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Why Property Management? Why Now?

By
Real Estate Agent with Real Estate Solutions

Why property management?  Because it might be the best way to keep your seller, and for your seller to keep their faith in you.  If you have a sales listing that you have been unable to sell, you're not alone.  Where are all the buyers?  Interest rates are incredibly low, are they not?  Prices on many homes have been drastically reduced....   So where are the buyers?  Is your seller asking you the same question?

 Everyone has to live somewhere.  If the "buyers" are not buying, they're renting.  If you are having a hard time selling your listing or listings, why not offer the seller an alternative?  Especially if the house is vacant, you might suggest that they rent the home out under the management of a professional property manager until the market picks back up.

 For seller's who have little or no experience in the role of "landlord", there are a host of negative assumptions to overcome.  "Tenants will destroy my house", is a common one.  And as with any situation that implies dramatic change--or at least the perception of dramatic change--human nature is to resist said change...

Just the same, renting the house to tenants is often the best possible alternative to a down and out seller.  I work at one of the few truly full-service real estate companies in Jacksonville--and we've seen time and time again how relieved many of our "sellers" are to have income from their property or properties.  Sometimes, and particularly in this market, renting the property out is the only way keep the seller from losing their home to the bank.

Of course, this is not to say that the seller's apprehensions about turning their home into a rental are wholly unfounded.  There is a certain degree of risk and uncertainty in renting a house to tenants.  This is exactly why REALTOR's who do not specialize in rentals or property management should develop a relationship with a REALTOR who DOES.  (Of course, I recommend discussing this with me personally, but you should at least find a Property Manager who holds a professional property management designation and who is a full-time Property Manager with references)

When you refer your frustrated seller to your preferred professional property manager--someone who understands and can empathize with the concerns and the uncertainty associated with renting a house for the first time, you will have done more to earn that seller's trust than if you held yet another open house for the 10th weekend in a row...

If you have a seller who really needs to do something with their home, you might find out if professional property management is right for them.  Only your Professional Property Manager knows for sure if Property Management is right for your seller.  Side effects may include loss of frustrated seller phone calls and emails, more free time on the weekends, referral commission, and a positive working relationship with a professional in another area of real estate.

 In all seriousness, you could be doing the best thing for your client, get paid a referral when the home rents, and still retain the customer for their future sale. 

Matt Ratcliffe, REALTOR
Keller Williams Realty Brazos Valley - College Station, TX
The risk is always greater that a tenant will not take care of the property.  Sell now at a lower price, move on.
Jan 28, 2008 01:13 PM
Jon Zolsky, Daytona Beach, FL
Daytona Condo Realty, 386-405-4408 - Daytona Beach, FL
Buy Daytona condos for heavenly good prices
That's a tough one. We were pretty successful in renting out our client's homes, and we got absolutely stock with one since September. So awkward, unbelievable. People are angry with us, we are frustrated, it costs us money and time, and no results,
Jan 28, 2008 01:49 PM
Anonymous
Anonymous
I would tend to disagree, Matt.  Let's take a common hypothetical example (this is one I see a lot in my area):  Seller has their home listed at a reasonable market rate with company X.  Seller had a job transfer and moved many miles away, so they are really hoping the home sells through company X.  The home, if rented, would yield $1500/month with a $1500 Security Deposit.  6 months into the sales listing, the seller is bleeding money like crazy.  Lets say their mortgage is right around that $1500/month.  How much money have they forgone by listing their house for sale?  So far, the vacant house has cost at least $9,000.  That's real money.  Real money that they have lost and that will not be recovered.  Professional Property Managers have very low eviction rates, ensure the property is being maintained via interior and exterior inspections and lease enforcement, carefully screen tenants through background checks, rental history, credit, etc., and are able to rent the property for the most the market will bear.  In a sales climate such as this, the greater financial risk is in NOT exploring property management.  Even if the homeowner is unable to rent the house for the amount of their mortgage, taxes, insurance, HOA dues, etc.--they still are likely to come out on top in a few years.  Based on history,  the appreciation rate in the housing market over time will more than make up for any short term outlay of cash.  The vacancy is the true expense in this equation.
Jan 28, 2008 11:14 PM
#3
Fred Griffin Florida Real Estate
Fred Griffin Real Estate - Tallahassee, FL
Licensed Florida Real Estate Broker

Hi, Greg.

     We invite you back to ActiveRain in the year 2017!

Jan 19, 2017 08:50 PM