Have you ever seen those polls which list different groups and industries by how much respect they get from the public?  Real estate agents and used car salesmen usually rank near the bottom.  And while I’ve never seen the rental property industry evaluated in any of these polls, suppose we were included?  Suppose the American public was asked how much they respect landlords and rental property agents.  What would they say?

Answer: they would rank us way, way down the list – possibly even lower than those guys who try to sell you 20-year-old Buicks.

Reputations are driven by the media. Why does everyone respect the Coast Guard? Most stories about the Coast Guard involve boating rescues, drug busts and other heroics. Unfortunately, most stories about landlords and real estate investors are sordid, embarrassing or even criminal. That gives us a horrible reputation. Good landlords – who provide a useful service to the community while trying to earn an honest living – are tarred with the same brush as the rotten jerks who shaft their tenants, allow their buildings to be grungy and dangerous, and let down their communities.

(caption: You don’t rent slums, so why get thrown in with the slumlords?)

We pay a real price for our reputation. Remember that government decisions are driven by two things – effective lobbying and public perception. Landlords and real estate investors don’t have effective lobbying because we are fragmented. And our public perception is awful. For those reasons, governments on the federal, state and local levels are happy to stick it to us. We get hit harder with new mandates, higher taxes and increased liabilities.

How are we going to reverse our public image? One of the best ways is to police ourselves. We should denounce those landlords and investors who deserve their bad reputations. It’s challenging to make that mental switch, because our natural tendency is to defend people that we think are like us. Consider the recent story about the landlord who was charged with homicide after his tenants died from carbon monoxide poisoning (hat tip to Richard Warren).

When you first see this story, your natural inclination is to defend the landlord – he’s one of us! – or to hunker down and think “I hope that never happens to me.” I think it’s actually a great opportunity to defend our industry, in part by throwing this landlord over the transom. He’s not like us. Read the story and you’ll see what I mean. Of course, he hasn’t been convicted of anything yet, but if the charges are true, he committed multiple crimes even before the horrible act of negligence that left his tenants dead.

When you see a newspaper story like this, write a letter to the media outlet and condemn the behavior in the strongest possible terms. Point out that responsible landlords don’t behave anything like this. Note that we do a vital service for the community by providing housing for people who can’t afford to buy their own homes.

Of course, this is playing defense. You can also play offense. One way is to make sure the public knows when you or your fellow landlords do something good. Get the word out when you do something to beautify the neighborhood or improve your properties (if the improvement is significant). Become an effective advocate for affordable housing in the community. Go to meetings. Get in touch with housing organizers and politicians. Make it your business to educate people who don’t know how landlording works, but should.

While you’re doing that, don’t ever whine about your hard lot. Believe me, nobody wants to hear how hard it is to be a landlord. The non-landlording world thinks of us as wealthy people who don’t really work. Challenging that perception is going to be really difficult. It would be far better to avoid the subject and instead focus on what we do and how we help.

Almost every community wants to increase its affordable housing and become a bigger, better and stronger city or town. Because we do this for a living, we know the solutions to creating affordable housing, which are:

1. Have a free market in rents
2. Reduce regulations that limit or prohibit building
3. Eliminate unnecessary regulations that increase our costs or liabilities
4. Eliminate transfer taxes.

By taking these steps, we can do more to improve our reputation, remove some of the burden of government, improve our communities, and yes, grow our businesses.

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Tags: housing, landlord, landlording, Media, renters, tenant

Just like any other financial market, real estate continually cycles through its highs and lows.  There can be great debate on whether the market as a whole has bottomed out, but there is a growing consensus that many markets already have. Either way, now is a great time to start investing in real estate.

Here are five fundamental reasons to start investing today:

1. Price:  The sales price in almost every market has dropped substantially.  When you combine the effects of short sales, foreclosures and bank owned properties with an already saturated market, this makes for a real steal for those that have a good game plan.
2. Inventory:  Inventory is at an all time high in most markets, which only contributes to the falling prices, but also helps with selection.  Investors should not only look at the sales price and appraised value, but they should look very carefully at the rental market in which they are selecting a home.  Sometimes passing on a little equity to capitalize on a strong rental market can have both short term and long term benefits, also known as cash flow.
3. Interest Rates:  Current economy conditions have pushed interest rates down to historical lows.  Investors that are considering long term holds will benefit the most as interest rates and inflation increase over the next few years; so will the rents.
4. Seller Expectations:  Most sellers including banks are now working harder than ever to move their properties.  This not only translates into lower sales prices, but more concessions.  Sellers are now willing to pay closing costs, help buy down the rate, or assist in paying for repairs.
5. Renters:  As more and more individuals foreclose on their homes, the rental market will continue to increase.  There are a number of individuals that bought the wrong home at the wrong time for the wrong amount and now they are upside down on their homes. Many of these homeowners have and will continue to simply foreclose.  These new renters that have great income can and will be able to afford larger rental amounts.  li>

Keep in mind that every market has a bottom; it is up to you to do the due diligence that leads to a successful real estate transaction.

Tags: Economy, Interest Rates, investor, market, real estate, real estate investing, renters

Looking Ahead . . .

Home Sales May Fall, Durable Orders Rise: U.S. Economy Preview - The real-estate recession will worsen as stricter lending rules and higher mortgage rates make it more difficult for potential buyers to get financing. The economy will avoid recession as businesses, led by growing demand from overseas, continue to invest and hire.

“The credit tightening is having a significant impact on home sales,” said Dean Maki, chief U.S. economist at Barclays Capital in New York. “The rest of the economy continues to grow at a solid pace.” ^Bloomberg

News for Renters

Default crisis is evicting renters; Tenants forced out by foreclosures - Hundreds of tenants in foreclosed buildings have been evicted or are facing eviction by mortgage companies that do not want to be landlords . . . Tomorrow, US Representative Barney Frank said he plans to introduce federal legislation on foreclosures that includes a provision that tenant leases remain in effect after foreclosure, and that tenants without leases must receive 90 days notice before eviction. ^Boston.com

National Association of Realtor (NAR) Tidbits: Opinion

DOJ sues the corrupt and monkey-run National Association of realtors for antitrust. Goodbye realtors, and good riddance. - I guess the NAR can’t buy off everyone. Just Congress, your local goverments, and the Bush Administration. Here’s the anti-trust complaint (pdf). I’m truly amazed to see the DOJ go after the NAR. Government doing its job? Amazing. Someone deserves a raise. And here’s the DOJ’s new anti-NAR website. Enjoy! ^HousingPanic

Tags: foreclosure, Foreclosures, housing, NAR, realtor, renters