What Landlords Need to Know About Raising the Rent

Raising the rent isn’t easy. It’s a task that requires business savvy, market research and the people skills to navigate negotiations with tenants. Whether you’re contemplating raising the rent for the first time in years or new to real estate and questioning how much to charge, the process of raising the rent needs to be handled delicately. Scott Safadi of Cal Bay Property Management recommends doing your research before making any big decisions.
So how do you conduct that research? Start by investigating rent prices in similar apartment communities in your area. Check out at least five other rental property prices within two or three miles of your property. When you compare, make sure you are looking at units with the same number of bedrooms and bathrooms as your own. Use rentals that are of a similar age as your property, too. For best results, be sure to compare properties that are visually similar to your rentals.
When you’re ready to raise the rent for your existing tenants, be sure to give them plenty of advance notice. Put the notice in writing and keep a copy for yourself. It’s a good idea to send the notice via certified mail. That way you know the tenants received the information. Hand delivery is also an option, if you’re open to a discussion at their door.
It’s possible that the tenant will get upset at the change and in price and want to negotiate with you. The best course forward is to remain professional and explain your reasoning for raising the rent. Your tenant may choose not to renew their lease, but that is a risk you have to take. Negotiate if you want, but remember to always keep things light, professional and friendly.
Of course, there are times when landlords should avoid raising the rent. It is illegal for landlords to raise rent in retaliation or to discriminate against a tenant. If you have a history of conflict with a tenant, be sure to document your desire to raise the rent and your logic for doing so.
There’s no magic formula to make raising the rent easier. That said, if you do your homework and handle the change as professionally as possible, you’ll reap the rewards and few of the drawbacks.
– Scott Safadi, Cal Bay Property Management

 

Advertisements

Simple Updates For Your Rental’s Kitchen

Keeping your rental modern, up-to-date and fresh is critical for ensuring your tenant’s happiness – and your ability to seek the maximum rent possible. Unfortunately, though, kitchen trends change near constantly and renovations can be expensive to undergo. The good news? There are easy, affordable ways to update your kitchen in just a matter of a day or two! Scott Safadi of Cal Bay Property Management recommends tackling only one of these projects at a time, but one success will build your confidence and allow you to take on more renovations soon.
Here are three of the most affordable and quickest ways to update your rental’s kitchen:
1. Reface your cabinets. More cost-efficient and easier than replacing the entirety of your kitchen’s cabinets, refacing allows you to cover exposed frames with affordable veneers of wood or plastic laminate. It’s affordable and can be done in just a day or two. Refacing isn’t a magical cure all – it won’t fix the bad layout or design of a kitchen. It will, however, add some modernity to an older kitchen in need of a facelift.
2. Replace old fixtures. Adding a new faucet or cabinet pulls can also help update a rental’s kitchen. These statement pieces can add style and freshness to an older kitchen. Replacing a boring faucet with a graceful swan’s neck faucet is a quick way to bring your rental’s kitchen into the 21st century. The best part? This project can be done in a matter of an afternoon.
3. Consider a new countertop surface. Granite, laminate and corian countertops are all fantastic options for a kitchen in need of an update. Considered the gold standard for counters, granite is heat and cut resistant and comes in a wide variety of colors. Laminate is more affordable and is moisture and stain resistant. Corian, on the other hand, is stain resistant and won’t fade in the sunlight. All make for great options when renovating.
No matter how you decide to upgrade your rental’s kitchen, even the smallest of projects can pay dividends. Be sure to do your research before committing to any renovation and hire contractors you trust. Create a budget and be honest about what you can and can’t afford for the project. By crossing your t’s and dotting your i’s before the project begins, you’ll ensure the best possible results for your rental.
– Scott Safadi, Cal Bay Property Management

Greater Profitability with Long-Term Tenants

Owning or managing a rental property has plenty of perks, but virtually everyone will agree that the leasing process can be a headache. Advertising availability, holding open houses, taking guests around the property for tours and the complicated background checks necessary to conduct before signing a lease are nobody’s idea of a fun time. Scott Safadi of Cal Bay Property Management says that some landlords fail to recognize how much of a hassle – and how expensive – this process can be until a long-term tenant has already moved out.
Long-term tenants save landlords a lot of money. How? Think about all the time and work that goes into attracting a new tenant. You’ll have to write up a new lease, advertise the vacancy, correspond over phone and email with prospective tenants, pay for repairs and maintenance to upgrade a unit that may have fallen behind the times and conduct interviews with folks interested in renting.
Even when you hire a quality property manager, this process takes time. Instead, knowing the worth of a long-term tenant can save you money and stress. The less turnover you have in your community, the less work you’ll need to do and the less money you’ll need to spend. But how do you convince long-term tenants to stick around?
Happy tenants are tenants who feel taken care of. One of the main reasons good tenants leave their rental is because of frustrating experiences with the management. Be proactive and check in with tenants regularly, not just when something has gone wrong. Have a positive attitude when dealing with complaints and go above and beyond what is expected of you to solve problems.
Keeping rent increases to a minimum can also help you keep long-term tenants. Unless you have made significant improvements to the rental or community, dramatic rent increases make it hard for tenants to justify staying another year – especially in competitive markets. While cost of living increases are understandable, it’s important to keep rent increases reasonable. Reward long-term tenants with discounts when possible. After all, you want to reward loyal tenants, not punish their dedication!
Treating tenants with respect and kindness can go a long way and pay off in big ways. Handle issues with professionalism and you’ll see more and more of your tenants staying long-term! That’s not just good manners, that’s good business advice.
– Scott Safadi, Cal Bay Property Management

How #housingforgoogle Will Impact San Jose

What happens when a multibillion dollar corporation moves into a neighborhood amidst a housing crisis? San Jose is about to find out.
Google is planning an 8 million square foot campus and tech village in downtown San Jose. The space is equivalent to half of the entire downtown area. East Coast investors have already begun purchasing office space nearby for more than $500 per square foot. That is a record for the area, locals say.
Some are excited for the evolution of the downtown area. Small business owners are hoping to capitalize on the 20,000 Google employees expected to work on the new campus. New shops and restaurants will open soon.
Unfortunately, though, not everyone is thrilled with Google’s move. San Jose is already experiencing a housing crisis, with many homeless people living on the streets downtown. Given Google’s net worth, some argue that the company has a moral obligation the city of San Jose. The president of a local affordable housing network recently told Mercury News that Google should be held accountable to doing no harm.
Activists say Google should create homeless encampments on the property of the new tech village and work with the community to provide 20,000 units of affordable housing. The mayor of San Jose, Sam Liccardo, says the city has only just begun working with Google to address the affordable housing issue.
Scott Safadi of Cal Bay Property Management has seen the way tech companies have revolutionized the Bay area and understands why locals are concerned about housing. The Google effect on San Jose could be transformative in ways both good and bad. While progress is exciting, society must not forget about the less fortunate who may struggle to find anywhere to live once Google comes to town.
High-rise condos and ground floor restaurants will certainly see Google’s move to San Jose as a good thing, but the rising prices of real estate could eventually drive out even middle class workers hoping to make their home in San Jose. No matter how you feel about Google’s move, there’s no question about it: downtown will be forever changed by this move.
We’ll be keeping a close eye on the progress of both Google and local activists as they work towards a compromise and attempt to keep housing affordable for everyone in the San Jose area.
– Scott Safadi, Cal Bay Property Management

Staging an Apartment for Rent

Staging has long been a favorite technique of realtors everywhere. After all, showcasing how beautiful a home can look is made easier with trendy furnishings. Human beings love a story, and the best staging provides a narrative. When the narrative is enticing enough, visitors touring the home can easily envision themselves as part of that story.
Property managers can channel that storytelling into the model apartments they show to prospective tenants. Even the smallest of units can become charming with the right flourishes. Clearing out clutter and diving into a deep clean is a great first step. Once you’ve got a clean slate, choose neutral colors to decorate. By appealing to a wide variety of tastes, your staging will resonate with more visitors.
In your staging, include visual cues to suggest how a space could be used. A sunny window can easily become a cozy reading nook with the right chair and end table. The master bedroom can be luxurious and relaxing with the right fabric choices. Even the bathroom can become spa-like with some accent lighting!
Be careful about overloading small spaces with too much furniture, experts warn. If the unit in question is small, it can be made to seem even tinier with oversized furniture. Instead, stick to a minimalist decor and optimize open spaces. The quality of the furniture matters less than you might expect, too. Remember, these are spaces people will spend ten minutes in, not months. Some professional staging companies will even blow up air mattresses and fit them into bed frames rather than buy a real mattress. After all, under pretty sheets and a comforter, who can tell the difference?
Add in some fresh elements to really liven up the unit. A potted plant or two can go a long way!
Short on cash? Or maybe you just don’t have the space to allot for a permanent model unit. Cal Bay Property Management’s Scott Safadi recommends new landlords work with a professional staging company. Rent furniture just long enough to take photos to display on your website. Virtual tours can be a great way to give visitors an idea of what the space is like.
Whether you hire a professional staging company or choose to do it yourself, staging a model apartment unit can be your recipe for landing new tenants with ease.
– Scott Safadi, Cal Bay Property Management

Understanding Deferred vs. Preventative Maintenance

For most property managers, doing more with a smaller budget is one of the greatest challenges in their position. Shrinking budgets often inspire a delay in general maintenance of the property. System upgrades and repairs to apartments aren’t cheap, and skipping out on routine maintenance is indeed tempting. Scott Safadi of Cal Bay Property Management understands the allure of delaying or even indefinitely postponing maintenance until more funding becomes available.
Unfortunately, deferred maintenance comes with a cost. Too often, repairs become replacements. Consider a broken door knob that needs repaired. When a fix is not in the budget, it is tempting to leave the door knob as is until next month. After all, the door still works, folks will just have to be gentle with the knob until it can be repaired properly.
The reality? That door knob will still be used daily. Chances are good that the door knob will become even more broken and perhaps even require replacement rather than a simple repair. Replacing a broken door knob, window or lock is much more expensive than your average repair might have cost. Staff productivity will also take a hit, as replacing such items will likely take longer than it would take to repair instead.
When repair projects are put on hold, the cost of deferred maintenance can multiply to extreme costs. That’s why preventative maintenance is so critically important for successful property managers. Prevention can save time and money and helps property managers avoid replacing costly materials. When planned in advance, preventative maintenance is the most affordable and least disruptive form of care for an apartment complex possible.
Just how much of your budget should you allocate for preventative maintenance? Experts say between two and six percent of your annual operating budget should allow for routine maintenance. Periodic assessments of a building’s condition can help inform maintenance budgets and decisions. Take a look at the mechanical and electrical equipment as well as interior structures, finishes and the building’s shell.
Of course, most property managers would rather invest in preventative maintenance, but budget cuts are often the catalyst for deferred repairs. In order to convince stakeholders that the budget should be increased a little, remind them about the increased risk of liability associated with delayed repairs.
Showing the financial ramifications of delayed repairs can also bolster your argument. Work up a comparison of the costs of preventative maintenance versus deferred maintenance and have an honest conversation about expected outcomes for each. The reality is that the faster a repair is taken care of, the better.
– Scott Safadi, Cal Bay Property Management

Fill Your Vacant Unit Tomorrow With These 5 Tips

Vacancies are a bummer. They’re a drain on your wallet and on your resources. There’s no need to struggle for tenants forever, Cal Bay Property Management’s Scott Safadi says. Check out these five recommendations on how to fill your vacant unit as soon as possible:
1. Price check your rent. If you’re charging too much, you could be scaring off potential applicants. If you’re charging too little, you could discourage the kind of high quality tenant you’d like to attract from looking into your rental. Check out your competitors and make sure you’re falling in the “just right” rent category.
2. Update the unit. Be honest with yourself: is the rental aesthetically pleasing? Would you want to live there? A minor splurge on new paint, carpeting or appliances can go a long way to update a unit that is past its prime. Yes, it requires some out of pocket expenses, but you’ll quickly recoup the cash from the rent money you receive from a tenant.
3. Allow pets, if you don’t already. Animal lovers aren’t willing to sacrifice members of their families for cheap rent. Tack on a pet fee or pet rent if you must, but allow folks to move in with their beloved cats or dogs. You’ll appeal to a much wider range of tenants if you do so.
4. Ask for referrals. We all have our favorite tenants: you know, the ones who pay rent on time and never keep neighbors up with loud parties or music. Chat those tenants up and ask if they know of anyone looking for a place to live. Chances are good, their friends will be just as respectful and reliable, making this tip a no brainer!
5. Take better photos. Are your advertisements lacking in the photo department? If you don’t have great photos, you won’t convince anyone to click over to your website, let alone apply to live on your property. Shell out the cash necessary to hire a professional photographer. The results will pay in spades!
However you decide to take initiative and fill the apartment, resist the urge to lower your standards. Great tenants will come. Saddling yourself with a messy, unreliable tenant for the next year just isn’t worth it!
– Scott Safadi, Cal Bay Property Management