10 Questions a Landlord Should Ask When Interviewing Management Companies

Finding a reputable property management company can be quite daunting as it is difficult to really know how well the company is run. We have put together a list of items you should ask when interviewing a potential property management company.

1. How long have they been in business?

You want to associate yourself with an established company, as this speaks to a company’s length of service in the community.

2. Do they manage other assets in your area?

A property management company should have a presence in your local area, managing properties that are in the same asset class as your property. For example, if you own an apartment building in West LA, you should look for companies that manage apartments in West LA. The properties they manage may be available on the webpage, if not, ask this question while interviewing them in your initial conversation over the phone.

3. Are they carrying the proper insurance coverages?

The company should at a minimum carry general liability and workers compensation for their business. In addition, it is always wise to look for a company that also carries Errors and Omissions insurance.

4. Do they have their own experienced maintenance team or do they have to hire maintenance companies?

Many times smaller property management companies will outsource their maintenance. In addition to asking if there is an additional service charge for this, also ask how the management company vets their vendors (do all of their vendors carry liability insurance, are licensed, and have workers compensation insurance).

5. Do they have emergency services?

The ability for a property management company to handle every property incident, particularly emergencies, is crucial. At any time, day or night, a property manager must be equipped to handle emergencies that occur on your property. Communication is key in any tenant / landlord- management relationship – a toll-free number that is answered by a human 24/7 should be a mandatory service provided by any reputable management company.

6. What kind of reporting do they offer the property owner?

Are the reports sent monthly, or do the owners have online access? If the management company offers online access to the monthly reports, do they charge extra for this?

7. How do they set up the bank accounts for your property and will you have access?

Is there one trust account, or do they offer individual property accounts for each of their clients?

8. How often will they visit your property?

You want to make sure your property maintains its great shape. A world-class management company will ensure the grass is being cut, maintenance requests are fulfilled, and property regulations are followed. Visiting the property on a regular basis will ensure all maintenance work has been completed to the highest quality, as well as check to see that any other issues are addressed.

9. How detailed is their tenant screening process?

A reputable management company should thoroughly screen their prospective tenants, running a background and credit check, as well as looking for any prior violations committed on other apartment properties, available with Incident Reporting from providers such as theRRD.

10. Do they keep up to date with current laws?

Different municipalities have different laws related to rental units. Are they familiar with the laws, do they update their information/forms to comply with these laws, and are they up to date on any changes in the labor laws?

11 Types of Common Notices for Managing Rental Property

Managing a rental property involves knowing when to send out notices in order to communicate with tenants and protect yourself legally as a landlord or property manager. Whether you have a tenant who has failed to pay rent or need to let a tenant know about upcoming renovations, it’s important to familiarize yourself with the types of notices property managers and landlords send out.

1. Notice of Repairs – This type of notice informs tenants that repairs or renovations will be made on the property on a certain day. It also lets tenants know about any outages that will occur, such as having the electricity shut off.

2. Notice to Enter – With this type of notice, landlords let tenants know that they will be entering the property. Whether landlords are doing an inspection or checking on repairs, most states require this notice to be sent to tenants at least one day before visiting the property.

3. Notice of Lease Amendment – This notice informs tenants that there has been a change to their lease. If the change was negotiated between the landlord and tenant beforehand, this serves as a formal document stating that the lease has been amended.

4. Notice of Rent Increase – This type of notice announces an upcoming rent increase that will take effect on a certain date. These notices must be sent to tenants between 30 and 60 days before the new rent takes effect, depending on state laws.

5. Offer of Renewal – This notice lets tenants know that their lease will expire on a certain date and provides them with a renewal offer.

6. Notice of Non-Renewal – With this type of notice, landlords let tenants know that their lease is set to expire on a certain date and will not be up for renewal. It also includes a date by which tenants must vacate the property.

7. Unconditional Quit Notice – With this type of notice, landlords let tenants know that their lease is being terminated within a certain period of time for a specific reason, such as illegal activity or major property damage. Tenants do not have the opportunity to remedy the situation.

8. Notice of Intent to Dispose of Abandoned Personal Property – This notice announces that tenants must pick up their personal property or it will be disposed of. Some states require advance notice, such as 30 days, while others do not.

9. Notice of Returned Payment – This notice informs tenants that their rent payment was returned due to insufficient funds. It also typically includes a returned check fee that the tenant is responsible for paying.

10. Notice to Pay or Quit – This type of notice gives tenants a certain number of days to pay rent that is overdue or risk having their lease terminated. The amount of time you give tenants to pay up varies by state.

11. Notice to Cure or Quit – This notice gives tenants a certain number of days to fix a violation, such as having pets that are not allowed or unapproved roommates, or risk having their lease terminated. This only applies to violations of clauses or conditions included in the lease agreement.

How Do We Make the Property Management Industry More Attractive to Millennials?

I have been in the property management industry for 25 years and for the last several years I have noticed how it has become a very tired industry but what I hadn’t realized is how bad it actually is. I recently read an article stating that 60% of everyone in commercial real estate services will be at retirement age in the next five years. Now that’s alarming!

Much of what I have read about millennials is that they are almost equally concerned about their wages as well as the impact their job has. If this is true, doesn’t it seem like property management would be the ideal industry as it allows for them to impact their community at the most basic level? Housing!

I am a firm believer that it’s not that difficult to transition into an industry that can be more attractive to the younger generations. Here are a few approaches:

1. Offer generous job compensation to acquire the most talented employees and to reduce turnover.

The first step we need to look at is how you are paying your staff, if you choose to be at the bottom end of the pay scale you will get just that kind of work and have high turnover. I believe that if you do some fact checking you will find that most employees that are paid near the top of the pay scale tend to bring you more value, longevity in their position and in the end give you a better return on your investment.

2. Offer extensive training programs

The second step is training, the millennials want to be informed so let them learn the business from the bottom up by tagging along with the entire staff all while they are training for the position you hired them for. They want to know what and how the maintenance person performs their daily task to the Regional manager. They will take it all in and have a complete picture of how they can perform their job at its peak level. Try to create an open and collaborative environment so that the millennial feels a part of the team, not just the newbie.

3. Implement the right tools & latest technologies

The property management industry overall is in need of an image remake, it is a crotchety old industry that seems to be stuck in the past. Technology upgrades are becoming more and more available and that will give us a boost, hiring individuals that are excited to help us bring some life to the industry is key.

Giving a millennial the right tools to do their job is vital to their performance. The property management industry historically has been behind the times with implementing the proper technologies. The millennials have grown up with a smart phone in their hand so they are ready to handle most technological tasks you give them.

4. Create an environment that allows them to flourish & be creative

The work environment is key, not just for millennials but for all employees. When I started in the industry, our office had multiple couches with some of the ugliest flower print imaginable and it made it feel like our owner simply found the cheapest furniture they could to fill the space. These days it’s much simpler to find better looking furniture and fixtures at a good price that can help you create an environment that your team will enjoy working around.

5. Show how their work will impact peoples’ lives in the community, in a positive way

The property management industry allows millennials and others that want to make a difference in communities a platform to get involved and really change the way any community operates. By being in this industry, we can implement programs to help children, elderly or other groups in need. Doing so will enhance your community. This can also be a win-win, in that a millennial will surely bring in fresh ideas and potential efficiencies that will help your business run even better.

We just need to start!

Expert Insights with Joe Killinger: Companies Should Look towards Transparency

For our latest entry in our Expert Insights series, we had the pleasure of sitting down with Joe Killinger, experienced broker and partner at Commercial Brokers International. With over 25 years of experience in both residential and commercial real estate, Joe was directly involved in selling and marketing over 5,900 assets, closing transactions amounting to over $900 million across the United States.

We asked Joe to tell us more about where he got his passion for real estate, what he thinks the state of the industry is at this moment and where he thinks it will go next. Read on to find out more about his journey to being a successful real estate professional.

Q: Tell us a little bit about your background and why you chose a career in real estate.

I grew up on a small farm in central Nebraska and my father saw that the farming industry was going to go through a significant change and quite honestly he wanted to have a better life for his family so he trained and became a licensed Auctioneer and Real Estate Broker. Killinger Auction and Real Estate launched and I immediately got the real estate bug.

When I graduated high school I immediately began taking courses to get my Nebraska real estate license and when I went off to college I got my license and was lucky enough to be introduced to Pace Woods that was the CEO of Woods Bro’s Realty in Lincoln, Nebraska. I am not sure why he gave this 18 year old with no experience a start but he gave me a phone book and said there’s your potential clients…good luck!

I chose to go after selling and leasing farm land as I thought there may be less competition and I was correct but at my first meeting of a potential client he immediately asked me how old I was, (I look back at some old pictures and I see why he asked as I looked like I was about 13 years old) I started parting my hair to the side and found some very cheap designer glasses that had simple plastic lenses with no prescription and I felt it made me look a bit older and maybe a bit smarter. I was not the greatest at selling farms but had some luck, and it truly sealed the business as my career and I am thankful.

Q: How have you seen the industry evolve in the past 25 years you’ve been involved in it?

Tech has been such a game changer for our industry, it used to be you focused more on a specific area so you knew everything there was to know about the market, properties, potential sellers or leases coming up and anything that could affect that market. With the technology we have at our disposal today you can handle a broader market place as well as multiple asset classes as most of the information is just a click away. These systems create incredible efficiencies that allow Agents to make more money and Investors/landlords to be better informed in their market place.

Q: Where do you see it going in the future?

On the brokerage side I feel there will be more consolidations as many of the current platforms are struggling to keep up with the changes in the industry. For many companies when a slowdown does happen they won’t be able to survive without some significant reworking of their platform or will need to sell to a competitor. Real Estate investors in general will be able to better find potential assets to invest in due to the new platforms that are coming out that will allow them to find more investment opportunities as the up and coming generations are more likely to use these technologies. Companies will need to adapt and be able to show the value they bring to the table to maintain these client relationships. The office market is already seeing a significant change due to office sharing companies like WeWork and Knotel and I can see how these will cause change to the office market even more significantly over the coming years.

Q: What is your general assessment the real estate market so far in 2019? Have you spotted some interesting market trends?

The market has been strong to this point in 2019 and really hasn’t shown a lot of signs of slowing, I have seen some investors moving into less risk adverse investments such as Triple Net Investments. Many of the investors are also going to the fundamentals of real estate investing; location, location, location, buying assets with less returns in prime areas in lieu of tertiary markets but for the most part it has been staying strong. I am a little concerned with the amount of development in some areas as we are starting to see absorption slow and there is still a good amount of development coming on line.

Q: What do you think is the “next big thing” – or what should we all keep an eye out for?

I mentioned companies like WeWork and Knotel earlier, I believe they will change the way a good amount of office properties are marketed and leased out, there are even more office sharing companies coming on line and they have some interesting ideas so I do believe we need to watch how this evolves. Retail over the last few years has been pushing towards more experiential retail and getting away from the traditional retail shop. This trend should continue as retailers look to attract the spending dollars of millennials.

Q: Is there anything that you believe everyone in this industry should be working towards?

This one could get me into trouble; I believe companies should look towards transparency. I believe it’s outdated for CRE companies to not put their listings on the open market (unless the seller/landlord requests it to be that way). A company that tries to do everything in house is in the end doing damage to their client, how do you know if another Agent/Company might have a client that would be willing to pay more. I am an investor in, and an Advisor for, Commercial Brokers International in Los Angeles and our CEO (George Pino) asks our Agents that if they know of a property that would work for another Agent in the office or even another company to be sure they know about it. I know this sounds a little “New Age-y” but we have found that it works for our Agents and in the end creates more deals for everyone. I think if we try to work together a bit more we will see our industry be positively affected. I also like the fact that we are finally starting to see more women coming into the industry and finding great success, in what has traditionally been a male centric industry, I hope to see this trend continuing.

Q: Any other insights you’d like to share?

Overall, the industry, like everything else needs to evolve and adapt. The companies that are best positioned to do so will be the ones that not only survive but thrive. With the new technologies, we still must not lose sight that this industry is and always will be based upon service, and by providing the best service out there, you will be able to set yourself apart from the rest and create a career, not just a job.