Back in 2005 when Sylvia and I started CrosslandTeam.com and our Austin Real Estate Blog, we were in the process of taking a break from Property Management, having just sold our Property Management company the year before and taken a year off from real estate altogether. When we started back, we only brokered sales, mainly to investors at first, but eventually to mostly regular home buyers and sellers, which now make up the majority of our buyers and sellers.
Now, 5+ years later, we’ve built up a small portfolio of fee managed homes again, at present almost 50 managed homes. Sales remains our main focus, and we’re still very busy, averaging 3 or 4 closings most months, even in the down market. But the property management side of the business has slowly grown as well.
Why is that a problem?
The problem in trying to run two real estate brokerage specialties under one website is that each dilutes the other. It’s frustrating to me, when talking to a prospect, to hear “oh, you manage homes too?”, or, ironically, the opposite, “oh, you do sales also?”. Both have perused the same website here at CrosslandTeam.com but, depending on which pages they landed on and read, or which blog articles, come away with differing messages about what we do. Or, as one prospect told me incorrectly once, “you guys seem like you’re more of a management company than a sales company”. What? NOT TRUE, darn it. That’s the problem.
Additionally, in trying to remain findable by those who need to hire an Austin Realtor and/or Property Manager, it’s hard to focus the website keyword optimization efforts, as well as the site content, on two different types of businesses, no matter how closely related. This affects the choices for title tags and meta descriptions used on site pages and in blog articles.
So I’m announcing today the launch of our new sister site dedicated specifically to Property Management and Landlord-Tenant issues, CrosslandProperties.com.
Read more …
Yesterday, September 1st, I walked through a rental property in South Austin that had been vacated the day before. I had my Flip Mino Video Camera with me so I decided to make a short video of the walk-through and share a few things about what I look for when walking a vacant rental property after a tenant move out.
The result is one of the worst videos I’ve ever seen. I have no idea what I’m doing, or how to make a good video. I move too fast, muddle my words, don’t hold the camera steady, etc. I look like a dork and sound stupid. My Inner Critic is telling me to forget it, don’t post it. It’s terrible. Learn some video editing first. But if I wait until I know what I’m doing, it will never happen.
I have the camera mainly for vacations and recording family stuff, but I’ve thought for a while now that it might be fun to start making some video blogs, so this is what I’m starting with, for better or worse.
Here goes …
If you wonder what it’s like being a landlord, you’ll find it interesting (if you just watched the video) that the tenant emailed me the same day, after not following the instructions provided for returning keys, and stated in the email, “I spent a lot of time cleaning the house. I hope it was up to your standards.”
This is why I don’t allow tenants to walk through properties with me, or meet them for move-out walk-throughs. There is too big of a disconnect between what I observe and what a tenant deems to be acceptable. For more on that, read my past article “Why I Never Do Move-out Walk-throughs with Departing Tenants”
Back to video making and why I decided to go ahead with my first rough draft right out of the gate.
Read more …
As a green, freshly minted apartment landlord with zero property management experience in 1990, I one day received an abrupt and stark introduction to the world of security deposit disputes. This occurred roughly three days after mailing my first deposit accounting to a departed tenant, from which damage deductions had been assessed.
The tenant response was a phone call of raw anger, yelling, threats, accusations of dishonesty, and some colorful language. I responded to this verbal assault with relative calm, given that I was caught completely off guard and at first, literally wondering if the tenant was joking, so ridiculous were the protestations.
I muttered short statements of fact in between the barrages of verbal hostility.
“We found fish tank rocks in the disposal and it had to be replaced”.
“Your dog left pee stains on the carpet and those had to be removed”.
“Someone punched two holes in the back bedroom door and the door had to be replaced”.
These, in my mind, were indisputable facts, not matters of subjective pettiness. I really couldn’t even believe the conversation was happening. Little did I know about the interesting psychology and visceral anger that deposit deductions evoke in some tenants.
The closest I can get to understanding is the jolt of anger I feel when I get nailed with a $2 late fee at Blockbuster. It’s rather curious. I know I was late. It was my fault. I did it. I remember dropping the movie in the slot at 10PM the week before, knowing I would get a late fee.
Yet, while standing there in front of the cashier, paying for a new movie and being told I owe $2 late fee for the previous movie, I feel an almost uncontrolable urge to argue about it, to demand to know “which movie” it was (even though I already know). When was it due. And to say how stupid the fees are and how it was better the old way when there were no late fees.
Lucky for me, the person in line ahead of me already made a complete ass of themselves doing all of the aforementioned, and holding up the line in the process, so I control myself and make no mention of it other than to say “ok” when the cashier asks if I want to pay the late fee now.
But it nevertheless is a curious feeling that defies logic. The notion of feeling victimized and abused for being held accountable for not keeping an agreement for which I had full and complete control, but nonetheless did not perform as required.
So, if a perfectly sane person such as myself, who believes 100% in personal responsibility and accountability, and who tries to live his life in accordance with those principles, can feel an emotional jolt of anger over a $2 late fee at Blockbuster, I can only guess that a tenant opening up a deposit refund statement might possibly feel something as strong or stronger upon seeing hundreds of dollars in deposit deductions, no matter how justified and no matter how much they may have been expecting the outcome.
So, my point in opening up with all of this is simply that, as landlords, it should come as no surprise when we receive angry protest from a former tenant who wants to argue over deductions that were made from the security deposit. I view it almost as a sort of temporarily insanity that comes over the tenant, and I don’t take it personally.
And, as a landlord, knowing that this situation is more likely than not, no matter how careful and fair you thought you were being in assessing damage deductions, you should have a clear and pre-established set of steps to follow when dealing with such disputes.
Step 1 – Set Expectations in Writing
I won’t cover the entire topic here, but in a previous blog article I wrote entitled “Why I Never Do Move-out Walk-throughs with Departing Tenants“, you’ll find a move-out instructions letter that I send to all departing tenants explaining what must happen if they wish to avoid deposit deductions. Feel free to borrow from mine or make your own, but have something that you send to tenants upon receiving a notice to vacate. This helps the tenant understand what needs to happen, and it serves as the first in several simple steps that protect you legally and make it more difficult for a tenant to paint you as an unreasonable landlord out to rip people off.
I recently had a tenant express frustration over the fact that I wouldn’t come meet him to conduct a final move-out walk-through at the rental property. I’ve been moving tenants in and out of Austin rental homes since 1990, and I’ve learned a few lessons in doing so. One is that there is no upside for a landlord in conducting a final walk-through with a tenant. Only bad outcomes can occur.
Namely, the tenant is going to want you to affirm or state that everything looks “ok” and that they’ll get all of their deposit back. Nowhere in Texas Property Code is this sort of “instant accounting” required. You’d be a fool to agree to say something like that, because a lot of possible damage is not discernible on a cursory walk-through.
Just a few examples off the top of my head are fleas that haven’t hatched yet, carpet stains that were scrubbed invisible that morning but will re-appear tomorrow, the dirty A/C filter your HVAC guy could find sucked up into air intake cavity (as I encountered last month), pet odors that are masked at walk-through but which return in a couple of days, the cat hair blanketing the refrigerator coil, and a long list of other possibilities.
Therefore, even if I wanted to, even if the place appeared to be in great condition with no visible problems, there is nothing I could or would say to a tenant with regard to whether the home “passes” inspection or not. The reason the tenant wants the walk-through – to receive assurances – simply can’t and won’t be provided.
And then, as I learned in the old days when I thought it made sense to do a move-out walk through, an argument ensues. So I just don’t go there anymore.
To better and more fully see my position, there are a few things one must understand.
Read more …
My long time appliance repairman John at Austin Appliance informed me today that he’s only coming into Austin once a week now, and will eventually stop serving Austin altogether. He lives in Spicewood and mainly works Marble Falls now.
Darn it. My veteran vendor team people keep getting older and retiring on me. John’s also working now as a fishing guide on Lake LBJ. Sounds better than fixing dishwashers and refrigerators I must admit. I’ve use him since the early 1990s, and I hate to lose a trusted service call vendor.
So today I put my feelers out for a new appliance company or person. I’ve had many good recommendations already but the problem I keep running into is the pricing structure that seems to be more prevalent now than it was 10+ years ago. It seems most service companies nowadays want to bill a service charge just for showing up, usually $50 to $92, then, once there, they want to quote a price based on the “book rate” of the repair, and then do the job only after the price is approved.
That doesn’t cut it for me. I don’t use “book rate” vendors because book rate pricing is a poor value for my property management owners. It’s inefficient and expensive, two things I despise. Maybe for Joe or Jane Homeowner who only need a service call once every few years, it’s not such a bad deal. You know the cost before the work is started and exactly what will be done. But I can’t operate a property management business under that pricing scheme. Instead, I need my guy to show up, fix the problem, and bill me a fair rate for time plus materials. I’m not worried about getting ripped off because, after nearly 20 years of managing and fixing rentals, I know what it should cost to fix things.
Here’s why my way is better and why I don’t use book rate people.
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Average rents in Austin have taken a slight dip for the first quarter of 2009. The number of rented homes is up 11% over the same three months a year ago, no doubt due to the fact that many sellers are opting to rent instead of dropping prices below their bottom dollar. This creates additional rental inventory, which gives renters more homes to choose from, and prevents prices from increasing.
Personally, I’ve leased 4 or 5 homes in the past 2 months, and the market is really spotty. One house I leased central received 4 applications in 2 days. Another one I leased north central leased immediately for $1,650 a year ago, but took about 45 days to lease for $1,595 this year. Another one in Western Oaks leased for $1,550 (same amount as last year) in about a week. A different home in Western Oaks, also listed at $1,550, and newer and in better condition, has not received any showings in more than a week. It’s not an easy market to predict right now, much like the sales market.
The stats chart is below, followed by the 1999-2009 Austin leasing history graph.
|Austin Real Estate Rental Market Update Q1 2009 Jan-Mar|
|Houses only (condos, duplexes, etc. not included) compiled from Austin MLS data|
|Oct-Dec 2008||Jan-Mar 2009||Jan-Mar 2008||Yr % Change|
|Avg $ SQFT||$0.72||$0.71||$0.72||-2.01%|
|Not Rented %||30.03%||25.12%||23.02%||9.12%|
As noted in the chart above, average rents in Austin (for single family homes) are $1,364/mo., down 1.45% from $1,384/mo. the same quarter 2008. Median price has fallen from $1,225 a year ago to $1,200 this year, meaning half of all homes in Austin rented for $1200 or less.
Below is a graphical representation of the Austin rental market from 1999 through March 2009.