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Investor Benefits Package™️ IBP™️: How Does It Help Owners?

An Investor Benefits Package™️ (IBP) in property management is a suite of products, services, and benefits offered by property management companies to property investors. Just like a resident benefits package is a way to drive value for residents, investors, and property managers, the IBP™️ is an innovative approach to property management that focuses on driving value for an investor's assets and turning that value into profit for the property management company. In this article, we’ll dig into the different features that an Investor Benefits Package™️ can include, and how those benefit not just investors, but property managers and residents, too. What Is an Investor Benefits Package™️ (IBP)? As stated above, an Investor Benefits Package™️ (IBP™️) is a comprehensive suite of services that offer property investors higher quality property management, stability, and profit. It's referred to by some as an Owner Benefit Package, but we'll get into that in a moment. An IBP™️ typically includes concierge-level services beyond basic property management – such as property insurance policies, eviction guarantees, rent guarantees, maintenance plans, asset performance reports, etc. These services are aimed at maximizing the investor’s assets, stability and convenience, profitability, and peace of mind in managing their properties. They're commonly managed through an investor experience platform to securely manage and monitor the performance of these assets online, which we'll discuss later. The first step to outlining an IBP™️ is to define what your basic management fee means and covers. If the answer is, that it’s collecting rent, handling maintenance, and general communication – does that include maintenance coordination or is that a separate fee? Does it include asset reporting or is that an additional service? In your management agreement, define what the management fee is, what it covers, and how much it is. An IBP™️ can be an effective tool for articulating the new and differentiated things that an investor wouldn’t be able to do on their own and that you are offering beyond basic property management. Articulate your unique and differentiated services (IBP™️) and use that as a tool for positioning and charging for what it’s worth. Why Call it An "Investor Benefits Package™️"? Here at Second Nature, we like to refer to “tenants” as “residents” and “landlords” or “owners” as “investors.” This humanizes the relationship between the resident and investor and is important in what we’re trying to accomplish: a "Triple Win" for all involved. That's why we're referring to an "Investor Benefits Package" rather than an "Owner Benefits Package." Winning as an investor is so much about attracting and screening for people who are most likely to be the best residents and delivering a professional resident experience that they will pay for and stay for. An Investor Benefits Package™ is instrumental to getting to that Triple Win, and we'll turn to that now. What’s Included in An Investor Benefits Package™️? An Investor Benefits Package™️ should include a range of solutions to help deliver consistency, insight, and asset protection to a property owner’s portfolio. After all, professional property managers don’t have to be functional managers of a home – they can be strategic partners in the management of financial assets. Again, you might hear services similar to the IBP™️ called an “owner benefit package,” but at Second Nature, we believe that the “investor” term is useful in encouraging a longer-term mindset, and emphasizes the economic value professional property management can bring. Contrast this with the notion of an owner-benefit package, which doesn't share the same mindset. According to Eric Wetherington, VP of Strategic Initiatives at PURE Property Management: “As property managers, we need to think more like asset managers. This client made an investment, and we should be guiding that client through managing that investment, not just collecting rent.” To build and manage a winning IBP™️, property managers need an Investor Experience Platform that unlocks scalable product and service customization, digitized onboarding, accounting policy automation, and more. In addition, Investor Experience Platforms provide transparency and convenience for your investors. Here are some of the most valuable services that property managers can offer through an innovative Investor Benefits Package™️. Property insurance program Similar to offering a renters insurance program through an RBP in the lease agreement, property management companies can offer an insurance plan to investors to cut costs and ensure the safety of their assets. Most management agreements will include the requirement that the investor carries insurance on the property and that the property manager is additionally insured. But what if you as the property manager could help manage that for the investor – at scale? Property Insurance for investors should have dynamic pricing based on individual investors’s property portfolio and needs. The benefit beyond flexibility is the savings they’ll see on their premiums while also getting insurance that’s tailored to the needs of their specific property class. At Second Nature, we work primarily with single-family rental properties and small multi-family residences. Property Insurance Programs can bring scale that will drive economic value for the investor over what they could get retail on their own. They’d still have the option to go get their own insurance that meets requirements, but they can pay you a small fee to manage it for them. Rent guarantee An IBP™️ can include a number of financial guarantees to protect property investors and drive ancillary revenue for PMCs. A rent guarantee, or rent protection, ensures a consistent rental income to investors by protecting them against resident defaults or non-payment of rent. If a resident fails to pay rent, the property management company covers the unpaid amount and takes necessary steps for eviction or collection, providing financial security and minimizing the risk for property owners. Rent guarantees work for professional property management companies that have enough properties to balance the loss of rent if a resident doesn’t pay. The risk is low and the additional profit from fees for this guarantee can have a very high ROI while driving satisfaction and stability for the investor. Plus, if you’re using services in an RBP to help incentivize on-time rent payments, you’ll rarely find yourself out in the cold. Eviction protection guarantee An eviction protection guarantee also goes beyond the normal scope of property management services and can be used as a secondary source of revenue. Eviction Protection is a service provided by property management companies to property investors that offers additional security and financial protection in the event of an eviction. Under this guarantee, the property management company assumes the costs associated with the eviction process, including legal fees and court expenses. It helps alleviate the financial burden on property investors and provides peace of mind by ensuring that they are safeguarded against potential losses resulting from resident evictions. The eviction guarantee helps protect property owners from the complexities and potential costs associated with evictions, ensuring a smooth and efficient resolution to tenant-related issues. Pet guarantees & other guarantees A pet guarantee is a service offered by property management companies to property investors that aims to address any potential issues related to allowing pets in rental properties. It typically involves implementing policies and procedures to ensure responsible pet ownership, such as thorough pet screening, pet agreements, and collecting additional pet deposits or fees. The pet guarantee may also include services like pet damage insurance or assistance with pet-related issues during the lease term. It provides property investors with a framework to accommodate residents with pets while minimizing risks and maintaining the condition of the property. For many residents, finding a pet-friendly apartment increases retention and profitability. They’re willing to stay longer and pay more for a pet-friendly place. And–get this–pet damage is less likely to happen than damage from kids! It’s not a huge risk to the asset, but can provide a big benefit in terms of satisfied, longer-term residents. Maintenance plan Home warranties are a four-letter word for property managers. They’re a massive headache to deal with, and yet there’s high demand for them among property investors. Because of that, most property managers charge a fee for home warranties, for each they have to file. Imagine if there was a world where home warranties weren’t needed. Here’s the thing: Professional property managers already have the vendor network and the know-how to coordinate maintenance jobs. What they don’t usually have is a product that’s priced to give the investor the experience they want. Let’s say right now an investor is paying $50 a month for a cheap home warranty. The warranty only covers 40% of issues and it creates all these extra people and friction in the middle. For anything moderately significant that goes wrong with a property, PMCs generally must contact the investor for permission to get work done. It’s all a massive hassle and loses time in maintenance requests that leave residents frustrated. What if there was a product that costs, say, $150 to $200 a month but it actually covered everything? Instead of having sudden expenses and emergencies, this maintenance plan smooths out the experience and makes it more predictable for the investor. For PMs, it means taking the initiative on fixes without waiting for approval. Imagine a world where you didn’t have to get owner approvals for 95% of maintenance issues – because they’re already budgeted for and already paid for. For residents, it means better maintenance, and faster. Another Triple Win! Asset performance reports Another piece focuses on property managers as asset managers. Think about any investment app, like Robinhood, Acorns, etc. You can log in to these apps any time, 24/7, and see how your stock and investments are performing. In most investment classes, you can see in real time how your assets are performing. Why shouldn’t property investors have that as well? An IBP™️ can include exactly that: a dashboard or online portal that shows investors regular reports on how their property is doing. They could get updates on the value of their home over time, the home price appreciation, rent price over time, and project rent growth, typically maintenance costs and how they’re doing against that, and more. Resident Benefits Package Another piece to include in your IBP™️ is to highlight the benefits of your resident benefits package to your investors. Explain how features like a filter delivery program protect their assets and reduce HVAC repair costs. Show how a renters insurance program can ensure coverage and protection. Give numbers on how credit reporting incentivizes on-time rental payments and helps ensure financially stable renters. Explain how a movie-in concierge saves both time, headache, and money. Each of the pillars of an RBP is critical to encouraging better resident behavior, increasing renter retention and lease renewal rates, reducing vacancies, and more – all primary goals for a property investor. A note about Rent Advance Programs There’s been due buzz about “Rent Advance” offerings, though many advise caution when approaching this financial product. It works in some ways like cash advance programs, which can satisfy urgent needs, but not be more valuable for anyone long term. The way it works is PMs offer to send a year of rent upfront to the investor in a big chunk, and collect monthly from the resident. The investor typically pays a 5-10% premium on the advance, which can be their entire expected return. So the question becomes, where do they put that cash to get a better return instead? Another thing to think about is who would actually use this product. Investors who don’t have enough cash on hand? How does that benefit anyone in the long run? What happens when there’s a big maintenance bill later? Does this encourage better decisions and practices by the investor? To date, there’s been pretty low adoption of this program, which is another sign it may not be hugely beneficial to everyone involved. But plenty of innovations start that way, evolve, and find traction. One case where it might be a value generator is if an investor is looking to take a cash advance and put it toward a down payment for another house. That would benefit the property manager as well, promising more business, and the PM could offer a lower rate for getting more properties to make the financing more attractive than hard money loans or other alternatives. The jury is still out here, it’s an interesting one to track. How Can Investors and Property Managers Benefit From an Investor Benefits Package™️? Investors and property managers can benefit from an Investor Benefits Package™️ in several ways. They’re also great for residents in the sense they build more stability and quality into the renting process. Here are just some of the benefits of an IBP™️. Enhanced investor attraction An Investor Benefits Package™️ provides incentives and advantages that can attract more investors. Financial guarantees and protections against the risks associated with evictions or late payments can increase stability, while services like a maintenance plan can ensure premium care of their property assets without increasing their workload. By offering attractive perks, property managers can differentiate their offerings and generate greater investor interest. Increased investor retention Both IBP™️s and RBPs help build loyalty with residents and investors. By fostering a strong relationship and demonstrating ongoing value, property managers can build trust and loyalty among investors, and retain them over the long term. IBP™️s help establish the stability, transparency, and asset growth for a real estate investment that an investor hopes to achieve. Improved property performance An Investor Benefits Package™️ can also contribute to improved property performance. For example, by offering discounted property management fees or access to professional services at reduced rates, property managers can help investors optimize their returns and reduce costs. Additionally, incentives such as rent guarantees or eviction protection can mitigate risk for investors and attract more capital to the property. Streamlined communication and transparency A well-designed Investor Benefits Package™️ facilitates effective communication and promotes transparency between property managers and investors. This can involve regular reporting on financial performance, property updates, and the sharing of relevant market insights. Transparent and consistent communication builds trust and confidence among investors, fostering a positive and long-lasting relationship. Competitive advantage A comprehensive Investor Benefits Package™️ can give property managers a competitive edge in the market. When investors have access to exclusive benefits and advantages, they are more likely to choose a property managed by a company that offers a compelling package – and to recommend it to others. Say hello to increased investment inflow and a stronger market position for your PMC. Should You Make an Investor Benefits Package Mandatory? The first thing most property managers ask us when we’re talking about an RBP or an IBP™️ is: Should I make this mandatory for all investors or do I make it a flexible opt-in/opt-out program? Unlike RBPs, where best practices are more proven and established, different PMs are taking different approaches with their IBP™️s. Some have a mandatory level of service set at a flat price. Others may say they’re fine offering a base level of service without these differentiated products, giving investors the choice to simply pay a baseline management fee and opt out of the IBP™️ premium service. Some may offer a baseline to all investors and then give them the chance to opt in for premium IBP™️ services. There are a lot of ways to do it. With the RBP, we’ve found that making it mandatory does not generate nearly as much pushback as people expect – and can be a strong value add overall. About an Investor Benefits Package™️ by Second Nature The Investor Benefits Package™️ is an innovative way to generate ancillary income and create more value for investors and residents. Similar to Second Nature’s premier Resident Benefits Package, the IBP™️ can deliver high-quality service for investor experience – and help create a triple win for investors, residents, and property management companies. The IBP™️ reinforces the value of a professional property management company for investors and helps differentiate you from the crowd. Stay tuned to learn more about the latest in the IBP™️ space, or learn more about how a resident benefits package can launch a whole new level of value for your PMC.

November 22, 2024

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The Property Maintenance Services List for Property Managers

There are a couple of reasons why property maintenance is so crucial in managing rental properties. First, no matter the size of the property, keeping up with both its interior and exterior aspects ensures a safe, attractive, and functional environment for residents. Secondly, it protects the value of the property, which is vital for investors. In today’s post, we’ll take a closer look at the ins and outs of these important services. We’ll discuss: What property maintenance services entail The benefits of staying on top of these tasks Services that are commonly provided to residents How planning for both routine and emergency maintenance is crucial Related: Property Maintenance Guide for Property Managers What Are Property Maintenance Services? Property maintenance involves the regular care, repair, and upkeep of a property to ensure that it remains in good working order. It includes building maintenance, as well as maintenance for the exterior portion of the property, such as lawns and driveways. Maintenance tasks can range from routine inspections and resident requests to emergency repairs. All told, a well-managed maintenance program helps avoid unexpected breakdowns and ensures that all aspects of the property meet safety standards. For interior maintenance, this can include heating, ventilation, and air conditioning (HVAC) services, plumbing upkeep, and electrical system checks. On the exterior, it includes tasks like landscaping, pest control, and seasonal repairs. Beyond ensuring that residents are satisfied with their living environment, the main goal of property maintenance is to maintain the real estate value, keeping it visually appealing, and making sure it operates efficiently. Regular inspections can help identify issues before they become larger problems, reducing the likelihood of costly repairs in the future. Maintenance services also play a key role in resident retention, as residents are more likely to stay in properties that are well-cared for and meet their expectations. Benefits of property maintenance services As alluded to above, there are several advantages to keeping up with property maintenance for all parties involved—property managers, property owners, and residents. Here are some key benefits: Improved property value: Consistent maintenance keeps the property in excellent condition, which can help preserve or even increase its market value over time. This benefits property managers as well as investors looking to protect their investments against wear and tear. Cost prevention: Proactive maintenance helps prevent major breakdowns or expensive repairs down the line. By addressing issues early, property managers can avoid having to deal with larger, costlier problems in the future. For instance, fixing a minor leak can prevent water damage that might require significant structural repairs later. Resident retention: Residents are more likely to renew their lease if they live in a well-maintained property. A safe, clean, and functional environment leads to a positive resident experience, which in turn can reduce turnover and vacancy rates. Keeping residents satisfied means they’re less likely to move, saving property managers time and money in finding new occupants. Longevity of equipment: Regular maintenance of systems such as HVAC, plumbing, and electrical units ensures they last longer, reducing the frequency of replacements and major repairs. This not only saves money but also minimizes potential disruption to residents down the line. Most Common Property Maintenance Services Below are some of the most common types of maintenance services property managers handle: Interior Services HVAC maintenance: This includes regular inspections, filter replacements, and cleaning of heating and cooling systems to ensure they’re in good condition and function efficiently. Maintaining these systems prevents breakdowns and helps reduce energy costs as well as maintenance costs. (Learn more: What is HVAC?) Plumbing: From fixing leaks to maintaining water heaters, plumbing issues are common in rental properties all year long. Regular maintenance of pipes, drains, and fixtures can prevent more serious problems later on. Electrical systems: Inspecting wiring, outlets, and appliances helps avoid fire hazards and makes sure that all systems operate safely. Air filter services: Delivering and replacing air filters (a service offered by Second Nature through our resident benefits program) regularly improves indoor air quality, which benefits residents and the property itself. General repairs: Maintaining doors, windows, roofs, and flooring keeps the property functional and appealing. Regular upkeep of these elements reduces the potential for expensive maintenance issues later on. Exterior Services Landscaping and lawn care: Maintaining the appearance of the property’s grounds is essential for curb appeal. Regular lawn care, tree trimming, and other landscaping tasks are necessary for both safety and appearance. Pest control: Preventing infestations is key to maintaining resident satisfaction and protecting the property from damage caused by insects or rodents. Pest control is a service offered by Second Nature as part of our resident benefits package. (Learn more: Why Pest Control Is Important) Safety inspections: Routine checks of smoke detectors, fire alarms, and carbon monoxide detectors ensure the property complies with safety regulations and provides a secure environment for residents. Related: Preventive Maintenance Checklist for Property Management Learn more about rental inspections Seasonal checklist for maintenance Property managers should also consider the timing of certain maintenance tasks. Some jobs need to be handled throughout the year, while others are more seasonal. Here’s a quick property maintenance checklist covering how to plan for routine and seasonal maintenance: Year-round maintenance: Regularly check HVAC systems, faucets and plumbing, electrical setups, and safety features like smoke alarms and fire extinguishers to prevent the need for emergency repairs and maintain property safety. Winter: Test heating systems and check fire safety equipment. Spring: Focus on landscaping and checking the property for mold or water damage that may have occurred over the winter. Summer: Lawn care and landscaping tasks such as mowing are essential. It’s also a good time to service HVAC units for cooling needs. Fall: Inspect downspouts, clean gutters, and ensure the heating system is ready for the colder months ahead. Fall is also a good time to assess winter readiness by checking for roofing issues such as loose or missing shingles. Emergency planning Having a solid emergency maintenance plan is essential for any property manager, as emergencies such as a burst pipe, electrical issues, or fires can happen unexpectedly. A well-prepared plan should include evacuation routes, emergency contact information, and a clear process for residents to report urgent repairs. Having this in place minimizes damage and ensures resident safety. Property maintenance services software Technology plays an important role in making property maintenance more efficient. Many property managers use property management software to streamline maintenance requests, track repairs, and manage ongoing tasks. These tools help managers keep up with routine maintenance while ensuring residents can easily report issues and track their resolution. Learn more: 10 Best Property Maintenance Software Final Thoughts The bottom line is that a well-maintained residential property not only keeps residents happy but also protects the long-term value of the investment. By staying on top of routine inspections, preventive maintenance, and emergency planning, property managers can avoid costly repairs and create a positive living environment for residents. For more detailed checklists and resources, explore tools like Second Nature’s rental inspection checklist. Learn more about the benefits of resident benefits packages.

November 4, 2024

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What Is a Rent Rewards Program?

Rent rewards programs are designed to make renting more rewarding for residents by offering incentives for behaviors that benefit both the resident and the property manager. These programs often help residents improve their financial standing while encouraging responsible residency. In this blog, we’ll look at: What these programs include Benefits they bring to property managers, investors, and residents How rent rewards programs work An Overview of Rental Rewards Programs A rent rewards program is a loyalty program that encourages and recognizes positive resident behavior, from paying rent on time to renewing a lease. In providing a structured system of rewards, these programs aim to improve resident satisfaction and encourage long-term residency. Many property managers offer a range of incentives for various behaviors, which we'll explore next. What rent rewards programs typically include Most rent rewards programs are designed to offer residents something in return for making timely rent payments or taking other actions that benefit the property. Here are some examples of behaviors that are commonly incentivized in these programs: On-time rent payments: Residents might receive a credit boost for consistently paying monthly rent on time, which helps them build credit over time. Lease renewals: Property managers often reward residents who choose to renew their lease instead of moving out, reducing vacancy rates. Autopay enrollment: Residents may earn rewards for setting up automatic rent payments, reducing the chances of missed payments. Positive reviews: Leaving favorable reviews on social media or review sites can also be rewarded. Prompt maintenance reporting: Residents who report maintenance issues quickly may receive incentives for their proactive actions. Rewards vary by each property manager, but they typically include gift cards, credits toward rent, points that can be redeemed for various perks such as travel rewards, or discounts on local services such as gym memberships and fitness classes. Some residents might even receive cash back or percentage discounts on their rent for maintaining good payment habits. How a Rent Rewards Program Benefits Everyone Property managers For property managers, rent rewards programs reduce delinquencies and encourage residents to take better care of their homes. These programs also help properties to stand out in a competitive market, offering an extra reason for residents to stay for the long term. Managers can also incentivize and track behaviors they want to reward, adding a layer of customization to the program. Investors Happy residents are more likely to stay in a rental property, which boosts retention rates and reduces turnover costs. Real estate investors benefit from consistent occupancy and reliable rental income. Residents For residents, rewards create extra motivation to pay rent on time and engage with their property manager in a positive way. Beyond the financial benefits, these programs offer peace of mind by helping residents improve their credit scores and manage their rental experience more smoothly. Note that residents can continue to pay using the method preferred by the property manager, including credit card, debit card, or direct bank account deposit. Resident Rewards Through Piñata Second Nature partners with Piñata to offer its rent rewards and credit-building services. Piñata provides an app (accessible via mobile as well as desktop) that allows residents to track and redeem their rewards easily. This partnership gives renters access to additional perks, such as exclusive deals and credit improvement opportunities, making it a win-win for both residents and property managers. How rent rewards work When a property manager signs up for a Resident Benefits Package with Second Nature, a rent rewards program is included in the price. They can simply tailor the program to fit their needs. Managers choose which behaviors they want to incentivize, such as paying rent on time or renewing a lease. As indicated above, with Piñata, these programs are accessible through both a web browser and a mobile app, making it easy for residents to track their rewards. Residents benefit right away, with some programs offering a welcome gift at lease signing. Over time, residents accumulate reward points they can redeem for rewards in Second Nature’s exclusive perks marketplace, with built-in savings. They also position themselves with better credit scores, meaning better deals on credit cards and leases, as well as better rates on loans, including an eventual home mortgage. From the property manager’s side, the rewards – and the resulting positive resident behaviors – are part of the resident benefits package, so there are no extra costs involved. Final Thoughts Rent rewards programs bring value to both property managers and residents. By incentivizing positive behaviors, property managers can reduce delinquency, increase resident retention, and help ensure a better rental experience overall, as well as a more rewarding rent day! For more information on how rent rewards programs can work for your property, check out Second Nature’s Resident Rewards Program. Additionally, you learn more about the many benefits of a resident benefits package here.

November 4, 2024

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How to Value, Buy, or Sell a Property Management Company

Putting a precise figure on the value of a property management company can be challenging, given the changeable nature of the market. That’s why understanding what goes into the value calculation is crucial for both investors and business owners. Today, we’ll be discussing how property management company value is calculated, with an assist from Jock McNeill, VP of Acquisitions at PURE Property Management. Jock has completed over 70 property management acquisitions and has tons of insight into valuation models for property management companies. How to Value a Property Management Company: Contributing Factors Several factors help determine the value of a property management company, including revenue, profit margins, average rents, portfolio diversity, growth potential, and more. You can think of these as success metrics in determining “What is my company valuation?” Here are the most important factors to consider. 1. Profitability Before valuing a property management company, you need to determine profitability. Evaluate financial metrics like gross revenue, profit margins, cash flow or EBITDA, and debt-to-income ratios. McNeill explains how they evaluate this at PURE: “We evaluate pro forma financial statements and arrive at a percent profitability based on adjustments we can make by removing ‘seller benefits’ such as vehicle leases, personal expenses, etc.” Two of the biggest red flags in terms of a property management company's valuation, says McNeill, are “low revenue per door managed and low-profit margins. [These] can keep a business on the lower end of the valuation scale. These are often driven by low average rents and high labor costs.” 2. Consistency Consistency is key in valuing a property management company. A company with "lumpy" financial growth is risky. Steady growth in profitability, on the other hand, shows reliability and may provide a reliable basis for projecting potential returns on investment. The same goes for employee turnover: a revolving door of staff suggests instability. Similarly, consistent and well-organized records make a company more attractive to buyers (it facilitates due diligence processes and generally reduces the headache of taking over operations). In sum, consistency across finances, personnel, and records paints a picture of a well-run, predictable business, and that translates into higher value. 3. Portfolio churn Portfolio churn tells a story about the company's ability to keep clients happy, which directly affects its future revenue stream and overall value. High churn (i.e., with rental properties frequently leaving the portfolio) suggests difficulty retaining clients. This could be due to poor service, pricing issues, or a weak rental market. Low churn, with properties staying on board for extended periods, is an indicator of strong client relationships and high satisfaction – which reduces uncertainty for potential buyers. 4. Overhead costs Overhead costs refer to indirect expenses required to keep the business running smoothly, but that are not directly related to managing specific properties. Examples include rent and salaries (excluding those assigned to specific properties), office supplies, marketing, and software subscriptions. Expressed as a percentage of revenue, these overhead costs play an important role in a company's valuation. A lower overhead percentage of total revenue indicates a more efficient company that can generate profit without excessive spending. In turn, this can translate to higher potential returns for investors. 5. Debt-to-income ratio Debt-to-income ratio (DTI) is a key metric of a property management company's value. It shows the balance between a company's debt (loans and outstanding payments) and its ability to generate income (revenue). Lower DTI is better, as this indicates the company relies less on debt to operate. This suggests financial stability and a lower risk of defaulting on loans. A higher DTI, on the other hand, raises concerns about a company's ability to manage its debt burden. This can make it vulnerable to factors such as economic downturns, and cause investor hesitancy. 6. Customer concentration Customer concentration, or how reliant a property management business is on a single large client, can significantly impact its valuation. If a large portion of the portfolio belongs to a single owner, the company's income virtually depends on keeping that client happy – and if the owner decides to switch property managers, this could represent a severe financial blow. Property management companies with diversified portfolios are essentially spreading this risk thin, which is a plus for potential investors. 7. Transferability Business transferability, or the ease with which a property management company can be sold to a new owner, is a crucial factor in its valuation. A company that has well-documented processes, a strong team, and a healthy client base is easier to transfer to new ownership than a company lacking clear documentation, or that relies heavily on a single key employee. 8. Specialization Companies specializing in a specific type of property (e.g., single-family homes) develop deep expertise in that market. This expertise translates to better service for clients with that portfolio profile, potentially leading to higher client retention and satisfaction. Loyal clients are a valuable asset and boost a company's worth. 9. Contract terms The contract terms of properties under management are another important consideration. Management contracts with longer terms and automatic renewals create a more predictable stream of recurring revenue for the company over a period of time. Property management fees are another important consideration. Stability is attractive to investors, as it makes future income streams steadier and more predictable. Conversely, short-term contracts with frequent renegotiations introduce uncertainty about future rental income, potentially lowering valuation. 10. Future Growth Potential And, of course, signs of growth potential are critical to a property management company's valuation. Many buyers are thinking about company value related to size. According to McNeill, “Growth potential can influence how we approach a deal. If we can grow organically and quickly in a market, that can be very attractive. What a seller may perceive to be a problem in their business can be the acquirer’s opportunity. Maybe the issue is as simple as better systems, we can help with that.” Growth potential can be in the form of the real estate market in the area, but also opportunities to grow the business with existing residential properties. It’s also key to see a demonstrated network within those key markets. Property management is still largely driven by personal contacts and business relationships. Having strong contacts and connections in key markets is an important sign of growth potential. How to Calculate the Value of a Property Management Company: Valuation Multiples Valuation multiples are a key tool for determining the fair market value of a property management firm because they leverage comparable market data to establish a standard for pricing. We’ll cover the basics and provide some examples. Property Management Company valuation multiples to consider Property management company valuation multiples compare key financial metrics such as earnings or revenue, to the market value of similar companies that have recently been sold. When using valuation multiples, the caveat is that it's important to compare companies that are truly similar in terms of size, clientele, and service offerings. Three common types used for property management companies are SDE (seller’s discretionary earnings) multiples, EBITDA (earnings before interest, taxes, depreciation, and amortization) multiples, and revenue multiples. SDE multiples for a property management company The SDE (Seller's Discretionary Earnings) multiple focuses on the cash flow available to the business owner after accounting for all business expenses and taxes (excluding owner salaries and perks). The SDE times its multiple is one way of representing the value of a business. A higher SDE indicates a more profitable company, and the SDE multiple applied will reflect that. In the property management industry, a company with a strong track record of SDE might command a higher SDE multiple (say, 2.5-3 times SDE) compared to a less profitable company (say, 1.5-2 times SDE). An established company with steady profitability might be valued at 2.5 times its SDE. If its SDE is calculated at $1 million, this would result in an SDE x 2.5 = $2.5 million business valuation. EBITDA multiples for a property management company The EBITDA multiple is similar to the SDE multiple but excludes non-cash expenses like depreciation and amortization, and also ignores owner compensation. A growth-oriented company might be valued at 6 times its EBITDA. If its EBITDA is calculated at $700,000, this would result in an EBITDA x 6 = $4.2 million valuation. Revenue multiples for a property management company Revenue multiples simply take a company's total revenue and multiply it by a factor to arrive at a valuation. For example, a rapidly growing company with a revenue of $2 million might be valued at 2 times its annual revenue, resulting in a $4 million valuation. What multiple should you consider when valuing a property management company? No one multiple tells the full story. It is, after all, just an indicator, and cannot predict the future. That said, revenue multiples are a less common metric for property management companies compared to SDE or EBITDA multiples, given that revenue alone doesn't reflect profitability. Indeed, this multiple is often used in conjunction with other multiples for a more accurate picture. Valuators of property management companies are more likely to use EBITDA multiples alongside SDE multiples to get a more comprehensive view. Factors That Affect the Value of a Property Management Company A property management company's value is typically influenced by a variety of factors reflecting its operational structure, market position, and potential for future growth. These elements can provide insight into the overall stability and attractiveness of the business. Below is an overview of some key factors that can significantly impact a company's valuation. Owner involvement The role the owner plays in the day-to-day operations is crucial. A business that's heavily reliant on its owner may be less appealing to potential buyers because of the challenges involved in transitioning leadership. If the owner is deeply involved in tasks like managing client relationships or handling property issues, the company may struggle to maintain operations after a sale. Conversely, businesses where the owner plays a more passive role and has a solid management team in place are easier to transfer, which makes them more attractive and valuable. Number of units The number of units under management is one of the most straightforward indicators of a property management company's scale. Larger portfolios generally signal greater revenue potential. However, it’s not just about numbers; the quality of management across these units also matters. Naturally, a company that's managing a significant number of units efficiently, with minimal client turnover and satisfied property owners, is seen as more valuable than one managing the same number with operational inefficiencies. Types and quality of properties The types of properties under management can directly impact revenue and client retention. For example, a company managing high-end, well-maintained properties will typically have more stable clients and higher margins. On the other hand, a focus on lower-quality properties, especially those in difficult-to-manage areas, can reduce profitability due to increased maintenance demands and tenant turnover. Diversifying the types of properties under management can also reduce risk, contributing positively to valuation. Contracts The structure and length of management contracts are another clear indicator of future revenue stability. Companies with long-term contracts in place, especially those with automatic renewal clauses, can offer a more predictable and consistent revenue stream. This makes the business more appealing to buyers who value income security. Short-term contracts or those frequently renegotiated, on the other hand, introduce uncertainty, which can detract from the overall value. Expansion opportunities Any company’s potential for future growth is always a key consideration for buyers. A business located in a growing real estate market, or one with untapped opportunities to expand its portfolio, can be significantly more attractive. Expansion can come in the form of geographic growth into new markets or by adding additional services to existing clients, such as maintenance or leasing services. The ability to grow without significant capital investment inevitably increases the company's appeal and overall value. Location The location of the company can affect its valuation in different ways. Businesses in high-demand real estate markets or rapidly growing areas often see higher valuations, as market conditions are favorable for both current operations and future growth. On the other hand, property management companies in regions with stagnant or declining real estate markets may face a tougher path to maintaining value or increasing it. Business tenure The length of time a company has been in operation is often an indicator of its stability and credibility in the market. A property management company with a long track record is usually viewed as more reliable, especially if it has built a strong reputation for service and client satisfaction. Newer companies may struggle to command the same valuation, as they lack the historical data that provides insight into their ability to weather market fluctuations. Increasing the value of a property management company before the sale For owners of a PMC looking to sell, your first goal is obviously to increase the value of your business as much as possible before the sale, in order to increase the eventual purchase price. Keep in mind, though, that increasing your company value doesn’t need to become a barrier to selling. In fact, McNeill warns not to be too perfectionistic on that front. “One of the biggest misconceptions is that valuation is only based on revenue, and you have to have your business in perfect condition to sell,” McNeill says. “There are many factors that influence valuation, but for PURE, revenue and profit margins are most important. We’ve also seen a lot of potential sellers stall in early discussions because they want to wait to get their shop in order, implement new initiatives, or clean up their books. It isn’t always necessary, and trust me, we’ve seen it all.” Here are some industry tips for increasing your PMC’s value to buyers or property owner investors. Invest in your business infrastructure By this, we mean that you should invest in technology and people. Reinvesting in your business will make it healthier and more valuable to potential investors. On the tech side, you could adopt new property management software, update your current tech infrastructure, or integrate the newest AI-enabled tools. On the people side, you don’t necessarily need to hire more employees. Rather, ensure that the people on your team are as equipped as possible. Invest in excellent recruiting and onboarding processes, ensure you have robust training programs, etc. Integrate ancillary services We’ve talked a lot on our blog about how to develop ancillary programs to drive income. Ancillary fees aren’t just a cash grab – they’re a way to add needed value for residents and investors while driving profit for your PMC. Ancillary property management services can include things like: Renter’s insurance programs Credit-building Supportive services like air filter delivery Resident rewards And more! One of the best value-added services is to integrate a resident benefits package into your program. Develop marketing strategies You should be able to show potential investors that you have a strong marketing plan that has proven to grow your business over time. Your marketing strategy should include a content plan, distribution, social media strategies, networking events, and more. Pay attention to things like your reviews and online reputation as well. Marketing your property management company well will pay off in dividends when you are ready to sell. How to sell a property management company Completing a thorough valuation is just the first step in selling a property management company. If you’ve done the work to value your PMC, the next steps will be much easier. Whether you're looking to retire or simply move on to a new business venture, selling your property management company requires careful planning and execution – with the following steps. Identify potential buyers The next step after valuing your PMC is to identify potential buyers. The field of possible buyers may include other property management firms in your area, real estate investors, or even individual buyers looking to enter the industry. Determine how you want to sell In his article on valuing your PMC, Lohmann outlines the two different transaction types in how a property management company can be purchased: A stock sale. In a stock sale, the buyer will purchase shares of your business. They take on all past liabilities of your company but also get to hold onto your brand, contracts, and vendor relationships. The depreciation of long-lived assets is not reset. Asset sale, also known as Goodwill. In this case, the buyer buys your “book of business.” They’re paying for the property management agreements or contracts your PMC holds. If any of your contracts aren’t assignable, you’ll need to get an individual agreement from those investors. Prepare your PMC for a sale Next, you'll want to prepare your property management company for sale. This may include making necessary upgrades to your facilities, improving your management processes, and ensuring that all financial records are up-to-date and accurate. According to McNeill, the question you should ask yourself is: “How can I best tell the story of my company to a potential buyer? Are my financials detailed, and can I show a buyer I have great margins (or how they can achieve them)?” Work with a qualified broker or attorney Finally, when it comes time to negotiate a sale, it's important to work with a qualified business broker or attorney who can help you navigate the complex legal and financial aspects of the sale. With their guidance, you can ensure that you get the best possible price for your property management company while also protecting your interests and ensuring a smooth transition of ownership for your employees and clients. How to buy a property management company But what if you’re on the buying side? Buying a property management company can be a great investment opportunity, but you can’t sleep on due diligence. Before you start the process of purchasing a property management company, there are several key steps you should take to ensure that you make an informed and profitable decision. Research thoroughly & find a PMC that fits The first step in buying a property management company is–like with anything–to do your homework. Thorough research on PMCs involves identifying potential acquisition targets, analyzing their financial performance, and evaluating their market position. You'll want to look at factors such as revenue growth, profit margins, and client retention rates, as well as any potential growth opportunities that may make the company more valuable in the future. Basically, everything we covered in the sections above! If you already run a PMC, you want to make sure the business model can integrate with your structure. But again, McNeill cautions against being too rigid on this one. “We have yet to see a company that does everything the PURE way after over 60 acquisitions. Our partner integration team jumps in quickly and has a plan in place before we close a deal. If a seller has already implemented similar ancillary revenue models, such as a resident benefit package, etc., it means we can optimize that faster than rolling it out from scratch. Our proven platform includes the people, processes, relationships, and technology to consolidate, tech-enable, and optimize the companies we acquire carefully and thoughtfully. We have an all-star team of industry insiders, innovators, and leaders already in place, so when we bring on new teams, the integration is pretty smooth.” Conduct due diligence and identify liabilities Okay, so let’s say you’ve identified a potential PMC you’d like to buy. Now it’s time for due diligence. This involves reviewing financial records, contracts, and legal documents to ensure that there are no hidden liabilities or risks associated with the company. Additionally, you'll want to evaluate the quality of the company's management team, as well as its operational processes and systems. Determine fair market value After completing the due diligence process, you'll need to determine the fair market value of the property management company. This involves taking into account a range of factors, including its current and projected financial performance, market position, and growth potential. Once you have a clear understanding of the company's value, you can begin the negotiation process with the seller. Work toward a smooth transition Finally, once the sale is complete, it's important to take steps to ensure a smooth transition of ownership. This may involve working with the existing management team to establish clear roles and responsibilities, as well as communicating with clients and stakeholders to ensure that they are aware of the change in ownership. According to McNeill: “A buyer should make sure they have the foundation in place to integrate an acquisition into their existing operation. Look for opportunities to add value for the clients and residents, and that will turn into value for you as a buyer. Anything you can do to create a simple and satisfying experience for clients and residents will help with the anxiety that can come with a sale.” Conclusion Ultimately, the value of a property management company will depend on a range of factors, and there is no one-size-fits-all approach to valuation. But the bottom line is that by following a structured and analytical approach, you can feel confident in your valuation, which will help you make informed decisions about buying or selling the business. Whether you're a business owner looking to sell your property management company or an investor looking to make an acquisition, a proper valuation is essential to ensuring a successful transaction.

October 18, 2024

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How to Choose Moving Concierge Services: Personal Touch vs. Automated

Moving is a complex process that can feel overwhelming, from organizing packing to coordinating utility setup. For many, moving concierge services offer a much-needed helping hand. But in a world leaning heavily toward automation, does the personal touch still hold value? In today’s post we’ll explore: What moving concierge services are How moving concierge services work Typical cost of moving concierge services Two approaches: personal touch vs. automation The verdict What Are Moving Concierge Services? Moving concierge services, or relocation concierge services, are designed to simplify the resident's experience of moving to a new location. Relocation services often cover everything related to setting up a new space, primarily focusing on utilities such as electricity, gas, water, high-speed internet, and home security systems. The idea is to provide a seamless and stress-free transition for residents, taking the worry out of the moving process. Imagine stepping into a new home with all utilities up and running, with none of the hassles of making multiple calls to various providers. That’s the promise of a moving concierge service. Some even extend to help with additional tasks like finding local service providers, scheduling movers, and more. These services can work in different ways. Some are complimentary offerings that come as part of a resident benefit package provided by property managers, while others might require a fee if handled separately. A complimentary resident move-in concierge service typically partners with utility providers to arrange everything on the resident's behalf. How moving concierge services work Different platforms offer varying methods for assisting residents with specific needs in their move to a new house. In many cases, the service involves scheduling a call or using an online portal to set up utilities. When included in a Resident Benefits Package, the property manager works directly with a concierge service provider to ensure utilities and essential services are ready by move-in day. (Note that Resident Benefits Packages typically include this service.) Residents are often sent a personalized link or receive a phone call, allowing them to schedule a session to handle their utility setup. This process may include collecting information from residents, like current utility account numbers, to streamline the transition to the new address. Cost of concierge moving services without a resident benefits package Without the project management support of a moving concierge service, residents may find themselves spending several hours managing utility setups on their own, across a number of days or weeks. The process can include contacting each provider individually, scheduling installation or activation times, and sometimes dealing with long-distance calls, as well as unexpected last-minute fees, even in cases of local moves. The cost can vary widely depending on location, the number of services needed, and the providers involved. For some, the time and stress alone can feel like a hefty price. Moving concierge srvices offered through Resident Benefits Packages are typically included as part of the package, saving residents both time and money. Two Approaches: Personal Touch vs. Automation When selecting a moving concierge service, there are two primary paths: a personal touch approach or a more automated process. Let’s take a closer look at two high-quality services in this field: Citizens Home Solutions (CHS) and Utility Profit. Citizens Home Solutions (CHS) Citizens Home Solutions (CHS) offers a personalized experience, aiming to make the moving process as smooth as possible. CHS originally started as a phone-assisted service, focusing on creating a higher level of personal interaction. Their survey data indicated that 59% of residents preferred phone calls over completing online forms, underscoring the desire for human interaction in the moving process. Through its partnerships with providers, CHS seamlessly handles the setup of utilities like electricity, gas, water, high-speed internet, and security systems—all free for the resident (as part of the Resident Benefits Package). Their approach involves reaching out to residents through calls or digital means, offering a choice between speaking with a representative or completing an assisted digital workflow. This flexibility ensures that residents who value a personal touch can have it, while those who prefer self-service still have that option. The process with CHS involves receiving move-out reports in advance, allowing them to research and prepare for the resident’s new utility setup. When it’s time to set up utilities, residents receive a personalized link through email or SMS to a mobile-friendly webpage. From there, they can choose to schedule a call or proceed with the digital workflow. CHS then guides them through the setup process, including account management, so everything is ready for move-in day. With over 200,000 residents served, CHS has proven expertise and positions itself as a one-stop solution for utility needs. Their experience shows in their seamless process and attention to the individual needs of each resident. You can call them or use this form to schedule an appointment. Utility Profit Utility Profit takes a different approach by automating most of the process. As a newer company, they offer a streamlined service that directs residents to set up utilities on their own through a dedicated webpage. This method is designed for those who prefer handling things directly, with less involvement from a third party. Residents can navigate the setup process using Utility Profit’s online platform, entering their information, selecting utilities, and submitting their account numbers. While this method can be efficient for tech-savvy individuals who want to manage things independently, it may lack the personal guidance some residents find comforting during a stressful move. The simplicity of Utility Profit’s system can be attractive to those who desire more control over the process. However, for individuals who are not as comfortable navigating these tasks solo, this option may seem daunting. The verdict Both personal touch and automated services have their merits. However, in the realm of moving, where stress and uncertainty often abound, the comfort of having a human on the other end of the line can make a significant difference. Citizens Home Solutions stands out because of its blend of personalized and digital options, offering residents the best of both worlds. With a track record of over 200,000 satisfied residents, CHS has honed its process to cater to individual preferences. Starting as a phone-based service, they recognized the need for a personal touch, particularly during such a life-changing event as moving. Over time, they've adapted by incorporating digital workflows for those who prefer a more hands-off approach, demonstrating a commitment to meeting diverse resident needs. In contrast, Utility Profit offers a viable solution for those who are comfortable with a more automated approach. While this might work for some, the value of CHS lies in its ability to offer guidance and support throughout the move, ensuring nothing falls through the cracks. For many, that extra level of care can transform the moving experience from a daunting task into a smooth transition. Final Thoughts Choosing the right moving concierge service depends on what you value most: personal guidance or streamlined automation. Services like Citizens Home Solutions combine the personal touch with modern digital conveniences, ensuring residents receive tailored support while also accommodating those who prefer to manage things independently. If you're looking for a service that prioritizes a seamless move with a blend of personal and automated options, CHS is worth considering. Their extensive experience and adaptable approach have helped countless residents settle into their new homes with ease. Learn more about what Citizens Home Solutions can offer for your move. For property managers interested in incorporating moving concierge services into their resident benefit package, explore Second Nature’s Resident Benefits Package benefits now.

October 10, 2024

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Property manager filling out rental inspection check list

Property Management Rental Inspection Checklist [Free Template]

There's a hero tool that stands between you and potential disputes, wear and tear issues, and even costly oversights. It's a Property Management Rental Inspection Checklist. Now, someone who isn't in property management might think, "It's just a checklist, right?" But professional property managers know that without it, everything can kind of fall apart. Throughout this article, we'll dive deep into what rental inspections are, their undeniable importance, the key items you shouldn't overlook, and – because we love making your life easier – we're gifting you a comprehensive checklist template. Stick around to have all your pressing questions answered in our FAQ section and discover how Second Nature can be your partner in acing rental inspections. What is a Rental Inspection? A rental inspection is a systematic evaluation of a rental property's condition carried out by the property manager, landlord, or a dedicated inspector. It’s not just a casual walkthrough of the premises. The inspector will thoroughly assess every nook and cranny of the property – from the foundation to the roof, from the plumbing to the electrical fittings – is thoroughly assessed. The primary goal? To ensure that the property meets all safety and maintenance standards, that the residents are complying with their lease agreements, and that potential issues are identified and addressed before they escalate into major, costly problems. Think of it as a health check-up, but for properties. It provides an objective snapshot of the property's current state and offers insights into areas that might need attention or repair. Here's an example of what a checklist might look like: Why Are Rental Inspections Important? Rental inspections play a crucial role in the property management world, and here’s why: Resident Experience: A well-maintained property is a happy home for residents. When renters see that the property management company is proactive about upkeep, it fosters a sense of value and respect. This can translate to longer tenancies, on-time rent payments, and even positive word-of-mouth referrals. (Learn more about this in our State of Resident Experience Report.) Protection of Assets: Your rental property is a significant investment on the part of your client. Regular inspections ensure it remains in top condition, preventing minor issues from escalating into costly repairs, and protecting your clients’ real estate investments. Safety Assurance: By checking everything from electrical fittings to potential structural issues, inspections make certain the property is safe for habitation. No landlord wants to be on the receiving end of lawsuits or liabilities. Lease Compliance: Regular inspections ensure that tenants are adhering to the terms of their lease, such as not making unauthorized alterations or keeping pets when they aren’t allowed. Predictive Maintenance: Rather than always being in a reactive mode, inspections help in predicting potential issues. This way, you can schedule maintenance tasks before problems arise, which can be more cost-effective in the long run. Property Value Preservation: A well-inspected and maintained property not only attracts and retains quality tenants but can also help maintain or even increase its market value over time. In essence, rental inspections aren’t just a formality; they're a pivotal tool in ensuring the long-term success of your property management endeavors and in enhancing the overall resident experience. What to Include in a Rental Inspection Checklist When you're planning a rental inspection, your approach should be methodical and thorough. As Janet Sprissler, Broker/Owner at Rent 805, puts it: “There are no optional parts of the checklist. That’s why it’s a checklist; you have to check everything off. I don’t have any nice-to-haves on my checklist because everyone is treated the same. We don’t do for one resident what we won’t do for the other.” Organizing your checklist by room or space is a practical way to ensure no corner is overlooked. For each item listed within these spaces, always include a status, such as "Good," "Requires Maintenance," or "Replaced." This helps in keeping track of the condition and any changes over time. You should also consider what type of inspection you’re conducting and may want to tweak what you include depending on where the property is in its rental cycle. Different types of inspections include: Move-In Rental Inspection: Conducted right before a resident moves in, the move-in inspection serves as a benchmark for the property's condition at the start of a lease. It helps to document the existing state of the property, from the functionality of appliances to the appearance of the interior and exterior. This documentation can be invaluable in resolving potential disputes over damages when the resident eventually moves out. Move-Out Rental Inspection: Carried out once the resident vacates, this inspection compares the property’s condition to its state during the move-in inspection. It identifies any damages or changes that have occurred during the tenancy. Based on this, you can decide what portion of the security deposit needs to be returned. Routine Rental Inspections: These are regular checks conducted during a resident’s lease period. Typically done every six to twelve months, routine inspections monitor the ongoing condition of the property. They're also a great way to catch and address issues early, as well as to ensure lease compliance. “Drive-By” Rental Inspections: These are less invasive checks where property managers drive by the property to ensure its exterior is in good shape and being maintained appropriately. This type of inspection is less about detailed checks and more about getting a general sense of the property's outward appearance and ensuring no major lease violations are visible. For single-family property managers, these inspects may be less frequent since properties are often spread out from each other geographically. As you create your rental inspection report, remember that every property is unique. While categorizing by room ensures thoroughness, it's essential to adjust and add specific items tailored to each property’s unique features and needs. And always remember, communication is key. Ensure that residents are aware of inspections, their purpose, and the schedule to foster a transparent relationship. How to Conduct Rental Inspections Given the importance of rental maintenance, it's important to conduct inspections methodically and thoroughly. We highly recommend using a detailed checklist to ensure you are covering all areas of the property. It's also critical to conduct inspections in a professional and courteous manner to maintain a positive relationship with residents. This means informing them about upcoming inspections (notice may also be required by local laws – more on that below), scheduling inspections at reasonable times, and generally minimizing disruptions to their daily routine. As indicated above, there’s also an important compliance component to rental inspections, so be sure to familiarize yourself with local housing regulations to ensure your inspections meet all legal requirements. This will help you abide by fair housing laws and avoid discriminatory practices. To protect everyone involved in the process, document inspections thoroughly and maintain accurate records. You’ll find it helpful to schedule inspections regularly, for example, on a semi-annual basis, in order to nip any maintenance issues in the bud. Semi-annual inspections should focus on the property's overall condition, including the exterior, interior, and appliances. You’ll also check for wear and tear, potential damage, and any maintenance needs. Also, ensure that safety systems, such as smoke detectors and carbon monoxide detectors, are functioning properly. Yearly inspections are an opportunity for more in-depth inspections, including a detailed examination of the roof, foundation, and HVAC system. You'll assess these for any signs of structural damage or pest infestations, and update any necessary documentation, such as property records and insurance policies. As for the inspection process itself, simply follow the following 6 steps: Schedule the inspection: Coordinate with the resident to schedule a convenient time for the inspection. Gather your materials: Prepare your inspection checklist, camera, and any necessary tools. Conduct the inspection: Work through your checklist, taking note of any issues or concerns throughout the process. Document findings: Take photos and videos of any visible damage or maintenance needs. Communicate with the resident: Discuss your findings with the resident and address their questions or concerns, if any. Follow up: Create a plan to address any issues identified during the inspection. By following these guidelines, your rental inspections go a long way toward protecting the investment, maintaining property value, and ensuring resident satisfaction. How to Notify Tenants about Rental Inspections As mentioned above, effective communication is vital during the inspection process. Here are some tips to ensure that your approach is as thorough as possible. Provide written notice While the property manager's right to inspect the property may be (and should be) specified in the lease agreement, including frequency and required notice, you should also send a formal written notice to the resident, either by mail or email. This notice should include the date and time of the inspection, as well as the purpose (such as routine maintenance, addressing maintenance requests, or ensuring compliance with lease terms). You should also indicate whether the tenant's presence is required during the inspection, and provide your contact information in case of questions or concerns. Choose the right time Be sure to schedule inspections during reasonable hours. For example, avoid early mornings, late nights, or times when the resident may be unavailable. If possible, work with the residents to find a time that’s convenient for them. Respect resident privacy Before entering the property, knock on the door and announce your presence. Limit disruptions by keeping the inspection brief and by avoiding unnecessary distractions. If you need to access areas with personal belongings, handle them with care. Document the inspection Document the condition of the property, any maintenance issues, and any violations of the lease agreement. Consider sharing a copy of the inspection report with the tenant, especially if there are any issues that need to be addressed. Address resident concerns If the resident has any concerns or questions about the inspection, address them promptly and courteously. Explain the reasons for the inspection and the importance of maintaining the property. These tips will help you maintain a positive relationship with your tenants while also protecting the property investment. Property Management Rental Inspection Checklist With the help of OnSightPROS, we've developed a rental inspection checklist template for single-family rental property management companies. Use this template to build out your checklist. General Overview Date of Inspection: Inspector Name: Tenant Name: Address: Previous Inspection Date: Front Exterior Status: [Good / Needs Maintenance / Poor] Mailbox: Functional door and flag, no damage Lawn and garden: Well-maintained landscaping free of debris, no bald grass spots Driveway and walkways: No cracks or obstacles Fencing: In good condition, no damage Exterior lighting: All bulbs functioning Windows/Screens: Clean, no cracks, seals intact, screens intact Walls/Siding: No damage or cracked/peeling paint or caulking, no insect damage Downspout/Splash Blocks: Attached properly Light Fixtures: No missing bulbs or broken fixtures Roof/Trim/Gutter: No visible damage or leaks, discoloration, holes, clogged or loose gutters Rear Exterior Status: [Good / Needs Maintenance / Poor] Lawn and garden: Well-maintained, free of debris, no bald grass spots Patio/Walkways: No cracks or obstacles BBQ Grill: Set away from house, not under awnings Rear Door: Weather stripping intact, locks installed as needed Possible Hazards: Trampoline, open fire pit, swing set Pool: Clean, clear water, no damage, fence and lock in place Fencing: In good condition, no damage Exterior lighting: All bulbs functioning Windows/Screens: Clean, no cracks, seals intact, screens intact Walls/Siding: No damage or cracked/peeling paint or caulking, no insect damage Downspout/Splash Blocks: Attached properly Light Fixtures: No missing bulbs or broken fixtures Roof/Trim/Gutter: No visible damage or leaks, discoloration, holes, clogged or loose gutters Entry Status: [Good / Needs Maintenance / Poor] Smell test: No odors from animals, smoke, waste, must Patio/Porch: No cracks in concrete, railing, stair intact Front door exterior: No scratches, chipping, stains Locks/Keyless Deadbolts: Check for installation, functioning correctly Front door interior: No gaps in weather stripping, clean Walls and ceiling: Clean, no signs of mold or damage Closets: Shelves stable, no stains or damage to walls Flooring: No damage, carpets clean Blinds/Drapes: Fully functional and clean Windows: Open and close easily, locks work Living Room Status: [Good / Needs Maintenance / Poor] Smell test: No odors from animals, smoke, waste, must Door/Door stops: Fully functional Walls and ceiling: Clean, no signs of mold or damage Ceiling fans: Working properly Closets: Shelves stable, no stains or damage to walls Flooring: No damage, carpets clean Blinds/Drapes: Fully functional and clean Windows: Open and close easily, locks work Kitchen Status: [Good / Needs Maintenance / Poor] Smell test: No odors from animals, smoke, waste, must Door/Door stops: Fully functional Flooring: No damage, carpets clean Walls and ceiling: Clean, no signs of mold or damage Cabinet under sink: No leaks with running water, no standing water Countertops/Backsplash: Clean, no damage, caulking intact Cabinets: Doors/drawers work, no damage Sink/Faucet: No leaks, drains well, spray hose works Pantry: Shelves intact, walls clean, lights functioning Appliances (oven, fridge, dishwasher, microwave, etc.): Clean, functional Exhaust fan: Functional, no excessive noise Windows: Open and close easily, locks work Hallway/Stairway Status: [Good / Needs Maintenance / Poor] Smell test: No odors from animals, smoke, waste, must Door/Door stops: Fully functional Handrails: No loose or missing spindles, or other damage Walls and ceiling: Clean, no signs of mold or damage Closets: Shelves stable, no stains or damage to walls Flooring: No damage, carpets clean Blinds/Drapes: Fully functional and clean Windows: Open and close easily, locks work Bedrooms (repeat for each bedroom) Status: [Good / Needs Maintenance / Poor] Smell test: No odors from animals, smoke, waste, must Walls and ceiling: Clean, no damage or mold Ceiling fans: Working properly Flooring: No damage, carpets clean Closets: Shelves stable, no stains or damage to walls Door/Door stops: Fully functional Blinds/Drapes: Fully functional and clean Windows: Open and close easily, locks work Bathrooms (repeat for each bathroom) Status: [Good / Needs Maintenance / Poor] Smell test: No odors from animals, smoke, waste, must Door/Door stops: Fully functional Flooring: No damage, no sagging floorboards or discoloration Walls and ceiling: Clean, no damage or mold Exhaust fan: Working properly Closets: Shelves stable, no stains or damage to walls Toilet: Flushes correctly, no leaks Sink/Faucet: Drains well, no leaks Cabinet under sink: No leaks with running water, no standing water Shower/bathtub: Drains well, faucets work, no mold Towel bars: Present and functional Mirrors: Clean, no damage Blinds/Drapes: Fully functional and clean Windows: Open and close easily, locks work Utility Spaces (if applicable) Status: [Good / Needs Maintenance / Poor] Smell test: No odors from animals, smoke, waste, must Door/Door stops: Fully functional Flooring: No oil stains or cracks Walls and ceiling: Clean, no damage or mold Closets: Shelves stable, no stains or damage to walls Blinds/Drapes: Fully functional and clean Cabinet under sink: No leaks with running water, no standing water Windows: Open and close easily, locks work Washer/dryer: Functional, no leaks. No lint or debris in dryer. Water heater: No visible damage, no leaks HVAC system: Operational, air conditioning filters clean, no moisture issues around drip pan Satellite dish: Attached to house correctly Garage (if applicable) Status: [Good / Needs Maintenance / Poor] Smell test: No odors from animals, smoke, waste, must Interior door/Door stops: Fully functional Garage door opener: Functions correctly Flooring: No oil stains or cracks Walls and ceiling: Clean, no damage or mold Windows: No damage, hardware intact, no evidence of moisture Storage areas: Organized, no damage Safety and compliance Status: [Good / Needs Maintenance / Poor] Handrails: In good condition, no damage Smoke alarms: Up to code, batteries good, working order. Fire extinguishers: Inspected, and placed in easily accessible and visible spots. Carbon monoxide detectors: Up to code, batteries good, working order Electrical outlets: Functioning, GFCI compliant installed Lighting fixtures: Functional, no missing bulbs or broken fixtures Lighting: Functional Electrical panel: Good condition, labeled, all circuit breaker boxes work properly Additional Notes: Space for the inspector to make any additional comments or observations. Signature: Inspector’s signature, date. What To Do After a Rental Inspection Once you've conducted your inspection, there are a few steps you can take to make sure you're not missing any identified issues. 1. Document the inspection: Create a detailed written report of the inspection, including the date and time of the inspection, the property address, and the names of the inspector as well as the resident. Include all observations about the property's condition, particularly any damage, wear and tear, or maintenance issues. You'll want to take photos or videos of any significant issues, and keep a record of the inspection report in your property management records. 2. Communicate with the resident If appropriate, share the inspection report with the property resident, highlighting any concerns or maintenance issues. Address questions and concerns promptly and courteously. If maintenance or repairs are needed, provide the resident with the expected timeline for completion. 3. Schedule repairs Prioritize maintenance tasks based on their urgency and impact on the property's condition and resident safety. Where needed, hire reliable contractors to complete the repairs. As needed, monitor repair progress and ensure that they’re completed on time and to your standards. 4. Follow up Once the repairs are completed, inform the resident and schedule a follow-up inspection as necessary. If the resident has concerns or complaints about the repairs, address them promptly. 5. Update your records Update your property management records to reflect the completed repairs and any other relevant information. FAQs Here are a few frequently asked questions about rental inspections. Q: How often should you conduct rental inspections? A: The frequency of rental inspections can vary based on several factors, including local regulations, lease agreements, and the specific needs of the property. Generally, here's a recommended guideline: Move-In Inspection: Once, right before a new resident moves in. Move-Out Inspection: Once, immediately after the resident vacates. Routine Rental Inspections: Typically, every six to twelve months. It's a balance between ensuring the property is being maintained without being overly intrusive to your residents. Drive-By Rental Inspections: These can be conducted more frequently, perhaps quarterly, since they are less invasive and don’t require entering the property. However, always consult your local laws and regulations, as some areas might have stipulations on how often you can inspect a rented property. Also, it's crucial to provide residents with proper notice before any inspection, respecting their privacy and rights. Q: Can a tenant refuse a rental property inspection? A: While rental inspections are essential for property managers, tenants have rights, and their privacy must be respected. Generally, a resident cannot outright refuse a rental property inspection if: It's Stipulated in the Lease: Most rental agreements or leases have clauses that allow for periodic inspections by the property manager or landlord, given proper notice. Adequate Notice is Given: Many jurisdictions require landlords to provide a specific amount of notice (usually 24-48 hours) before entering the property unless there's an emergency. The Inspection is Conducted at a Reasonable Time: Inspections should be scheduled during reasonable hours, avoiding early mornings, late nights, or any time that might intrude on the tenant's reasonable expectation of quiet enjoyment. However, if a resident has a valid reason like health concerns, religious reasons, or personal issues, it might be possible to reschedule the inspection to a more convenient time. Always be sure to check local laws and regulations as tenant rights can vary by jurisdiction. Open communication and understanding between both parties can help mitigate any concerns or conflicts. Make Property Management Easier with Second Nature At Second Nature, our goal is to make property management easier for professional property managers. We built our Resident Benefits Package to support property management companies in delivering the best resident experience on the market. From a move-in concierge to air filter subscriptions to rent reporting, we deliver the services that residents will pay for – and stay for. Learn more about our RBP today!

October 10, 2024

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Benefits of Outsourcing Property Management Services

Property management services have changed by leaps and bounds over the past 5-10 years. And property management outsourcing services have grown along with it. While the traditional approach to property management simply provided the basics – maintenance, rent collection, etc. – entrepreneurial PMs saw a massive gap in that value proposition and have transformed the real estate industry. Now, property management services are increasingly seen as a way to generate value for residents, real estate investors, and property management companies. PMCs are delivering resident benefits like credit reporting, renter’s insurance programs, pet guarantees, and more. And each of these services acts as a value add for everyone involved. But that can also add extra burden and cost to your property management business when your team is already spread thin. One of the best ways to offer value without overextending your team is to outsource some of those PM services to PropTech products, contractors, or a fully managed solution. Today we’re going to talk about this option in more detail. Whether you’re just getting started in property management or a seasoned pro, we hope you’ll find something here to help. Key Learning Objectives: What is outsourced property management? What services add the most value to the resident experience? What property management services are most easily outsourced? What are the costs associated with outsourcing PM services? What are the benefits of outsourcing PM services? What is Outsourced Property Management? Outsourced property management refers to the practice of paying for a third-party company or product to handle certain tasks or operations for your property management company. This could include tasks such as tenant screening, resident benefits, renters insurance programs, rent collection, maintenance and repair coordination, lease enforcement, financial reporting, and more. Property management is, in itself, an outsourced service for real estate investors/property owners. Just as property owners often choose to outsource their property management to save time, reduce stress, and ensure they stay profitable – property management companies may outsource several of their services for the same reasons. Property management outsourcing services, whether PropTech products or fully managed solutions, allow property management companies to build efficiencies and focus on quality and growth. Outsourcing certain services can give residents more of what they need and investors more value for their dollar. What Services Can Property Management Companies Outsource? Advances in technology and innovation within the property management industry have given PMCs greater flexibility in terms of outsourcing key services. As a property manager, you may outsource for a range of reasons. Maybe you’re still building up your team and need cost-effective expertise in a certain area. Maybe you have core products you want to focus on and want certain services to take less of your time. Maybe your investors or residents are asking for out-of-scope services that you can offer for an additional fee. Overall, outsourced property management services can help PMCs save time, reduce stress, and maximize the profitability of their company. So, what are some of the most commonly outsourced property management services? They can be grouped into a few categories: A single-family property management software and integrations that enable all kinds of business operations. Maintenance and repair. Many PMs outsource things like plumbing, HVAC, and other contractor work. Resident benefits and ancillary services. Property managers often outsource value-driving products like an RBP and other services that investors want, and residents will pay for. Let’s dig into the services that might be included within each of those larger categories. Rent collection Third-party payment processing companies can handle the actual collection and processing of rent payments for the PMC. The property management company will provide the payment processing company with the necessary information and details about the residents and the property, including lease terms, payment due dates, and amounts owed. The process may involve various payment methods, such as online payments, credit card payments, ACH transfers, or other payment options. Some popular outsourcing solutions that help collect rent include Buildium, Propertyware, and AppFolio. Second Nature provides a fully managed service that helps ensure your residents pay rent on time. Repair and maintenance Many PMCs outsource repairs and property maintenance. We’ve spoken with experts like Bob Preston, who run their own maintenance companies separately as another source of income and an added value to their clients. When a property management company outsources repair and maintenance, it typically involves hiring third-party contractors or service providers to handle the actual repair, upkeep, and maintenance tasks required for the property. Outsourcing repair and maintenance can offer several benefits for property management companies. You can access a broader range of specialized skills and high-quality expertise, which may not be available in-house, and save time and resources by avoiding the need to recruit and manage in-house staff to handle repair and maintenance tasks. Marketing and advertising Marketing isn’t everyone’s strong suit, and that’s okay! When a property management company outsources marketing and advertising, it typically involves hiring a third-party marketing or advertising agency to handle the promotion and advertising of the rental properties. The agency will work closely with the PMC to develop a comprehensive marketing strategy that aligns with the property's unique selling points and target audience. The marketing agency may use a variety of advertising channels and mediums to promote the property, including social media marketing, search engine marketing, online advertising, email marketing, print advertising, and other marketing channels. They may also create engaging content and visuals, such as videos, images, and virtual tours, to showcase the property's features and amenities. Legal Most PMCs outsource their legal services to a third-party law firm or attorney to provide legal advice and representation on various matters related to the property or properties. Legal services that may be outsourced can include lease agreements, evictions, compliance with local and federal laws and regulations, dispute resolution, and other legal matters that may arise in the course of managing the property. Outsourcing legal services helps minimize legal risks and liabilities, ensure compliance with applicable laws and regulations, and protect the property investor’s interests. Accounts and finance Many PMCs outsource to an accounting firm or financial service provider to handle the financial management and reporting. The outsourced firm will work with you to manage financial records, provide financial reporting, and ensure compliance with accounting standards and regulations. Accounting and financial services that may be outsourced can include bookkeeping, financial statement preparation, tax planning and compliance, budgeting and forecasting, and other financial reporting and analysis. Overall, outsourcing accounts and finance can help property management companies to operate more effectively and efficiently and achieve their financial objectives while minimizing financial risks. Insurance PMCs often work with a third-party insurance broker or agent to provide insurance coverage and manage insurance-related issues for the property or properties. The insurance coverage that may be outsourced can include property insurance, liability insurance, workers' compensation insurance, and other types of insurance coverage that may be necessary or recommended for the property. Another way to outsource insurance is to find a service that provides a renters insurance program like Second Nature’s. Ensuring that residents have insurance coverage is a priority for 90% of property managers, but only 41% of residents maintain compliant coverage. At Second Nature, our renters insurance program has 100% compliance. You can learn more about our coverage and fully managed Resident Benefits Package in our 2023 Resident Experience Report. Safety and security Many PMCs outsource to a security company to provide safety and security services. The security company will work closely with the property management company to assess safety and security needs, design and implement safety and security protocols, and provide safety and security personnel and equipment as needed. Security services that may be outsourced can include security personnel, security systems and equipment, safety training and education, emergency response planning and execution, and other safety and security-related services. Costs of Outsourcing Property Management Services? The cost for a PMC to outsource some property management services can vary depending on a number of factors, such as the scope of services required, the complexity of the work, the location of the service provider, and the level of expertise required. Some service providers may charge a flat fee, while others may charge an hourly rate or a percentage of the property's rental income. The cost of outsourcing property management services can range from as low as $1 per property per month to as much as hundreds of thousands of dollars annually, depending on whether it’s a full-service tech solution, simple maintenance services, a Resident Benefits Package, etc. It's important to note that while outsourcing property management services can come with a cost, it can also provide benefits such as increased efficiency, reduced workload, and access to specialized expertise. Before outsourcing any services, it's important to carefully consider the potential costs and benefits and to choose a service provider that offers high-quality services at a reasonable price. Benefits of Outsourced Property Management Services Outsourcing property management services can have a massive impact on your return on investment per door and per client. Outsourcing also helps with scaling when you can’t afford to run every service in-house. With the ability to outsource, you can offer more value to your clients without skyrocketing your operating costs. You can also drive secondary sources of revenue through outsourcing. Not convinced? Let’s go over some of the real-life benefits we’ve seen PMCs leverage with outsourcing select services. Cost savings Outsourcing property management services can save property management companies significant costs associated with hiring and managing in-house staff, as well as investing in technology and infrastructure. Outsourcing can also help to minimize overhead costs, such as office space, equipment, and supplies. Let’s think even bigger. Outsourcing value-generating services like a Resident Benefits Package has multiple benefits: boosting resident satisfaction, incentivizing on-time payments, and reducing vacancy rates. Talk about a cost-saving win! Increased efficiency We’ve seen PMCs use outsourcing to streamline their operations, reduce administrative property management tasks, and increase productivity. This can free up time and resources for property management companies to focus on core business functions and strategic planning. Instead of using your own team for time-consuming tasks, you can outsource them. Access to expertise Outsourcing property management services allows PMCs to access specialized expertise and skills that may not be available in-house. This can include legal, accounting, marketing, and maintenance expertise, among others. Outsourcing can also provide access to the latest technology and software, which can improve efficiency and effectiveness. Better risk management Property management inherently involves risk. You’re managing people’s lives on the one hand (residents) and investments on the other (owners/investors). Outsourcing can help better manage risks associated with property management, such as legal liabilities, compliance issues, and safety and security concerns. This can help protect your company from financial and reputational damage. Improved resident satisfaction You can more seamlessly and reliably improve resident satisfaction by providing better maintenance and repair services, more efficient rent collection, and faster response times to tenant concerns and requests. This can help to increase tenant retention and attract new tenants. Higher employee satisfaction Outsourcing services to a third party is a direct way to impact your employees’ satisfaction. How? Outsourcing helps reduce workload, gives access to better training and development, improves working conditions, and provides a better work-life balance. Often, outsourcing means that your employees get to focus on the core functions that they love instead of getting bogged down in tasks they don’t love or don’t feel equipped for. Factors to Consider When Outsourcing Property Management Back Office Services Selecting the right property management outsourcing services provider is a crucial decision that can significantly impact the efficiency, profitability, and overall success of your property management operations. Here are key factors to consider: 1. Range of services Evaluate the range of services provided by the outsourcing company. Check to make sure they offer the specific services you need, such as rent collection, maintenance, legal support, marketing, financial management, and resident benefits. A comprehensive provider can handle multiple aspects of property management, which can streamline your operations. 2. Industry experience Look for a provider with extensive experience in property management and a proven track record of success. They should have expertise in the specific types of properties you manage, whether residential, commercial, or mixed-use. Experienced providers are more likely to understand industry-specific challenges and deliver effective solutions for various situations. 3. Reputation Research the provider’s reputation within the industry. Check online reviews, testimonials, and case studies to gauge client satisfaction. A provider with positive feedback and strong references is more likely to deliver high-quality services. 4. Cost Evaluate the cost structure of the provider’s services. Compare their fees with the value they offer, as well as review how they bundle these services. While cost is an important factor, it’s essential to consider the overall value and benefits the provider brings to your property management operations. The goal is to achieve a balance between cost-effectiveness and high-quality service. 5. Customer service Effective communication is vital to successful outsourcing. Assess the provider’s responsiveness, transparency, and customer service quality. They should offer multiple channels for communication, ideally with a main point of contact, and provide timely updates on important matters. 6. Technology and innovation Assess the technology and software solutions the provider uses. Advanced property management software can enhance efficiency, improve communication, and provide valuable insights. Ensure the provider leverages the latest technology to offer seamless and efficient services. 7. Compliance and legal expertise Ensure the provider is well-versed in local, state, and federal regulations related to property management. They should be able to navigate legal complexities and ensure compliance with all relevant laws. This reduces the risk of legal issues and ensures smooth operations. How Thousands of PMCs Are Outsourcing Services for Better Resident Experiences Property management companies are always looking for new ways to generate value for themselves, their residents, and their investors. One of the quickest ways to scale and increase return on investment is to outsource property management services. At Second Nature, we’ve pioneered the first-ever fully managed Resident Benefits Package in order to support PMCs with just that goal. Our RBP provides services that residents are proven to pay and stay for – and our team manages every part of the process so property managers can focus on strategy, growth, or work-life balance. We’ve helped thousands of property managers transform their services and their operations with a customized RBP providing services they couldn’t do alone. Our goal is to make property management easier for PMs, residents, and investors – and drive value that benefits all three. We call it the Triple Win.

October 2, 2024

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9 Best Property Management Podcasts to Follow in 2024

As incredibly busy single-family and multifamily property managers, staying informed on the latest industry trends and resources on top of your ever-increasing list of to-dos can feel near impossible. But thankfully, there is now a wealth of excellent industry podcasts to do the hard work of staying up to date. All you have to do is tune in. Property management industry podcasts make it extra easy for you to gain insight, advice, and practical tips while commuting, cooking dinner, or working out. By listening to industry thought leaders and experts, you'll learn new ideas and perspectives on improving your strategies and ultimately growing your business. We've combed through all of the property management podcasts to find you the eight best ones. And we've made sure they meet the following criteria: The podcast's relevancy to your role as a single-family property manager – With so much information tailored to multi-use property managers, it can be hard to find industry insight into your particular challenges and industry issues. The caliber of the hosts and their guests – we looked for those run by reputable sources endorsed by trusted associations, organizations, and professionals in the property management business. Content quality and diversity of topics – We wanted to see that the podcast covered a wide spread of topics—from real estate investing to leasing challenges to tips like building your cash flow—and provided a well-rounded perspective on the industry. Actionable insights – We looked for podcasts that provided practical tips, strategies, and advice you can readily implement in your day-to-day work as a property manager. Length and accessibility – We all know how tiring it can be for a podcast to drone on and on. We looked for ones that were under an hour and were accessible, engaging, and even entertaining. 1. Triple Win Podcast The Triple Win Podcast is hyper-focused on the needs and challenges of single-family property managers. With each topic it addresses, The Triple Win Podcast looks at how property managers can create and monetize value for their company while also building strong working relationships. Its core focus is finding solutions that are a win-win-win for everyone involved—residents, real estate investors, and property managers alike. The Second Nature team hosts the podcast and invites experts across the industry to discuss topics such as using Practical AI for property management, turning customers into superfans, and tips for revenue building, annual goal planning, and more. The Triple Win Podcast is released twice a month and can be listened to here, and for more insights, subscribe to one of these property management newsletters. 2. Owner Occupied with Peter Lohmann Owner Occupied is an interview-style podcast. Each week, Peter Lohmann invites experts from across the industry to discuss the business side of property management. Lohmann covers super granular topics (like competing with the 3% management fee) and ones that look at the big picture (like how to know which opportunities to pursue and which to let go). Lohmann interviews experts such as Michael Girdley of the Complete HoldCo Course, Todd Ortscheid of Always There Repair, and Brandon Scholton of Key Renter Denver. The best part of this podcast is that Lohmann lists the time stamps in the description. So, if you don't have time to listen to the full interview, you can easily skip to the parts that most interest you. Find Owner Occupied on Spotify here and tune in weekly for valuable information and insightful interviews. 3. Property Management Business with Marc Cunningham Marc Cunningham of PM Build works tirelessly to help property managers build their people, profit, and processes. And he shares a wealth of industry tips in his podcast Property Management Business. Each episode is less than 30 minutes, making it incredibly accessible and easy to fit into your day. Marc brings an optimistic and grounded perspective to the industry, inspiring property managers to build strong working relationships with property owners, tenants, and realtors. He also encourages property managers to simplify maintenance and discover the industry's exciting future. Tune in for new episodes each month and be inspired to grow your business here. 4. The Profitable Property Management Podcast Do you love to hear success stories of non-stop go-getters? Well then, The Profitable Property Management Podcast is for you. The host, Jordan Muela, has worked in the industry for over ten years, started three businesses, hiked the Grand Canyon to raise money, launched two podcasts, and released the industry's first financial benchmarking study. And he brings all of that energy and expertise to his interview-style podcast. "This podcast is dedicated to the property manager entrepreneurs that refuse to settle in life and business," says Muela. And it's clear he's walked the talk. Tune in to his weekly podcasts on Apple, Spotify, or wherever you like to listen. He'll inspire you to find meaning at work, boost your profit margins, and stay resilient as you navigate the daily challenges of property management. 5. 300 to 3,000 300 to 3,000 is hosted by Matthew Whitaker and Spencer Sutton of Evernest. The episodes vary from 30 minutes to over an hour and a half, but because they are chock-full of tips for adding new properties to your portfolio, we decided to include it in our round-up. Evernest is a national property management company that grew out of necessity. When the 2008 economic crisis happened, Matthew Whitaker owned 30 investment properties he was desperate to sell but couldn't. Using all of their creativity and gumption, Matthew and Spencer launched their property management company. They have grown from the rockiest start to a thriving property management business that oversees 15,000+ properties across the U.S. Every week, Matthew and Spencer provide industry insight from an incredibly thoughtful perspective. They cover interpersonal dynamics (Episode 82: Trying to Build a Great Team? How Trust and Conflict are Essential), the emotional strain of property management (Episode 61: How to Find Clarity in the Middle of Painful Problems), and practical business tips (Episode 55: How to Grow Your Maintenance Department). Tune in here. 6. NARPM Radio The industry's most trusted association is the National Association of Residential Property Managers (NARPM). NARPM hosts conferences and trade shows, provides courses and webinars, advocates for policies that affect property managers, and offers ample networking opportunities for PMs. It's no surprise that their podcast is also an excellent resource. Twice a month, host Pete Neubig interviews different industry experts and provides invaluable insight into the various aspects of property management. Learn how to identify your business's core values, stay focused while growing your business, navigate property management taxes, and more. Connect with the organization on social media and catch the latest episodes here. 7. The Property Management Mastermind Show Like The Triple Win Podcast, The Property Management Mastermind Show focuses on single-family property management and is thus a valuable resource for those in that specific sector. Host Brad Larsen owns RentWerx, one of the fastest-growing property management companies in Texas. Brad brings his own hands-on experience to each episode and provides listeners with insight into the latest trends, best practices, tips for vendors, and more. Catch his weekly episodes here and take your property management strategies to the next level. 8. Property Management Brainstorm This podcast focuses primarily on maximizing your property value and raising your income while maintaining strong relationships with your tenants. Host Bob Preston brings his experience as a Silicon Valley technology executive to the property management space, guiding PMs on using the right technology and implementing effective operations to streamline and scale their businesses. Every week, Bob interviews other industry experts to help property managers think through business strategies and operations. Earlier this summer, Bob re-released our conversation on pest control in rental properties. It was such a delight to chat with Bob and I'm honored they have dubbed it one of their best episodes ever. Tune in to the full Property Management Brainstorm podcast here. 9. The Property Management Show The Property Management Show podcast, created by Brittany Stephens and Marie Liamzon-Tepman of Fourandhalf, Inc., breaks down the keys to business success with insights from industry experts. Launched in 2015, the podcast covers topics such as marketing strategies, industry innovations, and best practices for running a successful property management business. All content is based on the expertise of the folks at Fourandhalf, a marketing agency specializing in helping fee-based property management companies grow through services like website design, SEO, content creation, and online advertising. Catch show episodes here. Alright, there you have it—our nine favorite industry podcasts. We would love to hear which ones you enjoy the most and which ones you would add to the list. Happy listening!

September 30, 2024

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Property Management Pest Control: Why It’s Important

Pest control plays a critical role in effective property management. That's because pests are not just a nuisance – they can also contaminate food, damage belongings, spread diseases, and make rental properties unlivable. In this blog, we'll cover the impact of pests on your property and residents' lives, practical strategies for controlling these unwanted guests, and the benefits of a preventive approach to pest management. On hand to help us deliver these insights is Landon Cooley, the Co-Founder and CEO of Pest Share, a commercial pest control expert. Cooley's extensive experience in the pest control industry provides valuable knowledge on how property managers can effectively integrate pest control into their maintenance routines. What you'll learn: Why preventive pest control is a smart strategy How to monitor and control pests on your property The responsibilities of property managers and residents in maintaining a pest-free environment Common pests, how they enter properties, and the importance of immediate action and resident education By the end of this article, you’ll have a thorough understanding of the importance of pest control in property management and actionable steps to ensure a healthy, comfortable living environment for your residents. Why Preventive Pest Control Is a Good Strategy The most important part of pest control? Prevention. There are so many reasons that a good preventive pest control program can pay off for your company, your investor, and your residents. It sets professional property managers apart from the crowd. Here are some of the top reasons why preventive pest control works. Cost-effective in the long run Investing in a preventive pest control plan can save significant costs in the future. While there is an upfront cost, it's generally far less than the expense of handling large-scale infestations or property damage caused by pests. Prevents major infestations Pests have a way of multiplying exponentially. A preventative approach can nip potential critter nightmares in the bud. By treating small issues promptly, you can prevent them from developing into major infestations that are difficult and costly to eradicate. Enhances resident satisfaction Preventive pest control contributes to a comfortable and healthy living environment. By keeping pests at bay, you increase resident satisfaction, which can lead to longer tenancy periods and positive word-of-mouth referrals. Preserves property value Pests can cause significant damage to the structure and aesthetics of your property. By keeping properties pest-free, you protect and preserve the value of the property. Property managers are, in the most foundational way, asset managers for their property owners. This is a critical way to protect those assets. Reduces health risks Many pests carry diseases that can pose health risks to your residents. A preventive approach to pest control helps maintain a healthier living environment by reducing these risks. It also protects you and your investor from liability associated with those health concerns. Maintains reputation Effective pest control is a key aspect of property management, and a preventative approach helps maintain a good reputation. It shows prospective and current residents that you are proactive and dedicated to providing a safe, comfortable living environment. Again, prevention sets you apart from hobbyists and amateur property managers. How to Monitor and Control Pests in Your Property Regularly scheduled inspections are the best mechanism for effective pest monitoring. Ideally, qualified personnel should conduct quarterly or biannual checks. These inspections will focus on identifying potential entry points for common pests, and might include checking for cracks in the foundation, gaps around pipes and wires, and proper ventilation in crawl spaces. Maintaining open communication with residents is equally important. Encouraging residents to report any signs of pests, like droppings or unusual noises, allows for early intervention. Property managers should have a clear procedure for responding to such reports, ensuring a swift and effective resolution to prevent infestations from escalating. Of course, understanding the problem only gets us halfway (if even!) to solving it. As property managers, the responsibility of dealing with pest issues falls squarely on your team’s shoulders. Great property management companies employ a strategic approach to integrated pest management (IPM), minimizing the possibility of pests – and dealing with them immediately when there’s an issue. Along with routine inspections, here are some of the top property management pest control trips we’ve handpicked from the industry. Immediate action Taking immediate action at the first sign of a pest problem is crucial. Delays can allow the pest population to grow, making the issue more difficult and costly to handle. A quick response to reported issues shows your residents that their comfort and safety are a priority and can often prevent minor issues from escalating into serious infestations. Whether you call an exterminator or handle it in-house, a swift response is key. Tenant education Educating tenants on proper food storage and waste disposal can drastically reduce the attractiveness of your property to pests. Regular communication about cleanliness and preventative measures empowers residents to contribute to a pest-free environment. Professional pest control services Sometimes, professional intervention becomes necessary. Pest control services can effectively deal with large infestations, employing safe and targeted solutions. They can also provide expert advice on preventing future infestations. Cooley says it’s important to understand what specializations pest control companies offer when hiring. “There are several different segments of the industry, and not all companies do everything,” he says. “Some do only residential insect control, or maybe rodent control. Some are very robust and specialize in all these areas. Every company is a little different.” Landscaping and exterior maintenance Maintaining the exterior of your properties is as crucial as looking after the interior. Regularly trim overgrown plants, manage water drainage effectively, and keep outdoor trash areas clean to deter pests. Seal entry points Prevent pests from entering by regularly checking for and sealing any potential entry points. This includes filling cracks, fixing broken screens, and covering crevices. Keeping your property in good repair helps make it less accessible to pests. Proper waste management Secure and timely waste disposal is key to pest prevention. Ensure that all trash bins are properly covered and regularly emptied to avoid attracting rodents, insects, and other pests. Each of these methods contributes to effective pest control, helping to create a comfortable, pest-free environment for your residents. Property Management Pest Control Concerns Who is responsible for pest control? The responsibility for pest control can vary depending on the state and the specific situation. In many states, landlords are largely responsible for maintaining a habitable dwelling, which includes addressing existing pest infestations and taking preventative measures. However, some states place more responsibility on residents, especially if the infestation arises from unsanitary conditions within the unit or from a tenant's actions that attract pests. Lease agreements often address pest control by outlining each party's obligations. It's important for both property managers and tenants to understand these clauses to avoid confusion or disputes. What are the most problematic pests? In terms of structural damage, termites and rodents are high threats due to their ability to gnaw and burrow. Ticks pose significant health risks as they can transmit diseases. For general nuisance and quality of life issues, cockroaches and bedbugs are common culprits. Ultimately, the most problematic pests will depend on the specific location, property type, and potential health risks. Do I need preventive pest control? If the properties you're managing have historically had pest problems, or are situated in an area with frequent infestations, then proactive measures will certainly be beneficial. Regular inspections and preventative treatments can offer peace of mind and potentially save money by stopping infestations before they start. Even if you haven’t had any issues, a purely reactive approach can end up costing you. How can pests enter my property? Pests can enter properties in a surprising number of ways. Cracks in foundations, gaps around windows and doors, holes created by utility lines, and damaged vents are all potential entry points. Even seemingly small openings can be enough for some persistent pests, like rodents and insects. Additionally, pests can hitchhike inside year-round on cardboard boxes, used furniture, or on pets. Why Property Management Pest Control Is Important When we talk about property management, pest control isn't just an afterthought—it's a crucial component of providing the peace of mind that comes with a safe and comfortable living environment. Dealing with these “visitors” is important beyond just the ick factor. “The pest control industry only serves 15% of US residents, and yet 86% of US residents have an experience of pest infestations every year,” Cooley says. “So there’s a big gap.” Let's delve into some of the key reasons why pest control is so important. Pests contaminate food Many pests, such as cockroaches, ants, and rodents, are notorious for finding their way into food supplies. They can carry harmful bacteria and other pathogens, contaminating food and cooking surfaces. Mouse droppings, for example, can spread disease, in addition to just being … gross. This can potentially lead to foodborne illnesses amongst residents, causing unnecessary discomfort and potential health issues. Pests destroy property Pests like termites and carpenter ants can cause costly damage to the property structure, eating away at wood and compromising the integrity of the building. Other pests may gnaw through electrical wiring or insulation, leading to costly repairs. By maintaining consistent pest control measures, you can prevent such destruction and safeguard your property, making it a more secure and stable environment for your residents. Pests destroy residents’ belongings Some common pests, like carpet beetles or silverfish, may seem small and harmless, but they can wreak havoc on a resident's personal belongings. These pests can destroy everything from clothing and books to upholstered furniture, causing financial stress and discomfort to your residents. Pests spread diseases Pests are known carriers of a variety of diseases and can be a public health risk. Rodents can spread hantavirus and salmonella, mosquitoes transmit West Nile virus and Zika virus, ticks carry Lyme disease, and fleas are known to carry several diseases or allergic reactions, to name a few. Roaches carry any number of bacteria and diseases. Keeping these pests at bay is critical to maintaining the health and well-being of your residents. Pests make it difficult to live Beyond physical health risks, pests can create an uncomfortable, even distressing, living environment. The presence of pests can lead to anxiety and sleep disturbances, negatively affecting residents' quality of life. Pests like fleas and bedbugs cause physical discomfort if not outright health problems, and many pests, like mites, spread or trigger allergens. In short, effective pest control is essential to maintaining the integrity of your investors’ property assets, the health of your residents, and your reputation as a caring and responsible property manager. How Much Does Pest Control Cost? The last, and sometimes biggest, hurdle when it comes to pest control? Cost. General pest control methods can cost hundreds of dollars per service. Here’s an average breakdown for budgeting purposes: Cockroach/flea treatment: $350-$750 per service Bed bug treatment (heat): $1500+ per service Bed bug treatment (chemical): $1000+ per service Rodent trapping service: $250+ per service Quarterly general insect service: $40-$50 per month How can property managers find a cost-effective solution that drives value and comfort for their residents without breaking the bank? Throughout his years of experience, this is the question that Landon Cooley found was nagging the property managers he met. “We wondered: Can we take these specific pain points – bedbugs or cockroaches or fleas – and find a solution that we can build into our Resident Benefit Program?” Property Management Pest Control Solutions Cooley’s solution? He co-founded Pest Share, which is a new service in Second Nature’s fully managed Resident Benefits Package. The Pest Share model is a subscription model that works like a co-op: everyone pitches in, and the collected funds go to the more expensive parts of the plan without burdening any one client with too much cost. Property managers simply select the Pest Assurance plan from four tiers of service levels. They add that plan to their RBP or OBP and pay a flat rate for it, which they can also roll into their overall RBP ancillary fees. Their residents can then go directly to Pest Share on their mobile phones to get pest services for no cost. “What we’re offering is unique, on-demand, and very tech-forward. Pet Share gives quick access to service but allows us to offer cheaper price points for the same end result,” Cooley explains. “Our approach is, 'How can we take this off the property manager’s plate?’ We aim to create ancillary revenue for them, take an annoying task off their list, and enhance the resident experience.” The result? Pest Share has helped their property management clients increase their Benefit Package ROI by 75%. For Second Nature, including Pest Share’s model in our Resident Benefit Package – and upcoming Investor Benefit Package – was a no-brainer. Learn more about Pest Share by getting in touch, or read our latest study on the impact of our RBP on the resident experience.

September 27, 2024

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12 Tasks for Property Management Automation

Property management automation refers to using technology and software to automate various tasks and optimize processes related to managing properties. It can involve using single-family property management software to streamline tasks such as rent collection, applicant screening, property maintenance requests, and accounting, among others. At Second Nature, we think of automation and outsourcing as two sides of the same coin. Either way, you're getting your time back. That's why our focus is making life better for residents and easier for property managers. Our suite of resident services helps support a better resident experience, driving up retention and making investors happier, too. And, since we fully manage every part of it, we also make life easier for you, the property manager. That's a "triple win." With that being said, let's dive into the nitty-gritty of property management automation: the 12 tasks and seven tools you can most easily automate and the seven tools to help you get there. Which Property Management Tasks Should You Automate? Automation might make us think of manufacturing lines or robots, but in the modern workplace, automation is simply a catch-all term for tech tools that can instantly streamline your work process. Automation tools handle time-consuming, repetitive tasks, speeding up the workflow process, creating fewer mistakes, and freeing us up to do more valuable work. Without automation, we find ourselves losing time with busy work like: Manually entering data Writing and sending emails Phone calls and follow-up Keeping track of to-do lists Fixing mistakes in spreadsheets or other work Reminding team members how to do day-to-day tasks Think about the last month when you took the same action repeatedly – or saw the same situation and made the same decision – or got the same question and shared the same information. If a task is easily duplicated and policy/rule-based, automation is coming for it. Here are a few of the most common areas where PMs are standardizing and applying automation tools. 1. Rent collection automation Online rent payments can automate reminders to tenants, reduce errors, and increase on-time payments to collect rent without creating any additional work for the PM. Tools like ELI+ (formerly Colleen.ai) and EliseAI are innovating this space. Both are chatbot-type tools that help automate things like rent collection by automating communication about delinquency and the follow-up process. The tools communicate directly with your residents for you with rent payment reminders, support, and more. 2. Property inspections and compliance Maintaining compliance with property regulations and ensuring thorough inspections are critical responsibilities for property managers. Using an automated checklist on a handheld device not only speeds up the inspection process but also ensures consistency, helping you meet regulatory standards efficiently. Automation tools can instantly generate comprehensive reports, eliminating the need to return to the office to manually input data. Tools like RentCheck and OnSight Pros can either automate or outsource this work for you as a property manager. RentCheck is a software tool that you and your staff can use for photos, checklists, workflows, and more, all while ensuring that inspections adhere to compliance standards. There's also a native app that residents can use to do inspections themselves. Then, it will compile a clean, easy report that you can send to your investors. OnSight Pros isn't exactly an automation, but it has the same impact on your workflow. They have a network of professionals who do property reviews in person for you, helping you stay compliant without having to perform every inspection yourself. They're not available in every market, but you can check their website for available service areas. Related: 5 Best Property Management Inspection Software Property Management Rental Inspection Checklist [Free Template] 3. Maintenance requests A 24/7 maintenance portal means you don’t have to take calls every time they come in, and you can quickly and easily triage maintenance requests. Tools like Property Meld help automate work requests, vendor communication, scheduling, and more. Mezo is another newer tool on the market that provides conversational AI to interact with your residents, scope the maintenance issue, support self-service, and help deploy the right professional if needed. With a tool like this, you can eliminate multiple trips out to the property or even have it fixed by the residents themselves. Related: 10 Best Property Maintenance Software 4. Accounting and bookkeeping Bookkeeping was one of the first areas of automation when computers entered the scene. It's hard to find a professional property management business that doesn't use property accounting software. Tools like Rentvine help automate fees, statements, financial tracking, and more. Most property management software platforms provide accounting features, and everyone uses them somewhat differently. You can use integrations, layer in vertical tools, and more. However, a lot of the actual accounting can't be truly automated. Instead, you can outsource to companies like Bynnd and Reconcile Daily who will do the accounting work for you. 5. Document management Property managers are always on the go. Automated document management is a game-changer. This one is pretty straightforward. Most property management software works with cloud-based documents and tracking or integrates with services like Docusign. 6. Managing new accounts With integrations, you can add new properties, trigger automatic processes, and reduce vacancies more quickly. For example, after entering a new property in your CRM, automation can launch a new property checklist and notify your whole team. For example, you can set up an integration where a new lead comes in as "won" through LeadSimple and Zapier automatically starts a new property checklist in Process Street, populates the data from the sales process, and assigns the checklist to the right person on your team. All automated. 7. Resident communication Email is the most common form of communication, and yes, it is automation. Some PMs are using even more streamlined workflow communication like Slack, LeadSimple, or Help Scout. Automation can feel alarming to some at first, but the best property managers are embracing it. They’re quick to do the hard work of developing policies, documenting the process, and then using tools to systemize their expertise and automate the work. The result is more reliable and likely less expensive than people doing it. Solutions like LeadSimple provide communication tools across customer types so you can set up automation for clients and residents. 8. Lease renewals Automating lease renewals allows property managers to streamline communication with residents when their lease is going to end soon. Various tools on the market can automatically generate renewal reminders, send them to residents, and draft lease agreements for electronic signatures. By automating this process, property managers can ensure they never miss a renewal opportunity, helping to reduce vacancies and keeping the workflow organized without manual tracking. Related: How to Craft a Lease Renewal Letter That Wows Your Residents [Free Template] 9. Resident onboarding Self-service workflows for resident onboarding allow new residents to manage their move-in process independently. Through online portals, automated messaging, and chatbots, property managers can reduce their direct involvement. This is especially useful for smaller property management companies that need to stay competitive while cutting down on manual tasks. By using these tools, residents can handle everything from signing leases and making deposits to setting up rent payments and maintenance requests, all without the need for back-and-forth communication. Although some property management companies may have some hesitation around adopting new technologies, the ability to simplify operations and offer a more seamless experience to residents makes these systems a smart choice for companies looking to operate efficiently in a tech-driven world. Related: How to Create Self-Service Tenant Onboarding Workflows Best Tenant Onboarding Software 10 Steps to Onboard New Tenants 10. Vendor management Managing vendors is an integral and sometimes time-consuming part of property management. Automation helps by consolidating communication and scheduling. For example, software systems can automatically dispatch work orders, track progress, and update the property manager on the status of repairs or maintenance. By using automation to manage vendor interactions, property managers can ensure timely service delivery while keeping their operations running smoothly. 11. Reporting and analytics Automating reporting and analytics allows property managers to track essential key performance indicators (KPIs) in real-time, providing a clearer picture of both financial and operational performance. These KPIs might include rent collection trends, occupancy rates, or maintenance costs, categorized by financial, operational, or property performance. By automating reports, property management companies can instantly access critical, transactional data while keeping sight of broader objectives like maximizing customer lifetime value. This enables data-driven decisions that not only focus on short-term metrics but also support long-term growth and stability. Learn more: Top 20 Property Management KPIs to Track 12. Utility billing and expense management automation Utility billing and expense management can be complex, but automation tools simplify the process by accurately tracking utility usage, generating bills, and distributing them to residents. This eliminates manual errors and ensures timely payment, while also allowing managers to monitor utility expenses across multiple properties. With automation, you gain full visibility into costs, making budgeting and forecasting significantly easier. Property Management Automation Tools After identifying the processes you want to automate, the next step is to adopt the best tools available to property managers. We’re seeing buzz from PMs across the industry using automation tools at every stage of their operations. One of the more visible examples out there is Peter Lohmann, CEO of RL Property Management. He outlined several no-code tools that he uses to automate his property management business. No-code tools are easy for anyone, and most can “talk” to other software through APIs. Here are some of the tools we like the best and how Lohmann has used them for his PMC: 1. LeadSimple LeadSimple is a sales and operations CRM geared towards property and real estate management. You can approve a rental application in the CRM and trigger other automations like emails, checklists, and more. LeadSimple recently added workflow automation and an inbox product that works like a ticketing system. 2. Zapier Zapier is a workflow automation app that connects all your other apps. For example, when you mark a new property in your CRM, it can “zap” your checklist software to start a “New Property Checklist.” 3. Process Street Process Street is an automated checklist software that gets your entire team on the same page. You can assign management tasks, mark priorities and completions, schedule, and more. It also has email templates that can be automatically populated from your CRM. 4. Slack We all know Slack. Slack is the communications app that puts your whole team in one place, sets up groups, streamlines topics, and more. Zapier can automatically send notifications through Slack about new accounts and assignments. 5. Mailchimp Mailchimp automates and sends professional emails. Through integrations, you can connect it with your CRM and other automations, so emails are automatically populated and triggered at the right time. 6. Airtable Lohmann explains that he has transitioned all non-financial data from their legacy system into Airtable, where they have control of it and can connect it to other tools. 7. Buildium Buildium is a property management software for PMs with 50+ doors in their portfolio. With a monthly fee, you can use Buildium to set up recurring rent payments with credit cards or ACH and use other property management features. Benefits of Automating Property Management Workflows and Processes Professional property managers don’t just manage property; they manage projects, workflows, and processes. Here are some of the top benefits of implementing automation tools to improve those processes and workflows. Improved efficiency Automated property management processes can drastically reduce the time spent on repetitive tasks, allowing your team to focus on more strategic activities. Use rent collection as an example: Instead of manually tracking payments, an automated system can collect payments electronically, keeping records updated in real time. Minimized errors Automated workflows minimize the chance of human error in tasks like accounting, tenant screening, or maintenance scheduling, ensuring accuracy and consistency. For instance, in accounting, automating calculations and data entry can reduce errors that may occur due to manual entry, ensuring the accuracy of financial records. Increased resident satisfaction Automation can speed up response times to maintenance requests, rent payment processing, and communication, leading to a better tenant experience. Using maintenance as an example here: Tenants can submit requests online, the system can automatically assign a service provider, and update the tenant with progress in real-time. Enhanced communication Automated reminders and notifications keep all stakeholders, from tenants to service providers, informed and engaged, improving communication. For example, automated reminders can notify tenants about upcoming lease renewals or rent due dates, ensuring they're well-informed and reducing late payments. Scalability Automated systems allow for easier scaling of operations as your property portfolio grows. It's much simpler to manage increased workloads when processes are automated. As your property portfolio grows, an automated system can easily handle adding new tenants, properties, and corresponding data, without requiring more administrative effort. Real-time reporting With automation, real-time reporting becomes possible, providing valuable insights into your business's performance and enabling better decision-making. An automated system can provide real-time occupancy rates, rental arrears, or maintenance costs, enabling you to make data-driven decisions. Cost savings By streamlining operations and reducing manual labor, property management automation can lead to significant cost savings in the long run. By automating routine tasks like tenant screening or lease agreement generation, you can save administrative time and associated labor costs. Regulatory compliance Automated systems can help ensure compliance with housing laws and regulations, reducing the risk of legal issues. For example, automated systems can update you on changes to housing laws and ensure all lease agreements are compliant. Remember, automation doesn't mean losing the personal touch that sets your business apart. Instead, it's about freeing up time and resources to focus more on those areas that truly require a human touch. What Is an Example of an Automated Property Management System? One innovative example of automated property management is right here at Second Nature. Our service helps manage and automate the resident experience to be the best that it can be. Our Resident Benefits Package allows property managers to deliver premium services – without the hassle of managing the programs in-house. Second Nature's RBP™ offers benefits that residents pay and stay for, like rent reporting, renters insurance, filter delivery, identity protection, resident rewards, and even a move-in concierge. With the RBP™ you can essentially automate resident happiness. How Second Nature Helps With Property Management Automation Automation sets professional property managers apart. As automation is adopted across the industry, professional PMs are more likely to build the right systems and put together the right tools faster than people who aren’t as motivated or skilled. At Second Nature, we believe in the power of innovation, and we see it every day in property managers around the country. Our tools, like the Resident Benefits Package, aim to bring more ease and automation to your work processes so you can get out there and grow your business. Learn more about our benefits and tools at secondnature.com.

September 26, 2024

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Resident Benefits Package: What is it? And How to Roll Out

What is a Resident Benefits Package? A Resident Benefits Package (RBP) is a selection of services provided by property managers to residents of rental properties. Sometimes referred to as a “tenant benefits package,” these benefits are usually included in the lease agreement and are designed to make residents’ lives easier by meeting their wants and needs. Some examples of these services could include filter delivery, credit building, and 24/7 maintenance. At Second Nature, we pioneered the only fully managed resident benefits package. If you’re ready to get started, you can start building your own Resident Benefits Package today! Note: We chose the term “resident” because the “tenant benefit package” sounded too impersonal for the value we’re driving. Continue reading to find out the benefits of a resident benefit package, how it can generate revenue, and how to implement one to give your residents, investors, and business a win. What Are the Benefits of a Resident Benefits Package? The resident benefits package adds value to residents by anticipating their needs and providing them with services that make life easier and better. It adds value to investors by preventing maintenance, vacancy, and delinquency. And, of course, it adds value to property managers because it differentiates them from the competition. Let’s take a deeper look at how the RBP creates a Triple Win – for residents, for investors, and for you, the property manager. 1. Attracting and retaining residents through better experiences Offering a comprehensive benefits package can make a property more appealing to potential residents. By providing desirable perks such as exclusive discounts, concierge services, or access to credit reporting and other financial benefits, the property management company can attract a larger pool of prospective residents and increase occupancy rates. Retaining residents is also crucial for profitability, as turnover costs can be significant. A benefits package can enhance resident satisfaction and loyalty, reducing turnover and associated expenses. 2. Higher rental rates for higher value A well-curated tenant benefit package makes properties more valuable. When residents perceive additional value in the form of amenities, services, or discounts, they are often willing to pay more for their living experience. This allows the property management company to command premium prices for their units, leading to increased revenue and improved profitability. 3. Differentiation and competitive advantage In a crowded real estate market, a distinct resident benefits package can set a property apart from competitors. It becomes a unique selling proposition that highlights the property management company's commitment to providing an exceptional living experience. By offering a package that exceeds what other properties in the area provide, the company gains a competitive advantage and attracts residents who value the added benefits. 4. Ancillary revenue opportunities A tenant benefits package can create opportunities for generating additional revenue streams tied to specific benefits in the package. Resident Benefit Fee: How Much Does a Resident Benefit Package Cost? Most resident benefits packages cost between $20 and $100, which is often included in the lease and added as a monthly fee for the resident. Prices vary depending on a few key factors, chief among them being the mix of benefits selected by the property manager. What Does a Resident Benefits Package Include? Here’s what the Second Nature Resident Benefit Package includes. Filter delivery service Air filter delivery was the first service Second Nature offered to scattered-site and single-family property managers. It is a cornerstone of the RBP, and over 1M residents have shown that a physical, tangible product is key to their ongoing perception of value. One of the most common causes of HVAC maintenance requests is a failure to change the home’s air filters on time. Air filter delivery from Second Nature solves the problem by delivering the correct-sized high-quality HVAC filters directly to each home’s front door on a predetermined schedule. The delivery serves as a reminder for the resident to change the filter, and voila – problem solved. The resident breathes clean air, the PM has fewer HVAC tickets to deal with, and the investor has their asset protected. That’s a triple win. Our message to residents: “Changing filters is as easy as opening the front door.” Phil Owen, founder of OnSight PROS, says of the delivery system: “Last year OnSight PROS performed third-party property condition reports at almost 18k single-family rental properties on behalf of property managers. The number of filters that we have to replace or mark as ‘needs attention’ becomes almost zero when a PM implements the Second Nature program. I cannot imagine how a property manager could justify not protecting their landlords with this program. The difference between those using the program and those who simply hope that their tenants go to the store to purchase and install a new filter is staggering.” Our filter delivery service has proven to reduce total HVAC maintenance requests by 38% and save up to $250 per year per property. $1 million identity protection One in four Americans will be victims of identity theft. In 2021, digital theft incidence surpassed home burglary incidents for the first time – and is rapidly rising. With identity protection as part of your RBP, every adult on the lease automatically gets the peace of mind you can expect from professional-level identity protection. Backed by AIG and monitored through IBM’s Watson, Aura Identity Guard works proactively on behalf of the resident to identify fraudulent use of their identity and alert them. In the event of an actual identity theft case, the resident receives a dedicated case manager and is covered up to $1,000,000 for most resulting damages. This protects the resident's ability to pay rent, which makes it a win for the investor. And it keeps property managers out of the middle of another difficult situation and decision. Related: How to Help Residents Use Their Identity Protection Services During a Data Breach Credit building With RBP’s credit building service, on-time rental payments improve the credit score of your residents. It may seem crazy that people are building credit by paying for Netflix and other small subscriptions, but not their largest monthly payment... rent! But that's the truth for most residents. We asked, how is it even possible that someone's largest monthly expense is the only one they aren't getting credit or rewards for? This credit reporting program reports positive-impact, on-time rent payments automatically to all three credit bureaus, helping residents build their credit simply for paying their rent on time. Residents also get an immediate boost with 24 months of back reporting included. This service directly impacts rates on credit cards, auto loans, and future mortgages, incentivizing residents to get rent in on time and helping set them up for home buying in the future. The property manager and the investor both reap the benefit of the extra incentive to get rent on time and the resident gets to see their credit score rise as a result of something they have to do anyway. It’s a big-time triple win here. Resident rewards program Rental rewards are a favorite among residents and another powerful and positive incentive for on-time rent payments. Rental rewards programs deliver automatic benefits at move-in. Then, residents can unlock even more rewards by paying rent on the day it's due. At Second Nature, all on-time payment tracking is done through the app. Like other services in your RBP, it’s managed for you. Gifts include: $30 gift card for national and local brands $25 restaurant card $40 rewards cash on rent day each month rent is paid on time And more The value of rewards is covered in the cost of the RBP, so the property manager isn’t seeing any additional liabilities. The PM and investor only see a benefit, which is the increase in on-time rent payments. For the resident, rent day is now rewards day. Another triple win. Move-in concierge Setting up utilities can be a massive headache for a new resident. Residents aren’t sure who to call and who provides utilities and home services like internet and TV for their new address. Moreover, the research for discounts/promotions/coupons available takes more time. Most times, the process is clunky, with lots of friction that gets in the way of it getting 100% done. And it is too easy to overlook fine print in the lease about installing satellite dishes. Move-in Concierge changes all of that for professional property managers. In one phone call, residents find out what their best options are and can even get help simplifying setup. An experienced concierge confidently guides multiple people every day to properly set up their utilities. Renters insurance program Nearly all property managers require a renters insurance policy in their lease agreements. As part of our RBP, Second Nature offers price-competitive insurance coverage options through a Renters Insurance Program that property managers can apply to all their residents locked in with one group rate. Residents who have their own renters insurance can receive a waiver on RBP's insurance program, but the current list of enrolled residents is tracked for you by Second Nature, and any resident who drops off of their own insurance is automatically enrolled. No more hassle for you, quality asset coverage for the investor, and immediate and comprehensive liability coverage for the resident – another triple win you can create with your Resident Benefits Package. Additional benefits At Second Nature, we help property managers deliver all their services to residents. If you’re already offering perks and are ready to level up to a resident benefits package, we can help you bundle the above benefits with other services. We’ve worked with PMs to bundle in their existing property management services, including: 24/7 maintenance coordination: A huge benefit to residents and PMs is a service that provides after-hours support without dragging the property manager out of bed. This type of program makes reporting pesky maintenance issues easy and fast for the resident. It also helps prioritize emergency maintenance. Online portal: With a simplified online resident portal, residents can access all of their documents, messages, and more through an app. Residents can also pay rent and receive reminders to pay rent online. Home buying assistance: For residents who are building up toward home ownership, some PMs offer assistance in building credit and savings. We help them get there. Vetted vendor network: A vetted network ensures that vendors who service your properties are screened to exceed your standards for insurance, licensing, and professionalism on the job. Property managers, residents, and investors can rest easy knowing that they have the best vendors working on their assets. Washer/dryer rental: Some properties may have these appliances installed or the residents come with their own, but we’ve seen the impact on prospective applicants choosing homes due to the convenience of having the washer/dryer available. Security deposit alternatives: Security deposit alternatives come in different packages, but all serve to provide residents ways to be financially liable for damages without having to pay a significant lump sum upfront. Pure insurance, surety bonds, and ACH authorization programs are all versions of deposit alternatives that seek to lower the barriers to rental, which in turn keeps days-on-market low and turnover costs down. Pest control services: Property managers can partner with pest control companies to provide routine or property management pest control services to the homes they manage. Bugs are one of the most common complaints from renters, and having services available to prevent infestation issues is a big win for resident experience. When implementing a full-service, fully managed resident benefits package, you don’t have to lose the benefits you already offer. A great service can integrate all of these benefits together – delivering more impact to residents, investors, and property managers. How Much Revenue Can I Create Per Unit With a Resident Benefits Package? The amount of ROI on a resident benefits package will vary depending on the property class type, market, and number and type of services offered. Generally speaking, resident benefits packages are often in the $25-75/mo range for residents, but could be more or less. It depends primarily on the amount and type of products and services. To go back to our concept of the experience economy: a resident benefits package gives residents the kind of incredible experience that they will pay and stay for. In short, keeping residents happy can reduce turnover and lead to lower costs and higher ROI for you and your investor. According to Eric Wetherington, VP of Strategic Initiatives at PURE Property Management, “Revenue is all about providing a service. The younger generations we’re dealing with in property management – they want convenience, they want experiences, and they want things to be simple, and they’re willing to pay to have things taken care of for them.” A fully managed resident benefits package can generate revenue in two key ways: Increasing services to improve resident retention Decreasing costs by increasing efficiency A resident benefits package can help to accomplish both. Routine filter delivery cuts down on HVAC and maintenance costs. A move-in concierge helps cut down time and cost as residents get settled in their new home. Credit building services keep residents invested in paying on time, sending online payments, and delivering incredible value. The list goes on. A resident benefits program creates a huge win for you as a property manager, and your investor, by driving higher ROI over time. How Can Property Managers Implement a Resident Benefits Package? If a resident benefits package is new to your company, you may wonder how best to implement it. Should you roll out a resident benefits package as part of your base service – ensuring the maximum benefits for your investor – or allow residents to opt in or out? What is legal or not? We do recommend including this as a part of the base package for all residents. Offering optional RBPs creates potential for headache, and the theoretical benefits almost never materialize. According to Second Nature's Head of Sales, Bob Hansen, “You have to look at the value that a resident benefits package brings to the investor and the resident, not just you as the property manager.” At Second Nature, we’ve seen incredibly low pushback from residents when an RBP was introduced. After all, it benefits residents, and most are delighted to have the extra service. How Can Property Managers Reduce Costs With a Resident Benefits package? The answer is: in several ways! Implementing a comprehensive residential benefits package can provide property managers with opportunities to reduce costs and increase operational efficiency. Let’s look at examples from the product above. By including air filter delivery as part of the package, property managers can ensure that residents have regular access to clean air filters, reducing the need for costly maintenance and repairs caused by poor air quality. Offering identity protection and credit-building services can help mitigate the financial risks associated with identity theft and delinquent payments, potentially reducing costs related to collections and legal procedures. They also improve retention and encourage on-time payments. Including a resident rewards program can also incentivize desirable behaviors such as timely rent payments or positive referrals, fostering resident satisfaction and reducing turnover costs. By partnering with a renter's insurance program, property managers can transfer potential liability and property damage expenses to the insurance provider, minimizing their own financial risks. A move-in concierge service can streamline the onboarding process for new residents, reducing administrative costs and improving operational efficiency. By providing these benefits, property managers can enhance resident satisfaction and retention, ultimately reducing expenses associated with turnover, repairs, and legal issues. Common Mistakes Property Managers Make in Implementing Resident Benefits Packages In our experience helping property managers implement RBPs, we’ve heard our share of concerns or even horror stories from PMs who had bad implementations with other products. Here are some of the most common mistakes in RBP implementations – and how to avoid them! 1. Overpromising and underdelivering Property managers may advertise extravagant benefits that they cannot consistently provide or fulfill, leading to disappointment and resident or investor dissatisfaction. Property managers should accurately represent the benefits package, ensuring that the offered perks are realistically achievable and consistently provided to residents. 2. Lack of communication Failing to effectively communicate the details and availability of the benefits package to residents can result in confusion and missed opportunities for using the offered perks. Property managers should effectively communicate the details, availability, and utilization process of the benefits package to residents through multiple channels, such as newsletters and online platforms. 3. Inadequate research and selection Property managers may choose benefits that do not align with the residents' preferences or needs, leading to a lack of interest and underutilization of the package. Property managers should conduct thorough market research and engage with residents to understand their preferences and needs, ensuring that the benefits selected align with their expectations. 4. Failure to evaluate cost-effectiveness Neglecting to assess the costs and benefits of the package can result in offering benefits that are financially unsustainable or fail to provide a satisfactory return on investment. Property managers should regularly assess the costs and benefits of the package, considering factors such as resident utilization, return on investment, and overall financial sustainability to make informed adjustments as needed. 5. Lack of flexibility and adaptability Not regularly reviewing and updating the benefits package based on resident feedback and changing market trends can make it less competitive and less appealing over time. Property managers should actively seek resident feedback, monitor market trends, and periodically review and update the benefits package to ensure it remains competitive and relevant to residents' changing needs. 6. Insufficient staff training Failing to train property management staff on the benefits package and its administration can lead to ineffective communication, missed opportunities, and difficulty addressing resident inquiries or issues. Property managers should provide comprehensive training to their staff on the benefits package, including its features, administration processes, and effective communication strategies, enabling them to effectively support and engage with residents. 7. Neglecting legal and regulatory considerations Property managers must ensure that the benefits package complies with all relevant laws and regulations, such as data protection requirements or fair housing laws, to avoid legal repercussions. Property managers should consult legal experts or advisors to ensure that the benefits package complies with all applicable laws and regulations, protecting both the company and residents. 8. Ineffective marketing and promotion Inadequate marketing efforts to promote the benefits package can result in low resident awareness and limited participation, reducing the overall effectiveness of the package. Property managers should develop a strategic marketing plan that utilizes various channels to promote the benefits package, highlighting its value proposition and actively engaging residents in participating and utilizing the offered perks. 9. Ignoring resident feedback Neglecting to seek and incorporate resident feedback can hinder the improvement and optimization of the benefits package, missing opportunities for enhancing resident satisfaction and retention. Property managers should establish channels for residents to provide feedback on the benefits package, actively listen to their suggestions and concerns, and make necessary adjustments to enhance resident satisfaction. 10. Lack of coordination with vendors Failing to establish clear communication and expectations with vendors offering benefits can lead to subpar service delivery, difficulty resolving issues, or missed opportunities for cost savings. Property managers should establish clear expectations, contracts, and regular communication channels with vendors offering benefits, ensuring a seamless and satisfactory service delivery process for residents and promptly resolving any issues that may arise. This is A LOT to keep in mind, and avoiding these mistakes might feel like it will cost too much or simply take too much work. But that’s why opting for a fully managed RBP is a solution so many PMCs are turning to. You can rely on a partner to manage all aspects of your RBP, and ensure it's delivering on its promises to your residents. More on that in the next section. How 1,000+ Property Managers Are Creating Triple Wins With a Resident Benefits Package Rolling out a resident benefits package is a powerful way for property managers to create a Triple Win – for residents, investors, and themselves. An RBP like Second Nature’s is designed to be simple to use and easy to implement. All the services included within it are managed externally by Second Nature, meaning there is no day-to-day upkeep required from the manager. You plug it in and Second Nature keeps it running. The value creation an RBP generates – with such little work required from the PM – is an incredibly easy way to grow your business and create great experiences that residents will pay and stay for. Don't get left behind in the evolving world of resident experience. Learn more about our fully-managed Resident Benefits Package and how we can build ease for you, your investors, and your residents. Learn More About RBP from Second Nature

September 23, 2024

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How to Write a Tenant Move-Out Letter: Thank You & Reminder + Free Templates

When it's time for a tenant to move out, sending a well-crafted letter can make all the difference in ensuring a smooth transition. Whether you're expressing appreciation for how they’ve cared for the property or simply reminding them of key dates, this communication is an important part of the rental process. Below, you’ll learn what a tenant move-out letter is, why it matters, and how to create one that leaves a positive impression. Note on language: Here at Second Nature, we like to use the term “resident” rather than “tenant” to highlight the human aspect of property management rather than the transactional. However, we’re writing this article in response to a verbatim query from one of our readers, so we wanted to reflect on their choice of language in full respect. What Is a Tenant Move-Out Letter? A tenant move-out letter, also known as a goodbye letter or termination notice, serves as an official notice to remind renters that their lease term is ending soon. Unlike an eviction notice letter, which often involves legal action due to lease violations, a move-out letter is generally more friendly and straightforward. It's a polite way of notifying your tenant about their approaching move-out date and outlining the next steps they should take to leave the property in good condition. Most move-out letters are routine and come at the end of a lease term, so they should maintain a positive tone. After all, your tenant has been living in your property for an extended period of time, and fostering goodwill—even during the process of departure—can leave both parties with a sense of satisfaction and end the current landlord-tenant relationship on a positive note. Why Send a Tenant Move-Out Letter? Sending a move-out letter offers several advantages for both property managers and tenants. Here’s why it’s a good idea: Avoiding confusion: A move-out letter provides clarity, helping both parties avoid any misunderstandings about key details like the move-out date, key return procedures, and cleaning expectations. This simple step can prevent miscommunication that could otherwise escalate into bigger issues down the line. Legal requirements: Depending on your location, a move-out letter may be a legal requirement so be sure to check state and local laws. Ensuring that all notifications are properly documented protects both parties and helps avoid unnecessary disputes. Planning and preparation: By sending a move-out letter, you give tenants enough time to prepare for their move. This allows them to schedule movers, clean the property, and organize move-out logistics, reducing the likelihood of last-minute complications. Final inspection planning: Scheduling the move-out inspection allows both you and the tenant to address any potential concerns before they depart. This process helps ensure that the property is left in good condition and that any necessary repairs or cleaning are handled promptly. Property maintenance: Including instructions in the move-out letter regarding cleaning and maintenance helps ensure that the property is returned in a suitable condition. By making your expectations clear of normal wear and tear, you can reduce the likelihood of damage or uncleanliness. Smooth transitions: A well-structured move-out process allows for efficient scheduling of maintenance issues and repairs after the tenant leaves, minimizing vacancy downtime. This quick turnaround is key to getting the property ready for the next tenant. How Are Move-Out Letters Different from Notices to Vacate? Move-out letters and notices to vacate serve different purposes. A move-out letter is a friendly courtesy reminder of a lease termination, while a formal notice to vacate often involves asking the tenant to leave the property for a specific reason, such as non-payment of rent or a violation of the lease agreement. While both letters involve tenants leaving the property, the tone and intent are very different. A notice to vacate is more formal and may involve legal repercussions if the tenant fails to comply. In contrast, a move-out notice is often seen as a courtesy to ensure that everyone is on the same page regarding the end of the lease. Read more: How to Write a Notice to Vacate Letter to Tenants [with free template] How to Write a Move-Out Letter to a Tenant When writing a move-out letter, keep it professional yet friendly. This is your opportunity to set your move-out expectations clearly while maintaining a positive relationship with your tenant. Also be sure that your letter is free of spelling and grammatical errors! If time allows, you can personalize the letter with a kind message about your experience with the tenant. Here are the essential elements to include in your letter: Date of delivery: Mark the date that the letter is being sent to document when the tenant was notified. Contact information: Make sure your contact details are easy to find so that the tenant can reach out with any questions or concerns. Tenant’s name: Address the tenant by name to make the letter feel personal and respectful. Move-out date: Clearly state the date by which the tenant needs to vacate the property, including their personal belongings. This helps avoid any ambiguity about when they should be out by. Lease agreement details: Reference the title of the lease agreement and the date it was signed to connect the letter back to the original terms agreed upon by both parties. Legal requirements: Include any local or state laws/regulations that pertain to the move-out process, such as the required notice period. Final walkthrough date: Offer a specific date and time for the final inspection of the property. This gives both you and the tenant a chance to address any concerns before they leave. Security deposit information: Provide clear guidelines on how the tenant can ensure they receive their security deposit back. You should also have their forwarding address handy. This might include information about cleaning, repairs, or any other factors that will influence the return of their deposit. Name and signature: End the letter with your name and signature to formalize the communication. Each of these elements is crucial to both providing clear instructions and maintaining a positive tone. How to Write a Thank You and Move-Out Letter Sometimes, property managers like to go the extra mile and include a thank-you note to tenants who have taken good care of the property. This small gesture can help leave a lasting positive impression and foster goodwill, even after the tenant has moved on. Here's a sample letter template: Template: Dear [Tenant Name], Thank you for being a valued tenant at [Property Name] for the past [lease term]. We appreciate you taking good care of the property throughout your tenancy. This letter serves as a reminder that your lease term ends on [move-out date]. We wish you all the best in your new home! Please refer to our previous move-out letter for a detailed breakdown of the move-out process, including final walkthrough scheduling and security deposit return information. Sincerely, [Your Name] Property Manager This letter not only reminds the tenant of the move-out process but also expresses gratitude, leaving a positive final impression. How to Write a Reminder Move-Out Letter to a Tenant A reminder letter serves as a gentle nudge to the tenant, ensuring they’re aware of upcoming deadlines and responsibilities. It's particularly useful if the tenant’s move-out date is approaching quickly, and you want to make sure everything is on track. Here’s a sample template: Template: Dear [Tenant Name], This letter serves as a friendly reminder that your lease term at [Property Name] ends on [move-out date]. We haven't yet received confirmation on your final walkthrough scheduling. To ensure a smooth transition, please contact the property management office at [phone number] or [email address] to schedule your final inspection. A detailed move-out guide outlining cleaning requirements, key return procedures, and security deposit information was previously sent to you. You can also find this information on our website at [link]. We look forward to hearing from you soon to schedule the final walkthrough. Sincerely, [Your Name] Property Manager This type of letter ensures that important details are not overlooked, helping both you and the tenant stay on the same page as move-out day approaches. Final Thoughts Writing a tenant move-out letter is a crucial step in maintaining a positive relationship with your tenants, even as they prepare to leave. By keeping the tone professional yet friendly, and including all necessary details, you can ensure a smooth transition that benefits both parties. If you’re a property manager looking to further improve the resident experience, consider enhancing your offerings with a Resident Benefits Package. You can learn more about these packages and how they can make your rental properties even more appealing at Second Nature

September 20, 2024

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How to Write a Noise Complaint Letter to Tenant + Free Template

Writing a noise complaint letter to a tenant can be one of the more challenging aspects of real estate property management, but it's a necessary step in ensuring a peaceful living environment in and around the rental property. In this blog, we'll discuss: What constitutes a noise complaint? Scenarios in which you may need to send a complaint letter Steps to take before sending a complaint letter Elements to include in the letter (along with a customizable template) How to send the complaint letter effectively What Is a Noise Complaint? Noise disturbances are not always cut and dry. Sure, the neighbor’s dad rock garage band is pretty awful, especially around happy hour, but should it be illegal? Opinions may vary! But fundamentally, a noise complaint happens when sound levels disrupt the peace and comfort of others. These disturbances can range from loud music, parties, or even frequent or loud arguments. Generally, noise complaints are about activities during designated quiet hours, typically late at night or early in the morning. There are general laws governing excessive noise levels. For instance, many local ordinances set limits on acceptable noise levels during specific times. Property owners and managers should familiarize themselves with these laws and ensure they align with any local or state regulations. Consider obtaining legal advice to ensure that you have full clarity on what constitutes a legal noise disturbance. Why You Might Need to Send a Noise Complaint Letter There are several situations where a noise complaint letter might become necessary. Some common examples include: Multiple complaints about loud noises during quiet hours. Specific complaints mentioning a resident by name or address, indicating recurring noise problems. A property manager personally identifies noise disturbances during routine inspections or visits. Today, we’ll address these common scenarios and provide guidance to property managers who may need to send one of these letters to noisy tenants. We’ll also include a customizable sample letter you can use in these cases. Related: Types of Tenant Issues and How to Deal with Them Property Manager Noise Complaint Warning Before drafting and sending a noise complaint letter, it's crucial to investigate the situation thoroughly. Rushing into sending a complaint without proper groundwork can lead to unnecessary conflict and misunderstandings, and create an uncomfortable resident experience. Identifying the source of the problem If complaints have been received from other tenants about the same individual, it's a good starting point to talk to the neighbors to confirm the issue. Evaluate these complaints in detail to gather all the necessary information such as the type of noise disturbance, when they experienced it, and how often these might occur. It might also be helpful to visit the property during reported disturbance times, although this isn't always feasible due to odd hours. Discussing the issue with the offending tenant Before issuing a formal complaint, having a conversation with the tenant can sometimes resolve the issue. Talk to them about the complaint, discuss the incident, and ask them to change this behavior. This serves as a preliminary warning, allowing the tenant to improve their behavior before further action needs to be taken, such as eviction. It also provides an opportunity for face-to-face de-escalation of the issue before proceeding to more formal corrective or legal action. Noise Complaint Warning Letter to Tenant for Noise Violation For first-time violations, issuing a warning letter requesting them to comply with quiet hours is often recommended. This letter should be polite yet firm, indicating that there has been a noise complaint (or even several) and explaining the necessary steps to mitigate future disturbances. Example of a warning letter [Your name] [Your address] [City, state, ZIP code] [Email address] [Date] [Tenant's name] [Tenant's address] [City, State, ZIP cod Dear [Tenant's name], This letter is to inform you that we have received a noise complaint regarding your residence. As per our records, the disturbance occurred on [specific date] during [quiet hours]. We kindly request you to be mindful of the noise levels to ensure a peaceful living environment for all. If the noise issues persist, further action may be taken. We appreciate your cooperation in this matter. Sincerely, [Your Name] What Should the Noise Complaint Letter Include? A well-structured noise complaint letter should contain the following elements: Notification of complaint: Explain that one or more noise complaints have occurred, and that this issue needs to be addressed. Further details: Back up your claims by providing the total number of complaints that you’ve received, and the timeframe they occurred. If the exact information isn’t available, provide some general timelines (such as “late Wednesday evening”). Legal information: If there are applicable local laws or noise ordinances, share that with the tenant, as well as how it applies to their actions. Lease agreement reference: Reference the rental agreement if it mentions noise-related laws and ordinances in detail and the consequences of not complying with them. Proposed solutions: Suggest ways to keep noises at a reasonable level and to avoid loud activities during designated quiet hours. Timeframe for compliance: Give the tenant a specific period of time to reduce their noise levels, and inform them that you’ll follow up with them. Consequences of non-compliance: Clearly state the potential consequences, such as eviction proceedings, if the noise disturbance continues. Noise Complaint Letter to Tenant Template Here’s a customizable letter template for a noise complaint: [Your name] [Your address] [City, State, ZIP code] [Phone number] [Email address] [Date] [Tenant's name] [Tenant's address] [City, State, ZIP code] Dear [Tenant's name], This letter is to inform you that we have received several noise complaints regarding your unit. The disturbances have been reported to occur during [specific dates and times]. This is in violation of the noise regulations stated in your lease agreement and local noise ordinances. We request that you reduce noise levels, especially during quiet hours, which are from [start time] to [end time]. Please take immediate action to remedy this situation. We will check in again after [specific period] to ensure compliance. If the noise disturbances continue, we may have to take further action, which could include eviction. Thank you for your understanding and cooperation. Sincerely, [Your name] How to Send the Complaint Letter to the Tenant The complaint letter can be sent via email or delivered as a hard copy. Make sure you retain a copy for your records, noting the date and method of delivery. Final Thoughts Handling noise complaints efficiently is crucial for maintaining a peaceful living environment. By following the steps outlined above and using the provided template, your property management company can address noise issues effectively and foster a more harmonious community for all renters. Learn how you can further improve the resident experience, with Second Nature’s Resident Benefits Package.

September 20, 2024

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How to Write a Tenant Welcome Letter + Free Template

When a new resident moves into your rental property, a positive first impression is the key to setting the tone for your future relationship with them. One straightforward way to do this is through a warm, well-written tenant welcome letter. In today’s post, we’ll examine the importance of this welcome letter in detail and what you should include. We’ll also provide a free tenant welcome letter template to help you get started. Note on language: At Second Nature, we prefer to say “resident” rather than “tenant,” but will use the terms interchangeably since many property managers are using long-standing document management conventions to leverage these checklists. What Is a Tenant Welcome Letter? A tenant welcome letter is a document sent by a real estate property manager to new residents prior to the move-in date. Its purpose is to: Provide important information about the property Outline expectations related to resident responsibilities Make the new residents feel both welcomed and informed Create a positive relationship between the resident and property manager The letter will typically include details about move-in procedures, contact information, property rules, and any neighborhood amenities. (Don’t worry–we’ll discuss this further in the blog.) Why Should You Send a Tenant Welcome Letter? Beyond just the all-important positive first impression, sending a tenant welcome letter has several other benefits: Highlights your brand: For property management companies, new tenants are an opportunity to showcase your brand. A well-crafted welcome letter demonstrates professionalism and shows you care about the comfort and satisfaction of their tenancy. Provides move-in instructions: Clear instructions about the move-in day (including any specific procedures or requirements) will help ease the often stressful and overwhelming process of moving into a new home. Eases the transition: By providing detailed information about utilities, local amenities, and property rules – as well as anticipating any questions your residents might have, you help them feel at home more quickly. When to Send a Tenant Welcome Letter The best time to send a new tenant their welcome letter is after both parties (the resident and property manager) have signed the lease agreement but before the resident’s move-in day. Sending the letter in between this period gives the residents enough time to review the information in detail and ask any questions before they officially move in. This is also an ideal time to inspect the property and schedule any necessary repairs before move-in day. Related: Property Management Rental Inspection Checklist If you don’t have a tenant move-in checklist, we have you covered. Check out our Tenant Move-In Checklist for a free template you can customize. What to Include in a Tenant Welcome Letter Start the relationship on a positive note by focusing on the resident’s experience. A welcome letter to tenants from property managers is pivotal to their tenancy and should include helpful information that addresses common questions or issues that may come up during the move-in process, and acts as a good reference point, as well. Property manager’s contact information Provide your contact information, including your phone number and email address, so residents know how to reach out to you for any questions or issues. Be sure to mention what days of the week and hours you’re available, and additional contacts they can reach out to if you’re not free. Details about move-in day Include specific instructions for move-in day, such as any loading zone rules and areas, moving truck parking information, or designated move-in times to make their move-in experience more convenient. Move-in checklist Offer a list of tasks the resident needs to complete before and after moving in, such as setting up utilities and obtaining renters insurance. To make their lives easier, send them a list of providers and their contact information. We’ve got you covered with a tenant move-in checklist you can modify to fit your needs. Local utilities As mentioned, within the move-in checklist, you’ll want to provide information on how to set up local utilities such as electric, gas, cable or internet, water, and sewer services. Share details about how to pay for them, as well. This should include information about local utility companies and providers to save them time. If any cost is covered by the property management company, be sure to mention it. Lucky for property managers, Second Nature offers move-in concierge services as part of their Resident Benefits Package to provide ease and convenience to residents. Learn more about our move-in concierge services. Property walkthrough Schedule a time and date for the property walkthrough, ensuring that all parties (residents and property manager) are aware of the current condition of the property before move-in day. Related: Rental Inspection Checklist Key collection details Inform the resident where they can go to pick up the keys to their new home, as well as when–what days of the week and during your business hours. If they can’t pick up the keys during your preferred time, provide a contingency plan for key pickup. Renters insurance Remind residents to provide proof of renters insurance (if it’s required), and be sure to link to specific resources that explain the benefits of renters insurance. Second Nature offers renters insurance as part of our Resident Benefits Package. Learn more about Second Nature’s renters insurance. Rent payment Explain when rent payments are due, as well the full rent amount is on a monthly basis and the payment methods available (such as an online portal). Share information about what late fees are if rent isn’t paid on time. Maintenance issues Outline the procedure for maintenance requests and provide emergency contact information for plumbing, HVAC, or electrical problems. See also: Preventive Maintenance Checklist for Property Management. Trash collection and recycling Provide information on where to dispose of trash and recycling, as well as collection days and any special disposal instructions, such as for bulk items. Parking information Explain parking arrangements for tenants, as well as any of their guests. This could include information about permits or designated spots. Neighborhood information Share information about local grocery stores, parks, gas stations, public transportation, and local attractions to help residents get familiar with their new neighborhood. Overall tenant responsibilities Reiterate key responsibilities, such as any necessary minor repairs and upkeep, to ensure residents are aware of their duties. (These will already have been outlined in the rental agreement, but it doesn’t hurt to reference them here.) Property rules Summarize the property rules and regulations, and be sure to refer to the lease agreement for detailed descriptions. Tenant Welcome Letter Template Below is a tenant welcome letter example you can use or customize to suit your unique needs: [Property Manager's Name] [Property Management Company] [Address] [City, State, ZIP Code] [Phone Number] [Email Address] [Date] Dear [Tenant's Name], Welcome to [Property Name/Address]! We are excited to have you as a new resident. To help you settle in, we’ve put together this welcome letter with important information and resources. Move-In Day Details: Move-in Date: [Date] Move-in Time: [Time] Loading Zone Rules: [Details] Contact Information: Property Manager: [Name] Property Management Company: [Name] Phone: [Phone Number] Email: [Email Address] Key Pick-Up: Date and Time: [Date and Time] Location: [Location] Utility Set-Up: Electric: [Provider Contact Information] Gas: [Provider Contact Information] Cable/Internet: [Provider Contact Information] Water: [Provider Contact Information] Sewer: [Provider Contact Information] Rent Payment: Monthly Rent: [Amount] Due Date: [Due Date] Payment Method: [Online Portal/Other] Maintenance Issues: Report Issues: [How to Report] Emergency Contacts: [Contact Information] Trash and Recycling: Location: [Details] Collection Days: [Days] Parking Information: Tenant Parking: [Details] Guest Parking: [Details] Neighborhood Information: Grocery Stores: [Details] Parks: [Details] Public Transportation: [Details] Local Attractions: [Details] Tenant Responsibilities: [Responsibilities] Property Rules: [Summary of Rules] We hope this information helps you settle in comfortably. If you have any questions or need assistance, please don't hesitate to contact us. Best regards, [Property Manager's Name] [Property Management Company] How to Send a Tenant Welcome Letter Email is the most efficient method of sharing the welcome letter since it ensures prompt delivery and allows residents to reference the information easily. It’s also good practice to provide a printed copy of the welcome letter upon move-in. You can simply leave it on the kitchen counter or another visible spot in their new home. Final Thoughts A tenant welcome letter is a simple yet powerful mechanism for enhancing the resident experience, fostering a positive relationship, and showcasing your brand. Ultimately, by providing essential information and a warm welcome, you are setting the stage for a smooth move-in process and a happy residency. For more ways to improve the resident experience, check out our Resident Benefits Package.

September 20, 2024

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How to Help Residents Use Their Identity Protection Services During a Data Breach

With personal data becoming increasingly valuable to bad actors, data breaches are unfortunately becoming a regular occurrence. The situation is particularly alarming at a time when cybercriminals are arming themselves with more sophisticated technology. Exhibit A is the recent theft of personal records belonging to 2.9 billion people from National Public Data. We’ll get into the details in a moment, but first let’s note that property managers are in a unique position to help residents respond to breaches, particularly when residents’ confidential information may have been exposed. As a property manager, knowing how to guide your residents through using identity protection services can make a big difference in minimizing the damage resulting from the breach. In today’s blog, we will cover: What a data breach is and how it affects property managers and their residents Steps to take to determine if your property management company and your residents are affected Key actions to help residents protect themselves after a breach How preventative measures, including identity protection services like Aura, can help safeguard personal information in the future About the Data Breach Data breaches occur when unauthorized persons or organizations gain access to sensitive personal information. A recent breach involving the hacking group USDoD targeted National Public Data, exposing the personal records of 2.9 billion people. This massive breach serves as a wake-up call for property managers and property management companies, as sensitive information such as names, addresses, contact information, Social Security numbers, driver’s license numbers, passport numbers, and financial records can be used by criminals to commit identity theft, fraud, and other crimes. Even more alarming, stolen data can include biometric data, healthcare and medical information, and financial account information (such as debit card numbers and bank account numbers). In short, any and all computerized data comprising of all types of personal information can be breached. The costs of data security breaches associated with personally identifiable information add up pretty quickly. In fact, recent years have seen a spike in the costs associated with cybercrime, likely because more and more organizations and financial institutions are opting to conduct high-value business transactions online (see image below). Unfortunately, despite consumer protection and data privacy legislation, civil penalties, and law enforcement’s best efforts, criminal investigations are often hampered by jurisdictional issues, as cybercriminals don’t respect international borders! For property managers, this type of cybersecurity breach is especially concerning because of the vast amount of personal information they collect and store about their residents. The thing is, data breaches like this don’t just affect the residents directly. They can also lead to a breakdown of trust between residents and property managers. Being prepared to act quickly and effectively in the wake of a breach is essential to mitigating the damage and helping residents protect their identities. Are You Affected by a Data Breach? If you manage properties that involve storing confidential resident information, it’s crucial to determine whether your company was affected by a breach. Here’s how you can figure that out: Confirm details about the data breach Start by verifying whether your property management company was impacted by unauthorized access to information. This means reaching out to the breached organization directly (in this case, National Public Data) for more information and confirming whether any of your residents are among the affected individuals. Beware of phishing attempts. Cybercriminals might try to trick you into believing your company has been affected when it hasn’t. Scammers may pose as the breached organization, sending fake notifications via email or phone. Always double-check the validity of any such communications. These often include unfamiliar email addresses, spelling and grammatical errors, and links to unknown URLs. In some cases, residents may contact you directly after receiving notifications about the breach. Make sure you have accurate, verified information to provide them, ensuring they don’t fall prey to scammers who may exploit the situation further. Above all, stay calm and be patient when communicating with residents. Determine what information was stolen Once you’ve confirmed a breach, the next step is figuring out what type of information was stolen. Was it just email addresses, telephone numbers, and names, or were more sensitive details exposed, like Social Security numbers, identification card numbers, credit card information, health information, or home addresses? The more you know about the nature of the breach, the better you can help your residents respond appropriately. For example, if a breach only involved email addresses, the threat might be lower than if Social Security numbers were leaked. However, if highly sensitive data is exposed, residents will need to take more substantial steps to protect themselves. What You Can Do After a Data Breach Once you’ve received a security breach notification indicating that your property management company and residents have been affected by a breach, you’ll need to notify your residents immediately and offer them guidance on what to do next. Here are the essential information security steps you can recommend: Change passwords Encourage residents to change all passwords and personal identification numbers (PINs) associated with their accounts, especially if they use the same credentials across multiple platforms. It’s also a good idea to recommend a password manager to help them create and manage secure passwords. However, be cautious in suggesting a password manager—only recommend ones with a solid track record and no history of breaches themselves. Additionally, advise residents to enable two-factor authentication (2FA) on all accounts that offer it. This extra layer of security requires a second form of identification (like a text message or authentication app) that provides an access code in addition to a password, making it more difficult for hackers to access their accounts. Remove personal information from data brokers Data brokers are companies that collect and sell personal information and data elements, often without individuals being fully aware of it. This information can include everything from names and addresses to purchasing habits and online behaviors. Unfortunately, during a data breach, the information collected by these brokers can be exploited by hackers, making it easier for criminals to commit unauthorized acquisition of data – and subsequently, fraud. Encourage residents to take the next step of removing their personal information from these brokers' databases. Several online services allow individuals to opt out of data broker lists, but it often requires a proactive approach. Residents may need to contact these brokers directly or use opt-out services such as OptOutPrescreen.com or Do Not Call lists to ensure their data is no longer being distributed. While this process can be time-consuming, it adds another layer of protection, reducing the amount of personal information circulating online and making it harder for hackers to misuse. Contact credit bureaus to freeze or lock your credit Another important step residents should take is freezing or locking their credit. This prevents scammers from opening new accounts in their names. Freezing credit involves contacting the three major credit monitoring services—Experian, Equifax, and TransUnion—and requesting that their credit be locked. This way, even if a hacker has stolen their personal information, they won’t be able to take out loans or apply for credit cards using that information. Additionally, residents can initiate a fraud alert with credit reporting agencies, to warn creditors that their information may have been stolen. Delete old accounts Another important step in minimizing the risk of identity theft is deleting old, unused online accounts. These accounts, often forgotten, can contain sensitive personal information that hackers can exploit in the event of a data breach. Residents may have accounts from years ago with shopping sites, social media platforms, or other services that still store their data. Encourage residents to review and close any accounts they don’t use anymore. They can start by checking for accounts tied to old email addresses, searching for accounts that use their email or phone number, or even using tools like Mine, which can help locate inactive accounts. By eliminating these forgotten accounts, residents reduce the number of potential entry points for hackers and strengthen their overall security. It’s a simple but highly effective way to protect personal data and limit exposure to future breaches. Monitor active accounts Remind residents to closely monitor their financial and online accounts for any signs of suspicious activity. This includes regularly checking credit reports, bank statements, and any unfamiliar credit inquiries or new accounts. Any strange emails, phone calls, or texts asking for sensitive information should be treated with caution. If any fraudulent activity is detected, advise residents to file an identity theft report with the Federal Trade Commission (FTC) through IdentityTheft.gov. This will allow them to take immediate action to stop any further damage to their personal information. What to Do to Prevent Data Breaches While dealing with a breach is stressful, there are steps that both property managers and residents can take to reduce the chances of a breach happening again. One of the most effective ways to do this is by using a trusted identity protection service like Aura, in addition to a Resident Benefits Package. Aura is Second Nature’s partner in providing residents with comprehensive protection. Aura identity monitoring Aura offers an extensive suite of identity protection services that can help property managers and residents stay ahead of potential breaches. Some of the services provided by Aura include: Financial fraud protection: This monitors residents’ financial activity for any signs of fraudulent transactions or unusual changes in their accounts. Identity theft protection: Aura scans a variety of sources, including the dark web, for compromised personal information, alerting residents if their data is found. Antivirus and VPN: These tools help keep residents’ devices safe from viruses, malware, and other types of cyberattacks. Parental controls and scam call protection: This is particularly useful for residents with families, offering extra layers of security for children and elderly relatives who may be more susceptible to scams. By offering a service like Aura as part of your property management’s Resident Benefits Package, you can give your residents the protection they need to safeguard their identities and personal information. Final Thoughts Helping residents protect their personal information is a responsibility that property managers must take seriously, especially in the wake of recent data breaches. Aura, a trusted identity protection service, offers a solution to the growing problem of identity theft, providing both residents and property managers with peace of mind. For property managers, incorporating Aura into your Resident Benefits Package is a practical and effective way to improve the overall resident experience while ensuring that their data is protected. Aura offers identity theft insurance of up to $1,000,000, making it an attractive option for residents looking to protect themselves from fraud. Its 14-day free trial is an easy way to see if the service is right for you. By being proactive and offering these services, you not only reduce the potential damage of a breach but also build stronger relationships with your residents, giving them the tools they need to safeguard their information for the long term. Learn more about how you can improve the resident experience through Second Nature’s Resident Benefits Package.

September 20, 2024

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How to Write a Security Deposit Return Letter + Free Template

Returning a security deposit is one of the final steps in a tenancy relationship, and it's important to handle it properly. Indeed, knowing how to write a security deposit return letter can help you close things out smoothly and professionally. Today we’re presenting a practical guide on crafting these letters, complete with examples and essential details to keep in mind. Important note: While this guide offers helpful general advice, it’s vital to check local and state laws to ensure compliance with specific regulations in your area. Note on language: Here at Second Nature, we prefer the term “residents” rather than “renters” or “tenants,” as that emphasizes the human element over the transactional. But because formal property management documentation often makes exclusive reference to “tenants,” we’ll favor that term in today’s post. What Is a Security Deposit Return Letter? A security deposit return letter serves as formal documentation that details the return of the security deposit to the resident after they move out. It's more than just a formality – this letter can clarify the amount being returned, explain any deductions, and provide transparency to avoid deposit disputes. When done correctly, this letter can help you avoid potential claims against the deposit. It’s also a chance to demonstrate professionalism and fairness, which can lead to positive relationships and, potentially, good word-of-mouth in the future. Here are a few things to keep in mind when crafting a security deposit return letter: State laws: Local laws dictate the time frame in which a tenant’s security deposit must be returned, what deductions are allowed, and any other related requirements. Preventing disputes: A well-crafted letter can help prevent claims against you by clearly outlining the return process and any deductions made. Insurance considerations: In some cases, following the correct procedures for returning a deposit can also help you avoid issues with any insurance policies you may have in place in relation to security deposits. Related: What is Security Deposit Insurance: Pros, Cons, and Best Practices? Common Questions About Security Deposit Returns Handling security deposits can be tricky, and questions often arise. Below are a few common concerns landlords and property managers face. Keep in mind that local and state laws vary, so always consult the relevant regulations. What can a landlord or property manager deduct? You can generally deduct unpaid rent, repairs for damages beyond normal wear and tear, and costs for cleaning if the unit is left in poor condition. However, these deductions must be reasonable, and you should always provide documentation, such as receipts or photos, to support them. What is considered normal wear and tear? Normal wear and tear typically includes things like minor scuffs on walls, light carpet wear, or small nail holes from hanging pictures. Essentially, it refers to the natural aging of a property during normal use. Anything beyond this—like large stains, broken fixtures, or damage from pets—may warrant deductions from the security deposit. When should you return the security deposit interest? In some states, landlords are required to pay accrued interest on the security deposit. If this applies to you, check the relevant deadlines and ensure you include any owed interest along with the returned deposit. You’ll need to itemize this in your letter as well. What if you don’t have a forwarding address? If the resident hasn't provided a forwarding address, it’s still your responsibility to attempt to return the deposit. Try reaching out through any available means, such as email or phone. If all else fails, you may need to follow state-specific protocols, such as holding the deposit for a set period. Learn more: Security Deposit Alternatives for Property Managers and Residents What to Include in a Security Deposit Letter A well-organized letter should cover all the necessary information, presented in a clear and concise manner. Here’s a breakdown of the key elements you’ll want to include: Landlord's name and contact information: Your full name (or the name of your property management company) and how you can be reached. Tenant’s name and contact information: Make sure to address the letter to the correct person in relation to the correct property address. Date of letter: This is important for record-keeping, as well, and signals what day the notification was shared. Lease details relevant to the deposit: Reference the deposit or lease agreement that applies (you can also provide a copy of the relevant agreement). Original deposit amount: Clearly state the original amount of the security deposit. Itemized breakdown of deductions: If any deductions were made, list them here with the corresponding amounts and explanations. Receipts or documentation for deductions: Include copies of cleaning, repair, or maintenance receipts as proof of expenses. Remaining balance: Indicate the amount being returned after deductions. Deposit details: Mention how and when the deposit will be returned (e.g., check, direct deposit). Signature: Ensure that the letter is signed by you or an authorized representative from your property management company. How to Write a Landlord Security Deposit Letter Security deposit letters can take different forms depending on the situation. Here’s a brief overview of the most common types and when to use them: Security deposit letter for full refund: If you’re returning the full amount of the deposit without any deductions, this is the easiest letter to write. A straightforward explanation, along with the original deposit amount, is all that’s needed. Security deposit letter for partial refund: In cases where part of the security deposit is being withheld for cleaning, repairs, or unpaid rent, your letter will need to include an itemized list of these deductions. Be clear and provide any supporting documentation. Security deposit letter for no refund: If the entire deposit is being withheld, your letter should carefully explain why. Be sure to include receipts and a detailed breakdown of the costs involved, as this can help prevent disputes. Security deposit letter with request for payment: If the security deposit isn’t enough to cover the damages or unpaid rent, you may need to request additional payment. This letter should include a full explanation of the costs and a deadline for payment. Below are sample letters for these scenarios: Sample letter: Security deposit letter for full refund [Your Name] [Your Address] [Date] Dear [Resident’s Name], This letter serves as confirmation that your security deposit of $[Amount] is being returned in full. Thank you for leaving the rental property in good condition. Please find the enclosed check for the total amount of your deposit. Sincerely, [Your Name] [Your Contact Information] Sample letter: Security deposit letter for partial refund [Your Name] [Your Address] [Date] Dear [Resident’s Name], After inspecting the property, we’ve determined that $[Amount] will be deducted from your security deposit for the following reasons: [Itemized list of deductions and costs] Please find the enclosed check for the remaining balance of $[Remaining Amount]. Receipts for the deducted amounts are attached for your records. Sincerely, [Your Name] [Your Contact Information] Sample letter: Security deposit letter for no refund [Your Name] [Your Address] [Date] Dear [Resident’s Name], After inspecting the property, we’ve determined that the entire security deposit of $[Amount] will be used to cover the following costs: [Itemized list of deductions and costs] Unfortunately, no balance remains to be refunded. Receipts for the deducted amounts are attached for your records. Sincerely, [Your Name] [Your Contact Information] Sample letter: Security deposit letter with request for payment [Your Name] [Your Address] [Date] Dear [Resident’s Name], After inspecting the property, we’ve determined that the cost of repairs and unpaid rent exceeds your security deposit of $[Amount]. The remaining balance of $[Balance Due] is owed to cover the following: [Itemized list of deductions and costs] Please remit payment by [Due Date]. Receipts for the deducted amounts are attached for your records. Sincerely, [Your Name] [Your Contact Information] How to Send a Tenant a Security Deposit Letter The best way to send a security deposit return letter is by certified mail with a return receipt. This ensures that there’s proof of delivery, which can protect you in case of disputes. Some states may also allow you to send the letter electronically, so check local regulations to confirm the appropriate method. Mistakes to Avoid When Writing a Security Deposit Return Letter When writing a security deposit return letter, be mindful of some of the common pitfalls below. Failure to meet the deadline Every state has specific rules about how long you have to return a deposit, broadly ranging from 10 days after inspection (as in the case of Montana) to 60 days (West Virginia and other states). Missing the deadline can result in penalties. Not providing enough detail If you’re making deductions, be sure to include detailed explanations and supporting documentation, as specified earlier. Neglecting to include interest In states where interest on security deposits is required, make sure you calculate and include it in the return. It’s best to document this early on to save yourself a headache down the road. Not retaining a copy Always keep a copy of the letter and any related documents for your records. It helps to also back up electronic documents, as well, but be sure to keep original copies of everything first. Final Thoughts Handling security deposit returns correctly can help you avoid disputes and maintain good relationships with residents, even after they’ve moved out. By following these guidelines and customizing your letters to fit the situation, you’ll be able to navigate this process smoothly and professionally, while ensuring a positive experience for all parties. For more tips on improving the resident experience, check out Second Nature’s Resident Benefits Package.

September 19, 2024

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How to Write a Pet Violation Letter to Tenants + Free Template

Dealing with pets in rental properties can be tricky. While our furry friends bring comfort and joy to many, they can also cause issues for property managers as well as property owners. That’s why it's essential to address the situation professionally and promptly when a tenant brings in an unauthorized pet. In this blog, we’ll discuss: What a pet violation letter to the tenant is The process of confirming an unauthorized pet lease violation How to write a pet violation letter to the tenant And bonus: we’ll share a free pet violation letter to tenant template you can customize to help you through the process. Note on Language: At Second Nature, we like to say “resident” rather than “tenant,” but will use the terms interchangeably since many property managers have official terminology around these templates. What Is a Pet Violation Letter to Tenant? A pet violation letter is a formal notice sent to tenants when they’ve violated the terms of their lease agreement by having an unauthorized pet. This type of letter serves to notify the pet owner of the violation and the consequences of not resolving it. The primary goal is to ensure compliance with the lease while maintaining a respectful and professional relationship with the tenant. The letter is typically sent after a property manager has confirmed that a tenant is keeping an unauthorized pet in their rental unit. This can be an issue when a lease explicitly prohibits pets, or when a pet does not meet specific criteria outlined in the lease, such as size or breed restrictions. (Note that while dog breeds often associated with aggressive behavior include pit bulls, dobermans, German shepherds, and others - actual breed restrictions vary by state). Put simply, unauthorized pets are animals kept by tenants without the property manager's consent. This issue can arise for a variety of reasons, including the tenant's desire to avoid pet deposits, fees, or restrictions, or simply because the tenant wasn't aware of the rules. Regardless of the cause, it’s important to address the situation before it escalates. Property managers might enforce a no-pets rule for several reasons, including protecting the property from potential damage, minimizing noise, or reducing allergens that might affect future tenants. There are also legal considerations to keep in mind, especially regarding service animals and emotional support animals (ESA), which we’ll cover later in this post. Pet violation in the lease agreement A rental agreement often includes a pet policy outlining what is and isn’t allowed. Some common restrictions might include weight limits, breed restrictions, and behavioral requirements. For instance, lease terms might allow pets under 25 pounds or prohibit aggressive breeds. There could also be rules about how many pets are allowed or requirements for pet insurance. Property managers have the right to enforce no-pets policies, and this is generally supported by law. However, enforcement must be consistent and in line with the lease agreement. If a tenant violates the pet policy, the property manager can request that the pet be removed or even take legal action if the tenant refuses to comply. An important caveat is that you need to be familiar with state laws as well as federal laws regarding pets. Service animals, for example, are protected under the Americans with Disabilities Act (ADA). This means that even if your lease has a no-pets policy, you must accommodate service animals without charging additional fees. Emotional support animals are a bit different from service animals – they’re protected under the Fair Housing Act, but property managers are allowed to ask for proper documentation. As a disclaimer, we urge you to obtain legal advice to ensure you are not stepping on any local regulations, as this blog post does not constitute formal legal guidance! Related: If you do offer pets in your rental property, check out our blog - Pet Policy for Renters: Best Practices for Property Managers to find out more. Examples of unauthorized pet scenarios Unauthorized pets can cause a range of issues, from minor inconveniences to significant property damage. Here are a few examples of common scenarios: Odors: Pets, particularly dogs and cats, can leave behind strong odors that linger in a rental unit long after they’re gone. These smells can be tough to eliminate and may require professional cleaning. Fur: Pet fur can accumulate on carpets, furniture, and air ducts, leading to additional cleaning expenses. Damage: Pets can cause visible damage to a rental unit. Dogs might chew up carpet or scratch wood floors, while cats could damage walls or furniture. It’s important to document these issues when addressing unauthorized pets. Clear evidence will help you communicate the problem to the tenant effectively, as well as help you deal with any ramifications around security deposits. Exceptions to the rule Not all pets can be treated the same under the law. Service animals and ESAs have special protections that property managers must respect. A tenant with a disability is entitled to keep a service animal, even if the property has a no-pets policy. These animals are not considered pets but rather essential aids for their owners. Emotional support animals are slightly different. While they don’t have the same legal status as service animals, property managers must still make reasonable accommodations under the Fair Housing Act. If a tenant provides a valid ESA letter from a licensed mental health professional, the property manager must allow the animal unless it poses a direct threat to the safety of others or causes significant property damage. When presented with an ESA letter, be careful not to overstep privacy laws when verifying its legitimacy. A respectful approach is key to maintaining a good relationship with the tenant while upholding the property’s rules. Related: Pet Screening 101: How Top Property Managers Do It Confirming an Unauthorized Pet Lease Violation Before sending out a pet violation letter, it’s essential to confirm that the tenant is actually in violation of the lease agreement. This might involve observing the pet directly, collecting evidence from neighbors, or discovering signs of a pet in the unit, such as fur or odors. Once you have confirmed the violation, check the lease to ensure the tenant is aware of the policy they’ve breached. When addressing unauthorized pets, start by communicating clearly with the tenant. Explain the violation and give them an opportunity to correct the issue. In some cases, a simple conversation can resolve the problem without the need for a formal cure or quit notice. If the tenant refuses to comply, you may need to take further action, such as issuing a formal pet violation letter or, in extreme cases, beginning the eviction process. Writing a Pet Violation Letter to the Tenant When crafting a pet violation notice, clarity and professionalism are crucial. Here are the key elements that should be included: Tenant’s information: Start with the tenant’s name, address, and the date of the letter. Violation description: Clearly state the violation, including the specific pet policy they’ve breached. Mention the lease agreement and the relevant clauses. Evidence: Include any evidence you’ve gathered, such as photos or reports from neighbors. Resolution options: Outline what the tenant needs to do to resolve the issue, whether that means removing the pet or paying additional fees. Deadline: Provide a deadline for compliance. This gives the tenant a clear timeframe to address the violation. Consequences: Explain the consequences of failing to comply, such as fines or legal action. Contact information: Include your contact information for any questions or concerns. Here’s a template to guide you through the process. Pet Violation Letter to Tenant Template [Your Name] [Your Address] [City, State, ZIP Code] [Phone Number] [Email Address] [Date] [Tenant’s Name] [Tenant’s Address] [City, State, ZIP Code] Dear [Tenant’s Name], This letter is to inform you that we have discovered a violation of your lease agreement regarding pets. Our records indicate that you currently have an unauthorized [type of pet] in your rental unit at [property address]. According to your lease, pets are not permitted without prior approval and proper documentation. We have attached evidence of this violation, including [brief description of evidence]. Please review your lease agreement, specifically [mention relevant section], which outlines our pet policy. To resolve this issue, we request that you [describe resolution, e.g., remove the pet from the premises or provide the necessary documentation]. Please comply with this request by [insert deadline], or further action may be taken, including fines or legal proceedings. If you have any questions or would like to discuss this matter further, please do not hesitate to contact us at [phone number or email]. We appreciate your prompt attention to this matter and hope to resolve it as soon as possible. Sincerely, [Your Name] [Title] [Company Name] If this is the first violation, a warning letter may suffice and can leave space for a humane and respectful resolution. In this case, follow up with a check-in after a suitable period. If the tenant has failed to comply, follow up with a more formal notice and be prepared to escalate the situation as needed, up to and including an eviction notice. Final Thoughts Managing a rental property comes with many responsibilities, and handling unauthorized pets is just one of them. By staying on top of these issues and communicating clearly with tenants, you can protect your property while fostering a positive tenancy experience for the resident. For more tips on improving the resident experience, learn about Second Nature’s Resident Benefits Package.

September 19, 2024

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Tenant Screening Checklist: Free Template, Printable PDF, and Form Example

When it comes to renting out a property, selecting the right tenant to take up residence can make all the difference in your experience as a property manager. While this might seem like a simple process at first glance, tenant screening is a multi-step journey that can save you from a host of headaches, when done correctly. That’s why developing a checklist to thoroughly address the full range of tenant screening considerations can streamline the process for everyone involved. Note on language: Here at Second Nature, we prefer the term “resident” rather than “tenant,” as that emphasizes the human element over the transactional. But because legacy property management systems and documentation often make exclusive reference to “tenants,” we’ll favor that term in today’s post. Related: How to Write a Tenant Welcome Letter + Free Template What Is a Tenant Screening Checklist? At its core, a tenant screening checklist is simply a tool designed to help property managers vet potential renters. It's a systematic way to ensure that you're gathering all the information required to make an informed decision about who will be living on the rental property you’re responsible for. The checklist includes a range of steps, from gathering contact information and employment details to running background and credit checks. The goal is to cover your bases so that when you hand over the keys, you feel confident that the person moving in will be a good fit for your property. Some of the typical components of a tenant screening checklist include: Rental application: This is where prospective renters provide their contact information, employment history, rental history, and more. Credit report: A detailed credit check gives you a glimpse into how financially responsible the applicant is. Background check: Criminal history is another factor that can play a significant role in your decision-making process. Reference checks: Talking to previous property managers, landlords, or employers can provide insight into how reliable the applicant is. Employment verification: Verifying that the applicant is gainfully employed and can afford the rent is crucial. Why you should use a tenant screening checklist A tenant screening checklist is more than just a series of steps to follow – it's a protective measure for your property and investment. Here's why it matters: For property managers: It ensures consistency. Every applicant is subjected to the same process, which not only helps you find the best fit for your rental property, but also legally protects you by showing that you treat all applicants equally. For potential residents: It fosters trust. Prospective renters know that if they're accepted, they earned their spot fairly, based on the same criteria as everyone else who applied for the rental property. This can create a stronger property manager-resident relationship from the outset. By sticking to a checklist, you avoid oversight or bias, and ensure that the process is transparent and fair. What property managers should know As you implement your tenant screening process, there are a few key areas that require special attention. First, familiarize yourself with the Fair Housing Act. This federal law prohibits discrimination in housing-related activities based on race, color, national origin, religion, sex, family status, or disability. Violations of this law can lead to severe legal consequences, so it's essential to understand and comply with all its provisions. Privacy is another critical consideration. The information you gather during tenant screening is sensitive and should be treated with the utmost care. Personal details like social security numbers, credit reports, and employment verification should be kept confidential to prevent identity theft and other security breaches. Consent is also vital. Make sure you obtain written permission before running background or credit checks on applicants. Not only is this a legal requirement, but it also helps build trust with potential residents by showing that you respect their privacy. Learn more: Your Guide to Property Management Laws, Regulations, & Rules How to Properly Screen Prospective Tenants There are several essential steps to a thorough tenant screening process. We'll walk through each of them in detail, but note that meeting the tenant in person, or connecting with them via phone or email, can also be helpful in assessing their suitability. Importantly, we’ll also highlight the contents of the rental application, which is crucial for gathering essential details like contact information, employment history, and rental history. It’s also where you’ll obtain permission to run background checks and credit reports, a legal requirement before proceeding with these evaluations. Now let’s take a closer look at each element of a thorough tenant screening process: Rental application The rental application is the first step in gathering essential details about a prospective resident. This form typically includes their full name, contact information, employment history, and rental history. Additionally, you may want to request a photo ID as part of this step. The rental application is also where you should ask for permission to run background and credit checks. Without consent, you're legally prohibited from conducting these checks, so this step is crucial. Income and employment verification Once you've received the rental application, verifying the applicant's employment and income is the next logical step. Pay stubs, employment verification letters, or a quick call to the employer can confirm that the applicant is both employed and earning enough to comfortably afford the rent. It’s essential to establish whether the applicant has a stable job that’ll allow them to meet their financial obligations. Consistency in employment is often a good indicator of a responsible resident. Credit check and credit report A credit check provides insight into an applicant's financial habits. Are they consistently paying their bills on time, or do they have a history of missed payments? While no one is perfect, this step can help you gauge the likelihood of timely rent payments. Before running a credit check, make sure that the applicant is aware and has provided written consent. Background check A background check can reveal any criminal history that might affect your decision to rent to a particular individual. It’s not just about finding out if someone has a criminal record – it’s about understanding the nature of any incidents and whether they present a risk to the property or the community. While it’s essential to take this information into account, it’s also important to comply with state and federal laws that govern how criminal history can be used in housing decisions. Rental history Checking an applicant's rental history is another key step in the screening process. Contacting previous property managers or landlords can provide a wealth of information, from whether rent was paid on time to how well the applicant maintained the property. Public eviction records can also give you insight into whether the individual has a history of problems with previous rentals. Reference checks Requesting references from previous rental or employment experiences can give you further insight into an applicant's character and reliability. Personal references can be helpful, but professional references tend to provide more objective feedback. Pet screening If your property allows pets, it's important to include a pet screening process as part of your checklist. This can involve gathering information about the type of pet, breed, and size, as well as providing an opportunity to review any rules or restrictions you might have regarding pets on your property. For a more in-depth look at the process of screening for the ideal tenant, check out our blog: How to Screen Potential Tenants: Tips for Property Managers. Next Step: How to Evaluate Applicants Once you've gathered all the information from your checklist, it's time to evaluate your applicants. Look for any red flags that might indicate future issues, such as a history of evictions, inconsistent employment, or a poor credit score. At this stage, you might also want to conduct an interview with your top candidates to ask any final questions and clarify details. This conversation can reveal important information that didn't come up during the formal application process. Once you’ve made your decision, it’s time to notify the applicant. If they’re approved, the next step is to provide a lease agreement for their review. Make sure to discuss the lease terms in detail and give them the opportunity to ask questions before they sign. This step is crucial for preventing misunderstandings down the road. Learn more about next steps: How to Create Your Tenant Move-in Checklist, Tips + Free Template What is a Resident Benefits Package? Tenant Screening Checklist Template The checklist below covers the process for screening potential tenants from beginning to end, and will help ensure that you are missing no crucial steps: Rental application Provide rental application form Collect full name, contact information, employment history, and rental history. Request a copy of the applicant's photo ID. Obtain consent for background and credit checks. Review rental application Confirm that all necessary fields are completed. Verify the accuracy of provided information (e.g., contact details). Income and employment verification Verify income and employment Request pay stubs or employment verification letters. Optionally, call the employer to confirm details. Ensure the applicant's income can comfortably cover the rent. Assess employment stability Look for consistency in employment history. Consider the nature and duration of current employment. Credit check and credit Report Run credit check Confirm written consent from the applicant is on file. Evaluate credit history, focusing on payment habits and outstanding debts. Identify any red flags, such as missed payments or high levels of debt. Background check Conduct background check Ensure legal compliance with state and federal regulations. Review criminal history for any potential risks to the property or community. Document findings in accordance with Fair Housing laws. Rental history Contact previous landlords or property managers Verify rent payment history (e.g., on-time payments). Check how well the applicant maintained previous rental properties. Investigate public eviction records, if applicable. Reference checks Request professional references Contact provided references to verify the applicant's character and reliability. Prefer professional references over personal ones for objective insights. Pet screening (if applicable) Gather pet information Request details about the pet(s), including breed, size, and any specific needs. Review and communicate property rules and restrictions regarding pets. Confirm the applicant’s acknowledgment of pet policies. This checklist should guide property managers and landlords through each step of the tenant screening process to ensure thorough and legal compliance. Tenant Screening Checklist Form A good tenant screening checklist form will include all of the components discussed above. Here is a sample that you can use or customize according to your needs and legal requirements: Tenant Screening Checklist Template Property Information: Property Address: Unit Number: Rent Amount: Security Deposit: 1. Pre-Screening Questions Preferred Move-in Date: Reason for Moving: Length of Previous Tenancy: Number of Occupants: Pets (Yes/No): Smoking (Yes/No): Employment Status: Monthly Income: Criminal History (Yes/No): 2. Application Information Completed Rental Application (Date received: ) Application fee collected: (Amount: ) 3. Identity Verification Photo ID received: (Type: ) Verified Name, Date of Birth, and Address 4. Income & Employment Verification Income Documentation Provided: Pay Stubs (Last 3 months) Bank Statements (Last 3 Months) Tax Returns (If Self-employed) Employer Contact Information: Employer Name: Contact Name & Position: Phone/Email: Verified Employment and Income (Yes/No): 5. Rental History Verification Previous Landlord Contact Information: Landlord Name: Phone/Email: Length of Tenancy: Rent Payment History: Any Damages or Issues Reported: 6. Credit Check Credit Score: Credit Report Reviewed (Date): Any Negative Marks: (Late Payments, Collections, etc.) 7. Background Check Criminal Background Check Completed: (Yes/No) Eviction History Check Completed: (Yes/No) Any Red Flags: 8. Additional Documents/Considerations Co-Signer Required (Yes/No): Co-Signer Information Verified: Additional Documents Provided: 9. Approval/Denial Decision Approval Decision Date: Denial Decision Date: Reason for Denial (if applicable): 10. Follow-Up Lease Agreement Sent (Date): Security Deposit Collected (Date): First Month’s Rent Collected (Date): Final Thoughts Tenant screening may seem like a complex process, but with a clear checklist in hand, you can navigate it smoothly. By staying organized, adhering to legal requirements, and keeping the lines of communication open with applicants, you'll be able to more efficiently find the best fit for your property, and set the tone for a positive resident experience all around. For more tips on improving the resident experience, check out Second Nature’s Resident Benefits Package.

September 19, 2024

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How to Write a Letter Notifying Your Tenant of the Sale of Property

Selling a rental property can be complex, especially when tenants are involved. But there are plenty of ways to notify your tenant of the sale in a clear, respectful, and legally compliant manner that also reduces their anxiety or concerns. In today’s blog, we’ll provide a practical walkthrough to help you draft this important letter, including: What a notice of sale of property letter is Rights of tenants when the property owner sells the property What the sale of property letter should include Sample letter to notify tenant of sale of property Note on language: Here at Second Nature, we prefer the term “resident” rather than “tenant,” as that emphasizes the human element over the transactional. But because legacy property management systems and documentation often make exclusive reference to “tenants,” we’ll favor that term in today’s post. What is a Notice of Sale of Property Letter? A notice of sale of property letter is a formal type of communication that informs a tenant that their rental property is being sold. It outlines the upcoming changes that will occur, reassures tenants about their rights, and details how the sale will affect their tenancy. You might wonder if selling a rental property is even possible with tenants in place. Yes, it is. However, the process requires careful consideration of the lease terms and local laws. If the tenant is on a fixed-term lease, they often have the right to remain until the lease expires. If the lease is month-to-month, the new owner may have more flexibility. But in all cases, understanding and following legal guidelines is crucial as they may vary based on your location. Why You May Want to Sell a Rental Property Property owners might have a variety of reasons why they’re planning on selling the rental property. We’ll break down some of the most common scenarios below: Potential for significant financial return: The property has appreciated significantly recently, and selling now could provide a substantial profit for the owner, and they want to capitalize on that as soon as possible. Eliminates the property management responsibilities: Managing the property has become too time-consuming or challenging, so selling is the best option to free up the owner’s time. Freeing up capital for other investments: They’re looking to reinvest in a different type of real estate, another location, or explore other markets entirely. Change of priorities due to finances: Financial needs, such as funding their retirement or other investments, are driving the decision. While selling a rental property has plenty of advantages, it also has its drawbacks. Here is a look at some disadvantages of selling a rental property: Loss of steady income: Monthly rent means money coming in at the same time every month. Removing that means another means of income needs to be secured. Potential legal challenges: There are many complex laws and regulations to consider, as well as logistics, so if not handled properly - this could lead to major issues down the line, including legal action from the tenant. Reputation: If not handled smoothly and above board, this can cause disruptions for tenants, which could lead to potential damage to a property manager or the property management company’s reputation. Rights of Tenants When the Property Owner Sells the Property Tenants have rights that must be respected when a property is sold. Knowing these rights and planning accordingly can help you avoid legal disputes. Please note that this guide does not constitute official legal advice, and it’s crucial to consult local laws or legal counsel for specific details. Some common laws and regulations you should be aware of include: Local laws and lease terms: Depending on your state or city, there may be detailed regulations about how to handle a property sale. For instance, some areas require you to honor the current lease terms, even with a new owner. In certain states, tenants with month-to-month leases might need to be given a specific amount of notice before being asked to move out. Tenants may not have to move: In some jurisdictions, tenant rights specify that they have the right to stay in the property, even after it’s sold. For instance, under California law, “tenants who have a rental agreement have the right to remain through the end of the rental agreement under the same terms and conditions. The new owner may be able to end a periodic tenancy (for example, a month-to-month tenancy), but only if allowed by law and after giving the tenant the required advance notice.” In other words, a buyer could inherit the lease, and this is especially true for tenants with long-term leases. Some local laws also require that tenants be allowed to stay until the end of their lease term. Always verify this with a legal expert. Utilities and maintenance: As the owner, you must continue providing a habitable property by providing utilities like water and electricity until the tenant moves out. Shutting off utilities during the sale process is illegal, and under criminal law, owners could be charged if they turn these off. For instance, New York Real Property Law § 235 provides protections for tenants, including prohibiting landlords from willfully interrupting utilities – and violations can be considered criminal acts under New York Penal Law. Additionally, if you plan to conduct maintenance or repairs, you need to notify the tenant as required by local laws. Property showings: Although giving notice for property showings isn’t always legally required, it’s good practice to inform tenants well in advance. Most state laws require you to provide reasonable notice before entering the property, usually 24 to 48 hours, though this can vary. Make sure you refer to your state’s tenant laws before scheduling any showings. As a matter of courtesy, prospective buyers should be accompanied by licensed real estate professionals, but in the event that this is not possible, it makes sense to keep open communication channels with the tenant and to maintain high standards for prospective buyers. Security deposits: If the tenant moves out before the sale, their security deposit must be handled appropriately. The deposit should be transferred to the new owner, who will hold it until the tenant vacates the property. Be sure to review your state’s laws to avoid any disputes over this process. As a point of accounting interest, note that on balance sheets, a refundable security deposit appears as a liability – the tenant security deposit belongs to the tenant and must be transferred to the new owner to be held until the tenant moves out. Lease terms: If the property is sold while the tenant is still living there, in most cases the new owner takes over the existing lease terms. However, this can vary based on state laws and the specifics of the lease agreement. For instance, under Florida law, new owners can provide a 90-day written notice of lease termination if they intend to occupy the property as a primary residence. What Should the Sale of Property Letter Include? When notifying your tenant of a property sale, the letter should cover essential points. Luckily, we’ve provided a breakdown of what should be included. Basic information Start with your name (or the property management company’s name), the date, the tenant’s name, and the property address. Include your contact information for any questions the tenant might have. Details about the sale Inform the tenant that the property is being sold. Be transparent about the process, including whether the lease and deposit will transfer to the new owner. Let them know that the property will go on the market, and they may need to cooperate with showings. Showing information Mention how much notice you’ll provide before a property showing. If state laws require specific notice periods (such as at least a one-day notice), cite them to reassure the tenant that their rights are being respected. Clarify that any showings will be conducted by licensed real estate professionals, and be considerate of the tenant’s schedule. Responsibilities before the sale If the tenant has any responsibilities, such as keeping the property tidy for showings, outline them in this section. You may want to consider offering a cleaning service to make it easy for the tenant to keep the property in great condition. In all cases, be polite and professional, and make sure the tenant understands what is expected of them. Incentives (if applicable) If you’re offering any incentives, such as paying for a hotel stay during showings, assisting with moving expenses, or providing a rent discount, mention them here. While not mandatory, these gestures can ease the transition for your tenant and foster goodwill. Relocation support If you manage other properties, you may wish to let the tenant know of any available openings, but this is completely optional and just a common courtesy you can provide to help ease the transition. Thank you section Close the letter by thanking the tenant for their cooperation during this process. Acknowledge the inconvenience this may cause and express your appreciation for their help in making the process as smooth as possible. Letter to Notify Tenant of Sale of Property Template Here’s a sample notice letter template you can use to inform your tenant of the sale, and customize to fit your needs: [Your Name/Property Management Company] [Date] [Tenant’s Name] [Property Address] Dear [Tenant’s Name], I hope this letter finds you well. I am writing to inform you that the property you are currently renting at [Property Address] is being put up for sale. This means there will be some changes in the near future, but I want to assure you that your rights as a tenant will be respected throughout this process. Your current lease will be transferred to the new owner, and all terms will remain in effect. You will be notified in advance of any showings, and we will work to make the process as smooth as possible for you. If you have any questions or concerns, please don’t hesitate to contact me directly at [Your Contact Information]. Thank you for your cooperation during this time. We appreciate your help in keeping the property presentable for potential buyers and making this transition as seamless as possible. Sincerely, [Your Name] Learn more: How to Write a Notice to Vacate Letter to Tenants [with free template]) Final Thoughts Selling a rental property involves careful planning, especially when tenants are involved. A well-crafted letter can help ease the transition and ensure a smooth process for everyone. Remember to stay informed about your local laws and consult legal experts when necessary. If you're looking for ways to enhance the resident experience during this transition, consider improving tenant satisfaction with services like the Resident Benefits Package. Learn more about these packages from Second Nature today.

September 19, 2024

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