Reasons Why Residents Renew the Lease or Not Renew the Lease

As a Chicago property management company, we know that a big part of the longevity of a property management company is the tenants a property management company has.  For years property management companies have been striving to find creative ways to maintain tenants.  Whether it was incentive programs, resident events or rental perks, it has been done, but has it worked?  Have incentive programs, resident events and rental perks really kept tenants occupying their space?  Not necessarily.  Sure it has probably worked for some, but not for all.  What makes or breaks whether a tenant renews the lease?  And what causes tenants not to renew the lease?  Here are a couple reasons why tenants renew or not renew the lease:

1- Safety of the building: Who doesn't want to feel safe in the place that they live or work?  One of the key factors facing whether a tenant renews the lease or not has to do with the safety of the rental space.  Studies show that if tenants feel their building or space is safe they are more likely to renew the lease. Safety can come in the form of a doorman in the building or a well-lit building or area.  Outside of typical security features, tenants also want to see that the space they are renting is as safe as possible.  The windows should be relatively new and have a solid locking system.  The door should have a good locking system, which may mean the door requires not just a key, but perhaps utilizes a chain as well.  On the flip side, if a tenant feels that the rental they have been occupying is not safe they will probably look elsewhere to take up residence.

2- Quality maintenance: Quality maintenance services are probably the most pivotal reason why a tenant will renew the lease or not renew the lease.  Quality maintenance services typically revolve around service requests.  Service requests should be fulfilled in the correct order that they come in to the office.  Whether the service request comes in the form or an email, call or the resident stopping by the main office, the resident has a need they are looking to have filled by the landlord or property management company.  This is when the office team needs to step in and provide quality maintenance services.  How the office team handles the requests and fills the need of the tenant will make or break the tenant's satisfaction with the building, landlord and property management company.  To prepare, the staff should be familiar with most common issues associated with the rental property and know what questions to ask tenants regarding the problem or issue they are experiencing.  Most office staff should be able to verbally walk the tenant through solving the issue and if need be get the tenant the proper help to fix the issue.  Tenants simply want to know that their issue will be resolved in a timely, efficient matter and that the landlord, staff and property management company supports them and will get the issue solved.  Odds are if tenants feel they are receiving quality maintenance services and care from the property management company, landlord and staff they will want to continue renting their space instead of looking elsewhere.

3- Good customer service: Customer service is key to keeping tenants satisfied and renting.  Similar to receiving quality maintenance services, tenants want to feel that they can approach their landlord, property management company and building staff with any comment or questions, so the lines of communication need to continually stay open.  Tenants want to feel like they're appreciated and that the landlord, building staff and property management company care.  Giving quality customer service to tenants is another way to ensure that a resident will renew the lease, rather than not renew the lease due to poor customer service.

A major part of whether a tenant renews their lease or does not renew their leases hinges around how safe they feel their rental space and building are, quality maintenance and good customer service.  This means a property management company, landlord and staff need to stay on top of the ball and make sure all tenants are being cared for properly.  If you have comments or questions on anything property management related, feel free to comment below or contact us.

Goals for Property Management Companies

Since it's January and the start of a brand new year, we thought we'd take a few moments to help out fellow Chicago property management companies, and really just property management companies in general, by sharing some ideas on potential goals to set for the upcoming year.  There's no better time then the start of a new year to come up with some new, fresh ideas and goals to help start the new year off right.  Here are a few of our Chicago property management company's goals for the new year:

1- Improve communication between your property management company and tenants: A great goal for any property management company for the upcoming year is to improve communication between yourself and tenants.  Communication is key when it comes to the relationship shared between a property management company and tenants, so keep the lines of verbal communication open to the best of your ability.  Let tenants feel like they can come to you with problems and show them that you will work hard to help them when it's needed.

2- Maintain a steady income: As with any property management company, your goal as a retail property management company, condo property management company, or industrial property management company should always be maintaing a steady income.  Make it your constant goal to oversee all daily operations of your property management company in the most cost effective way all while maintaining a steady income.

3- Increase rental property inspections: If you have been putting off rental inspections over the last few months make 2013 the year to get back on track.  Increase rental property inspections this year.  Make periodic scheduled visits of your rental property to ensure that maintenance and rental standards that were set forth originally in the lease are being maintained.

4- Increase rents appropriately and competitively: In a previous blog we discussed increasing rents and this year you will want to stay on top of the ball with your rental increases.  When it comes to increasing rent, make sure you are increasing your rental rates appropriately and competitively within the standards of the market.

5- Work on a marketing plan: If your property management company's marketing plan crashed and burned last year, consider your marketing approach for the upcoming year (if you haven't already).  Develop and implement a creative marketing plan that will allow for financial gain, company growth and stability.

What are your property management company's goals for the upcoming year?  Share a few with us in the comments below or feel free to contact us.

Staffing for Property Management Companies

While many property management companies may be hurting for income due to tight rental markets and smaller budgets, the need for staffing will always remain the same.  As a Chicago property management company, we know first hand how difficult things can get and we also know how vital it is for a property management company to get creative during tough times.  Even when things aren’t tough it will pay off to truly analyze your budget in regards to your staffing.  Do you work for or own a property management company, a condo property management company, retail property management company or industrial property management company that is in need of new staff members but doesn’t have the budget to hire new staff?  That’s okay, you have options.  Here’s a few of our staffing tips for property management companies:

1- Assess your current staffing situation:  Take your current staffing into consideration first.  As a property management company, condo property management company, or retail property management company where do you feel you are lacking in the staffing area?  What job duties or roles aren’t being completed?  What jobs seem to fall through the cracks month after month?  After a good analysis of your property management company’s situation you should be able to compile a list of duties that aren’t being done that need to get done.  This will help you see where you are lacking and where you need some help.

2- Talk to your current staff first:  After you have assessed your property management company’s current situation, you should have a good idea of what job duties aren’t getting done that need to be done.  Sit down and talk with your current staff and let them know the staffing issues that you see and ask them for their thoughts on what they feel should be done.  They may have some great advice and may be willing to help out and take on some of those extra duties.

3- Consider cross-training: Cross-training your employees could quite possibly be one of the most beneficial things you do with your property management company staff.  Your bookkeeper may have great customer service skills and might be willing to fulfill both roles very successfully, but you won’t know unless you try out cross-training.  While many members of your staff are probably specialists in certain areas, there is nothing wrong with a little cross-training, however you must be realistic.  Not all members of your staff are going to be great at multiple jobs, so keep that in mind. 

4- Utilize your connection: Ask your friends, family and acquaintances if they know of anyone that may be able to fill the role that you need filled.  You never know, they may have someone in mind that can help solve some of your staffing woes. 

5- Determine your wants and your needs:  You may want another hand on deck for customer service, but perhaps what you really need is another maintenance staff member.  Determine the roles that can easily be taken on by yourself or a current staff member and hire someone for a role that absolutely no one else can fill.  Budget-wise you will thank yourself in the end. 

Looking for more tips on staffing for your property management company?  Feel free to leave us a comment below or contact us?  

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.

The Benefits of a Property Management Company

Never underestimate the value of a good property management company-- and no we're not just saying that because that's who we are!  We know how important finding a good property management company can truly be.  Have you had a bad experience with a property management company in the past?  While there are some property management companies out there that might not be the greatest, there are some that are excellent and maintain buildings beautifully all while make a tenant's life run alot more smoothly. Here are a few of the benefits of having a good property management company:

(1) Quality tenants: A good property management company will do a great job screening tenants and will usher in waves of quality tenants.  Having good tenants is extremely crucial in the property management business.  A good property management company can rely on their experience and will be able to thumb through tenant applications and be able to weed out any tenant they feel is no good.  As a result, a good property management company will bring in good tenants who typically cause less problems, pay rent on time, rent longer, and will care for the unit.

(2) Good tenant retention: A good property management company will efficiently be able to keep tenants happy and have a low turnover rate.  Typically, a good property management company will have a solid, time-tested retention policy.

(3) Less legal problems: One of the most beneficial parts of having a good property management company is less legal problems.  A good property management company will be up on the latest landlord and tenant laws that will ensure that you are not vulnerable to legal problems.  This is probably one of the most important parts of working with a good property management company.

(4) Shorter vacancy cycle: A good property management company will be able to fill vacancies quickly by suggesting property improvements, determining the best rent rate and proper marketing of the vacancies.

(5) Personal:  Having a great property management company on your side can provide a ton of personal perks including less stress, more time on your hands, and increased freedom and flexibility.

Want to know more about the benefits of a property management company?  Feel free to comment below or contact us directly.

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.

Appreciation

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.

Leverage

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.