Generation Y – has decided not to buy – they have chosen to move back home (boomerang kids) they have chosen to rack up student debt to ridiculous levels (Sallie Mae) and can no longer qualify to buy a home. This has pushed many investors to reconsider the value of rental properties. For those investors who are tired of the stock market ups and downs real estate in San Antonio is providing a stable and reliable income source. Many of these Gen Y kiddos are forced into the roomate situations, since they may not qualify on their own. This is heaven for investors who can charge a surcharge for unrelated roomates and protect against risk by employing co-signers along with double or triple amounts of deposits.
The CEO of the nation’s largest publicly-traded residential apartment REIT, Equity Residential (NYSE:EQR) stated emphatically that more people than ever will choose to rent rather than own a residence.
When one factors in property taxes, insurance and maintenance to the monthly mortgage expense it’s easy to see that renting is still the more affordable option. Neithercutt pointed out that the “Millennial Generation” wants to live in areas where the cost of housing it too expensive to buy.
“There are 4 million people turning 21-years old every year in this country…there will be 1.3 to 1.4 million households being formed every year and institutional grade; core multi-family [rental housing] will attract a significant percentage of them.” The CEO of Equity Residential also said that 43% of the units they own and manage are occupied by single individuals. “They have no intention of moving to the suburbs and buying a single-family home.”
Millions of renters under the age of 35 are choosing to live in the city and can only afford to rent. They’re getting married later in life and moving to the suburbs later as well. Demographics is the key to why the number of adults who chose to rent a residence will continue to grow. – Article by Propertymanger.com
I have met many landlords who are Ostrich’s during the tenant occupancy. What I mean is they do not do periodic inspections of their property. As a property manager periodic inspections are critical to the successful management of rental property. Just in the last month we found roof leak, an unauthorized occupant, siding missing due to pet damage and a property that had a fence in the horizontal position. While we expect our tenant to report maintenance issues as they occur they don’t always do it. If you want to maintain the property and hold the tenants accountable for the presentation and preservation of the property periodic inspections are a MUST! Don’t be an Ostrich, inspect the properties during tenancy.
I often get asked when marginal applications are submitted for rental houses if the owners can wait and/or delay approving until they see if a better application gets submitted… the answer is maybe! The time frame for applications is 7 days from when they are submitted, if they are not approved or declined within 7 days they automatically become declined. The application fees are non-refundable but any deposits that have been submitted must be refunded upon application denial.
Our Texas legislature changed the rules for all LANDLORDS, not just those properties manged by professionals. House Bill 1168 officially changed the requirements of all leased properties from requiring smoke detectors to smoke alarms. This change also included a location addition for smoke alarms to be placed into every bedroom, in each hallway that services multiple bedrooms and on each level of a dwelling. This change is required to be implemented by Jan 1, 2013 and can not be waived by landlords.
Our office handles hundreds of rental properties and every single day we receive calls from prospective tenants. I have discovered the #1 mistake is not using one REALTOR to find their rental home. Most tenants find properties on the Internet and spend hours and hours calling office after office inquiring on rental properties. In some cases these tenants attempt to set up showing appointments with multiple real estate agents to see various properties. This process is frustrating for the tenants as well as the agents. In our market the professional property managers list their available rentals on the MLS (multiple listing service). In order to enhance the leasing process tenants should contact ONE agent who can narrow and find available properties that meet their criteria. This ONE agent can show all of the available properties to the tenant. This would dramatically improve the tenants leasing experience by streamlining their leasing process and would correct the #1 Mistake by Renters.
The golden rule of real estate is disclose, disclose, disclose and when you think you are done – disclose some more. On an average year I would estimate that I view, walk through, show, or inspect over 1000 houses on average. I have always told my sellers, owners, investors and clients, when it comes to property condition disclose everything! I have found the more disclosure up front reduces issues after closing and move in. Today I was showing buyers a condo built in 1982, this condo was a little over 700 sq ft and the seller required to be present during our showing. The seller stood in the middle of the kitchen during our showing and repeatedly claimed all of the appliances in the condo were brand new. I have always been very careful in using the term NEW, I prefer to list items updated or changed with the date completed such as Fresh paint 2012, New stove 2010, etc. As I stood in this kitchen with the seller and looked at the appliances they were reminiscent of appliances from the 1990’s, they may have been NEW at one time but they were clearly not NEW today during our showing. This seller made a huge mistake with declaring items were NEW when clearly they were not, NEW is a very very dangerous term in real estate, this seller actually caused the buyer to rescind their offer since after this type of disregard for disclosure the buyers were concerned about other items also not being disclosed properly. Disclosure is imperative and accuracy of disclosure is even more important.
To leave a fridge with a property or not – the answer lately is SELL THE FRIDGE! Our experience has shown that about 50% of renters have their own fridge, the owners that include a fridge with the lease have us list these items as as-is in the lease, this causes HUGE problems for both tenants and owners. Once the fridge leaks the tenant starts wanting the owner to fix it, if the tenant ends up fixing it does the fridge stay with the property? If the fridge totally breaks who hauls off the old fridge? In our latest cases the fridge failed, the food spoiled and the kitchen flooded, then the tenant was told the as-is fridge would not be fixed, obviously this resulted in an unhappy tenant. We have other cases where the tenant brings their own fridge and the owner leaves a fridge – does the owner fridge go in the garage? if it sits there for over 3 years – will it still work? My best advice for owners – SELL THE FRIDGE, Take it with you, give it to charity, do anything but leave it in the rental.