Property Management Fundamentals: Prioritizing Goals

To be effective in any workplace, you need to prioritize your goals to get the most important things done immediately, but also be able to have sufficient time to accomplish every aspect of your job. Once you get good at identifying where each task belongs on this list, you’ll be effective in prioritizing your work.

1. Emergencies

This is a given, however emergencies are the things you absolutely are unable to ignore, but often impede on your day-to-day. Whether it’s a plumbing issue in a unit, a tenant lock-out, or criminal activity in the neighborhood, you weren’t planning for it, but now it’s the most important part of the day. When there isn’t an emergency going on, you should be focusing heavily on projects and organizational changes that can reduce the risk of emergencies occurring in the future. If emergencies happen on a continual basis, then they’re getting too much in the way of your day-to-day work.

2. Procedural

Procedural tasks are tasks that you do on a schedule. You know ahead of time that they’re coming and they play a central role in the working of your company. Procedural tasks for a property manager include billing, make-readies, minor work orders, and more. These tasks are usually best accomplished first in the day if there aren’t any emergencies. Once accomplished, you now have the rest of the day to work on projects and organizational changes that improve your business.

3. Projects

In general, a project has a deadline. Projects are tasks that can’t be accomplished in one day, but provide great benefit to the company long term. Projects can be for all kinds of things that benefit your procedural tasks or may help to prevent emergencies from happening in the future. Sample projects might be a new marketing campaign, implementing new property management software, refurbishing a property, creating an event for your tenants, or other projects that improve the organization and efficiency of your work.

4. Research

It’s always good to do a little research on the side whether it is for building your own skills or finding new tools online that will help your business. Whereas implementing property management software can be considered a project, actually discovering and learning about that software requires research. However, research has no guarantee of providing immediate results. For that reason, it’s the lowest priority on this list. You can’t be researching 70% of the time and working for 30%. Your daily dose of research should probably be no more that 1-2% of each day, if not less. You may be at a stage in your work life where you’re working on to many emergencies and procedural tasks to ever have time to do research. In that case, you might consider doing research when you’re outside of work. Habitual research in small doses can provide powerful insight for improving your work in the present as well as develop your career in the future.

If You Are Not Advertising your Property Rentals On Social Networks You Should Be

We are always looking for the best ways to advertise our rental properties for lease with the company that will give us the best reach for the best price, if you keep your social networks current and active they may be the best way to reach potential new renters.

Here’s how:

1) The majority of your target audience is on social networks

– By keeping your listings current you can ask friends, family members, and current tenants to like and share your listing posts casting an even a wider net within the community. Larger exposure will equate to quicker rentals.

2) Photography Is Important

– be sure the photos you use are quality and show the entire property, especially areas you feel should be highlighted. Remember you want them to click onto your post to check it out, make it inviting.

3) Monitor Your Posts and Respond To All Comments

-Be sure to respond to all comments in a timely manner, especially those that ask if/when they can see the property. If this comment came from a friends reposting of your post then be sure to reach out and thank them for the help. Everyone loves a thank you.

Be especially aware of “internet trolls” that may post a negative comment just for the sake of it. Respond in a professional way, a good strategy would be to ask why, or how they have experience with your property, if it is a valid complaint, thank them for bringing it to your attention, and let them know it is being addressed.

4) Don’t Be Afraid To Repost

– The number of people seeing your post is not as great as you would think as there are so many posts that are vying for their attention.

5) Potential higher Quality Tenant

– Being that the potential new tenant has a good chance of coming from someone you know or already resides in your property it is a higher possibility that they will be a quality tenant.

Of course you want to be careful as with anything in social media there are scammers and others that can prey on information so be cautious of what is placed into your posts and as always be sure you run a background check and don’t do your showings without others in your company coming along or at least have them nearby.

What You Need To Know About Rent Concessions

With rent concessions on the rise nationwide we need to have an understanding what giving or offering a concession can do to your property value if not handled correctly.

Let’s start with the definition of a rent concession, a concession is any “reduction in price, rent or other benefit provided to a potential tenant as an inducement to lease your property”. There are many ways to give a concession, reducing the first month’s rent, reducing rents for a contracted time or maybe even upgrades the property they are considering ie: an accent wall or upgraded appliances. Your goal should be to have all scenarios have about the same amount of rent paid. Also, if you can get a new tenant to accept an upgrade to the unit as a concession, it can be even more beneficial to you.

What you need to consider as you are offering your concessions is how do these concession affect my long term value of my investment. If you find yourself wanting/needing to refi and you begin the underwriting process you will find that lenders are interested in how much income an asset is producing and how much income an asset can optimally produce. Concessions add an additional layer to the equation. When underwriting the Net Operating Income of an asset, concessions are typically subtracted from the Gross Rental Income in order to determine the Net Rental Income — which also factors in things like vacancy and unpaid rent that’s deemed ‘uncollectible’. This may affect the borrowing power of the property, as lenders use multiples and ratios to determine the maximum loan to value.

The top 3 types of concession are- Lease-Up Concessions, Marketing Concessions and of course the old ‘Red Flag’ Concessions.

Lets start with the Red Flag Concessions: Lenders will have some concern when you are looking at buying or refinancing a property with rents that are in line with market competition but have on-going concessions to keep the property occupied. They will wonder why there are ongoing concessions, and what hidden issues might be there.

Lease-Up Concessions are defined as discounts offered in newly rehabbed or newly constructed apartment product during the lease-up phase as a means to stabilized occupancy (roughly 90%) as soon as possible. These one-time concessions are generally not of concern to lenders so long as there is strong lease-up velocity and that asking rents are well supported by the market.

Marketing Concessions: You will find these concession across all asset classes. These are often more of a marketing play in that rents at the property may be slightly above market rates. The ‘concession’ brings rates more in line with the market. These types of concessions are usually of no concern as long as they keep the rents at the market rate.

No matter what type of concession you chose be sure that it is reflected properly in your rent roll as it will make it easier for potential buyers or lenders feel comfortable with your property.

Most Common Employment Screening Mistakes and How to Avoid Them

Successful companies all have one thing in common: hard-working, efficient employees. While you won’t always be able to determine which workers will fit best in their roles in your company, choosing the right screening service can help weed out undesirable candidates based on the criteria that matter to you and to the success of your business. By avoiding these common mistakes, you can help ensure that you are hiring the best candidates for your company’s individual needs and that you are protecting yourself from litigation and pointless spending. Remember, good employees can make the difference between a good and a great company, and finding the perfect candidate should be a top priority for business owners and hiring managers.

• Choosing a Screening Process Without Proper Research

• Running a business involves many moving parts, which means that certain aspects can be overlooked, even by the most thorough business owners. Because all screening services are not created equally, one of the biggest mistakes you can make is not doing the proper research before choosing a screening service. You’ll want to choose a service that meets your short-term and long-term screening demands, and that facilitates your company’s individual needs rather than the common needs of most companies.

• Failing to Abide by the Law

• All US companies must abide by the Fair Credit Reporting Act, but not all third-party services adhere to the FCRA when compiling data for their screening services. If you choose a service that is not FCRAcompliant, you open yourself up to legal action, which can cause statutory damage, punitive damage, actual damage, and legal fees. While these services may offer enticing prices, the long-term financial consequences outweigh the benefits of short-term savings.

• Overpaying

• Many screening companies offer a one-size-fits-all screening service that values the typical company rather than your company’s individual needs. This can cause you to pay for services you don’t want or need, and can prevent you from utilizing the services that make the most sense for your company. Choose a screening service that adjusts to your needs at a reasonable price.

Running a business and hiring people can be challenging, but you can make things easier on yourself by avoiding these common mistakes. Doing so can save you time, money, and can help maintain your reputation. Only you know what you need, and you are responsible for making sure you’re getting it. Make sure your employment screening service serves you.

What to Consider When Buying a Single or Multifamily Investment!

Many first time investors have the idea that their first investment should be a single family home due to the cost of entry and ease of management, however, this may not always be the best path to go down. One of the main issues that you have to consider is the fact that if the single family homes goes vacant you will have to cover the entire mortgage until you find a new renter, now if you have a duplex, triplex or fourplex that mortgage will be spread out across more units giving you some cash flow to help with the mortgage.

Another reason the first time investors tend to like the single family homes is that you can put a lot less down then you can on a commercial loan and the residential loan can be amortized out over the life of the loan. Residential loans can be on properties that have 4 units or less and can be acquired with as little 5% down, however, commercial loans are on 5 units or more will require at least 25% down and you will need to show a business plan plus as well as management experience and cash flow. When shopping for a commercial loan, be prepared to answer a lot of background questions regarding the property. Some of these questions include:

Who pays the utilities?

What types of maintenance are required?

Numerous questions regarding cash flow will also be asked. Commercial mortgage borrowers should be prepared to provide proof of business revenue and profits as well as a detailed plan for how the commercial property will generate enough income.

Where an investment in a residential property can be attractive is in the maintenance costs, you will have only one tenant in stead of multiple so it makes sense that your costs should be less providing you have a good tenant; however, multifamily properties typically afford synergies of scale (one yard, roof, etc…) so your overall cost per unit vs. rent will be lower.

When deciding on which direction to go with your first investment really look at your appetite for risk as having a home go vacant for a few months and having to cover all the expenses on your investment can be a big drain on your savings.