5 Questions for Your Property Manager

5 Questions for Your Property Manager

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Finding a good property manager is a difficult task, but it may be one of the most important decisions that you will make after purchasing your rental property. Renting a property can be a significant investment, so you want to hire someone that you can trust completely.

Responsibilities of a Property Manager

Before you begin your journey of finding a good property manager or considering various questions for property managers, you should understand what the responsibilities of a good property manager are.

Rent

First, the property manager oversees rent collected from tenants. With their knowledge of the market where the property is located, they can set the rent at an appropriate level for the property type and location. They will also set the date that rent will be collected and make sure tenants are paying their rent each month. Finding a good property manager will mean that you don’t have to worry about setting or collecting rent from your tenants unless you want to.

Tenants

Property managers are in charge of finding and screening potential tenants. This includes running ads for any vacancies at the property, running credit checks and criminal background checks on potential tenants, setting and handling lease terms, and more. Property managers must have the time and commitment to stay on top of all of these tasks for a successful rental property.

Maintenance and Repairs

Your rental property needs to be kept in safe and habitable conditions and your property manager is the one to determine if this objective is being met. They will see to any maintenance or repairs that need to be handled. However, various property managers operate differently when it comes to maintenance, so pay attention to our questions for property managers below to make sure you and your property manager are on the same page.

Property managers have many other responsibilities, but these are a few of the main ones. Now that you know what your property manager will be handling, the process of finding a good property manager can actually start. Often, finding a good property manager begins by interviewing various property managers and property management companies.

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Interview Questions for a Property Management Company or Manager

So once you begin the process of setting up interviews for potential property managers, what are the most important questions that you should ask in the interviews? Below are five questions to ask property managers before hiring.

1. What do you charge for a management fee?

This may seem like the most obvious question, but it is one of the most important questions for property managers. Property management companies typically charge between 4-10% of the gross monthly rents collected. Some companies charge additional fees, while others only charge the monthly management fee. You will want to discover exactly how much the property management company will be charging you. You don’t want to be hit with unexpected fees after you have entered into a contract with a manager or company. Make sure you are very clear with your property manager on how much you will be paying for their services.

2. What screening is done on potential tenants?

One of the main reasons to hire a property management company is to mitigate the risk associated with entering into a lease with a bad tenant. A good property management company will conduct a thorough background and credit check, as well as verifying all references. This will help ensure that only quality tenants will be living in your property. So, make sure that you ask potential managers how they screen potential tenants. Finding a good property manager means making sure that the tenant screening process is extensive and up to your standards.

3. Does your management agreement include a termination clause?

The last thing that you want to do is enter into a long-term agreement with a property management company only to find out that the property manager is not holding up to their side of the agreement. A quality property management company is confident in their service and will offer a “satisfaction guarantee” that will allow you to cancel the agreement if you are not happy with the service. Without a termination clause, you may be stuck in a contract that you are unhappy with. Don’t let this happen to you- make sure you understand the type of contract you will be entering into before you decide to hire.

4. How many properties does your company manage?

Keep in mind, there is no right or wrong answer to this question for a property manager or company. If the property management company manages several hundred properties, you will know they are successful and have been in business for some time. If the company is smaller, you can expect superior customer service and a more personal relationship with your property manager. You will need to decide which is most important for you as an owner, but the most important thing is that the company has adequate staff to handle their inventory. If the company has a large number of properties you will want to make sure that their firm has the time and resources to handle your property. You never want a property manager who isn’t fully committed to your rental.

5. Will the property management company authorize maintenance requests without consulting the owner?

A good property management company will authorize maintenance requests under a certain dollar amount, without consulting the owner. This allows the management company to maintain the property without having to bother the owner every time there is an issue. Obviously, the company will obtain permission from the owner anytime there is an issue that is going to cost the owner a significant amount of money. When interviewing potential property managers, make sure you understand when they will handle a maintenance request without consulting you. If you have a specific dollar amount in mind, know that they will abide by that number. This will ensure that your property is kept safe and habitable without you having to worry about too much of the maintenance.

Finding a Good Property Manager

These questions will help you find a good property manager that is clear and transparent in his or her services. It is important to find a property manager who you will work well with and that you trust. Your rental property was a large investment, so make sure that it is being cared for in the exact way that you want. Here at Wolfnest, we pride ourselves on giving rental property owners what they want. We let you customize your management plant by picking and choosing only the services you need. This separates us from other Utah property managers, so contact us today to learn more about how we can help manage your rental property.

How To Guarantee The Best Property Management Company

How To Guarantee The Best Property Management Company

Not every property management company is created equally and finding a good manager can be tricky. Here are three simple interview questions on which you can ask a qualified Salt Lake City property manager that most people wouldn’t think to ask. You can always add more as you continue your screening process but asking these questions will help you learn a lot about the person you are hiring so that you can make the best choice possible.

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1. Does your Salt Lake City property management agent own rentals themselves?:

If the answer to this question is no, then be cautious. Effective rental property management is about blending knowledge with experience, and if someone isn’t committed enough to “own their own product” so to speak – then that should be a giant red flag.

2. What technology does your Salt Lake City property management agent use?:

Like many industries, the management industry has been revolutionized by new technology that improves efficiency and reduces costs. Managers who use services like management software, advertising syndication, and automated showing systems are providing their clients with a level of service that old school managers simply can’t match. This will help you save money and time.

3. Is your Salt Lake City property management agent lenient with tenants?:

If so, I promise their leniency will soon become a problem for you. Tenants will start to pay at their convenience, violate the rules, and generally do what they please if there are not strict consequences for bad behavior. For example, it’s common for a manager to waive a late fee, in order to “be nice”. The problem is that by doing so, they are really only encouraging additional late payments because the tenant has faced no consequences. Stop the problem before it even begins by enforcing rules.

These are only a few of the questions you can ask your potential property manager but these ones are arguably the most important. It is essential to have an understanding of who your property management company is before signing any contracts. Your home is one of the most important aspects of your life and it is advisable to hire the most trusted property management company. If you’d like to learn more about how to qualify a Salt Lake City property management company, then contact us today.

How Salt Lake City Property Managers Screen Tenants

How Salt Lake City Property Managers Screen Tenants

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When interviewing Salt Lake City property management firms to decide who will take the best care of your rental, make sure you inquire about their tenant screening process. Taking the time to thoroughly investigate the credit worthiness and rental history of prospective tenants is essential to operating a profitable rental property, and the manager you choose should be able to explain the process to you. Salt lake City property managers should do all of the following when screening tenants:
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1. Criminal Background Check – A good first step when investigating potential tenants is to check for a criminal history. The opinions of Salt Lake City property managers will vary about what types of offenses are the most relevant, but cases involving drugs or violence have a tendency to repeat themselves.

2. Credit Check – Credit history is another important area to review during the application process. Some property managers in Salt Lake City go strictly by the score, others will look beyond the score and check payment history, amounts past due, and the ratio between outstanding balances and credit limits to estimate the monthly debt service. Make sure the rental property manager you hire has a policy in place and follows it.

3. Income and Employment Verification – It sounds obvious, but making sure your tenant has a verifiable source of income and can reasonably afford their monthly rental payment is the most important part of the screening process. Most Salt Lake City property management companies follow the 3x rent rule and require residents to have at least one year of employment at their current job.

4. Rental History Check – Ask any Salt Lake City rental property manager and they’ll confirm that accurately verifying rental history is difficult. Tenants don’t provide contact information unless they know a reference will be positive, and as a result, many routinely provide false information. If however, you can speak with a former landlord, the reference will provide valuable insight into what type of tenant you can expect.

Most professional property managers in Salt Lake City will investigate these four areas with prospective tenants because doing so will drastically reduce the number of “bad tenants” they place. Make sure the management company you choose places an emphasis on tenant screening, or you’ll be learning the most valuable lesson in owning rentals: There is no substitute for a good tenant.

 

If you’d like more tips on how to avoid placing bad tenants in your Salt Lake City Rental property, then contact us today!

Types of Salt Lake City property management companies

Types of Salt Lake City property management companies

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Salt Lake City property management company pricing structures

 

While every Salt Lake City property management company sets their own pricing, most companies tend to fall into one of two categories. They will either charge a flat rate to cover a variety of services or they will charge you a fee for each unique task performed. Let’s examine the pro’s and con’s of each type.

Flat fee pricing structure

Advantages: With flat fee pricing, you know exactly what you will be charged every month. You can take comfort knowing that all of the necessary tasks are being handled and that the cost to you won’t change based on the amount of work being done.

Disadvantages: You are paying the same amount each month regardless of what work is being done. Salt Lake City property management companies know that most of the “work” takes place when the property is vacant. Once a tenant move in, your manager is probably doing little more than processing payments and fielding the occasional maintenance call.

Fee based pricing structure

Advantages: With a fee-based structure, you only pay for work that is actually being done on your behalf. You don’t need to worry that you overpaid for the services you actually received. If you have a “low maintenance” property with good tenants, then you will likely benefit from this type of pricing.

Disadvantages: Your Salt Lake City property management costs will fluctuate based on the work required for your property. If your property requires a lot of attention or you have problem tenants, then your management costs could get out of hand.

As you can see, there are advantages and disadvantages to each type of pricing structure. The option that’s best for you will depend on the specifics of your rental property and your unique management needs. Learn more about how our pricing structure can meet your needs by clicking here.

Salt Lake City Property Management Costs

Salt Lake City Property Management Costs

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How much should you pay your Salt Lake City property management company?

 

This is a common question, and if you talk to 10 different managers you’ll likely get 10 different answers. Pricing structures will vary and the answer usually lies in what services they are providing. Let’s review a few common services provided by Salt Lake City property management companies.

Basic Services – Basic Salt Lake City property management services include advertising, conducting showings, screening applicants, providing legal forms, negotiating the lease with your tenant, collecting rent, providing statements and coordinating maintenance. These services are usually categorized as “management fees” and you can expect to pay 7-10% of collected rents. Make sure you ask exactly what services you’ll be receiving and get everything in writing.

Fees – Most Salt Lake City property management companies will have additional fees above whatever their management fee percentage may be. These fees are typically charged for signing up or setting up your account, placing or renewing tenants, marketing, performing inspections or annual charges. Fees may range from $30 to $500 or more for some leasing charges. Make sure you know exactly what fees your property manager charges and how much they cost you.

Other Charges – There are a lot of different scenarios that can occur during a lease term and most Salt Lake City property management companies will include language in their agreements to cover them if work is required that goes beyond the scope of their management agreement. These include evictions, court appearances, cases of abandonment, and other reasons. Be sure to read the entire agreement before you sign so these types of charges don’t catch you by surprise.

At the end of the day, management costs will vary between companies and the key is to hire whichever manager makes you the most comfortable. A few extra dollars per month is a small price to pay for quality management. If you want to discuss our pricing structure, please contact us today.

What will demand look like for Salt Lake City Rental Property Owners in 2015?

What will demand look like for Salt Lake City Rental Property Owners in 2015?

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Salt Lake City rental property demand projections for 2015.

While predicting the future can be a humbling experience, the experts at real estate investment firm Marcus and Millichap are always willing to give it a shot. They recently released their 2015 outlook for the Salt Lake City multi-family rental market and have good news for Salt Lake City rental property owners. Here are their forecasts for several key metrics:

Rental Rates: According to their analysts, “Following a 3.0 percent rise last year owners will lift rents an additional 2.8 percent in 2015 to $892 per month.” This is music to the ears of Salt Lake City rental property owners. 2014 was a great year to own rental property, and if their projections hold true, 2015 should be similar and owners can expect even more rent increases.

Vacancy: Their experts said, “Supply will edge out demand this year, pushing up vacancy 40 basis points to 4.4 percent. In 2014 vacancy fell 70 basis points.” Salt Lake City rental property owners enjoyed near record low vacancy rates in 2014 as strong job growth brought many new residents to Salt Lake. However they estimate that while rates will remain low, owners can expect an uptick in vacancy due to excess supply. Approximately 2,700 new rentals came online in 2014 and they project another 2,500 in 2015.

Employment: Their report predicts, “Payrolls will expand by 30,000 positions this year, a 2.7 percent increase. Last year, 28,000 jobs were created.” This might be the best news yet for Salt Lake City rental property owners as a strong job market is one of the best economic indicators for a stable rental market. Even more importantly, they project “The population of 20- to 34-year-olds, the primary renting cohort, is anticipated to increase 1.6 percent by year end, four times the national average.”

In conclusion, their report indicates that 2015 will likely be another great year to own rental properties in Salt Lake City. In fact, Salt Lake ranked 21 nationally on the NAI index for 2014, and will remain one spot outside of the top-20 in 2015. This means that their experts predict there are only a handful of “better” markets in which to own rental property than Salt Lake City.

If you’d like to learn more about the Salt Lake City rental market, then contact us today.

How Salt Lake City property management companies attract long-term tenants

How Salt Lake City property management companies attract long-term tenants

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Establish long term relationships with your renters to increase the profitability of your Salt Lake City rental property.

Truth be told, long-term tenants are not “attracted” but rather “created”. Tenants who renew their lease year after year do so because their current living situation suits their needs. The moment it stops doing so they will move – guaranteed. So the answer to the question of how to create long-term tenants really becomes how to make sure your property continues to meet the needs of your residents.

So how is a Salt Lake City property manager supposed to know how well a property meets the needs of their tenant? Simple, just listen to them. Every time you communicate with your resident, they are giving you clues about what is important to them. Pay attention, keep good notes and respond in a timely manner to tenant concerns and you will increase your renewal rate. Also, these tips will certainly help.

1) Treat your residents with respect. It’s easy to fall into the bad habit of treating your tenants like an inconvenience. After all, every time they call it’s to fix this or complain about that, right? Wrong. It’s an opportunity to listen to their needs. Professional property management companies in Salt Lake City pay attention to what’s important to their tenants and take steps to address their concerns.

2) Go the extra mile. Going above and beyond for your tenants is about the little things. Build goodwill by giving them a small gift at move in, sending a holiday greeting card, or remembering to wish them a happy birthday. Small gestures like these add a personal touch to an otherwise all-business relationship and can mean the world to some people.

3) Find out what’s important and give it to them. Property management firms in Salt Lake City who put an emphasis on tenant retention usually keep excellent records. Go back through your notes and see what clues they’ve given you about what they value. If you find they’ve had problems with a stubborn appliance, offer to replace it when you reach out to discuss a lease renewal. They will certainly appreciate the gesture, and you’ll find that spending a few hundred dollars replacing an old dishwasher is far cheaper than finding new tenants.

By taking simple steps like these, many Salt Lake City property management companies are able to drastically increase their resident retention. Ask anyone who manages rentals for a living and they’ll tell you that an increase in resident retention equals an increase in your profitability.

If you’d like to learn more about how to create long term tenants, then contact us today.

Is your Salt Lake City rental property a business or a charity?

Is your Salt Lake City rental property a business or a charity?

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How to treat your Salt Lake City rental property like a business

How would you respond if someone asked if your Salt Lake City rental property was a business? I’m guessing you would obviously answer yes. What about if they asked if you’ve ever had a tenant who’s fallen behind on rent? If you’re like most Utah landlords, you will also answer yes to this question. Here’s the problem: If you have a tenant who’s behind on rent, you aren’t running a business – you are running a charity!

We all like to think of ourselves as “having a heart”, but in the property management business, excess generosity is a sure path to bankruptcy. Did you know that if your tenant falls even one month behind, there is about a 65% chance that they will never catch back up? Does that change your perspective about being strict with your residents? It should. In fact, a reluctance to be the “bad guy” is the number one reason why most DIY landlords eventually hire a Salt Lake City property management company to care for their rental. A professional manager won’t be afraid to do what’s necessary to help your tenants pay on time.

Contrary to what you may believe, the best way to encourage your residents to pay on time is to hold them accountable when they don’t. If they pay late, then charge them a late fee – DO NOT waive it. Surprised? Think about the message that waiving that fee sends. If there were no penalty for paying your mortgage late, would you ever pay it on time? If you could show up to work whenever you wanted, would you be there first thing in the morning? Of course not, but we all do things we don’t want to do because they are required of us, and more importantly, because there are consequences if we don’t. Make sure that your tenants know that paying on time is a requirement.

 

If you’d like more tips on how to avoid turning your Salt Lake City Rental property into a charity, then contact us today.

The importance of reinvesting in your Salt Lake City rental property

The importance of reinvesting in your Salt Lake City rental property

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Reinvesting in your Salt Lake City Rental Property | Why it’s important

Being a Salt Lake City rental property owner isn’t easy. As landlords, we like to think that our properties are “good enough” and don’t need ongoing maintenance to keep them occupied. The fact of the matter is that every rental will begin to show signs of major wear and tear after a couple of residents. Traffic stains will start to appear on that new carpet, those freshly painted walls will begin showing scuffs and scratches and those “brand new” appliances become “old” much faster than we’d like. Unfortunately, prospective tenants will quickly notice and the desirability (read: profit) of your Utah rental unit will dwindle with each passing year. That is, unless you reinvest in your property.

Now it isn’t feasible to complete a total remodel after each resident, but earmarking a few dollars and planning to refresh the unit every few years is a great way to protect your investment. If weeds are taking over your yard – add fresh bark and plant a few flowers. If the blinds are damaged and hanging by a thread – replace them with new ones. You’ll find that keeping your property in great condition will help if lease quickly and stay rented. The income you’ll receive from reducing your vacancy rate and keeping your monthly rents near the top of the market should outweigh any additional maintenance expenses.

Furthermore, it’s easy to forget the oldest rule in investment real estate – your property’s value is directly tied to the income stream it produces. If you can spend a few thousand dollars updating your unit and increase the rent by a hundred dollars or more, then you have not only improved your monthly cash flow, but have increased the overall value of your Utah rental property.

 

Please contact us today if you’d like to discuss other ways to maximize the value of your Salt Lake City rental property.

First Time Investors: What You Need to Know

First Time Investors: What You Need to Know

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First time investor | What you need to know about real estate investment

Real estate property management is a huge responsibility to take on, and can be overwhelming if you’re new to investing. When you invest into real estate, your goal is to put money to work today and make it grow so you have more money in the future. You have to make enough profit to cover taxes you pay, costs of owning the property (utilities, maintenance, etc.) and the risks you take while putting your time into the real estate property. At FRE, we want you to have a smooth transition into managing your first investment, so here are a couple things to think about before you make the leap into real estate property management.

Personal Ability

For first time real estate property owners, it’s a good idea to hire a property management to do work, some contracting, and minor maintenance issues such as a clogged drain or a drafty window. If you are experienced with contracting, it will be easier to write up leases and insure leases stay current. Beginners will most likely need assistance until they can comfortably handle issues on their own.

Time

Real estate property management is a time-consuming investment. Remember the focus is on the tenants who pay good money to live in rental properties. In addition to that, real estate is not the type of investment that turns into a big profit over night. It can take a couple years, if not longer, to maximize investments. First time investors will need to learn to be patient because it isn’t a get-rich-quick type of investment.

Size

As a first time investor, it would be wise to choose a smaller property as the initial investment. Jumping straight into a fairly large property can be overwhelming to manage. A lot of investors end up having a property management firm tend to those properties. Managing a smaller building and being fully comfortable with that, comes with investing in real estate will make larger properties easier to tend to.

Costs

Potential investors need to consider all costs, and hiring a real estate lawyer to help them make the most of their investments and any profits they yield. Investors have to pay the taxes and insurance on the property, as well as any costs associated with maintaining and managing the property.

 

The time you put into preparing for real estate property management will make your experience as an investor easier and enjoyable. For more help or information about investing in real estate, contact FRE Property Management and let us help you get started in the property management business.