Wednesday, August 31, 2011

Did you know

as a property manager we have a fiduciary responsibility to the owner of the property. Fiduciary is one of those words we learn when taking the real estate exam. Fiduciary means “founded on faith or trust”. This mean as a property manager,our loyalty is to the owner of the property. We represent the owner not the tenant. We protect the owner. We look after the owner and make sure his/her property is safe. We have a responsibility of giving the owner a feeling of trust or faith in representing them. Being a member of NARPM (National Association of Residential Property Managers) has instilled in the importance of representing the owner not the tenant.

I came to property management as a residential and then commercial real estate agent. Sometimes I would represent the buyer and sometimes I would represent the seller. It changed from deal to deal. For many agents like myself, it was difficult to really understand the concept of “Representing”.

In many ways property managers are similar to attorneys,preachers and bankers. We need to keep all information confidential and put the client/owner’s best interest at heart.

We are required to follow the laws of the state the property is located and of course, the federal laws that govern.

This task is not always a defined course. Tenants do not understand why we do what we do. We are the bad guys. The tenants that are “well to do”, do not understand when we make statements like “ when we come to inspect the property we are checking to make sure the smoke detectors are in working condition, we are making sure the furnace filters are being changed, we are making sure that you are not growing pot in the basement and we are making sure you are not doing meth in the garage.” They resent the statement. We also explain that we are required to say this to everyone.

.If we only say that statement to the “not so well to do” then we are discriminating. Just because someone is well dress and speaks well does not mean they can not be doing those illegal activities. We must make all statements to all people.

Being a property manager is not as easy as it seems. It is more than just collecting the rent and paying the owners.

Professional Property Managers abide by all the laws of the land.

Tuesday, August 23, 2011

The North Carolina and Georgia Real Estate Commission sends out a quarterly Newsletter during the year. One of the major topics recently in both publications have been issues with property management companies and property managers.

Over the past 2 years real estate sales have been horrible. Nothing is selling except foreclosed properties for the most part. Because of this, there are some agents who have decided, “I will manage rentals to make money” but do not take the time to take property management classes to learn how to do it. Since they hold a real estate license they can go into property management without any additional training.

I just found out there is a property management company in Atlanta doing business and does not hold a real estate license. When you manage property for others, in Georgia and North Carolina you are required to have a real estate license There are some states that do not require you to have a real estate license.

If you are thinking about hire a property manager,here are so questions you need and must ask.

  1. Are you a licensed real estate agent? Ask for a copy of their license.
  2. Are you affiliated with a licensed real estate company?
  3. If you are an agent not a broker, Is you broker aware that you are managing property for others?
  4. How do you screen prospective tenants?
  5. How do you handle repairs?
  6. Will all repairs be done, if requested by the tenant?
  7. Do you go to court if the tenant has not paid the rent?
  8. How do you serve the demand letter for non payment of rent?

Now you have asked all the right questions of this particular property manager and you feel they are good at doing what they do best. You have two more thing you need to do. Ask for references but do it a little differently. Instead of them giving you the owners that really love them you go to their website. You choose 3 properties that they manage. Then ask them for the owner’s name and contact information for each of those properties. You then call those owners. Ask them what they like and dislike about the property manager.

Now do the same thing except ask for the tenant’s name and contact information for 3 of the properties. See what they like and dislike about the property manager.

At this point you have a pretty good idea if this is the kind of person you want to manage you most valuable asset!

Tuesday, August 16, 2011

Did you know

owning real estate is not for the young at heart. It is an investment that needs attention by the purchaser/owner. If no attention is given, then it is a sure thing that your real estate (investment) will go down in value unless the property is sitting on top of a gold mine or you strike oil. Both being highly unlikely. However, if there is any chance gold could be discovered in Young Harris, please let me know. You know, Dahlonega is not far from here, so you never know. Any thing is possible.

You can buy stock and just let it sit there. You do not have to give it any attention. It will go up or down no matter what you do. Hopefully while it is sitting, the stock will increase. Sometimes it does and sometimes it does not. Stockbrokers will tell you that when buying stock, it is for the long haul. Don’t try to make money overnight. Those day traders always amaze me. They are really working the system. Some are successful. Many are not.

The same applies to real estate. You need to own the property for the long haul. Yes, there are people out there that are “Flipping” property. Some are successful. Many are not. Several years ago there even was a show on TV about Flipping property. This show gave way to anyone and everyone investing in real estate. They had the “Bug” They needed to buy real estate and “FLIP” just like all those people on TV and make a fortune. Many were not success and many were not.

The reason that Some are successful in real estate and the stock market is they have done and continue to do their homework. They spend the time and the energy watching the market and the trends. They talk to stock brokers and real estate agents. They don’t just talk to one. They talk to many. Get their thoughts and ideas on what is happening. Is it time to buy or sell? Then they make an educated decision on how to proceed. If you do not do your homework, You will not succeed unless you are lucky. If you are lucky then go buy a lottery ticket. Much easier.

Buying real estate right now is the absolute best time that I have ever seen in 30 years. If you are thinking of buying, Spend time talking to several real estate agents, bankers, property managers and appraisers. Look at multiple houses or commercial property. Do not under any circumstance, look at one house or commercial building and decide to buy it. You have not done your homework. You are probably making an “Emotional” decision. The property has a fabulous view or it is on the lake or is on an unbelievable creek with rushing water. As always, if you don’t buy this property, there will be another property. In the past, I have always told my daughters, buying property is just like dating, “If you wait long enough there will always be another one just as good”. Don’t become emotional about buying. Write down the positive and the negative of the property and then make a rational decision about buying. Spend a lot of time analyzing the property or properties.

People who invest in real estate are a totally different breed then ones who invest in the stock market. Both are risk takers and both have a flair for adventure. They are after the American Dream. Own real estate and become rich. Isn’t that what we are all wanting.Many think that if they do what they see on TV or the Internet that they will become rich. No hard work needed. This is a BIG WRONG. Lots and Lots of hard work. The work is using your brain and some of your brawn. Buy a house at a good price. Then go in and make cosmetic changes only.

Find a real estate agent willing to spend the time, energy and the expertise to help you achieve the “American Dream”

Tuesday, August 9, 2011

Did you know

that when you purchased your home in the mountains to use as a vacation home or to retire when the time was right, that now you have decide to sell, you can’t give it away.

Your investment just went down the drain. You have had it on the market for 2 years and no one wants to buy this beautiful home at $100,000 less than you paid for it. What can you do.

Recently, this has become the new reality for many homeowners. You can let the property sit empty. Deteriorate every month because no one is not living in it or you can become a “Landlord”.

At first, becoming a landlord seems like a daunting task. The current real estate market has put many people in a position where their home does not appraise for what is owed on the mortgage. A homeowner turned Landlord may be more knowledgeable about the property than the average investor.

You have managed your own household by cutting the grass, cleaning gutters, paying utilities, being a good neighbor has now found that you are managing a tenant. You know that will take excellent care of your property because you did, so why shouldn’t they do the same. WRONG

Tenants have good intentions to try to take care of the property but it is not their top priority. They have no incentive to do so. Dealing with tenants takes a certain type of person. If you a very nice person and allow others to get their way, turn your property over to a property manager who deals with tenants on a day to day basis.

Being a landlord is not difficult, you just have to be consistent. It is like raising children, if you give them an inch, they will take a mile. So be consistent on each of these items and you will be successful.

1.You need to be a person who can enforce the lease. If the lease says that rent is due

on the 1st of the month. Then you need to enforce this. Don’t let them pay late with

no late fee. If you allow this to happen then they will always be late. Why should they

pay on time, if you allow them to be late. Also, if you ever do go to court, this will be

held against you.

  1. Have a policy on how repairs are to be handled. Do they call you at any time day or night? Do they email you the repair request? Repairs should be handled in a timely fashion. You need to handle repairs to protect your property.
  2. Know the laws of you state and county. When is the rent considered late? In North Carolina you are required to give the tenant 5 days grace period. What are the laws about sexual offenders? What questions can you ask and not ask regarding handicapped people?
  3. Have the tenant do a move in inspection. This must be documented. Have them list any damage before they move into the house.If it is not, you will regret it when they move out.
  4. Do not give keys to tenants until proof of utilities are in their name. Did you know that if you have the utilities on in your name and they move in without changing to their name, you can NOT turn the utilities off.
  5. Do not under any circumstance, do the move out inspection with the tenant. Do the inspection, using the inspection form the tenant filled out when they moved in. Once you have inspected, write or email them and give them a list of any problems.

  1. If you have allowed dogs or cats to be in the home, do NOT return security deposit

until you are sure there are no fleas. This is usually 14-21 days after they have left.

Protect your investment by using these suggestions. You will be happy you did.

Tuesday, August 2, 2011

DId you know

That renting a house requires much more preparation than you think. When you put your house on the market to rent, it is a whole other ball game then when you are selling. Tenants expect and demand more. So Is your house “RENT READY”? Let’s see.

Are all appliances in working order and “CLEAN”? This means “white glove clean”

Have the furnace filters been changed? Then tenant will be responsible for changing them if you have it in your lease.

Are all gutters clean? The tenant will be responsible for cleaning them if you have this in your lease.

Do the smoke detectors and CO detectors have new batteries? You want the tenant to be responsible for putting new batteries if the old one’s fail. Call me and I will explain why.

Is the house “CLEAN”?

Have the carpets been cleaned?

Does it smell good when you open the front door?

The house really really needs to be clean which includes carpets, windows(inside and out) and smells good when the prospective tenant looks at the house. Don’t use artificial smell devices. Tenants know when you are trying to hide something. Does this really need a explanation?

Are the flower beds mulched and free of weeds? If they are not, then the tenant won’t do what you should have done.

Does the outside of the house need pressure washing? This is protecting your property if you require the tenant to do this. They won’t clean it if you won’t clean it.

Does the inside need painting? If so, choose neutral colors but not stark white. They want something that looks good. They don’t want to rent something that has a “USED” look.

If these things are done then you have a better chance of renting your house at a better than average rent. If your house is not in top notch condition then you will not.

Here is why. A tenant thinks if the house is dirt or not well kept then the owner will take less. The prospective tenant will let the property manager know that there are other houses available that are in better condition at the same price. So why should they pay the same price for an inferior product.The tenant also feels if they take, this less than average home, they don’t need to take care of it. The owner doesn’t take care of it, so why should they take care of it.

One of the reasons a tenant will pay your price or even more is they are not the kind of tenant you want. They credit is bad. When I say bad, I mean not only is their credit score low but they have judgements against them, multiple collections, and IRS liens. They also forgot to tell you about their criminal record. Sometimes they will offer to pay 6 months in advance just so you will rent to them. You need to run not walk from someone who has these types of credit reports.

A local realtor has been writing articles every week in North Georgia News and Towns County Herald about staging homes for sale. Check her articles out because the same principles apply to renting your house. If the yard, house and inside are not in top notch condition, then it will be difficult to rent, sell or give away at any price.