NARPM Travels

Last week I was in Concord California attending a property management training conference. I learned a lot of things, but the advantages and uses of social media was the most intriguing. So, I’ll be studying it and if it can benefit us in renting up properties and communicating with our tenants, First Rate Property Management will most likely move in that direction. This week I’m in Denver, Colorado. I return for 2 days this weekend and then will leave to Atlanta, Georgia where I will be teaching ethics and leadership classes, and hopefully attend a few classes for myself.

Boise Rental Market

First Rate Property Management’s vacancy last week was 3.2% and improved over the past week and is now only 2.8%. In response to the outstanding vacancy, First Rate Property Management has reduced our renewal incentives to $150 plus carpet cleaning for a 12 month lease and $75 for a 6 month lease plus carpet cleaning. Additionally, I am encouraging our owners and employees not to be so quick to start offering incentives. And lastly, I want to see rents moving upwards. Maybe we’ll be back in the market where we pre-leased most of our properties, offered no move-in incentives, and higher rents. That would be great.

Property Tax Assessments

Between trips, I met with two Ada County Tax Assessors, one who specializes in apartments and the other who does residential, to get an idea what to expect this year. Your property values will be lower, but will they be low enough? In May, keep an eye out for your 2010 tax assessment which will be mailed to you. I’d be happy to assist you in appealing your tax assessment, but we have a short window to do so, so please contact me right away if you have concerns about your properties value.

ADA COUNTY BANK OWNED PROPERTY SALES

I recently attended the SW Idaho Chapter of the National Association of Property Manager’s meeting with guest speakers from Title One. Their main point of discussion was that many Home Owners’ Associations were experiencing significant balance deficits due to foreclosed homes. They explained that unlike some neighboring states, once the home is foreclosed upon, the dollar amount due to the association is wiped clean. In addition to that information, they included some interesting data about REO/Bank Owned Property sales.

Below is a graph showing roughly 30% of all properties sold are bank owned properties. Now, what percentage of sales are short-sales would also be an interesting number? I can tell you that in March, 96% of the residential income properties were either an REO or short sale. Unfortunately these sales have hurt value.

Below is a graph showing the rate of Notice of Defaults (NODS) in both Ada and Canyon counties. A Notice of Default is one of the first actions taken when a person gets behind on their mortgage. If the property is foreclosed upon, it’s at least 6 months down the road before they foreclose. So based on the data, it appears to me that we can expect the market to remain soft for a good portion of 2010.
 

 
 
Tony A. Drost
First Rate Property Management
Tony@frpmrentals.com

Vacancy Rate for the beginning of April

VACANCY

First Rate Property Management’s vacancy increased this first week of April to 3.7%. We may see another slight increase next week as we have more tenants move out, but then as we fill your rentals, the vacancy rate should decrease each remaining week. Our inquiry traffic has increased quite a bit. So that means we are entering the rental season. People are starting to surf the net and call to find a new place to move in to.

BOISE JOB MARKET

Job gains across much of the economy eased Idaho unemployment a tenth of a percentage point in March, the first decline in the jobless rate in 32 months. New jobs exceeded new job seekers for the first time in three years in another sign that Idaho's economy may have started to recover, quoted from state labor officials.

MAINTENANCE TIP

One of the tricks that we learned over the years is to use exterior rated paint for the interior. Why? For one, it is quite a bit more durable, so it holds up better. Another good reason is that it can easily be washed. So between tenants, we can wash the walls and minimize the amount of spot painting needed. And for those areas that do need touched up, the slight sheen difference from lot to lot has little to no effect on the paint that we use. The paint costs more, but once you have a full paint with it, you can go many more years between another full paint and your spot painting should be minimal. So it looks great and saves money in the long term.

FAIR HOUSING

We don’t hear too many complaints from our owners. Of the complaints I do hear, most are regarding our policies on Fair Housing issues and more specifically, those pertaining to reasonable accommodations. I have posted an article that was originally titled Fair Housing and Disability written by another local property manager for you to read. I renamed the article, “It’s a Horse of Course”. You are right, there are companies out there that ignore reasonable accommodations or find ways to work around them. In my opinion, they are putting you and themselves at great risk, as the costs can put you out of business overnight. Recently, I’ve seen two property managers decide to get out of the business due to Fair Housing complaints. I’ve had a number of self-managed owners take my property management class, who, after receiving Fair Housing complaints, wanted to sell their rental properties. Additionally, First Rate Property Management has taken on a number of properties where the owners were burned and needed someone to protect them. I know, I hear your complaints, but I am hear to tell you, you need to take a conservative approach to Fair Housing.

March vacancy closes out at 2.85% vacancy

Our vacancy rate continues to remain low. We’ve increased some rents and removed move-in incentives and have continued to rent units up. We’re using our weekly traffic reports in determining which properties need the incentives. For example, we have properties located off Orchard. They are very reasonably priced, so we are getting tons of calls and above average showings. However, because the streets and nearby bridge is under construction, it seems to be deterring some tenants. So we recognized that and made some changes.

Imitation is the greatest form of flattery

Years ago I found a local company that copied several pages of my website word for word and the only changes were their logo and colors. Recently we just took over management of some properties from another property manager and their lease was almost an exact copy of our lease. In fact many of their forms were obvious copies. In the past I have always thought the more that use my forms the more professional our industry would become. Well, I stand corrected. This company copied our stuff, but didn’t understand the purpose or the intent of many of the terms, so in this case, their forms may look more professional, but their business practices certainly did not help to improve the image of the property management industry.

Certified Residential Property Management Company

At the end of February, First Rate Property Management successfully passed our Certified Residential Property Management Company (CRMC) audit with the National Association of Residential Property Managers (NARPM). We officially should have our designation by the end of April. A good portion of our staff will attend the NARPM National Convention in Seattle, WA this October to walk across the stage and share in the glory. They worked hard for many years to get the infrastructure set up to pass this 100+ point inspection and two-day audit. If you are curious in the things they check, feel free to check out the Certified Residential Management Company Checklist to see all of what they checked for. We’re really pleased to be one of only two certified companies in Idaho and I truly believe that this proves that we are a cut above rest. Don’t get me wrong, there are a number of companies out there that are dedicated to education and ethical practices, but so many of our property managers in this area are not and they do bad things to hurt the reputation of the industry.

Tony’s travel schedule

This year I am sitting as NARPM’s President-elect. This does require some travelling and April is my most demanding month. After the 9th of April, I will be pretty much gone for the remainder of the month. It would be great if you could rely on the staff to assist you, but if you ever need my input, just email. Please allow a couple of days for me to respond.