By Matt Donnelly, Buildium, Boston, MA

If your tenants don’t own pets, they’re in the minority. That’s the finding of a new Apartments.com survey, in which a full 75% of renters said they owned one or more pets. That’s up a staggering 32% since last year. Most of these pets are cats and dogs, with fish trailing behind at 6%. (Sorry, Nemo.)

Curiously, only 63% of renters who own pets said they were required to put down a pet deposit. The most common deposit was $200+.

What’s possibly more interesting is that 58% of renters who don’t own a pet still sought out pet-friendly buildings. They want to live near pet owners. Of those renters surveyed in 2013, 78% said they lived in pet-friendly buildings, up from 59% in 2012.

The trends are clear: More renters are owning pets, and more renters without pets are warming to the idea of living near them. Add to this the fact that 65% of pet-owning renters said they had some problems finding pet-friendly rentals, and it seems clear that having pet-friendly units could put your property at a competitive advantage. Put another way, if you’re not allowing pets, you’re turning away a large subset of renters.

Are the risks of allowing renters’ pets greater than the rewards? Do you allow pets in your units? Why or why not? Share your experiences in the comments section below.

(Note: The dog featured in the photo belongs to Buildium’s own Ian Pirro.)

By Matt Donnelly, Buildium, Boston, MA

Low mortgage rates aren’t enough to tempt some young people to buy a home. Instead, they’re opting to rent one.

In Memphis, for example, property management companies like Lubin Property Management LLC and Renshaw Property Management are seeing big growth in single family rental homes.

“Young home renters have been our biggest area of growth,” Ryan Lubin of Lubin Property Management LLC told The Daily News in Memphis. “Even with mortgage rates low, we are seeing more demand for rentals from the 23 to 35 age group than any other group.”

Why the trend? Some experts are citing high student loan debt, while others point to macroeconomic uncertainties. Another reason young people prefer to rent a home instead of buying one is that they want to live in an area first.

In many areas of the country, investors are buying and rehabbing single-family homes that they turn around and rent out in order to meet the surging demand. This is big business — a $10 billion business, reports Bloomberg Businessweek.

According to new research by IBISWorld, property managers stand to benefit from this home rental trend:

Private equity firms and other large investors typically do not directly manage the day-to-day operations of the houses they buy. Instead, they outsource property upkeep and tenant relations to property managers, who currently derive about 63.8% of their revenue from the residential market. However, this market largely comprises the management of multifamily apartment buildings, rather than single-family homes; as such, these operators will shift slightly toward managing groups of homes, opening up a niche service segment for some property managers.

IBSIWorld projects 6.0% revenue growth for the property management industry in 2013 due to the wider U.S. housing recovery.

If you’re a property manager, have you seen increased demand for professional management of single family rental homes? Please share your story in the comments below.

By Matt Donnelly, Buildium, Boston, MA

Think of an English butler, and your thoughts probably turn to a devoted servant willing to do whatever it takes to make his employer happy.

Apply that same idea to property management, and you have what new UK-based property management company London Management Company is calling “butler” service. By “butler” service, they mean providing uncompromising one-stop service to tenants and property owners. London Property Management is convinced there’s a need in the UK property management market for world-class service, implying that it’s now lacking.

What can you as a property manager do to provide “butler” service to your tenants and property owners? Here are a few ideas:

• Put the tenants first: You might have lots of other things to do, but you should always strive to reply to tenant emails quickly and pick up the phone if you get a call.

• Sweat the small stuff: Sometimes it’s the small things that mean the most to tenants. You don’t always have to resort to grand gestures. Are there any small requests you can take care of today that will brighten your tenants’ day?

• Think of ways to make your tenants’ lives easier: What about online bill payment? How about letting them log maintenance requests online?

• Be innovative: What about giving your tenants “shrinking” lease payments if they consistently pay on time? How about offering a rewards card with discounts from local merchants?

• Invest in upkeep: If your units are looking their age, it might be time to invest in some upgrades. Don’t let repairs wait — take care of them quickly, and your tenants will notice.

Customer service — or the lack thereof — can be the difference between happy, lease-renewing tenants and a merry-go-round of empty units or new tenants. Which would you rather have?

Now it’s your turn. What do you do to provide “butler” service to your tenants? Please leave a comment below to continue the discussion.

A guest post by Sara Thompson, Gresham Sanitary Service, Gresham, Oregon

You have probably seen these homes on TV, or maybe you’ve seen them in person. People known as “hoarders” compulsively accumulate any and all kinds of things in their homes until it is packed to the ceilings with their every possession. Hoarders usually have an inability to let go of unnecessary items and clean their environment. In some cases, hoarders’ homes become dilapidated and dangerous. If you are managing such a property, this can present a serious problem, but with careful planning and consideration, your house can be habitable once again.

Dealing With a Hoarding Problem
People who become hoarders are in need of help, both with the situation at hand, and in terms of dealing with the disorder. Concerned family members and friends should have the hoarder examined by a doctor, and perhaps consult a therapist.

Helping the hoarder also involves completely cleaning out and organizing the home. Piles of clutter can make a home unlivable, creating both safety and sanitation issues. Thus, it’s critical for the home to be cleaned and organized before more problems arise. Possible issues involve fire (due to blocked exits, and huge amounts of paper and flammable objects) as well as the danger of illness from unsanitary conditions in the kitchen and bathroom.

Creating a Strategy
People who are involved with a hoarding cleanup project need to develop a strategy for cleaning the home, as many hoarding situations can become overwhelming. The best strategy is to break the cleanup into several projects, thus making the cleanup more doable. Here’s a list of jobs that will need to be accomplished in order to clean a hoarder’s home:

1. Assess the situation. Take a look at the overall clutter in the home and prioritize the work that needs to be done. It can be helpful to start in a small places like closets and bathrooms. When one small space is cleaned out quickly, it can motivate you to move on to bigger tasks.
2. Sanitize the worst areas first. Some hoarders seriously neglect sanitation in the bathroom and kitchen, which can lead to health hazards. These areas should be cleaned out and sanitized first, especially if there are areas with pet or human feces. While this is often a disgusting task, it can go rather quickly because you shouldn’t have to sift through items worth keeping. Most of what is in a bathroom, like half-empty shampoo bottles and expired toiletries can be trashed without consideration. The cleanup crew should bring plastic bags, mops, rubber gloves and disposable cleaning items like sponges and wipes to deal with the cleanup.
3. Do a major decluttering of useless objects. Some objects in the home may be useable if cleaned. Other items, like leftover mail, old newspapers and trash, must simply be disposed of. The junk items should be thrown out first before dealing with reusable items.
4. Get a drop box from a waste disposal company to help deal with major junk items. These large waste containers can be rented by the day at reasonable rates, depending on the time frame and size of the container. Many companies will pick up the full container and dispose of the waste once the job is done.
5. Once the home has been cleared of waste items and sanitized, sort through the other items. Make three piles for clothing and other items, and sort them into piles of what can be reused once cleaned, what should be given to charity, and what can be sold.

Creating a clean environment for a hoarder is a healing and healthy act. It’s a great gift to give a person who needs help. It can also be very rewarding for you as a property manager when the home has become rentable again.

A guest post by Brooke McDonald, Apple Valley Property Management, Minnesota

As we all know, outsourcing is a risk that can turn out to either be the best decision you ever made or the worst thought to ever cross your mind. When it comes to property management, you have to decide: Am I willing to put the care of my rental property into the hands of a stranger? Will the investment be worth it?

The stereotyped and semi-popular sitcom Outsourced didn’t last long on NBC, but it aired long enough to remind Americans of a poignant truth: Any kind of outsourcing involves some kind of learning curve, frustration, and a little bit of humor.

Thankfully, outsourcing your property management does not have to be as hairy as Todd Dempsy’s struggles to run his Indian call center, nor will it require working with an office on another continent (unless you hire a property management company in another country, which we don’t advise). No, local property management companies can, in fact, be an incredible benefit to you as a property owner, saving you time and money and providing real estate expertise that can protect you from legal trouble.

When you think of the word “outsourcing” in terms of property management, get rid of the negative connotations you often hear. Retrain your mind to hear the word “outsource” in conjunction with “property management” and think smart, wise, and worth it.

Outsourcing can be an outstanding decision

Doing all the management yourself is a heck of a lot of work for you, but it’s all in a day’s work for a property management company.

In addition, property management companies have all the structures and resources in place to do an excellent job. They usually employ software that an average person might not have – software that allows them to collect rent, perform background checks, and advertise listings.

Here’s what hiring a property manager can save you:

• Valuable time. Property management involves a lot of time communicating with tenants, marketing properties, advertising online and in high-traffic areas, and conducting showings.
• Worry about legal issues. Property management is a big responsibility and can result in lawsuits if tenant/landlord law is not followed correctly. No one wants lawsuits – and the experts you hire will understand the laws and know how to avoid them.
• Burdens about quality. A company that takes care of properties for a living can be trusted to go about things the right way. They also won’t be doing it on the side or in their spare time (as you might, especially if you have another day job along with caring for properties). It’s their main focus. You can relax knowing they have it all under control, rather than constantly thinking you might be missing something.
• Money (in the long run). Although there is a cost to property management, in the long run they will be doing needed maintenance as time progresses, preventing major blow-ups and ensuring that the property has all the updates it needs. Property managers also have the potential to make more money on properties because they understand local real estate, potentially charging higher rent, filling vacancies faster, and taking advantage of any special deals on maintenance and advertising they might have as professionals.

Common objections to giving up control

You may be saying, “But I really love this apartment, and I want to make sure it’s taken care of the way I want it to be taken care of.” Giving up control of your rental properties might feel a little bit like handing a newborn to a random hospital visitor. It matters to you! Nothing is more important to you as the owner than running a quality business, keeping tenants happy, and providing excellent upkeep of your properties so your tenants have a great experience.

Often, too, the cost that comes along with outsourcing property management makes people wrinkle their noses. But it’s possible to soothe your objections if you consider the overall advantages of hiring professionals – and hire the right ones.

Having confidence in your property management company

When considering people to hire, consider the recommendations of friends, as well as reviews and ratings of local companies. Also, sit down with the company and ask questions. Just as you’d screen a summer nanny or a house sitter, you want to feel confident and trust the person you choose.

Here are several helpful questions to ask, with some thoughts on the reason to ask them.

1. How often will you inspect the property? You want your property manager to get into the property on a frequent basis and ideally not charge extra for these visits. The more often they are able to check up on things, the better job they will be able to do.
2. How frequently will I receive reports? The more you are aware of how things are going with the property, the better. A good property manager should issue monthly reports – anything else is slightly suspicious.
3. What are your fees based on? Ensure that the fees are based on rent collected, not potential rent charged. Also ask exactly what services are included, and make sure everything you are looking for is listed.
4. How do you handle vacancies? Will they fill them ASAP? Will they charge you if a property sits unfilled?
5. What are their methods for handling repairs and maintenance? Some companies provide receipts and expense reports to owners to show all that they have done on the property. Many also detail the types of repairs they can and cannot do. It is helpful to know this up front. Also discuss their spending procedures, and when they need to receive permission to spend money on your property.

The caveat to all this is obviously that outsourcing will prove a crummy decision if you trust the wrong folks to do it. You want to hire an expert company who will do the job right.

But if you pick the right kind of people who can take your property and run with it, well, who wouldn’t outsource?

By Steve Boudreault, Buildium, Boston, MA

In Star Trek VI: The Undiscovered Country, Captain Kirk and Doctor McCoy are found guilty of assassinating the Chancellor of the Klingon High Council and are sent to the penal colony known as Rura Penthe. Upon arrival, the administrator of the facility informs the arriving prisoners, “Work well, and you will be treated well. Work badly, and you will die.”

This sentiment, paraphrased and without the threat of death, is a guiding principle of property management. If tenants behave themselves and follow the rules, the property manager can make their tenancy a pleasant one. If not, things can get ugly very fast.

There was a situation recently at a property in Virginia where the residents came close to rioting because of what they perceived to be shoddy property management. Management, for their part, claimed that the residents were disrespectful, slovenly, and constantly flouting the rules.

So as a property manager, what do you do when a situation turns ugly? You’ve all got to live with one another, right? If you say it’s them and they say it’s you, how do you come to an amicable resolution? Here are a few tips.

Document everything. If residents are accusing you of not performing your property management duties, be sure to have written documentation that states that you have been. And if, for example, residents are complaining about things not being repaired, photographic evidence of before and after can go a long way.

Isolate the problem. It’s very rare that an entire property rises up as one against management. Oftentimes it’s a single agitator, rallying other residents to the cause by pointing out minor issues and making mountains out of molehills. If there’s general grumbling, talk to your residents and see if you can trace the problem back to one or two malcontents.

Arrange town meetings. Gathering everyone together in an open forum is a great way to establish a dialogue, hear residents’ complaints, and keep everyone up to date on what’s being done and what will be done to fix things. Be sure to keep the reins tight, though. Meetings like these can easily degenerate into shouting matches if you’re not careful.

Property managers and residents live in an eternal state of careful balance. As long as everyone feels that their voices are heard and respected, that balance is maintained and everyone can live in harmony.

By Linda Day Harrison, theBrokerList, Chicago, IL

I came to the conclusion very early in discussions with potential new property management clients that an initial drive-by, preliminary meeting with the owner, if possible, and compiling facts about the property on my own internal “Real Property Inventory Profile” was the best approach for me to take in determining the information necessary. Keep in mind, this approach is only necessary with local owners who were typically comprised of a partnership of local individuals or related persons who pool funds to invest in real estate.

If the potential prospect is an institutional-grade client, the approach is completely different as that type of prospect knows exactly what is involved and generally the real estate has been managed professionally. In that case, a discussion with the existing property manager would be ideal, or you can provide your request for key information included in the “Real Property Inventory Profile” initially. The key fact is whether or not the property has been managed by professionals or self-managed, or is being built or acquired.

Why are all of these differences relevant? Well the basic reason is that a professionally run property has systems and procedures and good habits in place, and generally a self-managed or new property requires much more upfront labor to establish all of the systems and procedures that all reputable owners will concur are necessary.

In my professional opinion, all of these key factors would need to be considered before ever providing a fixed quote to any client. A range would be safe, but never a fixed quote of any kind.

In addition, you need to determine the serious level of interest in this client actually wanting to go down the path of hiring a new management company. That is why I created my own “Real Property Inventory Profile”  as my own cheat sheet of questions and information to gather so I could learn more. In some cases, I can just send this questionnaire to the owner and ask them to respond. The profile helps you to qualify the potential property owner and their level of interest up front. Why? Because providing a proposal to manage a new property is an investment in time and resources. Property visits, analysis, team discussions, research, and preparation of a professional proposal that speaks to that owner personally about their property takes significant time, effort, and in essence, if you do a good job, actually provides the building owner with insight into their own property.

The “Real Property Inventory Profile” is vital because it immediately tells me how much upfront work we would have to perform to actually start managing the property. In other words, were we going to manage something that was mismanaged and needed work from the ground up, or was this a well-managed property that was not going to require a “swat team” (see New Property or Facility Takeover: Where Do I Start?) to take it over and set up all of the processes and systems and procedures from scratch? That is a major point of contention with any new business assignment — how much labor will be required. Labor relates to cost and overhead, so when pricing an assignment, the upfront investment of labor is an important consideration.

It can also demonstrate to the client you are serious and want to know more about what type of owner they are. Are they hands-on? Are they an absentee owner or a rookie owner? Again, all of this information will enable the most accurate quote of labor, which is what business services is all about. Remember, in property management and leasing, time is our industry commodity, therefore we need to understand how much time all of the steps and tasks will take us to execute. There are many people who would take on any new business assignment, and that is fine, but it is fraught with risk and you must go into the assignment with your eyes wide open, as well as be prepared for price objections when a client states that something costs more than they are willing to pay. By doing your homework, you will be more prepared to handle the feedback.

A guest post by Sara Thompson, Zenith Properties NW, Vancouver, WA

You bought your investment property to make money over time, and with the right tenant, it can. Selecting a tenant is the most important aspect of managing your investment property. An undesirable tenant can turn your owner experience into a nightmare if they damage the property, fail to pay rent on time or at all, or cost you when you have no choice but to evict them. The situation can get ugly fast. So, let’s discuss how you can be sure to rent your property to the best possible tenant.

Eliminate the least desirable applicants over the phone
Before you invite them into your property, get to know them a bit better. When a renter calls to schedule an appointment to view your property, ask a few initial questions so that you can ensure you are only inviting reasonably qualified renters to look at the unit. If they are unwilling to fully answer your questions or are disrespectful, then you can eliminate them as possible candidates. Ask them questions like:

-Do you have pets?
-How many people will be living in the space?
-Do you have good rental history?
-Can you verify that your monthly income is three times the rental amount?

Consult Their Previous Landlords
Have a discussion with at least two of their former landlords and ask them these questions:

-Did they pay rent on time?
-Why did they move out? If they were evicted, was it for non-payment or for breaking lease rules?
-Did they get along with their neighbors?
-Did they provide 30 days notice before vacating?
-Did they keep the property in order?
-Did they damage the apartment other than general wear and tear?
-Did they complain or request maintenance often?

If the applicant is a first time renter they will not have a rental history, in which case, you may require a co-signer for the lease agreement.

Run a Credit Check
It is important to know that your future tenant has a habit of paying their bills on time. A credit check will reveal their bill paying history and how much debt they have. Even if they earn more than three times the rental amount per month, they may still have trouble paying rent if they have a lot of debt. A credit check will also show prior court judgments and/or bankruptcy filings.

Check Their Criminal Background
With just a name and date of birth you are able to view a tenant’s criminal record, which you can find at state and county courthouses. (It is important to check a valid ID so that you have their correct name and birthday.) Unfortunately, there isn’t a nationwide database of criminal records, so it may be difficult to reveal an applicant’s entire history, especially if they have lived in several states across the country. You will find it easier to justify rejecting an applicant based on drug-related or violent crimes than you would rejecting an applicant with multiple speeding tickets. Remember to reference state laws to make sure you do not unknowingly and illegally discriminate against renters with particular criminal convictions.

By Steve Boudreault, Buildium, Boston, MA

It all comes down to Sunday.

The journey that started back in September for the Baltimore Ravens and the San Francisco 49ers ends at the Mercedes-Benz Superdome in Nawlins, with one team going home with the championship and the glory, and one team just going home.

Ostensibly, the two teams in the Super Bowl are the two best teams in football. But how do you quantify “best”? One could make a case for the Atlanta Falcons, who were undefeated for the bulk of the season and shared the best record in the NFL with the Houston Texans. Or one could make a case for the New England Patriots (those of us in Boston certainly do), who picked a bad day to have a bad day in the playoffs.

So then why the Ravens and the 49ers? It’s actually a simple formula, really: it’s equal parts talent, preparation, execution, and luck. The same qualities that can make your property management team ready for the big time.

Talent: Do you have the best possible people working for you? Are they creative in their solutions to day-to-day issues on the property? Are they smart and dedicated? Do they bring an intensity and an energy to the team? Do they work as a team? When it comes to talent, you can’t compromise.

Preparation: Are the folks on your property management team proactive? Do they figure out situations before they escalate into problems? Are they organized and ready for walk-ins and showings? Are they on top of everything? Being prepared extends to everything your team does.

Execution: Is your team big on follow-up and follow-through? Do they show up when and where they’re supposed to? Do they put their collective best foot forward and present the property in the best possible light? When it comes to paperwork, do they have all their i’s dotted and t’s crossed? Being prepared is nothing if there’s a failure to execute.

Luck: Luck is the one element that’s beyond your control, but if good fortune smiles, a high-caliber team can capitalize on it. And a team never, ever takes luck for granted.

Your property management team may not wear shoulder pads or eye black (but if they do, please send us a photo), but they can be just as successful as whichever team prevails this Sunday. And remember — neither the Ravens nor the 49ers were Super Bowl teams at the beginning of the season. The ups and downs, trials and tribulations, and blood, sweat, and tears of a grueling season forged them into what they are at this moment. The Ravens got where they are as a team. So did the 49ers. So can your team.

Enjoy the big game!

By Steve Boudreault, Buildium, Boston, MA

As of this morning, the population of this little blue ball we call home was 7,061,514,434. And that doesn’t even take into account the number of babies born in the time it took to write that first sentence. As anyone who takes public transportation in the morning can tell you, this planet is packed.

Most of the preeminent scientists of our day — including the renowned Stephen Hawking — agree that the future of humanity doesn’t rest here on Earth. It’s the old adage of keeping all your eggs in one basket: there’s too much of a chance that catastrophe will strike either externally (a rogue comet or solar flare) or internally (exhaustion of our natural resources) and wipe out humans with one swift stroke. In order to better guarantee that humanity lives on, we need to set up colonies on the moon, on Mars, or in orbiting space stations. That way, if something ever happens here on terra firma, our race will continue.

But while moon bases and miniature Deep Space Nines are ambitious, some scientists prefer to think big. Like, really big. One of those scientists is Freeman Dyson, who in 1960 came with the concept of a megastructure known as a Dyson sphere.

A Dyson sphere, for our purposes, would essentially be a giant metal ball built around the sun. Its circumference would be the current Earth’s orbit, and its inner surface (where we would all live) would have the advantage of harnessing 100% of the sun’s energy. If thick enough, the Dyson sphere would protect us from all manner of space-borne destruction.

It would also alleviate some of that congestion we spoke of. The Dyson sphere’s inner surface would be 550 million times the surface area of the Earth.

“So,” you’re no doubt thinking, “550 million times the surface area of the Earth. They’re gonna need some serious property management.” That’s executive thinking, but hold your horses. There are a few minor issues that need to be worked out first.

The sphere would have no gravitational interaction with the sun, so it would likely drift and eventually collide with the sun. You’d probably have to install and run giant industrial fans in various spots on your MegaProperty to correct for the drift. And think what that’s gonna cost you.

The sphere would have no gravity of its own, so anything you put on the inner surface would simply fall into the sun. The only real solution to that conundrum would be to put everybody on the outside of the sphere, but then the sun’s light would be completely blocked and you’d be sitting on a giant metal ball in the cold vacuum of space. Good luck attracting residents to that.

There’s no known or theoretical building material that could withstand the sun’s gravitational pull, so you’d have to divide your time between being a property manager and being a theoretical physicist just to get the project off the ground. Hope you’re budgeting your time wisely.

Oh, and there isn’t believed to be enough material in the entire universe — even after mining the cores of gas giants, which we haven’t figured out how to do yet — to build a Dyson sphere. So your MegaProperty may have to be put on hold for a bit.

Still, the concept of a Dyson sphere certainly is tantalizing. If they could work out all the kinks, how many properties do you think you could manage?