Landlords feel the strain of struggling economy - East Valley Tribune: Business

Landlords feel the strain of struggling economy

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Posted: Friday, May 9, 2003 11:07 pm | Updated: 1:55 pm, Thu Oct 6, 2011.

The weak economy and record low mortgage rates have hurt the East Valley rental market. Landlords are struggling to keep their units rented and some tenants are struggling to pay their rent, landlords and attorneys say. Each year about 90,000 renters in Arizona get evicted from their homes and many of them are because they didn't pay their rent.

Independent landlords, which typically rent single-family homes and condominiums, used to be able to re-rent a place within a week of tenants moving out, but the market has changed drastically.

"Right now it's a very soft market,” said Jeff Young, chairman of the Independent Renter/Owners council at the Arizona Multifamily Association. "Lower interest rates have caused a lot of people to buy homes who in years past could not afford to. Major apartments are offering one month free and $1 move in."

Young said he's encouraging his 250 members to keep their prices modest and keep their rental units fixed up and ready to be rented. He said independent owners know their renters more intimately because they manage fewer properties.

"We're encouraging our people to be flexible if you've got a good renter whose falling on some hard times," Young said. "We encourage landlords to keep in mind that they're running a business, and they're not in the welfare business. That being said, I would encourage them to have some latitude with their rent and lowering it in hard times is not out of the question."

Although financial times are tough, some tenants are irresponsible. Young and other property managers say its essential that landlords do a thorough credit, employment, reference and crime check on potential renters. He also stressed the importance of having cash reserves to carry landlords through long vacancies and he suggested be less restrictive if you prohibit smoking or pets.

"If you do have a vacancy of a month or two, use that as a time to do some long-term maintenance that wouldn't have been possible with someone living there."

Dale Phillips, president of Mark-Taylor Residential, said most of the evictions at their 18 Valley properties are community infractions such as noise violations and unauthorized parking.

Phillips said his properties don't have many rent violators, but there is a correlation between people who don't pay their rent and the amount of free rent they receive at move in. The greater the move-in special, the more likely people are to disappear after their free rent deal expires. Arizona real estate attorney J. Denton Dobbins Jr. said communication is essential, but often neglected between landlords and tenants.

"For years, landlords and tenants were at odds," Dobbins said. "Put yourself in each other's shoes.

"If they can avoid us, that's good. They're doing everything right."

Dobbins said his law firm handles about 1,500 eviction cases each month from 200 communities and many didn't pay their rent. He said more property managers are willing to work with tenants now because of the economy.

Renters who don't pay their rent on or before the first of the month receive a five-day notice and if they still don't pay, they go to court. Arizona is considered a fair landlord-tenant state compared with others such as California.

The Arizona Landlord and Tenant Act overrides leases when there are discrepancies. Landlords must notify tenants in writing for most property and lease violations and must give them so many days to rectify the situation.

Tenants who engage in illegal activities such as drug use, shooting a gun, prostitution and threatening and intimidating behavior can be evicted immediately. Most large-scale landlords use standard lease agreements and have been trained, but some of the small-scale landlords haven't.

The Arizona Multihousing Association offers seminars on how to be a landlord. Also, the International Crime Free Association offers a free 16-hour course.

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