All Forum Posts by: Peter Sik

Do you see any new rental property up in the market has increased rent since L.A. fire issue?

Quote from @Adam Bartomeo:

It sounds like your PM gets the full amount of the late fees, unethical from my standpoint but it is common. It also sounds like they want "their" fees paid ahead of yours. Again, from my standpoint unethical but still common. They are probably aware that the tenant will stop paying at some point in the next 2+ years and they want to recoup their money ASAP. You will have to look through your PMA to get a better understanding how this works for your scenario.

"It also sounds like they want "their" fees paid ahead of yours." this is where I don't agree. This is not their fee, PM is just helping landlord collecting payment. Why the whole late fee goes into PM's pocket? Should just take 10% to be fair. In fact, there should have no such late fee existing after judgment decision made.

@Adam Bartomeo thank you for your information. The agreement didn't mention about how to handling the late fee that helped by collection agency. Usually, PM take 10% of the late fee in normal circumstance. 

One thing I don't understand is the late fee is belong to landlord and PM take portion of it as service fee. PM is helping landlord collecting payment from tenant ideally. How could PM take the whole cake??

I just received second email from PM saying:

"Hi , looking at the account , there are late fees for July and August. These were some of the existing unpaid charges submitted to the Attorney and before the Judgement took place. Funds collected as the result of the collection judgement are applied beginning with the charges in arrears. Late fees are flat fee charges while the 10% will be against any unpaid rental amounts.

It appears that the actual unpaid rent has been satisfied now, this is why those funds collected were applied to the late fees next. Soon the funds collected will be paid to you less, the 1/3 Attorney fee, without the flat fees or the 10%."

After took some time of understanding this email. My question is why there were some existing unpaid charge before judgement took place? The judgement claim balance is $7,569.33 then focus on this amount, should not mention any more number. Keep it simple....

After pm forwarded my case (tenant did not pay rent) to collection agency, the judgement claim balance is $7,569.33. The debtor will make $200 monthly payments until paid off.

1/3 of the $200 goes to the agency, and 2/3 goes to my account and within this 10% of 2/3 goes to PM as service fee. Simple and fair.

First month received that $200 and was distributed as above, Everybody happy.

Second month received $200 on time and PM break down that amount and claim there is $45 late fee, and all that $45 goes to PM account. Means I received less then I expected. So, I sent email asking PM why there is late fee existing? And they replied:

"Hi ,the total judgement not only includes physical damages that you had to pay initially to secure another tenant but also includes outstanding rent balance if any and late fees if any and any other charges that may have been charged against the previous tenant. The $45 is most likely a late fee.

So, as the funds are received from the Attorney, they are applied to all charges in arrears. Eventually you will receive funds less the 1/3 collection fee from the Attorney forwarded to you."

After sent them third email and finally got reply but that did not answer my question. Any idea what PM trying to do? Why not just following the distribution of the first month?

Update: Just got email reply from PM. 

"Hi , looking at the account , there are late fees for July and August. These were some of the existing unpaid charges submitted to the Attorney and before the Judgement took place. Funds collected as the result of the collection judgement are applied beginning with the charges in arrears. Late fees are flat fee charges while the 10% will be against any unpaid rental amounts.

It appears that the actual unpaid rent has been satisfied now, this is why those funds collected were applied to the late fees next. Soon the funds collected will be paid to you less, the 1/3 Attorney fee, without the flat fees or the 10%."

After took some time of understanding this email. My question is why there were some existing unpaid charge before judgement took place?  The judgement claim balance is $7,569.33 then focus on this amount, should not mention any more number. Keep it simple....

Second, the late fee is belong to landlord, PM can only take 10% of it. Not whole. 

Want to hear from you guys. What is this PM doing, is it making  sense? Thanks in advance

After pm forwarded my case (tenant did not pay rent) to collection agency, the judgement claim balance is $7,569.33. The debtor will make $200 monthly payments until paid off.

1/3 of the $200 goes to the agency, and 2/3 goes to my account and within this 10% of 2/3 goes to PM as service fee. Simple and fair.

First month received that $200 and was distributed as above, Everybody happy.

Second month received $200 on time and PM break down that amount and claim there is $45 late fee, and all that $45 goes to PM account. Means I received less then I expected. So, I sent email asking PM why there is late fee existing? And they replied:

"Hi ,the total judgement not only includes physical damages that you had to pay initially to secure another tenant but also includes outstanding rent balance if any and late fees if any and any other charges that may have been charged against the previous tenant. The $45 is most likely a late fee.

So, as the funds are received from the Attorney, they are applied to all charges in arrears. Eventually you will receive funds less the 1/3 collection fee from the Attorney forwarded to you."

After sent them third email and finally got reply but that did not answer my question. Any idea what PM trying to do? Why not just following the distribution of the first month?

Quote from @Jordan Myer:

Quote from @Peter Sik:

Quote from @V.G Jason:

Quote from @Peter Sik:

i have a rental property at Murrieta, CA sitting in the market for 2 months, the condition is good and the rental price is at the lowest. Have requested my PM to host an open house but they do not offer this service. Want to know what should i do to get it rented. thanks

 It's a winter market, so likely slower but even so for 2 months to be sitting the PMs need to be more proactive. You need find a better PM and re-do this, in my opinion. Likely off in price, but could also be a more advertisement. They should have told you around Day 10, hey leads are low from what we are seeing and figured out how to adjust. No later than 3 weeks some firm adjustment should've been done.

Find new PM, one that's proactive!

 Thanks for fast reply. At the very beginning, the PM wanted to list BELOW market price, I didn't agree. So it was listing at medium to high market price until now adjusted to lowest market price but still higher then their suggested price. I mean with such PM experience, what they can only do is lower the price under market price to get a tenant? Where is their marketing skill?? 

 Sounds like the problem could be that the price was lowered too many times. Potential tenants will see this as a red flag ( is there something wrong with this property). They should take down the listing for a few weeks and re-post

The price only adjusted one time.

Quote from @Bill B.:

You’ve already lost 16% of rent with the two months vacancy. If it goes another month or two you could have listed it 25% lower and been ahead before counting utilities. If you don’t think it’s the quality of or the location of the listing (picture quality, ad copy, or websites.) it’s the price. Adjust the price to whatever it takes to get a renter in there with a lease that ends at a better time of the year. 

 Yup, i have to get it pushy. Just got PM msg saying they are going to check the property next week to provide opinion.

Quote from @Brian Kloft: @Brian Kloft

There is only so much they can do on promotion. Plus when you chose to have the property at a higher price to start you lost the biggest promotion and that is a new listing. The tenants are going to look at a few things to decide where to rent, price, how nice it looks compared to your competition and location. 

From your description is sounds like your place has tired paint and older flooring from the competition, but your rents are lower than the competition. That is probably why they wanted you to be under market with the price. Cheaper than the rest but with those condition issues means you are only going to get those tenants interested that can't afford the others. Most tenants will not chose the house with tired paint unless there are no other choices. If your place isn't going to look as nice as others then you have to be more than just slightly under their prices, there has to be a big enough of a discount to give the tenant a reason to accept the condition issues. Also realize that in it sitting the last 2 months, part of that was the time period between Thanksgiving and New Years. The number of people looking then is smaller than the rest of the year. Also from your responses above it sounds like you are the one that insisted it be at medium to higher market price even thought the place is not in as nice of condition as the competition and that you only just lowered the price. Blaming them when you handcuffed them with a substandard product but at a premium price. No amount of marketing skill is going to overcome that. 

As far as an open house goes, in my 20+ years of doing pm I have never had one. The closest I have had is when I have a ton of people wanting to look at it, instead of setting up 20+ individual appointments I give them a 2 hour window on one day and a 2 hour window on another day to come and look at it. 

The property manager is not perfect. They should have pushed back more when inquiry activity was low or they were getting negative feedback on the showings. If you don't trust your property manager on pricing or housing condition then you should either get a different property manager or manage it yourself. Don't blame them when you ignore all of their advise and then things don't get leased quickly.

Thank you so much for your advise. No blaming anyone here, It is my property, my asset, I take all reasonability. 

"you ignore all of their advise"

The PM ONLY advised once so far, was to set the listing price at the beginning to the LOWEST in the area. I didn't agree because it was hard to believe my property is in the worse condition. Within 2 months, PM didn't provide any suggestion to push it nor proactive discuss with me on how to make this going. Open house is one method of the promotion, I believe beside renting at lowest price or open house, PM knows more then me to do something further.

Quote from @V.G Jason:

Quote from @Peter Sik:

Quote from @V.G Jason:

Quote from @Peter Sik:

i have a rental property at Murrieta, CA sitting in the market for 2 months, the condition is good and the rental price is at the lowest. Have requested my PM to host an open house but they do not offer this service. Want to know what should i do to get it rented. thanks

 It's a winter market, so likely slower but even so for 2 months to be sitting the PMs need to be more proactive. You need find a better PM and re-do this, in my opinion. Likely off in price, but could also be a more advertisement. They should have told you around Day 10, hey leads are low from what we are seeing and figured out how to adjust. No later than 3 weeks some firm adjustment should've been done.

Find new PM, one that's proactive!

 Thanks for fast reply. At the very beginning, the PM wanted to list BELOW market price, I didn't agree. So it was listing at medium to high market price until now adjusted to lowest market price but still higher then their suggested price. I mean with such PM experience, what they can only do is lower the price under market price to get a tenant? Where is their marketing skill?? 

Some PMs are able to do just what you suggested-- an open house. Also marketing on their facebook, etc., they can definitely push a certain house first. I will say that I usually defer to the PM on prices from the get, they get more committed than us homeowners coming in and intervening. Price will ultimately be the attraction, but the PM can absolutely create some action to help. If you disagreed originally on pricing, then maybe shoulder a bit more of the blame. Even then, they should have told you early on hey this isnt working we need to switch it up.

 Agree. And I don't blame anyone that the property is sitting here for 2 months. I hope they can show some skill on promotion, it is time to do some push.

Quote from @Theresa Harris:

It shouldn't take 2 months to get a property rented if the price is right (which is sounds like it is).  Try calling them from another phone to see how responsive they are to potential tenants.  Also find out where they are advertizing....I'd also think about trying another PM.

 Thanks, I know where they post and is responsive. As it is sitting here for 2 months, they need to do something for promotion. So I asked to host open house and said no such service nor advise anything. Just said there are lot of properties on the market and people have choices with new flooring, painting.... Yes, I studied those properties, their rent are higher.