As we head into the Spring/Summer leasing season in Austin, and I just mailed my first batch of renewal letters, I’m already fielding inquiries from tenants who have lease-end dates that don’t coincide with their future plans. The inevitable question is “can we have a move-out date of x instead of y?
For one tenant, planning to get married, extending the lease from a March 31 end date to a May 31 end date (two months) is not a problem. The home is owned by a long-term investor, and the new May lease end date benefits both the owner and the tenant. This is a win/win. It places the home dead center of the summer leasing season cycle.
In these win/win scenarios, I have flexibility because the adjustment benefits my client, the owner. I work for the owner and must only make decisions that are in the owner/client’s best interest. Thus, if that same tenant, in that same house, asked for the same 2 month extension for a lease that ended July 31st instead of March 31st, the answer would be “no”. Timing is everything.
As the listing agent for a lot of rental homes in Austin (for over 20 years), I’ve been dealing lately with a lot of really angry, frustrated renters and agents.
The reason for the upset is primarily the renter losing a home to other (multiple) applicants who applied quicker and/or had their act more together. Then thinking it was unfair that they lost out.
I’ve dealt with some applicants who have lost out on 3 or 4 homes in a row and who have to be out of their current house in 1 week, and have nowhere to go. Understandably, in this tight rental market, that sucks. Big time.
But that’s the “landlord’s” rental market we have in Austin at present, so you better become more prepared and more competitive if you want to avoid this angst. This is no market for slug footed, unprepared renters who don’t take the rental home search process seriously. You have to bring your “A Game”, or you may experience great frustration.
This article is written to help those searching for a home to rent in Austin TX to avoid that unfortunate circumstance where you lose out on a home to those better prepared. It’s a step by step guide to help you become the most awesome rental applicant out there. So read this and you’ll be a step ahead of others. You will become the winner, not the loser, in this competitive Austin rental market, and hopefully find the house you want.
Determine Your Specific Move Date Window
This sounds like a no brainer, but it’s hard to believe how many renter prospects I talk to who can’t answer the simple questions “when do you need to move”. You need to know, with certainty, the soonest and latest dates you can start a new lease. The larger window of time you can create for yourself, the better.
This year I leased 36 homes through the Austin MLS, plus some that never made it into the MLS. So probably 40+ leases this year. I would have leased another one and moved the people in this Friday the 30th, but they refused to sign the lease, so it didn’t happen.
A lease starts with an Application for Rental. Once a tenant is approved, we send the lease agreement via DocuSign, which allows the tenant to read and sign it securely online. Once I’ve signed off on behalf of my owner client, a copy of the completed lease agreement is automatically delivered via pdf attachment to all tenants who signed.
This paperless system is pretty cool, but it doesn’t provide for the face to face sit down that we had in the old days when we signed leases. Instead, tenants can email or call me with questions about the lease before signing.
The lease we use is the standard Texas Association of Realtors lease agreement. When I started leasing homes in Austin in 1990, the lease we used was 3 pages long. Today’s TAR Lease Agreement is 14 pages. Some tenants sign the lease without reading it carefully, judging by the short elapsed time between me sending and a tenant signing. Other tenants read the entire lease carefully, which is what I want every tenant to do. A lease agreement is a legally binding contract and a tenant should understand the obligations being entered into. Some tenants take issue with terms and conditions of the lease, and want me to make changes, which is what happened on the latest deal. But I don’t alter our leases for anyone, for any reason. Here’s why.
Most homes in Austin have fenced back yards. Most fences are built on the property line. The standard wood fence lasts about 8-15 years before it needs replacing (less if it’s a cheap starter home fence).
Usually, when replacement is needed, reasonable neighbors work it out and get it done, sharing materials and labor in a way agreeable to both, depending on who gets the “good” side and who wants the fence the most. Ideally, this is just an old fashioned handshake agreement and all goes well, and both neighbors are happy with the result.
But often things don’t go well. It only takes one unreasonable neighbor to make things difficult. Having managed and owned rentals in Austin for 20+ years, I’ve had many more “fence encounters” the past three months alone than most Austinites will encounter in 2 decades. What have I learned? … there are some very weird Austin kooks out there when it comes to dealing with fence issues.
Scenario #1 – Petulant ManBoy Brat and his Parents, Fiancee and Great Dane
I own a duplex in South Austin. I use to own the duplex next door as well. I purchased both in 1999 and sold one in 2003, keeping the other. There had never been a fence between the two duplexes, though there had always been fences along the surrounding lot lines in back and the outer sides. I’ve never rented to tenants with pets at the duplex, so I never needed or wanted a fence for each individual yard.
At some point, the new owner next door, without my knowledge or permission, installed a chain-link fence connecting the front corners of the two duplexes, thus creating a large combined “shared” fenced yard in back encompassing the back yard of my Unit B and their Unit A. Apparently, the tenant (daughter of the owner) asked my tenant at the time if it would be ok for them to have a dog. My tenant, as I’m told by the neighbor, said it would be ok. I never knew of this. Besides, the tenant wasn’t the proper person to ask as they don’t own the property.
Recently my new tenant reported to me ongoing problems with the neighbor, now the owner’s son, and dogs roaming the back yard, crapping in it, and making the yard a health hazard for her small kids because of all the dung.
At this point, and perhaps I expect too much of people, one would think:
A) Good pet owners don’t let their dogs run loose and crap in their neighbor’s yard.
B) it should take no more than a simple request to keep someone else’s dogs off my property.
That’s not how it went.
I’ve received a couple of calls already from agents trying to help folks displaced by the recent fires in and around Austin, including the Steiner Ranch fire and the fires in Bastrop. I currently have one vacant home ready for move-in, and would be more than happy to place new tenants in it immediately. But thus far, in both cases, the agents representing the tenants wanted me to cut corners and make accomodations that would violate my fiduciary responsibility to my client. This presents a tough quandry.
Should fire victims be granted a more lenient and expedited approval process than non-victims?
Yes and no. Property Managers who decide to waive requirements such as credit check and criminal background search and who otherwise might think it “good hearted” to skip certain parts of the application and verification process could be exposing themselves and their owners to greater liability in the event the tenant doesn’t pan out. More on that below.
On the other hand, I see no reason why we, as professionaly property managers, can’t expedite the processing and make reasonable, defensible accomodations should we receive an application from a displaced fire victim. But one agent I just spoke with basically wanted me to say whether or not I’d approve the application before it’s even brought in. I can’t do that. All I can say is that I’ll try to make it work, but it’s still going to have to be brought in and processed like any other application.
But here are some examples of what I think would be reasonable accomodation.
No Picture ID
We require a copy of a picture ID with every application. What if the applicant’s purse, wallet and all identification documentation got burned up in the house?
I remember the day clearly, Wed April 14th, 1999. I received a call from one of my property owner clients. He was working on his income taxes and he was angry, not at the IRS but at me! Even though he received a monthly statement showing all income and expenses on his property, adding it all up at tax time caused him to question the $1,200 in management fees for that year.
“Why am I paying you $100/mo to sit on your butt and do nothing?”, he wanted to know. There had only been two service call repair events that year at his home. Both were minor and less than $100 each. The largest expense for the year was management fees, and he wanted to know what I had done to earn that $1,200.
I responded by asking if his house (the one he lived in, in Nevada) had burned down that year? He said, “no” and “what’s that got to do with anything”. I asked if he’d called his insurance agent and yelled at him because, after all, that insurance agent had been paid all year for doing nothing, and in fact had done even less work than than me, the property manager. I went on to explain that property managers are paid not only for what we do, but for what we stand ready to do 24/7, 365 days a year. We are compensated for the peace of mind we provide by being on call so the owner doesn’t have to. From an owner’s perspective, we manage only that one house, but from a property manager’s perspective, we earn a living managing a portfolio of rental homes.
In order to understand why it’s a good thing if your property manager didn’t have to work hard on your property for an entire year, you have to understand the economics of owning and operating a property management company in Austin TX.