5 Great Reasons to Move Payments Online!

Your Paperless Office: Five Great Reasons to Move Payments Online
Posted: 28 Apr 2010 04:34 PM PDT
A single check seems small enough. But added up, the checks your property management company deposits or prints can ultimately bury your staff under a mound of paper. If you are on the way to a paperless office but haven’t yet tackled electronic payments for receivables and payables, you are paying more than you need to run your operation.
Many property management companies use a blended approach of electronic and paper-based payments, although the trend is clearly towards electronic payments. Most electronic payment implementations involve a combination of one or more of the following:
 Moving resident rent payments, application fees and other receivables online using ACH (Automated Clearinghouse) and credit cards.
 Moving your payables online by sending electronic payments to vendors, owners or investors, employees and others.
You may have already implemented check scanning for receivables or MICR laser check processing for payables. Congratuations – both these technologies are effective ways to streamline your backoffice. However, these methods still carry handling costs. Electronic payments can dramatically reduce these costs even further.
Here are five great reasons you should implement electronic payments as part of your paperless office initiative:
1. Improve efficiency and accuracy. After all, isn’t that the reason you decided to go paperless in the first place? With electronic payments, your staff can save a significant amount of handling time and reduce errors. According to independent studies, each paper check you eliminate can save your company at least $2.00 in handling costs.
2. Greater security. Each time a check is handled, whether it’s by the post office or your backoffice staff, the odds of a loss or security issue is increased. Online payments are a more secure way of getting the payments into or out of your account.
3. Improve cash flow and visibility. Rent payments made using an ACH system are deposited more rapidly than a traditional paper check. Notification of non-sufficient funds occurs faster as well. In addition to faster funds availability, electronic payments provide your accountant and management team with a more real-time view into receivables and payables.
4. Fewer trips to the bank by you and others. Payments you receive online are automatically deposited at the bank, saving you trips to the bank and improving deposit security. Your payables are deposited directly as well, and although this doesn’t affect your bottom line, it’s the greener way to go.
5. More convenience for your customers. Payments by paper check are clearly on the decline, and forward-thinking companies are offering innovative electronic payment methods to their customers. In property management, you can provide more convenience to your customers: residents, vendors, investors/owners, and employees. These customers expect it.
You can find electronic payment solutions from multiple sources, including your bank, independent payment processing companies, and from your property management software vendor. Once you get started with electronic payments, you can streamline your operation even further and start to unbury your staff from that mound of paper.

For More information on Online Payments go to www.heartlandpaymentsystems.com/cherylniesz

If you are using "Craigs List" You Must Read This Post!

Landlord Slapped With Fine Over Craigslist Ad
Posted: 22 Apr 2010 08:21 AM PDT
Landlord Must Issue Warning to Others on Craigslist
Massachusetts Attorney General Martha Coakley announced a settlement between her office and a Revere, Massachusetts landlord over allegations that his rental ad in Craigslist violated state discrimination statutes.
This judgment is the result of a continuing statewide investigation by the Attorney General’s Office into reports of widespread discriminatory housing advertisements on the Internet.
“As more families face tough financial times and have no choice but to rent, landlords and real estate professionals must recognize that the rental market is a regulated industry,” said Attorney General Coakley. “While we hope that this enforcement initiative will have a deterrent effect, our office will continue to monitor Craigslist.”
The Attorney General’s Office has settled 20 similar cases and filed six other complaints against landlords and real estate agents across the Commonwealth accused of violating state anti-discrimination laws on Craigslist.
In this case, the landlord used Craiglist to advertise a unit for rent in Revere, stating “no Section 8.” The Massachusetts Anti-Discrimination Act prohibits landlords and others involved in property rentals from discriminating against people who use state or federal housing subsidies to pay for all or a portion of their rent.
The settlement requires the landlord attend trainings on state and federal fair housing laws. He has also agreed to place “Equal Housing Opportunity” in any future rental property ads. And, in an effort to increase awareness of this important issue, the landlord is required to place postings on Craigslist informing other Craigslist users that the Attorney General monitors Craigslist for discriminatory advertising and that it is against Massachusetts law to state a discriminatory preference against recipients of housing assistance subsidies.
He will also pay $750 to a local charity that provides legal services to poor and low-income persons in housing and a variety of areas.See Fair Housing “Zero-Tolerance” Policy Netting Huge Awards Against Landlords.

April Property Mgmt. Marketing Ideas by: Property Manager.com

April is one of my favorite months in property management because it’s full of ANTICIPATION! We’re all waiting for that first big weekend, when the leasing season really kicks in to high gear for all those late May and early June moves. Instead of waiting this year, why not take a proactive approach with some fresh ideas to drive traffic to your door?! Here are three ideas to get your creativity flowing:
1. Not only is it easy being green, but it’s a great sales pitch! Tap in to the good feelings around Earth Day this year, April 22nd. This holiday, conceived in the 1970s by a senator from Wisconsin, has grown exponentially in popularity over the last few years due to the climate change concerns. You can make a good impression by tying in your move-in concession to Earth Day by planting a tree in the new resident’s name (there are services that will do this for just $1!), donating the cost of offsetting the carbon footprint of their move in, or even offering them a green move in gift, like a box of CFL bulbs for the lights in their apartment – a move that not only is eco friendly, but super wallet friendly for them as well!
2. April 16th is National Stress Awareness day, so what better time to invite people to come in and check out the stress free living that your community offers! This is a great chance for outreach with the community around you, since you can involve local massage schools or day spas in the marketing event by asking them if they’d either be willing to donate a coupon off their services OR spend a day in your club house, providing those services to people who come in to tour. Nothing is better the day after filing your taxes than getting a nice massage or pedicure. And it could be great for the business, since it helps them find clients.
3. April is also a great month in most of the country because it’s warm enough to start to see some outdoor activities, however, if you live in a large metro area like I do and have kids, I’m sure you know exactly how expensive some of those city teams can be for kids to play on. If you have the open space in your community, like a large courtyard or play field, why not send out fliers to a local school and offer to host dodge ball or kick ball games Thursday evenings for kids in their third or fourth grade classes? It brings people in to your community, and if you leave your office open until 7:30 those nights, you have a good chance of tapping into families who may be thinking about moving this summer. Best of all, you look like a community that understands how important and tight costs are right now to everyone, even kids.
These are just some springboards for your teams to start with. There are tons of great ideas out there for this month, you just have to sit still for a moment and think about them!

What to Consider When Hiring a Property Management Company by Chris Thorman

If a property owner has a growing number of properties, it’s inevitable that a day will come when they ask, “Should I outsource the day-to-day operations of my business to a property management company?”

Deciding when to outsource and which company to hire is one of the most important business decisions a property owner can make. Choose wisely, and an owner will be rewarded with the peace of mind that comes with responsible property management. Choose incorrectly, and an owner will be working harder after hiring a property management company.

Whether an owner has one or one hundred properties, it’s important to consider whether or not they’re prepared to hire a property management company. Handing over the management of property is a major decision. Before making that choice, owners will want to make sure they understand the following:

* The implications of self-owned management;
* The pros of outsourcing management to a third party;
* The corresponding cons; and,
* The alternatives to outsourcing.

Let’s take a look at each consideration in detail.

What’s Involved in Effective Owner Management?
Owning and managing property require two different skill sets. Unfortunately, many property owners purchase property not knowing the full responsibility that management entails. Before a person jumps into purchasing rental properties, they’ll need to understand what is going to be required of them.

* Knowledge of landlord/tenant law. Familiarity with the state laws that govern the landlord/tenant relationship is a must for any property owner. If owners aren’t comfortable with their level of knowledge or experience in this area, they could be leaving themselves open to lawsuits and fines. For example, the federal Lead-Based Paint Hazard Reduction Act requires the disclosure of lead-based paint and hazards before the lease of most units built before 1978. Owners can face a $10,000 fine if they fail to do so. Airtight contracts and leases are also extremely important for protecting owners from lawsuits and recouping lost costs.
* Time and expense spent visiting properties. Rental properties are going to require regular visits to check on the condition of the property, perform emergency maintenance or show vacant units. If owners’ properties are far away from home or each other, they will spend a lot of time in transit. If owners attempt to self-manage too many properties, they run the risk of spending all their time performing routine visits instead of managing the company.
* Responsibility for repairs and maintenance. A landlord needs to have a diverse range of skills to perform maintenance themselves. At the very least, a landlord needs to have basic plumbing, electrical, carpentry and landscaping skills to properly maintain a property. If they’re not well-versed in these areas, they’ll be spending revenue on repair services. While family members and friends can be labor outlets, relying on such help comes with inherent risks.
* Effective tenant screening. An owner will quickly need to become good at weeding out problem tenants during the screening process. If an owner only has a few units and has to replace a problem tenant a few times a year, their profit is likely going to drop dramatically. Credit checks, employment verification and collecting references are key in this process.
* Ability to deal with difficult tenants. Even if landlords screen tenants thoroughly, they will inevitably interact with unhappy or unruly tenants. Whether the tenant is simply unhappy or in violation of rules and facing eviction, a landlord needs to stand firm in the face of adversity and enforce the rules of the lease. If they’re not able to confront people, a property owner risks being taken advantage of by tenants. In the most extreme cases, landlords may even need to rely on lawyers or courts to settle issues and pay hefty fees.
* Good property management software. If an owner is managing a decent number of units, they’ll want to invest in software to manage their properties. Investing in a robust property management system has the ability to increase efficiency by:

o Accepting rental payments online;

o Performing credit and criminal background checks;

o Decreasing advertising costs by automatically posting units to popular listing sites;

o Automatically reminding tenants to pay their rent;

o Eliminating poor record keeping by automating certain processes; and

o Creating letters and tax forms automatically from pre-existing data.

A solid property management system can be a good tool to have, especially for a novice property owner.

Benefits of Hiring a Property Management Company
If a property owner decides that they’re not able to properly manage their property, it’s important to understand what side effects they should expect. In general, a well-run property management company will yield these results for owners:

* Increased revenue. A property management company is more experienced at advertising and usually has access to larger pool of potential renters, meaning units typically stay vacant for shorter periods of time. A property management company also has a better understanding of the local rental rates, putting them in a position to maximize the amount you can charge per property.
* More free time. Naturally, once an owner hands over the responsibility of managing its properties to a company, they’re going to have extra time on their hands. This is perhaps the most obvious – and enjoyable – benefit of hiring outside help. The property management company becomes the owner’s one point of contact for all things related to their property, eliminating the need to juggle a number of different vendors and services. A property owner can also use this extra time to expand their portfolio and focus on growing the business.
* Reduced direct costs. A property management company is be able to perform preventative maintenance, reducing the direct costs to the property owner. Furthermore, a management company will likely have extensive knowledge of local landlord/tenant laws, helping shield the owner from costly lawsuits. One lawsuit avoided may pay for years of property management fees. Finally, the management company likely has more experience screening tenants. This reduces vacancy cycles and damages from poorly screened tenants.

Drawbacks of Hiring a Property Management Company
Of course, outsourcing management involves risks that need to be considered. A property management company that is negligent in responsibilities could cause more headaches for their owners. The most common downsides include the following:

* Cost. A property management company will charge an owner between 3%-12% of the property’s gross monthly rent to manage it, depending on the level of service. For a property with a large number of units, this can be a significant cost.

To illustrate these costs, the table below shows monthly management fees for various amounts of units, assuming a 10% management fee on units rented at $1,000 per month.

Monthly Property Management Company Commission

Keep in mind that management fees aren’t the only fees that may be assessed by a property management company. Many companies charge additionally for creating or renewing leases, performing maintenance, and advertising vacant properties.

* Possibility of developing a bad reputation. The most vocal tenants in any community are those who are unhappy with management. Unfortunately, as more and more tenants flock to web sites to voice their disapproval with property managers, a property owner can can earn a bad reputation that will be displayed online indefinitely. Many rental property rating web sites have been around for nearly a decade now, which means bad reviews exist long after management has been changed or improved.
* Potential for inadequate record keeping. In most cases, a property management company is solely responsible for all record keeping, including accounts payable and receivable, service records and tenant complaint records. If the management company does a poor job keeping records, the owner may be completely lost once they part ways. Inadequate record keeping can also leave an owner with no ground to stand on if a tenant files a legal complaint.
* Vulnerability to lawsuits. It was mentioned before that a good property management company can help an owner avoid lawsuits. The opposite is true with a poorly run management company. A company that doesn’t keep up to date on changes in landlord/tenant law, or worse, doesn’t have a good understanding of the law in the first place, is leaving the owner open to a lawsuit. A single lawsuit could cripple a owner.

Ultimately, a property owner must determine if the benefits of hiring a property management company justify the expense. Owners who are able to outsource to effective companies and focus on growing the business would likely agree that the pros of outsourcing outweigh the costs.

Not Ready To Hire a Property Management Company?
An in-between option that exists between outsourcing and owner-management is hiring a residential manager. A residential manager is a person who lives on-site in one of the units and takes care of basic tasks related to the management of the property.

These basic tasks may include:

* Showing vacant units to prospective renters;
* Performing light maintenance and clean up; and,
* Coordinating with repair persons to fix maintenance issues.

If owners find themselves stretched thin but still not ready to hire a property management company, hiring a resident manager can be a good bridge between those two options.

Choose Wisely
Whichever route a property owner decides to take, a firm understanding of what property management entails will be essential for success. For the owners who choose self-management, they’ll need to become property management experts. For the owners who outsource their management, not knowing the industry will only lead to trouble down the road.

The lesson here is know the ins and outs of an business, no matter who manages it.

This article comes from Chris Thorman, who blogs about property management software at the Software Advice blog. It was originally published here: What To Consider When Hiring a Property Management Company.

What To Do When Tenants Abandon Their Pets

Hungry, Scared and Potentially Lethal: What To Do When Tenants Abandon Their Pets
Posted: 08 Apr 2010 09:24 AM PDT
It’s bad enough when a tenant runs out owing you money. Or, when you have to dispose of the couch they tossed to the curb before they left behind a messy unit. But nothing beats the trauma of re-entering your unit to find abandoned pets.

Often, these animals are scared and frantic from lack of food or water. One realtor discovered a Rottweiler living in the bushes behind a foreclosed home she was listing. Desperate for water, he had punctured a jug of anti-freeze and was drinking what he could as she arrived.

With the foreclosure crisis looming, many animal shelters are brimming with abandoned animals. As a result, more of these animals may end up euthanized than find homes. A number of grassroots organizations are attempting to rescue these animals in need by taking on some of the overload.

Let’s consider what you need to do as a landlord when you find an abandoned pet.

First, you must determine if the animal is legally abandoned. Follow the same local rules for abandoned property in general:

 The lease has expired and the tenant has given no indication they will remain on the premises,
 The tenant has given notice they have moved, or
 You have legally evicted the tenant.

If the animal is legally abandoned, consider safety first – yours and your neighbors’.

You don’t know why the animal was abandoned. You are assuming it is because the owner couldn’t afford its care, but it may be sick, or vicious.

The animal is stressed, and may behave badly. This is especially true if it has been foraging for food or water, or spooked by strangers around the property – workers, kids making noise in neighboring yards. A dog may continue to dutifully guard the premises and view you as an intruder.

If you were aware that a pet was on your premises, you may be liable for any injuries to neighbors, including other tenants. See more on Landlord Liability for pets.

For these reasons, calling your local police department’s animal control to file a report and request they remove the pet may be your most prudent choice. Not only is it best to go with the trained professionals, but depending on the animal’s condition at the time, the tenant may have committed a crime. It is best for the police to record how the animal was treated.

Alternatively, you can bring the animal to a shelter. But with the foreclosure crisis still looming, the shelters in hard-hit areas are brimming with abandoned animals. As a result, more of these animals will be euthanized than find homes, to the anguish of those directing these programs. They may not be keen to take on yet another pet. A number of grassroots organizations are trying to step in by taking care of animals when there is no room at the shelters.
But not everyone calls the police or takes the animal to a shelter. One landlord felt such pity for an abandoned dog, he took it home. The two bonded, and have been best friends ever since.

While that’s a happy ending to a tragic story, landlords can’t be expected to take in every pet they find abandoned.

Whatever you choose to do, remember that there are laws protecting a tenant’s property – even when it is abandoned. Once you take “possession” you need to follow the rules regarding notice to the tenant or face financial penalties in many states.

Property Management Pro James Safonov explains, “Due to the requirements a pet may need to remain healthy or at least stay alive, the landlord may contact the local humane society or equivalent to pick up the pet. A posting ought to be placed on the door (and mailed to the last known address) where the pet was taken to. The agency picking up the pet needs to be informed who the owner is so they may have the opportunity to pick the pet up.”


James Safonov is a profession Property Manager with HomePointe in Sacramento, California. You can reach James at jsafonov@homepointe.com. HomePointe provides full service property management, leasing, accounting, and maintenance.

Resident Security Deposits-Are You Covered?

Resident Security Deposits – Are You Covered?
Posted: 08 Apr 2010 07:00 AM PDT
When Judy moved out of her apartment, the property managers at one of New Mexico’s top management companies were mortified by the extent of damages. The front door was covered in dents, and windows were broken in both the bedroom and the living room. The carpet was covered in cigarette burns and ugly purple stains, and the bathroom tile was curled up and peeling from excessive water damage.
The only consolation was that the management company had a significant security deposit on hand that could be used toward the damages. Yet, within two months, Judy received her security deposit back, with interest, leaving the management company responsible for the tab.
Why?
Because management personnel made a costly error. They failed to provide Judy with an itemized statement of damages, a process required by state law. In fact, they didn’t send Judy anything at all. They simply kept her security deposit.
How can you make sure that your company avoids this common error, and doesn’t end up paying out of pocket for extensive damages?
 Note that most states require property management companies return tenant security deposits or provide former residents with an itemized statement of damages within 30 days of the date of vacancy.
 Know your state’s specific statutes. States such as Nevada and New Mexico use the 30-day rule, while Florida requires property management companies to mail security deposits within 15 days of vacancy, and provide an itemized billing statement for any damages within 30 days of vacancy. California currently allows 21 days for refunds or statement receipt, and Indiana allows 45 days for refunds and statements.
 Don’t assume your former residents don’t know the state statutes. Anyone with an Internet connection can easily locate this information. It’s vital that you know it as well.
 Be sure to provide an itemized list of damages. A generic bill for $400.00 is not sufficient. State statutes generally require property management companies to detail each charge that is applied against a tenant’s security deposit. Some states, such as California, also require receipts to be included with the statement. Again, learn your state’s statutes and abide by them.
Although careful tenant screening can often prevent excessive property damages, it’s important to not let simple mistakes prove costly to your company. Know the statutes, abide by them on a timely basis, and you’ll be able to retain the funds that are rightfully yours.