Archive for April, 2010

IP201 Seminar: How to Evict Your Tenant!

[ May 25, 2010; 6:30 pm to 8:00 pm. ] If you are a landlord long enough or own enough rental properties, you will eventually need to evict a tenant. It can seem like a traumatic and complicated event, but if you follow some simple tips, it is actually quite simple.  As a new landlord, it is very easy to listen to the sob story [...]

If you are a landlord long enough or own enough rental properties, you will eventually need to evict a tenant. It can seem like a traumatic and complicated event, but if you follow some simple tips, it is actually quite simple.  As a new landlord, it is very easy to listen to the sob story about why a tenant can’t pay their rent and before you know it, they can become several month behind in their rent. Ultimately, most books and “experts” will say, start the eviction process the first day after the rent is late. I would argue that in the real world, it rarely happens that way.  Come and hear practical and step by step ways to get rid of that bad tenant.

Sign up on our registration form or call 612-281-5419 for more information.

Home Prices Continue to Stabilize as Oversupply Issue Improves – March Stats

From the Minneapolis Realtor Association Newsletter-4/19/10
For the third consecutive month, home prices in the Twin Cities 13-county metropolitan area showed a year-over-year increase. We haven’t seen three consecutive months of progressively increasing year-over-year growth since June 2004.
The March median sales price of $165,000 was a healthy 7.1 percent increase from $154,125 last March. That’s the [...]

From the Minneapolis Realtor Association Newsletter-4/19/10

For the third consecutive month, home prices in the Twin Cities 13-county metropolitan area showed a year-over-year increase. We haven’t seen three consecutive months of progressively increasing year-over-year growth since June 2004.

The March median sales price of $165,000 was a healthy 7.1 percent increase from $154,125 last March. That’s the strongest year-over-year increase since May 2005. Part of the reason for the stronger upward movement is that a lower share of home sales are foreclosures as compared to last March. Short sales are another story.

“There are definitely some promising indicators and several positive trends at this time,” said Brad Fisher, President of the Minneapolis Area Association of REALTORS® (MAAR). “However, we need to keep a close eye on several submarkets, including short sales, new construction, and high-end properties.”

The median sales price of traditional homes (excluding foreclosures and short sales) in March was $199,900, down $11,600 or 5.5 percent from $211,500 last March.

Foreclosures posted a slight 0.3 percent increase to $118,000, while short sale properties posted a 2.0 percent decline to $147,000. Although short sales have become the new problem child on the block, the 10.0 percent decline in bank-owned new listings after a period of unprecedented growth is good news for everyone.

There were 5,051 signed purchase agreements in March, an increase of 14.6 percent from a year ago. The spring market continues to have a flurry of activity as we approach the April 30 deadline for the federal home buyer tax credit. Home sales are expected to continue to increase as buyers move to take advantage of this substantial market incentive.

This increased buyer activity has brought inventory down and restored some sense of equilibrium to the market. April’s supply-demand ratio of 4.39 means that there are 4.39 homes available per buyer for the month. In March 2008, that mark was 8.16. While the rate of inventory decline has been slowing in recent months, supply and demand is far more balanced than it was two years ago. This is a critical sign that the market is correcting oversupply.

“The oversupply issue has corrected in much of our market, and that has led to price stabilization,” said MAAR President-Elect, Pat Paulson. “This provides reason for cautious optimism.”

Considering Hiring a Property Management Company?

When I meet with new investors, this is often a major part of the discussion.  Who is going to manage the property?  Are you going to collect rent, but have someone else do the maintenance. Alternatively, maybe you see this as a hobby and want to do all the maintenance.  Other investors see this as [...]

When I meet with new investors, this is often a major part of the discussion.  Who is going to manage the property?  Are you going to collect rent, but have someone else do the maintenance. Alternatively, maybe you see this as a hobby and want to do all the maintenance.  Other investors see this as a passive investment and are not interested in even knowing the names of their tenants.

Chris Thorman wrote a long post of many things to think about when you are considering using a property management company.  Go over and take a read at software advice.

Twin Cities Home Prices May Not Recover Until 2025

Fiserv, a global financial data research firm released an article on April 8, 2010 detailing the home pricing trend and forecasts for 375 US housing markets.  The data comes from both Moodys.com and the federal government.  The report states that markets such as California, Arizona, Florida, and Nevada that saw the largest price run-ups (and [...]

Fiserv, a global financial data research firm released an article on April 8, 2010 detailing the home pricing trend and forecasts for 375 US housing markets.  The data comes from both Moodys.com and the federal government.  The report states that markets such as California, Arizona, Florida, and Nevada that saw the largest price run-ups (and subsequently the largest bubble crash), may not see the prices of their properties return to peak levels (prices around 2006-7) until 2025 or later.

Many other markets, including Minnesota, may need to wait 10 years or more to see their prices return.  They specifically mentioned Minneapolis in a part of their analysis:

“A protracted recovery in home prices is also expected in many urban neighborhoods where predatory lending was most rampant. There, home prices rose rapidly from very low levels during the bubble years. These markets include neighborhoods in cities such as Minneapolis, Memphis and Chicago.” 

The full members only report summarizes that the Twin Cities market could be back to their peak prices between 2015 and 2025.

Despite other experts stating that prices will decline only slightly this year in the Twin Cities, the Fiserv report says that nationally, prices will decline by about 7% through the end of 2010 and then begin a slow, flat recovery in 2011.  They emphasize that this recovery will be prolonged, meaning that many markets will see multiple years of 0% price growth.

On a positive note, some areas are more fortunate such as Pittsburg, Columbia (South Carolina), parts of Texas, Washington, and upstate New York.  These areas never had the dramatic price increases and consequently will see their prices recovery relatively quickly; possibly within the next couple years.

While the foreclosures are the details of the housing market making the headlines in the news, much of the lack of momentum in the housing prices is driven by the overall state of the economy.  With consumer confidence about their jobs and economy at such a low point, many people are unwilling or unable to purchase a new home, despite the great opportunities out there now.  This has reduced demand especially in markets that lost jobs, where employment is not expected to return to peak levels for 5-10 years.

Follow Me!

I have been dipping my toe into the social media Ocean for a while.  I just wasn’t sure where to jump in.  There are something like 40 different social media outlets from mainstream ones like Twitter to Facebook to Linked-In to odd ones like Buzz UP!, Reddit, and Orkut.
So here I am.  I am going [...]

I have been dipping my toe into the social media Ocean for a while.  I just wasn’t sure where to jump in.  There are something like 40 different social media outlets from mainstream ones like Twitter to Facebook to Linked-In to odd ones like Buzz UP!, Reddit, and Orkut.

So here I am.  I am going to make a go of it.  My initial reaction is that it feels like I am walking around with a webcam on my head, but it might be fun.  Check me out at any of the social media outlets here:

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Broke My Own Rules

I am human.  I make mistakes.  Sometimes I don’t even take my own advice.  This time I was desperate/frustrated/annoyed that I could not rent out a great 1 bedroom apartment that we just renovated with new windows, redone hardwood floors, new kitchen and bathroom.  I was renting it for $725 per month and then dropped [...]

I am human.  I make mistakes.  Sometimes I don’t even take my own advice.  This time I was desperate/frustrated/annoyed that I could not rent out a great 1 bedroom apartment that we just renovated with new windows, redone hardwood floors, new kitchen and bathroom.  I was renting it for $725 per month and then dropped it to $695 per month with a couple showings, but no applicants.

Finally a guy shows up with his pregnant girlfriend.  Very well spoken.  He is a contractor and made decent money.  She had a full time job.  Things were looking good.  Until he tells me he has 2 pit bulls.  I knew that I knew I should never take this guy.  But it was coming to the end of the month and I was going to lose another month’s worth of rent, so after he convinced me they would be OK and not a problem, I agreed.

That decision bit me in the ass, (figuratively).  The dogs were very aggressive to anyone in the yard.  They tore up the grass and even cornered a neighbor lady and wouldn’t let her move until the tenant called them off.  The final straw is when the neighbor saw the tenant hit the dog with a shovel in the head when it was barking.  Now I have animal control calling and wanting to get a warrant to break down the apartment door to take the dogs.  Multiple trips to the apartment later, the dogs are mysteriously gone when animal control shows up.

Repeat after me: never, never, never take aggressive dogs.    No matter how sweet the owner says they are, these dogs were bread for their aggressiveness, it is tough to train this out.  I have nothing against the dogs, but they are by their nature aggressive.  This is no different than trying to teach a pet alligator not to bite.  By the way, if a tenant ever says they have a American Staffordshire Terrier, that is simply another name for a pit bull.