(1) to care attentively for your home or property;
(2) to enhance your home’s value and appreciation;
(3) to maximize your annual investment income.
We deeply care about these things, because we know this is really important to you with these significant assets you entrust to our watch. Additionally, the name helps us market and care for your property by addressing the main concern every tenant has—will you fix things when they break? They really are not sure because so many companies don’t do it promptly, or many times at all.
We just began management this week of a triplex and a duplex that we helped some investors find and buy. Both of these came with existing tenants, and both were self-managed. ALL the tenants had a chip on their shoulder and were certain we were not going to fix things like a clogged sink, broken dishwasher, stuck door, stove top burner that wasn’t heating, faceplate of an oven that fell off, or faceplate of a dishwasher than came loose. Why did they think that? Because they had been trying for weeks and in some cases months to get these things taken care of. We look like rock stars because we did in one week what their previous managers could not get done. This attention to property CARE helps you as an owner because it dramatically reduces the number 1 killer of annual return: turnover. Turnover has repair, vacancy and tenant procurement costs that usually cost $2500 on average (sometimes we do turnovers for $0 but we don’t crow about it because it is hitting a grand-slam AND sometimes it can cost a lot more if you are changing from carpet to tile, for example—a prudent long-term move, but expensive at turnover). The #1 reason tenants give us that they are leaving their past rental is because the owner won’t fix things.
A well-cared for property is smart business for you as an investor. FIRST, prime condition properties rent and sell for more, and they rent faster (reducing the dreaded turnover cost). SECOND, tenants stay longer in well-cared for homes—that is the real grand-slam in investing: multiple year tenancy. THIRD, your property actually lifts values in your neighborhood. It is a well-worn trope that “a neighborhood is full of rentals” as a way of saying, “run down, less value, less desirable.” BUT, with your property lovingly cared for on an ongoing basis, you are actually influencing the value of your neighborhood in the other direction. Your care lifts the values on your street because people drive by when they are viewing a home for sale and they comment, “This is a neighborhood with obvious pride of ownership.” An anecdote: we really get annoyed when we get an HOA correction letter because it feels like a failing grade to us. Sometimes—well, to be honest—usually we are offended: “They coded us on our (that is, your) lawn? We have the nicest yard in the neighborhood!” FOURTH, resale value is dramatically effected by how well-cared for a property is over time. You can’t fake it at a sale. (Or at a prospective tenant walk through!). FIFTH, and this really is just a metric of the above: investors with A/A-/B properties build a lot more wealth than slum lords. Slum lords think they are winning by not spending money to fix things, and by looking at how much rent they are getting and how many things they say no to. It is measurable: they do not make as much money on their investment. If you think of it as a spectrum from D- to A+ property, the cash-on-cash return (ROI) increases as you move from one to the other.
Yes, you have expenses but that is small thinking. You have an INVESTMENT, that you keep investing in to enhance and protect its vale. It is not really an expense but an investment. It is NOT “the cost of doing business.” It is what every smart, profitable wealthy real estate investor does. That is how they got there, and there is not another path. Less property care and maintenance means less profits. Period.
Brian Dodd, Broker/Owner/Realtor