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Wednesday, October 28, 2009


HomeLovers had an interesting interview with Arizona Republic real estate reporter Catherine Reagor recently on renter trends and issues - real life examples of what's going on in the rental market with tenants right now.

One of her questions was the current renter market - are landlords negotiating with renters or bargaining? Are they settling for lesser tenants out of sheer desperation to end a vacancy?

For some investors, this is true.

For investors that purchased a home several years ago or longer – maybe not the ideal HomeLovers property, but still an investment they are stuck with - they are desperately trying to find tenants that will pay enough to cover their mortgage, instead of renting the home for current market value.

These desperate landlords are anxious to find a tenant. To compete with cheaper rentals priced at what the market will bear, they are accepting terms, negotiations and tenants that otherwise wouldn’t be in their best interests.

These investors might be in the tough position of trying to cover their costs, instead of running the investment as a business with temporary price adjustments based on the market.

It is very important to realize that if the investor has a mortgage for $1,400 a month, they may spend months chasing that rent instead of renting it quickly at the actual market value of $1,000.

Many fail to realize they lose less money renting a year at $1,100 (a $3,600 loss) than having a six-month vacancy because they are pursuing the full $1,400 (a $8,400 loss).

To get the full $1,400, those investors end up compromising, offering dangerous incentives or not thoroughly screening prospective tenants just to end the vacancy. (Read the HomeLovers article here on "How to select the right tenant.")

Renters that find they are paying too much are the same angry renters that tend to strip or damage homes. They feel taken advantage of and take that out on the property.

It is important to realize that if a home is in rent-ready condition and priced right, there is a huge demand of good renters available.

Monday, October 19, 2009

Canadian Buyer Looking for Arizona Foreclosures?

HomeLovers' Barbara Broyles was on Trulia this morning, answering a question from a Canadian Buyer looking at Arizona foreclosed homes. Click here for the full Trulia dialog.

One rule of thumb for Canadian buyers that are not paying cash? Get your financing in order BEFORE you start looking. It can take longer than you think.

Here is another important point, according to Barbara:
"Being in a different country does present its own unique challenges. Be sure that you have an agent in place here that has a team of individuals that can help with all aspects of purchasing a home including financing, insurance, accounting, etc. You don't want to be on your own for investigating and finding each professional you need via long distance."

According to the Phoenix Business Journal, part of Arizona’s appeal to Canadians is that the exchange rates have been fairly level between the U.S. and Canadian dollar.

10 Questions Canadian Buyers Should Be Asking AZ Real Estate Agents
BEFORE they decide on a long-distance partnership:

1. How many out-of-town investors have you represented?
2. What is your process for selecting good investment properties?
3. What is your average vacancy rate for properties you have selected for investors?
4. What about for properties brought to you for property management that have already been purchased by the investor?
5. What other resources do you offer, such as insurance, mortgage, title, taxes, etc.?
6. What happens when I go home?
7. Give me some examples of properties you have selected for an investor, and walk me through their process start-to-finish, all the way through the signed lease.
8. Give me some examples of what you think makes a good investment and why.
9. What data do you have that supports your theories?
Post a question for Barbara on Trulia or read her other blog articles here.