By Jim Parker
The Post and Courier
Debbie Miler has logged close to 30 years in real estate, yet she’s hard-pressed to remember a more active time in the leasing side of the business.
“Oh my gosh, it’s unbelievable,” says Miler, who heads up the property management division of Miler Properties in Summerville. “We can’t keep rentals on the market now,” she says. “We have people offering to pay more for rent.”
The rental spike stems from two things, she says. There’s a growing number of workers relocating to the Charleston area for large employers such as Boeing, the port of Charleston and local military bases. At the same time, the sluggish housing market has left a larger-than-normal share of properties as undervalued. “Rather than let properties sit,” she says, owners are renting them out until they can secure a decent sale price.
Miler Properties is one of the larger property managers in the Charleston area, overseeing 700 residences. “The great thing is we are getting a lot more properties as well,” she says, noting many family tenants want to move in before school starts next month.
Yet with a goodly share of homes unsold, everybody is getting into the act. “We have a lot of competition,” she says. One side effect has been an extra-worked staff that is “really stressed out,” to the point that the business is advertising for an additional full-time property manager, Miler says.
The rental blitz is taking place in various degrees throughout greater Charleston. In what’s increasingly a landlord’s market, close to 3,000 properties have been rented in the past six months at an average $1,200 a month.
Tenants are seeing an average $100 increase this year on every $1,000 they pay in rent. Finding leasable properties is more difficult since they’re being snatched up so fast. And whereas apartments were the overwhelming choice of renters in the past, more than 20 percent of leases in the Charleston area and 44 percent downtown are for houses. Yet the apartment business is hardly struggling: Developers have poured capital into new apartment home complexes in Mount Pleasant and Goose Creek among others that have brought hundreds more units to the market.
Eric Wetherington, who directs the property management division at Carolina One Real Estate, is cognizant of the revved up rental business. Carolina One’s clientele of home, condo and townhome owners who want their properties rented out has increased 25 percent from last year to more than 1,025 properties under management. Rents are up 10 percent across the board, he says.
Certain sectors of the Charleston area are stronger than others in terms of leases.
“Summerville is a very popular market,” he says. Residences fetching as much as $1,200 to $1,500 a month “are renting very quickly.”
In Mount Pleasant, some single-family home rentals are proving so popular that tenants are bidding on them, Wetherington says.
The agency’s property management chief cites two factors in the recent surge in rental business.
“We are still seeing a lot of folks coming to us to help rent homes out,” he says. At the same time, “We are starting to see more investors,” people who buy homes and condos and rent them out as income producers. Wetherington says the investor pick-up is due in part to the Lowcountry’s attractive economy.
“Charleston is a great place to live. It’s a popular market for people to buy homes and use as investments,” he says.
A beneficiary of the pick-up in rental homes, townhomes, condos and apartments has not only been the owners, who are receiving a steady stream of income. Also doing well are property management firms.
• Day-to-day managers •
While some owners self-manage their leases, many others turn the task over to professionals. Even an apartment developer typically brings in another company to take care of the day-to-day routine of screening tenants, welcoming them to the community, making repairs, fixing leaks, maintaining amenities, mowing the lawn and hosting social functions.
One local business that’s been ahead of the curve on home, condo and townhome leases is James Island-based Charleston Home Rentals.
Matt Manaker got involved in property management in 2005 and started the company the next year. Brothers Matt Azar and Josh Azar joined the company in 2009 and became partners a year later.
“We all grew up together in Connecticut,” Manaker explains.
Today, the business counts 300 owner-clients and oversees 600 houses, condos and townhomes. It handles all types of properties, charging rents from $500 to $5,000 a month.
“I think we were one of the first (in Charleston), the niche service,” Manaker says.
Along with the partners, Charleston Home Rentals consists of maintenance and cleaning chiefs and leasing agents. The business is steady year-round —- “We do a good bit for Boeing, Bosch, Blackbaud (employees),” Josh Azar says —- but also spikes at certain times or places.
One blitz of activity was earlier this month. The College of Charleston “told 1,000 students they couldn’t get on-campus housing,” he says. That sent hundred of college kids, and more-so their parents, scrambling for places to lease downtown.
One place turned out to be 35 Society St., a three-story brick residence and smaller dwelling in back divided into 10 rental units from 900- to 2,000-square-feet. A number of the tenants are college students, he says.
Charleston Home Rentals started managing the property in January, Manaker says. Just this week, Rachel Cottingham and her two employees cleaned a unit to make it ready for a new tenant, while Wes Austin fixed a busted air conditioning unit.
Cottingham says she jumped into the cleaning trade after she lost her job at MUSC during a round of layoffs. She wanted a position with flexibility, not 9-5. “I’ve been at it seven years now,” she says.
Cottingham, who contracts with Charleston Home Rentals, and her crew are thorough. They scrub and dust everything from high-up ceiling fans to the tight spaces behind the washer and dryer.
She says there’s no pattern on messiness. “I’ve gone into really expensive homes and I’m in shock,” Cottingham says.
Austin, who runs Charleston Real Estate Repairs and contracts with the home rental company to head up maintenance duties, has had his share of late night emergency calls.
Take an incident a week ago at a local residence. “The unit above flooded out the unit below,” Austin says.
He was notified at 11 p.m. Saturday. “It wasn’t resolved until 2 a.m.,” Manaker says. The culprit? “It was a toilet spraying (nonstop).”
Especially of late, Manaker and company haven’t had much time where they are totally away from the job.
“I sleep with my cell phone,” he quipped.
• Leasing the future •
Like his colleagues, Manaker notes that lease rates on Charleston Home Rentals’ properties have risen 5 to 10 percent in the past year. He believes that many properties were undervalued before that.
Wetherington, meanwhile, forecasts that the rental business will continue to extend beyond apartments.
“I think for the foreseeable future (you’ll see) more and more rental homes,” he says. Banks are starting to loosen up stringent lending requirements and taking part in short sales, where the borrower gets a break on paying off their mortgage. That’s a good thing, he says. It should help clean out the distressed property backlog. But even if the deals close today, short sellers are forbidden from buying a new home for three years. Wetherington believes the ex-homeowners aren’t likely to choose to rent an apartment for a full 36 months.
“They’re looking for homes,” he says.