New Lead Paint Requirements

I hope by now everyone is aware of the new EPA Certification requirements regarding Lead Paint. Boring? Yes, but heavy fines are more excitement than I can handle. Since I have been managing rental properties (20 years now) lead paint disclosures had to be used to warn tenants in houses built prior to 1978 not to let their kids eat the paint.

Apparently, that warning has not been enough to satisfy the govt. Now they have created a whole new burocracy to protect paint eating children. (Despite my obvious sarcasm, please don't think that I am insensative to lead poisoning in children. I have 5 of my own). However, I am not aware that this is a huge problem requiring a bunch of new laws, expensive requirements and heavy fines, training and certification of painters, hiring new inspectors to enforce etc. Sounds a lot like federal job creation and revenue enhancement at our expense.

In case you are not familier with the new requirements, here is a summary:

"The Lead-Based Paint Renovation, Repair and Painting Program" (RRP) is a federal regulatory program affecting contractors, property managers and construction trades who disturb painted surfaces. Failure to comply could cost you up to $37,500 in fines per day.
The EPA requires that anyone who performs renovations, repairs & painting on child-occupied homes, child care facilities, and schools built prior to 1978 that disturb lead-based paint shall be Certified by EPA and that they are or used certified renovators who are trained by EPA-approved training profiders to follow lead-safe work practices, YOU MUST be certified by October 1, 2010"

So if you own a rental property built prior to 1978 you had better hope that your Property Manager complies with this requirement by makeing sure all painters and repair persons have are certified. (Yes, ours is).

Awesome! We made it. Boy, creating a new web site can be a very involved undertaking, but 6 months later we are here. Some of the advantages of the new site include better results in organic search engine results which will help prospective tenants locate our available property listings better and faster. We are already the most intensive vacancy marketing property management company in Southwest FL, but this will help us even more.

Currently, our vacancy marketing reach involves more than 20 different web sites including Rentals.com, Rentalhomesplus.com, Yahoo, Google, Hotpads, local.com, Rentalhomepros, rentalhouses.com,twitter,lycos, Craigslist and many more! If someone is looking for rentals in Southwest FL, we want them to find our houses.

How important is internet marketing of vacancys? According to recent research, 90% of people looking for rental information use the internet. This only makes sense. How many people enjoy circling the classifieds and waiting for call backs on properties they may have an interest in, verses sitting in comfort at their computer while checking map locations, pictures of the home and seeing how updated it is. There's no comparrison. Futher more, 84% of web searchers use more than one online source. We want to be there front and center no matter where they are looking. This leads to shorter vacancies and better selection of renters to choose from.

I hope you like the new look and feel of our new site, Please let us know your comments!

Welcome to our new Web Site!

We are getting ready to go live with our new web site for Sarasota Management & Leasing. This new site is an exciting upgrade to our old site in many ways. In addition to a new fresh look we will have easier access to online documents for our owners, regular market updates with charts and graphs which will reveal the current state of the rental market for Southwest Florida as well as average days on market, average rents etc.

New search engine tools will help draw more tenants to our site to increase exposure to our listings as well as offer tenants new tools to request maintenance, view their statements and communicate with our property managers.

Stay tuned for the new upgrade!

Governments Latest Assault on Landlords

Landlords have been taking it on the chin in recent years with skyrocketing property taxes (don’t even get me started), rising insurance due to a bad run of luck with hurricanes and falling rents due to rising inventory from owners who cannot sell and are  looking to the rental market for relief.  Now the government is looking for the most convenient ways to boost their budgets. The local and state governments are in crisis mode looking for ways to balance the budget and with the slower economy causing a decrease in tax revenues, the push is on to find ways to increase revenues. Last week Florida lawmakers passed SB 1790 and it was signed by Governor Crist wherein the state is mandating increased “fees” for many different services. These are not considered tax increases since there would be little political support for that, but increasing Fees is a convenient way to stay under the radar and avoid political fall out. Most of the fees were relatively small so as not to gain much attention, but they really socked it to landlords by increasing the cost to file evictions by 400% The cost for filing evictions has been $75 for the past twenty years, but now as a result of this bill, the cost for eviction filing will become $265. I am a member of the Florida Association of Residential Property Managers who joins with the Florida Apartment Association to lobby the state in regards to issues that effect leasing of residential properties. In fact, they just met with legislators last month and were completely in the dark about this bill. By the time we found out about it and started contacting legislators it was already a done deal. When will times get better for landlords? I believe that when the sales market begins to stabilize and property values find support, many of the owners who never intended to be landlords, but were stuck with properties they could not sell will begin to unload their properties. Then, with a reduction of supply and hopefully an increase in demand as the local economy rebounds, we will finally begin to see rising rent rates. But in the mean time watch out for government carnivores seeking new food sources.

What Does It Take to Get a Property Rented These Days? That’s a great question and getting the answer is like nailing Jello to the wall. It is allusive at best and constantly moving. That’s the short answer. The more reliable answer is strong marketing and offering a superior value.  Strong Marketing:  Fish where the fish are.   I read a column in the Sarasota newspaper about the fishing here. In it a local fishing guide said the key to successful fishing is to fish where the fish are and give them what they want to eat.  Brilliant! Sounds blindingly obvious right? Well, I can’t begin to tell you how many times I have sat in my boat for hours at a time thinking that if I just wait long enough, some big fish will swim by and grab my bait. According to the fishing guide, if you have not gotten a hit after 30 minutes, move on. Well to bring this back around to property management terms,  if you are still placing ads in the weekend paper thinking that people are circling your ad and making calls to get info, you will just drown a lot of expensive bait. Tenants these days are sitting in the comfort of their home any evening of the week looking at pictures and map locators on their computers. They can see if the kitchen is updated or whether there is tile or carpeting. They can conduct a Virtual Drive By and weed out the 80% of properties that will not work for them. That is why we have increased our marketing allocation to internet sites significantly over the last few years. At last count we were using 7 or 8 different sites and looking into adding more. In addition to choosing the right advertising vehicle, another aspect of strong marketing is pricing and condition. Since the market is constantly in flux and is whipped around by the real estate market in general, we have to be light on our feet and ready to change direction quickly. If in two weeks we are showing that 300 people have viewed a listing online, but we have had few contacts and little action as far as showing the home, we have to have our good listening ears on. The market is speaking to us. Its time to reduce the price by 5%.  It is critical to make this evaluation every two weeks. The second worst thing to have happen to a rental property (1st by far is a bad tenant) is having a property sit empty and costing the owner money every month. You would be surprised to know how many properties are sitting vacant on the market for month after month. Some owners and Agents have an attitude that says “I have gotten X amount in the past or My Realtor told me it was worth Y so I am not going to give it away. If I price it too low, then I will only get tenants who can’t afford it. (Wrong – the tenants who budget their money and intend to pay their bills are know where the best values are). Its like the fisherman who stays in the same place on the shore using the same bait he has used for 20 years and belives the fishing is terrible. We will cover Property Condition in a future article.

IS IT A GOOD TIME TO BUY? Are we in a free fall, or is this a great opportunity to add another property to your  real estate portfolio? That is a good question. Noted financial advisor Dave Ramsey (nationally syndicated radio talk show host and Fox News contributor) recently said in Tampa that Florida real estate was at the best buying opportunity in 10 years. (By the way he is best known for his conservative approach to personal debt and investing.) In addition, last week I was at the national convention for the National Association of Residential Property Managers (NARPM), and heard a talk given by Paul Brewbaker, Ph.D., Chief Economist for the Bank of Hawaii. He stated that despite the current financial upheaval, it appears that we have seen the low in the real estate market and he sees considerable improvement by 2012.   Interest rates are near historic levels and prices have fallen to 2003 levels or lower. Most properties on the MLS are still priced too high, but I am seeing investors moving back into the market if they can find the right deal. Whether foreclosure, short sale, forced sale or if the seller has owned the property long enough to have sufficient equity that they can afford to price it at the current market, there are some great deals to be had. The key is to find the values out there and conservatively estimate your rental income. I can’t tell you how many investors have come to us in the past few years having purchased a property with unrealistic assumptions about rental values Usually they were assured that they could get an unrealistic amount for rent by uninformed Realtors. These people are hurting. An example of a recent transaction we were part of was a small 3/2 with pool which sold for $140k. This property could conservatively rent for $1100/month. With 20% down, your mortgage payment for a 30 year note at 5.75 would be $655. P&I.. If taxes and insurance were $1800 & $1200 your total expense per month would be $905. Not a bad return even before appreciation. This is my style of investing. Low risk and good upside potential on a property which will pay for itself. I do not like having to add additional funds for repairs or taxes.  Another investor I know paid 365k in 2005 for a 3/2. That same home is now on the market at  225k. (Can you say “On Sale”?) No one can say for certain that prices couldn’t fall further, but with the consistent appeal of Florida sunshine and with Baby Boomers nearing retirement, most experts believe that we are just in a deep correction from an over heated market of the early 2000’s. Warren Buffet said in a recent interview “I believe you should be greedy when everyone else is fearful, and fearful when everyone else is greedy”. Five years from now, I believe we will look back and wish we had added more to our real estate portfolio in 2008-2009. If you would like to look into the possibility of acquiring additional properties, let us know. We are compiling a list of good properties that we would be happy to help you purchase.