Rent Sense: Rental Ownership is a Unique Business
By Neil Fjellestad & Chris De Marco
FBS Property Management
We have built a healthy San Diego business out of advising independent real estate investors, acquiring and managing rental properties for clients while providing superior housing alternatives for qualified renters. Our business of four decades provides us a practical snapshot of the local economy.
So, what does our experience tell us about the unique rental housing business in San Diego? Here are some highlights that have remained pretty constant over the last year or so –
• With rare exception our renters pay on time every month. Rent payment has taken its appropriate place as a financial priority as it is clearly their largest household expense.
• Renters want to pay their rent online. They want the privacy, security and convenience of this method. Since providing our renters with this alternative they pay sooner and avoid additional late charges.
• Most of our rental owners are responsive to capital requirements to improve their properties though often forced to defer or accomplish in stages due to personal financial constraints. This is an excellent time to get improvements done on time and for less.
• Our rental owners can’t afford to allow a non-paying renter and they can’t abide extended vacancy. The number of days rented is more important than the rate so a year’s lease is normally required while a substantial premium is required for a month-to-month alternative.
• Most of our clients that are involved with either selling or re-financing become extremely frustrated with the lack of expected results and/or the extension of the time to accomplish.
• The cost and time to accomplish daily routines that require permission and/or cooperation with governmental agencies and public authorities continues to grow and frustrate due to cutbacks in most departments.
• We can see from the employment information provided by renewing and potential renters that most of the jobs lost over the last 3-4 years are gone. Employers have determined other ways to accomplish or greater productivity just requires fewer to get the job done. Other jobs are being created but with different requirements and rewards.
• Small businesses like ours will hire and/or expand cautiously when and if they can control risks (the cost of doing business) while believing that the benefits of growth outweigh the alternatives.