Do Pets Reduce Your Home’s Value?

For years, Americans’ love of pets has turned many a renter into homeowner. “No pets allowed” was a standard clause in rental contracts until recently, when many landlords realized they could attract and keep tenants happy if they were willing to put up with cats and small pooches.

A recent survey by website Apartments.com found that 72 percent of renters surveyed said they are pet owners, a big jump from 43 percent in 2012.

Ultimately, though, there’s no place like a fireplace, a back yard, a nearby dog park, and a friendly suburban street for man’s best friend. But while a house can mean big things for your furry family members, in recent years the evidence has been mounting that pets—and specifically their by-products—can cost their owners big time when the time comes to sell or refinance.

Cats vs. condos

A cat owner’s condo reportedly sold for up to $30,000 less than it should have because of damage caused by the pets, a real estate agent told a national magazine two years ago. A Boston-based real estate agent was recently quoted to effect that pet hair and pet stink can do major damage to a home’s resale value. The agent specifically mentioned another condo that sold for $20,000 or $30,000 less than it should have because of cats.

Appraisal Institute, a professional association of real estate appraisers, weighed in with a news release two years ago, suggesting that bad neighbors including homeowners with annoying pets can significantly reduce nearby property values.

Get on your knees and pray

Said one blogger on a real estate site: “Basically, if you are ever faced with trying to sell a home and own a pet or two, you should ship off Fido to a kennel, fumigate your house and then get on your knees and pray potential buyers can’t detect any stray pet scents.”

Appraisers also say that the mere fact a pet is resident is no reason to penalize the homeowner.  It’s understandable, however, that permanent scents, deep scratch marks on the floor or doors, lawns pitted with brown pee spot and buried bones, or other lasting signs of animal damage would be a bummer to buyers and thereby a reason to chop a few hundred or even a thousand off a home’s value.

Pet haters forget that 47 percent of households own at least one dog and 46 percent own at least one cat, according to the American Human Society. This means for every potential buyer turned off by Fido’s claw marks on the door, there’s another who will opt for the home with a pet door in the kitchen and a fenced backyard.

Custom-built dog runs

Just as landlords are accommodating pet owners for purely financial reasons, there’s a silver lining awaiting homeowners who have made their properties pet-friendly. A survey conducted four years ago by Move Inc., operator of Realtor.com, found that many homeowners are rewarding their dogs with custom-built doghouses, deluxe dog runs, custom “doggy-doors,” pet-friendly landscaping, private patios with personal fire hydrants, and other features that add value to their master’s property with many buyers.

At the time, Realtor.com listed a Victorian dog house that matched a $10,995,000 California home, a heated doghouse with a deluxe dog run adjoining a $520,000 listing in Idaho, and a secluded cottage built just for dogs with a $524,000 house in Illinois.

“Pets have become important members of the family, and their needs are often high on the list of must-haves for many buyers, sometimes even higher than priorities of the two-legged members of the family,” says, Eileen Healy at Prudential Rocky Mountain Realtors in Colorado. “Calling out features or local pet-friendly amenities can make or break a buyer’s interest in a particular property.”

source: totalmortgage.com

Micro-apartments, anyone?

NEW YORK - New York, a city of exorbitant rents with more and more single residents, is about to get a brand new type of apartment: micro-units, for decades prohibited under zoning regulations.

A first building of 55 prefabricated studios spanning nine stories is due to welcome its first tenants in Manhattan in the fall.

Between 260 and 370 square feet (24 and 34 square meters), they come equipped with kitchenettes, shower rooms, storage, large windows, nine foot six (2.9 meter) ceilings and a Juliet balcony.

In New York, 31 percent of the population lives alone, both young and older people, according to the statistics office.

"We don't have the stereotypical nuclear family as we used to with two parents and two children," said Tobias Oriwol, project developer at Monadnock Development which is building the pilot.

"People are marrying later, people are divorcing, people are living longer, deciding to cohabitate," he said.

"But the housing industry keeps delivering two bedroom apartments, one bedroom apartments, three bedroom apartments, and these don't fit the needs of these new households in the city," Oriwol added.

At the Brooklyn Navy Yard, dozens of workers are building the micro-units, which will be transported by truck to the building site, which is owned by the city, at 27th Street in east Manhattan.

They will be assembled in two weeks in June. Then the roof will be put on, the brick facades added and the finishing touches added to the exterior and the layout before the first tenants arrive.

Inside each unit, everything has been meticulously thought out: in the kitchen there is a mini dishwasher, mini fridge, two hobs and a microwave but no traditional oven.

Common areas

"We did a lot of research on what people wanted. We had to make choices," said Oriwol. "Our apartments are 100 percent usable, and meant to be lived in by today's people."

The tenants, who are expected to be of all ages and backgrounds, can rent additional storage space, and have access to a large communal kitchen, a TV room, a laundry, a bike shed and a gym.

"You may not need to host 15 people in your very own apartment, but you have the ability to do so in the rest of building," Oriwol explained.

Twenty-two of the studios will be classified as affordable housing while the other 33 will be offered at market price.

Studios in the neighborhood cost around $3,200 but "because these are smaller, it makes sense they will be cheaper," said Oriwol.

Developers and housing advocates are closely following.

In New York, regulations designed to help families have prohibited the construction of housing units smaller than 37 square meters in much of the city since 1987.

Under this pilot program, then mayor Michael Bloomberg waived the zoning regulations for the site to test the market for this new housing model.

If the project is deemed a success, many hope that the regulation can be lifted altogether.

The regulation does not correspond to the needs of people today, says Sarah Watson, deputy director of the Citizens Housing Planning Council, a non-profit research organization devoted to housing problems in New York.

Supply mismatches demand

"Actually only 18 percent of the households in New York City are nuclear family with all children under 25," she said.

"A third of all of the households are a single person living alone, and on the other side, about a quarter is people sharing in some way, to fit themselves into the city," she said.

Current legislation also prohibits the cohabitation of more than three people who are not related. Watson says there is a "big mismatch" between need and supply that often inflates rent.

"There are so many single people and such a small amount of well-designed studios for them that actually the price of studios are inflated," she said.

"If you artificially add five single people to share a unit then the landlord can get an lot more money for that unit."

If supply better matched demand, prices could also come down, she said.

Watson says that out of necessity, New York should offer more choice particularly with the city projected to absorb hundreds of thousands of new arrivals in the coming years.

The city that never sleeps, which is frequently a trend setter, is lagging behind other American cities on micro-units.

Boston, San Francisco, Seattle and Washington have already jumped on the micro-apartment bandwagon.

If the pilot is deemed a success in New York, then others will follow. And developers, never short of ideas, are already planning other micro-concepts, such as two or three bedroom 46-square-meter apartments, suitable for two or three roommates.

source: www.abs-cbnnews.com

Australian Property Market Sees Upswing and Price Increases

At the end of this year’s first trimester, the situation of the national real estate market seemed to present a more positive outlook than most experts, buyers, and sellers would have imagined. The more enthusiastic of them even touted words such as “boom” to describe the increase in housing prices, in the clearance rates at auctions, and, most importantly, in the levels of consumer confidence. While it would be overly optimistic do describe this mild, yet uplifting increase in overall market levels as a boom, it does indicate that 2013 might not spell disaster to the extent to which some may have originally imagined.

The housing price stats at the end of February 2013 indicated  monthly increases in four of the eight capital cities, with Darwin leading the pack for its 2.3 per cent rise in prices per dwelling per month. The most significant decrease for the month was posted in Brisbane (-1.1 per cent, down to $420,000 per home, on average). Overall, however, the situation did seem positive: on average, the eight capital cities saw a .3 per cent increase in prices per month, 1.2 per cent compared to the previous quarter and 1.3 per cent on the year. Returns had also increased by 5.7 per cent, the average price was poised at $460,000 and the stats for the rest of the states (i.e. for towns other than the capital city) were also improving: 1.0 per cent on the month, .4 per cent for the quarter, and .4 per cent on the year-on-year indicator.


Beyond this optimism, certain key questions persist. For one thing, though the average ratios might seem encouraging, the markets remain highly divided. Price comparisons by property type, price category, and capital cities differ widely – Melbourne alone seems to be genuinely bouncing back and going strong, with the third consecutive price increase on the month.

The bottom line is that the property market in Australia is not about to experience a strong comeback on 2013, but it is most likely going to continue on its stabilizing trend. A lot has changed for the better since May of last year, when, according to one survey, property prices hit rock bottom. In the real estate market cycle, that’s also when they started making a comeback. Prices have improved by 3.3 per cent since then and that’s all because buyers are timidly, yet decidedly making their comeback to the market. ‘Timidly’, because they’re being very picky about what and where they buy: areas in Australia where there is a clear surplus in housing stocks are still languishing. The price-location ratio is still the deciding factor and, in earnest, it only makes sense that the buyers should be choosy – the market is clearly a buyer’s market.


For this year, the forecast includes more growth on this mid-level segment of the market. The Bankwest Home Loans Density report has shown that though buyers are buying smaller homes for their first home, they are still buying, showing that confidence is also being propelled upward by the lending aspect of the with everyone expecting a comeback in the near future. Data shows that mortgages are on the rise, with Aussies getting new home loans this year despite being static for the past 10 years. Mortgage brokers (e.g. Smartline) are also on the rise.


The question that lies ahead is what’s going to happen when the mid-range segment of the market runs out of well located, fairly priced homes and apartments. The upswing in the property market cycle will also only last for so long, which adds an extra dose of pressure, especially for potential buyers in states that are riding high on the market recovery wave. The construction sector is still lingering – bad news for those who feel that the answer might just come from that direction.

source: 20smoney.com

Why Renters Need Insurance

The majority of Americans who rent an apartment or home don't have renter's insurance, according to a new survey released by InsuranceQuotes.com. That's because many say that their apartment building has good security and mistakenly believe that their landlord's policy will provide the coverage they need. Those surveyed also thought that renter's insurance was a lot more expensive than it really is.


Actually, any insurance a landlord may have will cover only the structure, not tenants' belongings. Even if a building is in a safe area and has a security system, there's still the risk of disasters such as fire or water damage from a leak. Without a renter's insurance policy, any damage to a tenant's property wouldn't be covered. The good news is that this coverage is quite inexpensive.



The average annual cost of renter's insurance is just $185 per year, according to the National Association of Insurance Commissioners. So that works out to just a littler more than $15 a month, which is a small price to pay for coverage against losses from fire or smoke, lightning, vandalism, theft, explosion, windstorm and water damage (not including floods). If your home or apartment is damaged by a covered event and you have to live somewhere else, most policies will reimburse you the difference between your additional living expenses and normal living expenses. Plus, renter's insurance helps cover legal costs if you're taken to court because someone is injured at your residence. The primary reason that renter's insurance is less expensive than homeowner's insurance is because it just covers belongings -- not a dwelling, says Laura Adams, senior insurance analyst at InsuranceQuotes.com.

Adams says that renters should shop for policies based on the specific amount of coverage needed. So you need to take inventory of what you have and determine a value for your belongings. You can get either a replacement-cost policy, which will pay to replace your possessions up to the policy's dollar limit, or a cash-value policy, which will pay only what the items are worth when stolen or damaged. You should expect to pay about 10% more for replacement-cost coverage, according to the Insurance Information Institute.




If you have expensive jewelry, collectibles or art, consider adding a floater to your policy to provide more coverage. Standard policies offer only a limited amount of coverage for these items. You'll need receipts or appraisals for items to be covered by the floater. And Adams says that if you have a high net worth or the likelihood of getting involved in a lawsuit, consider increasing the standard liability coverage,which is usually $100,000, or getting a separate personal umbrella policy (see Why You Should Have Umbrella Liability Insurance).

When shopping for policies, get quotes from several companies. You can compare costs at Web sites such as NetQuote.com and InsWeb.com. Make sure that the primary cost factors are equivalent when you compare policies or as close as possible so that you have an apples-to-apples comparison, Adams says. These include the types of coverage you buy, the amount coverage you buy and the deductible (the amount you pay out of pocket before insurance kicks in), she says.

Also ask about discounts. For example, you might have to pay less if you have a security system, smoke detectors and deadbolt locks. Insurers also offer discounts to customers who have multiple policies with them, have good credit or are 55 or older. So be sure to ask about ways to lower your premium.

Price is certainly an important factor, Adams says. However, the value of choosing a reputable and service-oriented insurer shouldn’t be overlooked. See Find Out How Insurers Handle Claims for advice on checking a company's complaint record.

source:  kiplinger.com

Rents soar as foreclosure victims, young workers seek housing

Few new units and tight standards for home loans add to the pressure. The average monthly U.S. rent is at an all-time high, and a 10% jump in Los Angeles County over the next two years is forecast.

A nation still struggling to clear up one housing debacle has run smack into another — soaring rents.

The foreclosure mess has pushed millions of former homeowners with tarnished credit into a competitive apartment market across the U.S. Add fresh demand from young workers, few new units and tight standards for home loans, and the result is rental sticker shock not seen in years.

Rents are surging from New York to Los Angeles. The average monthly U.S. rent for apartments hit $1,008 in the first quarter, pushing past the all-time high set in the third quarter of 2008, according to the data firm RealFacts. USC's Lusk Center for Real Estate forecasts a 10% jump in Los Angeles County rents over the next two years. In certain markets, it is now cheaper to own a home than rent.

Menachem Krinsky of Hancock Park recalls how in late 2008 every street seemed ornamented with "for rent" signs when he first moved to Los Angeles from the East Coast. Back then, his landlord was so desperate to keep him as a tenant that he slashed his rent of about $2,000 by $800 after Krinsky's first roommate bailed on the lease.

These days, however, Krinsky's search for a one-bedroom apartment costing around $1,500 is shaping up to be a major headache.

"I am looking for something clean and new, and unless you want to spend a fortune, it's hard," said Krinsky, a 22-year-old art director and graphic designer.

Units that years ago would have languished for weeks are snapped up in days. The Santa Monica-based listing service Westsiderentals.com is operating 14 hours a day to meet demand from renters. The company has even seen a bump in interest for its "platinum" relocation service, which offers to chauffeur clients to various Southern California listings.

Ellie Balderrama, who lists properties in Los Feliz, Silver Lake and Atwater Village for TheRenterGirl.com, said that as many as 20 people have showed up at some of her open houses. The ones who win arrive with completed rental applications and deposits in hand.

"In L.A., people have gotten so used to how relaxed it was, they are not aware how competitive it's become," Balderrama said. "Some people have got it, and some people don't, and the ones that don't suffer."

Rob Magnotta, a real estate agent, recently listed his two-bedroom Irvine condominium for rent on Craigslist for $2,300. He had six applicants within 24 hours, including one who wrote a poignant letter about losing a home to foreclosure.

"It was almost too easy," said Magnotta, who chose another renter. "I know the rental market was strong. But until you are actually renting the place, I think you are surprised it is that strong."

A big driver of rent increases has been demand from young workers who are striking out on their own after doubling up with family members during the worst of the economic downturn.

Alaia Williams, 27, recently moved out of her mother's Inglewood apartment to be nearer to her job at a Santa Monica tech start-up. She and a roommate are splitting the $1,400 rent on a two-bedroom apartment in Palms.

"We can't afford to live" closer to work, she said.

People who've lost their homes to foreclosure or short sales are also feeling the sting. Damaged credit means many must pay a premium or put down a bigger deposit to secure a place.

Robert Corlette pays about $1,700 a month for a two-bedroom town house in Anaheim Hills that he shares with his wife and five children. The family lost their home to foreclosure in 2009 after Corlette lost his $75,000-a-year job selling insurance. His current job, also in the insurance industry, pays about half that.

"There is a lot of pressure," said Corlette, 56. "It wears you down."

The crash has made owning a home more affordable than renting in some markets. An index by the research firm Green Street Advisors compares buying with renting in 79 metro markets; that index hit its most attractive point last year for buying since 1991, when the firm began tracking the data. Researchers calculate that the after-tax cost of a mortgage is only 10% higher than what it costs to rent nationally after taking into account mortgage rates, property taxes and other factors.

Orange and Los Angeles counties remain more expensive for buyers than renters, though that gap has narrowed, according to the index, while owning a home in the Inland Empire is now more affordable than renting.

Rising rents have converted some renters into buyers. Scott Matulis, 48, recently purchased a town home in Oak Park after enduring two consecutive years of rental increases. His mortgage, taxes and homeowner association fees now total $2,200, just $100 more than what he was paying his former landlord.

"I finally just pulled the trigger and figured I'd be throwing money away on rent," Matulis said.

Although rising rents may be motivating home purchases by people who are in good shape financially, those increases are walloping working class families and the poor — groups already hard hit by job losses, lost income and stagnant wages.

Marisela Alfaro has lived in the same one-bedroom Santa Ana apartment for 28 years. A large bed sits in her living room, where she and her husband sleep; their teenage daughters share the bedroom.

Modest religious art adorns her carefully kept home, but outside Alfaro's door the building is in disrepair, with tattered screens, broken lights and graffiti. Alfaro said the family pays $820 a month and feels lucky to have the apartment.

"There are other places that cost much more," she said in Spanish. "It's been difficult because my husband works in the fields, and that's the lowest salary that there is, and if there is no rain, there is no work."

Even for those with better jobs, paying rent can be difficult.

Virginia Villa of Brea, a single mother of four who works as a manager at Disneyland, has doubled up with her adult daughter, who contributes $400 to the monthly household budget. Still, Villa said, about half her take-home pay goes toward rent and utilities.

"I have a decent job and I would love to buy a house, but I don't think that's possible to do," Villa said. "In O.C., it's even difficult to find a substantial apartment or especially a house to rent — the rental cost for houses is really high."

source: latimes.com