosures, the market has regained a measure of normalcy.
“With the exception of really hard-hit markets, the vast majority is ready to turn around,” adds Jerry Howard, president and CEO of the National Association of Home Builders, NAHB. “The Washington, D.C., area is not only ripe for recovery, they need to start building units.”
Nevertheless, skeptics overwhelmingly outnumber the optimists, given the false-starts of previous years, the economy’s sub-par performance, a new wave of distressed properties and the capacity for the European debt crisis to spook business, consumers and investors.
“I think it’s premature,” says Richard Smith, CEO of Realogy, the nation’s largest real estate company, whose brands include Century 21, Coldwell Banker and Sotheby’s International. “We see little indications here and there. Transaction volume is improving. Prices are still under pressure. This isn’t going to be one of those spiked robust recoveries.”
Smith is echoing the conventional industry calculus: that price increases follow sales growth amid consistently strengthening demand.
There’s been little conventional, however, about this housing slump, which is one reason it’s had so many false bottoms. Among its many firsts – housing starts fell through 1 million annual units, foreclosures topped 2 million in three consecutive years, and home prices declined on a national basis.
The catalysts to recovery are mostly the same: for potential buyers, residential rents have now risen enough to consider buying; existing-home inventory is the lowest in five years, while that of new homes is at a 40-year low; affordability is at a record high; delinquencies have peaked;consumer confidence is on the rise ; and job growth is accelerating.
For investors, with a continuation of the gold rally in question, real estate is beginning to look like a viable inflation hedge alternative, while rising rents mean greater profits.
That thinking may help explain why the iShares Dow Jones US Home Construction Index Fund(NYSE Arca: itb), a broad barometer for the housing market, is up some 38 percent from the stock market’s October bottom, while the S&P 500 is up about 21 percent.
Finally, there’s the intangible fatigue with bad news, and a desire to end the negative feedback loop.
“We believe there is sizable housing demand that could be released into the market,” says Lawrence Yun, chief economist of the National Association of Realtors, NAR.
The NAR is forecasting existing home sales will rise 5 percent in both 2012 and 2013; prices will edge up 2 percent in each of those two years, then 4 percent in 2014.
The NAHB is forecasting a 5.1-percent increase in new home sales and a 10-percent increase for new home starts in 2012.
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