Author Archives: Kay Cleaves

Kay Cleaves

About Kay Cleaves

Kay has been working in real estate since 2005. She is a rental and multifamily-focused real estate agent with over 1000 leases to her name. A second-generation Realtor, she prides herself of providing a consistently high level of service partnered with extremely thorough research for all levels of real estate transactions, from apartment searches to condos, single-family homes and investment property. Prior to entering the real estate industry, she spent seven years working in technical theatre, honing her ability to stay organized and calm in fast-paced situations. As owner of Cutefuzzy Multimedia, she freelances as a PHP/MySQL developer, CSS wonk, tech support whiz kid and photographer. Kay has committed code to assorted open source projects, published short fiction and poetry, and serves as the neighborhood lifeline for pub quiz trivia tournaments. She custom-built her home computer, which currently runs six different operating systems depending on her mood, and provides support and maintenance for two Linux (Debian)-based web servers.

Quality Control Week #2: Recognizing Low Quality

Hey all! Sorry about the silence last week. Between business and the recent floods in my neighborhood it was absolutely frantic. As always, my clients come first.

So when we left off we were talking about the factors that make for a high quality home. Today we’re going to talk about how to spot symptoms of poor construction and quality when you’re in a showing. After all, a home with even medium quality construction will suffice for many of you, especially for renters who are only going to be living there for a short while. Poor construction and materials, however, can be dangerous and costly. You would not want to purchase a cheaply-made home without budgeting time and cash for major capital improvements to occur before you move in.

Sometimes it's easy to spot a cheap knockoff. Here's how to spot them when you're looking for real estate.

Sometimes it’s easy to spot a cheap knockoff. Here’s how to spot them when you’re looking for real estate.

Preparations

You’ll want to do a little research before you get started.

Learn the names of the current specialty appliance lines.

I recently worked with a buyer who rejected all homes with American appliances. If the kitchen had Maytag, GE, Whirlpool or Frigidaire appliances it was immediately off the list. He was only interested in imported labels like Bosch, LG and Samsung. In truth, every manufacturer has different lines of appliances with varying levels of quality and warranty. For example, GE currently has it’s basic line, as well as the Cafe, Profile and Monogram lines. Whirlpool Corporation owns the Amana, Maytag and Whirlpool labels, each label having multiple lines of appliances. There’s a big difference between a regular GE fridge and a GE Monogram fridge – a difference of several thousand dollars and several years of longevity.

The seller of a kitchen full of Amana (budget line) and no-name appliances will expect you to replace them when you move in. They’re basically placeholders. However, a seller who’s sunk a lot of money into top of the line gear will expect you to recognize their taste and pay more for it.

The same goes for IKEA. Yes, they’re known for cheap furniture, but some of their lines are well-respected for durability.

Take a trip to Home Depot

Home Depot is not known for their contractor-grade supplies. If you see a home that’s been outfitted with nothing but Home Depot fixtures, you can be pretty sure that the owner has been skimping on quality. It’s worth taking a look around to see what the cheaper stuff looks like, especially the lighting fixtures, bathroom fixtures and kitchen cabinets.

Oh, and if you watch a lot of HGTV, remember that their main purpose is to drive business to their advertising sponsors. They can make crappy cabinets look nice, but a TV show won’t show their durability over time.

Your Testing Kit

Appliances and cabinets are easy to test, but testing the structural quality of a home is the toughest thing to do. Here’s some things you should bring with you that won’t draw a lot of attention.

A scarf

You’ll want to make sure that door frames and walls are straight and not sloping or bowed. A slightly heavy winter scarf will do as well as a plumb-line to accomplish this test. Hold it up to the wall or door and make sure it stays flush all the way down.

A marble

Uneven floors can indicate foundation problems. You don’t need a level to tell you if the place is sitting pretty, though – a simple marble is enough. Lay it on the floor and see if it stays put.

A ballpoint pen

Any basic ballpoint of normal barrel size will do. That’s about the minimum size hole that a mouse could fit through. You want to make sure that baseboards and floorboards meet with no gaps larger than the tip of your pen. You’ll also want to make sure that any gaps around pipes are smaller than your pen. Pay particular attention to the areas under sinks and in the mechanical room.

You can also use your pen for listening tests. Tap it against things to get an idea of their interior composition. If you’re tapping against something solid and well-insulated, you shouldn’t hear anything at all. If you’re tapping something cheap or hollow, it will sound much louder. (Don’t forget to try it on the floors, too.)

Things to Look For

As many of my physician friends like to warn me, symptoms don’t always indicate the same disease. However, if you spot a large number of these problems in the same property it’s probably best that you move along.

Air

When it comes to the components that make up your home, you want as little air as possible. Window frames and doors are the main places where a seller, landlord or developer can get cheap on the materials by installing lots of air. Hollow-core doors and hollow-frame windows are simply not as durable. You want windows and doors to serve as insulators as well as security features, and air just isn’t as good at either as something solid.

A well-built window frame will be chambered and filled, not hollow. (Image from wikipedia.)

A well-built window frame will have many chambers, like this one, and be filled with insulation. (Image from wikipedia.)

Too much air in the walls – in other words, insufficient insulation – is also a problem. On a sunny day, head to the side of the house closest to the sun and hold your hand up to the inside of the walls. (Or on a snowy day, hold your hand up against the inside of any exterior wall.) If you feel too much of the outside temperature through the wall, you could be dealing with an insulation problem.

Stopgap measures and concealers

This one only works if the home is still occupied, but it’s definitely worth considering. Don’t get me wrong – I love duct tape and WD-40 as much as any other geek, but they’re still stopgap measures. A truly “fixed” item will not use either one. Pest control items scattered throughout the house are also a temporary fix that should really be remedied through more thorough means.

A lesser known fact is that the Chicago city inspector will fine a landlord who’s got visible damage to the sills and lintels that hold windows in place on the outside of a building. However, if the damaged sills and lintels are covered so the inspector can’t see them, they will escape the fine without solving the problem. Those sills and lintels are what keep water OUT and heat IN – you really want them to be intact, not just covered up to hide a deeper problem.

Systems with single Points of failure

When it comes to major fixtures in the home, you really don’t want any system to have a single point of failure. For example, the recent flood in Albany Park demonstrated the problem with sump pumps – many of them were hooked to the electrical grid without battery backup. During the flood, power was cut to many homes, rendering their sump pumps useless.

Of course, when your street looks like this even a sump pump can't help you much.

Of course, when your street looks like this even a sump pump can’t help you much. (Albany Park 2013, photo by me, unfortunately.)

Similarly, a furnace should have a manual cut off switch attached in case the thermostat fails, and outlets close to sources of water should have breakers built in.

Lack of Detail

While a simple aesthetic is certainly valid, complexity can in some cases be equated with quality. As we discussed last week, moving parts add to the usefulness and the expense of something like a kitchen cabinet. High levels of detail in trim indicate custom builds and considerably more care invested in the installation. Basic cabinets and plain walls will look frumpy by comparison. It isn’t just the visual impact that matters, either. While you certainly want your home to make your guests say “wow,” you also want it to last for a good, long time. Lack of detail can imply lack of quality – plain cabinets can be nice and sturdy, but you’ll definitely want to take a closer look at them than ones with lots of crown molding and heavy detail.

You should also pay attention to items that seem out of place. If you spot a contractor-grade ceiling fan in a home otherwise furnished with custom-grade decor, it may be a sign that the wiring behind the fan is faulty, resulting in multiple replacements over time.

Lastly, it’s worth considering how the moving parts, well, move. Do drawers and doors slam shut or do they quietly glide closed? Do faucets and drains open and shut fully and smoothly?

We Need to Go Deeper.

These tests are all quite superficial, and failing any one of them alone is not reason to walk away from a house. If you decide to put in an offer on a home, your inspector will be able to more thoroughly test everything so that you’re aware of major problems. Unless you’re planning on gutting the place, you definitely need to probe deeper than this before you get all the way to the closing table. However, basic awareness of quality and some quick on-the-go tests can save you from getting under contract on a clunker.

I’ll be back Friday (I promise!) with a special take on quality for folks who are looking for rentals. See you then.

Quality Control Week #1: What Affects Building Quality?

You probably know that there are different grades of quality when it comes to food. The USDA has three different grades for poultry, eight for red meat, and hundreds for fruits and vegetables. Similarly, building materials come in four different official grades: building, quality, custom and ultra custom. I would add “commercial grade” to those standard four. As the quality goes up, so does the cost; in some cases it increases exponentially. Homeowners must always walk a fine line between material quality and cost, but many are unaware of the differences and how they affect the bottom line.

Condo boards also face tough decisions when it comes to major capital improvement projects. Expensive materials will last longer – in fact, they may well outlast the current residents’ tenure in the community. Convincing condo residents to take on large special assessments for maintenance that they won’t be around to use is a difficult task. (more…)

Talking Trash

Chicago garbage pickup (or “scavenger service” as we Realtor wonks like to call it) is a bigger deal than you’d think for landlords. It tends to get overlooked by newer landlords, and even the experienced ones don’t like to spend too much time dwelling on the topic of handling other people’s junk. However, there are some laws to keep in mind and best practices to follow when it comes to dealing with your tenants’ trash. Today I’ll be reviewing the basics for you.

Trash pickup is also called "scavenger service." This little guy is also a scavenger, but of a different kind.

Trash pickup is also called “scavenger service.” This little guy is also a scavenger, but of a different kind.

First off, the city sanitation ordinance can be found here. Additionally, the recycling regulations can be found here.¬† Regardless of the size of your building I’d recommend that you give it a glance. Violations are penalized with tickets from the police.

Who Pays for Trash Pickups in Chicago?

If your building has four units or fewer, the city will pick up your trash as if it was a single family home. You pay for this service through your property taxes and sales tax. This also goes for individually rented condos in buildings with up to four units.

If the building has more than four units, you will have to hire a private hauler to collect your tenants’ trash. There are several private haulers that work the Chicago grid – most are Teamsters. Larger condo developments will also have to hire private haulers – this is paid for out of the owners’ assessments.

The most common private haulers that I see around here are Waste Management, Lakeshore Recycling, Groot, Allied/Republic, Flood Brothers and Veolia.

Either way, tenants in Chicago expect landlords to pay for scavenger service.

How Much Trash Is There?

The trash carts supplied by the city for small buildings hold 96 gallons of waste, or a little less than half a cubic yard. Based on my observations, a family of three will fill approximately one of those carts per week with regular trash, and another one every two weeks with recyclable trash. (If you have a bunch of dirty hippies living in your building it may be the other way around.) The last week of the month in moving season will see far more trash, as will the holiday season.

If you’re buying an apartment building, the prior owner will probably have trash containers out back that you can use to gauge how many you’ll need once you take over the reins. It’s possible that the trash contract may be passed over to you at closing. It’s a good idea to check out how the trash looks on the last day of a month to gauge if more containers are needed. Overflowing dumpsters lead to tickets – it’s always better to err on the side of too much space and downsize later if it isn’t needed.

It’s important to communicate with your tenants regarding how they handle trash if you want to keep the ticket brigade at bay. Make sure that tenants know to bag their trash and secure the bags firmly. Make sure they know that trash needs to be removed from the building regularly, not left to pile up inside their apartments. Take time to inform them about which materials are considered to be hazardous – this includes batteries, toner cartridges, paint and lighter fluid. If you allow cats in your building, make sure your tenants dispose of the cat litter with the trash instead of flushing it.

Also make sure that they notify you if the dumpster is too full. It’s better to head over and pack down the trash or schedule an additional pickup than to incur a $200 fine because a nosy neighbor got annoyed and called 311 on you.

What About Recycling?

According to city ordinance, renters must have recycling options made available to them, even if you’re in a small building in an area without blue cart service. The recycling method you provide must allow for separation of recyclables at your building. You also need to make an effort to educate your renters on what items to separate. Unfortunately for the planet, the recycling ordinance is pretty toothless and rarely enforced. However, it’s important to remember that the tenant pool tends to consist of younger residents with very eco-conscious leanings. A visible recycling program is not only good for staying on the good side of the law, but it’s also a great marketing tool.

Blue recycling carts in their natural habitat. (Photo by Mick Dumke, Chicago Reader)

Blue recycling carts in their natural habitat. (Photo by Mick Dumke, Chicago Reader)

Most private haulers will offer specifically marked recycling-only dumpsters. If you’re hiring regular dumpsters make sure you also provide a separate container for recyclable items.

How about Big Stuff?

Sometimes your tenants will need to discard larger items. Without proper preparation, this can lead to a big mess in your alley. Furniture left outside of dumpsters can lead to broken glass littered across the alley, thieves picking over the items, and the general enmity of your neighbors. Mattresses left lying out are a sign of a bedbug infestation, which can cause panic among your other tenants even if no problem actually exists.

Therefore it’s important to communicate to your tenants in the lease and explicitly in conversation that large items need to be placed in the dumpster. If they have something that’s too big to fit, they need to warn you immediately so that you can schedule an extra pickup with the city or with your private hauler.

Similarly, if you’re planning on doing any renovation work or clearing out an apartment formerly occupied by a hoarder, you may need to hire an extra dumpster on your own even if the city provides pickup. These types of projects create far more trash than your standard equipment will be able to contain.

By the way, if you do schedule a last minute extra pickup with a private hauler, be prepared to pay them in cash with a nice tip for going out of their way for you. Even if you have a contract for regular service, these kind of trips are above and beyond a trash hauler’s normal duties.

What About Shops and Restaurants?

If you’ve got a mixed use building, you’ll probably wind up with a few retail shops or restaurants renting from you in the commercial spaces. Unlike residential renters, most commercial tenants in Chicago are expected to pay for their own scavenger service (along with all the other utilities). Sometimes a very small office can piggyback onto your dumpsters, but any business that requires a sanitation license will probably be required to demonstrate that they’re in charge of their own trash collection.

This is about as close as you ever want to get to a grease dumpster. (Photo by TrashMonkey29 on Flickr.)

This is about as close as you ever want to get to a grease dumpster. (Photo by TrashMonkey29 on Flickr.)

If you’ve got restaurants, doctor’s offices, hair salons, catering businesses, childcare facilities or anything that generates a lot of icky trash, you’ll want to ensure that you leave enough space in the rear of your building for each business to provide their own dumpsters. Restaurants in particular may need space not only for a regular dumpster and a recycling container but also a grease dumpster.

Grease dumpsters require their own special precautions – while they’re designed to contain liquid waste, it’s easy to spill when you’re pouring hot grease in the dark. Hosing down the ground around a grease dumpster is actually illegal. You’ll need to make sure the ground nearby is fully cleaned with detergent to keep rats away and make sure the alley doesn’t become a skid hazard for passing cars.

What if There’s No Alley Access?

In order for trash to be collected, it needs to be accessible. For most buildings in Chicago this is an easy task. Dumpsters live in the alley, trucks pick them up there. No fuss, no muss. However, there are a few locations in the city where alleys do not exist, or if they do, there is no way to get to them from the house without a very long walk.

Before you purchase a rental property you need to consider how trash pickup is handled. If there is no way for you to leave trash containers in a place where both tenants and trucks can access them, you will need to make plans to haul the trash out to the street for pickup on a regular basis. Unless you’ve got a good crew of workmen on hand or plan to live on site, I guarantee that this will get old really fast. In theory you could offer a barter deal to a reliable tenant to haul the dumpsters out on trash day, but you’ll still want to follow up regularly to make sure they’re actually holding up their end of the bargain. This is probably not a situation that you will be able to resolve on your own, either. You can’t just go adding alleys on your block.

Should I Chain My Dumpsters?

Yes. Illegal dumping – that’s when other people put their trash in your containers – is a “three strikes and you’re out” offense in Chicago. The first two times you get a ticket, the third time is a felony with jail time. Building contractors in particular are notorious for dumping their construction debris in any nearby unsecured container. Make sure it isn’t yours.

Additionally, dumpster diving is not just for thrift shop loving hipsters anymore. Identity thieves have a field day rummaging through tenants’ discarded papers. Grease theft from grease dumpsters is also common, since grease is used to make biodiesel and can therefore be resold at a high price. (Most grease dumpsters are designed to have higher security than your normal dumpster for just that reason.)

However, before you go chaining up your trash containers make sure you’ve considered the tenant training you’ll have to do to make this kind of precaution successful. Tenants will need to have keys to the chains’ padlocks. They will also need to be instructed to re-secure the dumpsters after depositing their trash. Your success rate will depend a lot on how well you convince your tenants of the necessity. Better pest control and protection against identity theft should be your two biggest talking points on that front.

Private Hauler Gotchas

Long Term contracts. Wouldn’t it be nice if you could sign your renters to a five or ten year lease that allowed you to raise their rents arbitrarily at any point? Well, private trash haulers do exactly that. And they generally require four to six months advance notice to get you out of the contract. Make sure you negotiate heavily before you select a hauling company.

Graffiti. You’d think that for the cost of service, the haulers would regularly swap out dumpsters that get tagged, right? Unfortunately this is not the case, and the taggers know it. Dumpsters are one of the most popular locations for graffiti, since landlords assume that the haulers will clean them and vice versa. If your building’s dumpsters are located close to the street or an alley intersection they will be particularly likely targets for tagging. Make sure that you keep some paint on hand to cover any tags.


 

Next week I’ll be doing a three part series on the quality of building materials. (Trust me, it will be more interesting than it sounds!) See you then!

What Happens If Your Landlord Dies?

In previous articles I’ve addressed what a landlord should do if a tenant dies in the middle of a lease. However, I’ve not discussed the topic from the other side. So what happens to a tenant if the landlord dies?

Regardless of how you feel about your landlord's death, you probably have some questions about what's going to happen to your lease.

Regardless of how you feel about your landlord’s death, you probably have some questions about what’s going to happen to your lease.

I’m not an attorney, and I certainly cannot cover every possible scenario. However, I can address some of the basic questions that may arise. As always, the discussions here pertain to apartments in the Chicago area.

Question 1: Do I have to move out?

No. Your lease is part of the property, just like the refrigerator, the garage and the roof. If the owner sells the building, he/she sells your lease along with it. If the owner dies, your lease continues. You do not have to move out automatically. Your landlord’s heirs cannot suddenly kick you out because they want to move in.

Question 2: Where do I send my rent?

You should continue to send your rent to the address listed on your lease. Once the landlord’s estate is settled, the probate attorney and/or the new owners who have inherited the property will send you written notice of any changes.

If your rent check comes back as undeliverable, hang onto it unopened in the envelope as proof that you tried.

If your rent check comes back as undeliverable, hang onto it unopened in the envelope as proof that you tried.

Question 3: Who’s the new owner?

This is probably the most complicated question. It may take some time for the new owner to be determined, depending on how the property title was held. In other cases, the new owner could be able to step in within a matter of days. In the interim, the executor of the estate will become your main point of contact. This could be someone named in the landlord’s will or a court-appointed probate attorney. Either way, until you are notified in writing of a change in ownership, make sure all dealings regarding your apartment are handled in writing to the landlord’s address as listed on your lease.

If They’re Incorporated

If your landlord was incorporated – either as a corporation or LLC – with other partners, then you have nothing to worry about. The company will survive the death of the landlord. However, if the landlord was the only partner in the company, the entire company’s assets (including your lease) will pass on to the landlord’s heirs.

If They Have Heirs and a Legal Will

Provided the will is legal, the property goes to whoever is specified in the will. For all you know, it might even be you!

Provided the will is legal, the property goes to whoever is specified in the will. For all you know, it might even be you! (Maybe you should be nice to your landlord after all…)

If the landlord had a legal will and designated heirs, the property and your lease will pass on to the heirs specified in the will. These heirs will become your new landlords automatically, although it may take them some time to figure out who will be handling your specific concerns.

If They Have Heirs and No Will

It’s highly unlikely that your landlord will die without a will (“intestate”) but if so, the ownership will be determined through Cook County probate court. Illinois has a very specific order of preference for distributing property among remaining family. Children and living spouses are the first option, followed by parents and siblings, grandparents, great-grandparents, and if all else fails, the property goes to the next closest surviving relative. However, the property may well be distributed evenly among many relatives, so your property could wind up the subject of dispute between squabbling relatives. The most important thing in this case is to remain in close contact with the probate attorney appointed to handle the estate, as any official changes in ownership will come to you from them.

If They Have No Heirs and No Will

escheat happens

Again, this scenario is highly unlikely, but in the case that your landlord had no will and no surviving family, your building will become property of Cook County. (In legal terms, the property “escheats” to the county.)

If The Landlord Owes Outstanding Debts

What if your landlord died while still owing money to somebody? Regardless of what the will says, the landlord’s creditors have to be paid first. This may mean that your apartment will transferred in order to settle a debt. Three common situations where this could occur would be if the landlord had a mortgage on the property, if they had not yet paid contractors for major renovation work at the building, or if they had unpaid back taxes. Either way, the creditor gets your building and you along with it.

Question 4: Can I use this as a reason to break my lease?

Not really. The new owners who inherit the estate probably wouldn’t fault you for wanting to head out early, but since your lease is still valid and your apartment is still intact, you’ll have to follow the same lease break routine that you’d have followed if your landlord was still alive. Please be gentle with the relatives of your landlord when you go to discuss leaving – it is always a delicate and difficult situation.

Question 5: What if the owner lived on site?

All of the above is pretty much consistent if the landlord lived in the same building with you or not. However, if the landlord died in the building (I know, ew!) then you may have grounds for breaking your lease. A death on the property requires special clean up and care. Your property may be sealed for investigation by the coroner. If you can’t get into the property or it’s a health hazard, and the problem continues for over 72 hours, you do have a right to break your lease. The only problem is that you have to provide written notice to your landlord asking them to correct the problem, and figuring out who your new landlord is within 72 hours can be difficult.

Regardless, the most important things in this situation are to find safe substitute housing immediately – a hotel if you have to – and to cooperate with the authorities and the heirs in order to find out when you can safely return. This sort of extreme scenario would merit a call to an attorney to ensure that your needs remain prominent in the minds of those dealing directly with the death.

Question 6: What if my lease expires before the estate is settled?

Complicated estates can take months or even years to parcel out between heirs.

If you’re on a one year lease, it may well be that your lease expires before everything is resolved. Your lease expiration date, like all other aspects of your lease, remains valid even if the owner dies. In Chicago, a landlord has to provide you with at least 30 days written notice if they don’t intend to renew your lease. Unless your landlord did so before death, you have the right to stay in your apartment on a month-to-month lease.

If you choose to move out at the end of your lease, your course of action should be to send a letter stating as much to the same address where you send your rent, at least a month before the last day of the lease.

Question 7: How do I get my security deposit back?

This is probably the most complicated of all of the questions. The first step should be to provide your forwarding address to the executor of the estate when you move out, along with a reminder that they must return a list of itemized deductions within 30 days, and the balance of your deposit, with interest, within 45 days.

If the estate does not return your deposit before the deadline, you do have a right to sue them to get the money back.

Overall the most important things to remember in this kind of situation are:

  • Make sure your voice is heard. It is very easy in the process of settling an estate for the heirs to forget about the deceased’s renters. As soon as an executor is appointed, you must remain a firm presence in the process so that your needs are not forgotten.
  • Be kind and patient. The person who inherits your building may not have any experience as a Chicago landlord. Our landlord-tenant laws are some of the most complex in the country. It takes a while to learn how we do things around here. You’ll have to take some time to read up on the rules yourself, and you may have to gently coach your new landlord on how to do things the right way. Remember that they just lost a family member – please don’t take their inexperience as a reason to take advantage of them.
  • Seek help if you need it. These sorts of complicated situations are why professionals exist. You may deal with grief yourself over the loss, even if the landlord was not a good friend. If the estate spends a long time in probate you may need to consult with an attorney. Like it or not, the death of your landlord means that changes are headed your way, and not all of them will be predictable.

The First 10 Things You Should Do After Closing

So you’re about to close on your first house. Congratulations! You’ve come a long way and it’s probably been a big hassle to get here. Saving money, filling out paperwork, viewing house after house… now that it’s over, what’s next?

There’s bound to be a lot of silliness that comes with getting your first house. You can dance around in your new empty living room and call up all your friends for a housewarming party, but there’s a few very important things you’ll want to take care of before you pop the cork on that champagne.

Make Copies of your Closing Documents. If you’re a first time buyer, the documents handed to you at closing are probably the most expensive pieces of paper that you have ever encountered in your life. The first stop you make after closing should be your local copy shop. While all the documents are still together and in order, take at least one copy of everything.

(more…)

Safety and the Illusion Thereof

One of the most common questions among renters and buyers moving to new areas is whether or not those areas are “safe.” In fact, the majority of moves, be it between apartments, condos or houses, are within a very short distance. Safety and comfort levels are definitely a factor in this particular statistic – people stay within the area that they know. However, with rising prices in both the rental and purchase housing markets, many Chicagoans are faced with moving to new sections of the city where safety is an unknown factor. As for the folks moving from outside the city, it’s tough enough to understand the hundreds of distinct neighborhoods within the city limits, let alone to compare crime statistics to a reasonable extent.

Antique maps show monsters and dragons beyond the edges of known lands. This is coincidentally also the worldview of people who are moving to a new neighborhood.

Antique maps show monsters and dragons beyond the edges of known lands. This is coincidentally also the worldview of people who are moving to a new neighborhood.

As much as I’d like to reach every renter and buyer and explain to them how to statistically analyze crime risk in a given neighborhood, I can’t do so. Even if I did, my own rational explanations would be massively overwhelmed by the media hype surrounding Chicago’s high crime rates. Those crimes may be consolidated in areas far removed from your neighborhoods of choice. They may have little to no bearing on your daily life. However, they are prominent in the minds of any home seeker, and it’s tough to combat emotional conviction with reason. What you must fight against is not the idea that your particular area is a bad neighborhood, but that the entire city is a homogeneous, crime-ridden hole.

If you’re a landlord or home seller, it’s therefore far more critical to be aware of how safe your neighborhood feels. You can rattle off all the stats in the world, but if a potential buyer or renter feels wrong in your immediate vicinity they will not be interested in making an offer on your property. This is even more critical if you’re expecting to get an above-average price for your listing, since those tend to be taken only by folks from out of town who don’t know any better. Curb appeal in Chicago is not just about the visual appeal of your yard and building. It is also majorly affected by the aura of safety or danger projected by your block.

Familiarity Breeds Contentment

I’ve been living in Chicago for 15 years now, but I grew up in the suburbs of Connecticut and spent several summers mucking about in small New England towns. The last town where I worked before moving here was so small, the residents got offended if they saw you locking your car doors. Now, this doesn’t mean that I was a wide-eyed hick when I moved out here in the late 90′s, but it did take a bit before I found my “city legs.”

Lincoln, NH. My last "home" before moving to Chicago.

Lincoln, NH. My last temporary “home” before moving to Chicago.

Before I moved out here the worst sort of crime I encountered was a prank phone call or two. Since then I’ve had my car windows smashed in three times. Now, for Chicago these crimes are pretty benign, but the first time it happened to me it was still pretty shocking. The third time? I’d gotten used to it. I rolled my eyes, called up my mechanic (Speed Dial 6) and hauled out the vacuum.

As owners in Chicago we become inured to the level of criminal activity that surrounds us. The longer we stay here, the more difficult it becomes to see our neighborhoods through the eyes of a newcomer. Unfortunately, if you’re trying to market your home to a new resident that is exactly what you have to do.

Zeroing Out the Scales

For me, getting into a buyer or renter’s head often involves a day trip to the suburbs. I encourage prospective home sellers and landlords to do the same before they put their property on the market. There is not enough difference between Chicago neighborhoods to truly serve as a “control” in our safety experiment. You need to get out of the city completely – maybe even out of the county – and go spend a day walking in the shoes of someone from the outside. I don’t just mean a quick jaunt to Evanston, either. Get out beyond the reach of the El and walk around a residential neighborhood that has absolutely nothing in common with the city. The best time to do it is a weekday afternoon.

Observe everything while you’re out there. Notice how far the houses sit back from the street. Pay attention to the people walking around, the cars and where they park, the separation of commercial and residential areas. Observe what happens when a school lets out for the day. Spend some time walking around after the shops close.

"Honey, look! They still have front-in parking here! That's so cute!"

“Honey, look! They still have front-in parking here! That’s so cute!”

Once you’ve zeroed out your mental scales for what clean, wholesome livin’ is all about, it’s time to head back into the city and reassess your home turf.

I Spy With My Little Eye…

Upon returning from the city outskirts, it should become far more apparent what factors contribute to and detract from the feeling of safety in your own neighborhood. We’ve probably all had our moments in the city of turning down the wrong block and instantly knowing that we were unwelcome. However, if you’ve paid attention to the details in the suburbs you should be more able to pinpoint exactly what contributes to an illusion of safety.

Here are a few that I wrote down on my last trip back in from the hinterlands:

  • Claustrophobia. The distance from the sidewalk to the buildings (the “setback”) gets very shallow in some parts of Chicago. This can lead to a feeling of claustrophobia that can be off-putting for newcomers. The areas of the city that tend to feel “safer” also have deeper front lawns. Do buildings in your area crowd in close to pedestrians?
  • Gates and Grates. There are entire blocks where black iron fences line the street in front of the homes, and shops are secured with accordion grating. It’s a common enough sight in Chicago that locals tend to ignore it. To a newcomer, it can imply security problems and fear of trespassers.
This is probably not the "gated community" your prospective buyers and tenants have in mind.

This is probably not the “gated community” your prospective buyers and tenants have in mind. (Photo by therodabides on Flickr.)

  • Sounds. Listen to what’s going on, both during the day and at night. Do you hear lots of shouting? Traffic? Car alarms? How about friendly sounds, like the ice cream truck or the bus announcing streets as it drives along? Is it deathly quiet?
  • Interactions. Do the people walking past seem comfortable with your presence? Do they make eye contact or hurry past? Are there people just sitting around in their yards doing nothing? How about the local kids – what do they do after school? Are there parents and caretakers around? What about pets? Do you see a lot of people with small companion animals? Are there lots of strays? Do you see a lot of dogs that could be mistaken for guard dogs or fighting dogs?
  • Cars. What types of cars park near your house? Are they in good condition? Are there lots of cabs? How about old beater scrap metal trucks? Is there visible broken glass in the street left behind from break-ins? Any cars with the Denver boot, or piles of parking tickets?
  • Cameras. It isn’t tough to figure out that security cameras cameras in Chicago are a sure sign of a troubled neighborhood. Even without the obvious flashing blue lights, security cameras are a tipoff to newcomers that something has probably occurred to merit their installation.
  • Alleys. Newcomers won’t check, but Chicago residents know that our streets are like mullets – business up front, party in the back. Take a walk down your local alleys. Are they clean? Well-lit? Are the garages in good condition or are they covered in graffiti? How about the porches – are they well-maintained, or decrepit and covered in junk? Are the dumpsters tidy, or overflowing?
  • The Commute. The neighborhood around your house extends as far as the closest El station. Many newcomers will test the safety vibe of an area by making the walk from the train to their new prospective home. Alone. After dark. You should definitely do the same and make sure there’s nothing untoward to scare off a potential buyer or renter. Are the sidewalks in good condition? Are there panhandlers or large groups of loiterers hanging out anywhere along the way? Are there large stretches of empty stores or vacant lots?

These are only a few factors that contribute to my personal sense of safety in any given section of Chicago. I’m sure there are many others. Safety is a very relative thing, and I’ve lived here for a while now, so even with trips to the suburbs to freshen up my outsider eyes I know I’ve grown pretty blas√© about the things that make Chicago feel like a city.

Assemble your own list of criteria and test it out by visiting a new section of the city. Do you feel safe there? Why? If not, why not? Which of your criteria are within your control to fix? Which ones do you just have to accept? Would you adjust your asking price accordingly because of them?

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10 Mistakes Made by First Time Landlords

Last year I did two articles about mistakes made by first time renters and first time buyers. Today we’re going to look at errors made by first time landlords.

1. Setting Arbitrary Rent Rates

The price a tenant will pay has little or no bearing on your monthly costs. They will compare what’s available and, if your price is reasonable, they will rent your unit. If your price is too high, they won’t even look at it. If it’s too low, they will wonder what’s wrong with it or take you to be a sucker.

Apple can get away with pricing higher than anything else. You cannot.

Apple can get away with pricing higher than anything else. You cannot.

(more…)

Rent Bacon: March 2013

No Foolin’.

The Rent Bacon index number is an indicator of how a district is performing compared to the HUD Fair Market Rents. Landlords can use it to figure out how much more to charge this year. Tenants can figure out how much more it will cost to move.

The Rent Bacon index number is an indicator of how a district is performing compared to the HUD Fair Market Rents. Landlords can use it to figure out how much more to charge this year. Tenants can figure out how much more it will cost to move.

New month, new Rent Bacon. Rent Bacon gauges the change in actual value of apartments in Chicago on a quarterly basis using rental data from the local MLS. The index takes into account the rent rates, market times, and ratio of rented units compared to listed units. This month we’re looking at 2 bedroom, 2 bathroom apartments throughout the city. For more info on how the index is calculated, check out this explanatory post.

Observation #1: Better value

Now this is not something obvious from the chart above, but it is quite clear if you compare it against last month’s results for 3 bedroom, 2 bathroom apartments. The index value for 2 beds is considerably higher, peaking over 300 for the smaller units. Does this mean that they’re actually a better value? Yes, absolutely. (more…)

Rental Site Review: Zillow

A couple of months ago, I posted a review of SearchChicago.com, the Sun-Times online classifieds page. I concocted a scoring method to rate rental websites on a 40 point scale based on diversity of listings, listing freshness, listing legitimacy, and ease of use. SearchChicago scored 14 out of 40 – 35% of the maximum, a dismal failure. Today we’re going to use the same criteria to rate another, more well-known site: Zillow.

Zillow is best known as way to search for homes for sale. Their claim to fame since the beginning has been the “Zestimate,” or their estimated value of a home based on sale data from the area. For conventional homes, it can be reasonably accurate. For homes that deviate even slightly from your standard cookie-cutter architecture it is frequently wildly out of whack. Zillow recently expanded into listing apartments and homes for rent, and they brought the Zestimate along with them. It’s just as unreliable for rentals as it is for homes, but what about the rest of the site? Is it something your average Chicago apartment hunter should be using to find their next place?

Zillow scored 24 out of 40 possible points. Here’s why.

On the surface, it looks like Zillow has a ton of rentals in Chicago. And they do, but it isn’t as diverse as you’d think. In the 60640 zip code (Uptown), they list 910 rentals. The MLS has 79. In the 60625 zip code (Lincoln Square/Albany Park), they list 388 rentals while the MLS has 38. However, once you start picking apart the listings you realize that the surface data is misleading. Looking closely, over half of the listings are either duplicates or similar apartments in the same large buildings.

Even so, if you cut the total listings on Zillow in half, they still handily trounce the MLS. There’s all sizes and styles, from studios to five bedrooms and from houses to high rises. Rents range from $500 to five-figures and all different types of landlords are represented.

In terms of listing diversity, Zillow gets an 8 out of 10.

Zillow does not charge landlords or agents to post rental listings. This means that everyone and their brother can post an ad, regardless of whether or not they have the right to do so. Sites that do not charge advertisers are generally rife with questionable postings, and Zillow is no different on that front. A quick search this evening uncovered a fake copy of one of my own listings, which I reported using their handy “report” button. After reporting it, the listing disappeared from my search results, but I could still bring it up by typing in its direct address in my browser. I’m pursuing other routes to have the listing taken down.

In my search through the 60640 and 60625 zip codes, at least half to 3/4 of the listings used the ominous “undisclosed address.” Many used photos with watermarks from the apartment locator services, which are known for posting bait listings to free marketing sites. Others had no photos at all.

The apartments with actual addresses are more likely to be legit, but Zillow’s checking for unique addresses needs a little work. In the case of the scammer who copied my listing, he simply left off one digit from the apartment number to fool the system into thinking he was posting a different apartment.

Zillow gets 5 out of 10 possible points for listing legitimacy.

SearchChicago got a measly 2 out of 10 when it came to ease of use. Their slow, clunky site made for a totally dismal experience. By contrast Zillow comes out smelling like a rose. The site loads quickly, the back button works properly, and the mobile version takes me from a Google search result to an actual listing with only one annoying nag window about downloading their app.

Their mapping feature is decent, with nice neighborhood sectoring and the ability to draw your own boundaries. I’d have liked to see the ability to do a radius search in a circle around a specific point as well. Unfortunately, the map cannot be turned off unless you click through to a listing, and once you zoom in beyond a certain point you cannot switch from satellite to street view. On the map view, search results are displayed to the right in a list with basic data. However, the “basic” data on many of the listings is overly simplified, which leads to a lot of excessive clicking. Of course, Zillow being advertising-driven they want to be able to demonstrate that they’re generating lots and lots of clicks. Their approach seems to be to provide as little information as possible as a reward for each click.

A listing detail page dedicates about the top 1/4 of the page to the information obtained from the landlord or agent. The next 1/2 of the page is spent on Zillow’s useless “Zestimate” and price history tracking. Finally, the last 1/3 of the page is spent on school scores inlined from Greatschools, which is of marginal use to apartment hunters in Chicago who tend to be just barely out of school themselves.

The search feature is quick and dirty, but asks some strange questions. It’s obviously copied over from the home-for-sale search feature with little regard for the specific needs of renters. It allows the user to specify date of construction, lot size and square footage – most of which are omitted from rental listings altogether – but doesn’t allow the user to narrow their search by more important criteria like minimum lease length, security deposit, non-smoking buildings, or number of units in the building.

Overall in terms of ease of use, I’d give Zillow a 7 out of 10.

Finally, we’re down to the criterion that pretty much killed SearchChicago – listing freshness. If you recall, 72% of their listings had been off the market already for at least 3 months. Now, I’d like to say that Zillow did better. The MLS average market time for an active rental listing in 60625 and 60640 is between 40 and 56 days, so if Zillow comes in anywhere near that or better they’d be doing fine on the freshness factor.

Unfortunately, I just can’t tell how fresh the listings are.

See, if you look at the map page you can sort by “days on Zillow.” If you do so, you’ll see that the oldest listings are 34 days old. This makes Zillow look really good on the surface, until you start clicking through to the listing details. That’s where it all falls apart.

This is the teaser on the map page...

This is the teaser on the map page…

... and this is the detail page. Notice the difference in listing age?

… and this is the detail page. Notice the difference in listing age?

This means that short of clicking the detail pages for over 1000 listings, there’s no way for me to tell the actual age of the listings on Zillow. The oldest I found in a cursory search was 92 days – that’s a two month difference between the index page and the detail page!

Speaking as an agent who syndicates listings to Zillow, I can vouch that my listings take about 3 days to get picked up from the MLS. This is a very bad delay in a fast-paced market. I had a 3 day listing a few weeks back that didn’t even appear. However, they do tend to be very good about removing inactive listings promptly once they’re notified.

In terms of listing freshness, Zillow gets a 4 out of 10.

So, Zillow just barely passes with 60% of the maximum achievable score. If you’re comfortable with using maps, you can use it to search for Chicago apartments, but proceed with caution. Make sure to background check any landlord you find on Zillow. Also bear in mind that as the new kid on the block, most agents will post to multiple other sites before they think to post to Zillow, too.

Field Guide to Chicago Apartments: Studios

fieldguideIt’s been a while since we pulled out the old Field Guide for a humorous look at some of the different types of Chicago apartments. Last summer I gave you an overview of garden apartments and coach houses. Today we’re going to look at another common species of apartment with many quirks: the studio. As the economy starts to recover, many renters who have paired up with roommates through the recession will be able to move out on their own again. Studios, designed for single occupants, will be their next logical stop.

Habitat: Restricted

Unlike the previous two species we studied in the Field Guide, the studio apartment (apartmentus minisculus ecubiculus) cannot be found throughout Chicago. In fact, their territory is quite constricted. Studios can only be spotted in areas that currently attract large numbers of single residents, or in areas that attracted them in the past. They tend to flock together in high rise buildings along the lakefront and close to major transit hubs. Their slow appreciation makes them of little interest to condo developers. The ones that exist inland are usually converted from former hotels or clustered around college campuses and hospitals. (more…)

Exploring the Taboo against Prices on “For Sale” Signs

Once Upon a Time

Buyers agents as we know them in modern Illinois did not always exist. There was a time (and in some states it still exists) when agents were expected to represent both sides in home sales. “For Sale” signs with phone numbers were meant to give you access to the sellers’ agent, who would show you the property and serve as an intermediary in negotiating the purchase contract. In the days before the internet, this was one of the few ways you could find out price information, other than stopping by a real estate office or reading the Sunday paper.

If the price did not agree with you, the agent in question could take you out and show you other properties represented by their office. Before the advent of MLS systems, this was all they would show you. Back in those days when agents controlled access to all the listing information, the signs were a very important route for generating business. So, those real estate signs would never list prices. They would only list the name of the agency and a telephone number. Buyers would call in, have a chat, and get upsold. Brilliant.

This For Sale sign tells a great story, but still omits the price. What gives?

This For Sale sign tells a great story, but still omits the price. What gives? (Sign by Elle Zober of Greatfamilyhome.com. Worth a read.)

Of course, nowadays we have the internet. If you see a sign in front of a property you can look it up on a smartphone, or maybe scan a QR code, and you’ll get all the info you need. However, the internet also brings its problems. Scammers can co-opt listing addresses with fake ads, so that the information you get could be legit or fraudulent. Since many scammers make their money by posting copycat listings at too-good-to-be-true prices, one would think that the best safeguard would be to simply print the price of the listing right on the “for sale” sign, or perhaps in a little brochure in a box attached to the sign. Unfortunately, taboos exist against both of these options.

Once Upon Another Time (more…)