Property Management Maven

Surprisingly, I started getting several calls over the Easter holiday from prospects who wanted to know if I would LOWER the rent.  They did not know the rent the property was listed at, they just had a figure in their mind or a budget rent that was clearly below the market rent for properties in our area.

After the 3rd or 4th such call, I started asking the caller why I should even consider lowering the rent when I had not reviewed their application, run their credit report or heard their offer….such as a longer term lease; 6 months rent in advance, etc.  They were shocked that I would want to “check them out” BEFORE I AGREED TO NEGOTIATE A LOWER RENT - why wouldn’t I just lower the rent for a voice on the phone?

Maybe it is the constant media attention to the nationwide real estate slow down, the pundits advising “now is the time to buy” or the make an offer/any offer mentality; the REALITY is  there are FEWER good rental homes for a LARGER pool of rental tenants this year.
 
….there are area apartment/multi-unit residents who want to move out on their own and lease a single family home;
….there are MORE people moving into the area with UVA Medical Center, the expansion of NGIC, UVa grads schools as well as new-hires to new businesses in the area - Lowe’s at Zion X Roads, construction/expansion of the UVa Med Center;
….more people are choosing to RENT rather than BUY….in past years, the rule of thumb was if you would be in the area for 2 to 3 years, it made financial sense to purchase a home * in the current market, these people are electing to rent so that they are not stuck with a home to sell when they have to leave the area; and,
….we still have people moving into the area who want to rent for a year  BEFORE they decide where they want to buy or if they want to buy or build their own home.

Add to this, the fact that many investor owners have sold their older, single family investment homes over the last few years and gotten out of the rental/landlord business.  This has removed many homes around the university and urban ring from the rental pool so that even with property owners who have tried to sell homes and have now placed their homes on the rental market, the number of well maintained homes in DESIRABLE areas (south and north of town) will not provide enough inventory for the anticipated demand.

The economics of being a landlord can often be contrary to the current real estate market……Central Virginia landlords have the best of both worlds……

Military families (officers) coming in have more than sufficient salary/wages and housing allowance to rent homes in the $1,800 to $2,200/month rent range….a family who has rented in the area for a year with only his income and a CAT and who qualify for a $400,000 ($350,000 mortgage) home purchase do NOT qualify for the same  rental homes.

Even with raising my rents, incoming rental applicants are better qualified BECAUSE they do not want to buy.  They want to rent for the 2 or 3 years they are in the area in grad school, medical school, building the new addition to the UVa Medical Center or on assignment.  

It is not that the area sales market is so terrible * there are loads of nice, desirable homes on the market * the reality is they don’t want to be tied down to having to sell a home in two or three years. 

While some of our current residents are being forced to purchase a new home because they are at the end of their 2 year window from selling their former home and purchasing their “replacement” home for tax purposes, most of our departing residents are actually leaving the area through graduation, advancement in their medical specialties or reassignment by the military.  Those who are remaining have accepted a $100 to as much as a $300 rental increase to remain in their current rental homes.

For those properties that are going to be available in July and August, I’ve raised the rents $100 to $400 and have had no resistance.  Most incoming military families have significant housing allowances to rent LARGE homes in pricey areas such as Forest Lakes, Fontana and Redfields.

Schools continue to be a MAJOR feature in housing desirability; however, many incoming residents either home-school or have smaller children and convenience to day-care is also important.

As I have maintained for the last 5+ years, a 4th bedroom or bonus room for a home office is critical and broadband or DSL connections are a MUST.  Luckily over the last year or so, HughesNet high speed internet via dish has greatly improved so that even the more remote properties can get high-speed access.

Prospective residents who have been directed to search our local MLS rental listings are finding that homes being featered there are homes that are also available for sale and the owners/agents wish to continue to show them during their tenancy….since most military and incoming medical residents want housing for 10 months to 2 or 3 years, the prospect of having to move in 3 to 6 months removes these listings from consideration quickly.

Likewise, most “agent listings” * whether on MLS, Craigslist or broker websites * are poorly worded to attract rental prospects as few agents realize that what might attract a homeowner is not necessarily what is attractive to rental prospects.   

I am pleased that I started taking photos of homes while they were vacant many years ago and have kept those photos updated as interiors were repainted, carpets replaced, appliances changed out.  Since our web site listings also feature property floor plans, our website has become the “go to” web site for prospects wishing to rent “sight unseen”.

To maintain this position, I routinely post our listings on Craigslist, Kijiji, HotPads, Google base using postlet format.  This creates the greater potential for ”first capture” with a “long tail” as these listings contain hyperlinks directly to our website. 

Several other local property managers have now created their company web sites through HomeRentals.net * the national website that is highly ranked for national rental home searches.  The addition of these management listings  has populated the area listings on their national website with 30 and sometimes 60 rental listings which is good for all of the rental listings featured.