LOS ANGELES– Sept. 28, 2016 – GOBankingRates surveyed 61 out of the 100 most populous cities in the U.S. to find the best and worst cities to own investment property. And according to their analysis, Orlando ranked No. 1 as the top metro area in the U.S. to own investment property, with Tampa coming in second.
Overall, four Florida cities ranked in the top 15. Miami came in at No. 10 and Jacksonville at No. 13.
1. Anchorage, Alaska
4. Virginia Beach, Va.
5. Cleveland, Ohio
8. Tulsa, Okla.
9. Omaha, Neb.
10. El Paso, Texas
11. Wichita, Kansas
12. Cincinnati, Ohio
13. Memphis, Tenn.
14. Baltimore, Md.
15. Winston-Salem, N.C.
“Growing populations in the top 10 cities on our list are fueling the need for more housing,” says Cameron Huddleston, Life + Money columnist for GOBankingRates. “That’s why these cities are such great places to own investment property now. On the other hand, the cities at the bottom of our list have seen little-to-no population growth, so the demand for housing isn’t as high – which means real estate investors won’t do as well there.”
Five out of the 10 best cities to own property are located in Florida and Texas.
Population levels are declining in places like Anchorage and Cleveland, pushing them to the bottom of the list.
When it comes to real estate investments, Midwest isn’t best – none of the Midwest states made it into the top 15 of the best states to own investment property.
Seattle, Austin and Reno rank among the top 10 places to own investment property. However, it takes 17 to 19 years to pay off median home values in these cities based on yearly rents.
Most real estate firms optimistic about the future
WASHINGTON – Sept. 20, 2016 – The vast majority of real estate firms have an optimistic outlook for the industry’s profitability and growth, according to the National Association of Realtors® (NAR) 2016 Profile of Real Estate Firms. Profitability expectations declined since the 2015 survey, mainly due to inventory shortages and home-price growth, but real estate firms remain confident about their overall future profitability.
The report is based on a survey of firm executives who are NAR members. It provides insight into the business characteristics and activity of firms, the benefits and education provided to agents, and their outlook for the future.
“For a second year in a row, a majority of real estate firms have a positive outlook on profitability, with 91 percent of all firms expecting their net income to increase or remain the same over the next year,” says NAR President Tom Salomone, broker-owner of Real Estate II, Inc. in Coral Springs, Florida. “Although there is an overwhelmingly positive outlook, low inventory and high prices have led to an overall decrease in real estate firms’ sales volume since last year’s report. High home prices are holding back first-time buyers and low inventory means fewer sales at a time of increased Realtor membership.”
In 2016, 64 percent of firms expect profitability (net income) from all real estate activities to increase in the next year, down from 68 percent in 2015. Sixty-seven percent of commercial real estate firms expect profitability to improve (down from 75 percent in 2015); and 70 percent of large firms with four or more offices expect profitability to improve (down from 79 percent). Residential firms are a little less optimistic: 65 percent expect to see an increase in their net income.
According to the report, the typical residential real estate firm’s brokerage sales volume was $6.3 million, while the typical commercial real estate firm’s brokerage sales volume was $4.5 million. The size of the firm has a large impact on its sales volume; firms with one office had median brokerage sales of $4.5 million in 2015, while those with four or more offices had median brokerage sales of $203.8 million in 2015.
Forty-three percent of real estate firms expect competition to increase in the next year from non-traditional firms, down from 45 percent in 2015. Forty-six percent see competition from virtual firms increasing (up from 41 percent in 2015), while only 17 percent expect competition increasing from traditional brick-and-mortar firms.
The sense of competition has fueled more recruitment since the 2015 survey. Forty-seven percent of firms reported they’re actively recruiting sales agents in 2016, up from 44 percent in 2015. Active recruitment is more common with residential firms (51 percent) than commercial firms (32 percent) and more common among firms with four offices or more (88 percent) than firms with one office (39 percent).
Real estate firms are also seeing a growth in agents: 78 percent have a single office, and these typically include three full-time real estate licensees, up from two in 2015. The growth mirrors the growth in membership data found in NAR’s 2016 Member Profile, which found that 20 percent of members had one year or less experience, rising from 11 percent in 2015.
The study found that 30 percent of customer inquiries came from past client referrals, 30 percent from repeat business from past clients, 10 percent from websites, 7 percent from social media and 2 percent from open houses.
When asked about the biggest challenges over the next two years, firms cited profitability (49 percent), keeping up with technology (48 percent), maintaining sufficient inventory (48 percent) and recruiting younger agents (36 percent).
According to the study, 48 percent of firms are concerned with Generation Y’s ability to buy a home due to stagnant growth, the job market and their debt to income ratios. Forty-six percent of firms are concerned about the recruitment of Gen Y and Gen X real estate professionals.
The study also asked about professional volunteer work and supporting the local community. Eighty-two percent of firms encourage their agents to volunteer in the local community, 48 percent at the local association of Realtors, 28 percent at the state association of Realtors and 19 percent with NAR. According to the study, residential firms are more likely than commercial firms to encourage agents to volunteer.
The NAR 2016 Profile of Real Estate Firms was based on an online survey sent in July 2016 to a national sample of 147,835 executives at real estate firms. This generated 4,567 useable responses with a response rate of 3.1 percent.
NEW YORK – Aug. 30, 2016 – The Conference Board Consumer Confidence Index, which had decreased slightly in July, increased in August.
The Index now stands at 101.1 compared to 96.7 in July. The Present Situation Index rose from 118.8 to 123.0, while the Expectations Index that gauges consumers’ expectations six months from now improved from 82.0 last month to 86.4 in August.
“Consumer confidence improved in August to its highest level in nearly a year, after a marginal decline in July,” says Lynn Franco, director of economic indicators at The Conference Board. “Consumers’ assessment of both current business and labor market conditions was considerably more favorable than last month. Short-term expectations regarding business and employment conditions, as well as personal income prospects, also improved, suggesting the possibility of a moderate pick-up in growth in the coming months.”
Consumers’ appraisal of current conditions
Americans stating that business conditions are “good” increased from 27.3 percent to 30.0 percent, while those saying business conditions are “bad” remained virtually unchanged at 18.4 percent.
Consumers’ assessment of the labor market was also more favorable. Those claiming jobs were more “plentiful” increased from 23.0 percent to 26.0 percent; however, those claiming jobs are “hard to get” also rose, from 22.1 percent to 23.4 percent.
Consumers’ appraisal of future conditions
The percentage of consumers expecting business conditions to improve over the next six months increased from 15.7 percent to 17.3 percent, while those expecting business conditions to worsen decreased from 12.4 percent to 11.1 percent.
Consumers’ outlook for the labor market was also more favorable than in July. The proportion expecting more jobs in the months ahead rose from 13.5 percent to 14.2 percent, while those anticipating fewer jobs remained virtually unchanged at 17.5 percent.
The percentage of consumers expecting their incomes to increase improved from 17.1 percent to 18.8 percent, while the proportion expecting a decline decreased marginally from 11.0 percent to 10.7 percent.
Nielsen conducts the monthly Consumer Confidence Survey, based on a probability-design random sample, for The Conference Board. The cutoff date for the preliminary results was August 18.
Question: Some homes we manage have very expensive locks, and changing them can be cost prohibitive. If the departing tenants return all the keys we gave them at move-in, we do not change the locks before the new tenants move in. Are we required to change locks?
Answer: There is no legal requirement to change the locks, whether or not the departing tenant has returned all the keys. However, it is a prudent thing to do. You have no idea if the former tenant made copies of the keys. Even keys with the message, “Do not copy” means nothing. You can get them copied. We have seen a case in which a former tenant got drunk, forgot about his recent move and went back to the former residence and passed out on the couch.
Worse yet, a former tenant could break in and burglarize the unit or commit a serious crime, and most likely your company would be one of the parties held liable.
We always recommend a lock change as a cost of doing business, even if the previous tenant returns all keys. An owner who tries to save money by not changing locks is putting both himself and your company at great risk.
Harry Heist is a partner in the law offices of Heist, Weisse & Wolk, P.A., which concentrates on property management-related legal issues.