Optimism in the Housing Market Leads to More Rental Homes

Home prices expected to have first yearly gain since 2006.

New single-family home sales climbed 4.4 % in November to a seasonally adjusted 377,000-unit annual rate.
Many of these homes were purchased by investors who rent them out to former homeowners who now, for whatever reason, need to rent.

U.S. consumer confidence did fall more than expected in December due to the "fiscal crisis".  Despite that, there is a growing sense of optimism about the economy.  The number of Americans filing new claims for jobless benefits fell to a nearly 4-1/2 year low. The Labor Department said initial claims for state unemployment benefits dropped 12,000 to a seasonally adjusted 350,000.

“This recent improvement in the claims data is potentially a favorable signal for the labor market,” said Daniel Silver, an economist at JPMorgan in New York. With an anticipated increase in hiring due to the rebuilding campaign on the east coast in the wake of Super-Storm Sandy, there will most likely be more qualified, income-earning renters in the year ahead.

The S&P/Case-Shiller Home Price Indices

S&P/Case-Shiller Home Price Indices are the leading measures for the US to track changes in the value of residential real estate.  They are calculated monthly using a three-month moving average and published with a two month lag.  

Click to see the price indices as of December 26, 2012

Economic challenges still face owners, property managers and prospective residents, but trends are moving in our favor.

Good News for Idaho Falls Investors

Idaho Falls offers a lot of potential due to its current and expected growth:

• According to Inman Research, Idaho Falls is on the “top ten” list of small towns expecting rapid growth over the next 10 years.
• 50+ new multi-family units are under construction.
• Melaleuca is constructing a new 350,000 square foot facility plus a 6,000 acre commercial/industrial business park for future growth.
• A large manufacturing business is expanding into Ucon.
• Manufacturing jobs fuel growth due to the fact that whenever a manufacturing job is created there is a need for additional service jobs, housing, and retail.
• Vacancy rates for the area are consistently low compared to the national average.
• Value indicators in the Idaho Falls market based on 19 sales in 2012 are as follow: GRM ~ 7.7; Cap Rate ~ 8.0; Price/unit ~ $50,300; and Price/SF ~ $57.00. REO sales are down 80% for multifamily in 2012 vs 2011.

Turnover Efficiencies

Eastern Idaho Apartment Association

Owner of BMG & IF Rentals will be sharing over 10 years worth of systems and efficiencies that is sure to help any rental owner reduce turnover expenses.

 
What you will learn:

• Essential items to have in your lease
• Best practices when tenants move out
• Scheduling work and cleaning
• Effective marketing that reduces turnover
• Property condition

Clint's "open forum" style of speaking is very helpful - you are sure to have fun while decreasing your turnover expenses.

This meeting begins at 7:00 p.m. at Stockmans.  Networking takes place 30 minutes prior. 

Cold Weather Can be Costly

Dear Tenants and Property Owners,

Cold weather can be costly for tenants and property owners both.  It is important to keep your home heated and pipes warm.

If you encounter a problem with a furnace or other heating problems, please treat them as very high priority and call us immediately.  Repairs must be done as soon as possible, or an alternate source of heat must be put in place temporarily until the problem can be resolved.  These situations can incur additional expenses.

TENANTS

• Heat your home to at least 50 degrees to keep pipes warm.
• If you have pipes that are behind cupboards, you can open the cupboard to let more heat in.
• If you have places that are not staying warm enough like a basement or something, then please use additional heat, such as an electric heater.
• Expect higher heating costs.

PROPERTY OWNERS

• There is still a risk of freezing pipes even if a home is heated due to pipe location or other circumstances.
• If problems do occur, we treat these as emergencies.
• We take emergencies seriously; they will be addressed as quickly and as cost efficient as possible.

Owner of Salt Lake BMG recognized by the National Association of Residential Property Managers (NARPM)

Congratulations Chad Collins for being recognized by NARPM as a Next Generation Professional Superstar!

The Next Generation Professional group was formed to include individuals who are under 40 years old and recognize them for accomplishments to promote leadership.  Groups are formed across the nation with active members who take pride in their communities. 

Chad has held the following NARPM positions:

• Utah Chapter Founding Member
• Treasurer
• 2012 Utah Chapter President

 
As the Principal Broker / Owner at BMG Rentals Property Management in Salt Lake City, Chad leads a team that manages 500+ residential rental units. Chad and BMG Rentals Property Management participates locally in coat drives, food drives, and sponsoring youth sporting events.

Happy Holidays

More Coats for Kids 

No More Cards & Treats . . .
Thanks to the support of many, last year's coat drive was a success. This holiday season, we are going to put the resources that usually go to cards and treats towards the coat drive for local elementary kids. We appreciate your support!



It all started when a teacher was in our office paying rent on a cold day and mentioned that she couldn't believe how some kids don't have coats for winter. We thought she was talking about the crazy teenagers who just don't wear a coat, but she teaches 1st grade?? We asked for their sizes and it all grew from there. Other teachers and elementary school counselors started contacting us and we started spreading the word. The donations of coats and money kept coming in and we were able to provide over 60 coats to elementary age children last year.

Thank You For Your Business! 
We would like to thank all of our clients for their support this year. We hope you have a great holiday season and an even better new year!!!

Idaho multi-family properties may be eligible for insulation rebate

Available Multi Family Rebates for Attic Insulation (Electric Only Properties):

• Rocky Mountain Power Rebate for Electrically Cooled and Heated Property:
• R30 (12’’ fiberglass insulation) = $0.50 cents per sq ft

Pricing and Payment Information:

• Total Cost to install an R30 (12’’ fiberglass insulation) - $0.50 cents per sq ft. Assuming that a complex has been pre-qualified for the RMP Electric Rebate Incentive. The net cost after rebates to the customer is zero.
• It takes approx 6-8 weeks from the time the project is complete to the time the rebate is received. No payment is due until the rebate has been received. The Rebate incentive check will be sent direct to either your Management office or the apartment complex office and will be written in the name of the complex or the Management Company.

Key qualifiers that must be met in order to qualify for both the RMP and Questar Gas rebates:

• RMP:
• Unit must be heated using ducted Electric Furnace System (No gas Furnace)
• Pre-existing insulation level must be R19 or less
• Must be on qualified rate schedule with RMP Landlord Acct (residential rate customer)

Pre-qualification Process:

• In order to determine if an apartment complex meets the above criteria, Home Energy Solutions will need to have permission to work with the onsite apartment Manager. Once permission has been granted, a representative from Home Energy Solutions will schedule a time with the Manager to access 3-5 units depending on the size of the complex and take measurements of the existing insulation levels and pictures of both the furnace and cooling units. The only work required by the office in order to complete this process, will be to give notice to the tenants in order to access their unit. Once in the unit, the inspection process will take approx 5-10 min.
• In the event that there are vacant units or units with outside access to the attics, there will be no need to access the unit or provide notice to the tenant if vacant.
• Once we determine that a complex does meet the qualifications, we will notify RMP of our findings and a representative from RMP will then contact the office to verify our inspection results and confirm that the rebates are available.

Work Proposal (Approval to begin work):

• Once the “Work Proposal” has been signed, we can begin with the work. The basic outline of the Agreement requires that we are a licensed and insured contactor performing quality work with quality materials. It also reviews the payment details and how the utility rebates are used for payment.

Completion of Work:

• After the Work Proposal has been signed. Home Energy Solutions will work with the onsite Apartment Manager to complete the work. Home Energy Solutions will provide the apartment office with the schedule of work. The schedule will be used to give proper notice to each tenant. Other than providing notice to the tenants, no other work is required from the office. In the event that the apartment has outside access to the attic (breezeway or rooftop), we will not need to access the units and no work will be required by the office. When access to the unit is required, each apartment will take approx 30-45 min to complete depending on the size. All apartments will be left clean and in the same condition as when we entered.

Completion of Rebate Paperwork:

• All rebate paperwork will be completed and submitted to RMP by Home Energy Solutions. The only items needed to complete the paperwork from the Management or apartment office will be the following:
• A copy of the Rocky Mountain Power utility bill. This is usually called the “Landlord Tenant Agreement” account and is usually in the apartment complex or owners name. This is the account used when a unit goes vacant and needs to still have the electricity on. It will often include the commons area lighting and usually has several meters attached to it.
• Final signatures for the RMP rebate applications confirming that the work was completed.

Home Energy Solutions is licensed, insured, qualified and experienced contractor.

• We have worked extensively with Rocky Mountain Power and have insulated many large apartment complexes throughout Utah using the rebate programs to pay for the cost. We take pride in having as little impact as possible on all parties involved while completing the work in a timely and efficient manner.

When To Hire A Property Manager (Infographic)

Knowing when to hire a professional to manage your rental property can be difficult. In this infographic, we provide some pointers on how to narrow down and simplify your decision process.

Source: AppFolio.com

Eastern Idaho Apartment Association - Self Directed IRAs

Self Directed IRAs
You do not want to miss this one!  James Magee from Equity Trust will be providing a live webinar to teach us about Self Directed IRAs.  This creative investment strategy gives investors the opportunity to use tax sheltered funds to invest in real estate and other investments.  James Magee will inform us on some of the rules and laws regarding these investments.  He will be addressing traditional IRAs and Roth IRAs along with different structures in which to fund these investments.  Networking will begin at 6pm on November 14th with dinner.  The presentation will begin at 7pm.  Please forward this message to anyone you think may be interested.

Special Thanks
Special thanks to Barbara Dahlin-Solinsky for the standup job she did on the presentation regarding the Navigations Program and their role in prevention homelessness in Idaho Falls.

More information and benefits at http://eiaa.info

BMG Attends National Property Management Convention in D.C.

4 year lease required, utilities included.

New property might be available soon. The current tenant is trying to keep his job. If he succeeds he will sign another 4 year lease. If he loses his job this winter, there is a family waiting to sign another 4 year lease . . . If only we managed the White House!

We just returned from the 24th Annual Convention of the National Association of Residential Property Managers (NARPM) held in Washington D.C. The association celebrated their 24th convention anniversary during the event while the various general sessions emphasized professionalism and leadership by example. Workshops offered current attendees information to help residential property managers keep abreast of the latest developments in the industry. Suppliers and vendors were also present with samples of goods and services for improving the management of property.

Fall colors were worth the walk.

"The NARPM Annual Convention is a great way to keep up with current trends and changes in our industry and to locate products helpful for efficient property management and professional development" said Clint Collins. "We have been using video more in our marketing efforts. After learning some new techniques in D.C. our tenants and owners are going to see even more reliance on video for inspections and marketing vacancies." Workshop topics ranged from the latest trends in social networking to ethics to managing effective and profitable teams. As always there was a strong emphasis on the NARPM designation program in residential property management. Members of our staff in St. George and Salt Lake, UT and also in our Idaho Falls office are working on their designations and education in the property management industry.

Over 600 individuals were in attendance at the annual event. There are over 3,700 members of NARPM, the nation's only professional organization dedicated exclusively to enhancing the professionalism and ethics of the residential property management industry.

More Apartment Companies Requiring Renters Insurance

According to a survey of apartment companies conducted by the National Multi Housing Council (NMHC), 66 percent of lessor respondents required renters insurance, which is up from 44 percent in 2009, and in 2008 only 24 percent required the insurance.


There are a variety of reasons why apartment companies are beginning to implement renters insurance more, the most important benefit being the owner’s ability to recover damages. If a resident happens to damage the property the apartment company’s master insurance may cover the cost, but there’s the possibility of a deductible and raised rates.  With renters insurance the landlord would simply recover the costs from the resident’s insurance company. Landlords are also protected in the event that there is a theft or loss that a tenant blames on the property owner.

Coverage under a renters insurance policy usually covers damage caused by smoke, fire, explosions, and water. The typical policy has three fundamental components of coverage: Liability coverage, personal possession coverage and external living expenses coverage.

Although landlords are increasingly electing to require tenants to carry renters insurance, there are often state statutory limits on the amount of control a lessor can exercise over the resulting insurance purchase transaction.  Under most states’ laws, apartment companies are not allowed to require residents to use a particular insurance company. However, the landlords are allowed to provide a list of insurance companies as an option to residents. Indeed, landlords may identify favored insurance companies with which they have agreements for lower rates and pre-approval. Such arrangements offer incentives for both the landlord and tenant.

As the requirement of renters insurance becomes more common in the apartment marketplace, there appears to be little push back by renters. In fact, it is reported now that residents have begun to not only accept, but almost expect the requirement.

Winner - 3 Night Stay in Island Park

Rett Smith was the winner at the Utah Association of Realtors Convention in St. George, UT.  He beat out all other throws with seven in a row.

Utah Association of Realtors Anuual Convention 2012 in St. George, UT

Thanks to everyone who stopped by our booth at the Utah Association of Realtors Annual Convention in St. George, UT. Our property management team had a great time at his event. Check out our quick video and good luck to everyone who entered. At this time the record for the bean bag toss is a 7!!!!!! We will announce the winner through our website, facebook, and twitter on Monday.

Our St. George BMG Rentals Property Management office is growing and owners and tenants are happy with our great service. We appreciate all our customers in the St. George area and look forward to serving you.

Local owner wonders why her home won't rent

Is your rental home sitting vacant? See what we recommended to this home owner to get it rented.

Clint Collins response: To Julie,

I would review the price, presentation, and exposure. If she emails me the stats on that home I will send her a comparable report for the homes we have in that area and similar. (clint@ifrentals.com) See below:

If a property is not rented within 30 days it is typically due to price, presentation, and/or exposure. All 3 of these should be reviewed weekly while listing a vacant property:

Price: Develop a rental price based on comparable properties in the current market with a goal of having it rented within 30 days or sooner. Track the number of calls, showings, and applications for each vacant property. Lots of calls but no showings is a great indicator that the price is high if the price is not listed in your marketing. With this data we are able to adjust the price as needed.
Presentation: We will make recommendations based on our experience, and feedback from showings. If the property needs more cleaning the do it. Cleaning is more effective than most other move-in incentives. If there are other improvements that would help with presentation then weigh out the cost and determine what could be done. If the property is getting a lot of showings and no apps then it is most likely a presentation issue.
Exposure: Give your vacant properties maximum exposure through a full marketing program. This includes websites, local media, tenant referral program, yard signs, and local top ranking websites. More exposure gives you more options for screening for good tenants, less time vacant, and increased rental income. Use lots of pictures and even video tours so the showings you get are more interested and you waste less time. If you are not getting traffic on the property it is most likely an exposure issue.

If you visit the property weekly and review these 3 factors and make regular adjustments, your property won't be vacant for long.

More feedback from Jake:
I would re-iterate Clint's approach.

1. Ask yourself: how many phone calls have you received? How many showings? Applications? (Indicates Exposure)
2. What are 5 things you can do to improve Presentation? Examples can include changing burnt out bulbs, cleaning windows, trimming some bushes, addressing any odor, etc.
3. Price: Keep checking those comparables. Objectively compare property benefits/drawbacks with comparables. Sometimes drawbacks are difficult to notice such as cleanliness of neighborhood. It sounds like your exposure is good. If the place is looking good it may be time for another price reduction.

Original email:
Jake, could you forward to members?

This has been advertised for about 3 months. Did 1 month in post register, photo ad. plus craigslist the whole time trying to remember to renew every 2 days. Competition looked really stiff this summer, lots of homes for rent. It looked like rents had come down, just looking at the ads. Started at $1100 which was what I was getting for years. 3 bed 2 bath newer home in Cortland Ridge by Crowley and 45th S. 1200 sf, living room is really small, so limits possible tenants. Lowered to $1070. I had 2 other homes turn over during this time. One in a few days, the other in about a week. Do you guys have any suggestions? I know it has to come down to rent. What do you guys think? Is it overpriced or something else?

craigslist ad: http://eastidaho.craigslist.org/apa/3249588768.html. In case that link changes, title is $1070 / 3br - Newer East Side Home with AC (Cortland Ridge, Ammon)

With all the news floating around on the housing market and everyone trying to predict a recovery, here are some solid numbers, especially when considering the rental market.

BMG Rentals Property Management Attending the 2012 Convention - Utah Association of Realtors - Dixie Center, St. George

Join BMG Rentals Property Management in St. George for the 2012 Utah Association of Realtors Convention

BMG Rentals Property Management is scheduled to attend the trade show in St. George, UT from September 15^th through September 17^th.  Our booth will showcase our property management services and provide a general overview of our management techniques.  The booth will be staffed with experienced property managers from St. George and other locations who will be answering questions and explaining more specific procedures used in our business. 

Through our unique management style, we maintain a retention rate of 96%.  We have been in the business over 10 years and pride ourselves on our exceptional customer service, screening process, and marketing programs.

St. George BMG Rentals Property Management Office

BMG Rentals property management works with tenants and property owners to provide a great renting and investment property experience. Tenants can search for rental homes and apartments, view pictures, and watch video tours at our website. Property owners and investors enjoy our easy to read statements, regular inspection program, online portals, custom accounting reports, and our great customer service. We specialize in working with investors to improve cash flow and protect their investment. For more information on our management services download our owner information packet from our website. Also check out our property management videos and forms. We manage homes, apartments, plexus, condos, town-homes, and more. Our property management services are currently available in Utah and Eastern Idaho, with offices in Salt Lake, Idaho Falls, Pocatello, and St. George.

20 Percent of Property Management Companies are Less Than 2 Years Old

Who’s Managing Your Property?

In 2011 alone, according to RealtyTrac, 1.2 million investment properties were purchased. That’s up 60 percent from the 749,000 properties purchased in 2010. And the trend is continuing this year as investment property purchases account for 20 percent of all home sales.

This boom in rental properties has created a growing market for property management companies. All Property Management (APM), an online property management network, specializing in single family home rentals recently reported that one fifth of its clients have been in business for less than two years. The median number of properties they manage is 175, although 17 percent are currently managing over 500 properties. 70 percent of APM’s managers expect to see continued and increased growth.

Can a newly created property management company hope to protect you and your property with little to no experience in the industry?

There are a number of tricky situations and technical legal issues involved in managing properties. A recent survey found that on average it takes one to two months to evict a non-paying tenant, and the costs average between $1,000 and $3,000. Now imagine what would happen if your property management company mishandled the eviction due to a lack of experience in the area.

How much time, money and energy could an inexperienced property manager end up costing you?

With our many years of experience and education we are able to handle the legal issues and other situations that occasionally happen while managing properties. Not only is BMG experienced enough to handle an eviction quickly, while keeping costs down, but our pricing structure does not benefit from a vacant property. We only make money when your property is being rented.

Our Gurantee-

We maintain an owner retention rate above 96 percent. We like happy customers and do our best to keep them that way. We want them to use our services because it works for them NOT because they are tied to a contract. Either party in our management agreement can cancel the agreement with a 30-day notice with or without cause. We require that our entire management team provide you and your tenants with prompt and satisfactory service. If you ever have a question or concern, you can contact us at any time. If you are not satisfied with our service, we will allow you out of your contract, free of penalties and fees.

Diagnosing Vacancies

What keeps a property from renting?

Tenant turnover cannot be prevented. Renters will eventually move. Although the economy may be taking baby steps toward a recovery with national vacancy rates on the decline, regional rates continue to outpace the average. The national rental vacancy rate dropped to 4.9 percent the first quarter of 2012, its lowest rate since 2001.[1]

While Idaho’s rate has slowly been declining as well, down to 6.2 percent, it is still well above average. Utah jumped from 5.9 percent fourth quarter 2011 to 7.2 at the end of first quarter this year. [2]

Since an empty property does not generate income, what do we do to keep vacancy rates down?

Pay careful consideration to the current environment. If a property is not renting it is typically due to price, presentation, and/or exposure. Our entire team meets weekly to review each vacant property and address each factor for our owners.

Is the price right? - If your property is listed too high then it will take longer to rent and in most cases the extra rent you were trying to get was lost in the time the property was vacant. We run rental comparables for your property and area and use that information to determine a starting price, which we then review weekly and make adjustments as necessary based on the traffic, phone calls, showings, and applications.

How is the presentation? - We make recommendations based on experience and feedback from showings. Obvious maintenance or cleaning issues could repel potential tenants. If the property needs more cleaning or other improvements that will help the presentation, we will discuss these items with you.

Who knows about it? – If renters can’t find information on your property for rent, how will they know it is available? We give our vacant properties maximum exposure through our marketing program. This includes websites, local media, tenant referral program, yard signs, and our own top ranking website. More exposure gives us more options for screening for good tenants, less time vacant, and increased rental income. If you want even more exposure, ask about our marketing fund.

Unlike a lot of property management companies, we do not make money on vacant properties. Our system is designed to reduce vacancy rates and maximize rent potential. Most owners who have switched to our system have seen a decline in their vacancy rates.

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[1] http://www.thedaily.com/page/2012/04/05/040512-news-apartment-vacancy/

[2] The Quarterly Vacancy and Homeownership Rates By State and MSA Table 1: Rental Vacancy Rates by State

Should I Allow Pets?

Should I Allow Pets?

Pets can potentially cause damage to a property; however over 60% of renters have them. If you want to avoid the hassle of worrying over pet damages, it may take you longer to find a renter for your property. Here are some of the pros and cons to help make the right decision for your property.

 A survey conducted by the Foundation for Interdisciplinary Research and Education Promoting Animal Welfare (FIREPAW) found the worst damage reported by landlords averaged $430.

The average damage was $362 for tenants with pets, and $323 for tenants without pets. According to the survey, properties that allowed pets were able to charge 20 to 30 percent more rent than those that didn't allow pets.

Simply allowing pets does not guarantee you’ll be able to charge more in rent, however it does increase your tenant pool and you will likely have more demand allowing for potentially higher rent prices and lower vacancy rates.

Additionally, a tenant with a pet is more likely to stay, because it is harder to find another pet friendly landlord. The FIREPAW survey saw tenants in pet-friendly rentals stayed an average of 46 months, compared to only 18 months for those in rentals prohibiting pets. 

However, there is a reason property owners decide not to allow pets. Pets that have not been toilet trained can cause stains and odors. They may claw or bite carpeting, cabinets, furniture or blinds. Barking, meowing, or other pet sounds can lead to noise complaints from neighbors. Some pets can even be a safety hazard if not controlled or left unleashed as they may bite people or other animals.

Much of the risk of pet damage can be reduced by properly screening tenants, and performing periodic property inspections. To help prevent damage, if an owner decides to allow pets, we recommend a limit of 2 pets with weight restrictions based on the size of the property. We also suggest $300 to $500 per pet additional deposit. 

Our inspection process always includes a thorough search for pet damage and smell. We have found through years of screening potential tenants that pets typically match their owners. Good, clean people have good, clean pets.

For more information on allowing pets or to read the FIREPAW survey in its entirety go to: http://www.firepaw.org/CompanionAnimalRentersPetFriendly.pdf

What Do Renters Want from a Website? And Does Your Property Manager Have it?

When renters start searching for their next home over 70 percent begin their search online according to the National Multi Housing Counsel (NMHC). We have seen a dramatic shift in the last 4 years from newspaper searches to online searching. Many experts have credited this to the accessibility of the internet increasing with smart phones, tablets, and wireless access points. The days of throwing an ad in the paper and putting a sign in the yard to rent a property are gone.

Renters are demanding more from the sites they visit.

You can see in the graphic from RentJuice, the most wanted website feature is an available date. If renters can't tell when a property is available to rent then the information regarding that property is useless to them. It is surprising to see that 30 percent of the property management websites in the study did not have availability dates on their sites. It is even more surprising that 21 percent did not have pictures. With video tours becoming more and more popular, pictures seem to be the bare minimum a property manager should be providing. 

What About Video Tours?

One missing category from the study is video tours of specific properties. Video tours can accomplish three of the top four items renters want in a website.  As you can see on our site, or our Youtube channel, many properties feature video tours. This gives renters a look at the floor plan by walking them through the property. Renters searching our properties are able to do an informative walk-through while sitting at their computer. This is very helpful to renters who are moving to a new area. Renters get a good idea of the square footage through a well done video tour. And when given the choice between pictures or video, renters will choose video. One new tenant recently told us, "We were able to narrow our search down using your video tours. It was great!" We have been getting great feedback from renters who were able to take a tour of a property before it was even available. Now current tenants who are planning to move out are not bothered with showings, and turnover time is reduced with people waiting to rent as soon as the property is available.