May 2015 Words From Our Broker | Brokers Corner with Tanya Chappell

Spring is in full bloom and summer is quickly nipping at her heels here in beautiful Gainesville and Alachua Florida! We’ve had perfect weather with some coolness in the air in the mornings and evenings and even some afternoons. We had a few days hit the 90 degree mark – a reminder of what’s to come. But I’d take even the hot days here any day of the week. It’s a great place to live with so many options on things to do with the river, woods, beach, springs and this great weather to do it in.

This time of year also means a lot of movement in the real estate market. Most everyone is looking at whether they should sell or should they keep renting and for how much?? Are tenants renewing, are they leaving, do we raise the rent? All very good things to be considering and I strongly advise you get a professional to evaluate your property’s market value. (A lot of websites that claim to be able to quote value are often off by 20%).

Emotions aside, the answer should be based purely on financial reasons and if you have the energy and stamina it takes to own rental property.  It’s not for everyone. Real estate is a great investment but as with all things, it takes work. Real estate is more work than perhaps stocks and bonds where someone’s making those decisions based on your criteria and you have little interaction.

There are highs and lows. The highs are that you get fabulous tenants that pay rent on time all the time and handle their own little maintenance needs. The lows are that you don’t…… Checking credit, criminal, and rental history backgrounds and proof of employment is a must but can’t protect you against life’s events that effect their behavior. It could even be that there credit is fine but the last landlord didn’t tell you about certain annoyances that made him happy to see them go.

You can have tenants that are picky and need help when a bifold closet door comes off tract and others that give your landscaping a beautiful over haul. You have to be able to stomach the ups and downs, the disappointments and the financial set backs. It can be costly to replace carpet because of a bad dog or install that new AC (so you don’t loose your current good tenants because they’ve had enough of the old one breaking down). This is one of the reasons owning rental property on purpose is usually a long-term investment and can be stressful.

If it’s not your intention to keep it long term that’s ok but those terms still apply to you even if youmay not be in it long enough to feel the full affect of time and are unfortunate to have felt more downs than ups during your landlording 🙁

A lot of people get into owning rental property because they aren’t able to sell their property at an acceptable net gain. Also some aren’t convinced they won’t be back to this beautiful town someday. I feel renting the home is still a great option for these situations. It beats paying two mortgages and usually beats the loss you take in selling too soon. But again, there are annoyances and risks. I feel if you can detach yourself from feeling annoyed or stressed by the ups and downs of your rental property and realize it’s a great way to hibernate the property until conditions improve, It’s a great solution.

A good property manager runs your first line of defense on all of those risks and annoyances and relays information and advice to you. Everything is touched with their level of expertise based on their knowledge, experience, common sense, and ability to deal with all parties smoothly and effectively.  One of the best things a property manger can do for you is to minimize your risks and loss. Make sure the person who’s actually managing the property (not just the company) has the experience it takes to quickly react to a bad situation and work fast to turn it quickly like when a tenant skips out on a lease a few months early after being told they owe for carpet replacement. Getting that property turned around quickly and back on the market and notifying all parties of the expense and money needed to meet their obligations is key. It’s not pleasant for anyone but it is life sometimes and the quicker your response, the less money lost.

I didn’t intend this month’s Broker corner to be an advertisement for our services, but this is a very good example of what’s happening in our market right now.  We have helped numerous owners out of a bad situation by overseeing turning the property over with our suggested improvements and finding better quality tenants quickly. Some improvements in certain areas that I’ve stressed before can make a huge difference in the look and feel of the property.  This translates into a better caliber tenant. Remember it’s the highs that pull us through so we want to shoot for that quality tenant.

Timing is very important when it comes to real estate so don’t wait too long to make your move whether you sell or rent. I find I procrastinate on the things I’m less experienced in like my IRA lol….. If this isn’t your area of expertise, do yourself a favor and find the people who do know, or it may end up costing you way more than you thought you’d save by procrastinating and eventually doing it yourself. Let us know if we can help and enjoy the rest of your spring. Summer is coming and it feels like a hot one!

Read similar blog posts from “Words From Our Broker”:

Words From our Broker – January 2015

Words From our Broker – November 2014