VOL. 37 | NO. 21 | Friday, May 24, 2013
Renting property tricky for unaware landlords
With the reality of the recession fresh in the minds of many investors, there has been more and more interest in realty. While stocks may climb and fall, the need for shelter is consistent, and people somehow manage to pay rent in order to keep the roofs over their heads and their enormous television screens.
As more investors enter the market, it is important that they understand the laws governing property management, even if it is their own property. Along with the guidelines for property managers, there are tough laws for owners as the tenant is protected, on many occasions to the detriment of owner. So much for lawmakers being at the beck and call of powerful lobbyists funded by wealthy individuals and corporations.
Once a renter falls behind in his rent, the owner, known by some as the evil landlord, must await the day of the month on which the rent payment is due to write an eviction letter. After that, the owner may go to court in order to have the renter evicted.
The court date usually takes about two weeks and is subject to continuance if the person cannot leave work to attend. If the court rules in favor of the landlord, the tenant is granted two weeks in order to move.
If the tenant has not vacated, the owner must contact the sheriff’s office and schedule an arrangement in which the sheriff will arrive at the property and secure entry and stand guard while the landlord and or his group remove all of the personal property of the tenant, said property to be placed (ok, thrown) onto the roadside.
All of this can wreak havoc on an ROI (return on investment) and should be included in a business model when venturing into rental waters. In addition, roof leaks, plumbing repairs, HVAC, electrical and obscure, unreasonable demands.
The recession also forced many property owners into the role of property management by default. Many owners were unable to sell their homes as the economy tanked and were forced to rent their homes or face foreclosure. As most in these predicaments were strapped for cash, they fell prisoner to the whims of the renters.
128 Kenner Avenue
For example, one property owner was told by his tenants that he needed to have the house sprayed for bugs as the renter had four small children and feared that they might be bitten.
The owner had himself raised children there and never worried about bugs. The renter cited a clause in the rental agreement that required the owner to maintain the property in a condition that ensured the safety of the tenants, a term he readily accepted and stood prepared to adhere.
Yet, he felt the request, or demand, was excessive and told the tenant of his disdain for this request. The tenant gave his notice to vacate based on the owner’s refusal and forced him to cave on the matter. There was another $45 each month added to the deficiency.
A person relocated out of town from a Williamson County home reported that he had been held hostage over the installation of a security system. Another $3,000 down the drain.
Almost all would agree that an investment in a reliable property management company would have proven a sound investment. Throw that into the financial model when investing in realty.
Sale of the Week
The sale of the week this week is 128 Kenner Avenue and was listed by Whitney Musser of Worth Properties for $564,000 and sold for $535,000. That would appear to be a significant drop; however, the owner had paid $247,775 for the property only two years ago.
The house consists of some 2,626 square feet with four bedrooms and two baths with the large master suite downstairs, hardwoods up and down. Ms. Musser notes the master has marble countertops, double vanities, and a walk-in closet.
Additionally, the renovated kitchen opens into a dining room and rec room –just enough to entice Kelly Dougherty of Village Real Estate Services to bring her buyer to the home for a three hour lunch and seal the deal.
Kenner Avenue is a sleeper street in town where home values appreciate as rapidly as any area in the city.
The street is located off of West End Avenue and was across the street from White Bridge Road when it was a road over a white bridge and the scene of one of the most horrific train wrecks of all time, the Great Train Wreck of 1918. In that disaster on July 19, 1918 101 passengers were killed and another 171 were injured.
The bridge is now a pedestrian bridge and connects to the greenways. Rarely do the walkers collide.
Richard Courtney is a partner at Christianson, Patterson, Courtney, and Associates and can be reached at Richard@richardcourtney.com