Experienced investors will be quick to point out that self-managing rental property owners should be prepared for a full-time side job.

For those landlords that prefer to defer the headache of dealing with late night maintenance calls, tenant complaints, late rent payments or unauthorized pets, hiring a property manager is the solution to capitalize on your passive rental income with minimal effort.

Working with a property manager, however, is not without its own associated cost.  And despite the benefits of using a property manager, some investors are not willing to part with the management fee collected from their rental income.

The good news is, even if you are unsure about whether you want to hire a property manager or not, you can easily enter the rental real estate market by self-managing your properties while deciding if landlording is truly the right choice for you.

Here are some important steps to get your started with self-managing your rental properties – no property manager needed.

1. Picking the Right Rent -The right price for a rental property is a balance between wanting to maximize your income from rent payments and wanting to ensure the property is continuously occupied by trustworthy tenants. The right rent amount is determined by finding out what similar properties in the neighborhood rent for, known as the fair market rent. While property managers are experts in knowing a communities fair market rent, you can discover it yourself by doing a little research about rent in your area.

   Other factors that may affect a rental property’s monthly rate include: the number of bedrooms and bathrooms; whether you include utilities, like electricity, gas, water, or internet; if you allow pets; if you provide property extras like additional storage, garage, parking, or backyard; what kind of amenities the property has; and the property’s location to schools or other community attractions.

2. Automate Your Process – One of the biggest burdens of property management is finding the time to successful complete all your tasks efficiently.  Many real estate investors self-manage their rental properties as a side project to their regular career. Property maintenance, inspections, rent collection, and application processing will take up a big chunk of a landlord’s time.  In order to supplement this time commitment, a majority of landlords have seen tremendous success with helpful tools like property management software that automates the tedious administrative tasks.  Online tools, like Rentec Direct, are designed specifically for rental management and will allow you to streamline rent collection, screen your tenants, track your income and expenses, and market property vacancies all from one convenient platform.

3. Become an Expert on Landlord-Tenant Laws –  Laws pertaining to rental housing are established to protect both parties of the landlord-tenant relationship. Knowledge of and compliance with federal, state, and local regulations is crucial for both landlords and tenants. You can be sued for not obeying laws and ignorance is not a viable defense.

   Nolo provides a great starting point when conducting your own research on state landlord-tenant laws. The U.S. Department of Housing and Urban Development (HUD) is responsible for regulations covering discrimination and other federal issues affecting your tenants. You can also check with your state real estate board or join a local professional agency for property managers or landlords who should be able to provide guidance on state regulations.

4. Screen Your Tenants Diligently – Great tenants pay their rent, maintain the property, and communicate appropriately with their landlord. The trick is to be selective with your legal tenant approval process, set the right rent amount, and provide a nice property that good tenants want to live in.

   Landlords have the legal right to approve tenants based on income, rental history, debt to income ratio, and other factors that are verified in rental applications and tenant screening reports. Tenant screening is designed to help landlords make smart and informed decisions about tenants to protect their investment property.

   Landlords find that reviewing an applicant’s credit report gives good insight on a future tenants bill-paying behavior and reveals their debt to income ratio. If an applicant has outstanding balances and collections against him, what’s to say he won’t fall behind on his rent too?

   Landlord’s looking for an solution that provides instant credit, criminal, and eviction reports should look at Rentec Direct’s tenant screening solutions.

5. Use a Legal Lease Agreement – A strong lease is a landlord’s best friend when it comes to clearly defining expectations between you and your tenants. A lease is a legal contract that outlines the conditions of renting your home that is mutually agreed upon when signed. You should have every tenant named on the contract and review the lease in person with them during the signing process.
   Because each state has slightly different laws that impact a landlord-tenant relationship, be sure to use a state-specific lease rather than a more generic lease to best protect your investment and yourself.  Additionally, make sure your lease is reviewed by an attorney familiar with landlord-tenant laws in your state before your first tenant signs it.

6. Keep Up on Property Maintenance – Property maintenance for rental properties includes seasonal & routine maintenance, emergency maintenance and regular maintenance associated with owning a home and protecting your property.  As a housing provider you are legally obligated to maintain a habitual property for your renters. This means you need to provide a safe and livable home, with items like study structural features, locking doors, a roof that keeps out water, water, heat and the absence of known toxins, like lead and asbestos.

   Besides the legal requirement of providing a safe place to live, you will find the nicer home you provide the more rent you can reasonably charge and you will increase the likelihood of your tenants maintaining the property. Landlord maintenance also extends to responding to repair calls and establishing guidelines for tenant maintenance expectations in your rental agreement.

7. Perform Regular Inspections – The best way to ensure your rental property is properly maintained and in great condition is to conduct regular inspections.  Inspections provide 2 key benefits to rental property owners:
   – You will identify any maintenance issues that need to be fixed before they become expensive problems.
   – You can make sure your tenants are following lease terms and taking care of tenant required maintenance.

If you self-manage your rental properties you should be prepared to conduct 4 types of inspections, these include routine inspections and those related to the beginning and end of a lease term.

8. Get Insured –  Insurance policies designed specifically for landlords provide added protection for financial loss and obligations associated with your rental properties. While some landlords assume they can rely on their standard homeowners insurance to cover their rental property, homeowners coverage is usually not sufficient to protect an investment property. Homeowners insurance covers owner-occupied homes while landlord insurance covers liability and damages connected to tenant-occupied homes. Also consider having your tenants take out their own renters insurance policy.

9. Get Ready For Tax Time –  Rental real estate is praised for providing more tax benefits than almost any other investment. Landlords get to deduct items such as insurance, maintenance, and utilities from income, which homeowners do not. Other deductible expenses may include interest, property taxes, and deductions for depreciation.  Make sure to keep excellent records so tax time is a breeze (or at least as painless as possible).

10. Talk To Other Investors – Joining a professional organization will expand your network and will help you connect with your community.  You will be impressed to find out there are tons of real estate investors just like you that love sharing ideas and advice with each other.  There are national professional organizations with local chapters for real estate investors as well as dozens of online communities like BiggerPockets or ActiveRain where you can interact with your fellow investors to find out what is the best options for you.

While self-managing rental properties requires a significant time commitment and is a big responsibility, it is a popular solution for several real estate investors.  Alternatively, you may decide that hiring a property manager is the best option for handling all the management duties listed above.

After you have spent some time as a landlord, you can decide if you like self-managing or if you would prefer to delegate the tasks to a property manager.  Remember every experience is different, some self-managing landlords will tell you that property managers are unnecessary until there is that one tenant that makes you lose sleep at night.

{ Comments on this entry are closed }

Six years ago we launched ManageMyProperty.com. Since then we’ve sent out +100,000 leads to thousands of management companies.

Thanks for being a part of that 🙂

After the first few years we started to notice a couple of clear patterns:

1) Unstructured Sales Process – Most of our clients’ sales process was driven by a combination of gut instinct and current availability. This is best reflected by the average time that passes before the first call attempt is made (39 hours), and the average number of calls that are attempted (1.6).

2) Very Little Tracking In Place – Most PM’s don’t track their close rate. Many freely guesstimate, but few really document this, let alone more advanced sales stats like response time, or # of follow up attempts.

3) A Few Companies Dominate – Our clients tend to fall into one of three buckets:

• Bottom of the Market (25%) – Small, mostly new, pm’s. We see the highest rate of churn here. It’s harder to create value for these folks because their service offering and sales acumen is still evolving which affects their ability to close leads.
• Middle of the Market (60%) – Established companies, most of which are familiar with lead generation. Some are more competitive than others, but overall, this is where we get industry averages from.
• Top of the Market (15%) – Highly aggressive, systems oriented and process driven. Often younger and run by management teams from outside this industry. This customer segment closes the bulk of the leads we send out. Often times they’ve met with and are signing a contract before some of their competitors have made their first follow up phone call.

We’ve written more extensively about this phenomenon.

Why am I sharing all of this? Because it doesn’t have to be this way.

Two years ago, we released an early prototype sales tool to a handful of customers. We called it LeadConnector at the time.

The results were staggering.

Clients with average sales results and no dedicated sales staff were able to cut their response time from hours to seconds and double their overall close rate.

Brokers that oversee multiple agents, and historically had no way to monitor agent sales activities, were able instantly start tracking +90% of all calls and emails AUTOMATICALLY.

Multiple leads sources were streamlined and intelligently routed to the right agents in the right order.

For most of our clients this was a game changer.

Since it’s first release, we’ve rewritten LeadSimple from the ground up twice and made hundreds of incremental improvements based on the feedback from the property managers that are using it on a daily basis.

Now this is where you come in.

If you’re passionate about improving your sales performance, we want to help you on the fast track.

Here are the two best ways to learn more about LeadSimple:

1) Get a personal tour – Sign up for a 15 minute demo here.

2) Join the live webinar this week – Details below.

WEBINAR SEPT 11:

• Date: Thursday, Sept 11 at 2pm EST / 11am PST.
• Agenda: We’ll be doing a complete tear down of lead simple and demonstrate how property managers are using it to gain a competitive advantage in their market.

See Webinar Details

Even if you can’t make it for the live webinar, you can still register to get the recording afterwards.

If you’ve read this far, thanks again for being apart of this journey.

—————————–

So where does all of this leave Manage My Property? Don’t worry, we’re not going anywhere, and business will continue as usual.

It’s just that, for now, we’re pouring most of our energy and creativity into making LeadSimple the best property management sales tool out there. We hope you’ll take a look at the only sales tool built for property managers.

{ Comments on this entry are closed }

BiggerPockets.com just released a fascinating study on the nations residential real estate investors. The report shows solid activity and outlook amongst RE investors, here are a few highlights.

The survey found that 39 percent of active investors intend to increase their purchases over the next twelve months while 26 percent plan to buy as many in the year to come as they did in the past year. The 65 percent of investors who plan to buy the same amount or more in the next twelve months than they did in the past represents 4.5 million investors. Only 30 percent said they plan to buy fewer properties than they have in the past. Last year investors purchased 1.23 million homes, a 64.5 percent increase over 749,000 in 2010, according to the National Association of Realtors.

One Out of Eight American Adults is a Residential Real Estate Investor

Some 3 percent of American adults, or 7 million people, consider themselves to be real estate investors and they will be actively buying property with the next 12 months. An additional 9 percent own investment property but have no current plans to buy more. Thus, one out of eight, or 28.1 million, Americans either consider themselves residential real estate investors or own residential investment properties today.

The number of residential real estate investors today, according to the survey, is about the same as the number of Americans who own Roth IRAs (28.5 million) ^vi or the total number of money market fund shareholders (29 million). ^vii

Check out the full report on real estate investment trends.

{ Comments on this entry are closed }

All Property Management just released a great infographic on the difference between managing your property yourself versus hiring a professional property manager.

Click here to enlarge

Created by AllPropertyManagement.com

{ Comments on this entry are closed }

Our recent rental listing site report underscored the fact that Craigslist commands a strong presence in the search engines when potential tenants search for rental property. This, in addition to Craigslist’s large and loyal userbase, has arguably made it the most widely used “rental” site on the web.

Dave Dugdale, founder of Rentvine.com, recently posted a great interview with David Borden discussing the challenges and opportunities presented by Craigslist to the rental listing industry. (Click through to see the video.)

I see three important takeaways from this for owners of rental sites:

1. User experience is key, and it really shouldn’t be difficult for a specialized site to do a better job. However, remember that Craigslist has two native advantages: tons of content, which users want to see, and a very simple, completely familiar interface that everyone already knows how to use. So, user experience should not be confused with simply having more features, your site also needs to be really intuitive.
2. Rental scams still abound on Craigslist, and if a rental site does a better job of shutting down this activity, it could be an important selling point for users.
3. Because Craigslist does not allow companies to competitively differentiate their listings, the shelf-life of a rental listing is very low. There is money to be made in allowing companies to compete.

{ Comments on this entry are closed }

My last post compared the top rental sites in the U.S. based on their rankings in Google for competitive terms. But it left me with some questions. For example, does Rentals.com challenge Apartments.com for keywords like “apartments for rent”? So as a followup, I wanted to share some competitive keyword data that didn’t make it into the original post.

Some quick observations before getting into the data:

• It is incredibly hard to dominate multiple categories, so sites are picking their battles carefully (see Apartments.com vs. Rentals.com).
• Craigslist ranks perennially well in most categories – property managers take note.
• Vacation rentals is a different ball game; the top 10 sites don’t perform well in this category.

Thanks to Google’s visualization API, I was able to put together the following interactive chart to allow you to mix and match the data for yourself. Here are some quick pointers:

• Remember that #1 is the best rank, so in this case lower is better.
• Select any combination of values, and the chart will change. Cool, huh?
• Hold your mouse over elements of the chart to get more details.

Note: if you are a stakeholder in any of these companies and would like more data, contact me (360-718-9934). As always, suggestions and critiques are welcome.

{ Comments on this entry are closed }

Search engine optimization is one of the things we’re passionate about, and periodically we like to do a deep dive and get a handle on what is happening in related industries. Recently we ran across Andrew Shotlands’s post “IYP SEO Rankings Report 2009” ranking the different internet yellow pages sites by their share of competitive search engine rankings, and decided to apply a similar methodology to see how the different rental sites stacked up against each other.

Since many of you property managers use these sites to publish your rental listings, we thought you’d be interested in seeing which of these sites perform the best for the most important rental keywords in the search engines.

In brief, here is the methodology we followed:

• Identified the top 20 rental keywords using Google Suggest and the Adwords Keyword tool (see below)
• Performed Google searches for these keywords in the top 20 U.S. cities, with personalization turned off (for a total of 400 geotargeted queries).
• Each time a site appeared in the serps, we awarded it 1 point for each position, starting at the bottom. (On a page with 10 results, the first result got 10 points, the second 9 points, etc.)
• Weighted each search by the U.S. monthly search volume for that keyword reported by Google.
• Summed up the points for each domain to determine its final score.

So, in theory, this data should tell us which rental sites dominate the search engine rankings for the most important and competitive rental keywords.

And here are the results:

Top 25 Rental Sites by Search Engine Market Share

Regional Rankings – Top 10 Rental Sites by City

Those were the nationwide rankings, but we noticed quite a bit of diversity in the rankings for each city. For example, regional websites like AllAustin.com frequently claimed top spots, even though they didn’t make the nationwide list. Property managers and investors operating in these markets might be interested in the following regional rankings:

Anticipated questions

• Why did you only use Google rankings? We realized that results would vary by search engine, but collecting data for multiple search engines would have been tricky, and given that Google still commands 65.5% of the market, they were the logical first pick.
• Why only the top 20 keywords? From a data collection standpoint, this was the only approach that made sense. There are simply too many “long tail” keywords, and we weren’t confident that we could develop a representative sample set. So we decided to focus on performance for the highest traffic “head” terms.
• What about site traffic? It is hard to make an apples-to-apples comparison based on traffic numbers. Some sites get a lot of traffic from non-organic sources, and some cover a wide range of topics, like Craigslist.org, so Compete.com numbers aren’t very helpful when trying to determine search engine dominance.
• Were the searches conducted from an IP address located in the searched city? Nope, that would have been helpful but our branch offices in these 20 cities were all tied up while we performing the research ;-), so to quote Andrew Shotland on this point “c’est la seach”.

If you have any other specific questions about our methodology or the data we collected, let us know in the comments or via email.

Footnotes

Here are the keywords we used, with search volume data from Google Adwords:

So, that’s it. Thoughts?

Update: There’s more! See our followup post.

{ Comments on this entry are closed }