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Someone could make the argument that a local landlord, who is managing the rental themselves will have lower overhead and therefore have the ability to keep rents lower should they choose to do so.
I don't mean this question to be offensive, but have you ever been a landlord? If so, do you actually do this? I have a grand total of one property, so I have familiarity but hardly expertise, though family members own 7-8 properties (all of which they manage personally).
It is my experience that the market sets the rent. If I am saving 10% by managing the property myself (and I do manage it myself), I don't lower rent by 10% or even 5%. I charge what the market will bear, plus or minus some things on the fringes. I run the same background checks the big corporate landlords do and I am probably less flexible on certain items like 'controversial' dog breeds because I can't afford a problem as well as a bigger landlord can.
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There is, indeed, a difference between a local, responsive landlord and an out-of-state profiteer like OP clearly is.
You don't know the first thing about me, but I live up the road from you so I'm 'local and responsive' but somebody who lives two states away is unresponsive and profiteering?
I call the same A/C guy as a buddy who lives in DC and rents out a house in Pflugerville. Don't mean to threaten your worldview but there are terrible local landlords and great out of state landlords. You can be up the block and absentee or in Japan and on the ball, and the market doesn't care which you are when the time comes to set the rent.
I don't mean this question to be offensive, but have you ever been a landlord? If so, do you actually do this? I have a grand total of one property, so I have familiarity but hardly expertise, though family members own 7-8 properties (all of which they manage personally).
It is my experience that the market sets the rent. If I am saving 10% by managing the property myself (and I do manage it myself), I don't lower rent by 10% or even 5%. I charge what the market will bear, plus or minus some things on the fringes. I run the same background checks the big corporate landlords do and I am probably less flexible on certain items like 'controversial' dog breeds because I can't afford a problem as well as a bigger landlord can.
You don't know the first thing about me, but I live up the road from you so I'm 'local and responsive' but somebody who lives two states away is unresponsive and profiteering?
I call the same A/C guy as a buddy who lives in DC and rents out a house in Pflugerville. Don't mean to threaten your worldview but there are terrible local landlords and great out of state landlords. You can be up the block and absentee or in Japan and on the ball, and the market doesn't care which you are when the time comes to set the rent.
So the weakest part of my post was using the word "responsive". Care to address the rest of it?
Last edited by Westerner92; 06-26-2016 at 03:47 PM..
I can tell you this, any neighborhood that has a preponderance of investor/non-investor rentals I stay away from. Before I buy I do check TCAD/WCAD. And I try to stick to price points where the rentals won't be much of an issue. It's a shame, but during the downturn of the economy, the rentals really became a problem. A cavalcade of tenants both rotten and decent, unkempt yards, a gazillion dogs.... no thanks.
I don't mean this question to be offensive, but have you ever been a landlord? If so, do you actually do this? I have a grand total of one property, so I have familiarity but hardly expertise, though family members own 7-8 properties (all of which they manage personally).
It is my experience that the market sets the rent. If I am saving 10% by managing the property myself (and I do manage it myself), I don't lower rent by 10% or even 5%. I charge what the market will bear, plus or minus some things on the fringes. I run the same background checks the big corporate landlords do and I am probably less flexible on certain items like 'controversial' dog breeds because I can't afford a problem as well as a bigger landlord can.
I am not a landlord. The friends and family members of ours who have been landlords (some with multiple properties) have always chosen to be downwardly flexible with rent amounts for responsible tenants, choosing to forgo profit in order to have the right person in their house. Similarly, when I was renting, I always found rental prices to be lower if the landlord was local. This was true in Austin and elsewhere.
We have kicked around the idea of renting out our current house - I would not be interested in maximizing profit. We're staying put for now though so the point is moot.
I'm located in Denver and have recently sold some investment properties here. While I'm exchanging those for other properties in Denver, I'm also looking to diversify a bit into a lower-price market, but one still roughly similar to Denver. In so doing I've settled on Austin, but I don't know much about the city.
If anyone has realtor recs who can help me out (send me a PM please), I'm looking for someone who can:
a. work with an out-of-state investor
b. help me place site-unseen offers if need be.
c. go above and beyond in arranging for fix-up and other things for an out-of-state investor.
I have an awesome realtor in Denver who does everything for me, so I know how valuable such a person is.
In Denver most of my best investments have been in city-center neighborhoods that have been (at the time I've bought them) a bit rough around the edges but already attracting a cool vibe. If anyone's familiar with what the Highlands, Berkeley, and Sloan's Lake areas in Denver were once, they were bit rough, now they are ultra-trendy and expensive, so I'm selling in that area, and buying in some more up-and-coming areas in Denver.
So, what's the equivalent in Austin? Something that's already attracted the notice of would be residents (meaning rents have started to go up), but still not SO discovered that it's the darling of Austin Monthly and the national press.
Just to clarify, I'm not looking for old-money neighborhoods or the hipster neighborhood du-jour. That would be the already discovered area. I'm looking for perhaps what might be the NEXT area, popular.
Thanks in advance. Remember the realtor recs should probably be PM'ed to me in order to keep with c-d's terms of service.
This reeks of arrogance....me, me, me, me. Visit first.
Deeply appreciate all those who posted helpful advice; I will reconsider whether Austin is the place but still not necessarily turned off. To clarify, I'm definitely "sticking" with Denver, am mainly looking to avoid putting all my eggs in one basket.
I do sympathize with the sentiments and frustrations of many of the posters here; we have similar issues in Denver related to housing shortages, high prices, high rents, etc and it does lead to a lot of difficulty to many people, no doubt.
I can tell you this, any neighborhood that has a preponderance of investor/non-investor rentals
Well sure, but that's every owner, and it's because of tenants having less skin in the game. If you own your property you don't want a tenant as a neighbor. Nothing to do with where the landlord lives, unless maybe by 'local' you mean 'on the same street,' in which case, okay, that's definitely a plus for everybody else.
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The friends and family members of ours who have been landlords (some with multiple properties) have always chosen to be downwardly flexible with rent amounts for responsible tenants, choosing to forgo profit in order to have the right person in their house.
That isn't foregoing profit - that's an ounce of prevention equals a pound of cure. I'll take fifty bucks less a month (or sign a two year lease rather than raise the rent) for the right person. Neither your family nor me are being magnanimous -- we are weighing future investments of time, stress, and repairs into the equation. There is absolutely nothing about that equation that favors a local landlord except in the (rare) case where the landlord intends to move back into the house in the future; but even then, the landlord is getting the return on their investment, even if that return is 'my mortgage is being paid and my house is being well taken care of' rather than an financial profit every year. Excepting people renting to family members, all landlords are investors, and on the whole, investors will behave rationally with respect to their investment. Sure I care about having a responsible tenant and I want them to pay a fair price. But this is my retirement, and I don't intend to explain to Mrs. Aquitaine that we have to work another year or two because I cut rent by ten percent on account of my being such a great guy.
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So the weakest part of my post was using the word "responsive". Care to address the rest of it?
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Someone could make the argument that a local landlord, who is managing the rental themselves will have lower overhead and therefore have the ability to keep rents lower should they choose to do so.
Your conclusion here works only if your assumptions are correct, and your assumptions require a local landlord to not be an investor but some kind of benevolent overseer.
The type of situation where a landlord has a real judgment call to make tends to be situational edge cases and not just 'where shall I set the rent.' There is too much information too readily available for landlords to price outside what the market will bear. If you ask somebody who hasn't been in the rental market for a while (either as a tenant or a landlord) whether they'd prefer a local landlord, they'll tell you a local landlord is best, at least here in Austin where anything local is automatically better; and it's true that having a face-to-face meeting is going to resolve most any situation more easily than impersonal emails to an impersonal management company. It's also true that you can get a crazy, arbitrary landlord that will make your life miserable in ways that a corporate landlord just won't.
As it happens, my buddy in Jersey doesn't have a management company and handles everything personally. That's just what it took in that one instance for the investment to work out - the time and energy was easier to swallow than the added overhead.
I guess my point here is that we all have a natural impulse to want to shut the door behind us. You just bought a house in a new neighborhood? You don't want those renters in. You just moved off Escarpment and Mopac? You don't want SH 45 built. NIMBY isn't some group of 'other people' who are more arrogant and selfish than 'we' are; it's everybody, because when you've busted your chops to get something good, it's perfectly natural to want to keep its value up by limiting how many other people can share in it. Ask anybody who has been for 20+ years -- you could drop the population by 15% and you'd probably still have all of the 'cool' things that have come to town in that time without as much traffic or as many lines trying to get into whatever it is you want to do. I'm no different.
My reward for getting here when I did was that I was able to get into the real estate market at a more opportune time. That's benefit enough without also being unfriendly to a stranger trying to do today the same things I was able to do five years ago.
Deeply appreciate all those who posted helpful advice; I will reconsider whether Austin is the place but still not necessarily turned off. To clarify, I'm definitely "sticking" with Denver, am mainly looking to avoid putting all my eggs in one basket.
I do sympathize with the sentiments and frustrations of many of the posters here; we have similar issues in Denver related to housing shortages, high prices, high rents, etc and it does lead to a lot of difficulty to many people, no doubt.
I met a fellow who was doing just what your are...picking fringe areas of Denver and flipping properties both large and small. Gentleman was a good tennis player, nice looking fellow, very friendly. Nothing like that revitalization had happened in my home town and I was very impressed with the idea. Even after playing tennis for a few days on Hilton Head Island, I never got his last name...no idea how things worked out.
Did I mention this was in 1980 ???
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