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Property Management Banking Tips

By Carla Toebe, New Century Realty, Kennewick, WA If you have decided to delve into the world of property management then the banking procedures will be a bit more involved than simply having a bank account, making your deposits and payments, and balancing the register at the end of the month. I want to stress that every state’s laws are different. Much of what I talk about in this article relates to the best practices specific to the state of Washington. The first rule of business is to establish a trust account with your commercial bank. Oddly enough, once you have sat through the session to get this going, do some telephone banking and ask the representative what kind of account you have set up to make sure it was actually set up as a trust account. Just because they tell you that it is a trust account doesn't mean it is. You have to follow up to make sure that the personal banker did their job correctly. You could find out the hard way that this account was never in fact a trust even if you were told it was. If it isn’t a trust then it will not be protected from potential seizure in the event of bankruptcy or other issues with separate personal or business accounts. Do your due diligence and don't rely on the initial set up. Additionally, you should not have any business operating funds coming into or out of this trust account. The account should......
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Rent Versus Buy – Rent an Apartment or Buy a Home

For quite a while I have been amassing a list of resources that compares the cost of renting an apartment versus buying a home, renting versus buying calculators, or other articles that detail the advantages of renting.  If you have any other “rent versus buy” resources, please add them in the comments. CNN:  Renting: The new American dream? New York Post:  Home Sweet Rental – No Longer Buying Into The American Dream NMHC:  Renting versus Owning? Making an Educated Decision The Cost of Buying a Home Over 30 Years Why Own When You Can Rent? Four Letters Ease Housing Fears For Some: Rent Homeownership Is Overrated MIT Center For Real Estate:  Better Off Renting? Trulia Rent Vs. Buy Index New York Times:  Is It Better To Buy or Rent – Renting Versus Buying Calculator CNN Money:  Renting: The new American dream? The Washington Post:  5 Myths About Homeownership NPR:  Housing Guy Apologizes for Housing Bubble “It was not until the spring of 2008, just months before Freddie would be bailed out by the federal government, that (Freddie Mac economist Jacob) Kosoff began to question his fundamental belief that owning a home was better than renting.” TIME Magazine:  The Case Against Homeownership “Homeownership has let us down. For generations, Americans believed that owning a home was an axiomatic good. Our political leaders hammered home the point. […]  But our leaders, with our encouragement, went much too far. The dark side of homeownership is now all too apparent.” Renting Vs. Buying:  New Evidence......
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How To Handle An Abandoned Property

By Carla Toebe, New Century Realty, Kennewick, WA They say that abandonment is a landlord’s or property manager's worst nightmare when dealing with a tenant. How do you know it is really abandonment? Sometimes it’s obvious when everything is gone, the place seems perfectly empty, and the tenant's keys are lying on the counter. But what if the place is full of furniture, the food is still in the cupboard, and you can't get a hold of them? They haven't paid their rent, they haven't returned your phone calls, no one has seen them, and you can't get a hold of anyone on the emergency contact form you had them complete when they moved in. Surely this means they must have abandoned the place. So you change the locks, and uh-oh! There they are coming back claiming you have now burglarized their place. Oh no! This can't be, they clearly abandoned the place and you took all the steps you had to take that were required by law. Maybe it isn't that clear cut. Maybe a tenant still has some rights. Now you are facing penalties, a criminal investigation, and a whole slew of troubles you never knew you had. Let's back up and figure out how to determine that this is really abandonment and you have the right to take possession of your unit. You spelled out what abandonment was with your tenant and you had it written in the lease, right? Good, well at least you tried to get......
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Applying Green Principles In Property Management

A guest post by Samantha Harvey, General Waste Collection, Lancashire, United Kingdom With sustainability becoming more important to the general population, there is an ever-increasing necessity to provide eco-friendly properties. The rise in popularity of green technologies has led an industry that was once seen as expensive and niche-based into one that has competitive prices for many aspects of the building process. With the decreasing initial price disadvantage combined with the always present efficiency positives, the green movement presents a good deal of incentive to implement more eco-friendly resources. With the majority of greenhouse gas emissions coming from buildings, incorporating sustainable processes in homes is vital for curbing the impact of global warming. As a property manager, the bottom line is the strongest guide as to how a property is to be managed. Incorporating green strategies can be a very productive aspect of property management. A major incentive for providing eco-friendly aspects to homes are the tax breaks, whether on a local or national level. Whether it is windows, heating systems, or solar panels, incentivized government programs are out there waiting for people to take advantage. Along with tax incentives, the strategies of increased efficiency provide savings in the operating costs of residential buildings. In cases where utilities are included, the bottom line effect can really add up. If utilities are not included, the potential renter will, or at least should, recognize that their own personal utility bills would be lower. This provides a key advantage over non-green buildings where potential......
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Never Put Off Till Tomorrow

By Linda Day Harrison, theBrokerList, Chicago, IL Touch It Once is a mindset, a philosophy, and a management style. It is the antithesis of procrastination coupled with a smart way to work by stopping redundant behavior dead in its tracks; both of which are the enemy of any efficient and well run organization. The concept is simple – Touch It Once (TIO). Did you ever notice that each month the cycle is the same? Collect rent, send out 5 day notices, process accounts payable, cut checks, etc. So if this is something you know that’s going to happen, why is it so painful? Then at the end of the 30 day period, the cycle is going to start again! How can you not be prepared?! It happens every 30 days! If you think about how the concept of TIO comes into play it will change the outlook you have on your business. Every time you do a task, think about how you can do that task perfectly. Save the process, document the task, and create a road map for others to follow that same format or system. The next time the task is required, anybody can use your process, learn how to execute, and actually accomplish it with the least amount of error or redundancy. So how do you as a property manager or leasing agent “touch it once”? For me it was about checklists and document packets. These checklists include a new resident checklist, a move out checklist, a new......
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"It’s business, not personal.” If that is true, then why does it feel so personal?

A memorable line from one of the Godfather movies — “It’s business, not personal.” turns out, is one of the most important and yet the most ironic things I have learned in my career. As a manager, I find myself forced to make unpopular decisions almost every day. And so, I deal with the impact or perceived impact that my decisions make on my employees on a regular basis.  I try to follow the mantra of “it’s business, not personal”, but sometimes it feels personal, even to me - an obvious example being in cases where I am ending an individual’s employment with the company.   When I first began making decisions that I knew would be unpopular, I initially became quite discouraged and started to second-guess my decisions.  However, I soon realized how unproductive this was and instead began to focus on a more forward thinking perspective. When I have doubts about how I may have handled a situation, I consider the alternative actions I could have chosen and try to identify a more appropriate response for future situations. Of course, it is impossible to remove all uncertainty and guarantee that future decisions will be correct, but focusing on actions is a more positive behavior, while also not forgetting consequences. By setting goals, one takes a more objective approach and removes some of the emotion and defensiveness that can arise from an error. There are several practical steps any individual can take to manage performance effectively.     How Do......
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The Circle of (A Property’s) Life

By Linda Day Harrison, Manager Labs, Chicago, IL There are business models in all shapes and sizes. There are retail stores, medical and legal practices, cleaning companies, general contractors, grocery stores, etc. So when you think about a business, how many business models do you know of where the business owner outsources the entire business to another party? For instance, if you visit your local grocery store, is it managed by a grocery management company? How about a retail store management company? So what makes the residential real estate investment business any different? Why are there so many property management companies and outsourced service providers to the property industry? According to a colleague of mine, the answer is quite simple, “It is not easy, there is so much at stake, and there are many moving parts.” Also, when you think about properties as investments, there are often multiple partners and joint venture groups who own the assets. In those cases, the managing partner realizes they do not have enough time or expertise to do all of the functions required of them to maximize the value of the asset. That is what outsourcing offers. As a property manager outsourced by these partnerships, the responsibility of managing that asset is crucial in so many ways. First of all you have been selected by the partner on the management of the asset. All of the actions you take as the manager or management company directly reflect onto the reputation of that partner or company......
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Social Media: Managing the Dark Side

FB Logo with Bullet HoleBetty’s a self-described ‘old-timer’. She has been through more up-and-down economic cycles than she would care to number. "Happy Days are here again!" she told me. "But you know, it doesn’t last." Way to kill the mood, Betty. She is right. Cycles are called cycles because they keep coming around. In most of the markets I visit times are good. Vacancy is down; rents are being pushed. It is time to seize the day! Increase rents, pump increased revenues back to your profit-starved investors and make those long-deferred capital improvements. However, now is the time to put on your Leader Cap: your job is to take the long-range view. What are the potential outcomes of our current management behaviors? First, review economic reality: Homeless - According to the MBA National Delinquency Survey, 4,296,018 homes were foreclosed, sold in a short sale or the mortgage was over 90-days delinquent in 2011. Of these, 1,445,000 houses were lost due to foreclosure or short sales. Each of these people moved in with friends or family, are in a shelter, living in their car or are your new residents. Unemployed / Underemployed - Bloomberg reports that while the unemployment rate is dropping (down to 8.3% in January, 2012), underemployment is hovering around 17%. These are folks who are working well below their potential. No Cushion – MSN Careers says that 42% of Americans are living paycheck-to-paycheck while Economicrot puts the figure at a staggering 77%. Either way, there are a lot of people whose economic......
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Reach more renters where it counts…their inbox!

Here are three quick tips to help your email messages reach your subscribers’ inboxes, avoid spam complaints and maintain your status as a reputable sender: 1)     Ensure you are sending relevant messages to subscribers who have expressly opted in to receive your emails. For example, if a prospective renter signs up to receive property listings, the last thing they’ll want to see is an advertisement in their inbox about the latest weight loss trick!  There are many people out there who want to receive promotional emails, provided that you give them exactly what they’ve asked for. 2)      Don’t send to lists that are too old. While a subscriber may enjoy reading your emails when they first sign up, there often comes a point when they simply no longer wish to hear from you -- and that’s okay!  Perhaps they no longer have a need for your service or your message doesn’t apply to them anymore.  If you send to subscribers who signed up for your program years ago, you’ll have a much higher likelihood of spam complaints and bounces.  You may find many of these folks are no longer using the same email address or have completely forgotten they opted into your program way back when. 3)     Send your messages at an expected rate. While you don’t necessarily need to tell subscribers exactly how many emails they should expect to receive, a little common sense and the golden rule can go a long way.  You don’t want to bombard them w......
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Rent Roll Buying and Selling – More Than Meets the Eye

By Jo-Anne Oliveri, ireviloution intelligence, Brisbane, Australia Recently, I have been involved in the sale and purchase of a rent roll. I had the rare opportunity of consulting for both the buyer and purchaser. Let me say, this was the smoothest and least stressful rent roll transfer I have ever witnessed! Now some might say there is a conflict of interest by consulting to both the seller and the purchaser, and yes, I would agree! I definitely had my reservations about consulting and advising to both of them, but I discussed my dilemma with both parties. They both agreed they would retain me as the consultant and adviser through the negotiation, transfer, settlement, transition and retention period. In fact, I even conducted the inspection and overview on the selling rent-roll, and prepared the due diligence report. This was a tremendous lesson for all concerned (including me)! The offer and settlement process lasted for several months. The buying agency is now in the midst of the four-month retention period. The selling agency must continue to cooperate to ensure all clients (both property owners and tenants) are happy with the new managing agent. Both agencies must not become complacent or lulled into a false sense of security until they are clear of this retention period. For all intents and purposes the first goal of the buying agent is retention! The second goal is to build on the managements that they have invested in to encourage the investor to buy more property and recommend......
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