Friday, October 28, 2011

Curbing Troublesome Tenants: The Conclusion

The second part of our Curbing Trouble Tenants series is how to manage tenants while avoiding legal troubles and staying in control. Remember, as a landlord, you are 'letting' people stay in your property under certain circumstances, and the contracts you sign, as discussed in the last post, protect you. There are some other options to keeping your current and future tenants in good standing.

Respond to Complaints
Although the daily tasks of a landlord or property management firm can vary, responding and solving tenant issues is an important part of maintaining a happy rental community. The speed and efficacy in which complaints are dealt with - verbal or written - has a direct impact on the relationship between tenant and property owner or management. Failure to respond can lead to profit loss, angry tenants, high turnover and a bad reputation. Above all - always remember to communicate. This is all the tenant is asking for in the first place, so respond in kind and you'll not only keep your tenants happy, but your life (almost) stress free.

Offer Concessions
Why offer concessions? If your response to the tenant isn't what they were looking for or you forgot to respond to someone, this can be effective in quelling a possibly angry tenant. Concessions can come in the form of cash incentives for signing leases, the best parking spaces, or even rent discounts. If the problem is not with the quality of living but another tenant, offering to move the tenant into another unit can be helpful. Happy tenants are always willing to negotiate and more importantly, pay rent on-time and not destroy your property or spreading bad reviews out of spite.

Enforce your Rules
The best way to enforce your rules is by being consistent. These can come in many forms such as - noise violations, pet violations, or even hygiene issues. Although enforcing these rules may upset the one violating the rules, showing consistency and actually addressing the problem while show your best tenants that you can deal with issues swiftly and properly. Making sure tenants are properly following the rules is key. If they aren't, start eviction proceedings to protect the best interests of the rest of your rental community.

Have questions? Send us a comment! Or better yet, call us at 847.634.4772.

Tuesday, October 25, 2011

MK Asset Management: Our Handbook

In order to get to know us a little better, we thought we'd share with you some of what our Chicago Property Management Firm uses to make our company and your properties run as smooth as possible. You can download this or look at it on your computer.

>> MK Asset Management Handbook

Feel free to look through this handbook, or call us with questions! Look forward to the second part of our Curbing Troublesome Tenants piece coming soon!

Thursday, October 20, 2011

Curbing Troublesome Tenants: Part one

Residential Property Management Firm in Chicago

Troublesome tenants is something that keeps most property owners up at night. Some states that are tenant-friendly such as California and Arizona make it much more difficult for rental real estate owners to deal with tenants who are being unreasonable or causing problems. There is a way to protect yourself though: clearly and properly defined lease terms to protect from issues such as unpaid rental fees, property damage and more. Landlords or real estate professionals are usually the people putting together lease forms, but these forms can be added to in order to protect by using additional statements and stipulations.

Lease Form Tips:

1. For tenants who are always late with rent, and this is the top complaint from property owners, a stipulation such as: Eviction processes will begin on the first day after the grace period that rent has not been received. That simple line is an incredible motivator to keep inconsistent tenants paying on time.

2. Another great motivator are late fees such as: Tenant shall pay (a percentage) of the total monthly rent in late fees after the grace period has ended. The thought of having to pay more if late will, more often than not, keep people paying on time.

As a residential or commercial rental property owner, it is absolutely essential to protect yourself from troublesome tenants. Rentals today range from homes that cannot sell to standard residential apartment buildings. Home owners are even renting out their homes while renting an apartment themselves. Having a binding contract is essential when others are utilizing the buildings you own. To make sure you're not being taken advantage of, make sure there are proper stipulations to be agreed upon. Doing so will save you money, heartache and stress down the line.

Tuesday, October 18, 2011

Rental Property: The Advantages of owning a Residential Rental Property

Chicago Property Management Company :: Residential Property Management Chicago

Investing in real estate can sometimes look like an awesome idea on paper. You, in essence, buy a place in a nice area, find tenants, and let your bankroll grow. However, it's not always that easy. There are definite advantages to owning a rental property, but take into consideration some things before putting a 'for rent' ad in the paper.

Advantages of Rental Real Estate

The advantages of rental real estate properties are many. One that is not listed below is the fact that when you own rental real estate, you own a tangible thing. You can hug it when you're happy with it and throw stones at it when you're not. Shares of Apple, by contrast, are much harder to hit with a rock.

Many people who feel uncomfortable investing in financial assets have no problem with investing in real estate by contrast. This is a psychological difference, as a bad stock and a bad rental property are equally capable of losing money, forcing you to sell for a loss. That said, below are the advantages that show up on paper.

Current Income 
This refers to the rent money that is left over after the mortgage and related expenses have been paid. Current income is basically monthly cash that you did not have to work for - your property makes it for you.

This is the increase in value that properties generally gain as time passes. Appreciation is not guaranteed though. However, if you own a property in a stable area (cities), the property will likely increase in value over the years if it is kept in good condition. Even properties in sparsely populated and less desirable areas may appreciate due to inflation.

Rental properties can be purchased with borrowed funds! Yay! This means that you can purchase a rental property by putting down only a percentage of the total value of the property. Essentially, you can control the whole property and the equity it holds while only paying a fraction of its total cost. Also, the property you purchase secures the debt rather than your other assets. You may lose the rental property, but you shouldn't lose your own home.

Tax Advantages
Your rental income MAY be tax free if you do not receive net cash flow after expenses are deducted. This means that your mortgage is being paid down and you own more of the total value of the property (rather than just controlling it), but you do not pay taxes on the money that is doing this for you. In addition to this, you can also pull out tax-free money by refinancing your loan if the property appreciates and the interest rates have fallen. Lastly, you may be able to avoid paying taxes on the sale of a rental property if you sell it and reinvest the money in another property. Neat huh?

For every upside there is a down - stay tuned for our next blog when we discuss the downside of owning a rental real estate property and tips on how to keep the pros outweighing the cons.

Tuesday, October 11, 2011

Property Management: 10 Tips for Landlords

Chicago Property Management Firm :: Northern Illinois Commercial Property Management
Landlords need to keep an eye out on their real estate investment properties just as much as the property management firm does, and while it is the job of the property management firm to handle certain aspects of the building, it is up to the Landlord to keep tabs on tenants, contracts and the overall state of their real estate properties. A few things Landlords should be doing:

1. Always Screen Tenants
Never rent out space to anyone before checking credit history, references, and background. Inconsistent screening and tenant selection too often results in problems -- a tenant who pays the rent late or not at all, trashes your spaces, or lets undesirable people move in. Use a written rental application to properly screen your tenants for warning signs.

2. Get Leases in Writing
Always use a written lease or month-to-month rental agreement to keep track of the important events and agreements of your professional relationship with your tenants -- including when and how you handle complaints and repair problems, notice you must give to enter a tenant's apartment, and anything else significant.

3. Handle Security Deposits the right way
Establish a fair system of setting, collecting, holding, and returning security deposits to tenants. Inspect and keep track of the condition of the rental unit before the tenant moves in, to avoid misunderstandings and disputes over security deposits when the tenant moves out.

4. Make Necessary Repairs
Stay on top of maintenance and repair needs and make repairs when your tenant's request them. If the property is not kept in good repair, you'll alienate good tenants, and tenants may gain the right to withhold rent, repair the problem and deduct the cost from the rent, sue for injuries caused by defective conditions, and/or move out without needing to give you notice.

5. Provide a Secure Property
Don't let your tenants and property be easy marks for a criminals or other undesirable peoples. Assess your property's security and take reasonable steps to protect it. Often the best measures, such as proper lights and trimmed landscaping, are not that expensive. If you can justify the extra expense, a gated entry may be a great selling point for security.

6. Before Entering, Provide Notice!

Learn about your tenants' rights to privacy. Notify your tenants whenever you plan to enter their unit, and provide as much prior notice as possible, at least 24 hours or the minimum amount required by state law. If you do not handle notice properly, your tenants may be able to use what's known as 'Tort' and receive monies from you. Note: Landlords are only allowed to enter a rental unit without notice in the event of an emergency such as fire.

7. Disclose Environmental Hazards
If there's a bio or environmental hazard such as lead or mold on the property, tell your tenants right away. Landlords are increasingly being held liable for tenant health problems resulting from exposure to environmental toxins in the rental units.

8. Oversee your Property Managers
Choose and supervise your property manager carefully. If a manager commits a crime or is incompetent, you may be held financially responsible. Do a thorough background check and clearly spell out the manager's duties to help prevent problems down the road. If you're using a reliable Property Management Firm, many of those responsibilities can be loaded onto the firm rather than having to oversee an onsite manager.

9. Purchase Liability and Property Insurance.
Purchase enough liability and other property insurance. A well designed liability or other property insurance program can protect you from lawsuits by tenants for injuries or discrimination and from losses to your real estate rental property caused by everything from fire and storms to burglary and vandalism.

10. Always Resolve Disputes.
Try to resolve disputes with your tenants without the involvement of lawyers and lawsuits. If you have a conflict with a tenant over rent, repairs, your access to the unit, noise, or some other issue that doesn't immediately mean an eviction, meet with the tenant to see if the problem can be resolved without outside help. If that doesn't work, consider mediation by a neutral third party before resorting to legal help.

If you are in need of advice from a professional Chicago Property Management Firm, call MK Asset Management for top notch assistance with your Residential or Commercial Real Estate Properties.

Friday, October 7, 2011

9 Great Reasons to Hire a Property Management Company

You have invested in your first commercial or residential property. Are you going to manage your own property or hire a property management firm to look after your investment? It largely depends on what your skills and goals amount to.

Look at your goals: do you want to be a real estate investor, or just the owner of the site? As an owner, you will be responsible for collecting rent and repair broken appliances, fixtures, doors, walls and more. Your time will be devoted to the needs of tenants and things start slipping through the cracks. Investors spend valuable time in response to the needs of tenants. On the other hand, if you hire a property manager, the investor could spend more time to find and invest in property to build your business.

The 9 attributes of a good property manager are:
  • Management skills concerning work performance, tenant management and property contractors
  • Good negotiation skills with contractors including plumbers, contractors and more
  • Experience with investment property
  • Organization of daily needs such as garbage collection, garden maintenance and repairs
  • Good communication skills with tenants, contractors, investors and legal entities
  • Accounting skills are required to collect the rents, receipts and expenses
  • The data entry skills of daily work,complaints, supplies and needed equipment
  • The ability to research in order to find capable contractors and good tenants
  • Marketing expertise to minimize periods of vacancy

The day to day details necessary for the proper functioning of a real estate property is best left to a skilled professional with the necessary skills. An experienced property manager tends to satisfy the daily needs of the tenants, maintain records and meet the needs of building maintenance.

A great manager will want to interact with the tenants on friendly and professional terms. They listen and respond to complaints, dealing with rent and necessary repairs so problems get solved quickly and efficiently. The property manager is able to take over the daily management, while the owner can make profits without being personally involved with the residents or tenants.

Essentially, the property manager is there to take care of everything. They will automatically schedule tasks and collect the rent. The details of the property management success is best left to an experienced professional so the investor is free to seek other investment opportunities.

Want to learn more about working with MK Asset Management on your investment properties in Chicago? Just give us a call at 847.634.4772.

Monday, October 3, 2011

What is Property Management: The Chicago Version

Property Management Firm in Chicago
It goes without saying, that if you own a property, whether it is a commercial property or a residential property, you will need someone to manage it. The question is: does this have to be professional management? Of course!
The issue many landlords and property owners face is the lack of knowledge in property management services. What is Property Management? It is the management of a property by a property management firm, or someone other than the owner. Needless to say, quality and trust weighs heavily on which property management company you should use.

In Chicago, there are several property management companies you can choose from and not all of them are reliable. A good firm is going to do one things that some wont: Act as a go-between for the owner and tenants. Any issues pertaining to the property can be handled by the Chicago property management firm you've hired, and in most cases, are happy to handle more than one of your properties at a time. This is good for consistency of service as well, not only for convenience.

But what goes into managing a property and acting as the go-between? There are several things your property management firm should be handling for you.
1. Collecting Rent from Tenants
2. Hiring Groundskeepers and Repair People
3. Suggest Improvements
4. Handle Repairs

Property Managers also have a keen eye on protecting your property. It is up to them to make sure nobody is vandalizing your real estate property, residential or commercial, and will take care of tenants who are causing problems as well. These steps may include evictions, involvement with authorities, and any other situation an owner doesn't want to deal with. Your Property Management Firm can also handle issues that are not hostile enough to involve the police.

In the end: a quality property management company is the end all answer to many of the issues that real estate owners face when handling one building or even ten buildings. Let your local property management firm do the work while you take in the profits.

If you're unsure about hiring a property management firm in Chicago, contact MK Asset Management to schedule an appointment to learn more and to see just how much we can assist with your commercial and residential real estate properties.

When done well, property management is the answer to a lot of issues that real estate investors might face. The management team can do the hands on work while the investors reap the profits.