The Seattle real estate market is now well into its recovery. Housing prices in King County increased about 10 percent last year, and are projected to increase by about 5 percent in 2014. From a rental owner’s perspective, the rental market is doing well. Rental vacancy rates were at about 4.4 percent in 2013, and Seattle rents went up about 6 percent, placing Seattle high on the list of cities with the biggest rent hikes. The average rent for one-bedroom apartments close to or in downtown is about $1438.
We started to wonder how these numbers are affecting Seattle property managers in the trenches, so we spoke with Thomas Wilkerson, of Circle Point Homes Property Management.
We last interviewed Mr. Wilkerson back in October 2007, just as the real estate bubble was bursting. It’s interesting to look back at that article. At the time, Wilkerson indicated that many Seattle sellers were in a wait-and-see mode, not wanting to reduce their sales prices yet, and instead calling property managers to manage their homes. Ahhh. What a difference hindsight makes!
Today, the real estate market is very different, but the real estate bubble is still impacting the world of Seattle property management. Why? The answer is pretty simple: when the bubble burst, realtors had to turn to other work. Most states, including Washington, require property managers to have a real estate license. So when things fell apart, many realtors turned from home sales to rental properties.
What does this mean for Seattle rental property owners?
The increase in the number of Seattle property management companies gives rental owners more choices if they’re looking for help managing their properties. But Wilkerson warns that a real estate license does not a property manager make. Real estate coursework touches only briefly on how to manage rental properties. So while there are more property managers in Seattle, their levels of quality, experience and education vary widely. It’s important to do your research when selecting a property management company.
Wilkerson suggests that owners of rental properties in Seattle look online for property management companies if they decide they no longer want to self-manage their rental. While price is a factor, Wilkerson advises not to choose the cheapest property management company over a company with more experienced property managers and good references. Experience tends to be the name of the game in property management, as with many other professions. Regardless of which company you choose, ask for references and call the company’s clients.
Why do Seattle rental owners hire property managers?
Wilkerson says there are many reasons to hire a property manager. Many of his clients needed a property manager in Seattle because they’re absentee rental owners. However, he says, he has plenty of Seattle-based clients who have full-time jobs and are just too busy to manage their rental. He says rental owners are concerned about liability and compliance with landlord-tenant laws, fair housing requirements, maintenance/repair duties, and other obligations. Hiring a good, experienced property manager can really take a lot of pressure off if you’re concerned about not having enough time, messing up, or not being able to tell if you are making a mistake when in fact you might be.
For example, Wilkerson sees maintenance and repairs as inextricably linked with liability. He has a team of trusted maintenance and repair contractors he works with and before hiring anyone he conducts background checks. Wilkerson says many self-help landlords often go with the cheapest service provider when rental properties need repair work. Often, they don’t do background checks, which can lead to significant costs, liabilities, and issues for tenants.
Where do Seattle landlords get in trouble?
Wilkerson says the most common problems faced by Seattle landlords are preventable, and include inadvertent violations of fair housing rules, failing to maintain property, and safety and security issues. He emphasizes that the rules are always changing and it’s important to stay on top of them, which can be difficult if property management isn’t your profession.
What are some tips for Seattle landlords?
Good tenant screening is critical. Always call landlord references, going back at least two landlords. Be aware that some applicants will give you fake information. Wilkerson had one applicant who provided a fake landlord, but because he knew the neighborhood, Wilkerson was able to call neighbors and ask about it.
Wilkerson also advices that rental owners shouldn’t accept background checks and credit reports from applicants. Instead arrange for them yourself, as these documents can be easily faked or changed.
About Circle Point Homes Property Management
Thomas Wilkerson is the owner of Circle Point Homes Property Management in Seattle. He manages about 300 properties, none of which are vacant at this time, which he credits partly to very good tenant screening.
By Tracey March