Category: Real Estate Market

Rental Property Turned Meth Lab: Identify and Prevent

How do I identify and prevent my rental property from becoming a Breaking Bad nightmare?

Breaking Bad, the hit television series based Albuquerque, New Mexico, is in its final season.[1]?While many of us are sad to see this show end, I for one am grateful that my everyday life is not a Breaking Bad world of meth labs and drug dealers.

How do I identify and prevent my rental property from becoming a Breaking Bad nightmare.

However, I am trying to not be naive. Meth labs are often set up in rental homes, so landlords and property managers are at risk of having their rental properties turned into methamphetamine production facilities. This is a big deal because the chemicals that are used to make meth are highly flammable and explosive. And meth residue is extremely toxic and considered hazardous waste. Once it is discovered, the property owner is responsible for cleanup, which can cost tens of thousands of dollars, and most insurance policies will not cover it. In addition, meth residue can permeate an entire building, which means remediating all affected units, losing rental income, and relocating residents.

Given the physical dangers and financial consequences of renters setting up meth labs in your rental home, I thought some meth guidance might be in order:

1) Identify:
What are signs my rental property is becoming a meth lab?

Certain ingredients are necessary to make meth. If you watch Breaking Bad, you might recognize some of them. When you see the list, you understand why it is ?so toxic and why it is good to spot these toxic residues:

  • Large amounts of cold, diet, or allergy pill boxes (over-the-counter ephedrine or pseudoephedrine)
  • Sheets or filters that are stained red or have a white, powdery residue.
  • Empty containers of anti-freeze, white gas, ether, or starting fluids.
  • Drain openers, freon, lye, paint thinner, acetone, or alcohol.
  • Ammonia or propane tanks, anhydrous ammonia (in coolers).
  • Camp stove fuel containers or other compressed gas cylinder.
  • Jars or bottles with rubber tubing attached.

To make one pound of methamphetamine, six pounds of hazardous, toxic waste is produced. Besides ending up in the walls, floors, HVAC system, carpet and other places, some of the waste is often dumped on the ground, so also look outside for dead grass or plants, and stained soil.

2) Prevent:
How can I prevent my rental from becoming a meth lab?

Screening your tenants is and critical. People who cook meth tend to end up in rentals that are self-managed and do not have a standardized tenant screening procedure. So make sure to:

  1. Have a solid tenant screening system in place, or hire a property management company?that does.
  2. Call previous landlords to confirm that your applicant was a good tenant in the past (make sure the phone number you have is to the actual landlord, and not someone pretending).
  3. Check employment references, and verify income. Follow up if your tenant pays for rent in cash.
  4. Include in your lease agreement that there will be regular inspections (with the proper 24- or 48-hour notice, as required by state law. Regular inspections may deter someone who is engaged in illegal activities.
  5. Let the neighbors know you are the property owner, and that if they notice anything suspicious you’d appreciate a phone call to either yourself or your property manager.

3) Disclosure:
Should I let new tenants know that the unit was previously contaminated?

The answer depends on which state you live in. Scripps Howard news service examined state meth disclosure laws in 2012 and found that seventeen states require property owners to tell renters about prior meth contamination, although several of those states waive that requirement if the meth residue has been officially cleaned up.

One more warning for rental property owners: if you are planning on expanding your rental property inventory, make sure you are confident that any properties you purchase were not used as meth labs in the past, because as soon as you own it, you become liable for the cleanup. During due diligence, if you have any suspicions, consider checking with the local police department, and have the property tested during the inspection. If you find suspicious residue, you can even test it yourself with a ten-pack meth residue test kit from Amazon.com for about $30. If you get a positive result, that $30 would be money well spent.

Have you had any Breaking Bad experiences with your rental property?

Are you looking for a local property manager expert?

As always, the information provided here is just that–it is for informational purposes only and is not legal advice. If you have any particular questions or issues, please consult an attorney.

By Tracey March


[1] For those who don’t follow it, Breaking Bad is about a high school science teacher (played by Brian Cranston) turned methamphetamine cooker and dealer to provide additional income for his growing family when his cancer treatments start eating up his savings.

April 2, 2014 | 19 Comments More

Another Strong Year for Austin’s Real Estate and Rental Markets

Austin, TexasAustin is the 11th most populous city in the US, and the capitol of Texas. It is known for being a liberal enclave in a generally conservative state, giving rise to the unofficial slogan of some residents, “Keep Austin Weird.”

Government, education, technology, biotech, and business have strengthened Austin’s reputation as one of Texas’ major metropolitan areas. The city is also known for its live music opportunities, including Austin City Limits and South by Southwest. Austin offers many other cultural and recreational opportunities, including theater, museums, and an impressive park and recreation system.

Austin’s public schools generally rank very well compared to other cities. The city also does well in crime rankings: the FBI Unified Crime Report rates Austin the 2nd safest major US city. The unemployment rate in Austin is an enviable 5.6%, with 22,500 new jobs being added in 2013.

All in all, Austin seems like a great place to live–even the weather is great! Heck, after doing the research for this article, I’m considering a trip to Austin myself. It seems like a really interesting, open-minded, and diverse city. And I bet I can find a really great cup of coffee there too!

So, with jobs, education, recreation, and culture looking fantastic, how are the real estate and rental markets doing? Well–pretty much as you’d guess. It seems lots of people want to live in Austin, which means there’s an increased demand for housing, and consequently prices are going up.

Austin Real Estate

According to local experts, the Austin real estate market is in for “another stellar year.” The population of the Austin metro area has been growing consistently, and is currently estimated to be about 1.87 million. With demand projected to be 2.2 million by 2020, more housing units need to be built.

As of January, home sales had increased 4 percent year over year. The median single-family home price in January was $211,800, reflecting an increase of 7 percent since early 2013. Housing inventory is low at about 2 months, and average days on the market is also low, at about 63 and down from 72 in January 2013.

Austin Rental Market

As of January, more than 17,000 apartments were under construction. The vacancy rate is about 4.2%. The average apartment rent in Austin is $1159, with increases of 6% for one-bedroom apartments in the past 6 months, and 3% for two-bedroom apartments during the same period.

As in Seattle, many Austin real estate experts are anticipating the rise in popularity of micro-apartments. Although these “apodments” tend to be associated with a NIMBY attitude in the neighborhoods, these small units are popular among younger people, and more affordable.

Are you a property manager or landlord in Austin? How does the rental market seem to you? Are there frantic hipster rental applicants knocking down your doors?

Please comment–we’d love to hear.

By Tracey March

February 25, 2014 | 0 Comments More

Denver: Economy, Real Estate, & Rental Market Are Strong

DenverKnown as the “Mile-High City” because of its elevation of exactly one mile– or 5,280 feet–Denver seems to have become one of “the” places to live in recent years as it offers incredible outdoor opportunities with the benefits of living in a city–and a cool city at that.

Located between the Rocky Mountains and the High Plains, Denver is known for its great access to world-class ski areas, craft breweries, great restaurants, and its healthy economy. The city boasts over 200 parks, 12 recreation centers, and numerous community gardens; it also owns several mountain parks including Winter Park Resort and Red Rocks Park.

Denver has four distinct seasons, claims 300 days of sunshine a year, and because of its elevation and location on the edge of the Rockies, extreme weather isn’t uncommon.

Denver Economy

Denver’s diverse economy includes strong performances in areas such as telecommunications, energy, technology, tourism, finance, and distribution. Forbes lists Denver as #6 in its listing for Best Places for Business and Careers. Unemployment in metro Denver was 6.5 percent in 2013, a decrease of 1.2 percent from 2012. The Metro Denver Economic Development Corporation (Metro Denver EDC) projects employment growth in 2014 will increase 2.7 percent; the unemployment rate is expected to fall to 6 percent.

Denver Demographics

With a population of about 634,000 Denver is the 23rd most populous city in the US. The city has a relatively young population, tying for third with Seattle for its increase in 25- to 34-year-old residents. Median household income in metro Denver is a healthy $61,453, significantly higher than the average for US metro areas as a whole ($53,607). Net migration for metro Denver was 23,344 in 2013 and is projected to be 23,675 in 2014.

Denver Real Estate Market

The median sales price of single-family homes in Colorado’s metro region was $273,000 for Q4-2013, marking an increase of 7.8%, year over year, according to the Colorado Association of Realtors. The number of days on the market decreased compared to the prior year, dropping 26.2 percent, from 65 days to 48. As of December 31, 2013, there was a 2.3-month supply of single-family homes.

Denver Rental Market

Metro Denver EDC reports that the number of new residential units in 2013 was 12,235; that number is expected to increase to 14,885 in 2014.?The Denver Post reports that despite the addition of these new rental units, average rents in metro Denver increased by $63 in 2013, from $978 to $1,041.

The apartment vacancy rate in Q4-2013 was higher than it has been in two years, at 5.2 percent, according to the Denver Post. Demand by younger professionals for high-end apartments close to Downtown has been blamed for the increase in rents. According to Ron Throupe,[1] a professor of real estate at the University of Denver, the city has been one of the hottest spots for young adults and “when they come to town, they aren’t going to buy a house. They are going to move in with a friend or get a unit on their own,” so they’re more likely to rent.

Apartment rent and vacancy rates aside, looking at vacancy rates for all rentals of 1-4 units, the Colorado Division of Housing reports the metro Denver vacancy rate in Q3-2013 was 2.9 percent, with average number of days on the rental market at 48.2 and an average rent of $1,140.55, up from $1,090.76 the previous year.

So How’s Denver Doing?

Denver’s economy, real estate market, and rental market are strong. CoreLogic Case-Schiller predicts home prices will increase 2.7 percent from Q3-2013 to Q3-2014, and 3.4 percent from Q3-2014 to Q3-2015. 10,000 to 12,000 apartments are expected to enter the metro Denver rental market; predictions are these will be absorbed over the next 2-3 years. Their impact on rents and vacancy rates is yet to be seen, but the influx of young professionals, seeking a solid career and great lifestyle options, doesn’t seem to be slowing.

Are you a property manager or realtor in Denver? We’d love to hear how things are on the ground, please comment!

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By Tracey March


[1] As reported by The Denver Post

February 13, 2014 | 0 Comments More

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