By John Triplett
New data from the U.S. Census Bureau shows a growing number of Americans are spending at least 90 minutes each way traveling to and from work, a practice known as “super-commuting,” Apartment List says in a new report.
While the super-commuting trend is not new, the pandemic provided a “brief respite, eliminating commutes for many and reducing commute times for the rest as traffic abated. As the economy went remote, the number of super-commuters fell by over 1.5 million even as demand for suburban and exurban living remained strong,” the report’s economists say in the report.
The report says the city-to-suburb migration is more recently focused on homeownership and affordable cost-of-living options. That has encouraged families to head to the lower-density suburbs while keeping jobs in the central city.
The latest population estimates from the U.S. Census Bureau show suburbanization vividly, with high-growth counties forming visible rings around urban cores.
Wages Are Higher for Those Willing to Commute Long Distances
“The latest census data clearly show that workers are willing to trade lengthy commutes for higher incomes. In 2022, the median wage eclipses $50,000 for workers who spend at least one hour commuting, and is actually lowest for those who live within a quick 15-minute trip to work,” the Census Bureau report shows.
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The nationwide super-commuting rate is 2.7 percent, but double-digit rates can be found along the peripheries of several large metros in California and Texas, as well as Seattle, New York, and Washington, D.C.
The Los Angeles region has more super-commuters than anywhere else. The nation’s highest super-commuter rate can be found in Palmdale, a 60-mile drive from Los Angeles, where 16.9 percent of all workers commute at least 90 minutes for work.
Super-Commuting and its Implications
Apartment List senior research associate Rob Warnock writes, “The relationship between where people live and where they work continues to evolve. A record number continue working from home; however, many employers appear to be shifting back to in-person or hybrid arrangements.
“This is putting more commuters on roadways and transitways daily – including more super-commuters – and resuming the pre-pandemic trend. Worsening commutes for drivers increase car-related expenses, impact physical health, and amplify the environmental consequences of suburban sprawl. Meanwhile, worsening commutes for transit riders harm quality-of-life in urban cities and disproportionately affect the car-free households that tend to be lower-income. Altogether, this trend may increase tension between workers and employers, as they negotiate working arrangements that affect their commutes.
“Housing is, of course, central to any attempts at cutting back on super-commuting. In cities and suburbs alike, dense construction and infill development (built at a rate that scales appropriately with job growth) can improve housing opportunities so that those who wish to live closer to work can afford to do so,” Warnock says.
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Source: Active Duty Passive Income
Imagine owning a property where your investment not only grows but also nurtures a thriving community—welcome to the world of mixed-use properties!
In the diverse world of real estate investment, mixed-use properties are a unique and increasingly sought-after asset class. These developments, which blend residential and commercial spaces within a single project, present numerous benefits that attract both seasoned investors and those new to the field. This blog post will delve into the multifaceted advantages of investing in mixed-use properties, highlighting the potential for higher income, risk diversification, and enhanced property values.
What are Mixed-Use Properties?
Mixed-use developments are properties that combine residential units, like apartments or condos, with commercial spaces, including retail stores, offices, or restaurants. This configuration allows for a dynamic community where individuals can live, work, and relax all in one place. The setup of these properties can vary widely, ranging from a single building to an entire neighborhood designed around the mixed-use concept.
The Advantages of Investing in Mixed-Use Properties
- Diverse Revenue Streams
A key advantage of mixed-use properties is the diversification of income sources. By combining residential and commercial leases in one location, investors can access multiple streams of revenue. Residential units generally provide a steady income through rent, while commercial spaces can command higher rental rates and offer longer lease terms, contributing to a more stable cash flow.
- Reduced Investment Risk
Investing in mixed-use properties can also lower risk. These properties tend to be less affected by economic fluctuations than single-use buildings because they are not dependent on just one sector. For example, if the commercial market experiences a downturn, the residential side of the property can still generate revenue, and vice versa. This balance offers investors a degree of protection during economic downturns.
- Increased Tenant Retention
The convenience of having amenities and work close by can lead to higher tenant satisfaction and retention in mixed-use developments. Happy tenants are less likely to move, which helps to reduce turnover costs and vacancy rates. Additionally, the businesses operating in the commercial spaces benefit from the constant foot traffic from the residential community, which can help sustain their operations.
- Enhanced Property Value
Mixed-use properties often become key elements of the neighborhoods they’re in, driving up property values. Well-maintained commercial spaces can make residential units more appealing, while a lively residential community can attract businesses to the commercial spaces. Moreover, these properties often spur further economic development and revitalization in the surrounding area, leading to an overall increase in property value.
- Tax Incentives and Zoning Advantages
Investors in mixed-use properties might qualify for various tax incentives aimed at encouraging urban development and revitalization. These can include lower tax rates, grants, or other financial perks. Zoning laws in many cities are also increasingly supportive of mixed-use developments as part of a broader initiative towards more sustainable and efficient land use.
- Sustainability
Mixed-use properties promote sustainable urban growth by minimizing the need for extensive commuting, thus reducing carbon footprints and enhancing the pedestrian-friendliness of an area. This aspect of sustainability attracts tenants and customers who prioritize environmental concerns and seek convenience and quality of life in their residential and shopping experiences.
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Challenges of Mixed-Use Development
Despite the many benefits, mixed-use developments come with challenges, including the complexity of managing different types of spaces and tenants, higher initial capital requirements, and the necessity of choosing a strategic location that supports both residential and commercial activities. Investors must also navigate complex zoning laws, building codes, and an often demanding approvals process.
Mixed-use property investments offer compelling advantages for those looking to expand their investment portfolios and capitalize on the synergy between residential and commercial real estate. By understanding the unique benefits of these properties, investors can realize enhanced returns while contributing to the development of dynamic, sustainable communities. As urban populations continue to grow, the demand for integrated living and commercial spaces is likely to increase, making mixed-use developments an intelligent choice for proactive investors.
Whether you’re a seasoned real estate professional or just starting out, mixed-use properties are worth considering for their blend of flexibility, stability, and sustainability, standing out as a smart investment path for the future.
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By Frank Jachetta
In recent times, the rental landscape has seen a surge in evictions, posing challenges for landlords in collecting judgments from previous tenants. According to the Eviction Lab at Princeton University, eviction rates have risen steadily, with over 2.3 million evictions filed in 2023. Below are five useful strategies to reduce rental losses.
Strategy #1: Require a Thorough Application and Documentation
Collecting proper documentation and a thorough application first will help you reduce fraud, assess a renter’s financial capability to meet rental obligations, and streamline the process of
collecting rent debt. At a minimum, your application should collect name, date of birth, previous addresses, landlord references, employment information, all income sources, and in states where it’s allowed, a social security number. Check with your legal counsel to best
implement a screening policy that complies with your local and federal laws.
Also, consider collecting the following documents from all adults listed on the lease agreement:
✓ Government-issued identification
✓ Proof of income
✓ Recent bank statement
✓ Tax returns
Strategy #2: Check References and Run a Credit and Background Check
Next, review the applicant’s credit report, particularly their total debt, payment history, and collections. Ideally you want to ensure their debt will not stand in the way of paying rent
and that they have not recently fallen behind on payments. Note that nearly all evictions, tax liens, and civil judgments were removed from credit reports in 2017. Make sure you partner with a tenant screening provider that can provide these types of records in addition to a credit report. Lastly, call the applicant’s previous landlords to find out if they failed to make timely rental payments. If your applicant is employed, you can also call their employer’s HR department to verify their status and salary, which can help you further verify the applicant’s ability to pay rent.
Strategy #3: Utilize Lease and Deposit Protection
Lease and deposit protection from TheGuarantors can reduce bad debt up to 70%. Their Rent and Deposit Coverage can help you open doors to more renters – those who might be harder to qualify based on their income or credit history – without the same risk. All at no cost to the landlord, the products help you recover losses due to rent defaults, lease breaks, damages, vacancies, unpaid utilities, and more. In each case, the renter pays for the coverage that gives them access to the home of their choice and minimizes the landlord’s rental income loss.
While this coverage isn’t a substitute for fraud prevention measures, TheGuarantors offers
financial protection should renter fraud occur. According to TheGuarantors, Landlords who
use their suite of insurance services can see up to a 25% increase in lease conversions, because they can help you lease more confidently to non-U.S. citizens, students, recent graduates, freelancers, and thin-credit or thin-income applicants.
Pricing is determined by several factors such as the renter’s risk profile and the gross monthly
rent. It’s free for landlords to sign up and begin referring renters to get coverage. Renters who purchase a policy with TheGuarantors report a 95% satisfaction rate. Take Romey, for instance, a Vice President of Public Relations, who, despite making good money and always paying rent on time, has faced challenges renting due to past student loan issues. He emphasizes that TheGuarantors was instrumental in helping him get a rental, because they recognize individuals beyond mere credit scores, stating: While tenant screening remains crucial, being prepared for worst-case scenarios with a policy from TheGuarantors offers greater reassurance. Their landlord partners have the option of covering up to the entire term and cost of the lease, including missed rent, vacancy loss, utilities, and fees.
TenantAlert provides the ONLY instant tenant screening service with LeaseGuarantee. The credit screening company with options and guarantees.
▪️ Select from a number of reports including credit background check, nationwide criminal, and nationwide eviction.
▪️ Add up to 4 applicants in one order to screen multiple roommates.
▪️ Use your application or send off the TenantAlert application when vetting tenants.
▪️ You can pay for the credit screening or send a link to your tenants for them to pay for the service.
▪️ TenantAlert has easy to read reports with summaries to help you determine if the applicant meets your qualifications or not.
▪️ They rate the applicant on a scale of 100 and offer a lease guarantee for up to $10,0000 of protection against damages, lost rent, or legal fees that you OR the tenant can pay (starting at $199/year).
Strategy #4: Report Your Renters’ Payments to the Credit Bureaus
Reporting positive and negative payments to the credit bureaus is now possible. You can
help your renters build their credit with every timely payment, and if they miss a month, it will
be reported on their credit as well, incentivizing them to keep paying on time. According to The Credit Builder’s Alliance, “Among residents of one pilot group with a history of regularly paying late, those who agreed to have their rent payments reported were more likely than other residents to substantially increase their rate of on-time payment.” In this pilot study, 79% of participants saw an average credit score increase of 23 points, showing that both landlords and renters can benefit from these programs. Note, California’s Senate Bill 1157, has special
requirements for operators of subsidized multifamily units. Check with your legal counsel
to best implement a rent reporting policy that complies with your local laws.
Strategy #5: Implement Late Fees and Online Rental Payments
Late fees deter renters from paying rent late, but it’s important to ensure your policies are clearly written in the lease and that they comply with these local laws. There are several states that limit late fees to 4-10.5% of the rent due and or a dollar maximum. Although most states don’t require a grace period before you can charge a late fee, a 5-day grace period can offer your renters some flexibility which can foster a better relationship. You can also use property management software to accept automated online rental payments to make it as easy as
possible for renters to pay on time. Software can send renters automated reminder emails when rent is late and a bill for any late fees as well.
CONCLUSION
Although you can’t predict the future, you can take proactive steps to prevent or eliminate
rental losses. Before the lease is signed, implement a comprehensive application and screening process to lay the foundation for reliable rent payments. Then, leverage TheGuarantors’ now so that you’re able to recover rental income loss if it does occur. After your renter has moved in,
strategies like reporting rental payment to credit bureaus, enforcing late fees, and offering online rental payments can provide the right incentives to keep rent payments timely for years to come.
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