Life Changes – How they Impact your Rental!

In my 30 years on this planet, I have come to realize that one of life’s unchanging attributes is…change! As a matter of fact, I am writing this blog from a hospital room, on my smart phone, in the company of my wife and new son. I know that there is a great deal of change headed my way and I am happy to face it!

Although the wait for a room when my wife was in labor would make me think otherwise, I suspect that not all of you were out having babies today. If you were, shame on you for making her suffer without an epidural (kidding!). Anyway, the recent changes in my life made me think about upcoming changes with my rental property. I recently got word that my tenants of roughly four years will be moving. They have been the best tenants I could have imagined and I know that finding replacements for them will be a bit terrifying. For anyone else that may be in the same situation and anticipating an upcoming vacancy, let me give you a couple of things to consider based on my years in this business:

1. Be prepared for rental price changes. Any time a tenant vacates, there is a chance that you may have to adjust your asking price based on the current market conditions. Remember, one month of lost rent due to vacancy can easily outweigh that $100 bucks you are trying to hold onto.

2.  Be prepared to negotiate.  Your last tenant may have been allergic to every form of animal on the face of the earth, but what if the next applicant just can’t give up the two dogs?  When you are searching for new tenants you may have to make a few concessions in the interest of maximizing your rental income and reducing vacancy.

If you have a vacancy coming up, or if you would like to pick the brains of Santa Clarita’s finest property management team, feel free to contact the best in the business here at Classic Property Management.  May your life’s changes always be for the better!

Help! I’m Upside Down on my Rental! The Magic of HARP

During the boom years of the real estate market it was fairly easy to make a killing.  It was almost guaranteed that if you bought a house you merely had to wait a couple of months and you would have an enormous amount of equity built up.  Champagne fell from the heavens, exotic vacations could be taken, and money seemed to grow on trees!  Sadly, the shaky shell that was the real estate boom ended up imploding, and leaving millions of homeowners wondering what to do!  I have spoken to many rental home owners that tell me that they can’t sell their homes, that they can’t refinance their homes, and that they are desperately looking for some way to stop the financial hemorrhage that is draining their accounts each month!

Into this bleak scene enters the HARP program.  Many people have heard of the program because it allowed homeowners to refinance their homes even if they owed up to 125% of their home’s value.  But did you know that that cap was recently lifted?  Now if you qualify for the HARP program you can refinance your home no matter how far upside down you are!  Several major lenders like Wells Fargo and Chase Bank have already implemented these changes and are offering this program to borrowers.  So how can you find out if you qualify?  Simply pick up the phone and call your mortgage company.  After years of paying high interest rates, isn’t it worth a few minutes on the phone to save thousands of dollars?  Oh, and keep your umbrella handy…I think I just felt a drop of champagne…

For more information on the HARP program, click here!

Carbon Monoxide – Both Silent and Deadly

Did you know that as an owner of a rental home you are required by law to install a carbon monoxide detector in your home?  Each year carbon monoxide poisoning effects hundreds of Americans with fatal results.  The tricky thing about this poisonous gas is that it is invisible and odorless, which makes it virtually impossible to detect without the aid of a carbon monoxide alarm.  Oftentimes the symptoms of poisoning are mistakenly attributed to  illnesses like the flu or common cold.  Carbon monoxide can cause dizziness, nausea, headaches, confusion, and reduced coordination at moderate levels of exposure and death at high levels!

Carbon monoxide poisoning works by producing substances that inhibit your body’s ability to utilize oxygen.  Essentially the body suffocates due to lack of oxygen.  Carbon monoxide poisoning kills more people annually than just about any other form of accidental poisoning!  So what does this all mean to you?  Not only is it a law to include a carbon monoxide detector in your rental, but it you should also be aware of the tragic consequences that can befall you and your loved ones if you should fail to keep your own home protected as well!  These detectors can be picked up for a very reasonable price from just about any home improvement store, so head out there and pick one up today!

Click for more information on carbon monoxide, dangers in the home, and detectors.

Spring into Action for Reduced Vacancy!

Here at Classic, we have spent a considerable amount of time finding out what it is that makes homes rent faster.  In this blog we have covered some of the basics such as making sure your home is clean and making sure that everything works!  The truth is that what you do on the outside of your home can have just as important an impact as what you do on the inside!  Here is southern California, we have a habit of letting the yards get a bit wild during the winter months.  Even if you do manage to keep up with the mowing and edging, there are typically several other areas that tend to go unnoticed by everyone (except potential tenants!).  With that in mind, let’s spring into action with this action plan for spring!!!

1.   Those leaves take a while to decompose.  Even if your lawn is leaf-free we can oftentimes forget the wee mountains of leaves that accumulate in planters, gutters, and corners of your property.  The truth is that we all have these piles of leaves, but the rental that doesn’t is going to stand out as being neat and orderly!  So attack those mountains, lord of the landscape, and conquer your vacancy…

2.   Flower beds are a great place for…flowers!  If your beds show like a flower grave yard of fossil collection, it may be time for some added color.  It is interesting to note that when companies advertise a product they tend to use bright coloring.  The truth is that they do it for a reason!  A bright splash of color catches the eye.  The great news is that you don’t need a multimillion dollar ad research campaign to benefit from these little truths.  All you need is a fresh batch of flowers like this financially friendly foliage.

More great info is on the way, so stay tuned and cut that vacancy down!

Keep your Advertising…I Mean…Snow Day Photos!

As some of you may know, Southern California was recently dusted with a bit of snow! As some of you may also know, this is a blog devoted to property management and rental homes in Santa Clarita. So why do I care about a minor snow? Read on my friends!

When it comes to advertising a home, it can help to make people REALLY REALLY want it. Here in Santa Clarita, snow is an extremely rare occurrence. We don’t get to have snowball fights, make snow angels, or watch the flakes blow by the window very often. As a result, when we do get snow it is a fun time to remember!

When we head out to take photos of a listing, we try to capture the home in the best possible way. If it is a sweltering California summer and the home has a pool and spa in the back yard, guess what gets a LOT of attention in our ads? If it is fall and the home has great trees with leaves changing colors, those trees get some serious photographic “real estate”. I am sure that you can see where I am going with this, but if your home comes up for rent in the winter and you can supply us with a charming photo of the home covered in a blanket of snow with Christmas lights shining out across the frozen landscape and smoke drifting lazily from the chimney (flowery descriptions can be nice too), then guess what? I want them!  Obviously you wouldn’t want to include photos of you digging your car out of 6 feet of snow… but if you can create an emotional bond between your home and prospective tenants, then it will be much easier sledding, so to speak, to convert them into actual tenants.

If you can learn to play on the heartstrings of your customers, you will be much better off.  So get out there with your camera and risk frostbite to your extremities Maestro!

Serious Renters + Holidays = A Shot at Extra Cash

I recently read a little quip from a realtor I follow on facebook. He says “Sellers: buyers that are looking in the holidays are SERIOUS!” His point is that this is a great time to list your home for sale because the people who are looking to buy right now aren’t “looky-lou”s. I agree with him. And I will argue that the same goes for the rental market. Anyone currently looking for a rental is serious and many of the people looking right now will be moved into a place before the first of the year.

This year especially. Why? Because if they live in a home that gets foreclosed on they don’t have a choice. And from the looks of things, there will be foreclosures before Christmas. Now, could the federal government introduce or even pass legislation that would stall foreclosures until after the first of the year? Sure. They have certainly done equally drastic things in the past. But if you gamble that they will and they don’t you could lose much more than if gamble that they won’t and they do.

Last week was one of the hottest weeks in our company’s history when we talk about homes renting. We saw a flurry of applications with quick move-ins and many of our clients are now collecting handsome rent checks. Especially those clients who were aggressive with their pricing and presentation of their homes.

Now, I am going to offer a dose of realism. We don’t necessarily anticipate that our December numbers are going to beat our October or November numbers. But I do know this: they won’t be zero. In fact, we already have four homes where the leases have been signed with December move-in dates!

If you have thought about whether to buckle down and get that rental property ready for move-in now or whether to wait and be ready for the first of the year my advice is simple: err on the side of winning. Get it ready now and place it on the market, you might just collect a few thousand dollars more in 2010 and start 2011 with a head start!

 

Rental Market Crashes and Burns! The Holiday Induced Market Slump…

Whoa!  As a rental home owner, that is not the headline that I would want to see.  Obviously news like that would be a bit of a shock to ANYONE that relies on an occupied rental unit to meet their monthly financial obligations.  So what could cause such a sudden drop in rental activity?  What could possibly be the root of such depressing news?  The holiday season!

Hopefully for most folks out there, the holiday season conjures up images of eggnog, family gatherings, great food, and other warm fuzziness.  I, for one, love the holiday season and all of the merriment that it brings.  On the other hand, owners of vacant rental properties have a reason to dread this festive time of year.  Why would anyone dread the flurry of fun and activity of the holidays??  To put it simply, no one wants to pack up their home and kids, schedule a move, and ask family members to lend a hand in getting all of their stuff into a new home during that time, thus effectively killing their good times!

The good news is that although the market does slow down just as much as I do after 10 pounds of turkey and cheese ball, there is hope!  This is the time for owners to seize the opportunity to price their rentals aggressively, thus placing their homes at an advantage over the poor fellow who is holding out for top dollar in a declining market.

When it comes to rental homes and rental income, math reigns supreme.  Let’s imagine that you have a home that will rent today for $2,000, but you really really want to hold out for $2,100.  Let’s also imagine that you are fortunate enough to get the asking price after 30 days.  Guess what?  By leaving your home vacant for that month you effectively passed up on $2,000 worth of rent.  As a result, it will take you almost two years with your tenant to make up that difference and break even!  And that is assuming that your tenant doesn’t decide to move at the end of his one year lease after discovering that he can get the same house in the same neighborhood for LESS money.  If that is the case, you can safely assume that the property will have at least another 30 days of vacancy at turn over.  If you haven’t broken even at that point, you have dug yourself even farther into the hole.

Do yourself and your wallet a favor.  When the holidays are around the corner, play it smart!  Then you won’t BE the poor fellow that is so wrapped up in worrying about his overpriced home that he completely misses out on the holiday merriment.  Price your home to move and enjoy your holiday!  Get yourself a prime spot under the mistletoe, and grab a huge glass of that tasty eggnog you market savvy king of the cash flow.

Drink up my friend!  You’ve earned it…

Custom Home Decor with an Edge! Thrasher Custom…

“Craftsmanship, fueled by passion”

As a property manager, I have probably been into the homes of more strangers than the average joe.  As a result, I get to check out a LOT of different styles of home decor!  While the majority of these homes is tastefully decorated without anything too strange, there is one thing that does seem to be a common thread.  A lot of the homes have the same stuff!

While there is nothing wrong with buying nice things that are common, wouldn’t you rather buy nice things that are custom?  Things that are unique?  Things that set you apart from the herd?  If you answer yes to any of these things, there is hope!  A local start-up is in the process of manufacturing high-end wall decor, tables, and lamps at down-to-earth pricing!  Ladies and gentlemen, I give you…Thrasher Custom!

Anyone can run down to Bed Bath & Beyond and plunk down a pile of cash for something that was mass produced with the cheapest methods possible and packaged attractively to drive the price up…but then again, anyone can jump off a cliff or skydive without a parachute!  Just because it can be done, that doesn’t make it the right choice.  For myself, I would rather spend my hard earned dough on something that screams “quality” and “craftsmanship” than something that I can find in every house on the block.  Thrasher is planning to arrive on the Santa Clarita scene in time for the holidays, so all you guys out there, keep your eyes peeled for this up and coming brand!  Get someone a gift as unique as they are!

J&J Imprints – A Screen Printing Powerhouse!

24850 Avenue Rockefeller – Valencia, CA – 91355 – (661) 755-7500 – jjimprints.com

Here at Classic we like to take a bit of time occasionally to put the spotlight on local companies that we think deserve recognition.  Today’s spotlight goes to a company that many of you probably don’t recognize.  Not long ago, Dana Hutchins (Outside Sales) stopped by our office to let us know about J&J Imprints.  She told us that they were by far the best screen printer in the area and that we should give them a call if we ever needed anything.

Shortly after that, we found ourselves in need of t-shirts for the Magic Mountain Arthritis Walk.  We gave Dana a call at J&J Imprints and let her know what we were planning.  Within days we were sporting some of the best looking shirts at the walk!  I was so impressed with the quality and speed of the whole process, that we then ordered custom embroidered company shirts for day-to-day Classic business.  The result?  Not only are we the best property management company in the area, but we are the best dressed as well!

After testing the waters with two Classic orders, I decided to take the plunge and align my own start-up children’s clothing line (Skeletots) with J&J.  After all, with major clients like Sony Music, Hot Topic, and Warner Music who contract J&J Imprints to produce tens of thousands of shirts, I am sure that they can handle a little order like mine!

I swung by their facilities to take a look at the company first-hand and was blown away by the size and scope of their operation.  Behind the modern reception area and through a couple of doors lurks a staggering 11,200 square feet of product producing power capable of turning out over 10,000 garments per day by utilizing multiple fully automated and manually operated machines.  In fact, during J&J’s 10 years in business, they have rapidly grown to become the largest screen printer in Santa Clarita, and one of the largest in north Los Angeles.  Although the photos below don’t do this operation justice, you may be able to get an idea about massive amount of work this facility can handle.  If you need shirts printed, stickers and decals produced, or vehicles wrapped, this company can handle it all!  Give them a call!

Should I Rent my Home Furnished?

When I speak with new rental property owners, I am often asked if it is better to offer a home that is empty or a home that is furnished.  The short answer is that while there is a market for both types of homes, the market for an empty house is generally much larger.  Lets take a peek and examine the reasons!

The Fully-Furnished Home:

We, as a company, do have experience in dealing with homes that are fully furnished.  In fact, they are furnished right down to an exact number of forks and spoons!  When a tenant moves into these homes, they can literally just arrive with a suitcase of clothing and nothing else.  While that might seem a bit odd for those of us here in Santa Clarita, there are times when that arrangement might be exactly what the doctor ordered.  For example, we often rent these properties to families that are being placed by insurance companies after losing their own homes to disasters like fire, flood, earthquake, etc.  A large part of the demand for a furnished home has to do with location as well!  For example, tourist destinations like Lake Tahoe, Las Vegas, beach towns, and similar places will likely have more success with furnished homes because vacationers looking for vacation rentals generally don’t travel with all of their furniture.  Here in Santa Clarita, we don’t have a high vacationer draw other than Magic Mountain, and those folks generally just stay in a nearby hotel.

The Empty Home:

There are a LOT of great reasons to rent an unfurnished home if at all possible.  For starters, if you are managing your home yourself, it can be very, very tedious to go through the home and try to document the condition and number of every single item that is being left behind.  Is your stuff nice?  What if you leave a $5,000 desk behind and it gets a gnarly scratch across it?  What is it worth now?  Of course, you can always choose to accumulate a lot of cheap furniture just in case someone wants a furnished home, but where do you put it if someone wants the place empty?  I assume you would have to put it in storage…at a cost to yourself.

Obviously this blog is geared more toward rental home owners in Santa Clarita, but the universally applicable truth is that you need to know the market in which your home is located!  If you are in a hot destination area that is constantly packed with tourists, the furnished route may work out great.  If you are in a quieter more family-oriented area, your best bet for landing a renter who wants something fully furnished is to hope for a natural disaster to displace another home owner.* As always, the key to landing a renter quickly is to make sure your home appeals to as many people as possible!  If you were to tell us you HAVE TO rent the home furnished here in Santa Clarita, I would have to say, “prepare to wait a long time!”

*Classic obviously does not condone wishing for the misfortune of others. 🙂