All Forum Posts by: Joe Norman

 I'm surprised to hear that you are having so many tenant issues in a "peaceful" location in Baltimore. It sounds like tenant screening (in addition to communication) is the big issue here. Frankly I think tenant placement is one of a PM's most important jobs and will make or break the profitability of a portfolio. I would ask for more information on his tenant screening process and possibly look for ways to incentivize based on improvements there. Maybe the tenant placement fee doesn't get paid until a tenant has been in the property with a good payment history for 6 months?

Whoever you work with, PLEASE MAKE SURE THEY ARE LICENSED. Maryland is one of only a handful of states that does not require Property Managers to hold a real estate license. There is literally no oversight of the industry in our state. However PMs can choose to obtain a license, and therefore submit themselves to the scrutiny of the Maryland Real Estate Commission and give their clients some added protection. 

I've never heard of that type of charge in a Buyer Agency Agreement, and each agent/brokerage sets their own fee structure.

I don't really have advice for you assuming you signed and agreed to this.

I doubt you will be able to pull off a renovation with the tenant in place, especially since it's only one bathroom. I would only go into this if either (1) you can move the tenant out to do the renovation work, or (2) the numbers work for you to let the tenant continue to stay longer and do the renovations when they move on. 

Definitely check your state laws as each state handles things differently. I would assume (and its a big assumption because I am not familiar with the particular's of NJ's licensing laws and regs), that a Salesperson license would suffice as long as you are operating under a Broker who allows their agents to act as PMs. I would also assume that to act as a PM in any capacity you would need the license.

If its not easy to find this information then you can always call some prospective brokers in your area and ask them directly how they handle PM's that operate out of their office.

Good luck!

As Keith said there isn't enough here to know if the problem is the property or the PMC. Clearly the tenants aren't great, and improving the quality of your renters is part of the process of improving your investment. Assuming it projects to cashflow well (after budgeting for maintenance, capital expenses, vacancy, etc) then I would keep trying. Your success will depend heavily on the competency of your PMC so choose wisely.

One of the values I provide my clients is access to my network of other professionals. I would ask for referrals to people like Property Managers, General Contractors, HVAC Techs, Plumbers, etc (doesn't have to be a long list just pick a few pros). If they have great people ready to connect you with then that is a good sign that the agent is well established and professional.

Sounds like a rocky start, and maybe in hindsight not the best investment, but I wouldn't sell now at a loss. I'd give it at least a year of renting to a stable tenant and then, maybe, reassess. I suspect your numbers will look better once you have a longer term tenant in place.

As for appreciation, I wouldn't look at any shorter of a window than 5 years unless you are forcing it with major renovations. 

The downside to #2 is the exit if the partnership doesn't work out. It has to be someone you really really trust because you are getting into a long term relationship with them. I would avoid this option.

For #3 you could pay a "consultant" or coach, but how different is that then a good Realtor and Property Manager? If you have pros you trust in market then I would absolutely go with Option #1.

Keep in mind that regardless of what you offer co-op commission, the buyer can always ask for something different as a part of their offer. Co-op commission isn't fixed and is negotiable. Offering this "tiered" structure also may incentivize the agent to not act in the buyer's best interest (which isn't necessarily your problem, but your listing agent may have qualms about putting something like this out there).

I would just offer a competitive co-op commission (your Realtor can advise you on what that looks like in your area) and then negotiate fair terms with whoever submits offers.