|Protect Yourself with Renter's Insurance|
& Feeley, we often get asked by our tenants about the need for renter's
insurance and what it covers? We asked the experts at Winooski Insurance to
answer this question. Joe Burkhard, President of Winooski Insurance tells us that
renter's insurance is designed to cover your personal property you own while
renting an apartment. It also provides
coverage for liability insurance if you are negligent and cause bodily injury
or property damage to another party.
Why is having
this coverage important for a renter?
says, your landlord is not responsible for your personal property should the apartment,
condo or house you are renting be damaged, resulting in the destruction of your
personal property. If your building
suffered damage from a fire, windstorm or lightning, for example, you can
easily lose all of your belongings and have to start over. The renter’s insurance policy will provide
coverage for losses of this nature and if you choose adequate coverage, restore
you back with a settlement.
multiple renters in a building would certainly increase the chance of a loss
more than a single family home. Each tenant can increase the chance of a loss as
a result of their personal habits and put you and your property at risk. For example, a neighbor may like to burn
candles or smoke in their apartment. Those kinds of behaviors could make your apartment more prone to a loss
due to their lifestyles and choices. Grilling
on the back deck can cause severe fire losses - something we can all relate to.
part of the coverage is something people rarely think about - liability. You might be asking why you would need
liability coverage as a tenant. Here are
several reasons: If your pet injures
another person is an easy one but what about someone tripping on a rug in your
apartment or a guest slipping in your shower? Let’s go back to grilling on your deck for a minute. Here’s a likely scenario: you cause substantial damage to the building
you are renting. The landlord’s
insurance policy will pay for damages and then look to you for recovery of the
damages since you were the party that was negligent. Ouch! Did you know that was a possibility? Well, it sure is and it happens all the time.
Joe’s recommendation: always purchase as much liability coverage as
you can afford.
Base policies come with
$100,000 but buy more. It only costs
$14-$20/year to increase to $300K or $500K. In Vermont the cost for a policy is
about $150/year for $10,000 of coverage for your personal belongings. For more information about renter's insurance, contact Joe Burkhard at Winooski Insurance, 802-655-9000.
|Important Factors to Consider When Financing an Apartment Property Purchase|
At Full Circle, we
know that an investment property can be an important part of your portfolio.
vacancy at less than 2% in Chittenden County,
investment property has become an attractive option to many potential
buyers. Mark Benton, a Mortgage Plannerwith Regency Mortgage Corp. shares some great information if you’re considering
a real estate investment property. Mark says that there are three major factors
that will influence your investment property purchase:
Conventional fixed rate financing is available for single
family homes, condominiums, and 2-4 unit properties. Properties with 5 units or more will need
The down payment is the first important piece of investment
property financing. Typically, 25% down
payment is required for purchase. There
are some options with 20% down payment for a single family investment purchase,
but interest rate and points will be higher.
A strong credit score is also key. You will always get the best pricing with a 740
or higher credit score.
Reserves requirements have increased as part of the
financing process. Typically, you will
need to show 6 months of housing payments (mortgage, property taxes, and
insurance) for the property to be purchased, along with 2-6 months reserves for
each additional property depending on the total number owned.
With investment property inventory in short supply, it is
very important to get pre-qualified for your financing before going out to look
at properties with a realtor. Knowing
all of your options upfront means that when you find the right property, you
can act quickly.
Purchase and refinancing options with fixed rates are also
available to investors who own 4 or more rental properties.
Mark Benton is a Mortgage Planner with Regency Mortgage Corp,
located at 3 Baldwin Avenue in South Burlington, Vermont (NMLS 94675).
He can be reached at (802) 448-2802 or firstname.lastname@example.org.
|Tips for Choosing Apartment Building Insurance|
At Full Circle we work closely with people who are investing in rental property. We know and understand the importance of apartment building insurance. When choosing apartment building insurance there are numerous things to consider. For many of you, not only is your apartment building a large investment, it can also be a potential liability should someone get hurt. We have partnered with our friend Joe Burkhard, president of Winooski Insurance, to provide you with some tips for choosing apartment building insurance. Here are some ways to protect your investment and yourself from liabilities when choosing apartment building insurance.
Select the proper amount of insurance.
Most people think of their property in two ways:
#1. What is it worth?
#2. How much are the taxes?
However, the question you should be asking is this:
How much will it cost to REPLACE my structure if I suffer a large loss? Large losses do happen more than you think. We suggest you become familiar with the replacement cost and insure your building for that amount.
What if you don’t want to replace a damaged property?
Some carriers do offer the option of insuring your building at Actual Cash Value (ACV). This is defined as Replacement Cost-Depreciation. This will allow you to insure your building for less, but bear in mind if you suffer a large loss, the settlement will be less. This comes in handy for people who do not want to go through the process of rebuilding. The biggest challenge here is determining what the ACV limit should be.
When choosing apartment building insurance, be sure to get plenty of liability insurance.
How much is enough? How much can you afford or how much liability do you have? Most people underestimate their exposure. A loose railing, a furnace malfunction, or a faulty electric problem could all cause serious bodily injury to a tenant, for which you could be held liable. Start with at least $1,000,000 and go from there. You can always purchase an umbrella policy for additional limits of liability to extend over the current policy.
Consider purchasing building ordinance or law coverage.
Did you know that if you suffer a loss, your insurance carrier is only obligated to restore you back to where you were before the loss? Your local town zoning office may have different ideas. They can enforce you to bring your building up to current zoning codes and this extra expense will not be part of the insurance settlement. It will be at your expense. The good news is you can purchase insurance coverage to cover this potential exposure. How much should you buy? It depends on many variables. You should start with the following: How old is your building and what are the current building/zoning codes today vs. what you have invested in your building. We strongly urge you to investigate this exposure.
Do you require your tenants to purchase renters insurance?
You should. Why? Perhaps the biggest reason is if they cause a substantial loss to your building, your insurance carrier will recover the loss by subrogating against your tenant’s policy. Why is this important? Imagine suffering a large fire loss caused by a tenant. Chances are after your insurance carrier pays you for the claim, they will either increase your rates tremendously or drop you. And this happened for a loss that was not your fault. Most property owners are okay with being dropped or having a rate increases if they, themselves, were negligent, but most property owners are not happy when this happens due to a tenant’s negligence. The other added benefit is the tenant will have coverage for a loss and not pursue damages against you, claiming some sort of negligence.
Earthquake and flood insurance.
If you are exposed to these perils, it never hurts to get an estimate for these coverages or policies. You can then gauge the cost vs. the risk.
These are the most common topics we evaluate for consumers when choosing apartment building insurance.
Feel free to call Full Circle at 802-864-5200 or send an email if you have any questions about property management or property rentals. You can contact Stephanie Allen, Executive VP and Chief Operating Officer, Full Circle or Rich Feeley, President, Full Circle.
If you have any insurance questions or concerns, contact Joe Burkhard, CIC, President, Winooski Insurance, email@example.com or call 802-655-9000.
|Northwest Market Report 2014|
At Full Circle we want to provide you with the most up to date information out there on multi-family apartment investments. Our friends at Coldwell Banker Hickok & Boardman Realty have shared this report with us, and we hope you find it helpful.
With vacancy rates far below the national average, Northwest Vermont is attracting investors from out-of-state. Low inventory may lead to higher pricing in 2014.
Northwest Vermont continues to attract investors from in and
out of state, given its low vacancy rates and a diverse and growing
Tight inventory is putting upward pressure on pricing, which
may continue in 2014 given that new listings aren’t keeping pace with demand
from investors, according to our agents. Some investors are choosing to hold
onto their properties, given favorable trends such as low vacancy rates and
relatively high rents.
Sales of duplexes and other multi-family homes rose 5%
across Chittenden, Franklin, Addison and Grand Isle counties. Median pricing
rose 3.7%, reaching $279,950 across the four counties.
Chittenden County, home to the University of Vermont and
other higher education institutions, and employers such as Dealer.com and Burton
Snowboards, has a very competitive rental market, with its vacancy rate
standing at 1.6%, according to a December report from real estate consultant
Allen & Brooks. By comparison, the U.S. apartment vacancy rate stood at
4.1% in the fourth quarter, according to Reuters.
Chittenden County recorded 87 multi-family sales in 2013,
making it the busiest market in Northwest Vermont for duplexes and three- to
four-unit properties. Franklin and Addison counties recorded 12 and 6
multi-family sales, respectively. Grand Isle, meanwhile, recorded one such
transaction last year.
Within Chittenden County’s multi-family market, Coldwell
Banker Hickok & Boardman Realty handled 27% of all sales, outpacing all
other real estate offices in the county and placing our Agency almost 13
percentage points ahead our closest competitor.
The strong rental market is driven by economic and
demographic changes. With the economy recovering from the recession, more young
people are moving out of their parents’ homes and into their own apartments,
according to Allen & Brooks. At the same time, some renters are opting out
of buying homes at the time because of more stringent lending standards.
As the economy continues to recover and Vermont employers
add jobs, the rental market is likely to remain strong, Allen & Brooks
notes. With a stable supply of tenants, it appears likely that investors will
continue to express interest in multi-family properties.
Burlington recorded 54 multi-family sales, making it the
most active of any town in Northwest Vermont. Meanwhile, new listings in the
Queen City declined 8.5% in 2013, indicating tightening supply. Because of the
lack of inventory, well-priced and well-maintained properties are receiving
The city’s median sale price for multi-family properties
jumped 16.7% to $379,350.
Winooski recorded 14 sales, down from the 16 sales recorded
in 2012. Median sale pricing slipped 4.1% to $229,500. Still, duplexes and
three- to four-apartment homes took less time to sell, spending an average of
70 days on the market, down from 95 a year ago.
The Coldwell Banker
Hickok & Boardman Market Report is based on data collected from internal
and external sources such as the Northern New England Real Estate Network and
does not represent privately negotiated transactions unless so noted. All
material herein is designed for information purposes only and has been drawn
from sources deemed reliable. Though the data is believed to be correct, it is
presented subject to omissions, errors, changes or withdrawal without notice.
The report is not designed to solicit property already listed. Coldwell Banker
is a registered trademark licensed to Coldwell Banker Real Estate LLC. An Equal
Opportunity Company. Equal Housing Opportunity. All Offices Are Independently
Owned and Operated. © 2014 Coldwell Banker Hickok & Boardman Realty. The
report is not intended to predict future results. This does not constitute and
is not intended to constitute property investment advice or an offer to sell or
the solicitation of an offer to buy any property.
Copyright © 2012 Northern New England Real Estate Network,
Inc. All rights reserved. This information is deemed reliable but not
guaranteed. The data relating to real estate for sale on this web site comes in
part from the IDX Program of NNEREN. Subject to errors, omissions, prior sale,
change or withdrawal without notice. IDX data last updated on 02-14-2014..
|Chittenden County Apartment Market|
|At Full Circle, we want to make sure that you're informed about the local rental market. We asked Mark Brooks, a principal at Allen & Brooks, Inc., a commercial real estate advisory firm in South Burlington, VT., to share his analysis.|
The Chittenden County apartment market is characterized by strong demand, limited supply, and rising rental rates. We have historically seen very low apartment vacancy. In 2013, apartment vacancy in Chittenden County averaged only 1.4%. This extremely low figure is actually equivalent to the average vacancy over the past 20 years, illustrating that the limited availability of apartments is nothing new. The low vacancy is putting upward pressure on rents, with an average increase between 2012 and 2013 of approximately 3%. Rents in newly constructed or renovated apartments in and around Burlington are routinely in the $850 to $1,100 per month range for studio apartments, $1,200 to $1,400 for one bedroom apartments, $1,300 to $1,650 for two bedroom apartments, and $1,500 to $1,950 for three bedroom apartments. These rents are based on the tenant’s responsibility for heat and electric charges.
Developers have taken note of the strong market fundamentals and have responded with significant new apartment construction. Over the past 14 years, there has been an average of 196 new apartments constructed each year in Chittenden County. In 2012 there were 390 new apartments constructed, and in 2013 there were 385 new apartments constructed. Construction in both of these years was about twice the lon term average. In 2014, the high rate of growth will continue with 369 new units expected to be brought to the market. In spite of the rapid growth, the new units have been quickly rented. Some buildings were fully leased when they became available for occupancy; others were fully leased within three to four months. With the rapid absorption of the new units, we have not seen a significant increase in apartment vacancy.
The tight rental market is a product of several trends. With the improving health of the local economy, younger people who had been living with their parents or in roommate situations are striking out on their own and renting apartments. This is exemplified by the strong demand for one bedroom units. In addition, many financially secure tenants who in past years would have chosen to buy their first home are instead electing to remain in the apartment market. This is partly as a result of the more stringent mortgage financing requirements which made home ownership a more difficult goal to achieve for many people. High student debt load also detracts from the ability of many to afford home ownership. For others, home ownership has lost some of its luster and apartments represent protection from future declines in the housing market along with greater flexibility should they choose to relocate. In addition, with the many new apartment complexes, renters may be able to live in a newly built home, while home ownership would likely require them to buy an older home needing upgrading.
With strong tenant demand, low mortgage rates, and available financing, apartments are a comparatively low risk investment. These factors have drawn investors to the apartment market. The number of apartment sales has steadily increased each year as the economy moved out of the recession. In 2013, the number of sales was almost 50% above the 2010 level, which was the low point in sales over the past 10 years.
Looking at 2014, we may see a reduction in the number of sales because of limited availability of apartments which are for sale. Its apparent that many owners recognize that they have a very good investment and are reluctant to sell. With the lack of inventory, investors in the market are focusing on the limited number of available properties. The result has been increasing sale prices, which have averaged about 3% annually in recent years.
Looking forward, the overall rental demand will remain robust. The improving economy and job growth will bring more renters to the area. However, it is likely that the surge in new construction will modestly increase vacancy and reduce some of the upward pressure on rents. In addition, the improving economy will also support the owner occupied housing market. With low rates and more confidence among buyers, we have seen an increase in sales of single family homes. While we don’t expect the housing market to return to the boom times experienced before the recession, this trend will reduce demand for rental housing as most new home buyers are former renters. However, given the depth of the renter demand, and evident trends in the market which favor rentals, we expect that the local apartment market will remain strong.
Mark Brooks is a principal at Allen & Brooks, Inc., a commercial real estate advisory firm in South
Burlington, VT. The information on the apartment market was provided by the Allen & Brooks Report, which provides detailed analyses of trends in the Chittenden County commercial real estate markets. The Report is sold to subscribers.