Rental Property Ownership Manageable

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With interest rates as low as they are these days, many investors are getting in on the action and buying properties to rent out.  In fact, what used to be a market where renters were paying less rent than homeowners were paying in mortgages has now flipped around.  Property owners that are paying a mortgage can demand rent that is at least a few hundred dollars higher, if not more, yielding a sizable “instant” return on investment.

We talked to a property manager to find out where the rental market stands today and why it makes sense to hire a management company as opposed to tackling it all on your own.

What’s Happening in the Rental Market Right Now?

The most notable difference in the rental market recently as opposed to just a few years ago is that we are finally witnessing an improvement in tenants’ ability to support rental living.  With the economy slowly gaining momentum again, rent values are heading slightly up or at least remaining constant.  Some markets that were exhibiting declines in rent values are now seeing rates that rival those from 2008, a much stronger rental period across the board.  Keeping with the positive trend, areas that showed stable rental statistics between 2008 and present will likely experience a bit of an increase or at least remain flat.

Why Would Some Use a Property Management Company?

At a time when the economy seemingly has a long way to go before a complete recovery, many potential or existing owners of rental properties may be reluctant to spend on having their property managed. However, there are several reasons that it makes sense to hire a management company to handle all aspects of the rental business.

First, the process of screening tenants, handling all background checks, leasing units to those with approved applications and assisting with the move-in process is managed by the company.  Promotion of the location, attracting viable tenants that fit the desired demographic profile plus communication and operations – are all things that fall within the parameters of a property management company. 

Also, document maintenance and preparation that comes in handy when it comes times for accounting and taxes is also managed. Depending on the number of units in the property, the amount of paperwork can be staggering.  With someone handling all of these details, it allows the property owner to focus on other things.

By hiring a company to handle all on-the-ground aspects of running the property, the investor is then given a lot of freedom to travel or spend time in another county, state or country while continuously yielding the benefits of rental income and rental property ownership.

Finally, one of the most tedious aspects of rental properties is the need for 24-hour maintenance.  Late-night emergency calls, routine and other maintenance issues, assistance with grounds keeping plus other upkeep tasks are all managed by an experienced, organized staff that is well-versed in managing these aspects of rental units.

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If owning a rental property sounds good to you, be sure to consult with your Realtor to find the best properties available out there right now.  And of course, by hiring a property management company you can enjoy flexibility and freedom while at the same time be rest assured that your property and tenants are in good hands!

Home Maintenance Does More Than You Think

 

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For some, the phrase “home maintenance” might sound like a great way to spend a weekend, while to others it might seem like a dreaded, even avoided, task. However you view routine home maintenance, the fact of the matter is that this somewhat simple task, if done consistently, can increase your home’s value over time.

Increased Property Value

Benjamin Franklin once said, “An ounce of prevention is worth of a pound of cure.” This is certainly true when it comes to your home. In fact, proactive maintenance is essential to preserving the value of your home. If you ignore this important task, your home could actually lose 10% of its value over time.

There are a number of benefits you can expect from just making sure you home is kept in decent shape with occasional maintenance. For one, your curb appeal is improved by just simple acts of routine upkeep from time to time. Ultimately, your home reflects your attention to detail, or lack thereof.

Neglecting a home can greatly bring down the value of any property. Things like a house with chipped or fading paint, sagging gutters, or worn carpeting leads to a problem when it is time to sell. Not only does the work accumulate over time, so do the costs. A few simple fixes every year can add up to an increased home value over time.

Cost vs. Value

It’s easy to look at the cost of regular home repairs as a burden that might be able to be avoided. However, it is important to look at the value that you are placing in your home by performing the regular costs of upholding a well-built and maintained home.

A study out of the University of Connecticut and Syracuse University suggests that home maintenance can actually increase a home’s value by about 1% each year. Instead of viewing the routine tasks around a home as “chores,” these tasks should be looked at as a money maker. When you sell your home, you will reap their rewards.

Dr. John P. Harding, Professor of Finance and Real Estate at the University of Connecticut’s School of Business and an author of the study said, “It’s like going to the gym. You have to put in the effort to see the results. People and houses are somewhat similar – the older they are, the more work is needed.”

Some years what needs to be down may be more expensive than others, but it is the overall strategy to keep a “fit” home that should be the ultimate goal.

Proactive Maintenance Strategies

Budgeting for home repairs each year will prevent them from seeming like a burden each year. Knowing there will be a certain amount of money going to home repairs and upkeep makes them a regular part of your annual routine. They won’t be a source of financial devastation they can be for many families.

Other things to keep in mind to take the burden out of home maintenance include:

Play offense, not defense. Being proactive is vital in preventing a small problem becoming a mountain of problems. By having a regular inspections and creating a maintenance schedule, you are in control, for the most part, of home expenses, instead of the other way around.

Focus on a room a year. If you home is generally in good order, you may be at a loss of where to start. By targeting a room each year, you can inspect each and every item in that particular room and know where improvements can be made. This prevents an overwhelmed feeling with you looking at your entire house, scratching you head of where to start.

Keep track. Maintain a notebook or computer file to keep track of all of the maintenance and upgrades you perform is important. Also, either keep a physical file of paper receipts or a file on your computer where can put your scanned receipts. This helps you keep track of what you have done and also helps you prove to a potential buyer exactly what you have done to the home. It also shows you are a conscientious homeowner who has paid attention to the details of your home.

Home maintenance is an important task that should not be overlooked. Not only does it maintain a nice home while you live there, it also helps increase your home’s value when you are ready to sell.

For more on home maintenance visit Bob Vila's home maintenance checklist here!

Central Oregon Market Is On Its Way Up

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Multiple factors are pointing to an upward trend for the Central Oregon residential real estate market. Both the number of units sold and the average price per unit are increasing. Over the last five to eight months this increase has remained steady. Compared to this time last year the prices in Bend are up almost 11 % and sales are up 16.5% (per Oregon MLS). In August 2012 the median price for residential properties in Bend was $261,000 which is a 29.9% increase from prices in September 2010. When comparing the average price per square foot across all of Central Oregon (Deschutes, Jefferson, and Crook counties) there was an increase. From September 2010 to August 2012 there was a 14.8% increase.

Housing is currently very affordable due to historic lows. While credit requirements have increased there is still plenty of money to loan, buyers are simply required to provide more documentation of credit worthiness. Further signs that demonstrate recovery are the number of traditional sales. There are less foreclosures and more traditional sales in which there is a willing seller and a willing buyer.

Now is an opportune time for sellers as inventory is low. In Central Oregon there was a 27.6% decline in residential units that were listed for sale from September 2010 to August 2012. Bend alone has seen a 33% drop in that same time period. This decrease has resulted in competition amongst buyers. It is not unusual to see a home with four or five offers, nor is it unusual to see a home sell within a couple days of going on the market.

The tight competition has given buyers with cash the upper hand. Approximately a quarter of home sales in Bend were cash sales over the past nine months. When there are multiple offers on a property cash often wins. This is due to the fact that in order for lenders to approve a loan they require an appraisal that ensures the financing is an accurate reflection of the market value of the property. If a buyer has cash an appraisal is not required which can expedite the process.

Combining all of these factors seems to indicate that the Central Oregon real estate market is on a steady uphill path.

   

HOMESELLERS:

What is YOUR home worth?

Find out what your home is worth and what sold on your street right now.

HOMEBUYERS:

Find out what sold in the neighborhoods you are interested buying in.

Market snapshot guarantees the most up-to-the-minute neighborhood property information, detailing MLS active, sold inventory, and days on the market counts. 

www.WebMarketSnapShot.com

Ruben Garmyn & Jim Birtola
Team Birtola - Garmyn, Oregon's #1 Real Estate TeamPrudential High Desert Realty 
Bend, OR 
Office:  541-312-9449
clientservice@prudentialhighdesertrealty.com
http://www.BendOregonRealEstate.com