It's an excellent time to be an investor in San Jose, and we're going to explain why. Whether you're trying to plan your investment activities for the rest of 2017, or you're already thinking about 2018, there are several considerations that may impact what you will do with your rental properties in the San Jose area.
Rents are going up, and currently the incline is at around 2 to 3 percent in and around San Jose. Not enough new housing is being built in the metro area, which means that there is a limited supply of high quality rental housing and lots of demand for it. That's going to help you attract good tenants and keep your rent levels high, especially if you have a well-maintained property in a desirable location.
Job opportunities and local economic growth are making San Jose a great place to live and rent. With Apple doing a lot of construction into 2018, and several professional, competitive jobs with companies like Facebook and Google in the Silicon Valley area, people are moving to San Jose and looking for places to live. It's an attractive area for anyone who wants to work in the tech sector, and lots of growth in the job market to keep the tenant pool stable. The city of San Jose is also close to a lot of other major cities, including Oakland and San Francisco. There's a lot of recreation, professionals sports, and culture to get excited about. Tenants come from local universities, hospitals, and other thriving sectors outside of technology.
Many surrounding cities are dealing with rent control and the restrictions that come with it. Eventually, rent control in some form will likely be adopted by all the surrounding cities in the Bay Area. We are keeping an eye on how San Jose is responding to this trend, and we will keep all of the owners and investors we work with informed and prepared.
If you have any questions about the rental market in San Jose or any thoughts on property management in San Jose, please contact us at Zell Associates, Inc. We would be happy to tell you more.
When you want to maximize the returns you earn on your San Jose investment property, the best thing you can do is pay attention to the property's condition. When you preserve the condition of your home, you allow its value to increase and you attract outstanding tenants who are willing to pay high rents. Today, we are sharing three tips for maximizing those returns.
Preventative maintenance helps you earn more on your investment because it ensures small maintenance problems do not become larger, more complex repair issues. Have your major systems inspected once per year so qualified professionals and technicians have the opportunity to notice problems that may be right around the corner. Paying for an air conditioning contractor to inspect and clean your system every year is less expensive than replacing the whole system because you didn't know something was wrong. Inspect your property regularly so you can look for potential problems.
Make sure you're working with qualified, professional vendors who are experts in their field and stand by their work. You want to fix the problem right the first time so you don't have to send someone back in a few weeks or months. Each maintenance visit will cost you more money, and remember that time is money too. Don't waste your resources with quick fixes or temporary patches. Get the work done right, and make sure it's done by a licensed, insured, and professional vendor.
Upgrades and improvements will always make your home more attractive to top tenants, and will go a long way towards increasing your ROI. Just make sure you're making smart upgrades. Don't waste money on things that won't matter. Know the difference between an upgrade that will add value to your property and those that will not matter to tenants or future buyers. For example, removing carpets and installing laminate floors will increase rents and retain tenants. Stainless steel appliances in the kitchen are attractive and cost not much more than standard appliances. Stone countertops look modern and last longer than formica and tile. Make worthwhile improvements that make your property more competitive and require less maintenance in the long run.
If you have any questions about how to increase the returns you earn on your investment property or you'd like to talk more about professional San Jose property management, please contact us at Zell Associates, Inc.
The R.U.B.S. program in San Jose stands for Ratio Utility Billing Service. It's especially effective in multi-family housing units, but it can be utilized by landlords that own any kind of property to conserve resources and share the burden of utility payments.
How R.U.B.S. Works
Under this system, each resident pays a ratio of the common utilities, which covers water, sewer, and trash. The property owners pay around 25 percent of the overall cost, and the tenants living in the property pay about 75 percent, depending on the square footage of the property and the number of people who are living in the unit. The tenants pay a larger share of the bill because they are the ones occupying the property and using the water, sewer services, and trash collection.
How R.U.B.S. Conserves Water
This is part of a conservation plan because tenants will want to reduce their bill and pay as little as possible. That means they'll be conscious about the amount of water they use and more likely to conserve precious resources. After the drought that plagued California recently, everyone is more conscious about conservation and working hard to do more with less.
How R.U.B.S. Benefits Owners
This is a great plan for owners because they are not left to cover the entire cost of the water, sewer, and trash bill for their tenants. While this cost is often be rolled into the monthly rent, it's hard to anticipate exactly how much water a tenant will use and can reduce your investment return. With this ratio billing system in place, you are having your tenants pay most of the bill, so if the usage rates increase, you will not have to bear most of that increase. This will keep your expenses low, help mitigate rates and usage increases, and increase your rate of return.
Tenant screening is one of the most critical things you can do as a landlord or a property manager. Finding the right tenant will have a major impact on your experience owning a rental property. Make sure your screening and application process is consistent, thorough, and compliant with all state, local, and federal fair housing laws.
A good tenant is financially stable, and able to pay rent on time every month. Generally, we look for someone who earns at least 2.5 or 3 times the monthly rent. Always verify the income that your potential tenants claim they earn. You can ask for pay stubs, bank statements, or tax records.
Checking credit will give you an idea about how tenants manage their money, and whether they are responsible with bill payments. An ideal tenant will have a credit score of 650 or higher. If someone has bad credit but earns a good income and has great rental references, you can still approve that tenant, but make adjustments to your rent or your security deposit based on what the credit report tells you. Check for prior evictions, too, using a tenant history service.
A reliable rental history is important before you approve a tenant to move into your home. Ask for the names and contact numbers of at least two former landlords or property managers. Verify that you're talking to the right person; sometimes applicants who have something to hide will give you the phone numbers of their family members or friends. Know who you're talking to and ask some questions that will tell you what kind of tenant this person is. Did they pay rent on time? Was there any property damage? Was the entire security deposit returned? Did they have pets? Were the terms of the lease followed?
Always meet the applicants in person so you know who you are renting to. You'll want to confirm that their identification corresponds to the information you get back on credit and background checks. If you have any questions about how to properly screen tenants or anything pertaining to property management in San Jose, please contact us at Zell Associates, Inc.
Owning rental property is like owning a business, and there are specific things that set successful business owners apart from struggling business owners. Pay attention to these 5 habits of successful housing providers.
To run a successful rental property, you need to rigorously screen your tenants and verify all the information they provide you on the rental application. Check credit, criminal backgrounds, prior evictions and employment. Verify that the tenants earn enough money to cover rent every month. Talk to current and prior landlords to find out what kind of tenant your applicant has been in the past. You want to know everything you can ahead of the lease signing. Proper tenant screening will protect your property and your financial interests in the long term.
Document During Inspections
To avoid disputes over the security deposit, you'll need to conduct a thorough inspection of the property before a tenant moves in. Then, you'll do an inspection after the tenant moves out. The best way to compare the condition at move in to the condition at move out is through photos and videos. Document every inspection so you have proof that explains why you're withholding money from the security deposit to pay for damages.
Maintain a Business Relationship
Your tenant is not meant to be your friend. If you want to succeed as a rental property owner, you need to maintain a professional distance from your tenant and keep everything respectful and businesslike. You are running a business, and all of your decisions need to be made with a business mind, not an emotional mind. Put everything in writing and use a strong lease so there are no surprises.
Low Maintenance Homes
The most successful property managers take care of preventative maintenance so that small repair problems don't become costly nightmares. When you set up regular inspections and servicing of systems like your HVAC, you'll have the peace of mind that everything is running smoothly. Manageable maintenance costs and proactive repairs are traits of successful property managers.
Successful property managers avoid vacancy and turnover costs by retaining excellent tenants. When you respond to their repair requests immediately and keep rent at a reasonable and competitive rent, they are going to want to continue renewing their leases.
If you'd like to become a successful rental property owner, please contact us at Zell Associates, Inc., and we'll tell you more about how to succeed with your investment property.
Inspecting your property and responding to maintenance requests are both important parts of owning rental property. When you have specific process in place to address these things, it will be easier for you to document what happens and take care of problems or issues in a timely manner.
Inspect the inside of your rental property once or twice a year. You don't want to be there so often that you're disrupting your tenants and invading their privacy. Always provide at least 24 hours of notice and let your tenants know you just want to make sure that everything is working properly and in good shape. Look for liability and habitability issues, such as loose handrails on the stairs, broken window locks or smoke detectors that aren't functioning. Take a checklist with you so you can remember to look for specific things.
Training Maintenance Vendors
You can get an informal report on how the property looks from any maintenance vendors who go over to the property to make repairs. Ask them to check for things like leaking pipes under the sink and debris on the roof or in the gutters.
Drive by Inspections
We recommend that you drive past the property at least once a month. This is not disruptive to the tenant, who will likely not even realize you are there. It gives you the opportunity to make sure everything looks okay from the outside. If you notice dogs running around and you haven't authorized pets, you'll know to contact the tenants. When something looks off from the exterior, you can schedule an interior inspection to really understand what's happening.
When a tenant calls with a repair request, make sure you respond to it in a timely manner. Troubleshoot the issue over the phone if you can. There's no need to call out a maintenance professional if the problem can be easily identified and fixed. Make sure you have the right resources in place to handle any repair needs that come up. You'll need a list of reliable vendors who are prepared to help you and you'll need a budget or a reserve account to ensure you're financially able to make repairs as they come up.
Remember that any maintenance issues due to tenant behavior or damage should be their responsibility. If your tenant's toddler flushes all his socks down your toilet, your tenant must be responsible for the plumbing bill.
When you're managing your maintenance responsibilities, keep your eye on short term needs and long term priorities. Sometimes it's more cost effective to replace something than to repair it.
If you have any questions about inspections or maintenance, please contact us at Zell Associates, Inc.