If you're a homeowner trying to rent out your home and have a property management company acting as your potential tenant screener, you need to read this--especially if your property is still sitting empty after several months. But first a little history based on my experience of living in this town for 30 years.
When I first moved here to attend Graduate school at Western Washington University, I found a place to rent with no problem. I handed them first month's rent, had the utilities changed over to my name, and we had a comfortable relationship of tenant/landlord for the next year. It was the way you rented a place to live. And I happened to hit town in a year where there were a lot of empty rentals and a bunch of anxious landlords.
Things started to change shortly after that. Bellingham is one of those boom and bust towns. If you read up on its history you will see that the speculators come in, buy up the cheap housing, sell it at a profit, leave and wait for the next bust cycle before rinsing and repeating. The ones who get screwed are the ones who bought on the way up and are left holding a drastically devalued property when the housing market starts to bottom out again. Or the ones who need a reasonably priced place to rent.
During the boom years housing is at a premium. Because most of the properties are owned by out of town speculators, or even in town speculators, the property management companies provide the services required to collect the rent, maintain the property, deal with repairs, etc. For this they tack on fees that are either picked up by the renter or the homeowner. Until recently this was a good arrangement as it allowed those who bought homes as an investment to go on with their lives and not have to deal with being a landlord. But this has all changed with the collapse of the housing market and real estate agents and brokers needing to make up lost income.
Enter the new and improved property management companies. They look just like the old ones but they are staffed with desperate real estate "professionals" who are grabbing every dime they can just to survive. In order to even look at a house you have to pay upfront fees that range from 50-75 dollars per couple just for the background check. Then there's the credit check, the processing fees, the application fees, the fees upon fees. By the time you write a check, you're over a hundred dollars and pushing two hundred dollars.
Now here's the fun part. You pay those fees and there's no guarantee you'll get the place. And on top of that, the fees are non-refundable if you're turned down. In an economy where the bankruptcy rate has increased 58 percent (read more), the odds of most people looking for a place getting turned down because of bad credit is nearly 100 percent. I'm not talking about criminals here. I'm talking about good, decent people with boring ordinary lives who have never been arrested for anything and until the last year, had perfect credit ratings. Many are downsizing and trying to start over but as they're learning, it won't happen in Whatcom county unless they want to live on the street.
Now let's look at it from the property management company's perspective. They can collect fees from 10, 15, 20 people before they find someone who fits all the criteria of no arrests and perfect credit. In a town like Bellingham, that can take a long time, months even. In the meantime, the homeowner is told it's the economy, no one is renting, maybe next month, we're only looking out for you, etc etc etc as they charge them huge advertising costs for posting free ads on Craig's List and keep pocketing those big application fees.
So the houses eventually go into foreclosure because the owners can't find a renter to help with the mortgage payments. When I was looking I talked to a woman who was trying to rent her very nice place. It was beyond my price range but not at all unreasonable for how nice her house was. She was there changing the curtains in the window because the property management company told her the reason her house wasn't renting was because the curtains made it look cheap. Seriously. That's what they told her. She's been trying to rent it for over six months. She pays the property company every month. They collect fees from dozens of applicants. You do the math.
Then there's the growing problem that results from this kind of desperate greed. In the last few months since the economy really started to tank in Bellingham, there's more property companies in charge of renting out what used to be the lower cost housing, the cheap apartments in bad neighborhoods. Face it guys, no one who moves to one of these places has the kind of credit record demanded of them. They barely have the ink dry on their release from their latest arrest. And yet, even decent people who have had a run of bad luck can't qualify for these dumps! But the property management companies still collect fees from them, and then tell them no.
Check out the parking lots of places like K-mart, Wal-mart, the abandoned big box store parking lots that went broke. Mixed in with the alcholics and drug addicts in their beater cars and campers, you'll see a new breed of "tenant," older senior citizens who lost everything, middle-class working people who are forced to live in their cars, young people who haven't established enough credit to qualify for housing on their own.
Yes, both landlords and property management companies can cite numerous examples of being ripped off by bad tenants, but many decent people can also cite numerous examples of being ripped off by these property management companies. People who work hard, deserve more than being treated like the scum of the earth just because they had to declare bankruptcy or were late on their bills or don't make enough to pass the required "rent can't be more than 40 percent of your income" rule the companies demand. How many of you reading this can pass that one, no matter what your credit is? How many of you reading this can qualify to rent a place to live in Whatcom County? Probably very few of you and of those, you can bet the companies will collect on a whole lot of people before they say yes to you.
In the meantime, homeowners who have had their houses on the rental market now need to sit down and have a serious talk with their property management companies. Make them give you the applications of everyone who applied. Send friends in to apply so you know they are being honest with you. One of my friends who spent 8 months trying to find a tenant finally fired the property management company and put a for rent sign on her lawn. She got swarms of people trying to rent her place and settled on a grateful young family who have faithfully paid the rent on time for the last five months and keep her house immaculate. She's delighted with them and they with her. And they were turned down by every property management company in town because their business went bankrupt and so they were considered not worthy of a home.
And another note for those trying to rent their home or apartment. Check out the ads on Craig's List. When you see your home listed there, keep in mind that it's free to list it. If you're being charged advertising costs, there's a good chance the places it's being advertised don't cost the company anything. But I'll bet you're paying a premium for the listing.
For those of you who have been jacked around by these companies, it's time to sit down, write your story and send it off to your congressional rep and ask them to support legislation that would create some rules to prevent these property management companies from their money grabs. Yes, the real estate market is down for everyone guys, but when you see a property management company pop up overnight that is made up of nothing but unemployed and desperate real estate agents, the odds of finding a place to live go way down while their collection of money for nothing goes way up.
When I first moved here to attend Graduate school at Western Washington University, I found a place to rent with no problem. I handed them first month's rent, had the utilities changed over to my name, and we had a comfortable relationship of tenant/landlord for the next year. It was the way you rented a place to live. And I happened to hit town in a year where there were a lot of empty rentals and a bunch of anxious landlords.
Things started to change shortly after that. Bellingham is one of those boom and bust towns. If you read up on its history you will see that the speculators come in, buy up the cheap housing, sell it at a profit, leave and wait for the next bust cycle before rinsing and repeating. The ones who get screwed are the ones who bought on the way up and are left holding a drastically devalued property when the housing market starts to bottom out again. Or the ones who need a reasonably priced place to rent.
During the boom years housing is at a premium. Because most of the properties are owned by out of town speculators, or even in town speculators, the property management companies provide the services required to collect the rent, maintain the property, deal with repairs, etc. For this they tack on fees that are either picked up by the renter or the homeowner. Until recently this was a good arrangement as it allowed those who bought homes as an investment to go on with their lives and not have to deal with being a landlord. But this has all changed with the collapse of the housing market and real estate agents and brokers needing to make up lost income.
Enter the new and improved property management companies. They look just like the old ones but they are staffed with desperate real estate "professionals" who are grabbing every dime they can just to survive. In order to even look at a house you have to pay upfront fees that range from 50-75 dollars per couple just for the background check. Then there's the credit check, the processing fees, the application fees, the fees upon fees. By the time you write a check, you're over a hundred dollars and pushing two hundred dollars.
Now here's the fun part. You pay those fees and there's no guarantee you'll get the place. And on top of that, the fees are non-refundable if you're turned down. In an economy where the bankruptcy rate has increased 58 percent (read more), the odds of most people looking for a place getting turned down because of bad credit is nearly 100 percent. I'm not talking about criminals here. I'm talking about good, decent people with boring ordinary lives who have never been arrested for anything and until the last year, had perfect credit ratings. Many are downsizing and trying to start over but as they're learning, it won't happen in Whatcom county unless they want to live on the street.
Now let's look at it from the property management company's perspective. They can collect fees from 10, 15, 20 people before they find someone who fits all the criteria of no arrests and perfect credit. In a town like Bellingham, that can take a long time, months even. In the meantime, the homeowner is told it's the economy, no one is renting, maybe next month, we're only looking out for you, etc etc etc as they charge them huge advertising costs for posting free ads on Craig's List and keep pocketing those big application fees.
So the houses eventually go into foreclosure because the owners can't find a renter to help with the mortgage payments. When I was looking I talked to a woman who was trying to rent her very nice place. It was beyond my price range but not at all unreasonable for how nice her house was. She was there changing the curtains in the window because the property management company told her the reason her house wasn't renting was because the curtains made it look cheap. Seriously. That's what they told her. She's been trying to rent it for over six months. She pays the property company every month. They collect fees from dozens of applicants. You do the math.
Then there's the growing problem that results from this kind of desperate greed. In the last few months since the economy really started to tank in Bellingham, there's more property companies in charge of renting out what used to be the lower cost housing, the cheap apartments in bad neighborhoods. Face it guys, no one who moves to one of these places has the kind of credit record demanded of them. They barely have the ink dry on their release from their latest arrest. And yet, even decent people who have had a run of bad luck can't qualify for these dumps! But the property management companies still collect fees from them, and then tell them no.
Check out the parking lots of places like K-mart, Wal-mart, the abandoned big box store parking lots that went broke. Mixed in with the alcholics and drug addicts in their beater cars and campers, you'll see a new breed of "tenant," older senior citizens who lost everything, middle-class working people who are forced to live in their cars, young people who haven't established enough credit to qualify for housing on their own.
Yes, both landlords and property management companies can cite numerous examples of being ripped off by bad tenants, but many decent people can also cite numerous examples of being ripped off by these property management companies. People who work hard, deserve more than being treated like the scum of the earth just because they had to declare bankruptcy or were late on their bills or don't make enough to pass the required "rent can't be more than 40 percent of your income" rule the companies demand. How many of you reading this can pass that one, no matter what your credit is? How many of you reading this can qualify to rent a place to live in Whatcom County? Probably very few of you and of those, you can bet the companies will collect on a whole lot of people before they say yes to you.
In the meantime, homeowners who have had their houses on the rental market now need to sit down and have a serious talk with their property management companies. Make them give you the applications of everyone who applied. Send friends in to apply so you know they are being honest with you. One of my friends who spent 8 months trying to find a tenant finally fired the property management company and put a for rent sign on her lawn. She got swarms of people trying to rent her place and settled on a grateful young family who have faithfully paid the rent on time for the last five months and keep her house immaculate. She's delighted with them and they with her. And they were turned down by every property management company in town because their business went bankrupt and so they were considered not worthy of a home.
And another note for those trying to rent their home or apartment. Check out the ads on Craig's List. When you see your home listed there, keep in mind that it's free to list it. If you're being charged advertising costs, there's a good chance the places it's being advertised don't cost the company anything. But I'll bet you're paying a premium for the listing.
For those of you who have been jacked around by these companies, it's time to sit down, write your story and send it off to your congressional rep and ask them to support legislation that would create some rules to prevent these property management companies from their money grabs. Yes, the real estate market is down for everyone guys, but when you see a property management company pop up overnight that is made up of nothing but unemployed and desperate real estate agents, the odds of finding a place to live go way down while their collection of money for nothing goes way up.
1 comment:
Interesting perspective as I know someone going thru the rental search process now.
Craigslist is where to find a place, preferably from the owner themself. That's where the timeliest listings are being posted.
Reliable Robert, The Campbells of RE/MAX Whatcom County
(I don't do rentals.)
See BellinghamHomeSource.com if you want to buy or sell, though, and SAVE time, money and hassle in the process.
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