Ask any apartment building owner and they’ll tell you about the “Terrible T’s”: Tenants, toilets, Termites and Turnovers. We manage the Terrible T’s without incident and without your need to be involved. Of these items, Tenants are the complaints we hear the most from those owners asking us to take over the management of their buildings. We have very specific programs and procedures for dealing with tenants so that we can rent units quickly, to the right tenants, paying market rent, who do not give us (or you) problems.
Marketing & Sales: The Key to Leasing Units
We consider a vacant unit to be a problem. It’s an asset not generating income and dragging down profits. This is unacceptable so we move quickly to turn units and rerent them at market rates. This is key. Renting too low is like leaving “money on the table” and affects the bottom line. In rent controlled cities, it is seriously problematic because renting at below market rates may result in an underperforming asset for the long term. We have multiple resources which we check on a daily basis to determine market rate rents for various units throughout the South Bay.
Once we determine the true value of a unit, our program for leasing units combines heavy doses of marketing and sales to rent the unit as quickly as possible. On the marketing side, we produce quality ads with compelling descriptions, quality photographs and easy to read floorplans. These ads are posted to numerous online rental sites both common and uncommon. If our ads are not generating responses they are quickly modified so that the calls and emails do not slow down. Along with heavy online advertising which incorporates many unit photographs, we also post professional signage in front of the building and alert other tenants within the building of the vacant unit. We have found that current tenants often desire upgraded units and will also tell their friends, coworkers and family. Only as a last resort to do we utilize leasing concessions and then only if market conditions demand them.
The next step in renting a unit is sales: Good old telephone and face-to-face sales techniques to entice financially strong renters to sign a lease. We start this by promptly answering a special sales line and email address which a property manager carries with him or her at all times. The manager spends a few moments extolling the virtues of the unit and then asks some qualifying questions of the prospect. If there is interest from a capable and qualified renter, then the manager moves quickly to arrange a private showing of the unit.
Once we have created interest and the prospect wants to move forward, we enter into the second stage of tenant screening. This stage is much more thorough and in it we ask the tenant to complete an application which asks for current employment or other verifiable source of income for the monthly rental payment, rental history and other qualifying criteria. When completed we run a credit, criminal and rental history check with past landlords, as well as verify employment or source of income. All information is compared to our published rental criteria, which adheres to all Fair Housing regulations and was initially provided to the prospective renter at the outset. This application can be submitted online, thereby reducing the time to rent the unit.
Once the applicant meets our criteria, we move quickly to sign the lease agreement, collect the first month’s rent, security deposit and begin the move-in process. Our move-in process is far more involved than just providing the tenant with a set of keys. We actually review the lease agreement, House Rental Regulations, and inspect the unit with the tenant. The tenant is given a detailed walk through form to complete, sign and return, and we document the condition of the unit with video as well. This process lets the tenant know that we have pride in our units and expect them to be returned in the same condition upon move-out. As a result, the damage the unit sustains is minimal because the tenant has been advised from the beginning of our expectations. Upon termination of the tenancy the inspection process is completed again to ensure that any damage is documented and reimbursed by the tenant.
Tenant Management and Rent Collection
Once in the unit, we consider the tenants to be our clients, and we try to make their residency as enjoyable as possible. It is the property manager’s responsibility to establish a professional and cordial relationship with all the tenants. We discourage making the tenants our friends because in the end all parties must abide by the terms of the lease or rental agreement. On our end we provide a quality unit free of problems and noise in an attractive complex. We also strive to complete any needed maintenance or repairs in a very timely manner (within 24-48 hours depending on severity of the issue).
On the tenant’s side we expect that the lease be adhered to without any variation. This includes timely payment of rent, not disturbing the other tenants, not damaging the unit or the premises and adhering to all the house rules and regulations. We offer the tenants the convenience of paying their rent online, as well as communicating and filing any work order online through our state-of-the-art property management software which is completely integrated with our accounting records.
Lease Compliance and Violations
The most important document in managing rentals is the lease/rental agreement. This document forms a binding agreement between the tenant and landlord which is enforceable in a court of law. It is this agreement, along with our addendums and our customized Rules and Regulations document, which we rely upon to ensure that we run the building – not the tenants. We have walked into far too many management situations that require anywhere from mild enforcement to legal action to bring the building back into a manageable state from which it can generate profits. Moreover, in rent controlled cities with strict tenant protection (just cause eviction) laws, it is the lease/rental agreement which we solely rely upon to enforce building regulations and rid the building of problem or non-paying tenants.
Without a robust lease in place a manager is powerless to control the building. That is why our lease/rental agreement undergoes periodic review and revision so that it complies with the ever changing California state and local rental laws. We rely upon these contracts to protect you, the building owner, from lawsuits both frivolous and serious, and enable us to keep your investment a profitable one.
When it comes to collecting monthly rental payments, we aggressively enforce the terms of the lease. We make this extremely clear to all new tenants when signing the agreement so they know that the expectation is that the rent be paid by the first of every month. Depending on the building and the terms of the agreement we may offer a grace period or anywhere from zero to three days in which tenants can pay rent without a late fee. If the rent has not been submitted by the due date, we immediately serve the tenant the required three day notice to pay rent or quit, as well as comply with whatever municipal rent control regulations applicable to the property. Along with this three day notice is a sizable, but legal, late fee which we do not waive. If the tenant does not pay the rent along with the late fee in the specified time, we notify the tenant that they are in violation and that we will take legal action if they do not pay the full rent amount. Within just a few days of that conversation, we will hire one of our extremely experienced eviction attorneys to file an unlawful detainer action. While this can be somewhat costly to you and time consuming for us, we have found that aggressive rent enforcement results in profitable properties.