System - Monday, December 3, 2018
When discussing a target rental rate with landlords, I typically describe the need to balance between the competing goals of maximizing their cash flow and minimizing their vacancy. Setting a higher listing price will hopefully result in a more positive cash flow, while setting a lower listing price will more likely result in more interest from prospective tenants, a quicker move-in date, and a decreased likelihood of extended vacancy.
Personally, when setting a listing price for my own rental properties, I lean toward the lower range of the suggested listing price because I have a complete aversion to vacancy! Vacancy not only equals lack of cash flow, but also introduces many risks.
First, a landlord’s insurance policy may require additional coverage for properties that are vacant for more than 30 days. Landlords should always check with their insurance provider to understand their policy’s requirements regarding coverage during vacancies.
Vacant properties can become a “hang out” for teens to congregate around or break into. We’ve had several instances of teens breaking into vacant properties during the winter months to find a warm place to smoke. In some areas of our...
Michele - Sunday, July 22, 2018
As a property management company, we offer two separate services:
- Tenant Procurement (referred to as Listing the Property) and
- Management of the property once a tenant is in place.
Most landlords take advantage of both of the services that we offer.
Sometimes, a landlord may already have a perspective tenant identified from their social network or may wish to minimize their tenant procurement costs by finding a tenant using their own online resources. We are happy to work with a landlord in these scenarios as long as the landlord is still in the property and can coordinate showings, answer perspective tenant questions, and negotiate terms of the lease.
If the landlord decides not to procure their own tenant, we welcome the opportunity to list the property. This entails providing a market analysis, determining a list price, photographing the property, installing a sign and lockbox, coordinating showings, providing weekly updates, processing applications, and negotiating the lease. This service requires a licensed Realtor who is compensated through the listing fee based on a percentage of the rental rate. In our busines...
Michele - Thursday, February 23, 2017
Last week, a homeowner who is getting ready to move across the country for a job transfer contacted us to request that we procure a tenant and begin managing his property. Our associate broker prepared a rental market analysis and suggested that we start marketing the property at $1995 based on recently rented and currently active homes in the neighborhood of similar size, age, and condition. The highest price that any property had ever rented for in that neighborhood was $1995. There were several properties actively available for $1900-$1995. While the average rented price for homes in that neighborhood was closer to $1900, this property was an end unit in excellent condition. The broker felt that this property compared closely to the homes that had rented for $1995.
Despite our recommendations, the homeowner asked that we start with an initial marketing price of $2180 since the total monthly cost of his mortgage, HOA fees, and property management fees would be $2180. He also indicated that he’d like to have a tenant in place within 3 weeks.
We took the time to educate this homeowner on how important it is to start marketing at an appropriate...
Michele - Wednesday, February 17, 2016
When processing an application for a new tenant, we review credit and criminal history. We also verify income, employment, and rental or mortgage history. Unfortunately, we cannot vet an applicant on their house keeping skills.
However, we do have one possible way to glimpse into the how well an applicant may keep a home. When an applicant is well organized in their financial business, paying all bills on-time and not over extending their credit, it is likely that their organizational habits may extend to their home life as well. My mother in-law has an 830 credit score and her home is immaculate 365 days per year, so she is my point of reference, but over the past 5+ years, I’ve also seen a trend with our tenants. When tenants are working multiple jobs and scrambling to pay rent, they often don’t have the time, energy, or ability to maintain their rental property in a way that the owners wish or expect. Typically this doesn’t mean that there will be any damage to the home. But it does mean that the home may not show well when it is time to sell or re-rent.
So…. Just something that I’d suggest new landlords consider &h...
Michele - Tuesday, December 29, 2015
Having listed 140+ properties this year and hundreds more over the past several years, we are constantly looking for ways to measure and improve our listing performance. One statistic that we discovered early-on is that the optimal time to begin listing a property is 45 days before the availability date. Most tenants are looking for a property 30-45 days in advance of their target move-in date. For example, if a property is available for a tenant to move in on May 1st, we suggest putting the property on the market on March 15th. When we list a property 45 days in advance of the availability date, the majority of the time, we move tenants into the property on the target date.
Another important factor to ensuring that we have a tenant move in as close as possible to the availability date is pricing the property competitively when first going onto the market. Listed properties have the most visibility at the time they are first listed since many perspective renters have set up search criteria and are notified when a new property comes on the market that meets their criteria. Pricing even slightly above the range that is being searched for in the area means the property will not show up ...
Michele - Sunday, December 20, 2015
When I speak with perspective landlords, one of the pieces of information that I’m most proud to share is that 80% of the time we have a tenant move in on the day after the landlord or existing tenant moves out. When I network with other local property managers, I find that most do not allow for such one-day property turnovers.
Admittedly, there are lots of challenges associated with this process – scrambling to coordinate house cleaning or carpet cleaning when needed, handling coordination of utility transfer without interruption, and juggling schedules for inspections and key pick-ups. To address these challenges, we have vendors on standby to address needed tasks between 5PM on the last day of the month and noon on the first day of the month. Our staff works long days to allow for the quick turnovers as we feel the benefit to the owner of reduced vacancy is well worth the effort.
Since most leases end (and most owners move out) on the last day of the month, we list our managed properties as being available the next day, on the first of the following month, unless we have planned for repairs or maintenance to meet our ready-to-rent condition standards. Since most...
Michele - Thursday, June 18, 2015
Our experience indicates that the optimal time to begin marketing a property is 45 days before the target availability date. So, when an existing tenant is nearing the end of their lease, we typically schedule to put the home on the market for re-rental 45 days before the lease end-date. The lease has specific provisions that allow for us to put a lock box and sign on the home, and allow for Real Estate Agents to enter the home using a lock box during that time period.
However, the lease does not require tenants to make their beds, wash their dishes, or pick their clothes up off the floor. Most of the time, tenants in our managed properties do keep the homes in a condition that is suitable for showing the home to perspective tenants. 80-90% of our managed properties are maintained in a condition that allows for them to be listed with existing tenants in place resulting in procurement of the next tenant with less than 14 days of vacancy between tenants.
In approximately 15% of the homes that we manage, we will need to delay the marketing of the property until after the existing tenants have moved out. In these cases, where tenants are not maintaining...
Michele - Sunday, May 10, 2015
In order to maximize owner cashflow and minimize vacancy, our company has the following goals for tenant procurement:
- To have a lease signed within 21 days of a property going on the market
- To have a tenant move-in within 45 days of a property going on the market
In order to meet these goals, homes must be in “Ready to Rent” condition as defined below. Agents will not begin marketing a home until the home meets the following criteria:
- Lawn must be cut and shrubs must be trimmed and maintained in that condition throughout the listing period. During the winter months, the porch, steps, walkway and sidewalk must be free of ice or snow and maintained in that condition throughout the listing period.
- All trash must be removed from house and garage.
- Home must be free of insects and pests.
- Home must be clean and ready for move in – bathrooms, floors, appliances, etc.
- Carpets must be professionally cleaned.
- All smoke detectors and light bulbs must be in place and operational.
- All planned repairs must be completed. If repairs are scheduled, but not yet completed, agent will post a sign...