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Tips for Choosing a Property Management Company
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Me and Jesus....well...not really...at Compassion International in Colorado Springs
Greetings from Santa Barbra, CA….. rainy and gloomy….but the hope for sun tomorrow.
Anyway….
Here in CA to rub shoulders with the folks of Yardi Software and to checkout the sites. The rain has not stopped me….
Before I arrived in CA….I was in Colorado visiting my mentor Wes Roberts. So….I have been on a mini-travel marathon of sorts….next? ….D.C.
Today’s topic is property management. Specifically, hiring a property management company…..
Over the years, I have learned the hard way about property management. In reality, good property management is difficult to find. More specifically, “okay” property management is a gem if you find it. I know… I know…I may be going a little overboard….but I digress.
So….I was thinking….what makes a good property management company (PM)…for both commercial and residential assets…..and here is my list….very short….but enough to give you some thought….
1) A PM needs to have a solid understanding of the asset being managed. In other words, does the PM know how to manage a retail shopping center, or a large apartment complex, etc. You see, just because a PM has managed an apartment before…does not mean he or she knows how to managed a 100 unit apartment or a 500 unit apartment. Take a look at the portfolio the PM is managing currently and see where the PM’s experience is. If you want a PM to manage your storage units and the PM’s experience is only in residential homes….you have a big red flag
2) A Good software system. If your PM is using Microsoft Excel to manage a portfolio….you should run. MRI, Yardi, etc….are great software programs that offer clients a lot of bells and whistles. Make sure your PM is using solid systems because…PM reporting, accounting, etc…. is depending on it.
3) Turn-around times a.k.a., “make-ready” time is crucial. PM that are slow at turn-around times when a property goes vacant and the time it takes to get ready for the next tenant is crucial. Whether you have a waiting list or no list at all….having units available quickly will help your bottom line. Find out how fast your potential PM is turning things around by asking other clients what the turn-around time is. If you hear ten business days…then that is too long. One week is the most I can deal with. I like to hear three days. Obviously there are other factors that go into turn-around time…but the shorter the better.
Santa Barbra, CA
4) Communication. Another difficult thing I have learned is if you are having a hard time connecting with the PM….you are probably getting screwed. No return phone calls…..reports have not shown up……etc. Especially for long-distance properties. Talk to the PM’s other clients…ask what the communication is like. Knowing the communication process and how others perceive it will save you a lot of headaches.
5) Network. Talk to other owners about which PMs they use. Ask a ton of questions…how long? What types of assets do they manage? etc. I always like to get a perspective from other investors and see who they recommend. Does it always work? No…but….it is better to get a short list from people you know vs. starting cold.
Anyway…I could go on and on….and I am sure I will on another post….
Until next time……rob
Commercial Real Estate: Analysis – Estimating Tenant Turnover
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100% occupancy.....think again
Greetings from the metropolis of Cedar Crest, NM !
Back from my trip to Texas and trying to close on some deals. Dealing with lenders has always been difficult…..but I think lenders are looking for ways to make it even more difficult…but I digress.
Anyway….
Today’s post comes from the help of my friend and commercial mortgage broker Terry Painter from The Apartment Loan Store.
In my analysis of an apartment deal in Texas, I asked Terry about estimating tenant turnover from a lender’s perspective. I got a great reply from Terry and I wanted to share it. Terry’s response is below…..
Rob, there are 5 main factors that our HUD appraisers use to estimate tenant turn over:
1. Quality of tenants (mesured by how long each tenant has occupied) (will
need monthly rent rolls for the past 3 – 6 months to determine this)
2. Historical occupancy (based on monthly rent rolls for the past year)or
market data for the submarket
3. Type of tenants (Students occupy an average of 9 – 10 months, Military
about a year, Seniors 4 years and longer,General public about 8 months)
4. Demand for the property in relationship with other properties in
the market
5. Time to make-ready the unoccupied units (critical on properties that stay
full)So it is different for every property. Even newer in-demand properties with
a waiting list average 2 – 3% turn over rate and result in 97% annual
occupancy.Hope this is helpful…
Terry Painter, President
Business Loan Store
104 Monterey Drive
Medford, OR 97504
Mortgage BankerOffice 541-326-0570
Fax 888-404-7089
Cell 541-840-3078
Thanks Terry!
Until next time……rob
Move Ahead Of The Borrowing Game
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Buddy's loves people with bad credit!
With today’s worldwide failing economy, there has probably never been a more important period to get a copy of your borrowing report. Most us haven’t a clue about the criteria banks use to rate their chances of requesting credit – and it unsurprisingly isn’t as simple as you might think.
Criteria such as missed installments on personal loans and credit cards clearly influence banks decisions, but are you aware that you may be declined a mortgage because you haven’t ever had credit? It sounds crazy, but in fact lenders need not only to know that you are not already overloaded, but too that you have a good history of meeting your repayments.
For this reason, banks you have in the past been lent money from supply record keeping companies such as Experian and Equifax with information on how you stand with your credit facilities.
Another thing people frequently don’t know about is debt histories aren’t limited to credit cards, secured loans and mortgages. If you have a pay monthly phone that is going to be detailed on your debt report too. How about your satellite television account? Yes, that’s qualifying as credit as well.
Anything that enables you to generate an invoice could be considered borrowing. By looking at your borrowing file, you might find that you’ve been providing prospective banks more information than you realise, or worse still, wrong info! Only by getting your borrowing file will you see what the lenders can see – in fact, everything they are able to see. There are no debt barred lists, it’s all done by a formula comprising the debt risk profile made up by the information on your application and your debt report.
The great side of this is that you can take simple steps to improve your debt appearance – one example making sure you are fully registered on the resendential list. For more good advice, head over for the free trial of your credit history below – there’s no pressure to continue and buy so it really is risk free. A lot of people do buy after their trial however, as the cheap option could save them a lot of hassle in the long run.
So, why not make an effort to improve yourself right now and get a free trial? The Free Stuff website have joined up with Experian to offer a trial at no cost which means you can see everything on your borrowing report. It’s all on the web, so you will be looking at the same information the bank manager can see in just 5 minutes.