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What Experts are Saying About September Phoenix Rental Property Statistics

Rent check is ARMLS’s monthly publication showcasing the Valley’s residential single family leasing market. It only accounts for phoenix rental properties that are advertised for lease through the Multiple Listing System (MLS) and does not include rental homes advertised through all other sources including phoenix property managers.  According to this data, the median lease amount for September 2013, was $1,100.00 while the average lease amount was $1,386.00 and the average days on the market was 41.  Typically, October and the beginning of November are strong leasing months however January can be slow as many tenants don’t have the funds after the holidays to for moving expenses and security deposits.  

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Phoenix Rental Property Legal Class Registration


Everyone is familiar with the saying “What you don’t know can hurt you” well in this case, what you don’t know may COST you!  There are many laws and requirements associated with owning a phoenix rental property and one such is the requirement to register all rentals with the Maricopa County Assessor’s office. Luckily it is a pretty easy process in which you complete their form which can be found on their website and mail along with a check for $10.00.  You will need your parcel number which can also be found on their website and if you live outside of Arizona you will need a Statutory Agent.  Some phoenix property management companies include being your agent with your services.
                Now if you fail to register your residential rental property with the Assessor’s office, “the city or town may impose a civil penalty in the amount of $150 per day for each day of violation”.  Additionally, the tenant at your property can legally terminate the lease with ten days notice and  you would be required to return all pre-paid rent to the tenant.  

                
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The Beginner’s Guide to the Two Most Expensive Phoenix Rental Property Repairs

As a phoenix investment property owner, you should budget for two common repairs that are somewhat costly:
The first expensive repair is a water heater replacement. It is pretty common to see water heater leaks due to corrosion at anywhere from 6 to 12 years. Due to Arizona’s hard water, corrosion in water heaters tends to happen faster than in other parts of the country.
When corrosion leaks happen, there is no way to fix except to replace the heater.  The water heater itself can run between $400 and $600 depending on the size and whether it is gas or electric. Then you must also budget for labor to drain, replace and dispose of the old one. A full water heater replacement job usually takes four hours. If you are lucky, the leak will have been recognized by the tenant before any damage to the stand or surrounding walls/rooms occurs. Common stand and drywall damage usually is contained to the stand and immediate drywall and runs less than $200 to fix. However, in cases where the water heater leak is rapid and/or poor draining issues in the garage, the damage could run $1000 + depending on the severity.
The next potential large repair to consider is with the A/C unit due to the summer temperatures in Arizona causing the unit to work at a level it isn’t designed for. Unfortunately the A/C manufacturers do not make specific “Desert Tough” A/C units rather the units are manufactured in mass for more temperate climates. Because of this many of these units will fail inside of 10 years. It is not uncommon for outdoor condenser a/c units to last only eight years and we have seen them fail after only five. The compressor failing is the main reason for the a/c unit going bad. When this happens, the compressor or outdoor unit must be replaced. It is almost as expensive to replace the compressor only so the whole condenser unit replacement is a better idea at a cost of anywhere from $2,000 to $3,000. 

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Home Owner Associations (HOA Management)

So you’re thinking of buying an investment property in the phoenix area and have researched rental prices, crime statistics and probably mortgage rates but have you ever considered researching the Home Owners Association (HOA)?  It may be surprising but often HOAs have bylaws when it comes to such things as placing a tenant and advertising a phoenix rental property.  For example, most HOAs have additional fees for rental properties ranging from an initial tenant fee of $150.00 to annual fees of $50.00 when a tenant is living in a property in their community. Additionally, many HOA’s either restrict or don’t allow advertising at the property which negates your chance of getting any kind of drive by rental interest.  Furthermore, several HOA’s in Arizona are facing major financial crisis so they look to charge additional fines to out of state home owner addresses knowing that the owner can’t just drive by the property and confirm if the violation is even accurate.  As you can see, doing research on and about the property HOA prior to closing is a great way to save yourself potential problems and costs down the road. 
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Home Warranties

In our experience servicing rental properties in Phoenix, purchasing a Home Warranty Policy on your rental is a poor idea especially if you are interested in retaining your tenant for longer than the initial 12 month lease term.  Home Warranty companies typically utilize sub par vendors who agree to steep discounts just to get the volume of work.  As a result, the vendors typically schedule home warranty work in the last open time slot so they can fill the earlier slots with customers who are paying full price.  This type of service leads to very frustrated tenants who often have to wait longer than what is really acceptable for service.  Additionally, since the vendors are sub par it is not uncommon for them to need to be dispatched multiple times in an effort to actually complete the repair – this again leads to tenant frustration.  If however you are still set on purchasing a home warranty we have compiled a list of the four major players in Phoenix from poor to horrendous. 
1.  One Guard- They are quick to respond on the phone and have the most competent vendors however frequently vendors have to be sent back out for the same problem multiple times but eventually they do get the repair completed. 

2. Old Republic- This company seems to have improved a bit over the last couple of years and they have a pretty efficient online system.  However vendors have to be called numerous times to actually complete repairs once approval has been received.

3. American Home Shield- If you chose this company plan on always paying more than just the service fee as each repair always has a competent that isn’t covered or needs to be “updated to code”.  They do have a cash option for several repairs so this is the best option BUT again if you are going to use the cash option might as well not get the warranty.

4. First American Home Buyers Protection- The absolute worst! 30-45 minute wait time guarantee on all calls. Unfortunately we have had to use this company for several a/c problems this summer during high heat times (100-115 degrees) and every time, the vendor has not correctly fixed the problem on the first call out. Then when you call them to try to get a new vendor assigned they won’t.  

If you are interested in spending a lot of time on the phone and getting completely aggravated, then a home warranty is the way to go.
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Distressed Property Reports

Overall the percentage of distressed sales through out Maricopa County is down by 45.7% from last year. Short sales are down 55% from last year and lender ROI sales are down 26%.  There are however still some areas such as Goodyear, Buckeye, Maricopa and Queen Creek that still have their share of distressed property.  For example, zip code 85338 in Goodyear in August 2013 had 25% of its’ sales from distressed properties and close by neighboring 85326 in Buckeye saw 24% of its’ sales from distressed properties. This means that if you are a property owner in these areas you may want to consider property management and retaining your home as a rental for a few more years to see if the market continues to rebound.  Many cities in the East Valley of Maricopa County are also still seeing decent numbers of distressed sales.  In 85138 (Maricopa), distressed sales accounted for 21% of the sales in August and close by San Tan Valley and Queen Creek saw similar high numbers.   

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Phoenix within the TOP 10 for Rental Properties!

With the crazy adjustments in the stock market and large global cities on the verge of filing bankruptcy, investment property continues to be a valuable place for cash heavy investors.  Additionally, with interest rates rising, several hot cities should see a small increase in inventory available for purchase.  According to MSN Money, the top 10 rental cities are the following:

1. Las Vegas – 8.6% vacancy rate and average rent amount of $803/month

2. Orlando, Florida – 7.9% vacancy rate and average rent amount of $871/month

3. Colorado Springs, CO – 5.3% vacancy rate and average rent amount of $713/month

4. Memphis, Ten – 11.2% vacancy rate and average rent amount of $682/month

5. Jacksonville, Florida – 10.2% vacancy rate and average rent amount of $800/month

6. Houston – 10.2% vacancy rate and average rent amount of $792/month

7. Atlanta – 9.1% vacancy rate and average rent amount of $849/month

8. Columbus, Ohio – vacancy rate 8.6% and average rent amount of $690/month

9. PHOENIX, AZ – 8.9% vacancy rate and average rent amount of $755/month

10. Oklahoma City – 8.3% vacancy rate and average rent amount of $584/month

RPM West Valley offers full service phoenix property management services including but not limited to marketing/advertising your property on 40+ websites plus property signage; conducting thorough checks of background, criminal, credit, employment and rental history; handling all lease documentation; coordinating maintenance with our own maintenance staff or sub-contractors; full interior/exterior inspections with pictures; collecting rents, serving notices, handling evictions, providing detailed monthly accounting statements and notifications online and also offer direct deposit options with a dedicated Accounting Manager; and filing Monthly Privilege Taxes for your property.  

For more information contact us info@rpmwestvalley.com, 855 748 7841


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The Myths & Realities of Rental Property Accounting in Metro-Phoenix

Because of all of the licensing and tax rules/regulations in many cities within Metro Phoenix, it can get very confusing to figure out exactly what you need to do in order to be in compliance. One of the myths I hear as a property manager is that rental tax is only required when multiple properties are owned in the city however this is very far from the truth!  Even if you only own one rental property the city wants their monthly or quarterly tax.  The cities monthly rental amount ranges from approximately 1.5 to 3% of the monthly rent and are required to be paid with the appropriate filing forms either monthly or quarterly depending on the city.  Before you can pay the tax you must file for your license through the appropriate city.  In addition to the taxes, the Maricopa County Assessor’s office requires you to register your property as a rental.  Fortunately this step only needs to be done one time and the fee is minimal.  Keep in mind if you do not live within Arizona you will be required to supply the Assessor with a statutory agent who is willing to accept all service on your behalf.  For additional information you may contact the Assessor through their website http://mcassessor.maricopa.gov/assessor.  Additional you may contact the Arizona Department of Revenue through their website www.azdor.gov.

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It Did What? 8 Secrets About the Best Things to look for in a Rental Property

  
623-748-7800
info@rpmwestvalley.com
www.rpmwestvalley.com
Real Property Management West Valley specializes in property management services and therefore we are constantly being asked where and what are the best properties for rental homes.  The where question is very difficult to answer because it really depends on the price the investor is willing to spend as well as what annual return versus appreciation they are looking for.  The what is a much easier question to answer and as such we have compiled the following list for properties within metro Phoenix:
1. Single story single family homes are the best properties to purchase due to the incredible heat here in the summer – tenants are afraid to take on the electric bills on two story homes.
2. Three and four bedroom single family homes tend to rent very well
3. Try to purchase homes that have larger square footage for bedroom count.  For example, a 1700 sq. ft three bedroom is much preferred to a 1300 sq. ft three bedroom.
4. You won’t always get more rent for an additional bedroom AND sometimes it may be more difficult to rent.  For example, a 1700 sq. ft four bedroom means that the bedrooms are going to be really small given that 1700 sq. ft is really more the size of a three bedroom.  Chances are this type of home will sit on the market for a while. 
5.  Condominiums and town homes will have greatly increased market time since they compete against single family homes, other condos and town homes as well as apartments.  Also, the apartment market tends to offer crazy move in specials with no deposit and half off first months’ rent.  
6.  The less landscaping the better!  We recommend desert in the front and just rock (that’s right no plants or trees) in the back.  
7.  When it comes to pools make sure they have a second fence right around the pool and don’t just rely on the main block fence around the entire property.  Also, keep in mind that the increase in rent usually just about equals monthly pool services so it is a wash.  Having a pool however if in the right location can definitely decrease marketing time.
Lastly, if you wouldn’t live in the home than chances are good qualified tenants wouldn’t live there either.
For more information on our phoenix property management services please contact us today!
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City of Phoenix offers educational classes for landlords…….

 The City of Phoenix is the only city that offers a certified Landlord/Tenant Counseling Program in the state. If you are a new landlord than knowing the rules and requirements of tenant management is imperative. Additionally, you may be having some difficulties understanding the Arizona Landlord Tenant Act in its’ entirety.  One major responsibility of the counselors at the program is to put on free workshops that educate residents on the Arizona Residential Landlord and Tenant Act. The three-hour class features experts from many departments within the city including a speaker on fair housing issues, lead paint, crime and the city’s top eight code violations. The class is fully educational for landlords and tenants.  The program consists of three counselors who work for the city but educate landlords and tenants across the state on the state laws regarding landlords and tenants. The counselors are not attorneys so they do not offer advise or mediation but they can provide excellent information especially if you are currently deciding if becoming a landlord is for you.  For more information about the clases contact:

Landlord/Tenant Counselors Program
Neighborhood Services Department
200 W. Washington St., 4th floor
Phoenix, AZ 85003
Phone: 602-534-4444
Email: landlord.tenant.nsd@phoenix.gov
Questions or comments

And for a free copy of the Arizona Landlord Tenant Act visit the Arizona Secretary of State at www.azsos.gov.
For more information on Phoenix Property Management Services contact us at info@rpmwestvalley.com or 855 748 7841. 
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