The winter worries 2019

The winter worries!!

 

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My company BCL Properties LLC continues to build a steady increase of leasing and management clients in and around Georgetown, DC. I wanted to write a small blog today on the winter worries that face property owners and some brief solutions they can use to help alleviate their anxiety.

 

One of the consistent challenges we continue to face is working with new property owners in the winter time. The leasing business in Washington, DC is a very seasonal business. Most businesses, schools, Embassy’s transfers are usually done in the spring or summer months with some roll over in the fall. People are generally happier when the weather is nicer and willing to spend a day or two viewing property.

 

Usually owners prior to contacting me have a rental amount in mind. That’s typically made up from the owner calculating their mortgage, condo fees (if applicable), management fees if they want that service and or future possible repairs which is usually around 10% of the yearly income.

 

Owners typically want to break even or make a small profit. I am then presented with a number that sometimes is just too high. My job is not to offend the owner as I want to sign them as a client, but rather educate to give a realistic view of what they can achieve. I try to use systematic and research driven data to provide information on pricing.

Owners may scour the internet and use various real estate websites to produce “their” number. The numbers that those real estate websites produce can be based on moving averages over months or even past years. A number of the larger scale websites are based typically more for sales than rentals. Their developers usually care more about sales data then rental data.

 What those websites fail to do is show on a consistent basis the accepted price and when that happened. A lot of websites do send an email to ask you to provide that information but by then the owners are just happy to have a tenant or just don’t want to place that data online. Some owners do provide those numbers which is where the software companies get the rented amounts from. It is just a very inconsistent system that can cause owners to be misinformed.  

 

As agents are required to enter data in to the MRIS system we can show the price amount obtained, days on market, and specifics about the building or neighborhood. We can view additional information that can give us specifics about pricing. We can even contact other listing agents around our listing to see how their traffic has been.  One of the even bigger factors an agent can provide is experience. As I have been doing this for 14 years and have rented probably over 1000 properties I typically have a ball park number of what the property can rent for without much research.

 Price ceilings are important to keep in mind. In other words no matter how nice the property was renovated someone is only going to pay so much for a 1 bedroom or 2 bedroom and so on. That’s another blog entirely.

 

With Amazon coming to the DC area it should help rental pricing over time increase. We are not there yet!  (Blog to come on this)

 

Below are just a few ideas/tips that I use when marketing property in the winter time. The biggest takeaway is just to be patient. The winter comes and goes and with some marketing tricks I use the property will typically rent come early spring.

 

My comments below are based on my experience and not concrete data. Take it with a grain of salt. It’s not set in stone but will give property owners some tips when renting in the winter months.

 

1.  A property owner should have a reserve of at least 4 months of carrying money. Remember at least one of those months will go towards commission when rented by an agent. A few additional months in case the property does not rent right away.

2.  Always have 2 months of reserve even after rented in case of a large repair.

3.  The “lets try your price”. I will agree to this within reason for 15-20 days. If we do get it than great. If not we have to start considering a price reduction to stay aggressive in the winter. I will talk about vacant property status in another blog post and the negative effects of that.

4.  Remember that come November your faced with the start of the holiday season. From Thanksgiving, Christmas, New Years and any additional holiday one may celebrate. Most people are focused on the holidays that rather than moving.

5.   February / March the winter months hit stronger. Unless someone is being transferred into the area the cold weather, snow, and dreary days don’t bring out tenants looking around to move. Not many want to walk around in the cold looking at rental properties.

6.  Be patient… Your agent does not make money unless they rent the property. So trust me they are working to produce a tenant.

7.  When spring hits people tend to start walking around so if you can place signs outside of the property that is still one of the best marketing techniques out there. **One benefit is that if you can start a lease in the spring the tenants will typically move out in the spring/summer positioning yourself in the better time of year for future marketing.

 

For additional information feel free to contact me directly at Barry@bclmgt.com

 

www.bclmgt.com

 

Design You DC Rental Property in 2018

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IT’S TIME TO UPDATE!!

Time to set up for the spring market! Just in the past few weeks I have taken on many small construction projects as part of my services to upgrade and update properties for the rental market. January through March is a great time to get your property in the best possible shape for the rental season to come.

Some new color schemes for 2018:

Walls:

The days of off white are behind us. Depth and warmth create an atmosphere that gives tenants a sense of a home like feeling. The shades of gray I use are still neutral enough for tenants to decorate with their own style. We complete the walls with white baseboards / trim.

Kitchens:

For counter tops I am always comfortable with granite as it holds up well. However with some additional financial reach from an owner I would bump that up to quartz. The kitchen is and probably will always be the main area of a property. So don’t slack here! You need that wow factor. Stainless packages now range in pricing so it’s not just for the elite.  No need in a standard rental for subzero fridges and wolf ranges. Just make sure it is a solid product that looks good. Look for upcoming sales on holidays to take advantage of pricing.

Flooring:

I am really trying to stay away from laminates. To me they don’t hold up well and with seasonal change in DC no matter how well they are placed they always seem to buckle or bump up in areas (floating floors).  *DC inspectors are citing these issues and making owners rip out floors for re-inspection. They also don’t feel like wood. If the budget is not allowing real hardwood then a thicker engineered wood works well to be glued or nailed down. Some properties you have no choice but to float the wood floor. I believe over time causes issues especially when placed over concrete.  Even with a protective barrier the concrete gets cold and or heats up depending on season and can affect the wood. Yes I know you are supposed to leave a gap for expansion but even with the gap I have still seen laminates start to push up. Laminate and water don’t mix well. So that constant cleaning with a mop, or those wet boots from outside effect the laminate floor over time. Areas by the sink in the kitchen get the worst of it.

A great alternative is Porcelain. Porcelain flooring lasts for a long time and can withstand large weights (even cars). With new colors/styles that allow the tile to look like wood it is a strong alternative that can last longer than wood with no need to re finish.  Be on the lookout for some great deals on porcelain wood like flooring typically on sale at lumber liquidators.

Install will set you back a bit more than wood, however you only do it once if done correctly. No need for refinishing or sanding ever.

Baths:

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There are so many styles and options here. For your average rental my advice would be to paint in a light but warm shade. Heavy dark reds, or greens make the bath feel dated. Light grays or deep whites work well. Some accent tile around the vanity helps lift the modern feel. New vanities that have a modern look are great.  Frameless showers are great however I have had issues with some that leak. Be careful who installs them for you. Make sure to have a specialist install the doors. Home depot has many of them to choose from. Replace that old showerhead with something new and large.

Simple : Clean : Functional

Part of my business has evolved into the re-design of property for both sales and rentals. Taking older properties that need work and creating that balance between budget, ROI on rent/sale, and design to bring the property up to 2018 standards.

One of the larger problems with condos/homes built in the 80’s and 90’s in DC is that they cant hold weight to properties that are just being built presently. They don’t look the same and many features of the property are older. The days of just throwing some paint up after a tenancy are over. With the new millennial generation coming forth and generations behind them the modern look is what is needed to keep up to new construction. Remember this is your investment property. Just like a car that needs to be detailed your invest property needs to be detailed to the point where it shows better than the competition. Many owners wonder why they are not getting the same price points as 2-3 years ago and many of those reasons come down to the way the condo looks.

For more information please contact:
Barry Lieberman

www.bclmgt.com

barry@bclmgt.com