Category Archives for "Potential Landlords"

Are you fit for property management with Realty Trust Services?

When onboarding an owner as well as after serving an owner we periodically evaluate whether we are actually a good fit for you as a property management company or not. It’s important that we do this in order to make sure you as a client or potential client are best served.

Hiring a property management company means more than just paying fees and forgetting about your property.

Here is what we look for as we partner with you to manage your property:

1) BUSINESS MINDSET – An ideal client for us would be somebody that possesses a business mindset; or at least somebody who can partially adopt this mindset. By business mindset I mean being able to cope with the inherent risks and stress that comes along with owning a business. We are aware that lots of clients don’t begin with this mindset, maybe because of the circumstances in which they obtained their property (maybe a relative left it for them or they weren’t able to sell a vacant home); but at least a partial paradigm shift must be attained if you are to own a business of any type. The property investment environment is full of things you can’t control – people breaking promises, economy changes, tax law changes- so even if we deliver peace of mind for you today, if you can’t stop worrying about what might happen tomorrow and if this affects you negatively, you might not be a good fit for this type of business.  Also as part of a business mind set you need to see your rental property as an business that requires capital investment in order to grow it and keep it up.

2) AFFORD PROPERTY AND MANAGEMENT COSTS – Another characteristic that would be a good fit for us is somebody who needs property management services and can afford the expenses that come with maintaining a property. A person without any knowledge of property management and investment properties would definitely need our services. But, there are also people that, even if they have the knowledge and experience related to property management (collections, dealing with tenants, going to court, etc), still come to us looking for our services, maybe because they are professionals who lack the time to do it themselves, or maybe because it’s just comfortable for their lifestyle. It’s really important to also keep in mind that after all of the initial expenses of actually acquiring a property, certain maintenance expenses will come into play eventually. Some things need to be fixed and given regular touch-ups if you are to attract good tenants and keep the property profitable. And remember our priority will always be to give you peace of mind as an owner, but we also have families to support, so we need clients that are not only willing, but also able to pay for our services.

3) AREA –  If you own a property in a C-, D or F areas we will likely not be willing to manage it. This is because for us our ability to work for you is tied in with our profitability as a company.  Our largest expense is labor.  We did a time study and found that low end property will have 20 times the amount of service calls and inquiries as a high end property per unit which also means our labor costs multiply by that factor as well. Considering that this is our number one expense we simply can not afford to manage properties that have 20 times expense while also likely making less income.  Frankly you as a client won’t enjoy the reduced service we would have to provide to survive under those circumstances. This is one reason why offer a flat rate management fee module because we want to incentivize those people with higher end, higher rent properties to work with us.

4) YOUR SYSTEM NOT OURS – Another big N.O. for us is when a prospective client that already has a managing system in place (maybe because of their experience or other circumstances) wants to use our services but this person wants us to follow the system already in place. We have our own systems, and they are the foundation of how we are able to deliver a quality service and offer the rates we are able to offer while being profitable. We improve on these systems continuously, and having to adopt a second set of systems, on top of ours will only diminish our efficiency, and double the time we need to get things done for you. Along the same lines if you have your own maintenance we may be able to work with you but if we have issues with your maintenance we will typically have to either take it over ourselves or give you notice as a client.

5) WILLING AND ABLE TO MAINTAIN PROPERTY – I already alluded to this but if a property is not maintained it attracts bad tenants or none at all. Then the bad tenants do more damage and you find yourself in a downward spiral with your valuable investment. Come hell or high water you need to maintain your investments at a high level to see the highest return and sometimes that means acknowledging your return adjusted for maintenance might be lower than you expected in the short term.

All these items boil down to our desire to accomplish our goal as a property management company provide you with peace of mind as an owner. If a factor exists that we think might get in the way of that it’s better for both parties to not do business with each other rather than settle for less than optimal results for all parties.

Should I hire a property manager that sells properties as well?

A question that is commonly presented to us is whether a landlord should work with a property manager that also sells properties, or one that only specializes in property management. Here in Ohio, to become a property management company you’re required to be a real estate brokerage. Unless you’re planning on breaking the law, a property manager needs to be a licensed broker, or there at least need to be a licensed agent working under the oversight of a licensed broker and in the name of a licensed broker.

At Realty Trust Services, LLC, we have both licensed and unlicensed individuals. We have people that exclusively do administrative work that don’t need a license. Still, our goal is to get as many people licensed as possible; this goes in hand with our belief that the more licensed and fully prepared people we have in the company, the more it elevates the company as a whole – as well as the level of service and professionalism we are able to provide.

Some companies delve into both property management and property sales.

There’s a world of difference between a brokerage that takes care of property management and one that sells properties. The amount of administrative work, taking care of maintenance, leases, tenants… this is a huge burden that falls on the company that focuses on property management, and it requires a long-term customer service-oriented mindset, in contrast to a sale-by-sale oriented mindset that focuses mainly on completing a transaction that is usually associated with a sales focused brokerage.

With all this information on the table, we would normally suggest that a property manager specialized in your needs (either sales or management) is what you should be aiming for. Instead of one that try to take care of both tasks equally. Nevertheless, at Realty Trust Services, LLC we do have members of our team that are specialized in property sales, with years of experience under their sleeve.

In the end it’s your choice when it comes to which type of property manager you want, and it will probably depend on your specific needs as well, but we sure hope this information is useful at the time you make that decision.

Did your property manager lie to you about value?

After years of experience in the industry I have learned that it’s a really common practice for many real estate agents to not only mis-value properties during their first encounter with the owner, but also declare a fixed price for it, in hopes of trying to get your business. This goes for both rental price evaluation and sales price evaluation.  You would think that, since they are professionals, they probably know about this and have the expertise needed to place a price on your home or apartment with one look. Well you would be wrong.

One very important thing to remember is that value is not a synonym of price. In general terms, the word price represents the amount of money that is asked for in order to purchase a certain something. Pretty basic right? That’s when value comes in. Value represents the actual benefit you are gaining by paying a price at the time you make a purchase. Value is that extra space you would love to have in your bedroom for a triple dresser. Or those extra square feet you need in your backyard for the vegetable garden you want to grow. Or a good view of the beach from the second floor.

And this is why stating that your property is worth a fixed amount and can only go for a certain price is plain wrong. It is wrong because even when an expert is able to assess the approximate worth of a property based its characteristics and recent history, a whole set of additional circumstances go along with that into actually defining the end value of the same property for individual potential buyers.

Maybe there’s a very specific circumstance in relation to the neighborhood surrounding the property that will give one buyer a less attractive standpoint in regards to the value of the property while at the same time, another person will actually offer an additional premium due to the fact that its really close to their workplace. In the second case, as this happens, and this new offer appears due to a single need met by this specific property, the market value begins to vary. This is basic supply and demand going into action.

Being lied to about the value of your business and finding out later can be a taxing experience.

For this same reason, when stating a property’s potential worth, it’s common practice to use ranges when speaking about actual pricing. This way agents take into account a variation of value that a set of different additional circumstances offer, as well as other changes in market behaviour that could very well affect the value of the property at any given time.

So, if you get to meet a new agent and he/she instantly states a fixed pricing for your property, always remember – they are either lying to you, or they have a crystal ball.

Should My Properties Be Owned as an LLC or Corporate Entity?

Please check with your CPA and Attorney for purposes of Legal Consequences and Tax Consequences. Coming from experience all properties should be set to companies, and the main reason for people not wanting to do so is because certain mortgages. From the asset protection standpoint it adds an extra layer of protection, and inexpensive. You can login to the Secretary of States website and pay a fee, and you receive the certificate. You can give this certificate to the local title company; this ensures an extra level of insurance. Another main reason is doing this step can protect you from being targeted personally. In regards to that this is not 100% protective as there is ways to pierce the Corporate veil.

An example is if you own ten properties and someone injures themselves on one of your properties and wants to hold you personally accountable for the situation the attorney who is hired to assess the situation will research the owner of the properties. In which seeing they (you) are covered will avoid making this more of a dangerous situation.

Our experienced investment property management team can relieve you of the burden of managing your rental property while saving you some serious money! Call us today at (440) 220-7300 to see how we can help you!

Cleveland Ohio landlords have flexibility to sell, rent, or lease option

We can rent out your house while helping you sell it.

Many Cleveland Ohio landlords do not set out to be landlords. In many cases, the property owner needs to move out of the area for work or family reasons and doesn’t have enough time to sell their house before they need to leave. In those cases, many people turn to renting to cover costs. Or depending on the market, they decide to rent until the value of the the home increases.

In these situations, there are options, and we can help with all of them. You can continue renting the property and use a property manager to handle the day-to-day for you. We can help make arrangements to sell the property. The property can be marketed for sale while also rented. That way the rent is covering costs, while the house is still on the market. Learn more reading Help! I’ve been transferred out of state but can’t sell my home.

The third option that you may not know about is a lease option. This is a combination of renting and selling. In a lease option, the renters lease the property with the intent to buy after a predetermined period of time.Many Cleveland Ohio landlords understand the risks and difficulties of the market. Regardless of whether you decide to keep the property as a rental or sell it to get out of the rental business, we understand, and we can help.

Our experienced investment property management team can relieve you of the burden of managing your rental property while saving you some serious money! Call us today at (440) 220-7300 to see how we can help you!

 

5 problems with Cleveland Oh property management

These are the 5 most common problems with property management in Cleveland, Ohio.

Property management is a difficult industry in Cleveland Oh. We are often the messengers of bad news. Renting is difficult and expenses vary by zip code throughout the Cleveland Oh area. Property management is also a very young industry in the Cleveland area. Only a small percentage of Cleveland landlords currently use a property management company. Of the top five companies in the area, the oldest is only seven years old.

Due to the newness of the industry here in Cleveland, there are some problems that property owners need to be aware of before hiring a property manager. Here are the top 5 problems with Cleveland, Ohio property management.

  1. Lack of accountability. Unless you are following your property manager around making sure they are doing what they say they are doing, there is no way to know for sure. This creates an overall lack of accountability. We work to eliminate that with our property owners through the use of surveys, photos, videos, and inspections, as  well as provide regular reports and statements, as well as inspection services. We take the extra step to demonstrate accountability.
  2. Lack of fiduciary. All property managers are supposed to be licensed, but that is often not what you will find. Fiduciary care to all clients is sadly not happening. In many cases, it is someone who owns some properties and decides it would be easy enough to also manage other properties. However, they are not giving the same level of care to all properties. We use systems to make sure all properties are getting the same level of care. Our landlords also have dedicated representatives that act as their direct point of contact.
  3. Lack of license. I said earlier that many people offering management services in the area are doing it without a license. A quick check of Craigslist will verify that for you. Managing properties without a license is highly illegal.  If caught the individual will be charged with a misdemeanor and receive a fine of $1,000 per incident, which adds up quickly. This can lead to you losing a lot of money. Not to mention, working without a license is not professional and does not offer accountability or fiduciary responsibility.
  4. Lack of communication. This is a common problem between property managers and landlords because the management company has not created a system to monitor and encourage communication. We guarantee your dedicated representative will respond to calls by the end of business on the following day. We believe the more communication the better.
  5. No real process. Those new to the business quickly realize that without solid systems in place to manage every aspect of property management, things get out of hand quickly. This is a very complicated industry. The bigger the company gets, the more difficult it becomes.We deliver peace of mind through our systems. We utilize management software, maintenance software, project management software and more to ensure everything runs smoothly and efficiently for everyone.

We are always looking at our current processes to determine if there is something more or better we can be doing. If you have any suggestions or feedback, we are always happy to hear. If you are a property owner in Cleveland Oh, feel free to contact us with any questions.

Our experienced investment property management team can relieve you of the burden of managing your rental property while saving you some serious money! Call us today at (440) 220-7300 to see how we can help you!

 

 

How Do We Lower Risk For Our Clients and What Warranties Do We Offer?

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Lowering the risk

The question that always comes up is “How do we reduce risk for our clients?”We serve two different groups here at Realty Trust Services, Landlords and Tenants. Landlords often take on a great deal of risk whenever they get a new tenant. We reduce that risk by getting into the following three attributes of good tenants:

1.) Do they make their payments on time?
2.) Do they do their due diligence when making payments?
3.) What is their income?

We could also reduce risk by charging large deposits, but ultimately that doesn’t help when it comes to a new tenant. I can charge a very high deposit or I can charge no deposit with a tenant that I trust. This is part of those CORE values that help us to reduce risk. How do we get there?

Reducing risk through our Core Values

So what do we do to reduce risk for you, our clients? We build a foundation of trust which is at the core of our THREE values:

1.) Transparency. We remain transparent to you throughout the process of managing your property, before we manage it, and in the case you move on from us after we manage your property. We understand that this is an investment for you today and tomorrow.

2.) Empathy. Understanding you. Putting ourselves into your situation and what you want. Empathy is Key to understanding who you are as a client.

3.) Education. We constantly strive for improvement. That means that we are constantly educating ourselves. On a monthly basis we are reading books as a group that will help us with the integral systems that better serve you.

The Warranties that we offer

Our warranties come down to one thing: 100% satisfaction guaranteed. We want you to be satisfied with the services that we offer to you. Our Warranties are:

1.) We start with a 1 Year Management Contract, however you may opt-out at any time with a simple 14 day notice. We only ask that you do so within a 14 days of the end of the month so that when the next billing cycle for your tenant comes the transition is smooth.

2.) A tenant warranty that is pro-rated based on the length of time your tenant lives on the property. Does your tenant live there only six months? Than your charge is 50% of the fee. Does your tenant only live there for three months? Then you pay 25%. It’s that simple.

3.) If we are unable to lease your property we will waive the next management fee under the following two conditions:

A.) 30 days after renovations have been completed or
B.) 30 days after the last tenant vacated the property.

Our 5 Point Service Guarantee

1.) All Correspondence will be responded to within 1 business day from your portfolio manager or Andy himself. If you call us on a Friday we will respond to you by the end of Business on Monday.

2.) Money will be wired to your account on time, every time. We do weekly payments via ACH and bi-monthly payments to owners via check. Guaranteed.

3.) No hidden surcharges. This ties in with one of our core values, Transparency. All of our charges are explained both in your contract and on our Pricing page. We will also send notification of maintenance costs to you.

4.) We offer 24 hour maintenance requests. That includes the ability to reach us at any time within 24 hours including for emergencies.

5.) If it comes down to it we handle the evictions. We will pay for the costs up front and then you can pay us back. We will use the Ohio Revised Code to evict tenants and use the proper methods to evict when absolutely necessary.

If at any time you feel as if though we have not met our 5 Point service guarantee you can simply request a refund on our monthly management fee.

If you want any more information please feel free to contact us in the comments below or by contacting us directly via phone at 440-220-7300

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