Managing to Succeed: Ventures overseeing rentals, owner groups stay busy in tight economy
Smashing through dry wall one day, Billy Northern found holes patched with newspaper and mud. He’s seen plywood installed to cover damage.
That’s why the contractor with North Charleston Property Management is taking such care to professionally renovate units at Hunters Ridge apartments.
“It is actually recouping the neighborhood,” says Northern, property manager who daily drives from Walterboro to the Dorchester County property.
“We want to make it something you are not ashamed to live in,” says Lawrence Gillet, owner-investor with Chris Wiggins.
The group employs Coastline Property Solutions to oversee the apartment units.
“We are helping people find really good value, where rent exceeds expenses,” says Lindsey Hillman, part owner and property manager of Coastline.
Hillman; Northern and partner Lyle Cook, and their investor bosses Gillet and Wiggins are among hundreds of real estate people making a living overseeing and fixing up income-producing properties such as apartment complexes; condo, townhome and house rentals; and commercial sites such as stores and offices.
Looking after properties
The property management business has stayed steady, a hedge against the slowed home sales and building market. In some cases, full-service brokerages handle management tasks such as making repairs and being on call 24 hours as well as selling homes and advertising rentals.
“They are two specialized areas,” Brenda Guye of Summerville-based BG Properties, contends. “You should do one or the other.”
She has spent 32 years in the real estate trade. Along with a strong sales background, she specializes in property management, even teaching classes for certification, The company currently handles 120 condos, townhomes and single-family rental properties. Leases run from $900 to $1,600 a month.
“We are firm on collections," she says. As a result, the company takes in 98-99 percent of rents on time.
The most noticeable changes in recent years are in tenants’ attitudes to the properties they are leasing and the financial situations of the owners.
“Even though we screen our tenants, it just seems like people are so stressed out. They are just not taking care of the property,” Guye says. The company has to make repairs more often.
There’s plenty of quality tenants, too, such as the Whitmores.
“We came from out of town. We didn’t know anyone,” says Maggie Whitmore, who with her husband Leonard are renting a three bedroom home in Wheatstone for $1,100 a month. He’s a construction worker involved in the Boeing and Google projects.
The couple from North Carolina were referred to BG Properties. “They are just great people, down to earth people,” she says.
Meanwhile, a sizable share of owners weren’t prepared to invest in rental properties when they purchased up to a decade ago during the real estate surge.
“Today’s owner is different,” Guye says. Some may have lost their job. “The investor is in the same boat that the tenant is.” With property values down, “They can’t sell, either.”
Again, there’s plenty of exceptions, particularly involving local investors. Clara Haseldon, who bought a house in Wescott for rental income, has family in the property management business but went with BG Properties on the advice of the previous homeowner.
“We want it to be clean and kept up,” Haselson says, noting that the company has performed admirably. “She (Guye) has higher expectations than I do. I don’t think I want to go through her test,” she says.
Lee and Barbara Brockman own six rental properties managed by BG Properties. “She has been very good to talk with, very professional,” Barbara Brockman says.
Even with the struggling economy, “We’re doing fine,” Guye says. “I think Charleston is OK, we have good industries. It’s not just Boeing; Bosch (and) other industries (are) bringing in pretty good tenants. Property management should continue on as a competitive market.”
Steady income
Some ventures specialize in the rental business. Charleston Rental Properties has topped 100 homes, townhomes and condos that it leases, says Heather Burton, owner.
Staff has grown from just “moi,” she quipped, to three people.
Many of the clients are retirees from other parts of the country who want to move to Charleston and were able to buy properties at the current lower prices. But they might not relocate for two to five years, so the rental company is leasing the properties in the meantime, she says.
By contrast, Dan Ravenel Sotheby’s International Realty is a full-service real estate company that provides property management as one of its offerings.
“It’s a part of the business that’s grown steadily over a long period of time,” principal Daniel Ravenel says. Currently, property management accounts for 20-25 percent of the agency’s business, overseeing 200 homes, townhomes and condos.
Hot commodity
The rental trade has been an active venture as of late, with units filling up and rents rising.
Rentals have gone up 30 percent in the past year alone,” says John Liberatos of Liberatos Real Estate. Yet leases are still low compared with what people were paying to buy homes in the heated housing market of the mid-2000s.
“We are seeing a pretty hefty demand for tenants,” says Eric Wetherington, director and broker of Carolina One Property Management, which oversees 775 rental units locally.
“Over the past six months, our applications are up 20-25 percent.”
The median rent on MLS went up $50 to $1,200 (a month) six weeks ago,” he says. That’s a 5 percent boost. “I suspect over the next 12 months we will see another rate increase.”
Overseeing owners
Kathleen Greene has tallied 13 years in one specialized real estate field. Her company K.J. Property Management looks after homeowners associations, and horizontal property regimes for condos, and all that they handle.
“There’s some people who self-manage,” she says. But in her experience, “it’s not good neighbor to neighbor.” A professional outside company can take care of issues that crop up without homeowners having to quarrel among themselves.
Her clients are Long Branch Pointe, The Savannah and Seagate condo complexes; Wappoo Creek commercial park and Ashland Plantation neighborhood.
While lots of work is administrative such as bookkeeping and making sure dues are paid on time, sometimes, those matters can be more serious such as going to small-claims court.
“I’m a lot cheaper than a lawyer,” she quipped.
Liberatos likewise takes care of 28 condo regimes, from two to 44 units. “There’s a lot more involvement (than leasing). You’re paying tax bills. Especially downtown, the vast majority of owners don’t live here,” he says.
Keeping it commercial
Another steady property management service involves commercial properties.
“It’s preserving value for the owner,” says Charlie Moore, CCIM, SIOR and prinicipal in Carolina Commercial LLC.
A professional can keep an eye on properties for the owner, who in some cases maybe out of town. They can work with the tenants to see if the property requires landscaping or the parking lot needs paving and can keep up to make sure the occupying business are paying leases on time.
Carolina Commercial handles sales, leasing and property management for various industries, retail and office centers in the Charleston area. Moore says property management complements sales and leasing by providing cash flow in times when the other two areas are lagging. Also, Moore says, “It keeps you in front of the tenant and landlord.”
