Tag: management

Common tenant complaints and how to manage them like a pro

It does not matter how well you keep your property, some issues are still bound to appear. Handling tenants can be tricky, so dealing with them in a proper and kind manner will be really helpful for a fruitful relationship.

Keep reading to see the most common complaints tenants make and how to successfully resolve them.

Maintenance

Ensuring that the property is in tip-top condition can be challenging, but it is so necessary.  Maintenance requests left unattended is the number #1 complaint tenants make regarding their rental property. Letting them know you are interested in their comfort and security by tending to their maintenance needs can go a long way.

Having a clear line of communication and a simple system to send their requests is the best way to make sure that these issues are addressed.

Apart from emergency repairs, it is also very important to remember that seasonal upkeep must be properly managed. See our blog posts on seasonal maintenance here: Spring – Summer – Winter – Fall

 

Privacy

Not only is it a bit annoying for the tenant for you to show up unannounced at the property, but it can actually be a criminal offense if it even remotely resembles harassment against them. Having respect for their privacy is key to having a good relationship.

Unless it is imperative to visit the property because of an emergency, always ensure that you give them at least 24 hour written notice that you may be dropping by.

Noise

Noisy neighbors are not the owner’s fault, but it doesn’t mean you cannot help the tenants have a better time at your property. 

If the problem is with a tenant also renting with you, you could offer to talk to them or mediate to help them reach an agreement amicably. 

If not, you could look into helping them with the installation of insulation, or with soundproofing the property. 

The best solution for these issues will always be to resolve them by talking with the tenant causing the discomfort, but offering something extra can make your tenant really happy!

Pests

One of the most awful things that can happen in your home is having unwanted guests invade you, so this one requires immediate action in most cases.

Calling an exterminator promptly can solve the issue right away, but periodical inspections and upkeep can help you be sure that the pests won’t cause any more problems.

Something to keep in mind is that the lease your tenants get will need to include how you will manage each of these items, and must strictly follow the Texas Property Code.

It can be really tiring dealing with all of this, so leaving your property in the hands of experts (like us!) can help you relax  in the knowledge that things will be taken care of.

Don't know how to handle your tenants? We can help!

Anything you would like to ask us so that we can get ready for our call?

Why Choose a Professional (And Licensed ) Property Manager?

As the demand for rental property increases more and more investors are turning to real estate as a reliable and timeless investment. And while real estate can be an extremely profitable investment, it can also be very time consuming and become extremely overwhelming if you are not well versed. 

If you, like many, have ever wondered if professional property management is worth the expense. The answer is: Absolutely! As long as you partner with the right company. Here are a few ways that Frontline Property Management can increase your profits and improve the value of your investments.

Maximizing Rent by Monitoring the Market

Did you know that, in the state of Texas, professional property managers must also be licensed real estate agents? One of the many benefits to hiring a professional property manager is their vast knowledge of the real estate market. Knowing the market will ensure that you are listing your rental property at the right price and will get you the most bang for your buck!

Screening Tenants

One of the quickest ways to kill your profitability in a rental property is to approve the wrong tenant. While you obviously want to put focus on whether or not a prospective tenant can pay the monthly rent there are many other items to consider when approving a tenant. Some of these items include: How will they care for the property? Will they fulfill their lease obligations? Are they likely to be there long term, or will they be likely to move after just one lease term?

Hiring a property manager can help ensure each tenant is screened thoroughly before they move into the property. 

Collecting Rents

Once the tenant has moved in, the monthly rent must be tracked meticulously. In addition to tracking the rent a professional property manager will have systems in place to ensure that any late payments are handled appropriately and that prompt and proper action is taken in the event of non-payment. 

Keeping Your Property in Tip Top Shape

At the end of the day your investment is only as good as its value. Having a professional property manager on your side will ensure that your investment is well cared for. A good property manager will track and perform preventative maintenance resolving issues before they become costly.

Considering taking advantage of this knowledge by hiring a professional property management company?

Frontline Property Management has been dedicating itself to the well being of our investors for over 30 years. Reach out today to see how we can help protect your frontline in order to increase your bottomline.

 

Have a property that you need help with? Contact us today!

Anything you would like to ask us so that we can get ready for our call?

Property Management Accounting: Security Deposits

Handling security deposits can become unexpectedly contentious upon move-out or the sale of a property that currently houses renters. This is because although you, as the landlord, hold the funds, the money belongs to the tenant until such a time as the property is surrendered back to the owner. How you account for the security deposit matters well before move-out!

Keep It Separated

The easiest way to manage the security deposit is to keep it separate from other funds. This means setting up an account specifically for the security deposit. If you manage multiple properties, then the security deposits could all go into the same account. Separating the security deposits ensures that these funds are not comingled with your personal funds (remember, the money belongs to the tenant!), prevents accidental spending for other properties, and makes it easier to track and get back to the tenant once damages have been assessed.

Interest or Non-Interest Bearing Account?

In separating security deposits, you may have a choice of whether the funds earn interest. This is legislated on both the state and local levels. Some states require that security deposits are moved to an interest-bearing account and that the interest as well as the security deposit are returned to the tenant upon move-out. In Texas, no such law exists. In the Lone Star state, you may deposit the security deposit into an interest-bearing account without the obligation to return any interest generated from the funds to the tenants.

Tax it Correctly

One of the best reasons to keep on top of your accounting – besides being able to accurately predict future business directions – is that the IRS requires accurate income reporting. Although security deposits are funds that you receive from your tenants, again, this is not your money. Therefore, you would not count this as income upon receipt the same way you would account for rent. Security deposits do not become taxable as income until you have no legal obligation to return the amount to the tenant – and then, it would only be the portion of the deposit that was used and accounted as an expense to repair the property. You wouldn’t claim any funds that go back to the tenant as income.

Improper handling of security deposits can (and will) come back to bite you! A situation can get very litigious very quickly if a detail is overlooked or misunderstood. You need a property management company that understands the ins and outs of property law and state regulations. Frontline Property Management has a team of Accountants, Tenant Coordinators and Property Managers ready to take care of the details for you! 

Find out how letting us manage your property will help you avoid costly mistakes!

Let us know if you need help with your rental!

Anything you would like to ask us so that we can get ready for our call?

Property Management Accounting Basics: Reconciliation and Redundancy

Humans are hard-wired to seek maximum reward with minimal effort. We are driven to find ways to get things better and faster while doing less work. We are also sometimes simply forgetful of details when we are focused on completing tasks.

Reconciliation

In accounting, however, you cannot spare any details. Reconciliation is the process of making sure your bank account statements match the ledger for your business, dollar for dollar, penny for penny. If it’s off, then you’ve gone wrong somewhere.

First, you want to create the habit of reconciling weekly if not daily, and at the very least monthly (depending on the size of your business). It’s a lot easier to track down a discrepancy, transposed number in a transfer or a missing deposit someone forgot to enter – among a litany of other things that can go wrong – if it happened within the last thirty days and not sometime in the last half a year.

To combat the inherent nature of people to play fast and loose with the details, it’s also important to incorporate redundancy in your accounting. In the creation of your Chart of Accounts, you’ll need to properly set up accounts and sub-accounts that best reflect the nature of these transactions. You will also need to create Journal entries for any transfers made between accounts. Think of your Journal as a “dear diary: I moved this money from bank Account A to bank Account B because of reason X”. You can cross-reference the Journal entry as a memo line when you make the “real” transfer in your bank account.

Multiple layers of reporting will make your life easier and your accounts simpler to manage. Depending on your state, your property management business may also be subject to audit. While audits aren’t fun, they’re even less fun if your reports aren’t in order. The Trust reconciliation report is a collection of reports that are commonly required to pass audits conducted by state property management licensing boards.

The report combines Bank Reconciliation and Bank Account Balance Breakdown. Reconciling on a regular basis makes this monthly reporting a breeze! In property management, there are plenty of factors that are out of your control, but proper accounting isn’t one of them. Be diligent, detailed, and redundant, and you will be able to make the best financial decisions to further your business.

 

Are you too busy to reconcile appropriately?

Of course, if this is overwhelming (and it very well may be) – don’t worry! If you’re too busy making deals to handle details, let a property management company like Frontline Property Management handle them for you! Our accounting department is focused on keeping your reporting pristine and your monthly reports rolling!

Let us know if you need help with your rental!

Anything you would like to ask us so that we can get ready for our call?

Property Management Accounting: Accrual Vs Cash-Basis Method

Being a landlord is a business, and whether you’re managing one property or several, you need a method of keeping track of your transactions. It’s not just about collecting rent (if only it were that easy!) but you also need to decide how to track charges for repairs and services. All of this needs to be reported at the end of the year, not to mention it’s always good to know what your profit margin is!

There are two methods for accounting for your transactions: Accrual and Cash-Basis.

Accrual VS Cash Basis

The Accrual Basis

Using the Accrual Method, you would create transactions when money is earned or owed, not when the money is actually exchanged. An invoice, for example, is a notice of money due. You would note the invoice in your books then, and not when you’ve actually paid the invoice later. 

The Cash Basis

When using the Cash-Basis Method, your books would reflect the exchanging of funds from your accounts exactly when it occurs, eg, you would note the invoice when it was paid, not when it was received.

Smaller businesses typically use the Cash-Basis Method, as it is simpler and reflects a more immediate status of where your cash flow is at the moment. The Accrual Method, however, can give insight into the long-term health of your business as it takes into account future income such as rent, and expenses and invoices that are due but have not yet been paid out.

Whichever method you decide is best for your business, keep in mind that you must be consistent! After all, these records are not just for you but are the framework for your reporting to the IRS. Also be aware that if you start with one accounting method and would like to change later on, you must seek approval from the IRS.

Reporting your taxes can be daunting – let Frontline Property Management do the heavy lifting! Our accounting department tracks your general ledger, sends you monthly reports and even files the taxes for your properties so that you don’t have to!

Learn more about our services to find out how Frontline takes the hassle out of property management!

Let us know if you need help with your rental!

Anything you would like to ask us so that we can get ready for our call?

Application Process: Pets

As a landlord, you have no doubt by now heard some serious horror stories. At the heart of every issue is a problem tenant – something you’re hoping to avoid by creating a thorough and fair screening process. A question you should ask every tenant is “Do you have any pets?”

A question you should ask yourself is: Do you accept pets?

Accepting pets in your rental property can be advantageous in an increasingly pet-friendly market. Understandably, though, you might be hesitant to. Those afore-mentioned horror stories? Many of them include issues revolving around animals being kept in the property.

Whether or not you want or should accept pets in your property is completely a matter of choice and preference. As with everything else in property management, it’s a risk/reward situation. 

Let’s briefly examine those:


Why You May Not Want to Allow Pets:

  • Risk of Physical Damage to Property
  • Liability of Pet-Related Injury
  • Cost of Cleaning / Pest Treatment
  • Disturbance to Neighbors

Why You May Want to Allow Pets:

  • Increases Applicant Pool
  • Reduces Pets Being Snuck Onto Property (for free)
  • Charge More in Rent
  • Longer Tenancy (due to unavailability of other pet-friendly residences)

In a time when pets are increasingly considered part of the family rather than property, you will face the question of “Do you accept pets?” more and more. Here are steps you can take to address the concerns of pets in your property, and how to consider handling pets in the application process.

What You Can Do:

1.       Be Clear in the Listing & Lease

If pets are not allowed, ensure that this is stated clearly in the listing. If the property is listed on multiple platforms, make sure that every posting states that the property is NOT pet-friendly. This will be an automatic deal-breaker for anyone who has pets, and will save you and the prospective tenant both time and frustration over the application process. 

The lease should also clearly state that pets are not allowed on the property at any time, and specific penalties should be noted. This will help support your claims in court, should it come down to collecting money for charges related to animals being present in the home. 

And yes, even though you have made it clear that the property is NOT pet-friendly, still put the question on the application. This makes certain that the tenant clearly states in writing that they do NOT have a pet.

 

2.       Know Your Target Demographic

Millennials will make up 75% of the workforce by 2025. Having been hit hard by recessions, millennials are unable and unwilling to take on more debt in the form of a mortgage, and so is a demographic of majority renters. Nearly three out of every four millennials have a pet – and they will look elsewhere if their pets aren’t welcome. That’s quite a big swath of future business! 

Your target demographic may not lean millennial – for now. Make the best decision that fits the needs of your market and the tendencies that cater to those renters. They are your livelihood, and what the market demands will determine how profitable your business will be.

3.       Establish a Restricted Breeds List

Bad dogs come from bad dog owners, but an unfortunate human tendency of bad ownership has resulted in some breeds being restricted in residential properties – even neighborhoods and counties!  If you decide to have a pet-friendly property, you will want to check your insurance policy to find out what type of coverage you have. Make sure you know the amount of liability coverage your policy includes. Your insurance company may have limitations or exclusions to this coverage – such as a list of dog breeds they consider to be “dangerous breeds,” which will not be covered under the policy.

4.       Charge Pet Rent

Pets can (and arguably, should) be considered occupants of a home. A nominal monthly fee can be charged as “pet rent”. This reflects the higher demand of pet-friendly rental properties without penalizing someone who doesn’t have a pet. In this way, you cater to both types of tenants without having to exclude pet owners altogether.

5.       Charge a Pet Deposit

This one-time charge differs from pet rent in the same way that a security deposit is not monthly rent. This charge goes directly to covering the cost of inevitable cleaning and flea treatment of the property. Extra care (with extra associated costs) must go into deeply cleaning a pet-friendly residence at move-out, which responsible and reasonable pet owners will understand. While a pet-owner may be nose-blind to their animals, a sensitive nose or someone with allergies can detect even the faintest presence of odor or dander.

6.       Establish a Pet Application

 A pet application, like any other tenant application, can be used to screen & assess the liability of an individual pet according to age, breed and size and will guide the determination of pet rent costs. There are third-party companies that can provide this assessment (for their own separate application fee) which keeps the pet assessment a step removed from any internal bias.

7.       Conduct Yearly Inspections

As property owner and manager, you must conduct annual inspections. With tenants who have pets, it is especially important that you be on the lookout for signs of undue wear and tear on your property as a result of the tenant’s neglect on their pet’s behalf. Destructive behavior can quickly devalue a home and increase the cost of repair exponentially. If you have a residence that is NOT pet-friendly, be aware of signs that your tenants have been keeping a pet a secret, or have acquired a pet without thinking to add them to the lease. For liability’s sake, you need to have paperwork that properly reflects all occupants of the home at all times. Your inspection is a great time to address any concerns regarding the care of your property and the suspected presence of any unauthorized animals. 

8.       Understand the Difference Between a Pet and a Service Animal

Not every animal is a pet. Fair Housing covers the use of certified companion and service animals and it’s important that you understand the difference. A no-pet policy does not apply to service animals, as they are considered to be tenants and not pets. The pet application must still be conducted to determine the animal’s credentials as being certified as a service animal – and not just claimed as one. An “unofficial” service animal is still considered a pet. A true service animal will have the veterinary paperwork to support any claims made.

Property Managers have a history of dealing with a wide spectrum of pets and pet owners, their neighbors, and the fences in between. The legalities surrounding pets as family members and service animals are shifting, and at Frontline Property Management, Inc. we are determined to keep in step with the times and remain informed. 

Contact us today to learn more about how Frontline Property Management can help you manage your property with ease and find your next tenants – four-legged or not!

Let us know if you need help with your rental!

Anything you would like to ask us so that we can get ready for our call?

Application Process: The Criminal Background Check

Why Run a Criminal Background Check At All?

In searching for the tenant who will occupy your rental property, you have a right to know whether or not that tenant will be a danger to you, your tenants, or your property. While there is no way to be certain of the future, your prospective tenant’s past may provide some insight into their habits. A criminal history does not define a person; however, it is important to take your financial risk into consideration.

How Do I Run a Criminal History Report?

You will not need to gather this information yourself! There are plenty of companies that bundle criminal background checks with credit reports and eviction histories. These paid services make this task as simple as it is necessary. Some state laws allow the landlord to charge a prospective tenant for the cost of ordering a credit or background check. In any case, make sure the application plainly states that a background check, criminal history report, or credit check will be ordered if appropriate and that the prospective tenant is granting authorization for a check into his or her financial, employment, and personal history.

Who Should I Run a Background Check On?

Everyone. Every applicant (18 years of age or older) must be submitted to the exact same screening process. Regardless of if you “have a feeling” about a person, if you require a background check of one applicant, then every applicant must also be held to the same standard. This will keep you in compliance with the Fair Housing Act.

What Do I Look for in the Report?

Evictions

A key red flag to be on the lookout for is prior evictions. An eviction within the last five to seven years could be an indicator of a tenant’s inability to pay rent. Multiple evictions raise an even bigger red flag – you will not want to risk being another landlord in a string of unpaid landlords. If the eviction is two or more years in the past, a frank conversation with your applicant (and their previous landlord) may help you better understand the circumstances under which they were evicted. 

Criminal Convictions

Applicants with felony or misdemeanor criminal convictions, those serving deferred adjudication (either felony or misdemeanor) or who have pending cases for:

  • Violence
  • Sexual Offenses
  • Theft
  • Injury to persons, or
  • Damage to property

– or attempted felony or misdemeanor offenses related to the above – will be screened out of your applicant pool. Some landlords take part in “second chance” renting, in which case the above results are not an immediate disqualification and you may take the circumstances, frequency and date of the conviction into consideration. However, you are obligated to provide the safest and most secure environment possible for any other tenants you rent to, as well as the neighbors of your properties.

Be the most informed landlord you can be by obtaining and interpreting a criminal background check!

You will not know what you do not ask for. Securing a tenant with a reasonably clear criminal and eviction history increases your odds that you will have steady rent payments and few (if any) issues from neighbors or other tenants!

A Property Management company with a Tenant Coordination Department – such as Frontline Property Management, Inc. – has years of experience running these reports. Our standards are the same for all applicants and our methods take the pressure off you to decide what is and isn’t acceptable from an applicant. Working with Frontline means that you will not be ensnared by a direct plea from an applicant who has a lengthy history of criminal behavior or is a high risk for eviction. We have implemented a very accessible online application with clearly stated qualifying criteria. Our suite of services include lease-writing once your application pool has been screened and your next tenant selected. Our streamlined process and the diligent work of our Property Managers and Tenant Coordinators works every day to serve your needs!

Find out more about how Frontline Property Management, Inc. can save you time and effort in every step of the process!

3 Ways to Build Your Vendor Relationships

If you have decided that you would prefer the freedom of outsourcing your maintenance rather than, say, making yourself available at any time of the day or night to tend to your tenant’s needs, then you are now in search of maintenance vendors.

What you are NOT looking for: a “handy” family member or family friend, a “jack of all trades and master of none”.

What you ARE looking for: licensed professionals who are also covered by liability insurance.

Your maintenance vendors are a crucial part of your business. They represent you by interacting directly with your tenants and help you by saving time and money. Building a relationship with your vendors is imperative – here are three ways to do just that:

1) Select a FEW Vendors

It should go without saying that in order to build a relationship, you will need to choose a few go-to vendors for your maintenance needs. By doing this, you and your tenant benefit from consistency in performance, and the reassurance of a familiar face. Being a steady source of business for your vendor may actually get you higher on their priority list, as well.

2) Pay Your Vendors on Time

Recognize that the time and effort that you’re saving by not completing repairs yourself translates into dollars paid to your vendor. You are paying not only for the repair, but also their hourly rate. Remember that these are professionals that can not only diagnose the issue, but have it repaired in a timely manner that does not drag out the inconvenience to your tenant (which becomes an inconvenience to you!). Be respectful and pay your vendors in a timely manner as well.

3) Refer and Rate Your Preferred Vendors

Ratings are everything these days! If you love your vendor, refer them to other landlords like yourself! Getting your vendors more business is a great way to build a positive relationship. If they have a website, write a stellar review! Give them stars on Angie’s List or other online vendor search applications.

Keep in mind, this will be a matter of trial and error. You may find a fantastic vendor the first time you ever need a repair, or you may not. There are horror stories of vendors doing more harm than good, or upcharging exorbitant costs for what should have been a relatively simple repair. Also, as an extension of your own business, if they have a conflict with your tenant – you now have a conflict with your tenant.

Property Management companies like Frontline Property Management, Inc. have spent years vetting their vendors and building those relationships so that you don’t have to! If your property is hours away or out of state, that’s a huge impediment to having the face-to-face teamwork that we have with our vendors. With Frontline, you always know where your bottom line stands. Large repairs are never started without an appraisal of the work by a licensed and insured vendor, and we never EVER make a profit on the work being done. Our goal is a happy landlord and a happy tenant, and we do everything in between to make it happen!

Do you have a property that you need help managing? Are you tired of being on call 24/7? Fill out this form to see how we can help!

Anything you would like to ask us so that we can get ready for our call?