Home > Blogs > Jason Rush's Blog
1,531 views

Jason Rush's Blog

By Jason Rush | Property Manager in Phoenix, AZ
  • 7 WAYS TO KILL THE PROPERTY BOTTOM LINE

    Posted Under: Rental Basics in Phoenix, Property Q&A in Phoenix, Rentals in Phoenix  |  June 7, 2012 10:32 AM  |  295 views  |  No comments

    7 Ways to Kill the Bottom Line

    1-Holding on for that "home run" deal

    If the area supports it and the property is $1,295 in the current market, you can loose/waste a couple months income chasing $1,395. How many mortgage payments are you willing to make trying to get a "home run"? Home runs can backfire on you too. Tenants have a knack for finding out they could have had the home next door $100 less every month (and will choose to).

    2- Waiting to get repairs done

    "I will paint the house if it doesn't rent in a couple of weeks". Sound good? This is actually a really bad idea! You should always consider the tenant your home will attract. If your home isn't in optimal shape to attract the very best tenants in a competitive market, you will only get tenants who don't care what their home looks like. You may get the home rented without the cost of the repair, but it may not be the tenant you want in your home for the next 12 months.

    3- Ineffective marketing

    A simple "For Rent" sign or independent line ad in the paper may be the quick end to your vacancy. Be careful though - most consumers depend on the internet and some the best applicants now come through online ads. You have to track your efforts to see what media produces the best (not always the most) calls per dollar spent. A "free" ad can cost you days or months of vacancies if it keeps you from finding the best tenants.

    Whether you choose paper or online ads, you must have a well-written ad to get the phone to ring. You also have to be priced right, and have the home available to rent. If you aren't getting any calls, it is usually about price. If you are too high, most people won't even take a look. If you are getting plenty of lookers but no takers, check the home out to figure out what is turning people away.

    4- Using an inexperienced agent

    There are many reasons to use a leasing agent, but if your agent isn't experienced, there isn't much benefit at all. In any major markets, there are literally thousands of real estate agents who want a commission, but very few with enough property management and leasing experience to make them a good choice. Be prepared to do your own ads, applications, and tenant screening if you plan to lease your home yourself, or through the help of an inexperienced friend, neighbor or relative.

    5- Poor (or no) tenant screening

    Most evictions are the result of a poor or inadequate screening process. By extension, that means most repairs, vacancies and legal expenses are also due to approving the wrong tenant. This is an area where you MUST do your homework and not rely on first impressions or instinct. Looks can definitely be deceiving. Unless you have money to burn, screen well and know when to say NO.

    Take a close look at the entire family of your prospective tenant. If you screen the parents, you might not know that their teenage son has a history of violent crime - leaving yourself open to a high risk of potential liability.

    Many people who try to manage their own homes are very trusting, sometimes even skipping the use of a basic application and background checks. If you want to learn how evictions work, just go with your ‘gut' feeling on that prospective tenant and hope for the best.

    6- Using a substandard lease agreement

    Most leases on the market are very generic and seem to be built to not scare off a prospective tenant, rather than protecting the landlord. Do some tenants refuse to sign our lease because we have a "crime free" clause? We sure hope so. Does our "no dangerous breeds" language discourage the owner of 3 Pitbulls? You want it to. If the lease protects the tenant more than the landlord, then you are headed for trouble unless you get lucky finding the perfect tenant.

    7- Lost time

    Losing time is the easiest and most common mistake that we see new landlords make. Calculate the rent value of each day on your home. If your home rents for $1,395/month, then each vacant day costs you almost $50! We see people all the time who "can't afford $75/month for a professional manager", but lose a week getting their ad in the paper ($350)... or take a couple of weeks getting the house rent-ready ($700)... or feel bad for the tenant and delay the eviction for a month ($1,400).

    If you aren't prepared to be completely diligent and focused on the details, then you probably can't afford NOT to use a professional property manager. Sloppy practices with your rental property can kill what should be a very profitable and rewarding experience.

    SUMMARY

    Managing rental property is more complicated than it looks. Do your homework and either become an expert, or hire one. Every rental property is a business and should be treated like one. The problems outlined here are easy to avoid, but expensive to experience. Give your business the time and attention it needs and it will pay you back very well over time.

    Don't get tricked by a suspiciously cheap management solution; by the time you find all the hidden ways that the "cheaper" guys make money, it will be too late. The cheaper a property manager looks on the front end, the more they make up on the back. A great property manager will make your life easier and save you money. Remember - Good Property Management does NOT cost you; it saves you MONEY... For more information contact Jason: jason@rentalrenegade.com Visit: www.RentalPropertyRenegade.com

    Jason Rush

    Rental Renegade

    jason@rentalrenegade.com

  • Cease and Desist issued to another Phoenix PM company

    Posted Under: Rental Basics in Phoenix, For Rent in Phoenix, Rentals in Phoenix  |  January 28, 2012 1:35 AM  |  571 views  |  1 comment

    Yet another residential management company receives a "cease and desist" order from the Arizona Department of Real Estate earlier this week. 

    This not only impacts the property owner but the tenants and even the employees. This occurring during a time when folks don't have the margins that will allow for the financial impact of an account deficit to the tune of 3/4 of a Million dollars. 

    Tenants are left with unanswered maintenance issues, potential move-ins derailed and a resident that would now like to leave at their earliest opportunity. While it is not the same thing everyone knows of a tenants that was made to relocate unexpectedly due to property owner foreclosure. This can give that same kind of feeling.

    We choosing a management company there are so many more components than "what are your start up costs, your management costs"? It is so easy to offer a fee schedule that appear low initially but when factoring in the additional fees for services not included (HOA compliance, inspections, vendor/contractor coordination fees, etc). How can a company propose to manage a property and have no inspection factored in unless it comes at an additional cost. The management company should offer inspections at no fee, pay HOA dues at no additional cost, no fee for HOA compliance, offer direct deposit of rent rolls, online owner account portals, provide the owner the ability to approve the tenancy after all the background and screening is complete and say they have been in business for over 2 decades. Check out ONEprop, Inc

    The question seldom asked or considered is "how do you treat your tenants?" Do you offer on line payments? Do you offer online maintenance requests? Do you provide monthly billing to your tenants? Are your tenants treated as customers past the ink drying on the lease? How the tenants are treated? is seldom a question I have been directly asked in all the years of property management. You would think it to be a keep component seeing as how the tenants is "how all the bills are paid".

    While the tenants have a contractual obligation to pay (and pay on time) as well as take care of the property, but there is one thing I have seen in this business; how quickly motivated or demotivated they are to do so based upon the relationship with the managing body. Meaning whether it is an owner landlord, RE agent or property management company; if that relationship goes sour it will cost every especially the property owner. 

    Tenant must be treated like customers while the owner are the clients. The term customer should come with an elevated level of service but lets not forget some of the tenants are the people you may see on the video "The People of Walmart"

    There is always a bad apple in the bunch but the good part is the bucket is always full of GREAT apples.

  • Choosing the Right Property Management Company

    Posted Under: Rental Basics in Phoenix, For Rent in Phoenix, Rentals in Phoenix  |  January 26, 2012 4:37 PM  |  646 views  |  No comments
    The importance of choosing the right Property Management company continues to present itself as yet another Phoenix Residential Property Management company receives a "Cease and Desist" from the Arizona Department of Real Estate. This information may be found at on the main page of the Arizona Department of Real Estate: http://www.azre.gov/ and http://services.azre.gov/publicdatabase/DetailOrder.aspx?Id=6477

    It is very unfortunate when this occurs because this not just about another company gone bad and more employees impacted by the action of other; but this is about the property owners and the tenants. This is a time of confusion, chaos and exposure. Exposure to the property owner because the tenants requests go unanswered, maintenance issues go unresolved and rents in limbo. Exposure to the tenants for basically the same reasons but on the other side of the "coin". 

    Know who you are doing business with and who you are referring YOUR clients to. 
 
Copyright © 2014 Trulia, Inc. All rights reserved.   |  
Have a question? Visit our Help Center to find the answer