Santa Clarita Property Management

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!

The first most asked is “I lost my house, can I still rent through Classic?”. If you missed it, read it here. But this second most asked question is forefront on a lot of people’s minds. Why? Well, let’s see. Home values in Santa Clarita are down about 30-60% depending on the neighborhood and style of home, interest rates as of 4/6/10 are still crazy low, there seems to be a large pool of renters and there seems not to be a large pool of homes. It’s a valid question, “is now the time to buy?”.

Before I attempt to answer this question from my limited bank of knowledge, let me start by saying that this is an OPINION article. Not fact. No proven crystal ball sits on my desk. My track record isn’t staggering one way or the other. So take all of this with a grain of salt. Now, do I think I am right? Of course. Why would I post this if I didn’t? But if I were you, I would use this info as a piece of the overall pie of information keeping in mind that this is a property manager’s point of view (specifically a property manager from Santa Clarita, CA). It is industry and geographically specific and is biased by my knowledge and experience. I would encourage you to get some opinion from other sources as well, say, a financial planner, a mortgage lender or broker, a real estate sales broker, a pessimist, an optimist, etc…

Now, enjoy my opinion. I believe that we are at or very near (within 5%) the bottom of the market in most areas of Santa Clarita. I believe that we will remain here for some time, perhaps a year or more. I could leave it at that, but I am guessing that some engineer out there is going to want to know why and how I came to that conclusion. If that is not you, you can skip the rest of this post.

Here is some of the data that I used:

• In past declining markets, we have not dipped further than we have this time (granted, the reasons are different this time and there is a first time for everything).
• The fed is fighting tooth and nail to keep rates low until the recovery “gains traction”. (I realize that they have stopped their previous actions in the bond market, but I also believe that they are under the “belief” that the private money will show up. Way can go as far down that rabbit hole as you would like).
• I believe that we have seen the worst of unemployment in Santa Clarita (this is one with which I encounter the most disagreement, partly because it is perhaps the most subjective. Bottom line, this is my perception.) Again, we may hover at this unemployment level for a while, but I think we will not likely dip noticeably lower.
• For the buyer with a down payment of 10-20%, the PITI (principal, interest, taxes, and insurance) payments are darn near the same as the rent for a comparable property in most places.

Now, let’s assume that you assume my above assumptions are correct. What would you conclude? I can at least tell you what I conclude. I conclude that this is probably a good time to purchase an investment property in Santa Clarita and will likely remain so for a year or more. Could I be wrong? Well, I guess it’s possible. Okay, I’ll be honest. It’s not big of a stretch. If rates climb quickly, monthly payments will remain the same if the purchase prices dip which can make investors cringe. If unemployment takes a nasty turn in Santa Clarita, rents will dip which will pull sales prices down. (Oh, did I tell you that I believe rents sometimes drive purchase prices, not vice versa?) Honestly, there are probably lots of other factors that could make my answers wrong, but this is my post, so I get to post my opinion. You can post yours in the comments.

I recently made a conscious effort to try and expand my facebook circle of friends by targeting realtors and small businesses in the Santa Clarita Valley. This was intended to be an effort to expand our overall network, but it turns out that I experienced some unexpected benefits.

One of the people that I connected with is the Candleman of Valencia owner via their facebook fan page. So, while I was out to lunch today, I decided to swing by their store and see what they had. What a pleasant surprise! I found a beautiful store that was well organized, easy to find, and very specialized. I walked in with the intent to say “hi” and walked out with a gorgeous reed diffuser for my office (I got the Archipelago Noir). Now, everyone in wants to hang out in my office!

Did you know that the Candleman was honored by the Santa Clarita Valley Chamber of Commerce as the “Small business of the Year” in 2008? You can find out many things like that about the owners if you swing in and visit them. One of the things I really liked was operation 3-50. Go in the store and find out what it is. Especially if you own a small business.

Enjoy Santa Clarita!

John

Let’s start by stating the obvious: I am no Jon Mitchell. Jon is one of the greatest writers I have met in a long time. He has a knack for it and writes very relevant and entertaining stuff with little effort. I, on the other hand, take much longer to write a shorter article that is much less readable. However, when Jon asked me to write this one, I had to say yes.

“I lost my house to foreclosure/short sale and I need a place to rent. Am I going to qualify with Classic?” I currently hear this question more than any other. Sometimes in different forms, or from a 3rd person, but this topic is on a lot of minds right now. And for good reason. There are many people in our valley who are faced with the difficult choices that come with a foreclosure or selling a home short. If you were in any group of people in this valley and asked each person “are you or do you know someone who is currently losing their home?” you would likely get a “yes” answer from every single person. I know this because I have done it on more than one occasion. Back to the question at hand. Unfortunately, not everyone who applies to rent a Classic property is approved. In fact, our approval rate is much lower now than it was 3 years ago.

So here is the lowdown on this question. If you meet the minimum requirements, you can rent through us. We do not reject applications because of a foreclosure or short sale on the credit report. Nor do we reject applications because of a bankruptcy. So, let’s discuss some of the minimum requirements:

You must apply with us and allow us to pull your credit from Transunion, check your criminal background, search the eviction databases, etc… Even if you have a recent copy of a credit report, we will still need to pull our own. If your credit score from Transunion is 525 or higher, you may qualify. If it is under 525, the application will be rejected. A “no score” is a zero and is less than 525.

Now, there are many other criteria such as income requirements, tenancy verification requirements, consideration for pets, etc… And the security deposit varies between the equivalent of 1 month’s rent and 2 month’s rent and is based on the credit score. The higher the score, the lower the required deposit. While I am not going to post all of our specific criteria in this post, you may certainly contact us to find out the requirements. I wanted to post the credit score requirement because this is the one where people get hung up the most.

“So, John, how can I keep my credit that high while losing my home? And how can I check my score?” Those are two questions I can answer in this post. Let’s take a look at the first question – keeping your credit up while losing a home. The way to do this is simple, while you are not paying the house payment make sure to pay the rest of the bills. We have yet to see an application where someone paid all the bills except the house and fell below 525. The ones that fall below 525 let the other bills go as well – credit cards, student loans, cars, etc…

One of the traps we see is when people use credit cards to pay the house payment before realizing it’s hopeless. Then, when they decide to stop making house payments, they justify not making the credit card payments as well. I am not here to discuss the morality of the situation, but this type of pattern will result in significant effects in credit rating.

As far as checking your credit score goes, I only recommend one place: www.annualcreditreport.com. It is the only government-approved site. However, the government only requires that consumers be entitled to one free report from one agency per year. And it doesn’t include the credit score, just the content. In order to get the score, you have to pay a little extra. However, because you pulled it yourself through that website, you don’t get charged with an inquiry on your credit report. So, if in doubt, you can always check your score before you come in. Because we charge $25 per applicant, it can save you a little money if your application wouldn’t be approved. Just be wary of signing up for any recurring credit monitoring, even through annualcreditreport.com. They can be tough to cancel.

The bottom line is this, we understand what is going on with the housing market, foreclosures, short pays, and bankruptcies. It doesn’t automatically rule out your application. In fact, a staggering number of our APPROVED applications have one of the above items in the credit report. Check your credit with Transunion and if it’s over 525 and if we have a property you want, apply! We are in the business of helping people find a good home. We LOVE handing people the keys!