In case you have not noticed, real estate rentals of single family homes are soaring. Our friends at Zillow just paid $16 million for the real estate rental search site HotPads. Zillow says it is making this hefty acquisition to “expand the size of its growing rental audience and extend the reach of its marketing tools and productivity solutions for rental professionals.” Naturally, rentals rule in large cities like New York, San Francisco and Boston where real estate prices are high, the population is younger, more transient and there are more high density units to choose from.
But guess what: rentals are hot and getting hotter by the minute here in Dallas/Ft. Worth. The average Dallas-area apartment rent is forecast to reach $867 by the end of this year, up nearly 7 percent from 2007, according to a report by CBRE Inc. and MPF Research. But home rentals are killing it! In fact, it’s massive investments in rental properties that’s driving the real estate rebound. Traditionally, selling agents don’t mess with rentals because the commission thresholds are far lower. The classic example is an agent getting one month’s rent as a fee. With D/FW housing rents from $1000 to $5000 a month, that’s small potatoes commission compared to a 3% split on a half million dollar home.
Two local real estate veterans see those mini fries as a business opportunity. Local Dwelling is a professional lease/management firm founded by former Dave Perry-Miller agent Colin Lardner and residential HOA management guru Worth Ross. Together they have created a company that helps investors acquire, manage, maintain and liquidate rental properties. The majority of their business centers on single family residences, townhomes, duplexes and condominiums. They are serving the growing investor groups who are devouring distressed properties in DFW.
“We have a hedge fund looking to buy 100 homes a month in North Texas,” says Colin Lardner. “They want us not to just help them buy, but to manage and lease the homes once closed.”
Why the move to property management, I asked?
“Let me ask you the question, Candy. What comes to mind when you think of property management?” Colin asked me.
I made a face, I looked at my fingernails like they had long, glittering acrylics, popped a wad of chewing gum in my mouth and pushed my cleavage to the middle. Was my skirt short and tight enough?
That’s my whole point, said Colin. We want to take property management to a higher level, educate both the consumer and the owner on what to expect in the process, streamline and professionalize it.
LocalDwelling has an inventory of just under 500 properties in Dallas and growing. With a staff of 12, they offer very competitive management fees and a turn key process. They will help the investor locate and buy the properties, get them ready for occupancy, and manage the rental process.
Right now, the home lease management market almost resembles a mom and pop industry of individuals, some of them Realtors, who manage properties for a fee. LocalDwelling intends to take it to the top, growing into every major city in Texas plus sub markets, then taking the company national.
“We are building this company to serve various investor and home owner groups,” says Colin. “Investor Markets have become global but the need for Local expertise and a company that takes its fiduciary responsibility seriously, is more important than ever.”
Dallas/Fort Worth leads the nation in apartment construction with 17,792 units under way. But the single family rental market is getting downright brutal. With stringent lending rules, consumers are no longer afraid to shell out thousands a month on single family home rentals. They even pre-pay, that’s how competitive the market has become. Colin told me of one tenant who pre-paid an entire year of rent — $74,000 — to secure a lease home. That’s $5500 a month plus an $8,000 security deposit. In the M Streets, another tenant is paying $2100 a month and plopped down 3 months advance rent to finalize the lease.
To learn more about the rental market and property management contact Colin at the Local Dwelling Property Management at 214-522-9100 www.localdwelling.com