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MGMT Fee $195 Per Month - Leasing Fee Only $495

MGMT Fee $195 Per Month - Leasing Fee Only $495

How Much Time does a Landlord Spend at Their Rental Property?

In a survey about Property Managers and Landlord we learned a lot about why landlords own properties, and also the difference in how properties are managed.
I found the most interesting info to include the following questions and comparisons. Questions like why do investors acquire rental properties? What are the three most frequent complaints which make it most difficult for owners and managers to operate? How does the owner maintain the property? How much personal involvement do owners have with their property? How do properties seek and screen new tenants?Why do investors acquire rental properties?

The primary reason that owners acquire rental properties was for additional income, and the second most common was for the owner to use the property for their primary residence. This study is 15 years old, I wonder what the numbers would be compared to owners that bought a house, and then moved for the their job, or could not afford the property, and then it became an investment property. The third most common reason to invest in a rental property was for the retirement security. Personally I own 2 rental properties, and my main reason for buying one of the properties was for a tax benefit along with the retirement security. My goal was to own $1,000,000 in real estate, and rent them out. In 30 years they should all be paid off, and with modest increase in value, they should be worth $2,000,000. It would be great to have $2,000,000 is real estate, that could provide a great retirement. Plus if all units were rented, the cash flow would be great as well. Unfortunately I haven’t acquired the $1,000,000 YET!

What are the three most frequent complaints which make it most difficult for owners and managers to operate?

By far the most frequent complaint owners stated was the local property tax. I would agree, in DC the local property tax can be a very large sum of money. You add the local property tax, plus the other city fees like inspection fees, licensing fees, this can add up to a lot of money. The second most frequent complaint was parking restriction, and in DC this is a huge issue. Fortunately in most areas of DC the mass transit is very strong, and tenants don’t need cars like in other small cities. I would guess for owner with 5 or more units in DC, rent control might be high on this list. If you have managed your rent control correctly, it’s usually not an issue, just takes extra time to make sure everything is recorded correctly. If you have not stayed on top of this, then you might have a very nice 4 bed 2 bathroom house that should rent for $3000.00, but due to rent control, you can only ask $1200.00.

How does the owner maintain the property?

I think this is a very interesting question that tenants would really like to know. When I move into a new property, I want to know what to expect when it comes to maintenance. If my toilet is broken, how long will it take to be repaired? In the 5 years that I’ve been working with Real Property Management I would say this is the #1 reason tenants move when their lease expires. They are sick of waiting for repairs, or being told that the owner won’t do the repair. Unfortunately a lot of landlords are playing this game. Pay the mortgage or do repairs. They can’t win either way. As the property manager I explain to them the pros and cons. Usually something like this. Owner says, “This is the 2nd time the toilet has been broken since they moved in, I can’t afford to fix it again.” My response “Well, this tenant has been at the home for almost 3 years. Last time it was the basement toilet, and it was caused by roots in the sewer. If you don’t make the repair, the tenant may decide to vacate, and then you won’t be receiving any rents. I can get the repair done for $150.00, and we will still be collecting $2000.00 a month.” Sometimes landlords forget that their rental is an investment, and sometimes you have to put money into your investments. I always recommend that owners with a mortgage stay at least 1 month ahead on their mortgage payments, to help avoid these problems. On the other hand sometime tenants take advantage of repairs. We always try to find out how the toilet got clogged, and if there is a toy or something, then we will charge the tenant for the repair. In another post I’ll discuss the advantage of using a property management company compared to going it alone. 1 of the most common reasons I’ve read is property managers keep very accurate books, and if a tenant is late with rent, or does causes damages, we record this, and make sure it gets paid either today, or when they vacate. A lot of owners will just forget about it, or decide to let it slide. This is also a reason that a lot of tenants would rather deal with landlord, and not property managers. We have the policies and procedures in place to make sure tenants honor their lease.

How much personal involvement do owners have with their property?

About 1 in 4 small multifamily properties are owner occupied. 1 of 3 property owners are at their property less than one hour a week, these are probably managed by the professional property management company. About 45% of were at their property on average 1 day a week. These would be the guys that do the small maintenance, and like to take the time to look at the property. About 20% spend more than 1 day a week at the property. These are the owners that probably handle their own maintenance, do rent collection, and post all of their owner notices (If they even post notices). About one-third of the owner that own small properties would not buy their property again. I use to mange my own rentals, and I was so ready to sale them. For a few reasons I held on to them. Mostly for my retirement, but the biggest and most important thing I did was hire a professional property manager. I was tired of collecting rent, listening to excuses of why rent was late, or why they had a dog again, or why they can’t change the light bulbs. I let my manager do this, and it only cost me about $125.00 a month. That’s about $10 an hour if I spend more than 12 hours working on the rental. For me I was collecting rent, looking at all repairs before I called a contractor. Just the driving time alone was 30 minutes each time.

How do properties seek and screen new tenants?

Keep in mind this report is form 1995, but I can guarantee you that not much has changed. Owner might now put listing on craigslist or another online advertising site, but the others seem about right. The top choice is work of mouth. This is still one of the best ways. The second most common is newspaper. I would assume this has been replaced with online sites like craigslist. The third most common form for advertising was for rent signs. This is actually my favorite. I’m surprised that a lot of owners that we manage for don’t want a sign posted at the property. Some excuses are, people will know it’s vacant, and might break in, or vandalize the property. I don’t want the neighbors to know I’m renting the property. Having managed over 500 rentals, I’ve only heard of 1 time that a property was broken into, and to be honest, it was just a random act. WHY WOULDN’T YOU WANT THE NEIGHBORS TO KNOW? They can be you best word of mouth. They tell the friends, and their family about how nice the area is.

As you can see there are many ways to manage your rental property. If you hire a professional manager, you may be like me and feel that it was the best decision you’ve ever made concerning your rental. One day this investment will be paid off and kicking out cash and worth a lot of money. In the mean time it only cost me a few dollars to have it professionally managed.

Real Property Management DC Metro. 202-269-0303 www.RealPropertyManagementDC.com

I used the census.gov website to get all my info. http://www.census.gov/housing/poms/data/multifam.html http://www.census.gov/housing/poms/data/single-fam/sftab2.html

Real Property Management DC Metro. 202-269-0303 www.RealPropertyManagementDC.com

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