Management Mondays Blog

Are the Holidays a Good Time to List a Home for Rent?

24 Hour Property Management - Monday, December 9, 2019


Are the Holidays a Good Time to List a Home for Rent?

Ideally, you want to list a property for rent during the spring or summer months as this is peak real estate season. Typically, during this time, there is more market competition, but also more people actively searching for rentals. That said, when the alternative is a prolonged vacancy and loss of cash flow, we at 24 Hour Property Management would never recommend that you intentionally not market during the winter holiday season. Though there may be challenges and it may take a little longer to locate the right tenant than at other times of the year, it is absolutely possible to find a good fit between Thanksgiving and the end of the year. Besides, when you hire 24 Hour Property Management to fill your vacancy, we do not earn a penny until the first month’s rent is paid. So, you can rest assured that it won’t cost you any additional funds while we do our job and find you a qualified tenant.

Contact 24 Hour Property Management, Inc.

If you any questions about 24 Hour Property Management, our services, or our methodologies, please contact us so that we can answer your questions and advise you. You can reach us seven days a week at 949-409-8585 or you can check us out on the web at 24hourpm.com.

How Often Do You Send Out Owner Statements?

24 Hour Property Management - Monday, December 2, 2019


How Often Do You Send Out Owner Statements?

Every month, once rents have been collected, fees, taxes, and expenditures deducted, and net proceeds have been distributed electronically, we will send out an owner statement that details the activity for the previous month. The statement is typically dated around the 7th and sent around the same time. We generally send any associated documentation at this time, such as receipts or paid invoices.
 
The statements list the beginning cash balance, which may include any maintenance reserves we are holding, as well as additions and subtractions from cash. The second page also includes a detailed transaction list that lists the dates and amounts of rent, management fees, and owner disbursement, as well as any repairs or maintenance that may have occurred during the statement period.
 
Whereas we send these statements monthly, occasionally an owner asks for quarterly or semi-annual statements. We can accommodate any schedule as long it is not less than monthly. Furthermore, an annual statement is sent every January.

Contact 24 Hour Property Management, Inc.

If you any questions about 24 Hour Property Management, our services, or our financial reporting, please contact us so that we can answer your questions and advise you. You can reach us seven days a week at 949-409-8585 or you can check us out on the web at 24hourpm.com.

How Extensively Do You Vet an Applicant?

24 Hour Property Management - Monday, November 25, 2019


How Extensively Do You Vet an Applicant?

We’ve found that the majority of landlords, landlord agents, and property managers find that a credit check is sufficient to qualify an applicant. This level of investigation is sufficient for 97% of applicants. However, at 24 Hour Property Management, in addition to the standard credit check, we perform a background check that includes criminal and eviction histories. And it’s really that 3% you need to be wary of. Whereas we are primarily on the lookout for crimes that involve violence or theft, we do see a smattering of violations, misdemeanors, and other lesser crimes. Couple the background checks with the level of investigation we perform on each tenant’s financial health and character, you get one extensive and near foolproof screening process. 

Contact 24 Hour Property Management, Inc.

If you any questions about 24 Hour Property Management, our services, and our vetting process, please contact us so that we can answer your questions and advise you. You can reach us seven days a week at 949-409-8585 or you can check us out on the web at 24hourpm.com.

How Important Are Tenant Financials?

24 Hour Property Management - Monday, November 18, 2019

How Important Are Tenant Financials?

Just how important are tenant financials during the qualification process… very! First and foremost, you must ensure that a tenant has the financial wherewithal to be able to make regular rent payments. As discussed in previous Management Mondays, we recommend a gross monthly income multiplier of 3x the rent, though that can slide to 2.5 to 3.5 depending on the amount of debt.
 
 However, beyond just looking at the numbers, you must ensure that the documentation (paystub, bank statement, etc.,) is legit. We have seen an uptick in inauthentic proof of income in recent years. Applicants may be merely inflating their income to market themselves better. Worse, they could simply not afford the rent or be obscuring income from illegal activities. Regardless, you should do everything possible to verify the source of the income. We here at 24 Hour Property Management conduct research and call employers to verify the information submitted firsthand. 

Contact 24 Hour Property Management, Inc.

If you any questions about 24 Hour Property Management, our services, and our vetting process, please contact us so that we can answer your questions and advise you. You can reach us seven days a week at 949-409-8585 or you can check us out on the web at 24hourpm.com.

Can I Cancel a Property Management Contract?

24 Hour Property Management - Monday, October 28, 2019


Can I Cancel a Property Management Contract?

A Property Management Agreement (PMA) indicates the length of an agreed upon term for which the management company and landlord are legally contracted. Typically, this term is one year. Lawfully, you may not cancel or back out of this contract unless the management company has committed some sort of malfeasance or was in breach of contract in some other way. Long story short, the management company has a right to collect funds for as long as specified and you are obligated to pay.
 
 If you are so unhappy with the company that you want to get out, you should first talk to the management company and express your displeasure and see if they will amicably part ways. If that doesn’t work, you may try to negotiate a reduced amount. For example, if you are still on the hook for seven more months of management, you could offer to pay three months of management fees upfront to let you out. You could also consult an attorney if needed.
 
 At 24 Hour Property Management, we are confident that you’ll be pleased with our services; and, for whatever reason you are not, we will do what it takes to make it right. In the event that our professional relationship is irreparable, and it turns out we are not the management company for you, we have no problem letting you out of your contract. Fortunately, for us and our clients, this has yet to occur.

Contact 24 Hour Property Management, Inc.

If you any questions about 24 Hour Property Management, our services, and our excellent customer satisfaction, please contact us so that we can answer your questions and advise you. You can reach us seven days a week at 949-409-8585 or you can check us out on the web at 24hourpm.com.

What Income Multiplier Signals a Good Applicant?

24 Hour Property Management - Monday, October 14, 2019


What Income Multiplier Signals a Good Applicant?

When vetting an applicant or group of applicants for your rental property, there are many factors to consider, such as credit, character, and rental history. But the most important consideration in our estimation is the tenants’ ability to pay, i.e., their income. Honestly, even parsing their income is a bit complicated if you truly examine the numbers, but as a rule of thumb, we recommend that the combined monthly gross income of the applicants is equal to or greater than three times the monthly rent. For example, if you expect monthly market rent to be $2000, you should expect the combined monthly gross income of the applicant(s) to equal or exceed $6000 ($72,000 annual).

A few caveats to consider if you want to take a deeper dive:

  • Source of income – does all the income come from a reliable source, i.e., verifiable employment with longevity, as opposed to student loans or irregular contract work.
  • Monthly obligations – if the applicants have little to know obligations (car payment, high credit card payment, student loans) then you may be OK accepting a 2.5 multiplier. Conversely, if the applicants have a large amount of obligations, you may need to increase the multiplier to 3.5.

Contact 24 Hour Property Management, Inc.

If you any questions about how we dig into applicant’s income, or any other question related to property management, please contact us so that we can answer your questions and advise you. You can reach us seven days a week at 949-409-8585 or you can check us out on the web at 24hourpm.com.

Minimum Requirements for Property Condition

24 Hour Property Management - Monday, October 7, 2019


Minimum Requirements for Property Condition

In California, landlords must meet the following basic dwelling livability requirements (summarized):

  • effective waterproofing and weather protection of roof and exterior walls, including unbroken windows and doors;
  • functioning plumbing, heating, and electrical facilities, including hot and cold running water and a working toilet and kitchen sink;
  • clean and sanitary building and grounds (that is, free of debris, filth, rubbish, garbage, rodents, and vermin), with adequate trash receptacles;
  • well-maintained floors, stairways, and railings;
  • deadbolt locks on certain doors and windows;
  • no lead paint hazards; and,
  • no nuisances

Outside of the above, it is also required that the home has smoke alarms in each bedroom, in the hall leading to any bedroom, and at least one on each floor. Furthermore, each floor must have a CO2 detector and the water heater must be strapped properly. Required in some cities but recommended in the strongest terms possible no matter where the property is located, a pool safety fence should be erected when the property has a pool.

Beyond that, our property managers will walk-through the property and make recommendations for improvements based on potential hazards and rentability.

Contact 24 Hour Property Management, Inc.

If you any questions about mitigating liability or if an item should be repaired, or any other question related to property management, please contact us so that we can answer your questions and advise you. You can reach us seven days a week at 949-409-8585 or you can check us out on the web at 24hourpm.com.

How Many People Do I Have to Interact with at 24 Hour Property Management?

24 Hour Property Management - Monday, September 30, 2019


How Many People Do I Have to Interact with at 24 Hour?

Many property management companies have multiple points of contact for their clients. You may have to talk to one person when you’re on-boarded, another about the ongoing management, a third about maintenance issues, and still a fourth for accounting/financial questions.

That may be a fine model for them, but at 24 Hour Property Management we believe in giving you a single point of contact, one property manager that answers all your questions and provides all your updates. If you have a question about your monthly statement or about the progress of a certain repair, or about the quality of an applicant, you can ask your property manager. Similarly, when we must notify you about late rent or send an invoice for unclogging a drain, it will come from this very same person.

Contact 24 Hour Property Management, Inc.

We have an extremely customer-service oriented approach to property management and put our clients’ needs above all else. If you any questions about what we can do for you, or any other question related to property management, please contact us so that we can answer your questions and advise you. You can reach us seven days a week at 949-409-8585 or you can check us out on the web at 24hourpm.com.

Can a Tenant Make Improvements Without Landlord Permission?

24 Hour Property Management - Monday, September 23, 2019


Can a Tenant Make Improvements Without Landlord Permission?

The typical course of action is that a tenant will ask permission to do X, Y, or Z to your rental property at their own expense. This could be as mundane as painting the walls a different color to reflooring the entire unit. As the property owner, you have every right to consider the proposal and approve or deny it. Though, we generally recommend accepting improvements that add or maintain value or are easily reverted.

But what if the tenant makes improvements or repairs without your permission… what are your obligations? Save for a very few specific caveats, the tenant may not make alterations or repairs without your explicit permission. And, if they do, they are not entitled to reimbursement through any means. 

The California Association of Realtors lease we utilize plainly states, “…without Landlord's prior written consent, (i) Tenant shall not make any repairs, alterations or improvements in or about the Premises […]; (ii) Landlord shall not be responsible for the costs of alterations or repairs made by Tenant; (iii) Tenant shall not deduct from Rent the costs of any repairs, alterations or improvements; and (iv) any deduction made by Tenant shall be considered unpaid Rent.”

Contact 24 Hour Property Management, Inc.

If you any questions about your obligations to your tenant, legal or moral, or any other question related to property management, please contact us so that we can answer your questions and advise you. You can reach us seven days a week at 949-409-8585 or you can check us out on the web at 24hourpm.com.

How long does it take 24 Hour to find a tenant?

24 Hour Property Management - Monday, September 9, 2019

How long does it take 24 Hour to find a tenant?

In over 1000 rental transactions spanning a decade, we have found that properties that rent up to $3000 per month take an average of 17 days to locate a tenant. For properties that rent for over $3000 per month, the average time it takes to find a tenant is 31 days. However, for the first 8 months of 2019, our average days on the market is 14 and 20 for properties listed under and over $3000, respectively.  

To clarify, this time refers to the amount of time to find a qualified tenant, sign a lease, and collect the deposit. There usually can be days or weeks before the tenant moves in and starts paying rent.

There are many factors that can affect these averages for an individual property. For example, if you allow pets, you’ll likely speed up the chances of finding a qualified tenant. Your definition of a qualified tenant can affect the time frame as well. For example, do you require applicants to have 800+ credit and a gross monthly income of four times the rent? And biggest of all: seasonality. From mid-November through the end of February is the slowest time of year. So, if you list during this time, expect your rental take some extra time to become occupied. Conversely, May through August is extremely active. You may be able to rent your property even faster than the average times if listed during this time of the year.

Contact 24 Hour Property Management, Inc.

We’ve refined our systematic approach over the years through hundreds of rental listings and we have the data. If you any questions about marketing your property, or any other question related to property management, please contact us so that we can answer your questions and advise you. You can reach us seven days a week at 949-409-8585 or you can check us out on the web at 24hourpm.com.


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