Generally, self-managing owners keep the rent for their rental properties below market rents. The reason is either intentional, the owner keeps the rent low to retain the tenants, or unintentional, the owner is either friends with the tenant, or intimidated by them, and does not even try to keep up with market rents. If you don’t raise your rents to keep pace with the market, we find it has 2 consequences: the cost of goods and services increases, and you lose money; or the tenant gets used a fixed rent, and balks when you, or your property management company, finally increases the rent to the market value.
If you are looking for professional property management you may have experienced the confusing world of property management pricing. Unlike real estate, no two companies charge the same fees in the same manner. It can be time consuming and frustrating just to learn the facts about the fees. Why is that? The simple answer is, “It shouldn’t be that way.”, but I do have some guesses why it is:
Many owners want the tenant to obtain “renters insurance”. This type of insurance will generally insure two areas: the tenant’s personal property if it is stolen or destroyed, and provides liability insurance. Liability coverage protects a tenant if they are found legally responsible for injuries to other people or damage to the property. It may also cover for additional living expenses such as hotel bills and food should a tenant be unable to live in the property.
As you may be aware, a tenant is entitled to “normal wear and tear” or your rental. But the adjective “normal” can be problematic. What is normal to the tenant may be excessive to a property management company or owner. When deciding whether to deduct damages out of a tenant’s security deposit, here is what we consider:
It is difficult to make predictions because they are often wrong and if I knew what the future held I wouldn’t be typing this blog, I would be sipping mai tais poolside in Maui. But nothing ventured, nothing gained, so I will make some predictions for the coming year.
To most of the pundits’ surprise, Donald Trump won the presidential election and at least some of the policies and promises of his campaign will come to fruition. More importantly for California, the democrats have won a super majority in both the Assembly and Senate (along with holding the Governorship) and can pass any tax or ballot proposition without a single republican vote. What does this election mean for real estate and property management?
Over 80 percent of the clients at Progressive Property Management came to us after managing on their own for a while. We call them SMIPOS – Self Managing Investment Property Owners.
The real estate market is doing very well right now, particularly the Orange County rental market. This means the tenant pool is highly qualified, but it’s still easy to be stuck with a bad tenant.