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NAHB Now | The News Blog of the National Association of Home Builders

New Home Sales Drop 11.5% in September

Filed in Economics on October 26, 2015 • 0 Comments

ThinkstockPhotos-168769007Sales of newly built single-family homes fell 11.5% to a seasonally adjusted annual rate of 468,000 units in September, according to newly released data from HUD and the U.S. Census Bureau.

“Despite this monthly drop, our members continue to tell us that housing is moving in the right direction,” said NAHB Chairman Tom Woods. “Consumers may have simply been reacting to soft job numbers.”

“It is not surprising to see sales pull back in September following a strong August reading, especially after a few months of weak job creation,” said NAHB Chief Economist David Crowe. “However, new-home sales year to date are up 17.6% compared to the same period of 2014, and we expect the market to continue improving at a gradual but steady pace for the rest of year.”

Regionally, new home sales were down across the board. Sales fell 61.8% in the Northeast, 8.3% in the Midwest, 8.7% in the South and 6.7% in the West.

The inventory of new homes for sale was 225,000 units in September. This is a 5.8-month supply at the current sales pace.

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Tags: home sales, new home sales

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Property Management Fundamentals: Prioritizing Goals
January 27, 2015

To be effective in any workplace, you need to prioritize your goals to get the most important things done immediately, but also be able to have sufficient time to accomplish every aspect of your job. Once you get good at identifying where each task belongs on this list, you’ll be effective in prioritizing your work.

1. Emergencies

This is a given, however emergencies are the things you absolutely are unable to ignore, but often impede on your day-to-day. Whether it’s a plumbing issue in a unit, a tenant lock-out, or criminal activity in the neighborhood, you weren’t planning for it, but now it’s the most important part of the day. When there isn’t an emergency going on, you should be focusing heavily on projects and organizational changes that can reduce the risk of emergencies occurring in the future. If emergencies happen on a continual basis, then they’re getting too much in the way of your day-to-day work.

2. Procedural

Procedural tasks are tasks that you do on a schedule. You know ahead of time that they’re coming and they play a central role in the working of your company. Procedural tasks for a property manager include billing, make-readies, minor work orders, and more. These tasks are usually best accomplished first in the day if there aren’t any emergencies. Once accomplished, you now have the rest of the day to work on projects and organizational changes that improve your business.

3. Projects

In general, a project has a deadline. Projects are tasks that can’t be accomplished in one day, but provide great benefit to the company long term. Projects can be for all kinds of things that benefit your procedural tasks or may help to prevent emergencies from happening in the future. Sample projects might be a new marketing campaign, implementing new property management software, refurbishing a property, creating an event for your tenants, or other projects that improve the organization and efficiency of your work.

4. Research

It’s always good to do a little research on the side whether it is for building your own skills or finding new tools online that will help your business. Whereas implementing property management software can be considered a project, actually discovering and learning about that software requires research. However, research has no guarantee of providing immediate results. For that reason, it’s the lowest priority on this list. You can’t be researching 70% of the time and working for 30%. Your daily dose of research should probably be no more that 1-2% of each day, if not less. You may be at a stage in your work life where you’re working on to many emergencies and procedural tasks to ever have time to do research. In that case, you might consider doing research when you’re outside of work. Habitual research in small doses can provide powerful insight for improving your work in the present as well as develop your career in the future.

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Super Awesome Tenant Screening Tips

Super Awesome Tenant Screening Tips
November 19, 2014

So you’ve started advertising for your property and have begun receiving calls. Your next step is to start screening your applicants. Screening can take a considerable amount of time – and you don’t want to waste that time on every person who shows interest in your property. This is why pre-screening is so important.


Your pre-screening efforts begin with your property listing or ad. Whether you are using the newspaper, Craigslist, web listing, or another service to market your property – the information in your ad can help to weed out time wasters. For example, by placing the location in your ad, you are able to screen out individuals who are looking for another location. Putting the price in the ad also helps to keep those who can’t afford that price range from calling.

The initial phone call is the next step in screening. The first thing you hear is often an indication (though, not proof) of the kind of tenant they might be. When a tenant calls about a property you have for rent, you might ask them “What can I tell you about the property?” How the tenant answers might provide indications of the kind of tenant they are going to be. In the conversation, you can also always include a few minimum requirements. Example: The property has a minimum income requirement of $____ per month and we do a full background and criminal check to make sure we only rent to upstanding people.

This simple two-minute phone call does two great things – eliminates about 80% of unqualified tenants and prevents them from further wasting your time AND lets the eligible tenants know you are not a slumlord and only rent to good people.

Screening in Person:

The next step of screening is to meet with tenants and show them the property. This is also a great opportunity to screen the tenant before any paperwork is done. At this time, you might want to re-state your minimum requirements to the tenant in person – in case they didn’t understand (or chose to ignore) when you told them over the phone.

At this point, tenants that don’t quite meet your requirements will inform you, but might ask if you will work with them anyways. Even if you know immediately that they do not qualify, you should let them know why, but still offer them the opportunity to apply. Why? You don’t ever want to be accused of being discriminatory for any of the protected classes (race, color, national origin, religion, sex, familial status, and handicap).

Rental Application:

The application is your window into the tenant’s life. The following is a list of must-have sections to include and ask on your application:

1.Name, address, phone number, driver’s license number.
2.Social security number and date of birth.
3.Current & past landlords with contact info.
4.Current & previous employer with job details and contact info.
5.Have they ever had an eviction filed upon them or broken a lease?
6.Release of information signature.

Other good information to ask for: requested move in date, number & breeds of pets, number of felonies (if any), number of & make/model/year of vehicles, number of occupants, emergency contacts.

The Background Check:

A tenant’s credit report will contain a wealth of information related to the tenant’s credit history -including a detailed list of all the tenant’s open or closed trade lines (credit card accounts), car payments, monetary judgments, late payments, and more. This information can be overwhelming, but I recommend looking for the following items:

Credit Score: Depending on your criteria, you may establish a minimum credit score for your tenants.

Current and Former Addresses: Often times, a tenant may conveniently “forget” to list a past address. Verify that the addresses given by the tenant on the application match the addresses on the credit report. The credit report may not include all the addresses, but any listed should be verified. You can ask the prospective tenant about the addresses or simply do a look online for those addresses and (if it belongs to an apartment complex) you can call the apartment to see if the tenant ever lived there.

Public Records: This will list any judgments levied against the tenant (includes garnishments or evictions that have a monetary claim). Some landlords adopt a policy to never rent to a tenant with an eviction on their record, while others put a time limit on it such as “no evictions in the past five years.” This is a personal choice and depends largely on your risk tolerance level and the current demand for rentals in your area.

Calling Previous Landlords:

One of the most important things you can do to screen your prospective tenant is to verify their previous landlord. Generally, the way a tenant has behaved in the past is likely the way they will behave in the future. It’s not enough to simply call their current landlord – because many times, a landlord of a problem tenant will lie and give a stellar review just to get rid of a bad tenant. Always call their previous landlords as well. Also, keep in mind that sometimes a tenant will give you the name and number of a friend or family member – with the intention of that individual lying and claiming to be their landlord, just to give a positive review. To combat this, it’s a good idea to find the landlord or property management company on the web and see if the information provided to you by the tenant checks out.

When speaking with the landlords, there are a few questions you might want to ask:

•When were they an authorized tenant there?
•Were there any issues, late payments, NSF?
•Did you ever have to serve a legal notice?
•Did the tenant have any pets?
•Did the tenant give you proper notice to vacate?
•Would you rent to this tenant again?

You may find that some landlords will require you to fax them a copy of the tenant’s release of information (which you should have on your application) along with your questions to the previous landlord.

Screening Via Social Networks:

These days, people often put a lot information publicly on their Facebook, Twitter, Google+, or other social networking account than you would guess. You might be able to do a search for a potential tenant and see if there is any information that would aid you in making an informed decision. For example, a young couple applies for an apartment unit that does not allow pets, but upon checking their Facebook profile page, you discover that they have a brand new puppy that was not disclosed to you. You now know that you can move on to the next renter.

Whatever criteria you choose to employ when conducting your tenant screening practices, always make sure to keep them consistent. You do not want to be accused of, or subsequently sued for discrimination.

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Water Damage Prevention
by Harry Heist, Attorney at Law

All of us are aging. We see and feel it every day; at least I do. What we do not seem to recognize is that the units we manage are aging as well. It is hard to comprehend that 1970 was 45 years ago. When homes and apartment communities were and are built in Florida, many contractors used and still use the cheapest of materials. Cheap piping and wiring are extremely common. Some of these shortcuts have resulted in massive lawsuits as we have seen in the plastic piping and aluminum wiring class action cases. Other shortcuts are not as blatant, but are still now causing serious damages to the rental units. While you cannot ever prevent a storm from blowing a roof off or preventing a resident from causing a kitchen fire, there are a number of things you can do right now to prevent thousands of dollars in damages and the resulting legal headaches that go along with this damage. Water in the wrong place equals property damage, inconvenience and then the dreaded mold.

It takes a little time and little money to inspect your rental units and take action, action which not only can save money but can avoid legal problems. One small flood can cause a big problem. If a problem can be avoided, it should be. Many managers of single family homes do not look at themselves as asset managers. As an asset manager, one has a duty to preserve the asset for the client. An apartment manager often looks at himself or herself as “just an employee”, but we believe an employee has an important duty to help preserve the property of the owner. By doing so, everyone benefits, as everyone has a stake in the business that they are in.

This article will begin to examine just some things that should be looked at, evaluated, fixed or replaced on a rental property to prevent water damage, and detail the reasons why. The choice is yours. Sit back and wait for a disaster, or prevent one right now. Everything that follows is incredibly easy and inexpensive to do.


A typical rental home, or any home for that matter, has many interior water supply lines. These include the toilet bowl line, sink lines, washing machine hoses, dishwasher hoses, refrigerator water dispenser and ice cube maker hoses. Many of these supply lines or hoses when originally installed were of the cheapest quality possible, and even to this day, the cheapest quality materials are used. We have seen many cases when these lines burst or slowly leaked, causing massive water damage, and often resulted in mold damage as well. It is time to examine them NOW. Recently, we dealt with a case when a simple bump by a mop to the toilet water supply caused the wafer thin 30-year old line to break. Upon attempting to turn off the water valve, the valve crumbled in the hand of the resident. We have seen pin holes in supply lines to fully bursting washing machine hoses. Refrigerator water supply lines are usually made of a thin, clear, plastic ¼ inch line holding the full water pressure of the plumbing. They fail constantly. The dishwasher has rubber hosing behind the appliance, and under the counter and completely out of sight. You never see them or even think of them until one bursts. The washing machine which may be brought in by the resident or has been there for years, has 2 water supply lines comprised of black rubber hoses that bulge, crack, break and fail all day long.

The solution? Braided steel hoses. Speak to your regional manager or your owner now, and get these cheap or old hoses replaced with better quality braided steel hoses. Are the replacements cheap? They range from $5 – $15 and will potentially save many thousands of dollars. Own your own home or rent somewhere? I bet you have not even checked your own residence to see what type of supply lines are present. When replacing, always take the time to see if there are any leaks and to be aware that disturbing old valves can result in a big problem. Beware and be prepared.


Most air handlers are located in the ceiling of a rental unit, often above the air filter grate. Some are in closets. As the air conditioner is operating, water naturally condenses and drips into the drip pan located below the coils. In theory, this water is supposed to flow into a PVC pipe and usually ends up running outside where it belongs. Some air handlers have a safety feature which will shut off the air conditioner if the pan begins to fill up with water and fails to drain. The drain pipe for the air conditioner often gets plugged up by moss, mold, and algae growth. Sometimes a critter will nest in the line in colder weather, clogging it up. The result is an accumulation of water in the drip pan which then overflows and begins to soak the ceiling, causing damage and potentially mold. If the air handler has the proper safety float shut-off switch, and it works, the air conditioner will shut off. You will have a service call, and although you have to pay for this, the problem will be fixed with no damage. All too often though, there is no float switch, or it is nonfunctional; the drain line is plugged, and the water slowly or sometimes quickly enters the rental unit.

The solution is simple. Any air conditioning technician, maintenance tech or handyman is fully capable of checking the drain pipe or pipes on a routine basis, cleaning or blowing them out, flushing them with bleach and making sure they work. Failure to take this simple preventative maintenance step is a recipe for water damage, mold and the resulting legal problems. This is an extremely common problem. If you do not bother to deal with it now, you will have to deal with it later when it is too late, and after you have damage.


If a water heater is properly installed, there is a plastic, metal or rubber pan that the water heats sits in which is designed to catch water in the event of a water heater failure. It is not a matter of if a water heater will fail, it is a matter of when. They do not last forever. If you are able to catch a leak fast, you are in business, but many times, the leak is discovered too late or occurs while the unit is vacant or the resident is on vacation. The water heater pans are very similar to the pan dealt with above that is under the air handler. The water is meant to drain into this shallow pan and then flow out the PVC drain pipe to the outside of the unit. The problem we see is twofold. Sometimes the pan is not installed properly, or the drain pipe is not properly affixed to the pan. This results in the water slowly filling the pan and running out around the bottom of the drain pipe to pan connection and not into the drain pipe as designed. You also can have the same problems when the drain pipe is clogged just as discussed above. This clogged pipe results in flooding, defeating the entire purpose of the water heater pan.

The solution is to inspect the water heater pan and drain pipe. Some are made of tin and over the years have corroded away. Check the fitting from the drain pipe to the pan, and make sure the drain pipe is clear. This is something that can be done at the same time the air conditioner drain pipe is being checked and or cleaned out. There is no safety device on a water heater pan. If it fails, you will have a flood where the water will continue to run until the problem is discovered. No alarm is going to sound! The sound will be of running water and a screaming resident, if that person is lucky enough to be home at the time.


Out of sight and out of mind. Often a gutter is not cleaned until it begins to overflow, or you see something growing out of it. Clogged gutters and accumulating debris can result in water intrusion to the roof and eaves. The water flows out and over the gutter and seeps into the roofing material under the shingles, eventually rotting the wood and/or causing leaks in the home. The smallest of roof leaks can go unnoticed for quite some time until water intrusion occurs in the walls, ceilings or behind the siding, and mold begin to grow. Once mold begins, the residents cry foul and legal problems start. Leaves, twigs and other debris left to accumulate on the roof can cause leaks. Water is meant to run off of a roof, not sit on it and soak into the porous areas. A typical roof will have sewer vents, air vents, electrical pipes and flues going through the roof. Around each of these will be some sort of tar or other product used to keep a seal. With time, these products dry, shrink, crack and fail, causing slow leaks into the attic spaces and eventually the ceiling in the living area.

The solution is proper roof and gutter inspection, cleaning and maintenance. This needs to be done on a periodic basis along with checking to see whether the downspouts are sending the water away from the outside of the unit. Any item such as a pipe or vent protruding out of the roof needs to be checked for potential leakage, and this is often discovering by going into the attic or crawlspace. A leak can go on for a long time and the water evaporate prior to getting into the living areas, but can be readily discovered by a visual inspection in the attic. Why wait until it is too late? You cannot depend upon residents to tell you when something needs to be done. You need to inspect, and you need to ask residents if they have noticed anything unusual when you do your periodic inspection and maintenance.


Each year we deal with legal problems that arise when water slowly seeps into the walls or the countertops due to cracked or missing grout and caulking. Eventually, this water causes damage and often mold. Have you ever received a call from the resident regarding the smell of mold in their closet? Yes, the closet that is behind the shower? Often these leaks could have been prevented by proper maintenance.

The solution is a thorough inspection of the grout in the bathtub and shower areas, closets behind the bathroom, sinks and countertops. The damage is often found under the countertop, so a visual inspection above may show nothing. Taking the time and spending the money for caulking, grouting or regrouting now can save thousands later. Most insurance policies do not cover leaks due to grouting issues, as insurance companies expect you to maintain this, but insurance will typically cover leaks from structural problems or defective drain pans. Keep this in mind, as it could mean the difference in having the insurance company pay for a large job or deny the claim.


Most property managers have dealt with one or more of the water damage related issues above. Most know that water damage is the single most costly cause of damage to homes and apartments. Will the property manager take proactive steps to keep this damage from occurring? Sadly, most will read this short article and do absolutely nothing. Not even an inspection will occur. All we can say is to keep the phone number of your water remediation/extractor on speed dial, and hope that you as a property manager are not held liable for damages that you as a property manager could have easily prevented.

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tenant screening

What are the Warning Signs of a Bad Tenant?

July 9, 2014

You should ask yourself the following questions when showing a unit to a prospective tenant.


1. Is the applicant in a hurry?

Apartment hoppers are likely to behave in this manner. Also, applicants that are rushing the process are very likely to be hiding something in their past and don’t want you to look at them in closer detail. A good candidate will be at ease when they contact you. They’re not in a hurry because they want to find the best possible property for them. This also indicates that they have the resources and time to wait and find the best one.

2. Is the applicant inconsistent in their information?

Closely watch for change in a tenant’s info at the beginning and end of the application process. Often there can be subtle changes so as to hide important credit or criminal information during the screening process. This can be missed without closer scrutiny.

3. Does the applicant scrutinize the process/asks too many questions?

If an applicant is asking too many questions about the screening process, this can be a clear indicator of the person wanting to hide important info about him/her. They’re asking you questions so that they can think fast on their feet and alter how they provide you their info.

4. Is the applicant unable to complete their application on the spot?

Most tenants will have all of their information together on-site because they have a strong intention to rent soon. Asking to finish the application at a later date may be an evasion tactic to provide misleading information in the application. This also might just be an indicator of irresponsibility or lack of motivation. The question you have to ask yourself though is, will the prospective tenant also be forgetful of thing like rent?

5. Does the applicant question having to fill out an application?

This often can happen with friends and relatives. This individual will probably be under the impression that since you know them so well they should receive special considerations while living on your premises. Firstly, you actually don’t necessarily know them that well. You probably don’t spend that much time with your cousin. Secondly, they should appreciate that you’re running a business. Everyone legally must receive fair and equal treatment when applying for rent. Finally, no matter who they are, if the prospective tenant is expecting special considerations when making the application to rent, they’re probably going to expect leniency when they’re late on their rent or damage the property, or get into some kind of trouble.

6. Are there bad references?

If an applicant’s references are all their best palls, its cause for some concern. It would be nice to have some previous property owners/managers as references as this is the most directly relevant

7. Is there indirect answering of questions?

A common tactic in providing dishonest or sugar coating information is by “telling a story.” This is an answer that is longer than 4 sentences. Explanations sometimes are important considerations, but if you’re asking a yes/no question you should be able to get a yes/no answer and then the applicant can explain. If after pushing for a more direct answer you’re not able to get it, something’s up.

8. Is the applicant currently under the influence?

Plenty of people drink, but they shouldn’t be doing it when making a rental application. If other substances are involved, you should give this person a little bit more scrutiny before deciding to sign the lease with them. Responsible people will work hard to make a good first impression. Being sober during the application process should simply be an expectation. Seeing the applicant in an otherwise state of mind might indicate that they are unable to remain sober during important events.

Tags: tenant screening, rental applicants, asking questions, bad references

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