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Know Your Property Management Market Potential

By Jo-Anne Oliveri, ireviloution intelligence, Brisbane, Australia I see too many property management businesses either fail completely or forever fail to achieve their targets for many and varying reasons. It’s important, just like in any business, to understand and know your market. In order to create your business plan and targets you must know the market size, potential, averages, statistics and demographics. In this particular blog I’ll focus on the critical role market potential and averages play in the success of your business. Mistakes continue to be made in the property management industry because business owners focus on numbers and not income. There are many critical factors that can make or break the success and profitability of an agency. By understanding critical factors you should then understand that by focusing on the number of properties under management, rather than the income, you are creating a ‘Frankenstein’ for yourself and your team, not to mention disastrous consumer relationships. To put it simply by focusing on properties under management you are focusing on quantity only. By measuring targets on income you are focusing on quality. It’s a classic “quality versus quantity” dilemma,  and quality always beats quantity. A quality agent attracts quality teams, which tend to attract quality property owners and their quality properties, who in turn attract quality tenants. Next thing you know you have yourself a quality business and a quality brand. QUALITY PLUS! Always remember – when you are tempted to focus on numbers of properties under management, when ......
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Dodd-Frank Bill Requires Adverse Action Letters

By Salvatore Friscia, San Diego Premier Property Management, San Diego, CA The property is ready to be occupied, marketing is complete, and now you are receiving multiple inquires. At the first showing you receive two applications and it looks as though you’ll fill the unit quickly but remember only one party can be offered the property and after you have evaluated both applications – pulling credit information, confirming employment status and reviewing past rental history – it is clear that only one party meets your qualifications. So is it as simple as offering the rental to the qualified party and just letting the other party know that they didn’t get the unit? Not so fast. As of July 21, 2011 the Dodd-Frank bill requires you to provide the consumer with a Score Disclosure letter or an Adverse Action letter if you decline their application or impose additional conditions (such as a higher deposit) in order to accept the application. This law was enacted toward creditors but does include “Property Managers” who deal with making decisions based on credit scores for potential tenants. According to the Fair Credit Reporting Act (FCRA) creditors are required to issue an adverse action notice containing the name of the credit reporting agency, notice of the consumer’s right to request a free credit report, and notice of the consumer’s right to dispute the accuracy of the report’s content. The Equal Credit Opportunity Act (ECOA) requires creditors to provide consumers with the specific reasons for a denial, o......
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Not Everyone's a Property Manager!

By Salvatore Friscia, San Diego Premier Property Management, San Diego, CA I made a quick trade, put an offer in on a property in Arizona and then closed my laptop and headed with the kids for lunch in La Jolla. It was after lunch that I had an all too familiar experience. We were playing tourist for the day and on the walk back to our vehicle we stopped into a small boutique store near the cove to allow each kid to choose an item of there choice as a fun reward for good behavior throughout the day. I noticed the owner of the boutique slumping over his cash register near the back of the store and I greeted him and asked how his day was going. He responded quietly, “Better then yesterday” and we struck up a conversation. The conversation quickly went toward business and the owner proceeded to tell me that he just bought the store last year and sales were considerably down. To make matters worse the landlord was increasing his rent. I empathized with him and offered some of my ideas for a short term solution but it was obvious they were falling on deaf ears as the owner quickly interrupted me and said something that made me stop and think. He told me that he was not really worried about the slower sales at his store because he was going to start managing some real estate for a couple of friends that own rentals in ......
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Tenants Have Legal Responsibilities Too

By Colin McCarthy, J.D., Robinson & Wood, San Jose, CA Recent posts have suggested onerous burdens and detailed obligations owed by landlords.  “What about the tenants?” you ask.  They have some responsibilities, too.  If a tenant in California does not adhere to these minimum requirements, a landlord may not be held responsible for failure to provide a tenant with a habitable residence – i.e. the bare necessities.  Let’s outline them here, ok? To successfully prosecute a claim against you for not providing those bare necessities, a tenant probably should be able to show that: He kept the unit clean and not unsanitary.  He cannot let it get dirtier than it was when he first started renting. He cannot abuse or misuse the plumbing, gas, or electric fixtures in the unit. He should prevent his guests from damaging the premises. He should make written requests of his landlord when he wants something in the unit fixed. When you come to fix it, he should not prevent you from doing so.  He should not put the chain lock on.  He should not refuse to let you come to fix it on reasonable notice. He should throw out his trash and garbage. If your standard lease agreement does not spell out some of these responsibilities, you might consult with your transactional attorney to see if such terms can or should be incorporated. Basic equity (and some statutes) provide that a tenant should inform you if he believes the premises are or have become uninhabitable.  Any ......
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Move In - Move Out Checklist (Part 1)

By Salvatore Friscia, San Diego Premier Property Management, San Diego, CA A vital part of reducing cost when managing a rental property is limiting the expenses associated with tenant turnover. Tenant turnover usually requires the rental property to be professionally cleaned, painted or touched up, and carpets cleaned or replaced. In order for you to know what expenses to absorb and what expenses to charge back to the tenant, you should always know the current condition of the property as well as the condition in which the property was given to the tenant. To accomplish this, each tenant should be provided with a written “Move-In/Move-Out” checklist. The “Move-In/Move-Out” checklist allows both parties to identify in writing the initial “Move-In” condition and the final “Move-out” condition of the property. These checklists will eliminate any misunderstandings regarding which party will pay for non-normal wear and tear repairs throughout the tenancy and upon move out. Prior to giving the keys to the tenant the owner should completely inspect the property and document the existing condition on the “Move-In” side of the checklist. It is necessary to document the condition of the appliances, windows, screens, blinds, doors, walls, lighting, flooring, a/c, heating, toilets, faucets, ceiling fans, and any other necessary interior and exterior areas. During the initial walk-through with the tenants, it is important to review the findings with the tenant and have the tenant sign and date the document. The use of a digital camera or video camera is also recommended upon both “Move-in”......
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Creating Soul and Personality for Your Business (Part 2)

StarbucksBy Jo-Anne Oliveri, ireviloution intelligence, Brisbane, Australia Let’s continue from my last blog.  If it’s all about the client experience, and it is (just ask your clients), then how do you create a memorable and enjoyable client experience? Remember that it has to be a “real” experience because clients can spot fakes and phoneys from a mile away. Therefore your team must internalise your business personality – it must become the natural way that they interact with clients and teammates as well as how they represent your brand and your service. Step one in creating a happy client experience; inject soul into your business by finding your personality. Don’t be another ‘Me too’ business – find out what type of personality you want to portray to your clients. It doesn’t have to be fun and zany, although fun and zany may very well suit your company. Consider personality styles like classy, funky, professional, happy, colourful…the list is endless. However, you can’t fake a personality. It has to be real, genuine, and sincere. Your company has to be you. Brainstorm with your team. What is your personality? Only then can you know it, live it and be it. Once you know what your business personality is, you have the foundation to design your business premises, uniforms, marketing and in fact anything that represents your company right down to the font you choose to use to reflect this personality. By doing this your team will by way of nature automatically begin to in......
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Creating Soul and Personality for Your Business (Part 1)

DisneyBy Jo-Anne Oliveri, ireviloution intelligence, Brisbane, Australia How do we know what service experience we want our clients to feel if we don’t know what that experience is ourselves? We don’t, so it’s no wonder our industry is mostly confused when it comes to delivering the best client experience. Have you ever experienced that feeling when you walk into a particular business and feel a culture, energy, or vibe that makes you feel good – appreciated and respected – yet you just can’t put your finger on why you feel that way? I have on many occasions. It’s what I refer to as business with soul and personality – there businesses seem to know who they are and what they are there for. It’s all about business by design. Knowing what your purpose is and what experience you want to create for your clients. Disney® knows that their purpose is to create happiness and they create a magical experience for their guests. It doesn’t matter whether their guests are visiting the parks, staying at one of their resorts, or attending a Disney® movie. If it has the name Disney® attached to it, you are assured of a magical experience. And then there is Virgin. The Virgin Group, no matter which branch of the company you are dealing with, are all about fun and laughter and crazy pranks. Every client knows that whether they are flying with Virgin, subscribing to their telephone service, or using any one of their multitudes of products and ser......
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Property Management - Let's Talk Bare Necessities

By Colin McCarthy, J.D., Robinson & Wood, San Jose, CA In my last entry, we discussed how it was possible in this great country of ours that a burglar could sue a property owner for injuries he sustained while robbing that same property owner.  In my next entry, we will discuss why it is in the fine state of California that a tenant can sue his landlord for injuries sustained on the property which are inflicted by criminals.  But in this entry, I will get a little more practical:  we will discuss just what your responsibility is to your tenants regarding the liveability of the unit. Just what do you – the property owner – have to provide to your residential tenant to remain in compliance with the law?  Well most of this is just common sense.  If people are going to live in the premises, if you do not provide the following, not only are you not being nice, but you are breaking the law: A weatherproof environment.  The unit has to have a roof and walls as well as doors and windows that are unbroken (more on this next entry!) Electricity.  It may come as a surprise to you that most will not want to rent your unit if they cannot plug in a TV and refridgerator.  Or it may not. Plumbing.  It may also come as a surprise to you that not only would most tenants enjoy a good shower and functioning toilet, but the law generally requires it. Gas and heating.  People don’t like to be col......
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The Security Deposit - How Much is Enough?

Security DepositBy Salvatore J. Friscia, San Diego Premier Property Management, San Diego, CA Every property owner should require tenants to issue a refundable security deposit which is held on file to insure against non-performance of the lease agreement. Non-performance may be, but is not limited to, anything from damages occurring during occupancy to expenses accrued due to the tenants conduct or failure to pay rent. The confusion begins with the property owner not knowing how much to require the tenant to issue for the security deposit. It is important to understand that security deposits for residential properties are controlled by statute and call for nondiscriminatory  and equal treatment. It is a prohibited discriminatory practice to charge a family a different amount then an applicant without children. It is also prohibited by law to require an excessive amount for the security deposit. In addition to collection of one month’s advanced rent, the maximum security deposit allowed (at least in the state of California) for an unfurnished unit is two months rent and three months rent for furnished properties. [California Civil Code 1950.5(c)] Check your local area laws for similar guidelines in your area. Many owners will ask for the first and last months rent along with the security deposit. This is allowed; unfortunately most renters are unable to afford twice the rent plus the security deposit upfront. Some owners will offer their property with a reduced security deposit. The owner will advertise the rental property at $1,000 monthly requiring a security deposit of $500, ......
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Strategies for Collecting Missed Rent Payments

Rent CollectionBy Peter Lamandre, Better by Design Realty, Scranton, PA What to do when a tenant doesn’t pay or skips? I don’t mean hop-scotch I mean what do you do when the tenant leaves the rental prior to the termination of their lease? The process can vary and depends upon the terms of the lease (if there is one). This post will provide some pointers on how to handle this less than ideal situation. I’ve always tried to be human with my tenants and recognize that sometimes good people fall on hard times. The most important thing to remember is not to make this too personal – it is business and whereas you can empathize with the situation you can’t allow that empathy to blind you to the fact that the non-payment hurts your business. Have a specific policy set for dealing with the delinquent accounts. Here is an example action plan for collection, which based on location and local laws may need to be modified (but I think you will get the idea). 20th of the month – statements go out for next month1st of the month – rent is due5th of the month – late fees begin7th of the month – collection calls/letters begin10th of the month – eviction notices are posted13th of the month – eviction filing begins The big picture here is you need to have a plan and follow it. But what do you do if the tenant wants to make payments? Again it is all about having a ......
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