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Tips for Determining the Correct Rent Rate

With the growth of the economy and renewed construction projects, renting properties has become more competitive. Many factors that will influence the rent of a property, and for property management, fixing the right rent could be challenging.

If the rent is too high, there can be increase in vacancies and it will drive away new prospects. If it is low, profits can be compromised and it can even make people thing that there is something wrong with the property. Here are some of the important points that must be considered while figuring out the proper rent to be charged.

Reputation and Popularity of the Property

Reputation and popularity of a property is mainly dependent on the features and type of service provided. If it has the latest features such as Wi-Fi and broadband connectivity, superior entertainment options, play area for children, and smart storage then the property should be popular in the area, and it is possible to charge a higher rent compared to other properties that provide less features.

Type of service provided by property management and the reviews of former tenants will play a leading role in influencing the reputation of the unit. A stellar and golden reputation could demand a higher rent.

Market Conditions and Competition

These relatively strong factors can influence the setting of rent. Property management will have to keep track of rents charged by similar properties in the area, development of commercial establishments, job availability, and the overall economic situation. Experienced realtors in the area can provide sterling advice about the right rent; however, the level of competition between adjoining properties will also be a major factor.

Desirability of Individual Units

It may not be wise to set a standard rent based on number of bedrooms or floor space area, unless everything about the units is going to be exactly the same. For instance, when there are multiple two bedrooms units vacant, the rent could be different for each of these units depending on various factors. Units on higher floors could demand a higher rent depending on the view. For bigger families the layout and storage space available in the unit could be a major selling point.

Developing an Effective System for Handling Maintenance Issues

One of the most challenging tasks in property management is effectively handling maintenance issues quickly, especially on big properties. In addition, it can sour relationships and cause confrontations between tenants and property manager, if the repair is not done on time or not done satisfactorily. One of the best ways of handling this issue is to have an efficient system in place and train the staff to keep to the established protocol. Here are few important points that can help you develop a marvelous system.

Submission of Request

The first step would be to make submission of requests convenient for tenants. It would be reassuring for tenants when there is a separate line of communications specifically for such requests. One of the best ways is to have an online maintenance request form, which is simple and direct. Receiving maintenance requests by phone is convenient for the tenant, but make sure you have a responsible person attending to the call and there is a system for forwarding the request to the concerned maintenance personnel.

Scheduling According to Urgency

After receiving requests, it is vital to prioritize the work according to urgency or the severity of the problem. It is best to categorize different common problems and designate each issue with required low, moderate, or high level of priority. This is to be used as a common guideline for staff to follow, but it should not be a rigid parameter.

High priority complaints should be looked into on the same day or within a few hours, and attended to, if possible. Moderate priority issues can have two days deadline for fixing the problem, whereas low priority jobs can be fixed within the week.

Examples of high priority maintenance issues:

  • Gas smell
  • Major leak in the plumbing
  • Bug or fungal infestation
  • Clogged toilet
  • Malfunction of HVAC
  • Major issues that compromise structural integrity of the building
  • Accumulated snow or water after a storm
  • Windows or doors that do not lock
  • Lighting in the common areas

Moderate priority issues:

  • Dripping or leaking faucets
  • Internal light fixture is not working
  • Clogged sink or shower drain

Low Priority Issues:

  • Stained carpet
  • Cracked tile or damaged flooring that is not a hazard for walking
  • Issues with the cabinets in the unit
  • Molding repair
  • Small cracks or hole in the wall

Determining the Personnel for Fixing the Issue

After prioritizing the issues, you need to allocate the work to the respective personnel. This will depend whether you have a maintenance team or you are hiring repair services. Most delays occur at this stage, as the repair service may not be available or your staff is attending to some other issue. As a property manager, you might have to make some crucial decisions by judging priorities, mood of the tenant, and the overall situation.

Completing the Work

If the work is inside the unit, it is best to do it when the tenant is present, or ask for permission to enter the unit. After completing the work, ask the tenant to sign a note that says that the work was completed on the particular time and date. 

Major Risk Areas for Property Management

There are certain risk areas where property owner or property management can be held liable if anything goes wrong. Here are the major areas that need special attention.

Discriminatory Practices

Property management must comply with two important laws that prohibit discrimination. They are Americans with Disabilities Act (ADA) and Fair Housing Act (FHA). According to the ADA, property management or property owner should make modify the property reasonably for accommodating the needs of the disabled. Such modifications could include installation of wider doorways, ramps, and designating parking spaces for the handicapped.

As per the FHA, property management cannot discriminate against applicants or tenants based on disability, familial status, national origin, gender, color, religion, or race. Property management has to be careful that FHA violations do not occur while advertising the property and while screening applicants. Violations of the ADA and the FHA attract stiff penalties and property management will have to pay punitive damages as well.

Criminal Activities

Property management has the duty of protecting tenants, visitors, and its employees from dangers of criminal activities taking place in or around the property. If management has not taken sufficient precautions to stop and prevent crimes, then it will be liable for significant amount in damages.

For instance, if an employee commits a crime while doing his or her work on the property that results in harm or loss to tenants, visitors, or other employees, then property management will be held responsible. Similarly, property management is also liable if a contractor, contract staff, or tenant commits a crime, on the property. To avoid liability, property management will have to implement strict screening procedures for employees, workers, and tenants.

Environmental Risks

There may be certain conditions or things on the property that can cause pollution or danger to the environment. In United States, the Environment Protection Agency (EPA) is in charge of checking and making the guilty party pay for the cleanup cost of different types of contamination. This is a high risk factor, as EPA functions on the premise of absolute liability, which means it can hold a party liable simply based on the relationship of the party to the contaminated site, and regardless of whether it caused the contamination or not.

To avoid environmental risks, property manager can insist the property owner conduct a minimum phase 1 environmental audit. If the audit does not find any contamination, the property owner is considered an innocent purchaser, and cannot be held liable if later on contamination is found on the property.

Insuring the property is a fantastic way of covering several risks. General liability insurance can provide reimbursement of compensation to the affected parties. Property management will have to review existing policy and include coverage that they feel are required.

If there sufficient liability coverage and any incident occurs, property management will have to consult the insurance provider first before paying any compensation or reimbursement to the affected party. Most policies cover the events happening during a specific period, and not when the claim is made.    

Advantages of Installing Property Management Software

Managing a property is a complex task, and it is not easy for a property manager to handle everything from marketing for reducing vacancies, scheduling maintenance and repairs, collecting late payments, and complying with various federal and state regulations. Property management software will not only make tasks much easier to accomplish, but it will also improve overall efficiency and quality of the service.

There are different property management systems available today, and fortunately many integrate almost all the important things and processes needed in property management. Consider the software to be a super efficient assistant that does not take days off and does not ask for OT pay, who specializes in all the required fields and tasks. Secondly, much software available today is cloud-based, which means they do not require any installation, and the manager can access information and processes from any computer after logging in.

Property management software provides the ideal solution for managing various tasks and processes from one point. The software is obviously not capable of automating everything, but is a big help in managing difficult aspects of property management. Here are some of the main areas, where software could be a big boon.

Maintaining Accounts

If you are still struggling with Excel spreadsheets, it is time to consider a better option. The main advantage of having an integrated system is that you do not have to update every head of account manually. Once you have entered the figures under the specific heads, everything is automatically updated, receipts are generated, and tracking and reporting becomes extremely easy. Property manager can access critical financial data, generate reports, and keep a better hold over expenses.

Providing Convenience to Residents and Avoiding Rent Fraud

Keeping track of rent payments manually is a major hassle, and there is possibility of fraud and misappropriation of funds by staff. With property management software, it is possible to receive rent online, through various payment methods such as credit cards, PayPal, debit cards, e-checks, and so on. Residents not only having the convenience of making payments any time of the day or night, but they can also receive receipts as soon as their transaction is cleared online.

Managing Repairs and Maintenance Requests

With the right type of property management software, it is possible to create an online portal where tenants can submit their maintenance and repair requests. Property manager will not only get immediate notification of these requests, but he can also assign the tasks to staff or contractors. Furthermore, the software will also help in keeping track of various ongoing maintenance tasks, receive status updates, and make payments when the job is done.

Marketing and Tenant Screening

Property management software has features for automating rental listings and advertising on certain websites. Further, the software is also able to handle new applications, perform background checks on possible prospects, and generate lease documents. Lastly, the software can also be used for building and maintaining cordial relationships with tenants.

Property management software will require certain investment, but it pays back much more in a short amount of time. Tenants are happy with better services, and property management can have much more acute and comprehensive control over the different processes and tasks.     

How to Fill Vacancies Fast with Stellar Tenants

Property management has to be ready with their marketing strategy all through the year, as units can become vacant any time. Even though there are certain months when fewer people tend to move, it is always marvelous to have in hand different techniques to attract new people quickly.

No sure-fire technique that can always work, and hence methods have to be updated according to market situation and general outlook. The best approach is to minimize vacancies by having courteous staff and prompt services; however, even with long-term tenants, there are chances of vacancies.

Many property managers cast a wide net by using variety of techniques and media, with the hope that one will be successful. However, this can work out quite costly, and there is no guarantee of finding tenants when vacancies arise. Here are some techniques that do not cost much and work most of the time.

The Waiting List Program

Create a program, where prospects are prompted to leave their contact information, so that they can be notified of future vacancies. A small gift or some rebate would be a sparkling incentive for people to leave their name and contact info. Once you have a few names on your waiting list, it would be a prudent idea to prescreen these people, so that you are sure of contacting the best prospects when vacancies arise. Select applicants with positive reputations and appealing credit scores, and you will be assured of fine tenants for the most part.

The Referrals Program

If you have managed to build outstanding relationships with the current residents, then make a list of the most reliable tenants. Ask these tenants, if they would like to recommend the community to someone, they know. People, usually like to have their friends, acquaintances, relations, co-workers, and colleagues as their neighbors. Secondly, tenants will feel appreciated when you have given them the chance to bring in referrals. When such a referral becomes a tenant, then it would make sense to reward the tenant who provided you with the referral.

Spruce Up the Property

Prospects who are looking around for rentals should immediately want to rent a unit on the property when they physically inspect it. This is the best way to attract prospects and build the reputation of the property. Here are some important points for improving units that prospects will find hard to resist:

  1. Make sure the units smell pleasant, since that is the first impression prospects usually register when they enter a unit. Use a mild freshener with a homely fragrance. Strong scents will not only seem artificial but they might also seem offensive.
  2. Make sure the unit is sanitized and sparkling clean, especially the kitchen and bathrooms. Discolored grouting and caulking, leaking faucets, and peeling paint creates a sorry impression of the unit, so do your best to keep the property sparkling. After the previous tenant has vacated, conduct a thorough inspection of the kitchen, look for damage, stains, and burn marks, and rectify any issues that are apparent. You should have an electrician, plumber, painter, and so on whom you work with  

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