Credit card delinquencies

via Titan Invest (visit here)

U.S. credit card delinquency rates were the highest on record in the fourth quarter of 2023, according to the Federal Reserve Bank of Philadelphia. 3.5% of card balances were at least 30 days late as of the end of December. The number of people making minimum payments also rose, pointing to distress among cardholders. While 25% of active accounts have a balance of over $2,000 for the first time, one third of users pay their balance in full every month, exhibiting contrasting behaviors from likely different brackets of earners.

Issuers have responded to the rise in delinquencies by lowering the credit limit on new accounts. The problem is a direct result of the higher cost of living for Americans, as the last few inflation prints illustrated stickier than expected inflation. The Fed is unwavering in its goal to lower inflation, and their hope is that higher rates will eventually slow spending and reduce inflationary pressures. A higher for longer environment will help regulate the economy and the credit card delinquencies are an unfortunate symptom of the Fed’s remedy for inflation.

I could see this information permeating into tenants lives and thus into ownerships lives as tenants may begin to struggle with payments, rent increases, higher utility costs or additional fees.

If you would like to discuss the markets, or need some guidance for just about anything related to income producing properties including Property Management Rockstar Companies, Electricians, Insurance Providers, Landscaping, or just a plain old valuation and analysis for selling your asset(s), then you’ve found the right guy, so let’s connect!

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New Affordable Housing Incentives Will Allow Triple Density Along Some Sarasota Thoroughfares.

By Kim Doleatto  April 3, 2024 via Sarasota Magazine – CLICK HERE for complete article

While the surface of this density increase seems positive, at the deeper levels this appears to miss the mark in my opinion. While the article alludes to an example of (“no more than $58,500 a year for a household of two, or $73,100 for a household of four”) those costs as solely the cost of living. I understand the demographics of Sarasota support these levels, but if you are in the need of affordable or attainable housing, these numbers feel way over the mark. I’m not advocating for ample handouts, but the affordability aspect seems like a pebble into a lake versus a rock into a puddle. If I have a 200 unit complex with my new density, 30 units would be required to be attainable. That’s it. The other 85% can be as unattainable as the developer wishes. ~ Sean Dreznin

“The bonus units must include a mix of residences that range in cost from those priced at 80 percent or less of the area median income (no more than $58,500 a year for a household of two, or $73,100 for a household of four) to units priced at 120 percent of the area median income. “

City commissioners voted 3-2 Monday to expand developer incentives in exchange for affordable units to address the city’s affordability crisis.

A rendering of Artist Court, where developers are building a multi-family project that includes affordable units in exchange for increased density. IMAGE: COURTESY PHOTO

Developer giveaway or important step toward solving Sarasota’s ongoing housing affordability crisis? That’s the debate over a series of affordable housing incentives that were expanded Monday by the Sarasota City Commission.

The incentives already existed in downtown areas and along commercial corridors throughout the city, but with the City Commission’s 3-2 vote, they will now be extended to more than 700 parcels. The new zoning text amendment encourages mixed-use developments and provides density and height bonuses to developers who include affordable housing in mixed-use projects along Tamiami Trail, University Parkway, Washington Boulevard, 10th Street between Central and Orange avenues, Fruitville Road east of downtown, and Beneva Road, as well as Southgate Mall and its surrounding area.

The parcels in green in this map of the City of Sarasota are the areas being targeted for the new affordable housing incentives.IMAGE: COURTESY CITY OF SARASOTA

Developers who build in these districts will receive up to a triple-density bonus if 15 percent of the bonus units are priced as attainable. (Bonus units are the extra units above the base number allowed without the incentive.) That will allow up to 75 units per acre in two of the three new zones, and 105 units per acre in third zone that covers the North Tamiami Trail area. Base heights of three stories will be allowed, with an increase of up to five stories on parcels of three acres or more that are located at least 100 feet away from residential single-family homes.

The bonus units must include a mix of residences that range in cost from those priced at 80 percent or less of the area median income (no more than $58,500 a year for a household of two, or $73,100 for a household of four) to units priced at 120 percent of the area median income.

Critics at Monday’s meeting expressed worries that the measure amounted to a developer giveaway and that the affordability requirements do not do enough to address the city’s affordable housing crisis. Detractors also shared concerns about increased noise, traffic and stress on infrastructure, and argued that the new developments might negatively affect nearby residential neighborhoods.

All developments within an urban mixed-use zone district must meet daylight plane requirements with a gradual increase in height. The daylight plane requirement allows a maximum height of two stories starting at the side or rear setback line and then extending upward at a 45-degree angle until reaching the maximum height limit.IMAGE: COURTESY PHOTO

Supporters, meanwhile, welcomed the incentive as a step toward the construction of more affordable housing in a city where many workers are being priced out of the neighborhoods where they work, leading to long and costly commutes for teachers, nurses, firefighters and law enforcement officers, among others. The crisis is also affecting employee retention and discouraging workers from moving to the area for career opportunities.

Among Monday’s speakers was Heather Kasten, the president and chief executive officer of the Greater Sarasota Chamber of Commerce, which represents roughly 1,400 local businesses that employ close to 60,000 people.

“Affordable housing is the No. 1 issue our businesses are facing,” she said. “One statistic worth sharing is that 91 percent of the businesses we surveyed said they would support zoning changes that would create more affordable housing options. We cannot keep talking about this issue and kicking the can down the road and sacrificing good for perfect.”

Ron Kashden, who opposed the measure, said, “The impact of this amendment can’t be overstated. If you think the impact is in the distant future, then you don’t have the pulse on the current construction in downtown Sarasota. Just in January, Artist Court [a multifamily development headed to Washington Boulevard in downtown Sarasota] modified its plan to take advantage of the newly passed zoning incentives. So now it will be 10 stories, with 242 units, and just 26 affordable units.”

For builders to take advantage of the new incentives, they will not need approval from the city commission or planning board. Projects can be OKed by city staff unless extra density or height is requested, in which case a community workshop will be required.

Filed under

Downtown Sarasota, Development, Affordable Housing, Sarasota City Commission #Attainable #Sarasota #multifamily #apartments

Rent Concessions: Are They Worth It To Multifamily Owners?

By Kristi Mergenhagen Author. via rentprep.com

To some landlords, it might be hard to understand why you would want to give tenants discounts, free rent coverage, and other rent concessions. What is a monthly rent concession, after all? One would think it might be tearing your profit to pieces [and not in a good way].

In reality, a rent concession is a discount that builds your long-term profit. Even if rent concessions leave you with less incoming funds for a short period, you can acquire long-term tenants, a good reputation as a landlord, and lease renewals through these agreements.

Are you missing out by not offering rent concessions to your tenants and applicants? Find out more about rent concessions today to determine if this practice should be rotated into your typical business plans.

A Table Of Contents On Rent Concession

Rent concession is, in theory, as simple as giving a discount to a tenant. However, these tenant credits come in many forms. Which ones might bring a significant boost to your business? Follow along with us today:

• What Is A Rent Concession?
• How Do Landlords Benefit From Rent Concessions?
  • Stand Out From The Competition
  • Increase Your Renewals
• What Rent Concession Types Are There?
• How To Offer Rent Concessions To Tenants
  • It All Starts With The Right Tenants
• FAQs: What Is A Rent Concession?
  • What Does concession mean in rent lingo?
  • When should a landlord not use rental concessions?
  • Why do landlords give free rent periods?
  • What is an example of a rent concession?
  • What does Look and Lease (L&L) mean in the rental industry?
  • Does rent go up after a rent concession?
• Concession For Rent: An Alternative Option

What Is A Rent Concession?

Any discount or adjustment made to rent, a security deposit fee, or other fees paid by the tenant to their landlord is known as a rent concession. You can give these discounts to tenants monthly, at the start of the lease, or at any other point you feel is appropriate. Rent concessions are sometimes called tenant credits or rent discounts.

Experienced landlords have found that using rent concessions is a great way to show potential and returning tenants that you are committed to making your tenant-landlord relationship a solid, mutually beneficial one. After all, who doesn’t enjoy a deal?

As such, rent concessions can be recurring reductions, long-term reductions, or just one-time discounts. The goal of rent concessions remains the same: Landlords using rent concessions want to convince tenants or rental applicants to take action. Oh, and that the landlords would love for them to stay, which I feel like is a pretty big compliment.

Usually, you’ll want to use this type of discount when trying to sign or renew a lease, but there are other situations where these adjustments can come in handy.

The terms of the standard lease agreement still apply whenever concessions are used. The security deposit, monthly rent, and any other fees will apply. Any monetary concession is a temporary reduction to one of these amounts, which should be clarified when offered to the tenant.

How Do Landlords Benefit From Rent Concessions?

Landlords without experience in offering these reductions might not understand the appeal. After all, it isn’t often in the rental business that you want to offer to make less money. However, there are some major benefits to using rent concessions in the right situation.

Stand Out From The Competition

Is your area full of properties without enough renters to go around? Landlords having trouble filling vacancies at their price point may want to find a way to stand out from other vacant rentals. Offering and advertising rent concessions, such as a free first month’s rent, is a great way to do just that.

Consider what renters in your area want, and find a way to advertise that concession when marketing your property. Whether you offer upgraded amenities, discounted utilities, or a free month’s rent, you’ll likely receive considerably more applications using this technique.

Increase Your Renewals

Are your rental turnover numbers too high?

Landlords constantly working to fill vacancies and find new tenants need to improve their turnover rate. By convincing more tenants to renew their leases, you will spend less time filling vacancies and more time making money. How do rent concessions come into play?

Offering tenants rent concessions alongside their lease renewals is a great way to provide extra incentive to stick around. Giving rent discounts, upgrading appliances, refreshing paint jobs, and other simple concession offers can be a great negotiating tool for on-the-fence renewals.

Investing in reliable tenants is a great way to secure your long-term profitability, so don’t feel like this discount is a loss.

What Rent Concession Types Are There?

You’ve already learned about a few types of rent concessions—what else is there to consider when using these discounts for the first time?

As a landlord, be creative about what you offer tenants. While free rent is always exciting for the tenant, it may not be a practical choice for your situation. There are many other types of concessions to provide to applicants and tenants. Here are a few of the most popular.

• Free month of rent
• Reimbursed moving costs
• Temporary rent reduction
• Reduced security deposit or pet deposit
• Free or discounted access to amenities (parking, laundry, etc.)
• Upgraded appliances
• Improved flooring, windows, etc.
• Waived pet fees
• Free utilities, cable, or internet

These are just some types of rent concessions that experienced landlords have found success with. Ultimately, it’s between you and your tenant to determine what type of rent concession will get them to sign on. Get creative and find the best solution for your business.

For the remainder of the bullet points and other articles from rentprep.com

CLICK HERE <—–

Very insightful and interesting podcast regarding 2023 Multifamily recap and a view into what you might expect in 2024.

Via Bigger Pockets Real Estate Podcast

With guests Brian Burke and Matt Faircloth

https://podcasts.apple.com/us/podcast/biggerpockets-real-estate-podcast/id594419649?i=1000642457225

Multifamily real estate has crashed, but we’re not at the bottom yet. With more debt coming due, expenses rising, incomes falling, and owners feeling desperate, there’s only so much longer that these high multifamily prices can last. Over the past year, expert multifamily investors like Brian Burke and Matt Faircloth have been sitting and waiting for a worthwhile deal to pop up, but after analyzing hundreds of properties, NOTHING would work. How bad IS the multifamily market right now?

Brian and Matt are back on the podcast to give their take on the multifamily real estate market. Brian sees a “day of reckoning” coming for multifamily owners as low-interest debt comes due, banks get desperate to be paid, and investors run out of patience. On the other hand, Matt is a bit more optimistic but still thinks price cuts are coming as inexperienced and overconfident investors get pushed out of the market. So, how does this information help you build wealth?

In this episode, Brian and Matt share the state of the 2024 multifamily market, explain exactly what they’ve been doing to find deals, and give their strategy for THIS year that you can copy to scoop up real estate deals at a steep discount. Wealth is built in the bad markets, so don’t skip out on this one!

In This Episode We Cover:

The state of multifamily real estate in 2024 and how low prices could go

A “day of reckoning” coming for inexperienced/overleveraged multifamily owners

Whether or not we’ve reached the bottom for multifamily price drops

What rookie real estate investors should do NOW to take advantage of this down market

Rising mortgage rates and how increased costs have KILLED many multifamily deals

Exactly what Brian and Matt are investing in during 2024 to make money no matter how the market moves

And So Much More!

BTR Deliveries Surge While Starts Dwindle

We have somewhere between 6 and 10 of these massive projects already completed and renting or in ground up or lease up right now (Lakewood Ranch, FL)

Northmarq cites difficulty in obtaining capital for new projects as one reason.

By Richard Berger | January 11, 2024 at 07:58 AM <<— CLICK HERE for full story and others like it from GlobeSt.com

Single-family build-to-rent community completions through the first nine months of 2023 were 35 percent ahead of the previous year’s record-setting pace.

It’s a trend that Northmarq forecasts will continue into 2024, as developers work through a crowded construction pipeline.

Starts, though, tell a different story.

Capital has been more difficult to obtain for new developments, and the approximately 49,000 units that broke ground through nine months reflect an 11 percent year-over-year decline.

Given rising mortgage rates, some homebuilders are transitioning a share of their lots that were originally intended to be for-sale homes into for-rent communities, according to Northmarq.

“The lag between starts and deliveries is resulting in mixed construction trends for single-family rental homes in 2023,” the report said.

“While final year-end totals will not be available until early 2024, construction trends are on pace to diverge further.”

Hence, deliveries of single-family rentals were forecast to reach approximately 78,000 units in 2023, up 20 percent from the 2022 total, and starts will show a steep slowing in the second half, according to Northmarq, with the volume of construction starts for new single-family rental homes is expected to drop 27 percent from 2022.

Which smaller markets grew at the fastest rental rates in 2023?

It’s always nice to see my current and hometown of Sarasota, FL on the list!

– Jay Parson’s (Realpage) follow up to ‘Which (larger) markets grew at fastest rates’ <–Click on Jay’s name to visit this full article and heaps of juicy research!

Yesterday I shared the top U.S. markets for apartment demand in 2023. But since those types of leaderboards favor large markets, I wanted to follow up by sharing the size-adjusted version of the demand leaderboard: Which markets grew at the fastest rate in 2023? This version highlights the growth rate in the number of households renting apartments. Here are the top 15.

— Huntsville, AL, is in a category of its own with 15.1% more apartment renting households in 2023 versus 2022. Huntsville is no secret among apartment developers (as Huntsville also led the nation in supply growth rate for 2023), but it still flies below the national radar despite a well-balanced economy headlined by a boom in high-paying aerospace jobs.

— A trio of booming tertiary markets rank next: Sioux Falls, SD; Lakeland/Winter Haven, FL; and Port St. Lucie/Vero Beach, FL. All three benefited from pandemic-era migration booms, and while growth is moderating (as expected), these three appear to have staying power with different appeal in all three.

— But it’s not all about small markets. Bigger metros cracking the top 15 include Nashville, Salt Lake City, Charlotte, Raleigh/Durham, Austin and Jacksonville. Remember the bigger you are, the harder it is to grow at a fast rate, so growth rates of 4-6% are absolutely remarkable for this group. Analysts often bemoan the huge supply hitting all these markets, but let’s not forget what is driving all that supply: A LOT of demand. And while demand likely can’t keep pace in the short term, there’s little doubt demand will remain robust in these spots even once supply drops off in 2025-26. Cynics will say “but growth is slowing,” but that slowing is off the all-time highs of 2021. “Slowing” to pre-COVID levels in these markets still equates to huge growth.

— Others to highlight: Colorado Springs, CO; Pensacola, FL; Myrtle Beach, SC, Wilmington, NC; and Savannah, GA. And ranking right behind them are Sarasota, FL and Boise, ID. Takeaway: People like the beaches and the mountains. Some folks dismiss markets like these as “Zoom towns” that temporarily boomed only to bust. But they forget these were growing markets even prior to COVID. These aren’t merely seasonal spring break cities like some others. Moderating growth was inevitable, but these spots will remain migration magnets. Of course, smaller markets tend to be more prone to boom/bust cycles and most of these do have a lot of supply in the short term to work through, but they should do well over the longer term.

Supply shocks can cause short-term challenges. But over the long term? Follow the people.

#apartments #multifamily #rentersActivate to view larger image,

“72% of investors said they’ll do more multifamily deals in 2024” ~ Via Beau Beery

Beau recently sent one of his emails along with other points of contact and in this email was some great content, specifically he highlighted a Broker friend of his, Dayma Itamunoala, and a detailed list of 19 companies that show their respective market outlooks for 2024. I also thought this was extremely impressive and helpful, so next to these words you will find the link! LINK<—–

To highlight Beau and his great data and work, below is a recent poll he ran and those results which are very interesting to digest.

Beau Beery <—-Click here to visit Beau and learn more about all the good work he’s doing in the Central areas of Florida.

This will be the 3rd year in a row running this poll, will show all three years of results when complete.

Multifamily investors, what is your minimum target cash on cash return upon stabilization to make the deal viable for acquisition?

Multifamily investors, what is your minimum target cash on cash return upon stabilization to make the deal viable for acquisition?

5.0-6.0%

9%

7.0-8.0%

49%

9.0-10.0%

27%

11.0+%

15%

355 votes • 

How to analyze a rental property in 2024 – Via Bigger Pockets Web Series

I felt this was a useful breakdown for early investors who are getting started, need a refresher or just like to hear different perspectives and learn.

Enjoy.

Buy versus Rent – The age old question asked today

via Chartr and RealtyMogul

Read this on the web instead via Chartr

Renter’s market For Americans looking to get a foot on the property ladder, buying has perhaps never made less financial sense: CBRE analysis, cited by the WSJ, suggests that average new monthly mortgage payments are now 52% more expensive than typical rent on an apartment in the US. This disparity is now the most pronounced it’s been across the 27-year span of CBRE’s research. Unreal estate Various factors have coalesced in recent years to make the concept of buying a house, for many people at least, something of a pipe dream. The new analysis adds to the evidence that housing is at or near “peak unaffordability”, as steep prices, low inventory, and still-rising mortgage rates keep bidders at bay. Theory would suggest that rents and house prices should move roughly in line, but the real world is rarely so neat and tidy. Indeed, CBRE’s analysis suggests that buying was the “value option” for much of the 2010s — a period that must feel far away for the 51% of non-home-owning Americans who fear they’ll never afford that first purchase. Where we go from here depends on your perspective: either rents are about to soar to catch up, or house prices could be set to drop.

NYC squeezes Airbnb business

A new law in New York City has imposed stringent constraints on the operation of Airbnb and comparable platforms, leading to a “de facto ban” on many short-term rentals. The law mandates that hosts register with the city and limits hosting to primary residents present during rentals, permitting a maximum of two guests.

This regulatory clampdown mirrors a global trend where cities are reassessing the equilibrium between housing availability, communal harmony, and the exploding sharing economy. As Airbnb continues its expansion, such challenges could pose increasingly significant headaches. (Wired)