Roommate Effect...Good News for Phoenix Real Estate Investors

According to the Census Bureau, home ownership rates were reported at 63% at the end of 2015, which is a 20 year low for Americans, and even dropped a point from last year end report data. The good news for rental property owners is that vacancy rates are dropping as well, proving the demand for rental units is still there. In fact, Zillow reported that the average rent rates are on the rise. Combine that with the fact that the US had over 700,000 new renters in 2015 alone. You can see a lucrative market for rental property owners.

3 Factors Combined Lead to the “Roommate Effect”

High debts, high rent rates, and low incomes have come together to create “the roommate effect.” Zillow also studied how the “roommate effect” will impact the rental market. Just like on popular sitcoms “The Golden Girls,” or “Friends,” or even “How I Met Your Mother,” adults today are doubling up in rental homes as a way to save money. In 2012, the number of American renters living with roommates or family members was over ⅓ of the adult population.

According to Stan Humphries, Chief Economist for Zillow.com, “All of these doubled-up households represent tremendous potential energy for the market. And when these compressed households begin to unwind and these millions of Americans do start to create their own households, demand will bounce back, possibly even causing household growth to outpace population growth.”

A Growing Market

Studies show that rental markets are stable and will be for some time. So now is a good time for investing in real estate. As the leader of property management companies Phoenix has to offer, RPMWV Phoenix is here to help you as you grow your portfolio. Our overall goal as a company is to save property owners the time, money, and headaches often associated with rental property. We offer solutions for every aspect of Phoenix property management, and are experts on the local Phoenix area. As you continue to grow your portfolio, lean on our professional Phoenix property managers to guide you along the way.

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4 Ways to Avoid Tenant Turn over in the Phoenix Rental Market

There is nothing like losing a tenant to kill your cash flow. Advertising, and maintenance work to get a unit rent-ready, plus showing costs are a few of the many hits your wallet will take when you have tenant turnover. That doesn’t even factor in the lack of rent checks during vacancy days. RPMWV Phoenix has a few tips to help you keep your renters from jumping ship.

Properly Screen Applicants

After meeting a tenant in person, it is important to complete proper screenings as part of processing an application. Background and credit checks will help you determine how reputable this potential renter will be. By thoroughly prequalifying future tenants, you’ll avoid those who have questionable items in their pasts and who are more likely to be short-term renters. Also be sure to collect and analysis the correct financial documentation so you know that the renter can actually afford the rent.

Avoid Above Average Rent Increases

RPMWV Phoenix is aware of market standards when it comes to rent averages. While rent increases are common, the profits you make from hiking the rent regularly will not cover the costs of rental turnover if your tenants become frustrated with rent increases. Keeping rent on par with the area averages will help keep renters around for a longer time. It is important to know the market that your rental unit is in and keep your rent at the right amount for that market. RPMWV Phoenix knows the Phoenix rental market to price properties accurately.

Promptly Respond to Tenant Requests

Quick responses to requests for repairs and other such needs is a vital feature to good management. RPMWV Phoenix knows that renters become disillusioned fast if the property owner does not respond to complaints quickly (especially the AC in the summer!). In spite of a myriad of other appealing features, a renter will leave if they feel a property is not managed adequately. RPMWV Phoenix has 24-hour call centers to help with those unwanted emergencies that come at the most inconvenient times. Fast proactive maintenance completed by professional people is also important for both avoiding bigger maintenance problems in the future and keeping tenants comfortable in their homes right now.

Maintain Renter Relations

Open communication is key to maintaining long-term renters. The day a renter signs a lease should not be the last day they hear from you before moving out. RPMWV Phoenix online tenant portal ensures that all renters can review their ledger, open work orders and ask questions when it is convenient to the renters schedule. 

RPMWV Phx offers all real estate services including full property management services, purchases and sales of all real estate as well as tenant only services.  For additional services, visit the rest of our website at www.rpmwvphx.com or contact us at 623-748-7800 

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What Makes a Good Phoenix Rental Property?

As a newbie to the rental property business, you may be nervous about making that first purchase of your phoenix investment property home. Do you know what things to consider to attract renters? If you have ever rented a home yourself, then you have experience in what home renters are looking for. Most homes are renting to families who are happy with the less burdened renter lifestyle, or who are new to an area and checking out that area before they buy a home. As in every part of the Phoenix property management process, your Phoenix property management team can help answer any questions you may have during the purchasing phase and represent you in the sale. Here are few suggestions from the pros:

1) Look for homes no older than 15 years. This will help keep down maintenance costs and save you money long term.

2) Look for homes that are not located on busy streets.

3) Rental properties should have at least 3 bedrooms and 2 bathrooms, and be located in neighborhoods where home values are appreciating. This allows you as the owner to charge a higher rent.

4) Consider the proximity of the property to things people need and/or want such as shopping and dining.

5) If the home is in a HOA, there may be fees for violations and signage and parking rules. Be sure to identify what the HOA codes are and how you will enforce them with your tenants.

Remember that the decisions you are making in the purchasing process are ones that will affect you long term. The property type you choose will affect what type of potential tenants you attract, and how long the home stays vacant. These are all things to consider as you begin your journey into the rental property industry. By making smart decisions today, you and your Phoenix property management team will be pleased with your future results. 

RPMWV Phx offers full real estate services including the representation of buyers and sellers in the real estate transaction process as well as full service and tenant placement property management.  For additional information please call 623-748-7800

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Multi-family vs. Single-family Phoenix Rental Property Investment

WHAT YOU NEED TO KNOW ABOUT MULTI-FAMILY VS. SINGLE-FAMILY RENTAL PROPERTIES BUT WERE AFRAID TO ASK

For a new real estate investor, the question of whether to buy a Multi-Family Residence (MFR) or a Single Family Residence (SFR) can be a tough question. Like most things in life, there are pros and cons to each. You simply have to decide what is best for you in either case after knowing a few facts. Investing in real estate, either an MRF or an SFR, is a good investment. As long as you have a long-term plan in mind, you can make it successful.

Why Invest in a Multi-Family Residence? 4 Reasons to Consider....

At first glance, investing in a multi-family residence seems to bring the most cash flow. After all, more units to rent means more money, right? Well, that depends on your long-term goals. Here are 4 reasons consider investing in an MFR.

Property Cost

While it’s true that the overall cost of an MFR will outstrip an SFR every time, the per unit cost will be far less. Additionally, your cost to maintain that unit and even property manage that unit will be far less on a per unit basis. Let’s say you owned 2 SFRs and 1 MFR with 2 units. The MFR enjoys economies of scale for things like repairs and maintenance. If you need to replace the plumbing in the MFR, you can do one big job on both units, whereas with the SFRs, you’ll have two completely different plumbing jobs and that will mean higher cost. In addition, your state may require an onsite employee if the MFR is over a certain number of units.

Financing

The main difference you may not know about property financing is that even with best credit, banks will limit the number of mortgages you can hold—usually to 10. But, if you finance 10 MFRs with 5 units each, that’s 50 units you can call your own. And you can enjoy the cash flow of all those tenants.

Vacancy Expenses

This is a no-brainer. If your SFR remains empty, that means the cost for that unit is going to come right out of your pocket. On the flip side, if you have an MFR that’s only partially rented, you can offset some, if not all of the cost with the rent of the other units that are leased.

 Cash Flow

This has been mentioned before, but it’s worth bringing up separately; typically with MFRs, you’ll generate a positive cash flow quicker, especially with new units. That said, as MFRs age, and they typically don’t age as well, more of that initial cash flow will be eaten up by maintenance and upkeep costs, so be sure to keep that in mind as you consider where to invest your resources.

Why Invest in a Single-Family Residence...5 Things to Consider

So with all of the above reasons, why would someone consider investing in an SFR instead of an MFR. Again it depends on your long-term goal. If you’re looking to invest in a property and see a greater return on your investment in the long-run, SFRs might be the best option.  Here are 5 reasons to consider a SFR.

Location

Typically, an SFR is located in a nicer locale than an MFR. Consider a quiet neighborhood and its typical location compared to where apartments are located. Good property locations can make a unit easier to rent.  After all, location, location, location still matters in real estate.

Tenant Quality

Most property management companies will tell you that tenants in SFRs are usually more conscientious about their property than tenants in an MFR. That’s usually because they’re looking for a home rather than just a place to live. Tenants that choose a SFR can have more long term residential goals.

Tenant Turnover

Phoenix property management team RPMWV Phx says that tenant turnover is the single largest cost for real estate investors. That’s why SFRs are often a better play. Longer renting tenants means you won’t have to constantly advertise, show, and re-lease your property.

Appreciation

The Phoenix area is a booming housing market and for Phoenix property management, there is ample opportunity to get a good return on your investment. SFRs usually go up in value over time and so the opportunity to make money just by owning a property can be significant.

Exit Strategy

Here is where we talk about long term goals. With an SFR, you should have a goal to sell the house and pocket the investment once the property is paid off or go for a 1031 exchange. If you handle it correctly, you can have a big payday at the end of your investment which can fund a retirement or other investments.

So, which is right for you? That depends on your personal goals and situation. Rental property investing requires time and patience, and with a really good partner like RPMWV Phx you can be successful.

RPMWV Phx offers tenant & full service property management throughout the Phoenix metro area.  Call today for information on local specials. 623-748-7800

Are You Renting to A “Hoarder”? 5 Strategies to Handle the Issue

Because hoarding is recognized as a disability, your first reaction should not be to evict the tenant. Whether you handle the situation on your own or with the help of a professional Phoenix property manager, here are the top strategies to employ when dealing with a hoarder:

• Know the difference between a hoarder and a bad housekeeper. While some tenants may not clean up after themselves and have a mess, a hoarder oftentimes has piles of what may appear to you as junk, but is significant in some way to them. People who hoard things will typically leave little walking room in their space with things piled high up the walls. You will probably need to get an official evaluation.
• Make a house call. Whether you do this step on your own or delegate it to your Phoenix property manager, someone needs to visit the home for a first hand report and determine the implications of the habit. Documentation should be made especially if the hoarding is causing direct damage to the property, blocking emergency exits, or interfering with sprinkler systems or ventilation. A non-economic breach may be happening if the tenant is hoarding materials that are hazardous, or are perishable goods that can attract rodents and/or mold, or housing animals in a way that breaks the law or lease agreement. If extra documentation is needed, a city official may need to assess the home to confirm violations.
• Conduct a tenant strategy session. After determining that hoarding is happening at the property, it’s time to have a talk with the tenant. Since this is a delicate situation, you need to be respectful at all times and discuss a strategy for bringing things back up to code. Give the tenant a reasonable time frame to remedy the problem and create a notice in writing to be signed by both parties.
•  Enforce the lease agreement. If, after the allotted amount of time, the problems have not been fixed, eviction can be considered. If the hoarding habits are damaging the property or violating local codes, it is in effect breaking the lease and is grounds for eviction. Your Phoenix property manager will be able to assist you in this if necessary.
• Be proactive in conducting regular inspections. Even if the tenant was able to comply with the changes, protect yourself and your property by ensuring the tenant does not revert to old habits and conduct regular inspections of the property.

RPMWV Phx offers full service property management throughout the metro Phoenix area.  Contact us today for your free 3 months of management fees!!!!  602-281-2884

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