Home Improvement – Real Estate

When you are in a place where you have rental properties to look after, you may be a little overwhelmed at the idea of doing it all by yourself. The truth is that there are lots of property owners who hire property management companies to look after their concerns for them. Take some time to really consider what a property manager could do for you, and then make sure that you look for one that really suits your needs.

1.Experience
How long have they been in business and to what extent have they managed properties like yours before? It is one thing to manage a few single family homes, and quite a different one to manage an apartment building that holds more than thirty units.

2.Demeanor
Are you comfortable having them be the “face” of your rental property? Chances are good that they’ll see more of your clients than you do, so will they get along with your clients and treat them with respect?

3.Organization
When you visit their offices, are things neatly filed away and close to hand, or does it look like an explosion of paper work? If the work space isn’t tidy, you may be in a place where important paperwork gets lost or misfiled.

4.References
Who else lets this company manage their properties? If you know anyone else who rents properties but doesn’t oversee them themselves, consult with them to see what property managing companies are good and which ones to avoid.

5.Promptness
No matter how you contact them, they should give you a response in a reasonable fashion. If they don’t get back to you in a reasonable amount of time, you cannot expect them to get back to your tenants in a reasonable amount of time either!

6.Cultural sensitivity
When you are looking for a management company, be aware that they are going to deal with any one who might care to rent from, regardless of their race, sex or sexual orientation. Unless they can be civil, you do not want them working for you.

7.Checklists
Can they show you right away what they are willing to do for you and what kind of duties that you are going to be taking part in? This is an important way to figure out what is actually going to be done for you and so that you will be on the same page.

8.Other properties
Take a look at the other properties that they manage. Are they well maintained and does it look like the people who live there are happy with it? Take a moment to stop some tenants and see how they feel about the company that runs their property.

9.Money matters
Do they handle money, and how do they prefer to do it? Make sure that you are on the same page with your company when it comes to things like rent collection and other payments.

10.Better Business Bureau ranking
How do they rate on the Better Business Bureau? This can be an important step for you to take when it comes to finding a company that really suits you.

Finding a good property manager is like any other vendor search – it’s worth your time up front to make the best possible choice. That’s because a bad manager can cost you a lot of money, up to the entire value of your rental property investment. Consider:

• Your property manager will be receiving rent and fees on your behalf. A crooked manager could steal you blind.

• Your manager will be in charge of finding new tenants. A naïve or slipshod manager could bring in bad tenants who trash your building.

• Your manager will handle maintenance. A greedy manager could charge a fortune for simple repair jobs.

Here’s a thirty-question checklist for interviewing prospective property managers. The answers you get will provide a very solid understanding of each manager’s qualifications. You can also get an impression of a prospective manager from other cues – I’ll explain those at the end.

Finally, remember that you have to compare managers to others within an area. It’s possible that none of the prospective managers in one city will match the high standard of your terrific manager in another. On the other hand, if you can’t find a good manager in a city where you plan to invest in real estate, maybe you shouldn’t invest there.

The first questions have to do with finding good tenants, which I think is the key to a happy building. A building with good tenants tends to have fewer maintenance and other issues.

• How many vacancies do you have right now? Out of how many total units that you manage?

• What is the average length of time it takes to fill a vacancy?

• Is that average time getting longer or shorter?

• How do you market your rental units?

• Do you require an exclusive arrangement for marketing to new tenants?

• How does your web site look?

• What factors would make you reject a prospect?

• Would you accept a tenant who met your qualifications in some areas, but not others? Which qualifications are most important to you?

• What screening methods do you use?

You want a manager who finds good tenants reasonably quickly. He should use a variety of methods to find prospective tenants, such as a web site, Craigslist postings, newspaper ads, signs, flyers and more. Your manager should follow an extensive screening process, but be willing to accept a “maybe” tenant if the situation is right. You want a look at the web site to make sure that is inviting to prospective tenants, and constantly updated.

As for the exclusive arrangement, property managers never mind when you or somebody else finds prospects for them. However, in almost all cases, they will still want a rental fee for moving the prospect into your rental unit. Make sure you have a clause that if the unit hasn’t been rented for some time, and you or someone else you find brings in a new tenant, the rental fee is cut in half. You don’t want it cut to $0 because the manager will still have to screen prospects.

The next questions relate to tenant management. It’s just as important to keep good tenants as it is to find them.

• What does your lease look like?

• What is your late rent policy?

• What other rules do you set for tenants?

• What percentage of tenants do you have to evict?

• How does the eviction process work here?

• How do your tenants contact you?

I recommend sticking with the manager’s preferred lease, late rent policy, and rules unless you have a really major objection. If the manager is really experienced, chances are they’ve developed smart rules and policies over time. Tenants should be able to contact the manager through a variety of ways during the day, and have an emergency number for off hours. If the manager is always evicting tenants, he’s bringing in bad tenants.

The next questions relate to maintenance.

• Which kinds of maintenance jobs are handled in-house?

• Which ones do you use an outside handyman for?

• Which ones do you use professional contractors for?

• How many quotes do you get for jobs?

• How expensive does a job have to be for you to contact me before doing it?

• What are your rules for contractors being inside occupied rental units?

• Who are your preferred contractors?

Managers should have a well-thought-out system for assigning jobs to different parties – in-house employees, handyman and professional contractors. Almost any plumbing, heating, or electrical job should be handled by a professional. Other jobs, such as paving a parking lot, require special equipment that usually only professionals have. But most small jobs can be done by handymen who will cost you less.

You want multiple quotes for major jobs – say, anything over $500. You should also have a rule that contractors can never enter an occupied unit –even if the tenant is not home at the time – without a manager’s representative being there. Finally, you want the names of preferred contractors so you can run a quick check on them.

The last group of questions relates to experience. You want managers to know the local real estate world inside and out.

• How long have you been a property manager?

• How long have you been a manager in this area?

• Can I see some of the other properties you manage?

• Do you personally invest in real estate in this area?

Finally, you need to understand your arrangement with the property manager.

• What is your fee structure?

• How will I get reports?

• Do you require an exclusive arrangement to broker the property?

• How much notice will you give before terminating a contract?

The manager’s fees aren’t really important unless they are much higher than everybody else’s, or are so high that you really can’t afford them. Reports are very important because they are your only window into how your investments are performing. The best way is to get them on your own computer, on your time – as may be the case if they use on-line property management software.

You should not accept any exclusive arrangement to broker properties unless they have a limited term. In other words, if the properties don’t sell after a certain time, you can re-list with a different broker for no penalty.

Also, you should require good notice for the contract to be terminated – at least 30 days. That gives you time to find another manager.

Here are some other things to watch out for:

• A manager with a messy office or personal appearance. Chances are he doesn’t much care about the condition of the properties either.

• A manager you have a hard time reaching by phone or email. If he won’t return your messages now when he’s trying to get your business, what are the chances that he’ll do better later?

• A manager whom you sense is trying to intimidate you with knowledge. The “don’t ask stupid questions, I know all about this” approach is often a cover for not really knowing much at all.

Property management allows a real estate broker to:

1.  Even out the rough spots The real estate broker profession is a profession in which its participants will go six months without making a dime and then the stars align and $40,000 falls into the brokers lap.   The exhilaration of a large bank balance is soon forgotten as office overhead and overdue personal bills are paid and the roller coaster repeats itself.  In the feast-or-famine world of real estate sales, the management fees collected from real estate investment properties provide a stabilizer effect to help even out the peaks and valleys of 100% commission income.  Through the use of a property management business, the 10% management fees from collected rents can easily provide a broker with an ongoing income stream with which to pay office overhead. This stream of income can turn into a full-fledged river after several large properties have been placed under management; enough money to pay a salary in order to even out the ebbs and flows of real estate markets.

2.  Crack the often elusive trusted advisor circle Property management not only provides extra income through management fees, but also provides brokers opportunity through getting on the inside of a tough, but lucrative market – a real estate investors inner circle of trusted advisors. Many agents do not realize that the best deals never make it to the MLS. When it comes time for an investor to sell a real estate investment, they will work with an agent they feel is the most competent agent for marketing the investment and representing the investor. This may be a broker who manages the property or it may be a broker they have had success with in the past, but the property manager certainly has had plenty of opportunity to demonstrate levels of knowledge, skills, and competence.

3.  Provide an endless supply of would-be homeowners Eventually most renters will leave the rental market and enter into the world of owner-occupancy. Who do you think a renter turned would-be owner will look to when they are ready to purchase? An agent whose face and phone number have faded off the bench at the corner bus stop or their broker/property manager who was willing to work with them on their late rent while their baby was in the hospital?   Starting a property management business is not only a great way to increase income to offset sagging sales, but also help build a loyal clientele of investors and homeowners for the future.

Ryan Windley coauthored The Property Management Start-Up Guide “How to Start a Property Management Business and Still Keep Your Life” in order to introduce entrepreneurs to property management as a viable business.

Property management services offer individuals operational services in commercial real estate, residential real estate, and even industrial based real estate. Many property owners are now electing to implement the use of these services due to the advantages that they offer. If you are one that engages in one or more types of real estate, you may find that these services make your transactions and business run more smoothly. In this guide, I will highlight 7 advantages of using property management services.

1. The first advantage to implementing the use of property management services is that it allows you more free time to focus on other aspects of your business because the firm that you hire takes direct responsibility for acting between you, as well as your tenants. Many who are involved in real estate endeavors find that they lack the time, and even the expertise to deal directly with those who sublet from them. These services make this issue one of the past.

2. The next benefit to allowing services that focus on property management conduct business for you is that they work to reduce the expenses that you have as a landlord, and optimize your earnings. As a result, the service firm can actually work to increase the actual value of the property that you have.

3. When dealing in real estate, it is essential to learn all of the county, state, and even the federal laws surrounding the property that you have, as well as the rentals that take place on that property. When choosing property management services, you can work knowing that you are adhering to those laws as they are extremely knowledgeable in this particular area.

4. The next advantage to dealing directly with property management services is that the staff works to ensure that the property is well maintained and cared for. They know and understand the overall importance of attracting individuals to your estate. They will work diligently to ensure that when interested tenants stumble upon your property, they find it extremely attractive.

5. Management services that work in real estate take the issue of collecting rent out of your monthly regime. This type of service will deal directly with your tenants, collect the funds that are rightfully yours at the appropriate times, and delivery your cash in a timely fashion.

6. Property services know their business – and that is real estate. They study the highs and the lows of the market and optimize the amount of money that you can obtain by subletting your property. This means that you can experience the best rental rates on the market, without all the hassle!

7. Last, but not least, an advantage to property management services is that they can offer you piece of mind at an affordable rate. You no longer have to concern yourself with the day to day hassles of renting, and/or maintaining your property. The best part is that they will offer you all this at a reasonable price!

If you own any type of rental property, you should indulge in property management services. As you can see, these 7 advantages speak loads of the wonders that this type of service can provide to you!

In the eBook The Property Management Start-Up Guide How to Start a Property Management Business and Still Keep Your Life we have identified several systems that once implemented, will drastically reduce the time and headaches of property management.   Here are a couple systems that will help you keep your life while owning a property management company.

Rental Unit Key Management

In profession of property management managing house keys can be very confusing if a good system isn’t used.  Below are the two types of key management.

In office key management

In field key management

In office key management

Purchase a lockable key cabinet to store keys in your office.  Keep at least three sets of keys.  One set needs to stay in your office for the use of you and your employees/vendors.  The other two sets can be given to the tenants.  Make sure the property owner keeps a set as well.

In office keys should always be kept in a locked cabinet.  When writing the address on the key tags never write the entire address on the tag.  Should the key get lost or stolen, you won’t need to worry about uninvited guests entering the unit.  For example, the address 1234 Fake St. Apt A should be written on the tag as either 1234 A or Fake St A.  This will ensure that no the property will be recognizable to someone not associated with your office.

As your property management business grows larger and employs more office staff you will want to incorporate a key checkout system.  Have one employee (perhaps the receptionist) be responsible for the checking out of keys.  The checkout person will write the employee’s name and the date/time they took the key.  This system will ensure that keys that go missing will be easily traced back to the last person who had the key.

Field key management

Keys outside the office are best controlled by the use of contractor key boxes.  These key boxes have a combination lock and a shackle so the lock can be hung from a doorknob or locked onto something like a metal post.  For the sake of convenience set up an easy to follow key box combination system so everyone in the office knows the combination to each lock.  You can set all the combination numbers to the last four digits of your company phone number or set the combination to be the first four numbers in the property’s address.

Take a stroll through any city, and you’ll see them: lovely brick condos, inviting apartment buildings, gleaming tall skyscrapers, and even historic mill buildings and churches converted into contemporary living spaces. Today’s real estate market is constantly evolving and changing, and as this dynamic streetscape alters, behind the scenes is the invaluable and skilled player: the property manager.

One of the fastest-growing careers of the next decade, employment of property, real estate, and community association managers is projected to increase by 15 percent by 2016, according to the U.S. Department of Labor. As the mortgage market compels many Americans to rent instead of purchase homes, and baby boomers move into housing and healthcare units, property management professionals will be in high demand. There will also be opportunities with real estate development companies, commercial property corporations, and government agencies that manage public buildings. If you see a well-run, profitable establishment with satisfied tenants, chances are there is a talented property manager handling the day-to-day logistics of that community.

One successful California property management developer, Andrew Gross, vice president at Thomas Safran and Associates, an affordable housing development firm, says his profession has taught him not to be afraid “to dream big.” “Business development is a challenging process, and a developer must possess the creative know-how to put out fires and overcome hurdles.” Gross is a member of the Advisory Board at Fremont College,  a premiere degree and career college in Southern California.  He says that developing affordable housing has been personally fulfilling, allowing him to change entire areas and “see people truly enjoy their new situations.”

Property management holds the most potential for people like Gross who enjoy blending knowledge of real estate with customer service and sales skills. Being a property manager is like being the mayor of a small city-you manage revenues, make important decisions about management, oversee contractors, oversee residents, and more. “Attention to detail is crucial,” says Gross, who constantly finds himself drawing parallels between work and life in his daily challenges.

Property managers need to have a broad knowledge of business, finance, accounting, and real estate, as well as practical skills such as math, writing, computer, and oral communication. A business administration degree with a concentration in property management will equip you with knowledge of financial and expense control, customer service and marketing, leasing basics, and more. Various professional and trade associations also allow you to expand your knowledge of specialized subjects, such as insurance and risk management, personnel management, and reserve funding. Many fields overlap, says Gross, such as the constant intertwining of property management and real estate.

Your career opportunities may abound as a property manager-you can work for real estate agents and brokers, lessors of real estate, or any other real estate company. Just as an example, top U.S. and trade associations, such as the Building Owners and Managers Association and the National Association of Industrial and Office Properties all offer job postings and networking opportunities. Booming overseas expansions are also opening up international property management positions. At Thomas Safran and Associates, which owns and manages over 3,200 units of affordable rental housing in the Greater Los Angeles area, Gross says that the company is looking to hire skilled professionals who are able to communicate with clients.

So move aside, Donald Trump. The commercial and residential real estate industry is attracting talented young professionals with a strong educational background that equips them with a diverse skill set, talent, and experience. As a property manager, you can make a positive, sustainable impact on the environment and the economy, build lifelong relationships, and make a difference in the lives of hundreds of people. The welcome mat is out for a satisfying and rewarding career in property management. You just need to open the door. “It’s important to find life’s work that is fulfilling,” says Gross, who says it was serendipitous that he ended up in such a rewarding field.