Filed under: Property Management | Tags: Chris Hermanski, Home Maintenance, Portland OR, Property Management, property management services, rental property maintenance, rentals, tenants
The Annual Mainlander Property Management Vendor Appreciation Luncheon was held on Thursday, February 17th. It was another huge success! The festivities took place at Mainlander’s office in Lake Oswego and was attended by over 45 vendors. 
They came from all over to enjoy some great food that was either prepared by a Mainlander staff member or brought in from local restaurants like Busters BBQ! Many even found room to enjoy a piece of the giant Tres Leche cake for dessert!
The food, conversation and networking opportunities were much appreciated by all. Over the course of the lunch, everyone had a chance to relax, enjoy conversation and network with each other while the Mainlander staff gave out exciting door prizes to some very lucky winners.
Some prizes and winners included a Portland City Grill Gift Certificate to Willamette Spa, a Nel Centro Restaurant Certificate to Pro Drain, a 2 night stay at Hotel Modera in Portland to Coho Electric and a 1 night stay at Hotel Andra in Seattle to Norm Jensen!!!
Mainlander Property Management appreciates their vendors and looks forward to this event each and every year. It’s a time to give back and say thank you for all the hard work that is put into by these individuals to help make Mainlander the great property management company it has grown to be!
Filed under: Carbon Monoxide Detectors, General, Home Maintenance, Home Safety, rentals | Tags: Carbon Monoxide Detectors, Chris Hermanski, Home Safety, rentals
Carbon Monoxide Detectors – Proper Placement of Carbon Monoxide CO Detectors Important
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WASHINGTON, Sept. 30 /PRNewswire/ — Proper placement of a carbon monoxide (CO) detector is important, reminds the makers of home-safety and security website HomeSafe.com (http://www.homesafe.com/coalert).
Each fall the sad news of another family that has one or more of its family members perish in their sleep from carbon monoxide poisoning repeats itself.
The real tragedy is that these deaths can be prevented if the family had the chimney checked and/or installed carbon monoxide detectors near the sleeping and living areas within the house.
If you are installing only one carbon monoxide detector, the Consumer Product Safety Commission (CPSC) recommends it be located near the sleeping area, where it can wake you if you are asleep. Additional detectors on every level and in every bedroom of a home provide extra protection against carbon monoxide poisoning.
Homeowners should remember not to install carbon monoxide detectors directly above or beside fuel-burning appliances, as appliances may emit a small amount of carbon monoxide upon start-up. A detector should not be placed within fifteen feet of heating or cooking appliances or in or near very humid areas such as bathrooms.
When considering where to place a carbon monoxide detector, keep in mind that although carbon monoxide is roughly the same weight as air (carbon monoxide’s specific gravity is 0.9657, as stated by the EPA; the National Resource Council lists the specific gravity of air as one), it may be contained in warm air coming from combustion appliances such as home heating equipment. If this is the case, carbon monoxide will rise with the warmer air.
Installation locations vary by manufacturer. Manufacturers’ recommendations differ to a certain degree based on research conducted with each one’s specific detector. Therefore, make sure to read the provided installation manual for each detector before installing.
For more information about carbon monoxide poisoning prevention and to find top-rated CO detectors for your home, visit the CO ALERT at http://www.homesafe.com/coalert.
Filed under: General, MMHA, MMHA Apartment Report, NARPM, Property Management, Uncategorized | Tags: Chris Hermanski, MMHA, MMHA Apartment Report, Portland Metro Apartment Market, Property Management, rentals
By Mark D. Barry, MAI and Phillip E. Barry, Real Estate Broker
The Landlord Times Metro - November 2010 - Vol.14 Issue 10
Forecast For Balance of 2010 and 2011
So where is our apartment market going in the balance of 2010 and 2011? Our thoughts are as follows:
Portland Economy:
The recovery is limping along as we enter the fourth quarter of the year, and is coming at a time when many of the benefits of the government stimulus spending are wearing off. The US economy needs 200,000 jobs per month to bring the unemployment rate down. No one expects that to happen in the near future. In addition, low interest rates, which can encourage borrowing to spur economic growth, are already at near zero. The Oregon Office of Economic Analysis expects that there will be job losses in 2010, and that employment will not reach pre-recession levels until mid 2014.
Apartment Construction:
One thing you won’t have to worry about in the balance of 2010 and into 2011 will be apartment construction. 2010 will be the slowest year for apartment construction in our adult lifetime. There will be some government sponsored urban projects, but that’s about it. I expect we will see permits for 600 to 1,000 new units in 2011.
Apartment Vacancies, Rental Rates, and Income:
The balance of 2010 and first part of 2011 will be a time to concentrate on keeping your tenants happy, and holding on to what you have. Apartment vacancies should remain in the range of 3.5% to 4.5%. But, income will remain flat in the first half of 2011. Looking beyond mid 2011, apartment income should rebound quickly once the economy turns around. There will be a shortage of apartments by 2012.
Apartment Values:
Apartment values have stabilized in YTD 2010. We expect that apartment values will remain stable in the balance of 2010 and into 2011 due to low interest rates, low vacancies, and fairly stable apartment income despite some increasing expenses. When the economy improves, everyone expects apartment income to increase. The real concern is that interest rates will also increase in cap rates. Expect to see typical cap rates of 6.50% to 7.75% for B and C suburban apartments, and 5.75% to 7.25% for more urban properties in 2011. Don’t expect any property tax relief in the 2010-2011 tax year despite a decline in values, and expect to see continued increases in utility costs.
Apartment Sales Volumes:
In 2009 and YTD 2010, we have seen the lowest level of apartment sales activity over the last decade. We have nowhere to go but up. The next two years will be a far better environment for apartment sales. This will be due to owners getting better educated on values, some capitulation on the part of sellers, motivated sellers who need the funds, sellers motivated by possible increases in capital gains, and buyers who sense that we are close to bottom. We are seeing a two-tiered market. There is good investor demand and often multiple offers for well performing, well kept apartments in stable locations, and institutional apartments. However, there are have been more workout and foreclosure appraisals over the last nine months than any time since the early to mid 1980′s.
CONCLUSION
The recent job figures show that we are not yet there on any positive employment news. We expect the balance of 2010 to be lackluster, with some limited signs of recovery in the first half of 2011, but no real recovery until mid 2011 and 2012. Apartment construction will be at record lows, which will help in maintaining low apartment vacancies. We expect apartment income to remain flat for the rest of the year, with modest increases beginning in mid 2011. There will continue to be a two-tiered market, with good demand for performing well-kept and well-located assets, but some overhang of poorly performing assets in marginal locations, with most of these being owner managed. We all like to think that the economy has hit bottom. However, the most recent data seems to point to an anemic recovery at best in the balance of 2010 and into 2011. It is likely that we will have to wait until mid 2011 and 2012 for any significant recovery.
Mark D. Barry, MAI, is a real estate appraiser specializing in apartment appraisals in the Portland area. He has completed over 5,000 apartment appraisals since starting as a fee appraiser in 1983. He has a BA from the University of California at Berkeley, and an MBA in Real Estate from American University in Washington, D.C.
Phillip E. Barry is a real estate broker with Joseph Bernard Investment Real Estate, and specializes in apartment sales in the Portland metropolitan area. He is a graduate of Oregon State University.
Filed under: General, MMHA, MMHA Apartment Report, NARPM, Property Management, The Landlord Times, Uncategorized | Tags: Chris Hermanski, MMHA, MMHA Apartment Report, NARPM, Portland Metro Apartment Market, Portland OR, rentals
By Mark D. Barry, MAI and Phillip E. Barry, Real Estate Broker
The Landlord Times Metro - November 2010 - Vol.14 Issue 10
In late 2009, there were high hopes that our economy had hit bottom, and would be well on the road to recovery by this time. However, the recovery has slowed down in both the US and Portland, and is losing steam. Issues impacting the Portland economy are high unemployment, lackluster private sector hiring, the 9% across the board proposed state budget cuts, slow single-family sales, and Oregon now having the third highest rate of foreclosures in the country. So just what is happening here with the apartment market as of October 2010?
Portland Economy
Good news of late includes IBM announcing that they will add 600 jobs in Beaverton, Daimler announcing they will continue manufacturing trucks at their Swan Island plant, Greenbrier adding 260 jobs, and Vestas deciding to move forward with a $66 million headquarters project in the Pearl. However, we have actually lost 7,500 wage and salary jobs since January 2010, and our employment rate is 10.2%.
Apartment Construction
2010 will go down as the slowest year for apartment construction since the early 1960′s. Permits have been issued for just 460 apartment units in the four county metro area for 2010 through July vs. an average of around 4,000 units per year for the previous ten years. Apartment construction is dead!
Apartment Vacancies, Rental Rates, and Incomes
Apartment vacancies are reported at 4.0% in the fall 2010 MMHA Apartment Report. The average rent per Sq. Ft. of $0.91 is exactly where it was a year ago in the fall 2009 survey. Apartment vacancies are low to normal in most areas, with only Wilsonville and E. Vancouver showing apartment vacancies over 6.0%. However, our analysis of YTD 2010 operating statements shows that the income at most apartments is basically flat, with slightly more properties showing a decline in income that an increase. The biggest problem impacting landlords is tenants who have lost their jobs and who are forced to move.
Apartment Expenses
We are amazed at the rapid acceleration of expenses in recent years. Property taxes in Portland are up around 4.5 % percent per year over the last four years, while utility cost increases have gone up around 10% per year. In addition, our area had a huge construction boom from 1965 to 1980, and we are amazed at how high the overall repair and maintenance costs have gotten for these properties. With a flat income, expenses up around 10% in two years, net income is down by 5% to 8%.
Apartment Values
A flat income, some increases in expenses, and higher cap rates have impacted apartment values in recent years. Cap rates showed a noticeable increase in the second half of 2009 in comparison with the first half. Co Star figures show a 7.38% median cap rate for the second half of 2009, and a 7.01% median cap rate for the YTD 2010. Our analysis shows a decline in value of 10% to 20% from the peak in late 2007 and early 2008. However, apartment values have firmed up and been stable over the last year. The median price per Sq. Ft. for YTD 2010 is virtually identical with the second half of 2009.
Apartment Sales Volume:
YTD 2010 has continued to be a challenge for apartment brokers, though there was a noticeable improvement in the second and third quarter. There have been 61 apartment sales for $215.1 million in the first eight months of 2010 vs. 81 sales for $281.8 million on 2009. Apartment sales volume averaged $800 million per year from 2003 to 2008, and thus the 2010 sales volume is off by around 60%. However, 2010 will be a better year for apartment brokers that 2009, with sales volume and the number of transactions up by around 15%.
Next – PART II: Forecast for Balance of 2010 and 2o11
NPR August 17, 2010
With the housing market still in the doldrums, home-seekers and the Obama administration are reconsidering the emphasis on buying over renting.
Though many people may be thinking about renting, government figures show that they’ve yet to commit. The vacancy rate for rentals is at 10.6 percent, near an all-time high, according to the U.S. Census Bureau.
The homeownership rate is falling, and home sales remain weak — they fell 5.1 percent in June, according to the National Association of Realtors. But that hasn’t shifted more people into rentals.
Still, changing attitudes may boost the rental market going forward.
Rental Outlook
— The lion’s share of renters right now are young adults. But an increasing number of Americans over the age of 55 are expected to rent in the coming decade.
— Immigration continues to be a driving force in the rental market. Almost one-quarter of renter households were foreign-born in 2009.
— By 2020, minority households will make up the majority of renters.
Source: The State of the Nation’s Housing 2010, Harvard University’s Joint Center for Housing Studies
“The weak economy is sapping that demand as people go back home to live with mom and dad, or with a brother or sister, or they take on a roommate or become someone’s roommate,” says Mark Obrinsky, chief economist for the National Multi Housing Council, a trade group for the apartment industry.
With so many homes and apartments on the market, rents are being held down, according to the government’s consumer price index for rent. The CPI inched up just 0.3 percent over the past year — that’s the lowest yearly increase since the late 1940s.
Obrinsky says it’s going to be tough for the rental market to recover until the employment market really picks up. But when the economy recovers, he expects to see a rebound in demand for apartments and rental houses. That’s because tighter lending standards will make it tougher for people to buy homes.
Rental Relief
And former homeowners, like Jesus Felizzola, are seeing the advantages of renting. He is relieved to be renting a studio apartment in one of Washington, D.C.’s posh neighborhoods.
“This is what you get for $1,800 a month — a little box in Dupont Circle,” Felizzola says. Still, he says he’s happy to be renting even though his apartment is a far cry from the three-bedroom house he once owned in North Miami Beach.
After living in Florida for several years, he moved to the nation’s capital to take his dream job as a medical researcher. But his experience with homeownership turned into a nightmare when he had to sell his home at a substantial loss.
“I decided to rent out of fear of not feeling comfortable about investing again,” Felizzola says. “I decided to rent out of, well, I would say economic reality.”
One-third of Americans rent. And in many major cities, the numbers are substantially higher. In the coming months, the Obama administration is likely to put more attention on renting. Reforming the housing finance system is on its agenda.
Shifting The Focus Toward A ‘Balanced Housing Policy’
A number of administration officials have expressed concern that there was too much of a focus on homeownership in the past. One official tells NPR that “rentals are better financial options for many Americans.”
Nicolas Retsinas, the director of Harvard’s Joint Center for Housing Studies, says the federal government is now wrestling with whether to favor homeownership or “seek a more balanced housing policy, talking more about giving people options, worrying more about whether people have a decent place to live, rather than whether they own or rent.”
Rent Is No Longer A ‘Four-Letter Word’
Attitudes about renting have also changed. Retsinas says “rent” is no longer a “four-letter word.”
“In the past, you rented if you didn’t make enough money,” he says. “You rented if you weren’t ambitious. You rented if you weren’t sort of smart enough. But as it turns out, as we look in recent years, renting turned out to be a pretty smart thing to do.”
It was a smart move because renters weren’t stuck with mortgages worth more than their homes. Another advantage to renting in this economy includes having the flexibility to move to pursue a job. That’s not so easy if you own a home that you can’t sell.
Even though renters don’t get the same kind of tax breaks as homeowners, renting may feel more secure in this uncertain economy.
Filed under: NARPM, Property Management, Uncategorized | Tags: Chris Hermanski, NARPM, Portland OR, rentals
“Since the end of World War II, the “American Dream” has been defined as owning a house. But it didn’t start out that way. When historian James Truslow Adams coined the phrase in 1931 it meant “a better, richer, and happier life for all our citizens of every rank.”
Adams wrote of the “dream” of America as an opportunity to overcome the old world’s social orders. He specifically said that it has “Always meant more than the accumulation of material goods.”
Adam’s American Dream became co-opted in the post-war years after massive federal intervention in the housing market helped turn America into a nation of homeowners. Before that, there was no stigma attached to renting; as house – whether rented or owned - was simply a place from which to pursue the dream of personal achievement.
Returning to the Way We Were
In 2009, the American Dream returned to the way it was; the way it should be.
As house prices collapsed and the so-called dream of homeownership turned into a financial and emotional nightmare for millions, people began dreaming of more sustainable and rewarding lives. They discovered that you don’t have to buy a house to achieve the American Dream.
Americans of all income levels – even the wealthy – exchanged their mortgages for rent payments, and the conveniences, amenities and flexibility of apartment living once again became chic.
A Pall on Ownership
Homeownership’s near sacred reputation has been tainted by the bursting of the housing bubble. The evidence that homeownership is a risky investment is everywhere. House prices have plummeted 30 percent since the housing market’s peak and are expected to drop another 10 percent. U.S. home-owners have lost about $5.9 trillion in value since housing market’s peak in March 2006, according to Zillow.com.
Eye-opening statistics are abundant: One in seven loans was in foreclosure by the end of September 2009, the highest on record, according to the Mortgage Bankers Association. Moody’s Economy.com expected that 2.4 million homes will have been “lost” in 2009 alone through foreclosures, short sales or deeds in lieu of foreclosure. This follows the 3.2 million households who received foreclosure notices in 2008. Some predict there will be 10 million or more foreclosures by the end of this cycle.
Nearly 11 million homeowners – one in four – are “underwater” on their mortgages, according to FirstAmerican CoreLogic, and analysts at Deutsche Bank Securities expect that number to rise to 21 million by the end of 2010. In fact, price erosion is so prevalent that 11 percent of borrowers who took out mortgages in 2009 already owe more than their house is worth, adds FirstAmerican.
Naturally, many of these disillusioned owners will think long and hard before buying another house. But there is also a psychological ripple effect to their experience. Almost everyone knows someone who lost their house or is debating walking away from an underwater mortgage; those associations will color future housing decisions for millions more. And the children of all the foreclosed owners have learned that owning a house is not a guaranteed path to wealth or happiness.
Already, the bursting of the housing bubble is reshaping our attitudes toward ownership. A 2009 survey by the National Foundation for Credit Counseling showed that almost half of all American adults no longer believe owning a house is a realistic way to build wealth. Another 42 percent no longer own a house and don’t expect to ever own one again.
Rental Resurgence
More than a housing bubble is at work here. Demographics, tightened credit markets, changing lifestyles and new environmental awareness suggest that the U.S. is on the cusp of a fundamental change in the housing market.
Our society is changing in profound ways that mean the kind of housing we want in the future is very different from the kind we’ve been building for the past 50 years. The largest generation of children in the history of the U.S. will be entering the housing market in the next few years.
By 2015, there will be 67 million people aged 20-34 – the prime years for renting, and these young renters aren’t necessarily interested in a house in the suburbs. The painful recession has also taught them that they need to be more mobile to respond to fast-shifting economic opportunities.
At the other end of the spectrum, the number of seniors who no longer want to maintain a house is beginning to skyrocket, creating new demand for rentals close to services they need.
The biggest force at work, however, is a dramatic change in what constitutes the “typical” American household. Married couples with children – the backbone of the post-war suburban explosion – now account for only one in four households; by 2020, that drops to one in five. In their place are a growing number of nontraditional households who are more likely to choose renting – single parents, couples without children and empty nesters.
The debunking of the homeownership myth is liberating Americans to challenge the conventional wisdom and instead choose the housing that best suits their lifestyle. For millions, that’s an amenity-rich apartment in a vibrant mixed-use neighborhood.
How fast are Americans becoming renters? In 2006, Harvard’s Joint Center for Housing Studies predicted an increase of 1.8 million renters by 2015. Instead, we saw a surge of 1.5 million renters from 2005 to 2007 alone. A federal housing survey reports that 2.83 million new renter households were created in the last four years, the biggest such gain in 24 years.”
Source: Metro Mulifamily Housing Association 12th Volume Apartment Report Summer 2010
By Thomas J. Sugrue and excerpted from National Multi Housing Council Annual Report
Filed under: appfolio, General, Property Management, rentals | Tags: appfolio, Chris Hermanski, Property Management, rentals
Chris Hermanski and his staff at Mainlander Property Management talk about their experience switching to and using AppFolio Property Manager, the easy-to-use online property management software solution.
Serving you to the best of our ability is important to us at Mainlander. Our old systems were outmoded and unresponsive to meeting the needs of our owners and renters. We are constantly looking for ways that we can better serve all of our clients.
Filed under: appfolio, Goal Setting, Property Management, rentals, rentbits.com | Tags: appfolio, Chris Hermanski, Portland OR, rentals, tenants
From the rentBits Blog:
Chris Hermanski, who owns and operates Mainlander Property Management, places a strong emphasis on setting goals. When asking Chris to name a few things that have helped him remain one of the most successful property management companies in the industry, Chris responded by listing several of the themes that will be outlined in this book:
Prepare for change and have one, three, and five year goals
Surround yourself with good, talented people
NARPM – Learn from others
Be consistent and fair with all
Embrace technology
Filed under: General, Property Management, rentals | Tags: Chris Hermanski, Portland OR, Property Management, rentals, tenants
A common question that Property Managers often hear is, “What is the single family home rental market like?” As you might anticipate, not very well!
The Renter Has Many Choices
There are many factors that contribute to this, including a dismal sales market, a sluggish economy, Oregon’s high unemployment, and LOTS of rental choices. A quick check on Craig’s List revealed over 1750 properties available for rent posted from midnight to 4 pm today. This included all types of housing; apartments, plexes, and single family homes.
Nevertheless, this means the prospective renter has a plethora of choices and in my opinion, probably more choices than ever before. With online marketing, renters can shop and compare like they never have before.
What is a landlord to do?
You must be competitive and resourceful. Unless you are experienced, always available and creative; you’ll want a professional property manager to assist you. Critical details are going to be:
- Is the property in its best possible condition?
- Is it clean and tidy?
- Does the home show pride of ownership?
- Is the yard mowed, edged, green and free of debris?
Renting a Home in this Market Can Be as Tough as Selling the Home
A lot of landlords don’t realize that renting a home in this market is similar to selling a home; it’s all about attention to detail. Pricing is a very critical factor. Homes that are overpriced will sit, sometimes for months.
What a property rented for in the past has little relevance in today’s market. You must compare what similar properties are renting for, how desirable is the property, what are the amenities and does the home have a “cute” factor? All of these conditions have a bearing on how much you can anticipate receiving.
Holding Out for What You Want May Hurt You in the Long Run
Once a rental is priced, be prepared to reduce the rent if it’s not generating activity, usually every two to three weeks. The amount of reduction in rent depends on what price point you are in, more expensive homes will need a larger price reduction than less expensive rentals.
Plan on reducing rent in $100 increments to have a positive impact in this saturated market! In this market, marketing times can vary. If the home is in ‘move-in’ condition (it shows well), a home should rent within two to six weeks. Holidays, adverse weather and other issues can extend this time frame.
All properties must have an online presence in today’s world.
This means you need to capture the property with great pictures, lots of great pictures! They should be:
- Accurate, light and bright and free of distractions.
- Be user friendly; place a link for mapping the location and an option for specific directions.
- Schools are important to many families and this information needs to be accurate. Call and verify to double check on school boundaries, etc.
- You’ll need a well flowing description and explanation of all the features and amenities, along with a description outlining what’s included in the rent.
You Must Carefully amd Consistently Screen Prospective Renters
Properly screening and checking the background of all prospective renters is critical, especially in this market. Proper screening includes a credit check, criminal background check and eviction history. You’ll also want to ensure their employment is verified along with previous rental history. All of these details are standard operating procedure for a seasoned professional manger.
Chris Hermanski, MPM Mainlander Property Management, Inc. CRMC
Filed under: General, Internet Rental Scam Alerts, NARPM, Property Management, rentals | Tags: NARPM, Property Management, rentals, tenants
The National Association of Rental Property Managers (NARPM) Governmental Affairs Committee wants to warn you about an internet rental scam that has been making its way around the country.
Scammers are copying information, photos and text, from legitimate online rental ads and then posting that information on Craig’s List. It is listed with a significantly reduced rent and the property manager’s contact information has been replaced by the scammer’s.
In some ads the text is full of misspelled words and bad grammar but not always. This is because many of the scammers are operating outside the country, typically Nigeria, but many cases have also involved local scammers who are able to meet potential tenants in person.
With international scams, the potential tenants are usually required to send the deposit and first month’s rent through Western Union and are promised that the keys will then be over-nighted to them. Local scammers are often able to copy a key or simply break into a vacant property and replace the door lock with their own so they can actually provide the new tenant with a legitimate key.
In one situation an unsuspecting tenant was actually able to completely move into an apartment without the knowledge of the legitimate property manager. The property manager was only alerted to the problem when the tenant called the office to request that the “For Rent” sign be removed from their front yard.
These scammers are often very sophisticated and can play the part of a legitimate property manager well enough to fool potential renters. Make sure you are checking your vacant properties and Craig’s List on a regular basis. If you find an unauthorized ad flag it so that others will know that it may be fraudulent and contact Craig’s List to request that they remove it from their website.
Some property managers have even posted an additional listing with the same name but included, “THIS IS A SCAM” or similar language at the end of the post to help warn people. This way it will come up in the listing right after the fraudulent post and give the property manager an opportunity to provide the correct information.
The FBI has received countless complaints about this and other rental scams but they explained that this type of crime is low on their list of investigative priorities. If one of your properties gets caught in this scam, we recommend you visit www.IC3.gov and report the crime.
The Internet Crime Complaint Center (IC3) is a partnership between the Federal Bureau of Investigation (FBI), the National White Collar Crime Center (NW3C), and the Bureau of Justice Assistance (BJA). IC3′s mission is to serve as a vehicle to receive, develop, and refer criminal complaints regarding the rapidly expanding arena of cyber crime.
If you encounter a potential tenant who has been scammed and made the mistake of providing sensitive personal information such as their social security number, it is highly recommended that they go ahead and put a freeze on their credit.
NARPM.ORG 638 Independence Parkway, Suite 100, Chesapeake, VA 23320 P: (800) 782-3452 | F: (866) 466-2776 | info@narpm.org
