Property Management

Residential Property Management Services Explained

Consumers require residential property management services for a variety of reasons. Some buy rental properties and need management of the property. Other consumers will be absent from their homes for an extended period. Even if you leave for a three-week vacation, someone should be looking after your home for you. We will review these issues and others in the following post.

Residential Property Insurance Requirements

Many homeowners just close their doors and leave for their vacation. They are very excited about getting away. Many do not give a seconds thought about looking after their home. Many insurance companies have specific requirements about vacant homes. The requirements depends on the company, the time of year, where you live and your heating system. They may want checks on your home every day. Call your residential insurance company to confirm your requirements to maintain insurance on your home. Even condominium owners need to do this.

Temporary Absence Management

Many residential property management services companies will offer services to home owners in this situation. They can check your home for water leaks, power outages, heating system failures and break-ins. Have them check your home and report back to you after every visit. You will need a report especially if you need to make a claim to your insurance company. They want to know that someone is checking your home.

Extended Absence

If you are going to be away for a long period of time, it is important to arrange for residential property management services. They will check for water leaks, heating system malfunction, complete landscape management, snow removal and even water the plants. Consumers can arrange for all of the services they need. They can leave with confidence that their home is looked after.

Rental Residential Property Management Services

Many consumers purchase rental properties as investments. Some consumers will manage their own properties. Others do not want to deal with tenants or some of the problems that arise. This is where residential property management services can put your mind at ease. Some of the services that are included are:

  • Tenant selection and approval
  • Rent check collection
  • Deposit to bank accounts
  • Property management services
  • Property repairs
  • Regular monthly reporting

Property management covers all of the things that most consumers take for granted about maintaining a home. This area of services may include the following depending on the building type:

  • Cutting the lawn
  • Hedges and shrub maintenance
  • Maintain watering system
  • Routine repairs to appliances
  • Painting and cleaning after tenants leave
  • Management of special projects e.g. window replacement etc.

Summary

Regardless of the residential property management services that are required, there is a property management solution. Make a list of the services that will be needed for your situation. Decide the time frame involved. Call your insurance company to confirm their minimum requirements. Make sure that you will receive appropriate documentation from the residential property management company if you will need it to make an insurance claim.


Property Manager Online

Many customers can now have access to online reports from their property manager online reports to view their online statements, progress on various projects and overall status of a property or a unit. This is a huge time saving tool and if managed properly can actually improve customer service to tenants while reducing the overall cost of managing the building. But not all property managers are providing online information for their tenants or their owners of the properties that are being managed. Their focus is on property management and avoiding added investment in costs that are not deemed to be beneficial from a return on investment perspective. However the more competitive property managers are considering this latest technology innovation. it is up to you as owners and tenants to place some pressure on these property managers to improve their online services

Property Manager Online – Up To date Reports

Superintendents can also update reports online to provide a status to their owners, as well as to the tenants to show them when various repairs will be made and what projects are ongoing. For large companies this is particularly useful information especially when tenants call to find out about the status of their project. They can logon to the online site and review the latest status about issues they may be concerned about. The same applies to owners and other interested parties that have access to the system. There would be many less phone calls as a result.

This saves everyone a great deal of time. Reports are automatic and people only need to discuss details if there are questions on any updates. This is customer relationship management for property managers and owners, CRM in short for PM. Large apartment buildings with many units and property managers managing many dispersed buildings will find they can save a lot of time by being online and reporting information quickly and easily.

Using Smart Phones Online

Even smart phones are being used to do updates and trigger reports. As long as you have a data connection or Wi-Fi connection, smartphones and tablets can be used to create updates as well as view results online. This is particularly important for providing immediate answers on site or during a phone call based on a report you can pull up on a smart phone.

We are writing this report using a smart phone for this post about online property management. In fact we are using an iPhone, using the dictation Siri feature to dictate the text of this post. It is an awesome feature and could be used by superintendents as well as owners to update reports and results of repairs or projects.  There is no need to type, just dictate your status update!

This is the way of the future for this industry and others. If you are not already using online reports, with access by tablets and smartphones it’s time to get on the bandwagon. Significant savings can be achieved as well as significant improvements in communication between owners property managers and tenants. Although there may be an initial up front cost to get started and you may also want some customization, there will be a net savings overall with better customer relations thrown in which can be invaluable.

There may be some resistance to using these new tools by the property manager or the onsite superintendent. Once they learn that it can actually save them time and communicate more easily,  they will be willing to quickly adopt online property management techniques. We also find that the larger companies are more likely to embrace these new technologies as compared to small rental companies. They simply do not have the resources to devote to developing, implementing and managing online property management systems. If you are a renter, this might be something to consider when it comes to renting a property.


Property Management Online

Property Manager OnlineAs with all businesses these days, the property management business is also going online for both employees as well as tenants and investors. Property Management Online is a major trend that is impacting all businesses and if your property manager is not heading in that direction it is time to find out why. You could be receiving much more up to date information in real time that also decreases costs over all and allows the owners to keep closer tabs on just about everything.

Online Information for Investors

Investors can look at all of the reports on line regardless of where they are simply by logging on a server or CRM system that the property management company will provide access to. They will be able to see their income statements, expense statements, and all reports. The modern property management online company is now providing these kinds of services. In addition they should be able to review work orders and the status of these orders. In situations where there are multiple investors or owners, a limited number of people may have access to ensure security and privacy levels are maintained. For example the board members might be the only ones with access or someone who is designated the job of keeping tabs on the property manager.

Online Information for Employees

Property management employees can also update the CRM system so that management can review the results, work orders that need to be completed and the status of all of these work orders. All of the information associated with an apartment or facility that is being rented can be viewed online making it easier for everyone to understand what is happening.

This also provides a record of the activities associated with a particular unit. At one glance all work orders for a given unit can be reviewed and the history of the work completed can be viewed. This is a good way to determine if a rental unit has had more work than others completed. The same applies to common areas or the outdoor facilities. It is information that many owners and investors find helpful, but for property managers it is invaluable to them. This information helps them do their jobs better and reduces the cost to manage the building over all.

Corporate memory has long been relied on to manage apartment buildings and town houses as well as commercial properties. There may have been lots of paper records available for someone to dig through, however when it came to finding out what was really going on, you spoke to the superintendent of the building. He or she could always provide anyone with an up to date report of just about everything that was happening.

But what happens when the superintendent leaves for whatever reason. He or she may have retired, or have been let go. All of the real time corporate memory goes with them and this can be a large problem if there are also no accurate records to fall back on. There are many small invoices for repairs that need to be accommodated and if there is no record of them how is anyone really other than the tenant supposed to know.

Also if a tenant was asking for something to be completed in their unit and was turned down for some reason, if there is an online record of this a new superintendent can look at the records and make a decision on better information, rather than just listening to the tenants side of the conversation. There might have been a good reason the request was turned down by the previous manager.

Tenant View of Online Property Management

In some cases tenets of property buildings apartment buildings will also be able to log on the CRM system and view the status of work orders associated with their unit only and any common areas of the building. This provides him with a status update and helps to manage the expectations associated with the apartment.


Estate Manager

Property Management InformationAn estate manager typically looks after the financial planning of the estate and the administration of the estate of the deceased person. Specific types of estate managers may also look after significant property assets that an individual may have had during his lifespan . These assets may consist of investments in the markets, they may consist of property that must be managed, they could consist of business interest that must be kept running. We may not all have a home like this one, but our estates are still worth something and it is important that it is managed properly according to your wishes. Many employee jobs may even be at stake along with their livelihood and their families if there is a company of some kind involved.

Estate Manager – Property

The property manager or estate manager must account for all income from tenants, and all expenses for the property that is being managed. They must also be prepared to provide reports showing the income statement which outlines the income and expenses and the resulting profit and loss situation for the property. Much of this work may be delegated to the property management company that was originally in place and the estate manager may only need to liaise with them to keep everything running smoothly until the estate is wound up and the properties sold.

They must also be well acquainted with the estate planning techniques, as well as property management in the city or state or province that you live. There are significant requirements for estate managers who are also property managers.

Hiring Property Managers

Many estate managers will hire property managers to look after the property assets for the estate or for the deceased person. There may have been a contract in  place for example with the deceased and the property manager. An updated contract would need to be put in place between the estate and the company hired to deliver the property management function.

The skills required are typically not something that many estate managers possess themselves or within their company. The services will be contracted out and it is important for the administrator to understand this. It is also important for the heirs of the estate to appreciate the complexities of the estate and the steps that must be taken to ensure that everything is properly put in place to maintain the value for the estate and the heirs.

Who Can Be Estate Managers

In the vast majority of cases, the estate manager is a member of the family and the estate is wound up in an organized fashion with the guidance of the lawyer for the family and the accountant if there is one. The estate manager must also ensure that all taxes are paid from the estate as well as from the deceased income prior to their passing.

If the estate is complex and significant value, some families will opt for an unbiased estate manager to manage the estate. The fees associated with this sort of service is expensive, but sometimes warranted based on the skills and services that are provided. If there are many assets, investments and property with trust funds being set up it may be necessary to hire an estate manager to look after all of the details. Families need to be prepared to either do the work themselves or hire a professional and pay the required fees.

It is also an emotional time and it is difficult to make decisions that involve family heirlooms as well as investments and property. Someone who is separate from the family and not emotionally involved is sometimes better equipped to handle these affairs and make recommendations regarding various decisions that need to be made.

Finally the services that many people need are legal advice, accounting advice, investment advice and tax advice regarding the best approach to managing the estate as well as winding up the estate. Don’t forget the tax man wants to be paid as well and unfortunately this is one of the things that a lot of people forget about and then find the estate owes more money than everyone thought.


Property Manager Qualifications

Property Manager QualificationsWhen you hire a property manager, property management qualifications must be taken into account, in addition to many other attributes. For example the cost is an obvious one, the experience level of the property management team is another and the services that they will offer to you are another. This assessment can sometimes be quite difficult and take a lot of time with competing interests and different opinions on the board, however the important thing is to do a thorough job and in the end everyone agree on the best company for the job. Ask for other properties that are being managed and interview the owners to confirm service levels etc and other areas that you may be interested in.

Condo Board Decisions – Property Manager Qualifications

If you are interviewing property managers for the job of managing your property, or condominium as part of a board decision, it is important to make sure that you list all of the criteria that you are going to use to rate each property management firm.  Before a request for proposal is even issued, the board must review and agree to the requirements. Everyone will have a variety of opinions and it may be difficult to reach a consensus, but better to do this before the request for proposal is issued than after. The board needs to make sure that all of the requirements are included that satisfy everyone otherwise it is back to the drawing board and a waste of everyone’s time.

Property Manager Qualifications

The property management qualifications include services offered, price for those services, experience levels and knowledge of the current conditions of your property as compared to the legal requirements in the jurisdiction where you live.

Some board members, and owners will prepare a spreadsheet listing all of the services and features and costs and attributes that they’re interested in terms of interviewing a property management company. They will write all of these requirements and they will rank the level of adherence to each of the criteria that they are looking for. Some will have more importance of others and these will also be given a high-ranking. It is much easier when everyone has discussed and agreed to the rankings ahead of time.

Most board members will be well served if they document everything and have a detailed list of criteria that they will use to rank and interview property management companies. This is protection for both the board itself, the property manager and of course the owners of the property. If the board does not take this step and the property manager they hire fails or does not perform, at least you can go back to the documentation to confirm where you went wrong and avoid the same mistake the next time around.

Services Included

The services that are included will depend on whether this is an owner occupied building, a rental building or a mixed use building. Each group has different objectives and it helps to keep them separate.

For example the condo board is responsible to the owners, whether they live in the building or rent their units out. They may need a separate company to manage the rental of the units and the maintenance of the interior of the units. It is not a good idea to have the same management company managing the condo and managing the rental portion of the business. Sometimes there can be some cost savings, however the job of managing a condo is much different from managing a bunch of rental units.

In mixed use buildings there will often be a condo board to manage the condominium corporation and another board made up of owners who rent their units. This second board will be responsible for managing the tenants and the property manager responsible for the interior of the rented units. This board may also represent this subset of owners on the condo board as well.

There can be some conflict in these situations since rental unit owners do not have the same objectives at all compared to people who own their units and live in them. Some sensitivity to both parties is needed if you are going to make it work.

 


Qualifications for Property Management

Weekend House WatchersThe qualifications for property management are pretty loose. Just about anyone can set themselves up as a property manager. The big companies and the serious companies will have trained professionals on staff and people with lots of experience. Some of the smaller companies will hire just about anyone who has had some experience. You need to have experience dealing with tenants. Someone who is handy at looking after property or is available for the job.

Smaller companies and startup property management companies may be light on both experience and qualifications. In addition the board or owners of the property may also not have a lot of experience. They are depending on the property management firm to have the qualifications. They need experience to help them  keep everything legal as well as run the property efficiently and cost effectively.

What are the Qualifications for Property Management to Look For?

The questions most owners of rental buildings and condo board members ask themselves is what should we look for when we hire a property manager. What prices should be paid for the services that are being provided. What services should we expect. On the other hand these companies have an objective to keep everything running smoothly since that maintains their income. But at the same time they want to keep their costs to a minimum.

Many condo or apartment management companies will charge a flat rate per apartment to rent out the unit, to manage the unit and collect the rent. This will include miscellaneous reporting, tax reports, rent rolls and comparison to budgets that have been set up. Some will charge a finder’s fee for renting a unit while others will include this cost as part of their per door fee.

Attending board meetings or owner meetings may be included in the per door fee or they may be extra. Collection services and attending court proceedings may also be included for those situations where tenants skip town and do not pay the rent.

It is important to delve into all of the services that are provided as part of the regular fees and what exclusions are not included. Your property manager’s expertise and qualifications may be a factor in this equation.

Qualifications for Property Management – Government Requirements and Restrictions

Some government jurisdictions are also planning on enacting laws requiring boards and owners to take courses to train them in these areas. This is intended to protect condominium owners who are not on the board and do not always have much of a say in many decisions. The idea is to educate the board, investors and property managers on the functions of a condo board. this includes regulations regarding renting of units and the functions of property managers. The objective is to help everyone avoid costly mistakes and misunderstandings that could cause difficulty for many owners.

Rent increase legislation is popular in many jurisdictions by politicians who are going after the popular vote. Since more people rent than there are owners, these laws often are passed by politicians who are going after votes. They do not really care about the investment needed to maintain a building. Rents will be allowed to increase by a calculated percentage each year based on many factors. Rent controls and rent legislation is another area that property managers need to have expertise in or at least access to.

The smaller companies may not be able to afford to have someone on staff who is familiar with the methodology of how rent increases are calculated. As a result this could be another additional cost. The last thing a landlord wants to encounter is a charge by a tenant that rents have been raised too high and have to rescind some of the rent increases. It is costly and looks bad for the landlord and usually means less maintenance work is completed around the building.

Check out the qualifications for property management carefully before you hire a property manager. Take the appropriate educational courses to set yourself in a good position.


Property Portfolio Management

Vacant Home Property ManagementProperty portfolio management must be considered for those organizations who have a large suite of properties to manage. This may consist of several buildings in several cities with each city represented by a property portfolio manager and reporting as a unit on the set of properties they are responsible to manage. On the other hand for large companies managing properties that consist of rental properties for consumers as well as commercial properties, there may be a different organizational approach to managing these properties. The portfolios may be divided commercial, residential apartment, residential homes etc depending on the quantity and the location of these properties. There must also be on site or at least in city property management personal as well to take care of local details.

Property Portfolio Management

Properties can be divided into portfolios that represent types of rental properties. Depending on the size of the company and the amount of specialization that is desired, this could mean the portfolios are divided between commercial and residential for example. Commercial could be further divided by the type of commercial property such as mall or big box type commercial properties vs. office buildings that have predominantly office workers with a small amount of store fronts serving that office building. Each type takes specialized knowledge and skills that will ensure that the properties are run well and the tenants are satisfied with their services.

Residential can be subdivided by single family homes, town homes and apartment style buildings. The type of tenant varies a great deal and the needs of the buildings are very different as well. Note that the property portfolio management approach still requires an onsite property manager to deal with day to day issues and solve immediate tenant concerns and issues, including rental of units and approval of prospective tenants.

It can become much more complex when you have multiple cities involved and a mix of commercial tenants with residential tenants. If a building is predominantly residential with a few commercial stores on the first floor, does the residential property manager look after the commercial tenants or does the commercial property portfolio management team look after them? Turns out the answer is probably yes to both.

Local superintendents will look after the entire building. Commercial property portfolio management will look after all contracts with the commercial companies and the residential property portfolio management will view this lease of the space by commercial customers as just another tenant in their predominantly residential building. Most companies will need to work through these details while ensuring that they provide the best service to their customers and maintaining a profit for the owner.

Online tracking of rents, expenses, work orders etc is further complicated when there are multiple buildings in multiple cities to manage. Senior managers want to be updated each morning with a dashboard they can review that provides them with the current status of all of the issues they are interested in.

These could include rent collection status, delinquent rents, outstanding work orders, value of the work orders in terms of cost and so on. They also want to be able to drill down and examine details on any given report and take the appropriate action on items that they fell should be prioritized.  Data systems to store the data, collate it and present it in a format suitable for these needs must be purchased or designed. Data networks that provide connectivity to these systems from corporate offices as well as remote superintendent locations. Rental managers must be able to have access to rental contracts and systems that will allow them to track tenants as well as report up the line to senior managers. For larger companies they may even have an IT department to manage everything from email, data storage, accounting systems, PC needs, smart phone needs and telephone requirements.

Every rental property management company needs these services, however the size of the company will dictate how sophisticated the IT system will be.


Property Management Information

Property Management InformationOwners of rental buildings want a lot of property management information from their property managers. They look for regular reports at the end of each month. Rent rolls, status reports on various activities, annual reports, tax reports for filing with the government, rental reports to substantiate rent increases and a host of additional information that is needed from time to time. Most of all they want to make sure that there are no surprises. That they are kept abreast of all issues that could develop into serious problems requiring their attention. They also need reports and information on maintenance activities along with any improvements that have been completed.

Property Management Information – End of the Month Reports

At the end of each month, property management information should include a total income and expense report. It should show the rental income for the month and the year to date numbers. It should also show the expenses in the same format for all categories that have been agreed will be tracked and reported on. Anything that is not tracked will be lumped into a general category which will also be monitored. Rental units rented and the rent collected, end of lease projections, empty units, and collection activities should also be reported. They also want to be made aware of any special issues that should be brought to their attention. For example renters that skipped on their rent, renters that are behind on their rent, damage reports, repairs that were needed and so on.

Status Reports

There may be various projects and upgrades that are underway. A status report is usually provided to give owners who cannot get to the property an update. Pictures may be included and a discussion of any issues that have come up along with decisions that may be pending should be included. Some owners will want a monthly meeting to review this information. This meeting can be accomplished face to face if they are in the same city, however more often it will be a quick conference call which saves everyone time.

Annual Reports

Annual reports summarizing the year and projections for the coming year are also needed. These reports allow owners to budget properly and prepare financial cash flows if needed to cover under runs or large maintenance issues that may be needed. This is the time when budgets are discussed for the coming year. Every line item is often gone over and adjusted based on inflation, specific needs of the property and even specific agendas of the owners. Property managers usually prepare an initial budget which is then reviewed with the owners and adjustments made.

Tax Reports

Tax reports are also provided on an annual basis as part of the annual property management information flow. These reports can be provided to accountants who will incorporate the appropriate cash flows into the owners income tax reports to the government. This is an extremely important element that must be completed. Depending on the arrangement and the skill sets available at the property managers office, these reports may be prepared in-house or they may be sent out to a 3rd party accountant to prepare on everyone’s behalf on an impartial basis. This should not be construed as an audit. It is a tax report based on the information provided to the accountant.

If there is only one owner, discussions and decisions are often very straight forward and can be conducted easily. If there are multiple owners, the decisions take longer because of the discussion that is needed to come to a resolution on any item. This is just a natural phenomenon that should be accounted for in any schedule by the property manager in dealing with things like budgets, tax reports and any decisions that are needed. Often a board of directors will interface with the property manager and go over all of the property management information. The job of the board is to review all reports and make sure that results are in line with expectations for the budget and for the owners.


Rental Manager

Investment Property ManagementA rental manager for a large property management company spends a lot of time advertising for tenants, interviewing tenants, approving tenants and setting rent levels as well as defending those levels to tenants and government authorities in jurisdictions that have rental controls in place. One of the worst nightmares that a rental manager can have is to rent to a bad tenant. They cause a lot of damage, do not pay their rent and it is hard to get rid of them. Screening of tenants is one of the most important things that a rental manager can do.

Rental Manager – Manage Rent Levels

Rent levels have to be set based on  market conditions, the type of tenant you want in your building, the amenities that are offered in your building, and the occupancy rate for your building. Rental managers must take all of these conditions into account when setting rental levels and offering discounts in some cases to tenants as enticements at various times. Low rents may attract the wrong type of tenant which means you get people who are not good at paying their rent and do not have pride in the place they live. High rents can sometimes mean that units stay vacant for a longer period and you do not have the rental income, but then you do not have the damages either that many people cause.

Some governments have in place rental controls to avoid rent levels from increasing too fast. They will have prescribed increases that are approved each year and the rental manager must be able to justify their increases and show that they are within the level that has been prescribed by the government regulations. If the rent increases will be larger than allowed, sometimes they can be approved however substantial documentation must be provided to substantiate the increases that are above the allowed limits.

Balance Income and Expenses

In addition the expenses must be covered by the rental income. There is a balance between income and what can be spent each year in terms of regular expenses to operate the building, maintenance, upgrades and a reasonable profit. This also must be taken into account by the rental manager when setting the rental rates for the coming year.

This is a significant balancing act that most rental managers must deal with in addition to dealing with tenants, reviewing applications and setting contracts / leases for units. There are good and bad tenants at all income stratas. The trick is to pick out the people who will always pay their rent on time and take care of the place they rent for you. No one wants a deadbeat renter. You even have to be careful of rental managers who will say nice things about tenants merely to get them out of their building because they are in fact a bad tenant. This actually happens much more than you think.

Screen Tenants

Take the time to screen tenants and always use a screening service. The service may cost you some money, but it will be worth it in the long run when you avoid a lot of damage or lost rent when they skip town and do not pay their rent. This is money well spent. In one case we know of, a couple applied to rent an apartment and were in a bad credit situation. They had over 20 credit cards and were not making he payments on these credit cards. Can you imagine if you rented to them. What do you think the chances are that  they would be able or willing to pay you the rent check on time? There is very little likely hood that they would pay your rent and then you would be facing court costs to get rid of them and collect what is owed to you.


Property Manager Training

Property ManagementProperty management training can be learned on the job and in the classroom. There is nothing like on the job training for many professions, including property managers; however no one wants to pay for someone to be trained on the job and have to live with their mistakes. Most property managers will take a variety of courses these days to certify them for property management and to ensure that they understand the basics of what it takes to manage a building and all of the associated tenant issues. A well-trained property manager can save you thousands of dollars in better tenants and reduced expenses! Better tenants cause less damage and some will even spend small amounts improving their units in return for great service and good relations with the property manager.

Property Manager Training

Other Aspects of Property Management

Property management is also much more than just dealing with maintenance of various components that are required to keep a building safe and operational. There can be a lot of interaction with clients. This interaction can be with the owners who want status updates, who want see that their money is invested wisely and spent in a manner that makes sense for them and the tenants. Above all they would like the opportunity to continue making a profit going forward in time.

There is also a lot of interaction with tenants as well. In one respect the property manager is representing the owner. They are the interface that the tenants see possibly every day and their frustration etc with owner policies can be taken out on the property manager. The property manage is also the guy who can help the tenants with a lot of minor issues which enhances the reputation of both the owners and management. It is the property manager’s job to interpret the guidelines imposed by the owner and apply them to many different situations that may arise with tenants and with the building he or she is responsible for.

Property Management is a People Job

In many cases property management must also be a people job. With all of the interaction with tenants, owners, various trades that come to the property to do some kind of work and guests of the tenants, property managers need to have excellent people skills as well. Diffusing a situation that could erupt and involve all tenants for example can make for a far more harmonious workplace as well as save everyone a lot to time, energy and emotional distress. Property managers must be good at dealing with and managing people without getting everyone upset.

Property management training does not always cover these practical aspects of managing a building. Really this is more about interactions with customers and management. It is about dealing with problems and solving them. It is about people management, conflict management and communications. Not all property management courses cover these areas or provide training in communications for example

Local Bylaws and City or State Laws

Another area that property managers must pay attention to is local laws and bylaws that might affect the day-to-day decision-making when it comes to dealing with tenants, trades and city inspectors. Most people do not even realize that in some cities there are bylaws covering a multitude of issues and as a property manager it is your job to be aware of those that may affect your job and the building you are responsible to manage. If you decide to move to a new city to take a property management job, some time should be spent getting to know all of the local bylaws that might impact your new job.

At the very least, spend some time reviewing the major ones that could get you or your owners in a spot of trouble.


Property Management Maintenance

Property Manager OnlineProperty management maintenance is so important for owners as well as renters and most of the time neither is completely happy. Renters never feel that the maintenance that is done on their building that they live in is fast enough and it is never good enough. Owners feel that the maintenance costs too much, that renters are damaging their property and just do not care enough to take good care of the building they live in.  It is a fine line and at the end of the day, there must be enough money to pay for everything and still make a profit for the owner without totally gauging the tenant.

Caught in between is the property manager who must work to find a balance between both parties without spending more money than what they need to. Sometimes he or she will assess the tenant for obvious damages, sometimes they will delay minor repairs to group several together and save money by only having one service call. And sometimes they will delay major maintenance by using temporary measures simply because there is not enough money to cover everything when it is needed. But the property manager ultimately works for the owner and is the owners representative on the property. It is the property managers responsibility to implement the policies and guidelines of the owners at all times using their best judgement in many different situations.

Making matters worse is the government which regulates how quickly you can raise rental rates to pay for increasing taxes, interest rates and property management maintenance which goes up almost every year. Building a budget that factors in these increases and the rent increases sometimes will help property managers and the owners keep a building looking great for many years. In fact budgeting for repairs and building up a fund to handle emergencies and major repairs is just sound business practice.

Property Management Maintenance – Budgeting

Rental properties are some of the most difficult buildings to manage from a maintenance perspective for many of the reasons mentioned above. In addiction, for rental buildings there usually must be two separate and distinct budgets.

One budget must be set up to manage and pay for all tenant related expenses associated with the units that are being rented.  This would include any repainting, carpet cleaning and repairs after a tenant moves out. If the repairs are normal wear and tear, then the owner must absorb these costs out of the general revenue for the property. Appliances only last so long and carpets need to be replaced every so many years. Damages must be repaired for and paid, prior to collecting anything from the tenant. This all must be accounted for and included in a budget so that there is money available to cover these expenses. If damages are being assessed against a tenant, the owner must make the repairs and pay for them prior to collecting from the tenant.

The second budget that must be set up is for the building itself. This would include all common expenses and may include cleaning, window washing, common lighting, snow removal, garbage removal, repairs to the roof or windows and so on. Some of these expenses are operational in nature in that they occur on a regular basis weekly or monthly, while others should be accounted for over a longer term. A roof replacement is a good example and ideally money should be set aside every year to handle all major repairs such as this. In some locations, budgeting for these expenses is in fact part of the bylaws of the building particularly if the building is a condo and all expenses are shared by multiple owners.

There is a lot of responsibility for property managers. They are accountable for everything that goes on at the building they are managing. Hiring an excellent property manager who has experience and a good relationship with all parties will make a huge difference with everyone.


Rent Manager

Home Sitting ServicesThe rent manager has a very important job to do. He or she can make the difference between a building that is running well with satisfied tenants who take care of their units and those that do not. A rent manager is accountable for quite a few different activities. Although most people would feel that they are the ones who decides who to rent to and collects the rental checks.

Renting to the wrong person can mean that the investor who owns the property ends up with a bad tenant. They damage  the unit, do not keep it clean etc. When they finally move out there is a lot of expense to clean the unit and repair damage. This cannot always be charged back to the tenant because of laws that various governments have put in place to protect tenants. In out experience there are lots of good people who rent properties. Unfortunately there are lots that make it bad for everyone and really do not take care of their units.

Rent Manager Responsibilities

The rent manager may advertise for tenants, he or she may screen tenants and make decisions  about renting. They recommend that tenants be accepted or rejected from a building. For large buildings, the guidelines are established by the owners and the rent manager must apply those guidelines without too much interpretation. They also need to make sure that all applicable laws for the town or city they are in are followed.

Lease documents must be filled in and signed which for large companies will include auto payment deductions directly from your bank account. In many situations, 12 post dated checks will be requested. One for each month, however this is becoming less and less common as more and more people move to EFT transactions.

The rent manager must also deal with troublesome tenants. Such issues as repairs in tenants units. Any problems with the building that may be caused by tenants or may be causing difficulty for the tenants. In some situations, a rent manager may only focus on rental of the units, particularly for a large building. In other situations they may have a wider scope of control and responsibility.

Small Claims Court

Most landlords will take the tenant to small claims court to collect on the damages. Many will skip town that it is sometimes difficult to track them down. Also rent managers will sometimes end up renting to a bad tenant. This is because they get glowing references from other rent managers who are trying to get rid of a bad tenant. There are also laws that restrict what you can say about customers and clients without the appropriate data to back you up. It seems that governments have gone out of their way to protect tenants and not so much the landlords. There is an image that the big bad landlords will take advantage of the poor tenants.

Of course there are a lot more votes from tenants than there are landlords and the politicians will always go for the votes. They may not realize that they are creating the perfect conditions for dead beat tenants to take advantage of landlords. There are bad landlords of course, but sometimes the pendulum swings too far. Then no one wants to build rental buildings and they certainly do not want to rent to bad tenants. The cities will invest in subsidized housing. Generally this has been a disaster with units not wells maintained and tenants destroying units! It just costs the tax payer a lot of money to support these people who by the way generally do not pay taxes. They also receive many other benefits such as free health care.

Rent to High Quality Tenants

One of the main jobs of a well run building for a rental manager is to only allow high quality people to rent from the owner. This means people who have jobs, who have a track record of paying their bills all of the time. Who do not skip out in the middle of the night. Everyone is happier including the tenants who do not have to deal with transient people coming and going.


Property Management Solution

Property Management SolutionConsumers and investors are looking for a property management solution for their rental properties. They can always find some company to manage their property for them at various prices. These companies provide a variety of services. They include everything from renting their unit, collecting the rent, paying for advertising, managing the cash flow, paying for and managing repairs and upgrades if needed and so on. Many consumers like the idea of owning rental property as an investment. However they really do not want to have to deal with the details of renting and managing the property. This is where a property management solution comes in that can save you money and remove some of the headaches as well.

Property Management Solution and Rental Pools

One type of solution for multiple investors is a rental pool. This situation comes up when you have a condominium project that has the majority of the units owned by individual investors. It needs to be managed as a single properly to reduce the overall cost of the property management.

With a condominium, there is already a board of directors in place to manage the common elements of the property. All owners participate in the condo corporation. This board has nothing to do with renters or investor issues or with the interior of the units.

A rental pool must be established with a board made up from the investors. They have the responsibility of managing the renting of the units for the investors, interior unit cleaning and repairs and interfacing with the condominium board. This property management solution involves two separate distinct budgets, bank accounts and cash flows. There is also corresponding financial reports for both entities. It sounds a bit complicated, however if you keep both entities separate, a rental pool can work quite well.

Annual meetings are held for the rental pool where decisions are made with respect to rent increases and distribution of excess funds. The investors would be paid a monthly income from the rental pool. They would use this payment to pay their own personal mortgage on their units along with taxes. All other expenses for utilities etc would be paid either by the tenant or the rental pool if the unit is vacant for any length of time.

Do Rental Pools Work Well as a Property Management Solution

The answer is yes provided that there is a commitment by the investors to make it work and they follow an agreed structure similar to the condo in terms of bylaws, running meetings, electing board members etc. All investors must sign an agreement form that documents all of the bylaws and the way the rental pool will be operated.

As a previous board member of a rental pool and a condo board, my experience has shown that once a condo and rental pool are running smoothly, you never hear from the owners and investors. The single issue that gets everyone’s attention is huge increases in the monthly condo fees or a cash call to pay for some repair that is not covered or cannot be covered by the reserve fund. This is when owners get upset and it hits them directly in their wallet. With proper budgeting, an annual increase in the condo fees whether you need it or not will ensure that there is always enough cash to pay for whatever needs to be done. This also assume that you are making contributions to the reserve fund every year based on an engineering study of the life time replacement of various elements of the condo building.

A simple example might be the paving of the parking lot. If the engineering study suggest that the parking lot needs to be repaved every 10 years and costs one hundred thousand, then you had better be saving ten thousand a year to pay for this cost. A special assessment to pay for something that is known and planned does not go over very well with owners.

No Surprises

Property managers must communicate in such a way that there are no surprises for the owners. The same applies to condo and rental pool board members. If anything over communicate and let people know that the budget is going up by XX% and why. If you do it right, you may have all of the proxies at your meeting with few owners actually attending the meetings. Decisions are made efficiently and correctly such that they benefit all of the owners taking into account the practical issues of managing the building.

 


Investment Property Management

Investment Property ManagementMany consumers, particularly as they get older, invest in rental properties and manage these investments themselves. They do this for several reasons. One of the major reasons is to save money and make the rental property more profitable. In most situations this approach works fine and their property is fully rented with great tenants. These same individuals may also do their own repairs and maintenance as well to save money and cut down on costs. Investment property management by consumers works well when you have good tenants. Also if the property is fully rented without many vacancies between tenants. When you end up with bad tenants, there can be a lot of stress associated with dealing with these people.

What Does Investment Property Management Cost

Typically investment property managers will charge anywhere from $10 to $30 a door. The price depends on whether it is a large multi unit building or a single family home. The price varies a lot due to the cost sharing that is available to a large number of units. This fee will include managing the unit, dealing with tenants, collecting rent, paying for miscellaneous repairs and sending the remaining money to the owner. This fee does not include the cost of repairs, the cost of upgrades, tax preparation, utilities while the unit is vacant, advertising fees to rent the unit and many miscellaneous fees.

While this seems excessive, these are the typical rates that investment property managers will charge to manage your unit. Consumers living in the same city can do this work themselves. However when you live in another city from where your rental unit is, one trip to deal with issues can eat up any savings you might have obtained from trying to manage the property yourself.

Managing Repairs and Maintenance

Every home, whether it is a rental unit, an apartment, or a residential home that is being rented out requires annual maintenance. Some owners are very lucky with the tenant doing all of the work and maintaining their property as if it were their own. Others expect the owner to do all of the maintenance. They will not lift a finger even if it would avoid further damage as in a water leak. These are truly problem tenants to have.

Someone must manage these repairs and maintenance. They must hire a repairman to visit the property and make repairs. They must pay these people for their time and for the supplies that might be needed. If the work is inside the home, access must be arranged for at least 24 hours in advance unless it is an emergency. Someone might need to accompany the repair person or at least unlock the door to let them into the home. This all takes time and investment property managers will have staff that you also must pay for to look after these functions for you.

Develop a budget for Your Investment Property

Owners usually lose money on investment properties from an operating cost perspective. They tend to make money when the value of the property increases over time. Some owners do not have much hope of their units increasing in value. They will sometimes severely limit the maintenance and repair activity causing the unit to degrade over time.

This can be a serious problem for the tenant, the investment property manager and the owner. No one is happy. Many investment property managers will simply end their contract to manage a unit due to the ongoing problems. They simply do not want to be associated with a bad property that gives them a bad name. Owners must strike a careful balance between maintaining the property and managing how much money that they spend on the property.

Investment property management is not a simple task. Anyone getting into the business needs to plan carefully. They need to make sure they understand the cash flows, maintenance and repairs required as well as the quality of the tenants.


Rental Property Management Programs

Rental Property Management ProgramsMost people may have one or two rental properties and manage them themselves. They have to deal with all of the issues that renters will put land lords through and sometimes they even lose money over the deal as well. This can be from damages caused by the renter or perhaps the market just did not increase enough to compensate for all of the carrying costs and maintenance fees. There also this feeling by renters that landlords are rich and can afford to lose a month’s rent or perform repairs to things that have been damaged. Some also think that by walking away in the middle of the night they can actually get away with it. They can be found and charged and most are, but who really wants to go through that?

Some land lords will group together under rental property management programs and agreements. These are known as rental pools in some circles and have a great advantage of spreading the risk across a number of owners. Cash flow is always maintained, although it does vary. There is never a month were you have zero cash flow, such as when your unit might be vacant. This is an excellent advantage when you have taxes and a mortgage to pay every month.

How Rental Property Management Programs Work

There are likely all kinds of rental property management programs, however the one that this writer has had experience with is the rental pool program. Basically it works by all owners pooling all of their rental money into one account. All expenses to manage the condo or apartment building are paid out of it. This includes all common expenses, such as common lighting, garbage disposal, landscaping, condo fees, and rental expenses such as advertising.

The rental pool also pays for units that are vacant for the month. They also pay for expenses associated with going to small claims court to claim rent that has not been paid. In most cases a property manager is hired to manage the rental pool and all renting of the units. There is a board of directors for the rental pool separate from a condo board. The rental company is contracted to manage the rental pool, to pay all expenses and to pay all owners each month as well from the proceeds. When you pool units like this, owners can usually get a better price for the rental management side of things which also saves money.

Rental Pool Operation

Most rental pools that are part of a rental property management program run smoothly provided that you follow standard operating procedures. You must have a board made up of at least 3 members of the owners. The books must be audited each year and a tax report prepared each year for each owner to include in their tax filings.

Rental pools sometimes get into trouble when there is no oversight or very little oversite by the owners. Sometimes one owner will take control and that is usually when the trouble starts. Always make sure that there are at least 3 board members. They should meet with the property manager at least every 2 months and also review the books every quarter. The board should have an annual meeting that elects them and gives everyone to ask any questions that they might have.

An agreement for the rental pool should be set up. There should be a contract between the rental pool and the property manager. There should be an election of at least 3 board members each year. The board members staggered so that there is a combination of both new and experienced members on the board.

Follow some of these simple rules for a rental pool as part of a rental property management program. Generally you will have no serious problems unless the property manager fails to do his or her job. Always maintain a reserve fund for the rental pool as well to make sure you can deal easily with any financial surprises.

We will write more about rental pools in future posts. However if you have comments or want more information, please feel free to leave us some comments.


Certified Property Manager

Certified Property ManagerShould you hire a Certified Property Manager? Or someone who is offering the services of a property management firm? Many people every day are trying to figure this out. It usually comes down to what the services are going to cost. What you actually get for the money you are going to pay this Certified Property Manager. Consumers do want to hire professionals and they want to hire people who are honest and will not rip them off. After all you are asking a stranger to look after your home, one of your most prized possessions.

What does it mean when you have hired a certified property manager? Usually it means they have attended some courses on property management at a local college, hopefully received a diploma from that college and they belong to an association of property managers. Some people reading this may react and say well so what. It does not mean they have the experience to manage a property and they may not even be able to do a good job. Should you look for a certified property manager or for a company that has lot’s of experience with certified property managers working for them.

Certified Property Manager

We happen to think that you should hire someone who has both. Having been on the board of several condominiums and having dealt with many property managers, we have found like all industries there are some good ones and then there are those that really will never do a good job.

We even had one company who paid us lip service, said they would do everything we asked and then did absolutely nothing at all. We had to fire that company and it was a difficult time for all concerned, since you then must hire a new property management firm, transfer all of the records over and then get to know your new company. All of this must be accomplished in a less than friendly environment with the old company that you were dealing with.

Hire Experience

Always hire a property management company with experience and one that operates in a professional manner. Look closely at the fees and also the services you receive for these fee’s. Do you get the reports that you need to not only manage the condo or apartment building properly, but to also manage the property manager and assess the job they are doing?

You should also make sure that they have a certified property manager on staff so that in addition to experience, they are also up to date on the latest property management laws and consumer rights. Many states and provinces have consumer rights in place to protect the renter. You do not want to run up against some bureaucrat with unlimited resources who tells you to rescind a rent increase for example that you need to run your business.

Certified Property Managers are Good at Theory

Training is always good and it is important to have. However as with all training until you get out in the real world and face some of the issues that consumers throw at you, no amount of training can really help. Training may prepare you for what to expect, however it cannot tell you what to do in every situation. There are just too many variables and that is also why you must also get experienced property managers as well to manage your home, your condo or your apartment building.

Comments are welcome, especially regarding any experiences you may have had in the property management field that may assist our readers. Build a requirements list and match various property management companies against this set of requirements. Interview several and make up your mind based on the facts and not how well you may have gotten along with the representative. Sales is easy, doing the actual work is more difficult and you will need to be working with the people who actually do the work.

 


Electric Vehicles create issues for Apartment Managers

Electric Vehicles create issues for Apartment ManagersApartment dwellers are looking for electrical outlets to plug-in their electrical vehicles to recharge them over night. Electric vehicles create issues for apartment managers and superintendents. Governments are pushing better utilization of our resources, specifically to cut down on our dependence on foreign oil and yet this is creating many issues for individuals who want to support the initiative and are coming face to face with the reality of where do they charge up their vehicle. If you live in a single family home or even a townhouse were you have your own electrical meter, there is no issue other than the basic economics of  recharging your vehicle. We urge you to do your own math as well to confirm your potential savings when you purchase an electric vehicle.

Electric Vehicles create issues for Apartment Managers

Life is never Simple and Straight Forward.

For apartment dwellers it is not so simple. Most people will park in a garage or even surface parking were there is no access to an electric plug of sufficient amperage. In those few places were there are plugs, many owners are objecting to paying for the increase in electricity that is being used. Some property managers have removed electrical outlets so they cannot be used to charge electric cars. In addition, the existing electrical system in older buildings may not be up to the standard and capacity needed to support more than a few cars plugged in to recharge.

Expensive upgrades may be required and the owner is left wondering who is going to pay for this expense and how will he recover this expense through the rent or other fee’s. At the very least, there may be only one electrical outlet in the garage and not close to the car owners requested parking spot. In some colder climates, electrical outlets are provided for car warmers and engine heaters. they are intended for this purpose and not for recharging electric cars.

Car Owner Volunteers to Pay His Share

One electric car owner has volunteered to pay for his share of the electricity based on the manufacturers anticipated usage and local rates for electricity. He even volunteered to double what he should pay from a theoretical perspective. The apartment building owner is worried that even though this car owner is willing to pay , he may find himself committed to expensive electrical system upgrades or risk the wrath of the other apartment dwellers when the breakers let go and everyone is in the dark. In many jurisdictions, the rent is controlled so increasing the rent is not a solution.

Early Days for Electric Vehicles

This is still very early in the product life cycle for electric vehicles. The issues and problems are just now being realized. Many people with good intentions will purchase electric vehicles and then be faced with where do they recharge their vehicle. Once they have committed their money they will be motivated to solve these minor problems. All it will take is a competitive market for apartment units and an apartment owner advertising that they have parking stalls available for electric cars to get the ball rolling. It will become a competitive issue at some point to capture some of the best apartment owners who pay their rent on time and cause few problems. I am thinking that if you can afford to purchase an electric car, you are making pretty good money and will appreciate a higher quality of apartment.

Many other industries started out this way and gradually over time as the penetration of the product grew, more and more support facilities were made available.

If you would like to leave a detailed comment about electric vehicle recharging challenges, please leave one at the bottom of this post. You may agree with our opinion or perhaps not and have a different perspective on it. We would like to hear your opinions. Well written comments will be accepted and we will even approve a link back to your web site for well written on subject comments.


Residential Property Management Ottawa

Residential Property Management OttawaThere are many residential property management companies in the city of  Ottawa. How do you know which one to utilize and contract with to manage the rental of your home or apartment, your investment property? Perhaps you just need someone to look after your home while you are away on vacation to satisfy your insurance company!

Ottawa property management companies offer a variety of services. Some are city-wide while others cover only specific areas of the city. This is designed to minimize travel costs and the subsequent charges to their customers. There are very large property management companies and there are small mom and pop companies in the city of Ottawa.

Residential Property Management Ottawa Services

Some of the basic services that you need to consider are:

Administration:

  • rent collection in trust
  • payment of invoices, property taxes, utilities, insurance
  • monthly reports, annual reports
  • maintenance of property records
  • cash flow management
  • property inspections
  • receive and respond to tenet inquiries 24/7
  • representation on all rent review matters

Leasing:

  • advertising of rental unit
  • receive leasing inquires 24/7
  • schedule showing of property
  • complete rental application
  • tenant screening process
  • execute lease
  • collect deposits and post-dated checks

Residential Property Management Ottawa Companies

Here is a brief list of some of the companies in the city of Ottawa that provide residential property management services

  • Sleepwell Management
  • Marklyn Property Management
  • Taggart Realty Management
  • CLV Group
  • District Realty
  • Gow Property Management
  • Megacorp Property Management Inc
  • Woodbridge Management
  • Apollo Property Management
  • Metcalfe Realty Company Limited
  • Just Imagine Realty Inc
  • Affordable Property Managément
  • Merkburn Holdings Ltd
  • Immogest Property Management Inc
  • Attaché National Capital Management
  • Rest Easy Property Management
  • Elk Property Management
  • Deerpark Management Limited
  • Executive Home Mgmt
  • A Premiere Property Management Associates
  • Axia Property Management
  • Capital Concierge
  • Sentinel Management
  • Beauregard Property Management corp
  • Reid Property Management Ltd

While we cannot vouch for any of these companies we urge you to review our post about residential property management to understand some of the things you should take into account when you are considering hiring a property management company. This list has a lot of common sense items on it that you may find helpful when you are interviewing some of these companies.

About Ottawa

Ottawa has approximately a million people living in the area and is spread out along the Ottawa river. Hiring a local company that is based in your area may mean that you can get a more competitive price, however be careful that you do not sacrifice services to yourself or your tenant to get a lower price. It could end up costing you a lot more money in lost rent or damages that you must repair if your tenant causes a lot of damage and then skips out with out your property managers knowledge.

If you are leaving on vacation for a few weeks, check with your insurance company to see what the requirements are for someone checking on your home. Failure to have some one check on your home could mean that your home insurance is invalid and any claims may be denied.

If you are a property manage and do not see your name on the list, leave us a comment and we will be happy to add it. For more information on Residential property management, click here.

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