Santa Clarita Property Management

Sometimes, the world continues to move and change even when we don’t want it to.  For example, I remember just in MY lifetime when the cost of gas was outrageous  at $1.29 per gallon.  I am sure there are several folks out there who remember when it was even less!  How about home sales?  There was a time when you could expect your home equity to double every 12 months like clockwork!  And now?  Well, you get the idea.

On the flip side, there are some changes that have made life much more convenient and have changed mankind forever!  For example, we complain about the cost of gas but where would we be without our cars?  You think a 2 hour commute to work is bad?  How about a two DAY commute on a horse?  How about the unbelievable medical advances that have been made over the past decade?  Would you rather go to a modern hospital or go to some guy that sticks leaches on your arms to let out the “bad” blood that he thinks is causing your health problems?  Some advances have been great!

In my estimation, the most groundbreaking and life altering invention of my time was the advent of the internet.  Never before has worldwide information been so readily available.  Instead of waiting days or weeks for news about something happening on the other side of the world, we can now have live access through video, social networking sites like Facebook, and more!  Rapid information access has never been this easy!

So how does this relate to companies these days?  As the internet continues to become the primary source of information, successful companies must constantly adapt to, and utilize the web to accomplish their goals!  In your quest to locate a trustworthy property management company or any other company for that matter, you may want to pay close attention to the way they present themselves online.  Is their website easy to use, easy to navigate, and clean-looking?  Or is it out of date, cumbersome to navigate, and unappealing?  Is the content relevant, informative, and well presented?  Or do you have to search hard for the answers you need only to be disappointed by a poorly written, half-hearted attempt at information?

It occurred to me the other day that if a company refuses to adapt to the needs and preferences of today’s market, what other areas have they fallen behind in?  Are they sub-par in the areas of customer service?  Accounting technology?  It certainly makes you think!

Here at Classic, we pay very close attention to the market and the requests of our customers and clients.  Not only does our adaptation of the latest technology make our jobs more streamlined, it also allows us to present the homes that we manage to potential renters in the best possible way!  Being the best property management company in Santa Clarita isn’t an accident!  It takes dedication to our customers, and a willingness to adapt to the ever shifting conditions and demands of the rental market.

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.

As a rental home owner, I know firsthand about the slew of emotions that come into play when you choose to rent out your home.  Although I am not the kind of person who gets sentimentally attached to a house, I can see how others might.  I have had the pleasure of working with a LOT of homeowners.  While most of them make the switch from homeowner to investment property owner without any difficulty, others seem to have a bit more trouble.  You see, if you want to become a successful investment property owner, you have to be willing to view YOUR house as A house.  Lets take a quick look at how this can affect your way of thinking.

Someone who views their home as THEIR house is going to worry excessively when a tenant wants to paint a room, plant flowers, hang pictures, mount plasma T.V.s, etc.  As you can imagine, this can create a bit of a hostile living environment for tenants.  If a tenant moves into a home and is forced to leave everything exactly how it is on move-in day, it is the equivalent of asking someone to live YOUR life instead of their own!  Once you turn your keys over to someone else, you have to be able to view the rental as a business.  You aren’t living there anymore, the tenant is.  Now, some homes may be fabulous to the point that every human being would love to live there without changing a thing, but odds are pretty strong that a tenant will want to do something…

Obviously there are boundaries!  For example, I wouldn’t give a tenant free reign to knock down walls to make rooms bigger, cut skylights, or perform other major construction without my consent, but if they want to paint a room for their daughter, hang a giant plasma, or plant veggies out back, I say go for it!  Why you may ask?  Because this is one area where I know that it is not personal, it is business.  The happier I can keep my tenants, the longer the tenant will stay, and the more money stays in my pocket.  That is just good business sense!  After all, you can always tell them they have to put everything back the way it was if they decide to move out.

There are two different schools of thought when it comes to property management companies and their decisions on how to handle repairs.  Basically, you can hire a handyman or repair crew to be on your staff, or you can farm out the work to local companies.  Most apartment complexes will have a maintenance guy on staff because it is convenient to have someone close at hand to take care of issues.  But what about companies that cater to single family dwellings like houses, condos, and town houses?  Why don’t we take a look at these two options and I will let you know which route we at Classic have chosen and why:

Option #1:  Hire Maintenance Staff

This route does have some attractive features.  For one thing, you can set your own rates for repairs.  This means that if you want to charge $100 to change out an A/C filter, you can!  This is a tremendous money-maker for a less than ethical company.  Another plus it that you can determine what repairs are made.  This means that you are running an unethical company, you have the ability to nickel and dime an owner for every little thing that you can think of and make a ton of money doing it!  If you have hired a fantastic company this route isn’t a problem, but I would always be wondering…

Option 2: Farm Out the Work

This is the route that Classic has chosen.  Although we are a company with impeccable ethics, we wanted to make sure that we were above reproach as much as possible.  As a result, we didn’t want owners to have to worry about us making repairs that weren’t necessary in an effort to boost our income.  Basically, we have spent over 16 years sifting through local companies in an effort to find the folks who make repairs quickly and correctly.  Oftentimes, because these honest repair guys value our business, they will put our requests at the top of the list and even give us discounted pricing!  Not only does this eliminate the unnecessary repairs, but it saves the owner some $$ on the repairs that ARE necessary!

Don’t end up in court! Follow Fair Housing Guidelines!

This article is geared toward the “do-it-yourselfer” types out there.  In our ongoing quest to provide top quality information to the masses, we thought it would be wise to take a moment to discuss a pitfall that some unwary owners may inadvertently step into.  Let me introduce you to Fair Housing Laws!

The point of Fair Housing is to make sure that people aren’t being unfairly discriminated against.  Let me give you some examples of discrimination that should be blazingly obvious to you.  You can’t run an ad that says you will only rent to a certain race, religious persuasion, or country of origin.  I am sure that you probably knew about those restrictions.  But how many times have you seen an ad that says something like:

“Clean unfurnished home in quiet Southern California neighborhood, no kids, no pets, no credit scores below 650 from Experian.  Deposit is equal to 3 times the monthly rent. Call now!”

Did you spot the problems in this ad?  Some owners may run an ad similar to this without realizing that they are skipping blindly into a potential lawsuit.

In an effort to see if we can make this a more interactive forum, I would encourage you to leave a comment below if you think you have spotted an illegal requirement in the ad above!  Give it a shot!  If you would like to check your answers, feel free to peruse some of this information: Click Here

The first person to comment correctly with all of the illegal content will receive a $5 Starbucks card compliments of Classic Property Management!

In this series, we have been discussing ways to cut down on the amount of time that your rental stands empty.  The previous two installments discuss strategies that owners can employ to reduce vacancy on a home that is currently vacant.  In this article, we will discuss cutting down vacancy on a home that is occupied!  That might sound a bit contradictory, but read on my friends!  Soon all will become clear.

The Happy Tenant:

Oftentimes, it is easy to take a tenant for granted.  Let’s face it.  If rent is coming in regularly, you aren’t getting neighbor complaints, and you don’t have excessive repairs, your headache-free rental probably won’t occupy much of your thoughts.  Don’t get me wrong, I am not suggesting that you spend your time in panic mode because things seem to be going TOO well!  I love a smooth running rental!  After all, that is what we strive for each and every time we take on a new listing.  What I am suggesting is that you work with us to keep good tenants as happy as possible.  Here at Classic, our job is to make decisions based on YOUR best interest.  Here is the best way to look at it.  If you have great quality tenants, and you can keep them happy enough to stay for a long long time, you can virtually eliminate vacancy all together!  Imagine the peace of mind that would come with never having to cover two mortgage payments without incoming rent!  So how does one take on a feat of this magnitude?  Well, the simplest way is to hire Classic to do it for you!  After 17 years in this valley, we have honed our skills to a fine point.  If, however, you are one of the do-it-yourself types that prefers to manage their own homes, here are a few simple ways to entice tenants into long-term stays…

It is all about communication.  If a repair pops up, get back to the tenant right away!  If you get a message from your tenant about a repair,call them back to let them know that you got their call and are working to get someone over to the home.  Once you find someone to handle the repair, give the repair man the tenant’s name and number so that they can coordinate schedules to get the work done.  We also recommend calling the tenant to let them know that they should be expecting a call from ABC Repairs to fix the problem.  The key here is to make sure that repairs and requests are handled expediently.  Don’t put them off for a few days while you price shop.  Keep them in the loop and they will appreciate you all the more!

Be flexible!  Let’s imagine that the tenant has a new baby girl and they would like to paint a bedroom pink.  Let’s also imagine that you really really like the mustard yellow color that you painted the wall in the 70′s.  Honestly, it is hugely in your favor to let the tenant paint that room.  It may not seem like a big deal to you, but little things spread over the length of a year can add up.  And hey, worst case scenario is that you paint it back to your 70′s glory days when they move out!

Get creative!  You can even offer rewards programs to your tenants.  For example, you could tell them that if they pay their rent on time every month for the first year, you will discount their rent $100 per month for the second year.  Or you might try to simply stay in touch in a way that means something to the tenants.  Consider this:  I personally own a rental property here in California.  I love my tenants more than you could imagine!  They take awesome care of the property, they are always on time with the rent, and I never want them to move!  As a result, I try to think of ways to let them know that I appreciate them.  For example, this past Christmas, I sent them a hand written note and enclosed a gift card for the Outback Steakhouse.  I have also sent an occasional Starbucks card or something of the sort.  Why do I do it?  Honestly, in my case, I do it because I have seen what kind of renters are out there and I can honestly say that my renters are top-notch.  I appreciate them!  They are the kind of renters that every owner will kill for.  But the truth is, if I can’t find a way to let them know that, then what good is it?

The best way I can think to sum up this article is this:  If you want everything in your house to function correctly and have a bit of your personal touch, then why should a tenant not enjoy those same privileges?  When I think of my rental property, I don’t think of it as MY home.  To me, it is just a house.  I want it to be my tenant’s home.

In this series, we have been discussing the pitfalls associated with taking a potential tenant at their word rather than doing the right thing and investigating all of their claims!  In our ongoing quest to get your ducks in a row, we have come to another very important duck.

The Tenancy Duck!

This particular duck can be a bit tricky.  Verifying a tenant’s history and track record can mean the difference between a smooth rental process and a train wreck of epic proportions!  Sadly, many owners rely on first impressions when “screening” a tenant rather than doing some digging.  We ALWAYS recommend calling previous landlords to get a report card of sorts.  We find out if the tenant has ever paid late, bounced a check, took good care of the home, etc.  If possible, we like to get the previous landlord to sign something to that effect.

Here at Classic, we like to take it one step further!  In addition to calling the current landlord, we also contact the the landlord from their previous residence.  That way, we can hope to eliminate the possibility of getting a glowing report from a landlord that praises a terrible tenant just to get them out of their home.  The landlord of a previous residence won’t have any reason to falsify a request for tenancy verification because they don’t have to worry about being stuck with that tenant should they not be approved elsewhere.

Don’t fall victim to a schmoozer.  Take your time and do your homework!  If you get all your ducks in a row, it will significantly reduce the odds of you going through an eviction.

Occasionally, we here at Classic will encounter an unusual situation.  You see, most people hire us because they don’t want anything to do with the day-to-day requirements of managing a rental property.  In fact, I would estimate that 90-95% of our clients are too busy in their daily lives to manage their rental, and thus, choose to have us take on that responsibility.  As a result, it always surprises me when an owner chooses to become involved in the intricacies of our daily operation to the point that we are rendered virtually useless!  In this article, we will discuss the pros and cons of micromanaging a Classic Manager.

Let’s start with the top three “Cons” and go from there:

Con #1:  You end up paying a company to do something that you don’t have any desire for them to do!  We don’t work for free.  If we are managing your property, it is because we are being paid to minimize your risk and expenditures and work toward the best possible outcome for you.  If you don’t believe that we are keeping your best interest in mind, then why are you paying for it?

Con #2:  Crossed wires anyone?  Generally, owners that choose the full service route want us to be there for their tenants.  They want the tenants to call us with problems, concerns, and questions.  What happens then, if the owner chooses to initiate contact with the tenants?  Hopefully not much, however, several times this action can lead to chaos!  If an owner and a tenant are talking and keeping us out of the loop, it can cause HUGE problems!  If we don’t know what has been promised, agreed to, and negotiated, we are reduced to trying to figure out a “he said, she said” puzzle.  Another problem can arise when an owner is telling a tenant one thing and we are telling them another.  Keep in mind that it is totally up to each owner to decide how much information they want their tenants to have.  Generally, our owners want total anonymity (and we do recommend that), but should you choose to open communication, please keep us in the loop!

Con #3:   The wrench in our gears.  Here at Classic, we are a well oiled machine.  You give us the fuel in the form of rental property, and we churn out profits, reliability, and customer service that is unrivaled in our industry.  We have spent nearly 17 years perfecting and fine tuning our high performance vehicle of success!  When an owner disrupts our performance, it can negatively affect them as well.  Keep your rental running strong with Classic and enjoy the smooth ride!

Next, we will dive into a thorough discussion of  the pros you can enjoy by micromanaging the management:

Pros:

NONE…

If you would like to experience the same level of comfort and trust that our owners have, give us a call!  Classic is the one-stop shop for anyone who doesn’t want to HAVE to micromanage!

In the last post of this series, we discussed how overpricing your rental even by a small amount can lead to HUGE losses in income.  While overpricing is by far the leading cause of rental vacancy, it is by no means the only cause.  In this post, we will dive into the wonderful world of “it’s just a rental!”

I have worked in this biz for a while now, and it still blows my mind when I hear the phrase “it’s just a rental” attached to some problem areas of homes.  Now, keep in mind that there are times I totally agree with and would use that phrase myself!  Other times however, the phrase causes me to suffer temporary paralysis and nausea.

The Gross Home:

Every now and then, I will encounter a home that honestly freaks me out a bit.  Here are a few examples of problem areas that I have seen:  Bathtubs with cracks/holes in them, broken plumbing fixtures, holes in walls, holes/rips in carpet, stains on ceilings/walls/carpets, overgrown yards, exposed wiring, etc.  Obviously, several of these problems are not only gross but can cause massive liability and safety issues!  Although it sounds fairly obvious, I have to remind folks sometimes that RENTERS ARE HUMAN TOO.  A good rule of thumb is this: “Would you live there yourself?”

On the other hand, there are a few genuine reasons to use that dreaded phrase.  For example, if your home still has wallpaper, paint schemes, and fixtures from the 70′s, you are more than welcome to leave it in that condition…as long as it’s clean and everything works.  Having said that, keep in  mind that the more up-to-date and upgraded your home is the faster its going to rent, but that doesn’t mean that you have to run out to Home Depot and blow $20,000 to outfit your rental with granite, stainless steel, wood floors, and the works!    When I am taking a look at a home that someone wants to list with us, I am looking at the condition of three main items: flooring, paint, and overall cleanliness.  These three items can make or break a rental so keep them in mind!

Is your carpet more beat down than our economy?  If you have disgusting stains that cleaning can’t solve, or if you have to dodge rips and tears like land mines, it may be time to bite the bullet and break out the wallet.

If your walls are terrible, PAINT THEM.  I don’t believe you when you tell me that your food stains, scuff marks, crayon streaks, and dirt are actually a new style of faux finish…and neither will a tenant.

If your house is filthy, hire a crew to come in and get it up to par.  I don’t care if it takes your local Boy Scout troop, a professional cleaning company, or a HAZMAT team!  Get it done and get it done right!

Remember.  The condition of your home attracts tenants of like caliber.  If you put a home on the market that looks terrible, guess what kind of tenants you will attract…   Put a shiny clean home on the market and you will attract the kind of tenant that you want to keep forever!

Here at Classic, we know that vacancy in a rental unit can cause a financial hemorrhage for the owner.  In fact, most of the properties we manage can lose the owner hundreds and hundreds of dollars each week that they sit empty!  As a result, we take our job of minimizing vacancies very seriously.

As a rental home owner, you can play a big role in the amount of time that it takes to rent your home.  In this series of blogs, I will go over the top reasons for vacancies in rental properties and show you what actions to can take to eliminate them!  Although I don’t intend to put these reasons in order of importance, this first reason is by far the leading cause of emptiness…both for your rental and your wallet.  Read on my friends!

The Overpriced Rental:

Nothing in the rental world spells death of income like an overpriced home.  I could go on for some time recalling the eulogies that I have delivered over the death of an owner’s income.  Sadly, the owners of these properties knew the cause of death but refused to act on the doctor’s advice.  Had they done so, their income would have lived a long and glorious life!

Allow me to give you an example.  Let us imagine that you have a home for rent in a certain city.  This is the home that you lived in when you got married.  The home that your children were born and raised in.  The home that your childhood cat “Fluffy” is now buried behind.  Whatever the reason may be, you know in your heart that this home is FAR more desirable than anything else that the city has to offer.  Unfortunately, renters don’t care about “Fluffy” and the childhood memories.  With the economy in the toilet, taxes increasing, and tax credits being cut, today’s renter is looking at ONE thing when they skim a list of rentals…$$.

As a result, it is increasingly important to make sure that you are competitive with your pricing!  Remember, every week that you hold out for that extra hundred bucks could be costing you HUNDREDS in lost rent and mortgage payments!  If you would like help pricing your rental, give us a call for an open and honest opinion.  We don’t agree with the methods of some companies that will tell you whatever you want to hear only to pound you with price reductions after your pen met their paper.  If we think that you are listing out of your ballpark, we will let you know before you sign with us!  We are not in the business of LISTING rentals like some companies.  We are in the business of RENTING them.  There is a huge difference!