PropertyManagementMaven: June 2008

I am so pleased that out of 23 move-outs since Friday, June 20th, 5 of the properties were PERFECT * even to there being full toilet paper rolls in each bath....

My leases expire at noon on 3rd Friday of June, July or August....I allow 7 to 10 days for "make ready" down time between residents....5 of my properties were left in PERFECT condition.  When I did the check-out inspection absolutely NOTHING needed to be done prior to the new residents moving in.

Normally, I leave the property keys under the front door mat the day before the lease starts for new residents (I've already collected the FMR and SD with the lease signing).  At the same time, I install Citrus Magic odor absorbing cannisters over the refrigerator, in each bath, in the master closet and laundry room.  I also install a new full roll of toilet paper in each bath (Scotts Septic Safe) and place a new door mat at the front door and rotate any mat at the front door to the back/garage entry.

In most cases, the departing residents used the house cleaning and carpet cleaning services I recommended * they scheduled early and worked back on their move-out scheduling.  When these services know that the property is under my management, they take special care and often call me to let me know if there is a problem with their cleaning, they'll go back and fix it before the next residents arrive.

Next year, I will add the contact information my regular yard service as some yards needed attention with overgrown scrubs/bushes and weeds in the mulch I had put down in the spring.

Two properties had leaks from the second floor bathrooms - inattention to the jacuzzi jets and leaking hand held shower heads * so while the leaks were repaired when the residents reported the damage, I planned on repairing the first floor ceilings once the residents had departed.  Repainting a ceiling with a bright white in contrast to walls REALLY brightens up a room - I take new pictures after this painting is done.

To counter the potential for lost ceiling fan remotes, I am having newly installed ceiling fans re-wired to a reostat wall switch.  I am also installing high-end Pella storm doors where possible.  They really dress up the front of the property and help tenants with energy costs in summer and winter.  Storm doors also assist in protecting the door finish and cut down on repainting/restaining expense.

All-in-all - I am very pleased with the condition of these properties and my owners are VERY pleased at the increased rent I'll be able to get for them for the next 12 or 24 months!!!

Area Craigslist rental listings are slowly dwendling, homes are renting FAST and prescreening is even MORE important with gas at $4+/gallon.

I can tell more and more landlords are pre-screening caller/applicants.  Prospects when they call ALREADY know what questions to answer - when they need to move, what kind of pets they have, how long they have been in the area, how many in their family, where they are employed. 

Also, they are spending more time on my web site previewing homes by viewing interior photos and floor plans and charting distance from the property to their work and schools....once they use my website, they can really enjoy the benefits of the mapping capability and neighborhood features.

Although schools and neighborhoods are still VERY important in their selection process, driving distance and commute times are entering the pre-screening conversation more and more.  Questions about appliances, storage and services included in the rental rate are also being asked in the pre-screening contact. 

Prospects are traveling with laptops or using computers at their new job to narrow down their choice and are viewing several properties in a given area at the same time.

I've had prospects call me from in front of a property after viewing it from their laptop in their car as they had signed on to a neighbors unsecured wi-fi signal.

It's good to see prospects are doing their HOMEWORK * I guess that's why they call it HOME WORK!!

http://VaHomes4Rent.com * Finding your new rental home in Central Virginia just got easier!!

Jerry did not allow comments on his blog....SOOOOOOoooooo

IREM (Institute of Real Estate Management) does a study on property management salaries and publishes it to members and to the public.  This information is NOT for on-site/resident managers who are now called "property managers" by some....Long story - blame the National Apartment Association

LICENSED FEE-PROPERTY MANAGERS are different and I suspect the writer of the article Jerry quotes has mixed apples and oranges * bananas and mangos for J's benefit.

UNLICENSED property managers are usually salaried staff of large apt/real estate firms and those are the salaries that are usually collected by IREM in their survey statistics.  These #s would INFLATE the $$$.

LICENSED FEE-PROPERTY MANAGERS usually make a combination of base salary AND commissions based on leasing efforts for their "portfolio" of properties/clients.  Experience, education, designations and the ability to bring in new clients/properties are ALL a benefit in increasing fee-managers pay and enlarging the management portfolio of the Broker/Property Management firm.

One of the side-benefts of being a property manager is the ability to invest in real estate * find deals, find partners and hold real estate long term with your management expertise used as sweat equity.

*  A property manager in GA bought a home while she was pregnant with her first son, held it 18 years, then SOLD it and paid for his college education.

*  A property manager in VA buys homes in partnership with others * his "down payment" * is his mgmt expertise and he manages the property w/o a mgmt fee.  They split the deductions and split the profits when sold.

While I think the article Jerry highlights is basically flawed, I do think that property managers can make a VERY GOOD LIVING using their expertise in mgmt and investments AND the IRS tax code to shelter income and maximize deductions.

While Central Virginia Realtors are bemoaning no buyers for their lisings, the local rental market for SFRs * single family homes * is BRISK.

Schools are out for the summer and altough gas prices are now at $4/gal locally, people are moving into the area in DROVES!!

Additionally, many residents who are fortunate enough to actually sell their local homes are electing to rent for a year on the off chance the local sales market continues to remain fairly stagnant and they can trade up or down and create more home equity in their new purchase.

The segwaying of new hires for NGIC will start this summer as current staff are rotated out and new staff is brought in for replacement slots and new positions and brought down from the DC area.

Some areas such as Crozet/Old Trail remain slow to attract new rental residents, while areas like Forest Lakes/Hollymead as well as Redfields continue to draw new rental residents and medium price homes in Lake Monticello are selling and larger area rental homes are renting.

Remote properties down Rt.20 South and out 250 West are the least desirable because of distance to town/gas costs, and lack of internet access.  Many of these areas are not serviced by our local cable company and Embarq has not made high-speed available to land line phone users.  The price of installing a HughesNet dish is costly for a rental home and properties where owners have not already installed this equipment are at a disadvantage.

Larger rural homes with high-speed/DSL access are at a PREMIUM and rent quickly as many residents desire to work from home when possible and not spend time or money on commuting to work/town.

All in all, rental property owners who market properly, price their rent within the market and do not put too many restrictions on tenant applicants will enjoy the benefits of this BRISK RENTAL MARKET.

There are many reasons property managers don't post their listings on their local MLS.

1)  Many MLS systems don't even HAVE a rental section of their MLS.  I did not know this until I took a 2-day class from my website provider in AZ last Sept.  PMs in the class indicated that although they paid Realtor dues and MLS costs, their MLS system did not accommodate rental listings and there was no "public" website for Realtor rental listings.  This is very short sighted * especially in today's real estate market.

2)  Many Property Managers don't post their listings because they don't want to deal with Realtors and don't provide a referral fee to Realtors.  I have always offered a referral fee for residents and property referrals * I just want to be IN THE LOOP EARLIER rather than later.  It only takes a few times being chewed out by a Realtor who did not read your rental listing "remarks" or follow showing instructions to realize that Realtors don't read, think that everyone is on "their time" and that they think of your current tenants as second-class citizens.

Since I provide photos and floor plans on my website, I expect that the Realtor's clients have previewed the property on MY WEBSITE, know the schools, lease terms and rental amount.  They should know if the property accepts pets and if there are specific amenities - appliances, etc. that are of interest.  Many Realtors don't think that these items are of interest - the tenant will just LOVE the house.

3) Property Managers need to PRIORITIZE their marketing time and posting properties to a cumbersome MLS system is low on their priority list. 

This is the reason I rarely post properties on our MLS BEFORE they are vacant.  Once they are vacant, I'll put the listing in our MLS and put a lockbox on it for entry.  I keep a folder on the property kitchen counter with my application forms, several copies of the property floor plans and current/monthly property listing sheets showing other properties in the area.

It's happening already in our area. It usually takes until mid to late July for property owners with unsold homes to realize they need to RENT their home when they move....this is known as the "shadow rental market".

For the last 2 years, those homeowners would call me directly - they by-passed their sales agent as an option for a temporary property manager/leasing agent. This year is different. Realtors are calling me FIRST and THEN referring their clients to me. Maybe its the $250 I pay for property referrals * however, I rather think it is the knowledge that the home will go back on the market within the next 2 years when our area real estate market rebounds and they want to maintain the relationship with their client.

Since my management portfolio is mostly high-end single family homes, many prospective renters who call me are getting smart and are asking if the rental home I am offering has recently been on the market for sale...they don't want trigger happy property owners putting THEIR home on the sales market next spring and tasking them with showings and staging their home while paying rent. For this reason, I don't take properties listed/offered for sale and lease simultaneously.

When scheduling a viewing appointment, if there is a FOR SALE sign in the yard, my experience is that rental prospects will not show for the appointment which wastes my time and energy....Additionally, my website requires photos and floor plans for listing continuity which takes time and energy to prepare and upload. Most rental prospects for area rental homes are asking for longer term leases - 2, sometimes 3 years. They are coming to UVa or other large area employers and don't plan to buy and don't want to move several times over the next 2 or 3 years.

This is another reason they are selecting homes rather than apartments or condos where they have no knowledge of their neighbors or management capabilities.

While a few areas of the country are experiencing lower rental rates - Las Vegas, California, areas of Texas and Florida....most areas of the country are actually experiencing increased rental rates as DEMAND for good rental homes has increased as people are electing to not purchase homes and elect the flexibility of leasing.

One of the main reasons I have not suggested purchasing condos as investments has been the tendancy to have self-managed board of directors cost ALL owners money.

A few Sundays ago, I was at my office when I received a phone call on one of my rental signs.  The caller identified himself as member of the new board of directors and that my FOR LEASE sign would have to be removed.  For the last 2 years, the new HOA had been self-managed by the developer who obviously had had sufficient sales to trigger the formation of the HOA under the original governing documents.  I asked the board member if he realized the long term effect of not allowing For Lease or For Sale signs and he indicated he thought it would approve the appearance of the property.  I suggested that from 40 years of experience, the opposite would be the case.  I then went to the property and removed my sign.

Rather than getting into a  philosophical discussion, I decided to post a question on ActiveRain - the 80,000 member real estate website.....almost all replies came back that my argument was true.

Most real estate signs are professionally made and well-maintained.  Many agents actually have covers for their signs for storage in their cars, basements or offices.  My signs are stored in my basement and maintained and discarded when they deteriorate.

Most real estate signs actually benefit the unit owner whose unit is For Lease or For Sale in addition to the HOA....In these hard real estate times, marketing is critical and by posting a real estate sign, the agent/owner is notifying adjacent owners that a unit is for sale is a good way to market units in new buildings.  Additionally, unit purchase prospects driving through the development can see other units on the market that may better suit their needs.

Unit owners who can not post a real estate sign in front of their unit often post a hand-made sign in the window of their unit.....now that can be TACKY!!

Vacant units that remain on the market in the current real estate environment often remain on the market longer, causing financial hardship on the owners.  If the unit owner goes into foreclosure, any back/deliquent HOA fees are erased and the ENTIRE association membership/other unit owners share in the increased cost of these deliquencies. 

The HOA should ENCOURAGE any and all efforts in assisting in the financial health of all unit owners and that should include getting rid of any onerous rules and regulations including no real estate signs in front of units.

With my summer move-in/move-outs a week or so away, I'm alerting the vendors and service personnel on my management team about my upcoming needs for their services

1)  I have a Class B LICENSED contractor that I use for painting, repairs, blinds - almost everything that does not involve pulling an electric or gas line permit * then he has brothers/cousins/in-law who can do the work.

2)  I have an EXCELLENT carpet cleaning business - family owned, come when I call and I provide their card with my move-out instruction letter.

3)  I have a GOOD, professional cleaning firm * local although they are a national franchise.  Since I charge a 20% service charge of any charges taken from departing tenants' deposits, I encourage them to have carpets and rental home cleaned professionally so that I don't have to an charge them the actual cost PLUS my 20%.

4) I have a GREAT HVAC firm * owners moved from a house this weekend and new residents are moving in next week.  Owners noticed no cooling in upstairs unit before departure and let me know via e-mail.  They were confused as units were just serviced.  When I called THEIR service firm, they could not schedule an appt before new tenants move in so I took a key to my HVAC firm who got to the home within 2 hours, found the condensor was shot and e-mail repair options to owner before the end of the day.  AC will be up and running for new resident move-in....I'm the HERO.

5)  I have a WONDERFUL lawn care firm - I can call or e-mail and get a property mowed and SPIFFED up within a few days....they will mulch, mow and remove tree/storm debris.

I am always amazed that when people want to start their own PM firms, they don't think of the property service providers when accummulating items on their To DO list....I think they are the MOST IMPORTANT part of the process and a THANK YOU every so often is also important.

Who is on your team?

It took me a long time to realize how much PITA (Pain In The A-S) tenants and CLIENTS cost me in time and energy to deal. 

I've started 2 property management firms from scratch....while starting the FIRST one in NoCA 20+ years ago, I took any and all would-be clients * I got in the car, drove to their properties, talked about my services for an hour, crossed my fingers and hoped they would select me as their property manager....over the years, I've refined my procedures for acquiring new properties.

I took me a LONG TIME to realize that some properties and some property owners do not need my services and I do not need them as my clients.

When getting a call from prospective new clients, I ask a few questions about their property BEFORE I provide my fees and services.  I have established a geographic area for properties to manage of approximately 20 minutes from my office.....I do not manage properties that house undergraduate students at UVa; I don't manage condo or townhouse units that have a self-managed HOA (NO professional managemen agent) and I try NOT to have "specialty" or unique properties * that would be Historic which we have a LOT of in VA * or unique design.

When getting  a phone call, I ask the location of their property and if they stall and won't give the address, I ask when the property will be available for lease?  I then ask what their plans are for the property?  This ALWAYS stumps callers....I want to know if the property is currently for sale and they want a baby-sitter until the market turns OR if they are leaving the area and want to KEEP their current home as an INVESTMENT....somewhere in the conversation, I want them to commit that the property will be an investment. 

If they provide their name or a general location of their property, I can research their property ownership online on the tax assessor's records or our local MLS.  With a property address, I can usually find an exterior photo on either of these sites.

Knowing the area and "curb appeal" of the property should be considered when taking on a new property as well as the property owner.