First Rate Property Management Vacancy
Our vacancy rate for the first week of 2012 is 1.2%, compared to 2.4% last year at this time. The average vacancy rate in 2011 was 2.7%, compared to 3.7% in 2010.
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First Rate Property Management recently took over a new property. Within 30-days, we had to file 3 evictions. Including these 3 evictions, FRPM only evicted 8 tenants all year long, which equates to less than one tenth of one percent. In comparison, that is very good. So I wanted to explain a bit why I believe our eviction rate is so low and why we had 3 in one month for a new property.
Tenant screening is imperative, by examining past payment history, credit, criminal background, eviction history, income, employment verification, and so on, a landlord can quickly screen out those who have a higher chance of not paying. Collecting an application and reading what is entered is not adequate. Bad tenants lie, they have friends pose as their current landlord or employer. They fudge their income. They do what they can to beat the system. That is why we use a 3rd party screening company that digs in and verifies everything.
It is not always the case, but more often than not, those property managers who boast low vacancy rates and higher than market rents, are probably not screening as well as they should. Perhaps the lower screening criterion has worked out and appears to be worth the risk. I've just done this too long and seen too many slip through the cracks to be willing to take that risk for our clients or us as the property manager.
Immediately after tenant becomes past due, First Rate Property Management is texting, emailing, and mailing Past Due Rent Notices. For those who fail to communicate, we are delivering 3-Day Notices to Vacate at the property. After 3 business days, we go to the property and inspect. If payment hasn't been received, we then contact the owner and discuss options. Regardless of the decisions made, FRPM is aggressive on the collection of rent. I am confident that many tenants who were short on money were prepared to short the Landlord, but because we constantly hounded them at home and work, as well as on their computer and phone, they decided to pay us first, just to get us off their back.
So why the three evictions on the new property? I believe screening is one reason. The other was inconsistent procedures from previous management. Many landlords are short sighted and believe that working with everyone makes for a happy relationship. OK, I can see merit in this, but with limits, structure, and consistency. So basically, with any new property and its tenants, we have to train them in how to be good tenants. Pay your rent when it is due and if not, we are going to harass you until you do or we evict you. If you fail to communicate and ignore our requests, you will surely be given an eviction notice and might as well leave, because the cost of eviction are high enough that it doesn't make sense to stop the process once it is started. Let me tell you, after evicting tenants in November, the remaining tenants did a lot better job paying rent in December. I suspect that rent collection will improve as time goes by.