DIY Landlords — Why should you hire a Property Manager?

Many investment property owners cringe at the thought of hiring a property manager.  First there is the cost — the management fees paid to a property manager take away from the bottom line.  Second, no one manages your property better than you. Giving your property over to management is losing control over its operation.  On the surface, neither of these scenarios is attractive.  But let’s looks a little closer.

Management fees.  No one likes to pay someone else to do what they can do themselves.  But property managers can often add value,not take it away.

  1. Rent.  In many cases, owners are reluctant to lift rents and thus rent their property below market.  A property manager can often optimize rents in such a way as to pay for his/her management fee.
  2. Turnover.  Often an owner lacks the tenant screening skills necessary for good screening.  Consequently at turnover the owner is stuck with thousands of dollars in repair/utility costs.  A good property manager can avoid bad tenants and reduce turnover by thousands of dollars.  Amortized over the term of tenancy, this alone will pay for the manager’s fees.
  3. Taxes.  The fees paid to a property manager are tax deductible.  So his/her ‘effective’ percentage fee should be reduced by your tax rate.

No one manages it better than you.  If you’ve been a landlord for more than 15 years this is probably true.  But if you are still in “the learning phase” (and those lessons can be expensive!), here’s where a property manager can manage it better.

  1. Rent.  Many DIY landlords buy into tenant stories of hardship and let rent slip, often by many, many months.  A property manager has a fiduciary responsibility to collect the rent or evict.  A property manager won’t allow a tenant to get behind on rent by 3-4-5 months.
  2. Legal.  Owners often stub their toe in this expensive arena and cost themselves a bunch of time and money needlessly.  A property manager knows the law and how to navigate through troubled waters.
  3. Personal.  Sometimes things get personal between a landlord and a tenant.  This causes stress and clouds effective solution-making.  A property manager is accustomed to getting past the emotion and focusing on the issues.

There are a number of other reasons why a property manager makes sense, but these are the biggest.  The common myth that a property manager costs money should be easily debunked.  Sometimes, but a lot less than most people think.  A good property manager will actually save money!

Do NOT put laminate in a kitchen or bath

laminate-wood-flooring-in-kitchenLaminate flooring and stainless steel appliances are the fashion for homes and apartments (at least in the Pacific Northwest).  And for good reason.  They look sharp (particularly under halogen track lighting!), are easy to keep clean, and easy to maintain.

BUT, there is a down side to putting laminate flooring in a kitchen or bath.  Laminate flooring has a foam backing typically that makes the floor softer to walk on and easier on the knees and legs.  Cool feature, right?  Except when you have a water leak!  Laminate flooring — particularly at the lower end of the cost/quality scale — is porous and liquids can penetrate between the boards.  When that happens the liquid can be absorbed into the foam backing and trapped.

If you live in a mold-rich environment like the Pacific Northwest you are asking for a HUGE mold problem.  We recently had a situation where a refrigerator leaked water onto a laminate floor in a downstairs, daylight basement unit.  First off, there isn’t a ton of ventilation in the unit owing to the fact that one entire wall is underground.  It didn’t help that the tenants were using a humidifier for their children’s illnesses or that they were steam cleaning the floor.  But we believe an unreported leak in the refrigerator was the main culprit.

The leak seeped into the hardwood and a fresh, large crop of mold ensued!  The tenants were forced to move out and the owner had to pull up the flooring, clean the mold off, and re-install.  Not a fun (or cheap) affair.  Had the kitchen had vinyl or tile flooring there would not have been this issue.

This is just a word to the wise: if you are considering installing laminate, go forit.  Just don’t use it in the kitchen, bath, laundry room, or anywhere else that has a plumbing fixture.

An open letter to Tenants: A house is not an apartment!!

This post may come across as a bit harsh or unsympathetic.  I hope not; it isn’t intended that way.

I get frustrated by tenants who believe their home is an apartment.  They feel like they do not have to do any of the landscaping and that maintenance is a concierge service 24/7, just like they have at those large apartment communities….or Holiday Inn!!!  Therefore, I have penned the open letter below.

If you are a tenant — and especially a tenant of ours — already doing these things then I want to tell you how very much you are appreciated!  You are in the minority, and maybe for that reason your efforts are noticed and are appreciated!  Immensely.  You “get it”.  Thank you very much.

If you are a tenant who wants to be responsible but is new to living in a house, then please rb02efe50251427c680c853629abfb734ead the letter below from an informational perspective and try to glean from it what you can and help out.  And if you are one of those tenants who want all the privacy and room that a house provides, but are just too darn lazy to lift a finger then no worries!  Just read the letter, get your checkbook out, and pay somebody else to do the work.

Dear Mr./Mrs. Tenant,

A house is a wonderful place, isn’t it?  You have so much privacy compared to an apartment — no more listening to the neighbors fighting!  And the room!  My God!  No more storing all of your worldly possessions in one balcony closet.  Finally there is space to get some real furniture and spread those wings, so to speak.  A house provides so many wonderful ‘quality of life’ benefits over apartment living.

But with those benefits come some responsibilities.  Allow me to highlight a few:

Landscaping: Landscaping means don’t just mow the lawn twice in the Spring and once in the Fall.  It means edging the grass, trimming the shrubs, and cleaning out the flower beds of not only water bottles and Frisbees, but flowers and leaves as well.  To live in a house, you are looking at investing in some garden tools.  The less you like gardening the more I would invest in the tools.  For instance, a leaf blower/vacuum and a week whacker should be considered ‘de rigueur’ for home leasing.  Don’t worry about the tree trimming — we can take care of that.

Light bulbs: Yes, light bulbs go out and yes, you are responsible for them.  If they are 20′ in the air (like over a stairwell) call us and we can probably take care of themfor you.  But the bath vanity lights, bedroom lights, and all the other lights are your responsibility.  So please change them out when they die.  In fact, we keep a box of spare light bulbs in our hall closet!

Trash: This is a big one!  I know you have weekly trash pick-up service.  Thank you for that.  But the broken couch, basketball hoop, box spring & mattress, and 2,000 empty DVD cases lying around can be thrown away by you!  That’s right.  I realize they all won’t fit in your VW Jetta.  But U-Haul rents trucks solely for that purpose and the cost is very reasonable.  Or maybe you have a friend with a truck and one 6 or 12-pack will buy him off.  (Plus, he can help you!)

Carpet cleaning: Did you know they rent carpet shampooers right there at the grocery store?  You can pick one up on this week’s grocery run, shampoo the carpets,and return it on next week’s grocery run!  No fuss,no muss.  They work pretty much like a vacuum cleaner.  And just think of all the dead skin, dirt, and bacteria you’ll be picking up along the way.  If you miss just one day of work due to illness then your lost wages will be ten times the cost of renting a shampooer.  So why not buy that insurance policy and do the carpets — once in the Spring and once in the Fall.

24/7 concierge service:  Due to budget cuts we are having to discontinue our 24/7 concierge maintenance service.  That means that if you get a water leak in the middle of the night then you are going to have to find the water shutoff valve yourself (just like we have to do at our house).  Feel free to call us when our office opens in the morning.  And that plumbing clog from long hair?  That was your hair that clogged the drain, so I am afraid you are going to have to pay that bill.  Sorry.  You see, you are just going to have to accept the fact that in a house there are more things that can break than in an apartment, and some of those things are your responsibility.  Not all, mind you — but some.

That isn’t the complete list, but it’s a good start!  Thanks for reading this far.  If you  have any questions, or need help with any of these things, feel free to give us a call (during normal business hours).  Like I said, we LOVE our tenants who take responsibility for the property they reside in.

Sincerely,

Your Landlord

How to prevent carjacking

We got a call Tuesday night from one of our really nice tenants.   She is an older, single woman living in a townhouse near downtown Seattle on First Hill.  She was calling because she had just been carjacked!!!carjacking

She was sitting at a stop sign when a group of thugs smashed in her passenger window, grabbed her purse, and took off.  I did not ask her for details (she was stressed out as it was), but she told me that within 40 minutes they had racked up $1,000 in charges on her credit card while in Redmond, 17 miles away!  That is some fast work. The police told her they thought the guys were professionals at what they do.

Needless to say, she was pretty upset.  Not only did they get her credit cards, but also her address and house keys.  So she had to get her locks changed late at night.  To make matters worse, it was her birthday!

It got my wife and I thinking “What would we do?”

First and foremost, be vigilant.  Be aware of the situation.  If you are alone in a car and night has fallen then you need to understand your risk is higher.  If it is in the inner city your risk is higher, though I am sure carjackings occur in the suburbs and beyond.

Second, if you notice a group of 3 or more “young men” be on the alert.  I didn’t get details, but this is how I see the episode going down.  A group of kids or young men cross the street.  Just as they approach the part of the crosswalk where you are parked, one stops in front of the car (so you won’t run him over) while his accomplice or accomplices smash in your window with a baseball bat.  At this point you are so mortified that it is easy pickings to grab the purse, iPad, or anything else on the front seat.

So it could be just even two people.  They will likely have a baseball bat or something to smash the window with.  The earlier you see this kind of situation developing the greater your chances of prevention.

So what actions can you take?

1) Lock your doors and windows.  This will at least take out the thugs who left their bat at home!

2) Place your purse and other valuables under the car seat, out of sight and out of reach.

3) Shift the car in reverse if you see a potentially dangerous situation developing.  Obviously if there is a car behind you then this option won’t work.  But if you are all alone on the street then you are a more likely target so get ready to hit the gas and peel out of there!

4) Have your camera phone ready.  Take pictures of suspects before they become suspects.  In the heat of the moment you won’t have time to finid your camera and take a picture of 3 kids running away from you (like that will do any good anyhow!).  So have your camera ready and snap, snap, snap.

5) Have your phone ready on 9-1-1.  This won’t help much as the thugs will likely be gone by the time someone responds.  But it is worth a shot.

6) Honk your horn.  Maybe you’ll attract attention from a good Samaritan who can help.

We don’t hear about carjackings too often, but if these guys were professionals then it is obviously happening at a rate that is worth noting.  Hopefully by sharing information and being prepared we can thwart would-be carjackers.  For more information, go to http://www.state.gov/m/ds/rls/rpt/19782.htm for tips from the US Dept. of State.  Best of luck.

Disclaimer: The thoughts and ideas in this article are those of the author and do not represent the thoughts or opinions of Full Service Property Management.  Furthermore, the author has no experience with carjackings and cannot validate nor take responsibility for the ideas expressed herein.  Readers are strongly encouraged to talk to the police and do independent research before developing a plan for preventing carjacking.