Airbnb, Landlords Working Together To Fill Apartments With New Program

Airbnb rolled out a listing service for apartments that will include buildings where short-term sublets are allowed. Landlords who partner with the service will get a cut of the total booking revenue, usually 20%.

So far, the service offers apartments for short-term occupancy in more than 175 buildings managed by a dozen major apartment landlords in more than 25 markets, including Equity Residential and Greystar Real Estate Partners, The Wall Street Journal reports.

The service is an effort by Airbnb to increase the number of apartments it can offer for short-term rental, which was down 4.9% in October compared with 2019, according to peer-to-peer data specialist AirDNA. Over the same period, the number of total Airbnb listings was up 22.9%.

Airbnb bills the new service as a way for apartment renters to deal with inflation.

"As the cost of living continues to rise, renters can use the extra income earned by hosting part-time on Airbnb to contribute to their rent, save for a home, or pay for other living expenses,” Airbnb co-founder Nathan Blecharzyck, said in a statement.

The new service isn't the only step Airbnb has taken lately to shore up its business.

Earlier this month, the San Francisco-based company said it will increase the amount of liability coverage for hosts to as much as $3M, to better attract owners of houses in high-cost markets, ABC News reports. Airbnb also promised to make hidden cleaning fees — a major complaint among renters — more transparent.

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Source: Airbnb, Landlords Working Together To Fill Apartments With New Program

https://www.creconsult.net/market-trends/airbnb-landlords-working-together-to-fill-apartments-with-new-program/

The Dangers of Selling Commercial Property Too Late

The last downturn

cost those who chose to sell commercial property an average of

30.3% of their property value

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Reason #1

Why people sell commercial property too late:

Complacency

 

Complacency is the most dangerous state to ignore.

It’s the moment before the market corrects and values decline. When the market goes through this initial correction, our natural tendency is to be complacent because initial corrections actually look like a cool-off period.

Then we expect the market to pick up again and continue with its growth phase.

But, the market continues to deteriorate and worries creep in as we wonder what is going on. Next, it is normal to say to yourself that your investments are good ones that they’ll ultimately come back.

When the market continues to soften until it seems there is no hope in coming back, that’s the absolute bottom of the market and the worst time to sell.

 

This point of capitulation is one of surrender and of asking how the government could let something like this happen.

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Reason #2

Why people sell commercial property too late:

Ownership and Identity

 

In order to avoid loss, people will overvalue what they own.

That is what Richard Taylor, Daniel Kahneman, and Jack L. Knetsch identified with the Endowment Effect. In fact, Kahneman and Knetsch won the Nobel Peace Prize for their research in this area of behavioral economics.

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It’s normal for people to overvalue what they own.

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In a study with Cornell undergrads, broken into groups and given identical coffee cups, Kahneman and Knetsch told one group to value the cups they owned and the other group to value the cups they would purchase.

They found the undergrads with the coffee cups were unwilling to sell their coffee cups for less than $5.25 while their less fortunate peers were unwilling to pay more than $2.25 to $2.75.

But, it was Carey Morewedge’s research into the Endowment Effect that revealed that it’s not loss aversion that leads to overvaluation, it’s ownership and identity.

Morewedge found that it’s our sense of possession that creates the feeling of an object being mine, which then becomes a part of our identity.

 

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Reason #3

Why people sell commercial property too late:

Loss Aversion

 

Why is it so difficult to sell commercial property in a market decline?

According to Brafman and Brafman, authors of Sway: The Irresistible Pull of Irrational Behavior people will go to great lengths to avoid perceived losses.

What’s more, people also succumb to their will to recover what once was.  They will spend whatever it takes not to lose, be it time, money, or emotional resources.

Imagine watching someone playing craps in Las Vegas. When they are on a roll, taking in their winnings, they race through the growth phase, reaching the peak of the game.

They feel ecstatic.

But what happens when the tide turns and they start to lose?

They enter the complacency stage, call it a short turn of bad luck, and keep playing.  They believe they will return to the top. But their bad luck continues.

By waiting to avoid losses, people hold off and then sell at the wrong time — maximizing their losses.

 

They lose their winnings, keep playing and generate losses. They would rather hold onto the idea of getting back to where they were at almost any cost than realizing their loss and moving on to another opportunity.

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Reason #4

Why people sell commercial property too late:

Self Reliance Time Traps

Time Trap #1: Self-Education

 

People will self educate online because it is free and immediately available. A review of the search term on Google for “commercial real estate trends” returned 152 million results. A search for “commercial real estate trends YouTube” turned up 310 million results!

No doubt, an abundance of free information in the form of market data, blogs, market reports, and online opinions on what’s happening in the market is available.

Time Trap #2: Friends, Family, and Non-Commercial Advisors

 

When we aren’t sure what to do, we often consult friends, family, and non-commercial real estate advisors for input. Unfortunately, these people will not want to be the ones to say sell because it is easier to say no and risk being wrong than to say yes and risk not being right.

Plus, most of these folks will not have the data that you have seen here. These people are more likely to share anecdote based advice like “My friend made a killing in real estate. You should hold on, it will come back.” Remember, people who made this mistake lost in 2008-2010.

Time Trap #3: Hire a Traditional Broker

 

It is easy to find a traditional broker, given that 1 in 164 people in the United States today have a real estate license. According to the National Association of Realtors, there are about 2 million active real estate licensees in the United States.

The problem is that most traditional brokers do not specialize in Commercial Real Estate, Investment Sales and further specialization by property type. 

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Have you thought of selling your property and would like to know what it's worth? Request a valuation for your property below:

Request Valuation

eXp Commercial Chicago Multifamily Brokerage focuses on listing and selling multifamily properties throughout the Chicago Area and Suburbs.

We don’t just market properties; we make a market for each property we represent. Each offering is thoroughly underwritten, aggressively priced, and accompanied by loan quotes to expedite the sales process. We leverage our broad national marketing platform syndicating to the top CRE Listing Sites for maximum exposure combined with an orchestrated competitive bidding process that yields higher sales prices for your property.

 

 

https://www.creconsult.net/market-trends/the-dangers-of-selling-commercial-property-too-late/

Commercial Rate Snapshot 12-5-2022

Commercial Rate Snapshot 12-5-2022

These are the average available rates from eXp Commercial's Capital Partner CommLoan database of 700+ commercial lenders as of 12/05/22 and are provided for comparison purposes only. Actual rates are dependent on property and sponsor.

[ux_html label="Need Financing Now?"] [/ux_html] https://www.creconsult.net/market-trends/commercial-rate-snapshot-12-5-2022/

Mason Square

Just Listed! Fully Equipped Car Wash For Sale
1250 Douglas Rd | Oswego IL | 3,750 SF | 6 Bays | 1.19 Acres
Mason Square Car Wash, a fully equipped and operational 6-bay carwash in southwest suburban Chicago’s Oswego, IL. Ideally located on an out-lot of the Mason Square Shopping Center along heavily trafficked Route 34, averaging 45,000 vehicles per day,
Listing Agent: Randolph Taylor 630.474.6441 | rtaylor@creconsult.net
https://www.creconsult.net/fully-equipped-car-wash-oswego-il-route-34/

Renter incomes continue to grow but the pace is moderating

Renter incomes continue to grow, but the pace is moderating ... and interestingly, the moderating pace of growth mirrors the trend in asking rents. Still, this is an encouraging trend for renter affordability -- with household incomes among new lease signers up 8.1% year-over-year in November.

This data is specific to market-rate, professionally managed apartments (which cater to mid- and upper-income renters) and looks at household incomes from lease applications versus the effective asking rents for new leases.

Of course, the sheer number of lease signers was significantly higher in 2021 than it is in 2022 -- given the historic wave of demand in 2021 followed by the big slowdown this year. That's a remarkable part of the story that hasn't gotten widespread notice... that the demand wave of 2021 was notable not only for its size, but also the big incomes behind those numbers. It's also a big reason why rent collections have held up consistently better in this segment of the rental market than what Census HPS has shown from the broader rental pool.

Remember this data (neither rent nor income) will match Census data on the overall population, since market-rate professionally managed apartments cater to mid- and upper-income renters

 

Source: https://www.linkedin.com/posts/jay-parsons-a7a6656_renters-apartments-multifamily-activity-7006272451416391681-FMUW?utm_source=share&utm_medium=member_desktop

https://www.creconsult.net/market-trends/renter-incomes-continue-to-grow-but-the-pace-is-moderating/

1120 E Ogden

Retail / Office Space For Lease | 3,674 SF | $20/SF NNN
1120 E Ogden Ave, Suite 101 | Naperville, IL 60563
Broker: Randolph Taylor rtaylor@creconsult.net | 630.474.6441

https://www.creconsult.net/retail-office-for-lease-1120-e-ogden-ave-suite-101-naperville-il-60563/?wpo_all_pages_cache_purged=1

What is an Estimated Net Proceeds Sheet and How is this Important to Estimate Capital Gains Tax Exposure

A seller's net proceeds sheet is a document that estimates the amount of money a seller will receive after all closing costs have been paid. The amount of the net proceeds will vary depending on the purchase price of the property, the seller's existing mortgage balance, the amount of real estate taxes due, and other closing costs.

The following factors affect the net proceeds of a sale:

• Purchase price: The higher the purchase price, the higher the net proceeds.
• Mortgage balance: The lower the mortgage balance, the higher the net proceeds.
• Closing costs: Closing costs can vary depending on the state and the type of transaction.
• Other expenses: Other expenses, such as real estate taxes and home warranty fees, can also reduce the net proceeds.

The net proceeds of a sale are important to capital gains tax exposure because they determine the amount of profit that is subject to tax. The seller's taxable gain is calculated by subtracting the adjusted basis of the property from the net proceeds. The adjusted basis is the original purchase price of the property plus the cost of any improvements that have been made.

For example, if a seller sells a property for $500,000 and has an adjusted basis of $300,000, then the seller's taxable gain is $200,000. The seller will owe capital gains tax on this amount.

The amount of capital gains tax that a seller owes will depend on the seller's income tax bracket and the length of time that the property was held. For example, a seller in the 22% income tax bracket who held the property for less than one year will owe a capital gains tax of 22% on the $200,000 gain.

Selling a property can be a profitable transaction, but it is important to understand the factors that affect the net proceeds and how this can impact your capital gains tax exposure. By understanding these factors, you can make informed decisions about when to sell your property and how to minimize your tax liability.

Here are some tips for sellers to minimize their capital gains tax exposure:

• Hold the property for at least one year: If you hold the property for at least one year, you will be taxed at the long-term capital gains rate, which is typically lower than the short-term capital gains rate.
• Make improvements to the property: Any improvements that you make to the property can increase the adjusted basis, which will reduce your taxable gain.
• Donate the property to charity: If you donate the property to charity, you may be able to claim a charitable deduction, which can offset your taxable gain.

By following these tips, you can minimize your capital gains tax exposure and keep more of the money you earn from selling your property.

https://www.creconsult.net/market-trends/what-is-an-estimated-net-proceeds-sheet-and-how-is-this-important-to-estimate-capital-gains-tax-exposure/