All Forum Posts by: Spencer Abeyta

This is just my opinion, but I don't think virtual staging helps at all. People like to picture their belongs in the space, not someone else's.

From an investor standpoint, I hate looking at pictures that are virtually staged. I skip past them because they can cover up damaged floorings or walls. I also like to think most people are smart enough to understand that a bed would go in a bedroom and a table goes in the dining room.

The limit on late fees really hurts the 'penalty' aspect of PMs to encourage tenants to pay on time. We manage a little over 500 doors and so far we have not seen any tenants pay rent but not pay the late fee. We also apply payments towards late fees, posting fees, or utility bill backs before rent. You have to notify the tenants that they have incurred a late fee. We send out emails when a late fee in incurred.

Based on the legislation, if push came to shove, the tenant could tell us in writing that they want the payment to be applied to rent and carry a balance of increasing late fees. This would be a very rare situation but it could happen. If this situation happened and then the tenants moved out you would be able to take the late fees out of the security deposit. 

In our company, late fees go to the PM. For example say there is a $1000 deposit, $750 of repairs, and $500 of late fees. I think it would be the PMs responsibility to make sure the owner is covered before making profit for themselves. So we would pay the $750 for repairs to the owner, then charge the remaining $250 towards the late fees. From there, it would be up to the PM if they wanted to file a $250 collection or just count it off as a loss.

I would be happy to go into more depth about other changing legislation in Colorado if needed John!

In the business cycle of a PM company it is usual for the company to take on any rentals that someone is willing to let them manage. This can lead to some very undesirable properties, tenants, and owners. But at that point the company just needs money coming in to keep the lights on.

When a PM company matures, grows, and stabilizes, that is when they can start to be picky with what properties and owners they take on. There is a saying in the business, 'I can manage any property as long as I have the right owner.' We have had to turn down great properties in the past because the owner would have been a bear to deal with. It is important to screen PM companies, but keep in mind we are also screening you.

I have quite a few collogues with smaller portfolios that would recommend Buildium. For 20 units it think you would be looking at $55 per month.

My company currently uses Appfolio but they have a 50 unit minimum. 

NARPM is a huge organization in the property management space. I would recommend starting with companies who have earned a Certified Residential Management Company (CRMC) designation from NARPM. There are under 50 companies with this designation nationwide. In order to achieve this, you have to have a Master Property Manager (the highest individual designation) on staff and you have to meet high standards for business practices. If those companies are at capacity in your area they would be a good place to ask for referrals.

The damage and cleaning should be taken out of the tenants security deposit. Then if there is anything left it should be applied towards actual damages for loss of rent. 

If there is damage outside of what the deposit covers, that would be the PMs cost based on the blurb you attached. Keep in mind if the tenant trashed the place the PM will only cover UP TO $2500. Disclaimer: I am not a lawyer.

How many companies did you talk to? That could be the average for the area but you also may have only talked to the most expensive company in the area. There are a lot of different pricing modeled in PM and you should be able to find something that works for you. 

Keep in mind there have been a lot of discount brokerages popping up the past year because the sales market has slowed down. They offer lower rates but they have very little experience in property management. It is worth paying more money to get a higher quality service.

It really depends on the amount of rentals you manage. For smaller portfolios, I know a lot of people have had success with Buildium. The benefit of having a software is the ability for tenants to pay rent online, submit work orders, sign leases electronically, and the ability to complete end of year owner taxes. 

My company uses Appfolio but I think they have a 50 or 100 unit minimum.

You need groundwork in place before self managing. Most importantly, you need to have a lawyer drafted lease and be up to date on all the tenant/landlord laws. 

You need to have vendors that you can call on to repair the property (if you aren't going to to this yourself). Keep in mind that with self managing, you are now a 24/7 after hours maintenance service. You need to know what vendors you will send out and if they can go out in a timely manner.

Lastly you need some basic processes. For application screening you need to use the same process for everyone to comply with Fair Housing. For tenant move outs you need a process. If a tenant asks to break their lease early you need a process. If a tenant doesn't pay rent you need a process.

If that 10% management fee is not breaking the bank, I would recommend talking to other PM companies to see what your options are. Not all PM companies are created equal.

How much is the gift card going to be? You could rack up expenses really quickly with this method. You need to have a very defined list that you would target. With traditional postcard mailings if you are loose on your list and send it to someone who would never sell, you spend 50 cents per postcard. With a gift card method, you are sinking dollars into someone who would never sell.