Charlotte Property Management Blog

If you’re just starting on your rental property journey, or, you’re a seasoned investor, most likely, your goal is to maximize your profits and expand your portfolio. If this is your primary focus, then managing your own investment properties wouldn’t be very practical, even if you feel you’re capable of pulling off the job. This is where a property management company comes in. They can successfully manage your real estate investments and ultimately funnel more money into your bank account!

Let’s dive in to find out more about having your rental properties professionally managed to maximize your revenue stream.

Increase Your Profits by Hiring a Property Management Company

Maintaining a rental property comes with a significant amount of time-consuming responsibilities. In addition to this, it also requires having extensive knowledge of the subject to ensure that all your bases are covered. For instance, advertising and marketing, tenant screening, and property upkeep, are just a few of the elements that, if done properly and efficiently, will boost your profits. But, before you start searching for your dream management company, read more about finding a cash flow oriented property management team.

If you’re eager to learn more, take a look at these 7 reasons why hiring a property manager for your real estate investments will increase your profits and keep more money in your pockets:

1. Avoid Financially Draining Vacancies with Proper Marketing Strategies

An experienced property management team can literally save you thousands of dollars with their proven marketing strategies. Their advertising efforts can pull in a huge pool of candidates very quickly. This can certainly fill your rental property vacancy within a timeframe that prevents you from losing money. Also, a property management company will have the necessary experience and skills for writing compelling rental ads and creating professional photos. In addition to this, they are set up to be able to negotiate advertising rates; cutting your costs even more. Lastly, they have the know-how to host the perfect open house to successfully showcase your rental.

2. Escape Financial Risks by Weeding Out Bad Tenants

Even if you have the time to sit and interview all your applicants, do you have the experience to spot the red flags for problem tenants? A lousy tenant or two can cost you more than you realize. From lawsuits to property damage, an undesirable tenant can certainly lower your profit margin. Hiring a real estate property management company will ensure that all the proper steps are taken when searching for the perfect tenant. This would include verifying employment, checking credit and criminal reports, contacting previous landlords, and much more.

Experienced and trained property managers have an eye for spotting trouble makers. Additionally, they have a good sense as to which individuals are more likely to be reliable renters who will take care of your property. In sum, a good management property team can successfully preserve your revenue stream by placing qualified tenants in your rental properties.

3. Efficient Rent Collection Ensures a Consistent Cash Flow

Let’s face it, rent is expensive these days and tough times happen. With this in mind, you can expect to have some issues with rent collection. Time is money, and if you have to spend your time chasing down rent payments, as well as taking the proper steps when a tenant just can’t make that payment, it’s going to affect your bottom line. Hiring a real estate property management team that is equipped to handle all situations pertaining to monthly rent collection, will allow you to maintain a consistent cash flow. It’s their job to ensure that your tenants follow the lease agreement down to the fine print, which includes payment guidelines and late fees.

4. Boost Your Revenue by Achieving Higher Tenant Retention Rates

Maintaining a high tenant retention rate – keeping your current tenants from moving out, can easily be accomplished by property managers who know how to keep your tenants happy. Rental management teams have the experience to maintain good relationships with your renters. This includes such things as taking care of maintenance issues in a timely manner, conflicts with other residents, as well as keeping the property looking well maintained and attractive. Additionally, providing a rental portal for easily making payments and submitting repair requests is a bonus for your renters.

Basically, when property managers take your tenant’s needs seriously and make them feel well taken care of, it will go a long way. This can keep your current tenants from moving elsewhere. In the long run, it will decrease expensive tenant turnovers, and keep more money in your pockets.

5. Save Thousands by Letting a Management Company Handle Property Repairs

By hiring a real estate property management company, you will, without a doubt, save a considerable amount of money on maintenance and property repairs. By doing so, you will be able to utilize the management company’s professional and experienced maintenance staff. Plus, property management companies have access to bonded, insured, and licensed contractors who provide discounts for consistent workloads. This will not only add up to significant savings but also increase your property value.

6. Build Great Wealth by Investing in the Best Rental Markets

When you manage your own real estate investments, you may be limiting yourself to investing in convenient locations, as opposed to the best markets for profit gain. If you simply hire a property management company to maintain your real estate investments, you can set up rental properties in just about any location you feel is profitable. They can manage your rental to make life easy for you, as well as increase your cash flow.

For instance, let’s say you live in NYC, and there is a prime rental property situated in California. It could be very difficult to manage the property yourself long distance. How would you effectively screen tenants, deal with emergencies, or, periodically check on your property from 3,000 miles away? It only makes sense to hire a professional property management team in the area to attend to the needs of your property and your tenants. It would actually cost more to maintain it yourself due to travel and lodging costs, and well as possible high tenant turnover losses if you are not able to keep up with their needs.

When seeking out new rental properties, you may want to try DealCheck. Their software will enable you to easily analyze a rental property and estimate its cash flow. This will allow you to avoid unprofitable properties, especially when you are new to the game.

7. Grow Your Portfolio by Seeking Out Other Profitable Real Estate Investments

Hiring a good property management company to handle all aspects of your property will free up the necessary time for you to seek out other profitable investments. When a property manager deals with the day-to-day tasks of your rental property, that means you won’t have to. Therefore, you are able to invest time into growing your portfolio.

In a nutshell, your job is not to service properties; you’re an investor. So, let the professional property management companies service your rental properties for you. That’s what they’re there for. If you manage your own properties, you can only grow your portfolio up to a certain point, and this will cap your revenue. Are you starting to see the big picture now?

If you want to effectively and quickly grow your portfolio, you should check out our free Freedom Cheat Sheet. It will allow you to reach financial freedom by finding your specific Freedom Number. The Freedom Number formula calculates the number of properties needed to fully cover your expenses, enabling you to strategize your way to financial independence. Additionally, if you need help managing your rental, or, if you are looking for a new property to invest in, the team over at Morris Invest can assist you. Contact us for a 30-minute consultation to jump start your real estate goals today.

If You’re Not Ready to Hand Your Property Over Just Yet…

Are you’re feeling like utilizing a property management team is the right choice, but you’re just not ready to take that step yet? If so, we have a few resources that will help you manage your rental property until you take the leap and let a management company take over the reins.

• Innago – Free Tenant Management Software: This outstanding property management software offers effective tools such as a tenant portal, online rent collection and lease signing, maintenance ticket information, tenant screening, QuickBooks integration, an easy application process, and a much more. This helpful tool is free and will make your life easier!

• Stessa – Professional software that will seamlessly keep track of your property performance, finances, and the paper trail from your rental properties.

• eForms – Simplify the complicated form process by utilizing eForm’s Rental Application and their Residential Lease Agreement. This company will provide you with professional forms to easily complete the renting process.

You Can Fast-Track Your Financial Independence When Using a Professional Property Management Company

As you can see, managing your own properties can end up being a full-time job that’s better left to the professionals. Hiring a rental property management company will keep your tenants happy, ensure your property is well maintained, and increase your profit margin. Furthermore, letting a professional team manage your investments will not only put more money in your pockets, it will also allow you the freedom of making passive income and enable you to enjoy more time with your friends and family, which is priceless.

Original Post

One of the toughest parts of being a landlord is enforcing the rules and making sure your tenants are doing what they are supposed to be doing. Unfortunately, if tenants are refusing to follow the rules and are constantly failing to pay rent, you may have to evict them. This process can be long and will leave you without a tenant paying rent, but it is often necessary. Even if you have been a landlord for some time, eviction can still be complicated. However, by being informed and keeping communication open with your tenants, the process does not have to be as tough as it can be.

Reasons to evict tenants

You cannot just evict tenants for no reason.  You actually have to have a reason for eviction, especially since you are entitled to file a lawsuit. You will lose the lawsuit if your reason for eviction is not valid or if you do not even have a reason Some common reasons include failure to pay rent, violations of the lease, and damages to the property. Other reasons include breaking laws and health and safety hazards. However, the most common reason is a failure to pay rent. In all of these cases, you will need proof of documentation so that the court will be able to see what has happened.

Keep the eviction legal

Each state has their own laws regarding eviction. Make sure you put the laws in the lease so that you and your tenants know what to expect and know how to act. Consider using a lease agreement that was written by lawyers or consult one in the process of writing the lease. That way, you know that your end is legal and that you can be sure your tenants are aware of the legal expectations that are on them.

“Self-help” eviction is illegal in every state. This includes removing the tenant’s belongings from the property, physically removing the tenant, changing the locks or locking the tenant out, and shutting off essential utilities. Not only are these methods illegal, but doing any of these can give your tenant the upper hand should you need to go to court.

Image: Helloquence via https://unsplash.com/photos/OQMZwNd3ThU

How to avoid eviction on your (the landlord’s) end

While you are in charge of your property and need to enforce the rules, evicting tenants can be a difficult process, especially since you will need to spend time finding a new tenant and you will be out of rent money in the meantime. There are things you can do to ensure that you minimize the need for eviction. Make sure everything is spelled out properly in the lease so that your tenants can easily follow the rules and that there are no questions about what the rules say. If a tenant is struggling to pay rent, give them a grace period. This is especially helpful if your tenants are mostly students.

Process for eviction

If you do end up needing to evict a tenant, it may be tempting to just kick them out then and there. However, there is a process you must follow. Make sure you give the tenant plenty of notice. You should get a lawsuit ready so if the tenant refuses to move out, you can specifically file the lawsuit to evict the tenant. Your tenant is entitled to a court hearing if they dispute the eviction, and if they lose the hearing, a sheriff needs to be called in to physically remove the tenant since you are not allowed to physically remove them. Make sure to outline your eviction process in your lease so that the tenant knows what to expect.

Keep communication open

In any relationship, communication is key. This is equally as true with your relationship with your tenants. While it may be tempting to want to be best friends with your tenants, you also have to make sure they are not staying in their apartment for free. Meet with them in a public place such as a coffee shop and have an honest conversation with them. Tell them that you noticed they were having trouble paying rent and see if there is anything you can help with. Make sure you make it clear that they can’t live in your apartment for free. Help them work through what they are dealing with, but also be stern in the consequences of them not paying their rent. Again, make sure any rules are outlined in the lease and allow tenants to ask questions they may have about things outlined in the lease.

When approaching your tenant, be “understanding but stern.” Let them know that you understand what they are going through, but they need to pay rent or abide by the rules. If you are pleasant and understanding, the tenant will hopefully be more willing to move out on their own without legal action.

Evicting a tenant is tough, especially since you will be out rent money until you find a new tenant. It is difficult to do, even if you have evicted a tenant in the past. Making sure things stay smooth and legal will make the whole process easier for both you and your tenant.

Property managers have the ability to make or break their teams. Great leaders help their employees and their properties reach their full potential, while bad leaders can discourage workers and slow down the productivity of the property, as well as turn residents off. When looking for a new property manager, make sure they possess these four great qualities.

Responsibility

Being a property manager isn’t easy. You have to juggle the day-to-day operations while still making sure each home under your care is up to the standards of those living there. A good manager will take responsibility for the successes as well as the shortcomings of the property. They will keep tabs on employees as well as residents to make sure everything is running smoothly. When a problem arises, your property manager should be open and honest about it while speaking with residents professionally about how it’s being handled.

Decisiveness

Whether your manager oversees a small property or a large one, they’re going to have to make some tough decisions regularly. Look for candidates who understand that they need to make choices on behalf of the employees as well as the people who call your property home. Your property manager will need to act swiftly after putting in enough research to make an informed decision. These decisions can hold more gravity than those made by a manager in a regular office due to the fact that dozens of people are relying on your property manager to make the best choices for their homes.

Empathy

Your employees and residents need to believe that your property manager is on their side. People want to be able to trust those that they rely heavily on, especially the organization that keeps a roof over their head. Managers should be understanding of the complaints being made about the property, as well as being understanding of their employees. Look for someone who is able to put themselves in others’ shoes and think from another perspective. If your property manager can’t empathize with those they manage, bad things can happen.

Creativity

To take your property to the next level, find a manager that can think outside the box. Sometimes the best solutions aren’t the ones in black and white, which means finding someone who thinks creatively can be the best problem solver. Creative property managers are known for thinking about new ways to improve operations as well as the lives of their tenants and employees. Consider candidates who have led projects in the past, figured out new ways to improve productivity, or invent new products or services, and you’ll likely wind up with a creative manager to run your property.

Finding someone with all of these qualities can be difficult but it is possible. You want to ensure that your property is in the best hands possible, as you have a lot of people’s livelihoods to consider. Take your time to measure the abilities of each candidate, and you’ll find someone who fits the bill.

Just about every rent roll has them and most are equally unwilling to let them go! When business owners believe that the more properties they have, the better off they are, they often overlook the ‘ball and chain’ effect that bad business can have on their portfolio, staff and their bottom line. Let’s face it, finding good property managers is just not easy, and yet, finding bad owners isn’t hard at all!

If we intend to move forward we should be prepared to regularly review our owner clients and be willing to remove landlords that are not good for business, or at least increase their fees! Here are ten bad owners characteristics to be wary of:

1. Over-demanding and unreasonable

This type of client is just never satisfied and often needs to have control of your staff and makes communication with them difficult and unpleasant. When you’ve got good news, they’ll make you feel bad. They like to be the one’s in control.

2. They’re just downright time-consuming.

This is the owner who likes to write lengthy emails, blows small issues way out of proportion and gives you lots of frivolous requests. The time taken to read, comprehend and respond to such clients can be quite unfeasible and often results in lengthy and unproductive phone calls. Let’s face it, time is money, so is the fee income that you are receiving from this client covering the time that it takes to do business with them? We’ve done the math, and this type of owner will typically take up to double of your time than a ‘normal’ management.

3. Whatever your fees are, they just want less!

When you do an analysis of the owners that meet the criteria in points one and two, you will most probably find that they are paying less in fees than other quality clients. These clients are typified by lots of work with less income! This is what bad business looks like.

4. Whatever the rent is, they just want more!

If you give the owner a fair market rent assessment on their property and they then insist on charging more, one of two things can occur. Firstly, the property will remain vacant, or secondly, it will attract the type of tenants who are desperate and willing to pay anything but in the end pay nothing.

5. Spend little-to-no money on repairs and upkeep.

A bad owner is also typified by being overly reluctant to spend money on repairs and property maintenance. These properties increasingly become a safety and litigation risk! The more run down they are allowed to become, the higher the likelihood that problems or even serious injury to tenants and their visitors will eventuate leaving you legally wide open to costly litigation action.

6. The property tends to attract a bad tenant.

The more run down and ‘tired’ the property is, the less likely it is that a quality tenant will want to rent it. Quality tenants have standards. If the property doesn’t meet these standards it is fair to say that the only type of tenant that you will attract is the type that will not respect the property or pay the rent on time, if at all!

7. Low fee properties are lower in value to the business.

Lower fees have an impact on the value of that management to the overall business. Whether it is management fees or ancillary fees, it all has impact against the maximum value you should be getting in comparison to a quality property.

8. Will happily ask you to accept unfair safety risks.

I speak often with property managers who wrestle with owner clients who won’t fix the most serious of problems like defective smoke alarms, power points/outlets hanging off of the walls, wood rot in railing/balconies and the like. It should be an easy decision to stop managing the property should a owner refuse to promptly address urgent and dangerous issues. If they won’t, refuse to manage the property. The fee income you receive is not worth the injury or even a death of a tenant (or their children) on your conscience.

9. Staff burnout and turnover

The more ‘bad owner’ clients you have on your portfolio, the more ‘wear and tear’ to the mind, heart and emotions of the all staff involved. This shortens their professional life span as a property manager, increasing staff turnover which, in turn increases overall owner dissatisfaction making property management all that harder!

10. They are never satisfied!

This type of owner no matter how hard you try, just seems to be never satisfied. This makes the whole experience quite unpleasant for all staff concerned.

What to say to the boss if you want to get rid of these type owners.

At this point of reading, you may be thinking that you agree with all of this, but you have a principal (or you are the principal) who is concerned with the future potential loss of business, saying ‘they might want to sell one day!’

Quite simply, if they are a bad owner now, what is the chance that they will be a good vendor/seller? It is fair to say that they will demand less commission, want an unrealistic sale price and become a difficult and unprofitable client with selling as well.

In a day when the focus is shifting from trying to have the biggest portfolio in town to having the most profitable one (yes, there is a difference!), we must seriously take a look at our owner client base and make decisions about what is good for business and staff alike!

In this video, you’ll learn whether you should be a hands-on landlord, or hire a property management team. Many new investors think that collecting rent checks is a simple process, but the truth is, it can be complex! This video was inspired by a viewer who questioned his ability as a landlord.

As a real estate investor, this is one of the most important decisions you can make! How you decide to handle property management can make or break your real estate investing experience. This video is for you if you’ve ever considered being a DIY landlord.

You’ll learn many of the responsibilities that go into effective property management, and why I would never personally manage my own investment properties. I’ll share how to work a property management fee into your ROI formula, and how a property manager can help make your rental experience a passive income, cash flowing machine!