Setting Rental Prices

If you are a property management company, condo property management company, retail property management company, or industrial property management company you are probably all too aware that setting a rental price can be tricky.  Setting rental income is vital for any property management company or landlord, so getting the price right is key.  If you don't charge enough or charge too much you could find yourself in a heap of trouble.  Mechanisms needs to be put in place to bring in the right amount of money each month to keep your property management company or business afloat.  When all is properly balanced, you can expect to achieve a great return on investment.  Before setting your rental's price, consider the following:

Look to the local market

For a property manager or landlord to successfully set a rental's price, he or she must have knowledge of the local market and perform solid research on the last 15-20 most recently rented comparables.  Nothing takes the place of thorough research using current market data.  Make sure you consider the following:

-Current rents being charged for similar properties in the area:  Say your rental property is a two-story townhome with 2 bedrooms and 2 baths, then look for similar properties in your rental's area that match up to your rental.  See where they are priced at and that will give you a good range of what to charge tenants for your rental property.

-The shape that your rental property is in:  You cannot expect to charge a fortune for a rental property if it is not in excellent condition, so price needs to take into account the shape the property is in.  Look at your recently rented comparable properties and most specifically look at properties that are in similar condition to your rental.  See where they are priced at and that may give you a good ballpark figure for your rental property.

-Current rental demand in the area:  What is the current rental demand in the area your rental property is in?  If there is high demand and your rental is in a great area, that will allow you to charge more for your rental.  If the demand is low you will have to adjust the price accordingly.

-How desirable the rental's neighborhood is:  Is your rental property in an extremely desirable neighborhood or just the opposite?  The more desirable the area, the more you can charge for your rental.   

What will be included in your rental's price? 

What will be included in your rental's price is somewhat of a personal choice.  Some tenants or property managers may prefer that electricity, internet, water and gas be included in the rent and others may prefer to keep that separate.  If you are looking for a great competitive edge, you may want to consider including these items in your rental's cost.  However, leaving those things out may save you in case your tenant uses those items excessively.  This way you would not have to directly pay for them.  It is certainly something to think about.

Looking for more tips on setting rental property prices?  Feel free to leave us a comment or contact us.

Using Property Management Software

Property management isn’t always the easiest career, but it can be incredibly rewarding and made easier with the right tools.  There is software available to help property managers stay organized.  Have you found yourself buried in a mountain of scribbled notes and paperwork?  Consider property management software.  Property management software is designed to keep you organized and help your property management company grow.   Software costs can range anywhere from $100-$10,000.  Yes, that's a pretty big range!  With such a wide range available any property management company can utilize software at a cost that is most comfortable.  Here are some things to think about before you decide to purchase property management software:

(1) What’s out there: Before you purchase property management software look into all the different alternatives and what each product can offer your property management company.  Choosing the cheapest alternative might not be the best route.  Look into what pricey products will give you and what the less costly products will give you. 

(2)Assess your needs long before you purchase: Long before you purchase you should fully evaluate your property management company’s needs.  What are the most important qualities your property management software must have?  Why buy software that is complete overkill?  There is no reason and you will end up paying a lot more for features you will not even use.  The software you choose should do the following as far as the basics go:

            -Post rent, management fees and late fees

            -Deal with bank checks and deposits

            -Can easily update your information

            -Has a good interface

            -Maintain a separate ledger for tenants and owners

(3) Watch out for hidden costs: Hidden costs are out there so buyer beware.  If you purchase software that is not user friendly you may find yourself paying for support you never planned on needing in the first place.  Hidden costs can potentially break your budget, so make sure you know exactly what you're paying for and how much you're paying before you purchase.

(4) Features: Don’t be fooled into thinking that you need the latest and greatest software on the market today.  There may be cheaper alternatives that get the job done perfectly, but it all depends on the features.  Do some research on what each product provides and compare that with the needs we mentioned assessing in tip #1.  See where the products stack up. 

(5) Be wary of technical support: While most property management software companies do not offer support some do.  However, you must be wary of any property management software companies that do offer technical support as there might be big conditions attached.  Some companies offer free support for a short period of time then charge begin charging a certain dollar amount per minute and that’s where support can really get expensive.  If you know you would like technical support for your product, look for a company that will provide support you can utilize and afford.  

Looking for more tips related to using or buying property management software?  Comment below or contact us.  

Handling a Tenant Eviction

Let's face it, handling a tenant eviction is never easy.  Property management firms all have to face tenant eviction from time to time.  Whether your company is a real estate property management company, an industrial property management company, a retail property management company or a condo property management company, most likely you will have to handle tenant eviction at some point in your career.  It's not easy, but there are effective ways to handle a tenant eviction.  Here are some tips on handling tenant eviction:

Always follow state and local laws: A property manager looking to evict a tenant must first make sure they are following state and local laws.  This sounds simple, but in reality there can be plenty of sticking points, which makes it difficult.  If a mistake is made in serving an eviction notice, the eviction case may be thrown out and then legally, the real nightmares will begin.

Serving an eviction notice: Whether your property management firm hires someone to serve an eviction notice to the tenant or you do it yourself, it may be difficult, but it must be done.  There are several kinds of notices to issue, some types include the following:

1- Non-Payment of Rent- If your tenant does not pay rent when it is due, then the landlord can serve a notice stating that rent is due and provide the tenant with a time frame in which the rent must be paid.  If the tenant is able to pay the rent (in full) within the time frame than there cannot be an eviction.  This is based off of the tenants actions.

2- Unconditional Notice- Some states allow an unconditional notice to be given to a tenant.  If the resident has broken or violated the rental agreement or is breaking the law, then the notice can be given.

3- Fixing a Violation- In many states, a property manager or landlord can give a notice stating that a violation of the rental agreement must be resolved.  This notice must specify a time frame in which that violation be resolved.

When is Eviction Possible?

There are typically three scenarios that make eviction of a tenant possible for a property management company and this includes:

A Tenant Fails to Pay Rent- If a tenant fails to pay rent, then this could be terms for eviction.  This depends on how many months the tenant has failed to pay rent.  If it has been a period 1-2 months then many property management companies will be more lenient and simply mandate the tenant make up for the missed payment by a decided date in the near future.

A Tenant Poses a Health or Safety Risk to Others- If a tenant poses a health or safety risk to other tenants in the same building, they too may be eligible for eviction.  Any tenant conducting dangerous  or illegal activity that is a threat to other tenants could be evicted.  Many rental contracts include language that states no illegal or dangerous activity is to be conducted by a renter on a property.  That gives merit to a property management company seeking eviction of a tenant.

A Tenant Breaks Rental Agreement- If a tenant breaks the rental agreement this can of course be punishable by eviction as well.

The Eviction Process

One of the first things a property management company facing tenant eviction must do is terminate the tenant's lease.  An eviction lawsuit can't begin until the lease is terminated and the property management company or landlord has issue a written notice to the renter being evicted.  Each state has different laws that pertain to eviction, so again as we stated above, make sure you are following local and state laws.  This notice gives written proof that the tenant has been notified of the eviction and the reason why.

Looking for more tips on how to handle a tenant eviction?  Feel free to leave us a comment below or contact us.