Who Ever Said that "SIZE Doesn't Matter?"

By
Services for Real Estate Pros with Classic Property Management

   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!

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Rainer
139,927
Kelly Sibilsky
Licensed Through Referral Connection, LTD. - Lake Zurich, IL
Hmmm...I can think of several reasons why size doesn't trump all. Location, condition, upgrades, school district...do tell!
Apr 25, 2008 08:50 AM #1
Ambassador
581,612
Rich Jacobson
Fathom Realty West Sound - Poulsbo, WA
Your Kitsap County WA Real Estate Broker
Man, your titles totally crack me up! Perfect for a Friday afternoon...
Apr 25, 2008 10:23 AM #2
Ambassador
533,485
Jason Sardi
Auto & Home & Life Insurance throughout North Carolina - Charlotte, NC
Your Agent for Life
I agree with Rich, Jonathan:-)  Your message is clear and does make sense.  Thanks for the reality check....I think:-)
Apr 25, 2008 10:30 AM #3
Rainer
7,769
Alan Robinson
PTE REAL ESTATE GROUP - Phoenix, AZ

Even if there was a square foot price measurement, the location variable would always trump it. That being said, I am seeing large 5000+ sqft homes being rented at 2500-4500/month. It may not affect people selling homes half the size but if I were looking at ads you had better believe I'd put first interest in seeing an upscale property over an average joe! 

Apr 25, 2008 11:27 AM #4
Rainer
32,215
John Evarts
Classic Property Management of Santa Clarita - Santa Clarita, CA

Kelly, Rich, Jason, and Alan, keep your eye on this guy's blog. The info he is going to share in the coming blogs is very insightful (I have heard it) and I have a feeling it is not just taking place in his area.

Jon, good post. This is useful, timely, and needed info in our hectic market.

Apr 25, 2008 12:03 PM #5
Rainmaker
655,882
Bob & Carolin Benjamin
Benjamin Realty LLC - Gold Canyon, AZ
East Phoenix Arizona Homes
You are right. We see the same thing here in Arizona. The large homes do not really rent well and if they do they do not command a high rental price in comparision to the size of small ones.
Apr 25, 2008 07:07 PM #6
Rainmaker
556,743
Jeremy Blanton
Myrtle Beach Homes Blog - Myrtle Beach, SC
Myrtle Beach REALTOR®- myrtlebeachhomesblog.com
That is a great post...size matters when selling & renting, but it isn't an exact equation!
Apr 26, 2008 02:33 AM #7
Rainer
122,167
Christy Powers
Keller Williams Coastal Area Partners - Pooler, GA
Pooler, Savannah Real Estate Agent
LOL....funny you should mention this. Someone else said this not too long ago. haha. Size of a house only matters to the people living in it. 
Apr 26, 2008 04:05 PM #8
Ambassador
2,134,695
Respect Realty LLC
Respect Realty LLC - Milwaukie, OR
Brokers - Oregon / SW Washington Real Estate

Oh, we have the same thing here with lease options, people expect to get their full mortgage payment every month from the lease amount and it just doesn't matter the size of the home or the price you paid! It is what the market will bear.

Great post,

Apr 28, 2008 03:46 AM #9
Rainmaker
1,402,493
Vickie Nagy
Coldwell Banker Residential Real Estate - Palm Springs, CA
Vickie Jean the Palm Springs Condo Queen

Reluctant landlords make really tough clients don't they? Some of the worst are mortgage brokers and real estate agents that got caught up in the frenzy. Active income is down and passive income is non-existent.

Apr 28, 2008 06:14 PM #10
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Jon Mitchell

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