Hmmm. Would I ever want to be a property manager in Boerne or the Fair Oaks Ranch area? I really never thought about it, so today I attended a seminar about the subject, and learned some things that I’ll share with you.
The seminar featured a panel of three successful property managers and was question and answer.
The first question to the panel was:
What would you tell a property owner who was trying to decide whether or not they should lease their property or sell it.
-Advice from the panel included that the property owner should be counseled to have at least two months mortgage payments in reserve for future repairs. It was pointed out that many property owners do not have the cash on hand for air-conditioner replacement, hot water tank replacement, etc.
-The panel also advised property owners to keep in mind that their mortgage payment and the expected rent payment are not connected. Rent payments are market driven. Do not expect a tenant to pay your mortgage plus give you a profit. If it happens that’s wonderful but it does not always work out that way!
-One interesting tidbit that one of the experts gave was that sometimes he reminds property owners that even if a rent payment is $200 less than the mortgage payment the owner is still on track to own that property for as little as $200 a month.
Another question to the panel was:
What part of your job is not necessarily in the job description? (In other words what are some of the other things you deal with the besides just collecting rent, finding tenants etc.)
-The panel unanimously agreed that as a property manager you must remember you are married to the client. Sometimes a divorce needs to happen. Be picky in who you work for. And never take a property on in a managerial capacity that you have not personally walked before you sign the agreement.
-The panel made a point that they often screen tenants much more thoroughly than they do owners. They advise screening owners as well. One panelist recommended testing an owner by telling them they’ll need to spend $100, for example, to paint a wall. If the owner throws a fit over a $100 suggestion they may be too much of a cheapskate to take on as a client! They will be fighting with you on every repair.
-One panelist said they turn down 50% of owners that approach them to manage property on their behalf.
–Additional rolls that property managers are sometime asked to fill which are not a part of the job description include: owners asking for tax advice. Expecting property managers to be plumbing and air conditioner experts, as well as marriage and family counselors. Property managers are not tax experts. Call a CPA or attorney if you have questions like that was a common theme.
The panel was asked to give advice to folks new to property management.
-A common theme of advice was stay educated.
-Never talk to the other person’s attorney. If a tenant brings up the word “lawyer” just give them the phone number to your attorney and tell them to make that conversation happen. While often times it is just a smokescreen it was pointed out that going to court and having attorneys involved gets expensive. Make an attorney talk to an attorney.
-Additional advice to newbies was to keep tenant emergency contact information current. One of the panelist said that because a tenant had renewed for the last 10 years their emergency contact information was not current. When the tenant died in it was difficult to reach the next of kin.
-Don’t talk to anyone not on the lease.
The panel was asked an additional follow-up question on how a new agent can get and stay educated.
-The panel advises all property managers to stay current on property code. Take classes from the San Antonio Board of Realtors. Become a member in NARPM. Buy the Red Book of property codes. Download the “Landlords and Tenant Guide” free from the Texas A&M Real Estate Center.
The panel of property management experts were asked about common mistakes they seeing made by new managers and asked to share other words of wisdom.
-The experts recommend talking to your broker. Some brokers do not allow their sales agents to be property managers. They pointed out that your broker does not want to learn by accident that you have started managing property. Because of broker liability, many brokers do not even want to deal with the headaches that can come along with property management.
-One of the property management experts said he refers often to the TAR legal hotline as a resource.
-One of the experts said to stay out of trouble by making sure all verbal conversations are documented in writing by sending a confirmation email to confirm there was no misunderstanding.
-During the round table discussion of property management, one of the experts recommended sometimes admitting you are wrong even if you are not wrong. Many times in lower courts the decision goes to the tenant even if it is clearly in writing that the owner is correct. The expert told a story about how a property owner who was clearly on the right side of the legal case had to pay $2,000 of legal and court costs over a $150 carpet cleaning bill!
-Never try to evict someone around Christmas time. They say it just won’t happen!
After the session, being a property manager sounds interesting and a challenge. Do you need a property manager? If I’m not right of the job, I can help you find the right fit!