All Forum Posts by: Account Closed

Hey Brandon, congratulations on your first deal! @Brandon Sturgill brings up some good points, and often it does make sense to self-manage your first. It's very important to do your research first so you don't cross any legal boundaries and so that you are able to secure qualified tenants. Please feel free to reach out directly if you have any questions about managing and/or tenant placement, I am more than happy to help you out and give you a few tips!

Hey Adam! I don't have any specific recommendations, however I can help you out with a few tips on what to look for when you're searching for a Property Management company (especially when you'll be in another state!)

1. Location

Of course the management company you're looking for will need to be in the same area as your investment property, so do a Google search on management companies nearby. Remember, the first one is not always the best one, just because a company pays to be at the top of the listings, does not automatically mean that they're the best fit for you!

2. Response Time

If you are unable to get a timely response via email or phone from a property management company, this is likely how they'll treat you down the line, and how they treat tenants and prospects as well, keep looking for a company that will be quick to respond!

3. Cost

Contact a few management companies and ask what their associated costs are, below are some good costs to know and what to ask:

- Management fee | typically a percentage, ask whether it's based on charged rent or collected rent. Often the percentage will lower if you have multiple properties, so ask them if that's the case if you are thinking of doing more investing in this area

- Maintenance costs | ask for an hourly rate for general maintenance, any routine maintenance that you should be aware of, and if they have an in-house maintenance team or if they use third party maintenance. If they use third party, try and find out what they charge on top of any vendor bills that come through

- Placement fee | placement fees are charged when a new tenant is found and placed into the property. These fees can vary from a flat fee to a percentage of the rental amount.

- Renewal fee | when a current tenant renews, the property management company still has a significant amount of work tied up into this renewal, so often they will charge a fee or percentage for a renewal. It can be the same amount or lower than the Placement fee.

- Miscellaneous Fees | What do they charge for pets? Do you receive that fee or do they keep a portion of it? Do they charge a cleaning fee? What portion of that fee is coming to you? Utility charge? Late Fees? Make sure that you know where the money goes once it's received from the tenant.

4. Information

You'll want to see what kind of capabilities the property management company has for providing your investment's information, how will you get financial data, vacancy data, and maintenance data? Several management companies are able to automate specific reports and will work with you on what you'd like to see and how often you'd like them to send this data, other companies may have an online portal designed for investors so you have all of that information at the tip of your fingers at all times.

5. Reviews

Of course it's wonderful if the property management company has excellent reviews by both tenants and investors on Google and Facebook and other venues, however keep in mind that in property management, there are going to be a number of upset tenants. Whether it's losing a security deposit (most of the time rightfully so), or a late charge being added to their account, or a maintenance request that wasn't dealt with immediately, etc..., these are often arbitrary personal opinions that should not reflect poorly on the entirety of the management company.

6. Property Management Company

Ask the property manager what sets them apart from other companies in the area, how long have they been in business? How many units do they have under management? Have they worked with an out of state investor before? What is their typical turn-around time? What is their current vacancy rate? How do they market their units?

7. Website

Check out the management company's website, is it user friendly? Would potential tenants be able to navigate the site with ease?

8. Property Classes

Is your property a B class property? A? C? Check out the other properties that are under management of the company you're vetting, see if they're in the same class as yours. Most management companies will manage a couple of different classes, however if you are seeing class C-D properties on their website, and your property is in class A, you may want to keep looking. It is important to ensure that the management company knows how to manage properties in the class yours is in, and that they're able to get the highest rental amount possible.

9. Management Contract

See if you can secure a copy of a blank management contract, find out how long their contract term is, are you going to be signing up for a year? A month? Do they offer trial periods? What is the minimum reserve required per unit? Go through the contract thoroughly, make sure that you agree with what you're signing up for!

In conclusion, there are many factors to finding the right property management company, the key is to do your research, make the calls, and to go with the company you think will be the best fit for you and your investment!

Hey Nathan! It's easy to retain the shed for personal use only, just ensure that the lease states that the tenants will not be able to use the shed. If the property has no additional storage, this could deter some renters, but definitely not all! 

Hello Julie! Congratulations on realizing what you want your next step to be, it's awesome to be able to work in a field that you're experienced in and passionate about. In order to run a Property Management company, you will need to either wait until you can acquire your Broker's license, or hang your new license with a local brokerage, use their name and pay them a fee for this service. It can get a little bit complicated as people will call them looking to get a hold of you, but it can work when you form the right business relationships. An option you may have not considered is to start working under a local property management company, gaining even more tools and knowledge and learning how an official company does things, what forms they use, what processes, how they handle evictions, what lawyers and contractors they partner with, etc... Whichever option you choose, I wish you the best of luck, professional property management is certainly not an easy industry, but it can be quite exciting :) 

Stephen, make sure to check the agreement that they have, it's possible they have a lease in place and if so, you'll need to honor those terms. If they do not have a lease in place, I would sit down with the Property Manager and let them know what's going on, working out a rental rate or giving them the option to vacate. Congratulations on the 16 unit!

Hey Greg, congratulations on the upcoming purchase! In order to break a tenant's lease, I typically arrange a sit down with them, and ask them what their plans are. Sometimes tenants want to get out of their lease early and you are able to secure an agreement with them, other times you can ask them what it would take for them to leave prior to their lease end date, and there's usually a number that will make it worth it to them. I've seen owners pay from $500-$5000 for the current tenants to leave, just make sure you get an agreement in writing if it does come to this. Good luck!

Hey Ryan! Try checking out the local REI meetups, they're a great way to connect with your local real estate community. If there aren't any groups in your area, look into starting one! Chances are, there are others in real estate who'd love to be a part of such a group. You can find local groups here on BP under "Network" > "Events".

Hey Joshua! It completely depends on your goals and the direction you're looking to go in. It's always a good idea to know the basics of Property Management, however a lot of information is available on BP and other places, so if you're primarily looking to build your inventory of homes, it's wise to learn how to do deals and start making offers. Once you have a home or two it's easy to partner with a Property Management company who can take managing off your shoulders for a very small cost. If you're looking to manage your own homes and perhaps start a property management company, it's a great idea to get a job at one in your area, as you'll gain a lot of useful knowledge and can ensure that you handle future situations legally, correctly, and efficiently. Whatever you do, go after it with everything you've got, I started in Property Management years ago and have loved it, let me know if you have any other questions about the industry itself, I'm happy to help!

Hey Pawel,

I'd definitely give them a call, and then mail + email them a notice saying that you are going to start showing the property to prospective renters. Put your home online and start showing it, giving the current tenants a 24 hour notice (or whatever reasonable notice is in your area. In my experience, if they are not responding, they likely changed their minds about renewing, and you may get stuck with vacancy if you're not pro-active about filling it.

Hey Charlie, legally, once you have signed the lease, it is in full effect, and you need to refer to its terms on breaking it. Definitely call the tenants and let them know the deposit is due and work with them on getting payment. If you'd like, offer them the option to void the lease since no money has been exchanged, but it sounds like they want to move in and chances are they will pay the deposit.