The Bosshardt Blog

Local Real Estate Manager Earns

Professional Designation

 

             Gainesville, Florida, 08/17/10 –  Aaron M. Bosshardt, President of Bosshardt Property Management, LLC, headquartered in Gainesville, has earned the Certified Property Manager^® (CPM^®) designation from the Institute of Real Estate Management (IREM^®), an affiliate of the National Association of Realtors^®.  The CPM^® designation is awarded to real estate managers who have met the Institute’s rigorous requirements in the areas of professional education, examination and experience.  CPM^® Members must also abide by a rigorous Code of Professional Ethics that is strictly enforced by the Institute.

Aaron Bosshardt has been with Bosshardt Property Management, LLC as its President for 10 years. His civic service includes serving on the Gainesville Jaycees Board of Directors and as a two time Chairman of the Annual Gainesville Jaycees Haunted House. In 2009 Aaron served as the Chairperson of the Gainesville Alachua County Association of Realtors Professional Standards Committee. Aaron Currently sits on the Board of Directors for Partners In Adolescent Lifestyle Support and the Cubscouts of America Pack 611. Aaron is also serving on the National Association of Residential Property Managers Governental Affairs Committee and has been published in their trade magazine “Residential Resource"

ABOUT THE INSTITUTE OF REAL ESTATE MANAGEMENT

The Institute of Real Estate Management (IREM^®) has been the source for education, resources, information and membership for real estate management professionals for more than 75 years.  An affiliate of the National Association of Realtors^®, IREM is the only professional real estate management association serving both the multi-family and commercial real estate sectors. With 80 U.S. chapters, 12 international chapters and several other partnerships around the globe, IREM is an international organization that also serves as an advocate on issues affecting the real estate management industry.

Membership includes more than 18,000 individual members and 500 corporate members.  IREM promotes ethical real estate management practices through its credentialed membership programs, including the Certified Property Manager^® (CPM^®) designation, the Accredited Residential Manager^® (ARM^®) certification, the Accredited Commercial Manager (ACoM) certification and the Accredited Management Organization^® (AMO^®) accreditation.  These esteemed credentials certify competence and professionalism for those engaged in real estate management.  In addition, IREM offers Associate, Student and Academic memberships.

Collectively, IREM CPM^® Members in the United States manage over $1.5 trillion in real estate assets, including 8.4 million residential units and 8.4 billion net square feet of commercial space. An additional 977,400 residential units are managed by IREM ARM^® Members. IREM Members are employed by some of the most prestigious real estate firms in the world and nearly 70% hold upper-level management positions. Due to their professionalism and vast experience, property owners and investors worldwide continually seek out the management services of IREM Members.

To learn more about the Institute of Real Estate Management and its chapter network, call (800) 837-0706, Ext. 4650 (outside the U.S. call (312) 329-6000) or visit www.irem.org

Aaron Bosshardt interviewed on TV 20/ABC about the Local Real Estate Market in Gainesville and Ocala

In preparation for this interview I polled about fifty of our top sales associates at our weekly sales meeting. I gave them three options. Is the market getting better, staying the same or getting worse? All but one answered the market is getting worse. One agent answered that the market is about the same. Foreclosures and short sales are becoming more prevalent as comparable sales on appraisals an its accelerating the drop in prices.

The good news might be the contrarian view. If almost 100% of the experts think the market is getting worse, it might actually be the sign that the market has bottomed and is due for a rebound. There are some great deals out there on the market both for speculators and investors. If we get them back into the market they could just help us get rid of all the excess supply on the market.

Now It May be A Good Move to Rent Your Unsold Home, Use a NARPM or IREM member

According to Money Magazine and republished by NAR:

Renting Unsold Property May Be a Good Move

Home owners who can’t or don’t want to sell their homes in today’s market but must move should consider renting out the property.Obtaining a professional property manager is a good first step. Professional property managers charge 7 percent to 10 percent of the monthly rent in many areas. Two associations whose members manage small residential properties are National Association of Residential Property Managers and Institute of Real Estate Management. Current rents may not be high enough to cover carrying charges, including mortgage, taxes, and insurance. Nevertheless, renting out the property may still make sense if property values rise in the next few years. Offering a 12-month lease that converts to month-to-month is a good idea, if the owners are considering selling eventually. Include language in the lease that allows a real estate professional to show the home to potential buyers with 24 hours’ notice to tenants.

Source: Money Magazine, Amanda Gengler (07/28/2010)

 

Of course the timing isn't great for Gainesville as we just finished the rental turnover season. Still the selling season has ended as well and many sellers will now face making the full payments on their vacant homes for at least another eight months until the start of the next season or they can mitigate their losses with a renter in place. About two years ago I posted a blog about why the timing wasn't right for a seller to rent their home. The pendulum has swung and now I'll have to follow up with the top ten reasons why a seller should consider becoming a landlord.

 

Bosshardt Property Managment is a NARPM and IREM member. We have a standard provision in our lease that allows for showing the property and recourse for the Landlord in case the renter stands up the prospects.

Tiffany Thomas is the Business Devlopment Manager at Bosshardt Property Management. She is solely dedicated to welcoming new clients for either management services or leasing agent only relationships. 

 

For more information about our mangement, accounting, leasing, maintenance and consulting services contact TIffany at the above link or directly at 352-371-2118 ext 447. 

What Happens When my Rental Becomes Uninhabitable

What do you do when your rental becomes uninhabitable?  Hopefully your lease addresses these situations and often It isn't as simple as you might think. For example, my Lease has an act of god provision which gives the owner the option to release the tenant from the lease without future liability or make the repairs within thirty days, failing which the tenant can walk or stay and pay at their own risk. I've never had this happen until this year and wouldn't you know it, it happened twice. Neither case was covered by my act of god provision. The first case actually fell under my lease's indemnification clause.

In one situation A tenant left a can of spam on top of an active gas stove. That's the tenants negligence. In that case we called in the insurance company and luckily for the tenant the insurance policy covered lost rents.  The tenants paid the deductible and any lost rents the insurer didn't cover and once the repairs where done the tenants resumed their lease. The owner got a brand new kitchen. One of the three tenants had renters insurance. They paid for her moving expenses out and back in, as well as her short term rental payments.

The second case fell under my leases maintenance clause. A major plumbing leak caused the tenant to vacate and the owner, obviously wanted to make repairs. Our maintenance section is almost two pages long, two little sentences say "...in the event a major property requires the tenant to vacate the owner may at his discretion terminate this lease and the tenant will vacate and hold owner harmless. This one got a little tricky because their wasn't a comparable property for the tenant to make alternate living arrangements for less then $200 per night! The tenant of course was demanding to be reimbursed for the cost. Ironically the tenant was threatening to withhold rent, which I explained paying rent is what entitles you to be reimbursed. In any event without those two sentences the landlord wouldn't have had the option to terminate the lease and if the repairs hadn't gone as timely he could have been stuck with $200 per night for much longer.

Again the owner made an insurance claim and again this owner had loss of rents coverage. He got his $3000 plumbing repair and most of his loss from the alternative living arrangements covered. The tenant was happy and so was the owner. It's nice to have a good comprehensive lease, and of course good insurance.  

How Will We Know when Gainesville Homes are Going to Start Increasing in Value Again?

It seems like everywhere I go I get asked the same questions "How's the market?" "Are things getting any better?" My answer is the same lately, "Yes, better for us brokers and agents in that activity is up modestly, but worse for all of us in that prices continue to fall." The real question that everyone should ask is "How will we know when the housing market will START to get better, and what should we look for." Thankfully there are some really smart people out there to help us answer this question.

Yesterday the Joint Center for Housing Studies (JCHS) released their annual report "State of the Nation's Housing 2010" detailing comprehensive and well researched reports about the state and the future of the national housing market as we know it today. The National Association of Realtors also released their local markets reports for Gainesville today for the first quarter of 2010. That data matched with JCHS's research can help us figure out where we are and where we are headed.

Some good news in the JCHS report is that the mortgage payment on a median priced home has fallen to a 20 year low. Other good news is that they see no immediate increase in rates, and only tighter lending restrictions stand in the way for home buyers. NAR's report supports this local somewhat. Showing that home affordability local has fallen below our historical average.

With our exorbitantly high local taxes this advantage may be muted as these numbers don't include property taxes. Just in case you missed it last week, the Gainesville Sun finally sounded the bell on this issue, Citing a report from the Florida Department of Revenue that concluded our property taxes are the highest in the state at $23.60 per $1000 of assessed value. The report also discounted the popular argument that our taxes must be that high due to so much of our property being off the tax roll. They cited Leon county with a similar problem, yet taxes there are only $15.60 per $1000. Alachua county is currently moving forward with implementing a new fire assessment tax, raising taxes even further.

Separately the Gainesville Times reported the City of Gainesville is considering an increase in their property tax millage rate. 

Back to the JCHS report, they say that unemployment is going to be the key obstacle for a housing market rebound. Laurel gourd with Harvard University writes:

 

Over the coming decade and once employment stages a convincing comeback, demographic forces should lift currently depressed levels of household growth and spur increased construction and sales. Bolstered by immigrants, the echo-boom generation is already larger than the baby boom generation, and the baby-bust generation (born 1966-1985) is nearly as large. If immigration matches the pace projected by the Census Bureau and headship rates by age and race hold steady, household growth should come close to 15 million from 2010 to 2020. Even if it falls to half the projected pace, household growth should equal the 12.5 million growth from 1995-2005.

 

Locally, The National Association of Realtors released data that shows unemployment on the rise. Oddly enough, their definition of Gainesville includes Alachua County and Gilchrist County. That probably explains why they list our unemployment a whopping 8.5% from 6.2% one year ago. That's still better then the national average, but higher then the number I previously reported from the Department of Labor and Statistics.

The JCHS Study also addresses Rental Housing in detail. In essence, rents have decreased, vacancies are up, incentives are up, and defaults and late payments from apartment owners are on the rise. I talked to one local apartment owner the other day. He told me that his physical occupancy (percentage of rooms/units/beds occupied) is hovering just below 80%. His economic occupancy (percentage of rents received after incentives versus rent advertised) was below 60%. Those type of vacancy numbers can only continue to put pressure on residential home prices and rents, especially in the struggling condominium market.

The one curious and perhaps concerning exception to this is that the number of affordable rentals, defined as rentals with a monthly rental payment of $400 or less have declined. Primarily due to demolition. Locally there was one affordable property I know of that was demolitioned after it was burned in a fire.

There is some hope moving forward for the rental markets. The rental housing study concludes that the overall population of renters increased 10% from 2004-2009. They primarily cited foreclosures and immigration and they expect this trend to continue for the next decade. Still no help from the rental markets in the near term future to stabilize home prices, when they can't even stabilize rents.

Unfortunately for us foreclosures locally only seem to be worsening. The NAR report says actual foreclosures in Alt A, prime and sub-prime are on the rise in our area, as are foreclosures in process. Foreclosures are not only elevating supply they are now so prevalent that in some cases the only comparable sales an appraiser can use are foreclosure properties.

Local supply is still high and buyers who can get money are finding great bargains, and perhaps proving that this may well be one of the best buying opportunities to hit the gainesville housing market in decades.

Sellers are often frustrated. More so then ever before we are seeing sellers bring money to the closing in order to sell their houses. Multiple offers have been coming in on quality properties, but in the past these offers would bring full price or more. In three multiple offer situations last week, no one offered full list price.

There is no doubt that our housing market will recover. It's just a matter of when, and how transparent will the recovery be. We need some factual signs. The experts agree that when local housing supply starts to decrease, job growth returns, property tax relief, or a decrease in rental vacancies comes we will start to get some price support. Until then prices will likely continue to fall.

Rest assured as soon as any of these indicators start to show a glimmer of hope, I will be happy to tell you all about it. In the meantime sellers need to be ahead of the curve, that means expecting prices to fall further and making sure once a prospect gets in the door they do everything in their power to keep them.