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Industry Blog

Colorado Leases

System - Friday, August 10, 2018

Over the past few months, I have reviewed many, many home-grown and ‘Realtor-provided’ tenant leases for individual investors and homeowners who are trying to go it alone in the property management route. I have been shocked by what I have seen.


My philosophy is that manageing your own property is always the #1 option… no matter what a PM company says, nobody will give it the care and attention that you will.


Tenant leases are different. This is where you can loose your shirt, your home, and sometimes both. I have spent over $20,000 in legal, financial and other fees over the years on creating the ‘perfect’ lease. Even with a perfect lease, it is easy for a career rental abuser to make the ‘apparently perfect’ application package. You will love them. You will empathize with them. You will want to have a drink with them. Then they will squat in your property for 6 months without paying rent, knowing there is nothing you can do.


Please, please, if you DO do your own tenant leasing, make sure you:

  • Do not give more than 5 days grace period before posting a Pay or Quit noitice. This will be their first test for you.
  • ENFORCE late fees. Behavior is learned, not inherited.
  • Mandate they carry renters insurance. I make them add myself or Echo Summit as an additional insured under the Liability section.
  • Include a PAYMENT OF FUTURE RENT provision that allows you to accept partial rent payments in the middle of the evicton process (otherwise, you have to re-start the eviction clock every time you collect a penny)
  • Here are some good free forms that I am happy to share with you
  • Many other elements to consider, but at least make sure of these.

Single-family homes converting to rentals faster than apartments in Denver and Aurora

Echo Summit - Saturday, August 4, 2018

Echo Summit has had long lasting success in the Aurora rental market.  Denver Post had a great recent article:  Single-family homes converting to rentals faster than apartments in Denver and Aurora 

Denver and Aurora have relied heavily on apartment construction to house their growing populations, but they have also seen a surge in single-family homes converted to rentals since 2007, according to a new study.

RentCafe, an apartment search engine, counted 27,300 new apartments and 11,000 new single-family home rentals in Denver between 2007 and 2016. That works out to a 37 percent increase in single-family homes for rent, primarily from conversions, and a 35 percent gain in apartments, primarily from new construction.

In Aurora, the number of apartments rose by 7,700, or 25 percent, while the number of single-family home rentals shot up by 4,500, or 38 percent.

MOre information:

https://www.denverpost.com/2018/04/12/single-family-home-rentals-denver/?clearUserState=true



Denvers hottest neighborhoods

Echo Summit - Wednesday, August 1, 2018

Denvers hottest neighborhoods from Denver Post  Another great article!   What are metro Denver’s hottest neighborhoods for home buyers? Think south Denver, north Aurora and Lowry, among others   Home price appreciation approaching 40 percent in three ZIP codes For more info:  https://www.denverpost.com/2018/06/01/what-are-metro-denvers-hottest-neighborhoods-home-buyers/

Millennials in Denver Housing

System - Monday, July 30, 2018

Managing millennial expectations in Denver Rental Housing

According to Rental Housing Journal:

High turnover in the maintenance ranks is a problem in multifamily housing, especially among millennial maintenance personnel. They like easy-to-use technology applications on their smart phones and not old paper-based maintenance processes. That is why the company, Facilgo, did the study to research these questions.

  • How do millennials' expectations for faster maintenance affect property management maintenance organizations?
  • Are millennial maintenance personnel leaving multifamily due to the lack of technology solutions available in their day-to-day jobs?  What can be done to retain them?
  • What strategies are companies using to make their maintenance processes more efficient?
  • How will these new strategies help retain millennial maintenance personnel and satisfy millennial residents?
  • What will happen if companies don't do anything to cater to millennials' needs?


For more info:

http://rentalhousingjournal.com/articles/2018/02/20/millennials-expectations-driving-maintenance-changes 

 

Denver area housing market to see big value increase in 2018

System - Friday, July 27, 2018

According to Denver Business Journal:

 

"The greater Denver real estate market continues its fifth consecutive year of near double-digit appreciation. In fact, the average detached single-family home price just topped the half-million dollar mark for the first time on record and is being fueled by an insatiable demand for $1 million-plus luxury homes that continues to set records each quarter," said Anthony Rael, a Denver-based broker with Re/Max Alliance, in a statement.

 

For more information: https://www.bizjournals.com/denver/news/2018/03/29/denver-area-housing-market-to-see-big-value.html 

Denver Rental Manager Echo Summit Has New Headquarters

System - Thursday, July 19, 2018

Echo Summit Property Management, one of Colorado's largest and longest-running property management companies, has purchased a building at:

7076 S. Alton Way, Building A
Centennial, CO 80112

Corporate operations has moved out of their current Greenwood Village location, into the new building, while the company maintains its separate Ft. Collins location serving Northern Colorado.

 

With nearly 1,000 properties managed, and pioneers of RentHammer and the 16-Touch inspection system, Echo has the experience, technology, process and scale that sets us apart from the pack. Echo is the preferred choice for local owners, investors and real estate agents who understand that there can be no compromise in quality and ethics in property management.

Our approach and philosophy are simple... once you start treating an investment property like a -rental-, it will eventually dilapidate into one.

ALL WE DO IS PROPERTY MANAGEMENT. We do not do real estate brokerage, real estate development, or sell cars. We are property managers who strive for nothing short of excellence. Our dedication and approach has earned Echo a quality reputation in Colorado rentals. We invite you to speak with one of our property managers or our referrals to learn how we have helped others achieve their real estate goals, and how we might be able to help you.

More News:  http://www.echo-summit.com

 

Denver housing shortage... What does this mean for Denver rentals?

System - Tuesday, July 10, 2018


Denver housing shortage at a peak?  What does this mean for Denver rentals?


According to Denver Post: https://www.denverpost.com/2018/01/28/denver-chronic-housing-shortage-fixes/ 


The deficit of homes and apartments in the region is expected to peak this year at about 32,000 units, and that will put upward pressure on home prices for years to come even as supply rises to levels not seen since the early 2000s, warned Phyllis Resnick, lead economist for the Colorado Futures Center at Colorado State University. That deficit, which has been building since about 2014, represents the difference between demand from households and the supply of available housing.


Questions?  Contact Echo Summit today!   303-768-8255.


Echo Summit - Denver Property Management - on Normal Wear and Tear

System - Sunday, July 1, 2018

We run into these issues a lot.  

Normal wear and tear is a very important topic because it’s where landlords and property managers often run into difficulties when over-charging when conducting a security deposit disposition.
 The tenant moves out of the house and the carpet is heavily worn. The landlord wants to withhold some of the security deposit to repair or replace the carpet. The landlord has to ask some questions before they withhold some or all of the security deposit.
 • How old is the carpet?
 • How long have the tenants been living there?
 • Is the damage above and beyond normal wear and tear for a typical renter in their same situation (e.g. family of 4 living there for 3 years)
 • Do we have photo or video documentation of what the carpet looked like BEFORE the tenant moved in?
 • Was there a pre-move-in inspection sheet returned to us?

 If the carpet is more than 3 years old, the landlord has to be very careful because, in the state of Colorado, the average useful life of carpet (or paint for that mater) in a non-owner occupied property is typically 3 years. Does that mean if the carpet is 5 years old, and if the landlord has documentation showing the carpet was in great condition before the tenet moved in, then one little section was completely destroyed during their stay – that they can not withhold deposit? No, they can absolutely withhold for that. They just have to be careful when we are dealing with carpets that are entering the end of their useful life.

 Mildewed bathroom, very unclean kitchen. Here is another situation where the landlord might want to withhold security deposit to scrub the tile and maybe even re-grout because it’s so badly worn. Can they do this? Again, if this is a situation where a family of four had lived there and the tub area was already starting to get mildewed. When they move out the judge would ask ‘what would that tub look like after normal use by a family of four who had lived in the home for X period of time.’ The landlord will have to ask themselves this question because this will be what’s going to be defensible in court. The most important thing you’ll need to do is have documentation of what the area looked like before the tenant moved in. If you do NOT have before pictures or video, be very careful about withholding security deposit.


 Holes in the wall. This is a very common issue – because people like to hang things on walls; from pictures and mirrors, to flat screen TVs. In this case, the landlord checks a tenant out and find quite a different size few holes in the walls. What can they withhold for? Our first recommendation is having lease verbiage that defines what is allowed, and what is not. For instance: “…tenant cannot make alterations to wall surfaces without prior written approval from the landlord, aside from small nail holes used to hang pictures.” If the landlord does not have clear language in the lease agreement a judge could easily rule against them and say the big anchor bolts in the wall are in fact normal wear and tear because most televisions available today are flat screen and require wall mounting. Another good idea is to simply ask the tenant to leave all nails in the walls so it will be easier for the landlord to go back and clean up the areas versus the tenant trying to fix t walls and making it even worse. This could require the landlord to come back and have to retexture and paint the surface and then charge the tenants... which they won’t like.
 Scuff marks are another issue that’s common and often misunderstood. Scuff marks can result from a couch, chair or bed head board being close to the wall. The landlord would most likely want to charge the tenant to have the wall re-painted. In general, if the tenants have been living there for a reasonable period of time there, will be normal wear and tear and we would advise against withholding exorbitant security deposit in this case. There will be some cases of excessive dings and dents in which you might have cause to withhold, but you have to be very careful

For more information on this and other topics, please visit us online: http://echo-summit.com/education
 If you prefer to watch a video on this topic, visit us at: http://echo-summit.com/education/videos

Denver rental competition - Echo Summit can Help

System - Friday, June 1, 2018

Revisiting an earlier post, we continue to believe that competition for Denver residential single-family investment homes, at least at the wholesale level, has picked up dramatically in the past few months.

This is largely due to a massive amount of out-of-state money moving in, making cash offers, sight unseen with no inspection contingencies. It is very hard to compete with this, though Echo Summit is still having success via its network of investors.

Given this phase of the market, it is probably time to start thinking about purchasing turn-key rental properties, and aiming for cash flow, rather than short-term cash-on-cash return. Obviously, almost any property held for a minimum of 5 years will produce some form of cash-cash return based on appreciation alone. What I am a suggesting is to focus away from the masses who are hoping for quick returns on a wholesale flip, and target areas/property types that they are not.

Without getting into the boonies, I recommend focusing on transportation corridors (SSE is off the charts) and anything feeding into the Cherry Creek School District (for those of you who don’t know what bond proposals 3a and 3B were for in recent elections… study up. They passed, and will have significance for property valuation in the coming years).

As of March 2018, average rent for an apartment in Denver, CO is $1575 which is a 0.51% increase fro...

System - Friday, May 25, 2018

According to RentJungle:

https://www.rentjungle.com/average-rent-in-denver-rent-trends/ 

 

As of March 2018, average rent for an apartment in Denver, CO is $1575 which is a 0.51% increase from last year when the average rent was $1567 , and a 0% increase from last month when the average rent was $1575.

One bedroom apartments in Denver rent for $1399 a month on average (a 1.29% increase from last year) and two bedroom apartment rents average $1755 (a 0.57% decrease from last year).


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