When it comes to az investment property, one of the most important factors impacting profitability is selecting the right tenant.
Read the new HomeLovers article on eHow.com here on "How to Screen a Prospective Tenant for your Rental Property".
It has nine tips to help ensure you are putting the right tenant in your home for maximum long-term revenue on your investment property.
Wednesday, November 11, 2009
Tuesday, November 10, 2009
Scottsdale Investment Properties
Demand For High-End Home Rentals Increases
Because HomeLovers manages hundreds of rental properties all across the Phoenix metro area, we have our thumb on the pulse of the home rental and investment market. We see trends as they begin to shift and evolve, which can be critical to the long-term success of our investor clients.
Rent in the range of $1,000 - $1,200 have been the market's sweet spot for the last six months or so. Interestingly enough, the last few weeks have seen a major shift towards more expensive, larger rentals. Demand has picked up substantially for homes ranging in rent from $1,800 to $2,400. We aren't seeing it just in Scottsdale - it is all over the Valley.
We like this! These more expensive rentals attract a different type of tenant.
They are business people who often make great tenants, perhaps coming out of foreclosure on a similar home. They have a homeowner mindset, instead of a renter mindset, and they take care of the property. Some are coming out of a very large mortgage payment, realizing they can get a similar property for 1/2-2/3 less money each month. Turnover is less, and maintenance is less.
Scottsdale Investment Property Remains A Strong Investment
Scottsdale is still a choice location for investors, especially when it comes to homes that rent for over $2,000/mo. Historically, it has shown very strong appreciation, which is a critical factor of any long-term property investment strategy. For example, the 85253 zip code in Scottsdale had an 80%+ appreciation over a five-year period, even including the price decline in 2008.
Much like a stock portfolio, diversifying the types of homes in an investment portfolio is very important.
Unless you are a speculative investor that prefers to flip properties and is investing for the short-term cash flow, true investing considers the long-term gains. While cash flow can be good for the low-end properties, they just don't appreciate as much as the mid- to high-end properties can. This appreciation is critical in building wealth.
Wednesday, October 28, 2009
ARE AZ LANDLORDS NEGOTIATING WITH RENTERS?
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.
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:
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?
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?
Wednesday, September 23, 2009
How To Select A Property Management Company
by Noel Pulanco, HomeLovers Sales Manager, Realtor®
Shopping for a Property Manager can be one of the most confusing things you will ever do.
When people contact HomeLovers in their search for a property management company, inevitably one of the first questions that they ask is “what are the costs?” Some managers look very expensive while others seem unbelievably cheap. With the worst companies, you almost need a CPA to figure out what the real costs are.
So how do you read past the sales hype? Click here to read the full article just posted today on www.HomeLovers.com.
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Monday, September 14, 2009
HomeLovers Hits 500 Follower Milestone on Twitter
HomeLovers just exceeded the 500 follower milestone on Twitter - a big thank you to all of our fantastic followers!
If there is something you want to learn more about when it comes to real estate investing or property management, please post a blog comment or send a Twitter DM to @azhomelovers with your request or question. Then we'll tweet or blog all about it!
HomeLovers on Twitter:
@azhomelovers - for Arizona real estate property management and investor information
@rent_homes - for the newest rental property listings in Arizona
If there is something you want to learn more about when it comes to real estate investing or property management, please post a blog comment or send a Twitter DM to @azhomelovers with your request or question. Then we'll tweet or blog all about it!
HomeLovers on Twitter:
@azhomelovers - for Arizona real estate property management and investor information
@rent_homes - for the newest rental property listings in Arizona
Friday, September 4, 2009
HomeLovers On Home Page of NuWire Investor
HomeLovers has landed a spot on the home page of http://nuwireinvestor.com/ - with an article on "How to avoid investor pitfalls".
Doin' the happy dance. Whoot, whoot!
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