homes, but it also makes it harder for potential buyers to purchase them at a price they can afford. Because our housing fundamentals remain strong, it is more likely more homeowners will stay in their current homes than sell be- cause they are not under any pressure to do so. What this tells me today: The decreasing supply of residential properties and increasing cost of home pur- chases make renting a necessi- ty for a growing population. • Tenant Screening in a Challenging Market CHANGE #2 BAN ON RENTAL HOUSING AUCTIONS Seattle law has placed a temporary ban on housing auction websites where land- lords list properties for a base price and potential tenants put in bids for how much they are willing to pay. The city of Seattle has placed a one-year stop on these sites in the city while they examine the effects of such rental bidding more closely. If and until the ban is lifted, landlords in the area will no longer be able to screen or select tenants on these types of websites. > Continued from :: PG 32 Case Study:
this rule was meant to remove bias in the rental process by establishing a set of standards for tenants that was fully transparent and did not have any “grey areas.” Area landlords argued this ordinance took away their ability to make wise investment decisions when choosing the best tenant for their property, management style, and investment strategies. The law was struck down in March 2018, although there are plans to appeal. NAVIGATING THESE CHANGES While extreme, these changes should not put your investments at risk. The key is to act knowl- edgably, responsi- bly, and immedi- ately. First, in the event ties, get help with screening your tenants until you get a grasp on the changes. Using a tenant-screening service that helps you gather up in- formation on credit history is still possible, but you can be legally liable if you fail in disregarding standard inclu- sion of prohibited informa- tion like criminal activity. Second, take more time to get to know tenants before renting to them. By getting to know your client person- ally, you can gain a better understanding of what type of person they are, how of a major legislative change in tenants’ rights or landlords’ responsibili-
reliable they are, and why they want to move into a better housing situation. The simple solution to changes in tenant law is communi- cation! Finally, get educated about renting to clients with varied backgrounds. While many landlords fear renting to clients who have a criminal history due to the perceived risk, there are many cas- es where that risk is more imagined than anything else. Reach out to a local community center in the area that helps those with records find work, a home, and sanctuary when leaving prison. By talking with the people there, you will get a better understand- ing of what types of questions to ask of all clients in the future. Not everyone will agree with rental policy changes, ever. Careful, cautious, diligent landlords make money in the best and toughest markets because they do not permit external issues from affecting the integrity of their internal systems. • > Continued from :: PG 40 The TruthAbout "Totally Passive" Income from Syndications they are as advantageous as syndications. REITs may yield low dividend income and, when publicly trad-
ed, REITS can be volatile. Furthermore, real estate syndications, which are generally smaller than REITs, often have lower overhead and lower management fees, which can increase returns. Here are some additional benefits to investing in syn- dications:
process interests me. I don’t mind doing the work and I don’t even mind if it ends up not being viable for me to in- vest in property Georgia be- cause I am starting to think that international investing may produce bigger opportu- nities and profits than some of our over saturated markets due to being able to get in on the ground floor. Our world is getting smaller so why not expand your think- ing on what could be possible not only in our backyard, but across the globe? Truly, the entire world awaits. • > Continued from :: PG 91 How to Maximize Your Insurance Benefits project or keep track of ex- penses on your rental prop- erties for tax purposes, this will be easy. You must show copies of receipts for repairs and document expenses. And no: Your before and after photos are not enough proof! 10. SEND A SIGNED SWORN PROOF OF LOSS CONTAIN- ING THE INFORMATION REQUEST TO INVESTIGATE THE CLAIM. Insurers use this form to determine if they are liable for the claim. It includes a formal statement from the policyholder (you) detailing the true circumstances and scope of the property loss. It usually must be notarized and submitted within 60 days of them furnishing it to you. The document will likely include:
• Proof of ownership
agent should be able to help you fill it out correctly.
> Continued from :: PG 13 Residential Real Estate Indicators You Must Know monitor your investments. FACTOR 1 DEMAND The demand for rental property is increasing because certain factors are prevent- ing renters from becoming buyers. Dennis Cisterna, CEO of Investability, cited eight factors currently driving a rising demand for rentals even though low interest rates might lead you to expect in- creased home sales. They are: 1. Low unemployment 2. High student debt 3. Low rates of personal savings 4. Increasing healthcare costs 5. Tight credit markets for consumers with less-than-stellar credit 6. Growth in immigration 7. Growth in the general population 8. Increasing interest rates W hat this tells me today: Right now, demand for rentals is rising. That is good for landlords and turnkey property owners. FACTOR 2 SUPPLY Three factors presently limit both buyers’ and renters’ options: 1. Low inventory 2. Low permits 3. Minimal homeowner distress These factors not only make it less likely home- owners are going to sell their
• Your statement regarding the date and cause of loss • Your estimate of the property loss and documents that support your loss estimate
ALWAYS READ THE FINE PRINT Any contract, including your insurance policy, can make for a sleepy read. However, understanding the contracts you sign is critical and can have a huge impact on your financial well-being. Lean on your agent to help clear up any confusion. Tak- ing the time to get to know your property insurance policies will benefit you time after time. •
• Amount of claim submitted
NO. 1 Access to Bigger Deals
Smaller investors can partici- pate in bigger deals that they couldn’t afford on their own.
Failure to submit a Sworn Proof of Loss will result in the denial of your claim and no payment for your other- wise-covered property loss. If you have questions, your
NO. 2 Partner with Experts
Inexperienced investors can benefit from the expertise of experienced asset managers. NO. 3 Economies of Scale The cost of materials and services can be reduced with bulk purchases for construction. Investors can experience the ease of stock market investing with the security of real estate. NO. 5 Diversification A syndication may be secured by more than one asset. For example, if you invest in a private lending fund, it will likely be secured to multiple properties. In a REIT, you could be essential- ly investing in one trust deed for one property. • > Continued from :: PG 61 NewOpportunities & NewWorlds as a Cultural Ambassador a lot of research and due diligence, but the educational NO. 4 Security of Hard Assets
ADVERTISER INDEX
84 Lumber
2
Affinity Loss Prevention Services
91 11
American Association of Private Lenders
Angel Oak Prime Bridge Bronchick Law Firm
62-63
83 27 41 25 37 87 55 65 31 59 33
DHLC Investments
Home Invest
Memphis Investment Properties
My 1031 Exchange
Norada Real Estate Investments
Own America Patch of Land Point Central
IMN Supplement: 16
Private Money Lending Guide Radius Renovation Group Real Property Management
Recovco Direct
IMN Supplement: 4; 100
Renters Warehouse
3
RentFax
53 99
CHANGE #3 NO MORE “FIRST-QUALIFIED” TENANTS
Roofstock
Secure Pay One
IMN Supplement: 8 6, IMN Supplement: 2 IMN Supplement: 6
Think Realty
In 2016, Seattle passed an or- dinance that requires landlords to rent their properties to the first qualified tenant who meets a predetermined list of qualifi- cations. While hard to enforce,
Triumph Capital US Probate Leads
85
Yardi Matrix
IMN Supplement: 12-13
• Personal data like name and address
96 | think realty magazine :: august 2018
thinkrealty . com | 97
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