Chinese Buyers Abroad

As buyers from China have started to spend billions in Australia, the US and the UK, property prices

have started to skyrocket.  Even as the Chinese stock market has begun to crash, experts have predicted that much more cash is still on the way.  Chinese stocks have crashed 40% since June, wiping away trillions of dollars in market value.  As the yuan devalues, the Chinese are starting to think that foreign real estate is a more stable investment than Chinese banks.  

Chinese investors have been active in residential property markets in such cities as Sydney, London and New York.  Chinese are currently the leading foreign buyers of US homes, with sales reaching a record $29 billion in the 12 months leading up to March 30.  This makes up more than a quarter of all foreign purchases by value, according to the National Association of Realtors.  Credit Suisse has predicted that sales of homes to Chinese buyers are predicted to total $60 billion between now and 2020 in Sydney alone, double the amount spent in the past six years.  In London, Savills says that Chinese buyers already make up more than a quarter of all home purchases in London.  

With prices rising fast in major cities, Chinese buyers have started to get more creative by teaming up with local partners or looking to newer markets in other countries.  In the UK, they’ve started to put their money beyond London and into surrounding areas, including Surrey.  Commercial real estate deals are also on the rise; Knight Frank predicts that Chinese investors will spend $20 billion major deals this year, compared to just $5.5 billion back in 2012.  

This interest in foreign markets coincides with limited options for investors in China; many have lost money in stocks after domestic property prices started to fall about four years ago, or in various riskier investments in the shadow of the banking sector.  Despite the annual limit of $50,000 on the amount of money somebody can move out of China, this rush into world markets has taken place through channels both legitimate and not.  Restrictions means that investing abroad requires planning and creativity, such as moving out money over a long period of time or securing approvals to send large sums abroad.  The fact that investor interest is continuing in spite of these restrictions hints that this trend isn’t going away any time soon.

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Get a Real Estate Agent!

It can be complicated to get a purchased closed in the current market; it has changed dramatically from just a few years ago.  Buyers face more hurdles than ever, including stricter financing, low housing supplies, higher mortgage rates and rising prices.  To negotiate these challenges, you need to find a real estate sales professional who will help you close the deal.  A good real estate professional understands current market conditions, and has house-by-house neighborhood experience that will help you to obtain the right home at the best possible terms.

Your agent will also be able to help you find a home quickly.  Not only do real estate agents have access to the local multiple listing service, they and their colleagues share an extensive knowledge of homes coming onto the market.  Your real estate professional will tell others about your home requirements, so that they’ll also be looking for good homes for you.  Networking actually serves as one of the biggest advantages of the industry.  Many homes are bought and sold without any ads in the newspaper or signs in the front yard.  Yet for buyers to be shown the latest homes on the market there needs to be a strong relationship between buyer and real estate professional.  

If you want to be a buyer who's in the position to make the first and best offers, then make sure your agent knows how committed you are.  Some ways to do this include getting prequalified with a lender, working with only one agent and not shopping for homes without your agent.  Real estate professionals mostly work off commission, so be loyal; in return, they’ll tell you about any exceptional deals before anybody else.  Don’t try to play agents off of each other; agents tend to talk, and they’ll be quick to find out that they’re working for the same buyer.

The work really starts once you find the house that you want.  You’ll need to navigate negotiations, loan approval, seller’s disclosures, inspections and countless other hoops.  Yet from helping you to make a reasonable offer to providing for the discovery and disclosure of material facts, your agent can protect your interests.  Agents are skilled negotiators and problem solvers, who can also anticipate problems before they happen.  Your agent will share your risk, and make sure that you go into any home purchase fully prepared.  So take advantage of what could be the greatest homebuying resource around!

The Lease

A lease is the written legal agreement between a tenant and landlord, property manager, or property owner. Be careful when dealing with any legal document, as they represent binding terms. Certain information is necessary within the contents of the lease document, but sections can be tailored to match your (the landlord’s) specific preferences and that of the property. At Jason Cohen Pittsburgh, we know the importance of this document and cannot stress it enough. It is the basis for what youyou’re your tenant expect from one another. The Internet houses an abundance of sample leases, which you can use either as guides to write a tailored lease. A lawyer can also draw up a lease for a nominal fee.

The required sections of a lease are:

• The parties involved
• Property location
• Lease term
• Rental amount
• Acknowledgment or signature

The first section, parties involved, is simply a clarification of the names of the tenant and the landlord.  The property location should be listed in as detailed a description as possible. Include the unit number with the street address. The lease term should include the date that the tenant can take possession of the property and when she/he will have to vacate or renew the lease. The rental amount can be listed as a weekly, monthly, or annual fee — monthly is most common. Lastly, the lease must be signed by the tenant and the landlord, property manager, or property owner to be valid.

Within the section of the lease including the rental amount, it is advisable to detail additional terms. The deposit amount should be clearly stated in this section. The circumstances in which the deposit can be used can be explained in a separate section. The late payment policy can be included with the rental amount, or it could have its own addendum. The latter is more common.

Although a pet policy is not a necessary section in the lease, at Jason Cohen Pittsburgh, we advise you to include it in as much detail as possible. If an additional deposit is required for pets, describe it in this section. If pets are allowed, detail the types and sizes of the allowed and restricted pets. Consider all types of pets — from mice and hamsters to cats and dogs. Even take into account exotic pets, such as lizards and monkeys — you never know what you’ll encounter renting out a property. While many people do not consider fish a problem when it comes to rental unit, the size of aquarium should be limited to what the floor can support. Research the types of pets that residents may have before writing this section to be sure to cover all situations. Of course, the pet policy can be a simple “no pets allowed, ” but you may find the tenant pool shrinks with this strict rule. 

Sometimes a tenant will allow friends or family to visit or stay for an extended period. You can choose to include a section limiting the time that a guest can stay. Fifteen days is a common term for a guest. Detail the circumstances in which this can be allowed. For instance, a tenant caring for an ailing mother in the apartment can be viewed differently than a friend crashing on the couch for six months. Punishments for breaching this rule can either be listed in this section or in a section allotted to breach of contract for any reason. 

The words written in a lease agreement can be as important as the tenant’s signature. Including the mandatory parts of a contract make the agreement legal. Adding additional sections tailored to the property and your preferences will minimize issues later on in the renting process. 

Eviction 101: For Property Managers

As a property owner, you know that it is very important to find the perfect residents for your rental properties. Have you ever stopped to think, what happens if I was wrong? Just how hard is it to get a bad tenant out of my rental unit? While it varies from state to state, in most cases the process of eviction is long and arduous. Jason Cohen Pittsburgh knows how to protect yourself and your company while also maintaining the rights of your tenants by following several rules.

Even before you have a resident, you must consider eviction and the process of eviction. When creating the lease agreement, include sections explaining when and why you, as the property owner, have the right to evict a tenant. A violation of the rules and regulations in the lease is a reason to begin the eviction procedure. Obviously, failure to pay rent and regular late payment are two major reasons to evict a tenant. If the tenant is willfully destroying the property, you also have a case for eviction.

The first step in the process is giving the tenant written notice. If the reason for eviction is failure to pay rent, or breaking the lease by having an illegal roommate or pet, you may want to serve a “Notice to Quit” in place of the eviction notice. A “Notice to Quit”, allows the resident a period, such as 10 days, to correct the wrong. If the tenant has broken the lease to the point that a correction will not be offered, the tenant must be given a 30-day notice to leave if the lease is for a year or less. A 90-day notice is issued for leases that are longer than a year. This notice must include certain information in order to be legal — the date of the notice, the name and address of the tenant’s rental unit, the reason for the notice, the time period for correction, the date of eviction, and a statement detailing how the notice was given to the tenant. If essential information is omitted, the notice is not valid and the process must start over.

Rules are in place for getting the notice to quit or evict to the tenant as well. Oddly, you cannot mail this notice. The property owner or a representative at least 18 years old can deliver the notice. If it cannot be given directly to the resident, the notice can posted on the tenant’s door of the rental unit or somewhere else where the tenant will be sure to see it. Be sure to make sure it is conspicuous.  The notice cannot be hidden, covered, or placed in the mailbox. If the notice is not delivered properly, the notice is not valid and the process must begin again.

The next step depends greatly on the resident’s reaction to the notice. If the notice demanded a correction to illicit behavior and the tenant corrects this wrong, the tenant cannot be evicted. For example, if the notice gives the tenant 10 days to pay the late rent, and the tenant pays the rent, the tenant cannot be evicted. This also holds true for illegal pets or roommates. If a correction was not offered, the best-case scenario is that the tenant vacates the premises within the notice period. 

If the resident does not comply with the eviction, the property owner must file a complaint. The complaint will result in a hearing. Until the hearing is held and the decision is made, the tenant will still be in the rental unit. At this point, the tenant can file a counter-complaint, which will also be considered at the hearing. If you, as the landlord, win the case, you will receive a judgment for possession. However, you must wait no less than 15 days to have a constable or sheriff give the resident an “Order for Possession”.  Issuing an “Order for Possession” informs the tenant that, after a set date on the notice, the constable or sheriff will forcibly remove the tenant and the belongings from the unit. The set date must be at least 15 days from the notice.

When reviewing the procedure for eviction, it can be shocking how long it can take to remove a problem resident. Even though the procedure does not seem fair from a landlord’s perspective, it is the law. In order to avoid these proceedings, Jason Cohen Pittsburgh knows that it is essential to find the proper residents.