Try www.tipking.com
Orange County is projected
to increase population over 50,000 people per year until year 2009..
OC population is expected to rise from 3.1 million to 3.3 million in 2009. The
median age is about 33 yrs. and 38.4% of residents are renters. 10.3% of OC
residents are below poverty level; the median household income is rather high at
$65,409. 30.8% of OC residents have a college education. The average home age is
39 years and the average home size is 1654 sq.ft. per United States Census
figures. OC will continue to import labor for the next twenty years, labor that
is cheaper, younger and exhausted from driving the #91 Frwy,#22, #405, #57 Frwy.........
A more lucid example....Orange
County will grow in population almost as much as half the City of Tustin's
current population each year for the next 20
years. Of particular
interest, population grew about 18% the past ten years, housing stock only
grew 10.4%. Rental housing construction has not kept up with demand for many
years.....rents
will continue to rise. California adds 600 more registered cars per
day....50,000 new school children per year, 1700 new classrooms annually,
teachers and the usual bureaucratic ilk; 600,000 more residents
annually-----like the combined population of Santa Ana and Anaheim.
A recent forecast: 2.0 million jobs in Orange County but only 1.0 million
housing units......look for massive importing of labor from other counties on a
daily basis.
In 2002, over 591,000 more people in California. In 2003 more population growth primarily from births and immigration..... 2004 more of the same....2005 and 2006 more of the same. More educated and older people are leaving California than are coming into the California. Jobs are the main reason people come to or leave California. However, housing cost increases seem to be a major deterrent to job growth. 50,000 acres of farmland yearly is being gobbled up to meet the population surge. Water quality is an issue in California too. Water for 1.1 million people was taken out of the Colorado River allocation as of 01/01/03. Drought cycle in western states is rather severe and could lead to serious water conservation by California residents within 20 years. Desalination plants needed to improve water supply could triple the cost of water to California consumers.
18.0 million people to move to California in next 30 years, over 600,000 new residents per year.
IT IS TIME FOR SOUTHERN CALIFORNIA TO PRACTICE: WATER CONSERVATION. Also, website: www.bewaterwise.com
Growth has caused massive strains on transportation, water, education, rental housing and affordable new housing. If you have lived in Orange County for any period of time....you sullenly get used to it...the growth....the crowded freeways, lack of affordable housing..... We are always playing catch-up. Look at the doubling\tripling up occurring in single family homes in Orange County. Some home rentals have eight cars parked out front......Visit your impacted local schools...enlightening...
Have you heard calls for affordable housing? Cities do not want congregate housing, for they cannot afford to provide new schools. For example: A 300 unit apartment building most likely will have over 300 elementary age children show up at local schools. Elementary school class size is approximately 20 students per classroom, new state mandates, so....this 300 unit apartment building creates a need for 15 new classrooms, 15 new teachers, etc. etc. Local city managers and politicians practice "fiscalization" of land uses in their communities, the practice of encouraging commercial developments....car dealers, Wal-mart etc. to generate sales tax dollars for local coffers. Citizens favor "not in my neighborhood".... no affordable rentals or single family projects. Resident resistance throughout California is growing toward development of "big box" stores such as Wal-Mart and Home Depot, Lowes , IKEA and Costco. Foolishness...in five years there will be many more big box stores in Southern California....people love them.
In a recent article in The Register an executive of a large So. California builder indicates it costs approximately $17,000. per new home for various school fees, development impact fees, water and sewer fees, plan checking etc. etc. This translates into an increase monthly mortgage payment of about $120.00 per month or an additional total cost over thirty years of $43,200. Affordable housing!!!! In 1966 in Orange County you could easily find a home to purchase for $17,000-$22,000. in most OC communities.
It is notable that about 1.0 million households in California spend more than 50% of their income on housing. California is the second lowest state in the nation with about 55% of households owning their own homes....the national average is about 65%. Recent local newspaper articles discuss the lack of affordable housing is shutting out middle income consumers too!!! Where are the working seniors, the well educated young, the fireman, the school teacher, the nurse, the policeman, the postman to live.....they cannot live in the communities in which they work.....are they to commute to their jobs making the commuting nightmares worse???? California needs loads of new housing in established communities now. Those looking for Section 8 housing or general information on government housing try: www.hud.org. 2004 Federal budgets had a severe cut in HUD Section 8 housing impacting thousands of households in Southern California and reportedly continues into 2006.
Planners in California are finding that past planning models are obsolete and damaging....urban sprawl, inefficient use of natural resources, lack of affordable housing, lack of public financing of infrastructure are realities in many parts of California. To combat these problems planners suggest infill projects, revitalization of central cities, large and small; affordable housing near expanded, modern public transportation as well as additional schools and community centers and local health center, day care facilities.
A notable bright light concerning OC affordable housing is www.homeaidoc.org.
Local housing advocates are planning to add at least 1000 affordable rental units in OC. Southern Association of Governments feels 24,771 new affordable housing units are needed in OC between 1998-2005, but only 5000 building permits have been issued during the time frame 1998-2002.. Very few affordable housing units were built in 2003 and 2004 looks to be another poor year for affordable housing development. AND there is no affordable housing for the MIDDLE CLASS>
The Register reported on 07/22/04 recent studies of the homeless in Orange County report 34,998 people homeless. High rents have increased the homeless population as well as job loss and health and family reversals.
We see some gentrification, modest income families and small businesses being pushed out by increased property values and commercial rents, starting to occur in Costa Mesa west of Newport Blvd. The new Home Depot, other commercial properties being revitalized, calls for neighborhood revitalization such as demolition of older apartments, down zoning of apartment land to single family, aggressive zoning and code enforcement, citizen meetings to develop community improvement needs, acrimonious letters in local newspapers by diverse activists, the need for more parks, street and sidewalk improvements, call for added day care facilities, better grocery shopping, health care facilities, clinics, job centers vs keep everything the same.... etc. etc.... West side Costa Mesa lacks real leadership to solve the blight in the area....period.
The National Low Income Housing Coalition recently has reported: Nationally, it takes a wage over $15.78 to afford a two bedroom apartment rental. In Orange County, you need to earn $25.69 per hour to afford a two bedroom apartment rental. Another figure of interest....rents in Orange County purported to have risen 45.9% in last five years..... Minimum wage in Calif. rose to $6.75 per hr. on January 1, 2002. Second highest minimum wage in the country. 600,000 people work in California at minimum wage in the food industry. 54% of tenants in Orange County are struggling to meet their monthly rental payments. Some California cities pressing for "living wage" within their municipalities. OC has been somewhat quiet concerning "living wage"; "living wage" is approximately $10.00 per hour. Spring of 2004: the legislature in Sacramento was considering an increase in minimum wage to $7.75 per hour. WILL IT EVER END......government interference in private labor agreements.
Watch the new California paid leave legislation affording workers approximately 6 weeks paid leave, 55% of their wages for family sicknesses, child birth etc. Denmark in California. Now some legislator wants to let women go topless at beaches.
Manufacturing and real brick and mortar jobs are continuing to disappear from the California economy. We are becoming a magnet for younger, inexperienced workers in service jobs. These people need rental housing. More low paying jobs....more rental demand.... Since 1990, approximately 300,000 manufacturing jobs have in lost in California. OC is projected to create 27,000 new jobs in 2005; Approximately 8000 new jobs created in OC in 2004 per Employment Development Department of California.
Consumer debt from credit cards, auto loans and other forms of short term borrowing nationally to over 1.5 trillion dollars. Excluding mortgages 11% of Americans are in debt over $50,000. 18% percent reported no debt; 39% are in debt between 10-49,000. dollars. Short term debt is a way of life in America. Latest marketing program nationally is to teenagers...start them young.....Just heard most people below 30 years of age have no idea how much they owe on credit cards, but 50% of them worry about it often.....Try this website for assistance...... www.freebudgetkit.com
2. Insurance. Some major management companies are asking their tenants to carry renters' insurance. In a strong market you can ask tenants for lots of things...... Recent fires in apartment houses....very few renters had renters insurance policies.
Other insurance: HMO's are raising premiums substantially. Premiums for homeowners insurance are rising too. Homeowner coverage is harder to find, for major carriers such as USSA have stopped writing homeowner insurance in California. Commercial property insurance has risen significantly in 2003 and 2004 due to 9/11 losses and resulting increases in security costs. Workers compensation insurance and unemployment insurance are up sharply. Recent changes in workers compensation law in California have lowered some costs.
Always check with at least two different insurance agents about coverage's for your rental properties. We do not sell or advise on your insurance needs: however, we do know many who have called us through the years have incomplete coverage's and they have too low of dollar coverage for certain perils. Replacement cost coverage is mandatory. Higher insurance for properties with swimming pools is suggested by most risk consultants. Personal umbrella policies to increase liability coverage to at least 1.0 million should be discussed with your agent.
3.The internet growth as well as internal company intranet usage, networking etc. are creating incredible leaps in employee productivity. First class postage may become a thing of the past the way people are using faxes and emails. For example, we process almost 100 percent of our applications using the fax machine. Our various credit checks are instantaneously done by computers. We see similar productivity gains coming to property management from the internet.
4. Workers Compensation Insurance. If you have a resident manager, domestic worker in your home on a regular basis or "handymen" working on your properties.....carry Workers Compensation Insurance. Do not think you are immune from worker injuries or claims motivated by relatives of injured workers. You will pay big fines and back taxes and penalties. Also, there is no statute of limitations on fraud..... WC insurance cost rose rapidly in 2003 due to large losses by carriers. Also, various carriers have stopped writing workers compensation insurance. 2004/2005 saw some reduction in WC premiums due to legislative changes in Sacramento.
5.The rental market for homes is very tight in Orange County. Various companies are providing credit check services and providing lists of rentals for a fee to prospective renters. Such services have been growing in other metropolitan markets in the United States. Classified advertising in metropolitan newspapers is becoming cost prohibitive to advertise rentals, so it not surprising various new methods are emerging to get the word out about real estate rentals such as weekly newspapers, inexpensive ethnic newspapers, bulletin boards in laundries and markets, the internet and glossy apt. referral booklets in retail stores. This trend will escalate and continue to evolve...the internet appears to be the most cost/effective medium in the long run.
The most novel advertising method: An Anaheim landlord puts hand drawn posters on ice cream vendor carts and trucks advertising his rentals. Rarely has a vacancy.....
Want to get organized......try www.listorganizer.com, www.printablechecklists.com, www.checklists.com.
6. Metal detectors outside of court rooms are becoming a necessity. Emotions sometimes get out of hand in court rooms and the public appears at risk. It is advisable to be careful in the corridors outside the courtrooms; they are usually jammed with people and some of them appear to be stressed or upset. Hundreds of knives have been confiscated in OC courts by using detectors.
If you have a resident manager or "someone or tenant who helps around the property" to do rentals or maintenance work, have a written contract explaining rights and responsibilities of both employer and employee. Also, remember you are required to pay at least a minimum wage per government laws and other payroll withholdings required by the state and federal governments. You must have workers compensation insurance too. You are advised......there is no room for deviation.....you get caught.....you pay big penalties, interest etc.....YOU ARE AN EMPLOYER.
7. Have you ever been called by a tenant that there is hazardous waste in the dumpster and the Hazmat people are at the property to remove the hazardous waste materials!!!! Remember to instruct your tenants on a regular basis that auto batteries, oils and filters, antifreeze, starter fluids, transmission fluids, gasoline, grease and rust solvents and air conditioning refrigerants are not to be discarded in the dumpster or left around the property. Paints, strippers and varnishes, pesticides, weed killers, fungicides, chemical fertilizers, and rodent poisons are prohibited in dumpsters. Also, oven cleaners, drain openers, toilet bowl cleaners, bleach products, window cleaners, wood and metal cleaners as well as swimming pool chemicals, medication and drugs, ammunition, photo chemicals, compressed gases, chemical toilet waste, solvents and adhesives cannot be placed in your dumpster. For more info on hazardous waste try www.epa.gov.
An interesting organization: California Center for Land Recycling works with communities who want to clean up old Brownfields, blighted industrial areas...... check out their web site at www.cclr.org.
Tax law changes do affect rentals. Some income property investors are moving into their single family home rentals planning to live in them for two years followed by a possible tax free sale-See your professional tax advisor. This phenomena is accelerating the reduction of single family home rental inventory. Single family home rentals will be scarce for many years; rents are rising rapidly. I just saw a three bedroom, three bath condo for rent in Corona Del Mar Village for $3600.00...that is a huge increase over two years ago. For lots of answers of your real estate and tax questions try www.ourbroker.com , www.taxprophet.com or www.ourfamilyplace.com, www.realestateabc.com.
7. Satellite dishes are very popular with consumers due to programming variety and clarity of picture. In congregate housing, including town homes and condos, some feel having satellite dishes is unsightly. Some legal cases and FCC rulings are being decided in favor of consumers. The challenge: how to resolve the "cosmetic" issues of satellite ownership.
9. Certified Property Managers....there is a difference. CPM's must have at least three years of proven management experience, most have college degrees and they must take rigorous week long seminars to sharpen their skills. Of particular interest in hiring a property manager: Always hire a proven "fee" manager rather than a manager who works for an trust, financial institution or REIT. "Fee" managers must make a living working for a variety of individual investors. That takes lots of skill. Hire the best....hire CPM's who are proven, documented "fee" managers. See our Management page for additional property management information.
10. Property Management Software. At Ameriland Realty we use Tenant Pro Software. We have actually been fully computerized since 1981. We can provide you with cash flow reports, past due rents, cash balances by buildings, paid expenses and income collected by tenant on a daily basis. We practically can give you real time reporting, if needed. Also, we process NSF checks the day the check becomes NSF. All notices to tenants are processed the same day too. We are audited annually by a Certified Public Accountant. We carry workers compensation insurance and full liability insurance. Bank references are available on request.
11. Have you checked your sidewalks. There are entrepreneurs out there with cement grinding machines. They will grind down those rising edges in your walkways at a most reasonable cost. We know of one very innocent looking trip hazard that resulted in a 250k lawsuit award.....
12. Most people hire property managers for they are absentee owners. living out of area. Property managers are needed to collect rents, serve notices, provide 24 hr. emergency services, recruit and cultivate a variety of skilled workman at cost/effect rates. You will never know what managers do for you in emergencies, fires, tenant vandalism, crime, overcrowding, flooding, etc. etc. Our job is similar to a fireman....we need to protect your tenants and property like we would do for our own property or families. We had a triplex in Westminster completely wiped out when that big water tank burst a couple of yrs. ago. We worked with the city and insurance companies and solved everyone's problems.
13. Those commercials on the radio about giving away your old car and getting a tax deduction; we knew of investors during the recession looking to give away old buildings to somebody...anybody...Those buildings today are very expensive.....
14. Property managers must make management plans to increase income for your property as well initiate a preventative maintenance program for your property. Periodic and systematic maintenance saves money in the long run, increases tenant satisfaction....tenant retention increases...property values are enhanced immensely and rents rise too. We did not loose one property during the prolonged recession to foreclosure. Why? Our properties are well maintained. Lots of short sited property owners do not maintain their buildings. They pay big time with huge repair bills when tenants vacate their units.....they vacate more frequently in rundown buildings....more and more decorating costs. There is no free lunch in property investment for the inexperienced or those in denial.
15.Only 16% of Americans have saved at least $100,000. for retirement.... 36% of Americans do not have any savings at all, for any purposes! Few people know how much they will receive from Social Security. 16% have saved less than $10,000. Try www.ssa.gov to find how much you will receive from Social Security when you retire. You may be unpleasantly shocked!!!! Better start saving now... 9/2002 newspaper articles report approximately 70% of working adults want to work in their retirement years, for they need the money for health care costs or their retirement investment accounts are in the doldrums. Try www.asec.org for calculators to assist you in planning your retirement savings and investment program.
16. When hiring a property manager or real estate sales agent. Ask him or her do they own any property like a home or investment property!!! Many do not. How can anyone manage property when they do not have empathy with their client??? Ask them how much property they have sold in their career, how many units they have rented, classes attended, university degrees, what proven management experience do they have, how many evictions have they handled in the past two years. How many property exchanges have they been associated with in their career. Hire professionals! Hire people with a long time track record of proven leadership and results.
17. Income property. A property manager's primary goal is to maximize income. A blend of marketing, cost/effective maintenance, responsiveness to tenant's needs coupled with a working management plan with property owners to meet documented investment property goals. Most income property throws off a five percent return on invested capital....a ten percent return is highly desirable. If you feel you can buy property and ring up a return over ten percent.....rework your numbers or your goals for the property again. It is possible to have much higher returns...we only caution you on what can be reasonably expected from a property investment not what you may hear from the proverbial "45 day wonder" commission broker or the smiling, affluent television " GURU".
18. Everybody in the Xer generation wants services done faster and faster. The internet is the panacea of young people...... but....how come no one can paint a house any faster or clean bathrooms quicker. Why can't a live human talk to you on the phone. Hail to the painters and janitors in this county in those nasty old pickups. They do not buy from "dot com" retailers.....they do not need home delivery from guys in short pants, designer ball caps and white tennies. They loathe banks and put their money in milk cans in the back yard.....the millionaires next door!!!!!
18. Most of your wealth is in your home not in stocks. There has been a huge gain in stock holdings among Americans in the 1990's due to 401k plans, however, market gyrations gives one the "wealth effect" feeling or "it is time to move under the bridge" blues. 8.06 million people in America have net assets making them millionaires. There are about 17,000 people in California who make over 1.0 million dollars per year .
19. Home ownership in 2005 rose to a new record in the United States. Minority home ownership is at an all time high too.
20. Self improvement, particularly health/fitness, is big business today. Try www.personalhealthzone.com. Yuppies do not want to grow old. Aren't you sick of the pill and salve commercials on the radio to rehab or lube your joints??
Do you take care of your pets? For information on pet health and a variety of other related subjects: www.hsus.org. Try one of the pet hotels....these places are pretty nice.
21. Energy will be the challenge in future years due to massive population growth, urban sprawl as well as lack of affordable housing creating more community dysfunction...overcrowded housing units, schools etc. etc.. Federal help with local zoning and planning issues has been suggested as the answer..........Humans reportedly consume more in the world than the earth can replace. Super size/down size...the continuing struggle. For tips on energy conservation: www.homeenergy.org
22. The average age of apartment buildings in the United States is 34 years old. It is forecasted that in the next ten years the age of apartment buildings win the U.S. will rise to 38 years due to the lack of new apartment construction.
23. You may try rubbing a cut lemon on your rust stains on your concrete patio, wipe with a soft towel or cloth, repeat as necessary. Try this site for excellent info on stain removal www.chemistry.co.nz/stain.htm. Another great site on cleaning is located at www.howtocleananything.com.
24. Emergency preparedness is vital for property managers, fire, police, medical, emergency personnel. HOWEVER, the phone system and cellular phone systems and the 911 system have been unreliable during earthquakes in California. To learn more on how to be prepared for emergencies try these web sites:
www.fema.org www.oes.ca.gov www.inhalants.org www.nsc.org www.osha.gov www.cdc.gov www.dhs.gov
25. Too tired to look for a rental? Average office worker spends 46 hours at work and commutes an average of over 7.5 hrs per week from latest At-a-Glance survey. Budget crunch at state level will delay over 5.2 billion in road improvements for 2004 and beyond. In California, we have a legislature that "invests" in social programs and ignores the massive needs in infrastructure and housing.....
26. For ways to cut legal costs on simple legal transactions......try www.legalzoom.com.
