A Statement On Ukraine from Kevin Maggiacomo, SVN President and CEO

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Five Traits of an Exemplary Property Manager

What Makes an Exemplary Property Manager

According to Rory Williams, Managing Partner at SVN/Demetree Real Estate Services

Owning a property designed to be leased or rented is a significant investment of time and money. These properties—including retail centers, office or industrial complexes, self-storage facilities and homes—also carry a number of inherent challenges. What if I can’t get a tenant? What if my tenant is behind in payments? How do I keep up with the maintenance demands of the property?

Enter, the property manager.

Just remember, you invested a great deal into your property. How can you ensure that you have the best property manager for the job? 

You can—and should—get references, check the person’s vacancy rate or ask the manager a battery of questions about tenant acquisition, maintenance, fee structure, etc. There are also personal traits you can discern by talking to a property manager. These are important markers that will help you make the right choice.

[bctt tweet=”How can you ensure that you have the best property manager for the job?”]

Look for these traits when hiring a property manager.

1. The property manager is an excellent communicator.

On the most basic level, this means he or she promptly follows up quickly on phone calls. If you leave a voicemail, and the property manager doesn’t get back to you, your tenant will probably be treated similarly. Additionally, if a property manager procrastinates, it could end up costing the property. You want a flowing pipeline of communication between all parties, so there are no misunderstandings – the root of so many conflicts with tenants. Being a strong communicator also means being transparent, upfront about everything that is going on in the working relationship.

2. The property manager is highly knowledgeable.

The industry is complex. There is much a property manager must know about the current market, screening tenants, legal considerations, preparing leases. Be sure the person you’re working with speaks with authority and conveys the clear impression of being an expert. A property manager should be able to answer questions easily about security deposits, tenant retention, rent—all facets of the business.

3. The property manager keeps the tenant relationship professional at all times.

The tenant/property agreement is a binding contract that needs to be maintained at a professional level. An exemplary property manager is trained to work with tenants on a professional, dispassionate level – as a business should operate. For this reason, the property manager is able to act as a wall of separation between property owner and tenant, relaying information and taking action as your official agent.

4. The property manager is good with numbers.

Must he or she be an accountant? Not necessarily. But again, you have a large investment hanging in the balance, so the more you reduce the margin of error, the better. A property manager should be math-savvy, able to quickly and accurately calculate your costs, extra fees, cash flows or whatever other numbers are involved in the transaction. Having additional accountant staff is an important hedge against any slips when punching out equations that affect your property. It’s also a big help at tax time. So be sure your property manager has this vital backup.

5. The property manager has appropriate resources.

A property manager should have the resources necessary to make your job easy and seamless. Accounting was already mentioned but you should also take a look at the accessibility to that accounting system and the reporting structure. If a property manager has a team of supporting individuals and the technology required for you to easily access that information, you are likely to maintain a more transparent relationship with him or her. Ask and be knowledgeable about the software capabilities to be sure you’re getting the most efficient and effective product.

To read more about property management, read our Sperry Van Ness Property Management Value Proposition here.

SVN PM Value Prop

Choosing the Right Vendor for Your Property

Property Management Challenges

In our many years as a property manager we have faced numerous challenges with our vendors. Here are a few examples:

  • A sewage pump failed over the weekend and we called a vendor who wanted $5,000 to replace the sump pump. The pump cost was $1,000. We needed it replaced but ended up negotiating with the vendor to reduce the price. This company paid the technicians half of everything they brought in as a commission. You can imagine how they priced their emergency response.
  • A roofer installed a new roof. They issued a warranty on the roof. Within a year, the new roof started leaking and unfortunately the roofer went out of business, so the warranty was worthless.
  • A painter bid a project and asked for half upfront to cover painting expenses. After we paid half upfront, he ignored the project, took the money and went on vacation. We ended up litigating.
  • A drain cleaning company cleared a drain line. Unfortunately, the cutting tool on their drain cleaner destroyed the pipe. Was the pipe old? Or did they destroy the pipe?

As you can tell, there is room for error…and errors cost you money. Your goal is to limit the errors and in turn improve property operating returns.

Vendor Pricing

Most of us are driven by vendor pricing. We want the least expensive price we can find — that is just natural. Unfortunately, the lowest price often produces substandard work due to lack of licensing or insurance, miscommunication or plain old inexperience.

Scope/Specifications (Spec)

First, you need to provide your vendor with clear instructions. Do you really know what you want? In particular, do you have a special siding you want to use, a special roofing system you want installed, or a paint job completed where the paint has a mold inhibitor included?

Your property might need a paint job, but you may not know how to get a vendor to do this correctly. To get help on this you can meet a few vendors and get educated or you can go to a paint store (where they have paint specifications or specs on file to get direction). You can also hire a consultant (an engineer or an architect) to help you with details. In other words, you need to learn how to manage major repairs and get them done right.

It makes sense to meet with at least three vendors and obtain three bids. Make sure they detail what they are going to do. I usually also ask for a hand sketch of the property or the job to help visualize where repairs are going to take place, especially for siding and asphalt repairs. This process is somewhat time-consuming, but the investment in time is worthwhile if we want the best quality we can afford.

This painting scope is an example of a “Spec”:

General:

  • Your contact details
  • Preferred timeframe

Surfaces to be painted: Specify the material of each interior and exterior surface (brick, wood, plaster, metal, cement, render, etc.) and whether they are new or previously painted. The material and condition of the surface will impact the level of preparation required, the sealing process required, and number of finishing coats needed.

Interior:

  • Walls
  • Ceilings
  • Doors
  • Windows
  • Trims
  • Floors

Exterior:

  • Siding
  • Roof
  • Gutters / drain pipes
  • Fence / gates
  • Doors
  • Windows
  • Garage
  • Garden paths

Preparation Required. This is the most time-consuming part of the painting process and most critical for long-lasting results. Preparation items to include:

  • Re-putting of window glazing
  • Mold removal
  • Washing / cleaning of surfaces
  • Dust, grease or scale removal
  • Rust removal
  • Loose or flaking paint removal
  • Patching holes, cracks, broken plaster
  • Sanding
  • Removal of fittings
  • Priming and sealing
  • Caulking of windows and doors
  • Soffit and siding repairs

Painting Materials and Colors: Some colors will require more coats than others. The more specific you can be about colors and materials, the more likely they will be able to achieve the desired outcome. Include in the brief:

  • Color schedule
  • Brand of paints
  • Gloss level
  • Depth of paint application
  • One or two coats?
  • Paint samples

Method of Application: The best method of application will depend on the type of finish being applied, the desired results, the type of surface and your budget. The three methods are:

  • Brush
  • Roller
  • Spray painting

Clean Up: Ensure that the quotes include information on clean-up procedures including:

  • Rubbish removal
  • Paint disposal
  • Splatter removal
  • Landscape / outdoor furniture protection

Vendor Relationships

Over the years of owning and managing property you will have developed special relationships with vendors you trust, i.e. those that come back and repeatedly do a good job. Most of the time you will have received a referral from a friend, or through a rental owners organization, like the Rental Housing Association (RHA) or the Metro Multifamily Housing Association (MMHA).

You might search online or turn to online directories such as Angie’s List. I caution you to be careful when using the internet exclusively. Vendors who are very tech savvy will have stacked the deck and may be paying to maintain their web reputation.

Smaller, more cost-effective vendors will be harder to find on the internet. You may have to rely on word of mouth. Always ask the question if the referral source is getting paid for referring the vendor.

Other key items to consider as you chose vendors to work on your property:

Professionalism

  • Do they care that the job is done in a professional manner?
  • Will they do it right the first time, using products and parts that will last?
  • Will they limit their work to repairs authorized by the Landlord?
  • Does their staff have the right skill set? Are they well-trained?
  • Will they issue a warranty or guarantee for more than 30-days?
  • Do they have general liability and worker’s compensation insurance?
  • Do they have a contractor’s license and are they bonded?
  • If they hire sub-contractors to perform the job, who is responsible for liens and quality control?

Emergency Vendors (such as plumbers, electricians, basic carpentry/handy person)

  • Are they available 24 hours a day, 365 days a year?
  • How much extra do they charge for emergency response?

Recalls

  • Is your vendor willing to admit their mistakes?
  • Will they give you a credit?
  • If required, will they redo the job?

Cleanliness

  • Will the job site be cleaned before they leave?
  • Will they protect tenants’ possessions?

The Fine Print

Make sure you understand the language on the back of the bid.

  • The vendor’s rules they ask you to comply with
  • When the late fees kick in and at what rate they accrue
  • Collection procedures if you do not pay
  • Mediation to solve disputes
  • Lien releases for large jobs

Summary

We use most vendors over and over again. They are part of our team and we need them to deliver a quality job on a consistent basis. Therefore, it is our responsibility to be clear in our instructions and expectations. We also need to acknowledge excellence and pay them on time. Vendors have bills, employees, health insurance and taxes to pay. If we expect them to deliver for us, we should behave responsibly as well.

The vast majority of vendors are trustworthy. What differentiates vendors is their experience, their tools and equipment, their overhead, the quality of their staff and their problem solving techniques. Your job as a property owner is to clearly spell out the job scope and pick the best vendor for the job. Unfortunately, this is not easy, but the tips in this article will simplify the process for you and improve your maintenance results.

To read about the benefits of franchising for property managers, click here.

SVN PM Value Prop

Finding the Right Property Manager for Your Rental Property

How does the “right” property manager enhance the value of your rental property?

No property manager can execute perfectly, but the “right” property manager knows how to keep properties functioning and making money 24 hours a day, 365 days a year.

What sets these property managers apart?

The most important thing the “right” property manager can do for you is to keep your property rented. 

  • In order to do this, they need to manage the tenant mix. The wrong tenant mix can destroy a property. Tenants with felony records, a history of evictions and poor credit do not help in building a strong, positive cash flowing property. At the same time, the manager has to comply with all federal credit and fair housing practices including the requirements for accepting medical assistance (companion) animals.
  • It helps if the property is located in a great location, but even if a property is located in a “C” location surrounded by crime, the right tenant selection can save it. Of course, a property that is surrounded by barbed wire to keep the “bad element out” can be a bit intimidating. Property managers are not miracle makers, but they are tasked with helping owners and tenants to make a property as safe as possible. Renting to drug dealers, sex offenders or tenants without a visible way of making an income does not assist in making a property safe. A tenant’s number one requirement is to feel comfortable in their rental home/apartment and the property manager’s job is to do their best to achieve that.

Property managers need to make it easy for a potential tenant to rent a property.

  • Clear and easy web access is critical
  • Online applications make it easy to apply
  • Ease of access to a rental unit and meeting with an on-site manager who wants them as a tenant and welcomes them to the property
  • Signage at the property that makes it easy to find the on-site manager
  • On-site flyer boxes with current rental information

Does the property look good?

 Tenants and owners both judge a book by its cover. The potential tenant will drive on by if:

  • The property does not look clean and picked up
  • The property looks worn out and needs touch-up paint
  • The asphalt looks old and the parking lot is not seal coated
  • The landscaping is tired, overgrown or packed with litter
  • The decks are cluttered
  • The rental units are not cleaned, do not smell great and are not rent-ready
  • The manager is not available

Behind the Scenes

Like a movie director, a property manager has to direct many pieces of the puzzle to get a property to operate properly.

  • Property owners want to see monthly checks
  • They want clear reporting/accounting systems that help them track the progress of their properties
    • Rent roll
    • Balance sheet
    • Profit and loss reporting
    • Aged receivable reporting
    • Clear monthly property summaries
  • They want their property manager and vendors to be honest

This week a client told me a story of a competitor who spent $30,000 on repairs to properties. They even supplied the bills. But when the owner inspected the property unit by unit, the repairs were not completed. Appliances were billed for but not installed, nor were the floor repairs.

Property managers should:

  • Have excellent, reliable vendors who are licensed and bonded
  • Make sure invoices are clearly marked by unit
  • Spot check property inspections to prove that the work has been completed as invoiced
  • Have vendor policies in place that protect clients, properties, and the property manager
  • Make sure vendors get paid on time. Vendors that are not paid on time don’t have the financial resources to do the job right the next time

Excellent property managers:

  • Train their staff continuously in the following areas:
    • Customer service
    • Landlord-Tenant laws
    • Federal laws
    • Maintenance terminology
    • Emergency response
    • Use of property management software and technology

The “right” property manager focuses on:

  • Preventative maintenance
  • Staff availability 24 hours a day – 365 days a year
  • Planning ahead:
    • Using an annual management plan
    • Developing an annual budget and managing to that budget
    • Using experience to help set a property into the marketplace so it can compete for new tenants, increase value through careful expenditures, well-planned property upgrades and rental increases

All of these items build the basis for a consistent and thoughtful property management process, but one person cannot do them all by themselves. It takes the right property management company, with the right infrastructure, vision and team of professionals.

Successfully coordinating these items with the client’s priorities in mind makes for an exemplary property manager and property management company. Property owners in search of a property manager can use this summary as a checklist to establish a short list of companies that meet their needs. Good research should lead to good results.

Does that mean you will be hiring the least expensive property manager in the marketplace? Probably not. 

To maintain all of the above policies and procedures takes time, staff, experience and money. A low-cost provider will have a hard time delivering these items on a consistent basis. Rest assured, the marketplace can deliver competitively priced property managers who do an excellent job. It is these property managers who will be consistently focused on increasing the value of your property.

Sperry Van Ness® property managers are dedicated to providing excellent service. To read about the benefits of franchising for property managers, click here.

SVN PM Value Prop

Property Management Success Story: SVN / First Guardian Group

The Road to Property Management Success

Property Management can be very profitable  — just ask Sperry Van Ness / First Guardian Group. The San Jose, California firm recently announced the successful close of escrow on University Fountains, a student housing complex that sold for $34 million. Receiving several offers, the property saw substantial demand and competition among buyers.

SVN/FGG undertook the property management over an 18-month period before beginning to market the Class “A” property. Under SVN/FGG’s management during the current school year, the property occupancy increased by 15% — crushing other years in comparison. SVN/FGG set aggressive weekly leasing goals which compared improvements in occupancy and income against all other competitive properties in the submarket. The leasing team was given incentives based on their progress in moving the performance of the property ahead of all other comparable assets. The hard work of SVN/FGG Advisors produced returns of over 100% of the original equity.

So how did they do it? Proactive asset management and collaborative marketing efforts can get the job done.

Proactive Asset Management

  • Established aggressive weekly leasing goals to continually improve occupancy
  • Strong incentives for moving property performance ahead of all comparable properties in the submarket
  • Annual competitive re-bidding of all significant ongoing services (landscaping, garbage, pool maintenance, etc.)
  • Monthly owner conference calls
  • Detailed monthly variance reports including cost ratio comparisons to similar properties

Collaborative Marketing Efforts

  • All Brokers received marketing materials from day one, which included SVN’s statement “50% of the commission 100% of the time
  • All Brokers requesting access to the property data vault were personally contacted and encouraged to provide a bid
  • All Brokers were treated with the same respect and courtesy regardless of affiliation
  • All questions and inquiries were answered 90% same-day
  • SVN/FGG participated in all property tours with Brokers

Following these guidelines which emphasize competitive and collaborative practices can lead to property management success. So take a cue from SVN/FGG and collaborate with your team members to achieve a profitable property management turnaround.

To read more on property management, click here.

SVN PM Value Prop

Launch of Sperry Van Ness Property Management Services

A comprehensive product management (PM) franchise product–Sperry Van Ness Property Management Services— is now  is available as part of the Sperry Van Ness® organization.  This new offering makes available sales and leasing, building maintenance, tenant retention and other property management services to real estate investors.  Additionally,  Sperry Van Ness Property Management Services includes a master insurance program with lower deductibles and more insurance coverage.  Read more about what Kevin Maggiacomo, CEO and President of Sperry Van Ness International Corporation has to say about this new offering in the GlobeSt.com article Sperry Van Ness Launches Management Franchise.

To find out more, please visit our Property Management Services franchise offering page at https://svn.com/cre-franchising-opportunities/

*All Sperry Van Ness® offices are independently owned and operated.