Tracey's Blog

We Got Audited!

2007-07-19T01:33:28Z

Well, we got audited by the Washington Real Estate Commission yesterday - and it wasn't awful at all! I knew an audit was bound to happen sooner or later, but hadn't expected it this soon (I just got my broker's license in December 2006).

Just hearing the word "audit" sent a shock wave of adrenaline into my system when I got the call to head into the office because the auditor was on-site (it's summer, and I was at home with my seven year old daughter). Of course, to say I tend to worry a wee bit too much about things would be an understatement. That's why I'm not a lawyer anymore.

Happily, our auditor was great (thanks Robert) - very friendly, not scary at all. And also genuinely interested in helping us with any questions/concerns we might have. I did have to explain about the fact that we're a directory of property management companies and that we will never actually do property management ourselves, and although I had anticipated that there might be some confusion there, there was no problem. And then the audit was pretty quick because of that reason -- we don't actually do property management - so we don't have to deal with trust accounts, or maintaining copies of lease agreements, or providing monthly or annual reports.

Along those lines, I've actually found that most real estate commissions and their representatives really do seem to be interested in helping people comply with the law. On the whole, I've always found them to be very helpful when I've had questions about property management regulations.

Hot places for property managers - April 2007

2007-05-17T14:08:40Z

As usual, single family home or condo (<$300K) was the most popular search on the www.allpropertymanagement.com website in terms of the type of property needing to be managed. Also as usual, California, Florida and Texas led in terms of geographic location. Finally, the prize for the most popular zip code goes to: 95926 - Chico, California. Property managers in Chico - if you're looking for properties, we should chat!

By Type of Property Needing to be Managed:

Single Home or Condo (< $300K)
Single Home or Condo ($300-$500K)
Multi-Family (2-4 units)
Multi-Family (>100 units)
Multi-Family (20-100 units)
Homeowners Association (>50 units)
Condo Association (<50 units)
Homeowners Association (<50 units)
Single Home or Condo ($500K-$1M)
Condo Association (>50 units)

By Location of Property Needing to be Managed:

I'd like to avoid skirmishes...

2007-05-17T11:37:24Z

As our site (a directory of property management companies - we do lead generation) becomes stronger and more populated, we're starting to get calls from property manager clients using our site complaining that other clients on the site in their area aren't fully licensed. More often than not, it turns out that the companies they're complaining about ARE operating within the bounds of the law, but that information isn't updated or readily available to the public, and in the meantime we get caught up in a skirmish between competitors.

All our companies sign a contract that they have the proper licensing and stating that if they lose their license for any reason they agree to notify us immediately. But if we get a call that someone isn't licensed I follow up on it right away. This is totally self-serving, but I'd love it if the rules were the same in each state AND if you could easily check licensing in each state - it seems like some property management companies are working under some other broker's license, which makes it really difficult to confirm that the company itself is licensed - and it some states that's okay, and in others it's not. We're working on a policy here to deal with that, because it seems like some days I'm spending hours on the phone talking to real estate commission personnel trying to figure out if a company is properly licensed. And sometimes, depending on who I talk to at the commission, I get different answers.

My issue is that we do advertising - we're not a regulatory agency!

Is Chico Soft?

2007-04-17T15:46:24Z

According to our website statistics, a number of people are looking for property management companies located in Chico, California to manage their single family homes - in fact a Chico zip code got more searches for single family homes this month than any other zip code. The thing is, property managers in Chico don't seem too enthusiastic about getting new properties. Does anyone know if that market is soft? Is there significant development going on in Chico?

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Tracey March is the Designated Broker for All Property Management, LLC, an internet directory of property management companies in the U.S. and Canada. The company website is www.allpropertymanagement.com.

Creative solution to tenant who won't leave.

2007-04-16T13:07:24Z

Here's creative solution to a tenant who just won't leave from when I was practicing real estate law.

I had a client come to me who hadn't been using a property manager. He had rented a small house to some tenants and he didn't check references (how many times have I heard that!). By the time he came to me, the tenants had trashed the place, were 4 months behind in the rent AND they had ignored his notice to pay rent or vacate. I explained his options to him and after he considered the time, expense and hassle involved he decided to actually offer to PAY THEM to move out. He offered them about $300 (from what I remember) - and it worked - they moved out the next weekend. I think maybe it worked because they couldn't afford to move - and they were able to use the money for the next place.

I was wondering what you guys think about this. I mentioned this as an option to subsequent clients with the same problem and most of them refused to consider it on principle - they didn't want to reward dishonest behavior. The flip side is that it sure did save my guy some time and money in attorney's fees! He just wanted them out!

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Tracey March is the designated broker for All Property Management, LLC. The company website, www.allpropertymanagement.com, provides an online directory of property management companies in the U.S. and Canada.

Finding a Property Management Company

2007-04-15T20:25:49Z

Owning an investment property is a great step towards financial independence. While many owners decide to manage the property themselves, others find that having a property management company manage their asset for them can greatly simplify their lives. Depending on whether or not they have a real estate broker's license, a property manager can:

Advertise the property's availability to potential renters and show rental properties.
Screen potential renters, verify credit and check references. (This is a crucial step and could make or break your experience as a rental owner. Always make sure that references are checked to determine that the potential tenant really is as reliable as they may seem.)
Negotiate lease terms.
Collect and track rents.
Provide monthly and annual financial reporting about your asset.
Handle repairs and maintenance, often 24-hours a day.
Handle evictions. Proper notice of termination needs to be served to evict a tenant - a professional property manager will know these procedures.

Finding someone you trust to handle these issues can be well worth the expense, especially if you don't live near your investment property, or if you have a busy life like most of us do!

When selecting a property management company, look for experience in important areas, such as maintenance, leasing, collections, marketing, advertising, tenant relations, financial analysis and budgets, and knowledge of relevant local and state laws. Ask for sample reports and for references from other property owners using that management company.

In addition, make sure that your property manager has the proper licensing. In most states property management companies must have a real estate broker's license to list properties for rent, show them to tenants, negotiate leases and some states also require a broker's license to collect rents. You can always check whether a real estate broker's license is required by consulting your state real estate commission's website, and most state's have a license lookup tool on the internet. In addition, you can also check to see if any disciplinary actions have been taken against a broker.

All in all, working with a good property management company can not only help you protect your investment, it can give you peace of mind.

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Tracey March is the designated broker for All Property Management, LLC. The company website, www.allpropertymanagement.com provides a directory of property management companies and association management companies in the U.S. and Canada.

Internet Searches for Property Managers - March 2007

2007-04-14T13:32:09Z

Here's information on the top internet searches for property managers by state, and then also by type of property on the allpropertymanagement.com website in March 2007.

As is typical, California and Florida dominated in terms of geography - more people are looking for property management companies in California and Florida.

Also typical is that searches for single family homes or condos with a value less than $300,000 dominated - consisting of about 4 times as many searches than the next category, single homes or condos between $300,000 and $500,000.

Searches for property managers by STATE(or province):

1. California
2. Florida
3. Texas
4. New York
5. Arizona
6. Illinois
7. Georgia
8. Oregon
9. Ontario
10. Washington
11. Maryland
12. North Carolina
13. Michigan
14. Virginia
15. Colorado
16. New Jersey

Searches for property managers by TYPE OF PROPERTY:

1. Single Home or Condo (< $300K)
2. Single Home or Condo ($300-$500K)
3. Multi-Family (2-4 units)
4. Multi-Family (>100 units)
5. Multi-Family (20-100 units)
6. Homeowners Association (>50 units)
7. Condo Association (<50 units)
8. Condo Association (>50 units)
9. Homeowners Association (<50 units)
10. Single Home or Condo ($500K-$1M)
11. Multi-Family (5-19 units)
12. Office (10,000 - 100,000 ft²)
13. Retail (<10,000 ft²)
14. Office (<10,000 ft²)
15. Retail (10,000 to 100,000 ft²)
16. Single Home or Condo (> $1M)

Property Management Internet Leads

2007-04-13T16:41:34Z

I've been reading loads on active rain about internet marketing and lead generation - it seems to be something of a hot topic.

My company does lead generation for the property management industry (we connect property owners with property managers), so perhaps it's a little different than with pure sales leads, but according to our clients they're converting about 30% of leads into paying clients. The caveat is that this does vary a little depending on how well our clients have set up a system to respond to our leads. Some client's have specifically made checking email every half hour or so part of someone's job description, because we're finding that the response time is critical in converting a lead into a client (no surprise there!). Think about it - if you're hiring someone to manage one of your most valuable assets you'd probably like to think they're responsive. We're also finding that the first impression is also critical - whoever is responding and having that first contact should be professional and organized. On the flip side, when we've talked to clients with poor conversion rates, a common thread is that they've waited long periods to respond - sometimes up to a week.

Another reason our conversion rates may be higher is that we filter our leads for property type and location, so the property manager doesn't waste time on leads for property out of its area or on leads for commercial space when it only does residential - that is the leads are more likely to be a good fit for the company.

Anyway, my two cents is that we have seen companies that started with us when first began grow into healthy, productive, expanding companies - and many of them credit the internet for giving them a head start. I think having a strong internet presence is critical these days.

Later...

Tracey

www.allpropertymanagement.com

Property Management Regulations

2007-04-12T12:27:14Z

So, I work for All Property Management, LLC. Our website, www.allpropertymanagement.com, connects property owners with property managers (we're in the "lead generation" business).

As part of my job, I'm doing a bunch of research on property management regulation in each state, and I've noticed a couple of things that I thought I'd throw out there.

While states are pretty consistent in requiring a broker's license for listing or offering to list property for purchase, sale or exchange, or offering to engage in those activities, there is a fair amount of variation between states in terms of which property management activities require a broker's license.

For example, in Idaho property management activities are not regulated, so it appears a property manager there can negotiate leases, collect rents and list properties for rent and show properties without a broker's license. At the other end of the spectrum, some states, such as Connecticut, not only require property management companies to have a broker's license if they collect rent, negotiate leases or show properties for rent, they also require community association managers to have a license and be working under a broker. Of course exceptions apply, such as if the person collecting the rent is the apartment manager living in the building, but if the building has a property management company taking care of it, that probably isn't the case.

Anyway, for all you property managers out there who are not brokers or whose companies don't have a designated broker, if you are listing or showing properties, negotiating leases or collecting rent you could be in violation of your state law - in fact you're probably in violation of your state law because most states define those activities as real estate activities requiring a broker's license. Make sure that you're allowed to engage in these activities with your local real estate commission, or consult an attorney in your state. And also keep in mind that even if you're collecting rent checks that are in the owner's name and depositing them directly into the owner's bank account, if your state requires a broker's license to "collect rent" you may have an issue with your state's real estate enforcement division if your property management company doesn't have a broker's license.

Finally, because our website collects leads for property management companies, we have all sorts of useful information for property managers about where the most requests are coming from (geographically), and for what types of properties. More on that later...

By the way, I'm actually the designated broker for All Property Management, LLC and I'm also a recovering real estate attorney too - I gave up my law license a few months ago. Please let me make this clear that this is not meant to be legal advice of any kind. If you have any questions or concerns you should consult an attorney licensed to practice in your state.