Tuesday, September 23, 2014

The Face of an Apartment Resident

The face of an apartment resident cannot be pinned to any certain statistic. Apartment renters range in age, income, and household size. When renting, you can choose from apartment complexes with multiple units, duplexes, and single-family houses. Of course, each of these options has its benefits and drawbacks. At Jason Cohen Pittsburgh, we try to diversify our investments to accommodate the preferences of a variety of tenants.

Most apartment residents will stick to one type of units throughout their rental experiences. Those who find convenience in an apartment complex will generally stay with that type of accommodation. The upkeep in apartments in complexes tends to be minimal, thus ideal for those with little time to spare. While a duplex or single-family household may require the residents to clear the sidewalks in the winter and mow the lawn in the summer, apartment complexes have dedicated employees for these tasks. These factors may contribute to why 43% of rental households are in apartment complexes.

Out of the 122,500,000 households in the United States, 35% (or 43,018,000) are rental units. The rest of the households are considered owner-occupied. The vast number of renters in this country adds to the convenience of many options associated with renting. 

The majority of apartment residents are under the age of 35. This is not to say that other age groups do not rent.  In fact, more than 7 million people renters are over the age of 60. Renters under the age of 30 are more likely to move from year to year while older renters are more likely to stay in one place. This trend is most likely because younger renters tend to graduate from school, and get job or change jobs that may require them to move. The changing priorities demand that the younger renter move more often.

The largest demographic of apartment residents are those who live with unrelated people. Close to 50% of rental households are made up of nonfamily members living together. This figure combined with the 26% of renters that live alone, make single people the largest group of renters.   

The income of renters can be broken in to three categories — Affordable Housing renters, Middle-Income Renters, and Lifestyle Renters. Those in the Affordable Housing category make less than $20,000 a year and may or may not receive some sort of housing assistance. The Middle-Income Renters make between $20,000 and $49,999. Many of these apartment residents cannot quite afford to buy a house without saving and may choose not to buy now, if ever. A new and growing demographic, the lifestyle renters make $50,000 or more a year. These apartment residents have made the choice to rent and not buy. Many in this group may have owned a house at one point in their lives but have downsized due to an empty-nest. The three groups each comprise almost equal portions of the rental market.

Renting is a way of life for many. Young and old choose to live in a rental unit free of the stresses of home-ownership. The face of an apartment resident is the face of everyone you see. For more information on renting apartments, visit the Jason Cohen Pittsburgh site.

Sunday, August 17, 2014

The Pros and Cons of Renting to Section 8 Tenants

Sure, there are the horror stories of tenants turning your property into a veritable house of horrors, but renting to Section 8 tenants can have advantages. The U.S. Department of Housing and Urban Development runs this financial assistance housing program to help low-income families afford rentals. As with any demographic, there are risks and rewards to renting. At Jason Cohen Pittsburgh, we believe in thoroughly researching a program before either writing it off or diving in headfirst.

Pro: Rent comes in on time via direct deposit
Since HUD is responsible for the payments, rent is automated and deposited to a landlord on time every month. The federal government does not have medical or education expenses or vacation plans that make monthly payments late.

Con: Inspections
Local Public Housing Authorities conduct frequent inspections in 13 aspects of the property that must all meet their standards.

Pro: HUD takes care of payments if a tenant cannot
Even if a resident falls into unemployment, HUD will cover the rent until work is found.

Con: Lack of security deposits
The vouchers that HUD supplies for monthly rent payments do not cover security deposits. Obtaining the deposit directly from the tenant can be challenging, but it should be an essential step towards ensuring the state of your investment.

Pro: Higher profit margins
Because of the government assistance, you can charge more monthly rent in lower-income neighborhoods where properties are much cheaper to purchase.

Con: Limits on voucher amounts
Although you could receive more money in rent from HUD if you were to rent to non Section 8 tenants in the same depressed area, there are also limits on how much rent the government will pay each month. HUD calculates Fair Market Rents annually and allots voucher amounts based on those while factoring in number of bedrooms and condition of property. Even if your property is immaculate, there is a limit on how much HUD will pay.

Pro: Free marketing
Tenants are relatively easy to find by listing your property on the Section 8 web site. Keep your marketing costs low by containing your advertising on a free government site.

Con: Stigma
While you may not have any trouble renting your HUD-assisted unit, you may have issues renting other units in your building due to the stigma attached to Section 8 tenants. Even if the conception that Section 8 tenants are unruly is wholly untrue, it is still enough to drive other potential renters away from your property.

When dealing with Section 8 and any other tenants, screening potential renters is extremely important. If you are worried about the wear and tear that is often (whether fair or not) associated with HUD-assisted tenants, the onus is on you as a responsible landlord to thoroughly screen all applicants. At Jason Cohen Pittsburgh, we cannot endorse Section 8 housing either way. It is up to you as a landlord to decide if the pros outweigh the cons.

Friday, May 16, 2014

We aren't getting any younger...

We aren't getting any younger! Oh wait, yes we are!


-Jason Cohen Pittsburgh

Wednesday, March 12, 2014

Wednesday, January 22, 2014

Renting to College Students: Jason Cohen Pittsburgh’s Advice

College students are a huge rental market for real estate investors. Students are seeking short-term residences that offer location as the top amenity. They, or their parents, are generally willing to pay a bit more for proximity to the school, and they’re seldom looking for luxury living. College town rentals are typically seen as price-per-room, so the overall monthly income generated from each property is greater than renting to a single family.  

However, there are risks and rewards when renting to college students. From our years of renting to college students, we at Jason Cohen Pittsburgh have compiled the following list of smart strategies.

Require a co-signer
Most college students don’t have the credit history to run a credit check. And, many of them won’t actually be the ones responsible for payment. Sure, the check may be in their names, but the money will often be coming from the parents. Require mom, dad, or both to co-sign a college student’s lease.

Make the tenant responsible for utilities
For the majority of college students, this will be their first apartment. They may not realize just how much it costs to leave all the lights on in the house all night, or the air conditioner running while they’re at class. Having your tenants put utilities in their names puts the burden on them. Don’t get hit with huge bills because your renters don’t know how to manage them.

Include strange rules
In few places outside of college towns does one need to stipulate that couches do not belong on porches. It’s not the aesthetic — it’s the chance for burning when festive revelers light things on fire after a sports victory. You may need certain regulations that are not necessary outside of college life. You may have to forbid climbing onto the roof.

Keep the property in good shape
Students and their parents will not tolerate slumlords any longer. They’re willing to pay more these days for better. Maintain the property and you will reap the rewards. You don’t need to go overboard though. Students often still have meal plans and are seldom gourmet chefs, so high-end kitchens are likely not necessary.

Hire a property manager
Several factors make a student house or apartment a high-maintenance endeavor. This is likely their first residence that they will at least have some responsibility to maintain. College students just may not be aware of all the ways that household items can break. They may not know when to “fix” something themselves and when to call for help. They may even be afraid to call the problem in for fear or being penalized. Or they may call too often because they are unaware of what constitutes an actual problem with the property. And, they may be more prone to damaging the home more than an older tenant. Having a property manager dedicated to overseeing the property is a good idea if you don’t have the time to deal with young renters.

Renting a property in a college town can be an extremely profitable investment that you can keep year after year. The rewards can be great, if you know the risks and how to minimize them.