Welcome to the Smart Property Systems Blog

Have you ever felt like this after a day working on your rentals?  Most of us have. This page has been created to offer ideas and solutions to common problems associated with managing investment properties of all kinds.  Why would we do this, you ask?  We are a company who has a subscription based software as a service, in the cloud for property management.  We work with our subscribers and tenants all day long and get much insight into what is happening in the world of investment real estate.  We want to share our ideas with you and get your feedback as well.  Of course we would love to have you visit our web site and would like even more to be your go to choice for property management software.  But our main focus on this page is to offer information.  We welcome your comments and wisdom as well.

Together with input from owners and managers like you, we should be able to compile a pretty good library of how to’s and best practices which will help owners/managers solve even the most difficult problem rental or rental problem.   There are a variety of subjects which will be discussed.  I will post interesting articles and we can all comment on them.  We can add topics as you wish.

Our goal will be to make everyone who participates here be able to have that same look of smug satisfaction as the young woman at the top of the page and not the one holding her head in her hands.  So welcome and let’s start sharing our solutions.

What Does Charisma Have to Do with It?



Are you a c property manager? Do you try to be everyone’s friend when they rent one of your properties? Most people think Charisma is vital to the relationship between landlord/manager and tenant. However the short term benefits of being everyone’s new best friend are often neutralized by the long-term consequences.

Charisma interferes with judgment. It is said that there are three ways to influence others. They are reason, force or charm. Charm is based on emotional manipulation whereas reason and force are not. (Even when we are forced to do something, we do it for good reason.)

It is important to consider what you want from your tenants and what they want from you. By being clear, concise and business like, you will establish that relationship from the beginning.

Meeting the tenant to show a unit is usually the first face to face contact you will have. Dress for success. Your first impression will set the relationship off to a good start if you show up as a professional. Remember that if this tenant wants the unit and passes tenant screening, that you could have a long term relationship developing. But it is business, strictly business. You will be collecting rents, and possibly utility and other payments every month. You want this tenant to respect and care for the property. You also want this tenant to abide by rules and be sensitive to other tenants and neighbors in the area. All of these details are certainly included in your lease, but when you have a charismatic relationship with your tenants, it is easier for them to smooze you on being able to pay rent late, Or they will tease you out of them not mowing the lawn often enough. You know what I am getting at here.

We suggest that you use our online rent collection so that everything about rent is automated. They cannot call the system and complain that they had a car repair and cannot pay rent on time. They know that the system will send the late notice and attach a late fee automatically. We also recommend that you use the message system to communicate regarding repairs and maintenance, etc. so that there is a record of all communications kept for that tenant. That way no one can ever come back to you and say “You never told me that.”

So the message is that you already have enough friends. Tenants can be acquaintenances, but you are not ever going to be their hero. Put some respectful distance between you and your tenant and you will enjoy your management experience much more

Stay On Top of your Costs for Maintenance

Painting a unit is one of the large costs of maintaining a property is top condition. I have found that unless you have specific language in your lease agreement, that you may get stuck with having to paint at your cost between every tenant.  So my first recommendation is that when you paint, it is
recorded in your maintenance record and you determine what the lifetime of that paint job should be, based upon the quality of paint you use.  Consider normal wear and tear and then set the timing.

Put that timing into your lease agreement.  For example, you have just painted an entire unit including the garage space.  You expect that paint job to last
for 6 years.  If the tenant stays for one year and some painting needs to be done after they move out, you can then prorate the cost of that painting against
a deposit based on the time line for painting you put in your lease. Then update your painting timeline again. If the tenant stays for 6 or 7 years and then moves out, you will pay for the cost of repainting yourself. But the benefit of not having a turnover in that period of time gives you more of a chance to be profitable.

How often do you paint the outside of your buildings, fences and carports etc.  This is another large expense and lifetime of that paint job on the outside is another important consideration.  If you have single family residences, this is a no-brainer.  Damage caused to the exterior of the building is the tenant’s responsibility.  But when you have multiple families in a building, it becomes harder to assign damage.  I had a situation once, where I had just repainted a group of 12 duplexes located in a culsdesac which meant that no one came into the area unless they lived there.  About two weeks later, I came to oversee
a repair and found graffiti on the buildings and some of the storage sheds.  It is hard to assess blame in that case, as there were no stated witnesses. So a letter went out to all residents regarding the damage.  All of them had the stated lifetime for painting as an addendum to their leases.  So all were going to
be assessed for the repair of the damage.  Amazingly in less that two days, the culprits were caught by the other residents and the mystery was solved. The only tenant charged was the family of the two boys whose parents had bought them spray paint cans.  Yes Ethyl, that is a true story.

Replacing carpeting and vinyl flooring is another large expense required to maintain a property.  Your estimated lifetime for a carpet and vinyl/wood etc. for flooring will depend upon the grade of product you purchase and install.  The decision regarding quality will depend on the type of property you are managing.
For example, you would not choose a $35 per yard carpet to put into a rental which catered to young families with pets.  But you would consider doing that
quality for high end apartments which drew 55+ year old tenants who were not likely to have unattended pets.  Flooring and carpets have lifetimes based on quality.  Again, these details need to be added to your lease.  If there is damage to flooring done and you have your lifetimes built into the lease, it is likely that you will have not problems collecting against deposits for damage done during that expected lifetime.  I always used the same carpet for each unit in multiple units and then stored the left over pieces so that they could be used for “coring” if a section of carpet was damaged beyond repair.  That way I could replace a section which was dye matched and would not have to replace the whole carpet.

Just a note about allowing pets.  Dogs and cats often use the carpets in a new home to”mark” their territory.  Another problem I found was that owners would leave their animals in the unit for hours at a time, especially if they worked.  Male cats have a tendency to “spray” when they are scared or upset, which also damages walls. Inevitably there was damage when pets were allowed on the lease, and these odors are very difficult to eradicate. There will also be other damage such as scratches on doors, broken screens, dirty walls from contact .   Because this was a very consistent problem,
I began to charge a hefty non refundable pet fee.  This additional fee helps when you have to rip out a whole carpet because of cat sprays,especially when the deposit will not cover the costs.  We found that almost every time this cat odor problem was present, we would have to seal the floor and a few inches up the walls with white shellac   It was the best alternative to ripping up the sub floor which is VERY expensive.   The white shellac seals the floor and helps to ameliorate the odor problem. Once it is thoroughly dry the new pad and carpet can be laid.  Wood flooring is creates a similar problem when damaged by pets.  If a tenant has had cats that don’t use the litter box or dogs who just can’t wait, the whole floor may need to be stripped,sections removed and the sub floor shellacked as well.

Water damage is a common problem with rentals.  It is caused by leaky faucets and drain pipes.  But the biggest problems are usually under the commode or around the shower.  Regular inspections will  reveal if a tenant is abusing the premises by not being careful about water.  One common problem is that the tenant does not have a shower curtain and says they “can’t afford” to buy one.  We fixed that problem by always supplying one.  It is very important that the bottom of the shower curtain be contained within the tub and along the front and back wall of the tub. Lack of  attention to these details will cause water to splash onto the bathroom floor. There are shower curtains which have small magnets in the edges and magnets which attach to the wall.  These work well to solve the problem of water splashing out of the tub or shower area.

If water is allowed to splash, eventually the vinyl or tile  floor will discolor and degrade.  Water can then get onto the sub floor and will cause rot over time. The same problem will occur around a toilet which is improperly seated, drain pipes which are clogged and leaking, lack of caulk around a tub and its fixtures. When rot is present, it must be removed as it will “travel”.  After the section of rotted wood is removed there are products available to coat the remaining structure so that the rotting process is stopped. (We used to call the product we used green slime) . You can then add a new section to the subfloor and redo the vinyl or tile on top. If these items are in good repair when a unit is rented, and you do regular inspections, this kind of damage can be prevented.

Appliance replacement is another major cost.  My experience is that it is worth buying appliances which are mid range, (not the cheapest and not the high end).  If you buy in groups, you will get better prices than if you buy onesie twosies.  Use the manufacturers recommend life to establish your timeline.  Stuff
happens and bulbs burn out, oven elements break.  But lack of care to appliances was big on my “charge the deposit” list. If I had a tenant move in to a sparkling clean kitchen where the range and refrigerator were pristine, and found them gummed and greasy dirty at inspections, I would inform them that the problem would be solved by them within two days or I would bring in a cleaning crew at their expense. If the burner pans were trashed, the tenant had to replace them immediately.  This practice stops the problem in its tracks because the tenant  bears the cost.  Lack of care to appliances caused abnormal wear and tear and will deplete the life expectancy of your equipment.  It is important to keep on top of this common problem through regular inspections.

Use timelines for the life your major maintenance items and do regular inspections.  It will save you time in the long run and make your business more profitable.

By: T.  Ryerson


Will the Problems with Property Taxes in the UK Come Home to the US with the Looming Cliff?

UK Chancellor George Osborne is being urged not to tinker with property taxes when he makes his Autumn Statement later this week or in his 2013 Budget.In March 2011 stamp duty was increased to 5% for properties above £1 million, affecting many ‘ordinary’ family homes in London and the south east where property prices are much higher than the rest of the UK.

In March this year stamp duty was increased further to 7% for people buying properties over £2 million in their own name and 15% through corporate vehicles.

Both moves are regarded by many experts as having had a negative effect on the residential property markets. Last week, London Central Portfolio (LCP) reported a 53% decrease in Greater London transactions between £2 million and £5 million caused by the legislation changes.

Newly analysed data now reveals that this suppression extends to the whole of the country. According to HM Land Registry, sales between £2 million and £5 million across all of England and Wales have fallen by 30% in the third quarter of 2012 compared with the same period in 2011. Even the prime central London market has seen a reduction in sales of 9% across the board this quarter.

LCP points out that this has resulted in a massive loss in stamp duty to the exchequer. It puts this at £203 million. It also reckons that this has hit jobs and therefore the general economy.

‘Given the fragile state of the property market, stamp duty is unlikely be tampered with under the £250,000 mark where 75% of all of purchases take place. However, anyone with a property worth £250,000 upward should be on guard for higher charges at the next Budget and that means half of all the buyers in greater London,’ said Naomi Heaton, chief executive officer of LCP.

LCP has calculated that a fall in sales of 30% for all properties between £250,000 and £2 million on the back of a 1% increase in stamp duty would result in a further net loss of £297 million in tax receipts over one year.

‘Given the evident negative impact of higher taxes, in what is traditionally a buoyant quarter, and continuing uncertainty whilst buyers wait on tenterhooks to see where the next blow will fall, there is likely to be a further reduction in activity and associated economic fall out. Increased taxes do not always result in increased revenues and the tax losses due to SDLT changes are a clear example,’ added Heaton.