PropertyManagementMaven: February 2010

                                                                                                                     
1.    “It costs too much money.”

Actually, using a property manager will increase NET rental income in most cases.  Rental property owners managing their own property tend to “discount” their rent in order to attract residents.  Experience, however, indicates that property managers charge ‘Market Rent” and therefore attract and qualify better residents.  Any fees or costs involved with the use of a property manager are more than covered by the increase in rental income and decreased expenses.


2.    “I’ll loose control of my property.”
     
Most property managers will be able to anticipate the potential for a lot of rental property  problems....tenants want to buy a house; can’t pay their rent on time; need “special handling”.  Experienced property managers have handled many tenant issues before and can work with owners and tenants to resolve difficulties.

3.     “I want to do property repairs or designate repair people familiar with the property.”

Property managers are often willing to use owner designated or repair personnel familiar with the rental property.  In many instances, when repair personnel utilized by the owner are unavailable, the property manager can utilize their own vendors and repair people and ultimately save the owner money.  In reality, service personnel would much rather work with a professional property manager familiar with their services rather than deal with individual owners. 

4.     “I think I can get better tenants.” 

Visit a few tenant “gripe” sites on the web and you will read what tenants really think about non-professional property managers.  Rental property owners often manage by the “wish/hope” management  theory - they wish their tenant would pay their rent and hope that they don’t destroy the property.  A professional property manager has the tools at hand to screen and qualify good tenants willing to pay market rent for the rental home.

Also, a professional manager has the ability to negotiate with the tenant and the owner to create a win-win with no “ego” involved.  Rental property owners quickly tire of dealing with abusive or complaining tenants and become non-responsive; OR, they do way too much for their tenant’s benefit and their investment becomes a “cash drain” and unprofitable.  A professional property manager knows what is required under state and federal laws as well as the controlling written lease agreement.  If the tenant’s request is unreasonable, an alternative might be suggested.  If a tenant’s request is reasonable and the owner’s property would ultimately benefit, a property manager can point out the benefit of the request.


5.     “I would like to “try” management myself, first.”

Unlike many investments, the ownership of rental property is governed by many laws and regulations.  The federal government not only has tax regulations, it also has fair housing, lead based paint and other onerous regulations that apply to rental property.  The state may also impose more fair housing regulations as well as landlord-tenant laws and regulations to govern the relationship.  Learning all these rules and  applying them properly is very time consuming.  Keeping current with these various rules and regulations is onerous and not knowing items and procedures are required can be costly in the long run.

I am SO glad Bob McDonnell is our GOV!!!

I read a recent blog from a long-time AR member who says he is no longer allowing re-blogs of his posts and that the is not re-blogging.

I think this is very sad....and here's why...

Often, posts I re-blog are only posted in an AR channel * nothing to AR groups * this is unfortunate if the information is meaningful and relevant to our business. 

Posts are often posted to only 5 groups * there are 6,000+ groups out there * the information is not getting to many AR members who might find the post AND comments as useful.

Lastly, much of the information on the ins/outs of AR are very valuable to our experience and use of the site.  Re-bloging this information is really a duty in many respects so that everyones' experience can be enhanced and made more valuable.

As for me....re-blog my posts!!!  I'll consider it a compliment!!!  

Re-Blogging: Allow others to re-blog this post

1.    A clear headline – Each site allows for a headline. It is best to not use the address in the headline but rather phrases like Townhome For Rent in Denver – Granite Countertops or Three Bedroom Home For Rent in Atlanta.

2.    A detailed Description – 1 bd 2 bth, fireplace is not a very good description.The description should be rich in detail but not too long. What are some of the words or adjectives that help decrease vacancy rates for rental properties? Here's the breakdown: - Granite -State-of-the-art -Stainless Steel –Appliances -vaulted Ceilings –Maple – Gourmet – Corian - Wood Floors.

3.    Add Photos - Statistics show that adding at least one photo dramatically increases the amount of qualified leads that are sent to you. Things to keep in mind when taking photos of the property: Make sure there is enough light. Remove any knick knacks from the table or refrigerator. People do not like the sight of clutter. Top areas to take photos of: Front of home -- Kitchen -- Bath -- Living Room -- Back Yard

4.    Pricing - Depending on the product or in our case, the home you are trying to rent. It is best to put $995/Month instead of $1,000/Month. View more on Psychology of Pricing here

5.    Your Company Name and Contact – How can potential tenants get a hold of you? Be sure to add your company name and contact information to each ad.

6.    Benefits, benefits, benefits – Put yourself in the shoes of the tenant searching for a property. Why should they contact you and a particular property. What are the benefits of the property?

7.    Visibility – Tenants interested in finding rental properties search across many rental sites. If you use postlets (www.postlets.com) to post to your area Craigslist, your listing is automatically posted to their partner sites.

8.    Tracking - This is often of interest to clients and is used to justify reducing the rent.  Use it effectively if your website allows this function.

9.    Virtual Tours – They say pictures are worth a 1000 words than virtual tours must be worth 1 million. Take the time to develop a virtual tour.

10.    Spell Check – Remember first impressions are the most important. Make sure you double check spelling. An easy way to check spelling is to put your description in Microsoft word and spell check before adding to the web.

Concord, NC's Rowan-Cabarrus Community College’s 13 year old Motorsports Management Technology program will benefit from the gift of a Sprint Cup Series Toyota from the Red Bull Racing.

Red Bull fields NASCAR Cup teams for Brian Vickers (#83) and Scott Speed (#82).

The car will become a laboratory for Rowan-Cabarrus students in their Motorsports Management Program to see how NASCAR’s premier Sprint Cup cars are assembled and manufactured and it will eventually build an engine and transmission for the vehicle.

RCCC’s Motorsports Management Technology program is the first accredited motorsports-degree program in the nation and it combines the business and technical ends of the industry.

There are at least 100 graduates of the program who now work in the motorsports industry.

In my experience, people rent property on first impressions. Believe it or not, prospective tenants have pretty much decided whether they want to live somewhere before they ever get out of their car. Have you ever watched a car slow down in front of a property for rent, stop, back up, pull forward again, then speed off? The occupants' first impression told them that that was someplace they didn't want to live.

The way to get more rent and better quality tenants is to make your rental property look as if it ought to rent for more money. What follows are ten ways to do just that.

1. Plant flowers, clean up the yard and trim the shrubs. Make it look crisp and clean from the street.

2. Hang blinds. They don't have to be expensive, just in the windows.

3. Install a range and refrigerator or a built-in dishwasher. Make sure they are the same color to make the kitchen appear bigger and the refrigerator should have an icemaker.

4. Put in a washer and dryer. Less hassle when residents move and you control the potential for leaks.

5. Write an effective Craigslist or local rental web site ad. Sell the property to the tenant before he or she sees it.

6. Fence the back yard.  Give the tenant some kind of private space, if it isn't a single-family home.

7. Plant new bushes or flowers at the front and/or back entries.  Make these entries inviting.

8. Detail the front entrance. Put in a new front door mat, install new house numbers, paint the front door.  Just outside the front door and inside the first room you see as you enter should sparkle from extra attention.

9. Roll out or blow in insulation. Wrap the pipes. Make the house more energy efficient. That is just as important if the tenant is paying the power bills as it is if you are.

10. Wax the floors and polish the chrome. If anything is supposed to shine, make it shine.

When our area “sales market” started to “go away”, many rental property owners got anxious about the re-leasing of their rental property.....sometimes to their financial detriment:

$ * Owners of a high-end rental home upon hearing that the landscaping needed some weeding and mulching visited the property over a weekend - the same weekend that the property was being shown by a local Realtor to rental clients who were anxious to see the property after viewing it online.  When the Realtor and her clients drove by the property and saw several passenger cars in the driveway, they thought the home was being shown to other rental prospects and decided to come back later.  When they came back a few hours later and saw the same cars were in the driveway, they thought the home had been rented and the new residents were moving in.  The Realtor did not show the property.

Rather than hiring a yard service to mulch and weed for an approximate cost of $400, the owners’ property sat vacant for an additional month for a loss of $4,000 income.

$ * An owner, upon learning that her home’s 18 year old HVAC compressor needed replacing at a cost close to $5,000, decided to call her property neighbor for a suggestion of an alternative HVAC supplier.  When subsequent  rental prospects viewing the property for the 3rd time realized they knew this neighbor from work, they started asking questions regarding the neighborhood.  During this discussion, the neighbor volunteered that the entire HVAC system needed replacing and the property owner did not have the money to have the work done....needless to say, the “hot” prospects did not rent the property.

Rather than calling local HVAC service companies from the online Yellow Pages and question the quote she received, the owner alerted neighbors to a potential problem with her property which was reported incorrectly to prospective residents.

$ * An owner while arranging for some routine repair work at her vacant home decided to turn OFF the AC to save money on the electricity.  

Rather than turning the AC temp UP and keeping the home reasonably comfortable for summer showings in 90degree temps, the owner saved some money on electricity which cost additional monies in lost rental income, as well as yard maintenance and advertising costs because prospective residents thought the HVAC system was sub-par.

Unintended consequences ALWAYS need to be considered when second-guessing management leasing strategies......

There continues to be confusion on the protections of tenants in the event of foreclosure....irregardless of any state protections, the following are highlights of the FEDERAL law that was signed May, 2009.

If you are counseling tenants in properties under foreclosure, they should have a copy of this law and provide it to any and all contacts they have with the foreclosing lender.  They should not ASSUME that the lender or servicing company knows OF or will ABIDE by this law so putting them on NOTICE that the tenant is aware of their protections is prudent.

http://www.fdic.gov/news/news/financial/2009/fil09056.html

Under the Protecting Tenants at Foreclosure Act:

• All tenants must receive a 90-day notice before being evicted as the result of a foreclosure.
• With some exceptions, the law requires that in the event of foreclosure, existing leases for renters are honored to the end of the term of their lease.
• The stated exceptions are for tenants without a lease, tenants with a lease terminable at will under state law, or where the owner acquiring the property will occupy it as a primary residence. In these cases, the tenants must receive a minimum of 90 days notice to vacate the property.
• This law does not affect the requirements of any state or local law that provides longer time periods or other additional protections for tenants.
• The new law does not require any agency to issue implementing regulations; these protections apply to foreclosures after May 20, 2009.
• FDIC examiners will monitor and enforce compliance with the requirements of this law in the same manner as other consumer protection laws and regulations