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Falling home prices are hitting homeowners in these 10 states the hardest &mdash; with up to 10% of mortgage balances now topping their property values

<keyword id="20069374" type="General" weightage="20" keywordseo="IT-services" source="keywords">IT services</keyword> firm <keyword id="19924892" type="General" weightage="20" keywordseo="Tech-Mahindra" source="keywords" meta.keywordsubtype="org" meta.entityname="Tech Mahindra" meta.hostid="261" meta.entityid="Tech Mahindra">Tech Mahindra</keyword> on Saturday reported a more than two-fold jump in its consolidated <keyword id="19942166" type="General" weightage="20" keywordseo="net-profit" source="keywords">net profit</keyword> to Rs 1,250 crore for the July-September quarter, driven by special income from the sale of assets. The Mahindra Group company posted a net profit of Rs 493.9 crore in the year-ago period, according to an exchange filing. Revenue rose by 3.49 per cent to Rs 13,313.2 crore in the second quarter of 2024-25 compared to Rs 12,863.9 crore in the same quarter of 2023-24. "Other income includes gain on sale of property of Rs 4,502 million which comprises of freehold land and its related buildings along with the furniture &amp; fixtures sold for a consideration of Rs 5,350 million, receivable over a period of four years along with interest of 8.2 per cent p.a," the company filing said. Sequentially, net profit rose by 46.81 per cent and revenue by 2.36 per cent. "We continue to progress on our strategic improvement efforts even as the overall IT services industry has remained soft. "We have focused on strengthening client relationships and expanding the partner ecosystem while maintaining a sharp focus on operational excellence through project Fortius, which has resulted in an expansion of margins for the third sequential quarter," Tech Mahindra CEO Mohit Joshi said. The CEO unveiled Project Fortius in April, a three-year plan to achieve a 15 per cent operating margin with a focus on organic growth. "This quarter we see consistent performance around increasing deal wins, <keyword id="19965932" type="General" weightage="20" keywordseo="revenue-growth" source="keywords">revenue growth</keyword>, cost optimisation and steady free cash flow generation as we continue our journey towards FY27 stated targets. In line with our capital allocation policy the board has declared an interim dividend of Rs 15 per share," Tech Mahindra CFO Rohit Anand said. The company's TCV (<keyword id="23580531" type="General" weightage="20" keywordseo="Total-Contract-Value" source="keywords">Total Contract Value</keyword>), or net new deal wins, stood at USD 603 million in the second quarter of FY25. Joshi further said the company is on the right path for a long-term sustainable transformation, with its leading indicators moving in the right direction, and its 'Scale at Speed' narrative resonating in the market. "We have invested in strengthening the capabilities in the focus service lines by broadening the leadership and investing in technical specializations. "We continue to invest in strengthening our fresher hiring program, building the right mindset and future skilling and associates, by building capabilities in AI-first and cloud-first skill sets," he told reporters. Investments shall continue in creating and sustaining an outcome-driven learning organisation and cultivating a high-performance culture based on the pillars of simplifying, clarifying, innovating and driving a high-performance orientation, he added. This year could be volatile because we are in the turnaround phase, Joshi said. "I am confident, however, that the platform is being set for a long-term, valuable franchise thanks to a high-calibre and united leadership team and a clearly articulated strategic plan," Joshi said. The Pune-headquartered firm added 6,653 employees during the quarter under review, bringing the total staff count to 1,54,273. Shares of Tech Mahindra settled at Rs 1,688 apiece on the BSE on Friday, down 0.68 per cent from the previous close. 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Tech Mahindra profit jumps over 2-times to ₹1,250 crore in Jul-Sep quarter

<ul class="summary-list"><li>Mortgage rates stayed high despite rate cuts, attracting cash-heavy investors to the housing market.</li><li>Despite values dropping in some areas, those selling are still raking in gains.</li></ul>Despite the central bank cutting interest rates, mortgage rates haven't followed suit. The average <a target="_blank" class="" href="https://www.businessinsider.com/personal-finance/mortgages/average-mortgage-interest-rate">30-year term remains near 6.21%</a>.Still, there was an uptick in buyers during the second quarter, specifically those who are <a target="_blank" class="" href="https://www.businessinsider.com/personal-finance/investing/how-to-invest-in-real-estate-make-money">investors</a>, according to the latest data available from Redfin. The share of investors who purchased property rose 3.4% from a year earlier. They were likely attracted by an opportunity to meet the growing demand of renters who face barriers to homeownership that a lack of affordability and elevated mortgage rates have brought on, read the note by Lily Katz.Home prices nationwide, including those that were <a target="_blank" class="" href="https://www.businessinsider.com/personal-finance/mortgages/how-to-buy-a-foreclosed-home">distressed sales</a>, increased by 4.3% in July from a year ago, according to CoreLogic. An investor purchased one out of every six properties sold within the second quarter and one of every four low-priced homes for a whopping $43 billion worth of real estate, Katz wrote.Investors, which the real estate data firm defines as buyers whose ownership code on a purchasing deed includes either association, corporate trustee, company, joint venture, or corporate trust, are less reliant on debt and are not as rate-sensitive as the average buyer. Most, or 69%, pay in cash or make bigger down payments. It means they can take advantage of the lack of competition.Some of the cities that have seen a rise in investor interest include San Jose, CA, Portland, OR, and Denver, CO. Meanwhile, there has been a drop in purchases in areas like Oakland, CA, and Providence, RI, where median capital gains have plunged by 20% and 37% respectively.The chart below demonstrates the change in investor purchases over the last two decades. It shows upticks following the housing bubble crash and in the years that followed the pandemic.<div type="image" title="Chart demonstrates eb and flow of real estate investor activity." height="834" width="1626" msid="114377796" hostid="261" sizebytes="34338"></div>But whether they're buying or selling, investors have been doing quite well regarding capital gains, says Elijah de la Campa, a senior economist at Redfin. This was not the case in the years leading up to the housing crisis, where property owners were losing from selling."I still see the opportunity for making money on my investments and making a considerable amount of money with 30%, 40% price increases relative to the prior year," de la Campa said. "While things might be more challenging in certain places, overall it looks like there are still lots of opportunities to make money at buying and selling homes as an investor. "He added that even the cities seeing a retreat in their capital gains from a year ago are still profitable at their sale; they're just not going for as much as they would have last June.Below is a list of the 39 major metro areas in descending order of median capital gains over the past year into June. What stands out most to de la Campa is that many areas with the highest capital gains are affordable, particularly Philadelphia and Warren, MI.<table style="minWidth: 50px"></colgroup></colgroup><tbody><tr><td>Region</td><td>Median % Capital Gain YoY (pps)</td></tr><tr><td colspan="1" rowspan="1">Philadelphia, PA</td><td colspan="1" rowspan="1">37.70%</td></tr><tr><td colspan="1" rowspan="1">Warren, MI</td><td colspan="1" rowspan="1">36.80%</td></tr><tr><td colspan="1" rowspan="1">San Jose, CA</td><td colspan="1" rowspan="1">24.50%</td></tr><tr><td colspan="1" rowspan="1">Newark, NJ</td><td colspan="1" rowspan="1">20.80%</td></tr><tr><td colspan="1" rowspan="1">San Francisco, CA</td><td colspan="1" rowspan="1">15.70%</td></tr><tr><td colspan="1" rowspan="1">Detroit, MI</td><td colspan="1" rowspan="1">15.00%</td></tr><tr><td colspan="1" rowspan="1">Baltimore, MD</td><td colspan="1" rowspan="1">6.60%</td></tr><tr><td colspan="1" rowspan="1">Portland, OR</td><td colspan="1" rowspan="1">6.40%</td></tr><tr><td colspan="1" rowspan="1">Anaheim, CA</td><td colspan="1" rowspan="1">5.60%</td></tr><tr><td colspan="1" rowspan="1">Chicago, IL</td><td colspan="1" rowspan="1">4.70%</td></tr><tr><td colspan="1" rowspan="1">Fort Lauderdale, FL</td><td colspan="1" rowspan="1">4.40%</td></tr><tr><td colspan="1" rowspan="1">Los Angeles, CA</td><td colspan="1" rowspan="1">4.30%</td></tr><tr><td colspan="1" rowspan="1">Seattle, WA</td><td colspan="1" rowspan="1">3.70%</td></tr><tr><td colspan="1" rowspan="1">Phoenix, AZ</td><td colspan="1" rowspan="1">-0.30%</td></tr><tr><td colspan="1" rowspan="1">Columbus, OH</td><td colspan="1" rowspan="1">-0.40%</td></tr><tr><td colspan="1" rowspan="1">Milwaukee, WI</td><td colspan="1" rowspan="1">-1.50%</td></tr><tr><td colspan="1" rowspan="1">Las Vegas, NV</td><td colspan="1" rowspan="1">-2.20%</td></tr><tr><td colspan="1" rowspan="1">New Brunswick, NJ</td><td colspan="1" rowspan="1">-3.10%</td></tr><tr><td colspan="1" rowspan="1">Tampa, FL</td><td colspan="1" rowspan="1">-4.00%</td></tr><tr><td colspan="1" rowspan="1">Cleveland, OH</td><td colspan="1" rowspan="1">-5.50%</td></tr><tr><td colspan="1" rowspan="1">Cincinnati, OH</td><td colspan="1" rowspan="1">-6.10%</td></tr><tr><td colspan="1" rowspan="1">Minneapolis, MN</td><td colspan="1" rowspan="1">-6.60%</td></tr><tr><td colspan="1" rowspan="1">Miami, FL</td><td colspan="1" rowspan="1">-7.70%</td></tr><tr><td colspan="1" rowspan="1">Orlando, FL</td><td colspan="1" rowspan="1">-8.60%</td></tr><tr><td colspan="1" rowspan="1">San Diego, CA</td><td colspan="1" rowspan="1">-9.70%</td></tr><tr><td colspan="1" rowspan="1">Sacramento, CA</td><td colspan="1" rowspan="1">-11.50%</td></tr><tr><td colspan="1" rowspan="1">West Palm Beach, FL</td><td colspan="1" rowspan="1">-11.50%</td></tr><tr><td colspan="1" rowspan="1">Atlanta, GA</td><td colspan="1" rowspan="1">-14.80%</td></tr><tr><td colspan="1" rowspan="1">Washington, DC</td><td colspan="1" rowspan="1">-15.00%</td></tr><tr><td colspan="1" rowspan="1">Denver, CO</td><td colspan="1" rowspan="1">-15.30%</td></tr><tr><td colspan="1" rowspan="1">Charlotte, NC</td><td colspan="1" rowspan="1">-16.00%</td></tr><tr><td colspan="1" rowspan="1">Nashville, TN</td><td colspan="1" rowspan="1">-17.90%</td></tr><tr><td colspan="1" rowspan="1">Riverside, CA</td><td colspan="1" rowspan="1">-18.20%</td></tr><tr><td colspan="1" rowspan="1">Jacksonville, FL</td><td colspan="1" rowspan="1">-18.70%</td></tr><tr><td colspan="1" rowspan="1">Oakland, CA</td><td colspan="1" rowspan="1">-20.10%</td></tr><tr><td colspan="1" rowspan="1">Montgomery County, PA</td><td colspan="1" rowspan="1">-26.60%</td></tr><tr><td colspan="1" rowspan="1">Virginia Beach, VA</td><td colspan="1" rowspan="1">-28.40%</td></tr><tr><td colspan="1" rowspan="1">New York, NY</td><td colspan="1" rowspan="1">-29.10%</td></tr><tr><td colspan="1" rowspan="1">Providence, RI</td><td colspan="1" rowspan="1">-37.30%</td></tr></tbody></table>

Investors are piling into real estate as values skyrocket by up to 38%. 13 metros with the highest gains, and 25 that are plunging.

The <keyword id="20449324" type="General" weightage="20" keywordseo="Finance-Bill" source="keywords">Finance Bill</keyword> 2024 was passed by <keyword id="19895394" type="General" weightage="20" keywordseo="Lok-Sabha" source="keywords" meta.keywordsubtype="org" meta.entityname="Lok Sabha" meta.hostid="261" meta.entityid="Lok Sabha">Lok Sabha</keyword> on Wednesday evening, with a few amendments moved by the government. Replying to the debate, Finance Minister Nirmala Sitharman said the approach of the government has been to bring greater simplification of <keyword id="19987671" type="General" weightage="20" keywordseo="tax" source="keywords">tax</keyword> laws and procedures and enable growth and employment in the country. She responded to points made by members. The Finance Minister clarified that in real estate, the roll over provisions have not been withdrawn and are applicable. She said if the capital gain in a property transaction is invested in buying another one or two properties up to a maximum value of Rs 10 crore, no capital gain tax is required to be paid on such profits. <keyword id="20619608" type="General" weightage="20" keywordseo="capital-gains" source="keywords">Capital gains</keyword> can also still be invested in bonds which are notified under Section 54 of the Income Tax Act up to a maximum of Rs 50 lakh annually and save on taxes. To give relief on budget proposals, Sitharaman also moved an amendment in the Finance Bill on the changes in the capital gains tax on <keyword id="20412285" type="General" weightage="20" keywordseo="property-transactions" source="keywords">property transactions</keyword>. The amendment implies that taxpayers can avail either a lower tax of 12.5% without indexation or a rate of 20% with indexation, if the property is acquired prior to July 23, 2024, the day union budget was presented in the Lok Sabha. Sitharaman clarified that taxpayers can compute taxes under both provisions and choose to pay tax under the scheme where lower tax is applied. Effectively, July 23, 2024, is now set as the cut-off date for the calculation of the capital gains versus the earlier cut-off of 2001. Sitharaman said she has proposed these amendments as some members have raised hypothetical calculation to prove that under new provisions taxpayers will have to pay higher taxes. The new tax proposals on capital gains tax was brought in to bring in parity among different asset classes like equities, mutual funds and real estate. In the Finance Bill introduced on July 23, the Finance Minister had proposed a flat long term capital gains tax of 12.5% with no <keyword id="943856" type="General" weightage="100" keywordseo="indexation-benefit" source="Orion">indexation benefit</keyword>s, prior to it property transactions used to be taxed at 20% with indexation benefit. The minister also clarified that the grandfathering proposal will be allowed only for individual and Hindu Undivided Family (HUF) taxpayers and not for companies and Non Resident Individuals. They have to pay flat 12.5% LTCG tax without indexation. The proposed amendment will apply not only on real estate transactions, but also on unlisted equity transactions, which are done before July 23, 2024. All such transactions will be taxed at 10% long term capital gains instead of FY24-25 budget provision of 12.5% tax. With the opposition members demanding removal of <keyword id="19951327" type="General" weightage="20" keywordseo="GST" source="keywords">GST</keyword> on health insurance, Sitharaman said tax was there on medical insurance even before GST was introduced. "There was already a Service Tax on medical insurance, before the GST was introduced. This is not a new tax, it was already there in all the states. Those protesting here, did they discuss regarding the removal of this tax in their states? Did they write to the Finance Ministers of their respective states about it and asked them to raise it in the GST Council where states have 2/3rd part? No, but they are protesting here. This is their double standards, this is their drama," she said. "Wrongful protests have happened recently, and comments have been passed on the basis of a news report which suggested that the 'Centre has pocketed Rs. 24,529 crores of health insurance premiums alone'. This is incorrect and highly misleading. The GST rate of 18% on health insurance comprises of 9% CGST and 9% SGST. Thus, of the total collections of Rs 24,529 crores from health insurance in the last 3 years, Half of it, Rs. 12,264 crores, went straight to the states as SGST. It doesn't even come to the Centre," she added. The minister said that apart from this, roughly 41%of the Centre's share of GST collection on health insurance is devolved back to the states again, as part of Tax Devolution as per the Finance Commission's formula. Sitharaman said the new income tax regime is simpler and offers lower income tax rates for individuals. "It gives flexibility to the taxpayer to see where he wants to put his money in the absence of exemptions which is available in the old income tax regime. The old regime has not been dissolved and is still an alternative to the new tax regime. It still offers benefits of various deductions such as interest on home loan, etc. Individuals without business income can choose between regimes once and can revert back too. Hence, a choice has been provided to assesse," she said. For the previous Assessment Year 2023-24 till December 31, 2023, about 3.8% of taxpayers opted for the new tax regime, which equates to 30.93 lakh individuals, from a total of 7.98 crore ITRs filed in the categories of ITR-1 to ITR-4, she said. "However, for the Assessment Year 2024-25 until July 31, 2024, there was a dramatic increase in adoption of the new regime, with approximately 72.8% of taxpayers choosing the new tax regime. This represents about 5.25 crore individuals, out of a total of 7.22 crore ITRs filed in the same category." Sitharaman said this shows a substantial shift in taxpayer preference towards the new tax regime, over the span of just one year. "Taxpayers opting for the new regime does not mean savings and investments are not happening in the economy by the middle-class. Due to growth in fintech, better awareness, and ease of investment due to UPI, e-KYC, progressive regulations, investments in mutual funds have increased tremendously. On an average, 17.88 lakh new folios have been added every month in the last 5 years since June 2019. The number of unique mutual fund investors has grown from under 1 crore in 2014 to about 4 crore today," she added. The Finance (No.2) Bill, 2024 was passed after amendments moved by opposition were negatived. Sitharaman said the vision of Prime Minister Narendra Modi has been to establish a simple, efficient and fair technology-driven taxation regime in the country. "So, simplification and ease of compliance for the taxpayer has been the primary objective. In the last 10 years, and this year, in the third term of PM Modi, the approach to taxation has been to simplify it, reduce the burden on taxpayer and make sure it is transparent and equitable," she said. "This year also, our approach has been that we bring in greater simplification of tax laws and procedures, and that we enable growth and employment in this country," she added. Sitharaman presented the Union Budget in Parliament on July 23. This is the first full budget of the NDA government led by PM Modi. The BJP-led alliance won a third successive term earlier this year. The Lok Sabha took up discussion on the Finance Bill after the Appropriation Bill for the central government's expenditure for 2024-25 was passed by the House on Monday. The Finance Bill will now be discussed by Rajya Sabha. The passage of bill will complete the budget process.

Lok Sabha passes Finance Bill, provision on LTCG tax on property transactions amended

The <keyword id="19903456" type="General" weightage="20" keywordseo="Income-Tax-department" source="keywords">Income Tax department</keyword> on Wednesday said 'substantial <keyword id="20138064" type="General" weightage="100" keywordseo="tax-savings" source="keywords">tax savings</keyword>' are expected for a vast majority of taxpayers due to reduction in the <keyword id="22526761" type="General" weightage="20" keywordseo="long-term-capital-gains" source="keywords">long term capital gains</keyword> <keyword id="45031" type="General" weightage="20" keywordseo="tax" source="Orion">tax</keyword> (LTCG) rate in the <keyword id="19895040" type="General" weightage="20" keywordseo="real-estate" source="keywords">real estate</keyword> sector. The Budget has reduced tax rates on capital gains earned from sale of house properties held for long term, but has removed the <keyword id="22142879" type="General" weightage="20" keywordseo="indexation-benefit" source="keywords">indexation benefit</keyword> available to taxpayers. The LTCG has been reduced from 20 per cent with indexation benefit to 12.5 per cent without indexation for the real estate sector. The indexation benefit allowed taxpayers to compute gains arising out of sale of <keyword id="801267" type="General" weightage="20" keywordseo="capital-assets" source="Orion">capital assets</keyword> after adjusting inflation. In a post on X, the income tax department said the nominal real estate returns are generally in the region of 12-16 per cent per annum, much higher than inflation. "The indexation for inflation is in the region of 4-5 per cent, depending on the period of holding. Therefore, substantial tax savings are expected to a vast majority of such taxpayers," it said. Giving a comparison of benefits based on the holding period of the real estate property, the I-T department said the new <keyword id="22422932" type="General" weightage="20" keywordseo="tax-rate" source="keywords">tax rate</keyword> without indexation is beneficial in most cases. For property held for five years, the new regime is beneficial when property has appreciated 1.7 times or more, while for a property held for 10 years, it is beneficial when the value has increased 2.4 times or more. For a property purchased in 2009-10, if value has increased to 4.9 times or more, it is beneficial, it said. "From the above examples, it is clear that only where returns are low (less than about 9-11 per cent per annum) that the earlier tax rate is beneficial, but such low returns in real estate are unrealistic and rare," the I-T department said. As per the changes brought in the 2024-25 Budget, the government has retained the indexation benefit for taxpayers on properties bought or inherited before 2001. The changes in the tax rate have been made effective from July 23, 2024.

Majority of taxpayers to have substantial tax savings due to reduction of long term capital gains on real estate: IT Dept

<ul class="summary-list"><li>The commercial mortgage bond market is in serious trouble, according to hedge funder John Devaney.</li><li>The United Capital CEO pointed to woes plaguing offices in particular. </li></ul>The commercial mortgage bond market looks like it's in shambles, according to hedge funder John Devaney.Devaney, whose <a target="_blank" href="https://www.businessinsider.com/2008/12/john-devaney-apparently-selling-everything-not-nailed-down">fund was pummeled</a> during the 2008 subprime mortgage crisis, said he saw more trouble ahead for commercial mortgage-backed securities, which are bonds backed by loans on commercial properties like offices, malls, and hotels. The issues largely stem from high interest rates, which have stoked refinancing fears amid lower property valuations since the pandemic, Devaney said in an interview with <a target="_blank" class="" href="https://www.youtube.com/watch?v=FyJNLqOOf2U">CNBC</a> on Friday."The CMBS market is actually a disaster right now. Many things are unfolding right now and the bond pricing is telling us things are very, very bad," the United Capital CEO said, noting steep price declines in BBB- and A-rated commercial mortgage-backed bonds. Devaney said the office sector looks particularly troubled. He pointed to work-from-home trends from the pandemic, which have started a "slow-moving train wreck" in commercial real estate across the country.That could spell <a target="_blank" class="" href="https://www.businessinsider.com/us-cities-downtowns-fight-doom-loop-office-crisis-2024-4">trouble for cities with large downtown areas</a>, which depend on tax revenue for office spaces, other experts have warned."There are dozens and dozens of office buildings that are defaulting now in Chicago, Denver, Los Angeles, San Francisco, Philadelphia is in absolute, such trouble," Devaney said. "The cities I just mentioned are in such trouble, that most, like half of all the collateral, is worth quite a bit less than the mortgage values right now. There might need to be a bailout by the government or something to help out some of these cities, but there's real trouble. It's going to wipe out lots and lots of these bonds."Experts have turned a cautious eye toward the commercial real estate space over the past year as Americans continue to forgo commuting to work. <a target="_blank" class="" href="https://www.businessinsider.com/real-estate-outlook-office-buildings-vacancies-commerical-markets-investors-remote-2024-1">Office vacancies</a> notched a fresh all-time-high this year, and <a target="_blank" class="" href="https://www.businessinsider.com/office-commercial-real-estate-cre-crash-2008-gfc-delinquency-vacancy-2024-3#:~:text=Office%20values%20have%20dropped%20an,expect%20the%20descent%20to%20slow.">office values have dropped 35% from their peak</a>, Fitch Ratings said in March report.The <a target="_blank" class="" href="https://fred.stlouisfed.org/series/DRCRELEXFACBS">delinquency rate on commercial real estate loans</a> rose to 1.42% the last quarter, the highest rate recorded in nearly a decade, according to Federal Reserve data.Some forecasters see more downside on the way for the sector. <a target="_blank" class="" href="https://www.businessinsider.com/commercial-real-estate-crash-property-price-drop-defaults-interest-rates-2024-1">Commercial property prices could drop another 20%</a> as high interest rates spur a wave of distress, Capital Economics predicted in January.

Bonds backed by commercial mortgages are a 'disaster' as real estate values crumble, hedge funder says

<ul class="summary-list"><li>Shannon St. Val pivoted from her job in finance to pursue a career in real estate.</li><li>She is now the founder and owner of a short-term vacation-rental company.</li></ul>Shannon St. Val is the founder and owner of <a target="_blank" href="https://ep-mg.com/">Elevate Vacation Rentals</a>, a short-term vacation-rental company based in New York. She left her job in finance to manage short-term rental properties and shares how she started, how she makes money, and the challenges of the industry.This as-told-to essay is based on a conversation with Shannon St. Val. It has been edited for length and clarity.My career in property management hasn't been a straight path. My degrees are in finance and real estate, and I graduated in 2008 when the <a target="_blank" class="" href="https://www.businessinsider.com/office-commercial-real-estate-cre-crash-2008-gfc-delinquency-vacancy-2024-3">subprime meltdown</a> happened. I thought I would be working in commercial real estate, but then all the real-estate jobs disappeared and I started working in finance.I worked at Klynveld Peat Marwick Goerdeler, or KPMG, on the consulting side, specializing in financial operations for big banks and broker-dealers, specifically for investment-management firms.I knew I didn't want to work in finance for too long because the culture was intense. In 2016, I left my job to be my own boss. I took many of my finance and consulting skills and founded my own short-term property management company.At first, I started managing a few properties for myself, and then when COVID happened, I had to pivot and expand. I decided to take on clients outside New York instead of just managing my own. It's been my dream to return to real estate with property management.<h2 id="f5bbe9fe-75d5-46bf-9651-eee295b6fd7e">How I find clients</h2>A lot of my early clients came through word of mouth. I had friends, particularly people I met in the finance industry, who had houses in <a target="_blank" class="" href="https://www.businessinsider.com/marthas-vineyard-ferry-review-new-england-2024-7">Martha's Vineyard</a> or <a target="_blank" class="" href="https://www.businessinsider.com/hamptons-hot-spots-visitors-buyers-from-real-estate-agent-2024-6">the Hamptons</a> and would ask, "Hey, you're managing properties. I have a house. Can you manage mine?" Some people will advertise on social media, but I've gotten my business through <a target="_blank" class="" href="https://www.businessinsider.com/small-business-founders-explain-grow-your-company-referrals-2023-10">referrals</a>. If you do good business, people will refer you to their network.Some property managers who are just starting have found success in <a target="_blank" class="" href="https://www.businessinsider.com/cold-email-formula-that-landed-me-response-from-meta-executive-2024-5">cold pitching</a>. This means reaching out to short-term rental owners and saying, "I know you may have a manager, but I'm willing to work for a lower rate for the first year." Then, if you meet their expectations, you can increase the rate.Some companies can do outbound emails or outbound marketing for you, where you blast local owners or anyone who recently bought a new house in that particular vacation-rental area, advertising your services.<h2 id="25cfe19f-2fc1-49c4-8eee-5946221a2bc7">How I earn a living from property management</h2>There are two ways to earn money from managing short-term properties. The first is by working with vacation-rental owners and charging a commission on the nightly rate. I've seen commissions as low as 10% and as high as 30%, but the industry standard is typically 15% to 20%.I also manage a building. It's a master lease, which means I pay a flat rate and collect rent from each unit as a short-term vacation rental. Some homeowners just want their flat-rate rent and don't want to be involved, so I'll do a short-term rental. You have to be a little more sophisticated in this because if you don't budget and know your expected revenue, you could misprice it and lose a lot of money. With that model, we want to get at least a 25% to 30% return to provide a buffer in slower months.<h2 id="10437455-20ce-4e54-81a9-64cada1f3402">My typical day</h2>Your typical workday will depend on how many properties you manage. We're managing roughly 30 properties now, so we have a team that handles guest support. I work about eight or nine hours a day, but the job is really 24/7. If there's an emergency, you need to be available.My typical schedule involves a lot of meetings. We always meet with the cleaning team to discuss maintenance and cleaning issues. We go over that once a week with one of the cleaning companies we work with. In the middle of the day, we'll work on pricing reports for owners, update the listings, and read through guest reviews.We also schedule <a target="_blank" class="" href="https://www.businessinsider.com/personal-finance/mortgages/home-inspection">property checks and inspections</a> at least once or twice a month, depending on the property. It requires a lot of coordination, so you'll have to get used to talking on the phone frequently, rather than texting or Slacking messages.<h2 id="6416bf44-fab1-45cc-8b50-23bbf7277ff0">The challenges and rewards of property management</h2>Managing properties is time-consuming, especially if you're doing short-term rentals. You have to have 24-hour guest support, and things like cleaning crews and a maintenance person have to be coordinated for each property. The logistics are significantly harder with vacation-rental management versus standard property management.The most rewarding part of the job is helping my clients or the owners see the untapped value in their homes and helping them earn more money than they would have anticipated. I get thrilled when I double their income. I'm also happy to get a five-star review or feedback that we were super attentive, paid attention to detail, provided great customer service, or resolved an issue quickly.<h2 id="be52c448-f4a1-4953-97a8-8fcbc0d51a77">Advice for transitioning to property management</h2>You have to be very organized, have structured processes, and be good at communicating with multiple stakeholders, including the vendors, owners, and guests. My corporate background helped me a lot because it had so much structure, and I came in with project management and logistical skills. I have a certification through the <a target="_blank" href="https://www.pmi.org/">Project Management Institute</a>, but getting a degree or certification is optional.To break into the industry, I recommend working for a vacation-rental company before branching out independently. Use the time to learn some of their best practices before you move on. Check out national companies like <a target="_blank" href="https://www.vacasa.com/">Vacasa</a> or <a target="_blank" href="https://www.hostgenius.ca/locations/tampa">Host Genius</a>, which usually hire in different markets.You could also work with a smaller company like mine, where you just reach out and say, "Hey, do you have any roles?" There's always something to be done, and management companies are always looking for good help. Another way to break in is to attend a <a target="_blank" href="https://www.vrma.org/events/event-calendar">regional or national vacation-rental management conference</a> to network. Find a conference in your area, and you'll meet a lot of managers in one setting.<h2 id="4fabd0d5-be6d-4e5a-ba5d-90ebef4300ff">What I wish I'd known before starting out</h2>Property management can be very rewarding, but I didn't realize how important it was to overcommunicate. I also didn't know how hard managing so many stakeholders would be. For every property, I usually have between four and seven different people involved. I have the owner, the lawn person, the trash person, the regular maintenance person, the cleaner for that house, and then I have my guest support.Sometimes, keeping track of who's who can be overwhelming. So if you want to manage a larger <a target="_blank" class="" href="https://www.businessinsider.com/financing-strategies-for-real-estate-investing-how-to-scale-portfolio-2024-5">portfolio</a>, you need a really good process and team to keep track of everything. You also have to be extremely organized, provide good customer service, and pay close attention to detail.

How I transitioned from a career in finance to short-term property management

<ul class="summary-list"><li>Disney's dining plans are a great value for my family because we love food and sit-down dinners.</li><li>The main plan costs $95 per person per day — we'd usually spend more than that on <a target="_blank" class="" href="https://www.businessinsider.com/best-restaurants-at-disney-world-without-tickets-from-annual-passholder-2024-7">food at Disney</a>.</li></ul>My family of four has visited <a target="_blank" class="" href="https://www.businessinsider.com/how-family-spent-thousands-disney-world-trip-tips-2023">Disney World</a> over a dozen times.We love the attractions, shows, and characters, but we've also developed an appreciation for the food — we look forward to indulging in meals on the property more than we do meeting Mickey.But with <a target="_blank" class="" href="https://www.businessinsider.com/how-family-spent-10k-disney-world-trip-tips-2024-1">Disney ticket costs</a> going up and our kids aging into the "adult" pricing bracket, filling our bellies means emptying our wallets.Fortunately, Disney brought back its dining plans this year, and I find them to be a great value.<h2 id="d232906e-7b5f-440f-aa80-ea6f075cac55">Disney dining plans come in 2 tiers and include multiple meals and beverages</h2><div type="image" title="Blue dessert topped with scoop of yellow substance on plate with red smear on it " height="3024" width="4032" msid="114189559" hostid="261" sizebytes="555632"></div>Disney dining plans were suspended in 2020 but reinstated this January. The returning plans are similar to those of the past, offering visitors a discount if they prepay for meals as part of their resort and parks package.Guests can choose between the standard dining plan or a quick-service one — the main difference between the two is that the former replaces one quick-service meal with a sit-down one.At the time of writing, Disney World's standard dining plans cost about $95 per person per day for those 10 and up. The quick-service plans are about $57. However, Disney sometimes offers promos that allow its resort guests to get them for free.Earlier this year, we got free dining plans through a <a target="_blank" class="" href="https://www.businessinsider.com/guides/tech/disney-plus">Disney+ subscriber promotion</a> that required us to book at least a four-night resort stay with park tickets during select dates.My family booked an eight-night, nine-day stay in July at our favorite moderate resort, <a target="_blank" class="" href="https://www.businessinsider.com/staying-in-disney-world-hotel-room-port-orleans-french-quarter-review-2022">Port Orleans Riverside</a>, which made us eligible for free quick-service dining plans.Here's what this plan provided for each member of my family for every day of our vacation:<ul><li>Two quick-service meals, such as a food-court breakfast at the hotel and counter-service lunch or dinner at the parks</li></ul><ul><li>One snack, which includes things like Starbucks drinks, Dole Whips, churros, and ice-cream bars</li></ul><ul><li>One refillable mug to use throughout the stay for unlimited drinks at our hotel</li><li>A beverage with each meal — guests 21 and over can choose wine, beer, or cocktails.</li></ul>Through this same promotion, guests staying in pricier <a target="_blank" class="" href="https://www.businessinsider.com/ranking-popular-disney-world-resort-hotels-pros-cons-2023-10">deluxe hotels</a> could get free standard dining plans.Since we love sit-down dinners, we paid a fee of about $37 per person per day to upgrade to standard dining plans. This added about $1,200 to the cost of our trip, but it was well worth it as we'd typically spend $200 to $300 a night on sit-down dinners at Disney.The upgrade also allowed us to stay at our preferred moderate resort while also enjoying the benefits of the deluxe-tier plan.<h2 id="20bd4b13-d1ea-4528-a21c-26fafa29507d">The dining plans are worth it if you do sit-down dinners every night — or find a great promotion</h2><div type="image" title="steak, egg, and potatoes on a plate" height="3024" width="4032" msid="114189565" hostid="261" sizebytes="566158"></div>The paid dining plan is worth it for folks who enjoy Disney's food as much as its entertainment. It's an especially phenomenal deal for families like ours who like to have at least one sit-down dinner a day.In fact, I think we would've saved money even if we'd paid for the plans in full — my family usually spends more than $95 per person per day on food and <a target="_blank" class="" href="https://www.businessinsider.com/disney-world-best-alcoholic-drinks-to-get-2022-10">drinks at Disney</a>. That said, you might struggle to find the savings in the standard dining plans if your family doesn't usually do sit-down dinners every night of your stay. Additionally, standard dining plans might not be the best idea for those who don't want to do extra planning or spend too much time eating.You're responsible for actually <a target="_blank" class="" href="https://www.businessinsider.com/disney-restaurant-reservation-hack-try-sitting-at-the-bar-2023-10">securing reservations at restaurants</a> for the full-service meal each day. You'll also need to set aside at least a couple of hours each day for the extended meal.Although I'd pay for dining plans in full, I do think it's worth trying to book a Disney vacation based on when you can get them for free. No such promotions are running at the time of writing, but ones for Disney+ subscribers and Disney Visa cardholders ran in waves earlier this year.Before the dining plan was suspended, Disney also regularly offered deals that allowed guests to get it for free. Because of that, I'm hopeful Disney will soon announce similar promotions for 2025 — and it'll probably influence when and how I book my trip.

I've been to Disney World dozens of times. Its dining plan is a great value for families like ours — especially when offered for free.

<ul class="summary-list"><li>Violent weather events are driving down real estate values in Texas, Florida, and Louisiana, according to Capital Economics.</li><li>Property-insurance costs have grown at the fastest rate in 20-years due to billion-dollar storm damages, the firm said.</li></ul>The rise in violent weather events over the past few years are driving <a target="_blank" class="" href="https://www.businessinsider.com/florida-housing-market-outlook-nightmare-home-prices-mortgage-rates-affordability-2024-7">a decline in real estate values in Texas, Florida,</a> and Louisiana, according to a recent note from Capital Economics.Much of that is due to surging property-insurance costs in the wake of severe storms and hurricanes. Premium growth recently reached a 20-year high, the research firm said."Last year the US saw 28 extreme weather events where damage exceeded $1 billion, over three times the usual number in the past half-century," economist Imogen Pattison of Capital Economics said.Already this year, there have been 15 storm events that each caused more than $1 billion in damage. Just a few weeks ago, <a target="_blank" class="" href="https://www.businessinsider.com/texas-houston-whataburger-app-hurricane-beryl-power-outages-supply-electricity-2024-7">Hurricane Beryl</a> — which was the earliest-formed Category 5 hurricane in Atlantic history — caused an estimated $2.7 billion in damages, according to <a target="_blank" class="" href="https://www.reuters.com/world/us/damage-hurricane-beryl-may-cost-insurers-27-bln-us-kcc-says-2024-07-11/">Karen Clark &amp; Co.</a>That nearly $3 billion in damages from just one hurricane is ultimately what insurance companies will lose, and to make up for that and many other storm-related losses, they're jacking up insurance premiums in a big way."The steady rise in the frequency and intensity of natural disasters has had a dramatic impact on insurance premia for US real estate as insurers have scrambled to price-in physical risks," Pattison explained. "Others have withdrawn from particular markets altogether, causing a further climb in prices amongst those left behind."According to data from MSCI, insurance costs in Florida have more than doubled from less than 2% of income receivable in 2017 to 4.5% at the end of 2023.And those higher costs have ultimately helped drag down property values in impacted regions, especially in the multifamily sector.An analysis from CBRE found that the most impacted coastal regions of Florida, Texas, and Louisiana saw a real-estate-value drop of 7% since the end of 2019 for multifamily buildings, which is about double the national average of -3.6%.<div type="image" title="Real estate values dropping" height="484" width="1084" msid="112247912" hostid="261" sizebytes="32458"></div>But there has been a sign of hope in that the rate of growth in insurance costs appears to have peaked, according to Pattison. But she says the ongoing trend of violent weather could still exacerbate the issue in the future, further driving real estate values down in the most impacted regions."We suspect many of the most at-risk regions will see a worsening of weather conditions over the next 30 years. While the immediate impact of the rise in extreme events on insurance costs seems to be cooling, future climate-related risk will likely leave premium growth above its historic average," Pattison said.

Real estate values in Texas and Florida are being hit by violent weather as insurance costs spike

<ul class="summary-list"><li>There's a growing demand for luxury short-term rentals — and people to oversee these properties.</li><li>Property-management jobs are expected to grow faster than average in the next decade.</li></ul>The <a target="_blank" class="" href="https://www.businessinsider.com/renting-housing-market-home-ownership-mortgages-affordability-real-estate-2024-5">growing trend of "forever renters"</a> — people who expect to rent properties for their entire lives rather than owning any — is contributing to an <a target="_blank" class="" href="https://www.businessinsider.com/super-luxury-apartments-rent-rentals-2024-7">uptick in demand for luxury rentals</a>.With more renters and travelers seeking luxury vacation rentals, in particular, property managers are needed to vet renters or overnight guests, collect rents, and maintain properties. The US Bureau of Labor Statistics has reported that <a target="_blank" class="" href="https://www.bls.gov/ooh/management/property-real-estate-and-community-association-managers.htm">property-management jobs are expected to grow faster</a> than the average rate for all vocations through 2032.Business Insider talked to two property managers about breaking into managing short-term vacation property and residential rentals, as well as the industry's future.<h2 id="4da1d8db-c598-4fc1-8ef2-fc3a95024bdf">What skills are needed for property management</h2>Karen Hatcher, the CEO of <a target="_blank" href="http://www.sovereignrm.com/">Sovereign Realty &amp; Management</a>, manages rentals across metro Atlanta. Before starting the company, Hatcher worked in corporate sales, but after seeing her now-husband successfully flip homes, she got her real-estate license and eventually began managing properties.<div type="image" title="A headshot of Karen Hatcher wearing a purple dress and sitting behind a desk." height="3484" width="5219" msid="112574747" hostid="261" sizebytes="309112"></div>Although a four-year degree or certification isn't required, one state may have different requirements than another. In Georgia, property managers don't have to be licensed but must work with a licensed broker, Hatcher said.She also said newcomers to real estate and property management should consider joining the <a target="_blank" href="https://www.irem.org/">Institute of Real Estate Management</a>, which offers continuing education, skills classes, and networking. There are also a few industries that Hatcher said people may have an easier time transitioning from."Accounting or finance backgrounds provide a strong foundation because they focus on budgeting, financial analysis, and cash-flow management — all crucial for managing rental income and expenses," she said. "Sales experience is equally valuable, as property managers market vacancies, showcase properties, and negotiate leases."Jobs with many moving parts, customer-service experience, and marketing roles also provide "a great launching pad" for breaking into property management, she added.Rebekah Boley, the founder and CEO of <a target="_blank" href="https://hotelhomestays.com/hotelhomestays">Hotel Home Stays</a>, an Arizona-based company that manages vacation rentals, got into her industry after purchasing a campground in Charlotte, North Carolina, and turning it into a <a target="_blank" class="" href="https://www.businessinsider.com/hilton-points-autocamp-airstream-glamping-camping-rv-resorts-2024-4">glamping resort</a>.Unhappy with the service from the property-management company, Boley decided to develop her own, which has grown to include properties across the US. Boley said that having real-estate knowledge was a huge plus for prospective property managers."If you have a background in real estate, design, or contracting, you may have an advantage," she said. "Some soft skills required for this job are being organized, paying close attention to detail, knowing how to multitask, and being personable. It's also important to know that you may not have many days off."<div type="image" title="A headshot of Rebekah Boley wearing a white, pink, and orange-patterned shirt and sitting on a staircase." height="1056" width="1696" msid="112574746" hostid="261" sizebytes="95332"></div><h2 id="60dfb6ba-b1ea-4489-b1c9-75ec2054fcd6">What to expect on the job</h2>No two days are exactly alike, Hatcher said, but she consistently responds to owner emails, reviews new leases, and meets with her team, which is in charge of fielding rental inquiries, conducting screenings, and coordinating move-ins and move-outs."While my team handles the front lines, I'm focused on the bigger picture. As CEO, I'm constantly analyzing our portfolio's performance, from occupancy rates to financials," she said. "I review market trends, adjust strategies as needed, and set goals to ensure we hit our targets. Training is also a regular part of my week, and staying up to date on the latest rental laws, technologies, and best practices is vital."Boley said her work is usually more behind the scenes and that, like Hatcher, her typical day involves a lot of communication."Because the vacation-rental industry changes constantly, I'm always working on pricing and availability, making sure that the dynamic pricing is correct," she said. "My staff is also busy submitting insurance claims for damages or communicating with contractors."<h2 id="fcd8fe3a-0359-42af-a59f-6f46689f634d">The rewards of property management</h2>Two of the biggest benefits property management can offer are great flexibility and a high earning potential. Property managers are usually paid a salary plus <a target="_blank" class="" href="https://www.businessinsider.com/real-estate-agent-discusses-new-home-buying-rules-housing-market-2024-4">commission</a>, an agreed-upon percentage of a monthly rental or nightly fee. Hatcher said another benefit was helping her property owners maximize profits, whether for retirement or long-term wealth creation."There's immense satisfaction in knowing that my work directly contributes to a client's financial security, whether through aggressive lease marketing, stringent expense control, or proactive maintenance," she said. "Seeing the positive results roll in is incredibly fulfilling."Managing residential properties is different from managing vacation rentals because of the turnover rate. Vacation-property managers have to deal with the owner's expectations, but they also interact with guests expecting a certain level of customer service, which Boley said could be rewarding."Vacation-rental-property managers can make a decent income if their homes are making over $10K per month," Boley said. "Although income is rewarding, it's just as rewarding to see amazing reviews from guests who have loved their stay and sing our praises."<h2 id="fb37852a-437e-45fb-89d4-fa3dad5a9a0b">The challenges of property management</h2>The industry has its challenges because of the high level of personal interaction, Hatcher said, but implementing efficient systems can reduce some of the biggest problems, like squatting and <a target="_blank" class="" href="https://www.businessinsider.com/personal-finance/mortgages/mortgage-fraud">application scams</a>, and help attract and onboard quality renters. Property management also requires professionals to be "on it" at all times, she added."You're dealing with people's homes, offices, or businesses, which is very personal to them," Hatcher said. "It requires amazing customer service, conflict-resolution skills, lots of follow-up, and the ability to prioritize many tasks. It's this mix of behind-the-scenes process work and frontline, hands-on management."If you're getting into managing vacation rentals, the challenges are a bit different, as there are fluctuations that correspond with seasons, events, and weather. To succeed, you have to know the vacation market and keep up with the regulations around vacation rentals, Boley said."Vacation rentals are a niche market, and to perform at the top, you have to work extraordinarily hard," she said. "Most vacation rentals make less than $5,000 a month, so we focus on just the top luxury properties. You also have to ensure your product is in line with client expectations. Because the definition of 'luxury' is always changing in the market, there is an ongoing need to revamp and step it up."<h2 id="890f4c5b-b999-4a52-a2e5-cf17fe65ac92">The future of property management</h2>Boley said the growth of the vacation-rental market took off during COVID -19 shutdowns as people realized the value of a <a target="_blank" class="" href="https://www.businessinsider.com/vacation-home-primary-residence-family-benefits-2024-2">vacation home</a>, and many booked one for the first time. However, she said the future of luxury vacation rentals depended on the location and the freedom for landlords to rent out their properties."If cities continue to shut down the ability for people to operate vacation rentals, then the industry won't last," she said. "However, with more oversight and protection for guests, the industry will continue to grow and improve with time."Hatcher is confident that the residential-property-management industry will continue to grow, fueled by the growing history of rental properties as profitable investments and landlords' desire to delegate the work around increasingly complex regulations for rental properties."In Atlanta, the opportunities seem endless. The city's thriving economy, fueled by industries like film and technology, is drawing new residents and investors," Hatcher said. "This creates a high demand for quality rental properties and, by extension, skilled property management."She added, "Rental housing is becoming a larger share of the overall housing stock, and property managers will be needed to oversee these portfolios."

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