PROPERTY MANAGEMENT
Many potential or new investors are concerned that they will not be able to take care of all the details and problems associated with owning rental homes. This leads people to assume that they will need to budget the services of a property management company.
There are many companies out there providing this kind of service and American Republic REO has a relationship with an excellent property management company to whom we refer clients desiring this assistance.
Most property management companies will handle collecting the rent and forwarding it to you, handling any maintenance issues (they take care of everything except paying the bill), finding new tenants when required, evicting tenants when required and in general anything else that may need to be done. A typical charge is 10% of the monthly rent and additional flat fees for services like placing a new tenant (usually 50% of the first months rent) or handling an eviction (typically $300 or so).
I would urge owners to give this serious thought before jumping to the conclusion that such services are needed. I have been managing rental homes for over 10 years and I have never considered that the efforts required would justify the expense of a property management company. Its just not that complicated.
I do almost no hands on work on any of the homes I own. It's not that I am not capable, its that I choose not to do this kind of work. I do not enjoy it, I do not have lots of spare time and I prefer to pay someone else to take care of such hassles.
When a tenant calls me with a maintenance problem, I refer to my list of contractors and make a phone call to a professional who can quickly and cheaply get whatever the problem is corrected. In some instances, I may choose to meet the contractor at the home to review the problem and discuss possible options but this is very rare and is optional. The vast majority of issues are dealt with through a single phone call.
Every client who purchases a home through American Republic REO recieves a detailed list of contractors who can be contacted to deal with any maintenance issues that may arise.
Tenants mail rent checks to me directly. Rent is due on the 1st of the month and I charge a 10% late fee if the rent is not paid by the 10th of the month. This is simple and works well.
I always rent my homes for LESS than the maximum potential market rent the home could earn. I point this out to my potential tenants and I make it very clear to them that I am renting them the home for LESS than what I could get. I do this with the understanding that the tenant will NOT contact me or bother me with minor maintenance issues. I am not to be contacted because the toilet is clogged or the windows are dirty. The tenant is renting a nice home for a great price and the most basic maintenance issues are theirs to deal with. If the tenant is not ok with this, I do not lease to them. I have found that this tactic works well for everyone involved.
If you have further questions relative to property management or the realities of owning rental homes please do not hesitate to give us a call!