All Forum Posts by: Account Closed

Hello Rudolph! I don't have any personal connections in that area, but here are a few tips to help you in your search as an out-of-state investor!

1. Location

Of course the management company you're looking for will need to be in the same area as your investment property, so do a Google search on management companies nearby. Remember, the first one is not always the best one, just because a company pays to be at the top of the listings, does not automatically mean that they're the best fit for you!

2. Response Time

If you are unable to get a timely response via email or phone from a property management company, this is likely how they'll treat you down the line, and how they treat tenants and prospects as well, keep looking for a company that will be quick to respond!

3. Cost

Contact a few management companies and ask what their associated costs are, below are some good costs to know and what to ask:

- Management fee | typically a percentage, ask whether it's based on charged rent or collected rent. Often the percentage will lower if you have multiple properties, so ask them if that's the case if you are thinking of doing more investing in this area

- Maintenance costs | ask for an hourly rate for general maintenance, any routine maintenance that you should be aware of, and if they have an in-house maintenance team or if they use third party maintenance. If they use third party, try and find out what they charge on top of any vendor bills that come through

- Placement fee | placement fees are charged when a new tenant is found and placed into the property. These fees can vary from a flat fee to a percentage of the rental amount.

- Renewal fee | when a current tenant renews, the property management company still has a significant amount of work tied up into this renewal, so often they will charge a fee or percentage for a renewal. It can be the same amount or lower than the Placement fee.

- Miscellaneous Fees | what do they charge for pets? Do you receive that fee or do they keep a portion of it? Do they charge a cleaning fee? What portion of that fee is coming to you? Utility charge? Late Fees? Make sure that you know where the money goes once it's received from the tenant.

4. Information

You'll want to see what kind of capabilities the property management company has for providing your investment's information, how will you get financial data, vacancy data, and maintenance data? Several management companies are able to automate specific reports and will work with you on what you'd like to see and how often you'd like them to send this data, other companies may have an online portal designed for investors so you have all of that information at the tip of your fingers at all times.

5. Reviews

Of course it's wonderful if the property management company has excellent reviews by both tenants and investors on Google and Facebook and other venues, however keep in mind that in property management, there are going to be a number of upset tenants. Whether it's losing a security deposit (most of the time rightfully so), or a late charge being added to their account, or a maintenance request that wasn't dealt with immediately, etc..., these are often arbitrary personal opinions that should not reflect poorly on the entirety of the management company.

6. Property Management Company

Ask the property manager what sets them apart from other companies in the area, how long have they been in business? How many units do they have under management? Have they worked with an out of state investor before? What is their typical turn-around time? What is their current vacancy rate? How do they market their units?

7. Website

Check out the management company's website, is it user friendly? Would potential tenants be able to navigate the site with ease?

8. Property Classes

Is your property a B class property? A? C? Check out the other properties that are under management of the company you're vetting, see if they're in the same class as yours. Most management companies will manage a couple of different classes, however if you are seeing class C-D properties on their website, and your property is in class A, you may want to keep looking. It is important to ensure that the management company knows how to manage properties in the class yours is in, and that they're able to get the highest rental amount possible.

9. Management Contract

See if you can secure a copy of a blank management contract, find out how long their contract term is, are you going to be signing up for a year? A month? Do they offer trial periods? What is the minimum reserve required per unit? Go through the contract thoroughly, make sure that you agree with what you're signing up for!

In conclusion, there are many factors to finding the right out of state property management company, the key is to do your research, make the calls, and to go with the company you think will be the best fit for you and your investment!

Hello Jeff! I've tried several ways of handling this, but the most successful strategy I've found is to have the tenants submit a paint swatch, and once you've approved it, you can hire painters (or paint yourself) to paint it that color, while charging the tenants for time + material. My cost to the tenants is $50 per wall that they'd like painted, and I tell them my painters need to do it for liability reasons + to protect them from getting charged to paint it back to it's original color at the end of their tenancy. If the new color they choose is approved, you end up with a free fresh paint job and the tenants are happy.

Hey Eric!

I don't have any specific recommendations for Kansas City, however I do have some tips + tricks for you to use when finding an out of state property management company!

1. Location

Of course the management company you're looking for will need to be in the same area as your investment property, so do a Google search on management companies nearby. Remember, the first one is not always the best one, just because a company pays to be at the top of the listings, does not automatically mean that they're the best fit for you!

2. Response Time

If you are unable to get a timely response via email or phone from a property management company, this is likely how they'll treat you down the line, and how they treat tenants and prospects as well, keep looking for a company that will be quick to respond!

3. Cost

Contact a few management companies and ask what their associated costs are, below are some good costs to know and what to ask:

- Management fee | typically a percentage, ask whether it's based on charged rent or collected rent. Often the percentage will lower if you have multiple properties, so ask them if that's the case if you are thinking of doing more investing in this area

- Maintenance costs | ask for an hourly rate for general maintenance, any routine maintenance that you should be aware of, and if they have an in-house maintenance team or if they use third party maintenance. If they use third party, try and find out what they charge on top of any vendor bills that come through

- Placement fee | placement fees are charged when a new tenant is found and placed into the property. These fees can vary from a flat fee to a percentage of the rental amount.

- Renewal fee | when a current tenant renews, the property management company still has a significant amount of work tied up into this renewal, so often they will charge a fee or percentage for a renewal. It can be the same amount or lower than the Placement fee.

- Miscellaneous Fees | What do they charge for pets? Do you receive that fee or do they keep a portion of it? Do they charge a cleaning fee? What portion of that fee is coming to you? Utility charge? Late Fees? Make sure that you know where the money goes once it's received from the tenant.

4. Information

You'll want to see what kind of capabilities the property management company has for providing your investment's information, how will you get financial data, vacancy data, and maintenance data? Several management companies are able to automate specific reports and will work with you on what you'd like to see and how often you'd like them to send this data, other companies may have an online portal designed for investors so you have all of that information at the tip of your fingers at all times.

5. Reviews

Of course it's wonderful if the property management company has excellent reviews by both tenants and investors on Google and Facebook and other venues, however keep in mind that in property management, there are going to be a number of upset tenants. Whether it's losing a security deposit (most of the time rightfully so), or a late charge being added to their account, or a maintenance request that wasn't dealt with immediately, etc..., these are often arbitrary personal opinions that should not reflect poorly on the entirety of the management company.

6. Property Management Company

Ask the property manager what sets them apart from other companies in the area, how long have they been in business? How many units do they have under management? Have they worked with an out of state investor before? What is their typical turn-around time? What is their current vacancy rate? How do they market their units?

7. Website

Check out the management company's website, is it user friendly? Would potential tenants be able to navigate the site with ease?

8. Property Classes

Is your property a B class property? A? C? Check out the other properties that are under management of the company you're vetting, see if they're in the same class as yours. Most management companies will manage a couple of different classes, however if you are seeing class C-D properties on their website, and your property is in class A, you may want to keep looking. It is important to ensure that the management company knows how to manage properties in the class yours is in, and that they're able to get the highest rental amount possible.

9. Management Contract

See if you can secure a copy of a blank management contract, find out how long their contract term is, are you going to be signing up for a year? A month? Do they offer trial periods? What is the minimum reserve required per unit? Go through the contract thoroughly, make sure that you agree with what you're signing up for!

In conclusion, there are many factors to finding the right out of state property management company, the key is to do your research, make the calls, and to go with the company you think will be the best fit for you and your investment!

Hey Elizabeth! Great question, this can actually be at the state level (for example, in MI reasonable notice is at least 24 hours), unless a different number is specifically stated in your lease. Once you find the number in your state, I would recommend MEETING with the current tenants (do not email or call, you'll have a much more honest conversation in person). Let them know that you're simply looking to avoid vacancy, and the more cooperation you receive from them, the higher the chances that someone will sign the lease and the showings will stop. Then ask them if there is a particular day or time that absolutely does not work for showings, and by showing that you are willing to work with them, most tenants will be compliant for showings on the other days/times.

This is definitely a case for open communication, you are both on the same side and want the showings to end, but what you want to make clear is that they can have a hand in that by making their home as attractive as possible, and opening up showing times so that people will want to see it and sign a lease.

Good luck! 

Hello Beau! I technically self manage, as I am a Property Manager ;) I walk through all of the properties under my management at least every 6 months, and if I see anything out of the ordinary, I'll take pictures with my phone and address the situation later. I give my tenants at least a 24 hour notice of my walk through. I'd much rather face the situations head on and as early as possible than deal with any negative ramifications down the line!

Hello Eva!

A great option for out of state investors is to hire a local property management company. Here is a blog post I wrote on how to find the right PM if you're out of state. 

A good property manager will most likely be able to receive more in rent that you would as a private landlord, so most of the time there is no cost to professional property management. There are also an endless number of benefits to having someone in the same vicinity as your investment, not only to make the leasing process smooth, but also to have eyes on the ground to ensure that your property is being well taken care of. The PM company will also take care of turn-overs, so any painting/cleaning/maintenance that needs to be done will easily be handled. 

I understand you wanting to manage the home yourself to start, but would definitely recommend working with a PM unless you purchase a property in your local area, good luck!

Hey Cody!

It definitely depends on the market, the rental, the price, and your own renter qualifications. Personally I rent Class B properties to mostly young professionals, and I start marketing/showing the homes three months before the current lease ends. I leave myself two weeks between tenancies to clean, paint, etc... Most of my leases are from August 1st to July 15th of the following year, so my next tenant can move in on August 1st, and the cycle continues. 

If you do show the home while you still have tenants in it, you must notify the tenants with the timeline outlined in your lease or in your state laws, I give my tenants a 24 hour notice before any showing, and I personally accompany the showing as I am a licensed Realtor. 

This method reduces vacancy dramatically, and provides peace of mind as leases end, knowing you've already signed a lease with new qualified tenants.

Good luck!

Hey Stephen,

You can write an addendum to release him from the lease, all three would need to sign it. This would be the case if they're all on a jointly and severally liable lease. The other options would include all three of them being evicted/released due to a violent situation, or his name remaining on the lease until the end of the lease term. 

These situations are never easy, but at least he is moving voluntarily! Good luck

Be honest, straight forward and give them the information they're looking for. If you were to call someone for a landlord reference, you would expect and appreciate an honest answer from them, especially if they were a poor tenant, so provide the same courtesy. There's no need to go overboard and complain about your tenant, but as a landlord, we have to help each other out when we can! 

Hey Melissa! Ask them for a landlord reference form signed by the tenant, that will give you permission to share their rental history. It will typically ask things like the rental amount, times they were late, any problems you've had with them, and if you'd rent to them again.