I read with interest a recent article in the Arizona Republic on the Greater Phoenix rental market. I was interviewed for about an hour for the article as the Executive Director of AZREIA and was happy to give my perspective. The article was on how competitive the market is for perspective tenants and the difficulty in securing a home to rent. There was one thing in the article that greatly disturbed me.

A quote from a tenant describing a situation where the owner/landlord refused to make repairs stating they didn’t have to be able to rent the house. Now I am certain this owner isn’t an AZREIA or ARPOLA member as to say this is unethical behavior would be mild. It is precisely this type of behavior that gives landlords a negative reputation.

I am as much of a free market guy as you will find. Income property (non rent controlled) is pretty much a study in free enterprise. Supply and demand have a significant impact on rental rates. The buyer (tenant) and seller (owner/landlord) are free to negotiate price and terms. When demand is high and supply is low, rents will normally increase and terms will be more favorable to the owner/landlord. When the reverse is true tenants will benefit from reduced rents and/or more favorable terms. Remember, it wasn’t very long ago large concession like free rent were commonplace especially in the larger apartment communities.

Today around Greater Phoenix demand is high and supply is low. Nice rental properties in desirable neighborhoods in good school districts may have multiple applications from tenants. Rent rates are at historical highs and perspective tenants in some situations are offering rents above the asking rate. This is all very positive news for rental property owners, but it isn’t license to change or alter how the property is presented or maintained.

I would argue that the condition of the property has nothing to do with the state of the market. The market cycle may impact rents and terms and maybe in some cases the amenities offered, but it shouldn’t change the acceptable level of the condition. As a rental property owner deferring maintenance in never a good practice. Usually, the repairs will cost more and take longer if you do. Your tenants will most certainly look to move at the end of the lease if not try to break the lease sooner. Over time, your reputation will suffer. Now, I am not talking about legally requirements. If you are not providing safe and sanitary housing then there is a place for you – jail.

It may be tempting to not paint, repair drywall, leave the worn out carpet for just one more tenant or not repair or replace the dishwasher that doesn’t even heat the water. The cost of doing so will be much higher in the long run. Rather than taking this approach, why not keep your property in good condition, ask market rates for the rent and even ask for a longer term on the lease with built in rent increases. In this market cycle you are in control. There is nothing wrong with making this market work for you, but so it in the areas that won’t have a long term affect on your overall profitability. Take care of your property and your tenants.