Tuesday, February 5, 2019

Rising Seas Are Lowering Massachusetts Home Values

New reports show that rising sea levels are drastically lowering Massachusetts property values. Boston's Seaport hasn't been affected by flooding this year like it was at the start of 2018, however new reports have come out displaying how rising seas are hurting New England property values. The report, first published by New York-based First Street Foundation, a non-profit that studies rising sea levels, revealed that New England homes have dropped more than $400M in value due to tidal flooding and rising sea levels.

First Street Foundation studied 2.5 million properties throughout Massachusetts, Rhode Island, New Hampshire, and Maine coast lines, ultimately determining sea levels had accounted for $403.1M in home price depreciation between 2005 and 2017. Massachusetts faced the greatest amount of property loss, with an estimated $273.4 in lost value. Furthermore, property values are expected to continue decreasing from rising sea levels, unless adaptation and precautionary measures are being taken to stop it. The study stated that homes next to, but not yet in, flood prone areas are still highly susceptible to the damages and depreciating home values brought along from flooding and water damage.

Currently, Boston real estate leaders are going through several storm resiliency studies to determine the best way to prevent $80B of liable commercial real estate from getting damaged by regular flooding in the future. Boston Mayor Martin Walsh revealed a comprehensive plan in October that requested more private-public partnerships to build and protect the city around rising sea levels and flood damage.

Monday, February 4, 2019

How to Deal With Difficult Tenants

Every landlord's goal is to have ideal tenants who always pay rent on time, properly maintain their residence, follow the rules, and continuously renew their lease. Unfortunately, being a landlord involves dealing with all types of tenants, not just exceptionally great ones. Even by following a strict screening process and writing stringent lease agreements, you will inevitably come across difficult tenants at some point, such as those who: 

  • Fail to pay rent on time 
  • Damage property 
  • Sublet without your permission 
  • Cause general issues 

Difficult tenants can bring harm to your reputation and business. In Massachusetts, being a landlord is especially a challenge because the laws and rules are nearly all slanted in the tenant's favor. Fortunately, if you have a solid plan in advance to prepare yourself for troublesome tenants, you can handle tough situations smoothly and prevent problems from spiraling out of control. Taking the time to learn the following important legal knowledge will help you address any future negative situations with troublesome tenants:

1. Tenants not Paying Rent on Time 

When addressing tenants who are behind on their rent payments, you must always maintain composure and professionalism. Communicate with the tenant in person and in writing, reminding them of the consequences of paying rent late, including any late fees. Always save written documentation in case you need to bring the case to collections. 

In Massachusetts, the grace period for a renter must be clearly defined in the lease agreement, including when, where, and how the payment must be made. A landlord cannot begin the eviction process within the grace period defined in the lease. Late fees are also required to be defined in the lease agreement. According to Massachusetts laws, late fees and/or interest charges may not begin until 30 days after the rent payment is due. If the grace period expires and no payment is made, the landlord can begin the eviction process. Landlords are required to first provide you with 14 days "Notice to Quit". If the tenant makes a payment within these 14 days, the landlord can no longer continue the eviction process. 

2. Tenants Suddenly Abandoning their Lease

When you find out one of your tenants has suddenly abandoned their apartment and moved out, it's important to understand the law on property abandonment. You have the legal right to pursue unpaid rent and any additional fees the security deposit does not cover. Ensure that you document all efforts made to communicate with the tenant and keep receipts of any necessary repairs that were made. If your efforts to collect the rent back turn out unsuccessful, you may file your case with small claims court or hire a collection agency to track down your tenant. Consider reporting the tenant to all major credit bureaus, which will negatively impact their ability to secure another apartment rental. 

3. Property Damage 

If your property has been accidentally or purposely damaged, you must first asses the damages and figure out repair costs. Discuss restitution with the tenant and listen to their side of the story. If the property damage is minor, landlords have the power to retain the security deposit to cover any damages incurred by the tenant. Also consider asking your tenants to purchase renter's insurance, it's extremely affordable and prevents many major problems. 

4. Creates a General Nuisance 

Occasionally you will run across renters who break rules, accidentally or purposely. Examples of common troublesome behavior includes sneaking pets into apartments which are not pet friendly, or having large parties which cause noise complaints and legal worries. Whatever the case is, always begin by confronting the tenant in a respectable and kind manner. Ensure you go over the lease agreement terms and address any concerns or confusions they may have. A responsible property manager should always have an eviction clause in your lease agreement to protect yourself from troublesome situations that persist. 

Overall, having a clear-cut system to handle troublesome tenants will save yourself many headaches and legal troubles. Take the time to prepare yourself and educate yourself on property laws, which will allow you to conduct yourself in a confident and efficient manner. Remember that taking the time and investment to conduct background checks and credit checks before signing a lease often prevents many problems. 

Monday, January 7, 2019

Mortgage Rates Drop Lower in Early 2019

The new year started with lower mortgage rates across the board in the U.S. The 30-year fixed mortgage rate recently dipped to 4.51%. The low mortgage rate combined with decreasing home price growth should get prospective homebuyers excited to buy. However, the recent turmoil of the stock market may affect home buying activity in the next few months. The 30 year mortgage fixed-rate averaged 4.51% for the week ending January 3, 2019, down from last week when it averaged 4.55%. A year ago at this time, the 30 year fixed-rate mortgage averaged 3.95%. The 15 year fixed mortgage rate average 3.99% this week, down from last week when it averaged 4.01%.

This mortgage-rate drop offers a potential boost to the housing market. The decline on mortgage rates gives consumers an opportunity to obtain low rates on loans to purchase or refinance their homes, if they can look past volatile financial markets and still high home values. High home prices, stock market swings, and a traditionally slow time of year for home buying have largely lowered housing-market activity in recent months.

Short-Term Rentals Will Get Hotel Tax Treatment Under Newly Enacted Massachusetts Law

Under a newly enacted Massachusetts law, short-term rentals in Massachusetts will soon be taxed at the same rate as hotels. Massachusetts governor Charlie Baker signed a bill into law in late December aimed at regulating short-term rentals. This new measure goes into effect July 1st, and requires all hosts to register with the state, carry insurance, and taxes them at the same 5.7% short-term rental tax that hotels currently pay. The new law is expected to bring in at least $25M annually for the state. However, hosts who rent their home fewer than 14 times annually are exempt from the tax. 

The most popular short-term rental website, Airbnb, is very unhappy with the decision and is already preparing to fight back. Airbnb Northeast Press Secretary Liz Debold recently released a statement expressing their disappointment in the "flawed bill" and stated that Airbnb will continue to fight for "hosts, guests, and local small businesses". Airbnb most recently filed a lawsuit in federal court in November to overturn another Boston short-term rental law passed last summer which would have required hosts to register and a pay a $200 annual fee.

This new law will bring several large changes to Massachusetts, which encompasses several regions especially popular for short-term rentals. Cape Cod, the Berkshires, and Boston are specifically very profitable regions for Airbnb hosts. Under the new law, Boston is permitted to add on an additional 6.5% tax on short-term rentals. Massachusetts will be the first state requiring short-term rental hosts to register with the state. This law has serious benefits for the safety and security of consumers who stay in Airbnbs. Hotel industry groups were especially pushing for the required state registry and were happy with the new law. Lawmakers believe this law will create a more balanced playing field between short-term rentals and traditional hotels, leading towards a more fair and practical system.

Thursday, December 13, 2018

5 Winter Maintenance Tips for Property Owners and Property Managers

As the cold winter approaches, property owners and property managers should start preparing for the detrimental impact winter may have on their properties. Luckily, by proactively protecting your properties and being fully prepared for winter storms, you can easily avoid any negative damages from harsh winter storms. Here are 5 simple steps for protecting your homes from the damaging winter weather this upcoming season:

1. Inspect the Exterior of Your Properties

Before the harsh snow storms appear, ensure that your properties are in excellent condition and are capable of withstanding winter weather. First, inspect your property for dying trees and broken branches which could potentially damage your property when high winds and aggressive storms arise. Also, inspect your property for seemingly harmless defects, such as small cracks in siding and windows. Freezing winter conditions can quickly intensify these problems, causing larger and more expensive repairs in the near future.

2. Reserve your Snow-Clearing Contractors in Advance

When the first cold winter storm hits, you want your properties to be cleared out first. Make the time to set up contracts with snow-removal companies, to avoid long wait times and aggravated tenants. Monitor the storm forecasts and weather reports and call in advance to secure their services.

3. Check for Build-Up and Snow-Pooling on Roofs

Perhaps one of the most overlooked ways to prepare your properties for winter is to ensure your properties have robust roofs that are able to withstand the heavy snow and ice. Begin by thoroughly checking rooftop AC units and vents for any leaves or debris that would prevent snow from properly melting and draining throughout the winter season. Also, inspect your gutters and clean out any lingering debris. During snow storms, monitoring snow build-up on your roof is just as important as well. Check the distribution of snow build-up to make sure the property isn't overloaded. Low-sloop roofs especially are at a greater risk for pooling, which can result in leaks and heavy property damage.

4. Stock up on Anti-Icing and De-Icing Products

During winter, always keep your properties and buildings safe and risk-free. Preventing icy sidewalks and maximizing safety is extremely important. Simply sprinkling rock salt outside of the building and nearby sidewalks will not fix the problem. As a responsible property manager, it is absolutely essential to invest in anti-icing and de-icing products. De-icing products will melt snow and ice after they fall, while anti-icing products will prevent the snow from sticking to begin with. Anti-icing products are an amazing way to minimize winter snow build-up, while also making snow and ice much easier to remove. Most likely, you will need a strong combination of both anti-icing and de-icing products to face the winter strongly and vigorously.

5. Leave the Heat on

Always remember to remind tenants to maintain a minimum temperature of 55 degree Fahrenheit when they go away on vacation. This will prevent pipes from freezing and bursting from cold winter temperatures.

Zillow is Expanding to Buying and Selling Homes

Zillow is expanding, and shaking up the real estate industry in the process. The online real estate company recently expanded into the mortgage business with their acquisition of of Mortgage Lenders of America. Now, Zillow is ready to start buying homes directly from sellers for cash, making whatever improvements are necessary, and listing them for sale.

Zillow's new direct buyer business is called Zillow Offers. Zillow quietly launched their direct buying business in Phoenix in April; now their services are available in Las Vegas, Atlanta, and Denver. The company will be soon expanding to California and North Carolina as well. As of this week, potential home sellers in the Charlotte, North Carolina area will be able to request a free, no-obligation cash offer for their home from Zillow. If the seller agrees to accept the offer, they then pick a closing date which works best for them. Zillow then takes possession of the home, does any necessary home improvements or cleaning, and sells the home for profit.

What makes Zillow's direct buying program different from others, is that Zillow is not cutting real estate agents out of the process. Zillow will be assigning a local real estate agent in the purchase and sale of each home, which will allow the real estate agents to earn commission. Zillow will be represented by the Redbud Group at Keller Williams South Park in Charlotte, North Carolina.

Zillow will be partnering with multiple brokerages across the United States, even giving them leads from motivated sellers, who decide not to accept Zillow's cash offer. Zillow has become part of the growing trend of real-estate companies buying homes directly from owners. Zillow's new service will be available in eight U.S countries by the end of 2019, interested homeowners will receive a preliminary offer within 2 days and close the sale in as little as 7 days from signing.

Sunday, November 11, 2018

4 Low-Cost Ways to Increase the Value of Your Rental Property

1. Give your property curb appeal.

Prospective tenants will always view the outside of your property first, and first impressions are extremely important. An appealing and clean front lawn will help create an initial positive impression and set the mood for the remainder of the property tour. If you are not working with an extensive budget, upgrade whatever you can to make your property look clean and presentable. Remove fallen branches, leaves, and any debris which makes your property look worn and cluttered. Trim overgrown bushes and shrubs. Consider placing down fresh mulch, and adding bushes and flowers. Simply adding a new mailbox or a freshly painted one will make the property look fresh and new. Having outdoor lights and shutters can quickly and inexpensively make the exterior of your property pop. Furthermore, if there is a fence around your property, make sure it looks appealing. A broken fence or missing pickets is extremely unsightly, and not what any tenant wants to see. Ensure your fence is uniform and clean throughout the yard.

2. Extensively clean your entire property. 

Re-painting the entire exterior and interior of your property will add up extremely quickly, however cleaning the entire property is a more inexpensive way to increase property value. While scrubbing the exterior and interior of your property, consider painting any noticeable areas which need touch-ups. Overall, make sure the exterior of your property looks welcoming and bright. A freshly painted door gives the impression that you've actually renovated the house for the next tenant.

3. Upgrade your kitchen appliances.

Thoroughly inspect your kitchen appliances to decide if your property could use an upgrade. Brand new, shiny, and modern kitchen appliances will help raise the perceived value of your property and be extremely appealing to new tenants. Give potential tenants the functionality, quality, and aesthetic that they desire without breaking the bank. Stainless steel is the standard for modern kitchen appliances. Furthermore, the industry is moving towards appliances that are integrated within cabinetry. 

4. Create a higher demand.

A law of economics states that a commodity demands higher value when its demand goes up. If you successfully apply this rule when you're showing your property to respective tenants, you may be able to demand higher rent. If possible, invite all your prospects to inspect the house at nearly the same time. When the prospects see a large demand for your property, they will feel more inclined to pay a premium. They will also feel as if they want it more than they would otherwise. It's simply human nature.