Foreclosure rates in Seattle are among the lowest in the country. However, some undoubtedly are feeling the pinch. Many potential buyers are on the sidelines waiting to see what happens and the credit crunch has definitely taken many previously qualified buyers out of the game.

Sub-prime clients are not the only home owners biting their nails. Pre-construction investors, those of whom purchased properties under construction with the intention of selling them the day after they had taken possession of the home, are being hit especially hard. Many dreamed of selling these properties for a wild profit and are now forced to make payments they had never planned to make. To compound the problem, the explosive growth they anticipated was never realized and they are now at risk of losing money should they be forced to sell and pay brokers fees.

In some extreme cases, investors have purchased several pre-construction condos and are now having to make payments of $20,000/month or more. Currently in Seattle, the average time a house is on the market is 81 days. This is far better than most of the nation. However for some property owners, they will be bankrupt in a matter of weeks as their savings are rapidly drained. What should you do in this situation? BECOME A LANDLORD!!!

At first they may turn their noses to this idea. Some are overcome with fear that they will get the tenants from hell. While there is no guarantee that you will get the perfect tenant, there are a lot of upsides to renting and there is a lot you can do to make sure you get qualified tenants. Currently the rental market in Seattle is red-hot. Steve Glover, a Seattle-based property manager explains that “often when the housing market falters the rental markets explode”. Many of his rental listings have been rented before he is able to post advertisements for them. “It reminds me of the the housing market situation a year and a half-ago… the very first day a house was listed you had several offers”, he explains. Roughly 25% of his clients are investors that were caught off guard by the current housing situation and choose to rent their real estate versus getting foreclosed on or selling at a loss. Often this buys them time to acquire new loans or new sources of revenue.

Hiring a professional property management company can help make becoming a landlord a much easier process and help you avoid costly mistakes. There are many housing regulations you must follow as a landlord and not following them could lead you to legal trouble. Another advantage you will find with property management companies is they provide credit and background checks for prospective tenants. This will help insure that you have the most qualified individuals and families renting your property. On the outside chance your tenants did not pay the bills or needed to be evicted, a professional management company can facilitate the eviction process much faster than a first-time landlord could.

Property managers also know how to market your property. Steve uses several tools to market his listings including professional photography, listing the rentals on a variety of web sites, and maintaining the listing continuously throughout the year on his own real estate website. Most importantly, professionals managers know what you will likely get for rent. Much like selling a house, you do not want to overprice your rental. Being priced too high could lead to months of vacancy. On the flip-side, not getting the rent you could be getting will only diminish your financial potential.

Depending on your loan situation the rent you get for your property may or may not cover your costs completely, but it could buy you valuable time. Seattle’s real estate market has many positive things going for it. There is very little land left to build on, the weak dollar makes us attractive to foreign investment, and interest rates cuts are on the way. Soon the Senate will address the sub-prime issue and the credit crunch. You can bet that Seattle will be among the first markets to post major gains when the housing market turns. After all, when many markets in the United States lost 40% of their value, Seattle still managed to squeak out a 3.3% gain. Renting your property for 6 months could prove to be your very best real estate move or a financial lifesaver.

Not all property management companies are the same. You should find a reputable company that has up-front fees. Generally speaking, property management companies charge a fee of about 10% of the rental price of the property. Some pitfalls to avoid are hidden fees including applications fees, processing fees, credit check fees, and marketing fees. While many of these fees may be legitimate beware of heavy mark-ups or other fees that you did not know would occur. Read your rental agreement fully and do not hesitate to ask questions. Always get everything in writing.

A good property manager will have both a short-term and a long-term plan for your property and should customize a plan based on your specific needs. If you anticipate keeping your investment as a rental for years to come you need to allocate a certain percentage of money towards major repairs and up-keep. Keeping a well-maintained property will only serve to insure you can get the highest market value both as a rental and as a real estate listing.

The following are a list of services you should expect when hiring a property manager:

• Tenant Screening and Contract Negotiation
• Repair and Maintenance Management
• Monthly Rent Collection
• Managing your Utility and Tax Payment
• Monthly Fund and ROI Disbursement
• Financial Reports
• Vacancy Management
• Lease Renegotiation and Lease Extension Services
• Annual Property Market Analysis

Useful Real Estate Investors tools

• Seattle Real Estate Listing Emails – You can input the location, type, size and other features of a house you are looking and have new listings matching your criteria sent to you when they are listed.
• Periodic Home and Neighborhood Value Reports – Receive detailed real estate value report for property you are looking to buy or property you already own.

www.YourSeattleHomeTeam.com

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Seattle, WA, 98101.

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