What are the FAQs
Frequently Asked Questions by our Clients
Thank you for your interest in Progressive Property Management, Inc., Southern California’s leading property management company.
The following guide is designed to assist those who have selected our services and others still considering us. We want you to experience stellar customer service, and if for any reason you are not completely satisfied with any part of the process, please feel free to contact me, the owner, at:
Scott P. Brady, President
Progressive Property Management, Inc. is a professional full service real estate brokerage licensed by the California Department of Real Estate (DRE) and a California Corporation, license #01958885.
Our motto is, “We Manage Happiness” and we take that slogan very seriously. We are here to help owners and tenants enjoy their investment property: for owners to maximize the revenue and create the greatest return, and for tenants to have a safe and secure rental experience.
Since 2011, Progressive has been one of the fastest growing property management companies in all of California by offering aggressive pricing, stellar customer service, total transparency and unparalleled guarantees to our clients. We accomplish this by having a centralized operations department with local Property Managers who are within just a few minutes of our rental properties.
We manage properties all over Los Angeles, Orange County, Riverside and San Bernardino Counties. We may manage hundreds of properties, but we treat each new owner as family and strive to manage their investment property as if it were our own.
Do you have some questions? We have answers
If you have received this document, you may have contacted us about our services and have a copy of our management contract in your possession. If you don’t have a contract, and would like to have a specific proposal of management services for your property, just email us and we will provide one. Each contract may be different depending on a number of factors, but once executed, we will abide by the terms of your particular agreement. The contract may address many of your questions, but I suspect you may have more. This “Frequently Asked Client Questions” pamphlet is meant to answer some of the questions you may have about Progressive Property Management in particular and property management in general.
1. What are our “4 Pillars”?
We asked our owners what was important to them when we started this company and we listened. Based on what they told us, we created our “4 Pillars”:
i. Total Transparency – Owners want to trust their property management company. We try to make our company as transparent and easy to understand as possible. On our website, we have comparison charts, a map of all the properties we manage and our contract for your review.
ii. Compelling Value Propositions – Owners want to believe their property management company will perform as promised. We offer 8 Performance Guarantees to our owner at no extra cost.
iii. Stellar Customer Service – The only way to know your experience with us in the future will be a good one is to find out how our other clients say about their experience with us right now. We pride ourselves on superior customer service and will share our Yelp and Google reviews with you.
iv. Aggressive Pricing – If you are currently managing by owner, you are paying nothing to manage your property. The only cost is your time. We understand that our management fee may comprise a good percentage of your net profit. To minimize that impact, we price as aggressively as possible by having a centralized operations center, and local Property Managers.
2. What are our “8 Performance Guarantees”?
We don’t just promise to perform, we guarantee it. We offer 8 Performance Guarantees so that if we don’t perform as promised, we pay a financial price.
I. Better Tenant Guarantee – If a tenant we place in your rental does not abide by the terms of the contract in the first year, we will secure the next tenant at no cost to you.
II. Payment Guarantee – If a tenant does not pay their rent as agreed, you don’t pay us our monthly management fee. We are only paid when you are.
III. Service Guarantee – If we don’t mail or wire your monthly proceeds within 5 business days of receipt of rent, we will waive that month’s management fee.
IV. Response Guarantee – If an owner or tenant calls, texts or emails us, we will respond within 24 hours, or we will waive that month’s management fee.
V. Fee Guarantee – If you can find a lower fee in writing to manage your property in writing, we will match it. As long as the other firm does not charge additional fees, we guarantee to match it.
VI. Satisfaction Guarantee – If you are not satisfied with our service, you can cancel our contract as any time with 60-day notice.
VII. Happiness Guarantee – If you were managing by owner, and after 6 months of us managing your property you are not happy with our service, we will give your property back to you and refund ½ of the fees.
VIII. Rental Guarantee – If we do not secure a qualified tenant within 21 days of marketing your rental, we will waive our first month’s management fee.
3. What is the first step in our relationship?
There are a few documents we will need in order to move forward with the management of your investment property. This will include a fully executed management contract and also, but not limited to, the following documents:
• Our “Client Questionnaire” Form – This gives us information about the subject property, contact information and other critical details.
• W-9 – The federal government requires we report all rent collected on your behalf and attach it to a social security number.
• California Form 588 Waiver – If you live out of state, or intend to move out of state, if we do not have a signed waiver in file, we are obligated to withhold income on behalf of the state.
• Homeowner’s Association Rules & Regulations – If your rental belongs to a homeowners association, we must provide to the tenant the rules and regulations so they can follow the rules without getting fined.
• Cancelled Check – The Caliber requires a copy of a cancelled check where proceeds will be sent electronically each month.
• Keys – We recommend you keep one sets of keys, we give the tenants one set, and we keep one set in our office in case of emergency access.
• If Currently Occupied – We will need the current rental contract and contact information for your tenant.
Once you have signed and completed the necessary paperwork, we will set up an appointment at your earliest convenience to view your property and conduct the initial inspection of your rental.
4. What is our pricing?
What we charge our clients depends on a few factors: the type of property being managed, the number of units for the property, the amount of rent to be collected, and the location of the property and if we manage more than one property for an owner. Our fee can be as low as 3% and never above 10%. For any property, we have a minimum monthly fee which will be included in your contract.
We offer 4 Service Plans to you:
• Limited – If you just need us to secure a tenant for your property, we may be able to help. For a flat percentage of the first month’s rent we will market your property and help you find the best tenant possible.
• Basic – If you want a company to secure a tenant and then collect your rents and disburse the proceeds to you on a monthly basis, we offer a basic service plan. We would charge a low percent of the monthly rent and a one-time fee to secure your tenant. This service does not include monthly management and you would be responsible for enforcing the contract, sending vendors for repairs and paying all of your bills.
• Flat – For a low monthly flat fee plus a one-time tenant acquisition fee to secure a tenant, a flat fee plan allows you to know exactly what our fee will be every month.
• ‘A La Carte’ – For a low monthly management fee that is a percentage of the rent collected plus a one-time tenant acquisition fee to secure a tenant, you can choose our ‘a la carte’ plan. This works best for single family homes, townhomes and small multi-unit buildings where tenants stay an average of 2 to 3 years.
• All-Inclusive – If you wish to just pay one fee for all of our services, our ‘all inclusive’ plan may be the best choice for you. We charge a percentage of the monthly rent collected and there is no additional cost for tenant acquisition.
Which plan is better for you? It depends. If you expect low tenant turnover, for example, less than one tenant in your property every two years, you may find the ‘a la carte’ a better option. If you own a large multi-unit building, or expect greater tenant turnover, the ‘all inclusive’ may be a better way to go.
We will commit to your pricing in writing as part of our management contract. We strive to be the lowest priced property management company with the best customer service. We even offer a “Price Guarantee”: we will match any competitor’s monthly rate as long as the other fees and tenant acquisition fee are charged in the same manner as we do.
5. What are our additional fees to our owners?
We don’t nickel and dime our owner and they pay no more than four potential fees:
a. Base Monthly Management Fee – Whether you pay a percentage of rent, or a flat monthly fee, this covers our cost for full service property management.
b. Tenant Acquisition or Tenant Placement Fee – You will either pay a percentage of the first month’s rent as a Tenant Acquisition Fee or a flat fee as a Tenant Placement Fee, and both of these fees cover our costs to secure a new tenant.
c. 50% of the Late Fee – Should your tenant pay late, we retain 50% of the late fee for the additional work to bring your tenant into compliance.
d. Eviction Assistance Fee – In the unlikely event your tenant needs to be evicted, we charge $150 to start the eviction and $300 if we need to attend court on your behalf if the case goes to small claims. If you opt into our “Owner Protection Plan”, whereby the tenant pays a monthly fee of $15 which goes toward paying for their eviction, we waive this fee. The “Owner Protection Plan” is explained in more detail in FAQ #48.
6. What is the initial inspection?
Whether vacant or occupied, we want to understand your property and be able to speak intelligently about it to you and your tenants in the future. We will meet you at the property if you wish at your earliest convenience to view your rental and complete the initial property inspection.
We will take photos, answer any questions you may have in person, install a rental sign if requested and place a lockbox on the door. We will also give you suggestions on how to make your property “rent ready” if it is not already in that condition.
7. When do we need the keys?
We require all the keys, at least two sets of them, at the initial inspection. We also recommend that you keep a set of keys as well. Once the property is leased, we will keep one set at our office. If the tenant decides to “re-key” the property for their personal security, it is done at their expense and they must provide two sets of the keys to us. We will then forward you one set. If the property is in a homeowner’s association with community features that require a key, this must be provided to the tenant as well. It is commonplace for a key to a community pool to be “do not duplicate” in which case we would collect a key fee as well.
8. How long does the initial appointment take?
Depending on the number of questions you may have and the size of your rental, it should take between 45 minutes and 1 hour on average. It does make things go more smoothly if you have read the management contract and this guide and completed all of our paperwork before the meeting.
9. What should you do if you don’t live in the area?
Many of our owners are out of area and even live in out of state. You can mail your keys and documentation to our main operations office at: 1251 Yorba Linda Blvd., Placentia, CA 92870. If you don’t feel comfortable mailing your keys, you may leave them with a neighbor or friend.
10. When do we start the marketing?
Once we have a fully executed contract, keys, and taken the photos, we are ready to go. If there is a tenant in the property, we will work out showing instructions with them. It is ideal if the property is vacant. Most prospective tenants are looking for a property 3 to 4 weeks before their lease expire or living arrangements change, so we recommend having the property on the market 3 to 4 weeks before it can be occupied by a new tenant.
11. What kind of marketing do we do?
We use every useful tool in the real estate marketing toolbox to find the next tenant for your property. Your property will be uploaded into the local Multiple Listing Service (MLS) and from there it goes out to thousands of websites throughout the country including Zillow, Trulia, Realtor.com and every conceivable real estate related website. We may also install a ‘for lease’ sign and a combination box for easy access.
12. How long will it take to get your property leased?
If a rental is priced properly, you should receive applications within the first week or two. Your tenant is not buying your property, so it just needs to be “good enough”. What does matter to prospective tenants is the price. If you searched for management companies before selecting us, price was an important factor in your decision making. The same holds true for tenants. In our market, most tenants don’t negotiate the monthly rent, so if you are asking too much, your rental may sit on the market. We have found that it is best to lower the rent and have a paying tenant, than asking too much and have a vacant, non-income producing rental.
13. How do we determine the leasing price?
We will provide a market analysis of your rental and compare your property to others on the market based on age, size and location. Our goal is to have applications within the first two weeks and have a tenant in your property with 30 days or less of the last vacancy (we guarantee to have an accepted application within 21 days). We suggest that if you don’t have a tenant within two weeks, you should consider lowering the asking rent.
14. How do tenants apply for my rental?
We have a robust website which allows all tenants to apply online. For a fee of $35 per applicant, we receive a FICO score, credit rating and a complete application with all the necessary contact information.
15. What additional fees do we charge our tenants?
You tenant will pay a monthly lease to you. We charge a few fees to the tenants in certain circumstances:
a. Application Fee – Every adult intending to reside in your property will pay a $35 application fee. Upon request, they are given this report which they can use for other properties should they be denied to occupy your property.
b. Pet Screening Fee – If the tenant has a pet, we require they screen their pet, comfort animal or service animal through this third party company. For $25, the pet is screened (comfort or service animals are free, but documentation is required) and rated for your property. The tenant receives a link so they can provide this same information (vaccines, photos, microchip, address) to other service providers (veterinarians, daycare, groomers, etc.).
c. Initial Lease Administration Fee – The fee to process the rental application, screen applicants, execute the contract and conduct the move-in is $95.
d. Tenant Legal Liability Fee – We require every tenant to have liability insurance or renter’s insurance. If they opt for our third party tenant liability insurance, they will pay $12.50 monthly for $100,000 of coverage with no deductible.
e. Lease Breakage Fee – If a tenant decides to break the lease early, we will charge them a $750 Lease Breakage Fee. This offsets our cost to prepare the property for lease, secure a new tenant and have the property re-occupied. It is meant to discourage tenants from breaking leases.
f. Posting Fee – If we must post a “3-Day Notice to Quit or Pay Rent” or a “3-Day Notice to Quit or Cure” we charge the tenant $25 to post this notice at your property.
g. Lease Renewal Fee – Should you decide to renew a lease, we charge the tenant $100 to inspect the property, negotiate the new terms and execute a lease addendum.
h. Tenant Replacement Fee – If the tenants want to replace one roommate or tenant with another, we require the new tenant to apply and qualify. If they qualify, we will amend the original lease and charge the old tenant a $250 fee for the additional work.
i. Additional Unauthorized Tenant Fee – If without our approval or permission, a tenant adds an additional person to the property, we will require that person apply and qualify to live in your rental, and we will increase the monthly lease $100.
16. Who pays for the advertising?
For most of our rentals, we use the MLS to receive maximum exposure. This fee is included in your management fee or as part of the tenant acquisition fee. If an owner requests we spend additional money marketing, for example, paid advertising in Rent.com, that fee would be passed on to the owner.
17. What do we do if the property does not rent in a few weeks?
We offer a Rental Guarantee. If we do not secure a tenant within 3 weeks after the initial marketing, we will waive our first month’s management fee. This assumes a prospective tenant meets our minimum qualifying guidelines (minimum FICO score of 625, minimum verified gross income at least 3 times the monthly rent and a clean rental/mortgage history for the previous 12 months).
Even if we do not secure a tenant in the first 21 days, we will continue to market until we find a suitable tenant. Once again, having leased hundreds of properties, if your property is getting adequate exposure through the MLS and the general public is not moving ahead with applications, it is most likely priced too high. It is critical not to ask for rent what your total monthly cost is to carry the property (mortgage, taxes, insurance, etc.), what you neighbor’s tenant may be paying or what you read on the internet. The market of supply and demand determines your rent and very little else.
18. What do we look for in a tenant?
We use a ‘Better Tenant System’ and look for the following: verifiable income at least 3 times the monthly rent, previous rental history, a criminal background check, and we look at their credit. We are not looking for perfect credit, but a credit history without numerous collection accounts, recent late payments, or a large number of credit cards with high limits.
19. Can you help select the next tenant?
We will work with you cooperatively if you wish to be involved in the tenant selection process. We do suggest that you do not meet a prospective tenant in person until you have selected that tenant. We don’t want any accusations of discrimination. Most of our owners prefer we find the best tenant and choose the most qualified applicants from the pool we receive on your property.
20. You have somebody who wants to rent your property, can they call us?
If you have a possible applicant, please forward their information to us. If you decide to lease to that applicant, we reduce our tenant acquisition by one half. Most of our applicants apply online and we are able to respond very quickly to all applications.
21. What lease contract do we use?
If a tenant does not abide by the terms of the contract, and you wish to regain possession and sue for damages, the contract we use will be critical in a court of law. We use the California Association of Realtors (CAR) lease contract, which is familiar to most every judge in every court and which, if filled out properly, is also ironclad in court. We also include an addendum created by us which provides additional terms, and states in great detail the cost to the tenant for not adhering to the terms of the lease contract.
22. Who signs the contract?
Either we can sign the rental contract on your behalf or you can sign the documents. Just let your Property Manager know your preference. No matter who signs the document, we request you review all lease contracts and addendums and approve their content.
23. Why do we run a criminal background check on potential tenants?
If you lease your property to a criminal convicted of a violent crime, you could be putting not only your other tenants at risk (if a multi-unit building) you could be putting your personal finances risk as well. But recent laws make it clear you cannot deny everyone with a crime record from leasing your unit. We have to take into consideration the type of crime, how long ago it occurred, and what kind of rehabilitation they have done since the crime. It is then best to run the criminal background check at the same time as the credit check in order to deny an applicant with just cause.
24. What do we do for our monthly management fee?
The better question may be; what don’t we do? We handle the day to day operations of your property including, but not limited to: handling tenant issues, phone calls, emails, rent collection & accounting, tenant and owner billing, customer service, maintain owner and tenant trust accounts, receive and issue service orders, maintain and operate a full-service maintenance department, delinquent account servicing, eviction coordination, lease renewals, and lease executions.
We have a legal obligation to act always in good faith on your behalf and we have a fiduciary responsibility as well to you. As Realtors, we are bound by the Code of Ethics and regulated by the California Bureau of Real Estate.
25. What do we do for our tenant acquisition fee?
Whether you choose ‘a la carte’ or the ‘all-inclusive’ service plan, if your rental becomes vacant, we will handle the tenant acquisition duties. We prepare the rental for the market, take photos, put it in the MLS, show the property to potential tenants, screen applicants, execute the lease contract and conduct the move-in. Our goal is to find a long term tenant because every time a rental goes vacant you lose valuable rental income and the cost to prepare the property for market can be expensive.
26. Do we charge you when your property is vacant?
Never. We only earn a fee when the tenant pays as agreed. If you are not receiving any monthly income, neither are we.
27. Do we retain the late fee?
Half of it. Rent is due on the 1st and technically late on the 2nd. On most contracts, we issue a late fee penalty after the 5th. Our standard late fee is 5% of the gross rental amount (the state limit is 6%). Once the rental is assessed the late fee is added to their account and will be paid first when the payment is received. We retain 50% of the late fee for the extra work required by us to get the tenant to start paying.
28. When do you get your check (or proceeds)?
After we receive ‘good’ funds from your tenant, we will send out your physical check or send your proceeds via ACH the next day. Remember, most banks hold your tenant funds for 3 business days after receiving it to ensure the funds do not bounce. The same holds true for your funds: the bank may hold your funds, particularly if they are sent electronically, for 3 days as well. Even if we receive your tenant’s funds on the second day of the month, you may not be able to access your funds for a number of days.
29. What will your first check look like?
The first check you receive, particularly if we have secured a tenant on your behalf, may be the smallest one you will receive. From your first check, we withhold your reserve (usually $350), we deduct the tenant acquisition fee (as high as 35% of the first month’s rent, if applicable), the first month’s management fee and any pro-rations of rent since the tenant may not move in on the first of the month.
30. Should you expect the rent proceeds to pay that month’s mortgage?
It is not wise to depend on that month’s proceeds to pay for that month’s mortgage. It may be your tenant is late that month, or worse, there is a big unexpected expense we must pay for. Investors should strive to have a healthy reserve of 6 month’s mortgage payments on hand to cover emergencies, repairs, evictions and potential vacancies.
31. Should you leave your refrigerator or washer and dryer behind?
Most tenants already own a refrigerator and washer and dryer. If your property does not have these appliances, there is no need to provide them. If the tenants does not have these appliances and want to use yours, we recommend you leave them behind “without warranty”. This means that if they break down, you have no obligation to repair them. Just the cost to send out an appliance repairman and fix any of these may easily exceed the cost to replace them. If they break down, the tenant can decide if it is worth the cost to repair them. If they do repair them, they must still leave them behind when they leave.
32. Can you use your own contractors for repairs?
Yes and no. We have vetted and trust our vendors and know they stand by their work. With that said, we are always willing to try someone new. We do require that they have all appropriate licenses and registrations, complete a W-9, have worker’s compensation insurance and have a general liability insurance policy.
33. Why do we require a minimum $350 reserve?
By California Department of Real Estate (DRE) regulations, a trust account is never allowed to go into the negative. The reserve is our ‘pad’ so you have a balance on hand for us to access for repairs and recurring bills. Usually we take vendor bills and other expenses out of the monthly rental income, but if there is no rent for that month, we need funds on hand to pay your bills. This reserve account belongs to you and is returned to you when we close your account providing you have no outstanding balances.
34. Do we collect interest on the money held in the trust account?
No. All rent payments go directly into our broker’s trust account which by California law a non-interest is bearing account. We do not make money or benefit in any way by keeping your rent payments any longer than necessary. Our bank does “analyze” our checking account and waives certain bank fees depending on the balances we carry.
35. How big a security deposit will we collect from the tenant?
The amount of the security deposit paid by the tenant is completely negotiable. For unfurnished units, the maximum allowable security deposit per California law is 2 month’s rent. For furnished units, the maximum we can request is 3 month’s rent. Our company policy is to collect a minimum of one month’s rent and then increase that amount for pets or other extenuating circumstances. The deposit is held in our broker’s trust account until the tenant moves out and the unit is inspected. If there are no damages, and the unit has only normal wear and tear, we will refund their full deposit. If there are issues, we will deduct from the security deposit at our discretion.
36. Who keeps the security deposit?
The contract states who keeps the security deposit, either we do on your behalf you can retain it. If you retain it and earn interest on those funds, that money must be given to the tenant once they move out. Also, if you retain the security deposit and the tenant disputes the amount deducted after the move out, you will be expected to go to small claims court should the tenant file a small claims lawsuit because you have the funds on hand. If we retain the security deposit and the tenant disputes what we deduct, we will go to small claims on your behalf to fight their suit at no additional fee.
37. What happens if the tenant needs to be evicted?
If the tenant is late with rent, we will post a “3 Day Notice to Quit or Pay Rent”. If the tenant has not paid at the end of the 3-day period, we will recommend the eviction of the tenant. If no additional terms have been made, the tenant has not left your property on their own volition or they have defaulted from a payment arrangement, we will forward the tenant’s file to our eviction attorney. You will pay the attorney directly for their services. If the tenant does not contest the eviction, we charge a $150 for tenant eviction assistance, and it takes 2 to 4 weeks to gain possession of your property. If the tenant contests the eviction, and we must attend court on your behalf, the total fee for tenant eviction assistance is $300 and it takes 4 to 6 weeks to gain possession.
38. What kind of statements do we send?
You will either receive a paper statement monthly if we send you a physical check for your proceeds, or an email with a link to our management software if you prefer to receive your funds electronically. We also send out a 1099 statement for tax reporting purposes. We can provide samples of our reporting.
39. Should you contact the tenants or check on the property during the year?
Tenants are legally entitled to “quiet enjoyment” of your property and “quiet and undisturbed” use of the rental. In effect, they become the current legal owners while in possession and you are not able to enter the property or access the lot without their consent. More importantly, you hired us so you could be “arm’s length” distance from your tenants and avoid being involved personally. Contacting your tenants defeats this goal, confuses the tenant and undermines the authority of the Property Manager. If you wish to have access to your property, please contact us.
40. Can you get out of the lease with the tenant?
The lease we use is a legally binding contract, but we can try to negotiate on your behalf. If both parties agree, the lease can be terminated. Be aware, most tenants expect to stay in your property for the length of the lease.
41. How long a lease should you agree to?
We recommend leases no longer than 1-year in length and we prefer leases to expire January through September. The peak times for renting your property are during these months so we have more tenants to choose from and the rental rates are higher. It may be that we recommend a shorter lease that expires during this period and then renew for a year should the tenant abide by the contract. Even at renewal, a 1-year lease is preferred just in case a tenant becomes difficult, does not adhere to the contract or you decide to sell your property down the road.
A month-to-month is not recommended because a tenant only needs to give a 30-day notice to vacant and they may choose to do so in the months when tenants are scarce.
42. Should you pay for a gardener or let the tenant take care of your yard?
A tenant has no motivation to take care of your yard properly. Because we are still in a drought emergency, they can even stop watering your lawn, let it die, and we cannot debit their security deposit for your damages. If you pay for a gardener, we can keep better tabs on the condition of your rental and the gardener can advise us if there are disallowed pets at the property.
43. Should you pay for a pool person (if you have a pool)?
Absolutely. Maintaining a pool is not particularly easy and in just a few weeks, without proper care, your pool might suffer expensive repairs.
44. What do you need to do to get your property rent ready?
We will give you a list of necessary repairs and improvements after our initial inspection. But the property should be freshly painted on the interior (preferably with neutral colors), windows must have coverings, a smoke alarm must be in every bedroom and a carbon monoxide alarm on each level, the water heater must be strapped to code, and of course everything must be in proper working order and in relatively good condition. The nicer your rental, the more money we may be able to get for it and the more satisfied your tenant may be.
45. How many inspections do we do each year?
As part of our agreement, we will inspect your property approximately 75 days before the expiration of the lease. We will report back to you on the condition of your property and provide photos as necessary. We also offer a Preventative Maintenance Program, and approximately mid-term of the lease, we will have a technician from our maintenance company, Sierra Maintenance Services, provide a detailed report to you. The fee for this report is $75. Of course, if we have any issues with your property during the lease we will drive by your property or contact the tenant for an interior inspection.
46. What happens if the tenant stops paying?
Most rents are due by the 5th. If the tenant has not paid by the due date, we will post a “3-day Notice to Quit or Pay” and the tenant has an additional 3 days to pay. After three business days, if the tenant still has not paid as agreed, we recommend you move ahead with an eviction.
You will pay an attorney directly (currently we use the Duringer Law Firm, the biggest eviction attorney in Southern California). The initial cost to file with the court, hire an off duty Sheriff to serve the tenant, and the fee for their services is about $750. If the tenant contests the eviction, which they do 90% of the time, and the attorney must file for a court date, appear on your behalf and secure possession for you, they charge an additional $500. These costs are passed on to the tenant as damages.
47. What percent of tenants must be evicted?
Right now our eviction rate is very low: perhaps 2% of all current tenants will need to be evicted in the next 12 months. We find that by selecting the best tenant, it saves us the problem of evictions down the road. Should we encounter a recession or other economic turmoil, this percentage may change, but don’t let one bad tenant deter you from keeping your rental property and forging ahead with investment property ownership.
48. What is the “Owner Protection Program”?
Right now, the eviction rate is very low, but that can change quickly. During the last recession, the eviction rate climbed to 5%. Many of our owners don’t want to face the cost of the standard eviction where legal fees are $1,000 and if the eviction is contested, we charge another $300 for our eviction services. With our “Owner Protection Program”, if we need to evict a tenant we placed in your property, you don’t pay. We can’t charge owners for eviction protection because the Department of Real Estate won’t allow it. But with your permission, we can charge your tenant $15 a month for your protection.
We use these funds to evict the tenants who don’t pay as agreed or abide by the terms of the contract. We can’t offer this program in certain areas such as rent control, and can exclude properties we deem inappropriate for the program. We will pay for your eviction costs of up $1,000 in any 12 month period and we will waive our Eviction Assistance fee to you. In our management contract you will be given the option to participate in this program, or not.
49. Do we have vendors to do small repairs?
We have a sister company, Sierra Maintenance Services, that can handle small jobs on your property. We find that outside handymen pursue the biggest jobs first, and in good economic times, cherry pick their job requests. Sierra is priced competitively, can be there quickly, guarantees their work, and will always provide an estimate before commencing with any work.
50. Are your vendors priced competitively?
We try to use the best vendors in your area. They know we will provide them work in good economic times and bad and appreciate the volume of work we send their way. Per our contract, usually any repair over $350 requires two bids and your approval (unless an emergency), and we always to keep our owners abreast of any expense we pay on your behalf. Any vendors we use must be licensed and insured and stand by the work they perform. If you have a vendor you have used in the past and want us to use in the future, we will work with them to get approved and in our preferred vendor database. We must vet and vendor to protect you and us from litigious tenants.
51. Will we call you before doing any repairs?
We take service calls or online requests from tenants and qualify all repairs prior to making a trip to the property. For qualified small repairs under $350 we take care of them right away without the requirement of calling you. Emergency repairs also need to be completed right away and do not require prior authorization. All cosmetic repairs or improvements to the property requested by the tenant need to be authorized by the homeowner. You will be given an estimate and need to sign off before any work is started. Some owners want to be notified if we spend even one dollar and others just want to be contacted for repairs over $350 per the contract, please let us know your preference.
52. Will we work with your home warranty company?
If you have paid for a home warranty, we will work with them on the property issues they cover. It has been our experience that some home warranty companies are difficult to work with and not necessarily very responsive to the time constraints we face, so if you are considering a renewal of the warranty, we recommend saving that expense.
53. Do you receive receipts of every bill?
You will receive an invoice for repairs as well as an itemization as part of your monthly statement. All bills are scanned and attached to your file and may be accessed online on your owner portal. You may not receive individual receipts for paint, parts and the like because parts and supplies may come from our warehouse or service trucks.
54. What kind of insurance do we carry?
We have a general liability policy, errors and omissions, worker’s compensation and all state required insurance. We recommend you consult your insurance person to obtain the best coverage for your property. We ask that we be named as an additionally insured on your policy if feasible and at no additional cost to you. If you don’t name us as additionally insured, and we are sued by your tenant and we are held harmless (i.e., not at fault for the issue), my insurance company will seek restitution from your insurance company and put us at odds. It is best for all parties if we are named as additionally insured on your policy.
55. Why do we require the California 588 form to be completed, approved by the Franchise Tax Board and forwarded to us?
If you live out of state and collect rental income in the state of California you have two options with regards to withholding requirements:
- Complete a California 588 Form (Nonresident Withholding Waiver Request) – We will provide this form for you to complete. Upon completion, you must send it to the Franchise Tax Board for their approval. If approved, they will grant a 1 or 2 year waiver period. You need to forward the approved request for our files.
- Quarterly Withholding – If you are denied the request for us to waive the withhold requirement, we must retain 7% of your gross monthly rent and forward the proceeds to the state quarterly. If we must provide this service to you and the state, we charge a $50 quarterly withholding fee for the extra labor, time and risk.
56. What kind of insurance do we require of the tenant?
Recent California law makes it difficult to enforce tenant payment of Renter’s Liability and Contents Insurance: it is not considered material to the lease. In order to protect your asset and from the acts of the tenants, we can charge the tenant for a Tenant Liability Policy where you are the beneficiary and we can include that fee in the monthly rent to make sure it is paid as agreed. It is a $100,000 polity with a reputable insurance company that has no deductible at a cost of $12.50 a month.
Tenants agree to indemnify and hold both Progressive Property Management, Inc. and you the rental property owner harmless for damages or losses originated through their actions. If the tenant does provide evidence of liability insurance and it is current, we do not charge them this fee. If they choose to add Renter’s Insurance to their policy to protect their personal property, that is encouraged.
57. Can you make changes to our management agreement?
Our management contract is designed to protect both Progressive Property Management, Inc. and you the property owner. It has been vetted by hundreds of owners and many attorneys. We will not make substantive changes to the contract because once it is executed it is filed away and we won’t know your agreement is different than anyone else’s.
58. Can you get out of the management contract?
Yes. Most of our contracts are one-year in length but can be cancelled after 6 months with 30-day notice. After the one-year contract any owner can cancel our management contract with 30-day notice.
59. Whom would you contact if you have questions about your statement?
Your Property Manager should always be first point of contact for any issues. If you are not satisfied with their response or they are unable to answer all your questions, please email us at email@example.com and one of our customer satisfaction staff will assist you.
60. Whom should you contact if you have questions about your property or tenant?
Your Property Manager should always be your first call or email. If you are not satisfied with their response, or wish to talk to someone higher up at the company, please email our owner, Scott P. Brady, at firstname.lastname@example.org. The buck stops there.
61. Should you allow pets in your rental property?
It depends on the property and the situation, but in most instances, we encourage you to allow pets in your rental and by restricting them you may lessen the possibility of renting your property in a timely manner. We will increase the tenant’s security deposit, do not allow dangerous breeds (such as Pit Bulls, Rottweilers, etc.) for insurance purposes, and will screen potential pets carefully.
We now use Petscreening.com as well to determine the appropriateness of a pet. A prospective tenant pays $20 for the first pet and $15 for any additional pet for an objective screening of their animal. This third party service provides an objective rating of the pet and stores all pertinent information (rabies date, spading, vaccines, etc.).
If they possess a service or comfort animal, per federal law they cannot be charged a screening, but they will be still being required to supply the necessary documentation (certificate for the animal, etc.).
62. Can we help sell your house as well?
It is our company policy to collect the maximum security deposit allowed by California law for your property. For an unfurnished unit, that is two month’s rent and for a furnished unit, three month’s rent. It is critical we collect this amount on your behalf because these funds may be required to clean the unit, make repairs beyond normal ‘wear and tear’ caused by the tenant, and for any loss of rent in case the tenant decides to break the lease prematurely or as often happens, tries to use the security deposit in lieu of last month’s rent. Some tenants simply don’t have the funds at move-in for the first month’s rent and the two-month’s security deposit (on an unfurnished unit). If allowed by our owner, and if the tenant qualifies, we will guarantee two month’s security deposit to be used for these potential financial damages and cleaning. For tenant with a TransUnion or credit score of 700+, we will charge the tenant a “Security Deposit Waiver Fee” equal to 2% of the monthly rent to be retained by us. If they are unable, or prefer not to deposit one month’s rent, we will also charge 20% of the first month’s rent as a refundable “Cleaning Fee” to be used after move-out to clean the unit. If the cost to clean the unit is less than this fee, the tenant will be refunded the balance of these funds. If the tenants can make a deposit equal to one month’s rent, the Security Deposit Waiver Fee will be reduced by half (1% of the monthly rent for credit scores higher than 700) and the Cleaning Fee shall be waived. If the tenant’s credit score is 650 to 699, the Security Deposit Waiver fee to waive two month’s deposit shall be increased to 3% and if the credit score is 600 to 649, it will be increased to 4%. For the purposes of this program, if there is more than one applicant for a unit the lowest TransUnion or credit score of the applicants shall establish the credit score to be used for this program. The maximum we will pay for damages to your property shall be equal to one month’s rent. What are the benefits to you, the owner?
- You will have the protection of two month’s rent on hand
- No fighting with the tenant over the security deposit at move-out.
- We pay for damages to your property, if any, up to one month’s rent.
- More tenants will be able to apply to rent your property.
- Tenants will stay longer since this program is not offered by other companies and they may not have could save enough money as a security deposit for another rental.
63. What is the “Preferred Owner Program (100% Rent Guarantee)”?
In a perfect world, your tenant pays the rent every month as agreed, and once they leave your property, a new tenant takes their place the day after they leave. Rarely does it work this way. Once a tenant leaves, you will incur loss of rent. Also, the tenant is allowed normal ‘wear and tear’ of the property which means you may pay for re-painting, re-flooring and other improvements. You may have to pay a ‘tenant acquisition fee’, the cost to secure a new tenant, and it may take a few weeks for a new tenant to move in. All told, these costs may amount to thousands of dollars. The Preferred Tenant Program is designed to protect you from these costs. For a higher monthly management fee (usually 6% above our ‘a la carte’ monthly management fee), you will be guaranteed your rent. We will pay you your monthly rent even if there is not a tenant in place paying rent. We will pay for any repairs (up to one month’s rent), loss of rent (up to one month’s rent) and the cost to acquire your next tenant.
64. What is the “Preferred Property Program (100% Income Guarantee)”?
Even if you participate in the Preferred Owner Program and have your rent guaranteed, you may still incur costs from maintenance issues associated with your property. If you are interested in an income guarantee for an additional 3% a month, we will make all repairs to your property at no cost to you. There is no deductible, and we will not be liable for improvements to your property (re-roofing, re-piping or re-painting), but we will repair or replace water heaters, air conditioners and appliances. You receive all the benefits of the Preferred Owner Program and the security of knowing exactly how much income to expect every month: your monthly rent less our management fee. No costs for evictions, repairs, tenant acquisition, or loss of rent: just guaranteed income.
65. Can we help sell your house as well?
Progressive Property Management, Inc. is a full service real estate company, and if you decide to sell, our sister company, Partners Real Estate Group, is here to assist you. If you were referred to us by a real estate agent or real estate company, we would encourage you to contact them with your real estate needs. Why call us to sell? We are familiar with your property, can easily work with your tenant and utilize all of our resources to close your transaction quickly and efficiently. Need another reason? We will credit you for all property management fees paid up to the date of closing out of our listing fee, if you choose us. We do cap that credit at 1% of the selling price and other details do apply, but suffice it to say, you will save when selling by choosing us.
Thank you for choosing Progressive Property Management, Inc., we know your investment property is a valuable asset and we hope to exceed your management expectations. If there is anything we have forgotten, please contact us.