If renting your home is starting to feel like a “Mannequin Challenge”, give us a call! We’ll get you “Moving”. #MannequinChallenge#PropertyManagement #BevRobertsRentalsServing the #NorthCarolina #TriangleArea
Recent Census Bureau data reveals that only 1 in 10 Americans moved between 2015 and 2016, marking the lowest level of renters or homeowners to relocate since the agency started keeping track of data in 1948, a trend exacerbated by the housing crash — which led Americans to be cautious and cling to their homes and rentals.
Yale Law School professor David Schleicher said homeownership subsidies, more land-use restrictions, the increased use of occupational licensing and municipal bankruptcies are the main culprits, Construction Dive reports. Schleicher said relocation subsidies targeting residents trapped in poor areas could help create more movers.
While the overall mover rate is low, more affordable regions of the country, like parts of the South, Midwest and Rust Belt, experienced increases in migration. According to Realtor.com, smaller markets, including Denver, Nashville and Orlando, are likely to see housing demand grow this year.
Q: Dear Mr. Reno:
I have tenants that have moved out but are refusing to return the keys until they get the security deposit. I explained that I have 30 days to inspect the property and assess any damage and send them a notice of what, if any, the refund will be. They have also claimed the hot water heater is not working but have denied me access to the property and the police told me they can’t force them to let me enter the property.
The police told me as long as they are there I can’t make them give me back the keys but as of today the home is vacant. There are still a few of their possessions in the back yard but it seems to me they have moved out otherwise. Do I have the right to change the locks or am I breaking a law?
A: It’s a judgment call. My opinion: if their clothing and valuables are gone (TV, Jewelry, Stereo) then they’re gone. Probably OK to change the locks.
The Landlord Protection Agency’s “Ask the Attorney” column is for informational purposes only. The questions answered by Mr. Reno on this site do not constitute an attorney – client relationship and are not to be considered legal advice. Not all questions will be answered and some may appear in the LPA Q&A Forum.
The Landlord Protection Agency recommends that you seek legal advice before using any of the material offered on this web site, and makes no guarantee on the effectiveness, compliance with local laws or success of any of the material offered on this web site. The Landlord Protection Agency is not engaged in rendering legal advice.
A great property manager can be hard to come by. In today’s fast-paced, social-media centric society, consumers and renters crave and demand instant gratification – they are ephemeral.
That being said, property managers must constantly be on their toes and ready to take on anything! Not only must they be ready to draw in and lease to rent-ready prospects, but they must also always roll with the punches in order to satisfy current renters. Leaky toilet at midnight? Be prepared for a call. Can’t find the mailbox key. Better be on it. Locked out of your apartment? Must be prepared! Property managers deal with these scenarios (among thousands of others) on a daily basis.
Here are five tips to being a great property manager that you and your team should keep in mind:
Communication is KEY! Property managers deal with tons of people (at all hours of the day) from all walks of life. Some may speak different languages, have different personalities, different needs and different backgrounds. Therefore, those in property management need to have impeccable communication skills. Staying calm and speaking in a professional manner is a top priority. A lot of times, this includes PATIENCE. Residents must always be kept in the loop on things like office closures, maintenance, payments, etc. Additionally – property managers must keep said communication timely. When a work order is submitted, the resident should be notified immediately that their work order has been received and that the issue is being worked on. When a parking lot is being worked on, residents should know of any alternative routes to take ASAP. These are just examples, of course, but the list goes on and on. Keep in mind, that with communication comes listening. Sometimes, the best thing a property manager can do for a current or prospective renter is ensure them that their voice is being heard and that the community is doing everything possible to make their living situation a comfortable one.
Property managers often have to deal with questions, comments, complaints and concerns from dozens of renters and prospects daily. Not only must property managers make sure their current renters are happy, make sure the rents are coming in on time and make sure that work orders are being fulfilled, but they must also work on bringing in NEW renters as well. Organization comes in handy on a daily basis through things like lease expirations and renewals, background checks, security deposits, invoices, etc. A skilled property manager must be organized, and make sure they are hiring organized staff members as well! If you are impatient, anxious, edgy or bad with tight deadlines and daily interaction with “customers” aka your residents, you may want to reconsider your future as a property manager. Do you think you have what it takes?
3. People Person
One of the best gauges of the level of quality of a property manager is the way they interact with people. This does not mean just their renters. This means current renters, prospective renters, renters moving out, maintenance, vendors, other staff, lifeguards, towing companies, plumbers, carpenters, etc. Managing an apartment community is a large undertaking, and men/women that do not have a happy, approachable, “can-do” attitude will find it hard to not only retain residents, but to draw new ones in. A personable property manager must be able to handle the fast-paced nature of community management and make the process of signing a lease and moving in an easy one. Let’s face it – moving is a drag and a hassle. When people move into an apartment, the last thing they want to deal with is an unhelpful property manager with a sour attitude. That said, go the extra mile to make your renters feel welcome! Perhaps a gift basket with community “swag” when they move in? Maybe a couple of take-out menus from your favorite local restaurants? At the end of the day, a “people person” property manager is always easier to work with than a grouch!
Think about it. What are all property managers typically doing the first week of every month? Handling other people’s money! They collect rents, security deposits, and more. Property managers need to have the utmost understanding that the renters come first. They must always act with the highest level of integrity. As a property manager, they a lot of complaints are heard daily. While it may sometimes be easier to dance around the issue, a property manager needs to always be up front with the renter – even if it’s something the renter doesn’t want to hear. The washing machine can’t be fixed until Tuesday? Tell them ASAP so they can make other plans. The rent check won’t be deposited for another day? Let them know. Not being 100% truthful with renters can lead to mistrust and lower resident retention rates.
Having a reliable property manager takes the burden off of a lot of people – the staff, the property owners, the renters, the prospects, etc. When a tenant asks something of a property manager or needs help with a certain issue, they should feel confident that their property manager is taking their struggle into consideration. This can be anything from a missing trash can, a broken lock, a bug problem, a noisy neighbor, etc. Property managers must come through for their residents and should be viewed as someone who can quickly and effectively problem solve. Now, the world isn’t perfect and problems aren’t always easily resolved. However, as long as a renter knows that you, as their property manager, are in their corner and working your hardest to make their stay at your property a happy one, then you have done the best you can!
These five qualities, among others, are staple traits of a great property manager. Moving into an apartment is, let’s be honest here, never the most fun and can make for a very stressful time in someone’s life. Working with a quality property manager can make the experience so much more positive – maybe even fun! An organized, honest, reliable, personable property manager with good communication skills is pure gold!
The art of raising rents is a difficult one to master for newbie investors. The fear of creating a vacancy or offending a tenant is unbearable for most new landlords. It is a touchy dilemma. You are directly impacting the quality of a tenant’s life when you increase the rent, but you are also affecting your ability to pay your obligations with the rent increases. In this article, I would like to list reasons why raising the rent on your properties is a necessary decision, how to accurately assess the market rental rate, and how to raise the rents effectively without creating a mass exodus.
1. Keep up with the rate of inflation.
2. Grow the top line (revenue).
3. Stay competitive in the market.
4. Fight the expense creep.
If you have just acquired a property, or are in the middle of a renovation, you should read our article on our Three Step Reposition.
It is our framework on how to take over the operations of a property, and to effectively increase any rents that are under market. It will show you how to fill the vacant units, implement Ratio Utility Billing (RUBS), and raise the remaining tenants to market.
Before you consider raising rents, you need to make sure you are delivering a quality product to your tenants. What does that entail? In our properties, we strive to deliver clean, safe, affordable units with stellar customer service. We guarantee potential tenants a same day guarantee if they qualify to rent one of our apartments. We are always stressing our customer service and our quick and professional maintenance staff.
If you are trying to raise rents, and you business model does not deliver a quality product, you are going to experience the vacancy that I alluded to earlier. A tenant knows exactly what a two bedroom apartment is renting for, and if he can get a better deal down the street, then he is gone. But, if you can couple customer service with a competitive price, your retention rate will rise.
I often discuss with our Jake & Gino community the commodity effect. If your product or service becomes a commodity in the marketplace, then people will only shop you for price, and your margins and business will suffer. Take a look at the baking industry. Money has turned into a commodity, and the investor has countless choices to access money. Investors can drive a hard bargain with banks when trying to secure financing.
You want to avoid this mistake at all costs. The Internet has revolutionized how we shop for products and has led to the commodity effect. How do we try to navigate around the commodity effect? By offering great customer service, by differentiating our product and by giving the consumer reasons other than price to do business with our brand.
Now that we’ve discussed the importance of operations, I think we should examine the reasons why you need to be “pushing” rents. The most obvious reason is to keep up with inflation. Your costs go up every year, and your revenue needs to increase to offset your increase in expenses. The next reason may not be as obvious. Jake refers to this burden as the expense creep.
Every year, vendors are testing you to see if you are checking invoices to see if expenses are rising. It is your responsibility as an owner to review your contracts with vendors every year to insure the best price and the best value. Rent increases will offset some of the expense creep that occurs in everyone’s business.
Another obvious yet often overlooked reason is that landlords who do not stay competitive in the market are not maximizing their value. Let me give you a quick example. If you own 50 units, and the units are $50 per month under market, you are potentially losing $30,000 in revenue per year. That’s not even the worst part. The value of the property is $375,000 less at an 8 cap, due to the diminished income (Income/Cap Rate: $30,000/8%).
At this point, I think you’ve realized the importance of maximizing the revenue on your property. Let’s discuss how to determine the market rent and how to implement your strategy.
The first step is to determine the market rent. There are two websites that we use as a barometer for the rents. The first one is Rentometer. Plug in your address, insert the rent you are charging, pick the unit size and voila. The rent-o-meter will give you an average price, a median price and will tell you if your price is a good deal or if you are overpriced. You need to decipher what amenities your property offers compared to the market, but this is an excellent starting point to evaluate rents in the area.
The other site that we often use is Apartments.com. Look up individual apartment complexes to see what pricing is, what amenities are offered, and what is available to rent. Most landlords use this site to advertise their rentals.
You can also try the good old fashioned way of picking up the phone and calling a couple of brokers in the market. A good multifamily broker should have the pulse of the market, and should be able to tell you what a two bed is renting for in a specific neighborhood. I employ all three of these strategies to price my property accordingly.
Now that we have assessed the market rent, it’s time to go to work. Once we have tenants coming off a lease, we will go to market rent with the apartment, depending upon how many leases come up at the same time. If you have several buildings in one property, you can select to target one building every month or two and institute rent increases. This will lower your risk of having too many tenants vacating at the same time. This will also give you an idea if your increases are in line with the market. If you are getting serious push back on the increases, then you can modify the increase or choose not to implement one.
It is imperative that you work with your staff and get constant feedback as to how the tenants are responding. Are they mad, threatening to leave, or are they just venting their frustrations. You need to maintain a careful eye upon how many tenants decide to vacate due to the increase.
Begin by analyzing the rental rates in your market. Once the market rate has been established, check to see where your rents fall. Are they at the market, or is their some upside? If there is some upside, then start renting the vacant units at the newly established market rate and begin to increase the leases that come due to the new market. Remember, take your time and be flexible with your pricing.
Please share with us any tools that you use to assess the rental rates in your market. I would also like to know how you address increasing those rents.
1. Determine the market rent
2. Look in December how you are performing
3. Take it one step at a time