PropertyManagementMaven: April 2009

http://www.foxnews.com/politics/2009/04/08/virginia-house-rejects-m-stimulus-cash/

Kudos to the Virginia legislature for turning down $125M in federal stimulus cash....the Fed requiring Virginia to re-write the curren unemployment rules to follow "failed" states like Michigan and Ohio clearly justify this vote and although Gov Kaine * incoming DNC chair * will not like the stigma, it is what is best for the state, employment AND our economy!

Listening to Rob Bell, our local GOP representative who actually holds Thomas Jefferson's old House of Delegates seat, this morning talk about the consequences of taking these monies was chilling.

Virginia has a VERY LOW unemployment rate; a VERY HIGH quality of life and a VERY HIGH education rate - one of the top in the country.  Other states who have also turned down this federal government largess are less fortunate in these areas; however, they turned it down anyway because of the heavy legacy costs after the federal funding expires.....costs that would be borne by property owners and tax payers in those states.

I first realized I am in a dangerous business when the on-site managers of an apt complex next to one I managed in Hawaii were robbed, locked in a closet and then shot through the door....3 people died on the first of the month because their resident/tenant population dealt with cash and the thieves knew this.

Later, while I was in Northern CA, I learned about a real estate agent who went to collect the rent for a client; she was hit on the head and died a few months later having never regained consciousness.

When I first opened my own property management office, the safety of my staff, client funds and files were upper most in my mind.....except for a rock through my office window 20 years ago, I have never had an issue.

Now, I do not take CASH rent payments, remote deposit rent checks, have my office on a second floor with 3 locked doors AFTER office hours.  I receive rents at a post office box and except for key returns when residents leave properties, residents rarely come to my office.

I know who I am meeting when I go to show a rental property as I have their completed applications and have noted their cel phone or e-mail address in my LOG Book of property viewings.  I do not show resident occupied properties on the weekend out of courtesy to my residents and I do not want to put them or their family at risk by not knowing who will be coming into their home.

I have a remote access lock vehicle and have a cel phone with me during viewings and someone usually knows where I am and when I should be home.

Lastly, I trust my instincts when it comes to meeting people and sizing them up for their rental needs.  I have no problem with telling someone I am unavailable to show properties late in the afternoon - when it will get dark, or in the evening when it IS dark; nor do I have a problem with telling them they need to come to my office FIRST before we meet at a remote property. 

I'm more than happy to accommodate rental property showings; however, I am not willing to put myself in harms way needlessly.

A few years ago, I had to find a new HVAC firm....my THEN firm started concentrating on new-construction installations and my spring/fall property maintenance g0tt behind.  I made a list of 3 area firms and found an EXCELLENT firm fromt the 3 I contacted.

Now, my long-time maintenance man has become non-responsive which is unusual.  I have been suffering with having to provide hand written-work orders for him and dealing with his having no computer, internet access or e-mail and spotty cel phone service.  His response time has become longer and longer to where I have started leaving him voice mail messages giving him a deadline to call me back or I will call someone else.

With the slow down in new construction NATIONWIDE, there are loads of trained, talented construction/repair people looking for work.

Luckily, a fellow property manager's brother who was a custom home builder in a former life has returned to the area to care for their elderly parents.  Working for us, he will have ready-made clients, loads of direction and assistance getting up and running on his computer.  I e-mailed him my first electronicl maintenance request last week and got a completed work order in 3 days.  When I e-mail a work order/tenant contact information to my plumber, I get a work order by return e-mail within 48 hours.  My appliance repair firm is a little less "connected as I still get hard-copy invoices in the mail.

So far, his prices are GREAT; he is considerate of my residents and works around their schedule; his hand written bills are easy to read AND he is working on being able to e-mail invoices.   He is responsive to our suggestions as to what WE need to manage our clients' properties and he's ready to be a part of our team.....HEY! T*E*A*M!!!

.....But property management services cost money!?!....and my response is that YES; however, the VALUE added to the property/property owner's bottom line with the use of a professional property manager is MUCH GREATER!!!

How does this happen, you ask?  Professional property managers have resources, skills and knowledge that few small time landlords can not conceive they will need:

1 * We can arrange for repairs and maintenance at a reduced costs.  Even if the property management firm has their own in-house maintenance, these costs are usually less expensive. 

Landlords who self-manage often resort to the Yellow Pages/Google when they need repair work done or they task their tenant with arranging for repairs.  Historically, the largest YP ad is placed by the firm with the highest cost of services.  By using local, quality service people/vendors, property managers get better costs AND better service because these vendors want MORE work from us.

2 * Historically, professional property managers can rent properties for HIGHER rents.

In our market of Central Virginia, this is certainly true.  Landlords do not know the market or know how to value their specific property in relation to other rental homes of comparable size.  While "rent costing" is easier with condos or multi-unit apartments, it is much harder when attempting to value the rent for a rental SFR.

Property Managers have this information at their fingertips * LITERALLY....either via MLS or their own rental properties; however, when qualifying rental prospects, lowering the rent is one of the FIRST concessions an individual landlord may make and that is a mistake.

3 * We know and can arrange for preventative maintenance that will actually SAVE property owners over the long run.

GOOD property managers have on-going preventative maintenance routines for their rental property inventory * mulching in the spring for curb appeal, spring/fall HVAC maintenance, gutter cleaning in the fall are ALL costly; however, they add to the value of the property and life expectancy of the mechanical systems which will SAVE money over the long term.

4 * We know the rules and have the forms and documentation appropriate to the transaction of the rental property.

While a landlord may download a generic lease form from the internet or get a form from a Realtor; these forms are not specific to the individual property and rarely contain all of the information needed to PROTECT the property owner/landlord.  Move-in Inspection Reports, Move-out Security Deposit Disposition forms in addition to the CORRECT resident application are all necessary to the process.

If a local landlord uses our new VAR lease form, they are obligated to operate their rental property under the VRLTA which is costly as it requires interest on the tenants' deposit and imposes onerous rules and regulations for repair options.  Whereas, I have a common law lease which is more appropriate for the renting of a SFR and it does not have the obligations imposed by the VRLTA AND it offers MORE protection to the landlord.

5 * Many rental residents, especially in this economy, think they are in control.  Many landlords agree as the tenants are in possession of their property.

In reality, the lease and associated documents control the situation and many landlords, hearing or reading the tenant horror stories or having rented Pacific Heights often think they have to agree to tenant demands.

The professional property managers knows how to create a win-win for both parties so that the tenant relationship is kept intact more often than an attorney is involved AND the property owner actually SAVES money by respecting the tenants' rights and making them abide by the terms of their lease. 

In the process of doing our BUSINESS, let's not forget we are adding VALUE to our clients' BUSINESS

Each spring - I wonder when someone is going to cry......sometime it is in late April when they realize that they should have rented in March, and sometime it is in early June when they realize there are no local rental homes even NEAR their rent range that they can fit their family/belongings in the school system they want.

This year, I had a prospect cry in late March....just after "match day" for UVa Med School (all med schools).  She had been looking at my available properties since late February and thought she had time to make her selection because the property was still on my website.  Unfortunately, because I have started using my HomeRentals listings export feature to transfer my property listing HTML to Craigslist with water marks on the photos, I no longer have the option of placing LEASE PENDING on listings on my website.  I do stop placing the listing on Craigslist; however,  I don't remove a listing from my website until I have a signed lease and have deposited their check for their move-in monies.

Several years ago, at the height of the sales market, many SFR landlords with older homes around UVA and the City of Charlottesville elected to sell their property to first time home owners.  This removed a good number of rental homes close to the Med School and UVA graduate schools from our local rental home pool. 

Additionally, we are building a new Cancer center and enlarging a local private hospital on a several acre campus near my office.  The NGIC * National Ground Intelligence Command * is expanding is current building in northern Albemarle county and will be bringing in 800+ families over the next few years.  The sub-contractors (security consultants who are usually retired military) started renting in the area last summer and these firms continue to hire even in a "down" economy.

Although many prospects have heard about the tough local rental inventory, they are totally unprepared to pay rents in excess of their current home mortgage payment for a home they do not own in order to get the size and location they desire.  They believe the national media doom and gloom and think they should be getting DEALS on rents when they are lucky to find a townhouse in their rental price range.

I need a sign.....THERE'S NO CRYING IN LEASING RENTAL HOMES!!!