Rentals Archives - Page 5 of 6

What does the election mean for my Real Estate investment?

November 16, 2016 By Tayson Rockefeller Leave a Comment

I am going to do my best to tie this article to National trends, events that have an affect on Real Estate (such as elections), and the seemingly cyclical Real Estate pattern that applies in almost all cases, barring any outside catastrophe.

Hours after our recent election, it seemed as if the National election result(s) were catastrophic, though that subsided quickly, and the markets rallied. Yes, there are talks of rising interest rates which can also have an affect, but things seem to be settling back into place. In my opinion (as far as Real Estate goes) things settled right back in their respective place with regards to the Real Estate cycle, more on these economic cycles below.

The question is, will that last? Will the transition into the next President’s era once again upset the current cycle? I don’t think so. An a associate of mine sent an article from Harvard University (source below) that also seems to back that prediction.

The article talks about economic cycles with regards to Real Estate, and the phases of the cycles after recession. The cycle ultimately leads to another recession, due to oversupply (history shows us we never learn) Our last recession was 2008.

While reviewing the cyclical pattern ternds (the article refers to them as Market Cycle Quadrants) in the article, my small market mind’s gears were turning – “Where are WE now in the current cycle?” My answer was somewhere right above Long Term Occupancy average, during a period while vacancy is declining, and new construction is just now staring to occur. For those of you not referencing the article, The quadrants are broken into 4 phases of the cycle;

Phase I – Recovery
Phase II – Expansion
Phase III – Hypersupply
Phase IIII – Recession

I later discovered that the article also answers my question above, and we’re on the same page in terms of where we are in the current cycle, in the beginning stage of the expansion phase. All of that aside, I need to get back on track with regards to the election, how it may affect our market, and tie all of this together.

The great thing about this article is that it provides for a timeline, and even shows a nifty graph depicting these market cycles. It is actually quite remarkable. The findings go back to 1819 to gather data, and locate the peaks in Land Values, Construction, and Business. The average interval is approximately 18 years with one exception, WWII. The good news? I don’t see any clear pattern with regards to election cycles years, and these respective market swings.

For those of you refusing to open this fascinating article, and the contributors to the information in the article are correct, the next housing market recession will be in 2024.

Does that mean our local community is immune to a localized bubble filled with our own “hypersupply” will not affect us? Nope. Check out next week’s article.

Source: https://extension.harvard.edu/blog/how-to-use-real-estate-trends-to-predict-the-next-housing-bubble/

HOA’s & Rental Restrictions

May 17, 2016 By Tayson Rockefeller Leave a Comment

If any of you read the local paper, or follow social media etc. here in Teton Valley, you probably remember the drama with a Condo Homeowner’s Association in Driggs, ID that made the decision to require landowners and property managers to restrict long-term rentals (longer than 30 days) to “single family” use. That association later defined single family as:

(In an email to TVRManagement & other local property management firms dated January 5th, 2016) “Tenant” is defined as a single person, or a couple living together as a family, regardless of gender. The other occupants may include the child or children of the “Tenant.” Occupancy of each rental unit will be restricted to a maximum of six (6) persons. No subletting shall be permitted. All other provisions in Section 8 of the Amended Rules and Regulations shall remain in full force and effect.

Many of us tried to make an argument that the HOA was in a violation of the Fair Housing Act, but remember the protected classes under the act are race, color, religion, sex, handicap, familial status, national origin. This does not include marital status or sexual orientation – however you will note “regardless of gender” in the above definition, which was a product of another issue which arose during the HOA’s – successful – eviction of all tenants that did not meet the strict guidelines above.

As mentioned above, that homeowner’s association was successful in evicting all tenants in violation based on their own definition, mostly due to threats of immediate action for hefty fines and liens. That sparked me to write a post on HOA Fines and the procedures HOA’s must follow.

Read the story here: Can Homeowner’s Assosiations fine me for violations?

THEN – (and rather ironically) Idaho Legislature amended the bill where I derived the information for the above article, House Bill 511 to go on to state:

(3) No homeowner’s association may add, amend or enforce any covenant, condition or restriction in such a way that limits or prohibits the rental, for any amount of time, of any property, land or structure thereon within the jurisdiction of the homeowner’s association, unless expressly agreed to in writing at the time of such addition or amendment by the owner of the affected property. Nothing in this section shall be construed to prevent the enforcement of valid covenants, conditions or restrictions limiting a property owner’s right to transfer his interest in land or the structures thereon so long as that covenant, condition or restriction applied to the property at the time the homeowner acquired his interest in the property.

With the above said, the HOA in this example in Driggs will probably keep the rule in effect stating that it was passed by the board prior to the amendment of this bill- whether that’s legal or not. In fact, the original amendment was passed by a board majority vote based on the board’s authority to do so… meaning there is a separate statement in the bylaws authorizing the board to make amendments without approval of the owners as stated in the bylaws. I am sure this statement was meant to be used in an emergency situation (authorizing emergency repair work without consent of the owners) and not for purposes described above, but I digress.

I am sure the situation with this particular HOA will work itself out. Despite my posts about HOA’s, they are not evil. They are created with a necessary purpose, and operated on a voluntary basis. Most of the time, (99% of the time) for good, genuine reasons. At least we know these situations happen elsewhere, and are gaining attention.

Increasing Rental Rates, Will it Stop?

January 17, 2016 By Tayson Rockefeller Leave a Comment

Increasing Rent Rates, will it stop?

As most of us know, we are seeing major recovery in the real estate and rental market. Note I said recovery, not inflation – yet. Generally speaking, we are recovered to about 2005 levels. Not yet height of the market “boom” prices, but we are still recovering. There is quite a bit of buzz regarding new construction, homes to be built on spec, and even rental complex/apartment construction – mostly based on the assumption that the market will continue to grow and improve (hence the “spec” or “speculation”)
As we know, the key driving factor is demand. The availability of homes for sale in the affordable price range is minimal, and rental supply even worse. With that said, I agree that there is a fairly safe bet for investment potential.
The above said leads me to predictions for the question. My response is – I hope that is slows, or better yet, quickly recovers to reasonable degree, levels off, and stays on par with inflation. We need to remember that there is a fine balance between a return on an investment, and real world effects. The result of too much supply too quickly coupled with National ecenomic factors (which will always be in play) is still all too fresh in my mind. We must also remember who we are in Teton Valley. I believe we will always be the “quiet side of the Tetons” a family oriented community supported by our own tourism, and proximity to Jackson and Idaho Falls. We cannot directly compete with Jackson, and we should not. We have a niche here with semi-resort real estate prices that is still an attractive place for an investor, and/or a resident.
In my opinion, we are competing for a population and commerce, but more so with areas like Alpine, WY or Rexburg, ID. If prices here become unobtainable for most (such as Jackson) the vast majority of those who support us will not be able to afford to live here. This is particularly true with rental rates. In times where supply is dangerously low, the sky’s the limit. This is a perfect opportunity for investors and owners to take advantage of the market – as they should. However, I do caution our community. We need to remember that we must work together to support each other. We still have shoulder seasons. If the cost of living becomes too high for a meal, a service, or a rental, our community will look for alternatives they can afford.
So, here’s to continued growth, recovery, and profitability – in responsible, high quality, Teton Valley Style!

CC&R’s, what you need to know

December 1, 2015 By Tayson Rockefeller Leave a Comment

CC&R’s, short for covenants, conditions, and restrictions are basically written and recorded rules of the neighborhood or subdivision. It’s important that these rules be recorded to make them binding and enforceable. They should also conform to all laws as well as local government regulations and requirements. When it comes down to a dispute with a lot or homeowner, it’s important for the subdivision to have CC&R’s that have been written and recorded correctly.

The purpose for these restrictions is to ensure conformity in a subdivision. Most of the rules are just long winded ways of saying that you have to keep your lawn mowed and weed free. Some developments have stricter rules than others. Some require certain design aspects when constructing a new home, where you can and can’t park a trailer, and so on. For the most part however, the rules are considered to be for the good of the neighborhood.

When working with Buyers, I often have requests to spefically look at lots without these restrictions. Sometimes it’s only because they want to build a house smaller than what they assume most developments would allow. However, based on that example, there are a number of developments that require a minimum of only 900 square feet, which is pretty minimal. Some developments are even along Ski Hill Road surprisingly. When searching for a home or a piece of land based on your special needs prohibited by most restrictions, it’s important to remember that all CC&R’s are not the same. Some are only a few pages long, with very few restrictions. All of the above considered, don’t rule out being in a subdivision if you can help it. Consult with your agent, most experienced agents have an understanding of the general rules in each development. Another way to explore subdivision opportunities is to take a drive around the development. Usually, if all of the homes have trailers on the side of the house or in the driveway, trailers are allowed. If all of the homes have metal roofs, you might find out if a comp shingle roof can be used. Use caution however, this is not a guaranteed way of understanding what is or isn’t allowed.

You might ask yourself how or who to contact with some of these questions. Our brokerage can usually get you an electronic copy of the CC&Rs for free, any time. If we have it on file, we can also send you contact information for the homeowner’s association (HOA) who would ultimately be responsible for enforcing the restrictions.

To conclude, be advised that CC&R’s are not the only way to restrict uses or enforce rules with a property. Even a piece of land or a home that is not located within a subdivision can still carry deed restrictions which works similarly, though I will cover those in another Ask The Expert” column!

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