PropertyManagementMaven: July 2008

I recently wrote a blog and a client newsletter article about the leasing process.  Many property owner/clients think it is an EVENT * SHOW & LEASE.....in actuality, it is a PROCESS and the SHOWING, while important, is often not even in the process.....sometime residents rent sight-unseen so the web marketing portion of the process is VERY IMPORTANT.  Sometime residents look at one property and then rent another in the same area when they see what is available within their pricerange.

It is important to have all parts of the process covered so that good prospects don't get away or go elsewhere. 

Pricing the property correctly is the first step; getting good marketing materials/photograps and property features are crucial for web marketing;  showing availability is important and the application and lease forms are SUPER important....many owners think that good residents just walk in the door.

I am mentoring 2 friends in their foray into the property management business...I've gone on showing appointments with the newbie PM....he is SO busy pointing out features of the property that he forgets to listen to the prospects.  On the drive back to the office I asked him what he knew about these people he had just showed the unit to and he indicated he did not know anything since they had yet to submit an application....I told him where they were coming from, who their new employer is and that they have to sell their home where they live now....He knew none of this.

Paying attention through all steps of the process gets a win-win for the PM/property owner and resident.

My recent post indicating a departing tenant left a bath closet full of towels (not nice or matched) got me thinking about all of the STRANGE items that have been left....not just furniture or towels - pets, cars, plants, drugs.

At an eviction in Santa Rosa, CA 25+ years ago, when I went in with the police, the cop indicated there were 2 lines of coke on the TV that evicted tenant left.  I had no idea what it was so I asked him to get rid of it.....I did take the large, undamaged golf umbrella he left and still have it today.

A property manager in Suffolk, VA got his dog "Hathaway" from the back yard of a house where he had a move-out eviction.

What have departed/evicted tenants left you?

I'm half way done.....I've returned half of the security deposits for residents "departing" rental homes this summer...70% got ALL of their deposit back....I'm so pleased.

I have never intentionally make deposit returns a "profit center" for my company.  I do charge a 20% service charge (written into my lease) for any non-rent/late fee charges taken from security deposits. 

On the flip side, I do go overboard to provide departing residents with all the tools necessary to get their FULL deposit back.  Check out instructions are in the Resident Handbook they get BEFORE they sign the lease...so they know what is expected of them during their lease AND at move-out. 

I ONLY have fixed term leases * they end at NOON, on the 3rd Friday or May, June, July or August.

I provide a check out letter a month before the lease termination date with a 2-page cleaning check list (this is helpful with roommates who divide cleaning duties and if they use a professional cleaning serivce).  I also provide copies of the business cards of my preferred cleaning service and carpet cleaners.  For future move-outs, I'll provide a third card - my preferred yard service.

I encourage residents to schedule these services EARLY to make sure they are able to vacate and have the cleaning done BEFORE they return the keys to my office.

When they return their keys, I request that residents provide their forwarding address on a business size #10 envelope for the return of their deposit  * this way any delay is because of the sloppy handwriting * and most provide a stamp which is beneficial.  Since I have 45 days to account for their deposit, I wait until the 40th or 43rd day and do the returns at one time.....I am often tempted to provide the deposit earlier, and true to form, something is found that should be charged.....

The most common items that I deducted for were......missing/burnt out light bulbs;  yard not weeded or mowed;  items left at the property (one tenant left bath towels which I've appropriated for my new PUPPIES); dirty mini-blinds (some pro cleaning services clean the windows, pull up the blinds and NEVER CLEAN THE BLINDS!!)....

The CLEANER residents leave their rental properties, the less work needs to be done before new residents move in and that is a PLUS!!!

I've been following Jeff Opdyke's Love & Money articles in the WSJ....he and his wife were all set for him to take a position with WSJ in Hong Kong.  The chance of a lifetime for their family...only problem was getting their current home sold.  They tried and tried to get it sold and ran out of options and had to turn the job down....their subdivision did not allow them to rent out their home while they were gone and they could not afford to pay their mortgage and $4,800 rent in Hong Kong,

In last Sunday's article, he outlined what their new plan of attack will be.  They are still trying to sell their current home and when they do, they will downsize and purchase in a subdivision/PUD that DOES ALLOW property owners to rent out their homes.  They are looking for move flexibility and options with the purchase of their next home.

They are now considering the fact that they can not rent their current home as the SEVERE drawback it is in their particular situation.

This is happening more and more as owners must leave the area and their homes have not sold.

Locally, many HOAs have a limit on the number of rental/investor owned units and this restriction (along with the no real estate signs) will end up lessening the value of the entire subdivision/HOA. 

As has been seen in Las Vegas and areas of Florida,  as units do not sell, they go vacant and deteriorate.  Owners go into foreclosure and when they do, the HOA is stuck for any deliquent fees and costs as the bank is not responsible and rarely pay these fees.

As property managers, we should know our market area and watch out for these problem HOAs/PUDs and steer our investor clients away from purchasing there....NOW, individual homeowners need to pay attention to these restrictions as they restrict a VERY IMPORTANT option if they can not sell their property when they need to.