Nicklin Property Management Company Updates

As the economy twists and turns during this pandemic, the Las Vegas real estate market is seemingly immune – so far. Properties are selling at record prices and rental homes continue to be in demand for tenants while maintaining strong rental rates.

Last month (September 2020), brand new properties averaged a median sales price just over $411,000 (Home Builders Research) – a new record!  Meanwhile, the resale market in Las Vegas has continued to impress, setting another record as well. During the month of September 2020, resale homes averaged $337,250 (Las Vegas Realtors).

As in prior months, a very low interest rate contributed to the Las Vegas housing market appreciating as did a lower than normal inventory of available homes.

As of the beginning of this month, though, showings of tenant occupied homes and open houses are permitted again (previously restricted due to Governor imposed mandates – now allowed with some restrictions and safety measures), giving sellers more flexibility to sell their homes. How this will affect available inventory and price point into future months has yet to be seen. Currently, the unemployment rate in Las Vegas continues to be a concern as tourism struggles with hotels and supporting businesses seeing the effects of the pandemic. However, low interest rates appear to be here to stay at least for the foreseeable future.

How all of this will mix together is yet to be seen and no doubt, many are watching the market closely.

Managing a rental property comes with responsibilities. While many individuals aspire to own rental property and embark on the path to purchase one or more, most find that they are ill equipped to actually manage it. They don’t know how to list the home for rent, how to screen a tenant, where to obtain a lease or how to effectively manage a property. Here are 5 tips for managing a rental property:

1. KNOW WHERE TO LIST FOR RENT. While we don’t advocate one site over another, it is true that much advertising these days for rental properties occurs online. Prospective tenants may use a search engine or go to their trusted site for finding a property to rent or even buy. Some online sites have become dominant over others. Advertising on sites that do not draw interest or traffic to your property will cost you time and as a result, money. So, finding trustworthy and popular sites is key to getting the prospects you need and as a result, timely rental period.

2. TENANT SCREENING. Once you have someone interested in your property from the advertising you do, what do you do next? Do you have an application you would like for them to complete? What parameters will you use to screen them? Will you want to run credit? If so, where would you go to do that? It’s best to ask yourself these questions ahead of time and prepare well and do your research to know exactly where you will turn to once you have a prospect. And don’t forget, fair housing laws apply! So be sure not to violate those.

3. GET A LEASE. If you search for a lease online, you’ll find plenty that have been posted. However, not all leases are created equal and some may be less than desirable, without having solid provisions to protect you as a landlord. Also, keep in mind that landlord – tenant law varies from one state to another. So, using a lease from one state may not work in another. Did you know? Nevada has specific requirements for leases – specific things that must be part of a lease! Curious as to what they are? They are found in Nevada Revised Statute (NRS) 118A.200 at https://www.leg.state.nv.us/NRS/NRS-118A.html#NRS118ASec200

4. KEEP ACCURATE RECORDS. Developing a method to keep track of maintenance, expenses, income and more via, for example, a spreadsheet, will help you stay organized. You can track and see if the tenant has paid their share of utilities or maintenance. This way, when months pass, you have an easy and accurate reference tool to go back to. Be sure to keep copies of leases and other paperwork in a safe place, organized and easily accessible.

5. FOLLOW THE LAW. Real estate and property management is based on law and ethics. In Nevada, statutes are in place to protect both landlords and tenants and ensure a smooth transaction. Keep these handy and become familiar with them as many processes in the rental business are governed by them. NRS 118, 118A and 118B discuss landlord and tenant dwellings. Of course, keep in mind that additional regulations can also be imposed, such as is the case now during the COVID-19 pandemic, which must be followed. This includes fair housing laws and equal housing opportunity provisions against any and all discrimination.

Many landlords realize that managing a property can be overwhelming. That’s where licensed property managers step in. We help guide landlords everyday with their rental properties and make them a profitable and successful investment.

Shot of a Bright Cozy Modern Condo with new wood floors, fresh paint and furniture.

One of the most popular questions we get asked is if improvements made to a house increase its rental value? Perhaps the home you own was purchased many years ago and was recently remodeled – with new floors, counters, fixtures or cabinets. Or you purchased the home recently, maybe even brand new, and upgraded certain aspects of it to make it pop! How does this affect rental value?

Homes in Las Vegas are traditionally built in planned unit developments (aka PUD’s), or as we like to call them, tract homes (some call them cookie cutter homes). Homes are replicated by a builder with minor variations. As a result of this, when a rental analysis is performed on a home in one of these neighborhoods, other comparable, or identical model match homes that have leased are used to establish a value. For example, if your looking to lease a home that is a 3 bedroom, 2 bath, single family home with 1500 square feet, we would look to see if there is another model match in the neighborhood that has leased recently. In many neighborhoods, we can usually find a handful of model match homes. And due to this, because we are working with a similar size home, rental values will usually be within a specific range – not spread apart too far.

How, then, are upgraded features handled that may make your home stand out compared to others?

First, upgraded features definitely have advantages. They make your home stand out and make it desirable, allowing, in many cases, for it to rent quicker. How about rent value? Rent value can typically be increased, however, within reason. A home priced significantly above other comparable homes in the neighborhood may appear overpriced, even if it is highly upgraded. Consistent rental rates within a neighborhood play a significant role to tell a prospective tenant about what is competitive in a neighborhood. Of course, certain upgrades add solid value. For example, a pool can add rental value.

There are some additional factors to also consider. If you find yourself in a depreciating rental market, you may find that adding value is more challenging. An over supply of rental properties on the market can also affect this. The general economy plays a role as well – unemployment or decreasing wages for example.

So, whats the point of this article? Upgrades within a house make it more appealing to a prospective tenant to rent, even adding modest rent value. However, in many cases, upgrades do not add significant rent value above the rental range of a neighborhood or area. Depending on the economy along with supply and demand, this can also change. So, before you upgrade your home for the purpose of renting it, calculate to see if what you have in mind will be a good return on your investment.

Contributed by Nicklin Property Management. Opinion article reflects the views of Nicklin Property Management and is based on our years of experience.

It’s hard to believe that even though a pandemic is in full swing, unemployment is gripping the country and the price of goods is rising, the Las Vegas real estate market was up…again…during the month of July 2020. The average price of a house in the Las Vegas valley is $330,000. What is contributing to the rise of real estate prices?

For one, the Las Vegas housing market did not bubble in the preceding years – gaining value that it could not support requiring creative financing for the average buyer to qualify. While market value has grown significantly over the last 7 years, it was also rebounding from historic lows after the great recession. The Las Vegas economy grew at an unprecedented rate, creating many jobs and diversifying considerably, leading to an influx of new residents and folks willing to get back into owning a home. Interest rates dropped to historic lows as well over the last few years, making owning a home affordable for many. This spurred our local real estate market, yet it did not over inflate prices.

What about today? It is true, that the pandemic has taken a significant toll on local jobs – as a matter of fact, as of June 2020, the unemployment rate was 18% (according to bls.gov). However, this still means that many have retained their jobs and employment. Interest rates have continued to creep lower and lower, adding to affordability. Many first time and really, second time home buyers want to enter the market and take advantage. Yet, inventory is still tight – the supply of available homes, especially in the price point of what most can afford, is limited. As a result, this is driving prices higher.

What can we expect with the market? So far the market has gone against what many thought it would do – depreciate. If inventory remains about the same, we can expect relative stability with home values and modest appreciation. If we end up having more inventory come onto the market, market value may change some. However, interest rates continue to remain low – and it appears they may stay like that for the foreseeable future. Perhaps now is a good time to explore buying a property!

Contributed by Nicklin Property Management.

It’s no secret that Phase two restrictions due to COVID-19 have been extended – for an unknown period of time. Many Realtors who were planning on showing tenant occupied homes (which is restricted under Phase Two restrictions) that have been listed for sale were eager to start showing them on Saturday, August 1, 2020, when the Governor’s directive would of expired, only to find out that it was extended Friday evening. So, what can you do during this time?

If your property is leased and your tenant is paying rent, consider yourself fortunate! Perhaps keeping the home rented and waiting this time period out may be a possibility until restrictions are lifted.

If you absolutely need to sell a tenant occupied home, forging a good relationship with your tenant may be your best option. Current direction from the Nevada Realtors Association to Realtors states that due to restrictions to mitigate COVID-19, you can work with your tenant to obtain pictures or video of the home – tenant provided that is – so that you can have photos for your listing. You cannot force your tenant to do that, however, it is an option. Three dimensional property scans, virtual tours and virtual staging can also be used (Source: nevadarealtors.org).

If you can generate an offer and go under contract, most transactions can still take place while following directives and safety measures. COVID-19 disclaimers have been made available to Realtors in order to handle transactions during this unique period of time.

Of course, investors are scouring properties these days as well, looking for a rental property to invest in. So, there is still opportunity to sell the home. Granted, it may be more challenging. So, if your rental property is generating monthly income, perhaps consider waiting things out – if it meets your plans and goals. Otherwise, anticipate a sales transaction different than what you perhaps had in mind.

The Las Vegas summer is in full swing! With many days already over 100 degrees, some over 110, the heat will continue to build – and so will the humidity! Monsoon season is already here and as a result, humid air from the south will engulf the valley, adding to the uncomfortable feel of summer. Heat such as this can be dangerous! What can you do to keep you and your loved ones safe? Here are some tips:

1. NEVER leave your children in the car by themselves as you run an errand! Leaving windows cracked open does not help when temperatures are extreme outside. The heat and temperature build quickly when no air conditioning is on inside of a car. Additionally, leaving children by themselves is never a wise decision.

2. NEVER leave your pets in a car either. They are also susceptible to the heat and can easily have heat related issues.

3. Drink plenty of water! During hot days, our bodies lose a lot of water. So, drink plenty of fluids to stay hydrated – at least 8 cups of water per day or more! Take water with you to have it easily available. You might even consider having a cooler with you to keep those bottles nice and cool.

4. Leave water out for your pets outside – and even more importantly, make sure your pets have a climate controlled area to access.

5. Ensure that you change your AC filter regularly inside of your home to give your air conditioning system efficiency and prevent unnecessary repairs. No AC in the summer months can be brutal and take a prolonged time to repair as HVAC technicians are busy. So, give your air conditioner a fighting chance!

So, take necessary precautions now and before you know it, the cooler breeze of fall will be here!

An eviction will lead to a vacancy and additional costs

The State of Nevada Governor’s Directives that put a stop to evictions shortly after the pandemic began will soon be expiring. As a matter of fact, all directives that postponed various real estate processes will end beginning September 1 (unless the Governor extends them). So, what can you do to prevent an eviction and further costs if your tenant is behind on rent?

The answer is negotiation. Many tenants have ended up in a difficult financial situation due to shut downs and a faltering economy. Even now, reports of casino’s laying off portions of their workforce is becoming a reality. The truth is, the economy will take time to recover to the strength it was previously. So, negotiation is a very good option. Finding out if and when a tenant can catch up on a balance owed is key. If a mutual agreement can be reached, it would be best put in writing.

Why is negotiation perhaps the ideal option? Because you have to take into consideration how much an eviction and vacancy will ultimately cost you. Beyond the court and eviction costs, how much work will be needed to the house? Even if it is minimal, there will no doubt be some wear and tear. Further, not generating any rent means that the mortgage payment is yours to bear in its entirety. Negotiation may offset your expenses, even if it doesn’t cover them all. Of course, the time frame for how long a balance should be paid off in is up to your discretion. And if the negotiated amount is not paid, then the next step of filing an eviction can always take place.

It is best to remember that many have ended up in hard times. So, if your experiencing a situation where rent has not been paid or underpaid, your not alone. Finding a balance is key during these trying times and negotiation may be in your best interest and also your tenants.