The U.S. Census Bureau announced the following residential vacancy statistics for the third quarter of 2018.The National vacancy rates for the third quarter were 7.1% for rental housing.
As a general rule, 5%-8% vacancy is a good average although the city you are located in and rental market play a factor in this.
First Rate Property Management vacancy rate is currently 0.25%. The current vacancy rate for Ada/Canyon County is at 2.26%. Contributing factors that lead to these lower numbers are pre-leasing units that are currently on notice, marketing on several different levels (not just utilizing the internet platforms), constant communication with residents and interested parties, reasonable rent increases for both the owner and the resident, and quick response time for maintenance issues. These low vacancy trends we are seeing throughout the treasure valley are a great benefit for investors as property management companies will be able to push the rents. The demand for rental properties is far exceeding the supply.
The 3rd quarter NARPM survey results are out. Overall things still look good for this time of year. You will notice that the vacancy for single family homes is up right now. FRPM has found over the last month that single family home rentals are slower to get rented then the multifamily. As the winter approaches and the Holidays get closer we anticipate the single family rentals to remain slow. Rents overall are strong and still increasing some. It will be interesting to see what the market does once we get through the winter months and past the holidays.
Read full report here: 3rd Quarter NARPM Survey
The National Association of Residentail Property Managers published a recent survey conducted by the SW Idaho chapter of NARPM during the month of June 2018. The survey took 7,091 total homes into account. These multi-family and single-family homes are spread across both Ada and Canyon county.
The market is trending down heading into the winter months. According to these statistics dating back to 2014, the vacancy percentage is the lowest it’s been in quite some time considering the seasonality of this business.
First Rate Property Management’s vacancy rate in June 2018 was 0.72%. This is quite the improvement compared to last year’s 1.83%. First Rate manages a portfolio of apartment buildings, duplexes, and single family homes.
Of the 7,091 homes that were surveyed in June 2018, 2.03% were vacant. This is an opportunity for property management companies to capitalize on the market and really differentiate themselves among their competitors not only in the SW Idaho Chapter but even nationally.
The data shows vacancy rates to have decreased from 3.6% in Q1 to 2.0% in Q2. The rental rates in Ada County single family homes increased $149 per month per unit. We saw an increase of $6 per mont, per unit in single family homes just since the previous quarter. Assuming these trends continue, we can anticipate higher rents and lower vacancies than we’ve seen in half a decade.
You can find out more about Idaho’s premier organization of residential property management professionals at www.swidaho.narpm.org.
Leasing Team Leader
Ada County Vacancy Trends
Boise rental market is undeniably booming. This growth has been the case for several years now and is expected to maintain its strength for months to come. Boise’s rental demand is contrary to the trends in other metropolitan areas in the United States where vacancy rates have steadied. In Ada County, there has been an increase in rental rates between 6-8 percent.
First Rate Property Managements vacancy rates have been successfully trending downward. Last week our vacancy was at 0.7%. Last year’s vacancy rate at this time was a 1.85%! This is all due to a combination of high demand, low supply, rental market saturation, diligent staff, and qualified tenants.
When vacancy rates are low rents go high. The demand for housing exceeds the supply of available units, and renters lose their bargaining power.
Boise is one of the fastest growing cities in the United States right now. Property investors are able to capitalize on this growth. According to Yardi Matrix all rents are are being increase on average by 4%. First Rate is able to place many families in these homes but it is clear the demand is high and the supply is low. This market is ideal for investors who have budgeted a conservative amount in vacancy cost. We expect to see these trends continue to grow for years to come.
Leasing Team Leader
Friday morning Housing and Urban Development (HUD) filed a formal complaint under the Fair Housing Act against Facebook. The claim alleges Facebook to use its advertising platform to engage in housing discrimination. These claims maintain that Facebook allows advertisers to control which users receive housing-related ads based upon any and all of the protected classes. The classes include but are not limited to race, color, religion, sex, familial status, national origin, disability, and/or zip code.
The allegations also hold that Facebook enables advertisers to express unlawful preferences effectively utilizing “targeted advertising”.
While these claims are still just claims, Facebook has the opportunity to respond. However if after review it is determined that reasonable cause exists and there has been a violation of the Fair Housing Act, a charge of discrimination may be filed. These charges may be resolved through settlement, through referral to the Department of Justice, or through an administrative determination.
HUD’s complaint alleges Facebook’s platform violates the FHA allowing advertisers to effectively pre-screen internet users to reach/or not reach either only men or only women, users interested in assistance animals, users in a particular place of worship, religion, or tenet, users located outside a coded line around specific zip codes.
These claims were immediately followed by a statement of interest filed by the U.S. Attorney for the Southern District of New York (SDNY) on behalf of a number of private litigants challenging Facebook’s advertising platform.
Read full article below
August 17, 2018
Earlier today HUD announced that it has filed a formal complaint under the Fair Housing Act for allowing landlords and home sellers to use its advertising platform to engage in housing discrimination. As Assistant Secretary for Fair Housing and Equal Opportunity Anna María Farías notes, “"When Facebook uses the vast amount of personal data it collects to help advertisers to discriminate, it's the same as slamming the door in someone's face." For more, see below
Jeff McMorris, HUD Northwest Regional Administrator
* * *
HUD FILES HOUSING DISCRIMINATION COMPLAINT AGAINST FACEBOOK
Secretary-initiated complaint alleges platform allows advertisers to discriminate
WASHINGTON – The U.S. Department of Housing and Urban Development (HUD) announced today a formal complaint against Facebook for violating the Fair Housing Act by allowing landlords and home sellers to use its advertising platform to engage in housing discrimination.
HUD claims Facebook enables advertisers to control which users receive housing-related ads based upon the recipient's race, color, religion, sex, familial status, national origin, disability, and/or zip code. Facebook then invites advertisers to express unlawful preferences by offering discriminatory options, allowing them to effectively limit housing options for these protected classes under the guise of 'targeted advertising.' Read HUD's complaint against Facebook.
"The Fair Housing Act prohibits housing discrimination including those who might limit or deny housing options with a click of a mouse," said Anna María Farías, HUD's Assistant Secretary for Fair Housing and Equal Opportunity. "When Facebook uses the vast amount of personal data it collects to help advertisers to discriminate, it's the same as slamming the door in someone's face."
The Fair Housing Act prohibits discrimination in housing transactions including print and online advertisement on the basis of race, color, national origin, religion, sex, disability, or familial status. HUD's Secretary-initiated complaint follows the Department's investigation into Facebook's advertising platform which includes targeting tools that enable advertisers to filter prospective tenants or homebuyers based on these protected classes.
For example, HUD's complaint alleges Facebook's platform violates the Fair Housing Act. It enables advertisers to, among other things:
· display housing ads either only to men or women;
· not show ads to Facebook users interested in an "assistance dog," "mobility scooter," "accessibility" or "deaf culture";
· not show ads to users whom Facebook categorizes as interested in "child care" or "parenting," or show ads only to users with children above a specified age;
· to display/not display ads to users whom Facebook categorizes as interested in a particular place of worship, religion or tenet, such as the "Christian Church," "Sikhism," "Hinduism," or the "Bible."
· not show ads to users whom Facebook categorizes as interested in "Latin America," "Canada," "Southeast Asia," "China," "Honduras," or "Somalia."
· draw a red line around zip codes and then not display ads to Facebook users who live in specific zip codes.
Additionally, Facebook promotes its advertising targeting platform for housing purposes with "success stories" for finding "the perfect homeowners," "reaching home buyers," "attracting renters" and "personalizing property ads."
In addition, today the U.S. Attorney for the Southern District of New York (SDNY) filed a statement of interest, joined in by HUD, in U.S. District Court on behalf of a number of private litigants challenging Facebook's advertising platform.
HUD Secretary-Initiated Complaints
The Secretary of HUD may file a fair housing complaint directly against those whom the Department believes may be in violation of the Fair Housing Act. Secretary-Initiated Complaints are appropriate in cases, among others, involving significant issues that are national in scope or when the Department is made aware of potential violations of the Act and broad public interest relief is warranted or where HUD does not know of a specific aggrieved person or injured party that is willing or able to come forward. A Fair Housing Act complaint, including a Secretary initiated complaint, is not a determination of liability.
A Secretary-Initiated Complaint will result in a formal fact-finding investigation. The party against whom the complaint is filed will be provided notice and an opportunity to respond. If HUD's investigation results in a determination that reasonable cause exists that there has been a violation of the Fair Housing Act, a charge of discrimination may be filed. Throughout the process, HUD will seek conciliation and voluntary resolution. Charges may be resolved through settlement, through referral to the Department of Justice, or through an administrative determination.
This year marks the 50th anniversary of the Fair Housing Act. In commemoration, HUD, local communities, and fair housing organizations across the country have coordinated a variety of activities to enhance fair housing awareness, highlight HUD's fair housing enforcement efforts, and end housing discrimination in the nation. For a list of activities, log onto www.hud.gov/fairhousingis50.
Persons who believe they have experienced discrimination may file a complaint by contacting HUD's Office of Fair Housing and Equal Opportunity at (800) 669-9777 (voice) or (800) 927-9275 (TTY).
In a million years, would you have ever thought that ascending rents would cause parking problems? Well, it is, and not just in multi-family complexes either. As Boise area rents have increased, many tenants have solicited roommates to help defray costs and many of these have their own vehicles as well. Drive by a complex or a rental home and you will see more cars parked on the side of the road than before.
Let's look at an example. There is a 4 plex development with 11 four plexes. Each unit has three bedrooms and 2 baths. There is 1 assigned parking spot per unit with another 50 open parking spots within the complex which is first come, first serve and is used by residents and visitors. In looking at just one building of the 11, we know that one of the units has 3 couples in each room and each has a car. Two units are families with two working parents. The last unit has 3 roommates, each who have a vehicle. The total vehicles for this one building is 13. If everyone within the complex is home at the same time, that means 5 to 8 of the vehicles, for just this one building, are parking on the street. Or worse, they park in the open parking, which means other residents can only park their one vehicle within the complex and all others on the street. As our streets fill with parked cars, the amount of parking has become important to prospective tenants.
The lack of parking is not the only issue developing. Storage is another. With more and more roommates, the amount of storage space needed is increasing. Self-storage is big business these days.
Jack Harty with Harty Mortgage Advisors frequently updates his clients with wit and humor.
WARNING: Don't believe the Subject line above.
There is no reliable method for predicting interest rate movement beyond the next fiscal quarter. While there are many methods for predicting the future of rate increases, none are highly reliable.
Some methods are marginally more reliable than others, but in the end predicting rates is as reliable as predicting how dice will roll.
Since December 2015 the Fed has raised short-term interest rates seven times. At its August meeting the Fed held steady and did not raise rates (see step-graph below).
However conventional wisdom, strongly anchored in Fed pronouncements, anticipates another rate increase in September 2018 and probably yet another by December. Looking into 2019, which is through a glass darkly (1Corinthians 13:12), the betting is that rates will be increased another two to three times.
Counter forces that may restrain future rate increases include effects of a trade war, political turmoil in the US and elsewhere and domestic employment dynamics, to wit: While unemployment has declined over the past two years (from 4.9% to 3.9%(, the rate of wage growth has also declined during the same period (from 2.8% to 2.7%). In 2018 wage growth has barely exceeded and at times fallen below inflation. In 2018 inflation has ranged from 2.1% to 2.9%.
Federal Reserve Rate Increases 2014 - 2018
There is an obvious stair-step pattern to interest rate increases during the past couple of years.
The picture for upward movement of future interest rates is a cloudy picture (see cloudy picture below).
Graph for Rate Increases 2019 - 2020
Notwithstanding future interest rate uncertainty, it is currently certain that interest rates are still at virtual 40-year low point...and that ain't so bad.
10 Yr Treasury Bond Yield: 1978 - 2018
HARTY MORTGAGE ADVISORS
950 W. Bannock St. - Ste 420
Boise ID 83702
Mobile: 208 863 0655
Main: 208 344 4141
First Rate Property Management received the below email from the Deputy Chief - Fire Marshal of Meridian Fire. Also, they provided the attached Smoke and Carbon Monoxide Detector Log Sheet and Parking Lot Safety Tips.
FRPM: tests, replaces, and adds detectors as needed at each tenant turnover. Additionally for those property investors who choose to opt into our preventative maintenance, these detectors are tested again and repaired or replaced as necessary.
Good morning managers and owners. We recently had a fire in an apartment complex. The crews arrived on scene and found the smoke detectors were not functioning. I pulled it off the ceiling when I was doing my investigation to find it was 17 years old. Smoke detectors have a 10 year life span and CO detectors are about 7 years. They need to be replaced and checked at a regular interval.
I have created a log sheet to help capture the data, so you can keep track of these types of alarms. When we come for your annual fire and life safety inspection, we may ask if you are using the log.
As a reminder CO detectors are also required if you have gas fired appliances, or an attached garage.
PS – I have also attached a flyer for parking lot safety. We developed this for a complex here in town.
If the fire department can help with anything, please let me know! Have a great week!
Joe Bongiorno CFEI
Deputy Chief – Fire Marshal
33 E. Broadway Ave., Ste. 210, Meridian, ID 83642
(Direct) 208-489-0458 (Cell) 208-936-9554
Below and attached is an article from the Mortgage Bankers Association who reports that the demand to rent is holding up to the rapid growth in supply across the nation.
A 'Resilient' Multifamily Market
Michael Tucker email@example.com
July 26, 2018
The first half of 2018 ended well for the multifamily sector as rents rose $12 in June to a record-high $1,405 per month, reported Yardi Matrix, Santa Barbara, Calif.
Year-over-year, rents are up 2.9 percent as of June, a 20-basis-point increase over the previous month, the Yardi Matrix Multifamily National Report said. "The strong performance is a good sign that demand generally is holding up and that robust supply growth is not an impediment to rent growth in most markets," the report said.
Rents grew 2.6 percent during the first half. "Those numbers compare favorably to most years except the peak years of the cycle in 2015 and 2016," the report said. Though recent performance has remained strong in general, gains continue to be highest in "booming" secondary markets including Orlando, Fla. (7.4 percent), Las Vegas (5.6 percent) and California's Inland Empire (5.6 percent).
"The resilient U.S. multifamily market demonstrated its strength and consistency in the first half of 2018," the report said. "Despite headwinds presented by consistent supply growth and lack of affordability in many major metros, rents continue to grow steadily."
The first-half growth number is the best since early 2016, when rents increased by 2.9 percent. The healthy showing might put to rest anxiety that rent deceleration from the cyclical peak in 2015 and 2016 will turn into flattening or negative growth. However, the report acknowledged some doubts about the strength of property income growth. The market is in the middle of a four-year period in which 1.2 million new units will be added, while affordability concerns have sharply curtailed rent increases in some markets including New York and San Francisco. In addition, the report noted, the long economic cycle will come to an end.
"All those issues created legitimate questions about the ongoing strength of the market," the report said. "However, the doubts seem to have been answered by the healthy and widespread gains we are seeing so far this year."
Over the past few decades, there have been several property managers go out of business and the rumor is, when they did, they took and/or spent tenant deposits and rents. As of recent, a number of Ada and Canyon County investors have filed claims against another local property manager. First Rate Property Management has taken on a number of properties over the past few years from this company and we reached out to them asking what the telltale signs were that made them change management companies. Some say "the writing was on the wall", while others say they knew the company was struggling, but had hoped that the management company would pull through. When things like this happen, a great deal of people are hurt financially In no typical order, we have provided the list we put together based on these clients responses.
Links to recent news publications:
1. Communications: Poor communications or lack of response can imply poor organization or time management, but constant communication troubles are a flag. Inconsistent or untrue communications are an immediate flag.
2. Employee turnover. Constant employee turnover should be a concern. Additionally, when employees tell clients that employee paychecks are bouncing and/or payroll taxes are not being paid, is a serious flag.
a. Irregular posting of owner statements. No statement at all is unacceptable.
b. Irregular or delayed owner distributions. No distribution would be of immediate concern.
c. Regular inaccuracies on owner statements.
d. Undisclosed fees/kickbacks.
e. Undisclosed mark up or upcharges of invoices paid by the property manager on behalf of the property owner/investor.
f. Unpaid or long delays in paying vendors. Additionally, when maintenance providers (vendors of the property manager) contact property owners stating that they have not been paid, yet the expense appear on the owner's statement, something is awry. Worse is when these contractors file liens.
g. Contact from tenants stating they have not received their security deposit back or lack of communication from the Property Manager.
h. Real estate sales persons sees delays in transfers of funds after a property under the management company's care is sold.
4. Company growth. Accompanied by any of the other flags listed above, Rapid growth or a shrinking business could be a sign. You would think that seeing that a company is losing properties/clients quickly would be an easy one, but honestly rapid growth can be just as equally concerning. In the companies we have seen fail, they did so because they were growing too fast and were out of control.
Below are some thoughts we had on how to better protect yourself, the property, and your tenants.
1. Don't hire solely based on the lowest fee. We like to compare it to hiring a painter. Painter A's bid is half the cost of Painter B's. And would you believe it, Painter A may actually make more money. How? They use lower quality paint, do little to no prep, and don't carry the appropriate worker's compensation and liability insurance. End result, Painter A makes more money, provides an inferior product, and puts the property manager and the property owner at greater risk.
2. Hire a company with experience and longevity within the industry.
3. Hire a company who prescribes to Professional Standards and has both personal and company professional designations. Just being a member of a professional association doesn't cut it. Many companies simply join these professional associations to be able to use their logo for marketing purposes. Choose a company that is involved with these professional associations.
4. Read the company reviews and company responses.
5. Ask for references and call existing property owners/investors.
6. Ask for proof of insurance or if applicable, fidelity bonding
7. Look at how funds held are held and reconciled. Ask to see a copy of their 3-way reconciliation (Transparency is key)
8. Does the company have 3rd party audits of funds held in trust?
- Boise Area Rental Market
- Property Management
- Boise Area Real Estate Market
- Interest Rates
- Boise Real Estate Market
- Boise and Idaho in the News
- Deferred property maintenance
- Rental Property Maintenance
- Fair Housing
- 3rd Quarter NARPM Vacancy Results
- SW Idaho NARPM Vacancy Trends Q2-2018
- Ada County Vacancy Trends
- HUD files against Facebook
- Melissa Sharone
- Julie Tollifson
- Tony Drost
- Jim Sharone
- Tyler Selee
- Kurtis Tarbet
- Kristen Curtis
- Tyler Brown
- Tara Pecora
- Marie Swanson
- Lizz Loop