Property Management Basics

[David Yee]

Hi. I am new to the property management space.  My interactions with my property manager have been much different from my expectations.  I think this gives me a good opportunity to learn more about the job to provide clearer instruction and set expectations.  Here are areas I'd like to understand.

- Rent Analysis: I have a lot of trouble trying to create a rent analysis.  It's hard to find comparable properties as quads are somewhat rare and my rental units are efficiencies of various sizes.  Is there some sort of industry standard for getting rough rental estimates?  It seems very paper nakpin-y to me. 

- Rent Collection:  What is the best software for rent collections?  How do you feel about autopay?  I was thinking I'd be happy to reduce rent a little bit in return for setting up autopay but this seemed like a foreign concept to my prop manager.  Is there a reason against it (outside of renters probably not wanting to do it)?

- Maintenance Checklist - Are there any industry standard maintenance lists?

- Value-Adds: What are the big value adds for property rentals?

- New Tenant Marketing: What are some of the best places to advertise for new tenants?  I think my property manager just created a sign outside the property.  This seems highly inefficient in 2021.

[Nathan Gesner]

Originally posted by @David Yee:

Hi. I am new to the property management space.  My interactions with my property manager have been much different from my expectations.  I think this gives me a good opportunity to learn more about the job to provide clearer instruction and set expectations.  Here are areas I'd like to understand.

- Rent Analysis: I have a lot of trouble trying to create a rent analysis.  It's hard to find comparable properties as quads are somewhat rare and my rental units are efficiencies of various sizes.  Is there some sort of industry standard for getting rough rental estimates?  It seems very paper nakpin-y to me. 

- Rent Collection:  What is the best software for rent collections?  How do you feel about autopay?  I was thinking I'd be happy to reduce rent a little bit in return for setting up autopay but this seemed like a foreign concept to my prop manager.  Is there a reason against it (outside of renters probably not wanting to do it)?

- Maintenance Checklist - Are there any industry standard maintenance lists?

- Value-Adds: What are the big value adds for property rentals?

- New Tenant Marketing: What are some of the best places to advertise for new tenants?  I think my property manager just created a sign outside the property.  This seems highly inefficient in 2021.

There's no formula for rent analysis because there are too many variables. I manage about 400 rentals and just know off the top of my head what something will rent for given the size, layout, condition, location, amenities, current market trends, etc. I used to have a spreadsheet calculation (square feet, beds/baths, a few key amenities, garage, quality of home/location) and it would spit out an estimate, but my head was more accurate so I gave it up. Long story short, just study the market and you'll get better with experience.

Online rent collection is definitely the way to go, particularly if it's tied into your PM software so you don't have to log anything. I would not reduce rent for this because (a) it's not free to you, and (b) it's convenient to the tenants and has value to them. If anything, charge extra for anyone paying by check or money order in the office to compensate for the additional work it takes to manually deposit those funds. I know some companies that charge like $5 for every payment delivered to the office.

There's no industry standard for maintenance. Professional property management companies just build their own processes.

Value-adds are market specific. I have some apartment complexes that make a killing on washers/dryers but I have others that literally make less than $10 a month and I plan to get rid of them. Some tenants want storage space. Some want a nice pavilion for cooking out and entertaining. Off-street, covered parking. Pet- or kid-friendly yard. Interview your renters and see what's important to them, then figure out how to monetize it.

I use ShowMojo to market my properties. I list the property in my management software (Propertyware) and it gets published to around 50 sites, automatically watermarked to prevent scammers, and an auto-response system that saves me a ton of phone calls. What I use may be too expensive for you, but there are other options. Even free systems like TenantCloud will publish your listing to multiple websites, increasing your online presence. It's definitely important to market online. I haven't used the newspaper in like ten years.