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Rental Housing Journal Valley

February 2017

2. Examining the National Boom in Market 4. Pockets of Affordable Housing Exist Demand for Luxury Apartments Within the Most Expensive Markets 3. Jobs For Property Managers Pay Higher Than the Average U.S. Salary

8. Are Urban Areas Running Out of Millennial Renters?

5. Dear Maintenance Men – Caulk, Plumbing, Doors and Curtains

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

Portland Proposes Landlords Pay to Move Evicted Tenants

Home Buyers in Expensive Markets See a Longer Wait to Break Even It takes at least 1.5 years longer to break even on buying a home in the Bay Area than it did a year ago

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ome value appreciation is expected to slow in some of the nation’s most expensive markets, and as a result, it now takes longer to break even on a home in those markets compared to renting it. Nationally, buying a home becomes a better financial decision than renting it in just under two years, according to the Q4 2016 Zillow® Breakeven Horizoni. When home values grow quickly, home equity also accumulates faster, helping to offset and eventually recoup the large upfront costs of buying a home more quickly. But home value appreciation is slowing down in some places, especially expensive areas like Silicon Valley and the San

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new housing proposal from the City of Portland would require landlords who raise rent more than 10 percent, to pay tenant moving costs, including costs for evicted tenants, according to several reports. The proposed ordinance would require landlords to pay renters moving costs within 14 days of sending them an eviction notice. Landlords would also have to provide relocation assistance to tenants if they raise their rent by 10 percent or more in one year, according to Oregonlive.com. The relocation assistance requirement is part of the new Portland City Council’ss first two housing proposals, submitted by Commissioner Chloe Eudaly and Mayor Ted Wheeler. Landlords would have to pay renters between $2,900 and $4,500, depending on the number of bedrooms. Commissioner Eudaly, who campaigned on promises to better protect Portland renters, has drafted the ordinance—and has the support of Mayor Wheeler, according to reports. Willamette Week first reported the new proposed ordinance. “We thought we needed to take swift action to protect renters in our housing emergency,” Eudaly told the newspaper. “This is intended to protect tenants, not take rights way from landlords.”

Landlords say city attempting to engage in rent control John DiLorenzo, a landlord lobbyist and attorney, told Willamette Week the ordi-

continued on page 7 Professional Publishing Inc., PO Box 6244 Beaverton, OR 97007

continued on page 6

Handling Employee Evictions

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any communities require their employees to live on-site, and the often include an apartment as part of their compensation. As in any business, management must sometimes terminate employees. This article will examine the acceptable grounds for termination and the procedures to require terminated workers to vacate the premises. Most employees are “at will.” This means they work at the pleasure of the employer. The law presumes every employment contract for an indefinite term to be terminable at will. As an “at will” employee, his or her employment is for an indefinite term at sufferance. Either party could terminate employment at will for no cause or any cause. Another term for this is the employment-at-will doctrine.

continued on page 7 PRSRT STD US Postage PAID Portland, OR Permit #5460

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Rental Housing Journal Valley

Examining the National Boom in Market Demand for Luxury Apartments

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he philosophy of “The American Dream” has seen considerable alterations as it evolved over decades. Today, Americans view it as a lifestyle that offers less maintenance costs, more social mobility; community engagement with less seclusion - but more exclusivity; highstyle amenities with a smaller, greener footprint; and urban convenience with a picturesque view. Marcus Hiles, Chairman and CEO of Western Rim Property Services, responds to the current national boom in demand for luxury apartments by creating affordable, environmentally responsible, and socially friendly highend apartments.

Dallas is experiencing what Marcus Hiles calls a new norm in urban residential living. Millennials and retiring baby boomers increasingly want luxury without the labor. But, the reality is there are other forces at work here too. The high demand is also driven by large segments of the population that cannot qualify for a high down payment mortgage, are not looking to buy, or are downsizing - all at the same time. Hiles believes affordable upscale rental communities will continue to grow in popularity as affluent Americans become city dwellers - some by choice, others out of necessity. The popularity of renting over buying is significant, considering people are still choosing to rent even with historically low interest rates. This trend underscores a shift in priorities toward increased mobility and less commitment without sacrificing amenities and lifestyle. Properties developed by Hiles’ Western Rim are located near outstanding educational opportunities, shopping centers, and feature golf courses, swimming pools, and clubhouses with everything from European Grand Spas, hair and nail salons, an onsite doctor’s office, an executive business center, and a Starbucks café - designed to satisfy the rental consumers. Marcus Hiles is committed to creating high-quality residential rental communities. As the Founder, Chairman, and CEO of Western Rim Properties and Newport Classic Homes, Hiles is responsible for managing more than 15,000 luxury properties that include world-class amenities and a focus on a healthy lifestyle with ecological public spaces, top school districts, and recreation locations.

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Rental Housing Journal Valley · February 2017


Rental Housing Journal Valley

Jobs For Property Managers Pay Higher Than Average U.S. Salary by John Triplett, Desert Path Marketing Group obs for property managers pay higher • Typical education – High school than the average salary in the U.S. at diploma or equivalent $55,380 per year and show growth poProperty management jobs ranked tential of 8 percent through 2024, accord- overall No. 46 in the jobs in the $50,000 ing to a release. range, according to the survey. The property managers jobs were in a “Most property, real estate, and comlist put together by CareerToolkit.com munity association managers work out of of high paying jobs that anyone can re- an office. However, many onsite managers view free of charge. The salaries range spend a large part of their workday doing from $50,000K up to $100,000 and more tasks away from the office, such as showper year. The report chose $50,000 as ing apartments, inspecting the grounds, high-paying since the average medi- or meeting with owners. About two in an wage is $36,200 per year according five were self-employed in 2014,” accordto the Bureau of Labor Statistics (BLS) ing to the BLS. May 2015 reports. The BLS annual median wage is “Employment of property, real estate, $36,200 per year. So jobs that pay more and community association managers is than $50,000 a year are quite a bit higher projected to grow 8 percent from 2014 to than average. 2024, about as fast as the average for all “We put these high paying career lists occupations,” according to the BLS. “Job together so you can search jobs grouped opportunities should be best for those by income bracket. The $50,000 a year with a college degree in business adminjobs list is full of interesting careers from istration or real estate and for those who nearly every industry. Further good news obtain professional credentials,” accordis that there are 83 jobs on this list. So ing to the BLS website. there are a lot of jobs in the $50,000 a year While the average salary was $55,380, range and even more if you want to look there is a range among property manag- further up the income bracket,” accorders and association managers, accord- ing to CareerToolkit.com. ing to the survey. Jobs in the construction industry pay• Median salary - $55,380 ing over $50,000 a year include structural iron workers, plumbers, and millwrights. • Salary range - $28,490 to $123,790 Each of these jobs pays significantly per year more than the annual median wage and • Job growth – 8% (as fast as average) typically only requires a High school diploma or equivalent.

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Many technician jobs pay in the $50,000 a year range also. For instance, wind turbine service technicians, industrial engineering technicians, mechanical engineering technicians, and electro-mechanical technicians all earn over $50,000 a year. In addition, each of these jobs typically requires an Associate’s degree or postsecondary nondegree award or certificate. So that means you can get started without needing years of education.

positions. Managers of commercial properties and those dealing with a property’s finances and contract management increasingly are finding that they need a bachelor’s or master’s degree in business administration, accounting, finance, or real estate management, especially if they do not have much practical experience. Experience in real estate sales is a good background for onsite managers because real estate salespeople also show commercial properties to prospective tenants or buyers, according to the BLS. Take a look at the full list of $50K a year jobs here - http://www.careertoolkit.com/ high-salary-jobs-50k-100k-professions.html Resources: Guide to 285 high-paying jobs http://www.careertoolkit.com/high-salary-jobs-50k-100k-professions.html

Property managers and education

In terms of education for property management positions, many employers prefer to hire college graduates, particularly for offsite positions dealing with a property’s finances or contract management. Employers also prefer to hire college graduates to manage residential and commercial properties, according to the BLS website. A bachelor’s or master’s degree in business administration, accounting, finance, real estate, or public administration is preferred for commercial management

Careertoolkit.com start a career you will love http://www.careertoolkit.com/high-salary-jobs50k-100k-professions.html Bureau of Labor statistics https://www.bls.gov/ Occupational handbook for property managers, real estate and association managers https:// www.bls.gov/ooh/management/property-real-estate-and-community-association-managers.htm#tab-1

Publisher Will Johnson – will@propubinc.com Designer/Editor Kristin Flores – kristin@propubinc.com

Advertising Sales Will Johnson – will@propubinc.com Terry Hokenson – terry@propubinc.com Larry Surratt – larry@propubinc.com

Rental Housing Journal Valley is a monthly publication published by Professional Publishing Inc., publishers of Real Estate Opportunities in Investing & Real Estate Investor Quarterly

www.rentalhousingjournal.com The statements and representations made in advertising and news articles contained in this publication are those of the advertiser and authors and as such do not necessarily reflect the views or opinions of Professional Publishing, Inc. The inclusion of advertising in this publications does not, in any way, comport an endorsement of or support for the products or services offered. To request a reprint or reprint rights contact Professional Publishing Inc. PO Box 6244 Beaverton, OR 97007. (503) 221-1260 - (800) 398-6751 © 2015 All rights reserved.

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Rental Housing Journal Valley

Pockets of Affordable Housing Exist Within the Most Expensive Markets Even in metros where homebuyers have the biggest mortgage burdens, some cities within those metros provide relatively affordable housing options.

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he San Jose metro has been one of the hottest housing markets in the country. Homebuyers in Palo Alto can expect to spend 75 percent of their income on a house paymenti. But just 15 miles away, buyers in Milpitas, Calif. need only spend 35 percent. This example of disparity in the Silicon Valley demonstrates how hot housing markets are fueled by cities where high demand for jobs and amenities drive housing values to far outpace incomes. The phenomenon is one reason there is more inequality in very expensive markets. Zillow’s latest research on mortgage burdens at the city level illustrates how hot spots within popular housing markets have caused runaway housing costs that place significant burdens on the people who live and work there, even as the

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cities next door remain more affordable. However, choosing a more affordable city likely requires trade-offs, such as fewer amenities or longer commutes. “The Bay Area and other expensive West Coast markets get a lot of attention for being unaffordable, but even they have some areas where the share of income spent on housing is relatively low,” said Zillow Chief Economist Dr. Svenja Gudell. “Of course, buyers have to be willing to make some trade-offs to live in more affordable cities within the metro. Some cities in the most in-demand housing markets across the country have such a high housing burden that they are simply not feasible for buyers with lower incomes. If income growth doesn’t keep pace with home value growth, especially as mortgage rates rise, inequality will persist.”

In San Francisco, the flourishing tech industry and physical boundaries of the city have created a housing market with a high housing burden – buyers in San Francisco need to spend nearly 54 percent of their income on mortgage payments. Across the bay, homebuyers in Oakland fare a little better. Mortgage payments there require 42 percent of the typical household income. Within the Seattle metro, Bellevue buyers would have to spend the greatest share of income on housing – 29.6 percent. Less than 10 miles away, Kirkland buyers only need to set aside 22 percent of their income to pay their mortgage. This phenomenon doesn’t play out in less heated housing markets. Buyers in almost any part of the Kansas City metro, for example, can expect to spend between

7.3 percent and 13.2 percent of their income on a mortgage. Similarly, buyers in the Las Vegas metro can expect to spend between 14.4 and 18.9 percent of their income on mortgage payments, no matter which city they are in. Buyers moving to the Detroit suburbs will have similar mortgage burdens, with buyers having to spend between 10.2 and 15.3 percent of their income on mortgage payments. The city of Detroit itself has the smallest mortgage burden in the country – just 5.9 percent of the typical income needed to pay the monthly mortgage.

Metropolitan Area

Metro-level Mortgage Burdenii, 2015

City with the Smallest Mortgage Burden, 2015

City with the Greatest Mortgage Burden, 2015

United States

14.6%

Detroit, MI – 5.9%

Palo Alto, CA – 75.4%

New York/Northern New Jersey

24.9%

Brentwood, NY -- 14.7%

Passaic, NJ -- 45.7%

Los Angeles-Long Beach-Anaheim, CA

39.7%

Lancaster, CA -- 18.5%

Santa Monica, CA -- 66.1%

Chicago, IL

14.0%

Gary, IN -- 6.8%

Evanston, IL -- 20.1%

Dallas-Fort Worth, TX

12.6%

Grand Prairie, TX -- 10.6%

Lewisville, TX -- 16.1%

Philadelphia, PA

14.2%

Camden, NJ -- 11.8%

Wilmington, DE -- 13.7%

Houston, TX

11.9%

Pasadena, TX -- 9.6%

Baytown, TX -- 9.9%

Washington, DC

17.8%

Waldorf, MD -- 13.1%

Washington, DC -- 29.9%

Miami-Fort Lauderdale, FL

19.5%

Lauderhill, FL -- 10.3%

Miami, FL -- 42.8%

Atlanta, GA

11.8%

Johns Creek, GA -- 14.0%

Sandy Springs, GA -- 26.4%

Boston, MA

21.7%

Lowell, MA -- 21.3%

Boston, MA -- 35.9%

San Francisco, CA

39.0%

Antioch, CA -- 21.9%

Berkeley, CA -- 58.4%

Detroit, MI

10.3%

Detroit, MI -- 5.9%

Rochester Hills, MI -- 15.3%

Riverside, CA

23.6%

Victorville, CA -- 18.1%

Upland, CA -- 35.2%

Phoenix, AZ

16.8%

San Tan Valley, AZ -- 12.0%

Scottsdale, AZ -- 23.6%

Seattle, WA

21.4%

Marysville, WA -- 16.2%

Bellevue, WA -- 29.6%

Minneapolis-St Paul, MN

13.8%

Maple Grove, MN -- 12.4%

Minneapolis, MN -- 17.1%

San Diego, CA

33.0%

Chula Vista, CA -- 29.5%

El Cajon, CA -- 39.4%

St. Louis, MO

11.0%

Saint Louis, MO -- 11.6%

Saint Charles, MO -- 12.7%

Tampa, FL

14.3%

Riverview, FL -- 11.3%

Clearwater, FL -- 16.0%

Baltimore, MD

15.5%

Baltimore, MD -- 11.8%

Ellicott City, MD -- 20.4%

Denver, CO

19.6%

Highlands Ranch, CO -- 16.3%

Denver, CO -- 25.0%

Pittsburgh, PA

10.6%

Pittsburgh, PA -- 11.1%

n/aiii

Portland, OR

20.8%

Hillsboro, OR -- 17.1%

Portland, OR -- 24.1%

Charlotte, NC

12.7%

Gastonia, NC -- 11.3%

Rock Hill, SC -- 14.9%

Sacramento, CA

23.3%

Elk Grove, CA -- 18.3%

Davis, CA -- 44.4%

San Antonio, TX

11.8%

New Braunfels, TX -- 14.3%

n/a

Orlando, FL

15.5%

Pine Hills, FL -- 10.5%

Kissimmee, FL -- 14.9%

Cincinnati, OH

11.1%

Cincinnati, OH -- 14.2%

n/a

Cleveland, OH

11.1%

Parma, OH -- 8.3%

Lorain, OH -- 8.3%

Kansas City, MO

10.8%

Kansas City, KS -- 7.3%

Overland Park, KS -- 13.2%

Las Vegas, NV

16.8%

Enterprise, NV -- 14.4%

Paradise, NV -- 18.9%

Columbus, OH

11.9%

Columbus, OH -- 10.7%

n/a

Indianapolis, IN

11.4%

Fishers, IN -- 8.5%

Carmel, IN -- 12.1%

San Jose, CA

39.4%

Milpitas, CA -- 34.8%

Palo Alto, CA -- 75.4%

Austin, TX

15.9%

Round Rock, TX -- 13.0%

Austin, TX -- 20.3%

Rental Housing Journal Valley · February 2017


Rental Housing Journal Valley

DEAR MAINTENANCE MEN: Caulk, Plumbing, Doors and Curtains

By Jerry L’Ecuyer & Frank Alvarez

Dear Maintenance Men:

I’m attempting to remove old caulking from around a bathtub. Are there any tricks or chemicals to help with this job?

Steve

Dear Steve:

Most bathtub caulking is either silicon or latex based. If originally installed properly, it should stick pretty well. Most household chemicals will not affect the caulking or help in its removal. The best method is to use a razor knife to cut along either side of the bead. Then pull the bead out by hand as you cut. The balance of the material can be removed with a flat razor, either along the old bead or perpendicular to the bead. After all the material is removed, use a damp rag to remove any loose bits. Before installing the new caulk, be sure the area is clean and dry. You can use a wet/dry vacuum to suck up any water left over from your cleaning.

Dear Maintenance Men:

I have two units that have back to back kitchen plumbing that drain into a single pipe. They are constantly blocking up. We snake them on a regular basis, but to no avail. How can I solve this problem?

Julia

Dear Julia:

Unfortunately with two units draining into one drainpipe, you double the drain’s workload. This means the drain line has twice the grease, twice the soap and twice the food etc. In this case we will assume that your waste plumbing system consists of galvanized & cast iron piping. These two types of metal drainpipe’s inner lining tends to corrode and become rough and flake. This allows solid waste to form on the rough surface. A solution to the

GOT LEAKS? Is there a leak lurking around your property? High water bill? Hear water running? Be Safe! Find out!

problem is to instruct your residents on the proper use of the garbage disposal. The water must be running before you turn on the disposer and continue running after the disposer is turned off. This will insure that the waste has been washed all the way down the pipe. The garbage disposer must run a sufficient amount of time to insure the proper breakup of the waste. The residents should also be instructed to feed the disposer slower, and not to cram food down the drain. For persistent drain problems, we highly recommend getting the drain line Hydro Jetted and then have the line inspected with a camera. This will determine exactly where and why you have a constant problem with your drain line.

Dear Maintenance Men:

I’m starting a rehab in my unit’s bathroom and thinking of replacing the shower curtain as part of the work. A shower curtain is a fast and easy job. What are the pros and cons of a shower door versus a shower curtain in my rental unit’s bathtub? How do you install a shower door? I don’t want to poke holes in the bathtub.

Bryan

Dear Bryan:

Undetected leaks can threaten property values and repairs will be more costly. Avoid hit and miss digging. Save your property! Our highly trained specialists use advanced technology to accurately locate water line and leaks. We save your time, money and frustration. • Leak Detection on water and sewer lines • Video inspection of sewer and drain lines • Line locating of all utility lines including PVC • Cause & Origin investigation for water damage • Leak detection and inspection on Pools & Spas

While appearing as a guest on “The Tonight Show” one evening many, many years ago, famed hotelier Conrad Hilton was asked by his host (Johnny Carson) whether he had a “message” for the American people. With great gravity, Hilton paused momentarily before turning to the camera. “Please,” he pleaded, “put the shower curtain inside the tub!” Keeping with Mr. Hilton’s thoughts, we are big fans of shower doors as opposed to shower curtains, because residents also leave the shower curtain outside the tub. Shower door installations are a great doit-yourself project, because it is easy to do and the results looks great.

After removing the existing shower curtain, clean the tub and walls to remove any accumulated soap scum. Measure the tub ledge wall to wall and subtract 3/16th of an inch (to leave room for the wall channels) and transfer the measurement to the bottom rail track of the shower enclosure. After measuring twice and cutting once, temporally set the bottom track on the tub ledge and tape it in place. Next, set the wall channels in place, use a level to make sure it is plumb with the wall. Mark the mounting holes of the wall channel with your pencil. Do the same thing for the other side. Remove the channels and before drilling, center punch the hole mark to keep the drill bit centered. If drilling through tile, use a ceramic drill bit. Once you have made your holes, insert wall anchors. Now you are ready to set the bottom track. Use adhesive caulk and if you feel the track may be abused, also use some Liquid Nails adhesive at several spots under the track. Remove any excess caulk and then use duct tape to temporally hold the track in place. Before fitting the side channels, run a bead of adhesive caulk on the backside of the channel. Install the channel, use the supplied screws and bumper to fasten the channel to the wall, repeat on the other side. Wipe away any excess caulk. To install the top rail channel, measure from wall to wall at the top of the wall channels. Subtract 1/16 of an inch and cut the top channel to that length. Again, measure twice. The top channel should fit snug between top of the wall channels. Lastly it is time to hang the doors and adjust the fit. Most doors come with good instructions, read them, as there may be details not included in our explanation. 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 Jerry L’Ecuyer is a licensed contractor & real estate broker. He is currently on the Board of Directors and Chairman of the Education Committee of the Apartment Association of Orange County. Jerry has been involved with apartments as a professional since 1988. Frank Alvarez is 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. Frank can be reached at (714) 956-8371 Frankie@BuffaloMaintenance.com For more info please go to: www.BuffaloMaintenance.com

Eugene - 541-485-5325 Salem - 503-363-5325 CCB #164212

www.americanleakdetection.com Rental Housing Journal Valley · February 2017

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Rental Housing Journal Valley

Home Buyers in Expensive ...continued from page 1 Francisco Bay Area. This makes building home equity a slower process, and the Breakeven Horizons in both the San Jose and San Francisco metros are nearly two years and 1.5 years longer, respectively, than they were the year before. No other major metros saw the Breakeven Horizon grow as much in a single year. Home value appreciation isn’t slowing everywhere. Home values in the Washington metro, for example, are expected to grow at a faster pace over the next year after staying largely flat recently, leading

to a shorter Breakeven Horizon. Buyers in this area can now expect to break even after 3.5 years. Overall, U.S. home value growth accelerated at the end of 2016, ending the year at a 6.8 percent annual appreciation rate. At the same time, rent appreciation slowed significantly, only growing at 1.5 percent annually. These shifting dynamics can make the question of whether to buy or rent less clear in many markets. “There are many factors that go into the decision on whether to rent or buy,”

said Zillow Chief Economist Dr. Svenja Gudell. “Zillow’s Breakeven Horizon can help people better understand the longer-term financial calculation. It’s also helpful for buyers to understand that as home value appreciation moderates, it will take them longer to break even than in past years. San Jose buyers, for example, will have to stay in a home for at least five years to offset the high upfront costs necessary to make that purchase.” Among the biggest U.S. metros, it takes the longest to break even on a home purMetropolitan Area

Information Resources From the Multifamily NW website to regular communications and monthly newsletters we keep our members informed on the industry. Our biannual Apartment Report gives you the latest rent and vacancy data to stay competitive.

Professional Rental Forms Multifamily NW offers a full suite of Single-Family and Multifamily rental forms that are reviewed quarterly by a committee of experts and legal counsel. With over 100 different forms, we have you covered!

Professional Development Property Management has many facets. Whether you manage single-family or multifamily we are here to provide great opportunities for Leasing, Marketing, Financial Management, Forms Training and more! Nationally Recognized Designations through NAA are a great way to show your management expertise in the industry.

Legislative Action Government & Public Affairs Committee meets monthly to discuss the current issues facing the industry and provide support on behalf of our members. Legislative Alerts are regularly provided to members so that all are informed and ready for action.

Commitment to Charity Charity Events are a very important part of the Multifamily NW agenda. Annual golf events support housing charities around the state and the Service Committee hosts charity drives and events throughout the year.

Networking Opportunities Multifamily NW offers regular networking events throughout the year. It’s the perfect chance to connect with your peers to learn the tips and tricks that make your job easier.

Annual Events With 8 large annual events and counting, Multifamily NW is second to none for educational and networking resources. We offer great sponsorship opportunities to promote your business and are committed to promoting Members Using Members (MUM).

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United States New York/Northern New Jersey Los Angeles-Long BeachAnaheim, CA Chicago, IL Dallas-Fort Worth, TX Philadelphia, PA Houston, TX Washington, DC Miami-Fort Lauderdale, FL Atlanta, GA Boston, MA San Francisco, CA Detroit, MI Riverside, CA Phoenix, AZ Seattle, WA Minneapolis-St Paul, MN San Diego, CA St. Louis, MO Tampa, FL Baltimore, MD Denver, CO Pittsburgh, PA Portland, OR Charlotte, NC Sacramento, CA San Antonio, TX Orlando, FL Cincinnati, OH Cleveland, OH Kansas City, MO Las Vegas, NV Columbus, OH Indianapolis, IN San Jose, CA Austin, TX

chase in large California markets. In San Jose, San Francisco, Los Angeles and San Diego, the Breakeven Horizon is at least four years. Buyers will break even fastest in the South and Midwest. In Indianapolis, Orlando, Detroit, Atlanta, and Tampa, it takes less than 1.5 years to break even on a home.

Breakeven Horizon, 2016 Q4 1 year, 11 months 2 years, 6 months

Breakeven Horizon, 2015 Q4 1 year, 10 months 3 years, 2 months

4 years, 2 months

4 years, 1 month

2 years 1 year, 6 months 2 years, 5 months 1 year, 11 months 3 years, 6 months 2 years, 3 months 1 year, 5 months 2 years, 8 months 4 years, 6 months 1 year, 5 months 2 years, 2 months 2 years, 5 months 2 years, 5 months 2 years, 3 months 4 years, 1 month 1 year, 10 months 1 year, 5 months 2 years, 5 months 2 years, 3 months 2 years 2 years, 1 month 1 year, 8 months 2 years, 5 months 1 year, 9 months 1 year, 5 months 1 year, 8 months 1 year, 10 months 1 year, 7 months 1 year, 10 months 1 year, 9 months 1 year, 4 months 5 years, 2 months 2 years, 5 months

2 years, 1 month 1 year, 3 months 2 years, 10 months 1 year, 5 months 4 years, 5 months 2 years, 6 months 1 year, 5 months 3 years, 1 month 2 years, 11 months 1 year, 4 months 1 year, 10 months 2 years, 4 months 1 year, 11 months 2 years, 3 months 3 years, 5 months 1 year, 9 months 1 year, 11 months 3 years 1 year, 9 months 1 year, 9 months 2 years, 1 month 1 year, 9 months 2 years, 1 month 1 year, 6 months 1 year, 11 months 1 year, 7 months 1 year, 6 months 1 year, 6 months 1 year, 8 months 1 year, 8 months 1 year, 4 months 3 years, 3 months 1 year, 11 months

Zillow® is the leading real estate and rental marketplace dedicated to empowering consumers with data, inspiration and knowledge around the place they call home, and connecting them with the best local professionals who can help. In addition, Zillow operates an industry-leading economics and analytics bureau led by Zillow’s Chief Economist Dr. Svenja Gudell. Dr. Gudell and her team of economists and data analysts produce extensive housing data and research covering more than 450 markets at Zillow Real Estate Research. Zillow also sponsors the quarterly Zillow Home Price Expectations Survey, which asks more than 100 leading economists, real estate experts and investment and market strategists to predict the path of the Zillow Home Value Index over the next five years. Launched in 2006, Zillow is owned and operated by Zillow Group (NASDAQ: Z and ZG), and headquartered in Seattle.

The breakeven horizon is the number of years after which buying is more financially advantageous than renting (at the precise breakeven horizon one can be indifferent between buying and renting). We compute the breakeven horizon for each household by comparing the costs of owning a home versus renting a home at the end of each year for 30 years (assuming the house is purchased using a 30 year fixed mortgage). Our buy versus rent analysis incorporated all possible costs incurred when purchasing a home as well as those incurred when renting a home to make the comparison between these costs as realistic as possible. The full methodology can be found here: http://www.zillow.com/research/ rent-vs-buy-breakeven-horizon-analysis-methodology-updated-3549/ Zillow –http://www.zillow.com i

Text REALESTATE-ROI to 44222 to receive a digital copy of this year's Real Estate Opportunities in Investing (ROI) Finding Investing Success in Today's Housing Market Rental Housing Journal Valley · February 2017


Rental Housing Journal Valley

Portland Proposes Landlords Pay to ...continued from page 1

Handling Employee Evictions ...continued from page 1 Management can fire an employee for good cause or no cause, but not for “bad” cause. For example, an employer and employee agree that the employee will do the required work and employer will provide the necessary working conditions, as well as pay the employee for the work done. However, there cannot be a guarantee of continued employment or tenure. The very nature of the “at-will” precludes any claim for a prospective benefit. Either employer or employee may terminate the contract at any time.

nance would be illegal given the state’s prohibition on rent control, noting there is a “strong likelihood” he will sue the city if the emergency ordinance passes. “This proposed ordinance requires landlords to pay penalties (styled as relocation expenses) in the approximate amount of 3 months rent for the typical rental unit if the landlord terminates the tenancy or issues a rent increase in excess of 10% per year,” he writes in an email. “Requiring the payment of relocation expenses for rent increases is no different than imposing penalties for rent increases. Either way, the city is attempting to engage in rent control. Rent control is prohibited by state statute. We believe that this ordinance would likely not survive a court challenge. It is also unclear as to whether the proposal is intended to impact leases which terminate on their own accord.”

Evicted tenants moving costs may be temporary

gency, set to last through October 2017. The City Council declared the emergency in October 2015. Wheeler also submitted a resolution to waive development fees for certain affordable housing developments during the city’s housing emergency. “We are trying to create a broad set of tools that will protect the rights of renters and seek to reduce the time and cost of bringing workforce and lower-income housing online,” Wheeler told the newspaper. Resources: Proposed relocation ordinance https://www.portlandoregon.gov/eudaly/article/625338 Relocation ordinance fact sheet https://www.portlandoregon.gov/eudaly/article/625336 Relocation assistance ordinance https://www.portlandoregon.gov/eudaly/article/625340

The relocation requirement would apply only during Portland’s housing emer-

Good Cause

Good cause for termination includes lying, fighting, destroying company property, inability to perform the duties of the job, and insubordination. The employer can terminate the employment if he or she makes a subjective determination that the employee’s work is unsatisfactory. Often times, multi-housing employees receive housing as part of their compensation. The Arizona Residential Landlord and Tenant Act does not protect these individuals in employee-termination situations. A.R.S. § 33-1308 states in part: Exclusions from application of chapter Unless created to avoid the application of this chapter, the following arrangements are not covered by this chapter... 5. Occupancy by an employee of a landlord as a manager or custodian whose right to occupancy is conditional upon employment in and about the premises. Management should draft a written agreement stating that employees are not residents; the agreement is not a lease and the time frame for vacating the unit following termination. If the employee is a current resident, the landlord should cancel their lease agreement and inform the individual that the employee agreement takes precedence over the lease. Once management terminates an employee, it should personally deliver to him or her a five-day notice to vacate under the conditions of A.R.S. § 12-1173 (the forcible detainer statute). However, if, at the time of hiring, the employee signed an agreement specifying the amount of time

FOR SALE

he or she has to vacate, this takes precedence over the statute. Additionally, it is a good idea to issue this notice at the time of termination. Although lockouts are permissible as long as they do not cause a breach of peace, most courts do not look favorably on them. For example, a judgment has in the past awarded $5,000 in punitive damages to a former employee because of a lockout situation. At the end of the notice period, management may file a forcible detainer eviction requesting possession of the unit, fair rental value from the termination date, attorney fees and costs. This procedure is identical to a normal eviction for nonpayment of rent. Following the hearing and judgment, the constable can evict the employee under a writ of restitution after five days.

Example

Consider the following example: Clydesdale Apartments hire Miller Tyme and his girlfriend, Amber Lager, to perform maintenance and housekeeping duties. Apartment manager Bud Wizer requires that the two sign an employee agreement stating they must move out within 48 hours in the event of their termination. After a few weeks, Bud Wizer smells alcohol on their breath, frequent absences and poor work performances. The property owners, Mr. Brew and Mr. Stout, elect to terminate Miller Tyme and Amber Lager. They verbally request that the two vacate within the 48-hour period stated in their contract. Miller Tyme and Amber Lager refuse to move and the owners file eviction proceedings against them. At court, Judge Fosters dismisses the eviction because management did not deliver written notice. On the way out the courthouse, Miller Tyme tells Amber Lager, “It doesn’t get any better than this.” Andrew M. Hull, Esq. Hull, Holliday & Holliday, PLC www.doctorevictor.com • 602.230.0088

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Are Urban Areas Running Out Of Millennial Renters? By John Triplett, Desert Path Marketing Group

A

s apartment rents are peaking and even starting to moderate or decline in some urban areas from Seattle to Denver, and New York to Los Angeles, some experts are asking whether we may have reached “Peak Millennial” status and the number of Millennial renters will begin to decline. These experts say the urban core renters may have reached the saturation point, and in coming years will stop growing and begin a decline. Their argument is that as Millennials age and start families, they will want to move to the suburbs for more space for housing and better schools than in the urban core. Dr. Dowell Myers, a demographer and urban planner at the University of Southern California, has written a paper called, “Peak Millennials: Three Reinforcing Cycles That Amplify the Rise and Fall of Urban Concentration by Millennials.” Myers argues that the peak year of Millennial presence in inner city districts was 2015, and their declining impacts will become apparent before 2020. “Millennials were doubled up at entry levels of their housing life cycle, blocked by older peers who were unable to turn over their apartments for better homes,” Myers writes. “With renewal of new construction and home buying, stronger vacancy chains will again stimulate outflow. “The combined effect of the three reversed cycles will reduce central concentrations of young adults. Preferences may persist for urban walkability but, freed of

of housing independence, many residing with their parents in the suburbs and others in central neighborhoods of urban areas. In the next 5 years, when the larger cohorts of Millennials have moved into their 30s, and given continued recovery in the housing market, their residence will likely progress to a different stage, and likely in different neighborhoods.

their former constraints, preferences will now be expressed through choice from a broader range of locales. Cities and suburbs can compete for Millennials passing age 30 with walkable districts, transit, and better schools and housing,” he says.

Portland not peak Millennial

However in Portland, Joe Cortright, president and principal economist of Impresa, a consulting firm specializing in regional economic analysis, innovation and industry clusters, argues that the answer is, “No,” that we have not reached peak Millennial.

“While it’s fashionable to describe the trend toward city living as something caused by the unique preferences of Millennials, the shift toward city living both predates the maturation of the Millennial generation—and promises to continue as their places among the young adult age group are taken by the post-Millennials (or whatever name is attached to the succeeding generation),” Cortright writes. The relative preference for urban living for 25 to 34 year-olds has been increasing over the past two decades. The New York Times explores this topic in a recent article here - https://www.nytimes.com/2017/01/23/upshot/peak-millennial-cities-cant-assume-a-continued-boostfrom-the-young.html?_r=0

Declining Millennial renters presence in cities

“After a decade of rapid increase, we now can expect rapid slowing and then deconcentration,” Myers writes. “The explanation for why the urban episode of the Millennials will not persist is given by a tracing out of three cycles that worked together first to amplify the presence of Millennials in cities, and now are all reversing their effects and interacting together to reduce Millennial presence. “The impacts of Millennials will not disappear but will slacken as they shift toward their new life-cycle stage of early middle age. The young people of the next decade are less likely to fill the gap left behind by the Millennials,” Myers writes. He sets out three reasons Millennial renters will decline in urban centers. • The first is often overlooked but the most fundamental, namely the rise and fall of the number of births two decades ago that formed the Millennial generation, those born between 1980 and 1999. With the largest Millennial birth cohort passing age 25 in 2015, and smaller cohorts to follow, there may be grounds to declare we have reached the day of peak urban Millennials.

• The impact of the great recession. This severe economic volatility slowed the rate of job growth at the crucial time when Millennials sought entry-level positions. Now that economic growth has resumed and new construction of housing is on the rise, we might expect that previously stalled progress through the life cycle will at least partially resume. This economic recovery will also accelerate renewed progress through the housing life cycle as well. His conclusion on Millennial renters: “The period preceding and following the Great Recession may become known as a great natural experiment in urban flows. Whereas the demographic pipeline pumped young adults into cities at full volume, the normal turnover and outflow was clogged by older peers who lacked the job and housing opportunities to advance to the next stages of their employment and housing careers. “Millennial presence was amplified in cities because the drain was plugged, but now we can anticipate an amplified outflow of those who had been pent up,” Myers writes. The New York Times article says, “If there is an economic lesson that the Great Recession has stamped upon many Millennials, it’s that there is often a big difference between what you want and what you can afford. So while some 22-year-old Millennials might have made a declaration that they would rather die than live in a suburb, their 35-year-old selves might feel differently, especially when they discover suburban houses are often cheaper and suburban schools are often better.” Resources: Cities cannot assume a continued boost from the young https://www.nytimes.com/2017/01/23/upshot/ peak-millennial-cities-cant-assume-a-continued-boost-from-the-young.html Peak Millennials: Three Reinforcing Cycles That Amplify the Rise and Fall of Urban Concentration by Millennials http://popdynamics.usc.edu/pdf/2016_Myers_ Peak-Millennials.pdf Not peak Millennial: The coming wave http://cityobservatory.org/not-peak-millennialthe-coming-wave/

• The second is the housing life cycle. The Millennial renters are currently poised at the threshold

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Rental Housing Journal Valley · February 2017

Rental Housing Journal Valley February 2017  

Rental Housing Journal is the business journal for Oregon's Willamette Valley rental housing and multi-family property management industry.

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