All Forum Posts by: Dorothy Butala

@Aqil Dharamsey You are not alone.  I had a vacancy at one apartment, that usually fills easily, for a month and a half, another vacant apartment that needs to be renovated (but been busy putting out the rest of the literal and figurative fires), a porch roof at one property that the joists collapsed due to our snow last year and is now leaking into the foyer of the first for apartment and the contractor who was supposed to do the work refused to put my company on his insurance policy as an additional interest, so I am back at square one looking for contractors, a tenant's unauthorized long term guest caught another porch on fire when he carelessly threw his cigarette butt next to the building (in a non-smoking building), crossing fingers my public adjuster will get enough money from the insurance company to fixed everything, gave the tenant of the long term unauthorized guest 30 days notice, but have a feeling she won't leave which will turn into an eviction which will make the process last another 45 days on top of the 30 day notice (there are reasons I did not do the eviction first and am going with the lease termination notice), and received notice that another tenant is terminating their lease 5 months early and will be gone in a week.  

This is definitely a marathon, not a sprint, it takes grit and perseverance, plus some "tuition" in learning lessons, but will ultimately be worth it.  I view it as it all ebbs and flows, 4 weeks ago I was celebrating a huge bump in equity at a refinance and a reduction in mortgage payments, another mortgage payment lowered significantly which increase my cash flow on a different property and going under contract for a 12 unit townhouse complex...I try to take the bad in stride, and not take the good for granted.  Things will look up soon!  

@Brad Larsen @Patrick Philip  I realized in my post I never said anything about him hiring his own manager, which was his first question.  My answer was in favor of hiring and training his own manager vs using a property manager.  My apologizes for leaving out that vital piece of info!  

Hi Niki, I would put the late fee on the notice.  Hope this helps!

I worked in property management for several years, and my first question I would ask a property management company is how many of the employees of the company own their own rentals.  If they say zero, or less than 40% of the employees own their own rentals,  run away.  I worked at a company with approximately 30 people, and I was the only one with several rental properties that I owned and managed on my own for many years (some people had equity positions in rental portfolios, and I believe one other person had 1 rental).  It makes a huge difference in how the managers and leasing agents will treat your properties.  You want people who know what it is like because you will get better management by far.  

Once you find a PM who has employees who own their own properties, then you want to ask some of the following:

1. What types of properties do you typically manage? You want to find out if they are taking whatever they can get, or if they focus on a particular type of property, and make sure it aligns with what you have

2. What is your average vacancy rate? How many days does it take to fill a unit once it is vacant.

3. What processes and procedures do you have to ensure interior and exterior inspections are completed so that items of note are taken care of before they become large problems?  Ask to see the checklists and systems they are using, don't just take their word for it.

4. What is your eviction percentage? If this is high, they may not be screening properly

5.  What pre-screening and screening criteria do you use? Ask to see it.

6. What are you management fees?  What fees are there for cancellation, evictions, renewals, marketing, account set up?

7. Do you do a la carte pricing (mix and match accounting, facilities and leasing), or do you only do full service management?

8. What does your lease look like?

9. What professional designations do the PM's have?  Do any of them participate in education (attending professional organization meetings) outside of mandated continue ed?

Tell us a little more about your background and what motivated you to ask these questions...I am interested to hear...

I personally don't allow tenants to do any improvements to the property, any updates must be done by my contractors or maintenance technicians.  You don't know if the tenants will do the improvements correctly or shoddy, and if they do a bad job, now you have to go back and do it all over again, which wastes a lot of time and money. A tenant can get hurt if they are dealing with electrical systems and you don't want that to come back to bite you.  

If tenants are a known quantity (meaning the have rented from me for a while, pay rent on time, and are overall good tenants) I will do updates for them, like put in a new ceiling fan.  The purchase and install of a new fan is well worth the money you will save if a tenant decides to leave, and you also are improving your property and making it more appealing and increasing the value when doing items like that.  

When a tenant leases a property from me, they are taking it as-is, but I will accommodate reasonable requests, and not charge them unless it is something very specific they are asking for that may not add value, but gives them a sense of feeling at "home."

If there are certain items they want, like a better ceiling fan than what I was going to provide, I will allow them to pay the difference to go with the upgraded fan, but ensure they know that it becomes a fixture to the property and it stays once they leave.  
I am currently putting in a fence for a tenant and not charging them because I know it adds value to the property, and is an amenity that future tenants will want (my rentals are pet friendly, so a fenced in yard for dogs is sought after). 

I am curious to see what you decide to do, keep us posted!

Yes, you will want to sign a contract for your due diligence period.  You will also want to involve an attorney in the process regardless of which route you decide to go in terms of financing and purchasing the property.  Seller financing is nice because the property is fully owned by you and the seller acts as the bank at whatever terms you both negotiated and agreed upon.  I haven't used a master lease option but from what I have read, it reminds me of land contracts.  With both of these you don't actually own the property and a seller can back out of the contracts which means you may be doing work on a property you may never own.  I would play it safe and see if the owner will do owner financing.  

I am also curious about your offer of 25K.  What factors made you decide to offer that?  Are you leaving yourself some negotiating wiggle room?  Are you looking for a high equity position?  

Is the property being financed with a conventional loan or a commercial loan?  What size is the property (units)?  Is it a residential or commercial property?

Hi Hannah, welcome to the never boring world of rental property ownership!  The way I set my rent is by researching the "competition" in the area.  Go on Craigslist and Zillow and look for similar properties in your area, and by similar I mean, same amount of beds and baths, updated or dated, parking situation and amenities like washer/dryer included. Keep in mind what utilities you will include vs what the tenant will pay for, as well as any services you may provide like landscaping and snow removal.  You can also check out rentometer.com and put in how many bedrooms your property has, the address, and the rent you think it should be, and it will give you some feedback about rental data in the area.  Lastly, you can call a property management company and ask them what they would rent the property for, they may or may not give you an answer, but it is worth a call. I hope this helps!

I also agree on dropping the inspection contingency.  If you were asking for inspection contingency because you weren't confident in your numbers, you may want to try doing the inspection before making the offer.  I made a handshake deal with a local home inspector to do walk thru's with me when I am doing my repair analysis, and he points out things I may miss.  He doesn't write a report for me, but will write a letter noting specific items if I request one.  He charges me a fraction of what it would be for a full inspection.  For me, it is totally worth having an experience inspector walk side by side with me even before I submit an offer, it brings confidence to my repair numbers and to the offer I present.  Maybe that will help you as well.  

Hey Michael, I just saw this post, how did the interview go?  If you are continuing to search for leasing and resident manager jobs, let me know, and I will give you some pointers.