Rising foreclosures hurts some landlords, creates opportunities for others

BARSTOW — Increased foreclosures and a declining housing market has caused some Barstow landlords to reduce their rents and leave some properties vacant, according to local experts.

During the past several-year period of rising housing prices, out-of-town investors flocked to Barstow to buy its relatively cheaper properties as investments, said Carol Randall, property manager with Alliance Management Group. Additional options for renters combined with a stagnant economy is making it difficult for landlords to raise rents and find tenants in some cases.

“I’m seeing the rental market challenged as much as the sales market is challenged. It’s been a real fickle market,” she said. “The rental market has been hurt as much as the housing market in the Barstow area.”

She said that many of the property owners she represents  are seeing less demand, something she attributes to more soldiers deployed and military contractors hiring fewer workers at the local bases.

She said that although demand remains steady for some smaller apartments, especially from renters who receive government subsidy, it’s becoming tougher to rent out three- and four-bedroom houses. Some of the houses, which once rented for $1,200 and $1,400 per month, are now going for $1,100, she said. In other cases, it takes several months to rent out the properties.

As some investors are finding they can’t make the payments on their Barstow houses and can’t raise rents to cover their costs they foreclosure on their properties. The tenants who once lived in the foreclosed houses are immediately evicted and have to find other homes, which is benefiting some landlords.

Laura Brown, who runs property management firm All Services Realty, sad she’ s seen an increase in potential tenants from foreclosed upon properties.

“It’s just been crazy at the office,” she said. “Properties that would normally stay on the market for four to eight weeks are being rented much sooner.”

Still, she said that if rents all over town are stagnant or declining landlords must adjust their prices.

“You have to match the market. You just have to,” she said.

Edward Duitsman, who owns and manages 50 units with zero vacancies, said that he hasn’t been affected by housing decline. He said he isn’t sure why he’s been able to avoid the problems faced by other landlords, but thinks that his approach to running his rental business gives him an advantage. Unlike some investors who bought property hoping the price would appreciate, Duitsman said that he bought units only after he was sure that the rent could cover expenses.

“I buy it for today; nobody knows what will happen tomorrow,” he said.

He said that the rising number of foreclosures has allowed him and other landlords the opportunity to by distressed properties cheaply, renovate them and generate additional income.

The relatively low rents in Barstow compared to other regions has also made it easier for some residents to make ends meet, particularly those on lower incomes.

Barstow resident April Collum who recently moved into a rented house on Flora Street for $700 a month said that if rents go up families can suffer.

“I think it hurts renters, especially if you just earn minimum wage,” she said.

Contact the writer:
(760) 256-4126 or jason_smith@link.freedom.com