Recently First Rate Property Management took over management from another property manager. The owner of the property participated in what the other management company called an Eviction Protection Program. The other management company deducted $5 per month from the property owner. How the program worked was that if the property manager ever had to evict a tenant, they would cover the legal costs ($495) as well as the cost to serve the tenants ($120). This new owner liked the plan because he said that it gave him piece of mind. First Rate Property Management has never offered this service because our eviction rate is so low. I suppose we could offer the service and only charge $1 per property. But then again, I’m not too sure that would be worth all the extra effort the accounting department would have to go through. Anyway, if for whatever reason this program is of any interest, please let Lizz Loop know and we can do some further investigation. Obviously the more that enroll, the cheaper the fee would be.
An Old Wives’ Tale is that you cannot evict when it is cold out or around Christmas. This isn’t true. In the Boise area, the judges simply want to know if the rent was paid or not. Below is a link to a recent news story that ran on a local news station. A local property manager went to the media because they couldn’t get the tenants evicted while the tenants were destroying the house. Have you all watched the movie Pacific Heights with Melanie Griffith, Matthew Modine, and Michael Keaton? If not, I think you should. Both this recent news story and that movie create a very strong argument why investors hire professional property managers. So many think that renting out a property is as easy as finding a suitable tenant and collecting the rent each month. Unfortunately, it takes horror stories like these to make so many realize that there is so much more. First, you have to screen the applicants. In recent posts I have described all that goes into our screening. Second, you have to have a strong lease that precisely describes what is expected from the tenant. Third, the property manager needs to know what to do when a crafty tenant dodges the system. The news story describes a tenant who is able to dodge the legal service of the court appearance for the eviction. Since our application is much like an application to obtain a mortgage loan, we’re going to have the address of where they work, where their nearest relative is, etc. We’ll find them. In the meantime, I would publicly publish the notice of service so that the court date cannot be delayed further. Lastly, I would get very creative. For example, in the past, I have bought flowers, knocked on the door and stated that I had flowers to deliver. Everyone loves flowers. When they open the door, I serve them with the notice. I’ve got a whole host of these types of tricks, which fortunately, I haven’t had to use for many years. I would also make the tenant’s life miserable and make them want to move. Calling the news crew wasn’t that bad of an idea as it probably caused some of the tenant’s friends and neighbors to put some pressure on them. But because of the health risks, I’d also be calling the police and child protective services. Obviously, I would offer to meet them there so that I could serve the tenants while making their life miserable as authorities take their children away.
First Rate Property Management has officially reached its lowest vacancy rate all year at just below 2%. I predict that it will continue to fall for the remainder of the year. In general, low vacancies typically indicate a shortage of inventory and high demand. Well, I do agree that it appears that inventory is low. I think that we’re filling our vacancies because of the low rents and incentives being offered. If we continue to see this trend, then I believe it is safe to assume that as we exit the winter months, we should be able to remove any move-in incentives and see rents increase. What a great thing to see once again! I can only hope that we see the market that I saw in the mid 90’s where we pre-leased almost all of our rentals and pretty much got the rent we were asking. 2011 is looking like a good year.
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- Quarter 2 Vacancy Information
- We're Calling it: Rental Market Softens
- Procedures for Inherited Tenants
- Swope Investment Properties Investor Newsletter
- FRPM 1st Quarter Vacancy
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