Archive for February, 2010

US Housing Market Will Continue to Crash but Experts Advise Not to Buy – What This Means for Landlords

Thursday, February 25th, 2010

Although the US housing market prices continue to decline during the last quarter of 2009, many real estate experts are still suggesting that now is not the right time to buy. The reason? Because housing prices will continue to fall in most places. Prices are still dangerously high compared to annual incomes and rental prices. According to Raphael Bostic of the US Department of Housing and Urban Development, “the homeownership rate in the United States used to be somewhere close to 70 percent. We’ve fallen off by several million households now.”

So where have all the home owners gone? The answer, according to Bostic is simple: “a lot have now gone into the rental market.”

US Housing Market Trends

If the global economic recession has taught us one thing, it’s that the real estate market can be a ruthless game. The financial institutes and the US public are waiting to take the plunge into home loans until the housing market settles and there is more than enough in the bank.

Although buyers are now warier about purchasing their own homes, this does not mean that home buying has stopped all together. Coast to coast buyers are still borrowing 6 times their income and only putting down 3% on their new homes. The banks suggest a safe mortgage should be a maximum of 3 times a buyer’s income with a 20% down payment. What this means is that people are still falling short and could be paying the consequences down the road.

Real estate agents have been promising “rock bottom” prices for several months now but the housing market is still not quite there. Furthermore, they suggest that now, when interest rates are low, is the best time to buy. However, this is not necessarily the case. Many people have done their research and discovered that buying when interest rates are low can actually hurt them down the road. After all, interest rates have nowhere to go but up and this will normally happen during the worst times.

Renters Market on the Rise

Until the housing market makes a drastic change, many people will stick to the renters’ market. Renting is a cheaper, less stressful and less constraining option which is something many people need in a still-shaky economy. The US unemployment rate in November 2009 tipped the scales at 9.4%. With more and more people losing their jobs every day, renting simply seems like the safer option. Furthermore, renting comes with only one payment, usually on a monthly basis, while buying a home comes with property tax, maintenance and upkeep expenses.

So what does this mean for landlords across America?

Essentially, it means that landlords are able to afford to be picky in their selection.

With so many people in the rental market, it can be hard to determine who is the right person for a vacancy. Landlords admit that choosing the wrong tenant is one of the biggest problems they face every day. Almost 75% of landlords face renter’s arrears in recent times. Furthermore, the Residential Landlords Association reports that 150,000 tenants will face legal action by the end of 2010 due to problems surrounding rental agreements. The biggest issues include outstanding rent, disturbing neighbors and problems surrounding the deposit check.

“Right now from every 10 applications, we turned down nine,” Yazgul Odekova, a property manager in Alexandria, Virginia admits. Furthermore, of those who are accepted, many turn out to be the wrong person for the place. Pelletaire suggests that “today you need multiple minimum wage jobs to be able to afford a two bedroom apartment.” Many people are simply unable to make the payments each month and create an unstable situation for both themselves and their landlords.

Choosing Wisely in a Flourishing Market

Being thorough during the interviewing process is one way to battle against bad tenants. Another option, as many landlords have discovered, is to perform a tenant background check with every potential applicant. Tenant background checks provide landlords with access to previous evictions, credit reports, social security verification and criminal histories. Although this information will not guarantee that the tenant will behave and pay every month, it does provide assurance that the person has not been evicted in the past, does not have poor credit, has a steady stream of income and does not have numerous sex offender convictions to his name.

Tenant background checks can help assess the tenant before it’s too late. A blooming renters’ market means landlords have more choices, both good and bad. It’s important to sift through the bad in order to profit in this industry. “It’s not just because people are dishonest. Sometimes people have big medical bills, sometimes people have bankruptcy, sometimes they suddenly become sick and don’t have health insurance,” a property manager in Alexandria states. All of these can drastically affect the chance that they will make rent each month.

Until the housing market reaches that promised ‘rock bottom’ and until the economy returns to a steadier reality, people are finding salvation in the renting market. For landlords from coast to coast, this means it’s more important than ever to do the research and choose the right tenant. Tenant background checks can make that happen.

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Employee Theft on the Rise for 2010 Sale Season – How Businesses are Fighting Back

Thursday, February 25th, 2010

The end of 2009 is near but, unfortunately for retailers across America, this does not mean the end of employee-related criminal activity. In fact, experts, including Best Buy’s Director of Asset Protection, Tim Fisher, believe that “organized retail crime is a reality” and the worst is yet to come. With the start of 2010 sales just around the corner, this means that top retailers across the country need to protect their revenue and products from attacks both externally and internally.

Large retail outlets such as Target, Wal-Mart, Sam’s Club, Best Bay and Big Y Foods have all felt the crunch of employee theft in the past. Employee theft accounts for ten times the value of street crimes losses in the United States and retailers are often the hardest hit. In fact, the Department of Justice reports that nearly one third of all employees will commit some degree of employee theft during their working time. Furthermore, 75% of those who have stolen or committed a white collar crime will do so again. Of these drastic numbers, only one in 28 employees will be apprehended for employee theft, according to a study done by Jack L. Hayes International.

Large companies, retail and otherwise, take extreme precautions against shoplifting and burglary with locked display cases, bullet proof glass, alarm cords, concave mirrors, security videos and professional guards. But what are they doing to protect their business from theft that occurs from within these closed doors?

Indications of Petty Theft and White Collar Crimes

Minor employee theft includes a wide variety of activity, from stealing old fruit from the back of the store to ‘forgetting’ to scan an item through the grocery till. All of these petty crimes will add up for business owners. The US Chamber of Commerce reports that employee theft will cost businesses over $50 billion annually in losses. Furthermore, the Association of Certified Fraud Examiners reports that the average organization will lose nearly $10 per day, per employee due to employee theft. Often this loss will be passed on to the customers in increased prices and fees. In larger corporations white collar criminal behavior including embezzlement, bribery and insider trading can set companies back hundreds of thousands of dollars every time.

Dr. Richard Hollinger, a professor of criminology at the University of Florida, reports that employee theft acts like “a big faucet that drips day in and day out.” Large companies are often the easiest targets because there are simply too many employees and too many other important issues to deal with on a daily basis, especially during the busy sales season. Boxing Day Sales and January Sales mean more and more people will flock to the larger chain stores to stock up on discounted 2009 items. However, employee theft will continue throughout the year.

Protecting your Business

One of the main ways business owners are protecting their businesses from the inside is through video monitoring. Although video cameras will keep an eye on employees, they also run the risk of causing information overload. Grocery stores and large retail chains will monitor their employees at the checkout and in the back rooms; however, according to Malay Kundu, a security expert and entrepreneur, “less than 1 percent of video ever gets looked at by anyone.” There is simply not enough time to analyze video input day in and day out. Many companies are also investing in security software to catch insider criminals. But is it enough?

Your browser may not support display of this image. Your browser may not support display of this image. Your browser may not support display of this image. Your browser may not support display of this image. Of course, employee theft does not just hit the big retail outlets, even though during the busy shopping seasons they are often more at risk. Employee theft and white collar criminal activities, such as fraud, embezzlement and bribery can take place in all industries from small corner stores to large financial institutions. The banking industry is the hardest hit with $1 billion losses annually due to white collar criminal activity. However, the truth of the matter is, no company, no matter how big or small, is completely safe from employee theft.

The reason is simple – most business owners do not know every single little detail about their employees’ histories. During the hiring process, most business owners will conduct a quick interview discussing employment history, goals, education and reasons for wanting to work, followed by a reference check and then make a decision about hiring a potential employee. The entire process is quick but is it effective? When looking at the rate of white collar activities across the United States, it would appear the answer is ‘no.’

Solutions for 2010 – Employment Background Checks

Many large corporations and small companies are now focusing on a triple attack when it comes to the hiring process – the interview and the reference check, followed by an employment background check. An employment background check is a way for employers to access a person’s criminal record, credit report and social security identification to ensure that he or she is clean. Although conducting an employment background check and discovering that a potential employer is clean as a whistle will not guarantee that he will be the perfect fit for the position, it does add a level of security in knowing that he has not been charged with theft, embezzlement or other crimes that could jeopardize the future of a company.

The biggest problem with employee related crimes is that they usually come as such a shock to the company. No business owner wants to believe that his most trusted employee could be capable of theft. Employment background checks cannot offer 100% security that a company will be protected from employee related criminal behavior but it can drastically reduce this chance. And, with the bad after taste of the recession of 2009 still fresh in our mouths, can any business owner really take this risk for 2010?

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