Access gives Lake Elsinore family $250 towards rent

We are blessed by blessing others!

Presented by Holt Ministries and Sponsored in-part by Access, The Lake Elsinore Community Annual Turkey Giveaway held on Nov. 23, 2019 was a huge success! 544 thankful families in need, received turkeys and trimmings just in time for Thanksgiving.

As part of this outreach and for the second year in a row, Access gave one very lucky Lake Elsinore family $250 towards their rent! The Garcia family of four; Joseph, Stacie and their two children, Korinna and Joey received a little extra cheer just in time for the holidays – and all of us here – are so happy we could help. We are building stronger communities together.

Learn how you can help make a difference by getting involved. Visit Holt Ministries by going here today: http://www.outreachministryinlakeelsinoreca.com/

Many Military Homeowners have common questions and concerns when it comes to renting out their home. For some, the idea of keeping their home as they move to a new duty station seems too risky; this can be due to many myths and rumors told from those with little or no experience at all.

This blog will specifically target the unnecessary fears that can be easily alleviated by hiring the correct Professional Property Management Company. USAA put out a great article which can be viewed here: 6 Survival Tips for Renting Out Your Own Home. Let’s start by going through their list and then expanding on it from the eyes of a licensed Professional Manager.

1. Find a good tenant – a good tenant is the cornerstone of a rental property. Many owners are simply concerned with an applicants credit score, but a seasoned property manager knows there is much more involved. As the tenant rented a home before? How far do they work from the home? How often do they stay in one place? How many years have they been employed with the same company? These are great questions that not only help find the best tenants but help reduce maintenance costs, vacancy and reduce risk. Take for example a military member who has only lived in the barracks vs a military member who has owned their own home. Which person do you believe will have the experience, knowledge and ability to reduce cost of maintenance? Further, compare a tenant commuting 2 hours a day to work vs 45 minutes a day. Which tenant will likely renew their lease after one-year? These are factors true Professional Managers take into account when finding the best tenants.
2. Determine how much rent to charge – I hear all the time from inexperienced landlords, “My neighbor rented his house for $3,000 so mine must be $3,000” or “Zillow says my house is worth this much”….I can tell you there are many factors and nuances when it comes to renting your home. Paint, flooring, allowing pets, upgrades, views, location, and rental terms are just to name a few. A landlord should be flexible when it comes to setting a price for your property and also be able to understand that when your property is vacant each day you are losing money. As a Professional Property Manager I can tell you our strategy changes vastly for each home, and only experience can teach you how to efficiently increase your total revenue.
3. Protect your rights with a lease – The lease is much like the Military Code of Conduct. There are strict rules to follow and repercussions if they are not met. I can not tell you how many times I have been shocked by the lack of protection homeowners have by writing their own lease. A simple search of the internet brings up thousands of high-risk and weak lease contracts. A true Professional Management Company will have a air-tight and solid lease that works to fully protect the landlord in all cases.
4. Protect your property with insurance – Landlord insurance is critical when it comes to your reducing risk for your rental property. Traditionally we have seen that a transfer from your current homeowner policy to a landlord policy is about the same cost to you. Still, it is wise to ask your management company for references when selecting the correct policy for your home.
5. Hire a management company – Just as in the military each member has a critical role in securing a victory for the mission. Specializing in your job ensures you are the best person when needed. My first advice when hiring a management company is to choose a company who specializes in property management. You want someone who focuses clearly on how to find the best tenants, reduce vacancy and maintenance costs and not be distracted because they are trying to wear too many hats. Further, the article located on https://www.military.com displays another great benefit, “One big advantage of using property managers is emotional distance. “Often the owner will get involved with the tenant emotionally,”….a lot of times homeowners can make bad decisions based on emotions from competing interests from tenants, a property manager can be the buffer you need.
6. Prepare property for evictions – The good news here is evictions are not as scary as you may have heard. First, with our company the chances of having an eviction is around 2.00%. Second, the average loss in an eviction is around 2 months rent. Ask your management company on how they handle evictions, most of the time they can take care of the entire process without needing you.

Now that we have a basic understanding of the foundations of your rental property, let me alleviate the common concerns and questions I hear from Military Homeowners.

Question 1: What if I need to move back into my home? 

Effective communication is crucial here. As long as you are communication with your manager they can setup the current tenants lease to end at the same time you wish to regain possession. A worst case scenario would involve you having to wait until your current tenants lease ends until you regain possession; still our negotiating with tenants in lease have worked to get them out sooner at little cost to you.

Question 2: What if I am overseas or out of State? Do I need to come back for anything?

This can really depend on the management company. You will need to read their contract and ask them questions regarding to things like representing you in small claims, or handling of billing. As a reference our management company can literally handle everything for our Military Homeowners, from representing you in court, to handling all paperwork online, paying property tax, HOA matters and billing, mortgages etc. We are setup to handle all matters pertaining to your home and you can trust it will be handled as it is our own.

Question 3: What if my property goes vacant and I can’t afford the mortgage?

This question has larger implications when it comes to your financial well-being. A typical property management company has a 5% vacancy rate resulting in 18 days on average lost rent per year. It is wise to run a performance sheet with your manager to help you budget for costs to include vacancy, maintenance and miscellaneous expenses. Our company vacancy rate is around 2% which means you should expect 7-8 days lost rent per year.

There may be other questions or concerns you may have when it comes to renting out your home during a PSC move. Feel free to contact me directly anytime at (909) 247-0069 – Grant Blanchard with Access Asset Management Inc.

Happy New Year Everyone from the Access Asset Management team! 2016 was a huge year for us and all our owners. As our owners and residents know by know, rents have seen a drastic increase over the past year. According to published journals this is a decrease in supply or rental homes and increase in renters. The only fix could be further home development that surpasses the movement of current renters to home-owners.

Looking at property management in 2017 it is clear how technology is catching up to fulfill our industry needs. The majority of our residents have begun to use our online resources such as ACH payments, and portal maintenance requests. Here at Access we are dedicated to making the rental/moving process as easy and enjoyable as possible.
For our owners we have made great strides in performance. Access now tracks vacancy, maintenance costs and eviction rates on a monthly basis, this can be readily seen on our front page. For understanding, average property management vacancy is 5%, maintenance costs 8% and evictions 6%. Access has steadily seen our numbers fall far lower than the averages for the entirety of 2016. We look forward to working harder and harder in 2017 to keep performing even better.

During our years of property management and speaking to our owners, we have noticed two distinct strategies for renewing a lease with a tenant. First, we have owners that will do anything to keep the tenant and do not want to “rock the boat”. Second, owners who demand a rental increase of X amount based on various reasons. This post will examine both thought processes and conclude with Access’s methodology and processes in procuring lease renewals.

Let us start by looking at the approach of never increasing rents. The positive is a greater chance to obtain a lease with the tenant and another 1+ year of rental income. The problem we see with this model, is when tenants become long-term. This is even more evident over the past 2 years as rental rates have increased as much as 20%!. In one scenario a 3 bedroom rented for $1,400.00 in 2012/2013. The current market value in 2016 for their rental home is $1,700.00. By not increasing rents this owner is effectively losing $3,600 a year! Most people would evaluate their property at this point and decide maybe they should increase rent. But to what amount? $100.00 still leaves you with $200.00 potential loss. $150.00 seems fair as you are meeting them halfway, but now we are placing the tenant into a position where their budget may be stretched. You would have gained more money and set a clearer expectation to the tenant with incremental increases of $40-50 a year.

Many owners feel that because the rent is not increased the tenant will therefore treat the property better. Although this sounds nice there is no evidence to suggest its truth. Furthermore, many times an owner will not increase rent because the tenant does a good job of taking care of the house, or repairing minor items. Again, our experience shows that in most cases a tenant who does not submit work orders and claims to fix everything themselves, is just ignoring the problems to be deferred when they move-out. This is not to say this is always true, but the more likely situation. [The average maintenance costs for a rental is 8-10%, but because Access is better we expect to spend around 6% gross rents. So on $1,700.00/mo we expect to spend $1,224 a year on maintenance. This number also accounts for re-roofing/turnovers/water heaters etc. That’s $102.00 a month, a doubtful number of savings by taking care of minor items. A more likely estimate is around $20.00 a month savings for minor repairs or 2%/] Still, we do want to reward tenants who are overall deemed “good”.

Now, in examining the owner who is constantly pushing rental amounts to the current market value. The only positive is the ability to gain the highest gross rental income, but it comes with too many potential negative. First, you will see higher vacancy rates. Second, you will see an increase in work-order requests. From experience these two things always happen when pushing rents on tenants without negotiations and sound arguments. Most people will not move if they go online and see that their rental increase is still 5-7% under fair market value. But if you are pushing rent to the current market they may choose to downgrade or try another area as there is no cost benefit to staying.

Now let’s take a look what Access believes is a logical, tried and true method for determining rents at lease renewal. Remember that this is an investment, at the end of the day we are talking dollars and cents and an actual return on the money you put into your investment. In that same scenario where the rent was $1,400.00 but the fair market value is $1,700.00. What increase is justified if it will cost you 3 weeks vacancy and $850.00 placement fee, or $1,830.00 (maintenance costs are expected and not a factor in deciding to turn-over a tenant.) A $100.00 increase gains $1,200.00 over the year, a $630.00 loss in potential gains. $150.00 is $1,800.00 over the year, only a $30.00 loss. Thinking in these terms helps us understand our investment and how to negotiate to our benefit. Still, look at the alternative, a $1,830.00 loss compared to re-marketing at $1,700.00 would see a $1,770.00 yearly profit. We believe that $150.00 increase is still too little. And here’s why.

Access has determined the typical renter stays for approximately 2 years, so in this case if you do not increase rent the 2nd year you actually lose $1,800.00 ($150/mo. lost in potential rents). The actual increase should have been $200.00. Comparing the numbers again, $1,830.00 loss to re-rent but a gain of $7,200.00 over two years is a $5,370.00 gain. A $200.00 increase over two years is a $4,800.00 gain. So we still “lose” $570.00 potential, but there was little risk involved if we were able to negotiate $200.00 increase, and the tenant should be happy as their home is 6% under the fair market value.

Typically this is where we want to be, renegotiating leases for 5-7% under fair market value. This makes the tenant happy because they are still getting a good deal, and the owner happy as their investment does not become stagnant.

To simplify, if a tenant is not willing to negotiate an increase bringing the home within 5-7% under the market rate we suggest allowing the vacancy to yield an increase profit in rent projecting a two year minimum lease.