Property Management Maven

Local real estate offices are also wondering to how many “bodies” they will have on their team to generate income to cover their office overhead.

I wrote professional dues checks this month totaling almost $1,200 - granted - I pay half of that amount to IREM * the Institute of Real Estate Management and the Richmond IREM chapter * so my costs are double what the normal Realtor/agent would have.

According to our local Realtor association, almost 50% of agent members did not have either side * listing or selling * of a real estate transaction this year.  A few years with no income will be hard on many newer/unseasoned agents who don’t yet have repeat clientele or a referral base for purchasers.

The next few years will be good for the property management business.  I frequently get calls from property owners who ask if I am “still accepting properties to manage”….many management firms in CA, TX and FL are turning away properties because they don’t have the staff or resources to take on the number of unsold homes that are flooding the rental market.

The IREM publication Journal of Property Management has articles on where the next generation of property managers will come from.  I suspect that many will come from the ranks of discouraged Realtors who want to remain in real estate AND make money. 

The lure of the BIG REAL ESTATE COMMISSION has always been a myth.  As a property manager, I have probably made more money in the last 20 years that 95% of US real estate agents over the same time period. 

Maybe the realities of the current market and the actual costs of being a real estate agent will weed out the dead wood in the industry and the market and the industry will come back better and stronger.

I’ve already adjusted the rent for the time of year * after K-12 school starts and late in the rental season *  however, large, desirable homes in the Albemarle and Fluvanna areas were scarce a year ago and there are MORE people coming into the area wanting large rental homes…..why would I automatically say I would reduce the rent?

Prior to even discussing a lowering of the PRICE (that’s what a rent reduction is), I want to show the property, meet the prospects AND get complete rental applications on all adult applicants….why say YES, I’ll lower the rent without a quid pro quo - lowering the rent for GOOD, QUALIFIED APPLICANTS?

Why are there fewer rental homes in our area?   With the very strong home sales market of the last 5 years, many rental property owners sold their older rental homes to first-time homeowners and these sellers actually got out of the rental market. Because of this, fewer large rental homes have been on the market for the last 2 years when there were actually MORE rental prospects moving into the area….Graduate/Law/Business school families, UVA Medical Center resident families, as well as new hires for NGIC, GE-FANUC and PRA at the North Fork Business Park….ADDITIONALLY, we have people moving into the area who CAN’T buy a home because their home in CO, CA, AZ, TX, FL has not sold so they have no CASH to make the down payment on a local home purchase.

A 4 bedroom home with basement and/or 2-car garage in the 29North area might have rented for $1,995 during the “high rental season” of April, May or June of this year (2007).  The same home would rent for $1,595 in October or November * already a $400 reduction * below the “high season” rent.  Why should I go even LOWER for a voice on the phone?  QUALIFYING prospects at the higher  * rent meaning their income would be 3X $1600 per * and THEN lowering the rent if their FICO score is 700 or above or they want longer/shorter term lease or will pay 6 months rent at lease signing is the quid pro quo that owners and managers should look for.

As for those DESIRABLE homes I rented for $1,895 to $1,995 in the high season 2007, I’ll be RAISING those tenants rents at least $150 to $200 when I offer them their lease renewals in February, 2008.