Mark Browerof Mark Brower Properties was featured in the Property Manager Edition of Top Agent Magazine in the February 2020 edition. You can read Mark’s interview about the high level of service he always seeks to provide and why it’s important not only to his clients but the property management industry as a whole, the importance of not just managing properties but being a trusted advisor to clients, and his passion for running.
Top Agent Magazine is the premier real estate magazine featuring the foremost real estate agents, mortgage professionals, and affiliates in the USA, Europe, Canada, Australia, and New Zealand. Top Agent Magazine features the top producing and most accomplished professionals in the real estate industry, offering an in-depth look at their careers and providing a blueprint for their success.
To be considered for a feature in Top Agent Magazine all professionals must go through a nomination and interview process. All Candidates are then evaluated based upon production, professionalism, as well as industry and community involvement. It is considered a privilege to be nominated as it speaks to a certain success level all real estate agents strive for. Top Agent has set itself apart as a trusted source of real estate information and inspiration.
We are honored that Mark Brower was selected to be included as a stellar example of the kind of prominent leaders of real estate that Top Agent Magazine are proud to feature.
You are the owner of a home in search of the right property manager to hire. Maybe you don’t yet know what makes up the ideal property manager, but you do know your end goal: (1) optimal financial performance of your property and (2) peace of mind. As you continue your search, here are 9 things to consider in potential property managers to ensure that you achieve these goals. This list goes beyond the basics, because as important as monthly management fees and rapidly finding tenants are, they become less meaningful if they are not coupled with practices that align with your interests as the owner.
Fee Structure – How do property managers make money?
The obvious answer to this question is the monthly management fee, but it’s important to think beyond that. There are any number of additional sources of revenue that you may encounter as you interact with your property manager (several will be pointed out individually below). Before jumping at the lowest monthly fee, investigate all ancillary fees in order to figure out the true cost of property management.
Parallel Incentives – Does the property manager’s fee structure align with your interests?
Often times fees themselves are only half the story. Equally critical is the behaviors they motivate. A fee structure that has appealingly low costs may encourage suboptimal management in order to increase profits (a few specific examples are included in this list). When considering a property manager, examine every fee and avoid those that present a conflict of interest with the responsible management of your property.
Maintenance – How are maintenance costs handled?
Be aware of situations where property managers are marking up maintenance costs or using in-house maintenance. In cases such as these, where maintenance becomes a source of revenue, it can have the adverse effect of incentivizing unnecessary maintenance and targeting less than ideal tenants that may allow the property to fall into disrepair.
Late Fees – Are late fees exclusively pocketed by the property manager?
Invariably some portion of late fees will be absorbed by the property manager in order to recoup costs. The issue arises in situations where property managers retain 100% of late fees, as it can motivate them to target non-ideal tenants who are more likely to incur these late fees, thus boosting revenue. Ideally a property manager will, to some degree or another, split late fees with the owner.
Leasing Fee – Does the leasing fee seem steep?
Property managers will typically charge a leasing fee that covers costs and perhaps generates a very modest profit. Be weary of higher leasing fees, as they can encourage managers to favor short term tenants in order to collect leasing fees at every turnover.
Tenants – What focus is placed on finding high quality tenants?
Finding a tenant quickly is often a priority among owners, and there is no disputing that low vacancy is a desirable goal. However, this goal must be balanced with the desire for an ideal tenant. A little extra screening in this phase can lower costs for owners and property managers alike, ensuring fewer evictions, lower maintenance costs, and longer term tenants.
Routine Inspections – How are they handled and what do they cost?
Regular inspections of your property are in the interest of both you as the owner and the property manager. They encourage responsibility and accountability in tenants, help lower long term maintenance costs, and foster a positive relationship between all involved parties. These inspections should not be optional, nor be an added cost to the owner.
Important Metrics – What do the numbers say?
There are several telling measures that can give a good idea as to how a property manager operates. Ask for data on the number of past evictions, percentage of tenants that pay late, percentage of tenants that renew their lease, etc. They might not always have the information to give or be willing to share it even if they do, but it will spark a discussion about related practices that can be insightful.
Long Term Focus – Is your property’s value being preserved and increased?
A property manager worth your trust is operating with a long-term focus. They manage your property in ways that will not only generate consistent, sustainable revenue today, but will also lower your long term costs and ensure the highest value of your property in the future. This incorporates everything discussed above; a fee structure that aligns with your own goals, a system that finds the highest quality tenants, and practices that ensure that you, the owner, are getting the most out of your property without unnecessary worry about your rental investments.
Today we’re talking about whether you can sell your property while it’s being rented. You can absolutely do this, and it’s actually possible to maximize the proceeds from the sale when you have tenants in your house. Here’s why: a traditional sale occurs when the house is vacant. It might be vacant for two to four months while it’s on the market and being prepared for sale. Then there’s an additional wait while the buyers are getting their financing in order and the appraisal complete. You don’t actually make any money until the sale closes. Most people have a mortgage on the property they’re selling and they lose that cash every month it sits on the market. Many sellers also feel pressured to drop the price in order to move it quickly.
With a quality renter in place who is willing to be helpful with showings and the sales process, rent is still coming in. At Mark Brower Properties, we give our good tenants an incentive to allow potential buyers to access the home. We also incentivize them to end their lease early in the event we need to accommodate a buyer who wants to buy the home and move in.
There are two types of buyers – the investor, who would love to buy a rental property with a tenant already living there, and buyers who want to move in themselves. You can successfully manage this process by using your negotiation and communication skills. Talk to your tenant about your plans for selling the home and be respectful of their time and schedules. You can keep your tenant
in place and paying rent while still showing home and getting it under contract. Then, you can work together to get the tenant out early if necessary so the sale can close. This type of situation is a benefit to you as a landlord and an investor.
If you have any questions about this, please don’t hesitate to contact us at Mark Brower Properties, and we’d be happy to help you.
Today we are talking about how to choose a vendor the way professional property managers do. As a landlord, if you only have two or three rental homes, it’s not every day you’re going to be changing out a water heater or having an air conditioning unit replaced. In many cases, you don’t have relationships in place with vendors you need to do the work. You can research online what something should cost, but you need to work with the right vendor who will treat you fairly. You might not be a repeat customer for 5 or 10 years.
Referral Relationships
One thing that has always worked well for us is to find the vendor through a referral source that’s important to that vendor. For example, if you need an appliance repaired, call the appliance company and ask for the names of two or three repair companies they recommend. Then, when you call the repair company, you can say that the appliance company referred you to them as one of their trusted repair vendors. This allows you to establish accountability through the referral source. They will treat you a little differently than they treat other customers because they don’t want you to call the appliance company back with a report of bad service. You’ll have the leverage a professional property manager has with repeat business based on this referral relationship.
Online Reviews
You should always read reviews online. This can be tricky because a lot of businesses hire marketing companies to write bogus reviews, or they have their friends and family members write glowing online reviews for them. Take a look at the reviewers and see what other reviews they have left. If they have reviewed only this one company, you should probably discount what they’ve said. Look for reviewers who have also reviewed 10 or 20 other companies on Yelp and Google, and who don’t always give five star ratings.
Online Research
Finally, it’s important to do some research online. You want to know your repair costs and have an idea of what materials and labor will cost. It’s normal to have a little markup on materials when you’re dealing with a repair company, but don’t accept anything higher than around 20 percent. A markup that’s 300 percent is not appropriate.
Hopefully these tips will help you ensure you’re being treated fairly and getting quality work for a good price. If you have any questions about finding vendors, or you need any help, please contact us at Mark Brower Properties.
Today we are sharing a few tips on how to attract a quality tenant for your rental property. This is the single most important thing you can do as a landlord and if you choose the right tenant properly, it will help you avoid lots of issues down the road. Tenant selection starts with quality marketing. This includes high quality photos, a high quality write-up and the broad syndication of your ad. If you have those things and your ad is all over the Internet, you’ll know based on your call volume and showing volume if you’ve priced the home properly. Without quality marketing, you won’t know.
Pictures
You need a good camera. Get a digital camera with a broad lens to take pictures. We currently use the Samsung Galaxy II digital camera and it’s working really well. Stand in corner of a room with the light source to your back or side. Take a lot of photos – at least 50. Once we have a good collection of photos, we pull them into Picasa or use the Mac Book Pro to enhance them. This allows us to improve the exposure, remove any shadows and enhance colors. The result is about 15 to 20 photos that really showcase the property.
Description
Write the best property description you can. It doesn’t have to be very long. The primary goal with your description is to make sure the property lands on someone’s list of homes to see. Renters are searching online through sources like Trulia, Zillow and Homes.com. They will make a list based on photos, price and description. You want to be on that list, so write a description that is short, to the point and full of good adjectives.
Syndication
Syndicate your ad to the broadest possible base of websites you can. Without being an agent, you won’t be able to get it on Realtor.com or the Multiple Listing Service (MLS), so maximize your other options. Post on Zillow, Trulia and a couple of times a week on Craigslist. Respond to incoming calls quickly and make the property available on all days and at all times. Track your feedback. You want to see between three and six, maybe even seven or eight showings a week. That’s how you’ll know it’s priced correctly. The goal is to get a tenant in your property within 30 days. Any longer than that, you’re wasting money with a prolonged vacancy.
These are just a few tips on how to market your property like a professional. There is a lot more to talk about on this subject, so contact us at Mark Brower Properties if we can help you with your marketing plans in any way.
In today’s blog, we are answering questions about the eviction process. Many new landlords want to know how eviction works and what happens if their tenant doesn’t pay rent. They perceive this as a worst case scenario, but it’s actually not as bad as you might think.
Payment Policy
The first thing you need to do is to have a good payment collection policy in place. You want to start the eviction process as early as possible in the month, so your payment policy has to reflect that intention. When you sign the lease with a tenant, explain that rent is due on the first of every month by 5pm. That’s what it says in the lease and there’s no grace period. Rent is considered late on the second of the month. Let your tenants know you will file a 5 Day Notice by certified mail to start the eviction process if rent is not received before the second day of the month.
That might seem harsh if you haven’t been a renter for a while but it’s the best way to do business. We always explain to our tenants that we want to have a respectful relationship but we need to run a business and treat everyone the same. They usually don’t take that personally.
5 Day Notice
Sending the 5 Day Notice on the second day of the month by certified mail is necessary because the court system requires a five day receipt period. They don’t see it as received by the tenants for five days after it’s sent out. Then, you have to wait the five days in the notice. So you’re actually planning on 10 days. Get the letter out on the second day because it means the soonest you can file for eviction is on the 12th of the month. In most cases, if you don’t have the rent by the 12th, you’ll want to evict for sure. Control the timing.
Use an Attorney
Attorneys know the eviction process well and they also have valuable relationships within the court system. Usually, evictions are open and shut cases. When you have unpaid rent, the judge will give you a Forceable Detainer, and you’ll also get a judgment. Attorneys do this in volume and they really understand the process. They’re also not as expensive as you might think. As a property management company we get billed at flat pricing rates that usually range from $250 – $500 depending on how far things go in court and with the constable.
In most cases, we can have your non-paying tenant evicted in 30 days. There are lots of scenarios that are worse than evictions. Dealing with bankruptcies or tenant damage from people who neglect or misuse your home are much bigger threats. If you have any questions, or you’d like some help with a problem you’re having, please contact us at Mark Brower Properties.
Today we’re talking about tenant screening. The single most important thing you can do as a landlord is to find the highest quality tenant in the fastest amount of time. The key factors to excellent tenant placement are effective marketing and effective tenant screening. Without a great marketing strategy, you won’t have enough interest from potential tenants to screen well. Without a thorough screening, you’ll get someone in the property who may turn out to be a mistake and then it’s too late.
You need a marketing plan that produces a good pool of potential tenants and then you must be disciplined and uncompromising in your screening process. There are four components to a detailed tenant screening.
Credit and Criminal Check
The first part of the screening process is a check of credit history and criminal background. If you choose not to work with a professional property manager, there are services online that can provide you with these vital reports. Don’t trust your instinct and don’t think you know a person’s character just by meeting them. Get all the documented information you can.
Income and Work History
Make sure what the tenants put in their application is accurate. Call their employers and get a verifiable work history of between 12 and 24 months. Pay stubs are great to verify income, but you also want to talk to employers so you know your tenants work. Lead with a question like: “Jane Smith listed you as a reference on an application for a home. Can you tell me how you know Jane?” If the applicants used one of their friends or family members as an employment or a former landlord reference, this type of question might trip them up and get you more accurate information.
Rental History
Make the necessary phone calls to get an accurate sense of your applicant’s rental history. You don’t want to cut corners here. It’s important to know what kind of tenant this person has been in the past.
Cash for Move In
Good tenants will have the cash they need to move into your home. Don’t let someone limp in with half a security deposit or a partial rent payment. I own rental properties myself, and early on in my investment career I was burned this way because I was desperate to get a vacancy filled. It’s essential that you collect a full month’s rent and a security deposit before the tenant moves in. Our practice is to pro-rate the second month when necessary. If a tenant moves in on the 15th of the month, we collect the first month’s rent in full and then pro-rate the second month.
Do these things effectively and you’ll have well-screened tenants. If you have any questions, please contact us at Mark Brower Properties. We’d be happy to be a resource for you.
