Property Management and Investor Information: March 2009

Houses for rent in Roseville are holding their own.  The average price for a three bedroom house for rent in Roseville, CA is $1448.00 with a high of $2100 and a low rent of $1195.00.  Roseville has many diverse neighborhoods, some old and some new.

The average four bedroom rental house in Roseville, CA is renting for $1908.00 with a high of $2950 and a low of $1295.00.  As you can see, there are many choices and price ranges.  

We were able to locate 41 houses for rent that have 3 and 4 bedrooms in Roseville.

HomePointe has one of its 3 offices located in Roseville at 1220 Melody Lane.  If you need help locating a tenant and managing your home give us a call.   

The good news is that Sacramento is no longer one of worst 25 real estate markets in the country.  For a time Sacramento ranked among the worst 5 markets.  As you can see below nine other California cities rank worse than Sacramento.  I have noted that REO listings at the bottom end are attracting multiple offers and prices are firming up.  There may well be more foreclosures to come, but there are also plenty of buyers to snap them up when they return to market.

This information comes from www.housingredictor.com. 

Many newcomers to property management as well as many tenants do not understand how to prorate a rent payment.  This comes up when a new tenant moves in mid month.  Most property managers want all rents due on the first of each month, so the question becomes, how do we figure out what amount of rent is due to accomplish that.

On move in, most companies, HomePointe included, have each new tenant pay a full months rent and the entire security deposit.  If the rent is $1200.00 and the deposit is $1200.00 then the tenant must pay $2400.00 to get the keys.  If the tenant moves in on the first day of the month, there is no figuring to do.  Each month thereafter the tenant will pay $1200.00.

But if the tenant moves in on the 20th of the month, the question is, what does the tenant owe on the first of the next month?  It is quite easy to figure out as long as you stick to the formula and thought process.

Figure it this way:  Every month is considered a 30 Day month, which is what we call a bankers month.  If the tenant moves in on the 20th, they were not in the property for 19 days.  30-19 =  11 Days they were in the property.  Now take the rent rate $1200 and divide it by 30 days (one month) = $40.00 per day.  $40 x 11 days the tenant had possession = $440.00.  That is what they owe for the second month.

Our rental agreement states that all rent for the month is due in full in advance on the first day of the month. So the entire $440.00 is due on the first of the tenant's second month of occupancy.

Now you can sleep well tonight dreaming of collecting the correct prorated rent from your tenant AND be able to explain it to them. 

According the the Sacramento Rental Housing Association the County of Sacramento will be starting its version of a rental housing inspection program in January 2010.  The cost will be approximately one half the cost of the City of Sacramento's program and will rely on certified inspectors instead of county employees.  The owner of the property is except from getting certified.

HomePointe Property Management and our maintenance division, RAM Property Services plans to certify at least 4 inspectors to handle the program for our clients.

We have been signing up some clients for the Sacramento City program to be their local contact representative and will do so for the County program as well.

I will provide more details as they become available.

www.HomePointe.com

At HomePointe we watermark all our photographs posted online.  Why?  Because thieves are increasingly stealing content from rental sites,  including photos, changing only the contact information to their own.  

By using a watermark we make it more difficult for them.

We place the watermark front and center on the picture and it is this:  www.HomePointe.com  That way, the thieves cannot crop off the watermark and still use the photo.

It was noted at a local trade association meeting today that local property management companies are losing accounts as their clients get foreclosed upon. 

California and Sacramento in particular has been hard hit by the forecloser crises.  It is no wonder that local property manages are scrambling to handle this loss of accounts.

When a foreclosure happens, the property manager must not only close out the file.  They also have a tenant that is most likely going to be displaced.  This tenant's deposit may be at risk as the owner may control it. Although the owner is responsible to make good on the deposit, they may not be willing to step up and return it. There is not good solution to this problem and the property manager gets caught in the middle of it.

The good news is that there are plenty of replacement accounts out there from new investors and owner occupants that cannot sell.  Of course, HomePointe is happy to manage your home in the greater Sacramento area including Sacramento, Yolo, Placer, and El Dorado Counties.   

I keep getting this request from prospective owner clients.  They want to hire a property manager but not give full control.  Like they know what they are doing.....

Owners should not hire a property manager to do half the job.  Property managers should not accept clients that only want half the job.  It is very dangerous to be screening applicants to rent and then turn the final decision over to your client.

What if they don't like the color, the religion, the age? How to you say discrimination lawsuit?

My response is this:  I have been screening 200+ applicants a month for 25 years.  That is 60,000 applications! I know what I am doing.  

Mr Owner, what do you care what color the people are?  The only color that matters is that when they are approved by my process, they have GREEN dollars.

Let's keep this a business transaction and not a drama. 

I firmlly believe that most of us (90%) are working away and waiting for the downturn to be called over.  We have all had to be creative to continue to make a living and to save money.  Many of us have been hit with losses in home equity, the stock market, and our retirement funds.  Some of us have lost jobs and hopefully found new ones.  

But still, the downturn will, and I don't think it will be that many months from now (I hope less than 12 but surely no more than 24), will be declared over.

So what are you doing now so that you will not regret taking advantage of the current market?  Are you looking to increase your real estate portfolio?  If you truely believe in this business, I think you have to see the bargains out there.  Maybe you could buy a one for yourself.  Investors are doing it every day here in Sacramento.  I am no stock picker, but I am sure there are deals in the stock market as well.  

In these tough times, some will just have to hang on and wait for better days.

But, I say that if have some cash and good credit, go take advantage of the low prices before you read in the paper that prices have rebounded and the market has turned. 

I recently made two offers on bank owned property.  In looking for property to purchase I noted that the numbers of property for sale under $100,000.00 was much less than just a few months ago.  The two properties I made offers had multiple offers and both sold quickly. 

It seems that investors and first time buyers are out in full force and bottom feeding to the delight of the listing agents I am sure.   If you are looking for property for under 100k you better stop stalling and get going. 

www.HomePointe.com  Your local Sacramento Region Property Manager

With the California real estate market turned upside down, the FTB has decided to force property managers to pay FTB 7% of all money they send their out of state clients.  It is even worse for out of the country clients!  It all begins in April 2009 and any property manager that does not comply will subject themselves to fines for each violation.

We are in the process of contacting our clients to tell them what is happening.  The FTB has never made a pubic announcement as far as I know.  They just started calling property managers to see if they were doing it!  Their own online information says that residential rentals are exempted.  But that policy has changed.

With the state broke, they must need some cash flow.  Most owners in state or out of state have enough expenses and mortgages to make owning a rental low on net income.  There is not a lot of money for them in this category.  

If you are a property manager in California and had nothing to do or thought this was a great month, think again, go back to your office, and get cracking.