5 Qualities and Habits of Great Property Managers

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Sometimes life is what happens while we’re making other plans. Other times life feels like it’s in the palm of our hands waiting for our decisions about what we want to make happen next. Maybe that’s the way our lives are supposed to feel. One of the things I know for sure is that you can learn a great deal about successful property management by watching those who are adroit at it.

One of my “pet projects” is studying the habits, qualities and characteristics of highly successful property managers. Through the years I’ve discovered some consistencies they all seem to share.
The first is what I call “brilliance”. I don’t mean they’re extra smart nor have an unusually high Intelligence Quota (IQ). Their “brilliance” shines in their daily approach to their work. Like this article implies, they’ve learned from other brilliant managers and they’ve applied what they’ve learned. They’re willing to take the time to study the characteristics and successes of others.

The second quality, one that becomes habitual, is that great property managers have an extraordinary amount of curiosity. Since they are, either by nature or self-discipline, observant professionals, they keep their eyes and ears wide open for better ways to accomplish. They’re not afraid to ask questions, do research, and delegate to others the task of finding solutions.

They’re obsessed with growing and evolving. They seem to innately know that something that they don’t know is holding them back from reaching their full potential. They’ll go to seminars, join associations, listen to self-improvement CDs and watch DVDs. As the father of Self-Actualization, Abraham Maslow, would say, “They must become all that they must be!”

Humility is a key quality and component of their character. They’re not driven by their egos and they don’t care a hoot about becoming arrogant. They like achieving abundance and success, but they’re not compelled by an insatiable appetite for wealth and power. With their humility comes a sense of altruism and a desire to know they are making a positive contribution to society. They derive great satisfaction in serving the needs of their clients and residents.

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How to Become a Property Manager

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Source: Real Estate Express

If you’re looking to break into a new career, becoming a rental property manager could be the perfect gig for you. People of all ages are choosing to rent over buying a house, so the need for reliable property managers is out there. And the Bureau of Labor Statistics projects that employment in the industry will grow 8 percent through 2024, so the need will continue to exist for the foreseeable future.

Do a decent salary, steady employment, job security—and a strong desire to work with people—top your wish list when it comes to your next career? If so, follow these steps on how to become a property manager.

Ensure that you meet all the legal requirements

The specific licensing requirements vary from state to state. Plus, there are different rules that apply depending on the properties you manage. For example, managers of government-subsidized public housing are usually required to obtain special certifications. It’s entirely up to you to know which laws and ground rules apply to you.

Do your research and figure out how to become a property manager in your area. Once you know what is expected in your state, you can start taking the steps to obtain the right licensing and ensure that you comply.

Beef up on your real estate and business know-how

While a high-school diploma can be enough for some people to hire you, more and more companies want their property managers to have a bachelor’s degree in business administration, real estate, accounting, public administration, or finance.

Other companies seek out candidates with vocational real estate training or a real estate license. And coursework in real estate development, real estate management, real estate finance, urban planning, affordable housing administration, property management, and housing for the elderly are especially sought after.

If going back to school isn’t an option, you can always invest in online courses to increase your knowledge and build your skills. If nothing else, don’t underestimate the value of on-the-job training. You may need to start off at an entry-level position, but once you learn the business, you can move up the ranks.

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How Hard is it to Manage Rental Properties Without a Property Manager?

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By Mark Ferguson

Source: Invest Four More

Rental properties are a great investment, but they take work to manage, especially if you do not use a property manager. I own 14 rental properties and I managed my rentals myself up until the start of 2014. My rental properties are all single family properties and easier to manage than multifamily rentals, but it still takes time. Not only does it take time, but you have to pay attention to details and be firm with tenants to successfully manage rental properties yourself. You can’t be easy on your tenants and you can’t ignore problems, because that is when rental properties can change from a great investment to a very poor investment.

What is involved with managing rental properties?

There are many tasks associated with managing a rental property. However, most tasks come when first renting a property; once a home is rented there is much less work involved. Here is a break down of the basics of managing a rental property.

  • Determine what to repair before a property is rented. I want to control what is repaired whether I manage a rental property or what a property manager does. A property manager may help you with repairs before you rent a property, but they also may only help with maintenance and repairs after a home is rented. Even before you buy a rental property you should have a good idea of what is going to be repaired and how much it is going to cost. Out of state rental property owners may have to depend on someone else to manage the rental property repair process.
  • Determine what to rent a home for. I also like to have control of this whether I am managing a house or using a property manager. A property manager wants to get houses rented fast because they collect money based off the rent. They may not try to get top dollar, although some might. An agent on my team recently sold a home to an investor and that investor used a property manager. We had told the investor the home would rent for $1,500, before they bought it. The property manage they hired said they would rent it for $1,200! We urged the investor to rent it for more and they ended up asking for $1,600 a month. They rented it at $1,600 in two days and they were very happy they did not blindly take that property manager’s advice. Here is a great article on how to determine market rent.
  • Rent a home. Renting a home is the hardest part of management; at least it should be. If you take time to screen tenants and pick the best tenants it will make you more money and save many future headaches. You have to have to advertise the property, show the home, check references, check credit, create a lease and collect money. Don’t pick a tenant because they are the only ones that will pay what you are asking. Don’t pick the first tenant that wants the house because you are tired of showing it. Pick the best tenant and don’t convince yourself a tenant you have doubts about will work out so you can start collecting rent. Here is a much more detailed article on how to rent a house. Property managers should have strict guidelines for who they rent homes too.
  • Collect rent. When you rent a home you have to make sure your tenants pay on time and charge late fees if they don’t. If you let late rent slide, the tenants will think it is okay and they will keep paying late. They will get later and later with rent if there aren’t any consequences and may stop paying completely. You have to be strict no matter who is late and what their story is. If tenants get too far behind don’t be afraid to start the eviction process. Starting the eviction process usually gets your tenants attention and they start paying rent. A property manager will collect rent and should have no problem charging late fees.
  • Evict a tenant. It is never fun to evict anyone and I try to avoid it, because an eviction is just asking for your tenant to trash a house. I have yet to go through a full eviction, but I have had mutually agreed upon move outs. If I can have a tenant move out on good terms, they are more likely to take care of the home and possibly pay me what is owed. I would rather lose a tenant who is not paying rent and rent the home to a tenant that will pay me than a tenant who is constantly behind. A property manager will handle rent collections and evictions.
  • Check on your houses. Just because you have a tenant who always pays on time and never causes a problem does not mean they are taking care of your property. I always write in the lease that I have the right to inspect the property with proper notice.  I use this time to make sure the home is well maintained and I can change furnace filters, check smoke detectors and make sure no other repairs are needed. Some of the biggest problems come from landlords who rent a house and then never check it. The same tenant is in the property for years and they absolutely destroy a house and the landlord never knows. It is possible to destroy a house quickly, but usually the worst damage occurs over years of time. Some renters who always pay on time are doing so, because they don’t want landlord to come see the house. They may be trashing the property or doing something illegal like selling or making drugs. Property managers should check on your houses, but you never know if they are.

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The 7 Tips Entrepreneurs Need to Know Before Investing in Real Estate in 2022

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Why should entrepreneurs invest in the first place? The answer is: to have enough money to live on when we no longer can or wish to work. To put that money aside, however, we have to accumulate enough to offset inflation and the taxes that erode our savings. And for that purpose, real estate is an excellent solution.

The great thing about real estate is that even in a bad economy, it will usually fare better than stocks. Land, after all, is a finite resource. People need a place to live, work, shop and play — so real estate is really just a matter of supply and demand.

What’s more, real estate will continue to appreciate despite occasional slow-downs in the economy. In fact, it’s proven to be the best way to create wealth, and an investor need not be a genius or a millionaire to succeed. Here are some tips, then, for entrepreneurs on getting started and succeeding in real estate investing:

1. Do — plan your financial goals.

Before you buy that first property, or do your first analysis, determine what you expect from your investments. What are your financial goals?  We often discuss the “time vs. money” concept: The more you have of one, the less you need of the other to reach your financial goals. This means that you shouldn’t shy away from taking the time to understand your goals and make sure each investment is a step toward achieving them.  If you are unsure exactly how to create financial goals, meeting with a financial advisor is an excellent first step.

2. Don’t — spend a fortune on books, tapes and seminars, then just put all that information on a shelf.

You absolutely do need to learn some basics before venturing into investing. So, be sure to do some studying, but don’t let “buying and collecting” information become your endgame. Again, having goals in mind will make the process much more straightforward. It’s easy to get so tied up in the “research” phase that you never actually take action. Instead, write down specific questions you want answered or goals you want to meet before delving into the latest book/seminar/etc.

3. Do — look at plenty of properties.

Don’t just grab the first property you look at. Too many investors buy properties because they “look nice,” or the investors don’t want to put the work in to look at what’s really out there. Remember, you won’t be living there, so don’t make your investment decision based on your personal preferences. While you shouldn’t fall into the trap of analysis paralysis, make sure you are thorough in looking through properties. Give yourself a wide range of options, then narrow them down based on the criteria (goals) you have set for yourself.

4. Don’t — postpone starting your investment program because you’re waiting for that perfect “unicorn” deal.

That’s the flip side to number 3, of course. Plenty of beginning investors suffer from “a-better-deal-may-be-just-around-the-corner” syndrome. This can backfire in a big way, and you could potentially let a great deal slip just because you’re holding out for something better. Your task may feel difficult if this is your first property, but you must realize that the “perfect deal” rarely (if ever) exists. Better to execute on a deal that meets most of your criteria than wait for another that may never come.

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4 Reasons Why Property Management Businesses Are Thriving

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By AJ Agrawal

Source: Entrepreneur

The rental market is hot, so now’s the time to wade in.

As of this article’s writing, there are more than 23 million landlords in the U.S., according to Rental Protection Agency’s real-time Rental Clock. But that number means very little on its own. How much opportunity is there for those landlords? Well, according to the same Rental Clock, there are currently a whopping 113 million-plus renters in this country as well. Equally surprising is that — per the same source — 2,654 new renters enter the market every single day, while only 544 new landlords do the same. That’s a big, exploitable gap for real estate-investing entrepreneurs.

But not everyone has hundreds of thousands of dollars to buy real estate and rent it out. The good news is, you don’t have to. There’s another way to take advantage of that massive supply-and-demand chasm: property management. Most real estate investors who own more than a few properties will hire a management company to help them with the dirty work. And as more landlords and vacation rental owners (like Airbnb and VRBO) crowd themselves into the market, opportunity for real estate-management companies will only increase.

Here are four good reasons why property management businesses are thriving in today’s market, will continue to do so in the future and why you might want to jump on the bandwagon before it’s too late.

1. Rent-asking prices keep going up, up, up.

According to data collected by the United States Census Bureau, rent prices have been steadily increasing since the 1990s without any significant fluctuations. Even during the recession at the end of 2007, rental asking prices continued to increase steadily.

For-sale prices, on the other hand, fluctuate dramatically depending upon the health of local- and nation-wide housing markets. During the recession, for-sale asking prices saw a drop of almost $50,000.

For real estate investors, rentals are far less risky than fixed-and-flipped properties, and they provide the passive income that many real estate investors crave. As new and old real estate investors scramble to leverage the statistical safety of a buy-and-hold strategy, property management companies will benefit.

2. Nearly a third of occupied houses are rentals.

The Census Bureau also reports that 31.5 percent of occupied houses are rentals. And while owner-occupied houses account for 56 percent, that gap is getting smaller and smaller. In fact, rental vacancy rates have been decreasing steadily since 2009, according to the Federal Reserve Bank of St Louis. Conversely, homeownership rates were at a 50-year low in 2017 and have made a relatively insignificant recovery from 2004’s peak, as Advisor Perspectives reports.

What does this mean for real estate investors and property management companies? Well, as people continue to opt for rentals over homeownership, the demand for rental properties will increase and, as investors fill that gap, so too will the demand for property management companies.

3. Technology makes property management easier than ever before.

As property management businesses flood the market with lucrative success, savvy tech entrepreneurs have followed suit. Because the truth is, there’s a glaring problem with building a property management company. Namely, that it’s a highly demanding, boots-on-the-ground, 24-7 sort of business model. If the A/C stops running in the middle of summer, if there’s a sudden water leak in the kitchen, if the pipes freeze and burst, if anything sudden and unexpected happens, it almost always falls to the property management company to do something about it (that’s why the real estate investor hired you in the first place, isn’t it?). This means the property management company needs to have dependable people near each managed location, a quick way to communicate with tenants, employees and local handy-men, and a system for organizing everything behind the scenes.

Tools like Guesty (a property management platform for short-term rentals) and Buildium (for long-term rentals) are attempting to solve this conundrum by enabling property managers to automate tasks, streamline communications with guests and homeowners, schedule cleanings and organize portfolios, all from the comfort of their living-room couch.

4. Vacation rentals are outpacing the hotel industry.

Three years ago, VRMB predicted that vacation rentals would topple the hotel industry by 2020. Now, it’s 2019 and there are plenty of hotels in every city around the nation. Though while VRMB was probably overly zealous with their estimation, they weren’t entirely misguided. In fact, Airbnb is now the second-largest lodging company in the world, only 100,000 units behind Marriott International, according to Str. It’s also acquired 150 million users, with two million people staying in an Airbnb every single night. And more and more people who stay in an Airbnb don’t ever want to go back to hotels. Needless to say, business is booming.

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Three Core Strategies To Actively Increase Your Rental Property’s Value In 2021

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ByAri Rastegar

Source: Forbes

It goes without saying that we invest in real estate with the hopes of selling the property at a higher price than we spend to acquire it. The steady appreciation of real estate in the U.S. makes this a reasonable expectation, but waiting decades to realize gains from a rental property isn’t the most profitable or sensible strategy.

There are many ways to increase rental property value actively. Top strategies include renovating to increase the market value of each unit, maintaining a lean operation, deploying sustainable operation/design strategies and ensuring competitive market rental rates.

Let’s explore some of the best and most achievable value-add strategies for investors of varying experience levels in single-family and multifamily rentals.

Improving Rental Property Value Through Renovations

The most common way to increase property value is through renovations. Improved condition is more appealing to potential tenants, and enhances the satisfaction of existing tenants, stimulating sufficient demand to keep vacancy rates low and providing leverage for rental rate increases.

If you decide to focus on improvements, pursue updates and upgrades that deliver the highest return on investment. For multifamily, this generally means putting the most thought and money into kitchens and bedrooms, as well as flooring. Refinish cabinets and countertops, and use durable materials where possible to minimize costs and maintenance requirements.

Before getting started on an improvement project, I recommend assessing the highest and best use of the lot and structure. Research the local market and economy to identify demand factors and determine if the current use is still relevant in light of population growth, incomes, and availability of labor and employment. If the prevailing use, consumer tastes or industry makeup in the subdivision has changed since the original construction or acquisition, consider converting from retail to medical or office to retail, or repositioning the property to attract more exclusive tenants.

One trend that is effecting positive changes in real estate development and management across the world is sustainable design, also known as green building. Aside from building code requirements pressing the issue, the industry is finding that tenants value green features like photovoltaic (PV) solar systems, and are willing to pay premium lease rates for units that provide greater energy efficiency, durability, indoor air quality and thermal comfort.

A Lean Operation Equals Increasing Rental Property Value

Sustainability is synergistic with operational strategies that aim to reduce expenses before striving to generate additional revenue. Any improvement in cash flow through cost reduction results in an immediate and actual increase in property value. For the most part, all income properties — commercial or residential — are valued using the income approach to valuation.

The income approach estimates the value of a property as of a given date by converting the property’s net operating income (NOI) to value by dividing it by the prevailing capitalization rate. The capitalization rate (or cap rate) is the average rate of return demanded by investors for properties of the same class and perceived level of financial risk.

Green building features such as energy-efficient lighting, passive solar design and low-flow fixtures reduce energy and utility costs. Whether the property is a five-unit multifamily or industrial complex, tenants appreciate reduced operational costs and are willing to pay higher lease rates for efficiency.

When you’re paying for utilities rather than the tenant, you want to keep these costs as low as possible. Efficiency is even more critical to your bottom line in this case. Don’t get stuck with the bill for the irresponsible use of resources by tenants. Implement individual metering of utilities for every unit, and pass the cost on to each tenant according to usage.

If onsite property management costs are a cash flow drain, transition to a centralized property management structure, or outsource to a professional and reputable property management firm in the local market that specializes in your property class.

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