Property Management During Leasing Season

property management during leasing season

There are certain months during the year when comparatively more people are seeking to rent suitable apartments. During these months, property management will encounter more prospects visiting the property, and there might be existing tenants wanting to renew their leases. Therefore, property management should implement a two-pronged strategy of keeping the property ready for visiting prospects, and committing resources for encouraging renewal of lease from existing tenants.

During this crucial time property owners, administrative staff, and the property management team should work collectively to meet the set or ingrained goals.

Maintenance and Repairs

The first step would be to check for potential issues in maintenance and getting them serviced or repaired. This could present an excellent opportunity to interact with your tenants, build better rapport, and retain outstanding tenants. Here are certain points for implementing maintenance checks:

  1. Most maintenance issues are to do with plumbing. Hence, inspect tubs and sinks, and check for dripping or leaking faucets. Visually inspect plumbing fixtures for rotting gaskets and leaks.
  2. Inspect doors and windows to check the caulk and weather stripping. If it is worn out or causing leaks, immediately repair the issue.
  3. Fire protection devices such as smoke alarms should be tested and their batteries should be replaced.
  4. Air-conditioning system is another major area where various issues are possible. Before the onset of warm season, test the air-conditioning in each unit.
  5. Check for any signs of possible mold, fungus, or pests, and take necessary measures to prevent an infestation.
  6. Check the overall structural integrity of the building, roofing, and the condition of the common areas.

Online Solutions

While proper maintenance and repairs will mostly take care of tenant retention, offering streamlined online solutions for rental processes will attract new tenants. Many communities are taking advantages of technological advances and now offering better online solutions for rental processes. It is not just about providing the virtual capability of paying the rent online, but the complete process.

Modern tenants are looking for e-applications, and other online methods that are convenient and help save time. Approval methods involving paper processing may not be appreciated by most people, since there are quicker and more convenient ways of doing these things now. Hence, offer a complete solution to prospects, where most of the things are taken care of online. 

Take Care of Your Team

Whether it is on-site or off-site maintenance team, the administrative staff, or the property manager, they all should be adequately trained and prepared before the onset of leasing season. Review equipment, supplies, tools, and make sure adequate staff is available to meet any type of situation. Consider, extended work hours during the leasing season, since you never know when you will need personnel for additional work. This would be an extra investment, but a well thought of strategy for having more staff on the premises during these times could pay off well.

Lastly, property management should keep in mind that first impressions count a lot, and therefore before the start of the leasing season it would be a marvelous time to upgrade or update the property website and social media pages. 

Improved Occupancy Rate in the Property Market

improved occupancy rate in property market

Many property managers and owners feel that new constructions and increased supply of rental units is going to create improved supply and bring the rent down. There are also concerns about increased vacancy rates, as people might want to move to newer units. However, there is no need for panic, as statistics prove otherwise. Even though close to 200,000 new units have come into the rental market, the occupancy in existing units have not decreased, and the rental rate has continued to grow and seen the best levels.

In fact, the occupancy rate has been 95% for the second quarter of this year, and growth rate for rent is 2.4%, which are very promising signs. Hence, this time, even with new supply of units the property market is flourishing. Here are some of the reasons why it is different this time.

Diminishing Popularity of Single Homes

Even though rate of construction of new apartments for last couple of years has remained almost the same, the demand for apartments has increased. This is mainly because many families now are not eager to move to single homes, and prefer apartment units. Secondly, the rate of homeownership has also fallen considerably since 1995. This indicates there is lesser supply of residences, since homeownership is providing costly for many people. Even though rent may be high, people prefer to stay in apartments for a longer time, because the cost of owning a home works out to being even more of a financial burden.  

In addition, it is easier to move out of an apartment than a home. On top of this, the recession still continues.

Ownership is Scary

People have not forgotten the foreclosure crisis, where homes and equity were lost within minutes. Many people are now much more cautious and do not much care about homeownership. Secondly, families now prefer living in apartments compared to suburban homes, since they do not want long commutes and prefer to be near workplaces and play areas available at the core of urban areas. Additionally, most of the people seeking accommodation are young professionals, who are repaying their student loans. This means, they do not have the credit rating required for down payments on new homes.

Median salary ranges of America have continued to decline. The American economy is nothing to smile about and this is reflected in all those renters across the landscape.

Supply has Still not Caught Up with the Demand

During the recovery period after the recession, financing home construction was difficult, which means deliveries were late and inventory rate increased. Secondly, even though there is growth in new construction now, it has not caught up with the increased demolitions of obsolete structures. Additionally, many structures were converted to senior housing and condominiums, which increased the divide. Therefore, the market has not really caught up with the increasing demand, as can be clearly seen from the higher occupancy rates of some of the metropolitan areas.

New Apartment Units are Class a Category

Most of the new apartment units are in the top pricing bracket, since they come under Class A urban core category. This means only a few renters will be able to afford an upgrade to these expensive apartments, and only the new upwardly mobile crowd can think of renting these new apartments. Therefore, there is still a heavy demand for existing Class B and B+ units, which are generally more affordable by a vast section of society.

Property Management―Frills vs. Size

property management frills vs. size

Requirements of various types of tenants keep changing, and it is important for property management to keep on top of the current trends. An emerging category of young professionals is taking prominent position in the property market. There are many professionals looking for proper accommodation, especially near commercial areas and in metro cities. The interesting fact is that most of these professionals are willing to trade size of the apartment for frills and better amenities.

The Trend

According to statistics, the average size of the typical apartment in major cities has been steadily reducing for the past five years, and most professionals are more concerned about amenities and other facilities provided in the units, compared to living space. In many modern apartment complexes, there is the trend of allocating quite a bit of area to micro units, which shows that living space is becoming smaller.

Even though living space area has been reduced, rents have steadily increased, especially in properties that provide better amenities. Young professionals and even families are willing to pay higher rents, provided there is parking space, Wi-Fi connectivity, fiber optic broadband, and better satellite television or cable connection. 

This is because the poor banking situation has forced many people to rent. It is more difficult to obtain a loan nowadays and certainly a few years after the Alan Greenspan financial crisis.  

Small units, particularly in urban areas are very much in demand, as many professionals are relocating to cities with better prospects. It is not only the amenities provided in the units making a difference, but also the jobs, facilities, entertainment, and shops available in the immediate vicinity. Secondly, stringent standards implemented for mortgage (briefly mentioned above) and rising prices of new homes has reduced the number of homebuyers and increased the number of renters. This has put added pressure on cities, since the demand for accommodation keeps increasing. 

The Proper Focus

All these statistics and trends provide important clues for property owners and property managers. The focus should be on increasing amenities and developing better facilities that young professionals are looking for in apartments. Investing in better storage space within the units, and providing better Internet connectivity would be a good idea. Property management can also think of renting the ground floor areas to shops and small businesses that will make it convenient for tenants to shop and access important facilities and services.

If the property is relatively old and the living space of most units is quite large compared to modern standards, then strategies should be in place to facilitate sharing of the apartment unit by multiple renters. This would involve careful drafting of the lease agreement, where the responsibility of the rent is shared equally by all members renting the single unit. Many young professionals are not averse to sharing their living space, provided there are separate bedrooms.

A Long Commute is not Appealing

Property managers facing increasing vacancy rates can think of revamping their marketing strategy to attract young professionals. Investing resources for this category of tenants promises solid returns, provided the property has a sparkling location, and is near offices and commercial establishments. Most modern professionals are now looking for accommodations near their place of work, and do not want a long commute. Property management can carefully consider all these factors and implement strategies to tap into this emerging category of tenants.

Avoiding Major Mistakes in Property Management

avoiding mistakes in property management

Property management is a challenging job and can be hectic at times. There is ongoing administrative work to be managed emails and phone calls have to be answered, and various marketing strategies have to be implemented to make sure the vacancy rate stays to its minimum. In such a frenetic schedule, chances of committing certain sizeable mistakes are high and they can prove costly. Here are some of the major mistakes that are quite common in this industry, and they must be avoided.

Avoiding Routine Maintenance

When property management is trying to keep costs to the minimum, it becomes quite tempting to ignore minor maintenance issues, such as leaking faucet or servicing of a water heater and so on. However, this is a major mistake, since a small maintenance issue can quickly turn into a major repair where you will have to spend more money on something because of your dereliction. For instance, a leaking faucet that is not attended to, can soon give way, and cause flooding in the unit, which is so much more expensive to set right. Hence, it is better to be proactive and address maintenance issues right away, even if they seem minor.

 

Unwilling to Increase the Rent

Inflation is the bitter reality, and rising costs affects everybody. However, property management cannot ignore raising the rent, just because of fear of increase in the vacancy rate. It is imperative to maintain a decent return on investment, and raising the rent is inevitable at some stage. However, the new rate should be comparable to the rent charged by other similar properties in the area. Secondly, when you plan to increase the rent, provide sufficient notice to tenants.

Not Implementing Terms and Conditions of the Lease

It is quite difficult for property management to maintain excellent relationships with tenants and at the same time enforce all the terms of the lease agreement. Most property managers tend to take the easier route of being the "nice guy", and overlook things that are in violation of the lease. Such an attitude can land property management in major trouble and legal issues that can work out quite expensive.

For instance, not charging penalty fees for late rent or allowing pets when it is violating the lease agreement. The best approach is to maintain cordial and friendly relationship with tenants, but being firm when the situations demands it, and keeping to the terms of the lease at all times.

Ignoring Important Property Expenses

Property management usually has to walk a tight rope by managing expenses, and keeping costs to a certain percentage of the rent charged. This often leads to cutting corners when the budget becomes tight or certain expenses have gone beyond the expected amount. However, certain expenses such as insurance and taxes are paramount, and a property manager cannot afford to ignore them. If the taxes are not paid in time, it will result in not only penalties, but also various legal issues.

The same goes for homeowner's insurance as well. It will be frustrating to know (and possibly a game changer) that insurance was not in force or in effect after the fire department just finished putting a fire out in the complex.    

Increasing Returns with Effective Property Management in the Present Economy

increasing returns in present economy with property management

Property management is a challenging task, especially when cost of living and inflation is on the rise. For a property manager it becomes difficult to liaison between the property owner who wants better returns and the tenants who are looking for lower rents. It is tight balancing act, where rental rates are to be kept conducive for keeping the vacancy rate down and yet manage a good return for the property owner.

Suitable Information Accumulation

The only way for managing a property optimally is to increase revenues and decrease costs. There is salient scope for keeping check on costs with clever maintenance and repair management, but usually property managers find limited scope for increasing revenues due to prevailing economic conditions. However, there are ways for doing this as well, by collecting proper data and evaluating the exact impact the economy is having on rentals.

The usual route for increasing revenue is to finding new prospects; improve marketing of the property, and decreasing the vacancy rate. While occupancy rate plays a major role in improving revenue, it is necessary to understand what an optimal percentage should be for occupancy. Having full occupancy is indeed ideal, but 95% occupancy rate would be more realistic target to aspire. Experts believe that if vacancy rate is more than 5%, then there is something wrong with the marketing or promoting of the property. However, experts also believe that if the occupancy rate is over 95% then the rental rates for the property could be too low for that specific area.

Most successful property managers follow the guideline of having the rental high enough so that the property is comparable in the top 10% available units in the area. This would be an appropriate guideline to follow for several reasons. One obvious reason is that if the property is not classified in the best 10% of the available rental units in the area, then there is something seriously wrong with the condition of the property, and only better maintenance procedures can fix such an issue.

However, most property managers make the mistake of lowering costs by forgoing required maintenance and not implementing inexpensive improvements. Such tactics might decrease costs for some time, but it proves much expensive in the end, as it will take much longer to fill vacancies.

Filling Spaces

When the property is kept in top-notch condition, it makes it conducive to retain existing tenants and to attract new ones, as well. Secondly, however, and more importantly, it becomes much easier to raise the rent when the lease expires, and tenants will be much less likely to seek other accommodation if the rise in rent is reasonable. Property management need not always look at raising the rent with trepidation, as it improves the property value, and property owners will appreciate such a strategy.

Lower Class of Tenants

However, the percentage rise in rent has to be calculated carefully, taking into account rentals of other top properties in the area and the prevailing market conditions. Too much, and the occupancy rate might dip below 95%. On the other hand if the rent is not increased, the occupancy might be noteworthy, but the value and reputation of the property might take a hit, which is not desirable. 

Satisfying a Wider Range of Tenants in Property Management

Satisfying tenants

One of the best strategies in improving occupancy rate and retaining tenants is catering to specific needs of certain group of tenants. Since Millennials and Baby Boomers are the two major groups that make up most tenant pools, it makes more sense to focus on satisfying the requirements of these categories. However, keeping both these groups happy at the same time is a challenging task for property management, since their requirements are usually seen as diverse.

While marketing a property it therefore becomes important to cast a wider net and not compartmentalize the brand image. Rather than finding dissimilarities between the two groups, it is better to focus on similarities and build a brand image that does not stereotype the property that caters to only one of the groups. However, it is quite a challenging task to satisfy both categories equally. It may not be practical to provide different options to the two groups individually, but property management can present options for customization that can satisfy certain important individual requirements.

Split Differences

For instance, if one takes amenity requirements of the two groups, they are mostly the same, but there are differences in how they will be used. Both groups will be happy having multipurpose spaces and clubrooms for social activity. However, the Millennials will be more interested in attending social events, while the Boomers will mostly be hosting them.

Another challenge for property management in satisfying the two groups is having the optimum mix of units. Baby Boomers look for more space, and hence units with larger bedroom and living space will be more appealing for them. Millennials on the other hand are satisfied with smaller units, but will be particular about available storage options.

However, satisfying the Baby Boomer group is itself a challenge, as many of them have diverse preferences. This is due to many reasons, since the group could include people who have taken early retirement or people who have become parents in the age group of 55 to 58 years. On the other hand, preferences of Millennias will be more or less the same, and is much easier to satisfy as a separate category.  

The Internet is Key

Technology seems to be playing a key role, as an element that can satisfy both groups to quite an extent. Millennials are looking for environments that match their lifestyles, which are now mainly driven by technology and online social networks. On the other hand, Baby Boomers too are also becoming increasingly tech savvy, which means property management has to focus on online marketing for attracting prospects and also provide better broadband and faster Internet speeds in the units.

Even though both groups will want to inspect the unit personally, the property website has a huge impact on marketing. Studies have shown that more than 40% prospects of both groups will not visit the property if they find the website to be of poor quality or unwelcoming. Therefore, it is extremely important to make a fantastic online impression and have excellent imagery and content on the website for attracting new clients from both groups. 

Evicting Tenants – Overview of Rules

Evicting tenants and rules for

Evicting tenants can become a messy business, if the right set of rules are not followed. The first step that a landlord and Gastonia property management firm has to take is to legally terminate the tenancy. Only after legally terminating the tenancy will you be able to begin the process of eviction.

How to legally terminate a tenancy?

Different states have different laws when it comes to ending a tenancy. In general, it requires giving the tenant written notice on the basis of the specifications laid out by the termination statute in your state. Filing a lawsuit to evict a tenant is the last resort that must be taken only after the tenant has ignored the tenancy termination notice. For instance, after sending the tenant the tenancy termination notice, if the tenant does not move out in time, you may file for eviction.

In case, the property management firm or landlord were trying to change a particular behavior displayed by the tenant (not paying bills on time or keeping a pet against the express wishes of the landlord), and the tenant fails to reform, an eviction lawsuit may be filed.

Primary Types of Termination Notices

There are two basic categories of termination notices – those that are sent with cause and those that are without cause.

v Termination with Cause: Termination notices that are sent by landlords owing to the tenant’s misbehavior are deemed notices with cause. Pay rent or quit, correct/cure the problem or quit, and unconditional quit (in cases where the tenants have repeatedly violated rental agreement clauses, paid rent late or severely damaged the property) are basic types of ‘Termination with Cause’ notices. Gastonia property management may also choose to serve an Unconditional Quit Termination if the tenants are found to be engaging in illegal activities like drug dealing in the rental home/premises.

v Termination without Cause: A ‘Notice to Vacate’ may be sent by the landlord or Gastonia property management even when the tenant has not done anything wrong. Such a notice would offer the tenant a 30 or 60-day period in which to vacate the home. However, these notices may only be used in the case of monthly tenancies. Even so, most tenant-friendly states and rent control cities do not allow such a notice without a reasonable cause.

Even after receiving a legitimate notice if tenants fail to leave or fix the problem, landlords and Gastonia property management can begin an eviction lawsuit, also known as unlawful detainer (UD) lawsuit.

Landlord Maintenance Responsibilities and Consequences of Failure

Landlord Maintenance and responsibilities

For Gastonia property management services or a landlord, it is considered a best practice to repair any issues in rental units at the earliest. This will help you avoid complaints from tenants. Problems that are serious like plumbing issues or a breakdown in the heating system need to be dealt with immediately, within 24 hours at the most. Landlords and Gastonia property management firms are entrusted with certain maintenance responsibilities that need to be fulfilled.

Responsibilities

State and local laws specify exactly which services need to be provided and maintained in a rental unit to ensure that it meets basic habitability standards. These basic requirements are the provision and maintenance of:

  1. Adequate waterproofing
  2. Heating
  3. Water and electric supply
  4. Sound structure
  5. Clean and sanitary premises

Other than these basic requirements, landlords may also be held responsible for ensuring that the minimum requirements for lighting, electrical wiring and ventilation that are set by housing codes are also met. Some additional requirements put forward by housing codes may include:

ü  Installation of smoke detectors

ü  Basic security measures like lock and key

ü  Health and fire safety requirements

If you are unsure about the exact codes that you need to follow, it is a wise and suitable idea to approach the health or fire department to get the right information on requirements and violations.

Consequences of Violating Maintenance Responsibilities

When a tenant faces a maintenance issue in a rental unit, it is within his/her right to ask his/her landlord or Gastonia property management services to conduct required maintenance. When such necessary repairs are left undone, tenants have been given some rights by the state.

Rent Hold Out

Tenants could refrain from paying the full rent amount until the repair work is done. Depending on the laws of the state, they may be required to place the amount in an escrow account. They may also choose to pay less rent, or get a professional to repair the problem area and deduct the payment amount from the rent. By calling the local building inspector, a tenant can force the hand because the inspector can and most likely will order the landlord to make repairs immediately.

Litigious Considerations

More severe options include moving out of the house, irrespective of the lease status and suing the landlord for refund of rent and/or emotional distress caused by the landlord’s inability to take action and the substandard living conditions.

A fantastic rule of thumb for the landlord and Gastonia property management services is that major repairs should be taken care of in 24 hours, and minor repairs in 48 hours at the most.

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