Thinking about Selling Your Phoenix Rental Property??? Think Again!

There seems to be a misnomer about the Phoenix housing market right now.  Yes some houses are selling however monthly sales in June 2014 were down over 12% from the same time period one year ago and down 3% from May 2014.  Additionally, total inventory is up approximately 42% from last year leading to an average days on market of over 80 AND there is currently almost 4 months worth of inventory.  


In contrast the average rental amount increased from May 2014 to June 2014 from $1282 to $1413 and the days on market fell from 35 to 27.  In conclusion, make sure you look at all of the numbers before you decide to list your Phoenix rental property and disturb your tenants.

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Do you have the right Property insurance?

Are you turning your existing home into a residential rental? You have gone down the checklist, completed the repairs needed to get the property rent ready, placed your add and are working on placing a tenant. Chances are you forgot to update your homeowner’s policy which may no longer provide the needed coverage now that your property is a rental. If you fail to update your insurance company that the property is a rental they can sometimes deny coverage if a loss occurs. Updating your policy to Rental insurance provides liability and structural coverage for the home and its occupants. This policy does however, not cover tenants’ personal property in the event damage occurs via fire, water, etc. so tenants should purchase renters insurance to cover their personal belongings.

Be sure your Rental policy covers any vacancy periods. Recently, our clients had a property listed for sale and then opted to list for rent. When an agent visited the home to take updated marketing photos they discovered that the toilet had started to leak unfortunately causing significant damage. Fortunately the owner was able to quickly make the repairs needed to get the property back on the market since his policy did include a vacancy clause. Be sure to find an insurance company that provides the coverage which best meets your needs.

One additional item to consider with picking your policy is replacement cost vs. actual cash value. If you choose “actual cash value” to save money on the policy and you suffer a significant loss due to a flood a policy that dictates the damage would only be repaired based on the “actual cash value” at the time of damage. This means the insurance company could depreciate the value of the damaged items; for example, seven- year-old carpet has a zero dollar value leaving you to pick up the cost of the new flooring. If the total cost to repair your home is $29,000 the insurance company may only pay $15,000 of the “actual cash valve” leaving you the remaining balance of the $14,000 to get the property repaired. When reviewing insurance costs, consider replacement cost coverage—Actual cash value may have save you a few bucks up front, but is it worth it?

As a final reminder, be sure to find an insurance company and policy that provides the coverage which best meets all of your needs.
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The Heat is On - What Should You Expect to Pay for A/C Repairs at Your Phoenix Arizona Rental Property

If you own a property in Arizona, you probably know that it gets hot here and that an A/C repair could be a high maintenance cost and affect your bottom line.  Over the last several years, we have seen tons of common problems with A/C units at the properties we manage.  Below are brief descriptions of 5 common issues and their estimated cost to repair.

1. A/C Run Capacitor has failed - There are three main capacitors on most systems. The motor run capacitor, outside fan motor capacitor and indoor blower motor run capacitor. Capacitor failure is by far the most common A/C repair issue and can be repaired for around $200.00 (final price depends on the part quality).

2. Outdoor Fan/Blower Motor Failure - These two failures are the second most common issues. The blower motor is the motor that blows the air for the indoors.  The outdoor fan motor is commonly referred to as the condenser fan and this fan cools the outdoor coil so the refrigerant in the coil can go from a gas to a liquid.  Each of these repairs can be made for anywhere between $350 - $1500.

3. Leaks - There are unfortunately several places where a leak can occur.  Most frequently the leaks occur in the pipes or coils.  Leak detection is tricky and time consuming.  Sometimes, a stop leak product can be added and the unit can be charged and then work successfully.  This type of repair can cost between $300 - $500. Sometimes, however the indoor coil needs to be replaced which can run anywhere from $1000 - $1500 + depending on how much Freon needs to be removed and then added.

4. Compressor failure - This is a costly repair and can run between $1200 - $2000.  Additionally, with this repair it may be best to replace the outdoor condenser if it is compatible with the indoor unit.

5. Full system replacement - this is usually needed when the system is ravaged from theft or if there is a needed repair that is costly and the unit is old.  Full A/C system replacement includes the outside condenser, indoor handler, all parts, refrigerant and installation and ranges from $4000 and up.

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Effective advertising

As both the weather in Phoenix and the rental market heat up, it is important to list your homes using a few simple guidelines to optimize your advertising. Start with using an effective descriptive title to grab a prospective tenant’s attention such as the title should be both inviting and descriptive listing some of the amenities and upgrades. Some key items that could draw in a prospective tenant are: Appliances, RV Gates/Parking, Granite Counters, New Paint and Carpet etc.

Next, once you’ve grabbed a prospects attention from the advertisement the ultimate goal is to get them to view your home and rent it. Your ad should be honest, convincing, and attractive. Include unique features for your property. Be sure that the first impression of your home has a warm and welcoming feel. This is after all your opportunity to turn the potential interest into a potential tenant.

Finally, include Images in your listing! A listing with no images will be skipped over by nine out ten people looking for a home. The most important factor is that the images accurately present your home. As a renter, there’s nothing more disgruntling than seeing stock images for a property, only to find that they’re not actually reflective of the properties current condition. Be sure to include multiple images that show a fresh clean property, with good exterior pictures to draw in the perspective tenants. Include photos of all rooms especially the Kitchen and Master Bedroom/Bathroom, and Front and Back Yards.

With these few simple steps you could be well on your way to having an effective ad to quickly rent your home! Follow @rpmwvphoenix

The basics of Turnover Repairs

After a tenant has resided at your property for several years, there will be some normal wear and tear maintenance that is needed.  This can range from simple touch up painting and sprucing up to more extreme cases of multiple loads of trash out, full painting of the property and flooring replacement.

If you use our approach to move outs at your Arizona property, you will be able to make accurate and fair assessments of damage and determine whether your tenants should be charged.

At all of our move outs, we evaluate what needs to be done and whether the owner or tenant should cover the repair costs.  We take very detailed steps to assess property condition.

The first thing we do is take an inventory of the properties condition at move out.  This is done by completing a detailed check list referencing all the rooms at the property. Additionally we take on average 150 pictures of the property during this inspection.

With this information, we can compare it with the properties move in condition.  We also consider the length of occupancy of the tenant moving out.  It makes sense that normal wear and tear expectations would be different for a one year tenant than for a five year tenant.  Then, we determine what needs to be done and if the tenant should be held responsible for the damage.

The two most common issues that need to be addressed are the walls and the floors. With the walls, a room at the average rental property should go up to three years with a good coat of semi-gloss pant.  With carpet, a good rule of thumb is that carpet should last 5 years at a rental property.

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Tenant Retention

Although finding a new tenant in this landlord-friendly rental market may not be difficult but it is still more cost effective to retain a good tenant in most situations. Finding a new tenant can be a costly, time consuming process as placing the tenant after the old tenant moves out could involve deep-cleaning and repairing the unit, posting listings in multiple locations, holding showings and other time- and money-consuming events. Add finally the fact is that no tenant means no income!

When it comes to renewing your tenants lease, contact tenants in advance before the lease expires to get a sense of their future plans. If you initiate the conversation early on, you’ll have a better chance of negotiating a renewal from tenants who may be on the fence about whether to leave or stay. Consider offering a small incentive to tenants who choose to renew their leases. Some landlords offer a week or two of free rent off the 1st month of the new term or a $100 off the 1st month of the term. Others offer upgrades such as new carpet, better appliances, or other needed improvements. A minor incentive or special along with good communication with tenants is the first step toward encouraging lease renewals. In addition to responding promptly to maintenance needs. These simple things can be helpful in retain your existing tenant and save you money. Follow @rpmwvphoenix

Copper Thieves - Phoenix Rental Property

Arizona is known as the Copper State.  From what we have seen in the last few years it really could be referred to as the Copper Thief State.  If you own a phoenix rental property you need to be aware of the copper theft problem and how you can take one easy step to prevent it from happening at your property.

As we are sure you realize, your phoenix vacant rental property is a prime target for copper-jackers.  Copper is used at your property in the air conditioning system and often times the plumbing system.  To change out the plumbing system is an expensive undertaking however protecting your A/C is a very reasonable undertaking and costs way less than having to replace the unit.  The best way to protect the unit is to install a cage around the outside for a few hundred dollars versus paying several thousand if the unit has to be replaced and remember if they take the outside unit the air handler may not have a compatible replacement in which case you will be stuck replacing both!

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