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NEWS:

  • U.S. home values rose more slowly in August than they have in a year, and the cooling market offered a clear view of local markets that favor either buyers or sellers. The nation’s hottest markets, on the West Coast, continued to favor sellers with quick sales and high asking prices. But some still-recovering markets remained […] Read more
  • (MCT)—Question: I had our attic spray-foamed in 2010. Our HVAC contractor recently did a semiannual service. The technician came down from the attic, where he was checking the air handler, and he was wringing wet with sweat. Another technician says we needed an energy consultant to check the spray-foam job since leaks in the foam […] Read more
  • (MCT)—Even if you’re tending to the same garden, you’ll need different tools in the fall. “In the fall, you’re putting the garden to bed, so it’s important to have large multipurpose tools to work the soil,” says Maree Gaetani, director of gardening relations at Vermont-based Gardener’s Suppply Co. “In the growing season, you’re using smaller […] Read more
  • First impressions are everything and your home is no exception. When your home is listed for sale, you’ll want the initial look to create a positive impression that invites house hunters indoors to see what’s inside. “You should be getting your home picture-ready as soon as you know for sure that you’ll be selling it.  […] Read more
  • Editor’s Note: This article originally appeared on AmericanBanker.com. In recent testimony before Congress, Federal Reserve Chairwoman Janet Yellen confirmed what many aspiring homebuyers have known for several years. “It has now become the case that any borrower without a pretty pristine credit rating finds it awfully hard to get a mortgage,” she says. Lenders aren’t […] Read more

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Victory Real Estate, Inc 1135 Kildaire Farm Rd, Ste 200 Cary, NC 27511 919.249.8555 www.RaleighNCRent.com Rent@VictoryRealEstateInc.com
Raleigh, Cary, Durham, Apex, & Greater Wake County Research Triangle Area

Victory Rental Managers…
Rental property management company with the absolute best managers in the real estate business. Our companies are happy to boast the top agents of all area agencies. We serve the North Carolina cities of Raleigh, Cary, Apex, Morrisville, Wake Forest, Garner, Durham, and all of the Wake County Triangle Area...
North Carolina Rental Market Outlook… Why All that Glitters is not Gold in Rental Investing
The past year in single family rental housing has been an interesting one to say the least. Things technically haven’t changed much, but it does seem as though the market is being shuffled around more than ever. Multi-family on the other hand is undergoing much more subtle but still important shifts. In this letter I want to discuss a few metrics you tend to hear a lot about, and a few that are also very important but rarely discussed. Turnover… While rarely discussed in the media, it’s a major part of rental investing. If you consistently lease to excellent tenants that pay on time, and take great care of the home, turnover is the metric most likely to cost landlords money. On nicer properties, typically much more than repairs will. Without a doubt turnover has increased over the past couple years. We recently saw our average lease term drop from slightly over three years, to about 2.5. That’s pretty significant. Even with great tenants, you still typically must deal with 30 days vacancy, as well as cleaning and touch ups. Those expenses average around 10% of your yearly rental income. To put this in perspective, our average repair costs in 2012 were less than 5%, and the majority of that came from a handful of properties. Our nicer rentals were closer to 2.5%. We’ve always excelled at keeping turnover to a minimum, but as of late we’ve been focusing on possible solutions to help keep them longer despite a more transient trend. Vacancy… Of course vacancy is a highly sought after metric for landlords, particularly owners of apartments / multi-family complexes. Vacancy though is a vague metric. So many things contribute to vacancy issues. It’s important to know when crunching profit and loss financials, as it gives you an idea of what potential a rental may have, and how well overall it’s been managed to that point, but to really gain anything helpful you have to go past vacancy. Issues that contribute to higher vacancy rate can be Inattention to marketing / tenant leads Bad property condition Poor application choices Terrible neighborhood Refusing to work with good tenants on minor upgrade requests Aggressive rent raises As well as other smaller issues… Most revolve around a landlords’ inability to make decisions based on return on investment, rather than emotion. One thing in our opinion that doesn’t negatively contribute to vacancy is taking a hard line on non-payment. Once again ROI plays into this issue, but experience has shown us that unless a tenant has proven to be excellent, accepting excuses on non-payment is consistently a mistake. Return on investment… Also a vague metric, but something if committed to, is guaranteed to make you a better paid landlord. I’ll give an excellent example we often come across. Pets: often we have an owner tell us they don’t want pets in their unit due to damage concerns. That makes sense if you are renting to tenants that have nothing to lose. There is added risk. However, if like us, you only rent to tenants that will most likely take good care of the rental, let’s consider how no pet’s works against an owners’ income. First, at least 70% of leads that we receive have a pet of some sort. By restricting this population, you are now reducing your potential renter pool to less than one third of what it could have been. This stands to reason that you will experience longer vacancy, and most likely a lower rental rate. We’ve found that no pets nearly double the amount of time required to market, and reduces the potential rental rate by about 10%. You only need to look to communities that restrict pets to see the proof. In my hometown of Wilmington, there is a gorgeous community called Ashton Place. They do not allow renters to have pets, and as a result rents for this community across the board are substantially less than average. With a garage, a huge loft, and 1800+ sqft, these townhomes should rent for 1300+; instead they typically average $1100. We also charge a hefty pet fee usually $150 or more.
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Gorgeous Downtown Raleigh NC
North Carolina Rental Market Outlook Continued…
So if we have a $1000 a month rental, which rents for $900 instead, sits vacant for an additional 30 days, and doesn’t collect the pet fee, we now have $1250 invested in restricting pets. Most $1000 rentals can replace all carpet for less than $1250. It is however, extremely rare to have a pet damage carpet beyond repair. Our saying has always been that we’ve had a few tenant problems, but we’ve never had a pet problem. What we mean is that if the tenant is going to let the pet destroy the carpet, the tenant themselves most likely would have anyways… The big exception is puppies, and that is why we restrict age. That’s measuring return on investment professionally…Rental Rate… We tend to run into three types of owners, those that only focus on rate, those the focus on razor thin spending, and those that see the bigger picture. Here are a few examples. Qualified tenants are getting harder to find. The best way to attract quality tenants is to have a home in good shape, and to have a competitive rate. AAA quality tenants are not going to pay $1100 for a $1000 a month rental. You know who will? Those having a tough time getting approved. This plays into vacancy also, as sloppy tenants are guaranteed to increase both vacancy, and expenses. So if we average it out over 3 years, reducing your rate by $100 a month would cost you $3600. However, by holding out for that final $100 you substantially increase your odds for dozens of terrible problems such as lease breaks, excessive damage, high turnover, several months of vacancy, eviction hearings etc. It’s similar to buying bonds over stocks. Stocks pay more if you’re willing to put in the work / risk, but bonds make it easy for you to sleep at night… Save the gambling for Vegas, go with the safe bet, highly qualified tenants. That brings us to tenant quality. This is without a doubt, the metric we by far care most about. While we have had phenomenal success in keeping our properties filled with great tenants, we have stepped into some horrible situations. I’ve seen damage top $10,000 on $400K homes as a result of nothing more than bad management decisions. If you must paint and recarpet an entire house, you are looking at several thousand dollars for an average home. It takes an extremely high rate to offset the added expense, and the odds are heavily against you. In the past 10 months we have had to increase our average declined apps by 100%. Until recently we declined 2 applications on average per property, but as of late that number has shot up to 4. This certainly translates into somewhat more vacancy, and slightly lower rates, but once again, averaged over the long run, the return on those decisions more than pays off. We attribute this issue to the huge sales market rush that’s occurred recently. Basically, if they are qualified, they most likely purchased a home in the past 12 months. This means a large number of those that didn’t, are not very qualified. While the sales side seems to be normalizing, we still expect this issue to grow. We believe tenant quality will be the most challenging aspect of rental management for the next several years. Rental rates have softened lately, and vacancy is starting to creep up, but these problems are unimportant relative to extreme difficulty in finding tenants that can be trusted to pay, and maintain the home properly. We don’t expect a major decline in rental rates anytime soon. Nor do we expect to see vacancy take off, but the future for landlords and rental managers does appear to be more challenging than years past. We first notified our clients of this subtle softening in September of last year. Mid-August to mid-September has always been a very slow time with people focusing on getting back in the groove after the summer; however in 2012 we did not see a marked pick up in the fall as we normally do. So our point is that landlords are going to want to adjust their expectations going forward. At a time when the media is finally touting the great rental market, we are seeing things become more challenging, and those that ignore the signs are sure to pay the price. It’s a tough sell at times to convince an owner that it would probably be a good idea to accept a AAA tenants offer despite the fact that’s it’s 5-10% lower than what their neighbor rented their home for, but when you really consider all the moving parts, you will find that the Victory management method is built for the long run. We play the long run odds, not short term gratification. ed by a larger than normal number of notices to vacate coming from tenants. Many of these tenants had been in our homes for years, and were considered our favorite renters. While we’ve had no significant trouble filling these homes back up, the overall quality has diminished slightly. Slightly for us, typically means dramatically for others, and I am interested to see how our competitors and inexperienced landlords fair over the next 24 months. In our Q3 market update we’ll discuss the difference between rental ready, and sales ready. With an improving sales market there are no doubt many landlords looking to unload, (ironically, just as a huge portion of investors are looking to load up on rentals) but preparing for this eventuality requires more than waking up and deciding to put your home on the sales market. Get ready to discuss strategies for preparing to sell a rental investment, in great detail… As always, the Victory staff loves to field questions for landlords whether clients, or general public we’d love the help out when we can.
My Dad’s a Lawyer! Hilarious Video on Common Issues
Rental Property Management Information for Landlords
Catch up with the latest rental market news at our blog!
Craigslist Scam Advice for Landlords and Rental Managers / Owners
Craigslist can be a great resource for finding a rental home, but unfortunately can be double edged sword. Tenants should be cautious and aware that the site is littered with scam ads, drawings people in advertising notoriously low rental rates. A few of our own ads have fallen victim as scammers will pull the information from our property and list it for hundreds less than our advertised price. They then instruct tenants to send them a deposit and/or rent, then disappear and the tenant is left without a rental home. Courtesy of http://blogs.earthlink.net/how-to-spot-phishy-scam-emails/ A few things to look for when replying to an add include: if it’s too good to be true, it probably is! Google the address of the property to compare rental rates. If you find the listing on another website with a drastic price difference, contact the listing agent to confirm. If there is no local number on the advertisement or source to speak with the owner or agent directly be weary. Also, try to set a face-to-face meeting to view the property. Many scammers request that tenants send their deposit abroad, which is another red flag. If you find any suspicious advertisements, contact Craigslist immediately and flag the post. The best option is to email the link to a few friends and ask them to flag it to expedite the removal process. A few safety tips from Craigslist include: You can sidestep would-be scammers by following these common-sense rules whenever using craigslist: DEAL LOCALLY WITH FOLKS YOU CAN MEET IN PERSON - follow this one rule and avoid 99% of scam attempts. NEVER WIRE FUNDS VIA WESTERN UNION, MONEYGRAM or any other wire service – anyone who asks you to do so is likely a scammer. FAKE CASHIER CHECKS & MONEY ORDERS ARE COMMON, and BANKS WILL CASH THEM AND THEN HOLD YOU RESPONSIBLEwhen the fake is discovered weeks later. CRAIGSLIST IS NOT INVOLVED IN ANY TRANSACTION, and does not handle payments, guarantee transactions, provide escrow services, or offer “buyer protection” or “seller certification” NEVER GIVE OUT FINANCIAL INFORMATION (bank account number, social security number, eBay/PayPal info, etc.) AVOID DEALS INVOLVING SHIPPING OR ESCROW SERVICES and know that ONLY A SCAMMER WILL “GUARANTEE” YOUR TRANSACTION. DO NOT RENT HOUSING WITHOUT SEEING THE INTERIOR, OR PURCHASE EXPENSIVE ITEMS SIGHT-UNSEEN - in all likelihood that housing unit is not actually for rent and that cheap item does not exist. DO NOT SUBMIT TO CREDIT CHECKS OR BACKGROUND CHECKS FOR A JOB OR FOR HOUSING UNTIL YOU HAVE MET THE INTERVIEWER OR LANDLORD/AGENT IN PERSON. Recognizing scams Most scams involve one or more of the following: inquiry from someone far away, often in another country Western Union, Money Gram, cashier’s check, money order, shipping, escrow service, or a “guarantee” inability or refusal to meet face-to-face before consumating transaction
Are Property Managers Worth It?
Honestly, it’s a personal decision. Not every landlord (or property manager) is the same, It must be up to you to determine if hiring a property manager is a worth investment. The basic reasons to hire a property manager can be boiled down to three categories: Time, Cost, and Revenue. Property Managers in general will save you time. And, it’s hard to put a price tag on saving time and stress associated with not having to deal with daily “landlord tasks.” Property Managers will be their for your tenant’s emergencies, regardless of the day, holidays, or vacations. bigstock-Businessman-Hand-Drawing-House-45582826_1600x858 Property Managers will save you money. Property Managers have the resources to screen your tenants and an overall better understanding of the law. Since they literally do this all day, every day, they know the ins and outs and how to save money. They also will ensure a higher tenant quality, which in turn equals fewer trips to court! Property Managers will bring in more revenue. As I mentioned previously, property managers do this all day, every day, and have more resources to put towards your property. With better advertising, you can be sure to have shorter vacancies in your property. Additionally, with a greater focus on tenant screening, you will undoubtedly have longer tenancies. Rental Managers will charge as much rent as possible and are also more likely to make sure you get paid on time each month. Again, hiring a rental manager really is a personal decision. Determine what resources you have to manage your properties, where your properties are located, and then you will be able to determine if hiring a property manager is the right decision for you.

 



 

 

Our Mission…
Rental Managers

To treat every property as if it were our own, or crush the best competition nationally, whichever is greater. Where we lack resources, we’ll substitute ingenuity, flexibility, and aggressiveness. We’ll never make excuses. We’ll value mistakes over mundane. Open mindedness is a requirement. We will offer as low a cost solution as possible without sacrificing results. Our clients’ success will define our success. Passion will drive client success. We’ll always strive for better. Imagine what we can be…