Property Management Blog

Can Fifi or Fido Move in Too?

Web Admin - Monday, November 13, 2017

In the Southern California areas of Pasadena, Eagle Rock and Glendale where I provide Property Management most owners that I talk to say absolutely no pets in their rental properties. One exception is rental property in West Hollywood as there are more pets than kids in that city and if you don’t accept pets your vacancies will be slow to fill.

Yes, pets can sometimes damage property but there are also many responsible pet owners who have difficulty in finding a well-maintained property that will accept a pet.

I have a solution that will be attractive to both owners and tenants. If an owner decides to accept a pet I advise limiting the number and size of the pet, increasing the security deposit (not a separate pet deposit), asking for proof of spaying or neutering and up to date vaccinations, meeting the pet in person to see if there are temperament issues, contacting previous landlords to inquire about behavior or damage issues and adding a lease addendum referencing pet and pet owner rules.

So far so good, all normal and expected. Here’s the extra twist: inform pet owners that the property will have a twice-yearly pet inspection by the property management company, at the tenants’ expense, to confirm that there is no violation of the lease agreement. Tenants will gladly pay the inspection cost for the opportunity to rent a quality property and owners are happy that their investment will be monitored at no additional cost to them.

Are Home Warranties a Good Idea in Rental Properties?

Web Admin - Tuesday, November 07, 2017
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You might be concerned about repair costs in a rental property and it seems as though a home warranty would be a good way to prevent high repair bills.

When I am involved in a sales transaction I always recommend a home warranty as it gives both buyers and sellers peace of mind. If the water heater goes out in the first month there’s a number they can call.

However, I never recommend home warranties on rental properties and I know several property management companies that refuse to take on properties with home warranties.

Why not?

  1. Home warranty companies do not use A list vendors. Also each time you call you will be given a different vendor. The most common vendor in rental properties is a plumber. Property management companies give their plumbers volume so they get good service, a good rate and the plumbers know the properties. They don’t waste time finding cleanouts or other details.
  2. In addition to your premium you will also pay a service fee each time the home warranty company rings the doorbell.
  3. You will not get quick service. 48 hr. turnaround or longer is not uncommon and just placing the call for service will be a lengthy time on hold.
  4. They are in business to make a profit. If an a/c system needs replacing they will do band aid after band aid before finally agreeing that the patient is on life support.

Rather than use a home warranty for a rental property I advise my clients to self-insure. Based on normal expected lifetimes of property components you can estimate that your water heater will need replacing in the next 2 years, dishwasher might last another 3, roof should be replaced in 6, etc.

Far better to set aside x amount each month for expected replacement of the above items rather than waste money on a home warranty that will frustrate all parties involved.

When D.I.Y. Costs More

Web Admin - Tuesday, November 07, 2017
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Are you thinking of hiring a property manager in the Pasadena, Eagle Rock, Glendale area?

Are you already managing your own rental property yourself?

You might already have long term tenants who pay on time and you ask yourself why should I pay someone to take in the rents and send me the money? It’s not worth the fee they charge.

Let me share with you a story of an owner who made a costly do it yourself mistake several years ago and is now stuck. All because he didn’t want to pay a property management fee.

I sat down with this owner recently and asked him to tell me about his property. He shared that he has a long-term tenant who has left an unregistered vehicle in his unit’s parking spot and is using the vehicle as storage.

The owner asked me, “What can I do?”

I asked him, “What does your lease say about use of parking spaces?”

He used a generic form from a stationery store and did not include any language about parking spaces to be used only for licensed vehicles in good working condition. “Can I have the car towed” he asked. “Won’t DMV tow it for me since the registration is expired?”

No I said it’s on private property. Plus another detail—the property is under rent control. If it were not under rent control the tenant could be served with a change in terms but the only terms that can be changed on a rent controlled property without a tenant’s consent is the amount of the rent.

Property Management is not a part time hobby. If this owner had used a competent property manager the lease would be more complete and would have additional language about use of parking areas.

Don’t be penny wise and pound foolish. An experienced property manager is on top of laws and regulations and is well worth the management fee.

How much do you charge for property management?

Web Admin - Tuesday, October 24, 2017

Can an owner choose the tenant?

Web Admin - Tuesday, October 24, 2017

Who’s My Partner?

Web Admin - Monday, September 25, 2017

As a Property Manager in Pasadena and surrounding communities I am the agent for rental property owners. I have a fiduciary responsibility to place their interests above my own.

So what role do tenants play in my business since I am not representing them and am not their agent?

Some owners see tenants as adversaries and every interaction is about who won and who lost.

That thinking is flawed. Ask yourself do you want someone who views you as the enemy having legal possession of one of your most valuable assets?

A tenant who pays on time, maintains your property and keeps you apprised of any repair issues is invaluable.

Some owners are the other extreme and don’t treat their rental properties as a business. I had a client make an offer on a building with a rent controlled tenant in place for 10 years who had never had an increase so that thinking is also flawed.

As a Property Manager I bring balance to my owners and show them that well qualified responsible tenants protect their investments but also help them take the emotion out of interaction with tenants so that they can make sound business decisions.

Who’s Using All the Water?

Web Admin - Monday, September 25, 2017

If you recently got a big increase in your property’s water bill, time to be a detective as multiple factors are in play.

  • Are there unauthorized occupants?
  • Anybody operating a business on the premises such as: car wash, hair salon, etc.?
  • Are there broken sprinkler pipes or heads? Ask your gardening service to check.

Your leases should have language about tenants notifying you of any plumbing leaks, broken sprinkler valves, etc. but not all leaks are obvious.

Next step is to ask your plumber to do a leak test. An initial water meter reading will be taken and then another one 20 minutes later after requesting tenants not to use any water. If the readings are not the same something is leaking.

The most common source of leaks in residential plumbing is inside the toilet tank. There may be leaks around the flapper plug or at the top of the tank around the overflow tube. Your plumber can determine what might need adjustment or replacement. This is an inexpensive repair but if the toilet tank is leaking your water bill can increase exponentially.

Best practices: change out flappers with every turn and when plumbers do any repair on occupied units advise them to check all fixtures for leaks and make sure all angle stops are functional.

What’s In a Name?

Web Admin - Thursday, September 21, 2017

Ever wonder how pharmaceutical companies and car manufacturers come up with names for new products?

They spend megabucks on companies that specialize in branding.

When I was ready to launch my company, I checked my budget to see what was allocated for branding and discovered that coffer was empty.

But thanks to social media I had some options. I brainstormed a list of possible names and put up a survey monkey on my Facebook page and that gave me some valuable feedback. For free! I knew I didn’t want a name that had my name in the title and didn’t want a name that would limit me geographically. Why not think big, right?

My first choice, Stellar, was already taken. I thought there were some cool things I could do with a logo (stars, get it) and I could channel Marlon Brando when answering the phone: “Stell-a-a-a-a-r, may I help you?” But some earlier bird had already snatched that worm.

I chose Designation Property Management as my name because that’s how I differentiate myself from the competition. I belong to two professional associations specific to the property management industry, www.narpm.org and www.caanet.org. I’ve earned the RMP designation from NARPM and will soon earn the CCRM designation from the California Apartment Association. Education and training for real estate agents and brokers focuses primarily on sales, not property management and I have found the education and resources available through these industry specific groups to be invaluable.

I stay current on industry trends and new laws and regulations to protect my clients’ investments.

How Much Do You Charge?

Web Admin - Thursday, September 21, 2017

That is often the first question a potential client will ask when I answer the phone. It is a fair question and of course an investor needs to know how my services will impact his bottom line.

My simplest response is I offer a range of services and prices depending on your needs. But there’s more that an investor should be asking.

A competitor may be charging less but ask:

  • Are there any additional fees that are not included in the management fee?
  • Do you have a markup on maintenance invoices?
  • Do you have your own maintenance company?
  • Do you charge a fee during vacancies?
  • Do you charge a leasing fee?
  • Do you charge a lease renewal fee?
  • Do you charge a fee for inspections?
  • Do you use unlicensed vendors and if so who pays the worker’s comp?

We all need to earn our living some way and a low-priced provider may have many potential revenue streams other than the management fee.

If a client is looking for the cheapest in the Pasadena, Eagle Rock, Glendale and Burbank areas I won’t be the best fit. But if a client wants a management company with experience, professional designations, clear communication and transparent financial reporting then I say let’s talk.

Panic Button

Web Admin - Friday, September 01, 2017

Nobody likes a vacancy as it means nobody’s making money. Keeping a vacancy as short as possible is one of the most valuable things a property manager can do for an owner.

Owners first need to budget for vacancies and expect them. It’s unrealistic to expect 100% of your units will be 100% occupied. Even if you have responsible reliable long-term tenants life happens and people will occasionally move.

So how can you get those units filled as quickly as possible? First get them ready to show. Here’s where it pays to know your market. If you’re new to landlording surf the net and check out your competition on Craigslist and other popular sites. If your competition is holding open houses show up at one and take note of amenities and upgrades.

What are the salient points addressed in your competitor’s ads? That will help you decide what improvements will draw applicants. In my area of Southern California garage space is not a deal breaker but if you are in a colder area lack of a garage might be a deciding factor. Some areas that I cover prefer hard flooring to carpet. Other areas find every landlord willing to accept dogs. Do your homework and research your local market and then improve your units accordingly.

The cheapest improvement is fresh paint. Pick a neutral color but be more adventurous than the ubiquitous Swiss Coffee. If the kitchen has wooden cabinets instead of painting everything white make the bottom cabinets a different color, referred in decorating circles as the “tuxedo” effect. No price difference for you and your units will stand out.

Okay the work’s been done, ready to show, now what? Back to researching your market. Price your unit competitively. If you want to try for a higher price don’t hang on to it forever. Try it for 2 weekends and if activity is low and no applications turned in lower 5%. Put up signs, post the ad on your multiple websites and respond quickly to emails or phone calls.

During slower markets or times of year you may want to offer an incentive. In a multi unit building you may choose to offer a rent credit to existing tenants for anyone they refer to you that results in a signed lease. You may choose to offer a rent credit for the 13th month.

In your haste to rent don’t skimp on your screening. The only thing worse than a vacant unit is an occupied unit and a tenant who isn’t paying. Or even worse: an occupied unit, a tenant who isn’t paying and who is damaging your investment.