A new study looks at the relationship older Americans have with their homes and finds some surprises.
Aging Baby Boomers apparently missed the memo about how badly they’ve prepared for retirement. While study after study highlights inadequate retirement savings and planning, a new survey and report sponsored by Merrill Lynch finds that a broad cross-section of older Americans are eagerly looking forward to new adventures and, especially, freedoms, in their later years.
“Home in Retirement: More Freedom, New Choices,” prepared for Merrill Lynch by the Age Wave consulting firm, focuses on the age-related transitions that people are making in the way they live and how they regard their homes. According to the study, nearly two-thirds of retirees say they are now living in the “best home of their lives” and making active efforts to create living spaces that match their new retirement lifestyles. Nearly as many say they are likely to move during their retirement years, and most of this group has already relocated once.
“When I look out at the future of our aging population, I have concerns, too,” said Ken Dychtwald, head of Age Wave and a longtime leader in aging research. “I am not a beginner at this. But I think a lot of our worries are not a fait accompli,” he said. “I think we have, to a fair extent, overemphasized the misery of aging.”
After lives largely determined by work and family responsibilities, boomer retirees find they are experiencing a new sense of freedom about where and how they live. An estimated 4.2 million retirees moved into new homes last year alone, the report found. And while downsizing is often recommended as a new lifestyle for retirees, nearly a third of retirees who relocated actually moved into larger homes. (One reason: One out of every six retirees has a “boomerang” child who moved back in with them.)
Only one in six retirees who moved last year wound up in a different state, emphasizing the strong attachments that boomers have to their existing communities. Among future retirees, 60% say they expect to stay in their current state while 40% want to explore other parts of the country.
From their 60s to their late 70’s, people “think of this as a great time and a time of great freedom,” Dychtwald said. “That word—freedom—came up over and over again.”
Reaching age 60 seems to represent a “threshold event” for people, added Cyndi Hutchins, director of financial gerontology for Bank of America Merrill Lynch. With careers winding down and children out of the house, people take a new look at their futures. Another transition occurs in the early to middle 70s, when many begin to slow down and become less active. “We see a spike in that freedom threshold again at that age,” she said. “We see retirement as a succession of different time periods.”
Whether people move or not, or downsize or not, their homes assume added significance, the study found. “Prior to age 55, more homeowners say the financial value of their home outweighs its emotional value,” the report said. “As people age, however, they are far more likely to say their home’s emotional value is more important than its financial value.” More than 80% of people aged 65 and older own their own homes, and more than 70% of them have paid off their mortgages.
If boomers do reinvest in their homes, it would provide a major boost to the housing and home furnishings business. In the next decade, the study notes, the number of U.S. households will increase by nearly 13 million, with nearly all of this growth—nearly 11 million—occurring among people aged 65 and older.
“Age 55+ households account for nearly half (47%) of all spending on home renovations—about $90 billion annually,” the report noted. “While younger households slowed or reduced spending on home renovations between 2003 and 2013, spending among those age 65+ increased by 26%.”
Common renovations among retired homeowners include: home office (35%), improved curb appeal (34%), a kitchen upgrade (32%), improved bathroom (29%), adding age-friendly safety features in a bathroom (28%), and modifying their home so they can live on a single level if needed (15%).
The report found the South Atlantic states were the favorite place for people to live and to relocate, followed by Mountain and Pacific states.
It also echoed other research that finds people overwhelmingly prefer to “age in place” in their own homes, with 85% of people preferring this option as opposed to moving to a senior or assisted living community.
Leading age-ready home features include a no-step entry; single-floor living; extra-wide hallways and doors; accessible electrical controls; lever-style handles on doors and faucets; bathroom safety features, and, accessible countertops and cabinets.
The Merrill Lynch study is the fifth in its series of seven planned reports dealing with people’s life priorities for their health, home, family, finance, giving, work, and leisure. Its findings are based on a survey of more than 3,600 adults representative of the broader U.S. population in terms of age, income, gender and place of residence.
Philip Moeller is an expert on retirement, aging, and health, and co-author of “Get What’s Yours: The Secrets to Maxing Out Your Social Security,” Reach him at email@example.com or @PhilMoeller on Twitter.
Q: I’ve followed your advice and gotten three bids from different contractors who want to do my project. Now what? Do I just hire the one with the best price?
A: Those bids can tell you a lot about the contractors who wrote them—but they may not be very accurate measures of the total price each one would wind up charging for your project. Here’s why.
Unless you’ve given the bidders the exact specifications for your job—in other words, drawings, materials lists, and product names put together by an architect or designer—the bids are at best educated guesses, says Cambridge, Mass., Realtor and renovation consultant Bruce Irving.
The contractor is making assumptions about what you’ll pick as the project unfolds and pricing each component of the job based on those assumptions. So the differences in their bids could very well boil down to differences in their assumptions. And your costs are bound to escalate as the project proceeds, because you can be sure that the contractors will hit you with up-charges for any product or option you select that’s more expensive than his estimate.
If you have hired a professional designer (which Irving recommends for any significant project, because for the added 10% or 20% you’ll pay, he says, you will get you a far better result, professional oversight of the contractor, and a whole lot less stress along the way), the bids are likely much more accurate measures of what each contractor will charge, especially if their bottom lines are just a few percentage points apart. Always throw away outliers. Extreme low bidders are probably desperate for work and planning to cut corners on your job, and super high bidders are probably too busy to take on your project unless you’re willing to overpay.
Whether or not you’re not using a designer, however, bids can be quite useful as character studies about the contractors.
“Look not only at the numbers but at how they’re presented,” says Irving. “Are they clear, organized, detail-oriented, and delivered when they were promised? Do they accurately reflect the nuances of what you told him you’re looking to do?” There’s no guarantee that a quality bid equates to a quality contractor—or that a sloppy one means you’ll get sloppy work—but it increases the odds.
Look for a bid that thoroughly outlines every aspect of the job, from the cost of the porta-potty for the crew to the fee for the town building permits—and of course the contractor’s price for each and every element of the project, with a bit of detail about the options that he’s priced (not just “under-cabinet lights,” for example, but “eight under-cabinet LED light fixtures”).
That way, even without architect specs, you can see, in writing, exactly what he’s proposing to deliver—and charge you—for each part of the job. Once you sign the bid and it becomes your contract, if a question arises later about whether the price includes, say, installing stone or ceramic tiles, you’ll have his description to refer back to.
In any case, the bids should only play a supporting role in your decision about who to hire. “It’s just as important to visit a current project, see the way the jobsite is kept, and meet the crew,” says Irving. “And it’s vital that you talk to his three most recent customers to ask whether they’d use him again—and how close the final price came to his original bid.”
Owning a vacation rental can be a good investment, but a lot can go wrong if you're not prepared. Here's what to know before you buy.
Owning a vacation home can be a great investment opportunity, but it is one that does have some risk associated with it. Before you ever purchase a vacation home, you should do your homework and plan accordingly. Here are 5 things that can go wrong when owning a vacation home.
1. Annual Returns Can Go Negative
Oftentimes vacation homeowners are faced with a negative annual return especially if they had a down year for bookings or if they had a major repair. Before you ever purchase a vacation home, you should look at all the monthly bills associated with the property and be comfortable enough with the total amount that you could pay on these bills even if the vacation home did not bring in any money.
Just in a few recent years, we have had a terrorist attack on American soil and the second worst financial disaster in the history of our country. These two events had a major impact on people traveling and the amount of disposable income they have to spend on vacations.
The second thing you must research before you buy a vacation home is to figure out the average nightly rate guests are willing to pay for a similar property and how many nights a year the property should be occupied. Once you have these two figures, you can easily find out how much income the property will bring in on an annual basis. When you compare the income to the monthly expenses, you should have a positive cash flow. If not, I would think twice about purchasing the property.
You can find most of the information you are looking for by asking your realtor, property managers who manage properties in the area, and by calling homeowners who list their properties on VRBO.com.
2. You May Not Be Able to Visit as Often as You’d Like
Life has a funny way of jumping in and keeping us from doing things we really want to do. I can’t count on my hand how many times homeowners have told me that before they purchased a property in Orlando, they visited 3 or 4 times a year. Then after they purchased their vacation home, they never seem to be able to break away and visit. You oftentimes find this as kids get older and get into sports or other activities that seem to eat up your weekends.
3. Repairs Can Come Up
You will need to put money back into your property every year to keep it up and maintained. The National Realtors Association estimates that you should budget for 1.5% of the cost of your home to be spent on repairs and general upkeep every year.
So if you purchase a $200,000 vacation home, you should budget to put $3,000 back into the property every year. Now, if you are renting your vacation home out to short term renters, you might need to budget a little more. Guests may not treat a vacation home as nicely as they would their own house.
4. HOA Dues Always Go Up
If you purchase a vacation home in a community that has an HOA, the dues will always go up. In all the years that I have been managing vacation homes, I have never seen an HOA reduce their monthly or quarterly dues.
5. Vacation Homes Do Not Always Increase in Value
Just as we talked about before, when we have a huge natural, manmade, or financial disaster, investors get scared and sell their investments. This is what happened in 2008 and 2009. Too many vacation homes flooded the market, and the price on the houses plummeted. Many people were not able to sell their vacation home for anywhere near the price that they purchased it, and this caused many houses to go into foreclosure and some houses to be sold as short sales. The longer you hold onto a vacation home, the better chance you have of making money on the property, but buying a vacation home is not a surefire money maker.
Owning a vacation home is a good investment if you do your homework and research. Many people rush to buy a vacation home for the simple pleasure of just saying they own one. Take your time; buying any good investment is a marathon, not a sprint. Don’t be afraid to walk away from the property if you are not totally comfortable.
More from BiggerPockets:
Zillow executives talk about where home values are rising and what you should look for in a house.
Q: Should I refinance my mortgage? I can drop my current rate by half a point.
A: Mortgage rates, though still close to the 19-month low set in mid-January, have recently started inching up. The national average for a 30-year fixed mortgage was 3.9% as of Feb. 11, according to Bankrate. That’s up from 3.8% the week before, but well below the 5%-plus rates of 2011.
So if you’re a homeowner with good credit and a solid income, now might be an opportune time to refinance.
As a general rule, refinancing—that is, paying off your current mortgage and taking out a new loan at a lower interest rate—may be worthwhile if you can drop your rate by at least half a percent, says Marilyn Capelli Dimitroff, a certified financial planner in Bloomfield Hills, Mich., and former chair of the CFP board of directors. For example, if you have $390,000 remaining on an original $400,000 loan at 4.25%, refinancing the balance into a new loan at 3.75% would save you $162 a month.
There are costs to refinancing, of course. You’ll have to pay bank fees, attorney fees, appraisal fees, and title insurance fees that typically total about $3,000 to $5,000. Use a refinance calculator, such as this one from Bankrate, to plug in your current mortgage details, the new loan rate, and the refinancing fees, and you’ll see how many months it would take for the savings to repay the cost. Bear in mind, though, that refinance calculators tend to underestimate the payback time. They typically don’t factor in the mortgage tax deduction, which effectively lowers the net savings from reducing your monthly interest payment, and you may not anticipate every fee you’ll have to pay, so don’t refinance unless you’re planning to stay in your house for at least five years.
Even if all the numbers look good, there’s another factor to consider, says Dimitroff. By refinancing, you’re extending the loan period to 30 years from now. If you’re in year two of the original loan and you’re 34 years old, that’s probably no big deal. But if you’re in year seven and you’re in your late 40s, you may not want to start over with a 30-year loan.
If you’re concerned about extending your loan too far into the future—or if by doing so you will wind up paying additional total interest over the life of the loan, something you can check on any good refinance calculator—consider these two options:
- Take a 15- or 20-year loan instead of a 30. This will generally earn you a still-lower interest rate, though the shortened loan period will probably result in a higher monthly payment. With the example above, refinancing for 15 years at 3% (the national average in early February was 3.06%) would increase the monthly payment by $725. If you can afford that cost, this can be an extremely beneficial move because it means you’ll be done paying off your mortgage in just 15 years and will save more than $100,000 in total interest over the course of the loan.
- If you can’t afford to do that, see whether you could take a new 30-year loan, but use some of your monthly savings to pay a bit extra each month and shorten the term of the new mortgage to match the years remaining on your old one. For example, refinancing in year five of a $400,000 mortgage at 5% into a new loan at 3.75% could save around $450 a month. Put $200 of that toward paying down the principal each month, and you can shorten the new loan to 25 years and still pocket close to $250 a month. Or just keep paying the full amount you’re already accustomed to paying each month, and shorten the new loan to just over 20 years, with the freedom to pay only the regular loan payment anytime finances get tight.
Always shop around for your mortgage because rates—and fees—vary significantly from one lender to the next. If you have excellent credit, you may find the best rates from a local savings bank rather than a national bank or a mortgage broker.
Keep pets, friends, and bad credit from ruining your shot at a nice rental
If you are a renter, you have many obstacles ahead of you. Landlords are full of horror stories, and you are just another potential horror story. You want and need to be the best renter the new landlord has ever seen.
No landlord really wants you, but they need you. They need you to help them pay their rental mortgage; they need you to help them pay their personal mortgage, they need you to help them retire early. But they do not need you to come around and damage the premise or cause them a lot of extra work. Here is how to be the best renter you can possibly be.
Prepare for the Apartment Viewing Process
When you set up a showing for a rental property, it is really an interview. You are interviewing the landlord or property management company, and they are interviewing you. Make a critical mistake in this process, and you will have to move on to the next property. You do not have to be dressed for church, but do not come looking like you are homeless.
Get A Solid Credit Score
Anyone can have a decent credit score at 18 years old. Apply for a secured pre-paid Visa card, use it for a small charge once a month, and pay the bill when it comes due. Just like that, you will have a 700+ credit score. If you already have bad credit, you are starting behind the 8-ball and may have more difficulties. Clean up your credit report as soon as possible to increase your credit score.
Knowing approximately what your credit score is will help immensely, in case there are credit score requirements for the rental. There is no sense in applying for a place you will not get. Bring in your proof of a credit score to help, but know that any decent landlord will also run your application through a credit check process and verify that your version closely matches theirs.
Come Prepared to Rent
You should be ready to rent any place you are looking at; otherwise, why waste your time or the landlord’s? Bring along proof of employment and income, along with your W2, tax forms, or a pay stub. Bring a pen to fill out an application and a checkbook to write out a check for the application fees. If you like the rental, you should also put down a holding fee to hold the rental. If you do not like the place or the landlord, keep the information in your pocket for the next place.
Control Your Viewing Group
Bring everyone along who will be renting — and no one else. A landlord will assume that your friend who arrives with you and is “living somewhere else” will be moving in as soon as you sign a lease. If your fiance who has just gotten out of prison stays in the car, I will also assume he looks so rough no one will rent to him, and I will also assume he will be moving in. Do not be offended if the landlord wants to keep criminals out of their multifamily rental.
If you have kids, do not let them run wild in the rental. It is not your place yet. If you are viewing an occupied unit, remember that it is someone else’s house. The current tenants do not even want you there, but they know the landlord needs to show it. If your kid steals a toy from the current renter and you have to come back from your car to return it, please do not be offended when you are politely declined for the rental.
Clean Up Your Pet Situation
Get rid of your “lab mix” dog that looks and acts like a purebred pit bull. Landlords do not like pit bulls, insurance companies do not like pit bulls, and many cities do not like pit bulls. If you have a 200 lb. bull mastiff, expect to be declined as a renter in any places that do not also allow horses. If you have six cats, get rid of at least four of them. Do not even apply if you have an intact male cat.
If you have a fish tank, keep it under 55 gallons. I have had renters with 200+ gallon saltwater fish tanks, and while they are impressive, they are way too big. Do not think for a minute that large or poisonous snakes are a great pet in an apartment, even though they are quiet. If your dog barks, get a bark collar for it.
If you have more than two pets, in any combination of dogs and cats, you are going to have a problem, especially if you can barely afford the rent.
Learn Move-In Etiquette
Once you have been approved, plan on moving in during the day. You can start as early as 7 a.m. during the week — or even 8 a.m. on the weekends — but do not start moving in after 8 p.m. Wait until the next day. Do not block the other tenants’ cars with all of your mover’s cars. If you have to temporarily block driveways and garages, be prepared to quickly move out of the way in short notice. Other tenants need to go about their day and do not want to be inconvenienced by you.
Watch for the walls and ceilings when you move. Do not scrape the walls and break ceiling light fixtures. If you drop trash in the hallways or common areas, pick it up. If you see a neighbor, introduce yourself if they do not do so first. Your neighbor is your ally. They are the ones who will tolerate your noise — or call the cops on you. It’s your choice: be a neighborly neighbor or be the “strange person across the hall.” A simple handshake is all it takes.
Requirements of a Great Renter
Pay Rent. It is impossible to be a great renter if you do not pay rent. You could be a personal friend of Gandhi or a guest of the Pope on a regular basis, but if you do not pay rent, you are a terrible renter by definition. Pay your rent on time; it is due on midnight the evening BEFORE the first of the month. Not on the first, not on the fifth. Set up an auto-pay system so you do not forget; it will save your renter reputation. If you need to pay rent in two installments, pay half in advance, and the rest when it is due.
Do Not Force Other Tenants to Leave. If you have weirdo habits that creep other tenants out, it is a bad deal. Do not deal drugs in the apartment area, or even look like you might be a drug dealer. If you want to be a drug dealer, go do it at work, not at home. If you have a habit of hanging laundry on the deck or using a sheet for a curtain, think twice about it. You do not want to bring down the appearance of the complex because you are too cheap to live like a normal human being.
Do Not Bring in Pests. Stay away from the free furniture on the curbs. It is there for a reason; no one wants it. It is likely to be full of bedbugs. Stay away from bringing home boxes from stores and restaurants that are full of cockroaches. If you bring in cockroaches or bed bugs, do not be surprised if you are eventually asked to leave. It is easier to rid an apartment of pests when it is empty. Pests are non-discriminatory in terms of income level, but low income habits seem to attract them.
Do Not Invite Your Criminal Friends Over. Many criminals who have been to jail or prison have a different mentality when it comes to resolving issues. It typically becomes a fight waiting to happen. Combine criminals, alcohol, and a card game, and it is only a matter of time before someone gets offended and a fight breaks out. When someone gets into a fight and they are hit with a 1.5L brandy bottle, they can fall against the stairway railing and lose half of their ear. I have seen it happen. If you have criminal friends, go play at their house, not yours.
Do Not Just Hang Around. Do not loiter around the outside of the building or allow your friends to do so. When you come home or your friends come over, go into your apartment. Hanging around looks bad — it looks like you are looking for trouble to get into. And especially do not hang around the building or parking lot around after dark. Hanging around and drinking is even worse; do not drink outside your apartment. If you are grilling alone, a beer to pass the time might be OK. Never drink outside when you have friends over.
Disclose Your Extra Guests. Do not expect that because you have paid the rent, you can have extra people living there. There is a reason why tenants get screened; one reason is to make sure you will likely pay the rent. The other reason is to screen out potential troublemakers. If you want a guest, get them approved by the landlord. Maybe there will be slight increase in rent, maybe not. And extra guests also include extra pets.
Do Not Be Crazy. If you think it is a great idea to come home drunk at 2 a.m. and start a fight with your roommates, think again. The other neighbors do not want to hear you wrestling around like a bunch of wild bears upstairs. If you then think you are invincible and want to go out and find another party but decide to punch the ceiling light on your way out, it will not wind up good. The light fixture is cheap to replace, but I will be charging a much greater amount against your damage deposit for my time and trouble.
Be Quiet After 9 p.m. Most tenants work a typical day job. They expect it to be quiet when they go to bed or start to get ready for bed. If you like parties, loud TVs, shoot-em-up video games, or even loud card games, you need to think twice about whether a multifamily rental is for you. You share walls, ceilings and floors. Your music and sound effects become their noise. If you already met the neighbors, they might come over and help you realize you are making too much noise. If not, they may just call the cops.
Do Not Attract Police Calls. Call the cops as often as you need to, but never get them called on you. One call and you could be evicted. If you committed a cardinal sin, like domestic abuse or drugs, expect to be shown the door. If your live in roommate gets arrested for having a vehicle chop-shop in the garage, do not expect you will have until your lease ends to move out; you will be lucky to get until the weekend to move. When bad behaviors are noticed and one gets kicked out, everyone gets kicked out.
After the Move-In
Remember that the hurdle you had to overcome to move in, your neighbors also have experienced. The reason why your rental is nice is directly related to that tenant screening hurdle. You should want to keep it nice and get a great landlord reference.
Your home is your castle, but it is not going to be yours forever. Give proper notice to move out. Keep it clean and mostly presentable. Clean up after your pets and control your guests. Enjoy the time you are there.
More from BiggerPockets:
I Quit My Day Job, Retired Early & Started a New Venture Using Real Estate: Here’s How
3 Smart Ways to Make an Extra $1,000 a Month Through Real Estate Investing
5 Habits of Highly Miserable Real Estate Investors (and How to Kick Them)
Q: I’m hoping to sell my house in the spring, and I’m told the place could use some freshening before I put it on the market. I don’t have the budget to fix everything, so which are the best projects to invest in if I want to get some of that money back when I sell?
A: The good news is that after years of sluggish performance, in many places the housing market has started picking up steam again. But that doesn’t mean you can expect every home improvement project to increase your home value when it comes time to sell. Remodeling magazine’s latest Cost vs. Value report shows that, on average, home improvements paid back 62% of their costs at resale in 2014. That’s up from a low of 58% in 2011, but still well below the 87% paybacks of 2005.
Each year, the magazine surveys contractors about the costs for a host of common projects and asks Realtors to estimate how much each of those projects adds to a house. You can’t exactly take the results to the bank, because there are a host of other factors that will affect your payback, from how badly your house needs the work to how common such updates are in your neighborhood. Still, the numbers are handy to keep in mind if you’re investing in a project and also think you may sell within a few years.
Here’s how the 2014 return on investment looked for some major remodeling projects across the country. As you can see, curb appeal goes a long way, ditto cosmetic upgrades of kitchens and baths. For a regional breakdown to see how much these projects would add in your area, check out the full report.
|Siding Replacement (upscale fiber cement)||$14,014||84.3%|
|Deck Addition (midrange wood)||$10,048||80.5%|
|Minor kitchen remodel (midrange)||$19,226||79.3%|
|Window Replacement (midrange vinyl)||$11,198||72.9%|
|Finish basement (midrange)||$65,442||72.8%|
|Window Replacement (upscale wood)||$17,422||71.9%|
|Bathroom Remodel (midrange)||$16,724||70%|
|Major Kitchen Remodel (midrange)||$56,768||67.8%|
|Add a two-car garage (midrange)||$52,382||64.8%|
|Family Room Addition (midrange)||$84,201||64.1%|
|Bathroom Remodel (upscale)||$54,115||59.8%|
|Major Kitchen Remodel (upscale)||$113,097||59%|
|Master suite addition (upscale)||$236,363||53.7%|
Source: 2015 Cost vs. Value Report
New research finds that a Starbucks opening in the neighborhood helps local property values.
When searching for a new home, buyers usually consider the usual suspects: square footage, number of bedrooms, amount of sunlight.
Vanessa Pappas had another factor in mind as well: coffee shop proximity.
When Pappas and partner C.C. Hirsch recently closed on a three-bedroom property in Windsor Terrace, Brooklyn, it didn’t hurt that her favorite macchiato place was only a half-block away.
“Coffee is important,” says Pappas, 36, global head of audience development for YouTube. “It’s our daily ritual, and we always go to see our friends who work there. It makes us feel like part of the neighborhood.”
It turns out that easy access to quality java has broader implications. Call it the Starbucks Effect: Proximity to a local coffee shop has a very real, and positive, effect on home values, new data shows.
“We looked for certain markers for where homes appreciated faster than others,” says Stan Humphries, chief economist at real estate marketplace Zillow and co-author (with chief executive Spencer Rascoff) of the book The New Rules of Real Estate.
“Coffee houses emerged early on as a big predictor of future home value. Within a quarter mile, close enough to smell the coffee brewing, that ring appreciates faster than rings further out,” Humphries says.
How much faster? Over 17 years tabulated by Zillow, leading up to 2014, homes adjacent to the local Starbucks almost doubled in value, up by 96%. Those further out appreciated by 65% over the same period.
And apparently not all coffee shops are created equal. Zillow researchers compared homes near Starbucks locations to those near Dunkin Donuts.
Dunkin Donuts-adjacent properties also outperformed the wider market, rising 80% over 17 years, but they lagged those in the shadow of Starbucks.
Of course, there is a chicken-or-egg question here: Are coffee shops causing a boost in home values, or are the popular chains merely locating in promising neighborhoods that are already on the upswing?
Humphries’ discovery: Within the first few years of opening, Starbucks locations are actively helping local home values. After that, the outperformance of the broader market tends to diminish.
Whole Foods Effect
The coffee shop is hardly the only symbol of neighborhood gentrification. Researchers have found other amenities can have an even more powerful effect on home values.
Nearby specialty grocers, for instance, can lead to a 17.5% home-price premium, according to Portland, Oregon-based real estate consultancy Johnson Economics. That compares to a more modest 4.5% for coffee shops.
In that sense the Starbucks Effect might be more accurately be termed the Whole Foods Effect, according to the firm’s principal, Jerry Johnson, referring to the natural food supermarket chain.
Also significantly affecting nearby home prices, according to the Johnson Economics study: cinemas, wine shops, and garden stores.
Given Starbucks’ massive resources, it is perhaps not surprising that the Seattle-based chain is adept at picking out promising spots. After all, the company employs entire teams of professionals devoted to pinpointing optimal locations.
“Where we choose to locate our stores is as important as how we design them,” says Michael Malanga, Starbucks’ senior vice president of store development.
For potential homebuyers, it’s like heading into an exam with the answer key. Assuming that significant market research has gone into every store opening, buyers can piggyback on those positive conclusions.
“There are substantial resources spent by Starbucks headquarters to figure this stuff out and find where the best locations are going to be,” says Zillow’s Humphries. “So for homebuyers, you can essentially draft off the work that Starbucks has already done for you.”
As for YouTube’s Pappas, she’s not a fan of Starbucks. She prefers her local Brooklyn spot—Krupa Grocery. But she isn’t surprised that coffee shops turn out to be a reliable predictor of home-price appreciation.
“Especially in New York City, you want to be able to walk to everything,” says Pappas. “Having a coffee shop within eyesight is a big plus.”
Pay your bills, respect your neighbors, and please hide your weed. Please.
Sometimes the landlord/tenant relationship can be a difficult one. But it does not have to be that way, and it certainly does not have to start out that way. As landlords, we try to get this relationship off to a good start and keep it that way by taking care of our properties and tenant concerns.
But some tenants, perhaps due to past experiences, prepare for the worst and thus approach the relationship ready for a fight. Maybe they have never had a decent landlord. Maybe some just do not know how to act. Whatever the reason, here are 14 tips from our 12 years as landlords to tenants everywhere for a decent landlord/tenant relationship.
1. Pay your bills on time. Seems fairly obvious, I know, but many tenants believe they can pay every other bill before they pay the rent. Want to stay on our good side? Please pay your rent on time.
2. Always try to be polite. I will, too. Being polite and calm really does go a long way. You would not like it if I left you snarky or angry screaming messages on your voicemail. I know sometimes issues can seem to linger on and on, but we really are doing our best to get things resolved.
3. Listen to our instructions. We tell you things for a reason. If we show you how to trip a breaker or turn a gas valve off, listen. It may just save your butt. If we tell you there will be a hard freeze tonight and to please let your faucet drip, don’t call us the next day and complain that your pipes have frozen and you need to do laundry. I can’t control the weather, so you will just have to wait until it warms up.
4. Help us. We try to take care of our properties, but we can’t be everywhere all the time. Is there something we need to know about? Tell us. Is something broken? Let us know. Help us by being our eyes and ears.
5. Tell the truth. Did you or your kid flush something down the toilet and stop it up? Then tell us the truth so we can get the problem resolved as quickly as possible. After a dozen years in this business, we can almost always determine the culprit anyway.
6. Please just leave me a message. If we do not answer your call, do not hang up and call over and over again. There are times we simply cannot take your call. How do you think we are going to feel when we finally answer you after you have called five times in a row? It had better be a matter of life or death.
7. Understand that we have a lot going on. Sometimes other tenant’s issues may take priority. We know about your issue, and we will get to it just as soon as we can. We might for example need to make sure everyone has heat before taking care of your dripping bathroom sink.
8. If you get in a bind, talk to us. Communication is key! Tell us what is going on. Did you lose your job? Has your roommate gone off the deep end? We have been there before, and we know what it is like. But if you do not talk to us, there is no way we can help you. Please do not put your head in the sand and hope whatever problem you are having will go away. It will not, and things will only get worse.
9. Treat my property and the people who do work for me with respect. You would not believe how many people are just plain rude to the people we send over to try and fix their problems. Plus, how do you think we are going to react if we see that your place is a mess or that you are causing damage? Disrespecting our properties or our help is a sure way to create an adversarial relationship.
10. Work with me. We know you have a busy schedule. So do we, and trust us, we want your issue resolved as quickly as possible too because we have a dozen or so more to deal with. It all goes much easier if you work with us on times and arrangements. You might have to put up your dog for a day or allow us into your apartment on your day off. We hate to disturb you, but we will be done and out of your hair just as soon as we can.
11. Trust me. We are not going to steal your stuff or try and stiff you. Yes, we know some landlords might, but not us. If we say we need to get into your home, it is for a legitimate reason.
12. Follow the rules. They are there for a reason. They were explained to you when you moved in, and you agreed to follow them. It just makes life harder for all of us if you choose to ignore them. If you could not live with the rules, then you should not have moved in.
13. Respect your neighbors. Would you appreciate a loud party the night before you need to make a major presentation at work or before your final exams? No, you would not. Remember that you live in an apartment building, and you have neighbors — sometimes very close neighbors. Think about how your actions might affect them. I’m not saying do not have any fun; just try to be considerate.
14. Hide your weed. Just please do this. It is technically against your lease, and you really never know when there will be an emergency and who will need to access your place.
A lot of the above is just common courtesy and common sense. But for those few — and you know who you are — please review and follow the above and let’s make your stay with us as pleasant as possible.
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