Inside the House!

We’ve all heard lots of news in the past year about the desert southwest being among the hardest hit markets in the housing crash.  One of the most referenced is Las Vegas-the boom and bust town that was the fastest growing- in population and housing prices- through 2007. 

So, now that the dust has settled a bit and there are some small green buds coming through some housing markets, we wondered: how is Las Vegas faring?  Is it perhaps a good opportunity now to pick up some affordable real estate?

To help answer this, we went to see for ourselves- check out our latest webisode, “Vegas, baby!” to see a tour and discussion of the City Center project on the Las Vegas strip. The answer we found is-it’s  very mixed. 

Suburban Las Vegas does appear to be emerging with a housing market recovery, with 13 months of incremental home sales, though the trend of declining prices continued in April of this year (according to the Las Vegas Review Journal, http://www.lvrj.com/business/44634067.html.  Realtors sold 3,198 single-family homes in April, a 78.3 percent increase from the same month a year ago. Sales have more than doubled for the first four months of the year.  However, the median price dropped 39.9 percent as bank-owned properties dominate the market, accounting for about 80 percent of all sales and driving prices down. 

The story, however, seems very different on the Strip- that high stakes, high profile urban playground.  Condo’s in that project are being sold as “high in demand, not at a discount”, meaning that they aren’t bargaining on price.  A 620 sf studio on the 5^th floor (no view) is listed at $650,000, with $800/month HOA dues.  For investors looking to own daily/weekly rental units, there’s also a $250/month advertising assessment and $65.00/day housekeeping service per occupied day.   

However, the project is not close to being sold out, and has had some financing troubles (See WSJ article), so the fluctuations of the market and credit lending problems are not completely off the table yet.  Investors need to weigh this, along with the cash flows given the asking prices and potential rents in the current environment. 

It's not as uncommon as it may seem, and technically, it’s called a Holdover Tenant, or a Tenancy at Sufferance- which sounds a bit like a bad roommate situation or a guest who has worn out their welcome, doesn’t it?  When I was in college, a friend of my brothers came through town and needed a place to stay, so I dutifully offered my couch for the weekend.  2 weeks later, when he still hadn’t left, it became a bit of an issue.  Family friends are one matter, but in a property leasing situation, a tenant who stays beyond a contractual lease period presents some additional complexities.   

Generally, landlords do whatever they can to retain good tenants, and don’t want them to move.  But, there are any number of cases when a tenancy ends for valid reasons and the the landlord needs to enforce the agreed terms.  The May 1 Inside the House webisode includes a story about just such a situation.

A tenant at sufferance originally starts off as a lawful tenant, but when the tenancy ends, his or her tenant rights expire as well. This tenancy will continue until you choose to evict the tenant or begin a new rental agreement with them. Even though your tenant has no legal rights to stay on your property, they still have to pay you rent and play nice according to the rules of the original lease.  In fact, some leases include a term which, at the end of the lease period, automatically turns the tenancy into a month-to-month rental under the same terms.  There are pro’s and con’s to allowing this, and a property owner should carefully consider the implications before getting into this type of arrangement instead of requesting a new lease with a stated term.  If, on the other hand, a lease expires and there is no clause for automatic "periodic" agreement, you then have a holdover tenant.

How a landlord or property manager handles this type of situation can make all the difference; there are matters of the rent due and terms, notification requirements, and whether a lease renewal (rather than a month-to-month arrangement) is a better option in a particular case. 

About Inside the House

This is our new webisode series, and it's a new and entertaining look at the world of property management.    
It's sometimes hilarious, sometimes dramatic, and follows our Broker, Ricky D, and staff, as they navigate the drama, humor and challenges of keeping our properties running in top shape! 

The series can be found on our website or directly on YouTube at

This past winter was colder and harsher than any in recent memory- both in terms of the weather and the economy.  But slowly, Seattle is emerging from the frost and awakening to the first green buds of spring- just as the economy starts to show a few hopeful new leaves pushing through the barrage of bleak headlines.  So on one hand, there is more interest than ever in finding a better place to be next winter (and by better, I mean warmer); but on the other hand, is it crazy in this market to be considering a winter or retirement home someplace else?

Not according to Dottie May, who is a leading agent in the Saddlebrooke community near Tucson Arizona.  She points out that the media doesn't make it clear enough that the health of the real estate market is very localized, and that SaddleBrooke, with a steady influx of buyers, continues to have stable prices and is less affected by the economic downturn than other parts of Arizona or the country.  That means that a winter or retirement home in the sunbelt of Tucson is still that value it’s always been, and isn’t losing ground like many other markets.  Indeed, realtytimes.com noted recently that “Tucson's active adult communities are weathering this volatile market fairly well”. Prices have stabilized at pre-boom levels, short sales and foreclosures are rare, so there is no downward spiral in values based on distressed properties. That should be great news to those in Seattle who want to retire their ice scrapers before next year.

More about Dottie May.  RD House is happy to note that she has joined us as a Preferred Partner, something that we only extend to professionals and businesses who share our values, commitment and excellence in business, and whom offer expertise in their line of business to our clients as well.    Dotties professional background encompasses over 30 years of legal and real estate experience in marketing, negotiating, selling, and exchanging (IRC Section 1031) property, and has always adhered to the belief that success only comes from serving her clients best interests.   We have known Dottie for many years and are happy to have her join us as a preferred partner!

As we've blogged about earlier, being a landlord is not something that everyone is prepared to become, even if renting their home is an option they pursue. Landlord-Tenant laws, tenant screening, finding and working with good quality vendors, tenant relations (for example, what are your options if the tenants break one or more of the terms of the lease?, or, what are your obligations if they want to paint the interior in leiu of part of the rent, etc), are just a few of the myriad other issues that, unless an owner does a lot of research first and/or have the time to take on landlording as a "part time" or even "full time" job, s/he may not be effective at self-managing the rental. In these cases, using a professional property manager provides you with a trusted professional resource to navigate rental property issues confidently. 

Once you’ve thought through the issues of renting your home, you will have a better idea whether you should consider renting your property in the near term if you’re having difficulty selling it.  There are many pieces of information in our blogs, and if you’d like to review rental options further, RD House would be happy to sit down with you at your property for a consultation.  You can reach us at (206) 728-6063 or www.rd-house.com