“Yes, I would like some cheese with this whine. Thanks.” (Brett Furniss, Charlotte Property Manager and author of Charlotte Property Management Weekly)
“President Obama has declared the swine flu outbreak a national emergency…” (Charlotte Observer, 10/25/09)
Swine flu is now officially both a national emergency and a pandemic! I’m not entirely sure what that means, but it sounds pretty bad and pretty official. I imagine the only party happy about this is the pigs, who take an undeserved public relations hit, but see the demand for its flesh fall among the cautious populous (making its mortality rates decline significantly). If only the scheming cows from the Chick Filet commercials had thought of this, they could have saved themselves millions in dollars of advertising (with better results!).
Fortunately, I have not been personally infected by swine flu (yet…). I have been affected, though. I’ve seen this new, safer way to catch your sneeze by depositing this spittle storm into your own shirt! Yes, the one you are wearing. I’ve seen some guys on the street do it recently and I still can’t stomach the idea of my shirt doubling as a tissue. This is healthier? What is the point of tissues then? That is the next superfluous budget item to go, I’m sure. I’m thankful I haven’t seen any females do this. Apparently they believe in Fernando Lamas’s (Billy Crystal’s Saturday Night Live character) mantra, “It’s better to look good than to feel good.” But, I digress.
However, I have been affected by the “home sales swine flu” that has infected the Charlotte rental market. “What the heck does that mean?” you may ask. “And why do you keep italicizing so much in this article?” Well, let me explain. Being that few people can sell their homes, home sellers are flooding the rental market with their houses. This is creating supply and demand issues that are making it difficult for property managers to fill properties quickly and efficiently (sniff, sniff). Unfortunately, it has become painfully obvious Charlotte is infected. I’ve heard from other real estate professionals in other cities that they are observing the same thing.
So what about your market? If it has been infected by the HS H1N1, the following five symptoms should have started to appear:
1. Rentals are on the market for a much longer time (duration)
2. Monthly rental prices have fallen and continue to drop significantly
3. There are a lot more rental homes on the market! (number)
4. Realtors who never worked on rentals before are now listing several
5. Tenants are consistently trying to negotiate down already depressed monthly rents
As your real estate doctor, I can tell you that if your market is showing these symptoms, it is infected. The only known 100% cure for HS H1N1 is a mixture of “Excess Cash” and “Time.” If you wait long enough with this mixture, it will go away on its own. You should check with your local economist to get a general range on how much “Time” it will take to subside. And always double your initial estimate on how much “Excess Cash” will be required.
If you are not lucky enough to have a healthy amount of “Excess Cash” and “Time”, the following steps can be taken to slow the effects of HS H1N1 until it subsides:
1. Lock your existing tenants into 1 to 2-year leases ASAP at current rental rates
2. Lower the rental rates on your vacant homes by 10%
3. Increase marketing expenditures on vacancies while advertising the lower rate
4. Do NOT work with tenants who are more than 30 days behind. You must evict and get someone else in your rental!
Trust your doctor. Follow these simple steps to survive the outbreak in your market!
Brett Furniss is the President & Owner of BDF Realty, “Charlotte’s Most Innovative Property Management & Investment Company” (www.BDFRealty.com and www.RentToSell.com). You can follow his Twitter thoughts on the Charlotte real estate market by clicking on http://twitter.com/bdfrealty. He is the author of the FREE E-Manual entitled “How to Rent-To-Sell Your Own Home” (http://www.renttosell.com/RTS-Book.html) which details how to get the most potential buyers to your home in this challenging real estate market.
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