I had to chuckle this morning, when I read an article talking about how easy it is to expand your real estate business by adding property management services.  Easy, huh? I beg to differ.

Although it’s certainly true, the steady income of property management activity is enticing, setting up and running a property management operation is entirely different than running a real estate sales business. Yes, your real estate pre-licensing education may have provided the minimum training you are required to have in order to be a property manager (some states require specialized licensing for property management), but did you learn anything about the business of managing investment real estate? If more than an hour of your pre-licensing education was dedicated to property management activity, I’d be surprised.

The article claims, “…agents are already familiar with 99 percent of the real estate law they need to know. The other one percent can be found easily.” Seriously? Let’s look at that a bit more closely.

Fair Housing Law

Although the Federal Fair Housing Act applies equally to sales and property management activity, there are big differences in the types of issues that come up between buyers and sellers, compared with landlords and tenants. For example, how many real estate licensees know what to do when a prospective renter with an emotional support animal asks to occupy a unit in a “no pets” property? Or, does the typical real estate licensee know who will pay for physical modifications such as widening doorways or removing entry steps in a multifamily unit built in 2003? (Most likely, it’s going to be the landlord.) These are issues that are rarely, if ever, faced by real estate sales agents.

Landlord/Tenant Law

Does the typical real estate licensee know what constitutes “habitability” of a residential dwelling? How about the landlord’s responsibility for essential services? When is the rent actually “late?” What are “reasonable” late charges, and how should they be collected? How many people are “too many” in a 3-bedroom home? All of these are situations faced regularly by property managers, and rarely, if ever, by real estate sales agents.

Servicemembers Civil Relief Act

More and more often, property managers are being asked to accommodate the needs of renters who are called to serve in the armed forces. Does a real estate sales agent typically know the provisions of this federal law?

Fair Credit Reporting, Fair Debt Collection

How much does the average sales agent know about these two federal laws? Not much? Well, as a property manager, you’ll need to have a thorough understanding of both.

Tip of the Iceberg

I could go on, but I think you get the idea. Although most of these laws were probably mentioned in your real estate sales pre-licensing program, it’s not likely they were covered in sufficient detail to prepare any licensee to manage property.

And then, there’s the issue of time…

The article further claims, “…some agents fear they will not have the time. But property management software today is almost completely web-based…”  Sure. Sure. That’s true. Our advanced technologies help us in many ways. But, time savings is not one of them, in my opinion. In fact, I dare say that property management, if done correctly, is more time consuming now, than ever before. Why? In part, I blame technology.

Consider this, back in the day of the property management dinosaur (1980s, for example), we didn’t have ready access to instant communication. If our owners or renters wanted to contact us, they’d either have to pick up the phone, or send a letter. Now, with texting, email, and social media, our owners and tenants can contact us with every passing thought they have. And, they do!

Don’t get me wrong, I think it’s great that the communication between the parties is so instantaneous and thorough – it does a great deal to prevent misunderstandings. Yet, every text message, every email, and every contact MUST be answered. And, not only must we answer, we must be timely with our response, and thorough with the information we provide. This takes time. Lots of time.

Opportunity DOES Knock

Property management is an excellent opportunity for some real estate licensees to grow their businesses. But, I caution against jumping in without a complete understanding of the level of commitment required. Not only is education and training an absolute MUST for the new property manager, but a well-thought-out business plan, a bit of mentoring, and excellent time management skills will go a long way toward manifesting your success in the challenging world of property management.

What do you think? If you are both selling and managing real estate, what are your experiences? Has it been difficult to balance the two? Any particular rewards or challenges you’d like to share? Please do so, by leaving a comment.

Just got the word that I’ll be presenting two classes in Indiana at the annual state REALTOR® conference! One class will be on residential property management; the other on commercial property management. I’m excited!

Many of our tenants (and owners, too!) have been going through some tough economic conditions in the last few years. It’s no surprise that incidences of domestic violence tend to increase when a family is suffering economic hardship. Studies show that domestic violence is three times more likely to occur when couples are experiencing high levels of economic strain.  

In just one day, September 15, 2011, 67,399 victims of domestic violence were served by domestic violence programs across the United States. On that day, local domestic violence programs answered more than 21,748 hotline calls. Unfortunately, on the same day, more than 10,581 requests for services were unmet due to inadequate funding or staff available to assist these victims.

Many victims of spousal abuse either flee their housing to escape the abuse, or are evicted by landlords who “don’t want to get in the middle” of a volatile situation. Whether these victims leave voluntarily or through eviction, finding replacement housing is a challenge. If you’re like many landlords, a prospective resident’s prior eviction means an automatic denial of their application to rent.

Domestic violence is a leading cause of homelessness for women and children in the United States.  Many victims leave their housing to escape violence and do not have the resources to support housing alone.  Others are evicted from housing due to their batterer’s disruptive and often criminal behavior, or have terrible credit and rental histories due to tactics of financial abuse.  Victims are often also barred from housing due to the risk their batterers pose.

 

Perhaps it’s time, as housing providers, we begin to re-think our hard-line stance on prior evictions?

Could this position, regardless of a prospective tenant’s other qualifications, result in an act of unintentional discrimination? Yes, I think it might, in the case of a domestic violence victim.

Just a couple of months ago, the Department of Housing and Urban Development (HUD) charged an apartment manager with sex discrimination for evicting a victim of domestic violence after her boyfriend assaulted her. In its press release announcing the charge, HUD stated:

Victims of domestic violence too often experience housing discrimination because the acts of their abuser.  Housing authorities and landlords evict victims under zero-tolerance crime policies, citing the violent acts of a household member or guest.  Victims are evicted for the property damage caused by their abusers, or for the disturbance caused by their repeated calls to the police.

If you think evicting a tenant because of domestic violence is vastly different from refusing to rent to someone for the same reason, think again.

In February of 2011, HUD issued an internal memorandum discussing this issue. The memo is intended as guidance for HUD field officers in determining whether discrimination has occurred when victims of domestic violence are either evicted or denied housing. The memorandum discusses legal theories around proving fair housing claims, all of which have been tested and proven to be legitimate bases on which to bring a claim or charge against a housing provider. One of these legal theories is known as “Disparate Impact.”

In some cases, there is no direct evidence of unequal treatment [by the landlord], but a facially neutral housing policy, procedure, or practice disproportionately affects domestic violence victims… The theory is that, even when consistently applied, women may be disproportionately affected by these policies because, as the overwhelming majority of domestic violence victims, women are often evicted as a result of the violence of their abusers.

It appears to me that a “zero-tolerance” policy for prior evictions, regardless of the circumstances surrounding the eviction, might put the property manager at risk for a fair housing claim or charge. I think this is particularly true if that policy disqualifies a victim of domestic abuse who is otherwise qualified to rent from you.

What are your thoughts? Do you have a zero-tolerance policy for prior evictions? A zero-tolerance policy for crime? Do you make exceptions to those policies? Please share your thoughts by leaving a comment. Thanks!

Within the last week, I have had no fewer than 4 Nevada Property Managers ask me the same question.

“How do we maintain a contingency fund for our owners, if the Trust Account has to be zeroed out every month?”

It seems there may be some misinformation floating around out there. Let’s clear it up!

First things first… the “operating” Trust Account – the account where you hold the property management owners’ money – does not have to be “zeroed out” at all – ever.  At least, not until the broker closes the account, permanently. In fact, to carry a zero balance in this account would be very dangerous. What happens if a tenant’s rent check is returned by the bank? What about bank fees? Not only should this account never be swiped down to zero, but we are permitted to carry a maximum of $100 of the broker’s money in that account, to cover bank fees not chargeable to the owners.

Typically, a Property Management Agreement will call for a certain amount of money to be held in reserve for each owner’s property. This amount is intended to cover incidental expenses of the property that might arise between the time the owner is paid his periodic draw, and the next rent payment comes in. For purposes of this writing, let’s just call that amount $200.

If you have 20 single-family properties operating out of one trust account, all with a minimum balance of $200, you’ll be carrying at least $4,000 in the operating Trust Account at all times. This is perfectly acceptable, as long as all funds are properly accounted for and attributed to their various owners.

Just as a side note to this conversation, the Nevada Broker whose office provides Property Management services is usually going to be running at least 2 Trust Accounts – one for the owners’ money, and one containing tenant security deposits.  (I never advise giving the deposit to the property owner to hold, but that’s fodder for another post, entirely…)

Stay tuned – the Nevada Real Estate Division is sponsoring courses, soon to be offered all over the state, on the operation and maintenance of Trust Accounts. These classes will be free of charge to Brokers and Broker-Salesmen. A schedule will be posted on this site, as soon as it’s available. In the meantime, you might want to take a look at the latest edition of NRED’s publication “Trust Fund Accounting and Record Keeping for Nevada Brokers.”

Does this help? If you have unanswered questions on this issue, please post a comment on this blog. You’re probably not the only one with questions, and it’s important that we get accurate information out there to all Nevada Property Managers on this oft-violated area of law and regulation.

Property Management can be a very challenging profession, in terms of communication. Most often, when the telephone rings, it is a problem. The tenant is unhappy because something needs to be repaired. The owner is unhappy because he’s not making as much money on the property as he thinks he should. The vendor is unhappy because he didn’t get paid the day he submitted his invoice. Property Managers must balance the needs and wants of all parties in landlord/tenant relationship, whether residential or commercial, while at the same time, setting appropriate boundaries, mediating disputes, and communicating difficult messages.

Because most property managers have little to no training in communication techniques, many of them burn out within the first year or two in business. The negativity is just too much for them to take. It is out of this awareness, “Nonviolent Property Management: Communication Skills for Property Managers” was developed.

It is common knowledge in the property management industry that 20% of our clients often take up 80% of our time. Why? Communication challenges are costly – in both time and money.

I’ve heard it said by property managers many times, “We’re just one lawsuit away from closing our doors.” Property management is the single highest-risk specialty in the real estate industry. Your Errors & Omissions Insurance carrier knows this is true. In a recent conversation with Cary Smith, President of Treaty Oak Insurance Partners, I learned that errors and omissions insurance premiums for property management companies are every bit as pricey as medical malpractice premiums for specialties such as dentistry, optometry, and chiropractic medicine!

It’s easy to see why property management is such a high-risk business. In real estate sales, the agent is basically only answering to the buyer-client or the seller-client. In property management, the manager is balancing the conflicting agendas of multiple parties, including the owner, the tenant, and the vendors. When we fail to communicate clearly with these parties, lawsuits get filed.  

So much of our communication in the property management industry falls into patterns of making someone “right” or “wrong” in areas of conflict. It’s all too easy for us to become defensive or aggressive when we feel “put on the spot” by our owners, tenants, and vendors.

In the course, “Nonviolent Property Management: Communication Skills for Property Managers,” we’ll explore the elements of Nonviolent Communication, as articulated by Marshall Rosenberg, Ph.D. in his book Nonviolent Communication: A Language of Life, and how those elements can be incorporated into every Property Manager’s daily communications.  The participants in this course will walk away with immediately-useful tools to help them communicate more clearly, and reach consensus much more easily in all their communications.

The first offering of this course will be March 20, 2012 in Reno, NV, as part of the first-ever RSAR “Property Management Symposium.” I hope to see many of you there!

Rottweilers, Shepherds, and Pitbulls, Oh My!

The subject of today’s post was inspired by a recent class on accommodating the needs of residents with disabilities. As professional property managers, we know the Federal Fair Housing Act (FFHA) requires us to make reasonable accommodations for renters with physical or mental disabilities. Often times, these requests revolve around assistance animals (note: the term “assistance animal” is synonymous with “companion animal,” “service animal,” “therapy animal,” etc.)  It is widely known within the property management industry that accommodating such requests is generally considered “reasonable,” under FFHA.

What happens when the animal is a “dangerous breed” of dog?

Stories relating to incidents of deadly animal attacks on humans make national news on a fairly regular basis. As many of us know, some insurance companies keep lists of dog breeds they consider “dangerous,” and will refuse to write policies of insurance on homes that keep these breeds as pets. Some of these companies base that decision on a decades-old report by the Centers for Disease Control entitled, “Breeds of Dogs Involved in Fatal Human Attacks in the United States between 1979 and 1998.”  Among the breeds listed on the report are Pitbulls, which accounted for the highest number of deaths during the time studied. Rottweilers, German Shepherds, Huskies, and Malamutes were all included in the study. In fact, the report lists well over a dozen purebred and crossbred dogs involved in dog bit-related fatalities.

What if the owner’s insurance policy prohibits the animal?

A dilemma arises for the property manager when a resident with a disability asks to keep an assistance animal that is banned by the property owner’s insurance policy. Can the manager refuse to accommodate the request, even if the resident has sufficiently documented his need for the animal? In my opinion, the property manager would do so at her own peril. Not only is it ill-advised for the manager to summarily deny the request, I believe it would be equally risky for the manager to require the resident to obtain a separate policy of insurance on the animal.

HUD’s office of Fair Housing and Equal Opportunity has made it pretty clear to housing providers that these types of actions will likely be frowned upon. In its 2004 Joint Statement with the Department of Justice,  HUD states,

“Housing providers may not require persons with disabilities to pay extra fees or deposits as a condition of receiving a reasonable accommodation.”

The Statement then cites an example of a reasonable accommodation that may pose a liability risk for the landlord – use of a motorized scooter inside a multi-tenant building. In this example, HUD and DOJ state,

“…the facility may not condition [this accommodation] on a requirement that he obtain liability insurance…”

What should the property manager do?

Recognizing this dilemma, HUD published an internal memorandum in 2006 that discusses insurance policy restrictions.  In part, the memorandum states,

“If a housing provider’s insurance carrier would cancel, substantially increase the costs of the insurance policy, or adversely change the policy terms because of the presence of a certain breed of dog…, HUD will find that this imposes an undue financial and administrative burden on the housing provider.”

By FFHA’s definition, a request is not reasonable if it poses such a burden on a housing provider.

Not so fast…

However, the memo continues,

“…the investigator must substantiate the housing provider’s claim regarding the potential loss of or adverse change to the insurance coverage, by verifying such a claim with the insurance company directly and considering whether comparable insurance, without the restriction, is available in the market.”

I read this sentence to say that the property owner will likely be required to attempt to find another insurer – one that does not prohibit the breed of dog in question.

According to a national insurance underwriter website, both State Farm and Allstate have changed their approach to underwriting in this particular area of risk. Rather than inquiring about dog breeds during the underwriting process, these companies will only inquire about the behavioral qualities and past incidents of aggressive behavior of the animals in residence. If either of those companies insure properties in your area, it might behoove your owner/client to check on the availability of coverage before you deny an accommodation request for a “dangerous breed” of animal.

Been there?

Please share your experiences on this and related property management issues by leaving a comment on this post. Thanks for reading!

Property Management on Purpose

Much has been said about the “Accidental Landlord,” lately. It seems that a challenging sales market brings out the landlord in all of us. When the demand for housing shifts from owning to renting, the decision to become an investor-owner, rather than a seller, is one many of your clients have either already made, or are making now.

Among the many considerations your clients must weigh in this decision is how best to manage their properties. Are they better off managing a rental themselves, or would they be better served by hiring a professional to take care of tenant selection and day-to-day management?  

This is where you come in! Whether you are a full-time property manager, or you’ve taken on a few management accounts as an add-on service in your real estate business, managing your clients’ properties can be not only profitable, but fun and challenging work!

One step at a time…

First and foremost, proper licensing is key! Most states require, at minimum, a real estate license in order to manage property for others. Some states, such as Nevada, require both a real estate license and an additional property management license or “permit.”

Assuming you’re properly licensed, education is the next step. Property managers must be well-versed in myriad topics in order to properly handle their clients’ investments. Although most real estate prelicensing programs touch on these topics, very few of them cover the subjects in enough detail to give the property manager a working understanding of them. Subjects such as

• Fair housing
• Landlord/tenant law
• Tenant safety
• Insurance and liability
• Maintenance and repairs
• Risk management
• Disclosures
• Rental and management contracts
• Agency

are all applied somewhat differently in property management than they are in sales. By virtue of the fact that your property management accounts anticipate a long-term agent/client relationship, the property manager will encounter circumstances and challenges along the way that would never come up in a listing/sales scenario.

How can you get this education?

Although Nevada requires a minimum of 24 classroom hours of property management education, most states do not. The licensee is left to his or her own devices, when it comes to education in property management. There are many great reference books on the market that, if one takes the time to read them, will go a long way toward providing valuable education in the property management field. Yet, for my money, there’s nothing quite like a specialized course (or ten!) to really drive home the important facts, laws, and best practices of the business.

Consider a trade organization…

Some of the best educational opportunities can be found through participation in one or more trade organizations that support your property management specialty. Depending upon what type of property you manage, these organizations provide wonderful education courses that count toward professional designations, or simply for the purpose of enhancing your property management professionalism. Here are just a few of the organizations catering to the property management community:

National Association of Residential Property Managers – for managers of single-family homes and small residential properties.

Institute of Real Estate Management – for managers of multifamily and commercial properties.

International Council of Shopping Centers – for retail property managers.

CCIM Institute – for commercial property managers.

Society of Industrial and Office REALTORS – you guessed it! For office and industrial property managers.

Community Associations Institute – for managers of common-interest communities.

National Apartment Association – for multifamily managers.

Building Owners and Managers Association – the oldest trade organization for property management professionals, offering top-notch courses for commercial property management.

This is only a sampling of the many outlets available for quality property management education. I urge you, if your 2012 goals include building a viable property management portfolio, consider availing yourself of the benefits of membership in a property management trade organization.  (In a future post, we’ll talk about a few business models for property management that you might want to try, once you’ve got the education piece in place!)

Are you a member of a property management trade organization? If so, what benefits has that membership provided to you? Please join the conversation by leaving a comment on this post.

Trust Account Reconciliation

This post is by special request from a Nevada Real Estate Broker in Las Vegas who tells me that, when he attended a mandatory prelicensing class for Property Management, the instructor didn’t fully cover this issue. He is not alone. I’ve heard the same from other Property Management Permit holders. It seems there are quite a few brokers and property managers who are unsure what the Nevada Real Estate Division is looking for, in terms of the annual Trust Account Reconciliation. We’ll review the basics here, and then I would urge you to submit your comments and questions as a reply to this post, so that we can openly share some of the common misconceptions about this area of Nevada Real Estate Law.

First Things First

If you handle other people’s money, whether for property management or any other real estate purpose, you are required to have a Trust Account. Whether the broker is actually the Property Manager, or not, the broker is the responsible party for the trust account(s). Since the broker is ultimately responsible for everything that goes on with the trust account(s), this post is addressed primarily to Nevada real estate brokers. However, if you are the Designated Property Manager for your firm, please bookmark this post and share it with your broker.

If your company is involved in managing property for others, whether residential or commercial property, and you handle the money of owner-clients and/or tenants, you’re going to be required to have a minimum of two separate trust accounts – one for owners’ money, and one for tenants’ money (security deposits). This means that, every year, you’re going to be reporting on both of these accounts to the Nevada Real Estate Division.

When is the report due?

The annual Trust Account Reconciliation report is due on the anniversary date of the broker’s license renewal. In other words, whether the broker’s license is due to renew in 2 years or 4 years, the trust account reconciliations are due to the Division every single year on the anniversary of the broker’s license renewal date.

What period should the reconciliation report cover?

The Trust Account Reconciliation report should cover the calendar month immediately preceding the broker’s license renewal date. Example:

Broker’s License Renews:  June 30, 2013

Trust Account Reconciliation(s) Next Due: June 30, 2012

Period Covered in the Next Report: May 1 through May 31, 2012.

What does the report consist of?

The report is essentially a comparison of what the broker’s trust accounting records show, and what the bank statement shows. Let’s take a look at the report, section by section:

The first part’s easy, right? Just your basic office/brokerage information, and the banking information on your trust account. Remember that, if you’re reporting on more than one trust account, each account must be reported on a separate form. Up at the top where you see check boxes for “Custodial” or “Trust” accounts, in most cases, you’re going to check “Trust Account.” A Custodial Account is an account that is established in the client’s name (or property’s name – for a single property), and to which the owner/client has full access. If the client is not a signer on your account, it’s going to be considered a Trust Account. Either way, the report contents will be the same.

This first part of the report is a very simple reconciliation form. Using our example from above, where we’re reporting on the month of May, 2012, the first line of Part I is going to show the “ending balance” as reported on your bank statement as of May 31, 2012. (Don’t forget to attach a copy of your bank statement to the report.) The next line will show the total of any deposits to the trust account that were recorded on your books for May, but are not reflected on the bank statement. (Perhaps, you made a deposit after the bank’s normal business hours on May 31st, and it was not credited to your trust account until June 1.) The next line is a subtotal line, adding the two previous amounts together.

Any checks you’ve issued that have not cleared the bank by May 31 are going to be listed (in total) on the following line.

As for “Adjusting Entries,” I’m hoping this line is zero on your report. You really shouldn’t have any adjustments to your reconciliation, right? Your accounting software likely gives you the ability to record any bank fees in the month they’re charged which would change your ending balance accordingly. So, no “Adjusting Entries” would be needed in that case. Let me just say this… if I were a Nevada Real Estate Division Compliance Officer, and I were reviewing your trust account reports, I’d probably look first for “Adjusting Entries.” In “old school” bookkeeping lingo, we’d call those entries “force balancing.”

The last line of Part I of the report is simply the reconciled ending balance of your trust account (as of May 31, 2012), after adding deposits not appearing on the bank statement and subtracting checks that haven’t cleared the bank. It will not be the same number as the bank statement ending balance, unless you have no outstanding checks and no un-credited deposits. So far, so good. Let’s look at the next section:

The “as of” date that goes here in Part II is May 31, 2012 – all the amounts you’re showing on this report are as of the last day of the month on which you’re reporting. The “total” line in Part II is going to be what your accounting records show as the ‘grand total’ of all money in that trust account as of May 31, 2012. If you’re doing this correctly, that number is going to match the last line of Part I.

Part III is simply a breakdown of your individual property ledgers. So, rather than the balance sheet total for the trust account, the number that appears in this section is the total of the property ledgers, all added together. Your software will do this for you, and you can probably run a “property totals” report, or something similar that lists each property and its cash balance as of the report date (May 31.) Again, the “as of” date, in our example, will be May 31, 2012. If you’ve done this part correctly, the total between Parts I, II, and III will all be the same! The broker signs at the bottom of this section.

The schedules appear on the second page of the report. Just as they indicate, this is where you will individually list any outstanding checks or un-credited deposits. Remember, on the first page you listed totals for these categories. Here is where you’ll list the individual deposit(s) that is/are outstanding, and the individual uncleared checks.

As you might guess, “Schedule C” is where you’re going to list any “adjustments” you made on the first page. Naturally, you’re not going to have any of those, right?

Lastly, each of your individual property ledgers, with their corresponding balances (“as of” date remains the same, throughout) are all listed on Schedule D.  As is indicated on the form, you may make as many copies of the Schedule page as you need to, to accommodate the number of properties comprising your trust account.

That wasn’t so tough!

Am I right? It’s really easier than it looks. If you run into problems, don’t hesitate to email me with your questions. And, for those of you who have had some confusion about this requirement, I hope this post helps! Oh! One last thing… The Nevada Real Estate Division has published a guide to help you with all things “trust accounting.” You can download that publication here.

Please remember to post your comments and questions so I can follow up if there are issues I didn’t fully address in this blog. Thanks for reading!

Do you post video tours?

What an awesome discovery this has been for me! I recently started using video tours to promote my vacant rental properties in Sparks, Spanish Springs and Reno. Not only did it seem like a far better way to showcase the property than the standard still photographs, but the video allows prospective renters to get a really good “feel” for the property before ever making an appointment to see it. I personally show all my vacant rental properties; I don’t issue keys. As you might imagine, the video tour cuts down on the number of unsuccessful and no-show property showings. That’s just one benefit. 

Surprise Benefit

You may have heard that Google recently purchased YouTube. I’m no tech expert, but logic tells me that the more you frequently update a combination of video, still photographs, and written content on your website, the more likely you are to see a significant boost in your site’s visibility in a Google search. The logic paid off already. My first video is fairly new on my site, and already, I’ve moved up in ranking. Go ahead! Try it. Just do a Google search for “Reno Property Management” and see where I land. My company, Truckee Meadows Property Management, is on the first page! I didn’t used to be there, I assure you.

What equipment do you need?

I remind you, I’m no techie. I use my Android phone to take the video, and I edit it in Microsoft Live Movie Maker. Then, I publish the video on my YouTube account, and post a link on my website and other online advertising venues – Craigslist, Zillow, and Trulia, to name a few. That’s it!

Practice Makes Perfect

I should warn you ahead of time, this video was my first. The camera’s a bit shaky, and the editing is amateurish. Doesn’t really seem to matter much, though! The video is getting viewed, and it’s resulting is excellent property showings. With each video, I’m sure my technique will improve.

Watch this video on YouTube.

Isn’t it time you started using video in your property management business? If you’re already using video for property tours and other promotional content, please share your tips with our readers by leaving a comment. Thanks!

Happy New Year!

We all make them, don’t we? We all promise ourselves to do better, do more, and achieve the goals we missed in years past. And, if we’re like so many others, we lose sight of those goals in the madness of living, day to day.

This year, I would suggest to you, as a property manager, resolve to embrace just 3 principles that will greatly improve your day-to-day existence in the property management world. When the work life is under control, the rest of life generally seems to follow…

1. Document Everything

This is tougher than it may seem, but I urge you to do exactly that. As a property manager, your words are your tools for success or implements of failure. Document every single phone call you have, no matter how brief. Make a record of it – the date, the time, who you spoke with, what you discussed, and then make note when the issue has been resolved. Whether it’s a rental inquiry, a maintenance call, a possible new account, or a discussion with a vendor, make a record of it.

More than anything else, this principle is about risk management. As you likely know, a complainant in a fair housing matter has up to 2 years to file a case against you in federal court. How skilled are you at remembering telephone calls that took place two years ago? Two months ago? That’s what I thought. Document everything.

2. Be Consistent

Property managers really aren’t allowed to have a bad day, are we? If I treat one prospective renter differently than I treat another, am I not opening myself up to trouble? This is where your written policies and procedures will really serve you well. If you have established procedures for everything you do, and you follow those procedures to the letter, you are much less likely to be perceived as having shown favoritism, or its opposite, when dealing with tenants, landlords, and vendors. Be consistent.

3. Follow Through

This may be the most challenging of my 3 recommendations for your new year. The follow-through is what tends to trip up most property managers. When you think about it, it’s really no surprise that this is so tough! We get so busy, sometimes things slip through the cracks. We forget that we told the vendor we’d make payment within a day or two of receiving his invoice. We forget we told the renter we’d check on the delivery date for that new dishwasher. And, we forget we told the owner we’d report back after conducting the move-out inspection.

After all, who among us likes to make that phone call to the owner, telling him he’s going to have to replace the carpet after only 2 years’ wear? It’s no fun. So, many of us simply avoid the unpleasant phone call, until the situation reaches a critical point. Now, the owner’s angry that you haven’t rented the vacancy after a month, and you still haven’t told him the carpet has to be replaced! Not good. Not good at all.

The Burn-Out Factor

You don't have to burn out!

In my experience, many property managers burn out and leave this profession in as little as 2 years on the job. Why? Because they haven’t embraced the 3 principles outlined in this post. Things are piling up, and it seems every phone call is bad news – someone’s unhappy with them, and they can’t begin to imagine how they’re ever going to cope.

It doesn’t have to be that way. This can be a very rewarding, even fun, profession. The key to success is in the 3 principles, outlined above. Document everything (you never know when you’ll need to refer back to it.) Be consistent in all your dealings (if you’re having a bad day, take a minute to collect your thoughts before responding to any challenges.) Follow through – do what you say you’re going to do, when you promised you’d do it. If you can’t meet your self-imposed deadline, say so! Then, revise your promise, and follow through on it. If you have a difficult phone call to make, make it first – don’t postpone it. 

Do you have other principles for success in this business that you’d like to share with our readers? Please do so, by leaving a comment. Thanks, and Happy New Year!