Before Renting an Apartment

Renting an apartment is a very serious decision which warrants a great deal of attention before a final decision is made. When choosing an apartment to rent, renters have a variety of factors to consider including, but not limited to, price, size, location, amenities, whether or not they want a roommate and how long they want to stay in the apartment. Those who plan to rent an apartment should consider all of their options before making a decision to ensure they are making the best possible decision. This article will discuss the importance of considering all of the possible options as well as the possibility of having roommates and the importance of reading contracts carefully.

Consider All of the Possible Options

When renting an apartment, the renter should first investigate all of the options available to him to ensure he is able to make an informed decision. This is important because the renter may not even be aware of all of the available options until he starts to for an apartment. The best way to find out what type of apartments are available is to do some research on the Internet and in newspapers and rental magazines and then start visiting apartments which seem interesting. In visiting the apartments the renter will get a better idea of the size and types of amenities which are available in his price range. He will also begin to learn more about the types of amenities available. This is important because not all apartments will offer the same amenities. Renters may not find what they are looking for unless they visit a few places before making a decision.

Consider the Possibility of Roommates

Deciding whether or not to have a roommate or multiple roommates is one of the important decisions a renter will have to make. This is an important decision because roommates can make a living situation either significantly better or significantly worse depending on a number of factors. These factors may include compatibility of the roommates, ability to pay the rent and ability to assist in the household activities.

Having roommates can make an apartment more affordable. Often larger apartments may be more affordable for two people than a smaller apartment would be for one renter. Additionally, apartments designed for two or more people often have a larger overall living space with a larger kitchen, dining room and family room. This makes the possibility of roommates very appealing to some renters.

However, there are some caveats to making the decision to live with a roommate. Care should be taken to carefully screen potential roommates to ensure they are not potentially harmful. Strangers do not present the only potential roommate problems. Problems may even occur when the roommate is a trusted friend. In these cases, compatible living styles may be the issue. For example, if one roommate likes to stay up late and listen to music or watch television and the other roommate likes to go to sleep early there can be some conflicts if compromises are not made. Also, if one of the roommates is particularly neat and the other rather messy, conflicts may arise.

Read the Contract Carefully

Whether a renter opts to have a roommate or not and regardless of the type of apartment they select, the renter should be careful to read the contract before signing it. This is important because a rental agreement is a legal document and the renter should understand this document before they sign the agreement. Many renters may never need to know the exact information in their contract document but if a dispute arises, the renter should be aware of his rights. Additionally, the renter should pay special attention to any sections of the contract which specify the landlord’s ability to evict the tenant. Contract sections specifying the requirements of the renter are also very important. This may include requirements for breaking the lease agreement in the event that the renter has to move before the lease period ends.

Miami’s Rental Market – Great for Landlords

The Miami Herald recently reported on 1/18/2011 that the Miami Rental Real Estate Market was on a major upswing. Rents seem to be climbing at a very fast pace, especially in areas like Downtown Miami and Brickell. Much of this rise in rent is attributed to the low inventory levels of rental units. The Herald goes on to quote renters stating that their rents increased as much as 29%! Occupancy rates are as high as 95%.

The article goes on to reason why such increases in rates and decreases in inventory are occurring.  Booming neighborhoods and  young professionals looking to re-enter the rental market in a recovering economy are cited as some of the reasons why this rental market is booming. Although I most certainly agree with this reasoning and in fact would support them, I would also add to the formula the foreclosure market.  Keep in mind that we are still experiencing a very high foreclosure rate and as more homes are turned over to the bank we will see more and more displaced homeowners entering the rental market.  When this occurs not only do you have a person or family who once owned their home now occupying a rental property but the property that they once owned does not enter the rental pool of inventory.  With that said you could rationalize that in many cases a foreclosure affects the rental pool of inventory by two properties, the one the ex-owner now lives in and the one that they never vacated as a rental property.

So what can we expect?  I believe that the rental rates will taper off at the maximum that the market will tolerate.  Sometimes landlords list a bit too high and find themselves lowering the rate once they realize that tenants are avoiding the unit. So as a tenant don’t be shy about making a reasonable offer, the operative word here being “reasonable”.  We may see some additional units enter the market as buyers of new construction fail to close and developers find themselves turning to the rental market to generate income from vacant properties; hopefully this will alleviate stress on the inventory and also help to level prices a bit.

Overall renting is still a great option for those that are not ready to buy or feel that he market has a bit of “drop” still left in it before purchasing.  With this in mind, it is never a bad idea to work in an escape clause to a lease in the event that you do find that dream home to purchase.

Call or e mail us to help you rent your property today!

305-525-6005 or isela@arealtyteam.com

Foreclosure Crisis Question and Answer

This article was posted on my Florida Realtor Member site and I felt it was great information to pass on.

Foreclosure procedures undergo reviews:

WASHINGTON – Oct. 18, 2010 – Recent revelations about mortgage lenders filing possibly faulty court papers to foreclose on homes has sparked a public outcry and called into question tens of thousands of foreclosures. Here’s a look at the issue and its impact.

Q: How did this come to light?

A: Lawyers for homeowners fighting foreclosures took depositions from officials who prepare legal documents to get court approval to foreclose. The document signers – who have now been dubbed robo-signers – said they signed thousands of affidavits without reviewing the supporting papers or having the affidavits signed in the presence of a notary. Both are supposed to be done before foreclosure papers are submitted to courts in about 23 states that require judicial approval for all or most foreclosures. Some lawyers allege there were instances of fraud, too, including backdated documents and forged signatures.

Q: What’s happened so far?

A: Some major banks have suspended foreclosures while they review their procedures; others are proceeding while doing their reviews. Bank of America has suspended foreclosures in all 50 states. GMAC Mortgage has suspended evictions and foreclosures in the states that call for a judge’s approval and is reviewing foreclosure practices in the others. PNC Financial Services and Litton Loan Services are reviewing their practices. JPMorgan Chase suspended foreclosures in 56,000 cases in the judicial approval states and is reviewing its practices in a handful of the other states.

Q: Who is investigating this and what could be the outcome?

A: State attorneys general have launched a joint investigation. The Justice Department is reviewing the matter. The Office of the Comptroller of the Currency, which regulates the nation’s largest banks, said Friday that it is examining banks’ foreclosure procedures, and the Federal Housing Administration is conducting a review. The Senate Banking Committee has scheduled a Nov. 16 hearing.

Possible outcomes include civil penalties, criminal prosecutions, the creation of an independent monitor to oversee foreclosure practices and legal settlements under which lenders agree to do more to get struggling borrowers into mortgage workout plans to help them avoid foreclosure.

Q: What about a national moratorium on foreclosures?

A: Some members of Congress have called for one, but the Obama administration has rejected that idea out of concern that a blanket halt to all foreclosures could damage the fragile housing market’s recovery and, with it, the economy.

Q: Why is this controversy important?

A: Lawyers and consumer advocates for homeowners say that if banks are found to have acted illegally, courts could see a wave of challenges in both current and past foreclosure cases. It could lead to title claims in courts, where former homeowners who lost their homes in foreclosure actions assert they still own them, even after the homes have been sold. Banks say that even if procedures were not followed correctly, there’s no mistake that the homeowners are in default and that the banks have the right to foreclose.

Q: What impact could this have?

A: Foreclosures already take a year or more to complete in some states and could slow further as judges review documents more thoroughly and banks tighten procedures. That could keep some homeowners in their homes longer but might also postpone the sales of homes that have been abandoned or that banks have repossessed, keeping them vacant longer.

Delays could be costly for banks and taxpayers, because banks and government-owned mortgage giants Freddie Mac and Fannie Mae all must continue to pay maintenance and other expenses on foreclosed properties they can’t sell. Freddie and Fannie own or guarantee more than half of all first mortgages.

Q: What could this mean for the housing market?

A: If foreclosures are delayed significantly, economists say the housing market recovery could suffer.

Significant delays in completing foreclosures could mean it will take longer for prices to recover, economists say. About 30 percent of all house sales now are foreclosures or other distressed properties that sell at substantially lower prices than homes whose owners aren’t in financial difficulty. That pulls down market prices overall.

The longer home prices stay depressed, the longer millions of homeowners will be underwater, owing more on their mortgages than their homes are worth. About one in four properties are underwater, making it difficult for the owners to sell their properties or refinance their mortgages.

Q: Should I buy a foreclosed home?

A: Real estate experts say buyers shouldn’t avoid foreclosures. But you may want to buy a title insurance policy to protect against a claim stemming from a previous foreclosure, says Guy Cecala of Inside Mortgage Finance.

Lenders generally require title insurance before they’ll approve a mortgage.

Short sales – where lenders agree to let owners sell houses for less than they owe – should not be affected by the foreclosure controversy, says Rick Sharga of RealtyTrac.

Christopher Immel, a lawyer at Ice Legal, a Florida law firm that represents homeowners challenging foreclosures, says prospective buyers of foreclosed properties should examine court case files for missing documents and incorrect dates.

He recommends hiring an attorney to review the file.

© Copyright 2010 USA TODAY, a division of Gannett Co. Inc., Stephanie Armour

Right to Rent Act of 2010

A new law is being looked at in Washington which would allow borrowers of homes in foreclosure to remain in their current home, not as owners but as tenants. The “Right to Rent Act of 2010” or HR 5028 would do exactly this.  The bill is designed to assist middle income famalies who are facing foreclosures on their curent homes.  In short the bill would allow a homeowner to petition the courts to allow them to stay in the home at fair market rent as tenants.  The “fair market rent” would be determined by a court appointed appraiser. There are also other qualifications for this law: the borrowers must have lived in the home for the past two years as a primary residence, they must have acquired this loan prior to July 1, 2007, the home must have been purchase with in the median home value in its market as determined by the National Association of Realtors. In addition, the borrower would have to petition the court for the right to rent within 25 business days from receiving their foreclosure notice.

This law is aimed at assisting middle class homeowners in foreclosure.  Their monthly expenses would be decreased allowing them to regain a foot hold on their finances, in addition the real estate market would be assisted by keeping vacancy ratios lower than anticipated.  The lenders are also expected to be encouraged to be more likely to perform loan modifications in order to avoid becoming landlords.

For a complete property search for sale including foreclosures log on to: www.arealtyteam.com

South Florida Brokers & Associates, Inc.

Multi – Family Rental Inventory is on the decline

The research firm Reis reported that the South Florida multi-family market started the year off with an up swing. Both Ft. Lauderdale and Palm beach show a slight decrease in inventory avaialble and the rental rates have inched upwards. Vacancy rates dropped by 0.1% in Ft. Lauderdale and also dropped in Palm Beach by 0.4%. Miami’s vacancy rate was up 0.6% to a rate of 6.4%, in the Miami Metro Area .Accross the nation the vacancy rates remained flat while rental rates increased 0.3%. Out of 79 metro areas researched by Reis 50 saw rental rates increase. The largest rental rate increase was in Miami posting a 1.6% increase.

This is great news for landlords who had been seeing rental rates drop due to high inventory; however, tenants are still benefiting from excellent deals in the rental market.

Log on to miamirentseekers to find your next rental property.

Strategic Defaults – To walk or not to walk, that is the question

With foreclosures on the rise; a huge buzz word is “Strategic Default”. A strategic default is when a borrower decides to walk away form a mortgage because the property value is much les than the amount owed on the property (underwater borrower).

This exact question: “Do we walk away or do we continue to pay”, is currently plaguing households across the country.  In many cases the borrower can actually afford to pay, they simply do not feel that to continue to pay is a wise economic decision. Many of these borrowers feel that they will recover their credit faster than the home will recover equity.

The problem is becoming more evident.  It is estimated that roughly 50% of mortgages in South Florida (Miami-Dade, Broward and Palm Beach) are underwater.  Unfortunately, many of these mortgages came underwater because the homes were bought during the recent real estate boom (2004 – 2006) they were also bought with adjustable rate mortgages and with very little to no down payment, this only adds to the problem.

Borrowers that are considering walking away must consider the down falls of such a decision. Some of these pitfalls are losing 200 to 300 points on your credit score, also not being able to get a mortgage in roughly 2 to 3 years, plus bad credit could affect employment and even car insurance rates. In addition, in the state of Florida a lender may persue the borrower for deficiencies personally.  Regardless many borrowers are opting to accept the risk in order to get out from under a mortgage that is simply upside down with equity.

A common complaint we are hearing is that banks are simply not working with borrowers who are underwater.  They are not moving quickly with loan modifications and it is very tough to get around the red tape in these large organizations. In our opinion it may just be that the banks not only want to protect their own interest, but they may not have been ready for such a huge influx of defaults.

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