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RPM Phoenix Valley Experiences

Should you rent to a halfway house? RPM Phoenix Valley Experiences
Should you rent to a halfway house? RPM Phoenix Valley Experiences

RPM Phoenix Valley Experiences are very vast since we are property managers specializing in the Phoenix market for over 15 years.  Furthermore unlike other property manager’s in Phoenix we give property owners our honest opinion even if that means we lose business.  About six months ago a property owner with an 8 plex in downtown Phoenix contacted us about our services.  At that time the 8 plex was being completely renovated due to a fire.  The owner had originally rented the property on his own to a single tenant who was using all 8 units.  After two months of discussion the property owner decided to rent the complex to another single tenant.  Since it was a single tenant the owner decided to manage himself.

This past Friday we received a call from the owner needed our help to get rid of the tenant.  The tenant is a half way house.  The occupants just got out of jail.  Turns out the tenant is the same one who lived there when the fire started!  Additionally, the tenant had no insurance so the owner and his insurance paid for all renovations.  The tenant is in a five year lease.  The owner thinks he can force the tenant to move out since they didn’t have insurance.  The owner wants half of the occupants move out so he can rent those units and then once those are full make the rest of the half way house move out.  This way the building will never all be vacant.

Before taking on the project we made a visit to the provide to assess.  We found that the property smelled horrifically of smoke (ironic since there was a fire).  Also the home owner can’t force the tenant to vacate so he will need to pursue a legal eviction.  Market rent for the area is about $200 less than the owner had predicted.  The units are going to need repairs when the occupants move out.

RPM Phoenix Valley’s recommendation;  proceed with the legal eviction; rehab the units and then sell the complex.  From RPM Phoenix Valley experience sometimes it is best to cut your losses and move on!

For information on our property management service click here.

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HOAs In Phoenix

Phoenix Condo Community Currently Under Homeowner Association Management
Phoenix Condo Community Currently Under Homeowner Association Management

The Phoenix metro area has many planned community developments.  Most of the developments have Homeowner Associations more commonly referred to as HOA’s in Phoenix.  The HOA’s were created to keep uniformity within the neighborhood and are comprised of a board which consists of home owner’s who volunteer and are then elected.  Unfortunately however HOA’s can be costly and in this post we will look at 6 typical costs.

The first cost is the regular assessment which is collected usually annually or monthly.  The regular assessment typically pays for “routine” services such as management fees, landscaping maintenance if needed, pest control services etc.  Assessments can range from $30 to several hundred dollars depending on the type of community and what is needed.  Typically condominium and town home communities have higher regular assessments because their routine expenses  include insurance, roof maintenance & regular pest control to name a few.

The second cost is a transfer fee.  This fee is paid by the new buyer of a property in an HOA community.  The transfer fee covers the expense of transitioning activities and paperwork from the seller to the buyer.  This is a one time fee and is between $100 – $400 depending on the HOA.

The third cost is a disclosure fee which in Arizona must be paid by the seller.  This fee covers the cost of  the seller providing the buyer with the HOA’s governing documents, so that the buyer has full disclosure.  The document package typically includes the communities CC&R’s, Bylaws and current financials and is the most important part of the transfer process.

The fourth possible cost is a capital improvement fee.  HOAs in Phoenix usually have a capital improvement fee of one quarter of one percent of the sales price.  Repairs or improvements to the common area comes from this fee.

The fifth possible cost is prepaid dues.  These are monthly or quarterly dues that are collected up front at closing for future months of dues.  Usually 1-2 months are collected.

Finally the sixth possible cost is a special assessment.  Special assessments are for unforeseen expenses such as a new roof for a condo community.  Typically special assessments are due in the year they are levied unless the HOA offers payment plans.

There is a long standing debate regarding the positives and negatives of homeowner associations.  Those in favor think that they help to maintain the community in good condition by enforcing uniform standards.  Others find them to be intrusive and unnecessary.  One thing is for sure; if you are purchasing in a community with an HOA be sure to carefully review the CC&R’s to be sure there isn’t a rule that you can’t live by.  Also, double check the financials to make sure the HOA is financially healthy.

For information on our HOA management services (full and financial only) please visit us here.

If you are new to an HOA community the following website offers helpful newsletters.

 

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Phoenix Rental Market

Phoenix property manager
Phoenix property manager

As Phoenix property managers, we are going to provide a realistic overview of the current Phoenix rental market.  Although the media has been claiming that the rental rates are rising sky high in the area this is definitely not true to for all segments of the market.  For example, we spoke to a landlord last week who has a 2600 sq ft 4 bedroom 3 bath home in the Verrado, Arizona area which he has been renting for a few years.  He reached out to us as a potential Phoenix property manager because he is unhappy with his current company.   In this situation we like to determine what services the client is missing with their current management company.  Through out the discussion we realized that his only unhappiness with his current manager is the fact the home was still on the market.

The most recent tenants had been paying $1695.00 and were only in the property for a year.  He had the property now listed for $1895.00.  His logic was that he hears on the media how “hot” the Phoenix rental market is and therefore is sure that the 11% increase in price is justified. Unfortunately it is not!  The good news is that if you own rental property that is renting between $900 – $1200 a month then there has been an increase between 6-10%.  However, the bad news is that if your property rents for over $1500 then the rental amounts are pretty flat.

Here are a few examples of rental increases that we have experienced: Surprise 3 bedroom, 2 bathroom 1681 sq ft home in Bell West Ranch went from $1199 – $1299 which is an 8% increase from 2018-2019.  In Laveen  a 4 bedroom, 3 bathroom 1835 sq ft home in Country Glen went from $1299 $1399 which is a 7.7% increase from 2018-2019.

In conclusion the media of course is wrong and all rents aren’t skyrocketing in the Phoenix market.  Additionally, no matter how good a property manager is they can’t rent a property that is priced outside of the market rent.

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Buckeye Property Manager Success!

 

Our Buckeye Property Managers rented a home in Buckeye’s Sundance community in just 7 days!!!  Sundance is a premium subdivision in Buckeye just off the I-10. The community has a small town feeling but close to Phoenix.   As a result, Buckeye is a desirable area for phoenix property managers.  Sundance is south of the I-10 extending from just west Verrado Parkway to Watson Road off Yuma Road. The community’s started development around 2003 and first round of construction was completed by 2006 but construction has resumed in the Sundance.  The homes have between three to five bedrooms on average and two to four bathrooms as a result this neighborhood is perfect for those seeking single-family investment homes.

The Buckeye Property Managers first listed  the single level single family home which is 1635 square foot home in 2012 where it rented for $875, it then rented again in late 2014 for $900 and was rented until a new tenant was placed in July 2019.  In 2019 the home rented for $1195 and took just seven days to rent.  The 2019 rental price represents a 33% increase from 2014.

Buckeye is located approximately 30 miles west of downtown Phoenix. For more information please visit here.

 

For all of your Buckeye Property Management & Phoenix Real Estate & Phoenix Property Management Needs Contact:

Real Property Management Phoenix

www.rpmphoenixvalley.com

602-358-8130

info@rpmphoenixvalley.com
Follow us @RPMPhoenixValley
&

Follow @rpmwvphoenix

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Mesa AZ Property Manager

Our Mesa AZ Property Manager completed a rental study comparing the 85205 Mesa zip code to Mesa in its’ entirety.  All rental market figures for the 85205 zip code as well as all for Mesa were taken from closed rental data from the Arizona MLS from 2016-2019 (Year to Date).  The chart below outlines the number of rented properties, average rent and average days on market.  What our Mesa AZ Property Manager found is that overall the 85205 zip code brings in a lower monthly rental rate than Mesa as a whole. However the increase for 85205  from 2016 to year to date was 28%. Additionally, the average increase for the same time period for Mesa was 14%. Interestingly, the average days on market is pretty similar for both.

Mesa, AZ Property Manager rental study of 85205 zip code versus Mesa overall

The 85205 zip code has a population of approximately 39,858. It is located north of main street, west of Val Vista, east of Power and south of McKellips.  Additionally it has a median home value is $124,800 and median household income is $44,469 this zip code is an attractive city for rental property ownership.
Further information about the city of Mesa, Arizona… 
  • Median household income is $48,259 a year.
  • Mesa is the 3rd largest city in Arizona
  • The overall median age is 35.9 years
  • For every 100 females there are 97.5 males.

For more information on Mesa, AZ visit our informational page or visit the world wide population review.

 
 
For all of your Phoenix Real Estate & Phoenix Property Management Needs Contact:
Real Property Management Phoenix Valley
www.rpmphoenixvalley.com
602-358-8130
info@rpmphoenixvalley.com 
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Homeowner Association Property Management

Our July podcast is  now available and is part one of our series about homeowner association property management.  HOA Property Management is divided into financial services only and full services.  Full service includes financial services plus additional services.  Some of the additional services are attending meetings, resale disclosures, site visits, issuing/monitoring violations, emergency services and much more.  This first segment discusses financial services specifically monthly reports, association accounts, receipt of funds and collection of assessments.  We do include recommendations within each category in an effort to maximize your community’s management services.  Our free tip at the end provides suggestions for one of the largest problems for HOAs which is community involvement. Our next podcast segment will finish financial services and begin discussing some of the other services provided.  All three segments can assist a board in interviewing potential property management companies.

 

If your community is located within the Phoenix metro area please visit here for information on our HOA management services.

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4 Reasons to Buy a 4-plex

Top Reasons to Purchase a 4 Plex in Phoenix Az

Are you thinking about buying an investment property? If so, have you considered multi-family properties?  Does the number of units scare you away?  If so there are many good reasons to consider purchasing a multi-family property.  Here we highlight the top four reasons to buy a 4-plex:

  1. The top reason to buy a 4-plex in Phoenix or elsewhere is because it instantly gives you four doors which equals more income.  Most likely you will have more income on a monthly basis from a 4-plex as compared to the income that you would earn from owning a single-family home.  Also it decreases your risk of vacancy.  If you live in one unit that chances are you won’t have a month in which all three other units are vacant.
  2. Great Financing Options ! With a 4-plex you may  qualify for an FHA loan if you plan on living in one of the units. With an FHA loan you can purchase a property for as little as 3.5% down and this allows you to be an investment owner with not much out of pocket cost.  Also, this allows you to save money for times of vacancies or repairs.
  3. Get to live for free.  If you plan on living in one of the units of the four-plex you may have all of your expenses covered on a monthly basis with the rent that you collect from the other three units.
  4. Great Practice for Owning Larger Multifamily Properties. Starting with a four-plex is a great way to get experience to then expand your investment portfolio into larger muli-unit properties.

For information on valuing multi-family investment properties such as 4-plexes visit here.

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Phoenix MultiFamily Property Management

Phoenix multifamily properties

 

 

 

 

 

 

Property evaluations are one of the most important aspects of Phoenix multifamily property management.  Part of our Phoenix multifamily property management includes our six step evaluations.

Step 1: Know your local marketing conditions by using the Freddie Mac Apartment Investment Market index found here.  This index provides useful information such as property price changes, employment changes as well as information on housing permits.

Step 2: Determine the unit mix meaning the number of studios, one, two and three bedroom units in the building.  Then know your area so for example if your building is near a college than studio units will be desirable.  However if your property is in an area with mostly young families than three bedroom units will probably be more desirable.

Step 3: Know your market rental rates by completing a rental survey.  With this step be sure to use rented units in your area with similar amenities.  If you are only able to find vacant comparable homes through Zillow or Trulia be sure to adjust the rate by at least 15% due to their inaccuracies.

Step 4: Estimate your costs by determining if you need a property manager or if you can self manage.  Also, look at capital costs such as new HVAC’s (especially in the Phoenix market) as well as roof replacement.  Keep in mind that overall costs should be between 35-50% of gross operating income.

Step 5: Calculate the CAP rate which is the net operating income divided by the current market value of the building.  The current market value is what you could sell the building for today for cash.  Be sure to contact a Phoenix multifamily property manager to help with this information.

Step 6: Determine why the property is listed for sale.  A good reason would be retirement.

 

 

 

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Laveen Property Management Success!

Rented Laveen Crossing Home!

RPM specializes in Laveen Property Management.  Our Laveen Property Managers just rented a property in Laveen Crossings in twelve days!  Laveen Crossing is a neighborhood in Laveen which is located within South Phoenix.  48% of the residents in Laveen Crossing are renters making it a desirable area for Laveen property managers.  Laveen crossing is  south of Apollo, east of 51st, north of Baseline and west of 55th Ave. This neighborhood is perfect for those seeking single-family homes. The community’s homes were mostly developed around 2005 and construction was completed around 2007.

We first rented this five bed/two and one half bath, two story Laveen rental home in 2014 for $1295.00 and it took forty four days.  Furthermore, in 2015 we saw the home rent for $1350 in ninety five days.  In 2017 the home rented for $1325 in fifty seven days.  Final last month, 2019  we were able to get $1595 in  twelve days!  The 2019 rental price represents a 23% increase from 2014.

Laveen encompasses around 48 miles of space.  It is close to downtown Phoenix so it is a good area for Laveen property management.

 

Visit Laveen for more information.

For all of your Phoenix Real Estate & Phoenix Property Management Needs Contact:
Real Property Management Phoenix
www.rpmphoenixvalley.com
602-358-8130
info@rpmphoenixvalley.com
Follow us @RPMPhoenixValley
&
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Phoenix Lease Agreement Creation

Our latest podcast is  now available and it closes our series on phoenix lease agreement must haves. To review; our first segment was about specific items to include in the lease.  Then our second segment reviewed lease payment information. In this segment we discuss HOA addendum, pet agreements and lease end/move out verbiage.  Our free tip relates to the conversion of the lease to month to month.  All three segments will help the Phoenix landlord to draft a comprehensive lease agreement.  The lease agreement is an essential item for successful property management in the phoenix area because it sets the expectations for both the landlord and the tenant.  We always suggest enforcing the lease agreement rather than making modifications once the tenant is in place. Also we suggest Phoenix landlord’s to be familiar with the AZ Landlord Tenant Act and you can obtain a copy here.  To listen to the first two segments visit us RPM.

 

 

 

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