Our 3 part series about the history, current trends, and the future of residential property management received the most views and comments than any other. A good share of questions came from rental owners. Some wanted to share their experience while others wanted advice on how to protect themselves from a company that is or maybe planning to sell.
I can think of a lot of issues property owners should perhaps be more concerned about, but when it comes to selling, it would appear that many property owners are feeling betrayed. You asked for some flags and below are the few that I believe will help identify a property management company focused on growth and perhaps future sale value.
- Pressure to sign the management agreement immediately
- The answer is “yes” even before you have provided information about the rental or your expectations
- Getting your business is the goal
- Low entry fees with many add-on auxiliary fees
- Evasive answers
- Extraordinary claims and guarantees
- Marketing is heavily geared towards securing new clients and more properties
Some asked us “How can I protect myself if our property manager sells”. I have no real experience with this, but if you are that concerned, then I recommend you consult an attorney. An attorney may have a clause to add to the management agreement that requires the property manager to disclose the sale of the company and/or changes of the principal owners. The only other suggestions I can think of, is not to hesitate to question your property manager about any sudden changes in practices, like software programs.
Do YOU Wash the Rental Car Before Returning It?
This is part 3 of my blog posts that covered, preventative and deferred maintenance. In 2006, FRPM President, Tony Drost, wrote an article titled, "Do you Wash the Rental Car Before Returning It" which was published in a national property management trade magazine. Property managers across the country have used this article to help owners of rental properties to consider some tenant's mind-set when it comes to renting a home or apartment. Many used this article to set up property owner expectations. More importantly, we believe it shows why it is important for landlords and property managers to help set up expectations for tenants so that the tenants better understand their responsibilities and what they should do to ensure the property is maintained. Below is an updated version of Tony's article.
When considering the below questions, I'd like you to think back at a time when you rented a car.
Did you read your rental agreement?
I think most would agree that they were anxious and in a hurry and just signed the agreement and grabbed the keys so they could be on their way. It’s a very similar situation with tenants and we know this, which is why we require them to watch a summary slide show and also provide a summary page of the rental agreement for quick reference.
Did you purchase the rental car company's recommended insurance?
Most people do not. Most tenants feel about the same with Renter's Insurance. They think the likely hood they will need it is slim and not worth the money. FRPM recommends Renter's Insurance and provides real life situations where at no fault of the tenant, something happened and their personal property was damaged and not covered. Additionally we provide a list of insurance agents that specialize in Renter's Insurance.
When you received the rental car, did you thoroughly inspect it and annotate all cleaning issues and damages of the provided form?
Way back when, FRPM did the same as the rental car people did, which was to provide a self-move-in form for the renters to complete. Today, we require a joint move-in inspection where we inspect the property with the tenant and also orient them with the home or apartment, such as location and proper use of the sprinkler timer, location of water shut-off valves and circuit breaker panels, and demonstrate on how to change the furnace filters, etc.
Prior to using the rental car, did you check all fluid levels and things like tire pressure and did you promptly report needed repairs?
I assume most do not check these things and I believe they are in the right to assume that the rental car company does this on a regular basis. But what about the check engine light? Did you stop using the car and report this alarm to the rental car company right away? We want tenants to inspect important items and we don't want them ignoring alarms. That is why FRPM and the tenant perform a joint move-in inspection. Additionally, FRPM provides detailed information on tenant's responsibilities concerning maintenance issues, communications, and what to do if an alarm is sounded or displayed, like a check engine light.
While driving the rental car, did you find yourself not treating the car as if it were your own?
Did you accelerate and brake more quickly? Did you avoid road hazards? It's just a rental, right? Landlords and property managers need to do everything they can to help tenants understand that this a home or apartment that they have legal possession of and they have responsibilities, just like the landlord. On average, a rental car is brought back for inspection in less than a week. A home and apartment is a lot longer so tenants need to be aware of their inspection and reporting requirements.
Before turning the rental car back in, did you wash it?
A lot of tenants assume that there cleaning and damage deposit is used for that, so they just move out without doing any cleaning. So we spell out the tenants requirements upon move out and hope they strive to get as much of their deposit back as they can.
So knowing that a certain percentage of tenants will have a, "it's just a rental" mentality, supports my recommendations not to defer maintenance and have preventative maintenance/inspections performed.