Interview with the Rental Late Fee Police Commissioner
“The lease is the lease. If you don’t like it, don’t sign it.”
(RLFP Commissioner Hank Smith)
Moderator: I have the privilege of being here today with Hank Smith, the longtime rental late fee police commissioner. He and his team at the Rental Late Fee Police (RLFP) are in charge of enforcing late fees on monthly rental payments. Most standard leases dictate that rent is due on the first of each month and is considered late if not received by the fifth of the month; the late fee amount is usually 5% of the total rent due. The RLFP makes sure that this late fee is enforced. As you can imagine, his job doesn’t help him win any popularity contests…
So… Mr. Smith, or Hank…
Hank: Please refer to me as Commissioner… it’s a title I’ve certainly earned.
Moderator: Of course, Commissioner. My apologies…
Hank: I’m never short on getting apologies, especially on the 6th of each month!
Moderator: OK… we’ll get right to it then. Some people have called you and your policies “heartless” and “ruthless”. How do you respond to that?
Hank: I have a heart and I don’t know any Ruth’s. So, “no” and “yes” is how I’d respond to that.
Moderator: I think that they mean you are unfair and aren’t very nice about it.
Hank: Well, I’d certainly take issue with that! The boys & gals at the RLFP are about as fair as it gets. If your rent is paid by the 1st, you’ll never hear a peep from us. Even if you wait until the 5th, there will be nary a word. Now when the 6th rolls around, that’s why we’re employed, my friend. We are called to spring into action. Nobody likes giving a quarter to the librarian either.
Moderator: I think part of the discontentment stems from the lack of grace on being 1 or 2 days past due and still incurring the whole late fee.
Hank: That’s the most ridiculous thing I’ve ever heard! 1 or 2 days late? 1 or 2 days late is actually 6 or 7 days late! How many days do you want? 10? 15? How about 30 days? Or how about just paying whenever you feel like it? People like you are what is wrong with this country!
Moderator: Easy, Commissioner… As I’m sure you can empathize, don’t shoot the messenger.
Hank: Fair enough. Sorry about that… I get a little fired up sometimes. But, I mean, we’re already giving you a grace period of 5 days past the real due date of the 1st of the month; that’s 120 hours, 7,200 minutes, 432,000 seconds… No matter how you cut it, that’s a lot of grace! You want more grace than that, then pray to Jesus- he’ll give you all you want! But the RLFP will only give you 5 days- sorry.
Moderator: But sometimes the check gets lost in the mail and there are holidays to think of…
Hank: If you’re looking for me to defend the postal system, you’ll be waiting a long time. But why even risk mailing a check? There are so many other instant payment options out there- BillPay, direct debit, direct deposit, on-line payment, etc. I mean, if you’re hungry, you don’t need to wait for a chicken to show up on your front yard, just drive to Chick-Fil-A!
Moderator: Interesting analogy… But why do property managers and landlords want to get rich off of late fees?
Hank: Get rich? Is that a joke? Check out what kind of cars your property managers and the RLFP are driving versus what our other real estate brethren are driving (with no late fees, mind you). You need a whole lotta late fees to add up to upgrade from a Corolla to a Mercedes.
Moderator: Then why charge late fees at all?
Hank: A. I don’t charge them- I’m just enforcing the lease. B. If there is no penalty for being late, then who knows when the cows will ever come home? I mean, landlords need to make their mortgage payments at some point. Very few of them are just stuffing the rent dollars into their pockets.
Moderator: Commissioner, thank you for your time. Any last words for our audience?
Hank: Great! I’m outta here… I can’t believe they make me do this PR stuff- what a load of hogwash…
Moderator (interrupting): You’re still on the air, Hank… Any last words?
Hank: Oh… Pay your rent on time & Happy Landlording!
Learn MoreChristmastime in Charlotte Real Estate: You May Be Sorta Rich
“Holy Moley! I’m sorta rich!”
(Long-time Charlotte real estate investor)
I was surfing the Charlotte MLS doing some “research” this morning (aka wasting time looking at home values in neighborhoods I’ve worked in) and was truly amazed. I can’t believe how much Charlotte properties have shot up in value in terms of both rental and sale prices!
Here is some background on where I’m coming from. I started working in Charlotte real estate in 2003 and saw a hot market until about midway through 2007 when the mortgage market (and our economy) was decimated. This caused home and rental prices to drop until there was a market resurgence 5 years later in 2013. Rental and sales prices have been on a consistent upwards trajectory since then.
However, even before 2008, relatively inexpensive Charlotte investment opportunities were abundant. What did you want? “Starter homes” from $80-$120K were plentiful, but so were tons of homes in less desirable areas that could be had for $10K – $60K. And then in a bad market from 2008-2012, really great deals were there for the taking if you had money and really good credit.
When I look at the market now in 2017, all of the Starter homes have climbed to $150K+ and they all rent north of $1K. The $10K – $60K home market is gone. When I searched for those houses in the MLS today, there were 6 available (the lowest being around $40K and all being sold “as-is”- likely meaning they need a lot of rehab). There are only two (2!) rental homes under $900 available in Charlotte as of this writing. So putting two and two together, these formerly valued homes of $10-$60K are probably now renting for over $900/month. Hmmm…
For full disclosure, I am only using data from the Charlotte Multiple Listing Service (CMLS); I’m sure there are many houses that are for rent that do not list them on CMLS. But the 7,000+ Realtors in Charlotte do list their properties on it, so it is a good (and regularly cited) source of information. And the numbers I listed are for the City of Charlotte only and not the surrounding towns which would add some additional lower cost housing supply.
But still…
Only five years ago, I remember seeing several Charlotte houses in the $10K range; some of which were in the now hot “North End” district. I had people wanting to sell some 2 BR/2 BA condos for $30K that were 5 minutes out of Uptown Charlotte. I was “too savvy” of an investor to go for those deals!
Now you are a winner if you bought at those prices. If you are holding them, you’ve got a nice equity build up and a great rental cash flow. And if you sold them, you made a nice chunk of change. Well done!
In conclusion, if you bought any real estate in Charlotte prior to 2013, you may want to take a fresh look at your portfolio. You may be sorta rich.
Merry Christmas & Happy Landlording!
Learn MoreGood or Bad Home Warranty Company: Who’s Taking the Call?
“My mom always said life was like a box of chocolates. You never know what you’re gonna get.”
Forrest Gump
I like to play basketball at the local recreation center. I often wind up with “Jim” on my team which I’m ambivalent about (and don’t ask Jim what he thinks about having me on his team…). What I mean is that some days, having Jim on my team is a pleasure. He’s a virtual scoring machine; he just doesn’t miss any shots! I feed him the ball and just watch him go to work. We’ll call that “Good Jim”.
But then there is “Bad Jim”. I’m not sure if he has a split personality, or if he and his wife have an “on again/off again” relationship, or what, but other days he just doesn’t have it. He is disinterested, doesn’t play any defense, passes up easy shots, and turns the ball over constantly. Frankly, it’s disheartening. I feel like we are destined to lose when Bad Jim is on my team.
Do you want to know what reminds me of Jim? Home warranty companies. Some of our Charlotte property management clients utilize them to handle their repairs.
For the uninitiated, home warranty companies charge owners an annual fee (usually around $500) to handle any repairs. So when tenants have an issue, we (or the tenants) call the home warranty company, pay a service call fee (usually $50 -$100), and they will send vendors to fix any major component or appliance issue in the home (including, if necessary, the replacement of them) that are due to normal wear and tear. It doesn’t sound like a bad deal, especially for an older home.
But, like Jim, there is “Good Home Warranty Company” and “Bad Home Warranty Company”.
When Good Home Warranty Company is on, the vendor they put us in touch with gets back to us right away, schedules with the tenant, and takes care of the issue. It can be a good experience (though it makes it difficult to establish any type of service record with a particular company as their vendors change often).
But when Bad Home Warranty Company shows up, it makes it really tough on the property management company and the tenants. We recently had a refrigerator that took around 35 days to get fixed from the initial call(!) and an air conditioning issue that took a week to resolve (a long time to put up with excessive heat in the South during the summer!). The problem is that the home warranty companies have a vendor list and they send you one that you have to work with (and some are not so reputable). Sometimes these vendors call you back right away and other times they wait for days. As a property manager, it’s tough to push vendors you don’t know and have no prior relationship with.
Fortunately, 95%+ of our clients do not use home warranties. It allows us to use our own vendors who we have worked with for years; we use them because all of them care whether our tenants have to spend the night without air conditioning or don’t have a working stove to cook with. I think it’s important to have strong teammates who you know consistently have your customers’ best interests at heart.
Jim is a nice guy, but just not someone I like to have on my basketball squad because he’s too erratic; I never know if Good Jim or Bad Jim is going to show up at the gym. I feel the same about using a home warranty company. Not knowing whether Good Home Warranty Company or Bad Home Warranty Company is taking the call makes either of them difficult to rely on.
Happy Landlording!
Learn MoreHigher Rental Rates Could Be a Problem for Landlords?
It’s been a busy season for property management in Charlotte. The market is hot, activity is high, and rental prices continue to escalate.
So this sounds like good news in our arena! Higher rents, bigger profits for landlords, and faster turn-around times to fill rental homes is the new normal. Property managers are looking great! Everyone is happy!
Well, maybe not everyone. Tenants are seeing rents go up dramatically and they generally aren’t making much more money to offset the increase. This is really making some of our traditional tenant screening criteria, like debt-to-available-credit and rent-to-income ratios, go off the charts of even marginal acceptability. Truthfully (and this comes from screening a lot of applicants over the past few years), many of the applications didn’t have great ratios to begin with then. But as rents have moved up, things have begun to look even worse. Example:
Tenant makes $3,500/month. Old rent was $900/month and the rent of the new house they want is $1,250. Credit card debt is $8K out of $10K available.
For the rent to income ration:
$900/$3,500 = 26% (pretty good- we try to keep it around 25-33%)
$1,250/$3,500 = 36% (marginal)
But the real kicker is more of a common sense question. If the prospective tenant isn’t living within their means with almost maxed-out credit cards with a $900/month rental rate, what happens when the rent goes up $350/month?
Some landlords might say, “So what? I’ve got enough problems of my own. Let them deal with it.” But I’m reminded of a quote from the billionaire John Paul Getty:
“If you owe the bank $100, that’s your problem. If you owe the bank $100 million, that’s the bank’s problem.”
So if we slightly revise this for the Charlotte property management genre:
“If your tenant’s car breaks down, your tenant has a problem. If your tenant is living paycheck-to-paycheck and has no cash reserves or available credit and his car breaks down and he can’t make rent, that’s the landlord’s problem.”
So what’s the answer? Well, I actually have two for you, and you won’t like one of them. In fact, I’ll put it second so you would read a little longer before abandoning this blog.
- Screen a lot of tenants and don’t compromise your standards. However, this is easier said than done. When your rental home is sitting empty and you already have done 20 showings that generated 10 applications and you haven’t accepted any, you’re tired because it’s a lot of work. And by the way, expect angry phone calls and e-mails because prospective tenants DO NOT like being turned down.
2. (Gulp) Price the rental house at the lower end of the market. I know, I know- I’m hearing it already:
“But, Brett, that’s heresy!! I’m here to make as much money as possible! Do you understand how investments work? I’ll give to charity on my own! Top dollar or new property manager!”
That’s harsh.
We recently had a rental home where we ran through 7 relatively bad applications in a few weeks. We were priced near the top of the rental rates in the area. We lowered the rent $45.00 and received two great applications that were both easily approved. Now they lovingly share the house together (kidding- we sadly had to turn one away). Good tenants find good deals.
When I’m running comparables on rental properties, it seems like the large institutional investors always have filled their properties for the highest rental rate (by a good margin). It’s seriously impressive and I almost feel like less of a man because I wouldn’t even attempt some of the rental rates they have asked for (and gotten!).
But, being that some of them are public companies, they had to release their occupancy and eviction rates to their investors. They had a 25% eviction rate (1 out of every 4 tenants!). That’s really high. Evictions are expensive. Their model works because they can spread these expenses over thousands of units at higher than market rents. However, this wouldn’t work well economically (or emotionally) for the typical landlord who owns south of 5-10 units. One eviction can really hurt.
Higher rental rates are limiting the “safer” tenant pool. Screen wisely and (at least think about) keep the line at the rental rate.
Happy Landlording!
Learn MoreRental Home Marketing: Kim Kardashian or Jennifer Lawrence?
“There are pitfalls, lack of privacy, loss of privacy, and that’s not for everyone. For me, I can handle it.” Kim Kardashian (60 Minutes, October 2016)
“I teeter on seeming ungrateful when I talk about this, but I’m kind of going through a meltdown about it lately. All of a sudden the entire world feels entitled to know everything about me, including what I’m doing on my weekends when I’m spending time with my nephew. And I don’t have the right to say, ‘I’m with my family.’ … If I were just your average 23-year-old girl, and I called the police to say that there were strange men sleeping on my lawn and following me to Starbucks, they would leap into action. But because I am a famous person, well, sorry, ma’am, there’s nothing we can do. It makes no sense … I am just not OK with it. It’s as simple as that. I am just a normal girl and a human being, and I haven’t been in this long enough to feel like this is my new normal. I’m not going to find peace with it.” Jennifer Lawrence (Vogue, September 2013)
So, fame is a mixed bag. So many people work to be rich and well-known, and then realize they just want to be residential property managers (OK- not true- but it sounds like Jennifer Lawrence may potentially be convincible if we were able to get her at her lowest point).
But who cares about us? What about our rental properties? Should they be like Kim Kardashian, “handling” (if “handling” and “relishing” now mean the same thing) the pressure of being well-known? Or like Jennifer Lawrence, shunning the spotlight?
In Kim’s world, our property manager is a marketing dynamo! The rental property is on every website imaginable! We see people using our marketing ad as a screen saver. The magazine racks at the grocery store have publications with our property in there! #502THEMainStreetCharlotte is trending and its master bath has its own Twitter handle! Strangers are liking our home on Facebook and we’re getting rental inquiries from abroad! Strange men are following our employees to Starbucks to get the inside scoop (“It even has dual vanities??? Crown molding! I couldn’t even tell from the revealing Instagram photos!”)! The management office looks like it is having a telethon.
In the J Law (as the insiders refer to her as) world, the rental property would be left alone and no one would even know it was available.. “Shhh… it’s a pocket listing, I think.” The only way to find it is to do an exact address search on www.BDFRealty.com (and if you mess up on spelling or spacing, you’re probably out of luck…). Digital tumbleweed blows through your rental ad’s corridors.
So the Kardashian marketing method, though unnecessarily audacious, is probably the best plan to get a good renter quickly. But what about if your rental marketing is producing the privacy J Law craves and is your new normal?
Try these things:
- Google “rental homes in your town” and post the rental ad on the top 3 websites that allow you to do so.
- Get the property on the local MLS that Realtors use
- Put a sign up in the yard
- Post the rental to your social media accounts
Here’s a bonus: make sure your property maps correctly on MapQuest and Google Maps. We’ve occasionally run into some J Law results in our marketing, and upon some research, realized that the mapping companies had the rental property showing up on an ISIS air field (OK- not really- but you get the point).
“There’s only one thing in the world worse than being talked about, and that is not being talked about.” Oscar Wilde
Keep up with the Kardashians and Happy Landlording!
Learn More
Trump’s Cabinet Means You Should Invest in Charlotte Real Estate
The stock market will always go up eventually. Historically, it keeps happening. Most wealthy people (aka the people who make the rules- check out Trump’s cabinet of billionaires) have much of their wealth tied up in corporate ownership (stocks). It’s almost a sure thing. If the stock market crashed and stayed down permanently, our country would be in mayhem. And the dollars under the pillow and gold bars stashed in the attic wouldn’t mean much. Food would be the main currency.
So why do investors get fearful when the stock market goes down? It will go back up, right?
After 9/11, the stock market tanked. Billionaire New York City Mayor, Mike Bloomberg, had a message for his constituents. He essentially said,” People always ask me for investment advice so they can become billionaires. I don’t often offer it, but today is different. Take all of your available money and buy stocks now.”
The Dow dropped to under 9,000 in 2001, and almost to 7,000 in 2002. It is now over 20,000. Too many powerful forces have a vested interest in the stock market doing well for it to flounder long.
Charlotte’s population is forecasted to go up 50% in the next 10 years. All of those people need a place to live. Statistically, 2/3 will buy and 1/3 will rent. Housing demand will continue to drive rents and prices higher.
So, investing in real estate in Charlotte is a slam dunk? As much as investing in the stock market is, especially with a Trump administration.
So that leads to 2 questions:
- When is a good time to buy in Charlotte?
For long-term holds, anytime really should be fine. The best time to buy is when the market gets hammered (see 2008-2012 when we didn’t get many buying inquiries, but many of our clients were looking to unload their homes and became reluctant landlords). For short-term holds and flips, this might not be a great time as competition is fierce for good properties; it’s clearly a seller’s market now. But financing is easy and historically cheap right now.
- Where should I buy in Charlotte?
Once again, for long-term holds, anywhere within city limits will work; really the surrounding counties seem pretty good too. When I was a newbie investor 10-15 years ago, my first two purchases were in areas that were considered “war zones”. I bought them very cheaply ($27K & $39K) and now they are considered to be in “hot areas”. Note: I wouldn’t recommend this, especially for newer investors. The fix-up and tenant issues were challenging and I wished I didn’t own them for years due to the headaches. But there are plenty of Charlotte houses that are in better areas that will make coveted rentals for years and years. I’d recommend buying houses that are more expensive (the market is pretty good at pricing houses based on risk). The homes I bought over $100K were much easier and safer investments that have also appreciated.
Much like investing in the stock market as a whole, Charlotte real estate is a great long-term hold that doesn’t require a large amount of analysis. And Trump’s cabinet members (and President Trump himself) own a lot of real estate too…
Happy Investing & Landlording!
Learn MoreCash Bloodletting from Rental Home Subletting
A house on my street is a rental home. The owner had a long term tenant who always paid on time and was an agreeable guy. It seemed like a good situation.
However, every few months I would see moving trucks parked in front. I wondered if the tenant was moving out, but sure enough, days later I would still see his human-size dog running out his front door (as I would shield my 2-year old son from his “affections”). The tenant hadn’t gone anywhere.
So what was going on?
The tenant was a serial subletter. He would rent out rooms to strangers. It seemed like a good way to make extra cash being that he travelled a lot for work and lived alone (besides the aforementioned gigantic dog).
But something went really wrong recently. The tenant didn’t click with the newest subletter and they got in a physical altercation due to undone housework. His dog attacked the subletter (poor guy!) protecting his owner and the subletter needed an ambulance.
An ambulance, several police officers and animal control showed up at the house and the subletter wound up getting a restraining order against the tenant. Now the tenant was not allowed to go to his rental home. I had a new neighbor, and not one who was actually on a lease. However, due to the legal system, he had rights to the house and the tenant was essentially homeless because of the restraining order.
It was a mess for the owner. The subletter had to be evicted (which took a month or two) and it left the owner out thousands of dollars.
So, is subletting evil?
Generally-speaking, yes, I wouldn’t recommend it. However, if done properly, it can work well to keep a house occupied.
The two ways to avoid subletting bloodletting:
- Be involved. If a tenant wants a subletter (and this is applicable for any new home occupant), a rental application needs to be run. Owners need to know exactly who is going to be living in their rental home.
- The new occupant needs to be on a lease and the security deposit situation needs to be addressed (who has rights to it now?).
As a landlord, it’s easier to just let tenants do their thing as long as rent is coming in (like in this instance where it happened for years without incident), however it can come back to bite (pun intended).
As a Charlotte property manager for many years, we’ve picked up many good tenants from allowing tenants to add additional occupants to their lease. However, we’ve never budged on the two criteria above.
Don’t let subletting turn into a mess. Control the situation, run a rental application, and (if approved) get them on a lease!
Happy Landlording!
Brett Furniss is a property manager at BDF Realty (Charlotte Residential Property Management), the trusted real estate advisor for Charlotte landlords & Home of $100 Flat Fee Property Management. BDF Realty utilizes their innovative Pod System for exceptional customer service in residential property management, home repairs, and home sales for single-family homes, Uptown condos, and town homes in the Charlotte-Metro Area. Contact Us Today!
Learn MoreWesley Snipes’ IRS Case for Rental Home Inspections
Wesley Snipes is a great actor. Watching him in White Men Can’t Jump, Major League, and other films is some good theater.
But Wesley got some bad advice at tax time in the late 90’s. His accountants told him there was a loophole that would allow him to avoid $7M in taxes; in fact, he didn’t even have to file tax returns. He thought that sounded pretty good. And besides, everybody knows the IRS isn’t really paying close attention with the sheer amount of returns they have to log every year.
Well, the IRS was paying attention. And they got Wesley’s attention with a 3-year prison sentence that ended in 2013.
It was sad for everyone: his many fans, his accountants (who received even stiffer jail sentences), the IRS who had to use limited resources to prosecute his case, and especially for Wesley (who had reputedly earned over $40M from 1999-2004).
There were a lot of questions in Wesley’s case, but one almost undeniable certainty- Wesley’s tax returns now are the most truthful and timely documents he files every year.
This logic spills over into residential property management and periodic home inspections. If landlords can show tenants that they are paying attention to what is going on in the house and whether maintenance is being done, they will undoubtedly get a better conditioned house when the tenant eventually vacates.
So, yes, this means going over to and inside the rental house. I’d highly recommend giving the tenant a week or so notice of when the home inspection is and letting them know what you are specifically planning on looking at (e-mailing them a list is helpful).
Q. What should a landlord include in their home inspections?
A. Anything they care about.
Some general things I care about:
- Do the keys still work?
- Is the lawn and landscaping being kept up?
- Are the air filters being changed?
- Are the fire and CO detectors still there on each level of the house and are they functional (aka is the tenant changing the batteries when they die?)
- Is the home clean?
- Does it smell like smoke?
- Is there evidence of a pet if there isn’t supposed to be one?
- Does anything look weird?
Feel free to add anything else of interest. I also think conducting the home inspections twice a year (roughly on month 3 and month 9 of the lease) works well. Paying attention is good, stalking is bad.
Wesley has some well-maintained tax returns now and periodic home inspections should lead to some well-maintained rental homes.
Happy Landlording!
Brett Furniss is a property manager at BDF Realty (Charlotte Residential Property Management), the trusted real estate advisor for Charlotte landlords & Home of $100 Flat Fee Property Management. BDF Realty utilizes their innovative Pod System for exceptional customer service in residential property management, home repairs, and home sales for single-family homes, Uptown condos, and town homes in the Charlotte-Metro Area. Contact Us Today!
Learn MoreRental Lessons Learned from Britney Spears’s Management Team
On New Years Day 2004, Britney Spears’s management team was just waking up to a wonderful, wonderful, and more superbly wonderful morning. They had one of the hottest singers on the planet, she was making them tons of money, and her momentum was strong.
Everyone was happy and content.
Or should I say everyone with the exception of Britney, but she had enacted a quick plan to change that.
In the spur of the moment, she flew her childhood friend, Jason Alexander (not the rich one from Seinfeld), from Louisiana to Nevada. Then after a night of partying, she proposed they get married. Jason was down and they found one of those quickie Las Vegas chapels to hitch them up. They were now married and well on to their way to marital bliss. They just had to break the news to their families, and Britney to her management team.
I imagine Britney’s conversation with her management team went something like this:
Britney: I married Jason Alexander last night! It was…
Management Team (interrupting): The one from Seinfeld?
Britney (laughing): No! Let me tell you the story! Jason looked me in the eye and I knew it was meant to be and we drove right to the chapel and…
Management Team (interrupting): Whoa! Hold on. I think you skipped the most important part of the story, the part where you stopped by an attorney’s office and had a prenup drawn up before you made it to the chapel, right? Right????
Britney (pausing): Not ‘zactly. You’re sort of killing my buzz right now.
Britney’s management team started formulating the equation in their minds:
Short term courtship + booze + no prenuptial agreement + gross income equality (gazillions versus $20.00) + contractual lifetime commitment = Britney financial disaster and the eventual termination of our employment
This didn’t add up well for them.
Property managers are often put in similar situations with rental applications. Potential tenants walk into a rental home and fall in love with it. The owners are anxious to have it occupied. It’s a boozy, quick courtship that seems destined to consummate. Is it a match made in Heaven?
Maybe. But an experienced (property) management team can step in and start asking the tough questions about the tenants before anything is signed:
How much money do they make?
Did you see they have 2 monthly car and student loan payments as well?
What happened with that past eviction?
Isn’t the tenant’s dog uninsurable because it’s an aggressive breed?
A tenant that seemed like a good idea at the time may become less desirable under more vetting. To avoid something like the Jason Alexander nuptials, it’s usually better to have some unattached, impartial party give some input on important coupling decisions before tying the knot.
While Britney’s management team was able to forge an annulment and put down the marriage in less than 55 hours, it can actually take a few months to part ways with a less than ideal tenant. So make sure the vetting is done before anyone gets too excited!
Happy Landlording!
Brett Furniss is a property manager at BDF Realty (Charlotte Residential Property Management), the trusted real estate advisor for Charlotte landlords & Home of $100 Flat Fee Property Management. BDF Realty utilizes their innovative Pod System for exceptional customer service in residential property management, home repairs, and home sales for single-family homes, Uptown condos, and town homes in the Charlotte-Metro Area. Contact Us Today!
Learn MoreLong Term Real Estate Planning is (Politically) Correct!
If you knew you were running for president someday, you’d probably do many things differently. You may rethink all your controversial letters to the Charlotte Observer loudly demeaning the local politicians (those idiots!!); you may need their help someday campaigning on your behalf. That Election Day when you were in the throes of a “House of Cards” marathon, scarfing down Jet’s Pizza, and didn’t quite feel like driving to the polls? Better get up, wipe the sauce of your mouth, punch your chad, and make it look like you care about the political process! The video your friend made of you acting like a fool with the pool boy on that cruise a few years back? Better make sure that doesn’t find its way to Facebook because Glenn Beck will have a field day with it during the primaries.
This whole accountability thing can be scary! But if you know what you want to do in the future, you can plot your moves (and non-moves) and optimize your future plans.
Real estate works the same way and requires taking a long term planning view. What do you want your real estate to accomplish for you? And over what time period?
From being a Charlotte property manager for over a decade, we’ve had clients who have had many differing reasons why they are holding real estate. We try to put together a strategy to cater to these needs individually. Here are a few examples:
- “I have a house that I don’t have enough equity to sell right now. I want to rent it out until the market turns up again.”
With that in mind, we want to minimize fix-up costs (touch-up paint & carpet steam clean when turning over the property between tenants) before we see the market improve. Once it does, we’ll look to replace the carpet and give the home a full paint job to sell at the top of the market.
2. “These houses are my retirement. I want to keep them forever and live off the residual income.”
We’d look to find long-term tenants on the private market (multi-year lease only) or Section 8 tenants (who now, after 18 months of vacancy in one house, cannot move until they leave the program). We’d also look to more actively make optional repairs to maximize the enjoyment of the tenant.
3. “I want to have the option to stay in or get out depending on market conditions!”
We’ll keep you apprised of the market sales and rental prices 60-75 days prior to the current lease expiration. Then you can let us know which way you want to go, rental or sale. We’ll also let you know when an opportunity comes up when one of our investors is looking to buy an investment home with a tenant already in place to create a win-win for both of you.
The best way to get the outcome you want tomorrow is to wisely plot your moves (and non-moves) today. There are very few people who are politically incorrect, like Donald Trump, to whom this (apparently) doesn’t apply! But, in real estate, long term planning will save you both time and money.
Happy Landlording!
Brett Furniss is the head property manager of BDF Realty (Charlotte Residential Property Management), the trusted real estate advisor for Charlotte landlords & Home of $100 Flat Fee Property Management. BDF Realty utilizes their innovative Pod System for exceptional customer service in residential property management, home repairs, and home sales for single-family homes, Uptown condos, and town homes in the Charlotte-Metro Area. Contact Us Today!
Learn More