PropertyManagementMaven: Wallace S. Gibson CPM * GRI (Gibson Management Group, Ltd.)

In July, I received an e-mail from a property owner whose daughter had just graduated from UVa Med school and who was leaving the area and he wanted to keep the townhouse as an investment.  I arranged to meet with the daughter, view the unit and I gave a realistic rent estimate with the caveat that the rent needed to be reduced sooner rather than later because of the late time of the year.....After sending him my management proposal and management agreement, I got his e-mail that he had decided on another property manager.  When I realized who he went with, I knew his only criteria was their lower management fee.

The townhouse has now been vacant for over a month and having started out at a very AGGRESSIVE rental rate, it is now down to the rent I quoted in July.  Their property manager does not have a national website presence and has a canned "sales" website that she features her rental property on.  She has posted a half-hearted listing on our area Craigslist every week or so and does not have the CL presence that most area professional PMs have (I post daily on a rotation between my HERO listing HTML and postlet).

This is a REALLY good example of penny wise and pound foolish.....feel free to quote my exprience when you receive those dialing-for-dollars phone calls from prospects. If they are ONLY making their selection on the mgmt fee quoted, they are leaving DOLLARS on the table with lost rent, utility/upkeep carrying costs.

This late in the season, many prospects who move locally have sold their homes and want to rent while they build a new home or prior to leaving the area in the next year or so...many prospects currently work in the area so seeing property on the weekend is the only alternative to viewing property late in the afternoon when it get's DARK earlier and actually seeing the property is problematic.

Also, if "she" has seen the house during the week - at lunch or during a break - he will need to see before the final decision.  People moving within the community have many considerations including schools, distance to work, church and shopping.

With some prior warning, I don't mind showing properties on the weekends or doing client property presentations....I just don't want to be stuck in traffic for a UVa football game and I want to makesure I and the prospects have parking available while we view the property.

At my age, there are several moments in my life where I remember EXACTLY where I was when an event occurred!!!!

....when JFK was shot

....when SPUTNIK went up

....walk on the MOON

....assault on WACO

....9 * 11 * 2001

On that day, I was in my office meeting with a would-be client in my conference room and my office manager came in and said her mother had called and said to turn on the news.  Luckily our conference room had a TV and we watched NBC and saw the second tower go down.  My would be client had worked at the Pentagon, a suite mate's sister worked in Tower One (luckily, she was late to work that day) and several of the office tenants had friends or relatives in the Pentagon.

For those who may live an in area not effected * NY * NJ * PA * VA * we actually have this logo on a license plate and every time I see it, I am effected.....

I received a phone call yesterday from a local man who is assisting his son with purchasing an investment property in the area.  He was referred to me by a long-standing client who went to college with his son....after asking me many questions on our current rental market, he advised me that his son was working with a local Realtor who had suggested a property at XXXXX address.  DUDAH!!!! It might be a good BUY; however, it is NOT a good property to expect a positive cash flow with the $$$DOWN son was willing to pay....too far out, not the more desirable school system and very little socialization for incoming new residents......this is MORE important than many realize.....I suggested some alternative properties of similar price - one a BRAND NEW PROJECT where son could purchase for Spring 2010 delivery/possession and get to choose dual sinks in master bath, upgrade carpet, etc.....all desirable and less than 5 min from one of the area's BIGGEST employers.....a "good deal" going in (short sale) is not necessarily a good deal for the investor wanting to buy and hold for the long term.

Although several fellow realtors suggest we should not be political, I drove my RX with local GOP bumper stickers (Race Fans for McCain, Snow KNOWS, Bob McDonnell, Cuccinelli (for AG)) on my back window to the beautiful Auburn Hill farm in Milton (part of the original land grant of Monticello) to meet Fred Barnes (author of Rebel in Chief and commentator on Fox TV) pre-tailgate before the first UVa (v W&M) football game.....the turn out was outstanding with local GOP politicos Duane Snow, Ken Boyd, Rodney Thomas and Rob Bell. Laurence Verga who has filed paperwork to run for the GOP spot for the 5th District Congressional race in 2010 was also there * feature the Twelve Oaks bbq from Gone with the Wind with horses on the hillside, hay bales for seating under a BIG OAK TREE overlooking a beautiful pond. 

Fred's remarks showcased his quick wit and longstanding knowledge of "doings inside the Beltway"....Fred graduated from UVa in 1965 and has daughters who attended UVa (he says his son could not get in) and that he feels that the tide is turning on the Dems with Bob McDonald likely to win the VA governorship and the GOP NJ challenger also the likely victor. 

He also extolded that the conservatives have many new faces in the party on state and local levels including VA's own Eric Cantor.

Great UPBEAT day!!!....and thank you to Rob Bell's team for bringing this great speaker to our area!!

Yes - landlord friendly states.....just like BUSINESS FRIENDLY states, this feature should be in the TOP 5 FACTORS when deciding WHERE to invest $$$ for rental property ownership....how well the purchase $$$ work will be immaterial if all the investor's profits go down the drain with a 3 month eviction for non-payment of rent and if there are onerous rules or regulations for inspections and improvements.

Texas is a GOOD landlord state * Virginia is the BEST.......we have 2 landlord tenant codes and VERY ACTIVE apartment and realtor association involvement in our state legislative process.  We follow federal fair housing guidelines with the addition of ELDERLINESS (over 55)

We have an indemnification statute that if landlords abide by the lead based paint disclosure rules, they are indemnified from further action or responsibility.  Our burden in the case of mold at the rental property is also limited and insurance companies have assumed some of the burden also.

Our eviction process for non-payment of can be started and completed in less than a month and the removal of unwanted guests or invitees is just a visit to the magistrate's office.

....and BEST of ALL....after the state legislature changes the rules effecting our business, our real estate trade organizations and apartment associations have classes on these updates!!!  The Virginia Association of Realtors actually has the author of many of these laws * Chip Dicks * provide all-day courses with CE credit BEFORE the laws take effect.  Likewise, the Virginia Apartment Management Association has similar update courses throughout the state....VAR will have a 2 day property management meeting in my BACK YARD in mid-October when for the second year, the VAR Property Management Coalition has its meeting at our area's Boar's Head Inn......

NOW, there is no excuse for not knowing the RULES..... http://www.varealtor.com/MemberServices/AlliancesSIGs/PropertyManagement/CoalitionConference/tabid/708/Default.aspx

In the last few weeks, I've been called "silly" and "unprofessional".....because I won't talk to my residents' real estate agents.

I calmly indicate that I know my residents are looking for a home and their lease and Resident Handbook outline their options for being relieved for the remainder of their lease terms.....Goodbye!

Most states landlord-tenant statutes contain a CONFIDENTIALITY statute on safeguarding applicant/tenant information.  Just as credit reporting services require a site inspection to determine if our files are secure, state legislatures have enacted laws that provide guidelines and limiting statutes on WHO we can provide our residents' information to.

If my residents no longer have a copy of their lease, I'll provide it for a $25 "forms fee". If the residents call or e-mail me asking for their options, I'll send them a letter outlining their options as referended in my Resident Handbook and enclosing copies of my application forms.......however, discussing these options with their real estate agent is against my policy.  

My residents have a relationship with their agent and we are most probably Realtor agents in the same local association; however, I have no agreement to violate state law and my confidentiality promise in my Resident Handbook just because their Realtor wants to "help" them.  This is the wording in my Resident Handbook.

CONFIDENTIALITY: There are limited instances whereby we can disclose or discuss the terms of our relationship and the status of your lease agreement without your written consent.  Any request for information on your lease status should be requested in writing by all parties who signed the original lease agreement.

There are several non-real estate  "business" organizations that real estate professionals feel they must join in order to do business.....the Chamber of Commerce is one and the Better Business Bureau is another.

While I have not been a member of the Chamber of Commerce for over 20 years, I have never felt the need to join the Better Business Bureau.  In fact, I rarely see the BBB logo displayed at the businesses I patronize.

As a business practice, I do not respond to BBB complaints. It is WAY TOO EASY for disgruntled residents to complete a complaint form online with their side of the story.  When I receive these complaints, I file them and do not respond.  Sometmes the BBB follows up with a second request for my response which I again ignore.

A wise woman real estate broker explained her similar policy several years ago....as real estate professionals, we have numerous regulatory and trade organizations in our business....our state licensing board, our local Realtor association and our various trade associations such as IREM * all of whom have the knowledge and expertise to handle a complaint regarding a landlord-tenant issue and our licensing status.  The BBB has no such expertise and no regulatory authority.....by filing their complaint, the complaintant gets to VENT and RANT....good for them. 

By my responding to a BBB complaint, I would provide information to the complaintant which can be used in court AND rarely, if EVER, have I ever found that the BBB can resolve an issue or complaint to the benefit of a real estate professional.  

The first time I did respond to a complaint, I got a follow up phone call from the local BBB requesting my money in order to join their organization and receive a GOOD RECOMMENDATION from them for future inquiries.....it sounded like extortion to me so I declined to join.  Under further investigation, I checked to see what local real estate professionals were members * few and mostly newer ones * and what local retail businesses valued their membership. Again, very few.

Like advertising in the phone book yellow pages, I think that this is an unnecessary expense for most real estate professionals and monitoring our online reputations with Google and Yahoo alerts are a much better use of our time.

For the second time in 2 weeks, I have had prospects who want to view my rental homes show up LATE for their appointment because of their GPS.

Now I have BEAUTIFUL directions on my web site listings - directions from nearest large street/road with R/L turns AND there is a photo of the front of the house. Usually the wife has printed out my listings and the direction section is on the first page of the 2 pages.....meanwhile, the husband insists on using their GPS - either brought with them OR rented with their rental car.....1 prospect couple was sent down a dirt road to a new subdivision that does not have a name on it and the second couple was directed the WRONG way on a ONE WAY street * shorter, yes * but not exactly SAFE!!!

I've now added a suggestion to my confirming e-mail or phone call - print and use MY directions....play with your GPS, get to the property by my directions!!!

In some areas where the economy has not "stimulated", many tenants who rented as "singles" are approaching their landlord about taking in a roommate.....landlords who say NO face lost rent and a vacancy depending on their tenant's financial situation so having a policy to accommodate their tenants is a MUST.

Provide tenants with applications and require that their roommate complete it and return it to you.  Charge any application or credit check fee as appropriate.  Screen the applicant and if they pass, offer your tenant the option of approving them as an AUTHORIZED OCCUPANT under the current lease OR offer to re-write the lease and place them on record as a tenant who is jointly and severally responsible for the remainder of the lease term * I charge a fee for this lease re-write.

Option #1 allows your tenant to remain in control of the rented dwelling in case their new roommate does not work out.

Option #2 allows the landlord or property manager to now have 2 tenants on the hook for the rent AND responsibilities under the lease terms.

The security deposit at the inception of the lease remains the possession of the original tenant and the roommate should pay any deposit directly to the current tenant and they handle any disposition of the deposits between themselves.  The landlord/property manager is not involved until the end of the lease or the unit is entirely vacant so that an inspection can be conducted.