KGC Properties LLC ~ Property Management & Real Estate In Tucson!

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I’m A Property Manager – Not A Magician!

A common response after talking with a potential new client - dicussing the property and possible rent amount, “What do you mean that’s all I can get for rent – I need at least $500 more a month than that – why can’t you do it?” 

Because I am not a magician?!  No – I didn’t say that – but it did cross my mind! I believe in getting the highest rent possible for a home, but there is a point where the only way you can get an unrealistic rent price is if you could magically make it happen!

The toughest part about renting your home isn’t renting it – it is being able to “afford to rent it”.  Often, the mortgage payment, HOA, property manager fees, repairs, etc., cuts into the bottom line so much so that it becomes unaffordable for some owners.  And more often than not, these same owners aren’t able to sell similar reasons - not being able sell for what they owe.

So what can someone in this situation do?  It strictly depends on your situation – but options include:

  • Renting the home for what you can – since a little income to offset the mortgage is better than none.
  • Consider selling your home with a lease option to purchase or owner carryback.
  • If you are moving because of a job, ask your employer if a relocation program is available to help.

What should you NOT do?  Try and rent the home for more than what rental market supports. It doesn’t matter how much you try, how much you market it, just like you cannot sell an overpriced home – you cannot rent one either.

Buying or selling Tucson real estate, Mt Lemmon, Tucson bank-owned homes, Tucson rental homes, or Tucson lease option homes? Visit www.KGCPropertiesLLC.com .

                                                 

 

This blog is written with my opinions and my opinions are  presented with accuracy but not guarantees. Please talk to a professional before making any real estate, financial or agency decisions.    Gabrielle Kamahele Rhind - 2014. If you want to reprint parts of this - just email me for my permission: KGCProperties@gmail.com .

 

Comment balloon 33 commentsGabrielle Kamahele Rhind • February 18 2014 03:16AM

Comments

IMO, your mistake is not saying to them that you're not a magician, and then point out the facts to them.  When people ask for furniture at a ridiculously low price, I tell them I'm not Monty Hall and this is not Lets Make A Deal.

Posted by Roger D. Mucci, Lets shake things up at your home today! (Shaken...with a Twist 216.633.2092) over 4 years ago

Seems to me that a good presentation of the comps of that market area works.  Facts are facts.  Otherwise, don't waste your time.

Posted by Lenn Harley, Real Estate Broker - Virginia & Maryland (Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate) over 4 years ago

GOOD MORNING ROGER!  Yes, I should say it - sometimes, it just doesn't come out nicely though so I go with the facts instead - and I love your Lets Make A Deal comment - I'll remember that!

GOOD MORNING LENN!  For most people it works - for some, they press on and make comments such as, "But the view from the living room is worth the money", or "There has to be value in the Italian tile floor"!  These folks have a harder time seeing the facts.

Posted by Gabrielle Kamahele Rhind, Broker/Owner (KGC Properties LLC, Tucson Property Management & Real Estate) over 4 years ago

Good morning Gabrielle,

I love Rogers comment that he is not Monty Hall and this is not "Let's make a deal!" There are times those just understand the "facts" apply to their home too! When that is the case I most likely walk away..there is plenty of business out there and you don't always have to be the one to deal with unrealistic sellers or landlords!

 

Posted by Dorie Dillard CRS GRI ABR, Serving Buyers & Sellers in NW Austin Real Estate (Coldwell Banker United Realtors® ~ 512.346.1799) over 4 years ago

Something that we hear much too often: 'I need'.  Unfortunately the realities of the market place don't factor in our needs.

Posted by Gabe Sanders, Stuart Florida Real Estate (Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales) over 4 years ago

Gabrielle, I really enjoyed your post this morning. It may me think about something to expand on and write about for the last couple of weeks. Thanks for sharing.

Posted by Winston Heverly, GRI, ABR, SFR, CDPE, CIAS, PA (Winston Realty, Inc.) over 4 years ago

Gabe is right... and when they start with "they have to understand blah blah blah". They understand fine... not going to do what is unreasonable.

Posted by Andrew Mooers | 207.532.6573, Northern Maine Real Estate-Aroostook County Broker (MOOERS REALTY) over 4 years ago

Gab,

As we all know, the market determines the rent, not the owners "needs."

Rich

Posted by Richard Iarossi, Crofton MD Real Estate, Annapolis MD Real Estate (Coldwell Banker Residential Brokerage) over 4 years ago

Hi Gabrielle - those are all great suggestions for this situation.  A person should do the research before purchasing an investment property, or, if they are stuck with one, as you mentioned, renting it for what the market dicatates would be better than having it sit vacant for months.

Posted by ReadySetLoan Condo Approval Team, The FHA/VA Condo Project Approval Specialists (ReadySetLoan Condo Team LLC) over 4 years ago

I know you can pull off some amazing things Gabrielle, but magic is not one of them.  I hope your clients listen to your recommendations as your wealth of experience and your success speaks for itself.

Posted by Scott Larson, Park City, Utah Real Estate News (BHHS/Utah Properties) over 4 years ago

Gabrielle - I liked your post. Probably best not to say those words to your client. In this case, discretion is the better part of valor...and a good way to keep a client. Still, enjoyed your post. 

Posted by Kevin McGourty (Realty ONE Group) over 4 years ago

Am I crazy or is the second half of my comment about Monty Hall and Lets Make A Deal gone?  I don't see it..........

Posted by Roger D. Mucci, Lets shake things up at your home today! (Shaken...with a Twist 216.633.2092) over 4 years ago

I always appreciate property managers pusing the envelope for a higher rental price but a high vacancy rate has a much larger affect on ROI.

Posted by Joe Pryor, REALTOR® - Oklahoma Investment Properties (The Virtual Real Estate Team) over 4 years ago

It is very hard to look at the big picture when you see a negative on your spreadsheet. I appreciate you being a straight shooter and not a cover up artist...

Posted by Paul S. Henderson, REALTOR®,CRS,, Tacoma Washington Agent/Broker & Market Authority! (RE/MAX Professionals.) over 4 years ago

It can be very difficult for certain clients to understand that their "need" doesn't always translate into the reality of things, especially when it comes to having others makeup the shortfall!

Posted by Myrl Jeffcoat, Greater Sacramento Real Estate Agent (GreatWest Realty) over 4 years ago

HI ROGER!  Wow - you are right - what happened to it?!  I have no idea!

HI KEVIN!  Oh yes, I did not say it - just thought it!

Posted by Gabrielle Kamahele Rhind, Broker/Owner (KGC Properties LLC, Tucson Property Management & Real Estate) over 4 years ago

It is always better to get as much as they can and make up the difference and hope that they can wait a bit and be able to sell the property

Posted by Ed Silva, Central CT Real Estate Broker Serving all equally (RE/MAX Professionals, CT 203-206-0754 ) over 4 years ago

I am in the process of working a rental contract with a customer now that 'thankfully' is not in an underwater situation with their home.  The customer will be able to flex the amount of rent to charge.  This is a very nice blog with great tips for the homeowner turned landlord-to-be.  

Posted by Kirk Wessel over 4 years ago

Isn't that strange Gabrielle.....maybe it was Eddie.

 

Posted by Roger D. Mucci, Lets shake things up at your home today! (Shaken...with a Twist 216.633.2092) over 4 years ago

It is best to get as much as the market will bear and then wait for the market to improve. 

Posted by Joan Whitebook, Consumer Focused Real Estate Services (BHG The Masiello Group) over 4 years ago
The goal is to have the Charisma and engaging personality of a magician, right? Love and light, Laura
Posted by Laura Cerrano, Certified Feng Shui Expert, Speaker & Researcher (Feng Shui Manhattan Long Island) over 4 years ago
The goal is to have the Charisma and engaging personality of a magician, right? Love and light, Laura
Posted by Laura Cerrano, Certified Feng Shui Expert, Speaker & Researcher (Feng Shui Manhattan Long Island) over 4 years ago
The goal is to have the Charisma and engaging personality of a magician, right? Love and light, Laura
Posted by Laura Cerrano, Certified Feng Shui Expert, Speaker & Researcher (Feng Shui Manhattan Long Island) over 4 years ago
Just like selling Realestate the market determines what the property will rent for. I your client wants more per month rent as a fully furnished turn key unit.
Posted by Rod Pierson, Northern California (Results Real Estate Inc) over 4 years ago

Gabrielle, all you can do is show them the comps with the facts.

Posted by Michael Setunsky, Your Commercial Real Estate Link to Northern VA over 4 years ago

Wanting and getting rents is an interesting subject...Positive or negative cash flow comes out of it...However the rental market is no respecter of your profit & loss...It rents for what people will pay for it

Posted by Richie Alan Naggar, agent & author (people first...then business Ran Right Realty ) over 4 years ago

I tell Owners that it is like for sale, if they price their home out of the rental market people will just rent something else. My Husband tells people he can have someone in tomorrow for any rent they want IF we do no background check and let them in with no security deposit. Both approaches get the point across.

Posted by Leslie Prest, Owner, Assoc. Broker, Prest Realty, Payson, (Leslie Prest, Prest Realty, Sales and Rentals in Payson, AZ) over 4 years ago

True, rent is typically market value based, just as sale prices are.

Posted by Kat Palmiotti, The House Kat (Grand Lux Realty, Monroe NY, 914-419-0270, kat@thehousekat.com) over 4 years ago

Vacancies eat up profits in rentals and trying to get that extra $100/month will be a moot point if it sits on the market empty for an extra month.

Posted by Aaron Hofmann, aka Mr. Smyrna Vinings (Atlanta Communities) over 4 years ago

I often wish I had a crystal ball to take to listing appointments! Landlords can be unrealistic about the home's rental value, like sellers. I hope he listened to your advice and didn't lose money to make a extra!

 

 

Posted by Tracy Lee Parker, Buy*Sell*Lease (RE/MAX Dallas Suburbs/PLATINUM PROPERTIES & MANAGEMENT) over 4 years ago

Gabrielle, one thing always remain common - be it landlord or sellers! We are the professionals to guide them in right direction.

Posted by Praful Thakkar, Andover, MA: Andover Luxury Homes For Sale (LAER Realty Partners) over 4 years ago

When rents exceed the Market a landlord will either sit vacant or lease to a desperate/problematic tenant who is forced to pay such a rate !

Posted by Michael J. Perry, Lancaster, PA Relo Specialist (KW Elite ) over 4 years ago

Gabrielle - this is such a great post! So many times the property owner is as unrealistic about rental income as they are about what they could get if they sold their home. There's nothing worse than working with an owner who is barely scraping by with their payments, you get then a great tenant, then something breaks and the owner is so cash strapped they can't repair, or try to repair themselves, then your tenant gets irritated and leaves and the owner gets mad that the property is vacant. Your points are so well taken!

Posted by Susan Jacobsen, 20 Years Providing WOW Real Estate Service (The Alliance Group Realty) over 4 years ago

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