Taking Over Grandfather’s Apartment Complex

Hi everyone! I’ve been presented with an opportunity of a lifetime today and need some advice from you amazing people!  My grandfather has been working out his will and apparently, I’m going to be the recipient of his 12-bedroom apartment complex. This is the opportunity of a lifetime but I’m a little nervous owning and managing this property at such a young age (22). The complex needs a lot of work, it’s currently on the lower end for rent for my area, $750 a month 2 bedroom 1 bath units. I have a few questions and am looking for advise here on how to proceed. I’ve reviewed his lease (which is about 10 years outdated) and have noticed that a newly rewritten one will probably be the first action I take. It is located across the street from a private university, but no university student has ever stayed there. My goal is to turn it into more of a college student housing hopefully, but I know that opens up a whole other can of worms. The college has also presented an offer to buy the property so they can level it and build a parking lot there ($100,000). I’ve just graduated college and selling the property would be a great short-term option, but my finance side is ready to take this head on and hang on for the long run. How do I manage a property? How do I proceed to meet all my tenants and know if they are good people? How do I reinforce my soon to be written lease agreement? How do I evict people? How do I handle frequent late payments? If I wanted to get a whole new set of residents, how would I go about getting all the current residents out? Should I sell now and not take on this project? I will be owning my family business within the next 10 years when my dad retires and I’m unsure how over worked I will be. Thank you all! Response: The value that the University offered for the property seems low to me. I know that you are young and probably feeling a bit overwhelmed but the reason you went to school is to learn how to think. I think you can manage this property and make money doing so. First of all, if you have some money available, I would have a contractor that your dad and trusts come and do an inspection of the property to find out what the problems are. Some common ones are old and leaky plumbing, asbestos in walls or in popcorn ceilings, mold, rotten wood in joist near bathrooms or kitchen, water leaking under the foundation, sinking or cracked foundation. Once you have that report you will have a better idea if this is something you want to take on. Second, I am going to recommend that you invest in software for your property management. I own a property management software company, Smart Property Systems and know that we can help guide you all the way as well as provide affordable tools that will keep you on track to be successful. Once you have done that, you can go to rentometer.com to compare your rents with the rents in the neighborhood that are similar units. Now review the tenant files to see who pays rent on time and who does not. Look at inspection reports to find out how they take care of the property. If there is no data, you will need to ask your grandfather. Now schedule inspections for each unit. You are required to give notice before you inspect the units and I would recommend at least several days’ notice. Smart Property Systems customer service can provide you with a document to use for inspection. Be sure to fill it out as you go through and have the tenant sign and date it when you finish. You can then make a copy for them and give it to them when you speak to them next. Now you can make a decision about who will stay and who will have their tenancy terminated if month to month and not extended if on a lease.  

Customer Service is an Important Part of Property Management

happy tenantsIf you work for a property management company you know the importance of maintaining good relationships with your owners and tenants.  And if you are self directing your own property management you probably know that tenants and landlords often clash.  But it does not have to be that way. You must stay on top of your management tasks, and let your tenants know that each one of them is important to you.

Our company has provided software for property management to over 20,000 subscribers since 2005.  We are recognized as one of the best property management software companies and, by the way, we have just rebuilt the software to be even easier to use thus making the communication with tenants even better.  The legacy software won a webby and the New Release has already won a Best In Business for software award. With all of this experience, there are some things that we know will help you get good tenants, keep your tenants happy and retain them longer.

Expect the Best from your Tenants

You are entering into a business contract with each tenant. You expect them to pay rent and care for your property in return for their access and right to occupy to a quality property in which to live or work if it is a commercial property.  Remember that it is a business relationship, not a friendship.  From the beginning treat the tenant with respect.  Once the lease is signed the tenant has agreed to pay rent on time.  Be sure that he/she does just that.  We recommend use of automated rent payments made through a tenant portal which contains all of the pertinent information that they need plus a way to make their rent payment in less than a minute. If they are late, do not offer to waive late fees. In the automated system, late fees are added automatically on the designated day.  Waiving late fees only encourages more late payments.  If you have a chronic late payer, make arrangements so that rent is due after they have received their wages or can reliably make the payment.  If that means you extend the grace days a few more days then that is a better way to resolve the issue than to waive late fees. You might also have them pay two times per month instead of once.Don’t worry, if they are using automated rent payments, the accounting is done for you when that payment is made. And remember that any changes to the original agreement need to be memorialized in writing and signed by both parties.

You Make the Rules

It is the responsibility of the landlord or property manager in conjunction with the owner to make the rules for tenants residing in the property.  Include those rules when they sign the lease.  We recommend a separate document stating policies and rules as well as vacating procedures.  The tenant signs that document and it becomes part of the lease.  Tenants need to know the rules before they move in, not when they have violated one.  Tenants need to know that they are responsible for  being cordial to neighbors and abide by the rules of the property.  It is always best to meet the tenant in a professional environment like an office.  Our SPS software offers esign for leases and notices so that an office is not required to look professional.  One other thing that is very important is good communication.  The SPS software has tenant portals through which the tenant can easily notify you of any issues or report maintenance items.

Get Repairs Done Quickly

Things happen to rental properties during normal wear and tear, and repairs need to be done to keep the property in good shape.  Occasionally there is also tenant caused damage, like a child flushing toys down the toilet or someone hitting the garage door with their car.  Both types of damage should be repaired by the landlord or property manager, not the tenant.  The most important thing that a landlord can do is get the repair done as soon as humanly possible.  The tenant can be billed for tenant caused damage or the security deposit can be used if they do not pay. We recommend billing first so that the security deposit remains in place for the future.  Always follow up after the repair with the tenant to be sure that the repair was done to the satisfaction of the tenant.  We recommend that you inspect the repair or at the very least have the contractor take pictures before and after the repair and send them to you.  Your tenant will know that you care about their comfort and you will retain them longer.  Maybe even more important is that you will be sure that your property is kept in top condition.

You Must Do Inspections

Inspections are part of the price of doing business.  Inspections done regularly will insure that there is no major damage being done to your valuable rental property.  With new tenants, you may want to do an inspection or visit the property in one month to see how the tenant is faring.  At the same time you can look around to see how they are caring for the property. If all is well you may schedule the next inspection visit for 3 months.  If things look dicey, give notice to clean it up and come back in a week to inspect again. This may seem like over kill but we have seen some tragic situations experienced by our subscribers when they do not use the inspection software available to them. One subscriber found three families living in a two bedroom house.  Only 4 people were on the lease.  Another found a herd of cats, none of whom were authorized by a pet agreement. In fact the pet agreement clearly said that no pets were allowed.  If these situations had not been discovered, you can only imagine the damage that would have been done to the property.  Inspections are an ounce of prevention against pounds of cure.

Develop Good Relationships

Always be cordial to your tenants.  They are supporting your business and even if you may not like them personally, you need to be pleasant.  Remember that your tenants are not your friends.  They have a business relationship with you.  That does not mean that you can’t send Holiday cards or throw parties for the multifamily community once in awhile.  But in the process of running your rental business, be firm and fair, attentive and respectful.

Smart Property Systems gives our subscribers the tools to be able to develop good relationships with tenants, members of associations, and owners of residential and commercial properties.  That is accomplished with automation of most repetitive tasks and by allowing all stakeholders in the business to easily communicate through the portals.  If you are not using software or are unhappy with your current software check out https://smartpropertysystems.com.

Submitted by: Timmi Ryerson
December 18 2015

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Are You Afraid of Change???

Have you ever thought about how change affects your life? How many of us embrace the idea of change? How many dread it?  I am  not talking about change that comes when you get dressed.  I am not even talking about a change of scenery.  Those kinds of change can be easy to take, unless the view is from behind bars and walls.  Changing a diet can be very hard.  Changing where you live can be stress inducing.  Changing a job may be difficult for some. Changing the way you do your job may be even harder to accept.

Matathesiophobia= The fear of change.change fear                                                                                   Have you ever started something brand new and realized that you don’t have a clue about what you are doing?  Have you ever gotten physically dizzy or distracted from the task because you are having a hard time?  It can be like that for new owners or managers of investment properties. Even seasoned managers can get into overwhelm at times when the work load piles up. Many are literally overwhelmed by the prospect of having to advertise for tenants, do tenant screening and write leases.  But before we fall over the cliff in overwhelm, there is a better way. Using a quality software which is designed to be easy to use,  where the work flows don’t let anyone make a mistake, is the real answer.  Now that kind of change does not seem so hard.  The subscriber/new landlord or manager can have a path to follow with success at the end of the road.  When using the Smart Property Systems software, the steps for each task are lined out and the tools are right there on the dashboard for the investor/manager to use.

You have never used software before?  Is that a hard change to overcome?  Not really. Change can be easy to deal with, when there is a change of mind and good attitude.  Relaxing into the new software environment can actually be exciting as the user discovers that everything is automated and all work is saved by the software.  Just think. This change results in having all documents and tools at your fingertips. Simple organization at last!

Smart Property Systems offers property management software and it is designed to make the business of property management much easier for anyone doing that job.  But hardly a day goes by that someone in the customer service department hears a complaint from a subscriber or maybe a free trial users saying that it is hard for them to change. After talking about it for a few minutes they realize that their real reason is fear of change. Once that fear is overcome, the whole prospect of having answers to all questions and problems that come up in property management which are at their fingertips, makes the new world of software becomes glittery and golden.

Smart Property systems has been doing business in the Property Management Software sector since 2004 and served over 20,000 subscribers.  This company knows property management and understands the problems that repetitive tasks cause for the staff. Repetition can cause boredom and bored people make mistakes.k8479153 The motivation and dream of the staff at Smart Property Systems is to provide automation for those repetitive tasks and make the business of renting well managed properties to deserving tenants easier and more profitable. Software does not make mistakes. That is change we can believe in.

But what about the change that comes in having to pay for software? There again, just how valuable is your time?  When you get your properties and tenants into your subscription account and automate the rent collection, can you imagine how much time you will save every month?  Why that could be a full time assistant salary saved. If you have no assistant, using SPS software will cut your time by two thirds. Remember, now all communications  with tenants and vendors go through the message centers in each account portal, instead of having phone calls all hours of the day and night.  Now notices are sent though the software via email and stored in all appropriate accounts. Some, like statements and late fee notices are automated, so there is really nothing you have to do. Rent week comes and goes and all statements are sent out, rents collected and accounting for those payments done by the software for you!  You can look at the rent roll and see who has and has not paid.  So now, what will you do with all that extra time on your hands?  Maybe play some golf or tennis or go fishing? How about spending more time with the family?

Yes Change can bring stress but fear of change is really the main issue.  Once that fear is overcome, then the change from manual management of properties to software driven management is a no brainer.  Check us out at Smart Property System <https://smartpropertysystems.com>

Author: Timmi Ryerson
CEO
Smart Property Systems