Michele - Friday, May 18, 2018
When I first speak with new landlords, they often share that they are worried about getting a call from tenants in the middle of the night about a toilet overflowing. Actually, we rarely have emergency toilet issues, but we do often have emergency calls from tenants with no AC. This typically happens on the first hot day of the year when tenants are turning the AC on for the first time in the spring, or in late July and early August when the AC systems are pushed to their maximum capacity due to extreme temperatures.
Industry standards do not consider the lack of AC to be an emergency unless the temperatures are in the 90s or tenants have health related concerns. Because we are committed to providing excellent service, we ask our HVAC contractors for same-day service whenever possible if temperatures are above 85 degrees.
However, we’ve experienced that tenants consistently DEMAND that any lack of air conditioning be treated as an emergency! Tenants also frequently demand to be put up in a hotel if the AC is not working. We attempt to handle this situation in a way that keeps the tenants from losing their cool without a significant financial i...
Michele - Sunday, April 8, 2018
Because many of our landlords rely on incoming rent to pay their monthly mortgage, we feel it is important for them to be involved in the application vetting process.When we screen perspective tenants, we run a credit and criminal background search, verify employment/income, and obtain rental or mortgage history. A qualified applicant will have:
- Monthly income greater than 3 times the monthly rent
- Paid all rent on-time for the past two years
- Paid all other credit accounts on-time for the past two years
- A credit score greater than 650
- No criminal/felony history for the past 5 years
For each processed application, we will provide the landlord with a high level overview of the verified information obtained during the vetting process. We will also provide the landlord with a recommendation using a Red/Green/Yellow paradigm.
Green applications are those that meet all of our qualifying criteria. We recommend the landlord proceed with accepting the applications subject to the details of any pets or tenant requests.
Michele - Saturday, March 3, 2018
IN A PERFECT WORLD, you don’t need a property manager. In a perfect world, the tenant pays rent on-time (or early), doesn’t want to break the lease, takes good care of the home, and doesn’t have unauthorized pets or occupants in the home. …. In a perfect world, appliances don’t break down, HVAC systems don’t stop heating and cooling, basements don’t get flooded, sewage systems don’t back up, roofs don’t leak, faucets don’t leak, and trees don’t get blown down.
But of course, it isn’t a perfect world. For instance, yesterday, was not a perfect day!
Our area suffered a major windstorm with wind speeds up to 60-70 MPH. Several of our tenants reported trees blown down blocking roads or landing on roofs and fences. In severe weather circumstances, many major tree companies are contracted to work for VDOT or the power companies to prioritize restoring power and removing trees and debris from roadways. Fortunately, we have an excellent working relationship with a local tree company that allowed us to have the fallen trees removed within hours of tenant reports.
At least 20 of our tenants have already repo...
Michele - Sunday, July 23, 2017
Last week, a landlord who decided not to renew her lease so that she could sell the home, came into our office and said “There are scuffs on many walls in the home, please turn over the previous tenant’s entire security deposit to address those damages.”
As a licensed Real Estate brokerage, and per the Virginia Residential Landlord Tenant Act, we must prepare a SODA – Statement of Deposit Account - and provide a detailed accounting of the security deposit charges to the tenants within 45 days of their lease end date. Tenants are allowed to leave normal wear and tear, which does include some scuffs. If tenants cause damage above normal wear and tear, such as stains, major scuffing, dents, gauges, scratches or excessive dirt/grime then their security deposit will be charged.
When a security deposit is charged, some charges may be done on a depreciated basis per guidance from local judges. For instance, carpet damage is charged based on a 6-year depreciation period and painting is charged based on a 4-year depreciation period. This is dictated by guidance from local judges that landlords should expect to paint a rental pro...
Michele - Monday, July 10, 2017
One of the most important decisions that we made 5+ years ago was to become a member of NARPM. In choosing to do so, we have committed to holding ourselves to a higher standard of business ethics, professionalism and fair housing practices. We have also committed to additional education for our staff to ensure that we are providing the highest level of management service possible.
As a member of NARPM, our staff takes advantage of training, seminars, webinars, and online courses to keep up with market trends, issues, strategies and solutions. We interact with affiliate vendors to stay abreast of technology and outsourcing options. We also network with other NARPM members locally and nationally to share best practices and new ideas.
We often consider our fellow NARPM members as colleagues rather than competitors. NARPM members are truly committed to improving the property management industry, providing EXCELLENT service to our landlords and tenants, and providing support to fellow members.
Michele - Wednesday, July 5, 2017
One of the reasons that we are able to provide excellent management services is that we have developed excellent working relationships with a wide range of vendors to support all of the possible maintenance issues that could occur at our managed properties.
We have working relationships with three roofers, three HVAC contractors, three plumbers, three carpet installers, three cleaning companies, three landscapers, three tree trimmers, three garage door companies, three general contractors, three mold specialists, three paving companies, and many other specialty vendors. Before establishing a working relationship with these vendors, we test their services out on vacant properties or on the investment properties that are owned by the principals of our company.
Each of our vendors must provide prompt, courteous service including a positive interaction with our tenants. Vendors must provide quality workmanship and stand behind their work if any problems or questions arise. Further, vendors must provide competitive pricing. Each year, we research pricing by calling on other area vendors to price jobs and ensure that our pool of contractors remains compet...
Michele - Sunday, April 2, 2017
Since most of our new landlords are “Unintentional Investors”, many make an initial calculation of their projected cash flow by taking the expected rent and subtracting their mortgage, HOA fees, and property management fees. There is much more to determining your return on investment than that! So, as our new landlords are now becoming investors, intentional or not, we ask that they become familiar with the full scope of calculating cash flow and return on investment so that they can make better-informed business decisions.
There are five elements to analyzing whether your investment property is providing you with a positive rate of return:
Net Operating Income (NOI) – Income gained from rents minus operating expenses (not including your debt service or mortgage loan).
Cash Flow – Cash flow is calculated by subtracting the debt service costs from the NOI. Debt service includes the loan costs, such as interest, but not principal reduction. This is close to what most new investors assume to be their cash flow, but new investors often (incorrectly) include the ...
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 - Sunday, February 5, 2017
Over the past 9 years, we have placed over 700 tenants into our 350+ managed properties through our listing and vetting process. Only ½ of 1 percent of those tenants have been evicted. During the same time period, we began managing another 50 properties with tenants already in place. For the 50 properties where we took on management of a property with tenants that had been put in place by the landlord or another Realtor prior to our management of the property, we have evicted over 5% of those tenants.
While there is no organization that is compiling statistics on local or national average/expectation for eviction rates, I am confident that our success rate for on-time rental payments is due to our strict and consistent application process. We require applicants to earn a gross income that is greater than 3x the rent payment, to have paid rent on-time for the past 2 years, and to have paid all other bills on-time for the past 2 years. We also run a criminal history background check to further verify there have been no recent drug related or violent charges.
Once we process an application, we provide the owner with a Green/Yellow/Red risk indic...
Michele - Thursday, January 26, 2017
A straight shooting note to new landlords: I know that the garage door opener, the ice maker, the cook top vent, the dishwasher and the AC system were all working perfectly fine when you turned the home over to us and had worked perfectly fine for the 6 years that you lived in the house before you transitioned it into a rental property. But your current tenants are FULLY living in the house, and are wearing things out!!!!
Your tenants are doing 3 loads of laundry per week, so that dryer is handling another 150 cycles per year and is just going to hit its limit. The garage door is opened and closed over 900 times per year! Those tension springs and cables are getting a work out! Tenants, friends and family are putting tens of thousands of steps up and down those carpeted stairs, sometimes with their shoes on. The AC and the furnace are working overtime to keep the tenants comfortable during the extreme weather conditions we’ve been having. Tenants are changing the filter regularly but the HVAC system is now 15 years old and just can’t handle the hot-hot August days anymore.
As I mentioned in previous posts, 98% of our managed tenants main...