2022 Best Cities to Invest in Rental Properties PAGE 31
W I N T E R 2 0 2 2
A Look Inside AAOA’S BROKERAGE LAUNCH
FROM MAJOR LEAGUES TO MULTIFAMILY AAOA INTERVIEWS THE BIG LEAGUE REALTOR
You Can’t See in a Tenant Background Check 5 RED FLAGS PAGE 81
TO EXCHANGE INTO PASSIVE PROPERTIES PAGE 41 REASONS
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THE OFFICIAL PUBLICATION OF THE AMERICAN APARTMENT OWNERS ASSOCIATION
TEAM Editor in Chief Robbie Cronrod Staff Editor Nancy Abrams
Marketing Manager Alexandra Alvarado Designer Ross Furukawa Advertising Kit Baker-Carr Contributors Bradley Barth, Esq. Daniel Sharabi David Spooner Jason Salmon Jen and Stacy Conkey Jenny Lytle John Weis Kathelene Williams, Esq. Kevin Hudoba Lauren Lieb Leslie Tucker, Esq. Lyle Solomon, Esq. Matt Arnold-Ladensack Matt Easton Nancy Abrams Richard D. Gann, J.D. Steven C. Williams, Esq.
FIVE BENEFITS OF FIBER INTERNET FOR MULTIFAMILY PROPERTIES TWO GIFTS FOR THE PRICE OF ONE: HOW TO INVEST IN YOUR GRANDCHILDREN’S FUTURE AND ENJOY MORE TIME WITH THEM TODAY FAIR HOUSING AND THE SUPREME COURT RULING FOR THE LGBTQ+ COMMUNITY CLYDESDALES AND CABINS: AAOA MEMBER MAKES MOVES IN MONTANA
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CELEBRITIES ON THE MOVE
2022 BEST CITIES TO INVEST IN RENTAL PROPERTIES HOW TO USE PRICING AND REVIEWS TO CHOOSE THE BEST PROPERTY MANAGEMENT SOFTWARE FOR YOU
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38 41 48 52 55 56 58 63 67 69 72 78 81
LIVING TRUSTS FOR REAL ESTATE INVESTORS, A PARTING GIFT TO YOUR HEIRS 10 REASONS TO EXCHANGE INTO PASSIVE PROPERTIES 3 SMART TECH TRENDS THAT WILL SIMPLIFY PROPERTY MANAGEMENT FOR OWNERS AND INVESTORS RENTAL OWNERS ARE RUNNING TOWARDS RUBS HOW TO CONVERT CALLS TO QUALITY TENANTS A LOOK INSIDE AAOA’S BROKERAGE LAUNCH FROM MAJOR LEAGUES TO MULTIFAMILY AAOA INTERVIEWS THE BIG LEAGUE REALTOR WHAT TO EXPECT IN MULTIFAMILY INSURANCE IN 2022 5 REASONS WHY REAL ESTATE INVESTORS SHOULD USE SOCIAL MEDIA
As we look in the rear-view mirror at the wild ride that was 2021, it is time to reassess, plan ahead and make both life and business changes. Our cover story centers on Rob Scahill, who transformed his experience as a major league pitcher into a successful real estate career. We also meet Matt Arnold-Ladensack, an AAOA member who moved from Washington to Whitefish, Montana, to fulfill his luxury guest ranch dream. In this issue we also highlight exciting additions: Each quarter, our “Ask an Attorney” column will address questions from our members. Allen Artcliff- Cronrod introduces the new AAOA Real Estate Service Portal and AAOA’s brokers weigh in on the best cities in which to invest in 2022. The beginning of a new year is a great time to make sure that our property management skills and procedures are at their best. Our experts cover how to understand social media, fiber internet, IoT, RUBs and multifamily insurance rates. On the financial side, we discuss new tax laws, living trusts, and DST and 1031 exchanges. On the tenant side, you’ll learn about fair housing for LGBTQ+ applicants, converting applicants to tenants, tenant background check red flags, and choosing the best property management team and software.
ASK AN ATTORNEY
TOP 10 QUESTIONS TO ASK PROSPECTIVE PROPERTY MANAGERS TAX LAWS YOU CAN GET EXCITED ABOUT 5 RED FLAGS YOU CAN’T SEE IN A TENANT BACKGROUND CHECK
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RETIRE from your REAL ESTATE
Are you ready to leave the burdens of tenants, trash and toilets behind? 1031 Exchange your rental property for potentially 100% passive income! To learn more call (800) 445-5908 Or visit us at www.1031capitalsolutions.com
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FIVE BENEFITS OF FIBER INTERNET FOR MULTIFAMILY PROPERTIES
Make no mistake—internet connectivity, often called the “fourth utility,” has never been more vital for multifamily properties. While it’s not surprising that apartment residents (especially Gen Z) might consider getting online as essential as running water, power, and gas, developers and owners have numerous factors to weigh when choosing property-wide internet service. With plenty of options out there, owners should seek out a service that checks all the boxes. Some key questions to ask might be:
• Does it deliver a high-bandwidth, long-lasting solution? • Can it generate current and future revenue? • Will it meet or exceed resident expectations of seamless, always-on connectivity?
If the answer for building owners isn't fiber internet, they may need to prepare for a future of costly reinvesting, rewiring, and retrofitting. WHAT IS FIBER?
First, some basics. “Fiber-optics” is an internet technology that converts data into light impulses and transmits them through bundles of threadlike glass filaments at almost the speed of light. Since it doesn’t rely on copper wires using electrical energy to move information, fiber internet delivers less distortion, more resistance to outside interference, and a signal that can stay stronger over longer distances. The experience for fiber customers is a high-speed broadband connection, fewer slowdowns like lag time and buffering, and a durable network that can boast extraordinary reliability.
As an amenity, high-quality broadband access has pivoted from a convenience to a necessity in record time. Residents today spend an unprecedented amount of time online, connecting with their jobs, education, e-shopping, entertainment, and families. A Pew Research Poll found that nine in ten Americans view the internet as essential. According to a Deloitte connectivity study, they’re also using a record number of smart devices with an average total of 25 per U.S. household. More use and more devices add up to more bandwidth consumption than ever before. Let’s look at five reasons fiber internet can be a “win” for multifamily properties.
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Whether it’s work video conferences, couch- shopping for clothes, or taking down an army of mutant robots, today's tenants want (and need) fast internet for just about everything. As pandemic trends like remote work and heavier TV streaming persist, residents' hunger for bandwidth shows no signs of waning. The fix? An internet service that is ultra-fast. Of all the options available, fiber stands out by providing super-fast speeds. Faster data transfers mean speedier internet. Fiber
providers routinely offer "gigabit" speeds which work out to 940 Mbps. (Mbps stands for "megabits per second"—or 1 million bits of data per second.) This kind of speed allows for fast page loads, reduced lag time for online gaming, and less buffering or glitching when streaming video or teleconferencing. Plus, fiber's high speeds can handle the explosion of smart home and Internet of Things (IoT) device use, keeping multiple "things" connected and running simultaneously.
No matter what you use it for, unreliable internet can be limiting, frustrating, and at times, even costly. Property owners know they can't risk service interruptions for their business-side operations or their residents' connectivity. Fiber offers greater reliability due in large part to the technology of the fiber-optic lines themselves. Since they use light pulses and optics instead of metal wiring and electric current, fiber internet can be more durable and resilient than traditional internet connections.
Fiber also tends to be more resistant to outside factors like extreme weather, electromagnetic interference, or even corrosion—all of which might cause outages. A reliable internet connection is now a "must" for multifamily residents, especially with recent sharp upturns in working from home, online shopping, and streaming entertainment content. People don't just want internet service, they want it to work when they need it, and these days, that's all the time.
#3 SYMMETRICAL UPLOADS
Another fiber advantage is upload speed. While many internet services promise fast downloads, fiber technology can deliver what's known as fast symmetrical speeds. That means uploads move at the same speed as downloads. Older, traditional technologies like cable or DSL internet often have "asymmetrical" speeds since they prioritize download traffic over uploads.
Today's current surge in upstream internet traffic (much of it rooted in remote work or learning) has revealed a greater need for sharing large files, creating content, video chatting, or even telemedicine appointments. Bottom line: residents will continue to require fast uploads and having symmetrical fiber internet is a plus for any multifamily community.
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#4 INCREASED PROPERTY VALUE
#5 ATTRACTING AND RETAINING RESIDENTS
Since high-quality broadband usually scores at the top of resident surveys, investing in connectivity makes much sense. A property with top-notch internet service can stand out from the competition and stands a better chance of drawing and retaining residents who prioritize connectivity. Renters already lean toward multifamily communities that advertise high-speed broadband. If residents feel they can't use all their smart devices effectively at a property, they'll keep looking for a home that meets those tech needs. Plus, there's the convenience of having internet service pre-installed when residents move in. Owners that invest in bulk service arrangements can provide this for their renters, saving them the time, effort, and the waiting that often comes with setting up their service on their own. A bulk plan can also allow owners to take advantage of more attractive rates and create new revenue streams if they build internet prices into rent or pass their savings along to residents.
Multifamily property owners know the importance of focusing their investments on a community's most essential and beneficial amenities. With fiber internet, those benefits can be significant when it comes to increasing property value. Fiber allows building owners to increase rent prices since they can provide a vital amenity residents and potential renters want. Even as far back as 2016, a study by RVA, LLC for the Fiber Broadband Association showed fiber could add up to 11 percent in net income per apartment. The revenue increase came from a combination of higher rental rates, lower churn, and reduced operating expenses. Owners who market their fiber internet offerings can benefit from better residency, potentially higher rent, and thus, increased property values. Cost-effectiveness also plays a role. A single fiber- optic cable can bring multiple communication services, including internet, streaming video, and voice, into a multifamily community without the need to run separate wiring for each. Plus, since fiber internet is "future-ready," it has enough bandwidth capacity to handle ever-increasing use without becoming quickly outdated.
A RELIABLE INTERNET CONNECTION IS NOW A ‘MUST’, ESPECIALLY WITH RECENT SHARP UPTURNS IN WORKING FROM HOME, ONLINE SHOPPING, AND STREAMING
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FINAL THOUGHTS ON FIBER INTERNET
Wading through the many internet options can seem overwhelming. But it’s essential to look beyond low-cost, short-term solutions. Today’s multifamily property owners should find a service that can grow and expand with ever-evolving technologies and increasing
resident demands. Forward-thinking operators who choose fiber internet can meet those challenges, deliver ROI, and position themselves well to thrive both today and tomorrow.
Disclaimer: This blog is provided for informational purposes only and may require additional research and substantiation by the end user. In addition, the information is provided “as is” without any warranty or condition of any kind, either express or implied. Use of this information is at the end user’s own risk. Quantum Fiber does not warrant that the information will meet the end user’s requirements or that the implementation or usage of this information will result in the desired outcome of the end user. All third-party company and product or service names referenced in this article are for identification purposes only and do not imply endorsement or affiliation with Quantum Fiber. This document represents Quantum Fiber’s products and offerings as of the date of issue. Services not available everywhere. Quantum Fiber may change or cancel products and services or substitute similar products and services at its sole discretion without notice. ©2021 Q Fiber, LLC. All Rights Reserved. Quantum, Quantum Fiber and Quantum Fiber Internet are trademarks of Quantum Wireless LLC and used under license to Q Fiber, LLC.
JOHN WEIS Lead Writer Quantum Fiber
John Weis is a Lead Writer for Brand and Communications with Quantum Fiber, a Lumen Technologies brand. A writer by day, and reader by night, he currently crafts content focused on fiber internet and better living through technology. In a former life, John worked as a brand manager, marketing strategist, and broadcast media personality. He can be reached at firstname.lastname@example.org or at john-weis.com. Learn more about Quantum Fiber internet for multifamily properties at Q.com/ ConnectedCommunities.
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IF YOU'RE SELLING OR BUYING PROPERTY, WE CAN HELP!
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TWO GIFTS FOR THE PRICE OF ONE: HOW TO INVEST IN YOUR GRANDCHILDREN’S FUTURE AND ENJOY MORE TIME WITH THEM TODAY
Many people believe that the best thing about a Delaware Statutory Trust 1031 exchange is the relatively immediate benefits of deferring capital gains taxes. However, even experienced investors may not realize that the real brilliance of using a DST 1031 exchange is its ability to preserve wealth across generations while also helping investors create more free time to travel, learn new skills, or be with their friends and family. WHAT ARE THE RULES OF 1031 EXCHANGES AND
1031 Exchange Rule #1: The exchange must be set up before a sale occurs. KEY TAKEAWAY In order to defer capital gains, the taxpayer enters into an Exchange Agreement with a Qualified Intermediary (QI) for the sale of the property before it is transferred. The QI agrees to acquire the old investment property from the taxpayer, transfer the property to the new buyer, and acquire the replacement property for the taxpayer. In this manner, the investor never touches any money throughout the exchange and satisfies an important rule of 1031 exchanges.
1031 Exchange Rule #2: The exchange must be for like-kind property
HOW DOES A DST FIT IN? Before looking at how DST properties can help investors preserve wealth while also freeing up more quality time to enjoy life, each investor should be thoroughly familiar with the rules of 1031 exchanges and how Delaware Statutory Trusts fit in. Basically, the IRS insists that certain guidelines be followed:
KEY TAKEAWAY For many 1031 transactions (rental houses, farmland, office buildings, strip malls, etc.), the “like- kind” requirement does not mean selling and buying the exact same type of property. The term “like-kind” refers to the essence or character of the property rather than its grade or class. However, the property must be held for business or investment purposes.
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KEY TAKEAWAY In all 1031 exchanges, investors must complete their exchange within 180 days of their sale or the tax due date for the year in which the property was sold unless an extension is filed. 1031 Exchange Rule #5: The Exchangor has 180 days following the sale to complete the exchange
1031 Exchange Rule #3: The exchange property must be of equal or greater value
1031 Exchange Rule #4: The Investor has 45 days to identify a new property KEY TAKEAWAY The first 45 calendar days after closing on the sale of an investment property intended for a 1031 exchange is known as the "identification period." This is when an investor needs to identify potential replacement properties to buy. Properties must be identified in a signed, written document that is delivered to a QI.
KEY TAKEAWAY The general rule for
complete tax deferral in a 1031 exchange is to buy replacement property with a value that is equal to or greater than the value of the relinquished property. The net cash received at the closing of the relinquished property must go into the replacement property.
How Does a 1031 Exchange Work?
Owner (Exchanger) decides to sell investment property & notifies a Qualified Intermediary (aka QI or Accommodator) of exchange prior to the close of the sale
Funds are transferred to seller of Replacement Property(ies). Exchanger has 180 days to close of new Property(ies).
Proceeds from sale are transferred to Qualified Intermediary
Proceeds from sale are transferred to Qualified Intermediary
MUST IDENTIFY BY
MUST CLOSE BY
45-day period to identify Replacement Property(ies).
Exchanger must close on Replacement Investment Property(ies) within 180 days of the closing date of the property that was sold.
HOW 1031 EXCHANGES HELP BUILD WEALTH ACROSS GENERATIONS By following these very straight-forward rules, the 1031 exchange benefits the investor and potentially, the investor’s heirs, by deferring capital gains taxes on the sale of investment properties. That’s why real estate has long been a popular asset used to build generational family wealth. Consider a matriarch who bought an apartment building in the 1980s for $1 million. Thanks to careful maintenance and upkeep, along with a good location, that property is now worth $10 million. If the owner were to sell, she would face a hefty tax on the capital gain. Instead, the owner decides to put that property in her will to be inherited equally by her grandchildren. The grandchildren could potentially apply a step-up to the current value at the time of their grandmother’s death, allowing them to create a tax-advantaged exit upon the sale of the property.
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A recent report by CNBC revealed that between 2016 and 2019, more than 10 percent of all real estate transactions involved a 1031 exchange. However, because of the specific timelines associated with 1031 exchanges, investors often encounter significant problems completing them.
CHALLENGES ASSOCIATED WITH 1031 EXCHANGE TIMELINES
Finding suitable replacement property within the mandated timeframe; Finding the resources to perform the necessary due diligence on the property; Securing bank financing to replace the amount of debt on the original property;
Identifying appropriate properties within the timeframe; Successfully closing on the purchase within the timeframe;
Many of the like-kind exchanges would most likely be sole-ownership properties that would require the owner to be a hands-on owner, eliminating the opportunity for passive ownership.
HOW DOES A DST FIT INTO A 1031 AND ESTATE PLANNING? Helping solve the above 1031 challenges is where the Delaware Statutory Trust comes into play.
this way, each investor owns a “beneficial interest” in the trust which, in turn, owns the underlying property assets. This DST interest entitles the investor to his or her pro-rata share of potential income and appreciation in the DST while avoiding any active management responsibilities. Key takeaways here are that DST ownership not only qualifies as “like-kind” real estate for a 1031 exchange, it also offers the same benefit of a potential step-up in basis while providing some additional generational benefits that other ownership structures don’t. Chief among those advantages is the ability for investors to sell their investment real estate and utilize a 1031 exchange into DSTs to potentially defer taxes, greater flexibility for estate planning, and no active management responsibilities for heirs to assume.
A Delaware Statutory Trust (DST) is an entity that is used to hold title to investment real estate and qualifies as a “like-kind” exchange replacement property for 1031 exchanges according to Revenue Ruling 2004-86. DSTs can be structured as single-property vehicles or have multiple properties in one DST. DSTs are also different types of real estate, like apartments, commercial, industrial/distribution and healthcare/medical. Many DSTs are set up with real estate leased to large national or global companies as well. Much like a REIT (Real Estate Investment Trust), individuals who 1031 exchange into a DST may have partial ownership of multiple properties at one time. In
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The shared beneficial interest structure of DSTs allows an investor to easily diversify their 1031 reinvestment with flexibility. For example, an investor owns 30 units in an apartment DST and 50 units in a DST portfolio of Dollar General, FedEx and Amazon net lease properties. The individual wants to leave the DST investments to his two grown children. He can choose to give the apartment DST to one child and the Dollar General, FedEx and Amazon DST to the other child, or he can divide up the units within each DST to give some of each to both children. In comparison, carving up ownership for heirs in a wholly owned property can be difficult and even contentious. You can’t give the roof to one child or grandchild, the walls to another, and the doors to a third. It’s all or nothing. Some heirs may want to sell, while others don’t. If they all agree to sell, then they also have to agree on when to sell and at what price. In some cases, that process can drag on for years. During that time, the heirs also need to assume the management responsibilities for that property or pay someone else to do it. That process can get complicated. DSTs are commonly used in 1031 exchanges as a means to defer taxes. Yet the tax advantages of the fractional ownership structure also can be passed onto future generations to help build family wealth. For more information on how DSTs can be used in estate and tax planning strategies, it is always wise to consult with your tax and legal advisors. For a look at the types of DST properties investors are using for estate planning purposes, please visit the Kay Properties marketplace at www.kpi1031.com.
CREATING MORE LEISURE TIME TO SPEND WITH FRIENDS AND FAMILY In addition to the tax deferral and estate planning benefits of DST 1031 exchanges, there is another powerful benefit investors discover upon investing in DSTs: they have more free time! Because DSTs remove the responsibility of active management responsibilities and provide investors monthly income potential, investors are able to create more time for leisure. This gift of time is considered by many to be the most valuable asset available to us. More leisure time allows investors to get more involved with their friends and family or pursue new activities, like traveling, learning new hobbies, improving their health, etc.
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WHY INVESTORS CHOOSE DSTS FOR 1031 EXCHANGES:
Potential diversification: Instead of having all your eggs in one basket, DSTs allow investors to diversify both geographically and across multiple asset classes. Non-recourse loans: DST investors are not required to execute any loan guarantees or indemnities given their purely passive relationship to the DST and its real estate. Liability protection: The DST “wrapper” shields the exchanger/investor from any liabilities with respect to the property. Helps preserve wealth across multiple generations: Because the 1031 exchange defers all the taxes associated with the sale of real estate, this wealth can continue to grow over years. In addition, upon the death of the owner, the heir of the estate receives a stepped-up basis eliminating the accumulated capital gains taxes.
Inventory: By working with a DST 1031 exchange expert advisory firm like Kay Properties, the investor is assured of multiple DST properties for their 1031 exchange. Low minimum investment: DSTs typically have a minimum investment of $100,000 for 1031 exchangers and $50,000 for cash investors. Passive management: The DST structure takes management responsibility for the properties out of the hands of investors and places it into the hands of a professional manager. The passive nature of the real estate investment structure allows investors more quality time to travel or to spend time with their friends and family. Cash distribution potential: The rental income generated from the DST properties is potentially distributed on a monthly basis directly to the investor’s bank account via ACH.
Disclaimer: *Diversification does not guarantee profits or protect against losses. *NOTE: Past performance does not guarantee future results and DST investments may result in a complete loss of investor principal. This is an example of the experience of one of our clients and may not be representative of the experience of other clients. These clients were not compensated for their testimonials. Please speak with your attorney and CPA before considering an investment. Diversification does not guarantee profits or protect against losses. All real estate investments provide no guarantees for cash flow, distributions or appreciation as well as could result in a full loss of invested principal. Please read the entire Private Placement Memorandum (PPM) prior to making an investment. This case study may not be representative of the outcome of past or future offerings. Please speak with your attorney and CPA before considering an investment. All offerings discussed are Regulation D, Rule 506c offerings. There is a risk of loss of the entire investment principal. Past performance is not a guarantee of future results. Potential distributions, potential returns and potential appreciation are not guaranteed. For an investor to qualify for any type of investment, there are both financial requirements and suitability requirements that must match specific objectives, goals, and risk tolerances. Securities offered through FNEX Capital member FINRA, SIPC.
JASON SALMON Senior Vice President Kay Properties
Jason Salmon is Senior Vice President Managing Director of Real Estate Analytics for Kay Properties & Investments New York City office where he applies his more than 20 years of commercial real estate and financial advisory experience in assisting thousands of property owners as they navigate their 1031 exchange transactions and direct acquisitions of securitized real estate investments. He is considered one of commercial real estate industry’s leading experts in providing high-net-worth clients DST 1031 exchange investment strategies, tax advantaged exit strategies and estate planning solutions.
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In line with the Supreme Court’s decision regarding discrimination based on sexual orientation or gender identity, President Biden signed an executive order earlier this year mandating that all federal agencies review the ruling and make needed adjustments. So what can property management companies expect? Should we wait on updated guidelines from HUD (Department of Housing and Urban Development) or should we make changes now to avoid any appearance of housing discrimination against LGBTQ+ prospects? A New Protected Category? AND THE SUPREME COURT RULING FOR THE LGBTQ+ COMMUNITY FAIR HOUSING
A Quick Legal Recap President Biden signed an Executive Order on January 25, 2021, requiring protections of LGBTQ+ people in housing, health care, and education. The Executive Order cites the recent Supreme Court decision, Bostock v. Clayton County, that held that the prohibition against sex discrimination in the Equal Employment Act prohibits discrimination on the basis of sexual orientation and gender identity. The Executive Order requires the applicable federal agencies, including HUD, to promulgate actions consistent with Bostock and the various civil rights laws. This Executive Order will result in new HUD regulations explaining the protections of LGBTQ+ persons under the Fair Housing Act.
There is always confusion with any change. With this new ruling questions have been raised as to whether or not this ruling meant a new protected category. To clarify, we do not have a new protected category, rather we now have an expanded protected category of sex. Under this expansion, it is illegal to discriminate against anyone based on their sexual orientation or the gender they are presenting. The Time to Act Is Now The next question raised is whether or not housing providers should start making changes now or wait for guidance from HUD. We believe there will be a notable increase in testing and enforcement of the new fair housing protections of LGBTQ+ people. Whenever changes in regulations occur, housing providers can expect an increase in testing by housing advocacy agencies. To avoid unnecessary liability, all housing providers should be educated about these changes and ensure that all employees are properly trained and prepared for testers now.
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Fair Housing Compliance and LGBTQ+ Prospects Consider a few situations that may arise. A same- sex couple is interested in renting an apartment. Can you ask them for a marriage certificate? How would you handle an individual who is dressed as a woman and the name they give doesn’t match their government-issued ID? Fair housing best practices in both of these situations are to ensure your policies are up to date according to the new laws and that they are applied across the board. If your policy does not require a heterosexual couple to produce a marriage certificate, then you cannot request one from any other type of couple. As for a person who uses a name other than what is on their ID, your policy needs to be the same for everyone regardless of how they are dressed.
NOW IS THE TIME TO REVIEW YOUR POLICIES AND MAKE ANY NEEDED CHANGES ACCORDING TO THE EXPANDED UNDERSTANDING OF THE CATEGORY OF SEX.
Expect that testers will be focusing their attention on compliance with the new law. Up-to-date training is also absolutely necessary to make sure that every staff member is prepared to handle any situations that will arise. Remember the best way to avoid a fair housing complaint is to be fair housing compliant!
KATHELENE WILLIAMS Attorney and President The Fair Housing Institute
Kathi Williams is one of the founders of Fair Housing Institute. FHI is the accomplished vision of Kathi who views its educational courses as the best method housing providers can use to accomplish compliance and avoid litigation. Kathi is also a partner in the Law Firm of Williams Edelstein Tucker, P.C. providing defense and preventative representation for the housing industry in all civil rights matters. During the many decades Kathi has been advising her housing provider clients, she developed a unique understanding of the most effective methods of communicating fair housing best practices through training. Click here to watch Fair Housing Educational Videos.
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Add Mobile Payment to your Tenant Laundry! Eliminate the Need for Quarters! Improve tenant satisfaction and increase your revenues by keeping tenants on site for laundry, and not at the laundromat. Plus, reduce or eliminate the hassle of dealing with quarters. Even reduce vandalism risk! PayRange adds mobile payment to existing laundry machines in minutes, and no internet connection is required, the user’s smart phone enables payments. Get started for only $20 per washer or dryer then ongoing costs are about 3% per transaction. * No monthly fees, and installation of the PayRange BluKey device takes only a few minutes.
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Free PayRange App available for both iOS and Android devices allows for the use of multiple funding sources.
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*Terms and conditions apply. PayRange is a trademark of PayRange Inc. Patent 8856045andother Patents Pending. ©2021 PayRange Inc.
CLYDESDALES AND CABINS: AAOA MEMBER MAKES MOVES IN MONTANA AAOA member and investor, Matt Arnold-Ladensack, made a bold move to invest in Montana real estate with a twist. His innovative vision to combine cozy cabins and Clydesdale horses is a new take on luxury short-term rentals. Below, Matt explains why he made the move and how Montana tourism and population growth is drawing investors from across the country.
“Whitefish and Kalispell, Montana are two of the few places in America that have it all. Quiet, peaceful neighborhoods, endless city-maintained hiking and biking trails, a ski resort, a large alpine lake in the middle of town, great restaurants, and quick proximity to Glacier National Park.” “Like most towns, there is an affordability crisis since the pandemic pushed many into resort towns for second homes and a change in lifestyle. With Glacier Park International Airport in Kalispell, there are more direct flights than ever dropping off tourists and future residents.”
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“There is a distinct need for apartment rentals and plenty of room to build. Land prices are affordable compared to high-density areas with many rules and regulations. Apartment complexes and homes being built here are pre-booked and sold before completion; contractors are booked out for 2-3 years. There is a great demand, especially in affordable price ranges as well as for luxury custom homes.” “This situation led our family to move from SW Washington to Whitefish, Montana full time to build our guest ranch dream, Clydesdale Outpost. We acquired 92 acres, un-zoned and without covenants, along the Stillwater River just 10 minutes outside of downtown Whitefish. We are in the current stages of finishing Phase I: six luxury guest cabins, a Clydesdale barn, caretaker’s home, and a check-in center with coffee and cocktail bar. Guests can relax in cedar hot tubs, interact with and ride our Clydesdale horses or host a wedding or other event. It is set to open Summer 2022.” “If you’re looking for a place with low inventory to build apartment complexes, custom homes or acquire homes to fix and flip, I would look Northwest as you discover all the possibilities that Montana has to offer.”
MATT ARNOLD-LADENSACK AAOA Member, Investor, and Managing Broker TOPOGRAPHY brokered by eXp email@example.com
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ON THE MOVE
Mark Cuban It’s good to be Mark Cuban’s friend. The owner of the Dallas Mavericks recently purchased the “city” of Mustang, a 77-acre town in Navarro County, Texas, because his pal, the property owner, needed to sell it. Founded in the 1970s as the only place in the county where people could buy alcohol, the town today boasts 23 residents and features a few trailer parks, horse ranches and an abandoned strip club that was the scene of a 2008 murder. It is believed that Cuban paid about $2 million for the property in a private transaction.
After several years renting in exclusive guard-gated Bel Air Crest, Stevie Wonder and his wife Tomeeka have purchased an 11-bedroom, 15-bath mansion from HH Mohammed bin Faisal bin Saud Al Saud, the son and grandson of Saudi Arabian princes. Set on .58 acres and surrounded by mountains and canyons, the three-level residence covers 19,593 square feet and is served by an elevator. The home, which closed at $13.9 million, boasts a guest house, staff quarters and a wine cellar for 2550 bottles.
Tech billionaires are buying up the State of Hawaii. Jeff Bezos has started with 15 acres of oceanfront land on Maui, Larry Ellison owns 98% of Lanai and Mark Zuckerberg and his wife Priscilla Chan are the proud owners of 1400 acres on the island of Kauai. The Zuckerbergs recently paid $17 million for 110 acres of agricultural land to add to their previous holdings. Their assets now include turmeric and ginger farms, nursery and cattle ranching and a residence called Ko’olau Ranch that they completed building in 2017.
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ON THE MOVE
Trevor Noah Trevor Noah seems to favor the deluxe community of Bel Air. During the summer of 2021, he sold a home for $21.7 million that he had bought there two years before for $20.5 million. Then he purchased another Bel Air mansion at the end of 2021 for $27.5 million. The dramatic 11,000-square- foot residence was designed by architect Mark Rios, who named it Ledge House because of its hillside location. Influenced by Japanese design, Rios included six bedrooms, 11 bathrooms, an office, library, movie theatre, elevator, gym, spa, steam room, game room and infinity pool.
Ryan Gosling and Eva Mendes
Ryan Gosling and Eva Mendes have quietly sold their two Los Angeles-area homes in recent months and are expected to leave the area. For the last 10 years, they were living in a 1926 home that Mendes purchased in 2008 for about $3.2 million. The 3900-square-foot, four-bedroom, four-bath residence, which sold for $4.9 million, is located on .30 acres in the trendy L.A. area of Los Feliz. The second sale was for Gosling’s “bachelor pad” in Studio City in the San Fernando Valley. They still own a 5000-square-foot ocean view home on 5.5 acres in Carpinteria near Santa Barbara.
A 6,759-square-foot residence in the Hollywood Hills has been home to rock and roll royalty for five decades and has now been sold to another buyer with a musical pedigree. In 2015, Lady Gaga purchased it from the family of Frank Zappa, who had lived in the half-acre residence since the 1970s when they bought it for just $75,000. The new owner of the six-bedroom, five-bathroom property is Lizzy Jagger, the third of Mick Jagger’s eight children. The $6.5 million price tag includes a staff apartment and two detached guesthouses, a rooftop tennis court, a greenhouse and swimming pool.
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See. Know. Secure. S M A R T V I D E O I N T E R C O M - M
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HOW TO USE PRICING AND REVIEWS TO CHOOSE THE BEST PROPERTY MANAGEMENT SOFTWARE FOR YOU
With the right feature set, property management software can save you a lot of time and money.
It can also make your tenants happier too, which in turn, will help you retain better renters.
But in order to realize these benefits, the property management software you choose must have the right feature set for your business.
Last quarter (RENT ’21 Q4), we discussed the features and bonuses you should consider when choosing your new software. Now that you have an idea of what your ideal property management software platform should look like, the next question is, how much will it cost you? PRICING There are a variety of pricing models for property management solutions. It’s important to become familiar with these pricing structures so you can choose the best property management software for your needs - without any surprise costs. Unit-Based Pricing
Feature-Based Pricing In the property management software niche, this is by far the most widely used pricing plan. This type of pricing setup requires you to pay for specific features you want to use. These features can range from online rent collection, tenant screening, lease signing, customer service, listing syndication, and other critical features. This pricing structure can be a monthly fee, an annual fee, or a one-time fee. Unfortunately for landlords, this pricing structure is also primarily used by companies with multiple pricing models. This means that when you see this pricing structure, you are most likely going to have to pay multiple ways.
This structure is based on how many units you own or manage. Software programs using this structure will charge you on a unit-by-unit basis or when you reach certain thresholds (10 units, 25 units, 50 units, and so on). This type of pricing becomes more significant as you grow your business since each threshold or unit brings on more costs. Monthly Subscription This is the most common pricing layout across all software companies and is seen frequently in the property management software space as well. In this structure, you are paying a monthly fee to access the platform. These monthly fees can come in different plans, which typically allow you to use more features on the platform.
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Onboarding & Setup Another popular cost option you may come across is paid onboarding and setup. In this payment structure, you pay a one-time fee to get access to the platform and additional onboarding help. Getting set up with property management software can be time consuming. If you aren’t tech savvy, have several units with leases that need to be uploaded, or simply value having your own account representative to help you get started, you should expect to pay these fees. Freemium This pricing structure is also widely used by online software companies and is no different for property management software companies.
It’s an easy way for companies to give new users a taste of what the platform is like before making them pay. This structure can be presented in a couple different ways. The first is through a free trial, where you will get full access to the platform for a limited number of days before being asked to pay. The other setup is through a feature-light version of the platform. In this layout, you can do basic functions, such as add a property or tenant for free, but not use the software in its full capacity without paying. Free One of the least common pricing structures - but by far the best for your bottom line - is the free
model. In this structure, you get complete access to the software without having to pay any monthly subscriptions, setup fees, unit fees, feature-based fees or onboarding and setup fees. You get unlimited access to the software for as long as you want it. How do they make money? In this structure, you will commonly see minimal fees spread out to tenants. These fees may include the cost of running a screening report when they apply for a rental or small convenience fees for purchasing renter’s insurance or paying rent online each month. These fees are insignificant on an individual level, but when added up across thousands of tenants, they provide a great stream of revenue for the software provider.
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A FIVE-STAR REVIEW FROM 10 YEARS AGO IS NOT THE SAME AS A FIVE-STAR REVIEW FROM TODAY.
REVIEWS It’s easy to look at rating scores and say, “That product has a 4.5, this has a 4.9, and that other one has a 3.0. Clearly, the 4.9 is the best.” The thing to keep in mind is not just the score in a vacuum, but how the score compares to the rest of the industry. If most platforms score 4.5 or above and one scores 4.3, it may be a lot worse than the others, even though a .2 drop might not seem that bad. Another thing to look at in terms of review quality is what reviewers said. A product that might have gotten a 4.5 rating might be dragged down to 4.3 by a single 1.0 rating that was left for reasons unrelated to the quality of the app. Recent Reviews It’s also important to look at recent Diversity The final item is review diversity. In other words, look at a few different
their LinkedIn or Gmail accounts and provide proof that they’re actually using the software they’ve reviewed. TrustPilot makes it a little easier to get reviews published, but it’s the site Google relies on more than any other. Whichever direction Google goes, most people follow. There are many other sites, but you should at least include those three in your research. The point is to look at multiple, trusted review sites and see how the reviews stack up for the property management software you’re considering.
reviews. A five-star review from 10 years ago is not the same as a five-star review from today. If the software has been around for many years, it may have gotten better or worse over time - which the overall rating might not reflect. As mentioned above, somebody may have left a review a couple years ago about a serious bug that was fixed soon after. Do some research, check out the product website, and reach out to that platform to see if that’s still a bug or if it’s been fixed.
review sites. Is the property management software you’re considering rated 5.0 on one site and 3.0 on another? If so, which site is the most trustworthy and the most current? The three big software review sites are Capterra, TrustPilot, and G2. These sites are trusted by thousands of users. One reason Capterra and G2 are highly regarded is that they are two of the hardest review platforms on which to have a review published. They require reviewers to connect
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THE TIME YOU SPEND SELECTING A PROPERTY MANAGEMENT PLATFORM WILL PAY OFF IN A BIG WAY.
Property management software can make life much easier for you, your staff, and your tenants. It can cut days off the time you spend doing tedious tenant-related tasks and improve your bottom line. The trick is choosing the property management software that best fits your business. Figure out the most beneficial features for your business, find the pricing structure that works best for you, and once you have a short list of platforms, check out their reviews. The time you spend selecting a property management platform will pay off in a big way once you have the right software working for you.
DAVID SPOONER Co-Founder Innago (513) 964-0172 firstname.lastname@example.org
Dave Spooner is a co-founder of Innago, a property management software designed to simplify life for small to mid-sized landlords. He has been involved in the real estate technology space since 2013, working to enhance the way landlords and tenants communicate. In addition to his expertise in content marketing, Dave utilizes his experience with management and entrepreneurship to help landlords achieve sustained success.
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2022 BEST CITIES IN RENTAL PROPERTIES TO INVEST
Wondering where to invest next? We tapped AAOA’s network of agents and brokers to find the hidden gems you should consider. Access their insider knowledge to make your next move!
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MINNEAPOLIS, MN NASHVILLE, TN Minneapolis became the first large city in the country to end single-family zoning. This means the city allows small multifamily properties to be built on single-family lots. It is one of the biggest reasons why there’s been a strong housing market performance.
Nashville’s multifamily sector benefits from a business- friendly environment, expansive job market, and growing population. For years, major companies, including Alliance Bernstein, Amazon, and Oracle, have been relocating or expanding in the market, contributing to the stellar job growth and strong multifamily demand in both urban and suburban submarkets throughout the metro. With 14.1% of inventory underway, Nashville has one of the country’s most active multifamily construction pipelines. Around 3,600 units have been delivered in the last year, and over 19,000 are currently in development. There is also ramped up activity in suburban submarkets that offer numerous shopping centers, several major office- using and industrial employers, and highly ranked schools, including Middle Tennessee State University.
There are 16 Fortune 500 companies (including Best Buy, 3M, General Mills, and Ecolab), concentrated in the Minneapolis -Saint Paul metro area. Minneapolis is one of the most economically diverse and stable cities in the country. Minneapolis has 197 parks and 120 miles of bike paths, which ranks it as the best park system in the country. It is also home to the 3rd largest university (U of M) in the United States and in close proximity to the top ranked hospital system where the Presidents typically go (Mayo). These are just a few reasons Minneapolis boasts a quality of life that regularly ranks among the top 5 in the country.
• No single-family zoning • 16 Fortune 500 companies
• 8,000 new high-paying jobs • Downtown is the top submarket for units underway in the nation • Ramped up activity in suburban counties: Murfreesboro, Williamson, and Wilson County
• 197 parks, 120 miles of bike paths • Home to 3rd largest U.S. university • Top ranked hospital system where Presidents typically go
Chris Missling Multifamily Business Development, DRG Connect with Chris
Austin Tomaiko Multifamily Associate, Matthews Real Estate Group Connect with Austin
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