Renting on the Rise in Richmond (and everywhere else)

Have you noticed a recent spike in your monthly rent? A lot of people have, and it’s a trend not only locally but in markets across the country.

According to http://news.investors.com, over the past several years homeowning has become more difficult and former homeowners are now becoming tenants in mulitifamily dwellings. Due in large part to the economic downturn, many homeowners today can no longer afford to pay a monthly mortgage and instead are resorting to the next alternative: renting apartments.

As with most news, this is a mixed bag — it’s not good for renters, but it does make for a strong market for multifamily properties, supporting higher sales prices and spurring new development and redevelopment of multifamily properties. (see last week’s post about local development for current examples of this happening right here in Richmond)

Across the nation, multifamily properties are leading in occupancy and rent growth when compared to commercial developments, like office space and retail properties.

In a recent housing study by commercial property brokerage firm Cassidy Turley, chief economist Kevin Thorpe said:

“I’m optimistic about the multifamily sector, certainly for the next two years…We’ve entered a period of sustained rent growth.”

This recent boom in multiple tenants occupying apartment units is due to the fact that the average renter a year ago could afford the rent for a single family home when now the cost is too high.

Richmond seems to be following that rising rent trend, too. In 2007, the cost of a single bedroom apartment averaged $754/mo. and now the average cost is approximately $814/mo.

Have you seen this happening when your lease has come up for renewal? What do you think the renting forecast will look like in RVA for the rest of 2012?


Don’t try to fool the insurance company

Understanding Landlord Insurance

By: Dona DeZube

Published: September 1, 2010

Turning your home into a rental or buying an investment property? Expect to pay up to 20% more for the right insurance policy to protect your property.

 

Rental properties require their own type of coverage–landlord insurance, which is different than the homeowners policy you buy when you live in a house yourself. Landlord insurance protects you against losses from fire, lighting, falling trees, wind and hail, water damage, and injury to your tenants and their guests.

But it doesn’t cover the renters’ household goods. So encourage tenants to buy a renters policy to cover their stuff. You can even include a clause in your lease saying they have to buy renters insurance, so everyone is clear about what’s insured and what’s not.

Landlord insurance is expensive

You’ll pay 15% to 20% more for a landlord insurance policy than you will for a homeowners policy on the same house–and even more if you offer short-term rentals. Start your policy shopping by calling the company that sold you your homeowners insurance, then check with an independent insurance agent selling commercial and business policies.

Ask how you can get discounts if you have fire prevention devices, burglar alarms, or multiple properties.

What a landlord insurance policy probably will cover:

  • Lightning, windstorm, hail, explosion, riot and civil commotion, smoke, falling objects, snow, ice, sleet, vandalism, sonic boom, sprinkler leakage, frozen pipes, water damage, burglary, volcanoes, and sinkholes.
  • Things that belong to you that stay at the property, like appliances, furniture, or lawn care equipment. Keep an inventory of what’s on site.
  • Outbuildings, like sheds or garages, although this coverage will have its own limit (probably 10% of the overall insurance policy amount).
  • Costs to defend yourself against lawsuits filed by tenants or guests, as well as the costs awarded if you lose the case. Some policies cover medical bills for injuries; some don’t.
  • Lost rental income if the property is damaged and you can’t rent it.

What a landlord insurance policy probably won’t cover:

  • The tenants’ belongings.
  • Your rental property if it’s vacant for more than 30 days. Seek an exemption in advance from your landlord insurance company as soon as you know the property is going to be vacant.
  • War and nuclear, biological, chemical, or radiological attacks.

Optional coverage you might want to buy:

  • Flood
  • Earthquake
  • Vandalism (if the policy you buy excludes it)
  • Pool and tennis court insurance
  • Liability for personal injury, wrongful eviction, wrongful entry, libel, and slander

Don’t forget liability coverage

To cover yourself in case you lose a big court case filed by an injured tenant, buy anumbrella insurance policy that gives you liability protection for $1 million to $5 million or more if you have a lot of assets to protect.

Don’t file a claim unless you absolutely have to

There’s a limit to how many claims you can file before insurance companies start charging you more or canceling your policies. Claims can quickly add up as you buy more rental properties.

One time you always want to file a claim is when someone says they’ve been injured on your property. One claim you’ll want to avoid filing: water damage for less than $10,000 because worries about mold growing in water-damaged properties will lead some insurers to immediately cancel your insurance policy.

More from HouseLogic

How to Correct Your Clue Insurance Report

Improve Your Insurance Score

Other web resources

Renters Insurance Brochure to Share with Your Tenants

Dona DeZube, HouseLogic’s News Editor, has been writing about real estate for over two decades. She lives in a suburban Baltimore 1970s rancher on a 3-acre lot shared with possums, raccoons, foxes, a herd of deer, and her blue-tick hound.

 

Visit houselogic.com for more articles like this.

Copyright 2011 NATIONAL ASSOCIATION OF REALTORS®


Sexual orientation discrimination in housing? We won’t stand for it.

Residential Realtor logoWe have come a long way in the fight for civil rights in this country, and we have a lot to be proud of.  Unfortunately, in many states it is still absolutely legal to discriminate against someone for their sexual orientation when it comes to housing.  This needs to be addressed legally, but the Realtors aren’t going to allow any of our members to get away with such practices anymore.

Read through this article at Agent Genius to see what’s changed:  “Is sexual orientation discrimination in housing legal? Maybe.”  It’s great news!

According to the NAR, the Code of Ethics Article 10 has been amended:
Article 10: Equal Rights Amendment Passes:
The NAR Delegate Body approved an amendment to Article 10 of the Code of Ethics to prohibit discrimination on the basis of sexual orientation. In a roll-call vote, more than 93 percent of the Delegate Body voted in favor of the amendment. The Delegate Body decision confirms a vote by the Board of Directors in May.

As a personal note, AG strongly supports and applauds the measure taken that Realtors’ ethics supersede federal law so that no matter if it is legal or not locally, discrimination based on sexual orientation will not be tolerated from Realtors, a measure taken by Realtors.

Huzzah for the Realtor community for standing up for what’s right and making an amendment to the Code of Ethics to declare sexual orientation discrimination officially unacceptable!

Today is a day when I’m even more proud than usual to call myself a Realtor.


New chapter for a Church Hill institution

St Johns Realty AND Bandazian & HoldenSt. John’s Realty has been in the property management business almost as long as we have here at Bandazian & Holden.  While I haven’t seen a record of what year they started, I’ve been told that they have been doing residential property management for somewhere between 20-30 years. (FYI – B&H was founded in 1974.)

With the passing last year of the founder and principal broker owner, Danny Athans [edited 3/23/10, per information from Church Hill People's News -- link to announcement here], the future of St. John’s Realty was unsure.  I am proud to announce that we at Bandazian & Holden have stepped up to take over the accounts, and all of the years of hard work by St. John’s Realty will not go to waste.

There are a lot of other details that will be forthcoming, but there is a lot of work that we are doing right now to get in touch with the property owners and tenants to alert them to the change, and to get all of the files in order.

We are very excited for the opportunity to serve this new group of property owners and tenants, and to expand our presence in Church Hill!