Although buying a home is a rite of passage and the American Dream, it’s also the largest asset most people will purchase. First-time home buyers are prone to missteps that can be avoided with real research and a trusted partner that will help you steer clear of pitfalls. That’s where Bay Property Group comes in.
Are you ready to make the investment? Keep in mind that down payment isn’t everything — we recommend you set aside 1–3% of your purchase price to cover unexpected fees and expenses and for an added cushion, it’s prudent to hold at least six mortgage payments in the bank in case of emergency.
Getting your financial house in order
The Bay Area is a notoriously expensive place to live, making it imperative for aspiring homeowners to have a solid financial foundation before entering the market. Metro-wide, the median price of a home is $900,000 — nearly four times the national average.
The California Association of Realtors (CAR) set off to find what Bay Area residents need to earn to buy a median-priced home there, which varies by county. Read their analysis here.
The map below, compiled by Business Insider, shows the minimal annual incomes needed to afford a typical home in the Bay Area.
If you have all of your financial ducks in a row, let’s dive into getting started.
Many buyer financing options available
Bay Property Group advises first-time homeowners to compare rates and fees from at least three lenders. If you only approach one lender, you can potentially be leaving thousands of dollars on the table. As you are comparing quotes, ask whether any of the lenders would allow you to buy discount points, whereby you can prepay interest up front to secure a lower interest rate on your loan. How long you plan to stay in your new home and whether you have a lump of cash to purchase the points are two factors to put a finger on to see if buying points make sense.
Getting a preapproval letter
Getting pre-qualified for a mortgage is one thing — you get a ballpark figure of how much a lender may be willing to lend you based on your income and debts. But as you get closer to buying, it’s prudent to get a preapproval letter, where a lender more thoroughly examines your financial picture and confirms in writing how much they are willing to lend you, and under what terms. Armed with a preapproval letter, you look much more serious to a seller than the next buyer and this document can give you an upper hand in negotiations.
What’s your credit’s bill of health?
Since most home buying transactions involve a sizable home loan or mortgage, your credit score is clearly a paramount consideration. To get the best interest rate and loan terms, Bay Property group recommends you check your credit report before embarking on the home buying process and dispute any errors that can be dragging down your score. There are several opportunities to improve your credit, such as making a dent in any outstanding debts. Finally, to avoid a dip in your credit after you apply for a mortgage, resist the temptation to open any new credit accounts, like a credit card or auto loan, until your home closes.
Inspection and insurance
Once you and your agent find the right home, the transaction process begins. Typically, we’ll start by making an offer and once it is accepted by the seller, you’ll need to get an inspection and insurance.
The results of the inspection will only tell you so much and not all inspections test for things like radon, mold or pests, and we stress the importance of knowing what is included. We also recommend you attend the inspection and pay close attention, ensuring the inspector can access every part of the home, such as the roof and any crawl spaces. Don’t be afraid to ask questions and ask your inspector to take a look — or a closer look — at something that is of concern.
Before you close on your new house, the lender will require homeowners insurance. At Bay Property Group, we advise our clients to shop around and take a hard look what’s covered in the policies.
Let the journey begin
Searching for your first home can be fun and exciting, but it is also a challenge. Our home advisors will provide professional advice at every stage of this process and will be there to prepare you for the decisions, occasional disappointments and ultimate delight you’ll experience when you get the keys to your first home.
We hope you are lucky and quickly find an affordable home you are in love with, the seller accepts your first offer, you move into your new dream home with no broken dishes and your new neighbors bring you a casserole to welcome you. But for other first-time buyers, there are minefields to navigate. However easy or challenging, you can count on Bay Property Group for informed guidance.
When Senator Bill Dodd was forced to evacuate his NAPA home around midnight on the first night of the October fires, he couldn’t open his heavy wooden garage doors to use as an escape route. With widespread power outages, the garage door motor wasn’t working, but thankfully, a good neighbor came to his aide. One trapped neighbor encountering the same problem was actually forced to drive through his garage door.
“This isn’t a problem most people have thought of,” the Senator says in a news release, but he brought it to the forefront by introducing SB 969, co-authored by Assemblywoman Cecilia Aguiar-Curry, D-Winters and supported by the Consumer Federation of California.
Under the new law, landlords and other property owners will no longer be able to install automatic garage doors unless they have a battery backup function designed to operate during an electoral outage. The bill’s requirements will be enforceable next summer.
For Dodd, the fire season exposed several vulnerabilities and underscored the need to be proactive in adopting policies that make communities safer in the wake of a disaster. Ensuring battery backups for garage doors is “a small step that can literally save lives,” he goes onto say.
At least five of the 40 people who died in the North Bay during the fires did not or could manually open their garages, The Press Democrat reported in December. Seniors and those with heavy wooden doors are especially at risk.
What the law means for rental property owners
Landlords are not required to proactively install new automatic garage doors, but any replacement door installed on or after July 1, 2019, must have the battery backup feature. Owners face a $1,000 civil penalty for failure to comply.
We applaud the bill and have always maintained that owners should develop an emergency preparedness plan before a disaster strikes, to protect, life, limb, and property.
In our many years of managing rental properties throughout the Bay Area and accommodating the residents who have entrusted us to provide a place to call home, we have gone through many cycles of digital technology.
While we always like to take the personal approach and enjoy spending time with tenants, we understand that advancements are automating things. Never letting the grass grow from underneath our feet, we have adapted to technology and have listened to the needs of apartment hunters and busy residents who want a more efficient way to handle their daily, weekly, or monthly tasks.
With that in mind, Bay Property Group has made steady investments in technology to better serve the needs of our residents. Candidly, it hasn’t been easy to adjust to breakneck changes and evolve from a company that builds long-lasting relationships to a quasi-tech company that puts our residents’ rental experience on autopilot.
We’ve now gotten our online resident portal down to a science and wanted to share some of the benefits of this next-gen solution.
For current residents
With a couple clicks, our tenant portal gives you the ease of paying online and there is no need to chase down the “maintenance guy” — you can submit your maintenance request online and expect a timely response. Set up automatic payment, view your payment history, and sign up for automatic reminder emails.
For apartment shoppers
Finding an apartment that fits your lifestyle and budget can be a frustrating experience, but Bay Property Group makes this process easier by serving you an online application that is accessible anywhere, from any device. Securely pay any application fee online and transition through the entire leasing process seamlessly.
In parting thoughts, Bay Property Group is constantly innovating to improve renter experiences, but technology will never be a crutch. We will stay true to our roots of personalized service when serving the needs of residents who we call neighbors and friends.
Landlords in San Francisco, Oakland and throughout the Bay Area naturally want to inspect the condition of their property and identify any serious problems that may manifest themselves over the course of a tenancy.
Of course, an inquisitive owner can visit their properties anytime at a distance to glance at the exterior and observe activity in and around the dwelling, but we urge owners to resist the temptation to knock on the door and make an impromptu inspection of the rental unit. That’s because in California, tenants have a right to quiet enjoyment of their homes.
Translation: Once you hand over the keys, the law recognizes the tenant’s right to privacy and grants the owner permission to access the unit under limited circumstances. Barring an emergency, the landlord must give ample notice to enter the apartment to conduct specific tasks, namely:
- To make necessary or agreed on repairs, decorations or alterations, or improvements
- To supply necessary or agreed services
- To show the dwelling unit to prospective or actual purchasers, mortgagees, residents, workers, or contractors
- To inspect the premises to document the condition of the property upon moving in and out, for purposes of a security deposit
- To inspect a waterbed for compliance with installation requirements
When owners encroach on the tenant’s right to privacy, it can not only sour the relationship with the tenant and possibly nudge them to move — it can also be a breach of the tenant’s right to quiet enjoyment of the rental unit and expose the landlord to liability. If you catch the tenant in an embarrassing moment, you are inviting trouble to your rental business.
Move-in and move-out inspections
As we noted in an earlier post, security deposit disputes are the most common reason why landlords are ushered into small claims court. To avoid conflict, a property inspection before residents move in or out of the rental unit is critical. A proper move-in and move-out inspection both holds the tenant accountable for damages caused outside of “normal wear and tear” and reduces the likelihood of conflicts when any portion of the security deposit is deducted.
What constitutes damage and what should be considered “normal wear and tear” is an enigma to many landlords, but this handy PDF can serve as a guide to evaluate any degradation to the rental unit.
Property management is part managing relationships, part bookkeeping, and part knowledge of the law.
Competence in these moving parts are the building blocks of a successful relationship with a property management company and the hallmarks of Bay Property Group. To explore complete property management services for single and multi-family buildings in the San Francisco Bay Area, contact our office.
We look forward to delivering impeccable service and a seamless experience in managing your property and maximizing profits each and every month.
Great marketing impacts humans in all manner of different ways, inciting nuanced emotions from fear to anxiety, excitement, even empowerment. “People buy on emotion and then justify it with logic,” the late sales Goliath Zig Ziglar once said.
No one understands this better than the diamond industry. Although diamonds are one of the hardest materials found on earth, they have no unique distinctions and diamonds are actually the most common of gems. Yet, they have become an endearing symbol of love and commitment, as diamond marketers tell a story that connects in a deeply personal way.
Main takeaway for Bay Area rental housing providers
A main thrust of our leasing strategy at Bay Property Group is focusing on benefits, not features. One way to let these benefits shine through is to vividly paint a picture of the tenant living in your property. We talk about their furniture so they can mentally place it in the apartment or help them envision a lazy day by the pool, with the sun beating down on them as the weight of their stresses drip off their fingertips. Not too unlike Debeers imagery of placing a rock on her finger and sealing eternal love in that moment.
Different strokes for different folks
Of course, when we sell a lifestyle and not just a property, it’s important to keep a finger on what amenities matter to varying subsets of renters.
If Millenials are your lifeblood, we may showcase any high-end conveniences, community WiFi, recreational facilities, local pubs and other hangouts, and the like. Younger families may place a premium on the quality of the local school district, availability of daycare facilities and neighborhood safety.
Conversely, downsizing seniors may gravitate towards apartments with single-level floor plans, added security, proximity to transit hubs, and spaces for socialization, among a myriad of other amenities that solve their unique needs and life goals. A one-sized-fits all approach does not work in property management.
We like to say that we are not in the property management business, but the problem-solving business, and at the end of the day, we are successful only because we tailor solutions to the unique desires, concerns and problems of tenants and owners alike.
Make tenants part of the story
At Bay Property Group, we take a multi-pronged approach in marketing your rental listing, using the language and imagery that resonates with your targeted demographic.
The phrase “diamond in the rough” relates to the fact that naturally occurring diamonds are quite ordinary at first glance, and that their true beauty as jewels is only realized through the cutting and polishing process. To which we might add, the marketing process. You can leave that up to us.
Start the conversation
Getting the right renters in the door is just one component of our suite of full-service property management services, which includes applicant screening, rent collection, resident management, property maintenance, and other time-saving services for landlords and communities in San Francisco, Oakland, and throughout the Bay Area. Contact us for turnkey solutions.
In our many years of managing landlord-tenant relationships at Bay Property Group, we can assure you than one of the first questions on an outgoing tenant’s mind — even before they ask themselves how to get a giant sofa out of that narrow doorway — is if and when they are going to get their security deposit back.
In the way of trivia, the #1 reason landlords are pulled into Small Claims Court is disagreements over security deposits, but these disputes can be anything but trivial.
The sequence of events, of course, is predictable. The tenant moves out after what they consider to be a reasonable effort to clean the rental unit and the landlord refuses to give all or part of the deposit, claiming that the apartment was left dirty or damaged. The outgoing resident asserts the landlord is illegally withholding the deposit and pursues legal action to recover their money.
Awareness is half the solution
A foundational belief we share at Bay Property Group is that good management requires an awareness of the needs and responsibilities of both owners and renters. One of the owner’s responsibilities — and a trait that will likely avoid disputes down the road — is a familiarity with the rules concerning security deposits.
California laws concerning security deposits are complicated
The process begins with the actual collection of the deposit. California law prescribes the maximum dollar amount owners can charge for both unfurnished and furnished dwellings, with additional increases allowed when the tenant has a waterbed.
Bay Area landlords must also adhere to unforgiving deadlines that dictate the number of days legally required to return the deposit or explain why the deposit is being held, whether in part or in whole.
This begs the question of how and when an owner ascertains the condition of the rental unit when the tenant is moving out. Within a “reasonable” time after the notice of termination of the tenancy, the tenant must receive written notice of their option to request a pre-move out inspection and the tenant’s right to be present at the inspection. These procedural requirements are best journeyed with an attorney.
What is normal wear and tear anyway?
Although the landlord can deduct for deficiencies not caused by normal wear and tear, this is an ambiguous term that Bay Area landlords often struggle to define. Our legal partners at Bornstein Law have put together a one-page “cheat sheet” for landlords to evaluate any damages to their rental units. The PDF provides a framework to distinguish neglect from blemishes that should be expected over the course of time. Download it here…
Documentation is key
After inspecting the premises of the outgoing tenant and documenting any abnormalities, the landlord has additional obligations to send the tenant a written itemization of any deductions for repairs, cleaning, and unpaid rent. In the eventuality of litigation, the legal burden to prove damage falls squarely on the owner.
We help you cover all your bases
Fortunately, rental property owners can rely on our seasoned team to establish and implement policies that protect your investment assets in San Francisco, Oakland, and throughout the Bay Area. Contact us for experience-driven guidance in operating a successful rental business.
The relatively small amount of dollars spent in sustainable spaces is less a chicken-and-egg conundrum than it once was. The question has been, do rental property owners refrain from investing in green features because tenants won’t pay for performance efficiencies, or is that tenants don’t have access to these high-performing features and therefore, don’t have the opportunity to pay more money for them?
There is more evidence to persuade Bay Area landlords to invest in sustainable communities, not only to attract renters looking to live green but put green in the owner’s pockets. No less than 84 percent of respondents to an AMLI Residential survey reported that living in a sustainable environment is important to them. More telling though, is that 64 percent of respondents expressed a willingness to pay a higher rent for sustainable features and 85 percent attest that sustainable living is beneficial to their long-term health.
When Bay Area landlords consider adding sustainability features, it is less about an abstract cause of reducing the carbon footprint and increasingly, has become a wise return on investment in attracting environmentally conscious tenants that tend to be an upscale, desirable group of renters.
The survey underscores an opportunity for rental property owners to appeal to residents that seek a greener, healthier lifestyle. A smoke-free community was most coveted, with energy-and-water-efficient features not far behind. Communities that have high bike-walk scores or have proximity to public transit are also in demand, according to the survey.
The most requested green features were recycling and composting, solar panels, and community gardens.
Investment property owners who want to paint their apartment community green can also pursue other sustainable elements:
- energy-efficient appliances and lighting
- plumbing that reduces water consumption
- community recycling programs
- native plant use in landscaping to reduce water needs
- electric car charging stations
- bike storage and repair
- low or no VOC building materials
- air ventilation
- premium air filters
AMLI vice president of sustainability Erin Hatcher attributes renter interest in sustainability to a variety of reasons.
Some have indicated they enjoy the health and wellness benefits that come with sustainability; others like the idea of being part of a larger movement in sustainability that’s reducing their carbon footprint; and then some just, frankly, love to save on their utilities.
In our earlier article on employing technology to capture and retain millennial renters, we predicted that landlords who stubbornly cling to the old way of doing things may be left to the wayside. In the same spirit, rental property owners owe it to themselves to explore green features and keep up with the evolving landscape of sustainability.
At Bay Property Group, we are constantly innovating and pushing forward to better connect your rental property with the right tenants and maintain those relationships. This is just one component of a comprehensive approach to managing your real estate investment and ensuring the success of your business.
Our previous articles were devoted to attracting and retaining tech-savvy Millennial renters who have distinct lifestyle preferences and a demand for amenities and high-end conveniences. Now, we transition to a growing number of seniors that are trading home ownership for rental life.
The rent-or-buy dilemma is more commonly associated with Millennials, not people nearing retirement, but this conventional wisdom is being turned on its head.
In fact, many downsizing baby boomers are choosing to rent, either out of necessity when they cannot find a suitable place to buy, or because it’s a financially savvy decision. Aside from repair costs, condo fees and other expenses, the allure of flexibility and shorter commutes are driving golden homeowners into the rental market, and the numbers are telling.
While a majority of homeowners age 55+ plan to stay in their homes during retirement, according to a 2016 Freddie Mac survey, what about those that plan to move? One in five say they will sell their home and buy another one, yet one in ten intend to sell their home and rent when they move.
We note that baby boomers are the wealthiest and one-time largest generation in U.S. history. Given their deep pockets, seniors area a lucrative demographic for Bay Area rental property owners.
Getting beyond the raw numbers
Clearly, the dramatic growth of seniors entering the rental market will require housing and community adaptations. With vaster financial resources at their disposal than younger renters, they can afford higher end units and they expect rental property owners to deliver on that.
Seniors have an affinity for single-level floor plans and proximity to transit hubs. They value curb appeal when shopping for their “right-sized” apartment and put a premium on security measures. Spaces for entertainment, recreation and socialization also in demand.
Rental property owners should also understand the nuances in how seniors use social media and adjust their marketing efforts accordingly. We will delve deeper on pulling in this age group in future posts — be sure to subscribe to stay in the know.
At Bay Property Group, finding the most suitable tenants and maintaining those relationships are among our top priorities and just one skill set we have honed over many years of protecting and enhancing the value of your rental investment in Oakland, San Francisco and throughout the Bay Area. To explore our comprehensive suite of property management services designed to provide landlords a seamless rental experience, get in touch.
Bay Property Group is constantly innovating — pushing forward to better connect your rental property with the right tenants and employing technology to automate the relationship.
In our many years of managing rental properties throughout the Bay Area, our core competency continues to be protecting the investments of property owners and managing landlord-tenant relationships. Although these relationships will always be at the underpinning of what we do at Bay Property Group, the methods and tools we use to forge and maintain those bonds have evolved with modern ways renters and landlords exchange information.
This is especially true when it comes to residents who are millennials.
Also known as Generation Y or the Net Generation, this demographic cohort directly follows Generation X and while the term is loosely defined, millennials are usually considered to be born around the turn of the 21st century.
A savvy bunch
Few among this age group can recall a pre-Internet era and most have the net within arm’s reach. By and large, they don’t like making a phone call or writing a paper check to get things done and prefer an app, a mobile website, texting, Snapshot or a multiplicity of other means to achieve a digital component in most orbits of their lives.
Their virtual world extends to apartment hunting, paying their rent and submitting maintenance tickets, forcing rental property owners to accommodate this highly informed group — landlords that stubbornly cling to the old way of doing things may soon be left to the wayside.
With droves of young professionals seeking jobs, the Bay Area naturally has rampant millennialism. According to at least one account, San Francisco has cracked into the top three cities most friendly to residents between the ages of 25 and 34, with Berkeley and Sunnyvale not far behind.
With the average cost of a home going for seven-figures in many cities, this generation is willing to trade the American dream of home ownership for employment, the thrills of city life, and more endearing aspects of our region.
The Bay Area is a key hub for the millennial urbanite and a driving force in the rental market.
According to population projections from the U.S. Census Bureau, Millennials are on the cusp of surpassing Baby Boomers as the largest living adult generation. Cerebral types can read more about the forces behind the demographic shift here, but we’ll move onto how the millennial generation is shaking up the future of the property management industry in the San Francisco Bay Area and beyond.
Cities throughout the Bay Area are telling dual narratives: the economy is thriving but residents are struggling to afford their lifestyles. Staring at the highest home prices in the nation and saddled with debt, millennials still embrace the American dream of home ownership, but many have to defer that investment until later in life.
Aside from the financial challenges, lifestyle preferences have contributed to rental demand among young people — unlike their parents and grandparents, many millennials are more comfortable paying rent, rather than committing to a huge mortgage.
This multiplicity of factors has led to a large pool of Bay Area millennials in the rental market, leaving investment rental property owners trying to figure out how to attract and maintain the newest generation of spending power. Bay Property Group can help you crack the code.
Reflecting their demand for amenities, millennials seek housing with high-end conveniences. Bay Area landlords who can accommodate these preferences will undoubtedly be successful.
A study by the National Multifamily Housing Council and real estate consulting firm Kingsley Associates discovered that fitness centers, outdoor recreational facilities, barbecue grill areas and community WiFi were among the most highly prized amenities. Having access to quality common areas and co-working spaces is also paramount to this age group.
Using technology to attract and maintain millennials
It should go without saying that technology is one of the defining characters of this age group. Most Bay Area properties and their properties managers maintain an online presence to advertise their apartment listings, but many are only beginning to grasp the importance of online and mobile capabilities. Staying connected with millennials 24/7 across multiple platforms and social media is critical for the success of rental property owners looking to get in front of this tech-savvy crowd.
Millennial rental demand + technology = mobile property management solutions
Bay Property Group helps Bay Area landlords take a multi-pronged digital approach.
Communicating with residents
- Send automated and customized messages by text or email for important events such as lease renewals and payment reminders
- Deliver targeted emergency notifications to residents with a simple click of a button
- Provide residents with easy and convenient access to make rent payments
- Accept growing payment types such as debit card, credit card, and ACH
- Deliver automatic payment reminders via text or email
- Reduce or eliminate use of costly money orders
Improving Maintenance Requests
- Allow residents to submit fast and simple maintenance requests through mobile devices — even attaching a picture with the request
- Enable residents to track their maintenance history online or through a mobile device.
Surveying residents and gaining insights
- Leverage event-driven surveys to quickly and easily gauge resident satisfaction
- Use data to improve online reputation, reduce turnover, and improve occupancy
Millennial demand for apartments has a long runway into the future and Bay Property Group can help you attract and retain this undeserved demographic.