Tag Archives: Property Management Companies

Property Manager

Lease Only Services versus Property Management

Rental property owners often ask if they should use a lease only service or a property management company for leasing their rental properties.  Rental properties can be great investments, and like any investment there are different ways of managing them to maximize their potential.  Each has its pros and cons, and each may appeal to a different type of investor.  So this post will explore the basic differences between lease-only services and property management services.

Some rental property owners prefer to take a hands on approach and manage their own properties, instead of hiring a property management company.  One of the benefits of this approach is the investor/owner can save money on property management fees.  But for many rental property owners the most time consuming, most stressful, and most costly part of self managing their properties is locating suitable tenants and avoiding vacancy.  Vacancy loss can destroy the income potential of a rental property if it is not kept in check.  That’s where lease only services come in handy.

For the investor/owner looking to maximize cash flow on their rental properties and minimize vacancy loss the lease only services or leasing only can offer a great solution.   Lease only services are designed to handle the upfront task of obtaining tenants for a rental property.  Lease only services will usually include the following: all advertising and marketing of the rental property, fielding all phone calls from prospective tenants, prequalifying prospective tenants, showing the property, providing feedback to the property owner regarding showings, rental rates, and marketability, and providing tenant screening and lease document resources.   Once the property owner approves of the tenant and the lease is signed, the lease only services are completed.

For the investor that is more “hands-off” and doesn’t mind foregoing some of the cash flow to have a third party acting on their behalf to oversee the operations of the investment, property management may be the way to go.  Property managers can be responsible for rent collection, scheduling repairs and maintenance, property inspections, accounting functions, and more.  Typically they will require a long term contract at least for the term of the lease.   And the property manager will typically act as an agent for the property owner in all matters dealing with the tenant relationship.  Because property management companies will likely require a contract it is important to make to review the contract carefully with your attorney.

There are important cost differences between a lease only service and a property management service.  A typical property management contract charges an ongoing recurring monthly fee to the property owner based on the percentage of monthly rent- such fees can range anywhere from 7% to upwards of 30% of the monthly rent depending on the type of property- the fee is charged for each month of the lease term.  Many times there is also a tenant placement fee and renewal fee in addition to the monthly management fee.  On the other hand, lease only service typically charge a one time fee, sometime based on a percentage of the first month’s rent and sometimes a flat rate fee- and the fee is typically only due when the tenant is secured approved by the property owner.

With a lease only service there is no ongoing recurring fees and typically no renewal fees.   For this reason lease only services can save property owners thousands of dollars in rental income over the course of a lease term.  But only if the property is properly managed by the investor during the ongoing lease term.

A poorly managed property can also end up costing the investor more in the long run.   For rental property owners that want the ability to manage their own properties, are able to handle basic management duties, but not the hassle and expense of securing tenants, lease only services can be a great way to go.

Rental property leasing services are different from property management services in a number of ways, both in the fees involved and the services performed.   This by no means covers every leasing service or property management company that is out there but lets summarize the basic differences.

Compare the services performed:

  • Lease only services: focus is on quickly obtaining suitable tenants to minimize vacancy costs.  Handling the upfront tasks of advertising, showings, and screening tenants.
  • Property management: focus is on the ongoing management activities for the property such as: rent collection, scheduling maintenance and repairs, accounting, and property inspections.

Compare the costs of service:

  • Lease only services:  One-time fee due upon lease execution.  A percentage of first month’s rent or flat fee.  No recurring fees, no renewal fees.
  • Property Management:  Recurring fee due for each month for the term of the lease.  A percentage of each month’s rent for the term of the lease.   Often renewal fees in addition.

As a side note:  Both lease only services and property management fees are typically tax deductible as an expense of operating the rental property- **always consult your tax advisor to determine if this is the case for your property**.

Rental property owners/investors have a multitude of choices when it comes to renting out their properties and protecting their investment.  Regardless of which way you decide to go, hiring a professional to help can make your life easier and the ownership of your investment more enjoyable.

 Property Management Companies

What to look for in a property management contract

So you’ve found a great property manager and now it’s time to move forward with the property management contract. The question then becomes: what should you look for in the property management contract? Even if the manager is reputable, there still may be some points in the contract that do not suit your current needs.  Don’t be afraid to scrutinize the contract and ask for changes that you feel are important.

Full disclosure: I am not a lawyer and this blog post should not be used as legal advice in any way.  A property management contract is a legal document.   Always consult your attorney and/or advisors before signing any legal documents.  

Here are some items that you should look for in a property management contract.

1. What is the duration of the contract? You might not want to be locked into a long-term contract, especially if you’re not familiar with the property manager. In that case, it’s probably best to start with a shorter-term contract. Once the manager has been established for a while, and your confidence has grown, subsequent contracts can be longer term.

2. Be sure that the services and the fees are spelled out clearly. Upon selecting the property manager, you probably received a verbal  quote “10% of the gross rent” or something along those lines. The full contract, however, is much more complicated than that. The contract should spell out exactly what services will be performed by the manager, and at what expense. Some managers may charge for “extra management duties” which were not spelled out in the verbal agreement.

3. Be sure that the agreement specifies Equal Housing Opportunity. You don’t want to run afoul of fair housing laws. Your property manager should be well versed in fair housing laws and operate in accordance with those laws.  If your property manager is acting as your agent then you could potentially be liable for the actions of your property manager.  This should be spelled out in the contract.

4. Check the termination clause. In case either you as the owner or the property manager wants to terminate the relationship early, the terms need to be specified clearly in the contract. In your case, ensure that the contract does not require cause to terminate the agreement, and that it can be terminated without penalty.

Property management companies can be a wonderful resource for real estate investors. Contracts between them and the property owners, however, should be examined with scrutiny to ensure that the interests of both parties are protected fairly.  As with any legal documents it is always a good idea to consult your attorney and or advisor and have them take a look at the contract.

Apartment Finders

What to look for in a rental property listing company

Most rental property owners have a lot tied up in their properties financially, and as a result they have a lot of responsibilities making sure that it is taken care of properly.  One major concern is finding the right renters for that property who will be good tenants.  The world is full of so many different types of people that it can become quite a chore to sift through all of the applicants. Thankfully there is help to handle the daunting task of finding new tenants with the skilled expertise of people who specialize in this job.  

A professional rental property listing company provides a service that is appreciated by both parties involved. Prospective renters receive knowledgeable assistance to help them find just the right place, and the property owners benefit from the talented professionals who can handle the chore of filling vacancies for them. That means that you no longer need to worry about making time available to show the property or waste time waiting for no-shows. The experts are skilled at screening renters to make certain that your potentially new renters are qualified.  You won’t have to be concerned with placing expensive advertisements because these professionals have access to a huge network of exclusive rental websites, referral networks, print and social media that can save you a lot of time and expense.

The right property leasing and marketing professionals are very highly trained to be successful at finding great tenants for your properties, which helps you get the most value for your investment. And, of course you have the final say in approving the qualified renters that are matched with your property, giving you peace of mind.   Look for a professional rental property listing company with a dedicated property listing expert to handle your rental so you have someone who’s sole focus is your rental property – as opposed to selling real estate or providing other unrelated services.    They not only advertise your property, but also can take photos and video, place a professional sign on your property, field all telephone inquiries and pre-screen potential renters.

So not only do you save the time and expense of advertising to search for new tenants, but you also save yourself the trouble and inconvenience of conducting showings or property tours and running background checks as part of the tenant screening.  It is pretty obvious that this is a very smart choice for landlords in need of good tenants.  Find out more information about Housing Helpers rental property listing service and how “we connect people with places” by calling our office at 303.545.6000 or click on Rent My Property

Property Manager

Five benefits of hiring a property manager for real estate investors

People looking to invest in rental properties as a means of diversifying their asset portfolio will usually find themselves asking the following question: should I use a property manager or manage the property myself?

The answer is an unequivocal: it depends. Property managers are known to take between 7% and 20% of the gross rent. This means, simply put, that a property manager is an expense to owning the property, in addition to maintenance, taxes, insurance, and a variety of other expenses associated with real estate investment.

That said, there can be inherent advantages to hiring a good property manager.  Here are a few of them.

1. A good property manager can add value to the property.  This is one often overlooked value of using the services of a property manager. If the owner ever wants to sell the property, one excellent selling point in any advertisement is a line like this: “Property management already in place.” This makes it easy for new (and even existing) real estate investors who are looking to enhance their portfolios with good properties that already have sound management.

2. A good property manager gives the owner more free time. Time is money. If the owner has more free time that is not consumed by answering midnight calls about toilets that won’t flush or examining the property for obvious problems on a periodic basis, then that owner is free to do other things, such as look for other real estate investments.

3. Good property managers can shorten vacancies. A property manager has a full time job that includes, among other things, showing the property. The property owner may not, and probably does not, have the kind of time necessary to devote to showing the property. This means that, not infrequently, accomodations have to be made for scheduling conflicts between the owner and the prospective tenant. This would usually increase the vacancy time for the open unit. Vacancy time, of course, means that the owner is not receiving rent for that unit.

4. Property managers take care of a lot of administrative work. This is not only a time-saver, but is also a nuisance-saver. Property managers will keep track of expenses, will handle receipts, and provide monthly, itemized accounting information to property owners. This saves a lot of hassle when it comes time to file taxes.

5. Good property managers stay up to date on local and federal rental housing laws.  There are federal rental housing laws such as the Fair Housing Act.  And there are state and local laws that vary based on location.   Some cities, like Boulder Colorado, require rental properties to be licensed under City law.  In Boulder rental properties must pass a detailed property inspection and pay an administrative licensing fee.   If a real estate investor is not current on local and federal rental housing laws it could end up costing them a lot more than the cost of rental license fee.

While property managers certainly cost money, the benefit gained from investing in their services is a sound return on investment. Real estate investors who don’t want to have their time monopolized by adminstrative tasks and management hassles would do well to use the services of a good property management company.

Apartment Finders Housing Helpers Boulder Colorado

Boulder Rental Property Owner checklist : House, Inspection, License?

If you have recently taken advantage of the lower interest rates and increased property value in the current housing market and purchased a home, then keep reading. If you are now planning to stick a “FOR RENT” sign in the fertile rental land of Boulder, then the information presented in this post is all the more indispensable for you.

You must be a clever chap or lady to foresee the high-renter concentration in the Boulder area, especially in the hotspot areas surrounding CU. What many new owners in this position do not know, however, is the importance of the license.

And no, we don’t mean the driver’s license.

In the City of Boulder, property owners are required to hold a “Housing Rental License” in order to have the legal permission to rent out a property. This “Housing Rental License,” or “Housing Inspection License” as it is known by some, is required by the city’s Property Maintenance Code in order to uphold the safety and health standards for Boulder’s rental properties. This license must be current at the time of renting the property; otherwise you are subject to the same legal actions as those who attempt to rent an unlicensed property. Some exceptions to the rental license requirement can occur; a thorough explanation of these can be found on the City of Boulder website

In addition, an owner that lives in Boulder County is not required to have a property agent. It is only outside of the county that a property agent must serve as property’s contact person.

The Rental Licensing office is located in the Planning and Development Services Center in Boulder and has sporadic hours, so be sure to double check on their FAQ page before heading over.

The license fee is a flat $70 regardless of the number of units within the rental property. The license requires that a Baseline Inspection is completed in order to ensure the property is safe for tenants. This inspection, done by private inspection companies, covers four major areas: general life safety, plumbing and fixtures, mechanical and electrical, and finally, fire safety. If items need to be repaired, a re-inspection will be necessary before you can pass the Baseline Inspection. Upon its successful completion, the owner is presented with the signed inspection compliance verification form, which is an integral component of the rental license application.

Generally, this license must be renewed every four years with a renewal application, renewal inspection compliance verification form, a legal residency affidavit, and fee. However, if a new owner takes over the property at any point, the old license is considered null and void and a new inspection and license must be obtained.

While learning about this topic may not be on the top of everyone New Year’s resolution list, it certainly is an important one. If you are an owner of a property in Boulder and want to rent it out, then consider this post and this Rental License handbook as a letter with your name of it.

After you’re licensed, be sure to give us a call here at Housing Helpers so we can find the right tenants to appreciate your wonderful rental property! And remember, unless one of our rental specialists connects you with your future tenant, our listing service comes at no cost to you. We are confident we can find tenants who will adore your new property as much as you do.

Housing Helpers is Colorado’s most popular rental listing service. We provide Colorado Rental Property Leasing Services in Colorado for rental property owners, property managers, and property management companies in Boulder, Denver, throughout Colorado and Nevada.   Each City and town in Boulder County and throughout Colorado has different rules and regulations for rental property.  If you are considering renting your home or condo in Colorado start here to explore the rental property leasing services and property management services in your area.

 

Winterizing Your Rental Property | Helpful Tips For Landlords and Renters

Boulder Winter Flatirons  Even though the cold season has been slow to arrive this year, there is no doubt that a Colorado winter is sure to happen sooner or later. If the weather forecast is to be believed, it is likely to happen sooner rather than later! When it does, you don’t want to discover that your home or apartment wasn’t ready for the frozen flakes and sub-zero temperatures. Below are a few tips for winterizing your rental property and whether you are an owner or a renter, using these tips could save you a lot of unnecessary money and shivering down the road.

In order to avoid a lengthy to-do list, the following information is presented with the fitting acronym of SNOW-Seal, Note, Outside, and Windows.

Seal: The first step to winterizing your rental unit is to seal any holes, cracks, or crumbling mortar. A good way to find these often hidden nooks and crannies is to wait for a windy day and then carefully comb through your property in search of any drafty spots.

Key areas to check include walls, window sills, wood trimming, siding, and near electrical outlets and doors. With a thorough inspection, you’re bound to find a few places that need additional caulking or weatherstripping. Using caulk, tacky rope caulk, or weatherstrips in these areas will help keep the weather out and the warmth in.

Small gaps and holes can generally be fixed with a simple caulking, but larger problems may require a self-adhesive foam found in a local hardware store. If it’s an issue of a draft sneaking through beneath exterior doors, you can either replace the entire threshold or just insert a seal in the threshold. With any of these seal solutions, ensure that you try to find the exact fit- otherwise, get one size bigger and trim it down to the proper size. Trying to seal a spot with something too small will only lessen the problem, but not eliminate it.

Note: The next item in our SNOW tip list is “N,” for “Note”- and I don’t mean the type you used to write to your third-grade crush in elementary school. There are two primary components at play here- the heating system and the alarm system.

First and foremost, take note of your heating system before you need to rely on it through the cold winter days. Also check the pilot light and burners if your heating system runs on gas or oil. The filter should not only be checked at the onset to winter as well as checked (and if need be, changed) every month to avoid dust and pollutant build-up and increase efficiency.

Another item to note are the air ducts. The U.S. Department of Energy states that a centrally-heated home can lose as much as 60% of the heated air before it even reaches the vents if the ductwork is not done properly.  In other words, it pays to ensure that those air ducts are both well-connected and well-insulated. It’s also a good idea to vacuum them out every few years to allow easier air flow devoid of gunk and grime.

Another very important item to note for winterizing your rental is the alarm system. This includes both smoke alarms and monoxide detectors. The batteries should be checked twice a year to ensure they are working properly. Beyond the biannual check, however, it is vital that they are in working order for the winter months when homes and apartments are more likely to be enclosed with running heat and therefore more susceptible to fire dangers.

Outside: This section covers the importance of winterizing gutters, roofs, and outside faucets. A long autumn can cause a build-up of leaves and other windblown items into your gutters, but it is well worth clearing out before the snow demands the space. If snow falls on clogged gutters, it will hinder the water from effectively draining from the roof. This trapped water could potentially freeze, thaw, and re-freeze several times throughout the winter which can damage not only the gutters themselves, but also the attached roof.

In addition, pay close attention to any loose or damaged shingles because the weight of snow is bound to worsen their conditions. Finally, if applicable to your rental property, the chimney is another outside element to consider. Beyond the general sweep, it should be inspected as soon as possible in order to avoid unpleasant surprises later on.

A final word on the outside section concerns the curse words of winter, “frozen pipes.” It is important the note that your lease may hold you responsible for any damages that come as a result of frozen pipes, so taking caution in this matter is not only recommended- it may be required. Wrapping exposed pipes with heating tape or some sort of insulating cover is a good way to start. In addition, it is also important to drain any exterior spigots and pipes so as to avoid freezing excess water.

Windows: We have reached our final letter of SNOW, the “W.” Here it stands for the all-important windows element of winterizing. If storm windows are not an option, you can still enhance your heat efficiency by protecting them with plastic sheeting. This form of window insulation is installed from the inside with a double-stick tape. From there, use a hair dryer to affix the sheeting to the window. It may not be the prettiest addition to your home, but it will assuredly increase the heat efficiency by trapping the warm air inside.

If you can’t stand the look of it, another idea is to install curtains. An appealing drape will also provide a buffer between you and the winter outside.

A few last tricks of the trade to keep your rental property warm and cozy this winter is to consider your furniture placement. Take a stroll around your living space and ensure that no heat sources are blocked by furniture, which can prevent effective airflow. Aside from the fresh perspective that newly positioned chair can give, who knew that it could also keep you warmer.

Lastly, turn on the ceiling fan! By reversing the fans, you will actually push the warmer air downwards to a level where you can enjoy it.

Ultimately, the aim of the SNOW list is to keep you as warm as possible by being as heat efficient as possible. If you’re still in the market for a rental property or hoping to rent out your space this winter, consider using Housing Helpers to make this possible! Happy winterizing!   Housing Helpers can Rent Your Property quickly and provide a great way for you to manage your properties easily.   If you are considering long term rental property management or property management companies, check out Housing Helpers first as we are Colorado’s most popular rental locating service and we can recommend the right property management services for you!