The number one reason is that we are working with two opposing interests. One wants service with the lowest possible rent and the other doesn’t want to spend money and wants the highest rent they can get.
If we represented one community, such as a large apartment house, we would have one consistent image to offer our tenants. However, we represent hundreds of owners of different cultures and personalities. We unfortunately offer different policies for different properties and owners to our tenants. What is agreeable to one owner is not agreeable to another.
Some owners want their properties maintained while others; if it means spending money rather ignore maintenance.
This makes it very difficult to manage and keep the customers happy. Tenant retention is so important such as offering a gift or dinner out for renewing their lease and paying their rent on time. Not all owners wish to offer gifts. Some can’t afford it.
I have to share a story with you regarding a party I attended. A mortgage broker can up to me and said you have one of the toughest jobs in real estate. I agreed, but responded that is why I have a job. I wonder what he is doing today.
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This economic crisis has caused a great deal of hardship for many. Losing a home and losing a job is devastating. For others, this may be an opportunity to buy affordable homes that were unreachable before. If people have a job and feel comfortable with the future, now is the time to take advantage of the low prices and interest rates.
For investors, now is the time to buy investment property if they are able and ride on up the increased values that will happen again.
I knew the market would eventually crash, and when a realtor friend asked me if I was planning to “move up” using all of the equity I had acquired with my present home, my response was, “my home is overpriced and so are the others”. I remember Alan Greenspan, the former fed chairman, stating that real estate would experience a soft landing. I thought, well, he is an expert he should know.
I secretly felt that the market would crash, but didn’t want to appear negative to my real estate buddies. Anything that increases in value that quickly will come down hard later, especially when the values are higher than the median income of the community.
What then, was driving the market?
Speculation along with fraudulent loans made to unqualified people. Speculators sell to other speculators until the last one gets the one before the crash.
I feel very lucky because I bought my home nine years ago and the value went way up but later dropped about $200,000. Yet, I still bought $55,000 less than the current value today. Some financial planners will tell you to not pay off your home quickly, but rather to invest in more lucrative investments that will return more than what your current interest rate is along with the tax deduction. I wonder what they are saying today.
I am not a financial planner, but my advice is to pay your home off as soon as you can. Some will say I will lose my tax deduction. Think about this scenario. You are paying $1.00 and depending on which bracket you are in, for example 30%, you are saving 30 cents. I have a plan for you – pay off your home and pay me the amount of your former house payment for real estate services and deduct 30 cents for each dollar you pay me. You will have a free and clear house and still have your tax deduction.
My best to you and good luck in the future. Good times will return again.
My name is Lambert Munz and I have been licensed as a Real Estate Broker for 44 years with the CA Dept of Real Estate. I currently am President of Arbour Real Estate Management, Inc. Background was as a Buyer’s Broker for Investment properties. Currently a property manager and have been for 27 years. We offer residential and commercial management services. I hold two designations: RMP Residential Management Professional and MPM Master Property Manager. Awarded by NARPM National Association of Residential Managers. Past President of NARPM Sacramento chapter. My services are available in Sacramento CA. Visit my web site for more information on Sacramento Property Management http://www.arbourpm.com
