Filed under: Property Management | Tags: Chris Hermanski, Home Maintenance, Portland OR, Property Management, property management services, rental property maintenance, rentals, tenants
The Annual Mainlander Property Management Vendor Appreciation Luncheon was held on Thursday, February 17th. It was another huge success! The festivities took place at Mainlander’s office in Lake Oswego and was attended by over 45 vendors. 
They came from all over to enjoy some great food that was either prepared by a Mainlander staff member or brought in from local restaurants like Busters BBQ! Many even found room to enjoy a piece of the giant Tres Leche cake for dessert!
The food, conversation and networking opportunities were much appreciated by all. Over the course of the lunch, everyone had a chance to relax, enjoy conversation and network with each other while the Mainlander staff gave out exciting door prizes to some very lucky winners.
Some prizes and winners included a Portland City Grill Gift Certificate to Willamette Spa, a Nel Centro Restaurant Certificate to Pro Drain, a 2 night stay at Hotel Modera in Portland to Coho Electric and a 1 night stay at Hotel Andra in Seattle to Norm Jensen!!!
Mainlander Property Management appreciates their vendors and looks forward to this event each and every year. It’s a time to give back and say thank you for all the hard work that is put into by these individuals to help make Mainlander the great property management company it has grown to be!
Filed under: General, MMHA, MMHA Apartment Report, NARPM, Property Management, Uncategorized | Tags: Chris Hermanski, MMHA, MMHA Apartment Report, Portland Metro Apartment Market, Property Management, rentals
By Mark D. Barry, MAI and Phillip E. Barry, Real Estate Broker
The Landlord Times Metro - November 2010 - Vol.14 Issue 10
Forecast For Balance of 2010 and 2011
So where is our apartment market going in the balance of 2010 and 2011? Our thoughts are as follows:
Portland Economy:
The recovery is limping along as we enter the fourth quarter of the year, and is coming at a time when many of the benefits of the government stimulus spending are wearing off. The US economy needs 200,000 jobs per month to bring the unemployment rate down. No one expects that to happen in the near future. In addition, low interest rates, which can encourage borrowing to spur economic growth, are already at near zero. The Oregon Office of Economic Analysis expects that there will be job losses in 2010, and that employment will not reach pre-recession levels until mid 2014.
Apartment Construction:
One thing you won’t have to worry about in the balance of 2010 and into 2011 will be apartment construction. 2010 will be the slowest year for apartment construction in our adult lifetime. There will be some government sponsored urban projects, but that’s about it. I expect we will see permits for 600 to 1,000 new units in 2011.
Apartment Vacancies, Rental Rates, and Income:
The balance of 2010 and first part of 2011 will be a time to concentrate on keeping your tenants happy, and holding on to what you have. Apartment vacancies should remain in the range of 3.5% to 4.5%. But, income will remain flat in the first half of 2011. Looking beyond mid 2011, apartment income should rebound quickly once the economy turns around. There will be a shortage of apartments by 2012.
Apartment Values:
Apartment values have stabilized in YTD 2010. We expect that apartment values will remain stable in the balance of 2010 and into 2011 due to low interest rates, low vacancies, and fairly stable apartment income despite some increasing expenses. When the economy improves, everyone expects apartment income to increase. The real concern is that interest rates will also increase in cap rates. Expect to see typical cap rates of 6.50% to 7.75% for B and C suburban apartments, and 5.75% to 7.25% for more urban properties in 2011. Don’t expect any property tax relief in the 2010-2011 tax year despite a decline in values, and expect to see continued increases in utility costs.
Apartment Sales Volumes:
In 2009 and YTD 2010, we have seen the lowest level of apartment sales activity over the last decade. We have nowhere to go but up. The next two years will be a far better environment for apartment sales. This will be due to owners getting better educated on values, some capitulation on the part of sellers, motivated sellers who need the funds, sellers motivated by possible increases in capital gains, and buyers who sense that we are close to bottom. We are seeing a two-tiered market. There is good investor demand and often multiple offers for well performing, well kept apartments in stable locations, and institutional apartments. However, there are have been more workout and foreclosure appraisals over the last nine months than any time since the early to mid 1980′s.
CONCLUSION
The recent job figures show that we are not yet there on any positive employment news. We expect the balance of 2010 to be lackluster, with some limited signs of recovery in the first half of 2011, but no real recovery until mid 2011 and 2012. Apartment construction will be at record lows, which will help in maintaining low apartment vacancies. We expect apartment income to remain flat for the rest of the year, with modest increases beginning in mid 2011. There will continue to be a two-tiered market, with good demand for performing well-kept and well-located assets, but some overhang of poorly performing assets in marginal locations, with most of these being owner managed. We all like to think that the economy has hit bottom. However, the most recent data seems to point to an anemic recovery at best in the balance of 2010 and into 2011. It is likely that we will have to wait until mid 2011 and 2012 for any significant recovery.
Mark D. Barry, MAI, is a real estate appraiser specializing in apartment appraisals in the Portland area. He has completed over 5,000 apartment appraisals since starting as a fee appraiser in 1983. He has a BA from the University of California at Berkeley, and an MBA in Real Estate from American University in Washington, D.C.
Phillip E. Barry is a real estate broker with Joseph Bernard Investment Real Estate, and specializes in apartment sales in the Portland metropolitan area. He is a graduate of Oregon State University.
Filed under: Fair Housing Council of Oregon, General, NARPM, Property Management, Uncategorized | Tags: Chris Hermanski, Fair Housing Council of Oregon, Property Management
By Jo Becker, Education/Outreach Specialist, Fair Housing Council of Oregon
Following is a whimsical yet none-the-less hard hitting article by Nadeen Green, an attorney who has spoken on fair housing topics to residential rental audiences across the country since the Fair Housing Amendments Act’s inception in 1989.
Here at the Fair Housing Council (FHCO) we make ourselves available to those who feel their fair housing rights have been violated, as well as to those with fair housing questions, including housing providers! If you have a question about your rights or responsibilities under federal, state, and local fair housing laws, please visit us at FHCO.org or call our free Hotline at 1-800-424-3247.
Fair housing has been part of this country’s federal civil rights since 1968, when in response to the assassination of Dr. King the Fair Housing Act was enacted. At that time the protected classes were four (race, color, religion, national origin) and now that list includes sex, familial status and disability. State and local laws often offer other protections , so be wise and learn about and follow those laws, too. While laws can be complicated (you’ve got to love lawyers), the premise of the Fair Housing Act is simple… “no person shall be subjected to discrimination because [of protected class status] in the sale, rental, or advertising of dwellings.” Those of us who follow the cases, see that discrimination does happen and that perpetrators are punished. Those cases should be looked at not only as precedent and guidance, but also as a deterrent to similar bad or misguided behavior on the part of others. Nonetheless, there are those out there who don’t care about, or don’t know about, fair housing law, and the result is that the same sins continue to be committed. These sins may not kill you, but these sins could signifi cantly impact or even wipe out your business…and that’s deadly, indeed.
Builders and developers continue to build without regard to the Fair Housing Act’s construction and design requirements. For all new housing construction, if there are four or more units (other than townhomes) under a roof, every unit which is on a ground floor and/or every unit which is elevator-accessible must be built with certain design elements in place for the disabled. And that just isn’t happening. So our industry is regularly being sued, and the price tags in these cases for settlement and retrofi t are in some cases in the millions of dollars. Build right is the message here!
Yes, children may live upstairs! So don’t limit families with children to the ground fl oor of a condo or apartment building. This is not a complicated concept, yet again and again housing providers pay tens of thousands of dollars for restricting access to families with children to upstairs units.
And while we are on the subject of children, yes, boys and girls may share a bedroom. There are no age restrictions related to this. Quite simply, it is up to the grownups who live with the children to decide who will sleep in what room and with whom. Don’t impose restrictions on the sleeping arrangements of your residents, whether adults or children or combinations thereof.
It’s not all about Barbie®, but sometimes, looking at advertising, one would think it is. Human models are a great way to promote communities, but “if human models are used in display advertising campaigns, the models should be clearly defi nable as reasonably representing majority and minority groups in the metropolitan area”. And what metropolitan area does not have majority and minority groups? White-only advertising continues to draw the attention and wrath of fair housing groups, who are often awarded thousands if not millions of dollars because of the “chilling effect” that this type of advertising has on others (i.e. non-whites). And for those of you with senior housing communities, a head’s up – this law applies to you, too! Your only exemption from fair housing laws is that with the appropriate demographic at your community, you can turn away people with children although it would still not be advisable to advertise “no kids” even in these communities. Sex. No, this isn’t just to catch your attention or to spice up an otherwise dull article. Unfortunately, with regular frequency, male landlords are making rental or maintenance contingent upon sexual favors coerced from their female residents. You don’t need me to tell you this is wrong, so, enough said.
A service animal is not a pet! Ergo (I love using that word!), your pet restrictions, policies, and pet deposits / pet fees / pet rent do not apply. Keep in mind that service animals include both ones that assist those with physical disabilities (i.e. “working” animals) as well as ones that assist those with mental or emotional disabilities (i.e. companion animals). Don’t wrongly deny anyone their right to have a service animal live with them at your community. One landlord who recently did just that had to pay $314,000. I’ll add here that it doesn’t matter what the animal is called (service animal, companion animal, assistance animal, therapy animal, etc.) so long as it is there to assist an individual with a disability it is not, and may not be treated as, a pet. Note that Americans with Disability Act (ADA) rules and defi nitions of service animals for public places specifi cally differs from that of the federal Fair Housing Act. Also, you cannot get around the no pet fee / deposit issue by simply charging a disabled individual with a service animal a higher security or cleaning charge – that’s the same thing folks! Don’t do it.
You have a legal obligation to reasonably accommodate the needs of those who want to live with you or those who may already be your residents, as well as to allow for reasonable modifi cations of the structure if required to suit a disabled individual’s needs. A failure to reasonably accommodate or modify violates the civil rights of the disabled, can give rise to a charge or lawsuit, and can be very costly. Take each request seriously (and realize that the term “reasonable accommodation” or “reasonable modifi cation” may not be used specifi cally). Tell
the person that you and your company take fair housing law very seriously and that you will look into the request and then get back with them. And then, as the Nike ad tells us, Just Do It! Evaluate the request and make a timely response, and document this process. Reasonable accommodation / modification issues arise often in our industry, and include requests for service animals (see above) and specific parking spaces; permission to add ramps or make curb cuts; and permission to modify the unit itself in some way or ways. By the way, this is as
true for Realtors®, lenders, home insurance carriers, and homeowners’ associations as it is for landlords!
If you have fair housing questions, visit our site or call our free Hotline at 1-800-424-3247.
This article brought to you by the Fair Housing Council; a nonprofi t serving the state of Oregon and SW Washington. Learn more and/or sign up for our free, periodic newsletter at FHCO.org. “Fair Housing Focus” is written by NadeenGreen, Senior Counsel with For Rent Media Solutions™. The information contained in this article is not to be considered legal advice, and the author and For Rent Media Solutions strongly suggest that you consult with your own counsel as to any fair housing questions or problems you may have.
Qs about your rights and responsibilities under fair housing laws?
Visit FHCO.org or call 1-800-424-3247 Ext 2.
Qs about this article? Want to schedule an in-office fair housing training program or speaker for corporate or association functions?
Contact Jo Becker at jbecker@FHCO.org or 503-453-4016.
Filed under: appfolio, NARPM, Owner Portal, Property Management | Tags: appfolio, Chris Hermanski, Property Management, property management services
In addition to emailing Owner Statements every month, we can now provide owners with on-demand access to Owner Statements and reports. The good news is that Appfolio approached it in a unique way that won’t result in owners forgetting their username and password (a common challenge with Owners Portals).
We can post current and historical Owner Statements to each Owner’s Portal. We can also include any relevant reports so owners can download these reports at their leisure. Owners will have access to the same Owner Statements which are emailed on a monthly basis.
And it’s so easy! We simply provide Owners with the login page associated with their account. The owner then enters their email address and a one-time link to the portal arrives in their email inbox. They can then select this link and gain access to the Owner Statements.
Compliments of Appfolio – April 2010
Filed under: General, Property Management | Tags: Chris Hermanski, Property Management, property management services
Purchasing real estate can be a multi-million dollar investment. But chances are, time is scarce when it comes to realizing this investment’s full potential. Using a property management service provides the experience and expertise to ensure the largest return on a property purchase.
For owners, property management companies eliminate much of the headache involved in owning properties such as apartment complexes and condos. Here is a small sampling of the responsibilities management companies fulfill: set, bill, and collect rent; evict delinquent tenants; maintain the grounds; and lease to prospective tenants.
The three main advantages of using property management services are as follows:
1. People. Property managers have the experience and knowledge that will best preserve and enhance the property’s value. Just like with any business venture, it is important to hire the right people to run the property. The reason? To maximize income and keep expenses as low as possible. The right management company provides the property with a staff that values good customer service, which is critical to holding the property’s value. Also important is the staff’s knowledge of applicable state and federal laws. Failure to follow these will results in a lost investment.
2. Product. In real estate, the product the owner is pushing to customers is the property. Properties have to be well-managed to maintain their value and attract tenants. Property management companies come with a well-trained force of vendors to keep the property looking its best and running smoothly. Also, management services best understand the market challenges and pricing.
3. Price. Because property management companies are in the best position to analyze the market trends, they can help property owners get the maximum rental rates. This knowledge ensures that the tenant feels he or she is paying a fair price, and that the owner feels a good return is being made on their investment. Market knowledge also allows property managers to effectively use marketing dollars to generate traffic, leading to more leases. And finally, property managers save owners money by coming with extensive vendor contact lists that ensure the best pricing for the property.
Preserve and enhance your real estate investment by placing it in the experienced and knowledgeable hands of a property management service.
Article Source: http://EzineArticles.com/?expert=Rachel_Spohn
Filed under: General, Home Maintenance, Home Repairs, NARPM, Property Management, rentals, Spring Cleaning Checklist | Tags: Home Maintenance, NARPM, Portland OR, Property Management
Do those first warm days of spring get you itching to sweep out the winter’s cobwebs? Or do they elicit a groan as you survey the dirty lawn furniture and stuffed garage? Here’s a quick checklist of some recommended home maintenance and cleaning tasks.
Indoor cleaning projects
□ Wash windows and repair screens.
□ Vacuum dusty drapes and window treatments; send dirtier drapes to the cleaner.
□ Defrost the freezer and dust refrigerator coils.
□ Remove grime and grease buildup on kitchen exhaust fan.
□ Clean attic and basement, giving away or discarding unwanted items and clothing.
□ Shampoo carpets and rugs.
□ Steam clean upholstery.
□ Dust corners and ceilings.
□ Wash baseboards, doorjambs, windowsills, doors and walls.
□ Wipe ceiling fans.
□ Clean oven.
□ Wipe refrigerator clean.
□ Clean out office files.
Indoor maintenance items
□ Check attic fan.
□ Inspect caulking around tubs, showers, and sinks; replace if deteriorating.
□ Reseal grout on tile floors
□ Test ground-fault circuit interrupter (GFCI) outlets. A GFCI outlet has a “Test” and “Reset” button. Pressing the “Test” button will trip the outlet and break the circuit. Pressing the “Reset” will restore the circuit. If pressing the test button does not work, then replace the GFCI outlet. If the outlet does not pop when you press the “Test” button, but the outlet still has power, the outlet is miswired and it should be fixed immediately,
□ Tighten garbage disposal drain, connections and fastners.
□ Change furnace filters.
□ Change batteries in carbon monoxide and smoke detectors.
□ Lubricate door hinges and hardware.
□ Update first-aid and emergency kits.
□ Replace leaky faucet washers.
□ Replace incandescent bulbs with energy-saving lightning.
Outdoor cleaning tasks
□ Clean and de-clutter your garage and shed
□ Wash outdoor furniture.
□ Clean your grill and check for dead insects clogging the gas line.
□ Pressure-wash decks.
□ Pressure-wash siding.
□ Scrub porch ceilings and walls.
□ Clean umbrellas and awnings.
□ Clean light-fixture covers.
Outdoor maintenance must-dos
□ Inspect and repair or replace damaged roof shingles. Check around vents, skylights and chimneys for water leaks.
□ Inspect and reseal roof flashing if necessary.
□ Pressure-wash driveway and walkway.
□ Clean and inspect gutters and downspouts.
□ If you have a chimney, have it inspected and, if necessary, cleaned.
□ Check the oil and air filter on your lawn mower. If it runs poorly, take it in for a tune-up and have the blade sharpened.
□ Trim branches and shrubs that touch your home. They provide a pathway for bugs or excess moisture to enter your home.
□ Inspect the exterior surfaces of your home. Touch up any areas that need paint.
□ Check ironwork for rust spots.
□ Reseal deck.
□ Seal drafty doors and windows.
Information provided by: The Costco Connection February 2010
Filed under: 2009 Oregon Legislative Changes, General, NARPM, Property Management, rentals | Tags: 2009 Oregon Legislative Changes, NARPM, Property Management
Legislatures shift over time. Sometimes they are more aligned with landlord interests, sometimes with tenant interests. The 2009 legislative session was a tougher environment for landlord concerns.
This year SB 771 easily passed the legislature making sweeping changes to Oregon Landlord and Tenant Law statutes.
Basics of SB 771:
- 60 day no-cause eviction period for unchanged tenancies greater than 1 year
- Allows formation of a Temporary Occupant Agreement
- Facilitates property distribution when a sole tenant dies
- Reduces types of fees, specifies deposits
No Stated Cause Terminations – Month to Month Tenancy
- Tenant can terminate with 30 days notice
- During the first year of occupancy the landlord may terminate with not less than 30 days notice.
- After the first year of occupancy, the landlord may terminate with not less than 60 days notice.
- “First year occupancy” includes any periods in which any of the tenants have lived in the unit less than one year: i.e.: resets any time new tenants moves in
Temporary Occupancy Agreements
- A Temporary Occupant is not a tenant entitled to occupy the dwelling unit, and does not have the rights of a tenant
- A Temporary Occupancy Agreement may be terminated by the tenant at any time without cause, and the landlord may terminate for cause that is a material violation of the temporary occupancy agreement
- The temporary occupancy does not have the right to cure violation landlord cites.
- Landlord has the right to screen temporary occupant for past conduct or criminal record.
- Landlord may not screen for credit history or income.
- Can require temporary occupant to comply with any applicable rules, can include an end date, and landlord or tenant is not required to give written notice of termination.
- On termination of agreement, temporary occupant must vacate or is treated as a squatter.
- Tenant cannot become a temporary occupant in the tenant’s own dwelling unit.
- A tenancy may not consist solely of a temporary occupancy.
- Each tenancy must have at least one tenant.
Abandoned Property – Death of a Sole Tenant
In order to facilitate the transfer of property as a result of the death of a tenant who was the only tenant, now the following persons have the same rights and responsibilities regarding the abandoned dwelling as the tenant:
- An heir
- A devisee
- A personal representative (defined as a person named in a will or appointed by a court), or
- Any person designated in writing by the tenant to be contacted by the landlord in the event of the tenant’s death
Abandoned Property of a Deceased Tenant who lived alone
- Landlord must mail notice first class to deceased tenant at premises.
- Landlord must mail notice first class or personally deliver notice to any known heir, devisee, personal representative or designated person if actually known to landlord.
- Landlord must mail notice first class to attention of estate administrator of Department of State Lands.
- Follow Standard abandoned property procedures.
- If neither the heir, devisee, personal representative nor Department of State Lands administrator responds according to abandoned property timeframe, landlord shall allow removal of personal property by the designated person of the tenant.
- Designated person would have to contact the landlord in that period and show “reasonable evidence” of their status
- Landlord following these provisions is not liable to another person that has a claim or interest in the personal property.
New Fee and Deposit Disclosure
- Landlord must now provide any applicant with a written list of all deposits, fees and rent that is charged by landlord.
- This list must be provided before applicant enters into a new rental agreement or the landlord accepts any payment form the applicant.
- List may be amended by both parties prior to entering into the rental agreement.
- The Rental Agreement must include at a minimum a description of the fees that the landlord may charge.
New Fee Regulations
The following is a breakdown of allowable fees that must be included in the written rental agreement for the authority to charge:
- Late Rent Payment Fee
- NSF Check Fee plus any bank charges
- Smoke alarm/carbon monoxide alarm tampering/removal fee
Lease-Break fee parameters
- Landlord may charge lease break fee but it is not to exceed 1.5 times the monthly stated rent.
- If lease break fee is assessed, landlord cannot additionally recover any unpaid rent or recover damages relating to the cost of renting the dwelling unit to a new tenant.
New Fee Regulations
Landlords will soon be prohibited from charging noncompliance fees in excess of $50.00 and will only be allowed to assess such a fee for the following types of noncompliance:
- Late payment of utility or service charge that the tenant owes the landlord.
- Failure to clean up pet waste from premises (other than dwelling unit).
- Failure to clean up garbage, rubbish, or other waste from from premises (other than dwelling unit).
- Parking violations
- Improper use of vehicles within the premises.
Current Customary Fees not Allowed
- Administrative fees.
- Move-in/move-out fees.
- Pet fees (pet deposits unaffected).
- Cleaning fees (cleaning deposits unaffected).
New Security Deposit Rules
- The landlord shall provide a tenant with a receipt for any security deposit paid by the tenant.
- A landlord may not charge a tenant a pet security deposit for keeping a service animal or companion animal that a tenant with a disability requires as a reasonable accommodation under fair housing laws.
- A landlord is not required to repair damage caused by the tenant in order to claim against the deposit for the cost to make the repair. Any labor costs assessed for cleaning or repairs must be based on a reasonable hourly rate. The landlord may charge a reasonable hourly rate for the performance of cleaning or repair work by the landlord.
New Carpet Cleaning Parameters
- Defaults and damages for which a landlord may recover from security deposit include but are not limited to:
- Carpet Cleaning, other than use of a common vacuum cleaner, IF:
- The cleaning is performed by use of machine specifically designed for cleaning or shampooing carpets.
- The carpet was cleaned immediately prior to the tenant taking possession.
- The written rental agreement provides that the landlord may deduct the cost of the carpet cleaning regardless of whether the tenant cleans the carpet before delivering possession.
- The loss of use of the dwelling unit during the performance of cleaning or necessary repairs if the cleaning or repairs are performed in a timely manner.
Required Disclosures in Rental Agreement –
HB 2614 – 100 year flood plain disclosure
- If dwelling unit in 100 year flood plain – Failure to disclose makes landlord liable for tenant damages if flood occurs
Carbon Monoxide Legislation
- The 2009 legislature passed HB 3450 mandating carbon monoxide alarm(s) to be installed in most residential housing.
- Effective 7/1/2010 installation of carbon monoxide alarm(s) will be required in dwelling units containing a carbon monoxide source or units located in a structure having a carbon monoxide source according to State Building Code and Fire Marshall Rules.
- A carbon monoxide source is defined as a heater, fireplace, appliance or cooking source that uses coal, kerosene, petroleum products, wood or other fuels that emit carbon monoxide as a by-product of combustion , or an attached garage with an opening directly into a living space.
- Tenant must test and replace batteries, can’t tamper-fee allowed.
Implementation
- After July 1, 2010 dwelling units with new tenancies must comply (turnovers).
- All existing dwelling units must comply after April 1, 2011
- State Fire Marshall will adopt rules establishing minimum standards for carbon monoxide alarms including design, inspection, testing, maintenance, and placement by July 1, 2010.
References
- Bennett, Jeffrey; Attorney at Law, “2009 Oregon Legislative Changes Affecting Landlords”. Retrieved 10/7/2009
- Hahs, Andrew; Attorney at Law, “Oregon Landlord-Tenant Law – 2009 New Legislation”. Retrieved 10/2009
Filed under: General, Property Management, rentals | Tags: Home Warranty, Portland OR, Property Management
On any given day, we’re handed an opportunity to meet or exceed the expectation of a client. Imagine the ‘kudos’ one feels when they walk away from an interaction that just feels good! Granted, not all exchanges are entered into with smiles and handshakes, nor flavored with unicorns and butterflies, but we do strive to offer a level of professionalism no matter how difficult or minute the nature of business. Sure, we’re often thought of as the ‘bad guy’ when we follow policies and procedures, adhere to Landlord/Tenant Law, abide by Fair Housing Rules and Regulations and the Oregon Real Estate Agency, but we stand by our committment to provide a service that offers peace of mind to both owners and tenants.
The following posting is from a long time colleague from Sacramento, California. His years of experience as a Property Manager have served him well as he ponders, “How I made all my customers happy”.
How I Made All My Customers Happy
In a recent dream, I decided to make everyone I deal with happy. I would be the most popular and successful property manager in town and my business would be the envy of the industry.
It would be easy too. I would just deliver on the requests of my clients, both owners and tenants. At the end of the day, everyone would be happy with me.
Each new property management client would be asked how much they felt my fees should be and I would agree. I would not ask them to spend money to make the rental presentable. We would make it work. The owner would want a certain rent, maybe over priced, and I would tell them I could get it for them in a matter of weeks. Advertising costs would be no charge. What a happy client I would have.
Now, I would start showing the property and if someone came to the appointment, I would tell them to fill out our application and pay no fee for the credit report. I would tell them up front that their application would be approved without any formality of actually checking the facts. We believe them! Pay with a check if you wish, cashiers checks are so hard and expensive to get.
Now I am so popular.
Wait, I just got a fax from the bank, the security and first months rent check bounced. Now I have to tell the owner that we have to evict the tenant that has paid nothing. In addition, the tenant is complaining about a torn carpet that was not repaired and someone has tripped breaking their leg. I am to hear from their attorney.
Suddenly, and it did not take long, I am not so popular and everyone is mad at me. If they are not mad, they are ripping me off. Wait, the buzzer went off and my dream (nightmare) is over.
Now I am getting up to go to work. My real new account appointment that I have today will involve a discussion on what maintenance must be done and what the real rent range is. Our commissions will be a point of contention as some sales agent that just opened their business is undercutting my fees. Some prospective tenants will have to be told they don’t qualify. We do not want to do business with them. They will accuse me of something bad.
I am awake and I have been in business for 30 years. Luckily, in my real life I know how things work and I know not everyone will like me so I might as well do the right thing and stay in business for the long term. You see, people that have standards also have enemies.
Filed under: Home Repairs, Home Warranty Programs, Property Management, rentals | Tags: Chris Hermanski, Home Warranty, Property Management
Question: I pay $436 a year for a home warranty. But is it worth the expense? I wonder if I should save that money and pay for home repairs out of pocket instead?
Answer: Your instinct is correct. In theory, a home warranty covers all repairs on the appliances and service systems in your home for an annual premium of $250 to $450, plus service fees of $50 to $100 anytime a contractor is dispatched to repair or replace a unit. At first glance this might seem like a good deal, since you might pay thousands of dollars to replace a high-quality furnace or central sir system. The problem: These policies are loaded with caveats and exceptions in the fine print that can leave giant holes in your coverage.
For example, the cause of the problem generally has to be within the perimeter of your house, so if your plumbing breaks down because of a tree root in your yard, your claim will be denied. Ditto if a contractor arranged through the warranty company determines that you haven’t been performing proper maintenance on your system or appliance (say, you didn’t change the filter on your furnace frequently enough). You’ll also have limited say over what kind of replacement appliance you get, and you will almost always have to shell out extra if you need to upgrade your system, plus pay to get your old unit hauled away.
In other words, even with a warranty, you’re likely to end up paying plenty for home maintenance. So you’re better off using the money you would have spent on premiums and fees to build a truly adequate emergency fund that you can tap in the event of the occasional boiler meltdown.
- Carolyn Bigda
Money Magazine April 2008
Filed under: Home Repairs, Home Warranty Programs, Property Management, rentals | Tags: Property Management, rental property maintenance
Home maintenance is an important and complex issue for owners of rental properties!
Your home, like your vehicles, requires regular maintenance to keep the home in good repair and running efficiently. Unexpected repairs, unfortunately, leave you feeling frustrated in both the timing and the cost. Repairs reduce your anticipated rental income and, of course, the timing is never right.
Owner obligations
You have an obligation to your tenants, however, to keep the property in good repair; just as you have an expectation for your tenants to care for your house which is currently their home. As the owner, you must complete maintenance issues in a timely manner.
Our owners find it helpful to both anticipate maintenance needs and remember the benefits of keeping up their property. At some point in time you may decide that you want to sell the home; without proper maintenance, during the rental period, you can end up with even larger costs prior to selling and delay your ability to sell the home on your timeline.
Do not put off regular maintenance
Regular maintenance keeps your property in good shape and preserves its value. It can be tempting to defer repair issues to save on costs; however, this can lead to other problems: tenant complaints, legal issues, etc.
Where an owner living in their own home might be able or willing to put off a repair until a more convenient time, renters expect repairs to be completed in a reasonable amount of time. Deferring repairs can also lead to the issues becoming bigger and more expensive problems to fix; as well as making the property, as a whole, look less attractive to potential renters or buyers. Regular maintenance to your roof, furnace, etc. is a really good idea – it can extend the lives of these items, prevent some expensive problems, and diagnose other problems early; before they become an emergency, or worse, an ‘after hours’ emergency!
Proper maintenance attracts quality renters
Properly maintaining your home also helps attract quality renters. Most well-qualified renters will choose a property that is tidy and in good shape throughout. Tenants also reflect the owners’ attitude towards the property. If an owner is conscientious in maintaining the property; the tenants in turn will tend to respect and maintain it better. In contrast, if a property is falling into disrepair, tenants will tend to take less care to preserve the home, and may be slower to report problems.
Budget for repairs; do not let the expense be a surprise
As a landlord, it is a good idea to budget for maintenance. This reduces the stress when the need for repairs arises. We recently calculated that, on average, our clients who own single family homes spend about 8% of their annual rent on repairs. Condo owners spend about 3% of annual rent in repairs. Condo owners also may pay homeowner dues that partially go towards some building repairs.
Costs will vary from year to year for each property and the above are averages to use for planning. Your roof, paint, flooring, furnace, appliances, etc., all have a finite life span. When any of these large items need to be replaced, maintenance costs may be higher. On the other hand, there may be years when no repairs outside of routine preventative maintenance are needed. The best way to save you from anxiety is to invest in preventative maintenance, and plan ahead for those “surprise” repair costs when they arise and undoubtedly they will.
If you have questions please comment and a member of our staff will be happy to respond.
