Property management company Korman Residential has recently been working to roll out their KindSpace initiative, which has the company converting apartment buildings into sustainable and eco-friendly projects. These apartments use locally sourced materials, energy efficient appliances and much of the décor and construction materials come from recycled products.

While they aren’t the first company to make inroads in the green construction and rental business, it gives us here at Rocket Lease an opportunity to weigh in on the matter.  Korman has converted hundreds of units across the country, in Pennsylvania, New Jersey, Delaware and Florida into KindSpace apartments.

If you’re a landlord, we’re sure you love the earth and everything, but what about the bottom line here: does having an “eco-friendly” apartment available allow you to charge a premium?  While we’re not privy to the exact rental rates at the Korman properties, judging by the inflated prices on everything from organic tomatoes to vegan hand soap and gluten free cupcakes, we can bet that the answer is a resounding yet.  This has to be particularly true considering the fact that we’re already entrenched in a landlord’s market.  It’s just a fact that people are willing to pay more for something that makes them feel like they are doing something good for the environment and for themselves.  Furthermore, since that demographic who is more willing to pay for organic or eco-friendly or whatever the buzzword of the day is tends to be more affluent, they will most likely be the most desireable tenants.  This is an interesting and innovative way for Korman and other property management companies to attract the best tenants.

The market is another interesting thing to consider, however.  Since everyone knows that it’s impossible for it to stay a landlord’s market forever, now is actually a great time to be making improvement to properties, such as adding Energy Star rated appliances or painting with non-toxic paint.  That way when the market does take a turn for the renter, that property will be ready with an advantage to present to picky renters while other landlords scramble to make improvements.

We also know that one easy (and free!) way to “green” up your rental process is to switch to an online rental application which saves you time and saves the earth a few trees.

As a landlord, what do you think of converting units to something a little more earth-friendly?  Are you willing to spend a little more on your overhead to potentially recover a lot more in rent?  Furthermore, do we think this fad will last?

Image courtesy of Curbed.com

When you spend as much time keeping tabs on the real estate industry and rental market as we do, you can’t help but notice some trends.  And one thing that seems to pop up each and every week is a story about a celebrity (or a former pairing of celebrities, in some instances) selling his or her home.  Not that it’s in this blogger’s budget, but it got us at Rocket Lease thinking: what would it be like to buy a house that used to have a high profile owner?  Would you do it?  Let’s take a second to think about the pros and cons of buying a celebrity home.

Pro

Readily Available Aerial Photos

Gene Hackman's (Former) Estate

If you’re lucky enough to buy a home that was featured in celebrity arrest, the likelihood of finding pictures of it online that were shot from a helicopter are extremely high.  These types of photos can come in handy when trying to arrange furniture or figure out the best escape routes should those cops ever come for you.

Con

Mistakenly Receiving Their Mail & Unsolicited Scripts

It’s always annoying to get someone else’s mail after you move in to a new home, but it’s even more annoying when that mail consists of autograph requests and scripts for the next great indie comedy that you will definitely love if you just read it!  You could consider the endless supply of scrap paper to be a pro, but you probably don’t.

Toss Up

Celebrity Neighbors

Unless they’re the weird kind of celebrity that prefers to hole up in Wyoming when they’re not on set, most celebrities live in close proximity to their celebrity brethren.  This might be great if you like hobnobbing and namedropping, but it might be awful if you have to cope with TMZ photogs and Lindsey Lohan walks of shame.  Plus your neighborly disputes might end up somewhere a little more visible than the neighborhood ledger.

But What About the Money?

Most people do agree that the celebrity factor can help a house fetch a higher price.  While this isn’t necessarily a selling point when you’re looking to buy, it’s always something you could mention if you decide to rent the house out, like Meg Ryan did with her home, for something like $40,000 A MONTH.  We can only  imagine that those renters went through a credit check or two.

What do you think?  Would you buy or rent a house where a celebrity used to lay her head?

It’s no secret to readers of this blog or basically anyone that’s picked up a newspaper in the last 10 years, that the housing market we’re currently facing in the U.S. is virtually unprecedented.  After the housing collapse, many Americans found themselves forced to move out of foreclosed upon homes and, even as the market improves, with credit that is simply not good enough to buy a new home.  This has lead, of course, to a boom in the rental market, which has in turn lead to some surprising investment moves by companies who want to take advantage of this climate.

For instance, a recent article in the New York Times describes Waypoint Real Estate Group, who has a number of offices and inspectors with the sole focus of buying homes that are in foreclosure, fixing them up and marketing them as rental properties.  But Waypoint isn’t doing this in the way that an individual would go about becoming a landlord.  Instead, they’re purchasing homes on a massive scale, with their current operation snapping up five to seven homes every day, mainly through bank auctions.  The homes are bought only after putting some numbers into their proprietary algorithm to determine if the place is actually worth the investment at which point they are bid on and renovated to bring them up to a rentable state.  Waypoint even offers current occupants, the victims of foreclosure, the opportunity to stay in the house and rent it from them once the renovations are complete.

Real Estate experts and economist have mixed feelings about the future of this kind of project, but the fact remains that Waypoint is committed to seeing returns on these properties.  Regardless of what this may mean for local communities (where it could see property values go up initially as fewer homes stand vacant), it does mean that there are going to be a number of new property managers and landlords coming into the game with the aim of earning around an 8% return on their investment in just the first year.

While we can’t say for certain yet whether this influx of new rental property will be a good or bad thing, we can say that Waypoint and other companies like them are going to need to go beyond a real estate estimating system once they become landlords.  Having a great rental property, with new appliances and attractive landscaping, is just one piece of the puzzle.  What they’ll need next is an effective and efficient way to manage the rental applications and leases at all of those properties.  The company plans to buy between 10,000 and 15,000 new properties by the end of next year and must have a plan in place for managing them once all the renovations are complete.  An online rental application coupled with an online leasing system, like that offered oh-so-awesomely by the team here at Rocket Lease, would be a great start for Waypoint and their brethren.  We know that Rocket Lease is a great tool for an individual landlord, but there’s no reason that it can’t help out the real estate fat cats, too!  By allowing themselves to easily track their rental applications and have all their leases in one easy to access place, these companies will be able to better serve their tenants and the communities where their properties exist.

Who You Gonna Call? A Lawyer!

There are a lot of things you want to avoid as a landlord, like delinquent renters, unnecessary paperwork and shifty contractors.  But chief among these for most property owners is a law suit.  Whether you’re being sued for rental discrimination or unlawful eviction, you do not want to be faced with your recent tenants in a courtroom, no matter what the circumstances.

So you can imagine how thrilled a Toms River, New Jersey landlord was to find out he was being sued by a couple that had moved out of his rental home after only a week.  Turns out they thought they should get their security deposit back in full because the landlord didn’t tell them that the house was haunted.

After a week of what the couple has described as eerie noises, flickering lights and slamming doors, Jose Chincilla and his fiancée Michele Callan called in a paranormal expert to diagnose the house as haunted.  The ghost busters (not their technical name, I’m sure) at the Shore Paranormal Research Society decided that the house was indeed haunted and the couple moved out immediately.  You can visit the society’s website to see a video of their highly inconclusive evidence of paranormal activity (which is different from an all out haunting, apparently).

As you might expect, the landlord has a pretty different opinion about the situation.  He is countersuing the couple because he believes what actually scared them away was the prospect of paying their rent every month and the ghost story is just an excuse to break their lease and still get their deposit back.

A tenant certainly has a right to know about the quirks of a unit before they move in, but it’s doubtful that landlords are going to start including a haunting clause in their leases.

What would you do if your tenant told you that your property was haunted?  Would you give the deposit back?

Manhunter, Apartment Hunter, Same Difference

Up until this point, we’ve mostly been focusing on the landlord aspects of Rocket Lease, but the fact is that apartment hunters are our customers, too.  That’s why today we want to talk about the sometimes exciting but often dreadful apartment hunting process.  Whether you’ve found a new job in a new city or are downsizing your living situation to save your pennies, finding a new apartment can be extremely stressful, no matter what the reason is for your move.  To make things go as smoothly as possible, here are some things you’ll want to have as your start your search.

A Budget

One of the most important things to have when you’re scouring the world, or just the neighborhood, looking for apartments is a budget. The rent on your apartment is something you will have to pay each month, on time and in full so you want to be absolutely sure that the place you find is within your price range. Sometimes you will tell a property manager your budget and they will still show you apartments that are above that price mark, trying to sell you on newer appliances or more square footage, but you should stand your ground. Before you even open that craigslist tab one time, you should know how much you can afford to pay for your new apartment

An Open Mind

At the same time that you’re holding your ground about your budget, you may be forced to keep an open mind and have some flexibility about some things. Sure, everyone wants to live in the very best neighborhood with gleaming fixtures and a jetsetting neighbor who is only home twice a year during New York Fashion Week (she’s also a supermodel) but for most of us, that isn’t entirely realistic. You may have your heart set on a well-established neighborhood, but when you open your mind to an up and coming ‘hood, you might actually end up with a better apartment! The same goes for square footage. Something that sounds tiny might actually be all the room you need and you might actually be happier if you get rid of some of that early ‘90s Pizza Hut memorabilia. Think about it!

A Pet Policy or Plan

If you have a pet or are hoping to get one in the next year, be sure you know the pet policy of any place you look at. The last thing you want is to find your dream apartment only to learn later that Chairman Meow won’t be welcome there.

Good Walking Shoes

The internet has made everything better (obviously, since without it you wouldn’t be reading this blog right now). This includes apartment hunting which can now be done largely online, from searching to applying to signing a lease online (we do that, we should know). However, not every landlord is hip to the internet and you might actually find some killer digs by hoofing it around the neighborhoods where you want to live. Plus this is a great way to figure out the best spots that you’ll be able to walk to from your new place. Craig knows a lot, but his list doesn’t have everything!

All Your Application Information

The unfortunate fact for you as a renter is that we’re currently dealing with a landlord’s market. This means that, depending on the city where you live or are moving to, you might face some stiff competition for the best apartments. So when you do go out to find your new place, be sure that you have all your application information with you so that, if you like it, you can apply on the spot and have a better chance of getting it. Usually this means not just your own contact info but employment history, paystubs and references. Not everyone requires the same information but keeping it handy will put you at an advantage.

Dealbreakers

Especially if you’re going to be sharing your new apartment, either with a spouse or a roommate, you should both agree on a list of dealbreakers before you go on the hunt. Maybe one of you can’t live more than 2 blocks from a karaoke bar while the other one absolutely must have a parking space for no less than 3 Vespas. Whatever it is, agree on them so that hopefully you can avoid some of the hemming and hawing associated with apartment hunting as a pair.

Hopefully this list will help you when you venture out into the big bad world of apartment hunting. We can’t find your apartment for you, but feel free to give us a call when you need help moving. What weekend? Oh, we can’t, we’re going to be out of town. Um…pizza convention? Yeah, sorry, really wish we could help.

Here on the Rocket Lease blog, we’ve already devoted a little bit of time talking about the overall economy and its effects on the rental market.  But new figures that were recently released by Reis show that the market for apartment rentals may be even more robust that originally thought.  In fact, MarketWatch is predicting that the apartment vacancy rate will fall to 4.6% nationwide by the end of next year.  Up to now, occupancy rates like these have been largely unheard of except in the most competitive markets.  Today, in the notoriously competitive rental market that is New York City, vacancies have fallen this year to a paltry 2.4%.

As with any market trend, there are a lot of factors that contribute to numbers like these.  But probably the most important factor in today’s rental market is the fact that the housing market and the individual finances of most US citizens have simply not recovered to the point where homeownership is once again an option.  In fact, according to an informal survey conducted by apartments.com, an astonishing 33% of people who are looking for rentals on that site are former homeowners.  Clearly, when people are unable to afford the purchase or upkeep of their own home, they will most often find themselves turning to the rental market.

But what do these low vacancy rates mean for property owners and landlords?  Obviously, this kind of rental market – one that works strongly in favor of the landlords – can be a boon to property owners.  Indeed, one of the worst scenarios for a landlord is to find themselves with many vacancies which represent a loss of potential income.  However, that doesn’t mean that in a landlord’s market is a time to rest on your laurels and let the rental applications take care of themselves.  In fact, as the rental market becomes more competitive, it will be more of a challenge and necessity to find the very best tenants among the applicants.  Using an online  rental application system, of course, can be helpful in keeping track of all the applicants that come in and can also insist in quickly sorting and denying applications from those who are not qualified.  This can save you a tremendous amount of time that will be precious when trying to rent an apartment in a competitive market.

Furthermore, during these booming times, it may be a good idea to consider making improvements to your property.  Since you will no doubt have low vacancy rates and therefore be comfortably collecting monthly rents, using this income to make your building more attractive can help to prepare you for the times when business is not quite so quick.  Sure, with a 4% vacancy rate you may not have to offer the best amenities or even the best prices in order to attract tenants.  However, there will come a time when vacancy rates go back up and if you have done your due diligence in upkeep and improvement during the good times, you will more easily be able to weather the bad.

There are a lot of ways to avoid the worst kind of tenants (like those that don’t pay their rent on time or who have a history of being loud or otherwise problematic) but some human behavior is well beyond the realm of something that could be predicted by a credit check.  Take a gander at some of these weird houses and thank your lucky stars these aren’t your tenants.*

1. The Bunny Museum

Most homes become museums of sorts for those things that the occupant holds near and dear whether it’s a ticket stub from a Bon Jovi concert or a plasma screen tv that they saved up for.  But for Candace Frazee and Steve Lubanski, their home has become a very literal museum for all of the bunny memorabilia they’ve collected over the years to create The Bunny Museum.  Out of the kindness of their hearts, they let the public traipse through their home regularly to look at all of their bunnies, including the real ones that live there.  I can only imagine the difficulty a landlord might have inspecting a house fully of rabbits!  Check out the video below for an informative explanation of what admission costs (it’s veggies for the bun buns):

2. The Hobbit House

In another case of extreme fandom, an English family built their house to look like it came right out of Middle Earth.  Check with a lawyer before you decide to put a “No Hobbits” clause in your lease agreement!

3. The Hello Kitty Obsessed

Pretty much everyone has got some secret affinity for something from their childhood whether it’s a Transformers collection under the bed or a ratty stuffed animal from the State Fair, but the owners of this house in Shanghai have taken that obsession in the very adult world of homeownership.  They completely renovated this home in a Hello Kitty theme from the inside out.  At least pastel pink is easy to paint over…

Hello Kitty House

4. Weird Steve

We’re not passing any judgments on Steve, he actually seems completely fine being referred to as weird and once you see what he keep in his Seattle home, you’ll be able to see why.  From hundreds of antique toasters to a chill-inducing collection of literally two-faced animals, some people have called his home a Real Life Addams Family house.  All we know is if you found out tenant had a 13’ high minotaur bust in the backyard, you might think twice about renewing their lease!

 

If you’re reading this blog, let us know if you’ve ever had any wacky tenants or weird neighbors with crazy collections and how you dealt with them in the comments!

 

*Most of these people probably own their own homes.  This is just for fun.