- by Jeff Takle on November 24, 2008
Did you know that 80% of rental single family homes are owned by individual landlords who do not use a property management service? It’s a huge market. Around 10 million homes in America.
Did you know that over 90% of those landlord owners used a real estate agent?
Did you know that less than 1% of those agents provide any ongoing service to those landlords?
For the amount of money — and value — that a good real estate agent brings to the table when a landlord is buying or selling, it’s mind-boggling that after closing, agents immediately walk away and look for the next client.
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- by Jeff Takle on October 15, 2008
According to Redfin's corporate blog yesterday, they announced the layoff of 20% of their employees. These aren't agents, mind you, but the back end office support for marketing, sales, and delivery of their flat fee brokerage products.
What does this mean for us landlords?
Well, it means that the largest flat-fee brokerage in the country is hurting alongside all the others. It means that the pared-down service they provide will be pared even "downer" in the coming months. Personally, I'm really hoping they pull through because the agent industry is so long overdue in revamping its compensation structure. Here's a few shocking stats about the real estate agent market over the past two years:
- Home prices have dropped 24 percent on average
- Agent commissions have dropped 17 percent on average (from a 6 percent commission on sale down to 4.96 percent)
- Brokerages everywhere are cash poor, losing agents, and in big trouble.
The good news is that times are tough and them's good times to buy rental property. Bad news for the agents, but it's an opportunity for investors. If you've been thinking about expanding your rental portfolio, now might be a great time to start gearing up. Money is still pretty easy to get on smaller residential properties, agents are crying for business, and homes are cheap. I think it's time to start portfolio-building…what do you think?
- by Jeff Takle on September 19, 2008
Are the days of rotten real estate agent post cards finally gone?
According to that same California Association of Realtors study this year, only 1 percent of buyers/renters who search real estate online (which is nearly 80 percent of all buyers/renters) said they found their real estate agent through that agent's marketing materials. The rest found them primarily on the Internet. Wow!
That's a LOT of agent marketing dollars down the drain, not that it's a big surprise. For years, agents have been sending us fridge magnets with hazy head shots, fuzzy pens, doodle pads, and all kinds of crap that has nothing to do with real estate. I've often wondered what conclusion I'm supposed to draw from an 8.5×11 calendar with the agent's giant face pasted on it. Why would this make me want to give you $10,000?
No offense to this guy, but if I never see his face on a postcard again, that'll be just fine by me.
Anyhow, I read that statistic and had a good, hearty laugh. That industry is changing dramatically.
- by Administrator on September 10, 2008
A lot of landlords — and potential landlords — are under the impression that you need to live close to a rental property. While that helps you manage showings and maintenance, there is a flip side, too. Restricting yourself to buying and managing rentals within close proximity greatly reduces your investment options, e.g. the best rental deals may not be in downtown NYC or in cow country in Superior, WI (my hometown). If you go where the best deals are, instead of limiting yourself to whatever's closest, you're more likely to find cash flow positive rental properties. But how do you do it?
Many landlords live in different cities or states from their rentals; if you do, then know you are not alone! With a little preparation you can assemble a quality team, deliver a great rental service, and cut costs at the same time.
In general, this is a tradeoff between cost and convenience. Anything is possible if you have only a few rentals but if you're managing 100 or more, then you'll need a system with full time professionals.
You can use any of the following solutions…
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Did you know that 80% of rental single family homes are owned by individual landlords who do not use a property management service? It’s a huge market. Around 10 million homes in America.