Local landlords and rental property owners ask a lot of questions about Section 8, so today we’re clarifying what Section 8 is, and whether you’re required to accept it. We’ll also share some tips that you might find useful if you accept Section 8 vouchers now or in the future. read more…
A quick turnover is important when you are between tenants in your rental property because it reduces the amount of time that you’re not collecting rent. Have a plan in place for when one tenant moves out so you can get the property cleaned up and back on the market in a matter of days. Today we’re looking at a one bedroom, one-bathroom unit that was recently vacated in the Heritage Hill area in Grand Rapids. read more…
This can be looked at in a couple different ways. First, when you invest in a private placement, you are investing with the team. This team is key to whether the investment is going to be successful or not. The same opportunity can turn into a disaster in the hands of the wrong team. Secondly, private placements are just that, private. The whole world does not have access to the deal presented. The deal is available to potential investors because of their relationships and connections.
- Sponsor: Also called a promotor or syndicator. This is the entrepreneur or team putting together the investment.
- Executive Summary: Also called a Prospectus. This is the initial Marketing tool presented to prospective investors about a deal. It describes who the players are, what the deal is, the yield, the market, etc. It’s important to note that this is not a legal document. It doesn’t contain the full set of risk disclosures, but it still must avoid anti fraud provisions (misrepresentation, “pie in the sky”). This introduces the deal without providing every detail about it.
- Private Placement Memorandum: First of all, this is NOT an exciting marketing document. With this document, you can tell if they hired the right attorney because it will be boring, detailed, and contain disclosures and legal wording that is required by federal securities law. It tells all the ways you could lose your money. It is important to read and understand this document, but don’t waste your time with it unless you liked the Executive summary and want to move forward.
- Accredited Investor: This is defined by federal securities laws. Seen by the government as a less risky investor. They are considered more sophisticated, seasoned investor. They have a net worth of over 1 million excluding the value of their primary residence. OR they have income of at least $200,000 each year for 2 years and will make the same amount this year. You can also include a spouse in this amount and the number jumps to $300,000 year.
- Non-Accredited Investor: Seen as a higher risk investor because the investment is most likely a higher percentage of their income. They could be more problematic in a deal because they are less sophisticated and less practiced.
Stay tuned for our next blog on the benefits of investing in Private Placements!
- Rental rates are rising
- Homeownership is dropping
- Home sales inventory is at a historic low
- Fewer people can afford to own
A couple days late of June, but this post completes our June series, “Don’t you wish your property manager did this?”.
Your rental is a BUSINESS. Yes, you deal with people and people’s lives, but your rental properties are a BUSINESS. If you don’t treat it like a business, the IRS and legal system will hold you PERSONALLY responsible. Which is one reason to hire a property manager.
As your property manager, we take our business seriously. We treat our residents, our clients and our units under management professionally. Here are some ways that we design and implement our professional decisions and standards:
- Annual Fair Housing Training: We require each team member to attend annual fair housing training. Our team members bring back what they learn and work to make our screening, managing and maintenance teams better.
- National Association of Residential Property Managers (NARPM®): The team at Access took the initiative to start the first NARPM® chapter in Michigan. We still have active roles on the board and the chapter continues to grow. This organization is the most professional organization available to third-party managers of single family homes and small apartment communities. Check out more about their code of ethics here.
- We Are Investors: How can a manager possibly know how to manage a rental property without owning one? Our team members own single family homes and small apartment communities throughout the Grand Rapids and Kalamazoo markets. We know them because we invest in them.
- Professional systems: Another reason to hire a property manager is because of their systems. This can mean anything from their accounting software to their Move-Out process. With Access, you can be assured that we follow the legal rules involved with rentals. We are not tax professionals, but we provide you with the information needed to use the tax laws to your advantage. We put the complicated and time consuming systems in place to manage your property the professional way.
Have you ever talked with a “professional” and knew more about their profession than they did? Just this week I spoke with a customer service representative at the post office and found myself educating THEM on a new service the post office has out! Frustrating!
Here are a couple things we do to make sure we keep and maintain our status as experts:
- Continuing Education: For most property managers, this means the 6 hours a year that are required to have a real estate license. Besides those hours, we attend seminars, read books, listen to podcasts, go to conferences, join organizations, watch webinars, and learn from people. Here are just a few of the recent topics we have explored: Marketing to tenants, leasing and lease renewals, foreign investors, taxes and investment properties, laws relating to investment properties, team building, leadership.
- Professional Designations and organizations: We seek out the designations that provide our company with the greatest credibility and give us the most “bang for our buck”. What’s the point in getting a few letters behind your name if they don’t actually bring in value to our clients?
- Constant Improvement: In our company, we NEVER accept the answer “because that’s how it’s always been done”. We are constantly looking to improve our communication, procedures, software systems, and team. We bring in outside experts to assess our processes because a fresh look can bring a new perspective. When are are hit with a problem, we huddle as a team and find the best solution. This will be our culture forever, we will not settle and let the world pass us by.
- Client Education: In order for us to work at our best potential, we need educated clients. We spend countless time improving our communications to our clients. The more they know, the better decisions they can make. We work with first time investors that have a multitude of questions, to seasoned investors that bring us the problems that they aren’t able to solve. We are ready to be a partner with you through it all.
For the month of June, we are starting a series of blogs about what you wish YOUR property manager did. When it comes to property managers, your options are vast for your rentals: large property management firms, small local companies, the One-person-show property managers, even some realtors manage rentals on the side! This series will explore what sets Access Property Management Group apart from its competitors.
Tell us! What do you wish your property manager did? Return your voicemail before you forget what you called about? Give you access to their cell phone? Reply to your emails?
We pride ourselves on great communication. Our team has some of the most dedicated members in town. Here are just a few ways that we rise above the rest on communication:
- Cell Phones: When managing rental properties, issues don’t only occur during business hours. Access provides cell phones to our managers to allow them to get messages wherever they are and respond to emergencies whenever is needed.
- Voicemails: Quick response needed! Call us early enough in the day and we respond the same day. Our policy is a 24 response time!
- Emails and messages: Remember those cell phones? They help us to respond to your emails and messages promptly. As property managers, we spend a lot of time in the field, mobile devices help us to manage our workflow even when we aren’t in front of a computer.
Ask yourself, does your property manager do these things?
Stay tuned for Part 2 of our series next week!
The end of year is approaching quickly. As a real estate investor, there are a few more details to consider to plan, do and review for the next year. We put together this guide to help you with your end of year planning.
- Prepare For Tax Season
- Taxes are not scary! If you do these items, you will be much more prepared for tax season.
- Organize and Label Expenses. If you have been doing this all year long, good job! If not, now is great time to get started.
- Find a great CPA. Ask for referrals. Check out your local investor organizations for accountants. Interview and choose the best.
- Learn about taxes . Our founder, Justin Bajema, always says, “If you want better answers, ask better questions.”. How can you do this without knowing about the subject itself. A great book to get you started is Tax-Free Wealth by Rich Dad advisor Tom Wheelwright.
- Taxes are not scary! If you do these items, you will be much more prepared for tax season.
- Analyze Your Property Numbers
- You will need these for the next steps. Now is the time to look back over the past year, notice the trends, unexpected expenses, and get the big picture of what happened. Correct any mistakes you may have made and dig into the financial statements.
- Goal Planning
- Most people experience a lull during December. We encourage you to think of it as a time to review and plan. Without a roadmap, you can’t expect a result. Goal planning is different for everyone, so find out what works best for you. Write them down? Type them out? Private goal planning trip? Attend a goals retreat?
- Set up Replacement Reserves
- This is an area that can kill an investment. You HAVE to plan for repairs. Every item in a home has a useful life. How many years are left on the roof? appliances? flooring? What will need to be replaced in the next 12 months. Budget for these expenses.
- I know we are talking business here, but we believe that you will only be given what you can manage responsibly. It’s important to budget in both a business and in your personal life. This is part of your roadmap. There are plenty of great ways to do this, so choose an expert and learn how to do it.
- The most important things to invest in is yourself. You will only get as far as you take yourself. Start to look at what conferences are coming up. Are there any books that are on your reading list? Is there a speaker that you want to hear? Do you need to start taking people out to dinner to learn about them? Add these items to your budget. Make it a priority to become a better investor.
Have you been contemplating whether to rent your home now or wait until spring? Do you think you missed the summer renting frenzy? We want to share with you the top 4 reasons why NOW is a great time to rent out your home.
1. Millennial Home Ownership is DOWN
According to the US Census Bureau, only 36% of Americans under the age of 35 own homes. This is the lowest since 1982! Why is this? According to CNN Money, astronomical student loan debt, tight lending standards and stiff competition are causing millennials to hold back from buying a home and renting instead.
2. Snow is Coming!
Have you tried moving into a home with a foot of snow on the ground? Not easy! People in Michigan already have this in mind and are looking to move before the massive snow hits in January and February.
3. Happy Holidays!
Life slows down for nearly everyone between Thanksgiving and New Years. Although we expect to see a bit more activity due to the low rate of homeownership, now is definitely ideal to get your home listed before the holiday fever starts.
4. Increasing Rent Prices!
Basic economics says that when supply is low and demand is high, prices are driven up. Time Magazine states that rent prices have risen 14% since the end of 2009. Second quarter of 2014 was the 18th consecutive quarter of rent increases!
Click here for a free quote to see how much your home will rent for! Or call us 616-301-9450
In July, two of our team members attended an industry conference that was held by our property management software company in Chicago. One of their take-aways from that conference was the concept of Service Request Priority. Why is this important, you may ask? Imagine these, very typical, scenarios:
Resident Joe calls in on Monday afternoon, one of his toilets is not working, but he has two bathrooms in the house. We get the call and assign the work order to the vendor. The vendor is working, but gets the email that evening. Tuesday, Resident Sue calls and says her toilet in her bathroom is not working and she only has one toilet. We get the service request and notify the vendor that this is high priority. The vendor can get to Sue’s toilet that day, but has to wait until Wednesday to fix Joe’s toilet.
- Without Priorities, Resident Joe is mad because his expectations were to have it fixed immediately (not fun, but manageable). If we don’t let the vendor know the priority, he will fix it in the order received and Sue will not have a working toilet for 2 days (Not fun and no where to go…).
- With Priorities, we can manage both the vendor and the expectations of residents.
February 4-It’s 15°f outside and the Joe’s heat stops working. Resident Joe calls in and a service request is created. The service request is sent to the vendor with High Priority and the heat is back on within a few hours. March 29-It’s 50°f outside and Resident Joe calls in with the service request on a Saturday evening. If we send a vendor for an after hours emergency, the cost will most likely be double the amount. A service request is sent to the vendor on Monday and addressed within a few hours.
- Without Priorities, Resident Joe is upset that no one responds to his call right away like the first time and proceeds to call 5 more times until 3 am and 6 more times on Sunday. By Monday morning, he is fuming.
- With Priorities, Resident Joe understands that we will be in contact with him on Monday and puts on another sweatshirt.
How does this help you, the client?
Happy Residents = Long term residents. Simple as that. More lease renewals and less turnover costs.
How does this help us, the management company?
Happy, informed residents = less phone calls (when will someone fix my toilet?), less exasperation (I put in a service request yesterday and no one is here yet!) and clear expectations (Oh, my service request is medium priority, that means it will get fixed in 2-3 days).
How does this help the resident?
Clear expectations = less stress, easier to plan. Residents will know when to expect phone calls and service and can plan accordingly.
Below are our new service request guidelines with examples of each priority level that are now being communicated to residents and vendors for each service request.
Service Request Priority Guidelines:
After a service request is submitted, it is reviewed and a priority is given to it as follows:
- High – 24 hours. Examples: Power outage, A/C or Heat out in Extreme temperatures, No hot water, Sewer Backup, Flooding, Toilet out-only 1 bathroom.
- Medium – 48-72 hours. Examples: Appliance issues, A/C or Heat out in moderate temperatures, Small leaks, Toilet is broken with more than 1 in house.
- Low – 1-2 weeks. Examples: Blinds broken, shelving broken in appliance, pests(ants, spiders, etc)
- Low (Cosmetic) – Up to Owner Approval or Rejection. Examples: Painting, Updates to home, Flooring replacement.
Anyone who has ever rented — or rented to someone — knows that there can be a lot of negativity surrounding the security deposit. As a landlord, knowing what goes into it can save you some bickering or even a lawsuit.
We’ve assembled some quick-hit facts according to Michigan state laws about security deposits in every step of the process — from signing the lease to move out day.
What is a security deposit?
The first thing to know about security deposits is that, according to law, they are the property of tenants held by landlords to ensure rent is paid, utility bills are paid, and the property is kept in the same condition in which it was first rented. After a lease is up, the tenant is due back their deposit unless they (1) owe unpaid rent, (2) owe unpaid utility bills, or (3) caused damages — other than wear and tear — to the property.
In order to understand what landlords can charge for once the tenant is out, it’s first important to understand the legality of collecting a deposit. First of all, a landlord cannot ask for a deposit that is larger than one and a half month’s rent.
While there can be fees for things like pets, credit checks, storage, mailboxes, and keys, all of these fees are still considered a security deposit depending on certain verbiage. If fees are labeled “refundable fees,” they are considered part of the security deposit. If they are labeled “non-refundable fees,” they are additional to the security deposit.
There are three notices landlords and tenants are both required to provide regarding security deposits. Generally, these notices are in the lease.
- By 14 days after the tenant moves in, the landlord must provide the name, address, and receipt of communications regarding the tenancy.
- The name and address of the bank where the deposit is being held or who filed the bond with the Secretary of State.
- The landlord must tell the tenant it’s their obligation to provide a forwarding address within four days after move-out date.
The Inventory Checklist
While it’s not illegal not to have an inventory checklist done for your property, it can save some trouble in disputes over deposits. If a checklist isn’t done, it becomes one person’s word over another.
It must state on the first page of the checklist that the tenant is required to return the filled-out list to the landlord seven days after moving in. The checklist should include everything that is in the unit — such as appliances and carpeting.
It is also recommended that the tenant and the landlord both take photos or video of the property prior to when the tenant moves in. It’s a good idea to have a newspaper with the day’s date in some of the shots.
A landlord’s responsibility when the lease is up
Thirty days after the tenant moves out, the landlord must:
- Return the entire amount of the deposit by mail — which the tenant should have provided four days after moving out. OR
- Mail a list of damages and the remaining security deposit or additional charges. The notice has to state the tenant has seven days to respond to the receipt, otherwise the amount for damages will be forfeited.
If a tenant chooses to dispute charges, the landlord must either negotiate them or decide to go to court.
What is wear-and-tear vs. damages?
Things like smudges on walls as well as the wearing of appliances are considered normal wear and tear. The landlord cannot charge for things like painting walls or shampooing carpets — unless excessive cleaning is needed in which it is then considered damage.
An example of things that a landlord can charge for, however, would be holes in walls, broken windows, broken blinds, or a broken appliance that is relatively new.
For more information on deposits, you can read more on Michigan’s government website.
For the month of August, we are focusing on Maintenance. Maintenance is such a vital part of Property Management and, at the same time, can cause the most headaches.
To start this month off, we are going to discuss some commonly asked questions from our clients:
1. Why can’t you use the vendor that I choose?
Does your vendor have the following?
- Fair Housing Education
- Liability Insurance Coverage of at least $1,000,000 per occurrence
- Auto Insurance
- Contractors License
- Other applicable licensing or training (lead safe, builders, remediation)
- Workers Comp Insurance
- Willing to sign an agreement outlining how they will work within our system of managing your home.
If yes, great! Send them our way and we will sign them up for our approved vendors list!
If not, your risk is GREATLY increased by having them at your property. In our many years and thousands of work orders of experience, we have made mistakes with hiring inexpensive contractors. We have also made good decisions and saved our clients from lawsuits due to our diligence. Learning from those experiences, we will only work with our approved vendors list.
2. Why didn’t you charge the tenant for this work order?
First, lets define Normal Wear & Tear vs Damage.
- Normal Wear & Tear: a repair that is needed due to something reaching its end of life or a malfunction – responsibility of the landlord.
- Damage: a repair that is needed due to a resident or resident’s guest negligence or misuse of an item – charged to the tenant
The line between these two is very subjective. For every work order that comes through, we assess a situation for whether it is Damage or Normal Wear & Tear. We look at the following aspects:
- How long has the tenant lived in the home?
- What was the condition of this item before the repair was needed?
- How old is the item in question?
- Was this item on the inventory check-in sheet?
Keep in mind that as a landlord, the repairs will be paid first by you and then the resident will reimburse you. This is the process for charging a tenant:
- Work Order is requested or created.
- Work Order is completed and billed to owner. Then charged to tenant’s ledger.
- Invoice is paid by owner.
- Charge is paid by tenant within 30 days.
3. Can I get an estimate? How much does that cost?
Per our management agreement, we will perform any work that is under $300 to our discretion of whether it is needed. If an item is going to cost more than $300, we will get approval from you except in the case of an emergency (usually this is to prevent further damage from happening).
Some items are worthy of an estimate. Some items are not. If it is a routine item that we handle on a regular basis: i.e., stove, furnace, painting, cleaning, we already have an estimate in mind and a vendor that we know can provide the best value to you.
If it is more extensive or complicated work, we will ask for an estimate from an approved vendor.
4. When will they fix it? Can you let me know what was wrong before they fix it?
In order to be an approved vendors with Access, you must have a quick turnaround time. Our vendors have to schedule the maintenance with tenants so we don’t know the exact time and date the work is completed. If a repair will cost under $300, you will not be notified prior to the work being completed. After a work order is completed, you can log into your portal to see the closing comments. If you need more details, please feel free to call ask!
5. Why is there a markup?
Because we are high volume customers with our vendors, we often get reduced rates. With our mark up, you are still getting a great deal. Here are the all the items we manage that are covered under the mark-up:
- Working only with approved vendors.
- Verifying Insurance and licenses are up to date.
- Software to document and track all work order requests, invoices, and bill payments.
- Envelopes, Stamps, Checks and ACH fees to pay bills.
- Extensive communication with vendors, tenants, and clients to ensure work order completion.
- Our knowledge and experience handling all of these items to reduce your risk of liability.
Here at AccessProperty Management we urge property owners to take considerations before diving into their next round of renovations. Your best results will come from putting in some planning before you pull out the cash. See some great approaches to rental community upgrades in the paragraphs below.
4 Good Tips for Great Rental Upgrades
Tip #1 – Decide on an interior or exterior upgrade.
Many income-property owners favor interior renovations, since that is what their applicants and renters will notice the most. Beware of neglecting important exterior projects, though. You may be overlooking them to your community’s detriment. A weatherworn, weed-framed apartment community sign by the road, for example, can make the most luxurious rental property appear drab to casual passersby.
Tip #2 – Go direct to the source.
When trying to decide which project or new appliance might be the best choice, ask your present renters. They are the ones who really know, so you can usually trust their response, especially if it is nearly unanimous. Try sending out a questionnaire with multiple choices, instead of simply inviting ideas.
Tip #3 – Go simple.
Residents often receive smaller upgrades just as well as the larger, more costly ones. Consider which small upgrade might be most welcome in your income property community. A big-screen television in the fitness center is a good example.
Tip #4 – Look before leaping.
Our experts property managers in Grand Rapids, Michigan suggest testing an upgrade in one or two apartments before sinking cash into a property-wide project. This will give you a chance to see the actual versus projected costs, as well as gauge resident reaction on a small scale.
We hope these tips help you in making your decision on which renovations to make now and which ones to hold off on.
Gone are the days when landlords and Grand Rapids property management companies simply rented out apartments and welcomed the new resident, never to see the rental again until move-out time. Ongoing inspections of your rental property are now recognized as one of the most important tasks carried out by your property manager, a task that, if left undone, can prove to be an extremely costly one.
Inspection Suggestions from Access Property Management Experts:
- The initial walk-through – Traditionally, our property managers will perform a walk-through inspection, detailing the precise condition of the apartment and its contents. At Access Property Management we document this important inspection with a camara, taking photos of the property to ensure reliability of documentation. Our property managers create a report detailing the apartment’s condition as well.
- Have the resident complete an Inventory Checklist – At Access Property Management we have our residents complete this checklist within 7 days of their move in, which they can then sign off on via electronic signatures to make this process easier for everyone. This report should be signed and dated by both the new resident and the manager or landlord.
- The once-yearly inspection – The usual period between inspections is approximately one year, unless other factors are involved. We make sure to give the resident the correct amount of notice and are considerate of their privacy during this annual inspection. It is an excellent policy to do this inspection with a camera also, and report any potential problems to the resident, so they can avoid losing money on their security deposit.
- The move-out walk-through – Our property managers repeat the initial walk-through process at move-out time to assess possible damages once we have possession of the keys and the unit has been vacated.
These tips will help make it easier for property managers to effectively manage and maintain properties which in turn makes it easier for owners to have ease of mind that their property is in good hands.
When it comes time to find a new home, research shows that, home renters and buyers care very much about a home’s exterior appearance. Evidently, they want the home to appear impressive to friends, neighbors, and passersby, as though the façade were a reflection on themselves. However, they also care about what’s inside the home. They want it to meet their criteria for living comfortably and functioning optimally. Professional property managers in Grand Rapids, point out that in either of these scenarios, however, the moment arrives when the parties tour the home, and that changes everything. So it’s important to take some steps to make sure the property looks it’s best for your tour.
A property’s exterior appearance matters whether you’re selling or renting. It is the first thing people see when they drive up, and making a good first impression sets the tone for what’s to come. No matter how great the photos of your rental property come off, they are not the final determinant. They may get the potential renter in the door, but they do not close the deal. What closes the deal is the condition of the property itself.
Make sure the exterior of your property is well tended at the very least. Walls should appear freshly painted, and windows and windowsills should be fresh and clean. Trees and decorative shrubs are a huge attraction, especially in a climate where shade is at a premium, but they must be trimmed of overgrowth and well maintained. Lawns should be as green as possible, borders should be edged along the front walk, and in the milder seasons, flowers should be planted to add color, cheer, and character.
As for the inside, it’s important to make sure everything is clean and simple. A great idea is to hire a staging company to stage the home for your tour. That can make a huge difference for the renter to start imagining what it would be like to live in the home. It can help you have more competition for the property, enabling you to fill it faster and maybe even get a better rental price!
There are several ways that landlords and Grand Rapids property management companies can handle security deposits, which helps ensure that landlords are adequately covered in the event of damage. By following these suggestions you can count on an easier experience when dealing with security deposit issues:
- State Laws – Each state has unique laws that govern security deposits, including how the accounting should be handled. It is against the law to charge additional deposit amounts based on applicants’ status, race, or gender, as this is discrimination.
- Amounts – Some landlords may be tempted to charge less for security deposits. Access Group Property Management in Grand Rapids, MI advises charging a fair damage deposit, as this attracts more financially independent tenants and offers some defense against defaulted rent payments.
- Rent – Damage deposits are not considered to be rental income. If the home or apartment is not damaged, these deposits are required to be returned to the tenant unless there is unpaid rent upon lease expiration and move-out.
- Videos – Grand Rapids property managers and landlords can videotape walk-through conditions, which make it easier to conduct move-out inspections. This helps thoroughly document the property condition upon move-in. This information features a recorded date, which makes it easier to pursue future litigation if required.
- Professionals – It’s best to leave rental management to professionals that understand state and local laws. While many landlords may feel they are well equipped and capable to manage homes, without proper training, it’s easy to violate tenants’ legal rights.
At Access Property Management we want to help ease your burden. By having a set policy and plan in line for security deposits, we can ensure greater success for all parties involved.