TENANTS
Handle all dealings with tenants.
1.
Solicit new tenants from
a network of agents and contacts throughout the area. Advertise
with periodicals, signs, brochures, displays and print ads.
2.
Each rental application
should be thoroughly screened, including credit histories, employment
and checks with former landlords.
3.
A thorough orientation
session with each tenant should be held to make sure they understand
their specific obligations regarding the care of the rental property.
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INCOME
Collect all rent on your behalf, and distribute funds on
the tenth of each month.
1.
All rents should be due
on the first of the month, and deposited into an Operating Trust
Account.
2.
All rental and lease
agreements should be prepared with established policies and regulations.
Collection of initial rent and security deposits should be deposited
in to a Trust Account.
3.
Late charges should be
billed for any payment not received by the 5th of the month.
4.
Rent policies aggressively
enforced.
5.
Late notices sent on the
5th of the month. Initiate and supervise eviction proceedings
should the rent fall into arrears.
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EXPENSES
Contract for, and pay all the property's regular expenses
from an Operating Account on your behalf.
1.
Pay routine property expenses
as directed by you. These may Include mortgage payments, property
taxes, insurance and fees for gardening and lawn service, pool
service, and homeowner associations.
2.
A good property management company earns volume-discounted
prices on many expenses, and should pass these savings along to
you.
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COMMUNICATION
Owners should receive a detailed computer-generated report
on the status of their real estate investment every month.
1.
Account statement copies
of all invoices and any income distribution checks should be mailed
promptly on the tenth of each month.
2.
Owner approval solicited
prior to contracting major repairs or improvements preparation.
3.
Comprehensive monthly,
quarterly and year-end financial statements useful for tax purposes.
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MAINTENANCE
Your investment should be protected with conscientious
routine maintenance and quick effective action in non-routine
situations.
1.
When a tenant moves in,
an extensive inventory and condition checklist must be completed
to clearly document the property's condition. Your state law may
even mandate a checklist for use at checkout time.
2.
Contract for and supervise
all routine maintenance that you authorize.
3.
Make routine interior
inspections, to confirm the property is being maintained and to
determine if any repairs are necessary.
4.
A competent and experienced person must be available
by telephone at all times and, in the event of an emergency, respond
to situations quickly and effectively on your behalf.
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INVESTMENT MANAGEMENT
Property management should go beyond maintenance and collections.
As experts in real estate, a property manager should be able to
recommend the best and most appropriate strategies for your property.
1.
Evaluate your property
routinely and recommend specific repairs or refurbishment's to
increase the rental or long-term value. Provide estimated costs
and, when approved, supervise the work.
2.
Manage your property
as a portfolio. Analyze improvements as an investment strategy,
based on your financial objectives
3.
Monitor area prices and
comparable rents to ensure that you receive top market rents.
4.
Experience overseeing
apartment complexes and other types of investment income property.
5.
A good property manager
maintains a high level of expertise by their affiliations, and
by attending seminars and training classes designed to help them
serve you better.
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FEES AND OTHER COMPENSATION
Most state law requires real property managers to be state
licensed and regulated real estate brokers.
Property managers handle and control large amounts of other
peoples money. As a result, most states require that property
managers be licensed real estate brokers who are educated, extensively
regulated and who must maintain trust accounts on behalf of clients.
Federal and state anti-trust laws discourage real estate brokers
from having fixed fees. Therefore, property owners should be able
to negotiate a rate and service agreement specific to their situation.
However, our studies show that a property owner might expect
to pay around 5%-7% of collected rents, perhaps the first month’s
rent for new leases, some amount for lease renewals, and reasonable
hourly rates for special services. Naturally, a small property
owner with one or two single-family rental homes will likely pay
higher fees than an apartment community containing hundreds of
units.
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