Since our last links post was about preventative property maintenance, this seems like a good time to point out some links for do-it-yourself (DIY) websites that teach preventative maintenance tasks you can perform on your own.

• The DIY Network is a cable television channel; their website has a virtual library of DIY solutions.
• DoItYourself.com provides video tutorials to walk you through DIY projects step-by-step.
• With forums, galleries, reader projects, and its own wiki, DiyIdeas.com is a one-stop site that allows you to share your projects and ideas and learn from others.
• PBS staple This Old House has a website loaded with DIY information.  The show’s monthly DIY magazine (also called This Old House) is also a great resource.
• Longtime This Old House host Bob Vila now has his own website, BobVila.com, were you can find thousands of DIY tips.  And if the project seems too big for DIY work, there’s also a link to help you locate just the right contractor for the job.

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As is the case with any employment scenario, when it comes to hiring a property manager, landlords walk a fine line between ensuring they hire the best help possible and obtaining the most competitive price. Particularly because property management is not a one-size-fits-all kind of field, setting your property management fee at a rate that is both profitable for you and appealing to potential customers can be tricky. While standard property management fees today are set at 10 percent of a unit’s monthly rent rate (and go down to as low as 6 percent), there are a few things you should consider before setting your fee for any given project.

Percentage-based fees, flat fees, and per-project billing
Some property managers find a percentage fee works best, while others charge on a flat fee (see minimum charges below) or per project basis. In a case where you charge the landlord a percentage-based fee (let’s say 10 percent of a unit’s monthly rental price) for your services or a flat fee for all of your services on a monthly basis, the landlord can easily add your fee to his projected monthly expenses, building it into the rental unit price. Property managers can do likewise, relying on a set amount of income per customer on a monthly basis.

Sounds simple—so why consider alternate methods? Particularly in the case of landlords who are only looking to commission a certain, irregular set of tasks such as assistance in renting out or advertising units (as opposed to day-to-day repairs and maintenance) or maintenance and repair work, an hourly or project fee may be a better alternative.

Minimum charges
Particularly in cases where a property is large or work-intensive enough that you will have to think twice about taking on additional clients in order to adequately service that single employer, you may want to consider setting a minimum monthly charge or a flat fee. For example, if a complex has 35 units renting at $1,000 per unit, you will be paid a minimum payment of $2,500 per month regardless of vacancies.  Some property managers work on a straight flat fee while others may add on additional charges once vacancy rates dip below a certain level. For example, in the case above you might be paid an additional 10 percent per unit on top of the $2,500 per month when 28 units or more are filled.

Specify included tasks
As mentioned above, different property owners will require different levels of assistance with their units. While, in some cases, property management may be a near full-time job, in others there may be little more work to do than renting out the unit and collecting monthly rent checks on behalf of the property owner. To ensure you are being fairly compensated and that your client remains satisfied with your work, be sure to clearly define the tasks you will be performing during fee negotiation.

Also be sure to discuss an hourly or per-job payment scheme for any additional work not included in your regular duties. Obviously, you can’t plan for everything but setting some basic guidelines up front will serve you well in the future.

Know the going rate
Because property owners are really watching their bottom line right now, property managers are working hard to entice new customers. One way of doing this is by offering incentives. For example, some property management companies are not requiring unit advertising and marketing payment fees from property owners until the unit is actually rented out.

With incentives like this being given on a more regular basis, make sure you are aware of the services, fees, and incentives other local property managers are currently offering. While you want to make the money you deserve, you also want to make sure that you are remaining competitive and abreast of current market trends.

With all of this in mind, remember that before you can even begin to worry about figuring out your fee schedule, you have to identify potential clients. When doing this, be sure to advertise not only your prices but also the other intangibles you offer. Remember that in many cases you will be representing the property owner to tenants and vendors as well as looking out for his business interests. It’s crucial that a property owner find someone that represents him well—someone who is approachable, efficient, pro-active, and budget minded. Make sure you let potential clients know that you possess all of these qualities—and then demonstrate them on a regular basis.

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Generally speaking, property owners and managers are not required to allow tenants to have pets.* And, in fact, many properties exercise their option to decline pets on premises—for example, in San Diego, CA nearly 60 percent of all properties do not allow cats, while another 80 percent don’t allow dogs. However, according to the American Veterinary Medical Association, as of December 2006 there were nearly 82 million pet cats in the United States and more than 72 million pet dogs. Clearly, there is a great divide between landlord and tenant interests when it comes to rental pet policies.

Property managers looking to lower their vacancy rates should keep in mind that, long-term tenant or not, renting is an inherently temporary situation. Would-be tenants are more likely to seek out rental options that allow them to keep their pets than they are to get rid of animals for a short-term situation.

Vacancy rates aside, it’s nonetheless easy to understand any property owner’s reluctance to allow pets. Animals open a unit up to more potential damages and can cause noise and safety issues in a complex, not to mention a host of other problems that are often simply not worth the hassle. Be aware, however, that just as there are reasons for banning pets in your property, there is also a valid argument for allowing them. As the statistics above clearly indicate, allowing pets expands your pool of potential tenants. Also, because pet owners have fewer options when it comes to finding a rental, chances are they will tend to rent longer than their pet-free counterparts.

Ultimately, whether or not you allow tenants to have pets comes down to weighing the costs and benefits based on your own set of circumstances. The following considerations should be used to help those that do opt to allow pets follow some best practices for doing so.

• Be sure to include an additional pet deposit in your tenant’s initial payment to cover any animal-related damages or expenditures. (An additional $100 to $300 deposit per pet is standard; check your state and local laws, but generally such deposits should be held in an escrow account.)

• Include a special lease term stating that permission to keep a pet may be revoked at any time.

• Set forth clear standards and expectations for pet owners from the get-go. For example, let your tenant know what your rules are for pets when it comes to common areas, noise levels, and cleanliness standards.

• Establish a clear set of guidelines for handling pet-related neighbor complaints and other such issues.

• Consider designating only specific apartments for pets.

• Set a maximum number of pets allowed per apartment (two is standard).

• According to the ASPCA, many landlords err by basing their acceptance of a pet solely on size regulations (i.e., only pets 20 pounds or smaller are allowed). Rather than size restrictions, the ASPCA suggests providing potential tenants with only general average size restrictions and evaluating each animal on its own merit. The organization points out that a larger, sedate dog can be far less hassle than a small, constantly barking dog.

• Finally, the Community Association Institute points out that, really, “Pet rules are about people with pets rather than about pets.” With this in mind, they recommend determining how responsible the tenant is through referrals and recommendations from references and previous landlords rather than concentrating on the pet itself.

• Take care to define exactly what a “common” household pet is in your pet policy (according to the ASPCA, this is usually defined as dogs, cats, rodents, rabbits, and fish). According to the Community Association Institute, exotic pets (reptiles, wolf-hybrids, and monkeys) are on the rise; allowing such non-traditional pets can lead to a host of other requirements as mandated by state and local laws.

If you do allow pets and are looking to lower your vacancy rates, you may raise your property’s visibility to would-be tenants by posting your rental listing on DogHouseProperties.com or PeopleWithPets.com, both of which are geared toward renters with furry friends. Check out the Humane Society for some state-specific pet-friendly rental listing pages.

The Humane Society also offers some great free online tools for property managers and landlords, to assist with making renting to pet owners as straightforward and hassle-free as possible. Click here for everything from a suggested pet lease addendum to a pet application form.

* Please keep in mind that you should check your state laws and be aware that the Federal Fair Housing Act requires that all properties allow service animals for disabled tenants; additional state information can be found here. Also be aware that according to the Quality and Housing Work Responsibility Act of 1998, Section 526, public housing and public housing agency (PHA)-administered Section 8 assistance programs must allow residents to have one or more common household pets, subject to the reasonable requirements of the PHA.

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As property managers, it’s our responsibility to make sure clients’ properties are well maintained. Check out these preventative maintenance links for tips on how to keep your properties in tip-top shape.

• Check out this site for some basics on preventative property care.
• UNIT Management Ltd. offers up great reasons for being proactive when it comes to maintenance.
• Here are some organizational pointers for preventative maintenance.
• Don’t just take our word for it … here are even more reasons to have a preventative maintenance schedule.
• And if all that doesn’t convince you, check out these photos to see what happens when property managers ignore preventative maintenance.

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It’s only natural that the current state of the economy will have a trickle-down affect on vacancy levels and the going rate of rental units. At a time when everyone is tightening their purse strings, it makes sense that people are far more likely to think twice before moving. For renters, the moving process in and of itself is a costly one: transporting furniture and belongings from one location to another, putting down security deposits, and sometimes multiple months’ rent. All of these costs add up quickly. So what does this mean for property managers and landlords?

According to a recent New York Times article (One Month Free? Rents Are Falling Fast), for the first time in years, the city’s rental rates are down and vacancies are up. In an effort to fill units, landlords and property managers are offering incentives like a month’s free rent to get tenants in the door. While it’s true that there are many factors that make the Manhattan market different from other sectors of the country, there’s no denying the problem extends further than New York.

A Yahoo article on rocketing rental vacancies declares this a “renter’s market” and goes on to cite the top 10 markets with vacancy spikes, which include (among others): Salt Lake City, UT; Raleigh, NC; Seattle, WA; Portland, OR; San Jose, CA; and Boston, MA.

Even if you’re not in one of these markets, chances are that you already have—or will soon see—some recession repercussions. Be that as it may, there’s no need to panic. Just a few simple strategies will help you stay on top of your rental game, bad economy or not.

Know your market.
Now more than ever, make sure that you are going on Craigslist and other local rental posting sites to compare your rental rates with those of your competitors. If your prices are on the higher end, you may be guaranteeing that those renters who are out there won’t even consider your property. Also, if you’ve only been relying on one rental search engine to post your available units, this is a great time to expand your reach to other sites. (We like Rentvine.com; also be sure to check out online offerings from your local newspapers and other publications.)

Advertise like a pro.
Speaking of listings, make sure you are putting more effort than ever into selling your unit. Write up a few well put-together sentences that really highlight your unit’s amenities and the characteristics that make it more desirable than your competitors’. Do you pay heat and hot water? Are your units larger than most? Do you have a pool or in-house washers and driers? Perhaps a convenient location that will save your tenants commuting costs? If so, be sure to mention all of this. It could be the difference between a would-be tenant checking out your place and someone else’s.

Also take care to add some punch to your listing title or headline to make it stand out from the rest. Rather than writing “One bedroom/$950” in the headline, write “Spacious one bedroom apartment in convenient downtown neighborhood, heat and hot water included.” If you’re offering incentives, this should also be clearly stated in your listing headline.

Offer incentives.
However frustrating the economic climate may be right now, it’s crucial to bear in mind that it’s better to fill your units by using incentives or taking rents down a bit than letting vacancies build up. Yes, your profit margins may decrease and, obviously, this is not ideal. But it’s better than letting units remain empty. Also, be willing to negotiate. If you find a tenant with a good credit report and track record, you may be better to negotiate and get them signed up than to leave your unit vacant. Consider lowering the rent a bit (but know your bottom line!), paying rental agent fees, offering a month’s free rent, or one month less down at move-in.

Be flexible.
This may also be a good time to be more flexible with your rental qualifications. For example, if you generally don’t allow college students, perhaps this is a good time to consider them. Same goes for pet owners. This is not to suggest you deconstruct your entire rental procedure—again, remember, these problems are only short-term—but if you find a particularly responsible college student with a co-signer or a renter with a small pet and lay down very specific rental guidelines, this may be the time to consider expanding your pool of potential tenants a bit.

There’s a lot of gloom and doom news out there right now about the bad market and how it pertains to rentals. Certainly, it’s a time for everyone to be very conscious of their spending and the market around them. However, don’t despair. Regardless of the current economic situation, people will always need a place to live. Just be aware of your local market, stay abreast of the tactics other property managers and landlords are using, and be creative and flexible. And remember, although your profit margin may dip in the short-term, by following these strategies you’ll be better able to keep those vacancy rates low and will weather this economic durntown just fine in the long-run.

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Although we usually use this space to share some of our favorite sites and blogs, this week we thought we’d mix it up a bit by letting you in on some of our favorite property management books.

• Not surprisingly Property Management Kit for Dummies (from the famous For Dummies series) is an easy read, chock full of information.
• Ken McElroy is not only the author of Rich Dad’s ABC’s of Property Management but also a “Rich Dad Advisor” for Rich Dad’s founder Robert Kiyosaki.
• American Landlord: Everything You Need to Know About Property Management gives readers more bang for their buck.  This how-to book also comes with a CD that includes rental applications and lease agreements.
• Leases & Rental Agreements shows readers how to create rental agreements in accordance with their specific state laws.
• For a great general introduction to property management, check out the aptly-named Property Management. Among other things, this book includes a run-down of all the federal laws property managers should know.

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Building—and even more importantly, maintaining—good client relationships is essential to the success of any business venture. But property managers must be particularly conscientious about good customer service because not only are they building relationships with the property owners who employ them, but also with the tenants who rely on them on a daily basis. It all sounds a bit daunting but when it comes down to it, good customer relationships are built on a combination of all the other business practices that make for an efficient and effective property manager.

1. Happy tenants = a happy boss.
Although your property owner signs your paycheck, don’t forget it’s your tenants who are really paying you. Your property owner has hired you to monitor the day-to-day details and is trusting that you take good care of his tenants. Keeping your tenants happy is the fastest way to ensure that your boss is happy with your job performance.

2. Create (and stick to) a clear set of procedures and guidelines.
Establish a set of written guidelines and procedures for things like rent payment and repair requests. Once you have these in place, then make sure they’re readily available to tenants. Tenants are more likely to let you know what they need—making it easier for you to keep them happy—if they know how to go about reporting problems and understand what’s expected of them.

At the same time, remember that in this business you’re dealing with people. And whenever people are involved, chances are at some point you’ll be faced with an issue that doesn’t fit into a neat little box or fall within a clear set of guidelines. Remember that no matter how prepared and organized you are, sometimes things will fall in a gray area. In these cases, you must call upon your best judgment, keeping things as fair and reasonable as possible in the process.

3. Keep your bottom line in check.
Keeping overhead costs as low as possible will win over any property owner. Staying on top of things and making sure problems are taken care of as soon as they arise or—even better—before they happen, goes a long way toward running a tight ship. Just a little bit of maintenance and regular property check-ins will help keep big problems to a minimum and save a lot of money in the long run.

4. Make sure information is current and easily accessible.
Keep clear records of payments, outstanding issues, contact information, and any other relevant information in an up-to-date and easily accessible log. Even if your property owner is hands-off, you’ll look more reliable when you have immediate answers on those rare occasions when he does check in. And if you use a simple online tracking system to provide all interested parties with easily accessible information 24/7, all the better.

5. Return calls and emails within 24 hours.
This is commonsense, but not necessarily common practice: Return tenant and property owner calls and emails quickly. Try setting aside an hour every day specifically for getting back to people—perhaps at the end of the day when an easy project is in order. Always respond within 24 hours (unless it’s a pressing issue or emergency, in which case you should always answer immediately). Even if you don’t know the answer to a question or cannot immediately resolve an issue, respond with a quick call or email to let your tenant or property owner know you’re on the case.

6. Keep the lines of communication open.
No matter how good you are about getting back to tenants and property managers quickly, it’s all for naught if they don’t feel comfortable approaching you in the first place. Establish an open line of communication with tenants; you always want them to feel like they can come to you when there’s a problem or an issue. This will help create loyalty (which means you won’t have to worry about filling vacancies as frequently) and also betters the chances of them alerting you as soon as a problem or repair arises. And the more quickly this happens, the easier (and, often, more cost-effectively), you’ll be able to take care of things.

See? It’s all cyclical, really.

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