Natural disasters such as Hurricane Katrina and the California wildfires of 2007 serve as horror stories for property managers and tenants alike. While we don’t suggest living in fear, we do suggest taking the necessary precautions to protect your tenants and your properties from unexpected disasters. Here are some great links to help you learn more about how you can best be prepared for these unexpected events.

• The Property Insurance Coverage Law Blog has followed the aftermath of Hurricane Katrina very closely. The blog offers lots of interesting content regarding property insurance coverage and natural disasters.
• FEMA provides a mapping tool to help you identify if any of your properties are at risk for flooding.
• FEMA also provides a very comprehensive guide to preparing your property for a variety of natural disasters including floods, earthquakes, hurricanes, landslides, and tornados.
• The National Flood Insurance Program offers an interactive tool that can help you estimate how much flooding could cost your property management company.

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Do you think your day was stressful? Let’s stop for a moment to consider those extreme situations some property managers find themselves in. It’s often hard to personalize truly disastrous situations but when you think about it, there were faces behind those properties that were destroyed during natural disasters such as Hurricane Katrina and the raging fires that ripped through Southern California in 2007. While it’s likely you will never find yourself or your property in such extreme situations, there are lessons in both of these cases that can be taken and applied to more run-of-the-mill property management situations.

Hurricane Katrina and Insurance
We are all familiar with the images of the destruction Hurricane Katrina left in her wake—thousands of homes and buildings completely demolished and the families who lived in them homeless, with all of their property destroyed. Good thing insurance exists … right?

Well, according to an October 2007 article in National Real Estate Investor Online, one of the many hurdles which New Orleans faced in its ongoing rebuilding process was the fact that insurance premiums went through the roof, completely out-pricing many property managers when it came to getting back in the game. Not only did insurance premiums go up in New Orleans, says the article, but also “In coastal areas from Texas to Boston, insurers have raised premiums.”

What can possibly be gleaned from this situation outside of how unfortunate the repercussions of Katrina have been? Namely, the fact that insurance is a critical part of owning and managing a property — but one that many investors don’t think of when selecting a property for purchase. No matter how good of a deal you find on a property, if the monthly insurance premiums (which you must have to avoid major problems down the line) are out of control, the property is ultimately not a good investment for you.

When making an investment purchase, in addition to all of the other factors that weigh into your decision, make sure that you’ve done your research and know how much full-coverage insurance will run you. Arming yourself with this information ahead of time will save you (and your bank account) a whole lot of misery in the long run.

Southern California Fires and Safety Measures
When the Southern California wildfires ripped through 500,000 acres of land in 2007, there was not much the 1,500 people who lost their homes could do. While most wildfires are not as extreme as those in 2007, they are a real danger for any area that experiences the flammable combination of winter storms, spring winds, and summer heat.

According to ReadyForWildfire.org there are two steps any property manager who lives in this sort of environment should take to guard against the threat of wildfire:

1. Create defensible space – create a buffer between your property and the fire by removing any dead plants, grass, and weeds.
2. Harden your home – identify any weak spots in the exterior construction of your property that might easily fall prey to flying embers and bolster them with flame-resistant material.

And, of course, even property managers in less hazardous areas should protect their property by practicing basic fire safety: have accessible fire extinguishers on-hand in common areas; install smoke detectors in each unit and in common areas; and test and check the batteries of smoke detectors on an annual basis.

Though extreme situations may be difficult to relate to, there are lessons that can be taken from all of them to enhance property management practices and insure that disasters of the more personal variety don’t happen under your own watch.

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So maybe you’re considering a career in property management, or you’re already in the industry and you’re simply looking to take your career to the next level. Here are some great links to sites that will help you achieve your property management career goals. 

• The information at Payscale will help you get a sense of the salaries and benefits that property managers can expect to demand.
• Here is a great blog post for those of you who are considering a career in property management — if this article appeals to you, a property management career likely will as well.
• The Institute of Real Estate Management’s job board is a great resource for property management jobs. Take a look to see what types of job are out there, then apply online.
• Search IREM’s online course catalog to find courses by state — a certification or continuing education class could be all that’s standing between you and that great new job.

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One of the most commonly touted reasons property management professionals provide for working in this industry is diversity. Not only is each and every day different from the one before but, also, property managers have the unique opportunity to put a wide range of different skills and talents into practice.

With this in mind, there are several different avenues that may lead one to a property management career. Perhaps your background is in real estate, finance, law, or marketing. You may apply any of the professional skills learned in these areas to property management. Or you may simply find yourself wanting to utilize certain qualities or characteristics, such as dealing with people on a consistent basis, problem solving, or multi-tasking. In the property management field elements of all of these professional areas and personal skill sets will come into play. While you don’t have to be a master of all of them (or any of them, for that matter), you do have to possess the willingness to learn certain specific tasks. For example, you don’t have to be a finance whiz to be a property manager, but you do have to perform accounting functions; likewise, you don’t have to have a law degree, but you must have a solid grasp on local, state, and federal laws and regulations to ensure your property is always in compliance.

Do you know you want to get into property management but don’t know what your options are? Property management positions come in all shapes and sizes. You can be a self-employed property manager handling only your own property or you can oversee multiple units for a third party. You can be an operations manager, maintenance supervisor, or regional portfolio engineer. When it comes to finding a job in the property management sector, the Institute of Real Estate Management (IREM) offers a great industry hub. Job listings at IREMJobs.org include everything from basic property management positions to business systems analysis work.

With all of this diversity, where do you actually go to learn about property management and arm yourself with the skills necessary to enter into the field? Here are a couple of our favorite resources for starting your property management career on the right foot.

IREM: Institute of Real Estate Management
Although property managers are not required to obtain any sort of specific licensing, obtaining industry-specific knowledge is a great way to market yourself to potential customers and, also, to ensure that you have a solid education and grasp on the field. IREM offers a robust catalog of classes that include everything from professional ethics to on-site maintenance to fair housing. A wide variety of online offerings allows you to take these classes from the comfort of your own home.

BOMA: Building Owners and Managers Association International
BOMA offers both new and seasoned property management professionals the opportunity to build both basic foundational knowledge and area-specific expertise. Whether you’re looking to learn about the basics of real estate management or to educate yourself on cutting-edge energy efficiency programs, BOMA has you covered. Like IREM, they have online offerings as well as audio seminars, which can be attended by phone.

Property management is one of the few fields that allows professionals to use a wide variety of skill sets, keeping work interesting on a day-to-day basis. If you think property management might just be for you, the resources above are a great place to start.

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Offering renewal incentives to current tenants can help to ensure that your units remain occupied and vacancies are not killing your bottom line. Here are a few great resources to help you keep you vacancy rates low and determine whether offering a rental incentive is your best bet.

• In addition to offering renewal incentives, here are some other steps that can really help you keep your vacancy rates as low as possible.
• When trying to determine whether you should offer a rental incentive or how much it is that you should offer, consider the costs associated with marketing the property and repairing normal wear and tear in vacated units.
• Here is a great article from the New York Times on the subject of getting your tenants to stay put.
• Entrepreneur offers some great advice targeted at property management companies — offering incentives to property managers can also help with keeping vacancy levels low.

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Most landlords will agree that a vacant unit ranks right up there as one of their least favorite things. The bottom line is simple: A vacant unit is money down the drain. There are, of course, times of feast when rental units rarely remain vacant for even a few days in between one tenant and the next. But then there are the other, slimmer times, when people are saving their pennies and staying put. In this case, finding a new, quality tenant is much, much easier said then done — it can take weeks (in some cases maybe even months) to find the right tenant.

And, of course, even if you are able to find a tenant, flipping a unit costs money. As discussed in our previous post, even those units that are left in good condition require some degree of re-investment — not to mention the cost of advertising and marketing available units.

Which all seems to make it clear that, at least in the current economy, retaining good tenants is the best way to go. Not only will it save you the expense of turning the unit, but it will also prevent a potential lingering vacancy from sucking away at your bottom line.

Sometimes, though, no matter how good of a job you’ve done taking care of your tenants and making sure that your property and their unit is in tip-top condition, a tenant just feels it’s time to move on. If a good tenant is really ready to go, chances are you won’t be able to do much to sway him or her. But if the tenant is on the fence, you may just be able to win them over for another lease period with an incentive.

When it comes to nudging tenants into signing on for another lease period, the most common incentives provided are rent breaks. How much you offer is a personal decision that you will have to make at your own discretion. Even $100 off rent for the first month of their next lease period might do it. But, chances are, in the case of a tenant who is seriously contemplating making a change, $100 won’t be enough to sway them. $500 or half off a month’s rent — now you’re talking. This is an amount of money that will make a significant impact for most people. It will likely allow them to catch up on bills or enjoy some sort of extravagance they are not accustomed to on a regular basis. This amount may just be the sweet spot. It’s also likely that you’re not losing much as it takes at least $500 to perform the standard “turn over” tasks and advertising.

Those of you who have a really desirable tenant and a tricky local economy may even opt to offer a full month of free rent. Before making such offers, be aware that such an amount may actually be more than it would cost to turn the unit over and advertise it. However, also remember that, though you will lose a month of rental income on the unit, you have the assurance that rent payments will resume like clockwork the following month.

Rent incentives require a bit of strategy on the part of landlords. Before determining if an incentive should be offered and, if so, what amount, it’s important to consider both the desirability of the tenant in question and the general health of the local economy as it will pertain to your vacancy rates. Also remember to think long-term—don’t just consider how such an incentive will affect you on the month the lease begins anew but also how it will (presumably positively) affect you for the next lease period to come.

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Once a former tenant moves out of your property, it’s time to get to work rehabbing the unit. Freshening the unit up can go a long way in bringing in new tenants — and often at a higher rent rate. Here are some great links to help you take care of your newly vacated units.

• Before you do anything to the unit, make sure that you understand the difference between normal wear and tear versus damages. Any damages should be paid for out of a security deposit, not your pocket!
• You decide you need to repaint several rooms in a recently vacated apartment. When you get to the store, you are suddenly faced with hundreds of different paint options. Lowe’s interior paint buying guide is here to help.
• Likewise, selecting new carpets for your property can be a daunting task. Lowe’s carpet buying guide can quickly get you up to speed, ensuring that your new carpeting is the price, color, and type that you need.
• Cleaning appliances is likely not a frequent occurrence. So what is the best method to make your oven look like that lasagna never boiled over?

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The last box has been hauled down the stairs and the moving van has pulled away from the curb. Now that your former tenant has vacated his apartment, it’s time for you to get to work, flipping the unit in preparation for the new tenant that’s on her way. We’ve talked about the differences between normal wear and tear versus damages previously—so now let’s take a look at what tasks you can expect to complete on a routine basis when a tenant moves out of one of your units.

Cleaning Appliances

No matter how cleanly your former tenant was—and even if he cleaned the apartment himself prior to vacating—chances are some spots were missed. And some of the most common missed spots that require your attention are appliances, such as stoves, refrigerators, and built-in microwaves.

Cleaning Floors and Laying Carpet

Flooring is another one of those areas that may still be a bit grimy upon your previous tenant’s departure. As with the appliances, you will want to make sure that they are all thoroughly clean for your next tenant. Don’t just clean—use this opportunity to get rid of scuffs, stains, and any other markings that may be more permanent than just dirt. If you have hardwood floors, you may want to consider adding a coat of wax while you’re at it. Not only will it look great for your next tenant’s arrival, but it will also protect the floor against nicks and scratches from your next tenant. If you’re dealing with carpet, you will either want to rent a carpet-cleaning machine or bring in a professional to take care of the job. In addition to visually freshening up the unit, carpets can also hold odor, so you want to get rid of any lingering scents before your new tenant arrives. If the existing carpet is worn out, be sure to re-carpet altogether in between tenants.

Removing Nails and Patching Holes

Here’s a common one–removing nails from paintings and other fixtures hung by the previous tenant. Not only will you want to remove the nails, but also to patch up the holes left in their wake. You can hire a handyman to take care of this, but spackling kits from hardware stores are inexpensive (think less than $5) and make the process fairly straight-forward (unless, that is, you’re like one of our customers who had a tenant that left 444 nails in the apartment upon vacating it). When patching up holes left behind by nails, also be sure you have paint on hand to blend the area with the rest of the wall.

Paint

Speaking of paint, here’s another common one. You’ll want to carefully survey the unit to make sure that the paint job is fresh and new, fixing up any scuffs, scratches, or peels. In many cases, it’s easier just to re-paint altogether. Not only does a new paint job spiff up the apartment for your new tenant, but it also makes it easier for you to evaluate any damage incurred the next time you flip the unit. To avoid problems down the line, make sure that you keep extra cans of paint around to match pre-existing paint jobs in your unit.

The good news about the most common unit-flipping tasks is that most of them are do-it-yourself-friendly. When determining whether to take care of each unit on your own or with the help of a handyman or professional cleaner, evaluate the condition of each unit and determine whether or not the time and effort it will take you to accomplish these tasks justifies the cost of hiring a third-party.

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So you get the idea — giving a property owner some pro bono work shows them what you can do and that you are committed to earning the job. Here are some great additional links to help you stir up more business.

• The National Association of Residential Property Managers (NARPM) is a great resource for property owners looking to hire a property manager. Your company should be listed on their site.
• Use Indeed.com to find property management jobs in your area, then offer the property owner a free consultancy. It’ll go a long way in landing you the job.
• Property owners have likely made a large investment in their properties — they want to see that any property manager they hire is just as invested in doing a great job. Here are some questions you should be prepared to answer to satisfy property owners’ concerns.
• If your time invested pays off, you need to be able to keep those vacancy levels low. Here’s some great advice on marketing your properties.

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