Tuesday, 24 May 2016

Insurance for your Phoenix Rental Property: Top 3 Areas to Consider

Being Phoenix property managers, we always have Phoenix property owners asking us about the best option for property insurance for a rental property.  Of course when you live in the home, you have owner occupied insurance which often times gets paid by your mortgage company as part of your escrow fees.  But once you decide to rent the property out what insurance changes do you need to make?  Here are the top 3 things to consider:

1. Contact your insurance company to confirm they offer non-owner occupied policies because some of the very large discount carriers such as Geiko and Travelers may not offer the coverage in your area.

2. Ask your agent how long you have with your owner occupied policy to place a tenant - most companies only give you thirty days.  This means that if you vacate the home and in thirty days you haven't placed a tenant and your AC gets stolen your insurance company won't cover the claim.  Although vacant insurance coverage is pricier than owner or non-owner occupied it may be a good short term option to insure that your property is properly covered when vacant.  Then, when you find a tenant you can change the coverage to non-owner occupied (keep this in mind in between tenants as well).

3. Consider adding an umbrella policy to your other insurance plans.  Carefully review the total value of all of your assets and keep in mind that if you face a lawsuit with your rental, you can be sued on a personal level meaning that all of your assets may be compromised. However, an umbrella policy can offer you coverage beyong what your homeowner's offers. For example, if you have a $500K limit on your homeowner's and someone sues you for $1M, the difference of $500K can be levied against you personally whereas if you have a $1M umbrella policy your total possible insurance coverage is $1.5M.  Depending on your total net worth an umbrella policy might be a must have.

In conclusion, be sure that you have a good insurance agent who can provide you estimates for all options and discuss what plan is bet for your financial situation.

RPMWV Phx offer full service property management to property owners within the Phoenix Metro area.  Preparation for rental such as proper insurance coverage is all part of our full services.  Contact us today for your first 3 months for  FREE!!! 602-281-2884

Wednesday, 18 May 2016

DIY Property Management in Phoenix, AZ Creating Headaches for Local Neighborhoods

Investing in real estate over the last 50 years has usually been a safe bet. While it has had its ups and downs, for most investors, Phoenix, AZ real estate is something that can be counted on.

However, with the rise of more investors comes a similar set of do it yourself ("DIY") property owners. The downside of these DIY property owners is that they often don’t have the time or the resources to properly manage a rental property. That results in tenants who are poorly screened, inconsistent maintenance being performed on the property, and a host of other issues. The result is then problems to home values in the neighborhoods of the unit.

“The opportunity for real estate investment in the Phoenix market remains strong,” says Mark Joseph, Phoenix Realtor. “The problem that we’re facing now in real estate and Phoenix property investment is so many DIY property owners who don’t realize that by not hiring a good property management company, they’re sentencing their property to an early breakdown. It’s time that we educate these DIY property owners on the true value of having a property management company.”

Whether you need full or partial service to help with the managing, the idea is to find the company that will be the best partner for your investing needs.

“Most long term investors in real estate say you can’t realize a good return on your property without a good property management team,” Mark Joseph “They’re not just invaluable, they are necessary for a successful investment.”

As the market continues to provide a seemingly endless supply of renters, the trick will be to find the right kind of Phoenix property management firm to partner with.

About Real Property Management WV Phoenix

Real Property Management assists Phoenix property owners in finding the right rental properties, setting rent rates, advertising the property, screening tenant applications, leasing the property, maintaining and inspecting the property, and even assisting through the eviction process when necessary. The company is a full-service Phoenix property management company and has nearly 30 years of industry experience. For more information on how you can benefit from their services, visit www.rpmwvphx.com.

Monday, 9 May 2016

Phoenix Property Management Contracts

Back before Phoenix property management companies were so prevalent, almost every property management contract had a clause for earlier termination and with it usually came a penalty fee.  The penalty fee was in place because companies didn't want to do all of the hard work to place a tenant just to have the owner cancel right after the tenant moved in. Additionally, some companies viewed the  penalty fee as revenue to the management company.  Over the past few years however, Phoenix property management has grown exponentially.  As a result, companies are fighting for business by offering what appear to be very low monthly costs and property management contracts that can be terminated at any time with "no penalty".  As the consumer however you need to keep in mind that property management isn't a non-profit industry and therefore the property management companies need to recoup the fees that they used to gain from the early termination of contracts. As a result, the companies without early termination fees you will notice have far greater marketing and leasing fees - this way they gain the revenue up front so they don't care if terminate services and therefore have no incentive to keep your business.  

We will look at the following example referring to the first property management company Phoenix property management and they don't have an early termination fee and the second company we will refer to as Peoria property management with an early termination fee (both companies are actual property management companies in the Phoenix metro area but we are not using their real company name). Phoenix property management charges $199 marketing fee, $499 leasing fee and a $75 monthly fee.  Peoria property management charges $0.00 marketing fee, $398 tenant placement fee and a $78 monthly fee.  For the purpose of this example we will assume that you as the client stays with each company for six months.  Your total cost with Phoenix property management is $1148.00 and you "save" the early termination fee.  Your total cost with Peoria property management including the early termination fee is $1100.00 so you saved $48.00 WITH the early termination fee.  Now let's say you still with each company for 12 months so you then you do not have an early termination fee with either company.  In this example your total cost with Phoenix property management is $1598 versus a total cost of $1334 with Peoria property management which equates to a total savings of $264.00 bu choosing Peoria property management.

In conclusion, be sure when shopping for a property management company that you review the contracts for the companies you are considering.  Also be sure to take pencil, paper & calculator when looking at total costs to be sure that a company marketing technique doesn't cloud your financial decision.

Thursday, 5 May 2016

Is a Pet Friendly Rental Property Still a Good Investment?

Is a Pet Friendly Rental Property Still a Good Investment?

Often landlords feel that their Phoenix rental property values will lower if pets are allowed in the units. They also worry that increased maintenance from animal-caused damage will hurt cash flow. Studies have shown that with fewer property vacancy days, added premium pet deposits and minimum actual damage to property, having a pet friendly rental property can in reality increase your investment’s cash flow. Allowing pets will make the rental property more attractive to potential tenants.

Pet Friendly Rental Property has Decreased Vacancy Days

Some studies show that 62% of Americans are pet owners. Pets are seen as valued members of the family. These feelings towards the family pet can actually influence a family’s choice of where to live. Right away you can see that a pet-friendly lease option influences a faster renting time and decreased vacancy days. Once tenants know they are in a comfortable pet friendly home, they will more likely want to stay for a while, further decreasing vacancy days which increases steady cash flow.

Pets Don’t Cause Greater Damage Risk

A major concern for an investment property owner is animal related damage and the cost of those repairs. Studies show that the actual damage caused to property from pets isn’t much higher than normal damages caused by non-pet owning tenants, especially those with children. Pet deposits and fees can more than cover pet related damages, so a property owner’s financial risks for allowing pets are generally low.

Customize your Policies

If you are still concerned about increased costs from potential damage and increased insurance when you have a pet friendly rental property, discuss your concerns with RPMWV Phx. We can assist you in customizing a pet policy and pet agreements for your leasing situation. Real Property Management WV Phoenix is the Phoenix property management company that can take care of all your rental property needs and provide an environment that makes you, as a property owner, comfortable and makes your tenants feel at home.