Archive for category Property Management
There are many instances when you will have to have your Owners infuse their account with funds. This situation occurs for a number of reasons: the property has a monthly negative cash flow; you have just had to do some major repair (replacing the furnace or air conditioner); a major remodel after a long-term Tenant vacated, or something as simple but expensive as paying property taxes.
First of all, let me say that we strongly recommend that you maintain a buffer amount (minimum $500.00) in each of your Owners’ accounts. This will give you the flexibility to take care of small repairs without having to have your Owner send you a check, and depending how much of a positive cash flow the property may have, you can replenish the buffer fairly easily for that.
Holding on to the idea that Owners (as is the case with all of us) do not like surprises about money . . . unless we have won the lottery! Now, emergencies happen and usually, they are difficult if not impossible to anticipate. But I am speaking here about the expenses that the Owner is going to have on his property that we can anticipate: long-term Tenant moving out, real estate taxes (they’re always due on the same date – year after year) or a special assessment from the HOA. When we can anticipate these expenses we need to be proactive in estimating how much they will be and when our Owners will need to send funds. This will accomplish a couple of things:
1.) It gives your Owner a warm fuzzy feeling to know that you are watching his back and keeping him from having unpleasant surprises and 2.) It gives you the funds from which to pay the expenses. Otherwise you could find yourself in the unenviable position of having done $10,000 worth of work on an Owner’s property and when you call him to get the funds you learn he is in Zimbabwe for 2 months . . . or worse yet, he thought that the expenses were going to be less and he doesn’t want to pay the $10,000 and now wants to negotiate the amount with you . . . YIKES!
Dunning Letters and E-Mails to Owners for Funds
We have had very good luck with sending e-mails out (to our Owners that do e-mail) when we need funds. You may think this is very elementary but before you tell your Owner that you need more funds, be sure to do your homework. What do I mean by that? You don’t want to send your Owner an e-mail telling him that you need $1,500.00 to pay for the new water heater if his property is running $100.00 negative cash flow each month and he has no reserve buffer left. If you don’t say something about the negative cash flow and the status of his account, you will just be asking for more money again next month. This makes the Owner feel like you are not on top of your game (which you aren’t) and causes both of you more work in the long run.
Again, be proactive with your Owners and anticipate what their cash position looks like. Act like it is your money and how you would want to be treated. If I had the above scenario, I would tell the Owner that I needed $1,500.00 for the water heater (as we discussed previously) and the negative cash flow on the property has run through his reserves. We would like an additional $500.00 to replenish his reserve account and $600.00 to cover the next six months of negative cash flow at $100.00 per month.
Maintaining Security Deposit Liability Integrity:
When a Tenant pays you a security deposit on a property, that is a liability that you will maintain in the Owner’s account. The purpose of the security deposit is so that you have funds (security) in the event the Tenant fails to pay the rent or leaves the property damaged when he or she moves out.
When there is a cash need for repairs or whatever else on an Owner’s property, there is the temptation of the Owner to see that cash in their account and want to use it to pay those expenses. If you allow them to use it, this is a very, very slippery slope to allow yourself to step onto. For a couple of reasons: 1.) unless you document it well and in writing, after a few years, our memories fail us and our Owners are no different, they will typically not remember using that security deposit to pay operating expenses from and 2.) as property managers we are required by law to notify the Tenants that we are no longer holding their security deposit; that the Owner is, and give them the Owner’s contact information.
Now we, as property managers, are the Owner’s agent and the security deposit does belong to the Owner, we are just holding it for them. If the Owner insists on using this money, we recommend that you go about this in the following way:
- Write a check to the Owner for the full amount of the security deposit and mail it to him with a letter explaining the transaction and a copy of the letter you are sending the Tenant.
- At the same time send a letter to your Tenants advising them who is now holding their security deposit.
It is important that you not go back and forth with this transaction; giving the deposit to the Owner, putting it back in the account, back to the Owner, etc. First of all, this will breed a lot of insecurity and concern on the part of your Tenant and secondly, it is a lot of work and liability for you! If you are going to do this, we advise that you tell your Owner (put it in your management agreement if you want) that you will make one transfer of the security deposit and that is it. Something to think about, given enough time and aggravation it won’t be long before your State’s Department of Real Estate will be conducting an audit of your trust account. That could be right up there on the fun scale along with root canals and IRS audits!
There are a lot of very good fully integrated property management software programs on the market today. When I say fully integrated, I use the term loosely as these various programs are integrated to varying degrees. In general terms, there are programs on the market now that will take care of the accounting for your Owners; interface with your word processor so you can write letters to Owners or Tenants and it will file them with the property; and will keep a rent log for single or multiple properties.
This is the teaser. We will be discussing software programs and their pros and cons in the next chapter.
I hope you enjoyed our various topics today. Next we will start some discussion on “systems” used by property managers . . . don’t miss out!
If this information has been helpful to you, visit our website for more resources to help you profitably manage your rental properties!
Thanks for reading!
Pat & Kris Larkin
Delivery of Statements – Mail Hard Copy vs. e-mail
When our company started all of these processes and procedures . . . it seems bizzare to say it but . . . there was no internet or e-mail. All of the monthly statements along with all of the backup copies of invoices were packaged, posted and mailed out to each of our Owners. With the advent of e-mail and good quality scanners, we were able to move toward e-mailing our monthly statements to our Owners. The only thing that held us back was our Owners; many of whom were a bit technologically challenged and “didn’t do e-mail”.
As we moved forward though, we pushed to make the change. I am a big believer in processes and the more processes you have for the same outcome, the less efficient you are. I know that the time is quickly approaching when this will no longer be an issue and electronic delivery will be the standard for all property owners.
If you are just starting a property management firm, this is an awesome opportunity for you. You can start from the beginning sending your statements out electronically . . . and not be faced with converting to the new technology that will undoubtedly be here all too soon!
Payments to Owners
Assuming that our Owners’ property had a positive cash flow, we paid a disbursement out to each of our Owners at the time we issued the statements. Our software had a default setting that basically told it to send the Owner any remaining cash in the account after all expenses have been paid. This is not always a good thing; if you have a system like this, you want to be diligent to keep an eye on future anticipated expenses. Let me tell you it is not fun to have sent an Owner a bundle of money one month, then the next month you are trying to pay his real estate taxes and you don’t have enough money in the account. You then have the opportunity to ask the Owner to send the money back to you. This is not good for your credibility! We could also go into our system and set a cash minimum that we wanted to maintain in all of our accounts and it would automatically send the Owner anything in excess of that amount. It is all a matter of how you want to set it up.
Like mailing out hard copies of statements and technology marching on, making payments to our Owners has also undergone some changes. In the early days, we sent out live checks each month to our Owners. Now, with the advent of ACH or; Automated Clearing House, we can electronically transfer funds from our trust account to our Owners’ bank accounts, minimizing live checks, mail problems, etc. Again, we still had those Owners (probably the same ones that “don’t do e-mail”) “who don’t do electronic deposits”. We continued to work with them knowing that “someday . . . this too shall pass!”
Our hope and prayer is that this information has been helpful and sparked some thought processes for you. To discover more resources for managing rental properties for yourself or others, visit our website and check out our Books, Documents, Forms, Checklists, Videos . . . available in hard or immediately downloadable versions.
Thank you for reading!
Pat and Kris Larkin
One of the purposes of property management we was to provide accurate accounting for our Owners, and part of that is to provide them with monthly statements. As we mentioned previously, a property management firm must set up and maintain a “Fiduciary Trust” bank account for all of the monies for the properties it manages to flow through. In our company, we had the rent revenues as well as mortgage, HOA dues, maintenance and a multitude of other expense payments for over 320 properties flowing through this account. Keeping it all straight is paramount!
Regardless whether you manage one property for an Owner or five, you will need to provide all of your Owners with a monthly statement. This statement spells out all of the income, expenses, disbursements to or from the Owner, operating profit or loss, and the beginning and ending cash position for each individual property for each month. You will send out each statement, along with copies of all invoices paid for the period and the Owner’s check (assuming they have positive cash flow) or advice of deposit in their account.
Cutoff times and statement dates
This has been an issue that was a difficult one for us to get our arms around. We all have different needs, and while we were building the company, like any other fledgling small business, we attempted to accommodate everyone’s needs. Some Owners needed their disbursements by the 10th of each month and others were OK so long as they received it before the first of the month. Consequently, we set up two statement dates for our Owners; one on the 10th and the other on the 25th. This became very labor-intensive as we found ourselves always dealing with statements and statement issues. We later learned that if people want your service, they will adapt to your processes and procedures, so we changed to one statement date of the 25th for all of our Owners. OK, we still had some of our oldest clients, (some had been with us for many years and others had been on this earth for many years and others . . . both!) who we maintained a 10th of the month statement date for their convenience. Though that number continued to decrease!
We set up our statement date of the 25th of the month so that we could manage our clients’ expectations as well as exceed them. You remember I mentioned that most of our Owners needed their funds before the 1st of each month? Well, that is why we set up the 25th as the date we specify in our contract. We promised that they will always have their money by then. Now, to exceed their expectations; internally, we worked with a 20th statement date. Due to the calendar and the tricks it plays on us from time to time, we may miss that and go to the 22nd or so, but with few extenuating circumstances did we ever miss the 25th and nearly all of the time we exceeded it! Which of course kept our Owners happy!
It is all well and good that we talk about a statement date of the 25th. So what? What that really means is that behind the scenes we have to have a cutoff date for all transactions between the 15th and the 17th of the month, depending on where the dates fall on the calendar. That means all rents have to be in; all payments made including mortgages, taxes, HOA’s and even security deposit refunds. Otherwise, we will need to run a supplemental statement for that property for that month. If we don’t, there would be a gap in the information on the statements from month to month.
If this information has been helpful to you there is a lot more where it came from! Visit our website for more books, videos, downloadable e-books and live seminars near you.
Thank you for reading!
Pat & Kris
While you will have your ways of doing business and many regulations that you cannot stray from, to be successful managing properties for others, you will need to know how to adapt and work with their personalities. That is not to say that you be totally co-dependent on your Owners, but learn how they like to do business and make your best efforts to conform your practices to their idiosyncrasies.
Our philosophy is that the Owner has hired us so that they don’t have to deal with the day-to day-issues of managing properties. We try to spare them the gory details of the everyday stuff, but then involve them in the bigger decisions. At what level your Owner wants to be involved in the details, you will have to just learn and figure that out. We suggest when you are having your initial conversations with your Owners that you ask them some qualifying questions on this subject before you enter into a management agreement.
Qualifying questions for potential Owners
1) While we will always attempt to contact you whenever we have to spend money for service, we normally will respond to a service request under $100.00 without having to speak directly to you. We may leave a voice mail or an e-mail to let you know what is going on. Does that work OK for you?
2) Do you have e-mail? Are you willing for us to use e-mail as our primary method of communication?
Their response will give you a better idea as to whether or not you should do business together. If they aren’t going to be happy with you, you certainly are not going to be happy with them!
Types of Owners
The Involved Owner: Some Owners are very detail oriented and want to be involved in many aspects of the management of their property. Others want to be involved to a fault and may attempt to micro-manage or second-guess your actions. You may find yourself asking the question “Why does this person want a property manager?” There are a couple of issues at play here;
1.) Some people are simply very involved until you have proven that you are trustworthy and they are convinced that you indeed have their best interests at heart.
2.) Others are simply control freaks and no matter what you do, will be in your business all the time. With this second type of Owner, you will have to do some soul searching as to whether or not this is a positive situation for you. If it works OK, then great. If not, then there may be another property manager out there who it works fine for. That may be the best solution for both of you; to end the relationship sooner rather than later.
The Uninvolved Owner: On the other end of the spectrum, we have Owners who don’t want to hear about their property. They just want a monthly statement and a deposit in their bank account. The less they hear from you the better. While this type of Owner has a lot of positive attributes, this is the Owner that you also want to be very proactive with. You don’t want to pester them with details . . . remember, they hired you so they wouldn’t have to deal with all that stuff. However, be proactive with your communication with them, and this is true for all of your Owners. Document your actions in writing either by sending them an e-mail or by leaving them a voice mail and documenting it in a communication log. How technologically savvy they are will determine which method of communication you use. The uninvolved Owner can be a bit disarming at times. Don’t think their seeming lack of involvement means a lack of interest. The truth is they are very interested in the outcome of your management of their property. Continue to keep good records and keep them informed, even if they appear uninterested.
Be Dialed In to the Type of Properties you are Willing to Manage:
While this is a personal decision, we want to share some pros and cons we have observed in this area. We are not making a character judgment about any of the groups listed below. These are simply our observations as a result of our experiences in working with all of the groups.
White Collar Properties:
Also defined as high-end properties, these can attract very good renters. These renters have typically owned expensive homes and as a rule will take very good care of your property. On the other hand, our experience is that the high-end renter can have a very entitled mentality and can be difficult to work with. Things like requesting and scheduling maintenance, seemingly pretty simple things can become very challenging with these tenants. Another aspect of the high-end tenant is that if you don’t meet their expectations, they do have the resources to come after you legally. White collar renters will typically have more financial resources and are executives or self employed. You will find them to be fairly well insulated from an economic downturn.
Gray Collar Properties:
These are properties in the middle of the economic spectrum rented by the gray collar worker. What is a gray collar worker? I’m glad you asked! It is typically a middle management person; the manager of the local electronics, or grocery store. This renter is generally conscientious and will take care of your property. They are typically regular people and most all adults in the home are working full time. They are generally easier to work with than the white-collar renter when it comes to requesting or scheduling maintenance work. They possess moderate financial resources and will be somewhat insulated from an economic downturn.
Blue Collar Properties:
This renter is at the lower end of the economic spectrum. They usually work in the trades, i.e., construction worker, car mechanic or truck driver. Generally, all adults living in the property work full time. They are also just regular people and are generally easier to work with than the white-collar renter when it comes to requesting or scheduling maintenance work. They possess more limited financial resources and will be the first tier to be affected from an economic downturn.
Don’t Let Fear Deter You: If at anytime during your due-diligence/interviews with an owner you get that gut feeling that this guy just ain’t going to work out . . . heed the warning! This could be anything from not having a good connection with your communication or that he wants you to manage a type of property that you are not set up for. We are all different and there is nothing to be ashamed of in that. There are people that I am just too different from and will have difficulty doing business with in a way that will make them happy. Conversely, there are people out there that are just different enough from me that they would have a tough time keeping me happy either. Embrace your differences and rather than being fearful that you will lose face or be embarrassed, nip it in the bud! Do both of you a favor and save a lot of heartache and hard feelings; decline to do business with them. Perhaps you could refer them to another property management firm.
So, how do you do that? I learned a great technique from my pastor, of all people. I simply tell the prospective owner that based on our conversations, it is apparent to me that we may not be a great fit for one another. There are a lot of great property management companies out there and I am sure that one of them would be a better fit for their needs than I can be. I wish you the best of luck. And . . . don’t let them talk you into it . . . you know what your gut just told you! HEED THE WARNING!!
Thank you for reading!!
Pat and Kris Larkin
For more information and resources for profitably managing your rental property visit our Website
The curriculum vitae. What the heck is that?! It is a form of a resume that is used in several industries especially, education. It is becoming more widely used in other industries. The reason I bring it up is that it was an invaluable tool for me as I made my own transition from property management and homebuilding to writer/presenter/educator.
The reason I like the curriculum vitae is that it still contains the billboard feature (although less prominent) and it affords itself to your work experience. However, it puts an equal or even greater focus on relevant experience and studies, which relate to the position you are seeking and less focus on past employment. This is a great tool for helping to bridge the gap between two different careers.
Take a look at our Curriculum Vitae sample in the appendix at the end of this chapter to get a better idea of what I am talking about.
In general, the same rules apply to the Education section as we discussed in the resume discussion. Just list the schools attended and degrees earned. If you didn’t finish college, as I did not, just list the schools you attended. I don’t call attention to the fact that I didn’t get my degree. The people looking at this are smart and will ask you about it if it is important to them. If it is a non-starter for them, then it is.
Work Experience – Just list the dates, company names and position held for each firm . . . no more and no less.
Special Certifications/Affiliations – This is a great place to show how all your trainings and so on help you to be an asset for this company. List everything here that you think will be relevant. You will see in our sample in the Appendix that I have listed specific trainings and general things that will also cross over to any industry.
Presentations and Teaching – I created this section for my own needs because it demonstrated that I had exposure to teaching, speaking and presenting. This section is basically a place for you to list accomplishments, which are relevant to the position you are seeking. This is the place where, again, you continue to tie your accomplishments and experience forward to the position you are seeking. Leave no stone unturned. Sit and write down everything you have done and see how you can present it positively. For example, my boss used to have me get up in front of our company at retreats and spend 2 minutes updating everyone on the progress of my project. I listed that in this section as “Periodic Presentations to Company at Large”. For a position in property management, you may want to head this section something like “Significant Projects Led and Completed” or “Significant Areas of Leadership”.
Publications – This is pretty self-explanatory. If you have created, or been a part of creating any publications, list them here, and if not, delete the section.
Skills and Qualifications – This is nothing more than a mini billboard at the end of your curriculum vitae. Use this to again sell the viewer on your incredible skills and qualifications, whether they are speaking, communication, or organizational skills. This is also a good section to list computer literacy and competence with certain software and social websites.
References – This is no different from the resume: I subscribe to the idea that in your first exposure to folks, your mission is to make that great first impression. It is not to overwhelm them with paper work. I don’t include references with my resume but I do tell them that I will provide excellent ones if they would like. Again, if this is an important issue for them, they will ask.
For a sample of our Curriculum Vitae, please see the appendix at the end of this chapter.
In the ever-changing landscape of the Internet, possibilities for marketing yourself are endless. I won’t pretend to know all there is about Internet marketing and all the ins and outs. For that you need to consult with some real gurus who do know the ins and outs of job search and marketing yourself on the Internet.
What I will share with you is this; most jobs are gotten through networking. Once you have your resume or curriculum vitae all dialed in, it is time to get it out there. I would recommend that you network to find the best places to post your resume/cv. There are a lot of folks out there, not limited to friends and family, who have had experience with this and can steer you clear of the ones you don’t want to use. Of course, they can also steer you to the good ones who worked best for them.
The usual suspects come to mind: LinkedIn, Facebook and Twitter. Get on these sites as soon as you can and increase your exposure as much and as quickly as you can. Also, look for groups within the various web sites. For instance, LinkedIn has a property management group as well as a discussion group for just about anything you can think of. Use these groups to learn more about your field and start building a reputation for yourself as someone who knows what you are talking about.
Another avenue for building your reputation is writing. For some of you, this may not be something that is part of your gift set, but if you don’t do it, you are missing out on a great opportunity to get your name out there and continue to build your reputation.
One of the avenues for writing is your own blog. This is really easy with any of the zillion blog sites out there. Another place is Ezine.com. It is a website where you can write and publish articles on any subject and they have a built-in readership who will be exposed to your articles. You do have to agree to (among other things) allow their other subscribers to use your articles as long as they give you credit for them. One cautionary note here, if the purpose of your writing is to be a part of your marketing plan for yourself and your new career, limit the subject matter of your articles to the field to which you want to transition. If you want to write on other subjects, great . . . knock yourself out . . . but do it under a different name . . . add an initial or something. Keep your job marketing pure to your field.
Thank you for reading!
Pat & Kris
For more information about Kris and Pat Larkin or for more resources for residential Property Management, visit their web site.
Let’s assume that your construct confirmed your suspicion that you would be well suited for a career in property management, what are the next steps. How do you put together a resume which will convince the people hiring that you are a good bet in property management even though you may not have as much experience in the field as some of the other applicants for the same position?
Resumes and marketing yourself is a vast subject and to do yourself justice you will really want to take advantage of some of the information that is out there which will take you to a much higher level of detail than we will here.
We do, though, have a lot of experience in the hiring side of things . . . both from the perspective of the employer as well as the employee.
In today’s wide-open Internet world, the possibilities for you to market yourself to countless numbers of people are nearly endless. It is really just marketing. Experts tell us that you only have seven seconds to make your first impression and that is why a great format for communicating to the decision makers is so important . . . scratch that . . . it’s imperative.
In my travels I have finally come across a resume format that literally turns heads. I’ve even had interviewers at the end of an interview say to me, “This resume looks great, it really got my attention. Where did you get it?” So in the spirit of sharing my stuff, I am sharing it with you.
First you start with what I call the “Billboard” section of the resume. Remember the 7 seconds to make a great first impression? That’s what the billboard is all about. Please refer to our sample resume in the appendix at the end of this chapter to see what I am talking about.
Billboard – This at the top of your resume and it is going to give a quick snapshot of who this great applicant is (you). It will contain the title of the general position you are seeking and then a short (perhaps two lines) summary of who you are and how wonderful you are. Next part is just words in bold type that describe your skills and talents. Below this section is a section describing even more incredible skills and talents you have. I say that a bit tongue in cheek, but it is true, you need to be selling yourself and this is the place to do it.
Selected Career Highlights – This is where you list the previous positions you have held at various companies. Be careful here. Remember, you are not going to write this, as you would have when you were looking for another job in your old industry. You are changing industries so you need to find similarities between your previous positions and the one you are seeking. If you were a purchasing manager for a medical supply company and you want to be a property manager, you will want to find the things like: Balanced multiple projects simultaneously or Relate quickly and easily with all diversities, personalities and business levels. Tell what you did, such as: Contracted with major pharmaceutical companies balancing multiple priorities continually.
Don’t misunderstand me, I don’t want to put words in your mouth and I don’t want you to be dishonest. Tell the truth or you won’t be able to own it. Be sure and tell the part of the truth that won’t distract them and will show them the part of you that they want.
Be sure to limit your information per company to four or five bullet points in your first listing and less for the subsequent listing. This is of course unless one of your subsequent listing has the most in common with the position you are seeking.
You will want to continue to list previous positions to show at least the last five years of employment and, ideally, your entire career. You will need to balance this with length of your resume. Perfect world length is one page; I think 2 is OK, but I recommend that you not go over that.
Other Relevant Experience, I use this section in my resume for a position I held many years before the last job listing on my resume because it showed particular relevance to the position I was seeking but, did not fall into comfortable chronological order with the others.
Education – Just list the schools attended and degrees earned. If you didn’t finish college, as I did not, just list the schools you attended. I don’t call attention to the fact that I didn’t get my degree. The people looking at this are smart and will ask you about it if it is important to them. If it is a non-starter for them, then it is.
Professional – List your licenses, any and all Trade Associations you belong to, or special training seminars you have attended, and computer skills along with particular software you are proficient with.
Personal – You don’t want to make this too long or too personal. Just list your marital status – any children and what you like to do on your time off. Sitting on the sofa sucking down beers while watching the game probably wouldn’t be a good idea!
References – I subscribe to the idea that in your first exposure to folks, your mission is to make that great first impression. It is not to overwhelm them with paper work. I don’t include references with my resume but I do tell them that I will provide excellent ones if they would like. Again, if this is an important issue for them, they will ask.
Hopefully, this has been helpful to you. For more information and resources about transitioning your career to Property Management go to our website.
See you next time!!
“BEGIN WITH THE END IN MIND” I am not sure if Stephen Covey (of & Habits of Highly Effective People fame) first coined this phrase or not, but he is the first one I ever heard it from and it has stayed with me ever sense. Doesn’t it make sense?! We don’t (at least most of us don’t) strikeout on a vacation without having any idea where we are going. Similarly, you are looking at a major change in your life here and while you may not know specifically where that is leading, you need to at lease know it what direction to point yourself.
I have put together a couple of self-assessment tools for you to help you figure out if property management is right for you . . . or are you right for it! Take a few moments and work on these. I think you will find them well worth your investment of time!
Here you are:
GIFT AND TALENT CONSTRUCT
This is a self-examination exercise. We are not necessarily going to be interpreting your answers for you. This is a job for you in a quiet, reflective place. In our busy world, it is difficult for us to slow down and reflect. Well, this needs to be one of those times. Go to a quiet place where you will be comfortable and can hope not to be disturbed for an hour or so. This construct may or may not give you the answers and direction you want right away. What it will do, though, is open your mind to a different way of thinking about yourself and what you have to offer others. This is a process, not a simple fix.
Answer the following questions as honestly as you can and see what kind of possibilities turn up for you. Don’t limit your answers, just write the first things that come to your mind, don’t over-think this. If multiple answers come flooding in, write them all down and work through them later.
- What activity are you typically engaged in when you experience the quickening of time or lose track of time. This quickening of time is from losing yourself due to enjoyment or passion rather than from stress or being overwhelmed by too much to do.
- When you enjoy the quickening of time, are you typically by yourself, with your friends, colleagues or your spouse? Who is It?!
- If money were not an issue, what would you absolutely love to do with most of your time?
- What gifts and talents have you been blessed with, that you could use to be a blessing to others (musical talent, good ability to communicate, great marriage, an aptitude for math, a gift for hospitality, a gift for putting things into processes, etc.) ?
- In what ways do you think you could use these things to bless others either in the workplace or otherwise?
We define a “Life Transition” as an event in your life that changed your life, but did not change who you were. This is just a part of life; new job, a promotion, moving to a different residence, etc. We define a “Life Gate” as an event in your life that changed who you are and you can’t pass back through that life gate in the other direction and get back to who you were before. An example of this is a parent, child or spouse dying, having a child, breaking up with someone or changing careers or sub-careers.
Create a timeline for your own life and mark all of the “Life Transitions” and “Life Gates” in your life and how they changed you for the positive and the negative. Later, think about the positive aspects of each change.
Click here to review a sample of a construct on my own life: Career Life Gate Construct
You may also want to refer to the posting previous to this for the discussion on this construct.
PROPERTY MANAGEMENT TEMPERAMENT ASSESSMENT
This assessment deals with your temperament. Do you have the temperament that is conducive to being successful and fulfilled as a property manager?
For each question below, place a number from 0 to 5 in the right margin to indicate how strongly you agree or disagree with the statement.
0 = STRONGLY DISAGREE and 5 = STRONGLY AGREE.
- If I have planned my day and several things come up that prevent me from accomplishing my plan, I’m OK with that and just go with the flow.
- I don’t mind taking time after I leave the office for the day to deal with issues from work.
- I am wary of people’s motives. I am reluctant to take them at face value at first.
- I have worked in either real estate or home-building before in my career and have a strong aptitude in those areas.
- I am very much “customer oriented” and do everything in my power to exceed my customers’ or clients’ expectations.
- I like a high-energy job where the scope of what I do varies from day to day.
- I like to be challenged each day by new experiences and situations to resolve.
- I understand basic remodeling and redecorating of homes and what is required to get the work done.
- I understand financial statements and know how to figure out if they show a profit or a loss.
- I have or would like to have my real estate license.
PROPERTY MANAGEMENT TEMPERMENT ASSESSMENT
If your score is between 40 and 50, then you are most-likely well suited for a career in property management. You will still have a learning curve but Go-for It!!
If your score is between 25 and 40, you are in the gray area here. Getting into the mindset for property management will take some work and adjustment on your part. We can all make changes in our lives, but getting your head wrapped around the temperament requirements will probably prove to be somewhat stressful and challenging for you. You can do it if you want it badly enough.
If your score is below 25, property management may prove to be a pretty tough challenge for you. Feel free to test the waters by working as an intern with a property management firm. I would challenge you to look at the questions you answered with less than a 3 and do some soul searching in those areas. Are you willing to change in those areas or is that just who you are, and would you be happier doing something besides property management?
If you are finding this blog interesting, you will want to visit our website and discover the other helpful property managment tools and assessments that are available to you.
Thank you for reading!
Once you answer that nagging impulse in your heart telling you that you need a change, then there are some action steps you can take to get you headed in the right direction. This exceprt from our book; “Mange To Make Money . . . with a Career in Property Management” should prove to be helpful. I hope you enjoy it!
So you’ve decided that a change in career path is for you. You are not alone in that thought. From time to time, our economy will help us to see that our career path may be leading to a brick wall . . . or a dead end . . . QUICK . . . turn or make a change before you crash!
Making that determination is an important step, but, now what?! Moving into a different area of discipline can be challenging. What is the next step in pursuing a new career . . . a career in property management?
Let’s roll up our sleeves and see.
The first step is to explore what other careers you might be interested in. Our opinion is that we can all do OK in a career that is not necessarily in our gift set. What does that mean? Well, I believe that we were all created with gifts and natural talents that are unique to each of us.
For instance, I am well equipped for managing processes, I am creative, I am a good speaker and enjoy teaching people things that I know. Now, if I decide that I want to be a doctor, beside the obvious void in my education, do I have the God-given gift to be a doctor? Do I have the aptitude to understand the stuff I would need to learn in order to be a doctor? The answer in my case is a resounding NO.
Think with me for a minute about people who are in the wrong career paths. We’ve all run into them; they don’t really like their job and we are an imposition to them for expecting them to do their job. You know the cranky store clerk, the non-helpful customer service person. I’m not talking about someone having a bad day, I am talking about someone who is terminally unhappy in their job or in the wrong career. That would probably be me if I chose to pursue being a doctor!
The first step in this direction is to identify what it is you were gifted to do. OK well, that is like asking someone “how long is a string?”
We have created a short little construct to help you identify what it is you like to do. Now, it is impossible to learn all of our gifting from one little construct. Our gifts are like a treasure hunt; we have gifts that we may not discover for years. For instance, Kris and I only learned that we love teaching just a few years ago. But I have to say this; it was after a great deal of self-discovery coupled with chance.
You can only find this construct and other self-evaluation tools in the appendix of chapter 3 of our book. You may purchase the book as well as many other helpful property management tools at our web site: www.ManageToMakeMoney.com
Thank you for reading!
Before you go charging off to pursue a career in property management, we recommend that you first see if property management is for you. Or, are you for property management.
Managing rental properties takes a very broad but distinct set of skills and temperament. To give you a broad brush idea of what it takes to be a good property manager I have included below a brief job description of a property manager. Of course, the description will vary between property management companies:
Property Manger/Leasing Agent:
- Responsible for all maintenance on properties
- Responsible for all make-readies of properties between Tenants
- Responsible for collecting rent from Tenants
- Responsible for delivery of all notices to Tenants, including 3-Day Notices to Pay Rent or Quit
- Responsible for all Tenant issues relating to maintenance.
- Responsible for communicating maintenance needs of properties to owners and gaining their approval for work to be done prior to performing the work.
- Responsible for the collection of all “Funds Requests” from Owners.
- Manages all vendors and contractors as they relate to property maintenance
- Performs periodic inspection of properties
- Is primary contact for leasing ads alternating with other leasing agents
- Shows and leases properties.
- Screens all prospective Tenants, including running credit reports and writing up Lease agreements.
- Serves as liaison between Tenants, Owners and Home Owner Association.
- To have a working knowledge of the financial condition of each property managed.
- To oversee the timely production and communication of a monthly Owner’s statement and remittance of Owner’s distribution as appropriate
If that didn’t scare you off, let’s continue.
Again, in a broad-brush approach, below are some aptitudes and temperaments, which, while not absolutely necessary, will make your quest into property management smoother going:
Knowledge of Real Estate Law (state license is preferable)
- Knowledge of property maintenance.
- Knowledge of Accounting and financial statements.
- Strong People Skills
- Strong Communication Skills.
- Ability to “shift Gears” or change your daily or hourly priorities with a moment’s notice.
- Be a self-motivated, self-starter
- Ability to mange stress-charged situations and work toward consensus with all parties.
- Ability to work with agencies and organizations with authority and always work for consensus.
Something to think about: Our book: Manage to Make Money . . . with a Career in Property Management contains some self-evaluation tools to help you further assess your skill and temperament set for a career in property management. To check the book out CLICK HERE
Next is to figure out what type of properties you want to manage; industrial, commercial, institutional, retail or residential. Of course this book is oriented around residential but first a few notes about managing the other types: commercial, industrial, and institutional properties. Property management for these types of properties will tend to require much fewer hours to manage them. What do I mean by that? Well, with these types of properties for the most part, there is no one in them during the evenings or the weekends. No calls on Thanksgiving Day that someone’s oven doesn’t work. On the other hand, the retail and residential will require you to be on call more often to respond to service requests like the oven not working on Thanksgiving or the heating isn’t working on Black Friday and it’s too cold to have their sale. Just some things to think about.
So how do you break into the property management business as a career change? There are many ways you can do this but basically, you need education and experience. In many cases, the two go hand in hand, but, your life is going to be less complicated if you can get the education ahead of the experience. Otherwise, you will be making lots of mistakes as you learn the business and it will be in a real-world scenario with pretty high stakes.
We recommend that you take a course (or courses) similar to our “How to Profitably Manage Rental Properties” which will at least walk you through the basics of the day-in, day-out things that you will need to know in order to manage properties. In fact we taught a class in Pasadena, California and a few weeks after the class, one of our students contacted us. He wanted to get into the property management business and asked if he could intern with us for a while. We set up a part-time schedule with him and he learned a lot in his six months as an intern.
Another option would be to work for a property management company as an assistant to a property manager . . . a great source of education and experience.
Ok so that’s great, but how do you find a good property manager to even talk to? Believe it or not, it isn’t that hard, especially if you live in a fairly well populated area. There will be several companies out there to choose from.
How do you find a quality property manager? Do your homework, which will include research. My first and foremost piece of advice is to look for a firm that is a member of your local Board of Realtors. The Board of Realtors is a very strong trade organization, which also has a very positive history of regulating itself. You can call your local board and get a list of the firms who are property managers. If your board doesn’t keep the information that way then you can work backwards for it: search the web for property manager in your area and then screen them by which ones are Realtors.
Once you have the list narrowed down to between three and five, check them out! Go to their websites (if they don’t have one it’s not a non-starter but does raise a red flag) and see what they are about. From the website, you will be able to get a feel for their level of professionalism . . . or a feel for how much money they spent for a great web-designer!!
Next, check with the Better Business Bureau, Yelp Business or Yahoo Business and see if there are any complaints or comments that concern you, and if so what the status of them is. Also check with your State Department of Real Estate and confirm that they have a broker’s license with the State and that it is in good standing. Also, be sure to check if there are any complaints against the license. The internet is so well developed now that you should be able to do most of your homework sitting at your computer!
We recommend that you personally interview the companies who make the cut . . . at their office. This is a great opportunity to see their operation and possibly meet their staff. It is also a great time to see if there is a positive connection between you and them . . . do you share similar values? Do you communicate at the same level?
You may have to offer to intern for free or . . . at a much lower rate than is the market. This will help you get your foot in the door and you can always renegotiate, after you have shown that you are worth the investment.
Thank you for reading. To investigate our offering of Property Management Resources . . . Books, E-Books, Documents, Forms, Checklists, Seminar DVD’s and Live Seminars go to our Website: www.ManageToMakeMoney.com
The primary purposes of offering property management services can be simply outlined as below:
Alleviate the property Owners from the day-to-day hassles of managing their own rental property.
- Give your Owners peace of mind that their property is being managed competently while they are receiving a tax benefit!
- Provide accurate accounting records for your Owners’ rental properties which they may use as backup for the preparation of their income taxes.
- Do all of the above in such a way as to provide a positive experience for your Owners . . . as well as yourself.
No one will be able to achieve all of the four items above all of the time. If you don’t think you can provide these for your Owners as well as yourself at least 75% of the time, then perhaps a different career path would be a good thing for you to explore. As with anything, if you aren’t passionate about what you do, it will show . . . and it won’t necessarily be pretty. Others will pick up on your motives and your lack of passion for what you do. Many times they will end up going with someone else who exudes the passion for what they do.
Now, I am not saying that you have to love what you do or no one will use you . . . not at all. But if you don’t at least enjoy it, the equation doesn’t work for anyone; you should be doing something more close to what you were created for and others will feel more confident with someone else. Enough about that!
Property Management – Minimum Requirements
There are many things that you will need to do if you are going to manage properties for someone other than yourself, and we will cover most of those in the chapters to follow. But there are a couple of requirements you will need to fulfill before you go any further. Without these your operation will be illegal (at least in most states) and you will be opening yourself up to living a very complicated life. All right, already, you say . . . what are these requirements? Here they are:
It is a requirement in most states that at least one of the Owners or principals of a property management company be a real estate broker or an attorney at law in that state. Now let’s not be confused here, when I speak of a broker’s license, I am not talking about a real estate agent which, in most States is the first license you get. A real estate broker’s license can only be received after a person has been a real estate agent for a certain number of years and taken and passed many more hours of instruction, and taken and passed the State real estate broker’s test. From the State’s perspective, a property management business is no different than a real estate office . . . in fact it is a real estate office!
If you are not a broker or an attorney, there is one more option; you can hire a broker to be the broker of record for your property management firm, but you will need to be careful. This also applies if you have a property management business and want to open an additional office. Check with the real estate board in your state for the applicable laws. Most states require that the broker of record (this includes the attorney) oversee all of the daily transactions of the office for which he or she is the broker of record. Again, you will have to check with your state’s real estate board to see just how this would apply to you and how stringent they are going to be about it.
That is the requirement for the ownership of a property management business. But what about the company’s property managers? Almost all states require that property managers be licensed real estate agents . . . unless . . . they are full time employees of the property management firm. If a property management firm hires someone as a full time employee, as a property manager, that is legal in most states. But if you are doing contract work as a property manager, say, for several different property management firms and you are not a full-time employee, you will need to be a licensed real estate agent.
If you are looking to start a property management firm, as you can imagine, there are even more legal requirements you must follow. We will touch on some of them, but, if you truly are serious about this, you would be well served to consult with an attorney who is familiar with the real estate law in your state. The main requirement besides being a broker or attorney is that you set up and maintain a Fiduciary Trust Account. What the heck is that?
Fiduciary Trust Bank Account
At no time may you co-mingle your operating funds of the property management business with the funds being collected and disbursed on behalf of your property Owners. You will always need to maintain a separate account for running all of the income and expenses of your Owners. At no time should any of your own business funds (which would be your management fees), or payments for office rent and office electric bills, etc. ever touch this trust account. This was the case with us. We managed over 320 properties and we had a Fiduciary Trust account through which all of the income and expenses from all of those properties flowed. We were not required to have a separate account for each property or Owner but we did maintain meticulous separate records for each and every property we managed. Check with the FDIC on this also, regarding their insurance coverage for your Owners’ funds. There are some very substantial protections afforded your Owners’ funds when you structure your accounts this way.
This posting is an excerpt from our brand new book: “Manage To Make Money . . . with a Career in Property Management” available at our Manage To Make Money web site.