From professionally managed units to resident-hosting collaborations, owners, operators, and renters are finding the perks of renting out units for the short term.
Although March 2020 placed a screeching halt on travel and the short-term rental (STR) industry, what has blossomed post-pandemic for multifamily owners and operators is the opportunity to gain a healthy extra revenue stream and offload a little cash flow risk.
Remote and hybrid work continues to flourish, making the option of renting for the short term doable for many Americans. Yet, how this ability and its growing group of “subscribers” are harnessed through STR providers and hosts can make all the difference.
“With apartment vacancies on the rise, multifamily operators and owners need to be creative and innovative when looking for opportunities to maximize asset value,” says Jason Fudin, CEO and co-founder of Placemakr, which offers nightly, short-term, and long-term stays in apartment settings either owned or powered by the company.
“The good news is that there is a very clear way to bring cash flow back to—or better yet above—previous levels. The most effective way to do this is to tap into other customers where there is plenty of demand. Our recommendation? Furnishing vacant units to support short-term rental customers,” Fudin adds.
Flex rental operator Kasa continues to see a growing demand for various lengths of stays in apartment settings as travelers prioritize flexibility with a little more space. Roman Pedan, founder and CEO of Kasa, says millennial and Gen Zers are especially choosing experiences over things, which fuels the need for furnished rentals for the “self-directed, digital native, modern traveler.”
Pedan shares, “Properties that lack furnished rentals are invisible to this large and growing segment of housing/living demand. Over time, we believe that catering solely to long-term unfurnished and long-term furnished demand and ignoring flexible any-length-of stay rentals will be as unheard of to a property as not allowing pets [and, indeed, until consumer demand proved too strong, not too long ago, pets were banned from most properties]. Long-term properties need to serve the needs of their consumers, and that means providing a form of housing that is more dynamic than the 12-month unfurnished lease.”
At Kasa, the most common guests are business travelers, families traveling with children or with other families, and people living on the road for extended periods of time. Whether through Kasa-powered properties or partnerships with multifamily owners or operators, like AMLI Residential and Greystar, Kasa has found that the average length of stay is roughly six nights, and over 30% of nights are from people staying 30-plus days. Pedan says the average age of a Kasa guest is older than some might guess at 40, with an average income over $100,000, matching the income of residents in Kasa-powered properties.
This pool of short-term renters is an ideal target for multifamily owners and operators who are looking to fill vacancies as record new supply comes online this year. Whether through units set aside and managed by a STR provider or by the operator itself, a once-vacant apartment can become an additional revenue source with minimal investment.
“With lower-than-average deal volume and stagnant rents in many markets, operators increasingly seek opportunities to grow ancillary revenue while vigorously defending occupancy. Enter short-term rental as an amenity, representing operators’ competitive advantage,” says Jesse Stein, Airbnb’s head of real estate. The company collaborates with operators and renters alike through its Airbnb-friendly apartment program.
The program gives prospective renters the ability to stay at more than 400 Airbnb-friendly apartment buildings with more than 125,000 units on the platform across over 40 markets, including 127 cities and 17 states. Stein says, “When primary residents can host their apartments, rent becomes more affordable. Since its launch in November 2022, the median income generated per resident in the Airbnb-friendly apartment program has been $3,500, with the typical host hosting for 30 nights.”
Sentral president Lisa Yeh shares, “Multifamily owners are slowly coming around to the fact that, when done right, STRs can be a valuable piece of their overall strategy. At the same time, we’re seeing the STR industry begin to embrace partnerships with multifamily properties.” STRs are approximately 15% of Sentral’s 10,000 units under management, but Yeh says of those properties that do offer STRs, they consistently see net operating income rise an average of 20%.
Resident Perks
In addition to boosting revenue for multi-family owners and operators, the ability to offset high rental costs can also be appealing to residents, especially if they are already away traveling for business or pleasure. Yeh says, “In today’s uncertain economy, adding another revenue stream is almost all upside—provided, of course, you manage the mix correctly. One surprising benefit is that many residents enjoy engaging and connecting with people who are there for a shorter period of time, so it actually bolsters our sense of community.”
She adds, “Most Sentral communities with short-term units are ranked in [J Turner’s] Elite 1% for customer service scores. For example, our Chicago asset with 25% STR units is ranked as one of the best multifamily buildings for customer satisfaction—while driving 15% higher revenues thanks to the STR mix.”
Offering a mix of various lengths of stay can also give potential renters the opportunity to “try out” a community. “Flex rentals can be used as a zero-cost leasing channel for the property. After booking, about 4% of Kasa guests self-report that they are visiting the property because they are ‘considering a move,’” Pedan notes. “Kasa shares both offline and online leasing materials about the property with these guests to increase the odds that they lease at the property. This becomes a very targeted channel for owners to accelerate leasing and let prospective residents ‘try before they buy.’”
Building on residents’ boosted sense of community that Yeh mentions, Pedan adds that STRs within multifamily communities can also create a landing place for family or friends of residents who may not have the space to accommodate visitors themselves.
“Not only do flex rentals not detract from the rest of the community but—when done right—they can create an amenity for the rest of the property’s residents. This is because flex rentals can be used by visiting family and friends as inexpensive accommodations,” Pedan says. “Residents of a Kasa property can host traveling friends or family in the fully furnished and professionally designed Kasa units at their property, offering a more convenient, cost-effective, and comfortable alternative to a pullout couch or a downtown hotel.”
Greystar, who partners with Kasa but also Airbnb for resident hosting, has seen the advantages of allowing its residents to host their spaces through STR programs. Young Hill, managing director, flexible living strategic services, at Greystar, says, “The benefits of hosting include program parameters, oversight for community teams, a revenue share for owners, and responsible hosting in collaboration with Airbnb to deactivate ‘bad actors.’ Additionally, there is a new demand for long-term unfurnished leases from renters seeking affordability by hosting their homes.”
Greystar also has its own network of branded short-term units, ShortStay by Greystar, which ensures the company’s residents convenient access and exclusive perks as they explore the United States. The units range in availability from one night to 30-plus nights, are fully furnished, and professionally serviced in Greystar-managed communities, Hill notes.
Now a little over one year into its collaboration with the Airbnb-friendly marketplace, Hill anticipates that over 300 Greystar properties will become available this year in terms of resident hosting.
Like Greystar, Sentral also offers a mix of STRs and units listed on Airbnb by its residents. Yeh says, “It’s a natural fit for our company, since one of our main differentiators in the multifamily space is our inclusion of high customer service combined with hospitality-inspired amenities like valet parking, concierge services, rooftop pools, high-end fitness centers with group classes, curated resident events on-site and off-site, Tesla shares, and complementary food and beverage offerings.”
Placemakr’s Fudin adds, “Because this mixed-use approach has proven to help owners weatherproof their assets’ income through various headwinds (think COVID), it is likely that this blended approach of furnished and unfurnished units will become the industry standard. Many of us affectionately refer to this blended asset as flex living.”
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Operator Concerns
Of course, the horror stories of nonapproved resident hosting still ring in some multifamily owners’ and operators’ ears when considering the idea of allowing residents to rent out their spaces—and guests having access to the community’s often high-end amenities. Before regulations were set, some residents took it upon themselves to rent out their spaces without permission, causing not only trouble for residents, but also their neighbors.
And while the concerns of short-term guests who do not follow community rules are valid, providers like Airbnb and Kasa have set processes to not only maintain the quality of the communities but transparency between the community and its full-time residents.
“Contrary to belief, guests are screened through Airbnb’s platform. Concerns about a constant flow of short-term guests disrupting community dynamics are mitigated by limits on the percentage of residents allowed to host and night limits. A key factor in the Airbnb Resident Host program is that hosts are primary residents hosting their unit ‘part time,’” Hill says.
Airbnb’s Stein adds, “We’ve certainly heard operators’ concerns about safety, overall building sentiment, and STR activity happening in buildings without permission, and we have successfully built a program to alleviate these concerns.”
Safety and security systems echo throughout other STR providers’ protocols as well. Pedan says, “The most sophisticated operators have made significant progress in trust and safety systems, creating value for the rest of the community and in reputation management, and revenue generation systems.”
When selecting a STR provider, Pedan recommends that multifamily owners and operators ask a series of questions regarding trust and safety systems. He shares, “In addition to doing background checks and utilizing decibel meters and ID verifications, ask, ‘Does the flex rental operator also have cigarette and marijuana sensors, predictive risk scoring, and motion and Wi-Fi over usage detection? Does the operator track incident rates, and, if so, how does their incident rate benchmark to others?’”
Outside of direct concerns related to short-term guests, he says it is important to look at how a particular program typically impacts the lease-up and value to long-term residents for the rest of a property as well as the online reputation of a STR provider’s properties. To look at guest review scores, a quick Google search of properties and checking TripAdvisor can paint a clear picture.
Navigating Local Regulations
However, before even approaching the possibility of offering STR units or resident hosting, city regulations can pose some obstacles. Pedan says, in some instances, a regulatory approval process to operate a flex rental is necessary. “These processes can be as straightforward as an over-the-counter license obtainable in a week or a few weeks to a longer process. The longer processes, while more difficult upfront, serve as a deterrent for competing buildings from activating the same program and serve to distinguish a property that activates flex rentals from competing properties in the same city,” Pedan says. “At the same time, cities benefit from the added tax revenue from the occupancy taxes that flex rentals generate.”
He notes that STR or flex rentals can also add to city housing supply because they can help be the difference between a property that is able to access construction debt and equity capital to be developed versus a property that is not financeable. From his experience, he says, “In such a case, allowing a portion of a property to operate as flex rentals adds to the housing stock of a city since a portion of the property operated as furnished rentals allows for the whole property to get built.”
For developers, Pedan says Kasa units typically begin generating cash flow much earlier during lease-up and can generate cash flow in excess of a market rent at property stabilization.
Amid the country’s dire housing shortage, to finance more development through this additional channel is an opportunity that could rise in popularity. However, the newer STR industry has evolved—and will continue to evolve—in its brief time of operation. Stein says, “The pandemic caused a lifestyle shift for millions of people, and suddenly people could travel and work simultaneously. With many still working from home or in a hybrid model, this flexibility is a key part of the Airbnb-friendly apartment offering, allowing renters to take advantage of their flexibility from a monetary standpoint.”
In the near future, Greystar’s Hill says, “The STR or flexible living industry is expected to see consolidation among ‘branded short-term home managers’ due to funding challenges, regulatory restraints around ‘professional hosting,’ and lending requirements. Despite this, the demand for flexible living is not expected to slow down.”
She continues, “Resident hosting is poised to fill a portion of the gap resulting from a lack of supply of STR providers in certain markets. The sharing economy and the rise of digital nomads will continue to influence how the multifamily sector views alternative accommodations.”
While the addition of STR or flexible living options can present various challenges, according to all five professionals in the industry, the benefits of increased income and reduced cash flow risk can heavily outweigh the risks, especially in a time where market uncertainty is prevalent.
Pedan shares, “Flex rentals give owners or buildings access to a growing and not correlated demand segment. Take how they can be used to protect against future new supply in a market, as an example. As new supply gets built, a property without flex rentals will lose occupancy and thus cash flow.”
Yet, STRs and flex living options can provide added protection that is also easily removable if needed. He concludes, “A property with flex rentals can increase the percentage of furnished flex rentals [when a property loses occupancy] and increase exposure to the uncorrelated demand segment. This staves off a reduction in cash flow. Of course, if the flex rentals are not producing enough income, owners can always convert them back to unfurnished rentals. The impact of this is that a property with furnished rentals will have fewer volatile cash flows mathematically, which conceptually means the cash flows are less risky.”
Apartment Living with a Side of Hospitality
As multifamily communities air on the side of hospitality through flexible and shorter stays, the same ingredients found in luxury hotels and exclusive clubs are making an appearance in apartment living.
Concierge services, unexpected amenities, and keyless entry are just a few additions many multifamily communities are implementing. Sentral president Lisa Yeh says, “In most multifamily communities, amenities like fitness centers and workspaces are simply a box to be checked. At Sentral, though, we’re committed to offering luxurious amenities and custom programming that bring residents together in fun and unique ways while creating an exclusive atmosphere reminiscent of a private membership club.”
She adds, “We also host a steady stream of unique residents-only events–everything from cooking classes to private performances by the San Francisco City Ballet. While we see rents slowing down in certain markets, Sentral is outperforming the submarket by up to 25% for our unfurnished products thanks to our ability to drive higher rents through our hospitality services and offerings.”
In addition to programming, real estate investment and management firms like Jamestown are launching new hospitality living concepts to boost the flexible living experience. In Atlanta’s Ponce City Market, Jamestown is developing Scout Living, a 405-unit development that prioritizes flexibility with virtual check-in, keyless locks, and 24/7 access to building and tech support.
The community will offer flexible lengths of stays from a single night to a year, and anything in between. With a rooftop pool, a wellness studio, a terrace, reservable residential-style living rooms, and a chef’s kitchen, Scout Living has been envisioned to provide the comfort and community of home with hospitality-inspired services and amenities.
“Over the past few years, there has been a shift toward a more meaningful integration of live, work, and travel,” says Michael Phillips, president of Jamestown. “Designed to meet that evolution and serve a broad range of lifestyles, Scout Living can be a starter residence for someone new to a city or home base for someone living and working across multiple cities. With Scout Living, we are creating a new, flexible living experience that recognizes the need to anchor home in convenience, connection, and community.”
Scout Living will provide access to food, services, and goods at the touch of a button, as well as private Wi-Fi networks, which will reach throughout the building, the firm says. Guests will also be able to request laundry and dry-cleaning services, restocking of necessities for longer stays, housekeeping, and more.
In similar fashion, with Placemakr’s mission of flexible-use hospitality and multifamily operations, the company continues to launch pop-up hotels through partnerships with multifamily owners and developers. The latest concept being Placemakr Cathedral Heights in the heart of Washington D.C.
Offering studios to two-bedroom units, the signature pop-up hotel allows guests the ability to experience what it’s like to be a resident at Upton Place, a newly constructed luxury apartment building developed by Donohoe and Aimco. The property houses 689 residential units, 150 of which will be available for short-term guest booking for a short period of time.
Source: Multifamily Executive
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Financing opportunities and federal funds are available to multifamily if you just know where to look
Illinois Sen. Everett Dirksen, perhaps the last great Congressional orator, didn’t like spending the peoples’ money. To make his point he once said: “A billion here, a billion there, pretty soon it begins to add up to real money.”
That quip has become synonymous with government overspending. When it comes to multifamily housing, though, most providers don’t think Uncle Sam spends enough. But it turns out there is an appreciable amount of federal money going into apartment development that people just don’t know about.
Indeed, you can stick a shovel in the ground just about anywhere and you’ll find the federal government involved in multifamily and home lending. What we’re talking about here is the Community Development Financial Institutions Fund, a program better known for incentivizing business lending.
But the main CDFI fund operates several smaller, targeted programs, including a Capital Magnets Fund that financed almost a quarter of a billion dollars worth of multifamily housing during the six-year period from 2016 to 2021.
According to the Fund’s website, recipients used $246.6 million in CMF funds to finance or support 37,650 rental units. Indeed, the multifamily sector handily outpaced the fund’s home ownership component, which came to just 5,500 units and $37.2 million in disbursements.
The Opportunity Finance Network, a financial intermediary that has a coalition of 400 CDFI’s throughout the country, has reported significant real estate activity along with business lending by its members. The OFN touts its own intermediary multi-family and home mortgage programs in addition to aiding business lending.
OFN lending
The Opportunity Finance Network, a coalition of more than 1,400 CDFIs throughout the country, has reported significant real estate activity along with business lending. The OFN touts its own multifamily and home mortgage programs in addition to its business lending.
“Through 2022, OFN member CDFIs have helped support the development or rehabilitation of nearly 2.4 million affordable housing units nationwide. And CDFIs nationwide have financed $2 billion annually in mortgages,” the Network claims. The investments help develop affordable and desirable rental homes throughout the nation as well as in Puerto Rico and the U.S. Virgin Islands.
Here are a few examples of apartment deals using OFN money:
- The Florida Community Loan Fund provided financing for the Fort Lauderdale Community Development Corp. in both 2015 and 2020 to sustain and rehabilitate 37 multifamily affordable rentals and a single-family affordable home.
- CDFI Pathway Lending of Nashville helped Catfish Moving Co. to find office and multifamily space in the Music City.
- In Maine, the Caleb Group turned to the Genesis Community Loan Fund, a local CDFI, for a $1 million construction loan in January 2019 to purchase and preserve multifamily units. In this case, the deal involved Norway Savings and was supported by a Federal Home Loan Bank of Boston grant and an investment from Bath Savings Institution.
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Looking to the future
The Citizen Potawatomi Community Development Corp. in Shawnee, Okla., hasn’t done any CDFI multifamily transactions just yet. But Executive Director Cindy Logsdon says that “doesn’t mean we couldn’t in the future.”
Her fund has looked into one deal that had retail on the first floor and rental housing on the upper floors before ultimately passing on it.
But Citizens Potawatomi has used CDFI Bond Guaranty money to build an industrial park. According to Logsdon: “if several large manufacturers came into the industrial park, they could create 1,000 jobs,” creating an opportunity for multifamily. After all, business lending is the CDFI’s forte and in recent years it has expanded into residential mortgages.
Similarly, Uncle Sam’s New Markets Tax Credit Program was designed to emulate, on the business side, the Low Income Housing Tax Credit, which has financed multifamily housing for more than 30 years and is earmarked in the current budget for a significant increase in funding.
Even with its business orientation, the NMTC has still managed to fund more than $28 billion of real estate since its inception in 2000. And while rental housing doesn’t qualify directly for an NMTC award, savvy developers and lawyers have found a workaround that makes it an essential tool for mixed-use multifamily. They do so by using the tax credit to finance the retail component on the lower levels and build apartments above, utilizing separate financing structures to do so.
One such development, the Sibley Building in Rochester, N.Y., has 10 different condominium-style regimes, including three housing-related ones for senior, market rate and workforce/affordable housing. While this particular deal didn’t use the NMTC to develop the retail in the million square feet of space in the building, there are plenty that have.
For example, the Corporation for Supportive Housing of New York City received a $50 million allocation in a NMTC round a couple of years back. Its plans were to invest in homes that served low-income, high-health-need people who were homeless or at risk of homelessness or who resided in supportive housing.
Tapping the NMTC
CSH has received a number of NMTC allocations over the years. One transaction actually tapped funds from both the NMTC and the low-income housing tax credit for its Blackburn Building in Portland, Ore.
The project had a $15 NMTC million allocation to Central City Concern for a 51,000-square-foot health facility. The LIHTC component went towards 124 units of single-room occupancy and studio units.
On the Native American multifamily side, Native CDFIs are starting to tap both federal programs. The Native American Bank of Denver (which is also a Native CDFI) received a $50 NMTC million allocation in 2023 and McKinley Asset Growth Management of Alaska, also a Native CDFI, has received more than $100 million in several allocations.
While neither of the NMTC and LIHTC tax credits are in the billion dollar range, taken collectively, they have a lot of heft. And a billion here and a billion there… well, you know the rest.
Source: Multi-Housing News
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By Tom Scalisi
Wildfires are dangerous and destructive. Following these tactics and tips can help safeguard your home—and your family.
The damage caused by wildfires can be absolutely devastating. According to a 2020 study by the nonprofit research group Headwater Economics, wildfires destroyed nearly 89,000 structures between 2005 to 2020. Worse yet, 62 percent of the losses occurred in 2017, 2018, and 2020 alone.
While wildfires might seem unstoppable (and in many ways, they are), there are ways to protect your property from fire damage. With the right information and a proactive approach, anyone can take steps toward safeguarding their homes.
Clear Brush and Dead Vegetation
In some parts of the world, wildfires also are known as brush fires because they feed on the dead brush, vegetation, and trees in drier regions. One way to slow a wildfire’s approach is to keep the property clear of those combustible materials. Cutting down dead trees as well as removing dead brush, grass, leaves, and other debris will provide less fuel for a wildfire, slowing its approach across the property.
Create a Defensible Zone
Creating a defensible zone around your property is one of the best strategies to lessen a home’s risk during a wildfire. This zone includes everything within a 100-foot radius of the house, and it’s best to break the property into smaller, manageable zones:
- Zone 1 includes 0 to 5 feet from the house. Remove combustible outdoor furniture, fences, and storage under decks from this area. Also, use hardscape and concrete to create fuel breaks. Be sure to remove any dead plants and keep the plants in this zone irrigated.
- Zone 2 covers the area 5 to 30 feet from the house. Remove dead brush, maintain 18 feet of space between tree crowns, and plant trees and vegetation in small clusters.
- Zone 3 includes 30 to 100 feet out, and it’s important to keep these trees trimmed and the zone free of brush as well. Also, remove any small evergreen trees growing between mature trees, as they’re full of combustible pitch.
The National Fire Protection Association (NFPA) publishes a guide to defensible zones that contains additional useful information on the topic.
Protect Your Roof
Since flying embers from wildfires are often the causes of structure fires, protecting the roof is key. Using Class A-rated shingles will help to lessen the chances that an ember landing on the roof causes a fire.
The good news is that your roof might already be Class A-rated; most asphalt shingles are Class A-rated, and all metal roofing is Class A-rated. While these shingles won’t fireproof the home, they offer protection for its most vulnerable surface.
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Keep Embers Out of Vents and Windows
Flying embers are just as likely to float into open windows, cracks in vents, and open eaves. If the threat of a wildfire approaches, it’s important to safeguard these areas from danger. Sealing off attic vents and windows with ⅛-inch metal screening will prevent embers from floating in while still allowing airflow. As for exposed rafter tails and open eaves, it’s best to box them in even though it will affect the aesthetics of the home.
If a fire approaches and you are told to leave or feel threatened, be sure to close all windows and doors and leave them unlocked. If you have time, remove flammable window coverings and move flammable furniture away from windows and doors.
Work With Your Neighbors
You can take all the precautions in the world to protect your property from wildfires, but if you live in a densely populated area, your home is only as safe as your neighbors’ homes. Work with your neighbors to create safer yards and ultimately a safer neighborhood by following these protocols on their properties as well.
Prepare Your Escape Route
If you’re told to evacuate, ignoring the evacuation order and staying at home puts you, your family, and the crews responding to the fire at unnecessary risk. Instead, prepare an escape route. Keep your vehicle full of fuel and prepare a bag with some necessities. Also, know a few different ways out of your neighborhood to ensure you can escape regardless of the fire’s direction.
The smoke from nearby wildfires can reach across several states and affect air quality. Consider purchasing an air purifier before a local or regional wildfire starts to ensure your breathing air is safe while at home and when you return after evacuating.
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Many single-family rental investors look beyond their local market to diversify their portfolios and benefit from market variety. When these out-of-state investors start, the first thing they do is research the market. They look at financing, data on home sales, rental demand, price points, local industry, job market health, etc.
Up to a certain point, the properties themselves don’t matter. After all, it’s not a personal residence. You don’t need it to suit your tastes.
At the same time, certain things about the investment properties you buy matter—a lot. As you navigate the world of single-family investing, focus on these five essential elements of due diligence.
1. An Excellent Turnkey Provider
If you’re buying remotely, you’ll need a turnkey partner. The definition of “turnkey” varies, so you’ll want to thoroughly investigate exactly what’s being offered versus not. Ideally, you’re looking for a company that owns and invests in the properties they’re selling. They’re not middlemen. They are just there to broker a deal. They should have experience, well-developed operations, and in-house or highly trusted partners for property management and renovations.
Ask hard questions. Do your homework. Know their mindset and philosophy. And most importantly, know what you want and need so that you can choose a partner that aligns with your vision.
2. A Clean Inspection
We can’t stress this enough: No matter what property you buy or who you buy it from, get your own inspection. Remember, turnkey might mean something different to everyone. Problems you consider big might not be significant to the seller or turnkey provider.
It’s worth repeating: Get your own inspections done. Never waive them. You may want to go above and beyond for peace of mind—get the crawl space looked at and ensure your pain points are addressed.
Remember, you’re not likely going to be there for any final walk-throughs or see things for yourself in person. You need trusted eyes and ears on the ground.
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Collecting rent is always FREE for landlords! Only tenants will pay if they choose to use a credit card for payment. Otherwise, ACH (our recommended method) is no charge.
Upgrade to a premium account and they provide unlimited personalized leases for less than $10 per month ($8.25). This is HUGE for DIY rental property owners! Regardless of the state where your property is located, you are covered by state specific leases and addendums. Rather use them on an as needed basis? Custom leases are $29 each.
Manage your rentals and organize your documents all in one place. Efficiency is key and you will be able to streamline your rental property business with features such as in app messaging with tenants, handle maintenance requests, plus upload and store their rental insurance information. Available for the premium upgrade noted above ($8.25 per month).
If you are looking for a straightforward, easy to navigate, and low-cost option to help you manage your rental properties, look no farther. TurboTenant is our go to recommendation of property management software for newer landlords or for ones that presently only own a few doors.
3. Minimized Inconvenience
In addition to considering what your ideal residents want, consider what they don’t want. We’ve all seen properties that are just…off. Weird layouts, outdated design choices, quirky features—while these might be things someone likes, most people won’t.
You want to focus on ergonomic, appealing, and convenient properties. If they aren’t presently like this, what renovations would it take to get it there?
Sometimes it’s hard to see how inconvenient or frustrating a property can be until you’ve lived there for a while. That isn’t an option in this case, so anticipate needs and pain points. Listen to feedback as you go and seek out solutions. The more user-friendly a property, the less likely residents will have a reason to leave at the end of their lease.
4. Key Location
Location matters in both a broad and a specific sense. It’s the one thing you can’t change about a property. Be strategic. An imperfect house can be improved over time if the location is ideal.
At the same time, a perfect property in a poor location may have trouble staying occupied. Be mindful of the specifics.
5. Attention to Detail
You’re investing from a distance. Sometimes, it’s hard to know all the details, let alone focus on them. This is where your turnkey partner and property management team come into play. From the very beginning, you should only be with partners you trust to uphold a standard of excellence you can sign off on. They’re the ones who will see things and fix things—or not.
Sloppy renovations and corner-cutting maintenance efforts aren’t good enough. Leave your property in the hands of people who value quality from every angle. No investment property will be perfect—but they can get close! Choose stewards who show pride in their work and value your investment.
Provided by REI Nation
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Lighting fireworks and throwing summer BBQs are an American tradition! We all want our tenants to enjoy themselves while living in our rentals, but we also want them to be safe.
This is why we have put together several 4th of July and summer safety tips for you to share with your tenants.
From fireworks and grilling to pool time and parties, we are giving you all the information to create a gentle email recapping dos and don’ts before the fun kicks off. Not to mention how to remain safe while celebrating all summer long.
BONUS! We have created a FREE PDF download of rental property summer safety tips to share with your tenants!
LINKS
👉 OOPS! We thought we had already completed the podcast for Why Landlords Should Require Renters Insurance, but apparently, we had not. Check out our blog Why Landlords Should Require Renters Insurance for Tenants instead.
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By Emily Koelsch
Investing in Rentals in HOAs
Homeowners Associations (HOAs) are becoming increasingly popular across the country. Fifty years ago, less than 5% of people lived in communities governed by HOAs. In contrast, around 25% of Americans are currently part of HOAs. Once thought of only in the context of condominiums, there are now homeowners’ associations for townhomes and single-family home communities too.
Given their growing popularity, more real estate investors are faced with the question of whether or not to buy rental properties in HOAs. To help you answer this question, here’s an overview of HOAs, the pros and cons of owning rentals in HOAs, and tips for anyone considering investing in real estate governed by an HOA.
What is a Homeowner’s Association?
A homeowner’s association is a governing body that manages and regulates a residential community. The purpose of HOAs is to set rules that all members must follow to maintain established standards that benefit the whole community. Generally, HOAs are run by a board of directors elected by the HOA members.
When purchasing a property, the agent or property manager should disclose if it’s part of an HOA. You need to have this information from the outset because if you buy a property in an HOA, you are automatically part of the community and bound by its rules. You cannot opt-out.
Each HOA must outline all rules, regulations, and fees in their Covenants, Conditions, and Restrictions (CC&R). This is a public document that HOAs must file with the local county assessor’s office.
Benefits of Buying Rentals in HOAs
There are some distinct reasons that HOAs are becoming increasingly popular. Perhaps the most compelling, properties in HOAs maintain their value well and often appreciate at above-average levels.
HOAs also offer some distinct advantages for real estate investors:
- Amenities that help attract Tenants. Communities with HOAs usually have more amenities than other properties, like a gym, swimming pool, playground, or tennis court. These amenities help Landlords attract Tenants while also increasing rental values for units in the community.
- Fewer maintenance responsibilities. Owning a property in an HOA means less maintenance for Landlords and Tenants. HOAs usually handle landscaping, snow removal, and trash services. The result is less work for Landlords and the peace of mind that the property is well maintained.
- The Property and neighborhood stay in good condition. HOAs set specific standards for all properties and outdoor spaces. In addition, they have systems in place to ensure that all members comply with these standards. For Landlords, this is good for both property values and attracting Tenants.
- Mediation of disputes with neighbors. When conflicts arise in HOAs, the board helps to mediate and resolve disputes. This resource helps alleviate Landlord headaches that can come with difficult neighbors.
Disadvantages of Owning Rental Units in HOAs
As you might imagine, HOAs also have some substantial disadvantages for Landlords. Here are the most significant challenges investors should consider before purchasing a rental in an HOA.
- Rental restrictions. HOAs can set limits and regulations for renting properties in the community. Common Lease restrictions include limiting the number of Leases per year, establishing a minimum lease period for short-term rentals, requiring owners to live in the unit for a certain period, and capping the number of units in the community that can be rentals. Investors should always read the CC&Rs before purchasing a rental unit to be familiar with applicable restrictions. Also, it’s important to realize that HOA rules can change, so even if there aren’t currently restrictions, there’s always the risk that the board will add new restrictions.
- Management expenses. HOAs assess monthly, quarterly, or annual fees to cover the cost of maintenance and amenities. These fees vary widely based on the services and amenities provided, and this fee cuts into a Landlord’s monthly cash flow and annual returns. It’s vital to include this expense when running the numbers on a property, and it’s also worth noting that fees are regularly reassessed and generally increase over time.
- Special Assessments. When an HOA board determines significant repairs or upgrades are needed, they’ll require a special assessment from all members to cover the expense. Special assessments are unpredictable costs for Landlords that directly cut into cash flow and returns.
- Interference with property management. HOAs can set rules and restrictions that interfere with a Landlord’s management of their property. For example, banning certain types of pets, setting specific Tenant Screening criteria, requiring Tenants to review and sign by-laws, and having strict requirements for upgrading or repairing your property. These regulations can increase management costs and Landlord headaches while also making it harder to find Tenants.
- More Landlord liability. When you own a property in an HOA, you’re responsible for complying with all rules and fees. If your Tenant violates rules, you’re ultimately the one who will have to deal with the HOA, resolve the issue, and pay any fines. Additionally, if you pass on HOA fees to a Tenant and the Tenant doesn’t pay, you’ll be responsible for this fee and any late charges.
Make your business an LLC
Structuring your business as an LLC can bring important advantages: It lets you limit your personal liability for business debts and simplify your taxes. Here, you’ll find the key legal forms you need to create a single-member or multi-member LLC in your state, including:
- LLC articles of organization
- Operating agreement for member-managed LLC
- Operating agreement for manager-managed LLC
- LLC reservation of name letter, and
- Minutes of meeting form.
NOLO’s Form Your Own Limited Liability Company has easy-to-understand instructions, including how to create an operating agreement that covers how profits and losses are divided, and major business decisions are made. You’ll also learn how to choose a unique LLC name that meets state legal requirements and how to take care of ongoing legal and tax paperwork.
Tips for Investing in Rental Units in HOAs
There is no blanket answer to whether investors should buy rentals in HOAs. Instead, it’s an issue to address on a case-by-case basis. Here are some tips to help with this analysis:
- Always review the CC&R and be familiar with any rental restrictions that will impact your business.
- Analyze monthly fees to determine whether you can recoup these costs. For example, can you increase rent to cover the cost of amenities, and are the maintenance expenses comparable to the amount you would have to spend to keep the property in good condition?
- Consider the potential for a special assessment and have an emergency fund to cover this expense.
- Think through the risks associated with HOAs – for example, changes in rental restrictions or fees – and determine whether this is a risk you’re comfortable with.
Thinking through these tips will help you make an informed decision about rental properties in HOA. As you expand your portfolio, visit ezLandlordForms.com for investing tips, Tenant Screening Services, and state-specific Lease Agreements.
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By Emily Koelsch
Digital landlord is an increasingly popular term, so we thought we’d dig into what it means for real estate investors. Before getting started, it’s important to note that there are two different types of digital landlords: those that manage digital assets and those that use technology to manage physical real estate.
We’ll discuss the second category – Landlords that leverage software and technology to manage their real estate portfolios. To help you understand this growing category of Landlords, we’ll discuss what digital Landlords are, why this strategy is increasingly popular, and how you can get started as a digital Landlord.
What It Means to Be a Digital Landlord of Residential Real Estate
A digital Landlord is someone who uses technology to self-manage their rental property. A true digital Landlord uses technology in every phase of the rental process, including:
- Marketing the property
- Rental applications and tenant screening,
- Lease creation, signing, and renewal
- Collecting rent and issuing rent receipts
- Sending official notices
- Tenant communication
- Keyless entry
For example, a digital Landlord markets their property using online platforms like Zillow; provides applicants with an online rental application; screens Tenants using online screening services; creates a Lease electronically that can be reviewed and signed online; and uses electronic rent payment systems.
The Benefits of Being a Digital Landlord
There are some clear benefits to being a digital Landlord, and we’re seeing more investors take this approach. The biggest benefit is that it makes property management more efficient. This increased efficiency makes it possible for more investors to manage their own rentals.
Real estate investors benefit from self-managing their properties because it allows them to select Tenants, oversee repairs and maintenance, and stay in communication with Tenants. Unfortunately, property management can be time-consuming and stressful if you don’t have the right tools. Digital landlords take advantage of technology to automate more tasks and make property management less time-consuming.
Another huge benefit for digital Landlords is flexibility. They can manage properties from anywhere and have more control over the hours they dedicate to property management. This means investors have the flexibility to buy properties out of state, move, or travel.
Beyond these two advantages, there are several other benefits of being a digital Landlord:
- Consistently for Tenants. Automated systems and procedures provide consistency for Tenants. This consistency improves Landlord and Tenant relationships and improves your Tenant’s experience.
- Necessary records and documentation. Effective systems for property management help you stay organized and ensure you have the documentation you need for taxes and dealing with Tenant issues.
- Preventative Maintenance. Leveraging technology makes it easier for Landlords to be proactive about preventative maintenance and repairs, which helps keep rental units in good condition.
- Scalability. Once you have property management systems in place, it’s easy to grow your real estate portfolio and continue to self-manage your properties.
Looking for the next level of landlord software before handing off to a property manager?
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For a minimal amount, there’s a really good basic package but what we love is the option to upgrade and add 24/7 maintenance management on.
Hemlane offers complete financial support as well. You can link multiple bank accounts for direct deposit rent payments, add automatic late fees, sends reminder notifications to your tenants, and has a detailed profit and loss statement that can includes automatic and manual uploads of income and expenses.
It gets better! If you reach a place where you are ready to hand off management to a property manager, Hemlane has that too under their “Complete” option. You can try Hemlane out FREE for 14 days (no credit card required) to see if it’s a good fit for you!
The Tools You Need to Get Started a Digital Landlord
The key to becoming a successful digital Landlord is having the right software, resources, and tools. Each Landlord develops their own systems, but there are a few “must haves” to be successful as a digital landlord.
Here’s our list of tools you need to get started as a digital Landlord.
- Online rental application and tenant screening services.
- Electronic Lease creation, signing, and storage.
- A system for Tenant communication, including both informal check-ins and maintenance requests.
- A system for sending official documents like Notices and Lease Renewals.
- Electronic rent collection.
Partner with ezLandlordForms to Become a Digital Landlord
If you’re interested in managing your rental properties digitally, visit ezLandlordForms.com. We have the tools you need to become a digital Landlord, including Tenant Screening Services, state-specific Lease Agreements, and property management forms.
Plus, we have a customer service team available seven days a week to help you implement these tools and get started as a digital Landlord. Visit ezLandlordForms.com to create a free account or chat with our team.
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The rental housing market expanded over the past decade thanks to a growing customer category – the single family property renter. As waves of interest rate increases and property value inflation priced many potential homeowners out of the market, consumers (especially young, upwardly mobile professionals) re-defined their expectations. They settled for tenancy over homeownership. However, their aspirations for “big space” living, combined with a growing preference for remote work situations, resulted in increased demand for single family property rentals. These new single family renters present opportunities and risks. Finding quality, long-term renters is a property manager’s dream. However, dealing with credit risks, scams, and delinquencies is always a nightmare. In this blog, we show single family property managers how automated leasing tools alleviate current operational challenges, accelerate qualified lead conversions, and effectively combat rental fraud.
1. Automate for Leasing Success in 2024
Despite the economic headwinds impacting the housing market, at large, the single family rental property market offers a silver lining.
Single family housing inventory is expanding, creating opportunities to capture new revenue from an expanding market of new renters.
The Department of Housing and Urban Development (HUD) recently reported that single family housing completions in January 2024, were 2.8% above the number in January 2023. Fannie Mae reported a similar growth trend by projecting that 2024 single-family housing starts to be 5.7 percent higher than in 2023.
While this increased supply and demand bodes well for all involved, single-family operators still face operational challenges before achieving leasing success.
For instance, because the parallel growth in inventory and demand is likely to hold rental rates steady, operators must find new ways to strengthen their bottom line. Also, in order to maintain high occupancy rates, property managers must accelerate leasing velocity and convert more leads. All the while, inflationary pressures continue to constrain operating budgets and staffing shortages persist. Increasingly, property managers must “do more, with less”.
As a result, property managers are discovering that automation alleviates many of their current operational pressures and even offers the potential to achieve ROI gains.
“Leasing automation is the ultimate ROI enhancement,” Rently COO Andre Sanchez said. “It plays a key role in facilitating better, more personalized experiences for customers while moving them through the entire leasing process faster and more efficiently.”
By integrating leasing automation tools into their lead management, operators have seen conversion rates of 30 percent or more. In fact, often and ideally, by the time customers interact with a leasing associate, they are ready to sign a lease.
The decision to automate is an important first step towards leasing success. However, equally important is choosing which tasks to automate in order to still create a positive and engaging renter experience.
2. Become a Smooth Operator
In order to preserve renter engagement, while automating parts of the leasing process, it’s important for managers to optimize the entire renter journey.
Renters will hardly notice automations threaded through their journey if their cohesive experience is positive and smooth. In fact, by integrating multiple leasing steps into one seamless (frictionless) experience, automation benefits both renters and managers.
To increase leasing velocity, it’s essential for property managers to create an airtight “lead-to-lease” funnel that accelerates renter momentum and quickly drives conversions.
By using new and proven automated leasing tools, single family property managers can make sure to keep renters engaged and impressed during every step of the renter journey.
3. Introduce your property with dynamic online listings
Not so long ago, property listings could be found in newspapers or posted on flyers in leasing offices. With the Internet came exciting new marketing possibilities.
Internet listing sites (ILS) offer an effective way to reach millions of online renters and maintain constant contact with the marketplace.
Automating property listings enables syndication across multiple listing sites, creating a strong multiplier effect for lead generation.
In addition, the ubiquity of mobile devices makes it possible for renters to see online listings from anywhere, at any time, with real-time notifications of property availability. According to Zillow (2022 Report), 74% of renters now search for properties online using a mobile device, and 60% use an app.
Online listings are your first point of contact with a prospective renter. Make sure your listing includes the automations to keep that renter connected and moving forward through your marketing funnel. For instance, adding rental criteria to property listings quickly identifies qualified leads and saves time by screening out unqualified prospects.
4. Quickly set a tour date with automated tour scheduling
Leasing professionals understand the challenge of managing countless leads and trying to schedule them all for property tours.
However, imagine being able to instantly respond to 100% of your online leads with an automated option to quickly schedule a tour directly from a listing site. This feature is especially appealing to renters accustomed to on-demand experiences because it allows them to schedule and confirm a tour immediately after finding a listing that interests them.
Auto-scheduling tours accelerates leasing velocity by quickly moving your pre-qualified rental prospect from the initial interest phase to an onsite touring commitment.
In addition, by eliminating the time and hassle of manually arranging appointment logistics, your leasing teams can better spend their time on lead engagement at more important points in the renter journey.
Tour auto-scheduling saves property managers up to 30 minutes per requested showing. Multiply that by 100 showings, and you’ve just reclaimed a whopping 50 hours! That’s 50 hours your team can redirect towards other critical aspects of your business.
5. Show properties faster with automated tours
When a renter schedules a tour, an automation can offer them the choice of scheduling a self-guided tour, or an agent-led tour.
Self-guided property tours combine a user-friendly mobile app or web experience with property smart access devices like lockboxes or smart locks, creating a secure and independent property-viewing experience.
Self-guided tours offer managers significant time savings by eliminating the need to travel to and spend time on-site. In addition, self-guided tours increase overall touring traffic by 25%, boost lease conversions by 2% and reduce a property’s time on the market by 75%.
Originally designed to accommodate the 42% of renters preferring tours outside regular business hours, self-guided tours have widespread appeal. The ability to tour when convenient, combined with managing the entire process from a mobile app, resonates well with modern renters and property managers alike.
While self-guided touring has become a popular option, some renters still prefer the personal interaction of an agent-led tour. For these renters, automations also exist to streamline their experience. For example, when scheduling their tour, renters can directly sync to an agent’s calendar to find an opening and make a reservation. This eliminates time-consuming staff coordination.
6. Combat rental fraud with automated rental screenings
Single family rental properties are a serious investment, and it’s critical for operators to find renters with the financial stability to meet monthly payment obligations. Avoiding the drama and cost ( $7,685 per instance!) of evictions is a priority.
However, identifying high-risk renters is often a real challenge:
Source: NAA
Furthermore, the average renter screening process takes anywhere between 4-10 hours per rental application. In addition, 72% of property managers also noted the extra time and attention required to make sure that their rental forms meet the guidelines of the Fair Housing Act (FHA). This is all valuable staff time spent on just one leasing task!
It should come as no surprise, then, that automating the applicant screening process to activate multiple verifications at the same time, is a major time-saver.
It should not be complicated or stressful for prospects to tour and apply to rent a property. Similarly, it should be easy for managers to collect applications and identify quality residents. The smoother the process, the better the experience for everyone involved.
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7. Rently’s unique leasing automations
Years ago, Rently recognized that leasing automation has the potential to greatly benefit both renters and property managers. Based on real-world implementations, Rently saw that automations create an enjoyable renter journey, streamline leasing operations, accelerate lead-to-lease conversions, and enhance security. Therefore, Rently successfully integrated leasing automations into every step of the leasing lifecycle, from listings to leases.
Rently Listings, our company’s increasingly popular ILS receives 10 million visits and facilitates 3 million self-guided tours each year. Rently Listings is the #1 lead generation tool to reach today’s tech-savvy renters who want to tour on demand.
Rently Listings helps millions of renters find smart home properties that offer self-guided tours. Conversely, Rently Listings provides property managers with immediate exposure to a giant universe of renters who desire to tour on demand.
Rently Listings also automatically syndicates to more than 30 other listing sites. Therefore, property managers save hours of valuable time because they no longer have to manually upload/update listings to multiple sites. They can simply use Rently Listings to update all their listings, on all sites, at once!
Rently Listings automatically syndicates to the following ILS:
In addition to creating a listing platform that quickly drives prospects to smart home properties, Rently also offers groundbreaking, automated renter security and screening features. These save property managers hours – even days – completing the due diligence required to ensure quality tenants.
Even before a rental prospect enters a property for a tour, Rently completes a stringent ID verification process and ensures that prospects match the rental criteria set by a property manager. As a result, only qualified and verified renters gain access to properties.
Similarly, Rently’s screening automations also support post-tour leasing steps. For example, Rently automations prompt prospects to submit an application immediately after they tour. This engages renters at the peak of their interest and increases the number of applications submitted.
Once applications are submitted, Rently’s screening empowers managers to do their best due diligence. By combining six critical renter screenings into one automated process, Rently’s screening saves time and eliminates the hassle of verifying renter information with several third-party service providers.
Rently’s Screening auto-verifies the following renter data:
- Government-issued ID and selfie photo are matched, using facial biometrics before a self-guided tour
- Top fintech partners verify income documents, pay stubs, and W-2 forms
- TransUnion applies ResidentScore™ criteria (rental industry specific) to verify credit ratings, bankruptcy, eviction, and criminal records.
These automations expedite the screening process so that renters receive faster responses and managers accelerate lease signings.
Finally, Rently also offers a unique approach to data centralization and cross-platform integration.
From Rently’s centralized data dashboard, property managers are provided a single view of their property’s leasing automations. From there, they can track lead status as they make their way through the marketing funnel and engage with renters, in real time, at critical moments. In this way, automations allow managers to focus on what really matters – building relationships and closing deals.
To further maximize its value, the data collected by Rently’s leasing automations is easily integrated across popular PMS platforms. This is accomplished thanks to open APIs and customized plug-ins, such as those for Appfolio and Buildium.
Conclusion
Whether managing a small or large portfolio, single family operators benefit by using automated leasing technology to optimize operations, create a frictionless renter experience, and screen out high-risk rental prospects.
For Rently, automation is a leasing enhancement. It’s how we help property managers streamline time-consuming tasks and simplify operations to achieve larger business goals.
We see leasing automation as helping (often understaffed) property management teams move renters through the entire leasing process faster, while still creating a personal and positive experience.
Provided by Rently
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No matter what the situation is, be it a nice vacation, medical leave, or having to care for someone else, we have all been there.
But when you are a DIY landlord, how do you take an extended period of time off and leave your rentals?
This episode is several tips on ways to take that time away without worry.
From learning about the importance of timing the leave to the different means of replacing yourself, we are covering the methods that have served us and many landlords we know very well when taking time away from our rental property portfolio.
LINKS
Hemlane is a software that is built to grow with your needs as a landlord.
For a minimal amount, there’s a really good basic package but what we love is the option to upgrade and add 24/7 maintenance management on.
It gets better! If you reach a place where you are ready to hand off management to a property manager, Hemlane has that too under their “Complete” option.
Don’t know how to create a QR code? Go to the free site, QR Code Generator, and input the link to the pdf or online site for the use and care or troubleshooting guide for each appliance. Download a PDF of the QR code and input into a Word Doc to share with your tenant, either by email or in a tenant binder that stays in the unit for them to reference when they have a problem.
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👉 Email us Your Questions!
Stacie@YourLandlordResource.com
Kevin@YourLandlordResource.com
👉 Course Waitlist: From Marketing to Move In, Place Your Ideal Tenant
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👉 Help other DIY landlords discover what we have to say… Please leave us a review of our podcast!
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*This post contains affiliate links. We may earn a very small commission (at no additional cost to you) if you purchase from here. These small commissions are to benefit our business so thank you for your support.