Archives
October 2007
Oct. 31, 2007 - Is The Federal Interest Rate Cut Enough to Stabilize Sub prime Mortgage Woes?
As the sub prime mortgage debacle continues to play out across the United States, the Federal Reserve has opted to cut interest rates by half a percentage point, from 5.25. This cut makes all loans relatively cheaper, thereby encouraging a pantheon of economic activity to increase, hopefully in the troubled housing market. Such tactics have been used with relative success in the past, most notably in 2000 when the US economy suffered a major downturn in the wake of the dot-com collapse. This collapse triggered a recession, which took three years to completely stabilize. Since 2003, the Fed has slowly brought interest rates up in order to help keep dangerous inflation and reckless consumer spending down. These effects have been in line with forecasts at the time, showing that the Fed was relatively in touch with potential economic problems. Yet the slow buildup of the interest rates may have occurred too late for them to be high enough to combat the problems in the housing market because the federal interest rate still has a limited and indirect effect on housing purchases, which depend on a myriad of other factors, not least of which is the agreed interest rate on a given mortgage. Since those terms are decided between the lender (companies like Countrywide) and the borrower, (regular people) a rate cut can have many positive effects on overall spending without targeting the sickly housing market directly. Even though the Federal Reserve have made a definitive statement on the seriousness of sub prime mortgage defaults by cutting rates for the first time in four years, they are convening imminently to discuss a further rate cut, of an estimated .25. This rate cut will certainly stimulate some aspects of the US economy, but its effects on mortgages are less predictable. This is because unlike other, larger areas of the economy like job growth and retail spending, housing loans are tied to many other secondary industries that suffer slumps regularly whenever too many houses are on the market. Examples include the auto industry and the household appliance market, which accounts for many products that are still made in the US. The increasing interest rates of the past several years have had a negligible effect on the ability of lenders to lure millions of Americans into signing up for a sub-prime mortgage, even when as many as one third of those who have these faulty contracts would have qualified for safer prime mortgages. Rising interest rates also did little to curb the booming housing market and its aforementioned secondary industries from expanding, possibly to proportions that cannot be sustained. So will another interest rate cut be enough to bring back the mortally wounded housing market back from the brink of death? The possibility exists, but it appears to be unlikely without some other mechanism for assisting the housing market. The Fed works like an opiate- it treats all symptoms by allowing a patient in a lot of pain to get much-needed rest, but does little do address an underlying specific cause. Most would agree that, despite the rise in interest rates over the past several years, the economy has been relatively robust. Yet the sub prime mortgage issue has gone unchecked for years, while millions of Americans who have bought into the classic dream of owning a home despair and the lender/broker machine goes on unchecked. The only reason this fleecing of (usually) the poorest homeowners has come to any economist's attention is because of the spread of these faulty mortgages through markets all over the world. Without some degree of governmental regulation over lending practices, and reexamining the credit reporting agencies that allowed risky mortgages to be converted into bonds and securities in the first place, a federal interest rate cut can only do so much. Whether that is enough to stimulate the economy away from a recession is still unfortunately up in the air. Ki works for an Austin Realty company. He primarily works with clients interested in central Austin real estate. If you are interested in the Austin market a good starting off point is his website which offers a free search of the Austin MLS.
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Oct. 30, 2007 - Fun Fun Fun Fest
Festivals have been steadily gaining popularity all over the world in recent years, and the larger ones have expanded tremendously. However, as a result of the high ticket prices and relatively remote locations, a few oppurtunistic entrepreneurs have taken advantage of the backlash against the inaccesibility of events like Bonaroo, Lollapalooza, and other big-draw, weeklong festivals.
One notable example of this comes in the form of Austin's Fun Fun Fun Fest, which is now in its second year. Last year's event featured over 30 bands on three stages, for a modest charge of $10. Many local and nationally acclaimed acts were featured, from punk rock bands like the venerable Circle Jerks to Austin favorites such as the Octopus Project and the Riverboat Gamblers. Large festivals aim to please as many music fans as possible by providing an incredibly diverse cross-section of acts, thereby minimizing the liklelyhood of alienating a potential customer.
However, the drawback to this approach is that booking such a large number of acts means paying all of them, and providing a substantial amount of infrastructure. Even in the case of events like South By Southwest, which use mostly existing clubs to showcase the artists, the number of people who can see a given act is compromised by, if nothing else, fire codes which restrict how many people can be inside a club safely at a given time. On the other hand, festivals like Fun Fun Fun Fest serve as an intermediary between the larger festivals and one-off club shows by serving a relatively small subset of the musical crowd with a lot of bands. Thus the "bang for your buck" of a large festival is preserved, while many people are still more satisfied by the relatively low ticket price, which is more in line with a club charge for seeing at most four to five bands in one night.
Fun Fun Fun also brings a somewhat different aesthetic to the standard "carpet bomb" approach discussed earlier. By appealing to a more specific (some would say discerning) crowd, the fans are more likely to be happier with the experience, therefore making them likely to return. Since their acts do range from relatively unknown to national touring acts, new musical introductions are welcome and often. The 2006 festival was (somewhat hilariously) divided into three stages according to loosely defined genres: Rock, Punk, and Electronic. While these definitions seemed a bit inaccurate, (for example, anyone who has seen Peaches live would probably have placed her in the Punk or possibly the Electronic stage before the largest Rock stage, but the genre-based stage distinctions are no longer quite so brazen in the upcoming 2007 iteration) most would have considered the 2006 Fest to be quite a success.
This year's festival has expanded quite a bit, most obviously in that it is now a 2-day affair. It still takes place in Austin's own Waterloo Park, and there are still three stages (their genres still based along the previous year's lines, without calling them such outright) but the tickets are a bit pricier at $54 a pop (which does fall in line with the 75 bands now playing). This festival now appears to be in direct competition with the Austin City Limits (ACL) Festival, but with a narrower focus. I enjoyed last year's show immensely, and the acts seemed much more tailored to my tastes than ACL, not to mention costing less than a tenth of the hard-to-obtain ACL day passes. Also, since FunFunFun happens in November, the absurd dust storms and (this year) fires are no longer a threat. "What!" you say, "A festival in Texas that's comfortable and, well, fun?" I say check out the bands and see what piques your interest. If punk rock, electronic dance music, or just plain old rock-and-roll seems up your alley, then FFFFest is a good bet.
Ki works in Austin Texas the live music capitol of the world. His website provides information about Austin Real Estate. If you are looking for a property in Austin his site has a search of the Austin MLS along with information on Austin Neighborhoods.
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Oct. 27, 2007 - Halloween in Austin
With Halloween just around the corner, it's a good idea to keep track of some of the fun and creepy events coming up in Austin, Texas. The good news is that most of them are inexpensive and fun for the whole family.
The Bats
The bats are a popular Austin attraction from May until October every year, but Halloween is obviously the most appropriate time to go check them out. The underside of the Congress Avenue Bridge in downtown Austin is home to North America's largest urban bat colony, with these creatures of the night numbering close to 1.5 million. Every evening at dusk the bats fly out from the bridge in search of food, and people gather around, waiting and watching for a glimpse.
The Day of the Dead Parade
La Dia de los Muertos, or the Day of the Dead, is a Mexican holiday celebration that takes place each year on November 1. Because Texas is so close to Mexico, the culture has spread throughout Austin which, through its Mexic-Arte Museum, hosts a parade. This year it will be held on Saturday, October 27, 2007, and will not only feature the standard costumes, noise makers, dancers and music, but also a celebration of Frida Kahlo, one of Mexico's most beloved artists. In honor of Frida's 100th birthday (1907-2007), there will be 100 Frida look-alikes in the parade. Tickets for this event cost only $5 for adults and $2 for children, and entrance is free for participants in the parade.
Austin Ghost Tours
Austin Ghost Tours offers hour and a half tours on foot through the downtown Austin area, where you will hear the haunted tales and legends of various local buildings and people. They have a couple of tours each night, so you shouldn't have a hard time scheduling one. Tickets are $19.95.
Austin Haunted Forest
For only $10.00, the Austin Haunted Forest allows you to wander the October Trail of Fears and enjoy performance art and such attractions as the Life-Sized Mouse Trap. Popular events include the "Crystal Ball" costume party on Saturday, October 27, 2007 and the Ninth Annual Halloween Fire Show on October 31st. Note: If you have children under 13, it's better to take them to the Haunted Forest's 'G-rated' trail instead.
These are some of the best ways to have fun and stay safe for Halloween, whether you are a parent or a kid at heart yourself.
Ki is a realtor in Austin. His website Austin Real Estate Search provides information on the Austin market. The site provides a search for Austin Homes along with general info on his Austin Real Estate Blog.
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Oct. 24, 2007 - September Statatistics for the Austin Real Estate Market
 While Austin seemed to escape most of the slowdown that affected other parts of the country over the last year Austin is feeling the changes in the credit markets. The amount of sales in September 2007 was 1824 or falling 22 percent from the sales in 2006 of 2341. The amount of inventory also increased 22 percent. On one hand the amount of inventory last year was incredibly slow but its still a sign we would rather not see. It looks like East Austin is seeing larger inventory increases than most areas. If we break out the increases in inventory by area we see. Suburbs +21% Central Austin West +18% Central Austin East +62% It looks like East Austin is seeing large inventory increases because investors are pulling out and the total amount of homes in East Austin has increased due to rapid new construction. Looking forward what happens in the Austin real estate market depends largely on what happens with the more stringent lending practices currently gripping the nation. While the major banks and the government are looking at possible solutions to the current credit crunch we will have to wait and see if any of the solutions pan out. Ki is a realtor in the Austin Real Estate market. He runs a blog with general information on the Austin market called the Late Night Austin Real Estate Blog. He also provides a search for Austin Homes.
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Oct. 19, 2007 - The Decision to Sell Your Home
Change is the norm in today's busy life and in our real estate market in Austin,
Texas change can be fast, unexpected, and daunting. So, what happens when an unplanned or a strategic change requires your
reconsideration of your current location of your current residence? How do you deal with the potential to move to another city
or neighborhood? What should you do to divest of your current real estate in an equitable manner? What are the considerations
necessary to sell your current home, investment property or condo?
If relocation is a function of a company transfer or because you are taking a new job, then the process can be easier. The
employer may have relocation services to offer, so be sure to ask about these. The services often include assistance in buying
and selling your home, contracting a mover often with expenses paid, assistance in closing costs paid, and help securing
financing for your next home. If you are making a choice because you need more space and rooms for life changes like children
or elderly care or you are looking for a change of neighborhood, then evaluate the trouble and cost of moving versus the
benefits. Be sure to consider the closing costs of buying and selling a home, the moving costs, and even the time costs of
making the move.
In all cases, the first step is to evaluate the sale of your current residence. Do you have a clear understanding of the
market conditions in your area? Is it a sellers or a buyers market? If you recently purchased your home, has the value gone up
or down? If the value has declined and you will be realizing a loss, do you have enough savings to close the sale and pay-off
the mortgage? If you cannot cover the potential real estate loss and need to leave Austin or your neighborhood, have you
considered the possibility of renting your house or condo? On the other hand, if you are going to realize a gain, what should
you do with the money in the interim period before closing on the new property?
There are a lot of good resources available to you on the Internet that can provide you with data about the current real
estate market in Austin. There may also be sites that provide information about the area to which you are to relocate. You can
also review Austin MLS listings to research the inventory of homes on the market and perhaps identify property comparable to
yours. Once you have gathered sufficient data, you can carefully consider the impact (financial, personal, etc.) of selling
your residence.
However, a local realtor or real estate broker who is very active in the market can provide you with the answers you seek and
save you time, effort and potentially money as you work your way through this process. Good realtors have experience and
follow the market as closely and can be your professional consultant. So, once you realize you must sell your home, the next
step is finding the best realtor available.
Working with a small company operating in the Austin Real Estate
market. If you are looking in the Austin market his website provides a free Austin MLS search for Austin Homes along with
information on Austin Lofts.
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Oct. 19, 2007 - Should your First "House" be a Duplex?
There is a lot of talk about getting your first house. Its part of the American
Dream to get a house and maybe get a dog named Rover. But maybe someone's first house should instead be a duplex. Why
would I propose such a thing. Is it possible I am a secret russian spy that hates American pie. No their are simply to
many advantages to buying a duplex first
Buying a duplex has a number of financial advantages over buying a house. Alot
of people assume that in a particular neighborhood duplexes would sell for about twice of what a house sells for. This is
rarely the case. Duplexes are more frequently about 1.5 times the price of a house in a given subdivision. So to pick an
easy number if a house is selling for 100k then a duplex should be selling for 150k.
So lets compare the two. To keep things the same lets assume we have 20k to put
down and we are looking in the Austin real estate market so that the taxes are .025 percent of the purchase price and
insurance is .004 percent of the purchase price.
- Lower Monthly Payment
To start off with lets look at the house. For the house we are going to have a 6.5 percent interest rate. We can use
this mortgage
calculator
100k house price
20k down payment
Monthly Payment = $747.32
Moving on to the duplex. Since duplexes usually have higher interest rates we are going to assume a 7 percent interest
rate. We are also going to assume that the other side of the duplex is being rented for $650.
150k duplex price
20k down payment
Monthly Payment = $1184.18
Rent Payment minus 5 percent vacancy = $617.50
Monthly Payment minus rent = $566.68
The monthly payment on the duplex comes out to be 31.8% less than on a house. You might get different numbers based on
your area. In most areas a duplex leads to a lower monthly payment but there are a few real estate markets where the
opposite is true.
- Increasing Your Future Real Estate Purchasing Power
Besides the advantages due to a lower mortgage payment there is another advantage over buying a duplex first. Buying a
duplex first allows you to make additional purchases while buying a house first can negate your ability to buy additional
properties.
To understand why this is the case we need to understand a few rules about how banks determine whether or not to provide
loans. When you are purchasing your first investment property banks will usually not count the rent as income unless you
have owned investment properties for over 2 years.
So if a buyer first buys a house and then wants to buy a fully rented duplex they will need to be able to qualify for the
full price of the house and the duplex combined. This can be difficult for someone in the beginning stages of their
career. If a buyer first purchases a duplex first in 2 years when they are looking for a house they can count the rent
from the duplex as income which can help them qualify for the house purchase.
- Faster Payoff
Another interesting way to look at it is that if instead of simply spending the saving you incurred by owning a duplex if
you were to pay off your mortgage faster. So if you applied 747.32 to your house it would take 30 years to payoff. But
if you paid your duplex of $566.68 and then took the additional 180.64 and applied it to your mortgage you could pay off
your duplex in 18.5 years. So in 18.5 years you would have a $150k duplex paid off instead of a $100k house partially
paid off.
- Greater Benefits of Mortgage Payoff
Not only will you pay off your duplex faster but once you paid if off you will be in a better position. Once you pay off
your house you are living mortgage free but not payment free. Based on the original assumptions (Austin Texas 2.5 percent
tax rate and .4 insurance rate) you are still making a payment of 241.66 a month for taxes and insurance. In contrast
once the duplex is paid off you are not only living in your duplex for free you are actually getting a profit of $255 a
month.
Buying a duplex is not for everyone. Some people do not want the hassle of managing a property. And our article is not
proposing that everyone should buy a duplex. We are simply showing the financial benefits of buying a duplex.
If you are looking to purchase a home or duplex in the Austin Real
Estate market Ki can help you in your search. Ki is an Austin Realtor with a long history of helping clients
purchase personal and investment properties. His website has a search of the Austin Homes.
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Oct. 11, 2007 - Worst Idea Ever to Fix the Housing Downturn
Ok so the national real estate market is doing poorly. Many markets are seeing falling prices. When prices are falling, people
with low savings that are forced to sell can find themselves facing foreclosure. The credit crunch is lowering the number of
buyers further depressing prices. What are some steps to help the market and avoid a record number of defaults?
1) Lower interest rates
2) Help buyers avoid foreclosure by offering buyers flexibility on loans
3) Construct a bunch of houses and dump them on the market further depressing prices.
Wait what? Yes the House is looking at a measure to provide 800 million to 1 billion a year to create 1.5 million affordable
housing units over the next decade. The last time I checked artificially increasing inventory at a time of depressed demand
isn't exactly the best way to deal with problems associated with falling prices.
When I was writing this I was trying to think of a worse plan so I could write something along the lines of "While they are
dumping houses on the market why don't they just ...". But I actually can't think of anything worse for the housing market at
this point in time.
I understand that affordable housing units are needed. But simply put, when we are facing the worst national real estate
market in decades is not the time for the government to spend money to dump a bunch of additional units on the market.
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Oct. 9, 2007 - Quitting Real Estate - Why Its Not A Bad Idea For Realtors To Think About Another Profession
I read a post recently where a real estate agent was posting about whether they should leave the real estate profession. The
market had slowed in their area and their income stream had decreased rapidly. They worried that if the market didn't pick up
soon, they would have difficulty making mortgage payments. What surprised me were the responses the post received. Everyone
told them not to give up hope. It was a series of quotes about not giving up and lights at the end of the tunnel. And while I
think the commenters were doing what they thought was best I disagree about the advice they were giving. Remember when you see
a light at the end of the tunnel, sometimes it's a train coming to run you over. Let's consider a few facts. The housing
market is going from a period of fast paced growth to a downturn. The amount of business has decreased rapidly. If we all stay
in the same business we are quite frankly ignoring the economic realities we are facing. And if as a group we can't see that
the economy has changed, how are we fit to give advice to our clients about what they should do. And yes there are some people
that will leave because they thought this was an "easy" business and they discovered the hard way that it's not. But I think
at the same time a lot of intelligent hardworking people will leave to find other thriving areas of the economy to work in. Or
they will leave to pursue other business plans. And there is nothing wrong with that. Simply stated- that is how capitalism
works. When certain sections of the economy weaken and others heat up people move around. If that didn't happen we would all
be farmers trying to serve a very, very crowded market making very, very little money. I encourage people with million dollar
ideas to pursue them and not feel guilted into not quitting a profession that has a slowing market. I want to give an example
of what I am talking about. I have a friend that grew up on a chicken farm. And for awhile after school he continued to work
on a chicken farm. But at some point he saw that the future didn't look so bright for small chicken farms. So he went to
business school. Today he is the CEO of a multimillion dollar company with 1000's of employees. So I ask you. Is he a quitter?
A loser maybe? Or simply someone who found a better opportunity. In summary I am not saying there is anything wrong with
staying in the profession or leaving it. I am simply saying that leaving an industry with declining total revenues to pursue
more lucrative opportunities is not quitting. It's simply the way our economy works. So, we should not guilt those who are
thinking of leaving the real estate profession into staying, rather wish them good luck in their next adventure and maybe they
will flourish there or maybe they will come back to real estate again some day.
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Oct. 6, 2007 - A Man Loses a Zoning Case and Immediately pulls out a Gun and Shoots Himself in the Head
A man in Tennessee shot himself after having his up-zoning case denied. I've been down at the Austin city hall a few times
listening to zoning cases, and they can get pretty intense, but nothing near that level. Bo Ward of Bo's Barber Shop needed
the official commercial zoning so that he could get a bigger loan and pay off the debts he racked up after expanding his shop.
After the vote of 5-7 denying the commercial zoning, Bo walked toward the city council and said, "Y'all have put me under. ...
I'm out of here," and shot himself in the head. His death was shocking and upsetting of course to many people in the town. He
was well known and loved for giving free cuts to many of the soldiers and their families in the community that could not
afford it. The mayor said they would not hold any more council meetings in that room.
Ki works as a realtor for Escapeso Austin Texas Real Estate. His website provides
visitors a free search of the Austin MLS.
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Oct. 5, 2007 - Selling your Home: Making your Home Accessible and a Pleasant Showing Experience
A lot of people ask for advice on how to sell their homes. There is the standard good advice... You can hire a professional
stager to make your home be on the level of a model home. You can retile you bathroom or install granite in your kitchen to
have a little more upgrades than the one down the street for sale. You can do all kinds of things on the level of
presentation. One thing I think most people overlook is making your home accessible and making the showing experience a
pleasant one. First, try to be inviting to everyone who calls on the house. It is definitely inconvenient for people to be
romping through your daily lives, but it is unfortunately part of selling a home. When someone calls to see the home, say
something like: "Sure, we were heading to the park, so feel free to look around." Basically, you just want them to feel like
they are not bothering you. This just helps set the mood of the home being inviting instead of starting off the showing with a
feeling of intrusion. Another thing is to try to leave when potential Buyers are being shown the home. Buyers just do not feel
comfortable if someone is there, and they usually rush through the home without spending some time looking at where their
furniture will go or how big the closets are. In addition, if you have dogs or animals that would be distracting during the
showing experience (i.e. barking or jumping), try to take them with you, or if you are at work, keep them in the backyard.
Basically, let the Buyer concentrate on your home. Also, don't give a personal tour of your home. It is hard to resist since
you know the most about your home and want to share that with potential Buyers, but when it comes down to it, you want people
to daydream about the overall home being theirs, not concentrate on sink faucets. You want the people to become interested in
your home on a personal level, thinking of how they will go about their daily lives in your home rather than notice every
detail. Noticing every detail will come later. Also, ask your listing agent to list your house with the easiest showing
instructions so that your home is accessible without much effort. Sometimes Sellers will need to make appointments due to
certain situations like the elderly or newborns. But if possible, have the Buyers phone / leave a message and head to the
home. Our MLS system calls it "Call 1st - Go". This makes it possible for anyone to come by, even if they were just driving by
and admiring the home. You may not get much notice, but it allows these sudden-interest people to come in, and the more people
that come through will give you more a chance sell it. Talking about short notice, try to keep your home as clean as possible
at all times. Many Buyers will say that they can imagine beyond a mess, but most cannot. Messy homes end up being distracting
from what the home is offering. It is definitely hard to keep a model home look while trying to live in it, but it helps sell
the home. And if you keep it consistently clean, then when a Buyer ends up wanting to come with short notice, you will be
ready. Also, do not use combo locks, if possible. Phoning for the combination is an extra step that may prevent the showing if
the person with the combo is not available. Most MLS systems have electronic lockboxes available, which make access easy and
have the added plus of logging in each agent that comes. Of course, if electronic lockboxes are not available in your area
then combo locks are a good alternative to trying to arrange appointments. The last thing is to never say no to someone
requesting a showing. It can definitely be hard to prepare when someone wants to see your home, especially when you have
little notice. This again is where being prepared and tidy at all times is helpful. Have a game plan prepared, especially if
you have kids or animals. Many people decide to take their dog on a walk because it us a quick exit and lets the Buyers have a
little time in the home to look around. In summary, you want as many people looking at your home as possible and the showing
experience to be as comfortable for the Buyers as possible. So, try to make the showing access as easy as possible and keep
distractions (like animals, messiness, & even yourself) to a minimum. Austin
Homes is a website by a husband and wife team working in the Austin Real Estate Market. Their website allows users to
search the Austin MLS along with a description of different Downtown Austin Condos
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Oct. 3, 2007 - A Guide to Buying your First Rental Property and Becoming a Landlord
When you are buying your first rental property and becoming a landlord, there is lots to learn. How do I find tenants? What
should I charge for rent? Should I update the places to get more rent? How do I tell the tenants they are late on rent?
I have read a lot about how you have rule with an iron fist to keep your tenants in line. Our philosophy is much more laid
back, and it has worked out well for us. Every property is different, but this was our experience.
Our first real estate investment property was somewhere we would move into ourselves, and in retrospect, that was an aspect
more important than I would have guessed. There's many decisions along the way, and being a potential tenant yourself makes
those decisions much clearer.
First off, when it comes time to market your place, you are part of the target audience, so it is easy to find the right place
to advertise. Just ask yourself... how would we go about looking for a place? We actually mistakenly put costly ads in the
real estate section of the newspaper out initially, bringing in the completely wrong renters who were completely not
interested. Once we switched to advertising in places we would look, 90% of the people who came were actually interested, the
place would rent faster, and the tenants were happy to be in our place.
That leads to the next reason why buying something you would live in as your first rental property makes the landlord learning
process so much easier. The tenants! These will be people that you basically get along with because they like what you like,
and if you meet them, they will most likely like you, or they would not be renting it. You will make sense to them, and they
will make sense to you. When you are at odds with your tenants, the whole interaction and experience can be painful, so
getting along helps tremendously.
Why, you say, should I care if my tenants are happy? Because everything is easier. They will more likely pay rent on time,
respect & keep your place in shape, and stay longer. Believe me, there is nothing like a completely wrecked apartment by a
short-term tenant. Sure you can charge money for damages, but it will still take time and be a hassle to get it back up to a
rent-able state. And dealing the whole time with bitter, angry tenants is no fun either.
How do you make your tenants happy? There's a couple things we do. One is that we allow tenants some flexibility with painting
and decorating. 95% of the time, our tenants actually do wonders with our apartments and leave them with a better style than
we could have done ourselves. Many times, we even get good ideas to carry over to the other apartments to make them more
marketable, like some basic drapes & mounted wine racks. We even had a tenant call us to ask if she could plant some
flowers by her porch. We welcomed it. It was an indication that she felt invested in the place and felt at home. Of course, I
am not advising you let someone remodel your kitchens... I am talking small things that are easily undone, but make the tenant
feel invested and at home.
Another thing to do to have happy tenants is to give them a sizable re-signing bonus when their leases end. And unless it is
painfully needed, do not raise the rent, especially if the tenant is someone who pays on time and is easy to deal with. We
offer a $500 re-signing bonus each year with rents at $800. It is almost a free month but the cost of a tenant turnover
between lost rent and the make ready is usually around $1200, so it is good for us and them.
Also, we do not rent our places at the maximum. We make them a somewhat good deal so that many people will inquire, and so we
have a better chance of a good fit that will be happy and stay long. We also do not overcharge because feeling ripped off is
one main reason a tenant will leave.
We also treat our tenants with a lot of respect. We call them every time we enter their units, and if repairs take an
extensive amount of time or hassle on their behalf, we give them some rent back. We also maintain the property and do pest
control. And we always answer their issues within a day, at least with a phone call.
Becoming a landlord was definitely a learning experience. Everyone has their own style, and even different properties may
prescribe a different style. Just be open to handling your rental property business (which is basically your tenants) with
respect rather than the stereotypical overbearing attitude.
Austin Real Estate Properties is a husband wife team in Austin Texas. Their
website offers a free Austin MLS Search as well as a
custom real estate calculator
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A general blog about real estate with random tips and observations.
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