For those of you who frequent my blog, this blog is going to be a bit different.  I usually write my blogs to cover a wide range of rental home owners in an effort to help them in their quest for a successful rental.  For this particular blog however, I am going to focus primarily on the rental homes that are in the Antelope Valley in California.

   The Antelope Valley consists of several cities which are located fairly close to each other.  The two most well-known cities are Palmdale and Lancaster.  Palmdale is about an hour or so north of the Los Angeles basin and Lancaster is about 15 minutes north of Palmdale.  One distiction that the Antelope Valley is unfortunate enough to have is that of one of the worst hit areas of the state with the current foreclosure mess.  As a result however, it has never been a better time to rent out or purchase investment homes!

   Current trends in the local rental market show a steady increase in the amount of renters looking for a place to call home.  Many of these renters are prior home owners who had to let their homes go back to the bank after their ballooning payments got out of hand.  Others are people who would have qualified for a home purchase but are now unable to do so due to the recent restrictions in the lending industry.  Still others are people who are currently renting in appartments and would like to trade up to a house.  All of these groups are beginning to pile up and create a rental housing demand that we have not seen in years!  Obviously, this benefits those who own rental homes, but it is also a great benefit to those that are thinking about PURCHASING a rental home. 

   The increase in renters has caused our available supply of rental homes to drop surprisingly.  Of course, the laws of supply and demand come into play and rental rates begin to climb.  It is now quite possible to purchase a home that will rent out for more money each month than you will have to pay in mortgage payments, property tax, etc.  Most people listen to and base their decisions solely on what the media has to say about the market.  The smart investors however, are those who are buying when others are not!  That is when the great deals are found.  Of course, we do recommend that you at least check with a local reputable property manager to see what a home will rent for BEFORE you buy it.  We have gotten calls from several people recently who were told that they were getting a "great deal" only to find that the great deal was in favor of the selling party.  Please take the time to talk to someone who knows.  

   Your Realtor may tell you that your 1,000 sq. ft. condo will rent for $10,000 per month, but just because they are involved in real estate, that doesn't mean that they are qualified to make judgements on the rental market.  Dentists and brain surgeons are both medical professionals, but I wouldn't want my dentist attacking my brain with a water pick!  Would you?

   The Antelope Valley is going through a time of change, and all signs show that it will be a change for the better!!

For more information on how to become involved in real estate investing or for other solutions to today's rental market, please check out our website by clicking here!

   In my last blog I mentioned the fact that here in the Antelope Valley, we have an abundance of massive homes hitting the foreclosure market.  These homes are generally around the 2,500-3,500 sq. ft. range.  Once the pride and joy of the valley, these homes are now silent reminders of the past age of the castle homes...

   You see, once upon a time, there were wonderful wizards who spent their time granting wishes.  For the sake of our story, we will call them"wizards" rather than "lenders."  These wizards realized that they could make a lot of money by helping the local townsmen in their quest for vanity and fame.  Up until this point, the townsmen had been content to live in modest dwellings--dwellings that were sized just right for their family's needs.  No one quite knows what happened, but after a while, things began to change for the town's inhabitants.  Suddenly, one by one the people began to come to the conclusion that a family of 3 could not live in anything less than a six bedroom castle.  After all, how could they bear to live with themselves when the Jones's just bought a 4,000 sq. ft. castle for their family of 2?  It was too horrible to be imagined.

   In an attempt to restore their feelings of self confidence, our heroes paid a visit to the local wizard.  The wizard's gilded tongue worked its magic on the family and without a thought in their minds, they signed the magic scroll and purchased their million dollar castle with no money down.  Our heroes left the wizard's office with their hearts full of joy.  Little did they know that the castle that they just purchased would eventually lead to their doom. 

   As the months advances, the family realized that their home was worth much more now than it was when they purchased it.  This fact came to them none too late!  For the Jones's had just refinanced their home with the wizard to purchase a beautiful new recreational carriage.  Green with envy, our family visits the wizard once again.  This time, the wizard tells them how easy it is to take their new found money, money that magically appeared in their new castle somehow, and use it to buy all of the toys that their little hearts desired.  And so, without a thought in their heads again, they signed a new magic scroll and their toys were delivered the next day.

   Unfortunately, the next day, things took a turn for the worse.  You see, the village idiot began to sow tales of doom in the town.  For the sake of our story, we will call him the "village idiot" rather than the "media."  No one quite knows why the townsmen began to listen to the village idiot.  He was not qualified to make predictions about the town's economy, but some say that if he failed to sensationalize every little thing and avoid sharing good news, then no one would ever listen to him again.  And so, by the act of one village idiot, the entire kingdom would befall hard times.  Sadly, history would show that whenever the town befell hard times, the townsmen would pay more and more attention to the village idiot.

   Suddenly, no one wanted to buy castles anymore.  In fact, those who purchased them during the times of plenty could hardly find someone who would take them for a fraction of their original cost!  As the times grew worse, the town began to blame the wizards who made it so easy for them to compensate for their lack of confidence by buying castles.  The wizard's magic was short lived, or so it would seem, for the magically low payments that the townsmen were paying to live in their castles soon tripled.  Thus began the dark ages of real estate.  These once prideful castle owners were now in the sad position of renting modest homes from those who resisted the urge to gratify their egos.  And, although many would still say that the wizards were the ones to blame, most of the townsmen secretly knew that they should have read the magic scrolls before they signed them.  So let this be a lesson to all of those who would commit to something that is unclear.  Beware!  Lest the same fate befall you too...

For more twisted fairy tales or solutions to today's rental market, please check out our website by clicking here!

   I am sure that most people have heard that phrase at on time or another.  Shoot, maybe some of us have even USED that statement at some point during our lives!  Most people probably have all sorts of negative images coming up in their minds when they imagine someone saying those dreaded words.  Most people would probably be mortified at the thought of having to defend themselves with that statement!

   I however, am in a position to tell people that very thing several times per week!  I get a lot of calls from people who want to rent out their Antelope Valley homes.  One thing to keep in mind is that the Antelope Valley has been severely overbuilt with 3,000+ square foot monstrosities.  And why not?  When the market was really hot, people were buying these massive homes like they were going out of style.  Times were good!  Equity on new homes was doubling every four months, builders were making money hand over fist, lenders were slinging home loans like dope on the corner, if you had a pulse you were qualified, and if you didn't have a pulse, we could still get you financing with a separate addendum.

   Unfortunately, all good things must come to an end (just ask the lately incarcerated Wesley Snipes).  Now that the market has dropped, these over-sized behemoths of the housing world are vacant, foreclosed, and rotting like stuccoed whales out here in the desert.  Some of these owners are lucky enough to hold onto these beasts through some kind of financial wizardry.  Of those that are so fortunate, some of them will call us here at Classic Property Management to inquire about the possibility of renting out their homes.  Of those few who call us, a fraction of those will have a realistic expectation of how much they can get in rent each month...

   What most people don't realize is that the rent prices of homes are not directly tied to the home's square footage.  It makes sense right?  In fact, if we could have a standard price per square foot for rental homes, that would make our job incredibly easier!  To give you an example, we just rented out a 50 year old home that is about 1200 square feet for $1500/month in rent.  A couple of miles away, we manage a two year old 2800+ square foot home that we are having trouble renting for $1900/month in rent.  Common sense would dictate that if you are getting more than twice the house, you should be paying more than twice in rent each month right?  It seems reasonable, but it just does not work out that way. 

   There are several reasons for this phenomenon which I am planning to cover in future blogs, but for now, let it suffice to say that in the rental market, "size doesn't matter!"

For more reasons that size doesn't matter, or other solutions to today's rental market, please check out our website by clicking HERE!

   As many of you who read my blog know, the odds of getting your mortgage payment back in rent are ridiculously small in most cases.  In fact, for several years, it was almost laughable to hope for such a return...until now. 

   The Antelope Valley was one of the areas in southern California that was hit the hardest by foreclosures.  As a result of this unhappy reality, prices of homes here dropped like a rock.  Our market has become inundated with short sales, foreclosures, auctions, and every other type of Realtor's nightmare that you can conjure up.  There are homes that sold for over $250,000 just a few years ago that are now on the market for around $89,000.

   Sounds horrible right?  Not for the investors.

   The saying goes that every cloud has a silver lining.  In this scenario, the silver lining on the foreclosure cloud is the rental market and investment opportunities.  A side effect of the massive foreclosure rate is an increase in the number of renters.  Just because someone went through a foreclosure, that does not mean that they will no longer need a place to live.  All of these people who got their homes by utilizing some kind of sneaky loan program are now having to turn towards the rental market once again.  As a result, the massive surplus of rental homes in the area is beginning to shrink.  Rental home prices are going up, and vacancy rates are coming down!

   Here in the Antelope Valley, the market drop has made a tremendous impact on how investors are looking at the area.  For the first time in years, homes can be purchased and rented out for MORE than the owner will pay in insurance, property taxes, and mortgages combined!  Due to the fact that I work for a property management company, I have the ability to track rent prices as they rise and fall.  As a result, we as a company have been able to help several investors in their quest to find properties that are capable of producing a positive income each month.

   Just because the market has taken a downturn, that doesn't mean that all hope is lost!  Hope is always to be found if you look in the right places.  For those investors out there, take a look at the southern California real estate market.  You just might be surprised to find that there are amazing deals to be had and money to be made!

Classic Property Management...finding the silver lining in a cloudy market.  For more silver linings, feel free to check out our website by clicking on the Classic logo to the right!

   I have written several blogs about how home owners can benefit from the services of a property management company.  There is no better way to screen and place a tenant than to have it done by someone who does it all the time.  After all, these guys do get paid for something, right?  We are in a whole new era now.  You can not simply trust someone to rent your home based on the fact that they are an "honest looking guy."

   For this blog however, I would like to focus on the other party to a lease agreement...the tenants.  As far as the market goes, I live in an area with one of the highest foreclosure rates in California: The Antelope Valley.  You can pretty much point to any place on  a map of the valley and be assured that you are covering several bank owned homes with your finger.  Homes that sold two years ago for $400,000 are now on the market for $220,00.

   So what does this mean for tenants?  Here come the "Rent Skimmers!"  For those of you who don't know, "rent skimming" is a name for the act of collecting rent on a home that you are defaulting on.  We have gotten several calls from people who are looking for a place to live due to the fact that the owners of the home have defaulted and gone into bankruptcy, foreclosed, etc.

   I have spoken to many Antelope Valley renters recently who have told me that they were paying rent on a home for months without realizing that the owner of the home was not holding up their end of the deal.  To make matters even worse, these owners are running away with the tenants security deposits too!  I spoke with a woman the other day who paid a $2500 security deposit on a home only to be forced out when the bank came to take possession 6 weeks later.  The owner had skipped town with her two months of rent and the entire $2500 deposit.

   Just when all hope seemed lost, she found that there was a better way to rent.  Most property management companies use the same system that we do here at Classic.  We find that it is a much better idea to hold onto the security deposit in our company's trust account and remove temptation from the owners.  That way, there is no danger of anyone being ripped off.  A third party that is bound by laws and ethics is a great addition to any rental agreement.

   The road to happiness in today's rental market is filled with land mines and pot holes.  However, if you take the necessary steps, many of these dangers can be avoided!

For more information on dodging pot holes and land mines, or for other solutions to today's rental market, please check out our website by clicking on the Classic logo to the right!

   For the first time in the past few years, the massive supply of Antelope Valley rental homes seems to be shrinking!  For quite some time, our daily average supply of rental homes was hovering in the neighborhood of 250 available units.  Now however, the daily average appears to be holding steady at about 150 available homes for rent.

   The most obvious reason for this decline in numbers is based on the Countrywide crash.  When Countrywide tanked, it caused the lending industry to go through a major overhaul.  The carefree lending, 100% financing, everything is wonderful days came to a crashing halt.  So how does that influence the number of rentals available?

   Now that it is so much harder to qualify for a home loan, we are seeing massive amounts of people turning to rentals to meet their housing needs.  As an added bonus, many of these people have great jobs, awesome income, and perfect credit.  The problem is that they don't have a large amount of money to throw in for a down payment.  What that means, is that we are now seeing more highly qualified, low-risk renters than we have for a long time.

   Of course you still have to be careful.

   Just because there are more awesome renters out there today than there were yesterday, that doesn't mean that the bad ones have all gone.  It doesn't matter if you live in the Antelope Valley or anywhere else in the country, you still need to take the time to make sure the job is done right.  If you are considering renting out your home, you should at least talk to a property management company to learn about the way rentals work.  You might feel confident enough to manage your rental yourself, but it doesn't hurt to go at it with as much knowledge and information as possible.

   This may be the best time in years to rent out your home with peace of mind, but peace of mind does not warrant absence of mind!

Classic Property Management, putting your mind at ease for 15 years.  For more information, check out our website by clicking on the logo to the right!

   I am not sure about the rest of the country, but here in the Antelope Valley, we seem to have a surplus of rental homes on the market.  In our local newspaper, there is a daily average of about 210-240 single family homes for rent.  That's just from one source!!  Pretty shocking for an area the size of this valley.

   So, in a situation like this, how do you go about setting your home apart from the competition?  When we sign on a new home for property management, we usually take a walk through it with the owner of the home.  We use this time to ask questions about the place and get to know the owner a little better.  What may not be so obvious however, is that we are also scanning for common rental issues.  Rental issues are things that may cause potential renters to run the other way when they see the home.  The list of possible rental issues could fill an entire hard drive, but for most renters, there are a few deal breakers that stand out above the rest.

   And so, without further ado, here are five quick tips you can rent to get your rental rented!

1).   The Cruddy Home.  No one wants to walk into a house and feel as though they should have gone in for a booster shot for flesh eating diseases.  Before you advertise your rental, take the time to do a walk through and a thorough cleaning.  That means, wash the bathroom mirrors, behind and IN the toilet, the showers, exterior windows, stove tops or cooking surfaces, counter tops, floors, etc.  We also recommend that owners get their carpets cleaned.  We don't care if they do it themselves or hire a haz-mat crew.  Renters can't relax if they are constantly wondering what caused that weird stain on the bedroom floor.

2).   The Mural Home.  I am sure that most of us can appreciate a fine painting that spans an entire wall...who wouldn't?  However, if your walls utilize grease, fingerprints, dirt, chips, and cracks to paint a picture of the horror that your home has survived, it may not be the kind of image you want to advertise.  PLEASE, at the very least, take the time to wash your walls.  If they are not clean after a good scrubbing, then take the time to give them a fresh shot of paint!  You wouldn't go to an important event wearing the same makeup that you applied fifteen years ago right?  Either should your house.

3).   The Wasteland Home.  Ahhh...here in the Antelope Valley we are blessed with temperature extremes.  I am not saying that we live in the hottest or coldest place in the country, but rather we live in an area that can be both hot and cold.  In the summer, no one bats an eye if the thermometer tops out at 118 degrees.  In the winter, no one notices if we hit lows in the 1-20 degree range.  That's just the way it is.  As a result, our lawns and gardens tend to suffer.  When you are trying to rent your home, I don't expect it to look the Presidential Rose Garden.  But it would be nice if the lawn and planters were free of weeds and other debris.  Cut the grass, pull the weeds, edge the lawn, and even consider planting some inexpensive flowers!  A little bit of color can work wonders for your home's appeal.

4).   The Foul Home.  I have read about other people encountering this same problem many times.  As we live in a certain area for an extended amount of time, that place tends to absorb our odors.  Do you like fried food?  Do you have pets?  Do you have a home gym?  Any of these things can cause a smell that you may not pick up on anymore.  Why?  Our brains tend to phase out the smells that we emit.  Good news right?  Not exactly.  Just because we can no longer smell our own odors, that does not mean that others can't either.  I may have shocked and offended some of those out there who have just been told that they have a distinctive odor.  However, it's not personal...it's business.  I am in the business of renting homes.  If I can detect an unusual aroma in your house, I may recommend buying an air freshener. 

   Now, having said this, please don't overkill it on the scents.  Although renters don't want to rent homes that smell as though something has been dead for awhile, they don't want to feel as though they just signed a lease at the Glade manufacturing plant either!  Keep it simple and light.

5).   The "What the Heck Are They Thinking?" Home.  Any of the afore mentioned problems can cause a renter to run for the hills.  However, the number one cause of extended vacancy in the Antelope Valley is an owner who refuses to price his home right.  If someone calls Classic Property Management and asks for an idea as to what they can expect to get for their property, I give it to them straight.  There are management companies out there that will tell an owner whatever they want to hear just to get the listing.  We hold ourselves to a higher ethical standard.  If your house will rent for $1800/month, we will list it for $1800/month.  In times like these, the supply is outweighing the demand.  As a result, homeowners need to be prepared to negotiate more and be aggressive with their pricing.

   If you can follow these few tips, you may very well be ahead of the competition.  Good luck to all of those who may be trying to rent their Antelope Valley homes.  It is a difficult job, but somebody's got to do it!  If in doubt, hire a professional property management company.

For more tips on renting your home and other solutions for today's rental market, please check out our website by clicking to the Classic logo to the right!

   How many times have you heard that before?  I would hazard a guess and say that pretty much everyone who reads this blog has heard that phrase at some point in their lives.  Do you believe it?  For me, it depends on the situation. 

   For example, several years ago there was a craze over little bean bags shaped like animals.  Does anyone remember that?  That's right, the Beanie Baby craze.  At the height of this madness, people were willing to pay literally thousands of dollars for these little bean bags that cost their manufacturer mere cents to make.  Today, those people must be living in self loathing that I can not even begin to fathom.  These same Beanies can now be purchased by the box full at garage sales for less than one dollar.  

   So let me ask you.  Did these people get what they paid for?  I wouldn't say so.  Those little critters are still the same bags of beans that they were before, but suddenly, they are now worth a tiny fraction of what they once were.  We have all heard of someone being upside down on a home, a car, or other investments, but a bean bag??  Come on.

   Now let's take a peak at another situation.  Let's say that I can either buy a home made car from my cousin, or I can buy a BMW.  Obviously, there would be no comparison.  The additional cost that I would incur to acquire the BMW would be money well spent.  My cousin has no idea how to build a car.  BMW has been doing it successfully for many years.  It is that kind of knowledge and success that causes people to spend their money at BMW instead of my cousins house!  I could bring all the parts of a BMW to my cousin and ask him to put it together for me.  Would that be money well spent?  NO!  The monstrosity that would result from that little experiment would be lucky to function, much less emulate the BMW that it could have been.

   So how does this apply to Real Estate?  Basically, whether you are a property management company or a Realtor, you should be the BMW.  People should be coming to you because the money that they spend on you and your services is money well spent.  Here in the Antelope Valley, there are a lot of people who do business like my cousin builds cars.  They have the same materials to work with, but they have no idea what they are doing.  As a result, their homes don't sell and their rentals stay vacant.

    We recently took over management for an owner who had a home here in Palmdale.  They were using a different company that placed a tenant without doing their homework.  The company eventually went out of business, leaving the owner to deal with the mess they left behind.  The tenant ended up living in the home for about four months without paying any rent before we took over (a total loss of over $5,000 for the owner).  Did they get what they paid for?  No.

   For those of you who may be reading this blog, please take the time to find out about the person or company that you are relying on for your home's well being.  You should not make your decision based solely on the initial cost to you.  In the end, the wrong Realtor or property management guy could cost you infinitely more than you can imagine.

For more ways to get what you pay for, or for more solutions to today's rental market, please check out our website by clicking on the Classic logo to the right!

 

   In my previous article I wrote about the change that has been taking place in the Antelope Valley.  Basically, I went over how some unscrupulous characters (vultures) have begun to pop up.  These folks are taking advantage of homeowners who are looking for a good property management company.  I won't rehash the details here, but feel free to read about it on my blog by clicking here.

   Anyway, as promised, I am going to start writing about a few of the characteristics that you should be on the lookout for when choosing your property management company. 

#1.  Ask the management company if they are paid based on "Rent Due" or "Rent Collected".                    

   What I mean is this.  Property management companies are generally paid a certain percentage of the rent that the tenant pays each month.  Now for the sneaky part.  The vultures out there (bad property managers) will tell you that they earn their percentage based on "rent due".  Essentially, that means that these guys expect to be paid their percentage each month whether the tenant is paying or not!

   On the other hand, the good companies out there will expect to be paid their percentage based on "rent collected".  In other words, if the tenant decides to stop paying, we don't get paid either.  I say "we" there because this is the method that Classic Property Management uses.  Obviously, this means that we make it a priority to get the rent from the tenants each month.  Otherwise, our paycheck takes a hit (and nobody likes that)!

   What does that mean for you?  You get paid too!  Most rental home owners here in the Antelope Valley do not own their homes free and clear.  There are mortgages to be paid, taxes due, homeowner's insurance policies, etc.  Obviously if you are counting on your rent check each month to make or supplement any of these payments, then it needs to be a priority for your management company as well.  Beware!!!  If you can't count on your management company to collect your rent money, then the next carcass we see a vulture feeding on...could be you!

For more information on how to save yourself from the vultures, or for other solutions to today's rental market, please check out our website by clicking on the logo to the left!   Classic is here to help.

   Here in the Antelope Valley a change is taking place.  Just a few short years ago, property values were climbing at an astronomical (or comical) rate.  You could literally buy a property that would be worth $50,000 more  by the time that you made your first six payments.  Ahhh... the good old days right?  Of course, with homes flying off the market as fast as they were put on, several vultures spotted an opportunity to make a kill.  "Realtors" began popping up left and right who had no real interest in the profession other than to make a quick buck by utilizing their substandard work and ethics to prey on those who trusted them.

   Market crash - cue dramatic music:  Alas!  The market was as fickle as those vultures who capitalized on its good fortune.  The tide changed and suddenly homes were no longer selling as well as they should.  The "quick-buck" Realtors were gone, stampeding on to greener pastures, while leaving their poor clients to trudge through their manure!

   In the chaos that followed, lenders began to go out of business, standards were tightened, and it was no longer easy to buy a house without a substantial down payment.  It was at this point that a new breed of vulture spotted an opportunity.  Due to the fact that lending standards were revised and tightened, more and more people began to look towards renting to meet their housing needs.  These new vultures swooped in and began to offer themselves as property managers.  Several new companies were hastily formed here in the Antelope Valley...several of which have already gone under.  Their clients are now stuck with bad tenants, and no one to clean up the mess left behind (which is, ironically, a vulture's job).

   Some people might say that these guys won't be around for long and pose no real threat.  However, the truth is that they can pose a very serious threat to those who end up trusting them with their money and homes.  I spoke with an owner a couple of months ago who told me that he had trusted a guy that said he would manage his newly purchased property and take care of any repairs that needed to be made.  Unfortunately, the vulture ended up skipping the country.  He flew to the Philippines without letting the owners know he was leaving and took all of their repair money with him.  The problems went on from there.  While "managing" their property, he moved several people into the 12 units and neglected to run any kind of background checks, save applications, or even get a lease signed.

   Now, obviously this scenario was pretty horrible.  However, the fact remains that there are people out there who may not skip the country, but may not have the experience and knowledge to manage a home either.  A few weeks ago, I attended one of the weekly MLS breakfasts for the Realtors of the Antelope Valley.  During the announcement portion of the breakfast, a local (Big Shot) Realtor made the following statement.

   "...and just to let you all know, I have recently begun managing properties. I know...I know.  The things we'll do for money when the market sucks, right?"

   Hmmmmm...  Based on a statement like that, would you want to hire this guy to manage your home???  He obviously takes no pride in that line of work.  It comes across fairly clearly that he thinks property management is somehow beneath him.  It is that kind of guy that home owners really need to watch out for.  This is the type of guy who will sound like he knows what he is doing because he knows the lingo.  Unfortunately, knowing the lingo does not necessarily mean that he actually knows how it works. 

   In the next few blogs, I will go over the characteristics that you should be on the lookout for when choosing your property management company.  The rules that apply here in the Antelope Valley are universal.  Stay tuned!

For more information on how on how to avoid the vultures, or for other solutions for today's Antelope Valley rental market, please check out our website by clicking on the logo to the right!