Here is my top 5 list!!!!!
1.Managing owner Expectation
- I have to make them understand market value vs their value (just because their mortgage is $1200 a month doesn't mean that their rent should be $1300 to cover their costs). Once I pull a CMA (Comparative Market Analysis) for the neighborhood, then I schedule an appointment to look at the property. Based on what I see when I visit the property, and all the available information about the comparable I give the owners the news of what I think the property will rent for. If they go against my recommendation, that property could be sitting on the market longer than necessary. I have had many head strong clients, but when it lists at my recommendation price it is amazing how quickly it moves.
- I have to make an owner understand rental market cycle and how it plays in to renting your unit. Everyone knows the rental market, even a slow market is booming from June -September (Kids are out of school and people are moving). Once september approaches you see a significant slow down, and by the middle of November (I call this the pre christmas spending. everyone is buying christmas gifts and don't have money for security deposit and 1st month's rent). You don't really have anything pick back up until Mid February- March 1(Everyone is paying off credit cards for christmas and don't have money to put down on the security deposit and 1st month's rent). I always tell my owners going in to the winter months to rent their property that they need to expect it to be vacant the entire winter. I am a firm believer in plan for the worst and hope for the best, and I would much rather have a property rent much faster than much slower than I predicted.
- When owner look at the in and out numbers, they have to understand what is only a paper loss (depression) and what actual losses are. It is so hard to explain to owners that yes you are supposed to have losses, but that is how you don't have to pay taxes on your full rental income received.
- When owner's don't understand the difference from a tenant repair vs an owner repair and they want the tenant to pay for something that the tenant had nothing to do with. I have to make them understand that the tenant has no interest in their property, and they as the owner are responsible for the physical structure, but if a tenant caused an issue with the property then it is a tenant bill. Also if a tenant calls for a maintenance ticket, but there is nothing wrong (tenant did not believe the A/C was cooling properly), then that is a tenant bill if the A/C system is operating within manufacture Specifications.
2. Filing Court Documents for Eviction/ ( Unlawful Detianer in VA). I always send out 5 day notices on the 6th day, but I can not pursue court action unless the owner chooses to do so. Unfortunately we get into some cases where the owner says give them a chance to catch up, however in the meantime, they get so far behind there is actually no way for them to catch up. I get more frustrated at the owner for this because if they allow them to stay in the unit without rent, we are not making any income and neither are they.
3. Application information..... A lot of times owner's don't realize that as a licensed real estate company, we must follow fair housing laws at all times, In the past we actually went through the application with the owners and if the owner said I didn't want to rent to them because "they are not a married couple" well that is a fair housing violation in VA, and my licenses is in jeopardy. Also due to our contract with our credit reporting services, I can not handout any information about any potential tenant application to anyone that is not an employee, or sub-contractor of my company. Owner's think they need this information to make a good decision on weather accepting the tenant or not, but most owners really don't know what they are looking for when they are looking at a credit report, and sometimes they don't get the whole picture. They hire a property manager to look at this for them and make the best judgement based on the information that was pulled in the credit reporting service.
4. Repairs and Maintenance Warranty's.... Owner's don't realize that using a warranty company is never the way to go on a rental property. When a tenant puts in a maintenance request all they want is for someone to come out and fix it, they don't want the drama that a warranty puts on the situation. I don't want to name names, but on 4 different occasions we have had nothing but disasters... Most warranty companies will say that all you need to do is just call in the problem and they will send out someone to fix it, all you as the owner need to do is pay the deductible. Well they sell you on either at minimal deductible of $50-100 each trouble call, then you call in and they say we will send someone out ti fix it within 48 hours all you have to do is have the make and model number of everything covered under the warranty or they can't even schedule a service tech to come out. This gets irritating especially since you spent over 1 hour just waiting to talk to someone, now you are frantically trying to contact the tenant to go out and look at the system, or appliance. So your normal 48 hours now turns in to 1 week because you are waiting for the tenant to get the model number and serial number (even if you have already called on this system before), you finally get the information then you get on the phone and wait another hour to speak with someone only to find out that the soonest someone can look at it was next week.
Then after all that they try to find any way that system would not be covered under the warranty, then it goes back to the owner, which the contracted repair company knows and usually makes the bill larger than what it should be...
I could go on and on, but some owner's just don't understand that if they just saved the money they paid for the warranty and found a maintenance person, or even used the one that their property manager recommends, their repairs would be done faster and usually cheaper that what their warranty company charged them for the whole year.
5. Owner Accountability.... Owner's checking in and checking out but usually don't pay attention to anything...
- I have owners that don't pay attention to anything until you have to pay a bill on their behalf, even if you send them a copy of the maintenance request even when you sent it to the prospective contractor for work.
- My favorite is when you send an email to the owner asking about a large maintenance repair and they send you an email telling you to go ahead, you get the work done and they don't remember the conversation.... I just re-forward their authorization email and explain you gave me permission on this one.
- Or coming back at their year end statement and asking why they paid 20% commission one month and not any other month, (look at your statement and see that your tenant was 1 month behind, and you had 2 months of management fees come out in the same month). Our owner statements are very easy to read rent in and all bills out line by line, but when you don't look at your in's and out's every month, you don't get the big picture.
