Tag Archives for " investment properties "

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.

How are you insured to do property management?

This is actually a question we do not get asked a lot, but we should be because it is important to know what kind of insurance your property manager has. We deal with a lot of high liability issues on a regular basis, so it is important to have that protection in place.

We have two types of insurance: general commercial liability and errors and admission.

  1. Errors and admission insurance is if we make a mistake.
  2. General commercial insurance has a much broader umbrella and covers most things not covered with the errors and admissions insurance.

While it is important for us to be properly insured, it is still essential for the owner to have proper insurance.

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!

Will I have to get up in the middle of the night for an emergency?

No more middle of the night phone calls from tenants.

I assumed this was a given, but apparently there are property managers that do not offer 24-hour services. To answer the question simply, no. You will not have to get up in the middle of the night for an emergency.

Our property owners do not have to get emergency phone calls during the night. They do not have to get up to deal with anything. The only way you will get a phone call is if you request a phone call in the event of an emergency. Otherwise, we have a 24-hour answering service and direct dispatch. We will take care of all emergencies.

Our representatives have protocols to follow that address a wide range of emergency situations. This allows us to  also avoid middle of the night dispatch all together. For example, if a tenant calls during the night because there is a water leak. Our representatives will give them step-by-step instructions on how to turn off the water and will stay on the phone with them to ensure it happens. Then, in the morning, the leak can be addressed.

This saves a great deal of money since middle of the night phones calls to professionals are much more expensive than calls made during the day, and it is less stressful and more convenient for everyone. As usual, if the job can be done by someone on our maintenance staff, it is and the usual maintenance fees are applied.

 

How many units do you manage?

Our systems which are infused with the character and principles of transparency empathy and education are what will allow us to keep the promise of “delivering peace of mind”.

When you look at a property management company, there are a few questions you should ask. This will give you a better idea of the level of service you can expect. I am regularly asked how many units we manage, which is a good questions. However, there is more to that question that you really want to know.

Instead of knowing the number of units, you want to find out what the ratio is of people to units. You also want to know what systems are in place to take care of the properties. As well as how they communicate with both the property owner and the tenants. The goal of the property management company should be to keep all the properties well-managed.

There is a very large national management company that is planning to expand to the Cleveland area. They are absolutely huge and their ration is 1 personnel for every 200 units. This means property owners do not have an assigned representative. This can make communication hard and the overall management not as positive. However, they may be able to offer a lower cost, which seems good.

Our ratio is 1 manager per 50 units. That doesn’t include me or our support staff that handle a great deal of our services. The managers focus only on the properties they manage. That also does not include our full-service call center.

In addition to having a low ratio, we also have the systems in place to manage properties smoothly.

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!

What are your Cleveland Ohio property management fees?

We utilize the best available resources to make your properties profitable.

What do you have to pay for and what do you get in return? This is what you need to know when working with a property management company. Because our fees do change from time to time, I’m going to tell you what kinds of fees we charge and what you get for those fees, opposed to giving you actual numbers. You can check out our full list of fees on our Price List

We have a management fee – this is currently a flat rate based on the number of units. However, we are currently considering changing this one. The property management fee covers most everything we do once there is a tenant in the rental unit.

This includes:

  • monthly rent collection
  • fielding tenant calls
  • maintaining a 24-hour call center to handle anything that comes in
  • monthly accounting
  • help with legal questions
  • statement portals for you and the tenants
  • facilitate inspections
  • offer weekly direct deposit
  • customize financial statements
  • our years of experience in the local market and ongoing training to stay current on changes in the industry and how to best serve you.

We do charge the tenant late fees when they do not pay their rent on time and we keep those to compensate for the extra time spent collecting the rent. While you do not pay those, you will see them on your financial reports, so it is important to understand what that is.

We have a lease renewal fee. We go through a process that starts 90 days before the end of the lease to work witht hetentnat to get them to renew their lease for another year. Move outs and vacant units are very costly to the property owner, so it is our goal to keep the tenants as long as possible. We charge a flat rate renewal fee to cover that.

We also have a leasing fee of one month’s rent. This covers the marketing, online ads, videos, images, virtual tours, actual tours, and so on.

We do have other fees that are charged as needed and are outlined on our pricing page.  You can check those out and contact us if you have 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!

The importance of video inspections in property management

Learn how to protect yourself and your property.

Our ultimate goal is to make investment property ownership a stress-free and profitable for the property owners. There are many ways we do that, and we are always working to find new ways to meet the needs of our property owners. This is why we strongly suggest video inspections.

One of the many services we offer are video inspections. This includes a recorded walk through of the apartment prior to a new tenant moving in. It also includes a recorded work through of the apartment when the tenant moves out. Video inspections are provided when large repairs or improvements are being recommended.

We have found the use of video inspections to be positive for both us and the property owners. When a property owner decides to work with a property manager, there is a certain level of trust needed.

For example, when a manager contacts the owner to let them know about repairs needed to the property that will cost the owner money, the owner has two options:

  1. Trust the manager is making a good and necessary repair
  2. Refuse the repair until you get proof that it was absolutely necessary. This creates an awkward situation for both the owner and the manager.

One thing we do to lessen the potential for a bad situation and to build that trust with the owners is to do video inspections. This is good in several ways. You can see a lot more detail in a video that you can in photo. It allows us to zoom in on areas of damage while still providing perspective on where the damage is.

A video provides a better overall view of the property. This is especially helpful when comparing the condition of the property when a tenant moves to when the tenant moves out.

Limitations of video inspections

Video inspections can be limited in that it creates a sometimes long process. Particularly if you have to look through an entire video just to find one area of damage. However, we lessen that limitation by using the video inspections along with a written inspection report.

For example, if a property has exterior damage that needs to be addressed. We can provide a written report detailing the damage, repairs needed, and expected cost. We send it with a video of the damaged area. In this respect, the video will enhance the information provided in the written report.

Interior video inspections while a tenant is living there are sometimes difficult to get. However, this particular limitation can be addressed on a case-by-case basis.

Benefits of Video Inspections

By providing the video inspections along with inspection reports we are building trust between us and the property owner while getting rid of a possible awkward situation of the property owner feeling the need to ask for proof of property damage and repair estimates.

Videos are also helpful when a case goes to court. We have found that video is much more effective when a tenant needs to be evicted or taken to court and there is property damage involved. Getting a video tour of the damage has a greater emotional impact than photos. The videos can also be used to show a clearer before and after condition of the property in court.

If a deposit is withheld due to damages and the former tenant argues that they deserve all or part of their deposit back, it is the property owner’s responsibility to prove the damages were legitimate and caused by the tenant. This is when before and after videos are most useful.

Video can also be used to lease properties faster and more effectively. How to use the power of video to promote your properties will be covered in How to Use Video to Lease Your Property Faster.

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!

 

Can I Refuse Pets?

Let Fido help you maximize your business!

The short answer is yes. We do allow our property owners to have some discretion over pet rules. However, most of them allow pets and we encourage it. Let me tell you why.

Allowing pet owners will double your market. A good portion of the people renting single-family homes are doing so because they want to be able to have pets.

Because there is a higher demand for properties that allow pets, you will experience shorter vacancies between tenants. You’ll also have tenants longer. One study I read suggested that allowing pets can double the amount of time the tenant will live at the property.

Those two benefits work together; shorter vacancies and longer stays means more income and will more than compensate the potential costs associated with allowing pets.

Now, there is the potential for damage. Pets can get out of hand. They can pee all over the place. They can scratch up and ruin wood floors, door frames, etc. Pets can cause thousands of dollars in damage.

However, we do charge $35 per animal, which also helps to cover costs. We require potential tenants to submit photos of any animals they will have living in the house with their rental applications. This enables us to make sure we know exactly what animals will be there.

We also recommend our property owners request a 90-day Video Inspection, which will allow us to see if the tenant is, in fact, cleaning up after the animal and making sure it doesn’t destroy the property.

Despite the risks, we do thing allowing pets is a good policy. You can charge extra and reap the benefits.

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!

 

What will any upcoming inflation do to landlords?

Are you having trouble selling your house? Are you having trouble finding renters? Don’t worry…things may be turning around soon. I’m clearly not an economic forecaster, but I do pay attention to what is happening. Based on a broad range of factors, I would say there is a substantial chance of inflation soon. .

Now, inflation can sound scary and has a pretty bad reputation. Typically, when people think about inflation, they only think about the prices of everyday items increasing. However, if you are a property owner, inflation may work to your advantage.

During inflation, interest rates will increase, property values increase, and rents rise. I know many business people, who have been able to pay off their mortgages and become debt free thanks to inflation.

Here are just a couple of the potential benefits:

  1. Rent goes up. As the amount you can charge for rent increases, you can pay off your mortgage faster. The key is to not offer long-term leases with locked in prices. You also need to focus on putting that extra money towards the mortgage because once the mortgage on your rental is paid off, you’ll be making significantly more profit on your investment.
  2. House values increase. As home values increase, you will have a better opportunity to sell your property for a profit. This will also help out the many people that have wanted to sell for some time but didn’t want to lose money due to low house values.
  3. The potential for greater profit. For some property owners, who were planning to sell, the potential for increased profits may entice them to stay in business. This is when hiring a property manager may be especially useful because it will allow you to remain in business and enjoy the profits while not having to deal with the deal-to-deal hassle of owning rental properties.

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!

Is Your Current Manager Licensed? Don’t Get Hurt!

Don’t get hurt! Only trust licensed professionals.

While looking for a property manager, you may see ads for people offering to do property management. Maybe they are handymen or contractors, and they post ads that they can help manage your properties. They boast their ability to handle the maintenance themselves. But are they licensed?

The one most important question you need to ask when contacting someone is if they are licensed to do property management. Ohio Law states that when working as a property manager; leasing properties, collecting rent, etc. you have to have a brokerage license.

A brokerage license is not easy to get or keep. You might think having a license isn’t a big deal as long as they get the job done. However, you have to think about it as a commitment and investment. If a property management company went through the work of getting and maintaining their license, it is a sign of professionalism and commitment.

Someone operating without a license can disappear on you. They may be looking to make some fast money and get out. Likewise, if their business is maintenance and they decide to offer property management as a means of getting more business, you have no real guarantee that they have the experience and knowledge needed to manage your properties, which is a lot more than just the physical maintenance.

Having and maintaining a license is a means of protecting the public. For example, as licensed property managers, we have audited trust accounts. These ensure that deposits and rent money is being safely handled. If we are managing 300 rental units, we may have anywhere from $300,000 to $600,000 in the bank. That is a lot of money. For someone with little to lose, that money could just disappear. As licensed property managers, we are held responsible for every dollar.

If you have an issue with how we manage, you can go to the state. Then the issue will be looked in to. If we are found at fault, our license can be pulled. Because we are committed to our business, we work in the best interest of our property owners to ensure we maintain our license.

Additionally, operating without a license is a criminal offense with a $1000 fine per incident. If an unlicensed person is managing multiple properties, that fine can be huge. It does not take much for the state to find unlicensed people working as managers and put them out of business, which would leave the property owner in a serious bind.

As professional licensed property managers, we have the systems in place to care for many properties for both local and out-of-state property owners. Our system and processes are well developed and allow us to go beyond minimum care. We manage all the properties under our care as if they were our own, which provides peace of mind especially for out-of-state owners, who are unable to physically check on their properties.

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!

Do you manage your Cleveland Ohio property or does your property manage you?

Do you manage your Cleveland Ohio property or does your property manage you? This is a question you may ask yourself. Being a landlord can be hard and time-consuming. Tenants may feel the need to call you at all hours of the day and night. they may or may not pay their rent on time. Things get damaged. Neighbors fight. The life of a landlord is one filled with uncertainty and surprises.

This can put a big burden on a landlord trying to handle everything on their own, and It can play havoc on their life. It can negatively impact relationships, finances, and peace of mind. It is why many landlords leave the business or fail to make their business profitable.

When you feel like your properties are managing you, it may be a good time to look at what a property manager can do for you. Here is what we do for our property owners.

  1. We manage. This one may sound like common sense, but managing properties is our business. Our sole focus is on managing properties and making the property-owning experience as stress-free as possible, we have gotten quite good at it. How do we manage? Through the use of procedures, checklists and more checklists. We have learned that while following checklists may feel tedious, it actually saves time in the long run. It eliminates forgetting to do things. We never have to stop and wonder if the unit is completely ready for rent We don’t have to leave a lease signing wondering if we remembered to tell them everything. There are procedures and checklists in place for everything we do. This includes collecting rent, accepting maintenance requests, dealing with after hour’s emergencies, preparing rental units, and showing apartments. If we discover an area or process we don’t have a checklist for, we create one.
  2. We set tenant expectations. Not setting tenant expectations from the start leads to unneeded drama. We communicate with tenants. Set times they are welcome to call as well as acceptable topics to call about. We accomplish this with our tenant expectation checklist. This starts with requiring new tenants to watch a video that goes over the lease. It also covers how and when to report problems. This eliminates the Sunday morning calls to complain about the neighbor or the 3 a.m. calls to report the toilet is clogged.

One of the greatest challenges for landlords are dealing with “emergencies.” We have learned that setting expectations and following our checklists and procedures eliminates emergencies. Eliminating the emergency calls also eliminates a great deal of the stress. We work hard for both or local property owners and our out-of-state property owners. We can manage your properties, and we can provide you peace of mind.

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!

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!

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