Oh Christmas Tree, Oh Christmas Tree

As Property Managers we do not solely focus on the typical, enjoyable aspects of the holiday season.  With the holidays comes Christmas trees and as Property Managers we tend to immediately tie Christmas trees to an increased risk of fire, vs. presents and ornaments.   Unfortunately, no matter how much we’d like to, we are not in a position to dictate the type of decorations tenants have within their dwellings.  Nor can we inspect their trees for ample water and healthy limbs.  However, we should be educating them on the importance of testing and maintaining their smoke alarms to avoid that ‘worst-case scenario’.

It should also be on our to-do list during routine inspections.  Based on state and local Fire Marshal regulations we need to verify proper number and placement of alarms in each rental.  At a minimum there should be one smoke alarm on every level of a home, as well as one outside of each sleeping area.  It’s actually recommended that there is one in every room, excluding kitchens, bathrooms, garages or other unheated areas.

Proper education and thorough property inspections provide some peace of mind.  Ultimately we cannot eliminate the risk that goes along with this season and others, but we can maximize our resources to lessen the likelihood of those worst-case scenarios

So relax…….enjoy the season and focus on what’s really important.

 

It’s All About Balance

Two objectives that property owners have when they come to us for management are cash flow and maintaining the value of the asset.  They want cash flow NOW and increased value LATER. And it’s our job to balance these two objectives.

Problematic with this is the fact that these two objectives work against each other.  The most likely source of capital for maintaining investment property is out of cash flow.  However, in the long-term interest of the property it is vitally important to not defer regular maintenance and repairs. Investing back into properties ensures fewer costly problems in the future.

Enhancing income property typically maintains the rental value, which in turn helps obtain and retain quality tenants, thus increasing the value of the property.  During property inspections it is our responsibility as Managers to look for current concerns
as well as items that may need addressed in the future.  For example:

Roofing:  Shake roofs were common on homes built-in the 70’s and early 80’s in the Northwest.  If they are not properly maintained and repaired leaks are unavoidable.  The
damage from these leaks can affect electrical systems, sheetrock, paint, flooring, etc.

Painting:  Exterior paint, depending on the grade, should last 5 – 7 years.  Paint should never get to the point of peeling.  The longer a property goes without fresh paint the more expensive it can get, as well as the increased potential of damage to the siding.

Gutters: It is vital to ensure all connections are solid.  The full length of the gutters
and downspouts should be free of leaves and other debris to avoid damage to the
siding and foundation.

Water Heaters and Plumbing: Updating older plumbing fixtures can save time and money in the future. Outdated metal valve connections can break unexpectedly.  And
if the tenant is not present to shut off the water it can cause major damage throughout the entire unit as well as adjoining units.

Landscaping: In a lot of agreements the tenants are responsible for maintaining the landscaping. However it may be prudent to recommend that the owner hire a landscaper
and then recover the cost through higher monthly rents.  Neglected landscaping and irrigation systems can be very costly.

It can sometimes be a challenge to get these issues addressed before they turn into more serious, expensive problems.   That’s where clear communication and a professional, trusting relationship is critical.  We owe it to our clients to be vigilant and persuasive in taking care of these small items to avoid larger issues in the future.

Important Updates on Rental Legislation | October 2011

Important information for us to know.

The Legislative odd-year session ended June 30^th and produced Senate Bill 293 – the Landlord Tenant Omnibus Bill.  Below are some of the issues that were focused on:

Abandoned Property - Previously the law allowed landlords to dispose of tenant’s
personal property that has been abandoned and is valued at less than $500 after proper legal notification.  Any property valued more than $500 required a public sale. This $500 threshold was set back in 1995 and does not adequately cover the cost of storage and the conducting of a public sale today. To address this issue the Omnibus bill increased the
threshold value to $1,000 before a public sale is required.

Rentals in Foreclosure – The law provides tenants with a 90 day window for moving out of properties that are in foreclosure.  Tenants are allowed to apply any pre-paid rents and/or security deposits to future rents that are due prior to the date of the sale. This was instituted to protect tenants from losing their prepaid funds altogether.

The issue with this policy was that there was no required notice that the tenant had to provide to the landlord if they were going to utilize these prepaid funds and in some
cases landlords interpreted this ‘non-payment’ of rents as grounds for eviction.  The Omnibus Bill now requires tenants to give a written notice of intent to the landlord prior to the expiration of any nonpayment of rent.   However, if the property is taken out of foreclosure and the prepaid funds were applied to future rents, the money has to be repaid to the landlord within 2 months of the property coming out of foreclosure status.

Sometimes It’s Just Nice To Hear – or Read!

As a property manager expert - I came to this title by what is lovingly referred to as the school of hard knocks. I don’t think any of us started out with life goals to be “Property Managers.”  Those of us in the business know it can be a very difficult profession but when I get a testimonial from a happy property owner – I have to say it makes my day! It’s a great reminder to stay focused on providing extraordinary service, listening to the needs of  both owners and tenants and communicating quickly any concerns or issues. Below is our reward:

“Of all the decisions I’ve made regarding my apartment building in Medford, choosing CPM Real Estate Services, Inc. has by far been the best one. They respond quickly, have a genuine understanding of my concerns, are exceptionally diligent and professional in every way.”

Didi N., Owner of Parkside Apartments

This is what makes all the difficult days worth it. Thank you Didi N. for choosing CPM to manage your property, we’re honored!

CPM Adds HUD Housing To It’s Portfolio

CPM Real Estate Services is proud to announce the management of Mulberry Court, a HUD -Section 8- property.  HUD helps low-income families by providing rental subsidies through Section 8 certificates and vouchers, which help pay the portion of rent that families can’t make.  In order to qualify for rental aid, families must meet certain income requirements established by HUD, which change each year and vary by area.

Mulberry Court is a 30 unit apartment complex with an on-site laundromat and play area for the children.  Since taking over the management of this property we have made many changes and improvements.  We hired an on-site manager to address tenant concerns and resolve maintenance issues, as well as providing regular office hours and basic administrative functions.  Some of the major improvements include updated landscaping, a new property sign, and a full exterior paint.  To celebrate these improvements a community BBQ was held in September for all of the tenants and their families.  There were over 100 people in attendance.

One of the conditions of managing a government subsidized property is the completion of an educational course about the HUD program and the standards of managing this type of property.  In order to fulfill this requirement CPM sent three staff members to San Francisco to attend the course.  After being gone for a week and studying night and day, the staff members were armed with a better understanding of the stringent laws, processes and documentation that is mandated for the management of a HUD property. Additionally, CPM purchased the HUD module that integrates with our YARDI software in an effort to streamline the reporting and accounting process.

This endeavor has proven to be challenging as well as enlightening.  The opportunity for growth in this division is there and CPM is continuing to learn and formalize the management processes for this type of property.

Fewer Default Notices in February 41% from Last Year!

Foreclosureradar.com reported that February 2011 showed fewer default notices and bank repossessions in the housing market in Jackson County, Oregon.

 121 default notices were filed in February compared to 206 in February 2010.  This is a 41% decrease.   Thirty five properties were taken back by lenders in February 2011 compared to 45 in 2010. 

Does this mean we are out of the woods yet regarding residential housing?  Not necessarily.  From what I have read the banks are working through some of their inventory; however, they also may be waiting to see how restructuring of loans may turn out this time. 

 The first round of programs didn’tseem to be that successful, so we’ll just have to wait and see what “they” have up their sleeves for round two. Stay tuned…..

CPM Residential Vacancies Continue To Drop!

In March 2011, CPM’s residential vacancy rate continued to drop.  With over 2,000 units under management our vacancy rate was 4.36%.  This is down slightly from 2010 when the vacancy rate was 4.5%.

Eight straight months of vacancy in the 4% – 5% range.  Top reasons people were moving in March 2011 were:

1. Moving to a bigger place.
2. Leaving the area/financial
3. Bought a home

A year ago the number one reason people were moving was to consolidate or downsize, so that trend has turned.  The affordability of houses is driving some of our tenants to purchase (especially with rates the way they are right now).

Following these trends is a key indicator of what is happening in our valley. Keep checking my blog for updates each month!