Here’s an email I recently sent to a landlord who has questions about our property management services.
As promised here is my detailed reply. I’m numbering my answers so you can compare to your questions below.
1. We locate tenants with a multi-pronged approach but we primarily attract tenants through the Multiple Listing Service and one of our many websites. We do a background check on our applicants to learn credit history, employment history, income and criminal record. We report the results to you along with a positive or negative recommendation depending on what our investigation uncovers.
Listing a property for rent is a separate service apart from property management. Some landlords only use us to list property for rent. Some landlords only use us for property management. Most landlords do both. Each time the property is listed for rent there is a fee to the landlord.
Our structure is a little different from most companies in that we explain where the commission goes and then let you set the fee as you wish. We make a recommendation for how much the landlord should pay, but allow the landlord to set the fee at any level. I think this makes more sense than setting an arbitrary number. I would expect by glancing at your property online you will probably want to pay at least one half of one month’s rent to list the property, but you may wish to pay as much as three-quarters of a month rent. I can explain this at length when you contact us but in short some landlords sometimes pay higher commissions to attract more attention from agents.
In subsequent years, if the tenant stays on we don’t need to market the property and you won’t have to pay a commission. When the tenant moves on we’ll need to list the property for rent again. Nearly every landlord is looking for a longer term renter for this reason. The minimum lease we recommend is 12 months. In the rare event that a lease is less than 12 months, we pad the rent to recoup the additional expense to the landlord.
2. Our brokerage currently manages about 100 properties. We are a family business, not a large corporation. Our landlords and tenants know us personally and we know them personally. We do have a team approach. For example my wife handles the processing or rent checks and the preparation of monthly reports. My son often helps with dispatching handymen and with move-in and move-out inspections. But no matter who you talk to the buck always stops with me and no matter who you talk to we generally all know what is going on with our properties.
Currently, we only have one member of the foreign service as a client but we have a good number of clients who are overseas. Some of our overseas clients are high-ranking military, intelligence service agents, foreign nationals who have returned to their home countries, diplomatic persons and I can even call to mind a couple of academics who are in the wilds doing field research. We are well-accustomed to the challenges of dealing with landlords who might be 8 to 12 hours different in time zone and who may or may not have regular access to a phone.
3. I do not own any properties in 22206. We sold most of our own Northern VA rental properties a few years ago. Even then our properties were not in that zip code. We still have some property that is out of the area and for that we rely on a property manager. In fact, the only rentals we’ve ever had serious problems with are the properties which we owned and personally managed.
As an aside, without effort, I can call to mind 3 properties which we manage and that are in close proximity to your property. Two of these are condos and one is a single-family residence. The SFR is owned by an Indian technology guru who returned to India to raise his kids. One of the two condos is owned by a recently retired judge who move back to his home state. The third property is owned by a local attorney who does not want the hassle of managing his property. There may be a few more in your neighborhood, but those are the three that pop in my head.
4. We can inspect as often as you like, but we generally only inspect the property once per quarter. We do not do the inspection ourselves. Instead, we send a handyman who will check every system on the property and write up any deficiencies along with any recommendations. There is a small fee for this inspection ($35 or so) to cover the handyman’s time. But we do not charge anywhere near 10% of the monthly rent. Our rates vary depending upon the property, but we will charge 6.5% of the monthly rent for a property such as yours.
5. We use a software called Rent Manager to track our landlord’s expenses and accounts. I will copy this email to my wife Julie who can send you and example report on Monday.
6. We do not charge a fee when the property is vacant. We are only paid when you are paid. Money in general does not flow from you to us. Rather it flows from tenant to our company and then to your pocket. Rent is due on the first of the month. Most of the tenants pay sometime between the 29th and 3rd of the month. There is a grace period until the fifth day of the month. If rent is not received by the fifth of the month we charge a late fee to the tenant and swiftly ramp up to begin the eviction process. We quickly train any tenants to understand that we do not play around with rent and deadlines.
We pride ourselves on how quickly we get the money to our landlords. Some companies take 10 to 15 days to process rents. We usually deposit money into the landlord’s bank account within 24 hours of receiving payment. Because of the extensive background checks mentioned above, we generally don’t have much problem with unpaid or late rents.
7. Tenants contact us for repairs and we select the most cost-effective and prompt solution available. If the repairs are less than around $250 we generally do not get bids, we just make the work happen. We allow landlords freedom to set their own notification level. For most condos we recommend a $250 threshold. For most townhouses and single-family homes we recommend $350. However, yesterday a newly-made landlord asked that we set that number at $1. (Yes. ONE dollar.) We will abide by her request. A few of our busiest landlords don’t want to hear about bothered by anything less than $1k.
We do not “mark-up” any maintenance requests. We do not charge anything extra to manage repairs. Maintenance is not a profit center for us.
8. Property reports are usually delivered just a few days after rents are processed.
Our clients like us because we are very responsive to both tenants and landlords. We always seek out the most cost-effective solutions for our landlords. We are not an enormous company. You can call at any normal hour of the day and most likely reach the principal broker (me). If you call at a strange hour, you still might reach me. If you don’t reach me, I’ll call you back promptly. Most of our competitors charge higher fees than we charge. So we believe that our combination of price and service is very tough to beat.
I look forward to meeting you and thank you for the opportunity to be of service.
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