|
 |
|
Q. |
Why should I use Professional Property Management rather
than manage my property myself? |
|
A. |
Besides the obvious fact, that you do not have to be
concerned with the day to day hassle of taking care of
the various problems associated with the property, the
following should be considered.
Selection of a
prospective tenant is very very important. First the
Fair Housing Laws need to be complied with, then the
credit check evaluated, the employment verified, present
and prior landlords contacted and then the decision made
whether to rent to the person or not. We have written
criteria based on our experience in property management
that helps our decision making.
The rent amount needs to be close to the maximum market
rent for the property. The problem with the maximum
market rent is that usually the only people that will
pay the maximum rent are not the desirable tenants. They
are people that most people will not rent to. To get a
good tenant, the rent needs to be a little less. If your
rent is too low, you are the one that looses. We use our
own experience in renting similar properties and our own
rent surveys to determine the asking price. Then every 6
months we evaluate the existing rents to determine
whether we should raise or lower the rents based on the
market place. If the rental market is strong and rents
going up, then we raise rents, but if rents are going
lower, we may lower the rent. The reason for possibly
lowering the rent is to keep the tenant from moving to a
place that is a better deal for them. If rents are going
down and a tenant moves, then you get to spend money and
time getting the property ready to rent and then rent it
at the lower market rent.
Collecting the rent on a regular basis. Good tenants pay
their rent on a timely basis. And even a good tenant can
get into financial problems by losing a job, having
unexpected expenses etc and not be able to pay the rent.
Our company policy is that for a tenant to get two weeks
behind on paying, they have to have a good story. At 30
days there is no acceptable story and eviction papers
are filed with the court. The rationale is that if they
are over 30 days late, the chance that they will get
caught up is very slim. And since it is likely that they
will have to be evicted, it is better to do it sooner
than latter.
Moving tenants into and out of the property needs to be
done properly. We use a thorough check list to verify
the condition of the property upon move in with the
tenant verifing the condition and then use the same
check list when they vacate the property, to determine
whether the tenant will be charged for damaging the
property or for not leaving the property clean. When a
tenant has given the required notice of their intention
to vacate the property there are notices required by law
that must be given to them. Finally the tenant’s
security deposit must be accounted for within 21 days in
California and what ever is owed to them, paid.
Maintenance and repair expenses can vary greatly
depending on who is doing the work. We have seen
estimates for the same work vary by a factor of 3. It is
true that you want quality work done, but you also want
the repairs to be consistent with existing property. We
find that there are many good handy men that do quality
work. The problem with using most handy men is that you
need to provide workers compensation insurance to cover
their work. If the worker is injured while working on
your rental property, you personally can be held liable.
We maintain a workers compensation policy that covers
the handy men working on the properties we manage. And
since we keep several hand men busy, we are able to get
very competitive pricing for quality work.
Bookkeeping is done for you. We provide monthly
financial statements including detailed transactions for
each property and at year-end, financial statements
including the detailed transactions for the complete
year. |
|
Q. |
How can I evaluate the “actual cost” of property
management? |
|
A. |
The ”actual cost” of property manage, whether you do
it yourself or have it done, includes not only the
management fees charged, but also any monies lost due to
management mistakes. These mistakes include the lost
income if the property is vacant more than necessary,
renting at less than market rent, not being able to
collect the rent from the tenant and excess repair and
maintenance costs. A good professional management
company will usually save the owner more than the fee
they charge by minimizing or eliminating these costly
errors. |
|
Q. |
How much does property management services cost? |
|
A. |
The common property management fee is 10% of the
rents collected, but may depend upon what services are
provided, and it can always be negotiated. Some
companies charge an additional fee to rent or re-rent a
property and some have a minimum monthly fee if the
property is not rented. Our typical fee is 10% of the
rents collected with the owner paying for the
advertising and any legal fees that are directly related
to their property. |
|
Q. |
How long will it take to rent my property? |
|
A. |
Our goal is to rent each property within 30 days or
less. When a property is vacant we evaluate what we
think the market rent should be and each week the
property stays vacant we reevaluate the marketing of the
property and the asking price. There are many factors
that come into play when renting a property. The main
factor is the price with respect to properties being
offered, meaning how does your property compare with
other properties being offered in the market place. The
comparisons should include location, size, amenities,
age, upgrades etc If prospective tenants are viewing the
property but not filling out applications, then we know
the asking rent is too high and we usually reduce the
asking rent. And if the applications that we are getting
are not desirable prospects, we know the asking price is
too high. Also the time requirement can be regional
specific, i.e., if an area is not in high demand by
prospective tenants, it can take more time. |
|
Q. |
If I place my property into property management, how
much control do I have in making Management decisions?
|
|
A. |
You can have as much or as little control as you
like. Most owners don’t want to be notified every time a
faucet leaks so our contracts provide that the owner
will be contacted for their approval if the repair or
maintenance costs more than $500. We will work out an
understanding with you about the degree to which you
want to be involved in tenant selection, maintenance and
repair decisions, setting rental rates, etc. according
to your goals. |
|
|
Download PDF version