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San Antonio Property Management Blog

Home Warranty for Rentals

Sam Maropis - Tuesday, June 07, 2016

Home Warranty companies, better known in Texas legally as Residential Service Contracts can be a great thing to have on a home.

Even if you have owned your home for many years, you can usually get a home warranty. Granted there are exceptions to everything, and as such maybe your home does not qualify, but for so many homes it is well worth it.

If your home is say ten plus years old, you need to get the warranty. Lets look at some examples:

Granted prices are all different, so you need to call a few companies to find out, but generally the cost for a home under 5,000 square feet is around $400 to $500 per year. I know of a few companies that the cost is under $400 per year. I know that this seems a lot of money, but lets look at what they generally cover.

The first is the hot water heater, and I have seen this cost to be around $400 installed for a new hot water heater. Also in most of San Antonio our water pressure is really high, many times in the 125 lb range. They say, (who ever they are) that the water pressure should be in the 40-80 lb range, hence most homes have a reducer installed when the home is built, but they only last about five to seven years. This should be covered with most companies, but double check to be sure. Really high water pressure is what causes breaks in the pipes near the water heater, around sinks, etc. A water break can cause a lot of damage to a home. Something to avoid if possible.

The next is the HVAC, the Heater/AC unit. This is a monster cost. May homes in San Antonio have two units, one for upstairs and one for downstairs. Some of the homes under $150,000 apx have just one unit, no matter if the home is one or two stories, this is a big expense.

Costs to replace HVAC can be very expensive. Granted the warranty does not pay for the Freon gas, but still you can easily be looking at a cost somewhere around $5,000 to $7,000 per unit for a totally new system.

I had a home I was rehabbing and from the time I listed the home with the MLS to the time I sold it, the coils developed a leak and as such it cost me $1,500 for new coils on the inside unit in the home.

If you provide a refrigerator or washer and dryer, the home warranty can also cover it. Again if you have a garage door opener, or water softener they can be covered. So ask your warranty company for details.

Is a home warranty right for your investment, it all depends. But give me a call and we can talk about what I have found out from my experiences with getting work repaired.

Here are three companies that I know. First American Home Warranty has special pricing as such, if you call their call center, the operator can not give out these prices, but I can get them for you. 

First American Home Warranty Brochure

Old Republic Home Warranty Brochure

Select Home Warranty Brochure

We have a whole list of companies to look at if for some reason you do not like any of these, give us a call and lets discuss what are your best options at 210-504-4410 or visit us at www.ProfitRealty.com/Owners for more details.

Dictionary: Some Common Terms in Our Industry

Web Admin - Friday, June 03, 2016
Dictionary:Some Common Terms in our industry

Makeready

The term Makeready is really a lazy way of saying that when the tenant moves out, the unit needs to be made ready for the next tenant. This is a business of moving and as such folks move all of the time, and of course we work to slow that as much as possible, but folks move and as such we must manage the moves in a logical process, hence the name “Makeready”.

Makeready is very different from routine maintenance and or major repairs. Yes when a tenant moves out, many times we do normal routine maintenance at the same time, but during the move it is considered Makeready, and the costs of that work many times fits into the category of Makeready costs.

Why Property Management in San Antonio TX

Sam Maropis - Friday, June 03, 2016

Having been a real estate investor since 2002 and having owned a 48 unit apartment complex for eight years, (2007 to 2015) has taught me a few things about Property Management and Tenants and vendors/employees. I should also say, I have been a licensed real estate agent since May 2011 and became a Broker in the State of Texas last year, May 2015, ProfitRealty.com.

Over the next many blog posts, I am going to explore the some of the many differences between owners and property managers. I am doing this because after all of these years, I am now able to offer Property Management Services to owners in the South Texas, San Antonio area market.

Owning real estate and living off of the income from properties you own changes your views of ownership, management and of course tenants.

While I was running Peach Creek Apartments, I started a small company working to help owners run their businesses better, TrainingLandlords.com. The site and the domain are no longer operational. What I found was actual owners who ran their own properties were not as welling to spend money to save money, (I know a few cheap owners that fall into this category) but at the time of owning TrainingLandlords.com I was not able to offer Property Management to folks due to my license that was issued by State of Texas.

Yes any agent can offer Property Management Services, but it is the Broker that must manage the deposit accounts and as such, the Brokers I had worked for back then would not offer property management, hence the eventual move to starting Profit Realty Company.

I say all of this because the focus of an owner is very different from the focus of a property manager. Of course not all owners are the same and of course not all Property Managers are the same either. There are over 7,000 licensed Real Estate agents in San Antonio, so there are a few personalities to speak of, but that is a very different subject.

One of my major problems with this business is turnover. Most times I hate change, some times I like change, it always depends. Every tenant that moves causes a Makeready. Yes sometimes it is small repairs and costs but other times it is way to high of a cost. But what if we can do something to slow the monster turnover that some owns see? Why not?

I was helping a friend find an house last week and while we were in the house, the current tenant was there who let us in. I got to talking to this tenant, and he had a great job, (he did not change jobs recently) and he was looking for another house to rent. He said that he had moved every year, Wait, did I hear that correct? He has a good job, it has not changed, hence the location has not changed, the girlfriend hand not changed, what changed? I do not know. But would you take this applicant in? You may say Yes, but I am not so sure. His moving out, will require a full house painting and cleaning of the carpet. I know what you are saying, that the deposit will cover the costs. But not really. Some if it will but where will still be costs you the owner will incur.

We are going to talk about him and how Property Managers interview in later blogs that lead to a constant turnover of tenants.

One of the things I did while running TrainingLandlords.com was to produce a number of great videos on how to run this business better. We are going to show three videos in the next blog on what it means with Fair Housing And Equal Opportunity - HUD rules and how they impact owns and Property Managers, more on this in our next blog. Stay tuned.

In the Grip of the New Year’s Frame of Mind

Web Admin - Tuesday, January 05, 2016

Along with all of last week’s New Year’s Day festivities came what you could call the New Year’s Frame of Mind: the familiar, this-time-of-year special consciousness of the passage of time. For most investors, all the other seasons come and go with everyone too busy tending to everyday affairs to pay much attention to the big picture: the progress (or lack of it) toward the major goals most everybody hopes to achieve.

It’s that New Year’s Frame of Mind that’s behind the impulse to make New Year’s resolutions. After all, there’s no such thing as ‘Fourth of July resolutions,’ or ‘Labor Day resolutions,’ even though a quick check of the calendar confirms they come once every year, too. Nope; it is the moment when the crystal globe slides down to the Times Square throng and old Father Time greets Baby 2016 that’s most likely to trigger thoughts of how preposterous it is that another whole year has gone by.

Whether or not that feels terrific is partly due to how well we’ve advanced in our individual Grand Scheme of Things…be it a self-improvement incentive (that’s why they run all those ‘learn a foreign language’ commercials in December) or long-term career growth.

For most San Antonio Investors, progress toward financial security is one of the larger issues that the New Year’s Frame of Mind can trigger. Right on cue, many of last week’s end-of-year broadcasts included a sobering study about the average American’s savings picture…actually, ‘sobering’ is too mild a word. As one credit guru put it, the statistics were ‘dizzying.’

The survey was credited to an outfit called GOBankingRates. They had released it months ago, but it drew considerably more attention as the calendar neared January 1 (getting the New Year’s Frame of Mind treatment). Their pronouncement wasn’t so much ‘dizzying’ as it was frightening: the lead finding was that 62% of Americans have less than $1,000 in savings!

Reassuring information was readily available, though, for anyone who did more than a quick scan of the survey. It turns out that they had asked about savings accounts only—so the headline-grabbing number left out retirement accounts and the like. As it relates to area real estate investors (if you own a rental, you are certainly a real estate investor), they also hadn’t included real estate equity in the ‘savings’ total. That certainly makes their scare headline less than dizzying. As the first commenter on their own website noted, ‘why keep money in a 1% savings account?’

But GOBankingRates wasn’t exclusively a source for misleadingly bad news. As compensation, they also supplied surveys of the 10 Best Tax Havens in the World (Luxembourg is #1) and 2016’s Top Resolution (it is “enjoying life to the fullest”).

Here’s hoping that San Antonio’s 2016 proves to be a remarkably healthy, happy, and prosperous one for you and your family. And if ‘enjoying life to the fullest’ this year involves buying or selling commercial and multifamily real estate, I hope you’ll give us a call!

Some Investment Property Basics are Just Too Basic

Web Admin - Tuesday, November 17, 2015

Being in real estate, it’s probable that San Antonio investment property popups hit my screen more often than yours. Nonetheless, I bet that every Texas web user knows the phenomenon: you’re trying to accomplish something on the internet, and these ads keep bouncing up, doing their best to distract you. It seems to take more time to continually patrol your browser settings than to just X the pop-ups.

In any case, the other day while stuck waiting for something to process, I noticed the headline on one of those ads (they seem to be news items or features, but they all turn out to be ads). It showed a pretty model looking into the snout of a piggy bank under the headline, “How to Use Real Estate Investments to Cover Student Loan Debt, Car Payments & More.”

It occurred to me that this wouldn’t even make the first draft of any decent Investment Property for Dummies book (there seem to be several). I didn’t click on the ad, but I bet it would point out that a good investment property produces cash…and then you could take the cash, and use it to cover student loans…etc. This seemed to be beyond a no-brainer—more like a no-chance-of-ever-having-a-brainer. But it was intriguing that the sponsors seriously expected that people would click on it to find out how to use real estate investments, etc. It set me to actually looking at more of the pop-ups.

Over on the right of the monitor was a great big threatening one. The model was holding a hand to her forehead as if it ached terribly under “How a Lack of Confidence in My Real Estate Calculations Just Cost Me $25K.” This one was more tempting, but still resistible. There was a good chance that the article was actually an ad for a mortgage offer that, had she only trusted it by believing in their calculator, would have led to lower payments. I never ever click on the calculators that ask if you live in San Antonio, because they make you jump through hoops, and only at the very end tell you they’ll send you the answer (soooo, what’s your name and email address, chump?)…

There was 7 ABSOLUTE MUST-READ REAL ESTATE BOOKS FOR BEGINNING INVESTORS, which didn’t even have a picture of a model trying to look intelligent (it showed the back of a book being read by the model). When the title is in all caps, it’s like the ad is shouting…best to skip those.

There was a much more intriguing 6 Superstitions That May Affect Your Real Estate Investing—but the picture only had what looked like a motel room key with a key-tag that had a big number ‘13’ on it. Clicking on something like that is usually bad luck (maybe that was one of the superstitions). Next to it was the seemingly not-directly-relevant EARN YOUR MBA THE SMARTER WAY, which sounded like a good idea, but a resistible one, since I only had a minute or two before the computer finished processing.

One last temptation was You Can’t Succeed Without Discipline, Right? WRONG. Here’s Why, which showed a ditzy blond with big glasses and a sun dress holding her forehead with both hands! But then my project finished processing before I could find out why you don’t need discipline to make the most of your investment property.

You have to suspect that discipline couldn’t hurt, even for the ditzy model. If you agree, have at least a bit of discipline, and would like to have a look as some promising investment property opportunities, I hope you’ll give me a call!

Does a Price-to-Rent Metric Help Area Landlords?

Web Admin - Monday, November 09, 2015

Last week, residents who keep their eyes on real estate trends got some fresh information about one factor that seeks to put numbers to the relative benefits of buying versus renting. When real estate values head south, buying may seem to be a particularly risky proposition…even though later it’s clear that the value proposition was actually improving. The trade-offs are hard to quantify. Even now, if San Antonio listings reflect prices on the rise, renters who failed to lasso the most extreme bargains may assume they’ve missed the boat.

Putting numbers to the problem is a complicated, pencil-snapping exercise. In addition to current dollars spent, it involves speculating on future market values. But local readers who checked into CoreLogic’s Insights blog found some new data toward the end of last week, presented in an interesting way. It arrived in an article that looked at one particular aspect of today’s national real estate landscape “seven years after the last housing bubble.”

What CoreLogic’s market trend analyst Shu Chen did was to calculate the ratio of median home listing prices versus home rental prices, and chart it over the past decade. To come up with the numbers, national median home prices in key markets were divided by median annual rent figures. The beginning 2005 ratio was set at (indexed to) 100: the starting point for this “Price-to-Rent” ratio. The idea would be that when the ratio shows less than 100, it’s a good time to buy; when it goes over 100, the relative advantage has faded. It’s all relative, of course…and it doesn’t work out to be much more than a footnote to history—but you have to check the graph carefully to come to that conclusion.

Tracking the ratio’s movement over the past ten years, the graph shows a more or less steady Price-to-Rent ratio from 2005 until sometime in 2007. English translation: until the onset of the housing crisis, the financial incentives to continue renting versus buying remained pretty much unchanged. But then we see a bumpy but pronounced drop from 2007 until 2012. Aha! The housing crisis/mortgage meltdown! This would verify that listing prices were falling even as rent levels were rising. This would mark a point where purchasing became more advantageous—even though the risk level at the time seemed daunting.

Then, beginning in 2012, the graph does an about-face. It shows a steady rise as the Price-to-Rent ratio returned to previous heights. Right at the end, as we near today’s data, there is a minor drop: but it’s only slightly below the peak—which you’d think should coincide with the least advantage to buying versus renting.

That this conclusion is the opposite of San Antonio’s current situation is because the Price-to-Rent ratio isn’t the only game in town. The spoiler on the US Price-to Rent Ratio graph is a second line (a faint orange one that all but disappears next to the in-your-face deep purple of the Price-to-Rent line). The orange one is the mortgage interest rate curve. It mimics Price-to-Rent’s ups and downs almost exactly…until it doesn’t. At some point in 2012, the mortgage interest rate flat-lines near the bottom, then stays there, hugging the depths even as Price-to-Rent’s purple line heads skyward.

In other words, the relative advantage to buying versus renting, which should have all but disappeared as South Texas home prices climbed, did no such thing. Today’s historically low mortgage interest rates continued to make buying rentals a fantastic opportunity. If you’re one of those who’d like to check into those current opportunities in San Antonio, go over to our investor listings, or give us a call at 210-504-4410 and let us help you find a great rental to buy.

Bookshelves Hold Crucial Real Estate Information

Web Admin - Monday, October 19, 2015

When it comes to understanding the factors that come into play when buying or selling a home—or any practical real estate information at all—local high school (or even college) graduates are on their own. If any real estate information has even been touched upon, it will have been in the most cursory manner: at best, one line item in a Home Economics budgeting discussion. That’s one reason why everyone from first time town homebuyers to itinerant real estate investors can benefit from the best of today’s how-to real estate books. Here are some of the popular oldies—as well as some valuable newcomers:

100 Questions Every First-Time Home Buyer Should Ask: With Answers from Top Brokers from Around the Country is Ilyce Glink’s compilation of insights from top brokers across the country. Town first time buyers aren’t the only readers who will find this general reference valuable—local home sellers who want insight into the concerns of potential buyers will find it a useful resource. The “100 Questions” don’t address every local real estate information topic; but on the whole, this book is concise and informative.

Solid, practical information for homeowners readying their property for the local market can be found in Rhoney and Richard’s Smart Essentials For Selling Your Home: How To Get The Highest Price In The Shortest Time . In the same way that 100 Questions book is also useful to sellers, this one would make excellent reading for prospective home buyers who recognize the importance of understanding sellers’ priorities. Smart Essentials is mercifully short: just 92 pages!

For more seasoned readers who might be considering an area residential investment, the bookshelves have plenty to offer: The second edition of Gallinelli’s What Every Real Estate Investor Needs to Know About Cash Flow... And 36 Other Key Financial Measures, Updated Edition has been around for a while, but comes highly recommended for its textbook-level explanation of how economists digest real estate information for investment purposes. The formulas are all there, as well as examples that demonstrate how to apply them. Reading it won’t encourage prudent town non-CPAs to do their own business tax returns—but will acquaint them with valuable foreknowledge on how their tax advisor approaches maximizing their refund. Its description of four different ways to make money from real estate can be eye-opening.

J. Scotts’ The Book on Flipping Houses: How to Buy, Rehab, and Resell Residential Properties is a roadmap from start to finish on how to go about a lucrative house flip. There are many books on the subject, but this one is the leader of the pack. First published in paperback in 2013, it’s been a real estate information best seller ever since. Part of its wide appeal is the author’s (he’s a veteran flipper) candid step-by-step descriptions of how he executes his own projects. The author’s other book (with co-author Brandon Turner) is:

The Book on Estimating Rehab Costs: The Investor's Guide to Defining Your Renovation Plan, Building Your Budget, and Knowing Exactly How Much It All Costs This is a book local real estate information-seekers should find well worth its hefty paperback price tag ($22.49 on Amazon). It details a variety of different approaches to projecting a rehab budget, including a breakdown of the 25 components that need evaluating.

Lance A Edwards book, How to Make Big Money in Small Apartments is a must read. Great book on how to find and buy and manage small rentals. A great book, well worth the time and effort to read.

Books can provide invaluable background information for real estate newcomers and veterans alike. Another essential is the assistance of a knowledgeable agent: good reason to give me a call!

New Reports Help Guide Real Estate Market Decisions

Web Admin - Monday, October 05, 2015

At the beginning of any month, onlookers can find batches of fresh reports about national real estate market activity. Take October, for instance. We’ve just learned a bunch about what happened across the country. September’s numbers won’t be collected and analyzed for a while, but the fresh real estate market data for August is out, as well as July revisions. Since earlier findings are always being tinkered with as estimates are replaced with hard results, we also get improved readings from the earlier month.

This latest batch of real estate market news was upbeat, downbeat, and, uh…sideways. Thursday was the first day in October, which was when CNN Money came out with some good old-fashioned cheerleading. “Americans went shopping for homes in August,” they headlined. The reason cited was for new home sales: they notched the highest volume since early in 2008: 552,000. It was a nice way to get the month’s data reports started.

Home prices, on the other hand, were not yet available for the August timeframe—but July’s Case-Shiller Home Price Index had pointed upward. It showed a 4.7% rise in prices paid for homes from a year earlier. This made for “moderate, but still above average, price appreciation,” according to Realtor.com’s chief economist. The prices were seen to have edged up just 0.7% from June, which was “barely higher” yet “much higher than last year.” If that summary had been illustrated, it would have merited both a frowny face and a smiley face.

There were other preliminary soundings about what the August price information was likely to be, and they were just as equivocal.

The National Association of Realtors® tracks pending home sales data (homes under contract but not yet closed), and by that measure, there was a slight retreat from July’s level. Yet although the preliminary number showed a 1.4% drop, that was still more than 6% higher than August 2014’s had been. Which was more compelling? Altogether, the news for sellers was deemed to be stronger. “Demand continues to outpace supply,” according to the NAR. “Shed no tears for sellers.”

If that sentiment is shared by Texas homeowners and multifamily buyers, it might nudge some into listing their home now rather than waiting for the next truly robust real estate market—traditionally not expected until next spring. Although fall and winter usually find fewer buyers on the prowl for new digs, those who do surface are generally regarded as serious shoppers. And since the number of residential listings usually declines as the holidays approach, there’s a good argument to be made that less competition tilts in favor of sellers.

We have to wait until next month to get a read on how September activity fared; but for anyone who sees the advantages this fall’s San Antonio real estate market offers, I share your opinion! It’s definitely worth giving me a call.

Off-Market vs. Off the Market: Tricky Real Estate Distinction

Web Admin - Monday, September 28, 2015

The San Antonio real estate listings consist of the lineup of properties that are currently “on the market.” They’re for sale. Offered to buyers. Available for purchase. “On the market” is a straightforward real estate term; end of discussion.

So, you’d think that “off the market” should be equally unequivocal, and it would be, if it weren’t for “off-market,” with which it’s easily confused. And then there’s the fact that what actually happens after a formerly listed property goes off the market can result in a several different outcomes.

Sounds like a dose of contradictory real estate jargon—but it can be sorted out with a little determined effort. Here goes:

In real estate, off the market denotes a property that was listed in the past but currently pulled from the market. It no longer appears in the updated real estate listings, either because the owner has decided not to sell, or because the property is now in the process of being purchased (so more buyers don’t need to be recruited). When phrases like ‘under contract’ appear in a listing, it has the effect of being off the market at the moment, though interested buyers might keep an eye on it in case the sale doesn’t go through. An owner might withdraw a home if they now believe the market is not active enough to warrant more effort at this time, or because some event has caused them to decide to keep the house.

Off the market, in today’s web-centric real estate reality, is not quite as cut-and-dried as in former eras. Because the Internet never seems to forget anything, an off-the-market property may still pop up onscreen when buyers search for new income properties for sale (particularly when some of the national sites don’t promptly remove outdated listings).

On the other hand, Off-market is sometimes used as a synonym for “off the market,” but can be used by some national websites for upcoming properties that are being marketed, but have not yet been listed. More often, off-market is used to denote a property that is for sale but will not be advertised publicly. Since such a property isn’t entered into the listings at all, most potential buyers will be unaware that it’s available. You might think this is a nutty way to try to sell a property, but there can be good reasons. By not listing, the tenants do not find out that the property is for sale, hence no changes to the demographics of the property residents. Later news will say something like, “24 unit sold for cash”, or “New Owners, better management”. Some extremely high-end real estate offerings are offered quietly to other brokers. This is sometimes called a ‘pocket listing.’ When successful, it results in an off market sale.

You don’t have to be a celebrity to want to discreetly search for—or sell income property, you just need to talk to the right Broker. If you are beginning to think over your area real estate options, whenever you call me for a no-obligation consultation, it will always be treated with complete confidentiality.

A Property Search in San Antonio is a Participation Sport

Web Admin - Tuesday, September 22, 2015

For anyone who has never participated in a serious house-hunting effort, their mental image of how the experience will unfold may be a little off. They might imagine that, after narrowing down their requirements for a income producing property (size, price range, and the like) they will agree on a day and time, then just climb into their agent’s car and settle back to have the likely prospect properties exposed before them.

In fact, the house-hunting procedure is almost like that, except for one major detail:

A property search is a participation sport!

Experienced South Texas property searchers have learned to husband their energy on any day that includes showings. Especially when their property search doesn’t immediately yield a find that fits their target criteria, they know that it may take a while—and more than a few house-hunting outings—before they identify a suitable house.

What takes so much energy? Sophisticated buyers know that every showing holds the possibility that they could be setting foot in what might just become their future cash cow. Every showing is literally the only time they will ever have a valid ‘first impression’ of the place that might become a major purchase. And each of those first impressions often come as part of a day that includes multiple showings—one that can easily result in a jumble of impressions, where homes with similar features are easily confused in memory. Since second and subsequent showings should be reserved for properties that qualify as serious contenders, wasted time and effort (not to mention inconvenience to the homeowners) can be avoided by alert, sharp-eyed property searchers. It takes stamina!

That’s why more experienced prospects know from the outset that a showing isn’t a passive experience. It’s not a bad idea to have a pen handy for jotting notes on the listing sheets the San Antonio agent provides—notes about distinguishing features (good and bad!) that will help with comparisons at the end of the day.

For those who are veterans of previous property searches, this is old news: they remember reviewing sessions that include, “No – that was the one with the bay windows, not the one with the [fill in the blank].” For first-timers, it’s good to know in advance: a property search is a participation sport. And you’re the team captain!

If you are about to embark on the search for a income producing property, or have one that’s soon to be listed, do give me a call. Properly arranging efficient home tours is only part of my track record of helping successful home sales happen!


Management: (210) 209-8222
Commercial: (210) 504-4410
Fax: (210) 807-3143

4035 Naco Perrin Blvd
Suite 203B
San Antonio, TX 78217

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