Booming rental market means good things

 Beth Kassab / Orlando Sentinel

Tue Sep 27 2011 5:51 PM

An investor paid cash last month for a four-bedroom, three-bathroom house with a three-car garage in the Lee Vista area and immediately had a pool of potential renters competing to move in.

“I stuck a sign in the yard, put it on the MLS and had two dozen showings within three days,” said real estate agent Bj Edens of Re/Max Town Centre, who handled the property. “Things are crazy out there … I’m expecting it to continue for a little while until we start to see the loan market loosen up.”

Today’s rental market has the hallmarks of the frenzied housing market circa 2006, when buyers were willing to ask, “Where do a I sign?” before they even walked through a property.

But this is no bubble.

This is the beginning of the correction of the market’s radical over-correction.

Ever since foreclosures started rising, so did the demand for rental properties.

Thousands of former homeowners who either ended up in foreclosure or shed their house in a short sale are frozen out of the buyers’ market until they rebuild their credit.

Perfectly credit-worthy people are choosing to rent because they don’t want to gamble on values taking another nose dive.

We’re raising a generation of renters who are scared to buy after watching their parents struggle through the housing bust.

At the same time, housing prices and interest rates are at historic lows.

All of that adds up to one very important fact that points — finally — to a healthier housing market: Investors can get good enough deals on houses and command high enough rents that being a landlord is no longer a losing proposition.

People are starting to make money in the real estate business again. And that’s a step toward normal in an otherwise depressed market.

Scott Hampton owns a company that manages about 500 rental properties and launched a new division that charges would-be tenants a $350 flat fee just to help them find a home.

“The houses go so fast, we’re finding 70 percent of the people sign up for it,” saidHamptonof Hampton & Hampton Leasing & Management Inc.

Hampton, who owns the property management company with his wife, said they have hired seven leasing agents who charge fee to help tenants secure a property. People are willing to pay because they often have trouble even getting a returned phone call from landlords who are overwhelmed with multiple inquiries from potential tenants.

Another good sign for housing: as rental rates increase, more people who have good credit and can qualify for loans at today’s low interest rates will find it just makes more sense to buy.

With rents hovering between 75 cents and $1.50 per square foot, a monthly mortgage payment could be cheaper than rent.

“That will definitely be a factor again,” said Maria Rampy Blanchard, general manager of Olde Town Brokers.

She said the number of rental referrals she receives has shot up and that the good properties get snapped up quickly, which allows some landlords to charge a premium.

“The inventory is low,” she said. “They rent out almost immediately, definitely within a 30-day period.”

And then there’s the newest buzz word in the business, and perhaps the biggest sign that good rental properties are in demand — “foreclosure disclosure.”

Some renters are so desperate for a good property at a reasonable rate that they are willing to sign a waiver acknowledging the house is in foreclosure and they could be forced out before the end of their lease.

“We actually have forms for that now,”Hampton said.

 

Where to go when home improvement projects push you to therapy

By Marni Jameson, Orlando Sentinel

Fri Sep 23 2011 3:18 PM

The pent-up emotions were volcanic. It was only a matter of time before the collective angst that builds with home improvement found a virtual outlet. Thus, Hometalk.com — free online therapy for home improvers —erupted on the scene in February.

A place to go where no one has to know your name, the site — which now has 40,000 active registered members, said spokeswoman Miriam Illions — offers a place to whine, dump problems, ask questions, get free sympathy and solutions, and even brag a little.

“Usually, when a home improver takes on a project, that person has never done that kind of project before,” said Illions.

“Like when my husband refinished our front door, and it wound up looking more weather beaten than when we started?” I blurted, realizing I still need to work through this.

“Hometalk is a platform where people can tap the experience of others and avoid common, sometimes expensive mistakes.”

“Where have you been all my life?”

The day I learned about this website, I logged on fast, typing like a nail gun. I surfed around and got drawn into assorted dialogues: how high to hang a flat-screen, how to remove carpet stains, what kind of paint is best for concrete and how to stop your husband from doing a project that you will live to regret. (How I wish I’d known!)

Next, I took the site for a test drive, starting with my home problem du jour, my most recent, cardiac-arrest-prompting air conditioning bill.

“My air conditioning bill is way higher than it should be,” I posted. “Granted, I just moved toOrlandofromDenver, so I’m new to this constant a/c….” I then disclosed the particulars: number of a/c units (two), average temperature setting (78-80 degrees), the size of my house and the size of my August power bill: $500! Yeep!

Within two days, I had 10 helpful posts, mostly from pros. Advice came in three varieties: spot-on problem solving, validation and commiseration, and off topic, which just goes with the Astroturf.

In category one, a pro from Ace Hardware said, “Air conditioning units are often not maintained well. They need to be serviced at least once a year but twice is better. Make sure your filters are clean. If the coil in the air handler gets dirty, it won’t perform well. The money spent for maintenance would be quickly recouped in energy bill savings.”

And in the second group, “I lived inSarasotafor 20 years and worked for the power company. With a house the size you describe at your thermostat setting, I’m not surprised your bill is this high. Welcome to theSunshineState.”

Another reply suggested I see if my power company offered free energy audits. I did; it doesn’t. But the customer representative told me that woman who lived in this house before me had bills this time of year triple what mine are. Now I know why so many folks live in the north for the summer, and move south for the winter: What they save on energy bills pays for two places!

I called a service man out. He pointed out that the filters surrounding my outdoor units were filthy, as were the coils. He cleaned everything, and, after checking the lines for leaks, topped off my Freon, all for a modest charge. For my part, I felt uncharacteristically confident that I knew what he was doing and that it was exactly right. If only all life’s problems were so easily resolved.

Here’s how it works:

•Hop on Hometalk.com if you’re doing a project and want feedback, trying to decide between porcelain or ceramic tile, don’t know why your new wood floor is popping up, are questioning your contractor’s pricing or ethics, or need to place a cease-and-desist on your handyman hubby. The site is free to join and free to use.

•Get an edge. Women who feel that their contractor isn’t taking them seriously can use the site to get informed and feel empowered. Meanwhile men, even those who don’t know a pipe wrench from a nail clipper, can act manlier when talking with the studs at Home Depot.

•Fast, varied opinions. Replies come from home-improvement professionals as well as from non-professionals who “have been there and want to help others,” said Illions.

•No ulterior motive. Because the advice comes from people who are not trying to get in your pocket, you really get unvarnished opinions. Some pros who answered my question lived in another state. They really just want to help.

•Professionals benefit. Pros also are motivated to post because people in their area may look them up if they seem knowledgeable and trustworthy. Plus, their remarks stay in the chat box search results, so users find them when they search on a topic.

•Sometimes no post is necessary. If your problem is a recurring theme — like how to paper over wallpaper or keep squirrels away from your birdfeeder — your answer is already there.

•Bad advice happens. Given the live chat environment, you get the occasional dud (back in World War II…) or advice that breaks building code. “But the beauty of the site is its transparency,” said Illions. “The community holds everyone accountable and the truth comes out.”

Syndicated columnist and speaker Marni Jameson is the author of “House of Havoc” and “The House Always Wins” (Da Capo Press).

 

 

The Easiest Way to Grow Your Investment A Hundred-Fold? Home Maintenance

By JD Roth TIME Moneyland

Just as daily exercise and a sensible diet keep your body healthy and help you avoid costly medical bills, regular home maintenance keeps normal wear-and-tear from developing into emergency repairs.

My wife called me in a panic at the beginning of July. I was at a conference in Denver, where the sun was brilliant and blazing. Back home inPortland, however, the sun was nowhere to be found. Instead, it was raining cats and dogs — and much of that rain was leaking through the roof and into our house.

With the help of a neighbor, my wife made some quick, soggy repairs to the roof. It was enough to keep things dry until the rain had passed. Since then, we’ve hired a contractor to make real repairs before the autumn rains return. In the meantime, we’ve been reminded how important it is to perform routine home maintenance.

Your house is like a living, breathing organism. As much as you try to keep things in working order, eventually something goes wrong — and usually at the worst possible time. (My wife and I once woke on Christmas morning to find our water heater had broken, flooding one end of the house.  Happy Holidays!)

Just as daily exercise and a sensible diet keep your body healthy and help you avoid costly medical bills, regular home maintenance keeps normal wear-and-tear from developing into emergency repairs. Don’t be lazy or cheap. When it comes to protecting your most valuable possession, cutting corners can be costly.

As a rule of thumb, every year you should set aside about 1% of your home’s purchase price for maintenance and repairs. In other words, if you bought a $300,000 home, budget about $3,000 for annual upkeep. This is just a guideline, obviously — some years you’ll spend much more. (And some lucky years, you won’t spend anything at all!)

If you make a point of doing your own maintenance whenever possible, you’ll save money and develop confidence to tackle similar projects in the future. Home improvement can be intimidating at first, but with time you can learn to do most common household repairs. If you’re interested in improving your DIY skills, take classes from your local community college or attend seminars at a home-improvement store.

Because routine maintenance is so vital, it can be helpful to draft a checklist of annual chores. The previous owner of our home left us customized instructions. If you need general information about where to start, check out the following checklists:

• Healthy Homes Maintenance Checklist [PDF] fromNationalCenter for Healthy Housing
• Checklist for Maintaining Your Home [PDF] from the Association of Homeowners AcrossAmerica
• Big List of Home Maintenance Tasks from alt.home.repair on USENET

In 2004, we bought our current home, the inspector told us that for every dollar we spent on routine maintenance, we’d avoid roughly $100 in future repairs. On his report, he wrote: “I’ve looked at hundreds of homes in all age ranges, and I’ve seen thousands of dollars of damage to homes that could have been avoided by spending $5 to $10 and just a few minutes of work.”

As a frugal fellow, it’s tough for me to accept that it’s not just okay, but good to spend on solving small problems. It’s like self-insurance, or an investment in the future. If you deal with a small problem before it becomes a big problem, you can save yourself time, money, and hassle.

Silly Man Pictures…this time it’s an instant hot tub…on the job

Ask the Seal in the Orlando Sentinel

‘Seal’ offers wary consumers free peace of mind 

Greg Dawson

Sun Sep 4 2011 10:23 PM

 

In the late 1950s and early ’60s, Johnny Carson emceed a popular TV game show called Who Do You Trust? In Florida today, consumers looking for a roofer, plumber, carpet cleaner or other tradesman are unwilling contestants on Who CAN You Trust?, and it’s no game.

At least once a week I hear from a reader who a) was ripped off by a tradesman who claimed he was licensed, insured and wholesome as wheat bread, or b) wants to know where to find a tradesman who is really licensed, insured, wholesome, and will not rip them off. Until now, I’ve had no answer.

The Better Business Bureau is not the answer. Its most useful function for consumers is receiving and compiling complaints. Finding a dozen complaints on the BBB website should be a giant red flag not to hire Three Stooges Painting. Angie’s List is not the answer. Its unique feature is posting the opinions of customers who have used a particular business. But neither the BBB nor Angie’s List purports to answer the gnawing question: Who can you trust?

Answering that question is the sole function of AsktheSeal.com, an idea whose time has come. (Actually, that time arrived in Florida at least a decade ago.) AsktheSeal, headquartered in Tampa, has been operating since 2008 but I only heard about it two weeks ago when the founder, Ed Marchiselli, dropped me an e-mail.

“I wanted to make you aware of a new, completely free service to consumers in Orlando,” Marchiselli wrote. Right, I thought. And it probably comes with a “free” cruise to the Bahamas. I closed the e-mail but for some reason did not delete it. Maybe because I like seals. Whatever the reason, upon further review later, I discovered the service my readers have been looking for like a man crawling across the desert floor in search of water. And yes, it is free – no strings or time-share presentations connected.

Founded by Marchiselli, a Florida State graduate with a degree in finance and economics who spent years toiling in the business world, AsktheSeal does what many companies say they do, but often do not, or not adequately: background checks on licenses, insurance and criminal activity, as well as customer service records. It lists only those businesses which meet its standards – and continue to meet them. I spoke with Marchiselli recently about his godsend service.

Q: If this is “free” to consumers, how do you make money?

A: We perform background checks which the companies pay $29 for. We charge $49 a month for companies to initiate e-mails (Seal Mail) to customers from our site, or $99 to be listed on the site which includes Seal Mail. We issue photo IDs for employees confirming our background checks.

Q: How selective are you in accepting companies?

A: We turn down 90 percent of the companies who contact us.

Q: Good grief. I knew it was bad out there – but 90 percent?

A: This is slightly misleading because the scammers are the ones that are always looking for an edge. They assume that Seal is like almost every other accreditation out there – if you can write a check, you make the grade. We are constantly turning down companies willing to pay who do not qualify. I turned down a roofer with 55 employees who expected me to only background check his four sales guys and give him the seal of approval. Unbelievable.

Q: What happens if a listed business falls off the straight and narrow?

A: We are pretty careful, but that is inevitable. We have removed two companies for unethical business practices and others for letting insurance lapse. We are listed on their insurance so we get notified if it is cancelled or not renewed.

Q: How many businesses are listed on Seal?

A: We 200 companies on our site and are growing rapidly.

Q: There are thousands of businesses in Florida – these can’t be the only good ones.

A: Correct. There are good companies with good employees out there that have not joined for various reasons. We are constantly chasing the companies that don’t think they need us. Once we explain the program, we win them over. I always tell them, “This is not about validating you as much as keeping the fly-by-nights with a slick sales person from convincing the consumer that they offer the same level of service and protection as you for a cheaper price.”

To Repair or Replace? That is the Question

August 31, 2011 at 12:29PM by Jeff Yeager

Follow the 50% rule and these four other rules for determining when it pays to repair an item, rather than replace it.

Read more: http://www.thedailygreen.com/living-green/blogs/save-money/repair-replace-0811#ixzz1WiqwvSdH

My Grandpa Clyde was one of the great handymen of all time. He could repair just about anything.

Before Clyde bought something, the first thing he’d ask was whether he could get parts and supplies to repair it himself when it broke. If the answer was “no,” he wouldn’t buy it. If the answer was “You don’t need to worry about it, Mr. Yeager. This will never break,” Gramps would thank the salesman politely and walk away, rather than accuse him of being a bald-faced liar. As Grandpa Clyde was fond of saying, “Automatic means you can’t fix it yourself,” and he wanted nothing to do with it.

Unfortunately, times have changed since Clyde’s day. We now live in a world of planned obsolescence and one in which it costs more to repair most items – if they can be repaired at all – than to replace them. That’s not only costing us more, but it’s a massive waste of the earth’s resources. America’s nearly 2,000 landfills stand as sad monuments to our throw-away culture.

But sometimes it still pays – financially, and of course environmentally – to repair rather than replace, even if you’re not as handy as Clyde and have to pay someone else to repair it for you. Here are some rules of thumb about whether to repair or replace:

The 50% Rule:
Financial pundits often talk about the “50% rule” when deciding whether or not it’s more cost effective to repair an item rather than replace it. The conventional wisdom was that if a repair was estimated to cost 50% or less than the amount you paid for an item, it was usually better to have it repaired. This is still a good guide to keep in mind, although many consumer products (e.g. electronics, furniture, appliances, even clothing) have continually dropped in price (in inflation adjusted dollars) in recent generations. So now, to be more accurate, the 50% rule should be based on replacement value, not original purchase price, or even on the estimated current market value or resale value of major items like automobiles. Regardless, it’s simply one rule of thumb among many other considerations.

Appreciating Appreciation:
Before you decide to replace something instead of have it repaired, carefully consider whether the item you’re thinking about trashing might appreciate in value over time. In the case of a well-made piece of furniture that is likely to become an antique, the choice to repair it is probably obvious. But it may not always be so apparent: When they needed repair, I wanted so badly to pitch those clunky old stereo speakers my dad passed along to me when I was a teen, and buy some trendy new (cheap) ones at Kmart. But Dad wouldn’t let me; now those JBL speakers are classics and worth nearly as much as my 401-K (sadly, in that sense).

Around the House:
Well-made, older appliances may be worth the cost of repair (if you can still find parts and someone to do the work), but you need to factor in that most older appliances use considerably more energy than newer models (see energystar.gov), so in the end it’s often more cost effective to replace them when they need repair. On the other hand, replacing older windows in your home (if they’re still in serviceable condition) with more energy efficient ones may not be a smart investment, taking a good many years in most instances to recoup the significant upfront investment. What about the roof over your head? Investing in maintenance and even fairly major roof repairs to prolong the life of a roof – provided that it’s in generally sound condition – is often more cost effective, particularly for larger roof surfaces.

Rags or Riches:
When it comes to clothing, the priority should be on taking proper care of it (don’t use the clothes dryer!) to make it last rather than investing in repairing it. Because most non-designer clothing is relatively inexpensive, it’s usually cheaper to buy something new once garments become threadbare. Even if you put on a few pounds, tailoring garments usually only makes financial sense with higher-end apparel items, unless you’re a seamstress yourself.

Is It Plugged In?:
A friend of mine who owns an electronic repair business once told me that nearly half of all the items people bring into his shop are simply suffering from a faulty electrical cord, plug, or other connection problem, or something else with a simple fix like cleaning out an air filter or replacing a worn-out belt. If that’s the case, then repairing it will save you major currency (get it?). But, if it’s something more major and requires special parts, even my friend admits that most new electronics are so inexpensive that it’s probably not worth the fix.

Jeff Yeager (The Daily Green)