Most people are of the opinion that managing Residential Properties is easy. Well, easy is a relative term. If you have never done it before, it can not only be difficult, it can be expensive.  There are many different parts of property managment.

The three main ones are:

Lease-Ups

Tenant Management

Maintenance

From the perspective of someone who has never owned Investment properties, the attitude often is, “how hard can it be, you just slap an ad in the Penny Saver, show it a couple of times and voila, somebody rents it”. Every once in a great while it does work like that, most of the time, it does not. 

Let me ask some questions here, if you place an ad in the Penny saver on Thursday, are you in the weekend edition?

Do you know the cost of placing an ad? If you have done a one week ad (never a good idea), and you aren’t in the weekend edition, that is money down the drain. If you place an ad, and you are in the weekend edition, most of your calls are going to come on Sunday night.  Working people typically run around and do their errands and such on Saturday. This means people are going to ask to see the property that day or sometime during the next week. Even if you do luck out and have the first person who sees it want to rent it, they usually have to give 30 days notice. If it is now the 15th of the month, then they are not going to want to move in until the 15th of next month.

Let’s say you don’t rent it to the first person who sees it. You will take multiple phone calls, have to describe the property over and over again, and people say they are only in town for a few hours and can you show it right away. You are so anxious to rent the place, you drop everything, run down to the unit, open the doors turn on all the lights, straighten up, and ….you wait. You wait some more, you didn’t remember to take down their phone number, so you can not call and find out what’s up, so you wait, and you wait…an hour or so later, you close the place up and go home. THAT HAPPENS all the time.

A good property manager knows to try and schedule several showings close to each other, so they are not running back and forth. To get to know more about what the tenant is looking for  by asking questions, like do you have children, then you know they would probably like to be near a park or playground, or they might not like a place that doesn’t have a big back yard. They know to always take a phone number from any one who would like to see a property, and if prospects aren’t local, it’s best to get a cell number as well as a home phone.

Not every Investor has the proper attitude, or the stamina for being a landlord. While it is important to give your place a good once over, make sure everything is in good working order, and it is a good value for your tenant, it is also important for a tenant to understand this is YOUR property, not theirs. If there are things about the unit they don’t like, then you can decide what you will be willing to change or upgrade, but it is not for a tenant to make any of those changes without your permission. Nor are you as a Landlord, required to give in to those demands, if they are not affecting whether the property is in good order. A good property manager will manage expectations, on both sides.

As the Landlord, it is very important to check people’s credit, to check their references, to verify employment, and to understand that not everyone in this market is going to have stellar credit. If they do, then in this down market, they are probably buying, not renting. Bad credit is a red flag, but there are many good people out there who have simply hit a rough patch over the past three years, and will do their utmost to pay their rent on time. There are also people who have never paid any thing on time. If you aren’t someone who knows the difference, you can end up having to evict your tenant, and that is expensive, means loss of rent, and it can be devastating emotionally.

I believe in Real Estate, I believe in owning Investment properties, I also believe that while I can probably read a book about how to do something, there are things worth paying other people to do. I know the value of not trying to do everything myself, when there are good, honest, and qualified people who can do them for me.

Hiring a good Property Manager is one of those things that most people should hire out. Be careful to ask questions before you hire someone, though. Don’t just hire your cousin’s best friend who sells Real Estate part time. He or she may be able to get the property rented for you, but that doesn’t mean they know how to Manage Rentals. There is much more money in selling property then there is in managing and renting property. So which do you think most Real Estate Agents would rather do? In fact, we get many of our referrals from other Realtors, who love selling and listing properties, but do not want to rent them out for their clients.

If you have a rental, or are thinking about purchasing one, give us a call at 949-661-3990 and we can chat about it, at no obligation to you!!

Smaller single family homes, in the Dana Point and Laguna Niguel area, are being listed for between $545,000 and $645,000. For some of the people who purchased those homes in the last 3 to 4 years, that is probably not such good news. For those out there looking for a place to invest money and make a good return, it is fantastic news!!

Let me explain why I feel that way. For me, personaly, once my son became a teenager, it was not quite so important to have a larger home, with a yard and on a cul de sac. However, because of the prices on smaller homes, it would not have made sense for us to try and downsize. Now, it could. Another point, I have always believed that investing in Real Estate was the best way to build wealth. While the current market might seem to disprove that, over my many years in the mortgage business, every person, without fail, who had good, strong financials, owned two or more investement properties!!

When the average home price for a single family or townhouse was around $800,000, it was tough to be able to purchase and cash flow such an investment. At a little more then half that price, it becomes a better bet.  Both the economy and the state of California are in a sad state, still, and people are saying that it could take a few years for the recovery to fully happen. While this whole situation is painful, I believe we are all going to come out of this in a much different frame of mind, and I also believe many of us are going to want to invest in the tangible, not in things we can not see , touch or feel, one of those things is Real Estate.

We can help you :

• Locate a Long Term Residential lease.
• Locate a Short Term Vacation Home.
• Relocate to Orange County.
• Manage an Investment Property for Maximum ROI.
• Lease to Purchase.

We proudly serve the following communities in the area many call California’s Riviera, Orange County.