Property Management and Investor Information: August 2008

Late last year, I think it was Christmas Eve, a local realtor invited me to join Active Rain.  I went to the website, www.ActiveRain.com to check it out.  I noted that it was a place for those in the real estate industry to blog about anything and comment about any blog.  It was an easy decision to give it a try since it was, and continues to be free (except for the time spent if you develop a habit of checking in frequently).   What a fine Christmas present from Zeny Winn!

What I have found over the past 8 months is that AR has four great benefits if you participate on a regular basis. 

First, you will meet many real estate agents from all over the country and even Europe.  You don't have to get to know them personally, but you can read their blogs and learn from their experiences.  I am a property manager and I belong to two of the Property Management Groups.  You can join different groups, post blogs to the group and even create your own group if you wish.  You also have the opportunity to meet others in the industry such as appraisers, mortgage brokers, and search engine optimizers to name a few. 

 Second, you will learn from these people everything you need to know about blogging, real estate, joke telling, and more.  You can also learn more by commenting on their blogs.  The comments go back and forth and the conversations can get quite lively.  Be careful  what you say, once posted it is in cyberspace!

 Third, you will find out that when you blog, your blogs will index on the search engines.  You will start getting inquires from potential clients and referrals from other AR members.  I think this is the primary reason most of us AR members are here and participating.  It will grow your business!

 Fourth, there is a game within the AR community called POINTS.  When you blog you get 200 points.  When you comment you get 25 points.  There are other ways to earn points and some limitations, but blogging and commenting are the primary point gainers.  Depending on your profile selection (profession) you will be ranked on points by Profile and within your State, County, and City.   Get the most points and you will be on top.  There is something about point getting that creates a reason to keep moving forward with your blogging and your commenting.  I  think it makes it more interesting.

 So there you have it.  If you are in real estate in some capacity, check it out.  Use this link and I will get a few points as a credit for turning you on to AR.  Happy Blogging!

http://activerain.com/action/referrals/rmachado

We had two things happen at our company this weekend that makes you wonder. 

I received an email from a new client that read in part as follows:  "A Black Lady showed my houe to a Black couple.  My house was shown to some people whose vehicle cost less than a months rent." 

Now, it is true that we employ several leasing agents, but what color they are is not really an issue for us.  If they show up on time and are presentable, we think that is win win.  What rental property owner in this day and age cares what color their tenant is?  If they have good credit, solid rental references, and legal and verifiable income, they should get the place.  No more questions need to asked.

I also got a call from one of our leasing agents that while showing a house, a neighbor came out of their house and started yelling obscenities and telling everyone there to see the house that they were not welcome in this neighborhood.  I am not sure if this one was racially centered, but since several races were represented, it sure seems so to me.

I was brought up to put my faith in a persons charactor.  As a property manager I trust credit reports, job histories, rental references, and ownership histories.  Race never comes up as a positive or a negative.  It just does not matter.

www.HomePointe.com

On Thursday morning the City of Sacramento held a public information meeting at the Sam Pannel Center at 2450 Meadowview Road.

The meeting had several speakers with booths surrounding the the seating.  Max Fernandez runs Code Enforcement and his main point was that the city wants to make the program work.  He offered his phone number for anyone with issues or comments.  It is 916-808-7940.

Other speakers were Cory Kohler from the Regional Housing Association, Betty Gwaizdon from the Human Rights and Fair Housing Commission, and finally, Randy Stratton who runs the new inspection program.

Here is a quick overview of the program:

1.  All residential rental parcels will be inspected over the first 5 year cycle.

2.  If repairs are needed, the owner will have 30 days to complete them.

3.  All residential rentals must be registered with the city.

4.  If a property passes the inspection within 30 days of the inspection, it will qualify for self certification.  The owner will have to inspect their property annually and provide tenants the results. 

5.  The city will conduct random audits of the self certifiers.

6.  Each parcel must have a local representative that lives within 35 miles of the city.

7.  The program fee is $28 per year for each of the 5 years whether inspected by the city or not.

8.  Exempted properties are those that are 5 years or newer or that are inspected by another government agency.

If you need a local contact representative or need repairs, contact me.  We have a program at HomePointe for absentee owners and local owners. 

Robert Machado, CPM, MPM  rmachado@HomePointe.com

www.HomePointe.com

Once in while we have requests from a business entity to rent a house.  The business may have moved an employee to our city and they want to cover the costs for that employee.

It is our practice to take applications from the people that are to occupy the house.  It is too easy to dummy up a business and tax return, harder to dummy up a consumer credit report. Plus, a business may dissolve, but a consumer is not likely to dissolve.

So, if a company wants to rent from you, tell them that the people living in the property must apply and qualify.  Ignore the (monkey) business!

www.HomePointe.com  Houses for Rent.

There are many answers to this question, but for me, the true bottom is when investors buy single family dwellings because the rent they can get on a cash deal will support the price. 

If a property will rent for $1,000.00 a month it will generate $12,000.00 in a year.  If that property can be purchsed for say $100,000.00 the return over a year on that investment is 12%.  (note:  the actual net might be something closer to $6,000.00 after all expenses, so the return would be 6%). 

An investor would be attracted to this deal because the return is better than they can do in bank, plus they have a chance for appreciation down the road.  It is unlikely the value will drop further since another investor will likely step up for that return.

In Sacramento I have seen similar numbers in working class neighborhoods.  These prices then serve as a foundation for the next level up and so on. 

I think we are close to if not at the bottom, and things should at least stabalize at the low end.  Now if you are in more expensive neighborhoods, you may not see the benefit of this for some time.  It has to trickle up and that takes time, plus more foreclosures may delay improvement.

 A shared fence is a fence built on the property line between two adjoining parcels.  Each owner shares the fence equally.  If the fence needs repairs or falls down and needs to be replaced, each owner should chip in one half the cost.

There are many ways to handle the issue.  The two owners could spend the weekend buying the materials together and then jointly builidng the fence and then make a trip to the dump to get rid of the old materials.  In today's busy world, I suspect one owner will make arrangements and the other will simply write a check to cover their share.

When a rental is concerned it can be a harder problem especially if one or both of landlords live out of town.  Out of sight out of mind.  Property management companies often have to deal with this issue and it is not fun. 

If an owner will not cooperate the solution would be obtain three bids.  Then write the neighbor a letter enclosing the bids and telling the owner that if they do not cooperate you will proceed and take them to court.  The owner would then have to sue the neighbor, small claims court would be best, and hopefully win a judgement.  Lot's of documentation and photos would be good to have for the court to support the case.   Once the judgement is obtained the court will direct the winner how to collect.

Fences in disrepair do create liabilites such as dogs entering a yard, kids getting out, and more. 

A fallen fence is an opportunity to get to know your neighbor!

www.HomePointe.com

Rentals in the greater Sacramento area.

The City of Sacramento is holding two informational workshops on the new Rental Inspection Program.  City staff will present information on the new program and answer questions from property owners and managers.

Thursday August 21, 2008  9:30 am -11 am  Samuel Pannell Center 2450 Meadowview Road

Thursday August 28, 2008 6:30 pm - 8:00 pm South Natomas Center 2921 Truxel Road

Agenda Topics include:  Purpose, What to Expect During an Inspection, Top Ten Violations.

I will attend these meetings and give an overview after each meeting.

www.HomePointe.com

 Some of our clients want to rent their homes with some of the items "as is".  They might tell us that the washer and dryer can stay, but they do not want to fix them.  Or, they don't have a way to move their refrigerator, so can they leave it in the house, but rent it "as is".

Is this a good idea?

I think it is a bad idea for a couple of reasons. 

First, what happens when the refrigerater goes out one week after the tenant takes possession?  I can tell you with some certainty, that the tenant will not be happy.  Their first thought will be that they just got ripped off.

Second, what happens when the referigerator breaks down a year later?  Well, I bet the tenant has forgotten about the "as is" by then and will call to request repairs.  Even the best intentioned owner or property manager could simply send a repair guy out to make the repair.  Oops!  Or, they remember and now the tenant has an unexpected bill, plus the owner now has to haul the thing out of there.   How do you spell NOT HAPPY? 

Pretty much, renting appliances "as is" is a set up for poor customer service.  So, if you don't want to keep it in good repair, take it off the property.

Next:  What appliances should be provided with a rental?

www.HomePointe.com

We have houses for rent in the following areas:
Houses for rent in Sacramento, Houses for rent in Natomas, Houses for rent in Elk Grove, Houses for rent in Laguna, Houses for rent in Galt, Houses for rent in Franklin, Houses for rent in West Sacramento, Houses for rent in Davis, Houses for rent in Orangevale, Houses for rent in Citrus Heights, Houses for rent in Fair Oaks, Houses for rent in Gold River, Houses for rent in Carmichael, Houses for rent in North Highlands, Houses for rent in Antelope, Houses for rent in Roseville, Houses for rent in Rocklin, Houses for rent in Granite Bay, Houses for rent in Lincoln, Houses for rent in Loomis, Houses for rent in Marysville, Houses for rent in Plumas Lake, Houses for rent in Olivehurst, Houses for rent in Rancho Cordova, Houses for rent in Rosemont, Houses for rent in Cameron Park, Houses for rent in El Dorado Hills, Houses for rent in Shingle Springs, Houses for rent in Serrano, Houses for rent in Rescue, and more.  

1. It is cheap.  With tax write offs the investor gets close to a 50% discount.
2. Decisions are made with current laws in mind.
3. The investor's insurance company protects both the investor and the property manager for one price.  It does not cost extra to cover the property manager.
4. Tenants get 24/7 access to repairs.
5. All bills can get paid by the property manager, no rent collection, no bank deposits, no check writing, and no stamps!
6. Many property manager's are starting to offer online access to statements and bills, so no need to maintain a filing system.  I do suggest downloading the statements to your computer so you have a backup.  But, you can go paperless!
7. No missed showing appointments to rent property.  The property manager has to suffer through this.
8. Better tenant selection from a professional.
9. Access to cheaper and more reliable repair people.
10. Someone to share your frustrations with a new friend.

www.HomePointe.com

We have a property manager that services the following areas:
Property Manager in Sacramento, Property Manager in Natomas, Property Manager in Elk Grove, Property Manager in Laguna, Property Manager in Galt, Property Manager in Franklin, Property Manager in West Sacramento, Property Manager in Davis, Property Manager in Orangevale, Property Manager in Citrus Heights, Property Manager in Fair Oaks, Property Manager in Gold River, Property Manager in Carmichael, Property Manager in North Highlands, Property Manager in Antelope, Property Manager in Roseville, Property Manager in Rocklin, Property Manager in Granite Bay, Property Manager in Lincoln, Property Manager in Loomis, Property Manager in Marysville, Property Manager in Plumas Lake, Property Manager in Olivehurst, Property Manager in Rancho Cordova, Property Manager in Rosemont, Property Manager in Cameron Park, Property Manager in El Dorado Hills, Property Manager in Shingle Springs, Property Manager in Serrano, Property Manager in Rescue, and more.

I suggest that all property management companies verify who is on title of each new account.  This is an insurance policy for the property manager for a couple of reasons.

First, you will know that the person signing the agreement is the owner.  There are scams out there where people obtain the keys of a vacant house and rent the home out to an unsuspecting tenant.  Taken one step further, this could be done via a property manager.

Second, there may be a trust or other type of ownership holding title.  In that case the property manager should obtrain documentation on why the person signing the agreement has authority to do so.

So checking the title and keeping a copy will give the property manager and the tenants they place in the property peace of mind.

www.HomePointe.com

Homes for Rent in greater Sacramento area.