Is Hiring A Property Manager The Right Thing To Do?

Over the last few years, a lot of consumers have moved out of their homes and decided that leasing it was a better choice than selling it at a depressed price.  Others have made a transition to year round living at a second home but felt it wasn't beneficial to sell and also considered leasing.  If you're lucky enough to get a good tenant, everything is fine.  But if you scrimped on screening, it may have created more trouble for you than it was worth.

Josh Lawrence of Beka Management is my guest blogger and he talks about some of these issues below.
photo courtesy of Danilo Rizzuti/freedigitalphotos.net

You Do What?

So you are a Property Manager…….Does that mean you fix toilets, chase down late rent payments and take phone calls at 3 a.m.? Well, not exactly. In fact, a good Property Management company can minimize these issues and become a great resource for any homeowner or investor.  

Many of the horror stories that we hear relating to rental homes are due to the poor condition of the property and poor tenant screening. The first question that you have to ask yourself when deciding to lease out your home is..........If I were renting would I want to live here? Don’t be afraid to spruce the place up a bit, provide new appliances, etc. This will only increase the rent value and the number of interested candidates. The second question to ask is how much do I need to rent it out for? Maybe you are an investor and looking for a certain ROI or maybe you have to cover your mortgage payment. Whatever the reason, you will need to come up with an amount and make sure that the markets rent values support your decision.

Ok, moving on. So you have decided to lease out your home. Now it is time to choose a Property Management Company. Here are the top 3 things to ask your Property Management Company!

1.      How do you screen tenants?

A good Property Management company will Verify Income and Length of Employment, SS#, Criminal Record, District Court Filings (Evictions), Rental History, Utilities in Collection, NSF Checks and Credit. By moving a qualified tenant into a property, it helps to ensure that rent is collected on-time every month.

2.      Are there any hidden fees?

Make sure to ask your Property Management company what there fee structure is. How much do they charge to find a tenant? How much do they charge every month as a Management Fee? Do they mark-up the maintenance? Is there a charge for a lease-extensions? Who receives the late fee? It is important for both parties to be transparent up front.

3.      How do I know that my property is being taken care of?

One of the most important things in Property Management is an “Inventory Checklist.” Make sure that the lease clearly states that the Inventory Checklist must be filled out and sent back to the management company within a specific amount of time. This allows for the condition of the property to be documented when a tenant moves in. When a tenant moves in they also should be required to provide a “Security Deposit.” The security deposit should be at least 1 month’s rent, but not to exceed 1.5 month’s rent.

The truth is, there are a lot of really great Property Management companies out there. Find someone who is passionate about Property Management and is excited to lead you on the journey! 

Josh's contact info is:

Josh Lawrence/Director of Properties and Business Development

Beka Management

P.O. Box 552, Walled Lake, MI 48390

Office:  248-363-0999  Cell:  248-505-1271
jlawrence at  bekamanagement.com
www.bekamanagement.com  

July 2014 Realtor Confidence Index Results

Every month, REALTORS across the country are given an opportunity to give their impression of their local housing markets.  The National Association of REALTORS (NAR) puts this into a report.  I just received the July "sneak peek" and here is a brief summary.  I'll expand on it in the next week or so.

• REALTOR confidence has continued to moderate. Some areas are seeing better inventory, but overall, supply remains tight.
• Buyer traffic dropped slightly in July.
• Fewer REALTORS are reporting rising home prices.
• Most REALTORS expect home prices to raise modestly in the next 12 months. (Michigan expects 3%-5% increase)
• Properties typically sold within 48 days in July.
• First time buyers were 29 percent of sales. Most first time buyers also made down payments of 6% or less.
• Cash sales were 29% of total sales.
• Sales for investment purposes were 16% of all sales.  Second home buyers and relocation sales remain weak.
• Distressed sales (foreclosures and short sales) were only 9% of all sales and sold at an average of 20% discount.
• Demand for residential rentals remains strong with many areas reporting rising rent rates. In some markets, it is cheaper to pay for a mortgage than rent.

The housing market is more complicated than it would appear to many consumers. If you are planning to sell or purchase real estate, it pays to work with a full-time professional, both for the lending and the marketing/sales components.