Posts Tagged Rental Property

PROPERTY MANAGEMENT – PAYMENTS – SECURITY DEPOSITS – SOFTWARE

Payments From Owners

 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.

Buffer amounts

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.

Infusions

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:

  1.  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.
  2. 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!

Software

 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

 

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MANAGING PROPERTY FOR OTHERS – DELIVERING STATEMENTS AND PAYMENTS TO OWNERS

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

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MANAGING RENTAL PROPERTIES FOR OTHERS – Statements and Payments to Owners

Monthly Statements

 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

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MANAGING RENTAL PROPERTIES FOR OTHERS – Paying Bills for your Owners

One very important rule to have and to stick to religiously when paying any expenses for your Owners:

 DO NOT pay any expenses for your Owners unless you are also receiving the statements or bills for those same expenses.

 This may sound very elementary to you but unless you are receiving the invoices for the accounts you are responsible for keeping current, you have no way of knowing that the account is in fact current.  Think about this, on the first of May you mail in a mortgage payment for your Owner.  It gets lost in the mail and a late fee is assessed.  On the first of June, you mail in the June payment.  This one gets to the mortgage company but is applied to the May payment which, as far as the mortgage company is concerned is 30 days past due.  The Owner is still receiving the statement from the mortgage company and you didn’t receive the statement, so you have no idea that everything with this account is not perfect.  This goes on for several months, before your uninvolved Owner decides to open one of his mortgage statements. He sees that there is a past due balance of the last month’s mortgage payment and the late fee from May which has continued to carry forward.  Not only is your Owner upset and your reputation is tarnished, but now the Owner has several “30 days past due” notations on his credit report.  You will probably end up paying the late fee and begging and pleading with the mortgage company to remove the negative notations on his credit report.  This quickly becomes very time consuming, costly and negative to your relationship with your Owner.  Just make it simple, let your Owner know that you would love to pay whatever expenses he or she wants you to pay, BUT you have to have the statements mailed to your address in order for you to be able to do an excellent job for them.  Remember, you can always offer to send the Owner a copy of the mortgage statement with his monthly statement.

 Mortgages

 Be sure to check the monthly statement to ensure that everything is current and that there are no balances brought forward from the previous month.  Another thing to be sure to check is that you are making the correct payment amount.  In this past several years, there were a lot of adjustable mortgages written in our marketplace.  Some of these adjust monthly, some quarterly, some yearly and some after a number of years. 

 Many mortgages may also allow the option each month to pay one of three or four different ways for the mortgage.  If your Owner has one of these loans you will want to discuss these options with them before you start making their mortgage payments for them.  Here is a description of some of the options your Owner may be faced with:

 Minimum Payment is the lowest payment amount and is typically a negative amortization (you are not paying enough interest to keep up with the rate being charged) payment and the loan balance next month will be higher than it was this month.  Paying the minimum payment also may carry with it some zingers for your Owner later on in time.

 Interest OnlyThis payment is higher than the minimum payment and pays only the interest which has accrued on the loan over the past month.  This payment method will keep pace with the interest rate so your Owner will not end up owing more next month than he did this month.  The thing to know with this option is that it is just what it says; interest only and you will not be paying any of the principle loan amount down . . . . only the interest.

 30 Year Amortized Payment This payment is higher again than the interest only option and does pay down a portion of the principle amount of the loan each month.  If you continue to pay using this option for 30 years, the loan on the home will be paid off at the end of that period of time.

 15 Year Amortized Payment This payment is higher again than the 30 year amortized payment.  The reason for that is that it pays down even more of the principle amount of the loan each month than the 30 year amortized payment.  If you continue to pay using this option for 15 years, the loan on the home will be paid off at the end of that period of time.

 Again, be sure to discuss these options with your Owner.  You don’t want to be paying the minimum payment causing the loan amount to get larger while the Owner thinks you are paying his loan off all this time making the balance get smaller . . . or vice versa.

 Home Owners Associations

 Again, do not agree to make these payments either, unless you are receiving the monthly statements.  While the stakes are higher with a mortgage payment, an HOA can be relentless with their late fees, interest assessments, pre-lien fees and filing liens against the property.  The way they are set up, it takes very little time to accrue a very large amount of these penalties and the HOA management company does not have the authority to waive the fees . . . even in the case of a simple misunderstanding because you were not receiving the statements.  Typically, to waive the fees, the issue has to go on the agenda for the next Board of Director’s meeting and they, and only they, may choose to waive a penalty or fee . . . and they generally will not!

 Property Taxes

 If your Owner does not have their property taxes impounded in an escrow account with their mortgage company they may wish for you to pay them for them.  This is not a big deal, but again, be sure that you receive the tax bills that you are to pay.  We always try to audit our Owners’ accounts a couple of months before their property taxes are due.  This way, if the account is not going to have enough money in it to pay the property taxes, we can give the Owner adequate time to get the funds to us.  A short notice only causes stress on everyone, and we have no idea as to where the Owner has his funds.  They may have the money in a fund or account that takes some time to access and if we minimize their time, it creates a crisis for everyone.

 Maintenance

 You will typically be ordering most, if not all, of the maintenance work being done on your Owners’ properties, so you will be receiving the invoices for the work performed.  There are many ins and outs to managing the maintenance for them.  The main thing is to let them know when maintenance needs to be done on their property.  Whether they are an “involved” or an “uninvolved”, Owner, they will always appreciate at least a “heads up” as to what is going on. 

 When we pay anything on behalf of our Owners, we never mark anything up, and we always include a copy of the invoice or bill for the charge with their monthly statement.  This does nothing but build trust for the Owner that you are not overcharging them for anything and that you are not adding fees or overhead charges to their expenses

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MANAGING RENTAL PROPERTIES – Owners and What Type of Properties to Manage

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

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THE CURRICULUM VITAE AND MARKETING

Curriculum Vitae:

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.

 

Marketing:

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.

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RESUMES AND MARKETING YOURSELF IN TRANSITION


 

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.

Resume:

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!!

 

 

 

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TRANSITION YOUR CAREER TO PROPERTY MANAGEMENT

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!

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PROPERTY MANAGEMENT DYNAMICS AND ECONOMIC DRIVERS

So what drives the property management industry? Let’s talk first about what property management is: basically, it is managing a real estate asset for the owner of that property.  It is driven by that owner purchasing a property, whether it be a commercial, industrial, institutional or residential property, and then hiring someone . . . a property manager, to do all the things necessary in order for that property to continue to be a viable and income producing asset.

At any given time, there are a certain number of properties out there in the marketplace which are in service and being managed by a property manager.  That number is going to change very little.  If anything, though, over time, the number will tend to increase.

What creates income property or rental property as you might call it?  The commercial, industrial and institutional markets are driven by new buildings being built or sold.  In the residential market, which is the primary focus of this book, a change in use or a sale of property are primarily responsible for creating rental properties.  Another, very minor contributor to the rental property market is new construction.  Depending on your locale, new homes or condos may or may not be at a price point to compete with the resale of homes.

Our experience with our owners was that most of them created new rental property by purchasing a home for the specific purpose of creating a rental property investment.  Others would purchase a new home for themselves and move out of their old home and put it in service as a rental.

OK, I went through all of that rigmarole to say this; with my background in home building and land-development, I have been through some pretty gnarly economic times.  Consequently, I tend to view things through my worst-case glasses.  So when I look at the residential property management industry I ask; so what will cause this industry to slow down or crash?  In home building the vitality of that industry is tied primarily to jobs and interest rates.  If people are not secure with their jobs or if interest rates are too high, they don’t buy as much.   But what about property management?  Do people quit renting when the job market gets sucky (sucky is a technical term!)?  Not directly.  But if the job market is horrible, as in, jobs are moving out of your area, then rents will slow down and the rental rates will trend downward.  But the real story is that if the job market gets sucky, people are less inclined to purchase a home, but they will rent instead.  What about interest rates?  Same story.  People are more inclined to rent a home and wait out the interest rates.  Remember . . . they have to have a place to live.

The two places where we have seen vulnerability in the property management business are: softening of rental rates when the job market is soft and a sell off on the backside of an economic downturn.  What the heck does that mean?  Picture this scenario; property owners are continually buying and selling their rental properties . . . for various reasons . . . life happens.  When the economy gets nasty and property values take a nose dive, owners (unless they are in dire circumstances) stop selling their properties.  This is due to a couple of reasons: 1.) They are upside down on their property . . . they owe more on their mortgage than the property will sell for.  2.) They don’t have to sell and to sell in a down market causes them to lose money.  They will simply wait the market out.  And wait the market out they do!

Our experience is that once the market returns, or at least starts to improve (the backside of the economic downturn), owners who chose not to sell earlier are now incentivized to sell.  It is a sort of a mini pent-up demand for selling.  Property values are now finally high enough that they can sell and pay off their mortgage, or, their loss will be less.

In a recession, in which at its worst, property values dropped 25 to 28%, we experienced a 10% sell off of properties on the backside of the downturn.  Not great, but had we been the owners of all that real estate, we would have been looking at much greater losses.

The key: continue to increase your business with the static market during the downturn.  That way, if you do experience a sell off, you can hope to end up where you were prior to the economic downturn.  If not . . . you have 10% more business . . . WOO-HOO!!

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CAREER TRANSITION . . . PROPERTY MANAGEMENT

MANAGE TO MAKE MONEY . . . With a Career in Property Management

Managing properties for someone other than yourself.

The following post is an excerpt from our new book:  “Manage To Make Money . . with a Career in Property Management”.  I will be posting various excerpts from it as it is a great resource for re-tooling your career for one in residential property management.

The property management company which we owned and operated was started back in the early eighties.  It wasn’t necessarily a deliberate or planned event . . . it was more by default.  The woman who started the company was a real estate broker and was selling homes and condos around The Orange County, California area to the many professionals there.  After a few years, these professionals began to move up the corporate ladder and their companies began to transfer them around the country and the world.  Knowing that if they sold their home in this expensive and forever appreciating market, and ever wanted to come back and buy another home it would be very difficult for them.  They contacted the lady who sold them the home in the first place and asked her to keep an eye on their property for them and keep it rented while they were away for the next two or three years.  They agreed on a fee and the company was born.  Now, this was a one-at-a-time sort of deal. But over the years, with her doing the excellent job she did, her reputation spread throughout these companies, and as more and more people were transferred, they sought her out.  After several years, her property management firm was managing 120 privately owned homes and condos!

As I said, the start up of our firm was clearly by default.  Little did Lynn, the founder, know when she started managing properties that the area which she was operating in had two very key elements present that are very helpful for a property management firm:  1.) the area she was operating in has one of the highest education levels per capita of any major metropolitan area in the county and 2.) this area also has the highest percentage of non-owner-occupied homes (Owners who don’t live in their property) in the State.   As it turns out, those proved to be a couple of very important ingredients to her success. Now that doesn’t mean that you have to have those ratings in order for your property management endeavors to be successful, but . . . you will want to be sure that they are at least, present in your demographics.  The more they are present, the better the chances for success you will have.

If this positing has been helpful or interesting to you and you would like more to discover at your own rate, the book “Manage To Make Money . . . with a Career in Property Management” (along with many other resources) is available at our website: http://www.ManageToMakeMoney.com

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