Rent Controls

Rent Controls

Below in a copy of the letter we sent to all our legisatures this week. Rent controls will damage the rental industry for as long and the controls are on place.

Dear Congressman,

It has come to my attention that you have a strong resolve to bring new legislation regarding rent controls to the legislature. I understand that the desire for this is to reign in seeming out of control rental rates. However, after 17 years of managing property in the Eugene/Springfield area I can assure you that additional regulations will only exacerbate the situation. 

I have observed over the last two decades as new legislation has passed the relationship between the tenant and the landlord has deteriorated. The time honored business relationship between the landlord and the tenant is strained by each side feeling they are a victim of the other. This induces legislatures to pass more regulations and laws for both sides adding to the already difficult situation. Currently, the atmosphere is war with each side feeling they must secure the next victory in order to stay ahead. The losers are the property managers, landlords and tenants who are just trying to live their life.

In the real world of economics  price is driven in any industry by supply and demand. When the price is high the demand is high and supply is low. When the price goes up this should induce builders and investors to enter the market thereby bringing the supply to market level and bringing prices down again. Additional regulations will have the exact opposite effect. New regulations will only push investors out of the market and thus reduce already strained supplies.

In the end you may be given great accolades for your effort to help tenants, but in all intellectual honesty you will be only hurting them. Please think about your constituents and their families and stop this legislation before it starts.

With warm regards,

James (Ed) Waggoner
Empire Property Management LLC
541-913-8451

Raising Rents

Raising  Rents

Empire Property Management loves to raise the rent. Not that we like hurting struggling families with an additional burden, but we know that in the end it is best for all if we keep the rents at market value. But how is this good for tenants? Well, if the owner keeps the rental rates to low they will inevitable fall behind in the maintenance of the property. When the owner falls behind in the maintenance even tenants who understand the rental market will become unhappy with the arrangement and want the owner to keep the house up. In the end the tenants are unhappy and generally move leaving the owner with a run down house and no money to upgrade. This was a lose/lose for the owners and tenants. Moving is expensive, so the tenants lost. Vacancies and deferred maintenance is expensive, so it is a lose for the owner. Furthermore,expenses are always on the rise, and unless you think your local, state, and federal governments are going to stop their out of control growth we had better keep up with the market. 

We generally raise the rents effective May 1. That way if we get a vacancy over the issue we can often fill it more quickly by hitting the market at its peak. We do not like to raise rents on any tenant that has been in a unit less than a year. If you have a property that is eligible Empire will be contacting you soon. 

Payday by Direct Deposit

Payday by Direct Deposit

Empire loves payday for our owners. It closes the month and it is ultimately a measure of our success. But what we do not love is tracking down lost checks in the mail. The once steadfast USPS is falling fast. In recent years we have seen a dramatic increase in the number of checks that are lost in the mail. However, all is not lost. Modern technology comes to the rescue, and direct deposit has proven to be fast and safe. We have had enormous success with direct deposit. It arrives quickly and dependably, and the whole process is trackable. Payment usually arrive in your bank account in one business day. If you are not getting your payment by direct deposit and are interested let us know. We can set you up quickly.

Maintenance Is Like Eating a Cow

Maintenance Is Like Eating a Cow

"If you have to eat it all at once its going to hurt"

     Regular maintenance to your rental property is so vitally important to its ultimate success. Budgets and wishes aside, the law of nature do not stop for anyone. With this in mind resign yourself to the idea of spending and/or saving money every month on your rental. Items like paint, flooring, appliances, roofing, plumbing fixtures, and such start to wear out the moment they are installed. Without a concerted effort to budget for their inevitable replacement you will be caught in downward spiral. We have all seen the property in the neighborhood. First the regular clean up and yard maintenance is deferred. Rents fall since the property does not look its best and now the owner has an even more difficult time being able to afford the maintenance and keep it rented. Since budgets are strained more maintenance is deferred, and after a time the owner has to "eat the cow all at once" in order to pull the property back up. This hurts and is often not possible. 

So how much do I budget? Well, if this is a property you have owned for some time look back at your records and work it out. If it  a new property there is several ways of figuring budget forecast. The most strategic since we all live on the monthly rent cycle is to budget monthly. Usually 10-20% of the monthly rental income. It can be more depending on the current condition of the property. Start with a high estimation until you have an accurate track record. This way you want be caught off guard with a big expense such as a new roof or heating system. Also, consider a separate bank account for the funds you are budgeting. Human nature being what it is, out of site is off limits. 

--Happy Landlording

SB 390 = Big changes in 2016

SB 390 = Big changes in 2016

The passage of SB 390 this fall is making some big changes in Oregon Landlord Tenant Law. Landlord and tenant advocacy groups are both claiming victory. However, those in the trenches managing property clearly see that there was no victory for either side, and at this point we are just trading blows. Some of the changes going into effect are:   

• The ability to pass through some municipal bills directly to tenants. There are some restrictions for this and Empire will be taking advantage of this new law.

• New standards on how tenant payments are to be applied.

• New standards for requiring all bedrooms to have a secondary emergency exit. This is not an issue for most of us. However, many older homes who were previously grandfathered in may be open to a new interpretation. We are waiting on some clarification on this issue.

• Empire has been requiring our tenants to carry a renters insurance policy for several years. Now we can require the tenants to add Empire as an interested party to the policy. This will help with Empire enforcing the issuance.   

As a rule Empire does not support the passage of any new changes to the current landlord tenant law as we have seen through the years that even the laws that benefit landlords create friction and conflict between landlords and tenants. Sadly, politicians thrive on this conflict as their source of importance is keeping the two sides in perpetual war.

Payments on the 19th?

Payments on the 19th?

We are often queried why Empire makes owner payments on or before the 19th of the month. We understand the importance of getting your money to you as quickly as we can. However, there are several factors leading to our timeline:

• Rents are due on the 1st and late on the 5th of the month.

• We serve 72hr Notices on the 8th and the vast majority of rents are paid by this time.

• Checks paid on or before the 8th can and do bounce as late as the 15th. We see this every month. Modern banking is great, but according to Melody Prutsman, a branch manger at Key Bank, procedures have been put in place in many banks that send bounced checks back through the system a second time. This takes time and thus we often receive notices of Non-Sufficient Funds as late as the 15th of the month.

• The rest is simple. It takes us a few days to get all the Receivables and Payables in order to insure as accurate a set of books as we can provide.

Hope this helps relieve some of the mystery.

Only a Rich Man Can Afford Cheap Paint

Only a Rich Man Can Afford Cheap Paint

Being a landlord is about watching your pennies and working those extra hours to take care of your property, so that someday your property can take care of you. With so many of our expenses out of our control, a seeming great deal on paint at your local hardware stores sidewalk sale is hard to resist. But you must resist. In any painting project, the labor is the most expensive portion of the job. So with time being the our most valuable commodity, do not waste a minute putting cheap paint on your rental. Good paint will apply with ease, cover in one coat, and last for years. However, cheap paint is sticky or runny, takes multiple coats to cover, and will start to fade or peel soon after. There are many brands to choose from - Rodda, Sherman Williams, Forrest (my favorite), Benjamin Moore, and many others. Try to stay away from the companies that sell the different quality grades and stick with the best. Those companies sell only one grade of paint, as they do not want to put their name on anything less. Also spend time on the prep, and if you are going to paint your pre-1978 rental home, become lead based paint certified or hire a certified contractor to test the home for you. Being busted for this infraction will take all the profits out of your project for a long time, if not forever. Remember: everyone is trying to take your money or cost you money, so a little paranoia is healthy. I see a lot of folks whip out the sprayer fifteen minutes after they arrive on the job and run around like the world is on fire. Slow down, think the job through, and set some time aside to do the job right. We want this paint to last years - not months. A quality prep job using quality caulking and paint will last for years. So work hard, save your pennies, take care of your rental, eat your vegetables and someday maybe you will afford cheap paint. Until then, continue to resist the temptation. Happy landlording!