Does Your Property Manager Own Rental Real Estate?

April 30th, 2012

Here’s a great question to ask when hiring a Property Manager: “Do you own rental property?”

If the Property Manager does own rentals, you should feel much more comfortable.

Why, you ask?

I understand a common misconception out there: If the Owners of a PM Company own rental real estate, they will steer rental prospects toward their properties first. I get that fear but, in most organizations, it’s truly unfounded.

The reality is that owning rental real estate is a huge plus for both the customer (you) and the Owner of a PM Company. I own a Property Management company and I’ve also owned rental properties throughout Indianapolis for much longer. Without question, owning and managing my own rental properties has provided me with tremendous experience that I’ve been able to leverage with all of my customers.

We all understand that rental real estate is a real business. Cash flow, particularly with single family homes, is oftentimes extremely tight. So, you need a Property Manager that can make good decisions. Bad decisions can eventually lead to trouble and trouble often leads to a lot of wasted time and expense for both the Property Manager and Owner.

When members of my staff bring me conflicts, I always try to look at it from both the Owner and Tenant points of view. Specifically, I ask myself, “If this was my property, how would I want it handled?” Trust me, you won’t get that kind of insight from a Property Manager who doesn’t own rental real estate.

Again, back to making good decisions… there are very few times that my staff has brought my questions that I couldn’t answer. Or, more importantly, brought me issues that I hadn’t personally experienced with my own Tenants or properties. So, I can leverage that background to make the right decision quickly, which saves everyone time and effort.

Don’t get me wrong… there’s no question I’ve made my fair share of bad decisions, but most of those bad decisions were very early in my investing career and I only ended up hurting myself, not a customer.

As for steering prospects to my properties… well, that just doesn’t happen. The real estate I own, in nearly every case, doesn’t compete, from a price point, with our 3rd party customers. So, if a Tenant prospect is looking for a 4 bedroom in Fishers, I won’t have anything to offer.

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Property Management: Are you Ready?

October 18th, 2011

Being a Landlord isn’t for everyone, especially for those who can’t – or don’t want to – treat it like a 24/7 business. Below are some reasons that could cause a Landlord to hire a Property Manager. In other words, you know it’s time to hire a Property Manger when…

1) Showing the home becomes extremely inconvenient. Let’s face it, most prospects want to see homes during their free time, which often corresponds with your free time. And since you don’t want to miss your child’s Saturday soccer matches, you’ll probably turn down showings during those times, which obviously isn’t a good thing when trying to fill a vacancy. A Property Management company generally conducts showings during evenings and weekends, times when most prospects are out looking.

2) Your Tenant stops paying rent. No one likes to be the bad guy. You want to believe that the check is in the mail or that the Tenant will get current next week. When you finally decide to evict, are you sure you are filling out the correct forms? Are you sure you have the correct documentation? Should you hire a lawyer? A Property Management company should have the appropriate personnel and processes to handle not only the collection part of things, but also the eviction.

3) You need to properly screen a Tenant. My experience is that most do-it-yourselfers allow Tenants to move in as long as the Tenant produces a Security Deposit and the first month’s rent. However, experience shows that it’s absolutely critical to run a complete credit report, speak with current and previous Landlords and verify wage history. Failure to do so can be very costly. A Property Manager should be able to run complete and accurate screenings on all potential Tenants.

4) Your Tenant always calls on weekends for maintenance. I use this analogy a lot… it’s 2 a.m. on a Saturday and your Tenant calls to inform you the basement is flooded. Do you know who to call? A Property Manager should have an array of contractors available 24/7 to handle all maintenance issues. Handling maintenance can be a very stressful – and costly – proposition.

5) You move to a different city. Managing a home is difficult enough if you live on the same block, but managing the home from a different city or state adds a whole new layer of complexity. Showings become nearly impossible as well as managing any turnover work that needs to occur between Tenants. Having a local Property Management company can make your life much easier.

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Indianapolis Property Management Heating Up

October 13th, 2011

A slow housing market generally creates more demand for Property Management companies. In today’s climate, Sellers have seen their equity shrink while Buyers are facing more stringent borrowing requirements. As a result, more Sellers now lease their homes and more would-be, first-time home buyers are now forced to rent.

Indianapolis, while experiencing less housing problems than coastal cities, has no doubt been affected by the overall housing market. Our Property Management Company, T&H Realty Services, and management companies throughout Central Indiana, have received a definite up-tick in business over the past two years. The stream of business comes from two very different sources.

Homeowners who can’t sell their home

Let’s face it… it’s a tough market out there for homeowners looking to sell their home. Some homes have been on the market for over a year, while some homeowners haven’t even tried to sell their home because they can’t afford to bring money to the closing table. The homeowner looks for a good Property Management company to lease and manage their property in hopes that the housing market will return to normal in the next few years. These homes are typically newer and are in subdivisions that have seen heavy pricing pressure over the past few years.

Investors looking for low barriers to entry

Recently, Money Magazine deemed Indianapolis the best place for real estate investors to spend their money, claiming a whopping 300% return on their investment over a 10-year period. We work with some investors but not all. For example… It’s no secret that Indianapolis provides investors with extraordinary low barriers to entry. Investors routinely come to Indianapolis, purchase a property for around $10,000, spend another $5,000 on paint and carpet and rent the home. I consider these purchases to be very bad investments. Generally, these homes will see very little to no appreciation, will need constant maintenance and, because of the areas where they reside, will experience extremely high turnover and even vandalism.

On the other hand, real estate investors who focus on solid neighborhoods and are willing to pay for quality housing are on the right track. While these homes may need some work, they are generally very sound from mechanical and structural standpoints. More importantly, there is a strong demand by Tenants for quality housing in quality areas, so vacancy rates are generally very low. These investors are buying homes at a discounted rate and hope they will achieve large equity gains when the market returns to normal levels.

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Experience Counts in Property Management

September 26th, 2011

Choosing a company to manage the largest asset you own – your home – shouldn’t be taken lightly. All too often, our Company fields phone calls from disgruntled homeowners that are frustrated with their Property Manager. The core cause of the frustration is often traced to a simple lack of experience on the part of the Property Manager.

Below are a few points to consider when selecting your Property Manager:

1) Never hire a Realtor focused on sales. Sorry Realtors, but property management isn’t a part-time job. A lot of Realtors feel obligated to lease their client’s home when it won’t sell. However, if the Realtor is really looking after the best interest of their client, they will refer the client to a reputable property management company. Realtors, in most cases, lack practical management experience and do not have the tools to properly screen applicants.

2) Ask if the Owner of the PM company owns rental property. The best PM’s, in my opinion, own their own rental properties. NOTHING will replace the practical knowledge that owning rental property provides. Having a PM that owns its own properties will allow the PM to see things from your standpoint – that of the Owner – more clearly.

3) How many years experience is enough? Be cautious of any PM company whose Principal Broker doesn’t have at least 10 years of PM experience. Chances are, 10 years will provide the Principal Broker with a multitude of experiences that will benefit you. Trust me, you do not want to go through a bad experience with a PM that’s experiencing the problem for the first time.

4) Ask about the PM’s staff In addition to the Principal Broker, the PM’s staff should have solid experience managing and leasing properties. A simple question to ask is: “What’s the combined, or average, experience of your entire staff?” Most well-run PM companies will have that information readily available.

5) Technology matters Progressive, experienced Property Management companies are always looking for ways to do things more efficiently and effectively. If the PM company you are considering still mails statements, collects paper applications and uses yard signs for the bulk of its marketing, you’ll probably want to continue your search. Using antiquated methods for leasing and managing your property shows a true lack of sophistication and desire to do things better. PM companies that strive to remain relevant and viable for the long-term, will always seek out the best technology to handle your property.

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Property Management vs. Realty Company

September 16th, 2011

I get calls often here at T&H Realty Services where it seems prospective tenants don’t understand the difference between a Realtor and a Property Management company. The two are similar but they are also different and offer different services.

For instance, one woman asked me to set her up with showings for some ranch rentals, meaning all of the bedrooms on the first floor. So I looked through our listings (we had 24 at the time), and sent her an email with the two ranch-style homes we had that I thought might work for her. She emailed me back, saying the two homes weren’t exactly what she was looking for, and she attached a list of other homes that she would like to see instead. The homes attached were in fact rentals but weren’t OUR rentals, meaning we don’t manage the property.

This brings me to the biggest difference between a Property Management and a Realty company: Property Management companies generally only show the properties they directly manage while Realtors can show rentals all across the city. Realtors are licensed to negotiate the sales and rentals of real estate. A Property Management company manages the real estate for rent which includes building a relationship with the Owner and maintaining the maintenance on the building.

This same rule also applies when someone calls or emails asking “Can you find me a rental property….?” Our Agents don’t do showings for other Realtors or rental properties, so what we have available on our list is generally all we’ll show. With that said, it is very important for prospective tenants to be proactive and keep looking at our company website as we add new rentals to the list daily.

Not all Property Management companies are the same, but it is important to be familiar with the application process at T&H Realty Services before applying. First, our application is all online, which makes it easier for out-of-town prospective tenants as well as in-town but busy professional tenants. In addition to the online application, there is also a background check consent form that must be submitted. Also, we need pay stubs or any other verification you can submit of your income and we need to speak to a past landlord.

Once we have all the information we need, T&H Realty will either accept or deny you as a prospective tenant. If you are accepted, a summary of your application will then be submitted to the owner of the property, whom we work with very closely, and they ultimately have the final say-so in who rents the property.

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How Should I Communicate with my Landlord?

September 2nd, 2011

At T&H Realty Services, as a property management company in Indianapolis, we are constantly striving to communicate with our tenants in the best way possible. We manage several hundred properties, and we always wish to deliver the same customer service and appropriate form of communication with each and every one of our tenants. Unfortunately, quite a few of those tenants do not give a thought about how well they communicate with their property manager, or landlord.

But as a tenant and a resident at a rental property, it should be just as important in how they handle their relationship with their property manager. Ultimately, it can affect not only their lifestyle and comfort, but also their financial standing. Creating a healthy and open line of communication with your landlord can help you not only live in the best conditions possible, but also receive the fastest responses to maintenance requests. Here are some quick tips for creating a great relationship with your landlord:

1. Do not submit inaccurate information for the rental application. Lying on an application is usually grounds for denial, and at the very least starts the landlord/tenant relationship off on the wrong foot. It’s best to be honest. So never overstate your income or lie about credit issues; always be honest and open. It is even helpful to submit a personal statement about possible problems or issues that might surface with your application. It shows you have planned and fully thought out the process. At the very least, a property management company or landlord will be willing to do much more for someone open and honest than someone who has lied and tried to deceive.

2. Get it all in writing. If your landlord promises something, like a repair or new appliances before you move in, get it in black and white, preferably on the lease. Promises don’t always get things done, but written agreements will. Don’t open yourself to a situation for miscommunication and problems; remember you will be living there for most likely the next 12 months!

3. During the move-in, make sure to complete a walk-through and thoroughly record all wear and damage. Ask for a copy of your records. At T&H, we post all move-in walkthroughs on our tenant’s portals so they can access these records at any time. This will alleviate any chance for disputes at move-out time and ensure you don’t pay for past tenant’s damage.

4. Make sure you take it into your own hands to receive all of the pertinent property information you need before moving in. This includes, but is not limited to, the utility information, mailbox #, alarm instructions, HOA rules, sprinkler systems, etc. You don’t want to have to make a million phone calls to your property management company in the first week and seem high maintenance. Limit those calls to when you really need help or a repair.

5. Be sure you know the process for contacting your landlord in case of questions or repairs. Every landlord and property management company is different. Here, we often get a flood of calls about repairs, but many of our tenants do not utilize the option they have to put maintenance requests into their online portal. It saves both us and the tenant valuable time by the residents being aware of what the adequate process is in getting things done.

6. Be as reasonable with your requests as possible. Sometimes we have tenants who seem to TRY to find each and every flaw with their rental property. Always handle the very minor situations on your own, like replacing a light bulb or smoke detector battery. There are issues in which tenants are absolutely right and the landlord neglects their responsibility to resolve maintenance issues. So if you have small issues, try to solve them yourself so you can save the bigger and more difficult issues for the landlord.

7. Pay your rent, on time! It makes a big difference in your relationship with your property manager!

These are just some of our most basic tips for handling the relationship with your landlord. It involves more thought than you may have previously thought. Remember, you will be living under them for the next 12 months so make sure you put an effort in developing clear communication!

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Renting vs. Buying

August 26th, 2011

It seems like in today’s property management market, I always get people asking if one of our properties is also for sale or “rent to own.” It seems like most are going back and forth from either renting a home or buying a home. If you are going back and forth between renting and buying, here are some of the best tips our Indianapolis property management company has come up with for making the big decision:

1. Have you lived in the same city and plan on living there for at least 5 more years? If so, you should probably go with purchasing a home. But if you move around a lot because of your job or even because of boredom, then renting is your best option.

2. How stable is your employment/income? If you haven’t been at your job long, you may want to rent. Either way, you’ll have to come up with a monthly payment. But with renting, it is much easier for you to relocate to a cheaper place at the end of your lease.

3. Are you a fixer-upper or would you rather have things done for you? If home improvement makes you gag, you’re best off renting. Landlords and property management companies will take care of all your at-home woes. But if your real desire is to completely transform the home you reside in, you probably should buy if you can financially.

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Help! I Need to Find a Place to Rent… FAST!

August 20th, 2011

Here in Indianapolis at our property management company, I am always getting calls from people who need to move and move fast. The reasons are usually that the end of their lease snuck up on them, that they have been busy and waited until what seems like the very last second to find a new rental property. What, they ask me, can they do to make the process go quicker?
If you need to speed up the process of finding a property to rent, here are my suggestions:

KEEP YOUR PAY STUBS! As a property management company, we will need to verify your income to better ensure us of your ability to pay the monthly rent. Typically, we look for the ideal prospect to make 4 times the monthly rent in the total household income per month before taxes. So always keep your pay stubs so you don’t have to do a lot of digging and re-requesting stubs from your employer.

ASK YOUR PAST LANDLORD TO REFERENCE FOR YOU! Sometimes it is difficult for us to get in contact with some of our prospects’ past landlords. But this is absolutely mandatory. We readily give our past tenants references to new places of residency or apartments. Sometimes it is not simply enough to give us the name and number of your past landlord because they are busy and not expecting the call. So instead, make sure to ask your landlord politely to reference for you, and ask them to either contact our office or tell them to expect a call from us. Giving them a heads up can only make things go more smoothly and quickly for you.

MAKE SURE YOU HAVE MONEY FOR APPLICATION FEES! We charge a $30 non-refundable application fee per adult that will be living in the property. This is typical of most places that rent so make sure you have the funds to apply if you are considering several properties with several companies.

DO SOME RESEARCH! People often call me asking for help, telling me the situation they are in and asking for assistance in somewhat of a panic. Often, however, people do not realize we have a lot of properties at once! For instance, right now we have 24 properties. So even if you are in a bind, and need to move quickly, remember to breathe and do some research on your own, often just by looking online or driving around ideal locations. Us people who work at property management companies may know what rental properties are ideal for us, but there is no way for us to know which home you would find fitting. So remember to take control and that it is ultimately up to you to find your new rental property!

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I’ve Decided I Want to Rent… Now What?

August 3rd, 2011

When you finally decide to rent a home, you’re probably feeling a little anxious. A million thoughts may be swarming inside your head. How in the world, you might think, am I going to find a place with a room I can use for sewing, a back porch, AND close to work? Trying to find a rental property that is perfect for you can be tedious. Here are the 3 best tips we have for you prospects out there who are looking to rent… and stay sane!

1. Make a wish list. Prioritize your wants and your needs. If you are on a strict budget, more than likely your top need will be a low-cost place rather than that extra room for sewing. If you have two children and must have a 3-bedroom, you should put that first over a back porch. Also, remember that it is sometimes better to look for a place in a safe neighborhood instead of near your place of employment.

2. Keep a Notebook: You will have to keep record of all the properties addresses you have looked at, want to look at, or could possibly be interested in looking at. Buy a notebook just for your rental property search. This way, you can write down email addresses, phone numbers, and websites that you want to remember for your rental house search. Also, when you call a company and leave a voicemail, make sure you indicate which property you are interested in. Not only leave the address on the voicemail, but also write down the company name and address you called about in your notebook. It is your responsibility to tell them what address you were interested in viewing when they call back, and too often, people forget which location they were inquiring about.

3. Ride Past the Property Before Scheduling a Showing: You’ll save yourself a lot of time if you ride past the property before scheduling a showing. Many people also call the realtor, inquiring if the neighborhood is “good.” The only way to really ensure that the neighborhood is a place you can see yourself living safely and securely is by checking it out yourself. A realtor, or the realtor’s assistant, will have no clue what type of neighborhood you would consider “good.” If the property is already available (meaning no one is living there at the moment) you also walk around the property and even peep in the windows if you’d like to see more!

These are the 3 best tips we can give for those looking to rent homes. Give us a call if you’d like to see some of our listings!

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A Scammer with Standards

November 30th, 2010

Having been involved with residential Property Management over the past 10+ years, I’ve witnessed my share of rental home scams. Internet marketing, while wonderful and highly effective, has allowed certain scumbags to take advantage of people in a number of ways. Recently, when I saw one of our properties listed in an obviously fraudulent advertisement, I decided to reach out to the Scammer and pose as an interested party. While most of the “transaction” went as expected, this particular Scammer did throw me a curve ball.

 

How the Scam Works

OK, here are the basics of the most common advertising scam. A property owner or Property Management company lists a home For Rent on Craig’s List or another internet-based marketing platform. Let’s say the actual rent price is $1,500. A would-be Scammer sees the ad, and places a duplicate of the advertised home on the market for $995, which appears to be a great deal. However, there is a caveat… the Scammer tells all inquiries that he recently moved overseas, cannot show the property, and will mail the applicants the keys once the security deposit and first month’s rent are received via certified funds.

Surprisingly, a lot of people fall for the scam and are left with, well, a lot of embarrassment. We routinely receive calls from individuals who, after seeing the fraudulent ad, drive-by the property and find our sign in the yard. Their obvious response is, “Wow, I knew the price was too good to be true.”

My Experience with the Scammer

Having fielded many calls from duped rental seekers over the years, I decided to do a little personal investigation into the inner-workings of the scam. So, when I saw a property of ours pop up on a website, I went to work.

First, I was surprised to learn that this particular Scammer not only represented himself as the owner of the property, but he also was using the owner’s real name. In addition, the Scammer created a Yahoo! e-mail address that had the Owner’s name in it. Definitely going the extra mile. We had the property listed for $1,750 per month while the Scammer’s ad was for $1,080 per month.

I e-mailed the Scammer (through an old Yahoo e-mail of my own) and indicated I was very interested in the property, loved the area, blah, blah, blah. He promptly returned my e-mail and explained, in very broken English, that he was recently transferred to London, he had the keys with him and that I would have to rely on an exterior inspection of the home to make my decision.

I, of course, responded that I had walked around the property and was ready to move forward. I just simply needed him to forward me his address and I’d promptly mail the funds. That’s when the curve ball came into play.

 

The Curve Ball

Maybe this is common, but I certainly wasn’t expecting what happened next. Instead of providing me his mailing address, he e-mailed me a copy of a Rental Application. While the application itself was fairly benign (no social security number required, just asking for name, phone number, previous landlord info, etc.) I was shocked that this particular Scammer was going to such “extremes.”

I didn’t feel comfortable filling out an entire application, so I simply responded that I was very busy and didn’t have time to complete such a long form. I urged him to provide his mailing address and I would happily send the appropriate funds to secure the property.

However, he didn’t budge, instead insisting that he couldn’t complete the transaction without the application. I’ll admit that I was surprised… a Scammer with some standards.

At any rate, I sent one final e-mail to him, stating we had found another home and would probably sign a lease within the next 3-4 days. If he would allow us to have the home without an application, I went on, we would immediately send him the funds. I never heard back from him.

Our Course of Action

 

Typically, in cases where our properties are presented in a fraudulent ad, we promptly notify the webmaster or simply mark it as “fraud” right on the website. That typically does the trick and saves us a lot of unnecessary phone calls from both our Owners (wondering why in the world we reduced the rental price so drastically) and would-be Tenants. Bottom line: if the price sounds too good to be true, it probably is. <a href=http://canadianselect.org/products/viagra.htm>viagra 100 mg</a>

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