All Forum Posts by: Brandon Sowers

Thanks for sharing this with us @Nathan Gesner! How are you going about "sharing" this with tenants? In NC, our governor requires proof that we provided this via an affidavit. I have recently used certified mail and have not heard a peep from the 5 tenants it was sent too. 

I know the eviction moratorium has been discussed quite a bit here but have a specific question regarding the CDC 

Eviction Protection Declaration. 

Our PM firm is in North Carolina and our brilliant governor has required that we show proof that we have provided a copy of the CDC form to all tenants prior to filing for eviction. Out of our 900+ tenants, I only have a handful with high ($5k+) balances and no communication. Several weeks ago, I sent out the CDC forms to each one of those tenants via certified mail. I have not heard back from a single one. 

My question is simple. If I have proof that I sent them the form and they have not signed the form, should I not be able to file for eviction? Do they not have to sign the form to be and provide us with a copy to be "protected" from eviction?

Just wanted to say that I appreciate your thoughtful response on this topic. I could not agree with you more. Often people see PMs as fee hungry vultures but most really do not understand what we do on a daily basis. In truth, a tenant that pays on time, stays put for years, and hardly ever has maintenance issues is ideal for the PM and the owner. If your PM is constantly chasing fees... I recommend you find a new one! 

My firm takes a very simplistic approach regarding fees. Our owners only pay a commission on rent collected. We do not charge lease up fees, renewal fees, and there is no mark up on maintenance as we use 3rd party vendors. However, we do keep our application fees and late fees. This has been our model for over 40 years. 

It is a no brainer, in my opinion, that a PM would keep applications fees. There is a cost associated with this such as 3rd party fees to run credit/background/criminal and of course labor for the time spent processing. Our firm does make a little on this fee but roughly 1/2 is eat up by the cost to run them.

Late fees are certainly a more debated topic regarding fees. For our residents, rent is due on the 1st and late after the 6th. Our firm keeps late fees, again, due to the cost associated with collecting late rent. This includes reaching out to tenants via email/text/phone calls, making payment arrangements, and even posting notices on individual doors. Often, it is the same problematic tenants that owners are not willing to evict that we end up chasing. 

Our firm pays owners in the middle of the month and at the end of the month. Of our 800+ doors, 95%+ have all paid before we cut the first owner checks. So, our owners are rarely affected by late payments. If a tenant does ends up being evicted, we do not charge our owners fees for filing or appearing in court. 

I have never really looked at the application fee as a way to avoid "window shoppers" but as a way to pay for the resources it takes to actually process that application. My PM firm has to pay for the credit/background check and the time it takes for the leasing agent to gather the information. Throughly vetting an an applicant takes time and includes verification of income, following up on landlord references, credit check, criminal background check, etc. 

My firm does not collect a commission on a property that is vacant. Failure to collect an application fee would end up costing us a ton in 3rd party fees and labor. However, if you are a landlord with just one vacant property at a time, it may be worth considering not charging a fee since there is less overhead. 

Our application fee is $50. We manage 800+ doors ( MFH + SFH ) and we never get push back on the fees. What I do think is sticky is "not" charging an app fee but then hitting a tenant with a admin fee at move-in. In our market, you will often see admin fees over $100 but they state their is no application fee. Renters are not dumb and they look at the fees listed.

I would love to know what brand of camera you went with as well. I had been considering this for our owners properties even before all this insanity. Is there much of learning curve for someone with plenty of camera/tech experience? 

Here in North Carolina, a property owner/manager has at least 30 day to process security deposits. If there are charges, you can send an interim accounting letter giving you an additional 30 days. Because of this, often tenants will have to pay 1st months rent + a security deposit on their new home all while waiting up to 60 days to get their previous deposit back. 

@Carlos Carbajal

Our firm actually does offer flexibility on security deposits on most of our multi-family units. That is, if the owner agrees. For example, if a tenant meets our requirements and has a credit score over certain amount, they would qualify for 1/2 of the standard full months rent security deposit.  Unfortunately, in our market, tenants rarely qualify for this "special". With lower rents, come lower incomes... 

As rents continue to rise, this in turn increases the cost for tenants to move in to a rental property. It is not uncommon for us to list properties for $1500 per month. This can end up costing a new tenant over $3k to move into one of our properties if the "standard" 1 months rent security deposits applies. Our firm has a very thorough screening process for tenants that we place. However, qualifying for a particular property is one thing but having $3k+ to move in is another. I am certain there are  plenty good tenants we are missing out on that simply don't have that kind of cash on hand.

I am wondering if there are any BP owners or property managers that are trying anything different from requiring traditional security deposits? ( ie. full month, 1/2 month ) Maybe you are using Obligo or another service/product that allows the tenant to pay a low nonrefundable monthly fee to insure their unit against damages. Or, has anyone come up with their own system to help lower the financial barriers to moving tenants in. 

*I would like to keep this discussion limited to security deposits funds and not get into the weeds of how we qualify tenants or what is considered a "chargeback" to tenants. 

Often times, low rent properties are more of headache than those with higher rents. Typically, maintenance calls come in pretty regular, you are chasing tenants for rent, and they can be a time suck to turnover when a tenant does move. You also stated that these properties were in a rural area and this can be another pain point for property managers. Most PMs are going to be in urban areas which means some drive time if going to the property is required ( ie. showings, signage, inspections, notices ).

A PM like us would charge you 10% on rent collected and a $175 set-up fee. That would earn us about $105 per month on your to properties.