There are a lot of good reasons for an owner to hire a property manager, and many of them are well documented. Tenant procuring. Tenant screening. Lease enforcement. Reporting. Maintenance. The list goes on.
But one advantage of having a professional manage a rental is that the property manager knows the rental market. Why is that important? Because when market rents go up sharply (like they are doing right now), a property manager knows how and when to raise rents.
If an owner of one rental unit advertises his/her property for rent on, say Craigslist, then there is a better-than-even chance that the property will be under-valued. The owner won’t be aware of just how strong the market is. A property that could fetch $1,500 goes out on the market for $1,200 or $1,300. That difference pays for the manager’s fee AND adds profit. The owner sees a bump in his/her cash flow AND gets free property management! Not a bad deal.
We are currently raising rents significantly in the Seattle market. Demand is far outstripping supply.
The situation works in reverse when rents drop. A property manager (with the owner’s approval) can offer lower rent to tenants in order to keep them from moving and save on turnover costs.
Dupre’ and Scott just released their 1-19 unit Rents & Vacancies report. This report is always highly anticipated as Patty Dupre’ and Mike Scott do the best job analyzing and forecasting the rental market in Seattle and sub-markets. They also publish a similar report for medium and large apartment communities. This report focuses on single-family, multi-plex, and small apartment buildings.
Findings show rents are up between 4.3 – 6.9% over last year (versus apartment rents which rose 8.8%). The vacancy rate across all unit types is a very low 2.6%. 75% of respondents to the survey reported they plan to raise rents over the course of the next year on average 3%.
Interestingly, less than 40% of renters in multi-plexes and 5-19 unit apartments pay for their own water & sewer. The report goes on to break down vacancy rate, average rent, and number of units surveyed by each sub-market. For example, the average rent for a 3-bedroom house in Renton among 174 units was $1,595.
We all have those ‘moments’ — those moments when the kitchen drain or the toilet don’t drain or flush. Usually such moments are meant with angst and worry. We want the plumbing fixed, and we want it fixed NOW. So we go running to the phone book or internet looking for a plumber. We’ve all been there. It’s likely we’ll all be there again.
When it happens to a property we manage, though, our service manager has been given specific instructions to stay away from companies with the word ‘rooter’ in them. I am not going to name names, but we have all seen them. Why? We have a few reasons. None of them are scientific or proven — all of them are based on experience or superstition.
We have found that companies with the name of ‘rooter’ in them tend to charge more than other companies. They usually have large advertising budgets which need to be funded through higher labor and bid rates. We would much rather call ‘ABC Plumbing’, or better yet “Joe’s Plumbing’.
Call us soft, or call us a small business. But we like the idea of entrepreneurship — of some small-time plumber struggling to make it in business. I guess we like underdogs. We also figure the small-time plumber doesn’t have the advertising budget or the bureaucratic overhead of a large company.
It doesn’t take rocket science to figure out how to snake a drain! Joe probably has the thing figured out just as well as the rooter dude. And Joe just might add some personal service on top of it!. One thing we know for sure from experience: Joe’s bill will be less than the other guys’ bill.
We continue to work hard to save our owner’s money whenever and wherever we can. It is too easy and too convenient to not care and pretend you have a blank check. We don’t like that at all. So the next plumbing clog, we’re tipping our hat to the little guy!
As most people know, the great state of Washington decided last fall that it was a good idea to allow its citizenry to not only possess marijuana, but also grow it. While the law established control mechanisms, the legal action seems to have ‘softened’ the position of some law enforcement officials as well as the general population.
As a result, there is a growing (no pun intended) tolerance and acceptance towards indoor cultivation of marijuana. This social shift could place increasing burden on landlords and property managers coping from the residual effects of an indoor pot-growing operation.
To wit, we just toured a Federal Way, WA home where the previous tenant had an illegal operation going on. He was growing it in both the garage and the two bedrooms. The amount of mold present in the house was as great as we have ever seen!
Mold is already a HUGE problem in the Pacific Northwest. For residential occupants to add large amounts of moisture and heat to their homes for their pot-growing operation threatens to completely destroy entire homes.
For this Federal Way home, entire walls will need to be dismantled. The kitchen and bathroom are a total loss. The garage has so much mold and moisture that some of the framing was compromised. The extent of damage from the mold and moisture is unlike anything we have ever seen before. Sure, tenants forget to use the bathroom fan and some mold starts to grow on the ceiling. That is nothing compared to this!
Landlords – inspect your properties regularly. Have a ‘no cultivation’ clause in your lease. Enforce it!
Peter Nelson is a clean and sober President of Full Service Property Management. Full Service PM offers landlords of homes, condos, apartments, and HOAs in the greater Seattle area a full suite of management, maintenance and construction services. They may be found at www.fullservicepm.com.