WASHINGTON – The Federal Housing Administration (FHA) today published new guidelines under its condominium approval process intended to increase affordable housing options for first-time and low- to moderate-income homebuyers. Effective immediately, FHA’s temporary guidance will streamline the agency’s condominium recertification process and expand the eligibility of acceptable ‘owner-occupied’ units to include second homes that are not investor-owned. Read FHA’s mortgagee letter.
These provisions will expire in one year and serve to revise FHA’s condominium approval process until the agency can implement a more comprehensive condominium rule change. Today’s guidance:
Modifies the requirements for condominium project recertification;
Revises the calculation of FHA’s required owner-occupancy percentage; and
FHA-approved condominium projects require recertification after two years to ensure that the project is still in compliance with FHA’s eligibility requirements and that no conditions currently exist which would present an unacceptable risk to FHA. For existing condominium projects seeking recertification, FHA will now only require applicants to submit documents reflecting any substantive changes since the project’s prior approval.
Calculation of Owner-Occupancy
The procedure for calculating the required owner-occupancy percentage (50 percent) is modified to allow units that are not investor-owned to be considered owner-occupied for the purpose of Condominium Project approval. A condominium is considered to be owner-occupied provided they are not:
Vacant and listed for rent;
Existing (previously occupied), vacant and listed for sale; or
Under contract to a purchaser who does not intend to occupy the unit as a Principal Residence or Secondary Residence. The term Principal Residence and Secondary Residence have the same meaning.
Expansion of Eligible Condominium Project Insurance Coverage
Homeowners’ Associations (HOAs) are required to maintain adequate “master” or “blanket” property insurance in an amount equal to 100% of current replacement cost of the condominium (exclusive of land, foundation, excavation and other items normally excluded from coverage). Insurance coverage for condominium project approval that consists of pooled policies for affiliated projects, state-run plans, or contains coinsurance obligations on the part of the policy holder is now permitted to satisfy this requirement.
HUD’s mission is to create strong, sustainable, inclusive communities and quality affordable homes for all.
More information about HUD and its programs is available on the Internet
at www.hud.gov and http://espanol.hud.gov.
When a rental property that is occupied by a tenant is sold to a new owner there are many details that require diligent attention. One of these areas is the utility billing and interim billing. Interim billing is one of the first things that you would want to cancel because an Owner doesn’t want to accidently pay for bill that isn’t their responsibility. This ensures proper and accurate billing. As a general rule, the tenant is responsible for all utilities for a single family home. In this case nothing changes if ownership changes and the tenant stays in place. If the house is located in a city where the population is over 100K, the owner is responsible for the garbage service. In this case, the garbage bill is changed to the name of the new Owner.
As a local property management company, we have the garbage bills mailed to our office and we pay it out of the rental income on behalf of the owner. That way the charge will be reflected on the monthly statement. This is important because this expense is a tax write-off for the home owner. If the new Owner is going to move into the property, and the tenant is going to move out, then all utilities will be a prorated amount based upon the move out date of the tenant. If the tenant moves out on the 18th of the month, then they are responsible for 18 days’ worth of electricity, water, sewer, garbage and natural gas. As the property management company for the house, we track this and make sure all these charges are distributed correctly.
We also manage condominiums and often times the owner/investor will pay the Condo Association fees that include water, sewer and garbage. These charges are also a tax write off and can be tracked for the year. Although none of this is difficult to manage, it does need to be watched carefully so all parties involved pay only their share. This careful attention to detail is what we do here at Rappold Property Management.
In business, the slogan “Just Do It!” rings true and will serve you well. In the world of Property Management this is applicable as well. After all, we are trying to grow our business and be successful when we manage your asset wisely and efficiently. However, more often than not our slogan is “Just Do the Right Thing!”
As property managers we work with many vendors who complete work on our properties. We want quick, quality repairs, and at a good price for our clients. Sometimes this requires tough conversations. Navigating this world is our expertise and it is part of why you rely on us. Our fiduciary responsibility is always you, the client.
The other piece of the puzzle we have to navigate is relations with tenants. Our job is to provide clean, safe, well-maintained housing. However, and this might come as a shock, sometimes tenants can have expectations that are out of line. Just because a kitchen counter has a scratch on it doesn’t mean we need to replace the entire counter top with new, beautiful granite from Brazil. Often times a property manager has to say “no” in the most professional and courteous way possible.
Real Estate management is an active, engaging industry. One cannot just buy an investment property and watch it appreciate or mature, like treasury bonds. Having the right management in place is just as important as buying the right property at the right price. We have the expertise and experience to navigate the difficulties and pitfalls for you. Here at Rappold Property Management we take our job very seriously and we manage your property as if it were our own.
As of March 17 2014 there were about 7,821 single family and condo homes listed for sale in Portland Oregon. The median asking price of these homes was approximately $299,000. Since this time last year, the inventory of homes for sale has decreased by 2.2% and the median price has increased by 10.8%.
March 17, 2014
Median Asking Price
Recent Asking Price and Inventory History for Portland
Single Family & Condo
Portland Asking Price History
The median asking price for homes in Portland peaked in April 2007 at $354,740 and is now $57,585 (16.2%) lower. From a low of $239,125 in February 2011, the median asking price in Portland has increased by $58,030 (24.3%).
25th, Median (50th) and 75th Percentile Asking Prices for Portland Oregon
Portland Housing Inventory History
Housing inventory in Portland, which is typically highest in the spring/summer and lowest in the fall/winter, peaked at 23,354 in July 2008. The lowest housing inventory level seen was 7,810 in February 2014.
Housing Inventory for Portland Oregon
Portland Asking Price and Inventory History
Single Family & Condo
The ability to smoke in public and at apartment communities has been under attack for years. But what about rental homes? Often times an owner plans to rent their home for only a year or two. Certainly the owner does not want to receive the house back with the smell of cigarette smoke still lingering in the house. Even if the renter was a model tenant in all other respects, cigarette smoke can be very destructive. Smoking turns walls yellow (new paint job $1,200), it destroys carpets ($1,500), and it requires a deeper cleaning, perhaps with a deionizer ($500). The cost of all this stress…priceless.
The best approach? In all of our homes we have a no smoking policy. However, we do allow the renter to smoke outside, perhaps on the porch or deck. However, this issue can be a hard one to enforce. What if it’s cold outside? Who wants to stand outside when it’s only 35 degrees? The renter is easily tempted to stand inside the house or close to an open window and light up. Inevitably, smoke gets in the house and the home owner smells the evidence. A good suggestion is to do an inspection within the first month or two of a new lease if you know the renter smokes. Catch the problem early. Then do another inspection a few months later to make sure. If you detect smoke after the tenant moves out, a landlord can charge the tenant for the remediation of the smell. But this can be a tricky proposition. It is always best to be pro-active and keep this issue from becoming a possible expense. It is less ideal to react and pursue a vacating tenant for money.
You can always call Rappold Property Management with questions about your single family home investment.
Rappold Property Management, LLC
1125 SE Madison Street, suite #201
Portland, OR 97214
Making the decision to build a home might be one of the biggest you make in your life. You’ve found the perfect plot of land and have a vision of what type of home you want, but you need someone to bring your dream to life.
That means it’s time to start interviewing architects.
Hiring an architect isn’t as simple as just calling up a few and seeing who might have the time.
You’ll want to ensure you choose a professional that understands your design aesthetic, communicates well, can design on budget and has an upstanding reputation.
Below are a few key questions to ask when deciding whom to hire.
Do You Have A Specific Design Style?
When interviewing architects, be sure to ask each one if they have a specific aesthetic and if you can see a portfolio of his or her work. While most are adaptable, they usually all have design themes that recur in their projects.
Whether you want a minimalist structure or LEED certified construction, you’ll want to know they have the experience.
What Is Your Fee?
You’ll need to inquire whether they charge a flat fee for their designs or a percentage of the total building cost. Most architects charge a percentage of the overall cost of your home, usually ranging from 5-20 percent.
This is important to know because it means that for every floorboard installed, you’ll need to add on the architect’s additional percentage.
Do You Provide Project Management Services?
There are many services that architects should include within their contract, such as checking the contractor’s work, making adjustments as the construction moves forward and obtaining lien waivers.
Get a list of what each architect you interview includes in his or her fee. Additional charges can add up and might play a part in who you choose.
Interviewing architects and finding the right professional can make all the difference when it comes to building exactly what you want. One you work well with can make the construction experience extremely pleasant, while a negative relationship can leave you hating your new home.
This past week, several reports were released, all of which showed that declining home inventory is affecting sales. This decline is creating a seller’s market in which multiple bids are being made to purchase homes. According to the National Association of Realtors, existing home sales fell 1% in December, but were still at the second highest level since November, 2009. Inventory of homes for sale fell 8.5 from November, the lowest level since January of 2001, and are down 21.6% from December of 2011.
Following that lead, pending home sales dropped 4.34% in December to 101.7 from 106.3 in November, yet was 6.9% higher than December, 2011, according to the National Association of Realtors. The Chief Economist at NAR stated that “supplies of homes costing less than $100,000 are tight in much of the country, especially in the West, so first time buyers have fewer options”. Mortgage ratesare still low, affordability is still there, but the available homes are dwindling. In the meantime, home prices are increasing at a faster pace. According to the latest S&P/Case-Shiller index for November, property values rose 5.5% from November of 2011 which was the highest year over year increase since August of 2006.
The cause of the low inventory can be attributed to several factors. For the week ending January 18th, loan applications increased 7.0% on a seasonally adjusted basis, according to the Mortgage Banker’s Association. The Refinance Index rose 8% with refinances representing 82% of all applications. The seasonally adjusted Purchase Index rose 3%, the highest level since May, 2010. Many homeowners have chosen a mortgage refinance instead of moving to another home which is one reason that inventory is down. In addition, many underwater homeowners have refinanced through the HARP program which is available for loans that were sold to Fannie Mae or Freddie Mac prior to June 1, 2009. These homeowners may not yet be in a position to sell their homes until they have gained back enough equity. As home prices increase, this will eventually happen. The same can be said for those who refinanced through the FHA streamline program which is offering reduced fees for loans that were endorsed prior to June 1, 2009. Refinancing through these two government programs, both available until the end of 2013, hit all time highs in 2012.
Home builders are busy, but not currently building new homes at the rate that was seen during the housing boom. According to the Census Bureau and the Department of Housing and Urban Development, total new homes sales in 2012 hit the highest level seen since 2009 and were up 19.9% from 2011. There was much progress made in 2012, but sales for new homes fell 7.3% in December.
On the down side, the Census Bureau reported that homeownership fell 0.6% to 65.4% during December, down from 65.5% at the end of October and 66% at the end of 2011. Homeownership reached a peak of 69.2% in 2004 and has been falling since that time. The latest Consumer Confidence index dropped to 58.6 which is the weakest since November of 2011. It was previously at a revised 66.7 in December. This fell more than expected and is due to the higher payroll tax that is taking more out of the pockets of consumers.
The housing market, which is still in recovery, remains fragile. The lack of inventory and the rise of home prices may affect its progress this year. As home prices increase, fewer consumers will be able to qualify for a home loan. Existing homeowners may choose to refinance remain where they are instead of purchasing another home. While jobless claims have fallen, there are still many consumers who are out of work or are working lower paid jobs. The housing market is dependent on jobs, not just for salaries, but for consumer movement from one area to another.
FreeRateUpdate.com surveys more than two dozen wholesale and direct lenders’ rate sheets to determine the most accurate mortgage rates available to well qualified consumers at about a 1 point origination fee.