Select Leasing and Management

How to Determine Rental Prices that Get Units Filled and Still Make a Profit

rentals@selectleasingstl.com — Wed, 07 May 2025 14:11:24 GMT

The price of almost everything has risen dramatically in recent years, and rent is no exception. In fact, the price of rent has been increasing faster than the price of buying a home. According to the Census Bureau’s 2023 American Community Survey (ACS) , the cost of rent plus the average monthly cost of utilities and fuels grew by 3.8% annually, while median home values increased 1.8%.

These recent rental price increases, along with current financial burdens on the average renter, might leave some landlords uncertain about how much to actually charge for rent. After all, landlords are experiencing increased financial burdens, too. So, how can a landlord maximize their profit while still pricing rental property fairly in today’s market?

What to Charge for Rent: Too Much vs. Too Little

Determining What a Rental Property is Worth

Typically, the first step to determining what to charge for rent is adding up what the property is worth. Property owners that bought their property very recently may already have a good idea of the value, but those that have owned their property for a while and are looking to increase rental prices to better match the market have a few ways to help determine their property value.

Calculating Property Expenses

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Assessing the Local Market

Rent prices for similar properties can vary wildly across the area. A one-bedroom apartment in a modern building with average amenities might be priced at $800 a month in a smaller town and $2500 a month in a busy city. St. Louis, for example, is somewhere in the middle and had an average effective rent of $1244 in the last quarter of 2024, according to the MMG 2025 St. Louis Forecast report . However, rent prices are affected by many factors such as the exact neighborhood and the amenities the property offers. So, it’s important to check out the prices of similar rentals where the property is located.

Many sources are available online that allow users to browse through listings and filter results by rental type (apartment, house, condo, etc.), number of bedrooms and bathrooms, and amenities. Other rentals with similar criteria will give an idea of what potential renters are willing to pay.

Special Features

Looking at similar listings can also give landlords a better idea of what features are common in similar apartments and what features are more unique. If a rental has desirable features, like gym access, proximity to parks, balconies, etc., this can allow for a slightly higher than average rent. Certain renovations , like updated kitchens, can also warrant a higher-than-average rent.

Pricing a Rental Property Fairly

After a property owner has a better idea of property’s value and their own expenses, it is easier to pin down an appropriate rent price. That said, there are a few other things to consider:

1% Rule

According to the 1% rule, a rental property’s income should be at least 1% of the property's purchase price. Of course, this is not a hard rule that all landlords must abide by, but it can give a rough estimate of a fair price.

For example, a landlord renting out a house purchased for $250,000 would charge:

$250,000 x .01 = $2,500 for rent.

However, if the house was purchased 20 years ago, it is worth much more now, so the current value should be considered. This is when it makes sense to use an online valuation tool such as the one on Realtor.com , or to hire an appraiser. It is also important to compare this price to the expenses calculated in the previous section to ensure there is still a profit. If this 1% value is less than the average rent in the area and the property is in good condition, increasing the rent might be a good idea.

Rent Control Laws

Some states, cities, or counties have laws in place to protect renters from high prices. This can act as a cap on how much to charge for rent. This is more likely to be a concern in high rent, low-inventory cities, like New York City or San Francisco. There are currently no laws concerning rent control in St. Louis and there are no state-level rent control laws in Missouri. However, it’s always best to check for any updates to rent control in any area before determining how much to charge for rent.

How a Property Management Company Can Help

Landlords Must be Prepared for Emergencies. Here’s How a Property Management Company Can Help

bmurray@bhhsselectstl.com (Brett Murray) — Wed, 02 Apr 2025 23:57:35 GMT

Rental property emergencies can take many forms, from nuisances like burst water pipes to life-threatening fires or natural disasters. Regardless of the severity of the emergency, landlords must be prepared to respond quickly and decisively to ensure tenant safety and to minimize property damage.

Emergency preparedness for landlords who self-manage their rentals can be a daunting task. Entrusting a property management company instead is the perfect solution for landlords who are overwhelmed by the prospect. These professionals have the expertise to anticipate a variety of scenarios, plan and organize resources, and know what to do if and when a crisis arises. Here’s how they do it.

What Counts as an Emergency?

Some emergencies take more preparation than others. Fires, floods, tornados, and anything else that puts lives and property in danger are obviously worthy of a full-scale emergency response.

Many other situations are not quite so severe, but signal that a tenant should get in touch with their landlord or property managers right away. Having the furnace go out on a cold night, seeing sparks come out of an electrical outlet, or noticing water saturating the ceiling all call for immediate action.

Landlords must also be ready to respond to less serious situations that are still of obvious concern to the tenant. For example, a tenant might place an urgent call to the landlord in the middle of the night if their key breaks off in the lock and they can’t enter their apartment.

The point is that there doesn’t have to be a major catastrophe to consider something an emergency. Tenants should not be reluctant to call when something concerning happens. Part of property management is being available any time of the day or night and being ready for anything—large or small.

Anticipating and Preparing for Rental Property Emergencies

Emergencies are bound to happen, and property management companies take the burden off of owners by being proactive when it comes to being prepared. Even if rentals never experience anything serious, the following practices are a standard part of professional property management.

Preventive Maintenance

Keeping up with maintenance and repairs is essential to safeguarding the landlord’s investment property and fulfilling the duty of care owed to tenants. Regular maintenance and inspections will ensure compliance with safety standards and regulations. This will keep everyone safe and will make it less likely that certain types of emergencies will catch the property manager off guard. For example, staff may notice if a banister is loose, if the HVAC system is making weird noises, or if an appliance is due for replacement.

Preventive maintenance may also protect building owners from premises liability claims if someone gets hurt on the property. Service records will show evidence of regular upkeep.

Equipping the Property

Educating Tenants

Part of a property management company’s job is to inform tenants of what to do in an emergency.
They should point out or provide important things like:

The location of the nearest safety equipment such as the fire extinguisher
How to locate utility shut-off valves
Floor plans within each unit or in a prominent spot in common areas, so an emergency exit plan is clear
The emergency contact number or app for the property management company

A crucial part of any emergency response is knowing how to reach property management staff. Management companies like Select Properties use an online portal for maintenance requests, rent payments, and more. Tenants should be instructed on whether to use the app or contact the management company directly in an emergency. All relevant contact information should be furnished to tenants so it is handy when the time comes.

That said, tenants should always be instructed to call 911 first if anyone is hurt or in danger. Serious events (explosions, gas leaks, break-ins), should be reported to authorities first before notifying the landlord.

Having a Plan

Property management companies create protocols and procedures for various emergency scenarios. Ideally, these are documented in writing, and whichever staff member receives the notification has been trained on what to do.

In the case of a straightforward emergency like a broken furnace or burst pipe, the course of action may simply be calling an HVAC repair service or a plumber. A big advantage of property management companies is that they have a list of reliable contractors and resources.

Experienced management companies also have documented disaster plans for more serious situations like fires or weather-related events.
These should include:

A comprehensive tenant list with contacts
Emergency contacts for all tenants
Evacuation routes
Designated gathering points

Property managers should provide tenants with information about what to do in case of a serious emergency. For example, instructing people to go to the basement during a tornado warning, or to use stairs instead of elevators if there is a fire.

The management company staff should periodically review and practice emergency protocols and tenants should be reminded of them on a regular basis too.

Immediate Availability is Crucial During a Crisis

The number one rule of emergency preparedness for landlords is being available 24/7. This is often the biggest reason why landlords find a property management company . Time is of the essence when there is a crisis, and tenants can’t wait until morning or the next business day for someone to get a voicemail or see their text.

Once on-site during an emergency, the property manager will act as the liaison between the tenants and first responders, utility workers, or repairmen. They will also keep the owner informed about what is going on. Property management personnel know the property and its layout and can direct responders to access points and utility shut-offs. They will be able to disable security systems and unlock doors and gates as needed. They also know the tenants and will ensure that everyone is safe and accounted for and can provide tenant information to authorities as needed. Their role is very important as the tenants’ main source of information, updates, and instructions.

Recovery and Restoration Keeps Your Investment Up and Running

Property management companies are used to planning and budgeting for repairs and can coordinate repairs and restoration if the property is damaged during an emergency . They will act quickly, tackling tasks such as:

Securing and boarding up broken windows, changing locks, cleaning or replacing flooring, patching and painting walls, or rebuilding parts of the building that were destroyed.
Filing insurance claims, providing documentation of the damage and quotes for repair work.
Dealing with premises liability claims if anyone was hurt.
Helping tenants find temporary housing if their unit is not livable.
Extending the grace period for rent payments if needed.

Cleaning up and restoration after an emergency is crucial to getting the investment property back to normal. Property management companies can take care of the details, making them an invaluable partner for an owner who does not have the time or expertise to do it themself.

Hiring a Property Manager to Handle Emergency Preparedness for Landlords

Hopefully, your tenants will never experience a serious emergency in their rental units. But if they do, they deserve to have someone there who knows how to take charge, keep calm, and contain the situation. Landlords can’t always be there for their tenants when something goes wrong, but that is a property manager’s job.

Property management companies have the expertise to handle crises quickly and decisively. In the St. Louis region, Select Leasing & Management provides world-class residential property management services. We safeguard your tenants and your property, not just with exceptional day-to-day operations but with our responsiveness to emergencies big or small.

How a Property Manager Can Help You Avoid a Slip and Fall Lawsuit

bmurray@bhhsselectstl.com (Brett Murray) — Thu, 06 Mar 2025 14:26:04 GMT

Winter in the Midwest can be unpredictable. Chances are if you own rental property in Illinois or Missouri, you experienced the headache firsthand this past January. It can be nearly impossible to keep up with snow and ice on property steps and sidewalks while also performing routine landlord tasks. But if hazards aren’t cleared away promptly, you can set yourself up for a slip and fall lawsuit.

What many property owners don’t realize is that hiring a property manager can offer great peace of mind and relieve the stress of worrying about tenants falling. We’ll tell you why having a partner on hand is well worth the investment.

Can a Tenant Sue a Landlord After a Slip and Fall Accident?

Landlords have a legal obligation to keep rental properties safe for tenants. If lack of maintenance or failure to notice a dangerous situation leads to a tenant slipping and falling, the landlord can be found liable for a tenant’s injuries as well as their lost wages and related expenses.

To file a rental property lawsuit, the claimant must prove that the fall was due to the property owner’s negligence. Generally, a landlord can be sued in the following situations:

The slipping hazard was in a common area such as a sidewalk, stairway, or shared facility like the lobby or laundry room.
A fall within a rental unit was due to maintenance neglect. Generally, a tenant can’t sue if they slip inside their unit due to a hazard they created, such as on a loose rug or spilled drink. But a tenant could sue after slipping on water from a leaky toilet or dishwasher that the landlord knew about but did not address in a timely fashion.
The landlord knew about the hazard and did not fix it in a reasonable time frame. Both Illinois and Missouri laws require repairs to be made within 14 days of notification by a tenant.
The landlord knew about the hazard but did not place warning signs or barriers to prevent tenants from entering the dangerous area.
The landlord failed to have regular safety inspections, and a safety code violation caused the tenant to fall.

How a Property Manager Can Help Prevent Lawsuits

Fixing fall hazards and responding to maintenance requests must become a priority to avoid being sued. Hiring a property manager makes sense for a number of reasons:

They Can Get to the Property Quickly

Landlords who own multiple properties, have another job, or who live far away from the rental property can’t always respond immediately to emergencies. Property managers typically work on-site or have staff that is on call around the clock for emergencies and reacting to hazards. If the issue can’t be fixed right away, they can at least place caution tape over a broken stair railing, or a Wet Floor sign over a slippery area to warn tenants of potential dangers.

They Make Fall Prevention a Priority

Because keeping the property safe is a big part of their full-time job, property managers take a proactive approach to prevent falls. Spreading salt on the sidewalks when snow is in the forecast; fixing uneven walking surfaces as soon as concrete begins to sink; and burying electrical cords before they cause someone to trip. These are all things landlords might not think about but that property managers are trained to watch for.

They Make Repairs and Have Great Relationships with Trusted Vendors

Property managers have plenty of knowledge and experience with handling repairs , so they have the tools on hand to fix hazards like a loose step or faulty handrail. If the repair doesn’t fall in their wheelhouse, they have excellent relationships with plumbers, electricians, and other local specialists and vendors they can call upon when needed. Let’s say a leaky roof has progressed to leaky ceilings, causing water to drip into a tenant’s unit. That roof needs to be patched right away to avoid a slip and fall lawsuit. Property managers know plenty of reputable roofers in the area who can do the job quickly and prevent tenant injuries.

They Schedule Routine Inspections

Before tenants move in and periodically throughout their lease, property managers perform walkthrough inspections of units to look for conditions that could be unsafe. In addition, property managers know to schedule occupancy inspections with the city or county where the property is located. Having proof on file that the property is up to code can prevent tenants from suing a landlord.

They Prepare Lease Agreements that Minimize Slip and Fall Lawsuits

When a tenant signs a lease, they agree to all of the rules, regulations, and expectations in it. Property managers are highly skilled at preparing lease agreements that protect the property owner in slip and fall situations.

A solid lease answers critical questions when it comes to spelling out landlord vs. tenant liabilities, including:

Who is responsible for snow removal? If the lease says the tenant is and the tenant sues a landlord after slipping on a snowy sidewalk, the lease is proof that the landlord is not at fault.
Can tenants make repairs themselves, and what process must they follow to do so? If a tenant attempts to fix a washing machine but water leaks all over the floor and they slip, they can’t sue a landlord if the lease says no repairs can be made without written permission.
What is the typical response time for repairs? If the landlord was made aware of a needed repair one week ago but the lease spells out that he has two weeks to fix the issue, a tenant can’t sue.

Property managers also know to include a clause in the lease stating that the tenant is responsible for the prompt reporting of potential hazards like spills or uneven surfaces, and that the landlord will make reasonable efforts to repair them within a specified timeframe. That way, the tenant isn’t completely off the hook if they were aware of the danger and didn’t tell anyone.

Hiring a Property Management Company Can Take a Lot of Legal Weight Off of Your Shoulders

For decades, Select Leasing & Management has been keeping tenants safe throughout the St. Louis area. Landlords hire our property managers to keep up with maintenance on their properties and take care of hazards quickly. Not only does this protect the tenants, but it also keeps landlords out of legal trouble. Our team is knowledgeable about Missouri and Illinois premises liability laws, and we will do everything in our power to protect your investment. Contact us today to relieve some of your stress.

Landlords: Here’s How to Deal with Rental Property Damage

Thu, 06 Feb 2025 13:32:13 GMT

As a landlord, you know that routine maintenance and repairs take up a lot of time and money. Additional rental property damage—beyond normal wear and tear—can stretch your budget and your patience to the breaking point.

Unfortunately, no tenant is perfect. Accidents happen and people can be careless. And sometimes bad tenants may vandalize or destroy things on purpose. Liability for damage to a rental property depends on the type of damage and who caused it. When it is clearly the tenant’s fault, there are ways to recoup the costs. But you must understand both your and your tenant’s rights and responsibilities.

Normal Wear and Tear and Unavoidable Rental Property Damage

Worn-out carpet, scuffs on walls, and nail holes from hanging pictures are part of normal wear and tear in an apartment or rental house. These things happen gradually and are no one’s fault. Periodically replacing paint and flooring is a “cost of doing business” when you own rental property.

Rental property damage associated with weather events or natural disasters is unavoidable, and like wear and tear, is no one’s fault. Along with fire and water damage, these situations are often covered by an owner’s insurance policy which will help pay repair or replacement expenses. Ultimately, repairing or rebuilding after such an event is up to the owner, not the tenant.

Who Is Responsible for Fixing Damage to a Rental Property?

Aside from minor damage caused by normal usage or an unavoidable event, who is responsible for fixing damage to a rental property depends on whose actions caused the harm. Every situation is different, but here is a general breakdown of liability for damage to rental property:

Landlord Responsibilities

Deterioration and damage that happens because of a poorly constructed building, or one that is merely old is the responsibility of the owner, not the renter.

The same goes for the landlord’s failure to maintain the building . Landlords have a legal duty to provide a safe and livable dwelling. This means making sure to take care of code violations, faulty plumbing, or dangerous wiring as soon as they occur. It is also essential that they maintain safety by fixing broken doors, locks, and security systems and making sure smoke and carbon monoxide detectors, fire extinguishers, and sprinkler systems are in good working order.

Tenant Responsibilities

Liability for damage to a rental property falls on the tenant only if it can be proven that they caused the harm. It doesn’t matter if it happened accidentally, or if it was a result of neglect or abuse. The landlord can insist that the tenant pay to clean, repair, or replace whatever is necessary to return the property back to its original condition.

Some examples of tenant-caused damage:

Large holes in the drywall
Permanent stains on carpet or countertops (that can not be removed with normal cleaning)
Burns or tears in the carpet
Appliances broken due to misuse
Broken windows, doors, locks, or fixtures due to mishandling or vandalism
Fire or flooding due to carelessness or intentional acts
Stolen appliances or fixtures upon move-out
Damage caused by pets
Pest infestations

The details of how damage occurs are important to determining who is responsible. For example, landlords are typically responsible for keeping the plumbing in order. However, a tenant may be liable for damage caused by flushing something that should not be flushed, such as diapers—or if their child flushes toys or clothing.

Likewise, landlords may routinely spray for pests, but if a tenant never takes out their trash and ends up with an infestation, they may be asked to pay for fumigation.

While you can’t cover every possible thing that a tenant may do, many situations can be anticipated and put in the lease. For example, insisting that the landlord hang anything heavier than a picture (like a wall-mounted TV) to avoid damage to the walls. Or giving guidelines for what can and can’t be put down a garbage disposal (coffee grounds and potato peelings are a no-no). If damage happens due to a tenant breaking a rule in the lease, the landlord is justified in demanding payment for repairs. They will even be able to terminate the lease if they choose.

Steps for Dealing with Rental Property Damage

Damage needs to be addressed and fixed as soon as it is discovered. If the tenant is liable, following these steps can increase the chances of being reimbursed for repair expenses:

Identify and document the problem including photos and a record of dates, times, and the tenant’s explanation.
Determine the cost of repairs by getting written estimates or invoices and receipts for materials and labor.
Present the tenant with a detailed invoice for the repair with the estimates, invoices, or receipts attached.
If the tenant can’t or won’t pay, or the damage was discovered during a walk-through after the tenant has moved out, the amount may be deducted from the security deposit. If the cost of repairs exceeds the security deposit, you may sue.
If damage is extensive, consider terminating the lease or filing an eviction notice.
If the damage was intentional or related to criminal activity, contact the police to press charges.

In many cases, landlords may be unable to collect money from a tenant. Or the amount of reimbursement is not enough to consider filing a lawsuit. Building owners may end up eating the cost and may even end up letting the person stay, especially if the damage was accidental and they are usually good tenants.

Security Deposit Rules

In Missouri, landlords have 30 days to return a security deposit after a tenant moves out. That means that an inspection needs to be done as soon as possible in case there are damages to the rental unit.

An itemized list of deductions from the deposit should accompany the check, along with copies of receipts for the repairs. Landlords must be careful to deduct only verifiable damage and not instances of wear and tear. The tenant may be able to countersue using documentation of their own as proof that they left the rental in acceptable condition.

Landlord Insurance

Renter’s insurance pays for a tenant’s belongings if they are stolen or damaged while they’re renting, but it does not cover damage to the apartment or house. That is the landlord’s property and they should have their own coverage for their buildings.

Special landlord insurance is available that can cover much of the damage we have discussed. It may also include coverage for premises liability , which protects landlords if someone is hurt on the property.

When damage happens, check the policy. It may cover all or some of the repairs.

When choosing a policy, be sure to understand exactly what it covers. Some do not include things like intentional acts by tenants or the loss of rental income while repairs are made.

Your Best Defense Against Rental Property Damage

By preparing for the possibility of rental property damage, you may significantly reduce the chances of having to deal with it at all.

Screen applicants and conduct background checks to find tenants who will take good care of the property
Do periodic inspections
Conduct thorough walk-throughs with each new tenant and document conditions with photos
Have a good lease and enforce the rules
Be proactive about repairs and routine maintenance
Make it easy for tenants to report damage

A great way to do all of the above is to hire a property management company . If something goes wrong they can deal with fixing what’s broken and getting reimbursement from the tenants. You can rest easy knowing that your investment is protected.

If you need help managing your rental property, contact Select Leasing & Maintenance .

The Role of a Landlord vs. a Property Management Company

Thu, 09 Jan 2025 02:07:15 GMT

When many people think of a landlord, they picture someone who fixes things that are broken, handles complaints, and collects rent. But if that’s the case, what is a property manager?

The truth is that a landlord and a property manager can have a lot of the same responsibilities. The differences in their roles depend on whether a landlord decides to hire a property manager to take some of those responsibilities off his plate. We will explore the differences between landlord and property manager, and explain why hiring a rental property management company can offer great peace of mind for a landlord.

What is a Landlord?

A landlord is someone who owns rental property as an investment. They are responsible for maintaining the property and keeping it occupied with quality tenants. Many landlords choose to do this themselves, while others find someone to do it for them. A landlord who handles their own property needs to be able to:

Advertise for new tenants
Screen and do background checks on prospective renters
Prepare lease agreements
Enforce the terms of the lease agreement
Set rental price
Collect rent payments
Maintain the property and make any needed repairs
Handle tenant complaints and disputes

In addition, a landlord who owns the property makes major financial decisions, such as when to replace the roof or buy all new appliances in an apartment complex and when to raise rent prices.

What is the Purpose of a Property Manager?

A property manager acts as a representative for the landlord. They can do all of the same things a landlord does, but they often have more resources and the experience to do it more efficiently. Property management companies can have an entire staff dedicated to the various jobs that need to be done.

Landlords, especially those who own only a few properties or have a full-time job, often find it beneficial to outsource the work to a property manager. Property managers can focus on the work of running a rental 24/7, including performing tasks such as:

Help Finding Qualified Tenants

With extensive marketing and advertising experience, property managers can tap into a large pool of potential renters. They also have effective screening policies in place to weed out unqualified tenants. Not only can they prevent units from going unoccupied, but they can also make sure to cover things in a background check that landlords might forget .

Know How to Fix Things, or Who to Call if they Don’t

Owning a rental property means constantly receiving maintenance requests . A landlord may easily address some issues, such as replacing a lightbulb, but may not be able to handle more complicated tasks like fixing a leaky dishwasher. Property managers have plenty of knowledge and experience with handling repairs and also have excellent relationships with trusted plumbers, electricians, and other local vendors to call upon when needed.

Landlords who own multiple properties or live far away can rely on their property manager to respond to maintenance requests quickly, keeping tenant complaints at a minimum.

Prepare Vacant Units for the Next Tenant

To keep rental properties full, landlords need to clean and make any needed repairs immediately after tenants move out. A property manager can efficiently clean carpets, paint, clean appliances, and go above and beyond to make sure rentals are ready to show to new applicants, taking the weight off of the landlord’s shoulders.

Understand Landlord-Tenant Laws

Property managers are familiar with local, state, and federal laws regarding discrimination in screening and selecting tenants, the accuracy of lease documents, and a tenant’s right to privacy . They also understand the legalities of the eviction process and can ensure that the property itself complies with rental laws. Landlords can get very busy and fail to review many of these regulations, ending up with costly legal consequences.

Track Down Rent Payments

Landlords can spend a lot of time trying to collect rent from elusive tenants . And the longer rent goes unpaid, the farther behind they get financially. A property manager has the communication skills needed to get tenants to pay on time, or make them pay if they are late. They also know how to legally terminate a lease or begin eviction proceedings if necessary.

Keep Track of Finances

Not all landlords have the skill or desire to do their own accounting. A property manager can offer these services, tracking rent collections and expenses and providing financial reports. Property managers are also a great resource for a landlord’s decision-making about the property. They can advise about how to prioritize large capital investments and renovations for the property, such as installing new machines in a laundry room or recarpeting the hallways. They are also familiar with the local rental market, so they know how much similar properties are charging for rent, and how much tenants are willing to pay. All of this can be highly beneficial to a landlord when it comes to boosting their ROI .

A Rental Property Management Company Can Help Landlords Enjoy Their Investment

Self-managing rental property can be overwhelming for a landlord, especially when there are multiple units involved. Choosing to hire a property manager can mean letting go of a lot of the stress. Rental owners can leave their investment in the hands of professionals, allowing them to focus on their full-time job and their family, or just enjoy more free time.

If you are a landlord in the St. Louis region ready to increase your profits and have more time in 2025, Select Leasing & Management can help. Contact us today to learn how we can give you back your time, save you money, and safeguard your investment.ody content of your post goes here. To edit this text, click on it and delete this default text and start typing your own or paste your own from a different source.

7 Things Landlords Frequently Forget to Check During a Tenant Background Check

bmurray@bhhsselectstl.com (Brett Murray) — Thu, 05 Dec 2024 02:41:27 GMT

As a Landlord, you can’t just “trust your gut” when it comes to letting a new tenant move into a rental unit. Some type of tenant background check is necessary to ensure the person is who they say they are, can pay rent, and won’t cause trouble or property damage.

While there is no guarantee that someone will be a good renter or a bad one, a thorough screening process can help improve the odds. It’s also helpful to dig a little deeper than the usual questions for things landlords frequently forget, or that might be missed in a background check.

The Importance of Tenant Screening

Owning rental property is a business, and profits depend on collecting rent, minimizing expenses, and maintaining the
investment’s value. Simply put, finding good tenants with tenant background checks is a wise business decision.

Saying “yes” to the wrong person can cause property owners a lot of problems, like:

Unstable finances due to unpaid or chronically late rent
Increased maintenance, repair, and cleaning if tenants mistreat the property
Losing good tenants driven out by a neighbor’s disruption
Safety concerns and potential premises liability due to criminal behavior
Legal fees if eviction proceedings are necessary

The consequences of not doing background checks are far worse than the time and money it takes to do them in the first place.

Ground Rules for a Tenant Background Check

The U.S. Department of Housing and Urban Development’s Fair Housing Act makes it illegal to turn down applicants for the following:

Race
Color
National Origin
Religion
Sex (including gender identity and sexual orientation)
Familial Status
Disability

Not only is it against the law to even ask about these factors, but they have nothing to do with whether someone will be a good or bad tenant . Far more important information can be learned from a credit check, a criminal background check, and an application that asks for meaningful information about the applicant’s rental history.

Landlords are within their rights to ask for the following:

Employment and salary history
Current income
Social security number
Driver’s license number
Past evictions
Credit history and bankruptcies
Arrests, convictions, and inclusion on the sex offender list
References

Nothing prevents a person from lying about something on this list, but the information will be included in formal screenings. Inconsistencies in what’s written on the application and what comes to light with a background check are enough to justify turning down the application.

Landlords must get written consent to do tenant background checks for both criminal history and credit scores. An applicant’s refusal to give permission is itself a red flag that the person may have something to hide. Property owners are allowed to make background checks a requirement to consider an application .

Things Landlords Frequently Forget to Ask During Screening

Along with the standard background information listed above, there are some other things landlords can look into that can be helpful in making a rental decision. These topics can be added to the application so the answers are in writing. As long as all applicants are asked the same questions, they are not discriminatory.

1. What are the names of all occupants?

There are several reasons why knowing exactly who will be living in the rental unit is important. Ideally, all adults should be included in the lease. This way, roommates, partners, and adult children can all be screened for criminal histories and red-flag behavior. It might seem trivial, but a follow-up question asking how many vehicles will be on the premises could be relevant if parking space is limited.

Some leases include occupancy limits , either due to local laws or the landlord’s preference. This is another reason to ask for the names of both full-time and part-time occupants. Perhaps a tenant is the only full-time resident but has custody of several children on weekends or for the summer. Renting to them could violate the lease or Missouri housing standards .

2. Have you ever broken a lease or been asked to move?

Evictions are usually a last resort, so the standard question about past evictions may not give a landlord enough information. Asking these questions instead can be revealing. A past landlord may have given warnings and threatened to evict someone, but the tenant moved before they had to follow through.

Likewise, a tenant may have stopped paying rent and left before their lease expired. Either situation is a red flag. These questions can open a discussion to see if there is a reasonable explanation.

3. What is the status of prior arrests or convictions?

Everyone deserves a place to live, including those with a criminal past. Past arrests or convictions might come up for people who otherwise might be great tenants. What’s often missed in a background check is how their case was resolved or their current status.

Probing into the nature and seriousness of the crime and how long ago it occurred can tell a lot.

Was it a misdemeanor or a felony?
Is the case resolved or has it not yet gone to trial?
Can a parole officer vouch for you if they were incarcerated?
Are you in rehab or otherwise working toward rehabilitation?
Are you in the National Sex Offender Registry?

Remember, people can be arrested for many things but are innocent until proven guilty. And even if found guilty, they may have paid their debt to society. Unless you choose to adopt a zero-tolerance policy (which is perfectly acceptable), having these conversations is helpful.

Consider, too, that an applicant who is open about their past and tells you what you will learn from a background check, may be worth a second look.

Following Up With References and Past Landlords

While asking for references is common, one of the things landlords frequently forget is to actually contact them and ask good questions. Employers will be able to confirm the applicant’s job and salary. Personal references may give some insight into the potential tenant’s character, although they’ll likely only give favorably biased feedback.

Former landlords are often the most reliable source of information. They can give an honest opinion about what it was like to rent to the individual. It’s best to talk to more than just the most recent landlord when possible. After all, if their current landlord is hoping they’ll move out, they might gloss over problems. Property owners from two or three apartments ago may be more forthcoming.

In addition to verifying the dates that the renter lived at that address, and whether they paid their rent on time, the following questions can be added to the list for the tenant background check:

4. Did the tenant have a pattern of breaking rules?

A typical lease outlines rules and regulations for things like pet policies, smoking restrictions, quiet hours and parties, subleasing, and more. If the tenant routinely needed warnings about certain behaviors or habits, that’s a red flag.

5. Did the tenant ever refuse access to the apartment?

Landlords have the right to enter a rental unit , as long as they follow some basic guidelines. If a tenant wouldn’t let them in without a valid reason, this could be a bad sign for future landlords. At best, perhaps they were only being difficult and argumentative. Worst case scenario, they were engaging in illegal activity and had something to hide.

If a former landlord shares this information, it may be helpful to ask the applicant for their side of the story.

6. Was the security deposit returned in full?

Did the tenant receive their entire deposit back, or did the landlord need to hold back some of the money to pay for cleaning or repairs? Was there damage or dirt that went beyond typical wear and tear?

If there are any concerns about how a tenant might treat the property, one option is to ask for a larger security deposit than normal. In Missouri, landlords can ask for up to two months of rent.

7. Would you rent to this tenant again?

This is perhaps the most important question to ask a former landlord. Sometimes their tone of voice or how quickly they answer can tell you as much as their actual words. For example, they may give an immediate, enthusiastic “Yes!” or “No way.” Or they may hesitate and say “I’d rather not comment.” Listen carefully. It may be necessary to read between the lines and ask some follow-up questions to get a good idea of what they really think.

Getting Help with Background Checks

It’s possible to do a background check yourself, but it can be time-consuming. You would need to check the credit bureaus and local, state, and federal crime databases. There are also tenant background check services and apps like RentPrep, MyRental, SmartMove, and RentRedi. Each one offers a different fee structure and covers different information.

Property management companies like Select Leasing & Management offer tenant background checks along with day-to-day operations for rental property. They work with landlords to develop criteria for what makes an acceptable applicant. In addition to a standard screening, they’ll ask the things landlords frequently forget to fill in the gaps missed in a background check.

Contact Select Leasing & Management to learn how we can find the best tenants for your property.

How to Write a Lease Termination Letter

Tue, 05 Nov 2024 11:37:33 GMT

As a landlord, there are some valid reasons for wanting a problem tenant to leave before their lease ends. Eviction is one way to do it, but it should be a last resort since the process can be confrontational and costly. Often, a lease termination letter is all that’s needed to solve the issue. In Missouri, termination letters are also a necessary first step leading up to a court-ordered eviction.

When a landlord can find good tenants, they may rent to them year after year without ever terminating a lease. It is still important to know how to write an effective (and legal) lease termination letter, should the need arise.

Reasons for Terminating a Lease

Terminating a lease before its end date is possible, but requires a valid reason and an official lease termination letter.

In Missouri, and in most other states, terminating a lease is acceptable for the following reasons:

Failure to pay rent
Excessive damage to the property
Engaging in illegal activity on the premises
Violating any rules spelled out in the lease agreement

The last point is an important one. If a property owner has specific rules they would like renters to follow, they can include them in the wording of the lease. Some examples are regulations regarding pets, smoking, subleasing, screening and approval of roommates, or running a business on the premises. A lease can contain just about anything, as long as it does not violate federal or state anti-discrimination laws . For example, an apartment may have a “no pets” policy, but it is illegal to ban emotional support animals .

The more specific landlords are about their wishes, the easier it is to justify terminating a lease if the rules are broken.

Termination Notices and Missouri Law

According to the CPI Housing Survey , more than half of all leases in the United States are for a period of 12 months. Towards the end of that term, some landlords send tenants a letter either inviting them to renew their lease, or informing them that it is time to move out.

Sending this type of communication is a courtesy rather than something required by Missouri law. Once the lease runs out, it automatically terminates and it is commonly accepted that tenants will either leave or sign a new lease. If a landlord does not want to keep a tenant, they are under no obligation to renew the lease and they do not have to give a reason.

A lease termination notice is required, however, for a month-to-month lease. Tenants must be given a 30-day notice letter, telling them the lease will not be renewed at the end of the month and they have to move out. A Missouri landlord can not ask a tenant to leave early without one of the reasons listed in the previous section. If the tenant has broken one of these rules, the landlord has a choice of three notices they can send:

Cure or quit notice . This letter gives tenants a choice. They can stop the behavior in question within a specified period of time (usually 10 days), or move out. For example, if a renter brings in too many roommates and exceeds the occupancy limit in the lease, they will need to have them leave, or risk losing the apartment altogether.
Pay or quit notice. This follows the same principle as cure or quit, but it applies to unpaid rent. Tenants are told to pay the rent and any late penalties by a certain date (again, usually 10 days from the date of the letter) or the lease will be terminated. In Missouri, it is not required that tenants have a grace period after the rent’s due date (although many landlords offer one). This means renters may have their lease terminated fairly quickly after missing just one payment.
Unconditional quit notice. This letter is used for serious breaches of the lease agreement or illegal activity and orders the tenant to leave or face eviction. It is customary to give them 10 days to move out.

Sending one of these letters is often enough to either rectify the situation or make the problem tenant move out. If the tenant refuses to go, the landlord may begin eviction proceedings. Evictions can take time and require hiring a lawyer and going before a judge to have the tenants and their belongings forcibly removed from the premises. A property manager can act on behalf of the owner in these situations.]

Components of a Lease Termination Letter

Knowing how to write a lease termination notice in the right way can ensure that it does what it’s intended to do. A poorly written, unprofessional, or confusing letter may not fix the situation and could even work against a landlord if the tenant decides to file a lawsuit.

Here is a list of what to include in a lease termination letter:

A concise statement of intent to terminate the lease
The precise reason(s) for termination
If applicable, how the tenant may avoid termination (for example ceasing activities or paying rent)
A reasonable time frame (10-day notice, 30-day notice, 60-day notice, etc.)
Move-out instructions (for example, cleaning requirements or turning in keys)
Information about returning the security deposit (or an itemized list of damages to be withheld from the security deposit)

As with any important business correspondence , the sender must be able to verify that the letter was received. For this reason it is a good idea to send a termination letter by first class certified mail, which requires a signature, or to use a professional server to hand-deliver it.

Property Management Companies Can Handle Terminating a Lease For You

In a perfect world, all tenants would be responsible and landlords would never have to terminate a lease early. Unfortunately, this isn’t always the case. There are some steps property owners can take to safeguard themselves from bad renters and long and expensive court battles to get rid of them.

A detailed lease spelling out rules and requirements and a thorough screening process are great first steps. Then, knowing how to write a lease termination letter and how to carry out an eviction should something go wrong.

It’s not surprising that many landlords find these situations time-consuming and stress-inducing. A professional property management company like Select Leasing & Management deals with these issues every day. They have the administrative and legal expertise necessary to assist property owners in holding tenants accountable for following their lease agreements—and in terminating a lease when they don’t.

6 Most Profitable Renovations for Landlords

bmurray@bhhsselectstl.com (Brett Murray) — Thu, 03 Oct 2024 02:41:02 GMT

Renovations for an investment property should increase its value, attract applicants , and make the transition between tenants easier. Some landlords make the mistake of thinking it takes major remodeling to see the biggest bang for their buck, but it doesn’t require a huge dollar amount to boost your bottom line.

Most Worthwhile Renovations on a Rental Property

Changes to a rental house or apartment can bring in extra income and increase the property’s value. The types and extent of renovations depend on the available space and configuration of the dwelling. When there is room (which is more likely in a house than an apartment ) choosing which renovation to make comes down to the cost and the expected return on investment.

Not all renovations on a rental property can be counted on to pay for themselves in increased revenue. These changes will require a moderate investment, that won’t take long to recoup the cost.

In-Unit Laundry

According to the National Multifamily Housing Council (NMHC), 92% of renters say in-unit laundry is a must. A washer and dryer each cost around $600. If the unit does not already have a dedicated space and hookups, construction and plumbing is an additional expense.

Research by Angi shows that adding an actual laundry room to a home can cost $20,000, but a hookup in the garage starts as low as $1,100 and a laundry closet costs around $4,500. However, it can definitely be worth the investment considering that tenants are willing to pay 10-20% more per month to do laundry at home and are more likely to renew their lease, so less time is spent searching to fill vacancies.

An Extra Bathroom

Having more than one bathroom is a big selling point for families as well as those who plan to share the unit with a roommate. Some ways to make room for a bathroom in a small space include opting for a pocket door that doesn’t swing out and take up space, adding a walk-in shower instead of a tub, and installing a simple pedestal sink.

It can cost around $14,000 to add a small bathroom to a bedroom, but bathroom additions typically increase property value by about 10%. A good rule of thumb is to charge 1% of a property’s value for rent, so if your rental home is worth $200,000 and a new bathroom raises its value to $220,000, it’s reasonable to charge $200 extra per month.

Durable Flooring

The Department of Housing and Urban Development recommends that carpets in rental units be replaced every five years . When there is major wear and tear, it can be more often. Even cleaning carpets between tenants takes time.

One of the most worthwhile renovations for landlords is replacing carpeting with laminate or luxury vinyl planks, which can each last up to 20 years. They are water- and scratch-resistant, can mimic the high-end look of wood or natural stone, and simply require a vacuum and mop after a tenant moves out.

An Aesthetic and Functional Kitchen

A kitchen renovation for an investment property does not need to be as extensive as it would be for your home. Instead, it should focus on attracting potential renters while reducing the need for upkeep between renters.

If some appliances don’t match, consider replacing them for a more cohesive look. A coat of satin paint on cabinets along with a tile backsplash can provide a fresh look and make it easy to remove stains between tenants. And replacing damaged plastic laminate countertops with quartz will keep them free from scratches, stains, and heat damage for 15 years or longer.

Small Changes That Can Make a Big Impact

Renovations for an investment property don’t have to be costly. These low-cost updates will ensure units remain occupied with happy tenants.

Enhance Curb Appeal

Improving a renter’s first impression doesn’t have to cost a lot, but it does require a time investment. For many properties, it’s a matter of keeping up with maintenance. Painting a faded front door, washing windows, and trimming bushes can make a world of difference without breaking the bank. Planting a tree near the house can also brighten up the landscape while saving on energy costs. You can expect to pay around $200 for a young tree, but placing it strategically where it will provide shade to the home can lower energy bills by up to 25% and help extend the life of the HVAC system.

Improve Security

Not only are renters attracted to properties that make them feel secure ; landlords have an obligation to keep them safe. By making sure all doors have functional locks, windows can’t easily be broken, and all dark areas are well-lit, you can prevent break-ins and protect yourself from an expensive lawsuit.

Considering that new locks cost less than $50, a broken screen can be replaced for $13, and a motion light is as low as $20, security renovations on a rental property are definitely worthwhile. If the budget is bigger, tenants will appreciate the installation of doorbell cameras, alarms, or an intercom.

A Property Management Company Can Improve Your Bottom Line

When it comes to making renovations on an investment property , DIY projects can save a lot of money if you know what you’re doing — and have the time to do it. But if you have multiple rental properties, it can be overwhelming to renovate one while handling routine repairs on others.

The right property management company has experts who know all about big-ticket projects as well as smaller updates. They have relationships with vendors and installers who supply countertops, flooring, paint, and other supplies for improving rental properties on a budget. They will also get quotes from reputable contractors and oversee the projects — all while also dealing with regular maintenance issues and handling tenant turnover.

Select Leasing & Management can oversee everything from the smallest chore to the largest update. As a result, your tenants will be happy and want to stay, and your investment will retain its maximum value. Contact us today to discuss how we can take the burden of maintenance, repairs, and renovations off your hands.

Cover Image by zamrznutitonovi purchased on Envato Elements

What Rights Do Tenants have Without a Lease?

bmurray@bhhsselectstl.com (Brett Murray) — Thu, 05 Sep 2024 22:20:02 GMT

While most renters are used to signing a lease, there is no law that says a landlord is obligated to use one. And for a variety of reasons, many people pay to live somewhere without the benefit of any kind of written document.

But just because there isn’t a binding contract spelling out rights and responsibilities, doesn’t mean there aren’t any rules. A landlord and tenant without a lease still have some protections.

How the Law Views Renting Without a Lease

Anyone who pays to occupy a dwelling where they are not the owner is a tenant in the eyes of the law. A tenant without a lease is known as a tenant-at-will. Instead of writing up a rental agreement or lease which is a legal document, the tenant and landlord have an implied lease. This is a verbal agreement that may include the amount of rent, when it’s due, who will be responsible for paying utilities, and any other conditions the two parties decide on.

Common situations when an owner of a property might choose not to use a lease include allowing a friend or family member to move in or getting a roommate. Someone may also become a tenant-at-will if their landlord lets a written lease end without renewing it, or if a written lease is so poorly written that it will not stand up in court.

With an implied lease, landlords and tenants have the same rules and protections as if they had a written month-to-month contract (or week-to-week if that is how rent is paid). State and local laws determine those rights and obligations. So, the rights of tenants in Missouri or Illinois might be different than in other states.

Essential Rights of Tenants

All tenants who pay rent, whether they have a lease or not, are entitled to certain protections under the law, no matter where they live.

Rental properties must:

be a safe and habitable environment
provide access to necessary services such as water, heat, and electricity
comply with all state and local health and building codes
respect tenants’ right to privacy

Anything beyond these basic requirements is typically documented in a lease agreement , for example outlining pet or smoking policies, or providing renters with a parking spot, laundry facilities, etc. These things may apply to a tenant without a lease too, but it is based only on a verbal promise. So, if the landlord decides to suddenly ban pets or take away a tenant’s parking spot, the tenant has no recourse since it was never put in writing.

Some rules, like occupancy limits, might be determined by local ordinances. Both the landlord and tenant will need to follow these laws, regardless of any agreement they may make between them.

Raising Rent

Having a lease locks tenants into their rental amount for the duration of the lease—usually a full year. Since an implied lease is the same as a month-to-month contract, a landlord can raise rent at any time, with only 30 days notice. If there is an agreement to pay rent weekly, only seven days’ notice is required.

Neither Illinois or Missori have a cap or limit on the amount a landlord can raise rent. This is true both with and without a lease.

Security Deposits

A tenant without a lease may still need to pay a security deposit. There is no limit to the amount a landlord can charge in Illinois, but in Missouri no more than twice the monthly rent amount is allowed.

Refunding a security department when a tenant moves out follows the same rules as most leases: the money should be returned within 30 days. The landlord can keep a portion of the deposit to cover unpaid rent, damages, or cleaning, but they must provide a detailed explanation of the reasons. If a tenant-at-will disputes the landlord’s deductions, they can take them to small claims court to seek full compensation, even when there is no lease.

Privacy Rights of Tenants

It is the right of tenants in Missouri and Illinois to get 24 hours notice before a landlord or maintenance worker enters their rental unit. The lack of a lease does not give a landlord the right to barge in on a tenant . The only exception is in the event of an emergency. Even suspicion of illegal activity is not a good reason to enter a dwelling without permission and notice. Those situations should be referred to law enforcement to handle.

Harassment or discrimination of any kind is illegal too, whether it is backed up with a legal document or not.

Can You Evict a Tenant Without a Lease?

Just like rent increases, landlords must give tenants-at-will 30 days notice when they want them to move out . They do not have to provide a reason for wanting to end the implied lease agreement. Tenants are also expected to give 30 days notice if they decide to leave.

If a renter refuses to leave after being informed that they must move out, the landlord can begin the eviction process. The rights of the tenant include getting written notice and a court hearing.

Other valid reasons for an eviction, with or without a lease, are failure to pay rent, damaging the property, creating disturbances, creating a health hazard, or engaging in illegal behavior .

Landlord Protections—With or Without a Lease

A verbal agreement between landlord and tenant is enough to give both parties some protection. But having a good lease is still preferred. When all rules and expectations are explained thoroughly and in writing, there is less chance of disagreements and disputes .

For landlords choosing to go the tenant-at-will route, there are some additional things that can safeguard the property and their investment. Maintaining accurate records of all rent payments received, invoices for all repairs completed, and copies of written notices will be helpful if a tenant makes accusations that landlord-tenant laws were broken.

In addition to using a written lease, many landlords find hiring a property management company to be helpful. Property managers act on behalf of the landlord and are a great resource for tenant questions and leasing issues.

If you would like to learn more about leases, tenant relations, and how property management companies can help, contact Select Leasing & Management today .

How Does Property Management Work?

Tue, 06 Aug 2024 22:12:50 GMT

How Does Property Management Work?

Time—a gift so precious that you can’t get it back when it’s gone. That’s why it’s important to use time wisely, especially when owning rental property. If you are both the property owner and the property manager, it takes a lot of work and time to keep your property up and your tenants happy. If you get satisfaction out of that, great! But what if you don’t? Property management could be the answer giving back your time so you can enjoy your life. So, how does property management actually work?

How Does Property Management Function?

Property management is just that: a company or professional that manages every aspect of a rental operation. Property owners can hire a property management company to do all the routine tasks that may be keeping them from having a full life with time to do the things they love—like developing a fledgling business, gardening with the grandkids, or enjoying a staycation.

Think of it this way—hiring a property management company is like hiring a chauffeur to drive your car. With someone else driving, you get to sit in the back, enjoy your beverage of choice, and enjoy the view. It’s the same with property management because this service frees up your time so you can enjoy all that the St. Louis area has to offer.

Know the Difference Between Outstanding and Just “Meh” Property Management

Successful property management means bringing your A-game every single day. A-gamers display strong communication skills with both tenants and property owners, and work strategically to follow a plan for success. The property management company that communicates well finds solutions quickly and experiences fewer misunderstandings.

Outstanding property management companies listen well, too. They are great mediators who know how to intervene in trouble spots with either property owners or tenants. That takes skill.

Another trait of outstanding property management is that they work with a sense of urgency when problems arise. Neither the property owner nor the tenant should have to leave umpteen voicemail messages before getting a call back. They know it’s important to take action right away.

5 Ways a Property Management Company Takes the Load Off of Property Owners

How does a property management company help ? They hire the most qualified people to:

Screen tenant applications, follow the terms of the lease and pay their rent on time.
Maintain the property , both inside and out. This means taking care of the landscaping and handling any emergencies all without breaking the bank.
Publicizing empty rental units. Knowing where and how to advertise takes both time and expertise.
Collecting rent. Property owners without property management help can waste time following up on slow or missing rent payments. This is one of those “necessary evils” that property owners would prefer to avoid.
Handling paperwork. Writing up leasing contracts and managing important documents takes time. An experienced property management company has the skills and knowledge to take care of grueling paperwork and even keep it organized.

How Property Management Saves Property Owners Money and Headaches

Laws are constantly changing in real estate. It’s important to know exactly what the law covers regarding owner and tenant rights. Laws around housing discrimination and fair housing are important. Not knowing about these laws can cost you thousands and even millions in lawyers’ costs and court fees.

There are legalities in writing up a lease agreement. Many property owners try to go the easy route by just using standard boiler plate language. But owners can get in trouble if the language doesn’t incorporate the current city, state, and federal regulations. The good news is that most property management companies stay on top of any changes in such laws. After all, that’s what you’re paying them to do. Hiring a property management company makes good sense and saves good cents! Professional help with local expertise will help you get back to living the life you want and rediscovering all that St. Louis has to offer.

Now that you know what property management companies do, contact Select Leasing and Management to learn how we can assist you in the St. Louis area. Contact us to learn more. We’re here to help you enjoy your most precious gift—time to truly live your life to the fullest.

Choosing a Property Management Company: The Questions Some Hope You Won’t Ask

Tue, 06 Aug 2024 19:46:55 GMT

As a property owner, you know managing rental units is a big job. There comes a time when owners can’t, or simply don’t want to, do it on their own. Property leasing and management companies are there to lighten the load of the day-to-day work involved : Finding and screening tenants, administering the appropriate paperwork, collecting rent, and handling upkeep and repairs.

But there are a lot of property management companies out there. The best way to find one worth the cost involves getting answers to some probing questions.

The Obvious Questions, and Noticeable Red Flags

When searching for a leasing and management company, some questions are no-brainers, such as what it will cost , what services are included , and how many references they have.

The not-so-obvious questions, however, can narrow the field of candidates. It’s not that these questions always have clear-cut “right” and “wrong” answers. The degree of importance an owner places on each question and its answer will vary. But unsatisfactory answers, or resisting to answer at all—that’s a red flag that there could be problems ahead.

The following questions may be uncomfortable for some management companies, but they are essential for owners if they don’t want surprises down the road.

Tenant Relations

A recent survey of landlords found that 40.6% have had to deal with a tenant who suddenly stopped paying rent, and 44.7% have had to evict someone. A management company is instrumental in finding and keeping good renters , and more importantly, dealing with the bad ones.

Aside from the standard questions about their rent-collection stats and what types of background checks they run on potential renters, a few strategic questions can help an owner judge the success of a manager’s tenant relations.

Do you offer any type of eviction protection? Some management companies back up their screening abilities with a no-eviction guarantee, promising to pay some of the eviction costs if they end up letting in a bad tenant.
What percentage of renters renew their leases? A low percentage of renewals could indicate the property isn’t a very nice place to live. Could that be due to poor management?
Do you guarantee a response window for tenant problems? When a company is slow to make repairs or address complaints, the result can be unhappy tenants and a rundown property. Ask if they guarantee a window of time within which they will reply to tenant complaints and queries.
Do you use move-in and move-out checklists ? This is a way to communicate expectations to new tenants and instructions to exiting tenants. Look for a company that spells this out clearly and consistently.
Can your manager explain the Federal Fair Housing Act? If a company’s employees don’t know or understand fair housing laws well enough to discuss them, they could end up breaking the law. That is legal trouble that no property owner wants.

Money Matters

Fees are a key factor in hiring a leasing and management company. It’s important to understand the fee structure so you’re not blindsided by additional charges. The other money matter that must be discussed is rent collection. For example, most management companies these days offer an online payment option—one that doesn’t may have trouble collecting rent. Here are some other questions about fees and rent that can yield valuable information:

Does your company charge fees on vacant units? Some management companies charge a flat fee, which is convenient—unless you’re paying for empty apartments. There is little incentive for the company to rush to find a new tenant if they know they will continue to collect their fees.
What other services will trigger fees? Some companies may charge a lower per-unit fee but charge extra for emergency calls, certain maintenance tasks, or other miscellaneous items. Make sure the details are spelled out in the contract.
How quickly do you pay property owners after rent is collected? Management companies may take 30 days, 45 days, or even longer to pay owners after rent is due from the tenants. Will their schedule mesh with your financial obligations?
What percentage of rent payments are late? A lot of late payers could mean inadequate collecting procedures, or a failure to screen for renters’ ability to pay.
What percentage of security deposits are returned? A low percentage might show that tenants aren’t taking good care of the property. Perhaps the management company is either not screening effectively or not communicating expectations. (Or, it could even mean that the management company is pocketing some of those deposits for itself!)

Maintenance and Repairs

Overall care of both the interior and exterior of rental properties is a primary job of property management companies. It is essential to hire someone who has the ability to handle issues with plumbing, electrical, structural repairs, and landscaping. Some management companies employ their own staff to perform these tasks, while others subcontract out the work.

Is your company knowledgeable about local codes and inspections? Not following regulations can lead to unsafe living conditions and potential lawsuits.
What type of maintenance reserve is required? Many companies keep an account, funded by the owner, to pay for general repairs and maintenance. Insisting on a large dollar amount could lead to careless spending by the manager. But too small an amount can result in constant requests for reimbursement. It’s up to you to decide if the management company’s reserve requirement is fair and reasonable.
Does your company mark up maintenance and repair costs? Let’s say a tenant needs a new doorknob. If you are paying a fee to have rental units maintained, plus reimbursing the company for the doorknob, the company should not be marking up the cost of the repair to make an additional profit.
Who does your maintenance work and what type of screening is done on them? Anyone that the management company hires, either as an employee or a subcontractor, will have contact with your tenants, their homes, and their belongings. As an owner, it is important to know the company has vetted these workers with background checks and screening.

Business Issues

As with any business relationship, both parties must have confidence in who they choose to partner with. When looking for a leasing and management company, owners should feel free to ask for references. It is perfectly reasonable to want to ensure that the company has a good reputation for ethics, integrity, and transparency.

Basic information about the type, number, and location of properties serviced will tell you whether a management company has relevant experience. For example, making sure they know how to deal with things such as homeowners associations or an out-of-state owner if those apply. In addition, it’s important to thoroughly review the contract to be sure that the terms, fees, and conditions for cancellation are clear.

Some questions that might not immediately come to mind but can give even more data are:

Do I have to go through the management company if I want to sell the property? This is not necessarily a bad thing, but it can come as a surprise when an owner decides to sell. It is best to be clear about the terms of the contract and satisfied with any restrictions it entails.
What types of reports will your management company provide? Owners will want details about their investment in the form of financial reports, tenant data, work order completion, and maintenance expenses. The type and frequency of the reports should be something agreed upon upfront.
What is your company’s experience with evictions? Extensive experience with evicting tenants might indicate poor screening practices. However, owners need someone who knows the laws and procedures. The owner and manager should have agreed-upon rules for when an eviction is necessary.
How long, on average, do units stay vacant? Part of a leasing and property management company’s job is to market the property and find renters. If apartments are sitting empty for extended periods of time, the company’s marketing plan might not be effective.

Don’t Be Afraid to Ask the Tough Questions

Hiring a property management company can be a huge help for a property owner. When interviewing companies, ask questions that dig a bit deeper than basic information. This will help you find a good fit that will result in a long-lasting, profitable partnership built on mutual trust.

Select Leasing & Management offers world-class management services to residential properties throughout the six-county metro St. Louis region.
We’re happy to answer all of your questions—even the tough ones!

What are the Biggest Challenges for a Property Manager?

Tue, 04 Jun 2024 16:01:32 GMT

Owning rental property has many advantages including a steady income stream and certain tax benefits. But like any investment, there are risks and challenges. Landlords who decide to manage the property themselves soon find out how many decisions are involved and how much time and energy it takes. The alternative is to hire someone to take on the task.

The challenges for a property manager are the same as for an individual owner, with one big difference: Professional property management companies have experience and resources at their fingertips that a single landlord may not.

Knowing the challenges you’re up against when managing rentals is helpful in deciding whether or not to outsource the work. And learning how a property manager deals with those challenges is invaluable in choosing a management company—or switching to a new one .

Top 8 Things that Keep DIY Landlords Up at Night

Dealing with rental units and the people who live in them involves a special set of skills. Here are eight main challenges of day-to-day operations:

1. Finding and keeping good tenants

Finding a renter won't take much marketing know-how if a property has a desirable location, fair price, and good amenities . It is considerably more work if there is a lot of competition, especially if other properties are nicer or less expensive.

Once you attract potential candidates, there is the need to screen them for criminal backgrounds and financial fitness. Then, owners need to keep them happy once they move in. Ideally, landlords find great renters who renew their leases for years to come, but that can be easier said than done.

2. Keeping the Property Well-Maintained

Owning any property—whether one’s own home or a rental—means having a constant to-do list of cleaning, landscaping, repairing things that break, and making both major and minor upgrades.

Letting the grass grow, ignoring leaky plumbing, not replacing worn-out carpets or cracked windows, and keeping broken appliances are all recipes for disaster. Not only are tenants bound to get fed up and move out, but the property’s value will plummet too.

3. Responding to Emergencies

While many maintenance and repair projects can be scheduled, some end up happening at inconvenient times. A broken pipe under a sink, a failing furnace, or malfunctioning smoke and carbon monoxide detectors need to be dealt with immediately. Broken pipes can cause extensive damage, like rotting floors and ruining carpeting. But losing heat in the middle of winter or faulty alarms can put tenants at risk.

Landlords must be able to respond to emergencies 24/7 for the well-being of their tenants. This can be quite difficult for a DIY owner, especially if they have a full-time job or don’t live nearby.

4. Rising Costs

Expenses like property taxes, insurance, supplies, and labor are constantly going up, eating away at profit margins. Landlords need to find a way to keep their spending in check on things they can control, without neglecting what needs to be done.

5. Difficult Tenants

Dealing with renters can be uncomfortable for some landlords, whether the issue is late rent payments, illegal activity, or unauthorized roommates. It’s not a job for someone who avoids confrontation.

Owners must not be afraid to have difficult conversations when necessary, and when to take things further—like contacting the police or initiating the eviction process.

6. Keeping up with regulations

State, local, and federal legislation can change at any time. Landlords may be doing something that is suddenly non-compliant or a section of their lease agreements may not be aligned with new laws. They must be very careful that their actions follow fair housing policies that spell out both the landlord’s and tenant’s rights and responsibilities. Mistakes can lead to costly fines or land an owner in court.

7. Maintaining ROI

Owning rental property is a business, and it needs to remain profitable. This means pricing rent appropriately, cutting costs when possible, and being intentional about investing in upgrades that will keep their asset’s value.

Landlords need to consider the ROI—return on investment—of every dollar they spend. For example, replacing old appliances with energy-efficient ones requires a big cash outlay. But the result will be lower utility costs and an improvement that may even justify a rent increase.

8. Demands on Time and Energy

A landlord’s skills, the number and proximity of their rental properties, and even their age will all play a role in how difficult self-management will be. They may be concerned about keeping up with all of the chores. It might be impossible to take a vacation and they may be missing out on quality time with friends and family.

Taking care of rental units is hard, time-consuming work. When it becomes too much , it’s time to consider handing over all of these challenges to a property manager.

Challenges For a Property Manager? They’ve Got them Covered

The challenges for a property manager are no different than they are for an individual landlord. But an owner likely has family obligations and possibly another job to worry about too. A property management company devotes 100% of its time and energy to dealing with these things.

Here are some ways property managers face the challenges, so owners don’t have to:

They put strong marketing skills to work, knowing where and how to advertise and attract the most promising tenants .
Property managers have approval procedures and access to all of the appropriate screening services and databases to do background checks .
A property management company either has qualified staff to handle maintenance issues or a network of reliable service vendors with the right skills to call upon as needed. They can take the midnight emergency calls and address concerns immediately so you don’t have to.
Because they handle multiple rental properties, property managers can often save money by taking advantage of special pricing and contract terms with vendors that may not be available to individuals.
Professional managers excel at tenant relations , knowing how to collect rent, enforce rules, and carry out evictions if necessary.
They stay on top of the latest laws and requirements, avoiding fines and lawsuits for property owners.
Management companies provide accounting reports so landlords know the state of their financial investment.

Professional Property Management Pays For Itself

It is not uncommon for a landlord to resist hiring a professional manager due to the cost . But just as owners must examine the ROI of any other expense, knowing you no longer have to face the day-to-day challenges on your own will pay for itself in peace of mind.

At Select Leasing & Management, our sole focus is to lessen your burden as a landlord. Fewer sleepless nights, more free time, and knowing your investment is in good hands—that’s our goal for you. Contact us today to learn how putting a professional in charge will actually help your bottom line .

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For Leasing Contracts and Tenant Questions, Property Managers Are a Landlord’s Best Resource

Tue, 07 May 2024 21:14:51 GMT

When property owners hire someone to manage their rental properties, it’s often because they do not want to do the marketing, maintenance, or rent collection themselves. While those are obviously important services, for some, being able to hand off a lot of the inquiries and one-on-one interaction with renters is just as valuable.

With property management handling leasing contracts and fielding tenants’ questions, landlords can rest assured that their properties are run exactly how they want them to be.

The Benefits of Property Management Handling Leasing Contracts

The lease is a legal document and there’s a lot to understand about the rights and responsibilities of both owners and renters. It can be easy for an inexperienced landlord to make a misstep that lands them in legal trouble.

Property managers deal with lease agreements all the time and keep up to date on the latest laws regarding fair housing and tenants’ rights. Not only do they understand what should be included in a lease to protect the landlord’s interest, they know what to do when someone breaks the rules. Having a management company take on the unpleasant process of terminating a lease or beginning eviction proceedings can be a huge weight off a landlord’s shoulders.

Property Management’s Most-Asked Questions

In addition to questions about the lease, prospective tenants usually want a lot of information when deciding where to live, and the questions don’t stop once they move in. A great advantage of hiring a property management company is that it is their job to have the answers.

Property owners should take some time to consider how they want their properties handled. This includes their stance on subjective topics, such as whether or not to allow subleasing or pets. Once they decide on their preferred way to run their property, their property management company can answer questions confidently, knowing they comply with the property owner’s wishes.

It’s important to find a manager that anticipates likely questions and makes sure the information is spelled out in the lease. They must also be good at communicating the information in a clear and concise manner with renters. This avoids misunderstandings and helps develop a good landlord-tenant relationship .

Tenant inquiries typically fall into seven categories. We’ve listed the ones we hear most often:

Property Details

What amenities, facilities, or common areas are available on the property?
Are utilities included in the rent? If so, what is the average amount?
What security measures are in place on the property?
Is there a designated parking spot?
Where are smoke detectors, carbon monoxide detectors, fire extinguishers, and emergency exits?

Lease Terms

What is the duration of the lease?
Are there penalties for breaking the lease early?
What is the policy on subletting or adding roommates ?
Is a copy of the lease online (or in a handbook) for future reference?

Rent Payment

When is the rent due?
Is there a grace period for late payments? What are the late fees?
What are the accepted payment methods and are there online or automatic payment options?
What is the policy for increasing the rent ?
How are security deposits handled, and what is the process for returning them?

Tenant Responsibilities

What are the rules for keeping the property clean and in good condition?
For single-family homes, is the tenant responsible for lawn care and snow removal?
Can tenants be reimbursed for minor repairs they make themselves? What is the process?
Are tenants allowed to make changes to the property such as painting? Is prior approval required?

Rules and Regulations

Are there rules regarding noise levels, parties, or gatherings?
What are the restrictions regarding pets, smoking, guests, etc.?
Will the landlord respect tenants’ rights to privacy and property access ?
If a neighbor breaks the rules, what is the procedure for alerting management?
What circumstances will lead to eviction procedures?

Maintenance and Repairs

How can tenants report maintenance issues ?
What is the typical response time for repairs?
What is the method of contact for after-hours emergencies?
What routine maintenance is provided and when? For example, cleaning of common areas or spraying for pests.
How much notice is given before a landlord enters a rental unit, and will the landlord ask permission?

Lease Renewal and Moving Out

How far in advance should tenants notify the landlord of their intention to renew their lease or move out?
What are the expectations for moving out , cleaning, and returning keys?
Are there fees charged for lease renewal or the move-out process?
How and when are security deposits returned?
What will ensure the entire security deposit is paid back in full?

Select Leasing & Management Has the Answers

These questions cover a wide range of topics that tenants may ask before and during their tenancy. If they receive vague or contradictory answers—or no answer at all, it will reflect badly on the property and the landlord. This can turn prospective renters away or cause a current tenant to consider moving out.

The last thing a landlord wants is constant phone calls or tenants who are misinformed. When searching for a property manager , look for one who can anticipate and handle inquiries in a way that aligns with how you want your property to run.

Select Leasing & Management has experience with just about every scenario that can happen with a rental property. Our knowledge and ability to craft effective leases and respond to questions will give you peace of mind that your tenants have the comprehensive assistance and support they deserve. Contact us today to learn how we can help.

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Maintenance For Rental Property: You Don’t Have to Do It All Yourself

Tue, 02 Apr 2024 21:15:00 GMT

What frustrates do-it-yourself landlords more than anything else? In our experience, it’s the constant struggle to keep up with maintenance. Keeping rental units in good shape is a must for two very important reasons: retaining good tenants and protecting your investment.

When regular upkeep and responding to emergencies become too much, it’s time to turn to professional property management for handling maintenance. But how much maintenance for rental properties is included in a typical contract? Some landlords never want to fix another toilet, while others don’t want to hand over total control.

The best property management companies are flexible enough to provide whatever level of service that suits the owner’s needs.

Do You Need Property Management Or Just a Handyman?

Full-service property management companies offer administrative services and marketing in addition to maintenance for rental properties. They act as the owner’s representative , taking care of all day-to-day operations.

Some owners might not need this much help. Managing a single rental house, for example, could be easy for the landlord. At most, they may need a handyman to take care of the occasional repair job.

Multiple rental units or buildings in different locations, however, are going to have greater maintenance needs. Owners will need to outsource this work, and the most efficient way to do so is with a professional property management company.

Typical Maintenance and Repair Services

When looking for a property management company, it’s important to understand what maintenance is included in the company’s contract. There may be additional services that the company can perform that fall outside of the usual list. They may charge extra for these jobs. If there are things that will remain the owner’s responsibility, this should be clear from the outset.

The type of maintenance for rental property falls into one of the following categories:

Routine Upkeep

Keeping up with routine maintenance makes the property more attractive to potential tenants. And doing periodic inspections and taking care of things before they become problematic saves money in the long run . Most management companies offer a list of basic things they will do regularly, either according to a set schedule or on an as-needed basis. This often includes tasks like:

sweeping, mopping, or vacuuming the entryway and hallways
mowing grass or snow removal depending on the season
emptying trash bins in common areas
replacing light bulbs in common areas
upkeep of the pool, patio, playground, etc. (if applicable)
ensuring shared washers and dryers are in working order

Seasonal Refresh

The change of seasons usually brings on a variety of maintenance tasks that a property management company can handle. Many of these apply to common areas, but they may involve maintenance inside tenants’ units too. They may happen every season or on some other timeline. For example, repainting occupied apartments every three years or so.

checking safety equipment such as smoke detectors and fire extinguishers
switching from storm windows to screens in spring (and vice versa in autumn)
making sure HVAC is in working order
opening or closing the pool for the season
washing windows
shampooing carpets
painting
spraying for pests

Repairs

Appliances break, pipes leak, light fixtures stop working, and carpet wears out or buckles. Property management handling maintenance should do periodic inspections of apartments to see what needs to be repaired or replaced. In addition, they will respond to repair requests and emergencies.

Some property management companies have maintenance workers on staff who can handle just about anything that might come up. Others contract the work out to plumbers, electricians, or other vendors. Good management companies have a list of reliable contacts they can call upon when needed.

It is important to agree on how these maintenance jobs will be handled. For example, will the property management company pass on invoices for all materials and labor for the landlord to pay? Or will they charge a flat fee that includes most minor repairs like installing a new light fixture, and only bill extra for bigger jobs like replacing the dishwasher?

In addition to knowing that the building manager will take care of any repairs, landlords need to understand what it may cost them, beyond the contracted fee so they are not blindsided.

Tenant Turnover

There is a certain amount of maintenance that is necessary when a tenant moves out.

Property management companies usually work through a checklist to make sure that everything is clean and prepped for the next renter. This may include disposing of anything the former occupant left behind, deep-cleaning or replacing the carpet, cleaning and sanitizing appliances, and refreshing paint.

This is also an opportunity to inspect the unit and fix anything broken that may not have been reported. Safety features like smoke alarms, locks, and intercoms should also be tested.

Getting a dwelling ready for a new tenant can be time-consuming. For property management companies this is a routine chore that they can accomplish quickly and efficiently.

Big-Ticket Projects

Occasionally, a property owner will need to make a big capital expenditure, such as getting a new roof, resurfacing the parking lot, or replacing all the windows.

Although the costs of things like this are not going to be included in a property management company’s contract, the company can be instrumental in getting these large projects done.

First, the manager is likely to be the one who notices when these projects are necessary and will alert the landlord. They may then be tasked with getting quotes for the work and overseeing the job’s progress, especially if they are onsite daily.

Make Sure Your Property Management Contract Includes the Help You Need

While a property management company may include all of the maintenance tasks listed here, the only way to know for sure is to look carefully at the contract. It will outline:

what specific tasks are included in the fee (which is typically between 8% and 12% of rent collected)
how often regularly scheduled tasks will be done
what extra costs may be incurred

Additionally, the contract should detail how much decision-making authority the property manager has. For example, can the management company choose and purchase a new appliance, or must they have the landlord’s approval first?

Select Leasing & Management works to structure service packages that bring the most benefit to the landlord and their tenants.

You May Benefit From Property Management Handling Maintenance. Contact Us to Discuss the Details.

Not everyone has the time and energy to respond to all the maintenance needs of a rental unit. And for landlords with multiple properties, it’s impossible even if they wanted to.

Luckily, property management companies like Select Leasing & Management can oversee everything from the smallest chore to the largest project. As a result, your tenants will be happy and want to stay, and your investment will retain its maximum value.

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What Makes Leasing Property Worth the Investment? Find a Property to Lease that Will Appeal to Renters

Tue, 05 Mar 2024 23:21:11 GMT

What type of property investor are you? Are you a first-timer, considering trying your hand at becoming a landlord? Or perhaps you already own rentals and are looking to add to your portfolio. Or maybe you’re wondering if you should try to rent out a house instead of selling it. For example, one you’ve inherited or that is vacant due to your relocation, combining households, or downsizing.

Leasing property can be a great investment. The key is to find a property to lease that will be attractive to renters so it turns a profit. Here are the things that make a property great for leasing.

A Great Location

As the saying goes in real estate, it’s all about location, location, location. Leasing property will be much easier—and more lucrative—when it’s in a good spot. That, of course, means different things to different people. As a general rule, though, find a property to lease in a safe neighborhood with plenty of amenities and good schools. Being near major highways or having easy access to public transportation is favorable for commuting.

Some St. Louis area companies often end up on “Best Of” lists. Forbes 2024 list of America’s Best Large Employers, for example, includes Washington University, Edward Jones, and Emerson Electric to name a few. Rental homes near these locations typically do well, as do apartment complexes near the many office and industrial parks in Maryland Heights, Chesterfield, and Fenton.

For some renters, being close to popular entertainment and recreation opportunities will be appealing. It can be easy to find tenants for apartments near the food and fun of Soulard or the Grove, or within easy reach of Forest Park or the Missouri Botanical Gardens.

Well-Maintained Building and Grounds

No matter where a rental property is, if it is in bad shape it might stay vacant. This starts with the external upkeep, since potential tenants may not even want to look at a rental unit in a rundown building with peeling paint, cracked windows, and overgrown grass.

Inside, public spaces must be clean and well-lit. The apartments themselves should be kept up-to-date and have all appliances in good working order.

You might be lucky enough to find a property to lease that is already well-maintained. Or, you might find a building for a good price that you can renovate. Either way, ongoing maintenance and repairs are a must in order to attract and keep good tenants.

It can be hard for an individual landlord to keep up with maintenance work if they are leasing property in a large building or in several houses and apartments scattered across town. Finding an experienced property management company can ease the burden, as they will be responsible for fixing things that break, landscaping, and regular cleaning of entryways and common areas.

Responsive Management

Part of keeping a property in good condition is being responsive to tenant requests. This means doing regular chores, scheduling repairs as necessary, and being available for emergencies.

If tenants can not rely on their landlord to resolve issues quickly, they may leave when their lease is up. Landlords need to make sure their property remains a great place to rent by being as responsive as possible.

Property owners must ask themselves if they want to be property managers or real estate investors. Being a hands-on property manager and landlord requires day-to-day attention and answering calls 24/7/365. The other option is to be an investor, collect the passive income, and hire someone else to do all that’s involved in managing the property and its tenants. Property management companies help landlords make more money—plus their services are tax deductible.

Safety and Security

Top on the list of most tenants is a need to feel safe, and it goes way beyond good locks. They may be willing to pay more for an apartment with extra security measures like app-based surveillance cameras, access control systems, security gates, door and window sensors, and even lockboxes for packages.

If investors can’t find a property to lease that already has these features, adding them should be a priority. That may involve installing cameras or special locks or hiring an on-site manager who can ensure safety on the premises.

An investment in extra security will pay off by making renters more comfortable. It can also protect the landlord's investment by keeping the building and tenants safe from theft, vandalism, and other crimes, as well as reducing legal liability if something does happen.

Competitive Leasing Rates

One way a property can make landlords a profit is by charging a competitive rate for rent. This is more complicated than simply charging a lot. It requires an understanding of the local market and what the property has to offer, as well as keeping costs down.

A property management company can help crunch the numbers to set the best rental rate. They can also help reduce maintenance costs and make suggestions about what amenities and features will attract new tenants.

Extra Features That Make a Big Difference

Certain features can draw in potential renters. Basic things like on-site laundry or off-site parking in a high-traffic neighborhood are a big plus. So is including some utilities in the rent.

Other amenities like swimming pools, fitness centers, tennis or pickleball courts, and playgrounds may increase the amount that people are willing to pay.

And leasing property that appeals to a certain segment of the population can be helpful too. Advertising that an apartment is pet-friendly, great for families with kids, or easily accessible to seniors or those with disabilities is a good way to find applicants.

When a landlord is able to find a property to lease with these extras, it can be a good investment. Just remember that additional perks mean additional maintenance.

Getting Help When Leasing Property

Whether deciding if an “extra” home is worth renting out, or trying to find a property to lease, it’s important to remember what tenants want. The nicest apartment might stay vacant if it’s in a bad location. The same goes for a house where the rent is high but it needs a lot of work.

A good place to start is by finding a real estate agent who deals with rental property to discuss your property investment goals. Our affiliate company Berkshire Hathaway Home Services Select Properties can help.

Next, consider contacting a property management company to talk about your property. At Select Leasing & Management, we have years of experience in the St. Louis rental market. We’ll handle the day-to-day operations so you can make the most of your investment.

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7 Traits of a Great Landlord. Do You Have What It Takes?

Tue, 06 Feb 2024 21:40:06 GMT

Like any occupation, managing rental property requires a certain skill set. There are seven traits necessary for every good landlord. Master them all and you could be a great landlord.

These traits come naturally to some people. Others can learn the necessary skills with some effort and practice. The reality, though, is that not everyone is cut out for the job.

There is no shame in admitting that you don’t have the time, energy, or patience for one or more of these aspects of property ownership. But you can still reap the benefits of property ownership by finding a trusted company to provide great property management for your tenants.

How Do You Stack Up as a Good Landlord?

There are a lot of tasks involved in managing rental properties, and landlords who do it well have the following traits. These skills result in being able to attract and keep good tenants. This leads to a better bottom line that safeguards the owner’s investment.

1. People Skills

Being a landlord means remembering that tenants aren’t just a source of income, but real people with valid concerns. Good landlords have consideration and empathy for their renters and are mindful of potential issues that may arise. They keep the lines of communication open and work to maintain good relationships, while also respecting tenant privacy and boundaries.

The job requires a keen eye to distinguish good potential tenants from bad, along with using tools like formal background checks. Landlords must also be able to set aside their personal feelings when they have to turn down an applicant, raise the rent, or terminate a lease . They need to be comfortable dealing with all kinds of personalities and good at conflict resolution.

For someone who doesn’t enjoy interacting with people or is squeamish at the thought of enforcing rules or delivering bad news, hiring a property manager can be the answer. These professionals are experts at dealing with people from all walks of life.

2. Customer Service

Landlords can’t forget that owning rental property is a business, and they need to keep their customers—the tenants—happy. Owners have a duty to provide a safe, comfortable place to live in order for their tenants to want to stay.

Consider any company’s efforts to give good customer service. A landlord’s job is not that different. They must:

be responsive to requests, complaints, and emergencies.
prioritize safety, security, and cleanliness.
charge a fair price.
be available 24/7.

Keeping tenants satisfied—and doing all the things that entails—can be a lot of work, especially when maintaining a large number of rental units. A great property management company can provide added support.

3. Flexibility

A lease agreement spells out the rights and responsibilities of both tenants and landlords, but a good landlord is flexible and open to reasonable requests. For example, a tenant might ask to paint the apartment. If the tenant is trustworthy and they agree upon a color, the landlord may decide it is in their best interest to allow it, and may even provide the paint.

Or, suppose a tenant’s sibling needs somewhere to stay for three weeks, but the lease has an occupancy limit . The landlord could choose to temporarily waive the limit and let them stay—provided they do not discriminate by allowing the same courtesy to all tenants should the need arise.

4. Technical Know-How

We live in a digital world. Online portals and apps where tenants can pay rent, make maintenance requests, and communicate with the landlord are expected nowadays.

Landlords can’t continue to do things the “old” way forever. Younger tenants are looking for even more convenience and innovation, not only in interacting with their landlords but in their homes as well. More than five years ago, a study found that 86% of millennials were willing to pay more for an apartment with “smart” features. Gen Z renters and those who come next will likely demand even more.

Good landlords must be knowledgeable about—and ready to embrace—the latest innovations for their tenants. If keeping up with technology is not a strong suit, they may want to explore hiring a property management company instead.

5. A Finger on the Pulse of the Industry

As mentioned above, keeping up with technology is important. So is paying attention to everything going on in the rental and real estate industry such as:

being aware of fair housing rules and watching for changes.
understanding what is and is not legally acceptable, such as gaining access to a tenant’s apartment .
how to implement security measures to address renters’ safety concerns .
changes in rent amounts in the local market.
Amenities that will attract tenants, for example, a fitness room, bike storage, or lock boxes for deliveries.

Good landlords are curious about what will make their investment properties more appealing, and therefore more profitable. A professional property manager can do it for you if this sounds like too much trouble.

6. Maintenance Expertise

A huge part of being a landlord is handling maintenance and repairs. Many owners think that the only way to keep maintenance costs low is to do it themselves. This is fine, as long as they have the abilities and time it takes to do the job effectively. But even someone with great handyman skills will struggle with larger projects and could get tired of being available 24/7. They’ll eventually want some time off or need to retire.

Great property management companies have access to reliable, cost-effective workmen and cleaners. They may employ someone on-site for larger properties, or keep a list of contacts they can call upon as needed. And, managing multiple properties often allows them to lock in vendor and contractor discounts that an individual landlord might not have access to.

7. Business Abilities

Since running rental properties is a business, it takes someone organized and not afraid of dealing with a lot of paperwork. Good landlords have some financial and accounting knowledge. They must also understand legal issues regarding fair housing and leases.

Of course, a landlord can hire an accountant and attorney to handle these things, but they can also have a management company take care of it. Great property management companies worry about budgeting, paying bills, and collecting rent so the owner doesn’t have to. In addition, they will provide detailed reports and statements, keeping the landlord informed about the business’s financial well-being.

A Great Landlord Knows When to Consider a Property Management Company

For someone with the right traits, being a hands-on property owner is the perfect job. But that doesn’t mean someone lacking one or two of these characteristics can’t be a good landlord. In fact, getting the right kind of help might be what it takes to become a great landlord.

According to Business Wire , more than half of all landlords use a property management company, and another 24% are in the process of looking for one. This isn’t surprising, considering the amount of work self-managing rentals can be—especially for an owner who also has a full-time job.

Great property management companies handle what a landlord can’t do, or simply doesn’t want to do. By partnering with a professional company , they can provide the very best for their tenants.

In the St. Louis region, contact Select Leasing & Management to see how we can help.

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Why Property Management Companies Help Your Bottom Line as a Rental Owner

Tue, 02 Jan 2024 20:35:15 GMT

It’s understandable why so many rental owners ask “Why should I hire a property management company?” After all, the whole point of investing in rental property is to make money. Taking care of the property yourself means not having to pay someone else, and theoretically, that should allow you to end up with extra cash in your pocket.

Unfortunately, that’s not always how it goes when managing rental property. Keeping units occupied, handling maintenance issues, and tracking down rent payments is hard work – and you can actually end up losing money if those things aren’t taken care of promptly. Outsourcing all of those tasks to a property management company can increase your profits because these professionals have the skills, knowledge, and tools to get the job done right.

If you’re ready to see higher profits in the new year, consider these benefits of hiring a property management company.

Finding Qualified Tenants

Advertising open units can get expensive if you’re not reaching your target audience. Property managers know all the right places to announce vacancies so you can get units filled quickly. And plucking the “bad apples” from a pile of rental applications involves a sophisticated screening process .

Property management companies run credit checks, verify employment, contact references, and do all of the other things necessary to find good tenants who will take care of your property and pay rent on time. This not only saves you time but reduces the chances of having to repair units when destructive tenants move out. It also prevents the long, costly process of eviction if you end up with a bad renter.

Managing Rent Collection

When tenants don’t pay, you don’t get paid. Without a steady cash flow, you can’t pay the mortgage and other bills on time, leading to costly penalties and late fees. While some property owners spend days, weeks, or even months tracking down tenants who are late on their rent, property management companies have time-tested systems and tools in place to help streamline the process of collecting payments. Property management benefits also include raising the rent when necessary, so you don’t have to be the bad guy when the time comes.

Handling Internal and External Maintenance

Landlords don’t always plan for midnight and early morning calls, but they certainly happen. When a water heater breaks or the furnace stops working, tenants need help right away. Instead of property owners spending gas money driving back and forth from home to fix things, a property management company has someone near the units 24/7 who can get there quickly. They also have access to trusted vendors who offer discounts on appliances, and licensed contractors who provide timely, affordable, and quality work. That can save a lot of money vs. hiring a random contractor in the phone book who may do shoddy work.

And when it comes to outdoor maintenance, it’s difficult to beat property management benefits. If snow isn’t removed from a parking lot and tenants slip, or a light bulb between buildings burns out and a tenant is attacked, premises liability lawsuits are expensive. Having someone on board full-time who takes care of those things can offer peace of mind and save a lot of potential expenses.

Understanding Legal Issues

If you’re still asking “Why should I hire a property management company?” this section is reason enough. Managing a rental property requires extensive knowledge about fair housing and anti-discrimination laws, eviction procedures, and issues related to taxes to avoid liability suits. Making mistakes in who you refuse to rent to or following the wrong steps in pursuing an eviction can result in costly legal fees. Even turning away someone with an emotional support animal can land you in legal trouble. On the flip side, if a tenant breaks their lease or damages your property and you don’t have a solid lease agreement, you could be forking out money to cover those losses.

Property management companies stay on top of current laws to ensure rental properties are compliant with local, state, and federal laws to avoid penalties and lawsuits.

Maximizing Rental Values

Property managers continuously conduct market studies to decide how much tenants are willing to pay for a rental in your area. They can recommend when to raise the rent and suggest upgrades that would make the property more valuable. For instance, if surrounding complexes with higher rates have covered parking and car charging stations, a property manager will crunch the numbers and let you know if adding those amenities could bring you more money, too.

Take Advantage of Property Management Benefits in the New Year

If you’re still wondering why you should hire a property management company, consider the time you will save by handing off those tasks to someone else this year. You can focus on what’s important to you and your family instead of:

Advertising
Screening tenants
Drawing up leases
Maintaining tax and legal records
Handling maintenance calls
Tracking down rent payments

Perhaps you’ve been aiming for a promotion at your full-time job, and the distractions of owning rental property have kept that from happening. Or, you missed most of your kids’ sporting events and promised them you’d be there this year. Time is money, and for a reasonable fee , that’s exactly what a property management company can give you.

If you are a landlord in the St. Louis region ready to increase your profits and have more time in 2024, Select Leasing & Management can help. Contact us today to learn how we can give you back your time, save you money, and safeguard your investment.

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Why Hire a Property Management Company? Here Are 8 Great Reasons

Tue, 05 Dec 2023 21:08:36 GMT

Why hire a property management company? The answer is easy for investors who never meant to be hands-on landlords. Dealing with the day-to-day demands of a building and its tenants takes a toll, leaving many rental property owners feeling overworked and overwhelmed. Even DIY landlords who think they have everything under control can end up needing help.

We’ve compiled eight red flags for landlords that may signal that they’re reaching their breaking point. A reputable property management company like Select Leasing & Management can lighten the load and might even increase profits.

1. You’re Playing Whack-a-Mole With Repairs and Maintenance

Upkeep takes a great deal of a property owner’s time. In addition to routine tasks like cleaning common areas, mowing grass, and periodically refreshing paint, flooring, and fixtures, something will almost always need fixing. This is especially true as a building ages.

While the landlord of a single rental might be able to keep up, the more properties owned, the harder it becomes. Broken pipes, leaky faucets, burned-out lights, failed heat or A/C—the list goes on and on. A property management company could field these calls and make repairs, but DIY landlords are on their own to do the work, or to find someone else who can.

2. You Don’t Have a Head for Numbers or Paperwork

Owning rental property is a business, and as such requires some administrative and bookkeeping skills. Knowing what to charge for rent, understanding leases, and making decisions about if and when to make capital improvements are all important—but these tasks aren’t everyone’s cup of tea. There’s no shame in admitting that you don’t understand how to calculate the return on investment of a new roof, or that you don’t know which property management expenses are tax deductible .

Property management companies provide expertise that an individual property owner might lack. They know what needs to be in a lease, can determine what rent to charge in the local market, and can deliver detailed financial reports each month.

3. You’re Tired of Being the Bad Guy

Most landlords agree that finding good tenants is one of their biggest headaches. Even the best landlord-tenant relationships can have sore spots and disagreements . It can be disheartening for a landlord to continually remind renters of the rules regarding things like noise complaints, occupancy limits , or paying rent on time. And delivering the news that the rent is going up is never pleasant.

Property management companies act as the landlord’s spokesperson and legally-appointed go-between. They can handle all of those uncomfortable conversations and even take steps to terminate a lease or start the eviction process when necessary.

4. You’re Spending Too Much Time—and Gas Money—On the Road

Maybe you once lived near (or possibly even in) the apartment building you own. Moving a considerable distance away will make it much harder to be on-site taking care of things. Not only will getting back and forth for routine maintenance mean a lot of time in the car, but taking too long to drive across town is not going to cut it in an emergency.

A property management company can be available 24/7, either with an on-site manager or a network of resources they can call on when needed. This is extremely helpful for landlords who are not close by—and it’s essential for those who decide to relocate to another city or state.

5. Your Personal Life is Nonexistent

Self-managing a rental property means accepting that personal time can be interrupted at any moment. Without reliable backup, it can be hard to take a vacation, attend family events, or simply enjoy a quiet weekend at home.

A property management company can give landlords their time back. Knowing someone is in charge will give them the freedom and peace of mind to do the things they want to do, without getting a call from a tenant or having to worry about the daily, weekly, and monthly maintenance schedule.

6. You Worry About Lawsuits

When considering “Why hire a property management company?” landlords should ask themselves another question: “How confident am I in what I can and can’t legally do?”

The business of renting property is subject to strict local, state, and federal laws. Mistakes can subject a landlord to fines and lawsuits. They need to be careful to follow rules such as:

They must not discriminate
They need to understand the rights and obligations outlined in lease agreements
They must respect tenant rights like when they can legally access their rental units , or whether or not they have to allow emotional support animals
If they neglect to fix problems and someone gets hurt, they could be on the hook for personal injuries in a premises liability suit .

Property management companies make it their business to keep current on all laws pertaining to rental property so the landlord will not have to worry about missteps that could cost them money or land them in court.

7. You’re Losing Money On Your Investment

Losing money on a rental property deserves a careful look at the finances. Is the rent high enough? Is failure to collect rent on time resulting in owing late fees on expenses or the mortgage? Has the cost of maintenance and repairs gone way up?

It may seem counterintuitive—why hire a property management company if finances are already stretched thin? In addition to saving landlords time and headaches, the value a property manager can add is usually well worth the cost. Their expertise in the local rental market helps them set rent competitively. They also have the time and resources to market the property to attract good tenants and have access to the best tools for criminal background checks. Successful property management companies either have their own staff or a network of contractors to do any work that is necessary.

Every situation is different, so landlords will need to crunch the numbers to compare the time and money they spend to the fees charged by a property management company . However, entrusting a company with the time-consuming work of managing a rental could be what makes the investment profitable.

8. What Started as a Side Hustle Is Turning Into a Full-Time Job

Consider the example of two homeowners who move in together leaving an empty home, or someone who inherits a house from their parents might choose to rent out rather than sell the property. They look forward to the additional income and assume they’ll be able to handle the property management by themselves.

Landlords like these typically look at their rental as something they’ll take care of in their free time, not a full-time pursuit. But often it will become too time-consuming or physically demanding, especially while trying to keep up with a full-time job. This isn’t good for the landlord’s well-being or their family life. Plus, the property could end up being neglected and losing its value. These are all perfect arguments for hiring a property management company.

Is the Answer to “Why Hire a Property Management Company” Becoming Clearer?

If you are a landlord experiencing any of the eight situations listed above, it’s time to consider a professional property management company. In the St. Louis region, Select Leasing & Management has been helping owners with the day-to-day operations of their rental properties for years. Contact us today to learn how we can give you back your time, save you money, and safeguard your investment.

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Defining the Relationship Between Property Management and Property Owner

Tue, 07 Nov 2023 22:54:11 GMT

Owning rental property is a good investment, but it’s also a lot of work. Some landlords want to do everything themselves, while for others, hiring a property management group to take control makes more sense.

But property management can take many forms; it does not have to be an all-or-nothing decision. Duties and responsibilities can be shared. The parameters of an owner-management relationship can be customized and outlined in a property management contract . It all depends on how hands-on the landlord wants to be.

Why Consider Hiring a Property Management Group?

There are two types of rental property owners. First, there are those who are only interested in the investment. They may be an individual or a company with a portfolio of properties. Hiring a property management group is typically part of their business plan. The owner relies on these professionals to take charge of operating the property by finding and screening tenants, maintaining the building inside and out, collecting rent, and responding to requests and emergencies.

The other type of owner is an individual who somehow ends up with a property they don’t intend to live in. This could be a house they inherited, or the “extra” condo resulting when two homeowners decide to move in together. If they have trouble selling it or want an extra source of income, they may decide to rent it out. These owners are more likely to try managing the property themselves—at least at first.

But time is valuable, and landlords trying to do it all often find out just how much time and effort is necessary to take care of just one unit. Taking care of rental property by yourself requires people skills, knowledge of marketing, contracts, accounting, and fair housing laws, as well as maintenance skills. A landlord must also be “on call” for the tenant's needs, making it difficult to enjoy the weekends or take a vacation. And trying to do it with a family and while holding down a full-time job can be exhausting.

Other factors can make hiring a property management group a good idea, or even a necessity, such as:

Acquiring additional properties
Living too far away from the rental unit
Not having the skills needed for some of the tasks
Not having the same energy and ability as property owners get older
Being uncomfortable dealing with renters' issues or conflicts
Simply not wanting to invest the time and effort in landlord duties

Whether a landlord is feeling burned out and is ready to hand over control completely, or just needs a bit of help, hiring a property management group is often the best solution. And for owners concerned about losing decision-making power, there’s good news. The relationship with a property manager can almost always be customized to suit their needs.

Typical Property Management Services

Property management companies range from full-service professional agencies that are able to take over all day-to-day operations for a landlord, to small companies (or even individuals) that can fill in the gaps of service for a landlord on an as-needed basis. What a manager can offer and what the landlord needs will define the owner-management relationship.

Typical services that are offered by a property management company include:

Building Maintenance

Taking care of a rental property both inside and out involves ongoing maintenance as well as periodic repairs and handling emergencies. Property managers may be responsible for cleaning and painting vacant apartments, fixing things, replacing fixtures and appliances, taking care of common areas, landscaping, snow removal, and much more. They also need to be available at a moment’s notice for emergencies like a burst pipe or broken window.

For a single house or even a handful of rental units, a landlord might be able to make do with hiring a handyman or simply having a good network of contract workers to hire when needed. With a property management team taking responsibility for these tasks, however, a landlord can rest assured that problems will be solved without them having to get involved.

Marketing, Pricing, and Finding Tenants

Property management professionals are experts at knowing the local rental market and how to price a house or apartment competitively. They also have the inside track on the best way to advertise and attract good tenants. These tasks can be more frustrating and time-consuming than some landlords realize.

If a landlord only needs help finding tenants, they could hire a leasing agent instead of a full-service property management company. Leasing agents handle everything up until the lease is signed, then the landlord takes over. Property management companies, on the other hand, offer more comprehensive services. They can act as the tenant’s primary point of contact throughout the entire time they live in the rental property, as well as handling maintenance, rent collection, and everything else.

Screening Tenants

Conducting background checks on prospective tenants is essential. A property management company knows what to look for and has access to the various screening services available. Most landlords are more than happy to hand off this cumbersome task.

Rent Collection and Conflict Resolution

Dealing with rent can be stressful for a property owner. Luckily, they can give a property management company the authority to handle rent collection, late fees, and raising the rent .

Hiring a property management group also saves a landlord the headaches of dealing with tenant complaints and conflicts. Property managers can enforce rules (laid out in the lease) and even begin eviction proceedings if they are necessary.

Keeping Up With Rental Laws

Owning and managing your own rental property requires understanding and keeping up with federal, state, and local fair housing laws. Since these are subject to change, failure to comply could make an owner vulnerable to lawsuits. On the other hand, property management companies make a point of keeping current with all statutes and laws that apply to the properties they oversee.

Tailoring the Relationship to Fit Your Property Management Needs

When landlords are tired of managing their rentals by themselves, the decision to hire a property management company is easy. But some owners are capable of (or enjoy) doing some of the work themselves. For example, a landlord might feel more comfortable finding their own books. Another might be a CPA who doesn’t mind doing the books. And another might be retired and likes keeping busy doing the maintenance.

No matter how much or how little help is needed, look for the following traits in a property manager:

Good communication and transparency
Reliable and proactive
An understanding of and alignment with your goals
Professional enough to treat the property as if it is their own investment

In the United States, there are roughly 326,000 property management companies . No matter what type of relationship you are seeking with a property manager, you’ll be able to find it. If you want to stay involved in some of the day-to-day operations, the key is to find a property management group with complementary skills so that together, you can provide full service to your tenants.

If you are ready to share your property management responsibilities or have more questions, contact Select Leasing & Management . It could be the start of a wonderful relationship!

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What Can You Do When a Tenant Exceeds Occupancy Limits?

Tue, 03 Oct 2023 20:49:14 GMT

Occupancy limits set the maximum number of people allowed to live in a particular property. A typical lease should state occupancy limits for the house or apartment. When a landlord sees the same “extra” vehicles sitting in the parking lot of that property night after night for a month, it’s fair to assume the tenant’s “guests” are living there. Having extra people staying in a unit not only means the tenant is violating the lease, but it could result in the landlord having to deal with damaged property, hefty fines, and even a lawsuit.

Handling this type of situation can be tricky for property owners. They have to protect themselves while respecting tenant rights. It’s important to know how to tactfully approach renters who exceed occupancy limits before the issue gets out of hand.

Why Allowing Unauthorized Tenants is a Bad Idea

There’s a reason why landlords take the time to screen potential renters. A background check and financial inspection prevent criminals from living on the property and prove the tenant will be able to pay rent. People living on the property who are not on the lease is a recipe for disaster because:

They may cause property damage . While authorized tenants should have renter’s insurance that covers damages to the property, holding a guest or unauthorized occupant directly accountable for damages can prove difficult for landlords.
It poses a risk to other tenants . Having potential criminals staying on a property could be a danger to others living in nearby units.
The lease is unenforceable. Landlords have little recourse if occupants who never signed the original lease are responsible for noise complaints, parking violations, or HOA concerns.
In subsidized housing, a landlord can be accused of fraud . Unauthorized occupancy can lead to fraud claims if the authorized tenant does not report the income of the unauthorized occupants.

A renter might unintentionally break the rules by inviting a partner to move in or add a roommate to share costs. If this exceeds the occupancy limit, it should not be allowed. If the additional occupants are within the limit, they should be screened and added to the lease to protect the landlord from the above situations.

How Are Occupancy Limits Defined?

Occupancy limits vary between federal, state, and local laws. Missouri occupancy standards require landlords to allow two persons per bedroom, but the maximum number of people allowed to live in a unit depends on where the unit is located. For instance, some cities have rules that state every sleeping room used for single occupancy must contain at least 70 square feet of floor space, while if used for multiple occupancy, each person must have at least 50 square feet of floor space.

St. Louis rental properties require a Certificate of Inspection from the Housing Conservation District that assures they are safe and meet all appropriate codes. St. Louis County has a similar permit called a Residential Rental License. Based on square footage and the number of bedrooms, part of the licensing process dictates how many people can live in a dwelling.

Properties under HUD supervision may have different specifications. If an occupancy policy limits the number of tenants for any reason other than health and safety needs, landlords could risk charges of discrimination against families . In 1998, Congress passed a law requiring HUD to adopt occupancy recommendations outlined in a Fair Housing Act memorandum called The Keating Memo . Instead of simply limiting one bedroom to two people, it takes into account the size of the bedrooms, age of the children, and layout of the dwelling. For instance, a very small one-bedroom apartment would be limited to two adults, but a large one-bedroom unit could accommodate two adults and a teenager.

As long as it abides by legal occupancy laws of the state or city, a property owner can specify in a lease the number of people allowed to live in the unit. A property management firm or attorney will be able to verify whether those limits are within legal limits.

The Exception of Children

In general, an exception to occupancy limits can be made when a tenant has a baby within the lease period. But under the Fair Housing Act, it is illegal for HUD landlords to:

Limit the number of children under 18 who can live in the rental.
Discriminate against pregnant women or individuals and families who are in the process of adopting or securing legal custody of a child.
Insert illegal lease provisions, such as one that says the rental agreement will end if a tenant brings children to live within the home.

Every Lease Should Include Tenancy Information

It’s essential to include a clear occupancy clause in the lease stating the expected number of occupants in a rental, and the names and contact information of all adults living there. This creates joint and several liability for all tenants on the lease, which means each is responsible for rent payment and damages.

A lease should also include policies regarding how long visitors can live on the property before violating the lease, as well as circumstances when the landlord is allowed to enter the unit. Once a tenant signs the lease, they are legally bound to its terms.

How to Handle Tenants Exceeding Occupancy Limits

Even if a landlord or property management firm is certain a renter is allowing unauthorized people to live there, they have to be careful about violating tenant rights. Entry into the unit requires plenty of notice, since tenants may sue their landlord for breach of contract if they enter the unit without permission. Illinois requires landlords to notify tenants at least 24 hours in advance when they need to enter a rental. Most St. Louis area property managers have adopted the same policy, and many even settle on an agreed-upon time.

Long story short, it is against the law to just barge inside and catch someone who isn’t supposed to live there.

Write a Reprimand Letter

As a first line of communication, writing a letter allows landlords to remind tenants of the rules outlined in their lease. The letter should explain the issue and what needs to be done to remedy the problem. It should be polite but clear and concise, and include:

Tenant’s name and full address
The date
A subject line stating the purpose of the letter
Expectations (long-term guests are not allowed as stated in the lease)
The required timeline (have them move out within 30 days or by a specific date)
Signature by the property manager or owner

Hand delivery or posting it on the rental unit’s door are acceptable. Legal notices should be sent via first-class, certified mail, or a professional server.

If a tenant is interested in rectifying the situation, they may ask to come to an agreed-upon clause to the lease. For instance, if legal occupancy limits won’t be compromised by adding the person to the lease, a property owner could agree to do a background check before adding them. Or, if the long-term guest agrees to start paying additional rent (again, as long as it's legal), it can be written into the contract.

Begin Notice of Eviction

If the unauthorized renter remains on the property after the required timeline and the tenant has ignored the letter, the landlord can begin the eviction process by taking the following steps:

Inform the tenant the property owner has a legal right to enter the unit as outlined in the lease.
If they still refuse entry, issue a seven-day notice to cure and post it on their door. A notice to cure is a letter warning them of their violation and what they must do to avoid eviction.

Begin the eviction process .

A Property Management Firm Can Write Letters, Gain Access to Properties, and Handle Evictions

Dealing with tenants who are not abiding by lease terms is time-consuming and complex. A property management company knows the appropriate legal steps required to correct the situation and if necessary, evict the tenant. For many landowners, hiring a property management company means less stress and anxiety, and more time to manage your investments.

Contact Select Leasing & Management today to schedule a time to speak with our professional property managers. We are confident our solutions can help you succeed!

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Can Renters Refuse a Landlord Access? When it’s Legal to Enter Your Rental

Tue, 05 Sep 2023 20:56:25 GMT

Can Renters Refuse a Landlord Access? When it’s Legal to Enter Your Rental

In the world of rental agreements and property ownership, it's imperative for both landlords and renters to have a clear understanding of their respective roles, rights, and responsibilities. Nowhere is this more apparent than when it comes to accessing or entering a unit. Landlords need to keep a balance between respecting the privacy and preferences of their tenants while ensuring the upkeep of their valuable investments.

Most Missouri and Illinois property owners have similar restrictions regarding requests to enter rental units. Smart landlords develop policies based on what has worked for others, then include them in leases.

Honoring Tenants’ Rights

A landlord’s responsibility to the tenant when it comes to entering the property includes: giving notice, scheduling a convenient time, and letting the tenant know when they need access to the property.

The protection of tenants’ right to privacy is a foundational principle of landlord-tenant relationships . Many states honor this principle with laws on when building owners can access rental properties. Illinois requires landlords to notify tenants at least 24 hours in advance when they need to enter a rental for repairs or other reasons. (Property managers may enter immediately if there is an emergency such as flooding or a fire.) Some Illinois cities require more notice. In Chicago, building owners must notify tenants 48 hours before entering their unit.

The Missouri Landlord-Tenant Law , on the other hand, does not include regulations on building owner access. But most St. Louis area property managers have adopted the practice of notifying tenants at least 24 hours before entering a unit. In addition to giving 24-hours advance notice, landlords honor tenants’ rights by planning to enter the unit at a previously agreed upon time. This may be during business hours on weekdays and a short period of daytime hours on the weekend. The building owner access also may be in the evening if that works best for both the landlord and the tenant. Typically there is good rapport between tenant and landlord and it’s easy to set up a schedule that works for everyone.

Since there is no law to support a Missouri property owner’s need to enter a rental unit, entry policies need to be included in the lease. Without the specifics, it may be within tenants’ rights to refuse access to a landlord.

Missouri tenants may sue their landlord for breach of contract if they enter their unit without permission, especially if the landlord has no good reason to enter or they barge in unannounced. The tenants may seek to recover money lost in the conflict with their landlord. Plus, a judge may issue an injunction to keep the landlord from entering rental units. Landlords also are at risk of being charged with criminal harassment in disputes over building owner access.

Communicate the Reasons for Building Owner Access

Landlords will save themselves a lot of frustration simply by communicating with tenants about the need for access. When giving a tenant notice of the intent to enter their unit, the landlord should state the reason why access is necessary. Typical reasons include:

Repairs,
Scheduled maintenance (for example spraying for pests ),
Inspection of the property,
Confirming that a tenant has abandoned the rental,
Showing the property to prospective renters,
Tenant safety or health code violations,
To issue an eviction notice, and
To comply with a court order.

Some property owners think they can enter without permission in certain cases—for example, if the landlord suspects that a tenant is housing a pet and that isn’t allowed by lease. Or maybe they suspect that something illegal is taking place, and the landlord wants to put a stop to it. These reasons for a landlord entering the property may be well intentioned, but if the circumstances are based on assumption then it is unlawful.

In Missouri, where there is no law about landlords entering rental units, it is still important to include the reasons a building owner may access a rental unit in the lease. Without this information in the lease—a legal contract—landlords are poorly positioned to defend their desire to enter the rental unit when tenants refuse them access.

Take Action When Tenants Refuse Landlord Access

In some cases, St. Louis area tenants have the right to refuse the landlord access to their home. In Missouri, tenants can keep landlords out if there is nothing in their lease saying they must give them access.

Illinois renters can refuse their landlord access if they think the request to enter their home is unreasonable. One common complaint is the landlord wants to enter at a time that is inconvenient. Finding a time that works for both parties is advisable.

Some tenants refuse their landlords access because they do not want non-essential repairs to be made while they live there. For instance, they do not want the inconvenience of living in a rental home that is getting new flooring. In Illinois, tenants are allowed to refuse landlord access in such a case, but a tenant cannot go as far as changing the locks to keep the landlord out.

Landlords who cannot reach an agreement with their tenants can take the following legal actions:

Inform the tenant the property owner has a legal right to enter their unit.
Tell the tenant refusing landlord access is a violation of their lease.
Issue a seven-day notice to cure and post it on their door. A notice to cure is a letter warning them of their violation and what they must do to avoid eviction.
File a lawsuit against the tenant.

As a last resort landlords can evict the tenant if all other options have been exhausted.

When Landlords Can Enter

In every state, a landlord has the authority to access the premises without prior notice or consent in the event of an emergency. For instance, if there's a sudden pipe burst in your apartment that's causing water to leak into the unit below, your landlord or a member of the maintenance team may enter your residence in your absence.

Even when your landlord provides advance notice, they must have a valid reason for entering the property. Typically, your landlord can lawfully enter without a tenant present under the following circumstances:

In emergency situations.
To carry out necessary repairs.
When exhibiting the property to potential tenants during the lease termination process.
For safety inspections or to ensure compliance with building safety codes.

Get Help from Professional Property Managers

Landlords do not need to go it alone when they face tenants who refuse them access to their rental units. Select Leasing and Property Management in St. Louis partners with landlords and property owners to develop the best response to challenging situations such as tenants refusing access to building owners.

We also work proactively by managing property owners’ communication with tenants. In addition to sending notices about when rent is due, we contact tenants about building access when repairs are scheduled. Many property owners think the cost of hiring a property management company is well worth it.

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A Walkthrough Checklist for Landlords

Tue, 01 Aug 2023 17:00:00 GMT

Landlords who use walkthrough checklists when tenants move in and out see better returns on their investment. Having documentation about the property’s condition before and after the tenant lived there takes away any guesswork. Clarity often reduces conflict when tenants move out.

Using an apartment walkthrough checklist benefits tenants, too. They appreciate landlords acknowledging what needs repairs in writing when they move in. In many cases, landlords fix problems found in the move-in inspection using funds from the new tenant’s security deposit. In addition to seeing the repairs made, tenants like having proof of the condition of the unit when they move in to ensure they are not liable for damage they did not cause when they move out.

Doing effective walkthroughs takes planning and an organized checklist. Learning from other property managers helps, too.

Timing for House and Apartment Walkthroughs

The prime times for house and apartment walkthroughs are right before the tenant moves in and just after they move out.

Pre-move-in walkthrough: The property manager and new tenant walk through the home, taking notes on existing damage.
Move-out walkthrough: The landlord and tenant inspect the property together with the first checklist and any pre-move-in photos in hand. Using one checklist for both the pre-move-in and move-out inspections makes it simple to compare the condition of the items on the list.

When to Get Rentals Inspected to Obey the Rules

States, counties, and cities have their own laws and regulations about rental property inspections. Missouri state law requires landlords to keep properties safe and livable. Property managers must do walkthrough inspections after a renter moves out, then return security deposits to tenants within 30 days.

Seventeen states have walkthrough checklists landlords must complete. Neither Missouri nor Illinois requires landlords to use a certain checklist.You can create your own by changing one of the states’ forms or by using a walkthrough list template.

At Select Leasing and Management, we recommend using a checklist at move-in then comparing it to the move-out checklist. By doing so, you will be able to determine whether to refund the tenants’ full security deposit.

Cities and counties in the St. Louis area have their own guidelines. For example, University City requires inspections before issuing occupancy permits for rental units. A city inspection comes before a walkthrough with a tenant.

The St. Louis Housing Authority (SLHA) requires walkthroughs at move-in and move-out. Landlords and tenants must complete the city’s move-in walkthrough checklist together. A SLHA inspector completes the move-out walkthrough.

What to Include in a Walkthrough Checklist for Landlords

Walkthrough checklists for landlords list any problems with the unit. The tenant may have their own checklist, but the landlord’s is the official document they will file for future reference. It is a good idea to take photos with a camera that records the date and time on photos for proof of when the inspection occurred. The tenant may do the same thing.

Include the following sections on your move-in and move-out checklist:

Essential Features

At both move-in and move-out, check the condition of the floors, walls, ceilings, doors, electrical outlets, switches, light fixtures, windows, screens, and other items renters use every day. The features in this section get a lot of wear and tear. If the unit is older, they may not be perfect. Note the condition of the imperfections such as holes in the walls, loose tiles, or missing screens, but do not spend a lot of time writing out details unless there is considerable damage such as a water stain on a hardwood floor or chewed up carpet.

In a move-out inspection, look at whether the tenant made changes such as putting up wallpaper or painting. If they did, they need to restore the unit to its original condition.

Plumbing

Find out if plumbing problems exist by testing the faucets and toilets. Look for leaks around sinks and water damage to the ceiling and the floors. Check bathtubs and sinks for large cracks or chips and note whether caulking needs to be replaced. At move-out, see if problems noted at move-in have worsened.

Appliances

Test the kitchen appliances with the tenant watching. You will be showing them how the appliances work and that they work. Make sure to test every appliance from the microwave to the washer and dryer. At move-out, test the appliances again with the tenant watching and talk to them about how well the appliances are working.

Cabinets, Drawers, and Closets

Open and close the kitchen and bathroom cabinets. The hinges should be screwed in well and the doors should close all the way. Then, check the pulls and handles to see if they are tight.

Test the closet doors to see if they stay on the track or close tightly. In a move-in walkthrough, while you are checking the cabinets and closets, remove anything the previous tenant left. During the move-out walkthrough, check the cabinets, drawers, and closets for remaining items as well as their condition.

Stairs, Balconies, and Yards

If the unit has stairs, check handrails to make sure they are securely attached. If the unit includes a yard, garage, deck, or balcony, inspect those features, too. During a move-in walkthrough, check the yard for things the previous tenant left behind such as a swing set or trampoline and ask them to remove their property. You may also see damage from dogs. Note that on the move-in checklist then repair.

At move-out, review the items on the move-in list then remind the tenant to remove any personal property in the garage, in the yard, or on the balcony.

Safety Equipment

Make sure the tenant, and your property, will be safe by inspecting smoke detectors and carbon monoxide detectors. Missouri rental units must have working smoke detectors. Illinois rental units must have these safety features:

A deadbolt lock and peephole;
A smoke detector and carbon monoxide detector;
And a fire extinguisher if the unit is in a building three or more stories.

Doing a pre-move-in walkthrough with a new tenant lays the foundation for a business relationship based on trust. Consider doing a mid-lease inspection, too, if you are concerned about the tenants damaging your property. For example, if you do not allow smoking on your property, and neighbors have reported the tenants are smoking, you can find out with a mid-lease inspection. You also may find repairs you can make before the end of the lease to keep the property in top condition.

Clients of Select Leasing and Management have access to inspection guidelines in our portal and a place to store the lists and photos. The property management experts at Select Leasing and Management have many more tips on how to build relationships with tenants.

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7 Tenant Concerns that Property Management Companies Wished Landlords Knew About

Tue, 04 Jul 2023 22:08:51 GMT

Landlords have a duty to provide a safe and habitable place for their tenants to live. But the rental market is far too competitive to stop there. Renters are looking for much more than just a roof over their heads.

For landlords who are trying to keep up with day-to-day operations on their own, there is sometimes a disconnect between tenant concerns and their own priorities. In its many years as one of the top St. Louis property management companies, Select Leasing & Management knows what matters to renters. These seven things top the list of tenant concerns.

1. They Need to Feel Safe

You’d be hard-pressed to find a renter who didn’t care about the safety and security of themselves and their belongings. Landlords know this. But they’re not the ones coming home late at night, taking the trash to the alley, or going to the dark basement laundry room. In fact, how many landlords ever bother to visit their properties after dark?

Be sure there’s ample lighting throughout the property to make everyone feel safer. Entryway lights can be on a timer from dusk until dawn. Consider motion sensor lights in hallways near storage areas and the laundry room.

Where a sturdy deadbolt and a chain lock once were enough, today’s renters will appreciate more tech-savvy solutions like coded keyless entry and front door cameras they can access on a smartphone.

2. They Worry About Rent

Inflation and a lack of inventory are just two things that are responsible for increased rent across the country . It’s no surprise that many tenants worry that there will be an increase. While landlords have the right to raise rent, they can be mindful of how the news will impact their tenants.

It is important to know the legal way to increase rent. For example, it can’t take effect until the end of the current lease agreement. And landlords can’t try to force out bad tenants by upping the price.

If a rental property gets significant improvements or additional amenities, that is a valid reason to raise the rent . It also makes sense to raise rent if local market prices in general have gone up. Landlords must give ample notice and should deliver the news with compassion. They must also understand that even though the increase is necessary, not all tenants will be able to handle the financial impact and some might look for a new place to live.

3. They Want a Quick Response to Maintenance Requests

Responses to maintenance requests are always a concern for tenants. Not only is it imperative to fix problems quickly, but it must also be easy for renters to inform management about issues.

Today’s tenants have less patience for traditional ways of getting in touch to let someone know there’s a problem. Having to visit the property management office or leave a voicemail is going to seem old-fashioned to most renters. At the very least, give them the option of texting maintenance concerns. Better yet, set up an online portal through the management company’s website, or even an app, as a way to both request maintenance and check on the status of the work order.

When it comes to performing maintenance, keep the lines of communication open. Respond immediately, let the tenant know a timeframe for the repair, and follow through to see it is done on time .

4. They Don’t Remember What’s In the Lease

Knowing what is and isn’t allowed can be a concern for tenants. They may wonder if they are allowed to paint their apartment. Or if their neighbor’s late-night parties are breaking a rule. And will the landlord spray for bugs , or do they need to do it themselves?

One solution is to make access to the lease available online. Provide a copy of the document in a format that’s easily brought up on a computer, tablet, or smartphone. Renters can use this resource to answer their own questions about the rules or fine print in the lease document—without having to contact the landlord or property management company or dig out a paper copy from their files.

Most property management companies can also initiate their leases and rental agreements with electronic signatures online. Particularly in the era of COVID-19, this proved to be an efficient, easy way to take care of the usual paperwork. For younger renters who do almost everything online, it’s a no-brainer. And chances are that if they originally signed it electronically, they’ll have a copy somewhere on their phone or computer when they have questions.

5. They Want Updated Amenities

A Victorian-era home with antique features or a mid-century modern with a retro vibe will attract a specific group of renters. Most renters, however, prefer modern fixtures and updated amenities. Adding a few inexpensive features can make a big impact on the way a rental unit is perceived.

New cabinet hardware, faucets, or a rainfall showerhead are easy ways to update a bathroom. If it’s time for a complete remodel and the budget allows, walk-in showers are often preferred over tubs. In the kitchen, switch out old appliances for stainless steel.

Electronics and connectivity are a big concern, especially with more people working from home. Think about replacing ordinary electric outlets with ones that include USB connectors. Smart thermostats and keyless entry will be well received too. And a high-speed internet connection is a must, even if the cost is passed on as part of the utilities.

6. They Value Eco-Friendliness and Sustainability

Concern for the environment is a hot-button issue that is on the minds of many tenants these days. Highlighting eco-friendly touches throughout a property will not only satisfy current tenants but can help attract new ones. Plus, it is estimated that 42% of millennials are willing to pay more for sustainable goods and services, so investments in this area can translate to more revenue for a landlord.

At the very least, apartment building owners should think about setting up recycling bins and water bottle filling stations. Solar lights along outdoor walkways are inexpensive and easy to install. And if the budget allows, charging stations for electric vehicles are becoming an increasingly marketable perk.

Landlords can also go green with non-toxic, natural cleaning products. And tenants might appreciate environmentally friendly products around the property, such as sustainable mulch in the landscaping or picnic tables and playground equipment made of recycled materials.

Finally, energy-efficient appliances aren’t just good for the planet but can also save money on water and electricity—a welcome thing for tenants paying their own utilities.

7. Communication and Respect

Property management companies wish some landlords understood how crucial communication and respect are to tenants. Tenants want to be informed about important changes. For example, let renters know in advance about maintenance projects that could impact them. And give them plenty of notice of upcoming rent increases.

Everyone wants to be treated with kindness and compassion. If tenants have the impression that their requests and concerns are ignored, that’s a big problem. So is feeling like some of the rules and regulations are condescending or meant to single them out. Refrain from rude or disrespectful instructions or reprimands and opt for kind reminders instead.

Property Management Companies Can Address Tenant Concerns

Successful landlords understand that keeping tenants happy is part of their job. Evaluate all reasonable concerns and consider focusing your energy and budget on those projects. Aligning your goals and priorities for the building with your tenants’ concerns can help build the relationship for years to come.

But if you have your hands full keeping up with the day-to-day management of the property, let alone the issues that worry your renters, consider a St. Louis property management company like Select Leasing & Management . They’re experts at managing all aspects of your property, including what is most important to your tenants.

Article originally published October 6, 2020.

4 Sore Spots Between Renters and Property Owners

Tue, 02 May 2023 17:41:51 GMT

Owning rental property can be a lucrative business, but it is not without its challenges. Most landlords agree that finding a “perfect” tenant is exceptionally rare, if not impossible—and renters often feel the same way about their landlords.

While tenants and property owners might not see eye to eye on everything, there are ways to improve the relationship and avoid conflict. And if a landlord has had enough of trying to cope on their own, they can hire a property management company. Professional property managers are experts at balancing tenants’ rights with landlords’ rights to keep the peace.

At Select Leasing & Management, we have written extensively about the “sore spots” between renters and property owners. Whether you are handling property management yourself or considering outsourcing it , these articles offer practical advice on four topics where the most common disagreements arise.

1. Raising Rent and Collection Issues

Let’s face it: No tenant is ever going to be happy about an increase in rent. That said, there are rules that landlords must follow about when they can raise rent and how much notice they need to give. Find out what is and is not acceptable in Can a Property Manager Raise Rent?

Landlords have their own set of concerns about rent. Late or unpaid rent disrupts cash flow, making it hard to pay the mortgage or afford routine expenses. Tips for Collecting Rent: Getting What You Are Owed includes advice beginning with the screening process before a tenant is even accepted. It is important to make sure applicants are financially able to keep up with payments. And, sometimes, simply making sure that paying is easy and convenient avoids problems.

2. Maintenance Costs and Responsibilities

Ignoring or scrimping on maintenance and repairs to save money is a big mistake. Without regular upkeep and improvements, the property will decline in value and the amount of rent a landlord will be able to charge will decline drastically too.

Being proactive about maintenance will satisfy tenants and keep costs down. Read Advice For Landlords: Keeping Property Maintenance Costs Down for tips on doing inspections, scheduling preventive maintenance, and deciding whether to repair or replace fixtures and appliances.

One maintenance issue that often causes finger-pointing between tenants and landlords is pests. Residents seeing insects or rodents are likely to report them and understandably want the landlord to do something about them. Meanwhile, the landlord might blame the tenant for the conditions that are attracting the pests.

Renters are obligated to keep their apartments free of trash that could attract bugs or rodents, but laws in Missouri ultimately place the responsibility for pest control on the landlord. Details about the laws and what can be done to keep pests out can be found in Who is Responsible for Pest Control: Tenant or Landlord?

3. Bad Tenants or Unfair Rules?

Noise complaints, property damage, criminal activity—bad tenant behavior can create big headaches for landlords. On the flip side of the argument, extremely strict rules and regulations can make tenants feel like they are unable to enjoy living in their homes. Both sides must find a balance that respects both landlord rights and tenant rights.

What Makes Someone a Good Tenant? What Landlords and Tenants Both Need to Know offers a comprehensive review of both sides of the argument. Often, communication is the key ingredient to a drama-free rental relationship.

Landlords can also avoid some potential issues by doing the appropriate background checks up front. How to Find Good Tenants for Your Rental Property and Can a Landlord Do a Criminal Background Check? lay out the steps for you. Finding out about an applicant's track record of troublesome incidents with prior landlords before accepting them is time and money well spent.

That said, it is always important for property owners to understand the current local fair housing and anti-discrimination laws. 7 Things Every St. Louis Landlord Should Know gives a rundown on some basic laws. For example, security deposits are limited to a maximum of two months’ rent. And a landlord must give advance notice before entering an apartment.

One topic that surprises many people is What Rights Do Landlords Have With Regard to Emotional Support Animals? Believe it or not, they may be allowed even if the lease has a “no pets” policy.

4. Leases and Legal Disputes

The deciding factor for the majority of disagreements between landlords and tenants is the lease agreement. If a landlord wants to prohibit smoking or not allow a tenant to sublease the apartment, the lease is the way to make it clear. It is a legal document, so signing it means both parties agree to everything it includes. What Every Lease Should Have In It: The Basics, and Beyond discusses typical leases, along with information specifically for St. Louis landlords.

Leases often include what behavior constitutes grounds for eviction. In addition, there might be language explaining reasons why the landlord can legally break the lease agreement without going through the legal procedure of evicting the tenant. There are also instances when a tenant can leave and stop paying rent before the lease is up. When Can a Landlord Legally Terminate a Lease? What About a Tenant? explains how this works.

How a Property Management Company Can Help

Landlords who regularly interact with their tenants are bound to run into some of these sore spots. It can be a challenge to make everyone happy while still watching out for your own business interests.

This is one reason why many property owners choose to work with a leasing and management company. Property management companies take on the day-to-day operations , including fielding questions and complaints from tenants. Property managers handle many of the duties that result in the common conflicts outlined above, including:

Collecting rent and following up on late payments
Arranging for repairs
Scheduling routine maintenance and cleaning
Preparing vacant apartments and advertising for new tenants
Doing background checks on applicants
Enforcing rules
Drafting lease agreements
Making sure the property is in compliance with state and local laws
Beginning eviction proceedings if necessary

If you own rental property and dealing with tenant issues is becoming stressful or tiresome, contact Select Leasing & Management. We manage a wide range of residential properties in the St. Louis region, ensuring a worry-free rental experience for both landlords and tenants.

Cover image by 89Stocker by Canva.com

Changing Property Management Companies – St. Louis Property Management Advice

Tue, 04 Apr 2023 17:10:00 GMT

Ask longtime St. Louis property owners the secret to their success, and many will mention working with a property management company they trust. They have seen their share of ups and downs, working with both property managers who let their investments become rundown and with those who added tremendous value from day one. Experienced property owners say changing property management companies has solved many problems.

That said, property owners are also advised to do their research before making a change in management companies. Once the research is done, property owners should get ready to tackle challenges related to planning, recordkeeping, and communication.

Top Reasons for Changing Property Management Companies

Before changing property management companies, smart property owners run through a checklist of what is wrong with their current company. Some of the most prevalent issues property owners have with management companies include:

Increased or unexpected fees. All fees should be spelled out in a contract, and should be consistent For example, property management costs are consistent for all Select Leasing & Management clients: 10% of the rent per unit.
Inconsistent screening of tenants . When property managers skip screening of tenants, St. Louis property owners end up with renters who cannot pay on time, evictions, and sometimes, problems with renters with criminal backgrounds.
Tenant complaints that are ignored. Tenants who do not have their complaints addressed may not renew their leases.
Outdated systems. Both property owners and tenants expect to do business online. Many property management companies have online portals where tenants pay their rent, receive messages, and request maintenance, including Select Leasing & Management .

Property owners also lose faith in their property management company when the property falls into disrepair, there is crime or vandalism, or communication from the company is lacking. Owners want and need regular reports from their property management company.

Steps for a Smooth Transition when Changing Property Management Companies

Once a property owner decides to change property management companies, they do a search and talk with company representatives. They consider how the property management companies address maintenance, tenant relations, rent collection, and more .

Before committing to a new property management company, property owners need answers about how to time the change:

When does the agreement with their current management company expire?
Does the agreement include a clause for early termination? If it does, what are the potential costs of ending the contract early?

After the owner reaches an agreement with a new property management company, the process of transferring records and materials to the new company begins. The new property management company is responsible for requesting and confirming receipt of key documents. In addition to keys for all units, property managers should ask for:

Tenant information:

A list of the names, emails, and phone numbers of all tenants,
All lease documents,
Applications submitted by current tenants,
Inspections of units when tenants moved in and any records of annual inspections,
Any important communication with tenants.

Maintenance:

A list of open maintenance requests and the status,
Past requests for maintenance by date,
Documentation and photos related to the condition of individual units, and
Records of purchase dates of appliances on the property.

Financial records:

Tenants’ payment history and any balances they owe,
How much tenants paid for security deposits,
Prorated rent due to new owners based on when the property transfer occurs,
Number of vacant units, and
The pipeline of new tenants.

When property management companies do not transfer records to a new property manager, doing business becomes more difficult. For example, when tenants move out they expect to receive their security deposit back if they leave the unit in good condition. A new property management company needs a copy of a signed walk-through with the condition the unit was in when the tenant moved in. Without it, property managers are in a bind. They do not know how much of the security deposit to return to the tenant.

Let Tenants Know About Changing Property Management

Tenants often react with fear when they learn a new company is buying the property. They worry about rent going up, changes in the conditions of their lease, or even demands for them to move out. Smooth the transition with communication. First, ask the prior management to tell tenants about the change in management. Then, the property owner needs to communicate with tenants, reassuring them that although management is changing, their leases are remaining intact.

A letter from the property owner needs to include:

A statement about the new property management company with its name and address.
A copy of the tenants’ lease.
The tenants’ monthly payment and a statement that the terms of the lease continue through the end of their lease term.
The amount of their security deposit, which was transferred to the new owner.
Where to send rent payments, maintenance requests, and messages.

End a letter to tenants with a concluding statement about the property management company’s excellent service and commitment to the quality of the property.

Setting Expectations for a New Property Management Company

Property owners are in a great position to get more of what they want out of their investment when they change property management companies. Communicating their expectations sets the tone for a fruitful relationship. Follow these steps during the first 90 days with a new property manager:

Tell the new property manager, in detail, why they switched companies.
Lay out their expectations and the consequences if they are not met.
Agree upon grace periods and evictions.
Plan regular communication to see how the transition is going.
Address any problems before they become a major issue.

Many property management companies make regular reports to owners on finances, maintenance, vacancies, work order completion, and more.

In St. Louis, Select Leasing & Management exceeds expectations for residential property management on a daily basis. We provide comprehensive property management services using the latest technology, including an online portal system. Give us a call today at 314-835-6002 or start the conversation online . We look forward to seeing how we may be of service to you.

This piece was originally published on June 5, 2018.

Cover photo by ALotOfPeople on Canva.com

What is the Difference Between a Leasing Agent and a Property Manager

Tue, 07 Mar 2023 23:38:40 GMT

Real estate investors quickly learn that property management duties can take up more time than they want to spend. When they decide to seek support, their first question often is “What is the difference between a leasing agent and a property manager?”

The Difference Between a Leasing Agent and a Property Manager: Sales vs. Operations

Most property owners rely on knowledgeable and experienced property managers who handle leasing, along with other functions. Property managers find tenants and do much more, from screening prospective tenants to coordinating operations at large properties. That said, some owners prefer to hire a leasing agent to handle finding tenants, and then do the rest of the property management themselves. No one strategy is better than the other…but which professional you hire depends on how much of the day-to-day work you want them to take on.

Other differences between a leasing agent and a property manager include:

Communication after signing the tenant contract: A property manager communicates with tenants after they apply to rent a unit, and then continues communicating as the go-to person for the resident throughout the renter’s residency. Leasing agents usually do not interact with tenants after they sign the lease.
Knowledge of rental laws: Property owners must follow strict federal, state, and local regulations regarding rentals. Property managers ensure the business complies with them. Leasing agents, who are responsible solely for filling units, do not monitor the owner’s compliance with regulations.
Safety oversight: Property managers also keep the property safe, helping the owner avoid a potential lawsuit if a tenant gets hurt. Leasing agents have a transactional approach and do not provide the oversight that property managers do.
Pay structure: Leasing agents receive a commission for each signed lease, while most property managers are paid a set fee monthly.

If you are thinking of hiring a leasing agent instead or a property manager, do your homework. Leasing agents who work on commission sometimes are not as careful as they should be in approving tenant applications. When leasing agents rent to bad tenants, owners can be stuck with tenants who don’t pay their rent or damage their property. Avoid this situation by checking a leasing agent’s references and watching their work carefully.

Leasing Agent vs. Property Manager: Depends on Your Goal

When property owners consider the benefits of leasing agents vs. property managers, they benefit by keeping their goal in mind:

In the case of individuals leasing one property like a single family home, a leasing agent is a good choice. The leasing agent will market the property, talk with prospective tenants, and manage the application process.
When investors own a property with many units, their best bet is a full-service property manager. The manager will find tenants and manage the day-to-day operations of the multi-family units.

For personalized advice on whether a leasing agent or a property manager is right for you, contact a real estate agency specializing in property management, Select Leasing & Management.

What Happens When Property Owners Set Higher Goals?

Some property owners put off a decision on hiring a leasing agent vs. property manager. They like the way they manage their property and see no reason to change. When they eventually raise their revenue goal, they realize how much their lives will improve when they bring in the property management experts.

For a reasonable monthly fee , Select Leasing & Management provides professional property management to relieve your stress and boost your profit.

Property Managers’ Duties Range from Leasing to Upkeep

What do property owners get for their investment in a property manager? They get a versatile professional with expertise in managing people, marketing, and maintenance. Property managers’ duties typically include:

Leasing and Marketing

The right property manager ensures units are filled with worry-free tenants. Their leasing duties range from marketing to screening tenants . Property managers look for these red flags while screening tenants:

Has the applicant ever been evicted?
Are they a felon?
Does their employment and credit history indicate they will be unable to pay the rent?
Are they using a false identity?

Once a new tenant has applied and been approved, property managers prepare their lease. The manager tracks the lease through the review and signing process. Property managers also mitigate tenant turnover by providing excellent customer service.

In St. Louis, prospective renters want to know about the neighborhood, schools, and shopping. Select Leasing & Management agents know St. Louis and surrounding cities. We highlight the unique characteristics of the neighborhood when properties are located and paint them in the most positive light possible. Another plus: As a well-regarded real estate agency, we attract prospective tenants that property owners are delighted to rent to.

Pricing

As experts in the local rental market, property managers are valuable partners to property owners. They help owners make decisions on what rent to charge or when it is appropriate to increase the rent. They also know what amenities are necessary to attract tenants in different parts of St. Louis.

Staying Informed on Rental Laws

Property managers keep abreast of rental laws and advise the property owners of changes. They also make sure prospective tenants know the laws before they sign a lease. Some cities have regulations on how many people can live in a home. Others require residency permits and inspections. For example, the City of St. Louis requires a Housing Conservation District Inspection, and following federal, state, and local laws, while St. Louis County properties must have a Residential Rental License.

Maintenance

Property managers keep the owner’s investment safe and in good condition. Some make repairs and maintain the property themselves. Others manage on-staff maintenance workers or contractors. Many get the lawn mowed, snow shoveled, and pool cleaned.

Rent Collection

Property managers collect rent, make deposits, and manage accounting. They track late payments and take steps to collect it. If a tenant needs to be evicted, they manage that process.

For a St. Louis property manager with the backing of a major real estate company, contact Select Leasing & Management. We are part of Berkshire Hathaway HomeServices Select Properties, which means we draw from the knowledge of agents across the Greater St. Louis area, including the Metro East. Contact us today to start the conversation about partnering to meet your property management needs.

How Long Are Property Management Contracts, Typically?

Tue, 07 Feb 2023 18:59:18 GMT

When property owners partner with a property management company they trust, their business thrives: Owners can focus on big-picture activities, while property managers ensure units are occupied, attract tenants, collect rent, and arrange maintenance.

Owners benefit by paying close attention to contracts proposed by property management companies. Though there is an average length for the typical contract, the details vary and may be found in the fine print.

What to Expect in a Property Management Contract

The majority of property management contracts are 12 months long, but they can be shorter or longer. In addition to the length of the agreement, a property management contract covers everything the property manager will do for the owner and fees for the service. The contract also stipulates which party is responsible for the functions of the daily operations of the property.

Some parts of a property management agreement are non-negotiable and unlikely to change during the tenure of your relationship with the property manager. These include:

Adherence to the Fair Housing Act , which prohibits housing discrimination based on race or color, religion, sex, national origin, familial status, or disability.
Limitations of the liability of the property management company.
Details of how either party might terminate the agreement.

A property management contract, like other contracts, is legally binding. Both parties benefit by talking to an attorney before signing the contract. Government lenders, like the U.S. Department of Housing and Urban Development, also have sample contracts online . Other online legal sites include property management contracts. The forms include spaces to fill in regarding how long the contract will be in effect and other terms.

Property owners who partner with Select Leasing & Management don’t need to worry about drafting a contract, because we have a contract covering all the pertinent details.

Renewing a Property Management Contract

Property management contracts are living documents, updated as conditions change. If you have a year-long contract, we recommend reviewing it two months before your contract is set to renew . Think about whether you want to change some things. If you do, present your requests to the property management company.

Property management companies also review contracts annually and inform owners of pending changes approximately two months before the contract renews. A property manager might increase fees with the new contract and change services, policies, or procedures

Once it’s clear how the property management company wants to modify a contract, and the company has seen your requests, it is time to negotiate. An amended contract will need to be created and reviewed by an attorney.

Auto Renewing and Month-to-Month Contracts

Some property management contracts automatically renew at the conclusion of the contract for another term. If the contract is for 12 months, it will renew for 12 months. Before signing an auto-renewing lease, property owners must know they will be able to cancel the contract only at the end of the contract term. If the contract renews and they want to end the agreement a few months later, they are prevented from doing so.

Other contracts offer month-to-month agreements after the first year. Owners pay more for the flexibility of month-to-month contracts.

If you sign an auto-renewing contract, realize you may cancel the contract only at the end of the contract term, even if you have been a client of the property management company for years.

Negotiating the Length of a Property Management Contract

While most property management contracts are 12 months long, there are benefits to shorter ones. Normally there are no changes to contracts until they renew. With a shorter contract , both owners and property management companies have more opportunities to make changes benefiting their working arrangement.

A property owner might think a multi-year contract is a good idea. Maybe it is for them. However, many think 12 month contracts are best because they allow for annual adjustments based on market trends and the needs of both parties. If a multi-year agreement is reached, the contract needs to include the possibility of amending the contract if both parties agree. The same is true for 12 month contracts that automatically renew.

Benefits of Hiring a Property Management Company

If you are searching for a St. Louis property management company, consider Select Leasing & Management. Our services are designed to take the stress out of owning rental property. We manage condominiums, single-family homes, apartments, and multi-family units. Our agents create comprehensive marketing plans to give each property the visibility to help attract quality tenants. Other services include:

Screening prospective tenants and verifying the information on their applications.
Timely rent collection.
Helping prepare homes for the market.
Arranging maintenance and repairs.
Assistance with cleaning between rental cycles.
Assistance with snow removal and lawn care.

Property owners see their financial statements, access shared documents, and make online payments through the Select Leasing & Management Owner Portal.

If you’re looking for a better property management experience at competitive prices, drop us a note online or call us at 314-835-6002.

When Can a Landlord Legally Terminate a Lease? What About a Tenant?

Tue, 03 Jan 2023 15:49:01 GMT

The eviction process lets a landlord break a lease and remove a tenant before the lease term is up. But can a landlord break a lease without an eviction? There are instances when either the landlord or the tenant is within their rights to terminate a lease. Understanding when this is allowed will help keep everyone out of court—either for eviction proceedings or an illegal termination lawsuit brought by a renter.

Why Not Just Evict a Bad Tenant?

Eviction proceedings are expensive and time-consuming. So while landlords are glad to have a way to remove a bad tenant if they have to, it is something they typically try to avoid. Instead, there are ways to legally let a renter know they need to move—with an eviction as the last resort if they refuse to comply.

The most obvious reason to want a tenant out is if they break the rules of the lease. There are also a few other reasons besides broken rules when it is acceptable for a landlord to terminate a lease. The key is to anticipate and prepare for these situations by writing them into the contract. This way, the tenant is aware of the circumstances that can mean they will need to move out before their lease is up.

Breaking a Lease For Cause

When a lease’s term is up, the agreement automatically ends. The landlord has no obligation to renew the lease if they choose not to, and they do not need to give a reason. In the case of a less-than-ideal tenant, it is often easiest for the landlord to simply wait out the lease term. In Missouri, however, there is a list of things that will void a leasing contract. This means these actions (or inactions) give the landlord the right to terminate the lease.

A tenant is in breach of their leasing agreement if they:

Fail to pay rent
Cause significant damage to the property
Conduct illegal activity on the premises

The landlord can write more rules into the lease that, if broken, could lead to termination. Common additions are a no pets policy , requiring screening and approval of any roommates, and rules against subletting. As long as the rules do not violate any local, state, or federal fair housing laws against discrimination, they are up to the landlord’s discretion.

A tenant could try to dispute any reason a landlord gives for breaking the lease. They may even try to file a lawsuit. To avoid arguments, landlords must make sure that expectations and consequences are not only legal but crystal clear, leaving no room for misunderstandings. Landlords can also protect their interests by documenting all notices and warnings given to the tenant leading up to the termination of the lease.

Terminate a Lease the Right Way

For a landlord to break a lease in Missouri, they must follow certain procedures:

First, for minor violations of the lease, the landlord must give a 10-day “cure or quit” notice . This means the tenant has 10 days to stop the behavior, or they must leave.
A “pay or quit” notice may be issued for non-payment of rent. Missouri law does not require a grace period, so the landlord can demand immediate payment the day is past due.
More serious infractions can be addressed with an “unconditional quit” notice. Tenants must leave the premises at once and will lose their lease. Examples are drug-related activity or other criminal behavior that poses a threat to other tenants or the property.

For other types of lease terminations, again, be sure to include likely scenarios in the lease, along with how and when the tenant will be informed. Remember that breaking a lease means uprooting a renter from their home, so we suggest exercising compassion and patience. Some general guidelines:

Notify the tenant in writing that the lease will end early, along with the reason when appropriate.
Give tenants a reasonable amount of time (at least 30 to 60 days) to find a new place.
If possible, offer the tenant referrals to other housing or landlords nearby.
Discuss how the rent will be handled for the remainder of their stay. For example, will the security deposit be used for the last month’s rent? If not, when will it be returned?

Image by Canva.com

Tenant’s Right to Break a Lease

Just as landlords have the right to break a lease in certain situations, so can a tenant. But simply abandoning the property and stopping rent payments is not acceptable. Landlords can hold a tenant responsible for rent owed in a situation like that.

Missouri law outlines three situations when a tenant can legally get out of a leasing agreement with no questions asked:

The Servicemembers Civil Relief Act covers the deployment and transfer of military personnel. The landlord should be given at least 30 days’ notice.
A tenant may terminate a lease on a dwelling that is uninhabitable or unsafe.
Victims of landlord harassment may break a lease.

There are several other valid reasons a tenant may want to break a lease, but Missouri does not have statutes requiring landlords to comply. We suggest that landlords work with their tenants to come to an agreement in these situations. In some cases, this might mean allowing the termination of the lease.

A tenant wishing to leave for their own safety due to domestic abuse, sexual assault, rape, or stalking.
Losing a job could make paying rent difficult or impossible. When a tenant is no longer financially qualified to live in the home, the landlord can choose to work with them or to allow them to break the lease.
Allowing a tenant to break the lease due to a corporate job transfer could actually be a good idea. In many cases, companies are willing to compensate the landlord with a few months’ rent. Meanwhile, they can fill the vacancy with a new renter.
Even though both spouses will remain on a lease after a divorce, the landlord may choose to avoid drama and disputes by letting the couple terminate the lease and both move out.
Moving might be a necessity for a sick or injured tenant. A landlord can show compassion by not holding a seriously ill or disabled tenant to their rental agreement.

Tenants should communicate with their landlords about any issues they are having that might result in needing to move out before the lease is up. At least 30 days' notice is recommended.

Avoid Legal Trouble When Breaking a Lease

A landlord has the right to terminate a lease when necessary. To supplement those rights, they can also write specific requirements into their leases. By drafting a clear and concise document , they can legally protect themselves in the face of a number of different scenarios.

Many landlords benefit from hiring a leasing and management company like Select Leasing & Management . They have seen every possible situation play out between landlords and tenants. Their expertise in writing and enforcing lease agreements can take the burden off of property owners and give them peace of mind.

Tips for Collecting Rent: Getting What You Are Owed

Tue, 06 Dec 2022 18:16:13 GMT

Late rent payments, or tenants who do not pay at all, can cause serious cash flow problems for a landlord. When things stand in the way of collecting rent in full and on time , owners will have trouble paying their own bills. Not only is this frustrating, but also expensive. Late fees for the mortgage, insurance, and taxes will add up. And failure to pay vendors and maintenance workers on time could result in their refusal to do future work, leaving landlords and their tenants without valuable resources.

Luckily, landlords are not entirely at the mercy of tenants who won’t pay. Knowing how to collect rent effectively is the key. Here are seven tips to make getting rent on time easier right from the start.

1. Screen for Tenants Who are Likely to Pay

Screening is not always foolproof, but it can weed out problematic tenants. In addition to criminal background checks , looking at a potential renter’s salary information, credit report, and financial fitness will be a good indicator of whether or not they can afford the rent. Prior evictions , foreclosures, or bankruptcies are red fags. Follow up with the person’s previous landlords and personal references to get a sense of their level of responsibility. Leasing to an individual with a reliable track record is usually a sign that collecting rent will not be a problem.

2. Make Policies Clear

A clear, concise lease is the best way to set expectations with new tenants. This includes not only the rent amount but also very specific rules about rent collection—and what will happen in the case of non-payment. As a legal document, it is the landlord’s best defense against late payers or those who default on their rent payments.

A good lease will state when rent is due, the length of the grace period if there is one, and details about late fees. In Missouri, a landlord cannot charge a late fee unless it is written into the lease. Renters can also be billed $25 plus any associated bank charges for bounced checks. By putting these details in the lease, tenants are legally bound to follow the rules or face clearly stated consequences.

3. Make Paying Rent Easy and Convenient

Getting rent on time is more likely when there are convenient ways to pay. Online banking has made traditional checks less common, especially for younger people. Giving tenants an online portal or an app-based payment option makes it easy for them to pay from their computer or phone. Automatic payments that are set up to come directly out of a tenant’s account on a set schedule make it effortless.

Many landlords still accept checks, but handling cash payments is far less common than it once was. Eliminating cash payments is a good idea. Landlords do not need the added responsibility and risk of handling money. And if a tenant prefers cash, it could mean that they do not have a bank account or credit card—possible signs of financial instability.

4. Set Up Automatic Reminders

Late payments sometimes happen because the tenant simply gets busy and forgets to pay their rent. Today’s technology makes it easy to schedule email or text reminders a few days before the rent is due. Additional notices can go out to those who have not paid within a few days of the due date. Busy tenants will appreciate getting a heads-up so they can pay on time and not incur a late fee.

5. Late Fees and Incentives

As we mentioned in #2 above, it is legal for Missouri landlords to charge late fees for missed rent. These fees are limited to $20 or 20% of the monthly rent, whichever is greater. The precise amount of the fee, along with the date it will be imposed must be written in the lease agreement. Late fees serve two purposes: Not only will they encourage people to make timely payments, but they are also a good way for landlords to recoup a bit of the money they spend on their own late fees.

On the flip side, some landlords give incentives to tenants who consistently pay on time. For example, a certain number of months of on-time payments might earn the tenant a discount on the next month’s rent. Or, perhaps the landlord hands out gift cards at the end of the year to tenants who have never missed a payment. A landlord is free to offer whatever rewards they like, provided they do not play favorites with certain tenants while discriminating against others.

6. Keep the Lines of Communication Open

A big part of a healthy landlord-tenant relationship is communication. When landlords take the time to talk to their tenants, collecting rent becomes just one more routine interaction. Landlords who get to know their renters (while respecting their privacy) are more likely to find out about life events like a job loss, illness, a new baby, etc., all of which could become hardships or distractions resulting in forgetting a payment. Follow up can be non-confrontational and friendly.

Sometimes, tenants might take it upon themselves to intentionally withhold rent without informing the landlord. For example, if something is broken in their apartment, they might feel justified in not paying until it is fixed. Tenants are only allowed to do this if the apartment is unsanitary or dangerous, and the landlord must be notified. Landlords can avoid this situation and continue getting rent on time by making sure tenants understand how to make maintenance requests—and by following through on repairs in a timely manner.

7. Consider Outsourcing to Select Leasing & Management

Outsourcing property management tasks to someone else is a sure way to make collecting rent easier for landlords. Companies like Select Leasing & Management in St. Louis can handle all aspects of getting rent on time, and resolve payment issues with tenants as they arise. They are also equipped to start eviction proceedings if it ever comes to that.

Select Leasing & Management has cracked the code of how to collect rent. It all starts by finding the best tenants and writing leases to make expectations known. User-friendly tools to make it easy for renters to pay and communicate their needs. In addition, they provide landlords with in-depth financial reports about the property so they can make the most of their investment.

How to Find Good Tenants for Your Rental Property

Mon, 31 Oct 2022 20:47:05 GMT

Spring and summer tend to be busy seasons for signing new tenants, so winter is a great time to start attracting qualified applicants. While it is not always easy to find good tenants for a rental property, there are several ways to increase the odds of drawing in honest, respectful candidates. Remember, taking time to find good tenants now can prevent having to repeat this process in the near future.

What Should I Look for in Good Tenants?

It is difficult to determine whether someone will make a good tenant just by meeting them during a walk-through, so asking some basic questions can help landlords decide whether to move forward with the application process. Some initial things to inquire about include:

Smoker status. If smoking is prohibited in the building, a smoker will not be a good fit.
Number of pets (if any). A no-pet policy should be disclosed up front.
Household size. According to Missouri’s landlord-tenant laws , landlords must limit occupancy to two persons per bedroom except for children born during the lease period.

Once a potential tenant seems like a good match, the next step is to have them fill out an application with more detailed information such as:

Employment status and income. In general, a tenant should earn at least three times the monthly rent amount.
Prior criminal record . This will show up on a background report, but an honest tenant will list past convictions on the application.
Contact information for past landlords. Good tenants should be happy to list previous landlords if there’s nothing to hide in their rental history.

When the screening process is complete, it should be easy to identify a desirable tenant who has:

A positive credit report
No prior history of eviction
Positive reviews from previous landlords
Enough income and savings to pay the first month’s rent and any required deposits

What is the Best Way to Attract Good Tenants?

Just as landlords must take time to find the best tenants for their rental property, potential tenants must take their time searching for the best place to call home. Here are a few ways to draw their interest.

Advertise a Vacancy

To fill an open unit quickly, it’s important to get the word out as soon as possible. Some of the best ways to advertise an opening include:

Talking to current tenants. Renters who pay bills on time and take care of their apartment year after year might know someone who will do the same.
Posting a professional sign. While a cardboard “For Rent” sign from the local hardware store is fine for some tenants who happen to drive by, seeing a custom-printed sign can bring peace of mind to those who want to live in a professionally managed rental.
Listing it on a real estate site. Zillow and Trulia are popular sites where renters look to find apartments up for rent.
Sharing the vacancy online. According to Pew research , more than 80% of Americans use social media. Posting a link to the rental on Facebook could help draw interest from potential tenants.

Price Rent Fairly

More and more Americans are turning to rentals for affordable housing. In fact, research by Federal Reserve Economic Data (FRED) shows that the vacancy rate for rental units in the U.S. fell from about 10% in 2010 to 5.6% at the end of 2021. But while there are plenty of people who want to rent, landlords need to be conscientious about how much tenants can afford. Setting a price too high could result in early evictions if they end up not being able to pay the rent while setting a price too low could mean not being able to cover maintenance costs.

To lure good tenants and make owning a rental property profitable, the rental price should meet the fair market standard for the location and amenities of a property. The best way to determine a good local rent price is to compare it to other similar units in the area. It is a good idea to check Zillow or a local newspaper for current rental prices or to ask a local real estate agent for a list of nearby available units.

When pricing a rental property, it is important to consider:

Square footage. A larger unit should be able to draw more rent than a smaller one down the street.
Location. Is the unit in a convenient, walkable location? Does it have water views? These are desirable reasons a tenant would be willing to pay a little more. If it is next to a busy, noisy highway, they may be expecting to pay less.
Number of bedrooms and bathrooms. A two-bed, two-bath condo or apartment is certainly worth a higher rental price than a studio above a convenience store.
Amenities. A nice patio, garden area, or pool are all perks that can justify higher rent than a property with no outdoor space.

Keep Your Property in Desirable Condition

Tenants who do not keep their homes clean or take care of their belongings might be drawn to—or at least not bothered by—a rental where it seems like that is the norm. Likewise, tenants who respect their property want to live in a well-maintained property where it seems that neighbors do the same. By staying on top of the following issues, landlords can convince good tenants to stick around long enough to fill out an application.

Landscaping. Keeping grass mowed, shrubs trimmed, and leaves raked are all low-cost tasks that can boost curb appeal.
Exterior maintenance. Broken screens and loose railings take time to fix, but they add a lot of value for applicants who will want to feel safe living there.
Interior maintenance. Fresh paint, clean carpet, and working appliances are all sure ways to make a good first impression.

Set Expectations Up Front

Finding good tenants is only half the battle. To ensure that a unit stays occupied by respectful renters, landlords should have a clear and concise lease that lays out the rules . This way, there is never a question as to what will or will not be tolerated. When rules are enforced consistently, bad tenants can easily be weeded out, and good tenants can stick around for the long haul.

How Much Does It Cost to Bring on a Property Manager?

Tue, 04 Oct 2022 15:32:39 GMT

Owning rental property means constantly keeping an eye on expenses so they don’t eat up too much profit. After all, landlords are running a business, so ROI (return on investment) is important. This is a big reason why many landlords choose to manage their apartments and rental homes themselves , if they can.

When there are too many properties to take care of properly, the owner lives far away, or the work is simply becoming too much, it is time to consider a property management company. But what about the cost of bringing on a property manager? Let’s take a look at how property management fees are calculated and what they include.

The Base Rate and What It Includes

The most common way that companies charge property management costs is with a monthly fee based on a percentage of rent. Typically, this is between 8% and 12%. Consider a small apartment building with four units, each charging $1,000 per month. A management company charging 10% would cost $400 each month ($1,000 x 4 = $4,000, 10% of $4,000 = $400).

The exact percentage charged varies from company to company. So do the services landlords will receive for the fee. In most cases, they can count on basic maintenance and repairs, dealing with tenants, collecting rent, and taking care of the bookkeeping. Many property managers also include advertising and showing apartments, tenant background checks, and other administrative duties.

At Select Leasing & Management, our basic package includes all of this and more. We prepare homes for the rental market, do detailed inspections, and provide a marketing plan to attract the very best tenants.

When researching the cost to bring on a property manager, finding the base rate and what it covers tells the landlord a lot. A full-service company offering a lot of services gives an owner a fairly straightforward idea of what to expect each month. On the other hand, some companies provide minimal services for the base rate, and other things cost extra. This can make budgeting difficult as the costs—and ROI—fluctuate from month to month.

One note about fees as a percentage of rent: There is a difference between rent collected and rent due . If a tenant has not paid their rent in several months and the fee is based on rent due , the landlord must still pay the fee. Basing the fee on rent collected works in the landlord’s favor if renters are behind.

It is also important to understand the company’s policy for vacant apartments. Some will charge a reduced percentage for months when the unit is empty.

Study the Contract for Extra Costs

Everything about the property management services and costs should be clearly outlined in the contract. The document should list exactly what is included in the base rate, along with additional services and their fees.

Some things will always be more—for example, a large repair project or eviction proceedings . These fall outside what would be considered “normal operations,” so coverage by a base rate would be extremely rare.

But some companies will charge extra for things that another company considers routine. An example is tenant placement fees that cover tenant screening, drawing up a lease , and doing a move-in inspection. For a large apartment complex, these fees will add up fast if they are charged “a la carte.” Even things like snow removal, online rent payment, or financial reporting could potentially cost extra.

Go over the contract thoroughly and ask about anything that is not specifically mentioned. Then do the math. Add the base rate plus the extra charges for things that typically happen during a month. And imagine a “worst-case” month, where several things go wrong, to see if it is affordable compared to a DIY approach.

Signing on With a Property Manager

There is typically a setup fee to start working with a property management company or switching to a new one . This is usually only about $300 for doing all of the paperwork involved and setting up the necessary accounts and banking connections.

When switching property management companies, there could also be a contract termination charge, if the landlord leaves before the contract is up. Again, the details of fees like this should be listed in the contract.

Value-Added Property Management Services

If the cost to bring on a property manager sounds high, consider the value that the right company can provide. A reputable company with a lot of experience running rental properties can not only protect a landlord’s investment but enhance it. They do things that will keep renters happy and save money in the long run:

They act as a go-between for tenants and the landlord. The management company can field renters’ questions and problems, resolve tenant conflicts, and enforce rules.
Property management companies have access to the tools needed for thorough criminal background and credit checks .
A company will have the time and resources to prepare, advertise, and show rental units to potential new tenants.
They have the necessary accounting and reporting software and can set up automatic electronic rent payment options for tenants.
They either employ or have a long list of contracted resources for every type of repair or maintenance—plumbers, roofers, carpenters, electricians, landscapers, pest control services , etc.
They have the ability to respond quickly to emergencies.
Professional property managers are well-versed in current legal issues regarding tenant and landlord rights. They can successfully handle issues like rental assistance laws , evictions, and premises liability .

Property Management Costs vs. Your Time and Trouble

Running a rental property is a lot of work, especially for an independent landlord trying to do it all. To decide if the cost to bring on a property manager is worth the investment, the owner must consider how much time, energy, and stress is spent taking care of the building (or buildings) and the tenants’ needs. Obviously, the more properties that are owned, the more time-consuming, stressful, and physically demanding it will be. Add in a full-time job or living out of the area, and it is nearly impossible.

When it is time to consider property management benefits with a professional, contact Select Leasing & Management to see how we can help.

5 Things You Should Know About Property Management Companies in St. Louis

Tue, 02 Aug 2022 16:58:31 GMT

There are a lot of good reasons for a rental property owner to outsource leasing and management of their buildings. But before St. Louis landlords hand off tasks (like background checks , collecting rent, and maintenance) to a management company, it is important to find out more. Namely, how in-tune is a management company with the St. Louis region?

Along with a good track record for typical services, finding someone with local knowledge is an excellent idea. Property management companies in St. Louis like Select Leasing & Management bring their hometown expertise to the table. This benefits landlords and tenants alike.

Finding the Best Leasing and Management Professionals

There are two groups of rental property owners that hire leasing and management companies: Investors who never intended to take on the day-to-day operations of a house or apartment building, and independent owners who have tried but can not do it all themselves .

Independent owners have a variety of reasons for hiring a property management company. Caring for multiple properties can be too much for one person. And even taking care of a single rental unit is a lot of work. If the owner’s residence is far away, it is difficult if not impossible to self-manage. Any property owner outsourcing the daily management duties must make sure to find someone they can trust to deal effectively with their tenants and safeguard their investment.

A company with a strong local presence is important, too. In the St. Louis area, for example, everything from rules and regulations to school options can vary widely from neighborhood to neighborhood. The St. Louis region itself is unique, with differences between the city and each surrounding county. The area includes both Missouri and Illinois as well.

The right management can find and keep good renters, keep the building in good shape, and follow laws and guidelines to avoid costly fines or lawsuits.

What to Look for in Property Management Companies in St. Louis

When outsourcing, some landlords focus only on the services they can expect and at what price . These things are of course important, but when choosing a property management company in St. Louis, go beyond the basic service list. Find out what they know about managing a building in its local setting . The following can act as a checklist in assessing potential management companies for the right “fit”.

1. Their Licensing is in Order

Companies that are in business solely to provide comprehensive rental management services must have a current real estate broker’s license from the Missouri Real Estate Commission . In Illinois, there is a leasing agent license. Select Leasing & Management has a parent company, Berkshire Hathaway HomeServices Select Properties . Because that entity is a licensed real estate brokerage, the leasing and management branch does not need any additional licensing.

Individual owners who self-manage do not need a license. Neither do individuals or companies that they may hire to do specific tasks for the property. But this is an important question to ask before hiring a full-service management company, as a lack of the proper license could expose the owner to fines and penalties.

2. They Know Rental Laws

Renting and managing property is subject to strict laws and regulations at the local, county, state, and federal levels. Property management companies in St. Louis must understand the rules of the specific municipality where a property is located.

At the federal level, all management companies must comply with fair housing and discrimination laws outlined by HUD. Missouri has strict requirements surrounding security deposits and eviction procedures. Locally, each county and city has different rules for occupancy permits, the number of people allowed to live in a dwelling, and inspections. For example, a company managing properties in St. Louis City needs a Housing Conservation District Inspection, but St. Louis County properties need a Residential Rental License.

When it comes to tenants and the building itself, property management companies in St. Louis must understand premises liability. The property must be maintained as a safe place to live. If a renter gets hurt because of the manager or their staff’s neglect, the landlord could face a personal injury lawsuit.

3. They Understand Rental Assistance

The pandemic brought the topic of rental assistance to the attention of some landlords and tenants for the first time. When a good tenant falls on hard times and has trouble paying the rent, many landlords find it beneficial to work with them to get rental assistance rather than starting eviction proceedings.

Dealing with various governmental agencies for this type of help can be complicated. So, it is a good idea for landlords to ask what type of experience a property management company has with the rules and paperwork surrounding rental assistance that is available in and around St. Louis.

4. They Understand the Local Market

A good rental management company knows the area well enough to help a landlord make decisions. They can help decide what rent to charge or when a rent increase is called for . Their marketing strategy should be tailored to the type of property and what will make the property attractive to the desired renters. For example, an apartment typically rented to students near SLU might be advertised differently than an upscale high rise in Clayton.

A successful property management company can also be known by the local market . A company with a good reputation will often find the best tenants simply because of name recognition.

5. They’re Familiar With the Neighborhood(s)

Part of knowing the market is understanding the (sometimes confusing) neighborhoods of St. Louis and surrounding towns. Knowing the neighborhood vibe, and being able to highlight a rental property’s selling points based on its location, is a plus. As the property management team meets potential tenants, they can point out nearby resources and attractions. Understanding the local school system—and which schools are available to tenants— is particularly valuable when showing apartments or answering inquiries.

Partner With Select Leasing & Management

There are a lot of different property management companies in St. Louis, and they all offer a variety of useful services. But any search by landlords should dig a bit deeper to assess how well companies know our region.

At Select Leasing & Management, we know every corner of the region. We are also backed by the resources of Berkshire Hathaway HomeServices Select Properties, which include the knowledge of agents all across the St. Louis region and the Metro East in Illinois. Contact us today to discuss your rental property’s needs.

How to Write a Letter from a Landlord to a Tenant

Tue, 05 Jul 2022 15:13:11 GMT

Communication is a key component of a good landlord-tenant relationship . And there are certain requests and directives that are best communicated in writing. The administrative task of letter writing is more important than some people think. Landlords first need to understand when a letter or written notice is appropriate. Then they must know how to say what is necessary, in a way that is clear, polite, and most importantly, legal.

Why and When Putting it in Writing is Best

Putting important information in writing has some obvious advantages. If a landlord relies on phone calls or even a face-to-face conversation, a tenant could misunderstand or forget what was discussed. Worse, a tenant could deny that the landlord ever mentioned the topic. A properly written letter that includes all of the pertinent facts provides clear documentation for both parties. Not only is this the considerate way for a landlord to handle subjects that may impact the tenant, but it can also become the basis for resolving disputes or even future legal action. Writing a letter can simply be a courtesy to a tenant. For example, it is helpful to send out a notice informing apartment tenants that the building’s lobby will be repainted, or that the pool will be closed for maintenance. The landlord does not have to issue letters about such things, but renters will typically appreciate getting a heads up. In other cases, written notice is required by federal, state, or local law. For instance, in both Illinois and Missouri (as well as many other states), landlords must give tenants with month-to-month leases 30 days' notice before raising the rent. And every state requires written notice of eviction proceedings.

Every Tenant Letter a Landlord Might Need

Writing letters to tenants is part of managing rental properties. For owners who self-manage their rentals, there are websites such as letterspro.com or examples.com that offer free samples and templates for the various types of letters one might need.

Property management companies like Select Leasing & Management have administrative staff that routinely writes tenant letters. They are also well-versed in state and local laws so anything that should be in writing is done properly.

Listed here are the letters used to communicate important information to tenants:

Welcome Letter. This is a nice way to get off on the right foot with a tenant and can be included with the tenant’s signed copy of the lease. The landlord can use the opportunity to mention helpful information not discussed in the lease (such as nearby laundromats, parks, libraries, etc.) and names and contact information for property management personnel.
Maintenance/Access Notice. Landlords are required by law to give notice before entering a rental unit, except for an emergency. Putting this (and anything else that could pose an inconvenience) in writing is a good idea. Examples could be a planned brief interruption in power or water service, scheduled spraying for pests , the temporary closure of an amenity, resurfacing the parking lot, etc.
Response Letter to Tenant Requests. When a tenant has a request, it is a good idea to have the response in writing for future reference. For example: Giving a tenant permission to paint or make an improvement to their apartment. Denying a request to sublet. Or approving a new roommate, provided they add their name to the lease.
Invitation to Renew. Toward the end of the lease agreement, a landlord may send this letter as a reminder. Rent increase or other changes can be included in this notice. This gives the tenant some time to decide whether to renew their lease or move out.
Termination Letter. This signals the end of the rental agreement. It might be due to the tenant’s plan to move out or the landlord's refusal to renew the lease. A tenant may receive this letter after breaking rules or failing to pay rent, or for reasons unrelated to them at all. For example, a landlord who is selling the building or will no longer rent out the home. This letter can include instructions and procedures for moving out, cleaning requirements, and obtaining a security deposit refund.
Increase in Rent. Monthly or weekly leases require written notice of an increase 30 and 7 days prior to the change, respectively. Longer leases can not be raised until the end of the lease. As mentioned above, this should be detailed in an invitation to renew so the tenant can decide whether to stay.
Change in Payment Information. To avoid confusion and continue to receive rent payments on time, landlords should let tenants know of payment changes. For example, changing banks, adjusting the grace period, switching to all-electronic payments, changes to late payment or NSF fees, etc.
Introducing New Ownership/Property Management. Tenants should be informed if their building is sold or if there will be new people in charge of managing it. They need to know where to send their rent and who to contact for repairs or emergencies. Send a letter with all of the pertinent information included.
Reprimand Letter. This is used to inform a tenant that they have broken a rule. The letter should explain the issue and what needs to be done to remedy the problem.
Cure or Quit Letter. More serious than a reprimand letter, this directs a tenant to stop the unauthorized behavior or risk eviction. It should clearly state the rule they are breaking (which must be spelled out in the lease), what must be done, and by when to avoid an eviction notice.
Overdue Rent Notice. It is a good idea to put rent reminders in writing. A landlord might need proof that a tenant was chronically late in paying as a basis for terminating their lease.
Pay or Quit Letter. Like the Cure or Quit letter, this is a more stern warning about unpaid rent. It demands payment of current and back rent by a certain date or eviction proceedings will begin.
Unconditional Quit Letter. This tells a tenant in no uncertain terms that they must leave the premises. Every state has different reasons and timeframes that the landlord must give them to vacate. In Missouri, tenants must be given 10 days to leave after violating the lease, subletting without consent, serious property damage, gambling, prostitution, or illegal drug possession, sale, or distribution. Illinois calls for 10 days' notice for any violation of the lease, and 5 days for unlawful sale or use of controlled substances.

Follow These Steps for Tenant Letters

Whether a letter is routine (welcome letters, maintenance notices) or announcing something unpleasant (rent increase, reprimand) landlords should keep in mind the following things when writing them:

Keep letters consistent by including the following elements:
Tenant’s name and full address
The date
A subject line that summarizes the information
The landlord’s expectations (pay the rent, stop breaking a rule, etc.)
The required timeline (immediately, by next week, by a specific date, etc.)
Signed by the proper authority (the owner, property manager, etc.)
Be clear and concise about the message. Do not beat around the bush.
Be brief.
Be polite.
Be thorough and stick to the facts.
Avoid naming other parties (Instead of “Mr. Smith told us…” say “It has been brought to our attention…”)
Do not contradict the rules listed in the lease.
Deliver it in the appropriate way. Depending on the letter, hand delivery or posting on the rental unit’s door might be acceptable. For legal notices, use first-class, certified mail or a professional server and get a signature of receipt.

When in Doubt, Opt for Written Communication

In most cases, it is better to over-communicate than not say enough. By making a habit of writing letters to tenants about important information, there will be fewer chances for misunderstandings. In the unfortunate event that eviction might be necessary, tenant letters can provide a valuable record of exactly what happened and when. Like all parts of rental property management, administrative tasks like writing letters can become time-consuming. This is especially true for landlords who are spread thin with multiple properties or who are handling property management duties along with the responsibilities of a full-time job and family. For help with these and all other tenant-related services, consider contracting with Select Leasing & Management .

Can a Landlord Do a Criminal Background Check?

Tue, 07 Jun 2022 15:30:00 GMT

Property owners have a duty to protect their tenants, the property, and the community. Part of ensuring safety and security is through conducting tenant background checks. Not only is a landlord allowed to do a criminal background check of prospective tenants, it is a necessary part of managing rental property.

According to the U.S. Department of Housing and Urban Development, nearly ⅓ of the country’s adult population has some type of blemish on their record . And while everyone deserves a roof over their head, landlords have the right to deny renting to someone who may pose a threat, as long as their decision is fair and follows the law .

The Risks of Not Screening Tenants

Screening tenants is an essential part of rental management. A credit report and employment verification will illustrate their ability to pay the rent. Talking to former landlords can give insight into if they follow rules and keep their home clean. A criminal background check will tell the story of any illegal or dangerous activities in the person’s past.

Not doing a background check is a bad idea for a couple of different reasons. A violent criminal might cause physical harm to other tenants. Someone guilty of arson or vandalism could pose a threat to the building itself. People engaged in things such as theft or drug dealing might bring their illegal activity or other criminals to the property.

Any of these scenarios can be dangerous or destructive. Repairs and maintenance for property damage will cost the landlord additional money. It is uncommon and hard to prove, but if someone were to be harassed or hurt by another tenant’s criminal behavior, the landlord could be held liable . Failure to do a criminal background check or knowing about a tenant’s dangerous background and doing nothing could potentially be seen as negligence.

Criminal activity on the premises is often grounds for eviction . But it is preferable to weed out these tenants with a criminal background check before they move in. Eviction is costly and time-consuming, and good tenants might leave in the meantime.

What a Criminal Background Check Uncovers

The process of screening starts with an application that includes the prospective tenant’s name, date of birth, and recent address, as well as their employment information and rental history.

Screening services such as MyRental, RentPrep, and SmartMove collect data from public court records in multiple jurisdictions. Many will start a check for identity fraud with the social security administration.

Basic reports cost approximately $15 to $50. This wide range is due to each company’s different amount and type of information included in a basic report. Some are more comprehensive while others will include a deeper search for an additional fee.

Things that can be uncovered in a criminal background check that might be of concern for landlords are:

Arrests
Felonies
Misdemeanors
Pending criminal cases
Incarceration
Parole records
Probation records
Past warrants

Services gather this data from public records from the city, county, and state. The National Sex Offender Database will detail any sex crimes, when they were committed, and victims’ ages.

Some types of criminal activity might be unlikely, but searches might automatically run names through other databases as well. The OFAC (Office of Foreign Assets Control), for example, tracks suspected terrorists and people involved in drug or human trafficking and high-level organized crime. If an applicant is a fugitive, their name might be flagged on a Most Wanted list or by Interpol.

Is There More to the Story?

Landlords might need more than a basic criminal background check to tell them the whole story about a tenant’s past—and how safe it might be to rent to them. Keep the following points in mind before renting—or denying a lease—to someone with a record:

Make sure you have the right person. Checking with the social security administration can root out the fraudulent use of a social security number. A background check also might reveal other names the applicant may have used in the past. Another background check on these aliases can be helpful.

Arrested or convicted? Being arrested or being suspected of a crime does not mean the person was guilty. Dig a little deeper to learn the details and outcome of the incident.

Consider the nature of the crime. Landlords might have valid concerns when it comes to crimes like murder, sexual assault, or illegal firearms. But criminal records might include things like embezzlement, shoplifting, or even jaywalking. This is why a blanket “no criminal record” policy might not be the best option.

How much time has passed? Does the applicant have charges currently pending? Have they just been released from prison? Or did they commit a crime 15 years ago? Even if a crime was serious, if the person has paid their debt to society and has been rehabilitated, they might be a perfectly good tenant.

Is the applicant open and honest? People with criminal records understand that a landlord will most likely be doing a tenant background check. A potential tenant can tell the landlord what they are going to find. This gives them the opportunity to explain the circumstances and give assurances that it will not affect their tenancy. While this is no guarantee that the individual will be a good tenant, it could make a difference in the landlord’s decision.

Is there progress toward rehabilitation? A landlord might consider renting to an applicant who is in a program or actively seeking help for issues that may have a link to their criminal history. A drug rehab program, alcoholics anonymous, or a faith-based organization are signs they are working toward rehabilitation.

Following the Laws When Screening Tenants

Before screening potential tenants, the individual must give the landlord or property management company permission to do so . That said, the landlord has the right to deny renting to anyone who refuses the screening.

Barring someone from renting without a valid reason is not only unfair, it can also be illegal. Landlords must be cautious about how they use information from a criminal background check to screen people. HUD’s Fair Housing Act Standards provide guidance to ensure that a landlord’s rental policies when it comes to criminal checks are “ necessary to achieve a substantial, legitimate, nondiscriminatory interest .”

For example, refusing to rent to someone simply because they have an arrest on their record might open the landlord up to a lawsuit. If the arrest resulted in a conviction, the landlord might have a better defense. But the landlord must present a good reason why the person presents a risk to the property or the other tenants.

Another Act, The FCRA ( Fair Credit Reporting Act ) regulates the use of information gathered from screening services. While the Act deals with credit checks, it also governs how criminal background information must be handled. Under the FCRA, reports should not include crimes committed more than 7 years prior . In the event that a landlord will not rent to the person based on information in the criminal background report, they must give them an adverse action notice . This provides the individual with the reason their application has been rejected and explains their right to receive a copy of the report. Further, the individual can dispute any incorrect information found in the report and have it corrected.

If a landlord decides to rent to someone with a criminal background, they are allowed to modify the terms of the lease. They could, for example, ask for a bigger security deposit, insist on month-to-month terms, or require a cosigner on the lease agreement.

Navigating the legal details of criminal background checks and either denying or renting to people with criminal records can be complicated. Landlords must know the federal, state, and local laws that regulate them.

Having a lawyer handle these matters is a good idea. Hiring a leasing and management company can also minimize the risk of fines or lawsuits. For property management companies, tenant background checks are routine. Plus, they can help write and enforce policies that are both fair and legal.

Balancing Caution and Fairness

Property owners would love to fill their rental properties with good tenants . This includes people who pay their rent on time, take care of the property, and do not engage in criminal activity. Landlords have an obligation to keep their property and their tenants safe and secure. A criminal background check, along with common sense and compassion, can give them valuable information to do just that.

Just because someone has a spotless record does not mean they will be a good tenant. In the same way, a criminal past does not automatically make a person a bad tenant. A landlord’s policies should be fair, consistent, and look beyond the surface and take into account the type of offense, how long ago it happened, and whether or not the person is likely to commit crimes in the future.

If you need help with tenant background checks or any property management tasks, contact Select Leasing & Management .

How Does Rental Assistance Work in Missouri?

Tue, 03 May 2022 15:00:07 GMT

According to a report by the Center on Budget and Policy Priorities updated in January 2022, 134,600 people in Missouri cities and suburbs, and 42,900 people in its rural areas and small towns, received federal rental assistance help. These numbers do not take into account the emergency Federal financial support for renters affected by the COVID-19 pandemic.

State and local agencies and organizations work to help keep renters in their homes while protecting landlords’ interests, too. Rental assistance in Missouri is available through several different channels. Knowing how it works and where to look are the first steps in getting relief.

Tenants who have trouble paying their rent do not fit any particular mold. We are talking about true need—not just someone who has overextended themselves and is living beyond their means. Those seeking help might be veterans, senior citizens, people with disabilities, or low-income families. In the numbers above, 33% receiving assistance are working adults.

How Is Rent Paid With Rental Assistance

Rental assistance often has a mechanism in place to pay the landlord directly. This is particularly true of government assistance programs. If money is paid to the tenant, there is usually some type of stipulation that the funds be used only for rent. Programs may be for one time or for ongoing financial help and may cover past-due or current rent, and in some cases might pay security deposits.

Although most assistance applications are initiated by the renter, a landlord may be able to apply on their tenant’s behalf. Each program has different rules and procedures. Depending on which programs they are considering, the tenant and landlord both need to know their rights and responsibilities.

Where to Go For Rental Assistance in Missouri

When it becomes difficult to keep up with rent, various forms of rental assistance are available at the federal, state, and local levels. A good place to start looking for help is through local channels. Nearby agencies and organizations not only help people in the immediate area, but they are sometimes a great resource for more widespread contact information.

A great example of this in Missouri is the Community Action Agency of St. Louis County, Inc. (CAASTLC). This agency lists programs and support services for all kinds of community outreach including rental assistance. And while the programs they run are for county residents, their website also includes resources for numerous federal and state-wide agencies as well as non-profit organizations that can help.

The CAASTLC is just one example of community outreach that seeks to connect local residents with much-needed services. Similar organizations can be found in counties and municipalities across Missouri.

Another good starting point is RentalAssistance.us . The website has a nationwide database of assistance resources. Renters and landlords can search by county or zip code for federal and local government programs as well as non-profit and faith-based assistance.

Government Agencies

No matter where a renter lives, there is usually some type of government assistance available, provided they meet certain criteria. An application process assesses need based on factors such as income or disability. Start with the city, county, or regional housing authority.

The Missouri Housing Development Commission is an organization that helps with the Missouri Housing Trust Fund. This fund awards grants to various organizations that in turn provide housing assistance to individuals.

There is also a rental assistance program available to individuals with developmental disabilities or mental illness through the Missouri Department of Mental Health .

At the federal level, the U.S. Department of Housing and Urban Development (HUD), provides help with government-owned public housing, privately-owned subsidized housing, and the Housing Choice Voucher program known as Section 8. Section 8 housing vouchers are available to low-income individuals and families.

Landlords must follow certain rules when they agree to participate in the Section 8 program. They must agree to maintain the property in a safe and sanitary condition, and charge a reasonable amount for rent. They are allowed to conduct background checks as they would with any other candidates. The tenant pays a portion of the rent and the voucher covers the rest. This gives the property owner guaranteed rent revenue; however, they can not raise rent without HUD approval.

The Emergency Rental Assistance Program

At the time of writing this article, rental assistance is still available for those affected by the COVID-19 pandemic. On the federal level, the U.S. Department of Treasury’s Emergency Rental Assistance (ERA) can help. Missouri State Assistance for Housing Relief (SAFHR) Program is a resource for Missouri renters.

Until these funds run out, The Consumer Finance Protection Bureau’s website is the place to visit for information.

For renters and landlords who are struggling because of the pandemic, these sources can be extremely helpful in filling the gap until renters’ situations stabilize.

Nonprofit and Charitable Organizations

While government resources for rent assistance have a rigorous application process and often a waiting period, immediate help can sometimes be found through non-profit and charity routes. Organizations like the CAASTLC have a catalog of such groups. Renters can also check with their local churches and civic organizations to find help that might be available.

Because these organizations typically work with donations, the amount of funds available is limited. They will often give aid on a first-come-first-served basis, and prioritize individuals and families based on their particular situations and level of need. Many do not require any affiliation with their group, although some might.

Although funds may not always be available from these organizations, they are still great community resources. They are often very knowledgeable about the options available for people in need from other non-profits or government agencies. Some may even assist in the application process for government aid, or other helpful services like food pantries, child care, or transportation.

Just a few of the organizations to consider in Missouri are: Catholic Charities of St. Louis, Emergency Assistance Ministry, Jewish Services of St. Louis, The Salvation Army, and Urban League of Metro St. Louis.

Tenant-Landlord Communication is Key

Most people do not expect to need help with basic costs like paying rent. Having to look for help after a job loss, illness, or other life event is a source of stress, worry, and even embarrassment.

The best thing for a renter to do is to have an honest conversation with their landlord at the first sign of trouble. If the owner or management company knows that the tenant is struggling, they are more likely to be understanding. A leasing and management company that handles a large apartment complex or multiple buildings will often have resources for the tenant to contact.

It is important for tenants to remember that a landlord would rather not have to send warnings or start eviction proceedings . The process of finding new renters is a lot of work, and building owners are running a business. They need rent revenue to pay the mortgage on the building and fund repairs, maintenance, and other amenities. Getting rent assistance when needed benefits both parties by keeping people in their homes and getting landlords the money they are owed. Likewise, landlords need to be aware of the resources available to tenants with hardships so they can steer them toward the help they need.

In Missouri, where there is a need, there is rental assistance available. You just need to know where to look.

How to Manage Your Own Rental Property... and When to Call the Professionals

Wed, 06 Apr 2022 00:45:03 GMT

Owning rental properties can be a great investment. But whether it is the main source of income or a side hustle that just started, taking care of the property and the tenants often feels like a full-time job, especially when you already have a full-time job outside of being a landlord.

Taking care of a rental property yourself can mean saving a lot of money. But when it comes to balancing other things like work and family, not living nearby, or managing multiple properties, managing it all can become too much. But if you are considering a DIY approach to rental management, here is what you need to know.

One quick note: By “rental management” we mean the business of leasing apartments and houses as residences. This should not be confused with vacation rental management , which has its own rules and procedures.

Understanding the Law

Landlords and property managers have the responsibility of providing a safe place to live for their tenants. This means understanding tenant-landlord laws. Knowing and practicing the laws around managing a property includes keeping it a safe place to live and ensuring that tenants are treated fairly and not discriminated against. Not only is this the right thing to do, but it will also keep you out of legal trouble.

Beyond premises liability, tenant-landlord laws, in general, vary depending on the city, county, and state so it is important to be familiarized with, and read up on, all the laws and regulations related to this type of business.

Create a Lease Agreement

Creating a lease agreement is a way to set the rules and expectations between the tenant and landlord. The first step is making sure the lease complies with all applicable laws.

Finalizing lease agreements starts with customizing the lease. This step requires a lot of thought because if something is not in the lease, it could end up creating problems. Do you want to ban smoking? Allow pets? These are things to think about when it comes to creating a customized lease agreement.

After finalizing the lease agreement, you will want to run it by a legal professional to make sure everything looks good in regard to the applicable laws. Once it is ready to go, it can be reviewed with the tenant and signed and dated by both you and the tenant. Lastly, provide a copy for the tenant and always keep a copy for yourself.

Figure Out What To Charge

Deciding what to charge for rent is a crucial piece of owning and managing a rental property. Rent pays for the upkeep of the place, as well as your paycheck. Making rent too low means missing out on profits while setting prices too high can mean an empty property.

The best way to figure out what to charge is by comparing the property to others in the area. Getting a feel for what the area and your property have to offer can help in coming up with a price that is in line with the current rental market.

It is also worth considering what things could make the property more desirable, so you can ask more for rent. Then you can decide if they are worth the investment. For example, adding in-unit laundry or an assigned parking spot can be a hot commodity in some areas.

Marketing

Once the price is set, marketing can be a game-changer for how fast an apartment gets filled. Start with taking good pictures with natural light that show the place well. Make sure to include photos of every room and everything the property has to offer.

Share the photos and a detailed property listing on different sites like Zillow, Craigslist, Facebook, or with a local realtor. Focusing on the features and upgrades of the place will have potential tenants interested right away. In order to decide where to make your posts, do some research and figure out where your target market is looking.

Including any specific policies when advertising saves time by weeding out certain candidates. For example, stating the pet policy, income requirements, and whether the rent price includes things like utilities and wifi, is all helpful.

It is important to remember that managing the property yourself means being available for showings. Fitting in tours for potential tenants around work and home schedules can be challenging. And the further away you live, the more time-consuming it will be.

Finding and Keeping the Right Tenants

Determining if a renter will be a reliable tenant can be one of the most important parts of the job. Good tenants take care of things, pay their rent on time, and hopefully stick around for a long time.

Landlords may have to screen several tenants for any given property, as some renters live with roommates. These applications should provide personal information like name, phone number, and email address, additional occupants and pets, current and previous residences, employment and income, and prior evictions or bankruptcies. While going through rental applications, always comply with all applicable fair housing laws throughout the process of running credit and background checks on potential tenants.

It is crucial to run a background and credit check to verify that all information that candidates provide is correct. Bad tenants might not pay rent on time, wreck the place, or get involved in criminal activity. All of these people can (hopefully) be weeded out in the screening process.

Maintenance

Paying to live in an apartment means having someone to take care of things. Keeping your tenants happy with a rental that is well kept will make your life a whole lot easier. And general upkeep is just as critical as fixing things when they need fixing.

General maintenance includes things like general property walkthroughs, keeping the gutters clean, doing pest control, servicing HVAC units, and making sure that landlord insurance is up-to-date. Some other landlord duties include landscaping, cleaning common areas like lobbies and hallways.

In addition to these routine duties, landlords also must field calls 24/7 for things like plumbing issues, no heat, or blown fuses. Larger projects like repairing storm damage, fixing burst pipes, and replacing broken appliances are often urgent and costly.

There are ways to keep property maintenance costs down but it is important to keep the property in good shape, and that costs money. Creating a budget for day-to-day maintenance as well as other larger, unexpected costs and major upgrades is an important part of preparing for tenants.

Setting aside a portion of rent revenue to budget for maintenance upkeep is a way to stay ahead of these things. Consider setting aside around 50% of rental income for repairs, taxes, insurance, and general maintenance.

When to Hire a Property Manager

It is no secret that being a landlord is a lot of work. From advertising to running background checks to doing maintenance, there are many different roles that a landlord has to cover.

When things become too overwhelming, it is time to get some help. Yes, it will cost you something, but there are countless benefits. Property management companies have the skills and resources that often allow them to do the job more efficiently than a single owner. Plus, hiring a property manager means no more late-night calls, no more chasing down late rent payments, and any other unpleasant chores.

Property management companies either have their own staff, or a network of plumbers, electricians, and other contractors for just about anything. A property manager will even take care of evictions if necessary. Often, hiring a property manager allows an owner to work on growing the business because they do not have to focus on all of the details every day.

At Select Leasing & Management , protecting your investment is our top priority. If you are looking for help with your property, contact us .

Getting the Most Out of Renovating Older Apartments and Investment Properties

Tue, 01 Mar 2022 16:00:07 GMT

In St. Louis there are single family homes and apartment buildings constructed in every decade going back more than a century. These older properties have the potential of being vintage gems—or rundown eyesores. The difference, when it comes to investment properties, is how much time, effort, and money an owner is willing and able to invest in renovations.

How a rental property owner approaches renovating older apartments will be different for a 100-year-old building and one built 30 years ago. But no matter the age, updating and renos are a necessary—and beneficial—part of owning investment properties.

Boost Investment Property Bottom Line by Renovating

Even the nicest apartments can’t stay that way forever. Time, tenant wear-and-tear, and evolving standards and styles mean that, eventually, properties will need a refresh—if not a total upgrade. While renovating older apartments can call for a significant investment, it can also provide exceptional returns.

Whether rehabbing a distressed foreclosure bought for a song, or modernizing a property owned for years, renovating older apartments has distinct advantages:

Attract better tenants. Landlords who care enough to fix up older apartments are more likely to attract tenants who care about the condition of their home. On the flipside, renters in rundown units might feel free to be messy or even destructive.

Increase rent revenue. It goes without saying that the nicer the apartment, the more people are willing to pay. An older apartment that has been updated and modernized is more desirable than one that needs work. Money invested in renovations can be recouped, at least in part, by raising rent .

Reduce maintenance costs. When things are old and worn out, fixing them again and again will eat away the maintenance budget and the bottom line. New features in investment properties (think HVAC, windows, fixtures, appliances) can save on repair costs in the long run.

Improve resale value. Whether an investor intends to flip or keep an investment property, renovating will help increase the value of the real estate.

Tips for Making Renovation Decisions

A successful project always starts with a well-thought-out plan and some careful decision making. Consider the following when planning to renovate older apartments:

Set a budget. When renovating older apartments, it can be easy to go over budget. Landlords need to know what they can afford (or borrow) and how it aligns with cost estimates for each part of the project. Talk to financial advisors and contractors to understand what is realistic.

Expect the unexpected. Renovations have a tendency to uncover the unknown—and that can be expensive! Finding mold behind the drywall or that the wiring was done incorrectly can add to the list of projects in an old apartment building. And these “surprises” often must be fixed first for safety’s sake.

Hire professionals. It is best to leave substantial renovations to the experts. Find contractors who are reliable and know their stuff. Property management companies can be a great help in renos: They typically have a wide variety of trusted resources and can even help coordinate the work.

Prioritize. When it comes to renovations, kitchens and bathrooms are considered “high value rooms” that appeal to buyers and renters. But renovating older apartments might mean there are more important things to address such as new electrical, plumbing, or HVAC. Landlords need to pick their battles to get the most value out of their renovation budget.

Keep or scrap. There can be a lot of charm in older apartments. Landlords must decide what features add to the vintage look (built-in shelves, crown molding, or a stained glass window), and which are just old or inefficient (antique light fixtures or a tub without a shower).

Target the market. Understand what the target tenants want in an apartment and invest money there. For example, if renting mostly to families, having a more functional kitchen or adding even a half-bath can be a great idea. A building catering to students of a nearby university will do well if there is good security and units are Wi-Fi-ready.

Choose materials wisely. Remember that investment properties can potentially have a lot of different tenants and some may not take very good care of their surroundings. Pick things like flooring, countertops, and fixtures that are practical and able to withstand heavy use. Stay away from the upper and lower end for quality and price ranges.

Respect tenants. Ideally, renovating older apartments happens while they are vacant. But this is not always possible. If work is to happen while units are occupied, give tenants 60 to 90 days notice. Explain what will happen and how you plan to work around their schedules. Hopefully, they will see the planned improvements as being worth the inconvenience.

Start With a Simple Refresh

When it comes to renovating older apartments, safety issues come first. If there are hazards such as windows that don’t lock or loose banisters, those of course need to be addressed immediately. Once those are done, landlords can turn to other ways to improve the property.

When the budget is tight, some small changes can make a difference. Of course, every time a tenant moves out, the apartment should be thoroughly cleaned and things repaired. Beyond that, the following are relatively inexpensive things that serve to refresh the property:

Paint walls.
Replace carpet and tile.
Update light fixtures.
Change cabinet hardware.
Refresh landscaping and the exterior of the building.

Renovating Older Apartments Takes More TLC

As a building gets older, more effort is needed to update and modernize it. As the budget allows, the following investments will enhance the tenant’s experience and make the property more valuable:

Update the electrical system, especially if it has old-fashioned knob and tube wiring .
Replace rusting galvanized steel pipes.
Improve energy efficiency with new windows, HVAC, or water heater. Add insulation.
Consider renovating the kitchen with new countertops, cabinets, floor, and appliances.
Redo bathroom tile, vanity, and tub.
Old apartments often have small closets. Reconfigure unused space or add closet racks and shelving to maximize storage.

A Total Transformation

Investors who have the funds may choose to do a total gut rehab and completely transform rental units. Changing the floorplan is a large undertaking, but with the help of an architect, it can be done.

When space allows, adding a functional room will instantly increase the amount of rent that can be charged. Perhaps a dining room or enclosed porch can be reimagined as a bedroom or office. Or a section of a large bedroom converted to an en suite bathroom. Knocking down walls can provide an open floor plan which is not common in old buildings.

Short of creating more square footage out of thin air, the possibilities are endless for someone with the time and money to invest in renovating older apartments.

Renovating ROI

Older apartments can be great investment properties, as long as landlords keep them up-to-date. This means making periodic renovations to keep units competitive in the rental market.

The necessary changes can be a significant investment. But improved occupancy and higher rent revenue will almost certainly result. And newer features mean less day-to-day maintenance and repairs. If employing a property management company like Select Leasing & Management , discuss the changes with them. They can offer advice and resources to address the projects with the best ROI.

Landlords who have made the effort to renovate older buildings agree: It’s worth it.

Image by Canva.com

How Much Does Rental Property Management Cost?

Tue, 01 Feb 2022 16:00:27 GMT

Rental property owners have two choices when it comes to management. They can do it themselves, or they can hire a property management company. A landlord with only one or two rental units located close to home might be successful at self-managing, and for the cost-conscious, the DIY approach is tempting. But while the financial cost might seem lower, that is not always the case once you crunch the numbers.

On the other hand, someone who owns multiple units, lives far away, or has a full-time job and family obligations can soon feel overwhelmed. They simply can’t do it all. In this case, going it alone can cost dearly in other ways like time, energy, and stress.

Return on investment is the number one concern of anyone who owns rental real estate. The first step in doing that calculation, then, is to understand how much rental property management costs.

And, not to spoil the ending, most property owners we deal with have discovered that having an independent company take care of the day-to-day needs of their property management is well worth the cost.

How Property Management Companies Calculate Fees

So, how much does rental property management cost in terms of fees paid to a management company?

Management companies typically start by charging a minimum fee based on a percentage of monthly rent. This base rate averages about 8% to 12% of the monthly rent collected. On top of that, they may offer additional services at an additional charge, according to the terms of the contract.

So, a house renting for $1000 a month could cost a landlord anywhere from about $80 to $120 each month for management services. An apartment house with 10 units could cost $800 to $1200 each month.

Several variables determine where on the percentage scale a rental property might land:

Property size. A large apartment complex means more work for a management company than one single-family home. It will probably include public areas that must be cleaned and maintained as well as multiple dwellings and tenants to deal with.
Condition. Brand new, high-end properties may cost more to keep in good condition. On the other hand, an old property that requires constant repairs might require a lot of attention. Companies will likely consider the probable workload when setting a price.
Location. Just as real estate prices vary from the coasts to the Midwest, and from urban areas to rural, so do rents, and therefore property management fees. In addition, buildings in high-demand neighborhoods may fetch higher fees with luxury amenities to care for (pools, fitness centers, meeting spaces) and keep to certain standards.

Companies will look at all of these factors, along with the level of service they can offer, to determine how much their rental property management will cost.

What Landlords Can Expect from the Base Rate

There are certain services that are built into the typical base rate contract for property management. These include:

Rent collection and processing
Accounting and providing reports to the landlord
Regularly scheduled upkeep and occasional repairs
Emergency maintenance
Contact with tenants for maintenance and repair requests, complaints, and other issues

In short, a property management company takes care of the day-to-day operations at the property, keeping it clean and in good repair. They act as the liaison between the landlord and the tenants for all communications. A property manager might have an office onsite, as in large apartment complexes, or work from their own office and be available when needed.

Find Out About Additional Charges in the Contract

Every contract is different, so it is important for landlords to understand exactly what their minimum payment will get them, and what additional services will cost. For example, Select Leasing & Management includes a marketing plan to advertise and show properties to prospective renters. Other companies can charge extra for this.

Luckily, contracts are almost always negotiable. It should be noted, though, that any add-ons to a company’s basic list of services will undoubtedly result in a higher percentage of rent charged.

Following are some common details to look for when negotiating a contract with a management company:

Set up fee. Usually $300 or less, this one-time fee pays for the paperwork to set up accounts and transition management responsibilities to a new property management company.
Rent collected vs. rent due. Look for a contract that charges its percentage based on rent collected instead of rent due. When tenants are late or do not pay their rent, this keeps fees in line with actual cash flow.
Vacancy fee. Property managers still need to maintain empty apartments. They may charge a reduced rate for upkeep until they find a new tenant.
Lease fee. Sometimes called a tenant placement fee, this covers expenses for screening potential tenants, move-in inspections, and drawing up the lease . It may be refundable if a tenant ends up being evicted.
Evictions. Property management companies can handle eviction proceedings when necessary. They will charge for their time and legal counsel.
Repairs and large maintenance projects. Property management companies may have workers on staff to handle this work, or they may hire outside contractors on an as-needed basis. They may require a reserve account that they can draw from to pay for these (and provide receipts) or pay for things themselves and bill the landlord (usually adding a markup).
Approval. Property management contracts should spell out which decisions they can make about the property and which will need approval from the landlord. For example, anything over an agreed upon dollar amount might need the landlord’s consent.
Contract termination charge. Should the landlord decide to switch rental management companies or otherwise end the contract before it expires, they will usually owe a termination fee.

Landlords must be sure that they understand the terms of the contract and what property management is likely to cost each month—especially if a management company’s base fee includes only the essentials. These additional charges can pile up fast.

The Cost of Cutting Corners

While rental property management costs might seem high, the services they provide are valuable. If a building lacks basic maintenance, or repairs are put off or done haphazardly, the property’s condition will deteriorate.

Property management fees also pay for the company’s expertise in finding and keeping good renters. Screening and background checks are essential. Without them, bad tenants can ruin rental units and drive away good tenants. It will end up costing the landlord more to evict residents, clean up messes, and deal with dropping property values.

Benefits Besides Money

Getting the right rental property management company on board saves money in the long run. Not only that, the expenses are tax deductible . But the benefits go beyond financial. With a property management company in charge of day-to-day operations, landlords will have time for their own homes, families, and leisure.

Most of all, they will have the peace of mind that everything is under control at their rental property. We think that’s worth the price—and then some!

Cover image by Andy Dean by Canva.com

Questions to Ask a Real Estate Agent When Buying an Investment Property

Tue, 04 Jan 2022 15:45:02 GMT

Buying investment properties is not like buying a home to live in. The goal is profit, rather than personal preference and comfort. This changes the concerns a buyer has as well as the questions they need to ask a real estate agent.

Finding the Right Real Estate Agent for an Investment

Not just any realtor will do when buying an apartment building or other rental property. It is important to find someone who is investment-focused in the listings they handle.

Investment real estate requires a different skill set than finding homes for individuals. Buyer’s agents for houses will spend a considerable amount of time learning about a family’s needs and wish lists so they can help them find a house where they will be happy. Agents for investors also get to know their clients, but more from the perspective of their business goals, so they can offer buildings with earning potential.

The first question to ask a potential agent is about their experience with investment and rental properties. What is their knowledge of the local rental market? What connections do they have in the rental real estate community? How many successful deals have they made?

Zeroing in on Your Investment Goals

In addition to all of the questions a buyer should ask an agent, they should also look for a realtor who asks them a lot of questions.

A good real estate agent will take the time to find out a buyer’s business objectives for the property. They may have different suggestions for someone who is venturing into investment property for the first time as opposed to someone adding to an already extensive portfolio.

Some buyers would like to find a property that is well established and already occupied by tenants . Others may have aspirations to renovate and update an older apartment building. Or repurpose a commercial property or large home into rental units. The more an agent knows you, the buyer, the better they can help you zero-in on the right property.

What a Buyer Needs to Know About the Rental Market

Real estate agents make it their business to know the current trends and statistics of their local real estate market. For investment-focused agents, that means knowing the characteristics of local renters and the places they live .

The questions that buyers ask should include the following:

How do the available properties’ vacancy rates compare to the local average?
Is the area “up-and-coming” or on an economic decline?
What new things might attract renters in the area? (For example a new shopping center, employment opportunities, revived entertainment district, etc.)
What is the average rent for the market? What amenities are renters in the area willing to pay more for?
What type of renters live in the area? (Are they primarily workers at a nearby large corporation? Students at the university? Singles or families?)
Is there a preference in the rental market toward apartment buildings, townhomes and duplexes, or single family homes?

As a buyer, you might already know a lot about the area in which you are shopping for investment properties. But real estate agents can fill in the gaps to be sure that you can find the types of properties that fit your goals. For example, someone looking for quiet, long-term tenants might not be interested in a building full of college students with short-term leases.

What to Ask About the Building

As with any real estate purchase, the condition of the building is obviously important. Inspections will show if things are not up to code or will need attention. When buying investment property, there are a few additional concerns, not just about the state of the building, but the status of its tenants.

One question that can be helpful is this: “Why the owner is selling?'' Are they retiring and simply getting out of property investment altogether? Or are they liquidating just one of the buildings in their portfolio? If it is the latter, why this particular building? Has it been a bad investment for them?

Reduced property values in the neighborhood or crime might make it a bad choice. Other issues, such as tenants who don’t pay, rundown conditions, or a lack of effective management might be able to be fixed with the right amount of attention and capital.

Owners can sell a property while people are living there and transfer the leases to a new owner. This can be a benefit because revenue will be coming in immediately. But an owner could potentially fill their apartments without doing a proper screening , then use their 100% occupancy rate as a selling point. Buyers must be sure the data they get is about “effective” occupancy—meaning tenants who are in good standing and paying their rent.

What Type of Landlord Do You Want to Be?

Buying investment properties means becoming a landlord. Will the buyer self-manage the property or use a leasing and management company? Will they stick with the existing management company or hire their own? These decisions will shape the next set of questions for a real estate agent and any management company that is currently taking care of the building.

The following questions are important to ask of any property management company, whether deciding to buy the building they manage or looking for a new company to contract with :

What services are included in the company’s fees ?
How do they advertise and market the property?
What is their tenant screening process?
What routine maintenance is performed and what is the procedure for doing additional repairs and larger maintenance projects?
What major work has been done recently and what is expected in the next year or two? (For example new roofing, flooring, HVAC, etc.)
Are there any problem tenants currently in the building? (Rule breakers, late rent payers, etc.)
Do the tenants typically get along with management and each other?

In some cases, a real estate agent may know the answers to some of these questions, or they can arrange for a buyer to meet with the management company to discuss these and other issues.

Real Estate Agents and Property Managers—a Natural Fit

Some leasing and management companies work closely with one or more real estate agencies. Those realtors do not require that a client use the company, but it is one of the many connections they can offer to enhance the services they provide.

Select Leasing & Management in St. Louis, for example, is affiliated with Berkshire Hathaway HomeServices Select Properties . Together the two companies help many real estate investors find lucrative investment properties, and help manage them so they retain their value for years to come.

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Why, How, and When to Switch Management Companies

Mon, 06 Dec 2021 02:35:38 GMT

In a perfect world, a property management company would provide exceptional service indefinitely. Sometimes, however, rental property owners might consider switching. Handing over control to a new manager takes some planning and effort on the landlord's part. It should not be done on a whim. Knowing why, how, and when to make a switch can help an owner recognize whether or not it is worth the hassle.

Why: Reasons to Switch Property Managers

If there are problems with a management company, the landlord should take the time to discuss them with the property manager before making any decisions. If things don’t improve, it is often clear that a change is necessary. Other times, the choice is not so obvious. Here are some red flags that lead sway landlords:

Increasing or unexpected costs. Property management fees, and what services they include, should be outlined clearly in the contract. (For example, Select Leasing & Management charges 10% of monthly rent.) If up-charges or “special” fees start to pop up without a valid explanation, or beyond what is reasonable , it might be time to shop for a new management company. But a company trying to convince a landlord to sign on with a super low introductory price might be too good to be true. Be sure to look for value rather than simply price.
Run-down property. A management company’s job is to protect the owner’s investment by maintaining the property. Maintenance issues can pile up, turning minor inconveniences into major problems. These will cost more money to fix, make rental units less desirable for tenants, and affect property values.
Tenant move-outs. High turnover is expected if the neighborhood has deteriorated or if the economy is bad. But if these have not changed, the problem is probably with the building. If people, especially long-time tenants are moving out, it might be a signal that changes are in order.
Renter complaints. An uptick in tenants complaining about the condition of the property, other residents, or the management company, should be taken seriously. An unhappy tenant who’s concerns are ignored will look for another place to live.
Sketchy situations. If illegal or dangerous activity such as vandalism, theft, or harm to other tenants occurs on the premises, something needs to be done. It could be a failure to perform adequate background checks , or to enforce the rules in regards to behavior or visitors. If the property management can not provide a safe environment, it needs to be replaced.
Outdated operations. Today’s landlords and tenants expert property management companies to provide up-to-date services. This includes things like being able to make maintenance requests online or set up auto-payment of rent. Many offer online portals where owners can view their financial statements and keep tabs on their property. It might be time to find a new company if they are still requiring written checks and using snail mail for reports that are already out of date.
Lack of communication. Landlords need regular updates about what is happening with their property. If a property manager does not offer routine status reports, or worse, can not be reached when needed, it is time to switch to a company that is more responsive.

How: Follow These Steps to Switch Management Companies

Once the decision has been made to switch management companies, there are some things owners need to do to prepare.

Unless the situation is urgent, for example a management company that is going out of business or breaking the law, it is a good idea to research new providers before cutting ties with the old one. It is important to interview and vet managers to get all questions answered before committing to a new contract. The process can take some time, so start shopping around as soon as possible.
Review the contract with the current management company. The wording should spell out the owner’s rights and obligations. It may dictate how much notice is needed, or have a clause allowing for immediate termination of the contract in certain situations.
Notify the outgoing property management company in writing. Include the date when the contract will end and make all expectations known. For example, when will the company’s employees vacate the rental office, what equipment will they take and what belongs to the owner, etc.
Notify any state and local agencies with an interest in the transfer. For example, insurance companies, taxing authorities, banks, and vendors—anyone the prior company dealt with on the owner’s behalf.
Notify the tenants of the change. Provide them with new contact information for maintenance and repairs. If leases were written with the property owner’s information , they can remain as is. If they were written using the property management company’s information, they will need to be modified or an addendum attached. The new property management company should be able to help with this task.
Arrange for the transfer of all accounts, records, master keys and codes from the old company to the new one. Again, the new company can usually help facilitate these changes.

When: Timing the Transition

It is time to switch management companies when the pros of doing so outweigh the cons. On a more practical note, an owner can be strategic about the actual transition.

First, both parties will need to abide by the contract. It may require a specific number of weeks’ or months’ notice.

It is also important to find out how quickly the new company will be ready to take control of the property. Ideally this should be determined before giving notice to the old company so there is no lapse in services for the tenants.

If the owner can choose the time to terminate the contract, immediately after a rent cycle is a good time. Right after the grace period for rent payments passes, it can be assumed that there is no unpaid rent to complicate the transfer of money and accounting records.

Finding and Keeping the Best Property Management Company

Whether picking a property management for the first time, or switching to a new one, there are some things that rental owners can do to find and keep one that will work well for them. After all, avoiding problems in the first place can maintain stability for the owner and the tenants.

Owners must check in on their property and their property managers on a regular basis. The best property management companies work and communicate in such a way that the landlord is always kept apprised of the situation. Still, periodic check-ins either in person or by phone are never a bad idea.

It is also essential to address issues as they come up. An unexpected charge, the loss of a long-time renter, or the need for an eviction are all examples of things that warrant a conversation with the property manager. Allowing the management company a chance to explain or to correct things they are doing wrong might resolve things. It might even avoid the need to switch companies at all.

Owners hire someone to manage their rental units so they can eliminate the day-to-day work while protecting their investment. While the goal is to find a company that can provide the best possible service for the long term, there are times when it makes sense to switch.

The transition can be challenging and should be well thought out. But it is often worth it when it means a better managed property and peace of mind.

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What All Landlords Need to Know About Premises Liability

Tue, 02 Nov 2021 14:30:02 GMT

Landlords and property management companies owe their tenants a safe place to live. If someone gets hurt on the property, it could result in lawsuits and financial losses due to the legal concept of premises liability .

Premises liability holds building owners and property managers responsible when a tenant or guest suffers a personal injury on the premises. The injured person, however, needs to prove that the landlord or manager caused the incident by being negligent or reckless.

It is important to make sure that whoever is in charge of taking care of your rental property—whether you do it yourself or hire out to a third party—that it is being done with the renters’ safety and security in mind. Knowing what premises liability is all about will help avoid dangerous conditions where someone can get hurt, as well as protect your financial investment as an owner.

Premises Liability Claims

The most common type of premises liability case brought by tenants are the result of injuries from tripping, slipping, and falling. What happens inside an apartment is usually not the landlord’s responsibility, but anything in common areas can be . Common areas include the lobby, interior or exterior hallways and stairways, laundry or workout room, pool, sidewalks, or parking lot. A broken step or banister, buckled flooring, uneven sidewalk, or ice and snow on a porch or walkway might cause someone to fall and hurt themselves.

Hidden or latent defects in a building might also be the basis of a premises liability claim. These are specific dangers that a landlord or a property manager might know about, but do not disclose to a tenant, and that the tenant would not necessarily notice day-to-day. Examples could be faulty wiring or the presence of a toxic substance.

Property management comes with a duty to repair things that break or can cause harm. Neglecting repairs can open up a landlord or a hired manager to premises liability claims. Things must be fixed competently and within a reasonable amount of time. That means making sure that hired workers have the appropriate credentials or licenses and that all repairs meet legal requirements and local codes.

One of the biggest concerns of tenants is their personal safety . Well-lit, secure entryways, working locks, and in some cases security cameras and intercoms are a must. If someone gets hurt as the victim of a crime on the property and can prove that negligent property management allowed it to happen, they could have a case of premises liability against the manager or the owner.

When Owners and Managers Are Liable—And When They Aren’t

Failing to fix a problem is not the only requirement for an owner or property management company to be deemed responsible for an injury. First, they must have had knowledge of the issue. Then, knowing about it, they must have either ignored or delayed doing what was necessary to fix it.

Repairs must happen in a timely manner . The amount of time that is considered reasonable is often a point of debate. A judge or jury might have to decide what is reasonable for a specific circumstance.

Let’s say that a tenant has informed the landlord that a cracked floor tile in the lobby is becoming a trip hazard. Several weeks go by and there is no attempt to fix it. If someone trips and falls, breaking their wrist, they may have a claim against the landlord.

Perhaps the landlord has made arrangements for someone to fix the tile, but it isn’t scheduled for several weeks. This does not necessarily protect them from a claim, because the hazardous condition was still present. If, however, they put up a caution sign or protective barrier around the spot, and the tenant ignored it and fell, the landlord would most likely not be considered negligent.

What’s in the Contract Makes a Difference

When the owner of rental property hires a property management company, who is liable if someone gets hurt? An injured tenant could try to sue both of them.

Building owners need to be sure they understand exactly who is responsible for what when they contract with a third party for property management. A good company will take the necessary steps to keep the building in good shape and ensure that tenants are safe. Details about how they will do that should be spelled out in their contract.

For example, a management company contract might promise that all repair requests will be addressed within a certain timeframe, say 24 hours, or offer a guarantee that all workmen will be vetted and bonded. If a premises liability claim is ever brought against one or both parties, the contract could shed light on who bears responsibility.

Safeguards Against Premises Liability Cases

In a perfect world, rental property managers would make every repair immediately and no one would ever get hurt. But accidents happen. And in some unfortunate circumstances, rental managers or owners neglect their property and their tenants.

To have a case, a tenant must prove that they sustained their injuries on the property and that it happened because the owner or manager failed to provide a safe environment.

The following tips can help landlords and managers prove that an incident was not their fault, or in some cases, might avoid the accident altogether.

Have a written maintenance checklist. Check for necessary repairs on a routine schedule and fix them as soon as possible.
Make reporting problems easy for tenants. Let them know who to contact and encourage them to let management know if they experience anything that could become a hazard.
Keep a record of all maintenance requests and reported problems.
Commit to a specific timeframe to address repairs.
If repairs can not be completed right away, take steps to inform and warn tenants of the problem.

These steps might not stop an injury from occurring. However, they can go a long way in showing that the landlord took steps to keep their tenants safe. Not only is this simply the right thing to do, but it could also go far in defending against a premises liability case.

Premises Liability Insurance

A claim from a tenant will typically be settled out of court with an insurance company. As business owners, both landlords and property management companies should carry a general liability insurance policy. Both should also make sure they are covered in regards to premises liability issues.

There are a number of things to look for when searching for a property management company , and liability and insurance coverage is one that rental property owners should explore with potential candidates. Again, specific responsibilities can be written into their contract.

It is important to note that simply having premises liability insurance will not necessarily shield someone from having to pay damages. If negligence on the part of an owner or manager can be proven, an insurance company may refuse to pay. Landlords must safeguard their tenants and must make sure whoever they hire to manage their property does too.

Hire the Right Leasing and Management Company

The goal of every landlord should always be to take care of problems quickly, invest in improvements, and maintain good communication with the tenants . This is why it is essential to find a reputable company to handle leasing and management services.

Select Leasing & Management has been caring for rental properties throughout the St. Louis region for decades. Keeping your tenants safe and secure while protecting your investment is our top priority.

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4 Reasons Why Landlords Raise Rent

Tue, 05 Oct 2021 14:30:02 GMT

A raise in rent is typically not welcome news for tenants. It’s not particularly pleasant for landlords either. But there are valid reasons why they must sometimes raise rent amounts. Approaching it for the right reasons, and in the right way, will make it easier for both sides to deal with.

Top (Legitimate) Reasons Landlords Raise Rent

Tenants may be unhappy or even angry when the rent goes up, but it is important to remember that owning rental property is a business. And while landlords obviously want to make money, they rarely raise the rent just to increase their profits. There are a number of reasons why they must raise rent to keep their business afloat. Here are the 4 most common:

1. Increase in Expenses

No one is immune from the pinch of higher prices. Everyone feels it with each trip to the grocery store and gas station. The costs “behind the scenes” in a rented house or apartment go up, too. Taxes and insurance on the building might rise. So will the labor and materials necessary to fix things and do normal maintenance. As with any business, property owners do what they can to keep costs under control , but they have certain margins of profit they hope to make. In some cases it is a choice between raising rent and letting the property’s upkeep slide—something that tenants and landlords can both agree is not a good idea.

2. Renovations or New Amenities

At some point, every building will need a new roof, new HVAC, or replacement windows. The rental units will need to be updated periodically too. New appliances, countertops, or flooring will keep the apartment fresh and a desirable place to live. Or, a landlord might decide to add a major new amenity for the tenants’ benefit like a pool or workout room.

All of these things can improve the renters’ daily lives. Changes like these will also help keep the property competitive with others in the market. Good landlords are continually looking for ways to make their properties better, and quite often the only way to raise the money to pay for them is to increase the rent.

3. Improvements in the Local Market

You may have heard the phrase “a rising tide lifts all boats.” When a neighborhood improves, so does the prospect of living there. And when an area suddenly becomes desirable, rent amounts rise too.

When new businesses move into a neighborhood, or if a school, library, park, or other community-friendly place is built, people are more likely to want to live there. A large employer building a location nearby or the addition of public transportation routes can have the same effect.

It’s simple economics: Increased demand for rental units will drive prices up. Landlords need to review what comparable apartments are going for to set their prices. An up-and-coming area is almost certain to see a bump in rent. Tenants who are unhappy about the increase will see that they won’t necessarily find anything cheaper in the same location.

Market demand for certain types of dwellings can cause an increase in rent as well. For example, a landlord might leave the rent the same for two-bedroom units but raise rent for one-bedroom units if for some reason there are more people seeking them out.

4. Adjusting to Overall Market Demand

Supply and demand doesn’t just have an impact at the local level. An increase or decrease in renters nationwide will also affect rental prices. The St. Louis Realtors’ housing report for August 2021 showed that many would-be homeowners are sticking with renting for the time being. Many of them have been able to find homes for sale in their price range, and those that are affordable are snatched up quickly.

Smart landlords keep an eye on these market trends and in response, raise rent on their investment properties. The national median rent increased by 11.4% in the first half of 2021. This is unfortunate for renters who are saving up to buy a house , but until something changes in the overall housing market, rent increases might be unavoidable.

Raising Rent the Right Way

When a landlord decides it is the right time to raise rent, it is important to do it in the right way .

Depending on the state or municipality, there could be strict guidelines about how to manage a rent increase. In general, landlords cannot raise rent until the end of the lease agreement . How much notice a tenant should have, or the percentage increase allowed at one time, can vary from place to place. Fair housing laws prohibit discrimination, so landlords can not, for example, favor some tenants while raising rent for others in the same type of apartment, nor raise rent simply to force some people out.

One thing that renters (and many landlords) do not realize is that when rent goes up, security deposits will need to increase in lock step. Security deposits are usually based on the monthly rental amount; if rent goes up from $1000 to $1100, a security deposit of first and last month’s rent will trigger a request for an additional $200 to take the security deposit from $2000 to $2200.

How to raise rent in accordance with the law is something that all landlords must know. Owners who choose to hire a leasing and management company such as Select Leasing & Management can avoid much of the hassle, as well as dealing with potentially unhappy tenants.

Rent increases might be initiated by the owner, or suggested by their management company based on their monitoring the local market. Either way, a property management company can not raise rent without the landlord’s approval , unless it is written into their contract.

Avoiding the Hassles of Raising Rent

The best way to avoid the issues that come along with rent increases is mentioned above: Hire a property management company. Aside from that, we have some additional recommendations to feel less resistance to a necessary rent increase:

Eliminate confusion by putting information about the increase and new terms of the lease in writing.
Give the proper amount of notice. This may vary depending on the location, but in general, month-to-month leases require 30-days notice. Longer leases should have the timeframe written into the lease agreement . If possible, landlords can consider giving even more notice than is required. This gives tenants more time to budget for the increase. If they must move out, it gives them additional time to search for a new home.
Instead of a huge jump every few years, consider incremental increases every year. These may be easier for tenants to manage.
If the increase is tied to higher costs or new amenities, share that information. The tenants will be less likely to be upset if they understand that there is a good reason behind it.

Remind tenants as the time of the increase approaches, but be understanding if they forget the first time. They may be in the habit of writing a check for the old amount or have forgotten to update their autopay information at the bank. Giving them a gentle reminder is better for the landlord/tenant relationship than getting angry.

Is it Time to Raise Rent?

When it is time to raise rent, it does not have to be unpleasant. Most tenants realize that rent increases are sometimes necessary. When landlords have a valid reason and approach the situation with professionalism and understanding, they are more likely to get cooperation and retain their good tenants.

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What Makes Someone a Good Tenant? What Landlords and Tenants Both Need to Know

Tue, 07 Sep 2021 16:59:29 GMT

It’s obvious why landlords want to find good tenants. Owning rental property is a business. Without good tenants who pay their rent and take care of the place, property owners will lose money on their investment.

There are good reasons for renters to be seen as good tenants, too. Being on good terms with the landlord can ensure they have a nice place to live for as long as they want to stay.

Being a good tenant or a good landlord does not mean doing anything extraordinary. But there is more to the tenant-landlord relationship than just paying the rent on time or providing four walls and a roof over tenants’ heads. The keys are communication, cooperation, and common sense—for both tenants and landlords.

How to Be a Good Tenant

Pay the rent in full and on time. Do not damage the property. Follow the rules of the lease. No one will argue that these are signs of a good tenant, but there are some simple things renters can do to move into the category of not just good, but great, tenants.

Why does this matter? Because most people prefer to live in a safe place where they are treated with respect and can go about their day-to-day business without drama and conflict . And a tenant who proves themselves to be reliable, responsible, and respectful will almost always receive similar treatment from their landlord.

Communicate Like a Grownup

So many problems can be resolved or avoided in the first place with good communication. Good tenants keep their landlords posted on important information that could impact the property or the lease agreement. Some examples:

Give the landlord a heads-up if you might be a few days late with the rent. They will be more understanding if they know when to expect it and if the delay does not become a common occurrence.
Inform the landlord right away of any maintenance issues, even if they seem minor. A tiny leak under the sink could turn into a flooded apartment if a pipe bursts. A loose board on a stairway could result in someone falling and getting seriously hurt. A little information shared now saves complaints down the line.
Let the landlord know of any life-changing events, like a job layoff or serious injury or illness. It will prepare them in case you need to ask for an extension on rent payments, or even a parking space closer to your door.
If a partner or roommate moves in or out, a cousin comes to stay for a few weeks, or even if you get a new pet, let the landlord know. They need to know whether an unfamiliar person (or pup) belongs there or is trespassing.
Landlords need to know how to reach tenants in case of an emergency. If any contact information (phone number, employer, emergency contact) changes, be sure to let the landlord know.

Know Your Lease

There is a lot more to a lease than just the price and due date for the rent. It gives tenants details about how to submit maintenance requests, who is responsible for paying utilities, when and where to put out the trash, special requirements to control pests , and much more. It contains information that is not only helpful but legally binding. If a renter breaks the rules laid out in a lease agreement, they can be fined or even evicted.

Good tenants are aware of what is in the lease. If they don’t understand something, they ask. Most importantly, they understand their responsibilities and that a lease is a legal contract. Some people even have an attorney look over the lease before signing it, just to be absolutely sure they know what is expected of them.

Don’t Bend or Break the Rules

Because the lease is a legally binding contract, good tenants do not bend or break the rules. Sneaking a kitten or puppy into an apartment that strictly forbids pets is never a good idea. The same goes for rules about smoking or subletting. Doing anything that is expressly forbidden by the lease is a sure way to upset the landlord and could potentially lead to being kicked out. And criminal activity is always grounds for eviction.

A landlord might make exceptions in some cases, especially if a tenant asks permission first. For example, if a tenant has a good reason for leaving before the lease is up, such as a job transfer or military deployment, the landlord might decide to allow them to sublet the apartment. Landlords will typically be much more accommodating if the renter has been a good tenant all along.

Advice for Landlords

It is not just up to a renter to be a good tenant. The landlord has responsibilities for the relationship to work well too. Landlords need to respect their tenants if they expect tenants to respect them and their property.

Make Sure the Lease is Clear

As long as it does not violate housing and discrimination laws, landlords can put all types of restrictions and requirements in a lease . That said, leases should be fair and not overly restrictive.

Landlords should never assume that something is common knowledge and therefore doesn’t need to be written in the document. Likewise, they should never assume that just because a tenant signs on the dotted line that they have read or understood everything they are agreeing to.

In addition to putting rules in writing, it is a good idea to verbally explain the expectations, ideally before the lease is signed. This gives new tenants the opportunity to ask questions and get clarification.

Treat All Tenants Fairly

It is illegal to discriminate based on factors such as race, sex, or sexual orientation. Good landlords are careful about showing favoritism to anyone, even a particularly good tenant. If one tenant breaks a rule, they should have the same consequences as another tenant who breaks the same rule. As noted above, however, a good tenant might take the extra step of informing the landlord or asking permission before doing something other than what the lease requires. In certain circumstances, a landlord might make an exception that is still ethical and fair.

Be Understanding—Within Reason

A good landlord gives good tenants the benefit of the doubt. Someone who consistently pays rent on time for years will naturally be given more leeway if they come up short one month than someone who is chronically late.

Or, someone who throws the occasional loud party might get a pass if they comply right away when they’re asked to be quiet. Someone who causes disturbances every weekend and gets belligerent in the face of complaints will get much less understanding.

Landlords need to understand that their tenants are human and may cross the line occasionally. How they respond to those missteps can determine how their tenants cooperate in the future. Asking a tenant respectfully to change their behavior will usually get better results than becoming angry, yelling, or threatening.

Tenant Screening Essential

The easiest way to ensure getting good tenants is to avoid renting to bad ones. This means doing thorough background check s on all applicants. This includes checking criminal history, employment and financial means to pay the rent, and their track record with other landlords.

Skipping tenant screening can cost money in unpaid rent or damage to the property . It can also put other tenants in danger. Good landlords do the work to weed out bad potential tenants, making room for good tenants.

Communication Works Both Ways

Good landlords communicate with their tenants, just as good tenants communicate with their landlords. They let renters know about things like upcoming maintenance or changes to the property. They proactively discuss lease renewals and rent increases. The more open they are with tenants the better the relationship will be.

Finding and Keeping Good Tenants

When both sides of the tenant-landlord relationship understand each other and work together, everyone wins. Landlords managing their own property will want to follow the advice above. For those who choose to hire a leasing and management company, it is important to find someone who shares the goal of being a good landlord and finding and keeping good tenants.

Select Leasing & Management understands this relationship and how to make it work.

Advice For Landlords: Keeping Property Maintenance Costs Down

Tue, 10 Aug 2021 15:00:54 GMT

There are three facts about rental property that landlords must never forget: It is an investment, they are running a business, and they have a responsibility to the tenants. Keeping up with effective maintenance and repairs is a necessity for all three. Without it, the investment will lose its value, the business will not make a profit, and the tenants will be unhappy, or worse—unsafe.

But maintaining an apartment building or rental houses can be costly. Landlords can not always simply raise the rent to make up for increasing costs. While there is little to be done about the fixed costs like property taxes, insurance, and utilities, a landlord can look for ways to save on property maintenance costs without compromising on the quality and timeliness of the work that gets done.

What Type of Maintenance is a Must?

Taking care of rental property falls into three categories: Basic caretaking or janitorial tasks, repairs, and large maintenance expenditures. These might happen on a routine basis or might crop up as emergencies. Either way, landlords need to be ready (and the money budgeted) to handle them.

Basic Caretaking

These are the day-to-day, weekly, or monthly tasks that must be done to keep a place clean and safe. In multi-family rental buildings this can mean sweeping or mopping common areas, mowing, shoveling snow, and replacing smoke-detector batteries. For single-family dwellings, it might include changing furnace filters, or providing them so tenants can do so themselves. Routine pest-control might be done for any type of rental residence.

Repairs

Things don’t break on a schedule. Fixing or replacing windows, fixtures, appliances, HVAC systems, or anything else that needs repair must be done quickly and with as little inconvenience to the tenants as possible.

Capital Expenditures

Any building will eventually need a new roof, windows, HVAC or other big-ticket item. Proper maintenance can extend the life of such things. Plus, routine attention will alert the landlord when the expense is necessary, rather than waiting until it becomes an emergency.

To keep property maintenance costs low, it is best to avoid letting anything become an emergency. Sticking to routine maintenance will keep things in good shape. Keeping a watchful eye out for problems won’t let things fall into further, more costly, disrepair. Here is our advice on how you can put that into practice:

Do Routine Inspections

Make it a point to inspect certain aspects of the rental property on a routine basis. Create a calendar of inspections and stick to it. For example, do a site visit to check the building’s basement for leaks, the shared spaces’ flooring and paint for wear and tear, evidence or pests, and the properties general appearance. Fixing things before they become problematic is almost always more affordable.

Safety and securing of tenants is of the utmost importance, so landlords should routinely check the building’s locks, lights, and security cameras if they have them. They should also look for fire hazards and check fire alarms and sprinklers. Making sure everything is ship-shape will help reduce the risk of an expensive and possibly tragic mishap.

Check In With Tenants

Successful landlords have good relationships with their renters . Reach out to tenants on a regular basis to ask about any problems or concerns. There may be something minor like a leaky faucet that they didn’t feel was worth contacting the landlord about. Or, they may have noticed their refrigerator doesn’t seem to keep things very cold. A leaky faucet is easily fixed but could signal a larger problem with the pipes. The fridge might be ready for replacement soon. Both are important for the landlord to know about. Small problems can snowball into larger, more expensive ones when they are left unattended.

Schedule Preventive and Seasonal Maintenance

Keeping things in good working order with preventive maintenance saves money in the long run. For example, regularly scheduled spraying for pests can eliminate the possibility of an infestation. Seasonal chores like cleaning gutters, clearing snow, and mowing the lawn will ensure the place does not get rundown. This, in turn, will keep the property desirable for tenants and keep down vacancies. No one wants to live in a building overgrown with weeds or where the sidewalks and entryways are filled with snow and ice or littered with dead leaves.

Individual rental units might need storm windows changed out for screens in the spring, and a check of the furnace in the winter and air conditioning in the summer. They should all have smoke and carbon monoxide detectors tested and batteries replaced on a regular schedule.

Build a Great Contact List

While many landlords think they can save money on property maintenance costs by doing it themselves. Unless a landlord has the skill and time to do projects correctly and quickly, they are better off leaving maintenance and repairs to the experts .

Every landlord needs a list of vetted, insured, and dependable vendors they can call on in an emergency as well as for routine maintenance and repairs. Creating this list before it is urgent gives the landlord time to shop around for someone who can do the work well for the best price.

Know when to Repair vs. Replace

Making smart decisions about whether to replace or repair something can make a difference in property maintenance costs. For example, parts or a repairman for an old appliance might be hard to find. And even if it is fixable, how long will it last after the repair? Another consideration is the tenant’s convenience. How long will the repair leave them without the use of that appliance?

Replacing expensive fixtures or appliances may seem more expensive, but if the repair won’t significantly extend the useful life of the item, it is better to get a new one. This is also a way to update a rental property. For example, a brand new stove or refrigerator might be a big upgrade, making it more attractive to the current and future tenants.

Consider a Professional Leasing & Management Company

One way to save money on property maintenance costs, as well as time and headaches, is to hire a professional property management company like Select Leasing & Management. Management companies either have their own maintenance staff or contract with local vendors. Because they manage properties for several different landlords, they are able to negotiate the best rates for the work that needs to be done.

Landlords who do not have the time to devote to maintenance and other tenant issues can rely on a management company to be their liaison. The company can handle a routine maintenance schedule and take care of any emergency calls. They will let the landlord know when larger expenses are on the horizon.

In addition to maintenance, leasing and management companies can take care of the administrative functions for a rental property such as finding tenants, doing background checks , collecting rent, and even starting eviction processes if that is ever necessary.

Landlords who put their trust in a professional leasing and management company rarely go back to doing the work themselves. Hiring someone like Select Leasing & Management is a great way to ease the burden of maintenance tasks and the costs that come with them.

Cover photo by Krasyuk by Canva.com

How to Save for a House Deposit While Renting

Wed, 07 Jul 2021 14:44:48 GMT

If you’re renting but hoping to own your own home, you may have wondered just how long it will take to scrape together enough for a downpayment. After all, life goes on and with it, living expenses—including rent that’s due every month.

Saving for a house deposit takes patience and some smart money moves. From common sense to creative, here are our favorite tips for building the nest egg that will help renters move into that nest.

How Much Do I Need to Put Down on a House?

The more specific a goal is, the more likely a person is to reach it. When it comes to a down payment on a house, first consider the price range for the type of house you are hoping to buy.

Some people insist that a deposit of 20% of the purchase price is the wisest move. A higher deposit will make it easier to secure a loan and lower monthly payments. That said, 20%, while admirable, is not always necessary.

According to bankrate.com , conventional loans requirements are between 3% and 15% of the purchase price. This means you might be able to buy a house sooner than expected, but you will pay more each month on the mortgage. And remember that expenses that were once the landlord’s problem will be yours when you are a homeowner.

The bottom line is that the more you can put down, the better. So start saving as soon as the idea of buying a home enters your mind.

12 Tips to Save For a House Deposit

Just like with any large purchase, there are many ways to save for a downpayment on a home. Some of these tips are small things that won’t have much impact on your day-to-day life.Others involve larger sacrifices that may be difficult. Remember the goal of turning the key to enter your very own home. If you are determined to make it happen—it’s possible—even while you are renting.

1. Out of Sight, Out of Mind

Set up a separate bank account for your house deposit savings. You will be less likely to spend the money if it is not commingling with the cash you use for bills and day-to-day expenses. You can even use direct deposit to put a portion of every paycheck aside.

2. What to Do With Windfalls

If you can, send any “extra” money directly to your house deposit fund. This could include your tax refund, stimulus payments, a work bonus, or even extra take-home pay from a raise. If you were getting by without it before, you won’t notice it isn’t available to spend.

3. Study Your Spending

Seeing where your money goes is often eye opening, and always helpful when it comes to budgeting. It’s not unusual to be shocked to realize just how much you spend on things that really aren’t necessary. Once you know where your cash is going, write up a realistic budget and stick to it.

4. A Dollar Here, a Dollar There

While examining the budget, there are a lot of little ways to trim spending without causing much hardship. Instead of driving to your favorite coffee shop, can you walk or ride your bike? Or maybe you could skip it altogether and make your coffee at home. Consider working out at home or the local park instead of the expensive gym membership. Or if skipping the gym is a nonstarter, maybe skip the expensive organic smoothie on the way home. And how many subscriptions and streaming services do you truly use on a regular basis? Little changes can add up to big savings.

5. Research Fixed Costs

There are expenses we take for granted that can sometimes be reduced. For example, have you reviewed your car insurance policy lately? You could find something more affordable. Check what you’re paying in bank fees. Even adjusting your thermostat by a few degrees can save money on utilities.

6. Pay Off Debt

Credit card debt, student loans, a car note—all of these not only affect your credit score, but can limit your options when shopping for a mortgage. Lenders look at a borrower’s debt to income ratio. Paying off debt will make you a better candidate with the bank and will score you a lower interest rate when you’re ready to buy the house of your dreams.

7. Wait on Big Purchases

Resist the urge to spend big while you are saving for a house deposit. Sometimes it is absolutely necessary, but if possible, wait to buy a new car, furniture, electronics or any big-ticket items. This is not the time to book an expensive vacation. Just remember that all of these sacrifices will be worth it when you can call yourself a homeowner.

8. Sell Your Stuff

Not only will selling excess stuff bring in some cash, it will also clear out some clutter. When you do move into your home, there will be fewer boxes to load. Today, there are online marketplaces for all types of clothing and home goods. If you are renting a house with a garage, you can have a garage sale (as long as your landlord approves). Or, find a friend or relative who is willing to let you use their yard or garage for a sale.

9. Side Hustles

You can consider taking on a second job or put your skills to work for a side hustle. Driving for Uber or Lyft is popular, but you could also consider babysitting, tutoring, landscaping, or any number of services that are in demand. It’s not for everyone and requires some upfront money, but many people enjoy success selling products through multi-level marketing companies.

10. Consider a Roommate

You will need to check your lease and get your landlord’s consent for this tip, but if you have the room in your rental, you might want to consider getting a roommate. Splitting your expenses for rent and utilities can give you a huge head start on reaching your house deposit goal.

11. A Change of Address

If your rental home is expensive, you might consider moving someplace more affordable. Remember that amenities like swimming pools and workout rooms may be bumping up your rent. And if you don’t use those features, you’re wasting money. Breaking a lease isn’t advisable, but if the rental agreement is coming to an end, it might be something to consider. While this tip is drastic, it can get you closer to achieving your goal—or at least getting there faster.

12. Rent-to-Own

You may be lucky enough to find a rental home that the owner is willing to sell to you. The two of you can enter into a rent-to-own agreement. This usually requires that you pay a one-time, non-refundable “option money”. This is typically about 2 to 7% of the purchase price. Over the next 1 to 3 years (whatever the two of you decide) you pay rent, with a portion going toward the down payment. At the end of that timeframe, you will have made a considerable dent in the house deposit amount. Plus, you can spend that time enjoying the home that will one day be entirely yours.

Saving While Renting: It’s Worth It

When you’ve finally saved enough and are ready to start shopping, the next step is to find a great real estate agent. We partner with Berkshire Hathaway HomeServices Select Properties . They are experts who work with new homeowners all the time.

Until that time, keep saving! All of the hard work and sacrifice of saving will be well worth it when you can finally call yourself a homeowner.

Cover photo by krisanapong by Canva.com

Property Management for Townhouses

Tue, 01 Jun 2021 15:15:02 GMT

Professional property management companies like Select Leasing & Management are a valuable asset for owners of rental properties. They maintain and manage rental units and take care of tenant needs. But properties like townhouses can benefit from property management services, too, whether they are owner-occupied or rented out to tenants.

What is a Townhouse?

Although there are many different styles of townhouses, there are some characteristics that they typically share. They can be thought of as a cross between an apartment and a single-family home.

What townhomes have in common with houses:

Each unit has its own entrance without a common lobby or entryway
Units can include a garage and driveway
Rooms may be on more than one floor
They may have a private yard or garden
It can be owner-occupied or rented out

How a townhouse is like an apartment:

Units share at least one wall with a neighbor
Two or more units are under a single roof
Units form a community; they often share public space and amenities
Someone other than the resident handles certain maintenance and repairs

Townhouses in an urban setting are often called rowhouses . Think of New York City brownstones as an example. These homes share walls and are grouped together on city blocks, but they each have their own entrance.

Suburban townhouses are a bit different, and are the type we are focusing on in this article. They are typically planned communities with uniform architecture. Units may be in groupings of two, four, or more units forming a neighborhood-type complex. Each unit has a separate owner, but because the dwellings share a roof, walkways, and lawns, there are Homeowners Associations overseeing the community as a whole.

The Role of Homeowners Associations in Townhouse Communities

Similar to a condominium complex, townhouse communities are ruled by a Homeowners Association or HOA. The HOA collects dues from the residents, which go toward paying for upkeep of the exterior of the buildings (painting, new roofs, security gates, etc.), shared spaces (landscaping, snow removal, etc.), and amenities (swimming pool, fitness center, etc.) Owners of the individual units are responsible for maintenance and repair of anything inside the townhouse.

A group of residents are elected to serve on the board of an HOA. These individuals are responsible for making sure that all of the necessary maintenance gets done by hiring the appropriate vendors. They are also tasked with enforcing a Declaration of Covenants, Conditions, and Restrictions (CC&R). The CC&R is a legal document that lays out all of the duties of the HOA and the rules that residents must follow. How strict these rules are is up to the HOA. People might have a great deal of freedom to do what they wish with their home, or they may have specific limitations regarding things like outdoor decorations or size of pets allowed. (This article from the Los Angeles Times lists some extreme cases .)

HOA boards often turn to professional property managers who will not only handle the maintenance function, but that can also deal with the inevitable issues that crop up in collecting dues and enforcing the CC&R.

Why HOAs Should Consider a Professional Property Manager

Many owners of rental properties prefer hiring professional property management companies to tackling landlord duties all by themselves . HOAs face similar challenges and can benefit from management services too, regardless of whether the townhouses are owner-occupied or rented out to tenants.

In fact, a townhouse owner who leases his or her home may want to consider hiring a property management company just as the owner of a single-family house might to deal directly with the tenant, handling maintenance and repairs inside the unit. The service would be contracted and paid for by the townhouse owner. The owner of the home is still responsible for the HOA fees, even if they pass the cost on to the tenant. And if their tenant breaks the CC&R rules, the owner will be held accountable.

Volunteers vs. Dedicated Staff

Residents elected to an HOA board are volunteers. Many CC&Rs prohibit them from being paid and they still must pay their own HOA dues. Duties can be time consuming for anyone, even if they do not also have a full-time job.

A property management company is paid to make the townhouse community’s needs its top priority. They can dedicate the time necessary to make sure things are done correctly and in a timely manner. The board still must meet periodically and make important decisions, but it is much easier for them with a property manager’s help.

Conflicts of Interest

A property management company hired by an HOA is a neutral party. This is helpful, as the resident board members, no matter how well-intentioned, might have conflicts of interest.

For example, a resident who owns a landscaping company might try to influence the board to get the job of taking care of the mowing and planting around the townhouses. Other residents might understandably think this is unfair. But if the property management company is in charge of getting bids on the work, the job will go to whichever company meets the appropriate criteria. That may be the resident’s company or not. The point is, the decision will be fair.

Conflicts of interest may arise regarding the CC&R too. Enforcing rules might be done forcefully, mildly, or not at all, based on the biases or personality conflicts between neighbors who happen to sit on the board. A management company can apply the rules equally and fairly no matter who has violated them.

Professional Expertise

A property management company can do a lot more than just maintenance and repairs . They are well-versed in the legal rights of renters, and in the case of townhouses, HOA members. HOAs may put them in charge of collecting dues, and collecting delinquent payments. They are also able to work on budgets and produce financial reports for the HOA board.

As with our example of the resident’s landscape company, there may be members of the board who make their living as accountants or lawyers. Employing a management company instead not only eliminates any conflicts, but also provides expertise that is specific to real estate properties.

Finding the Best Help

As part of running an HOA, the board must find reliable, affordable vendors to do maintenance for the townhouse community. Property management companies have staff of their own, as well as a wide network of subcontractors and tradesmen for nearly every need. They will find the best companies for landscaping, pool maintenance, security—whatever is necessary. They often have the ability to broker deals at lower costs than the board would be able to negotiate.

For larger jobs, such as repaving sidewalks or replacing roofs, they can handle the task of gathering bids and vetting the bidders. They can also oversee the project, ensuring it is done on time and on budget.

Responsibilities of Townhouse Property Management

Like townhouses themselves, property management for townhouses is a combination of apartment landlord duties and HOA obligations. Unlike a landlord, these companies are not on call for a leaky faucet or broken appliance (although they might provide these services and bill the resident). But they do handle every part of the townhouse community outside of the individual dwellings.

Volunteering to serve on the board for an HOA requires making decisions about the townhouse community. One of the most important and best decisions they can make is choosing a capable property management company to take care of the details.

Contact Select Leasing & Management to discuss how we can help your townhouse HOA.

Cover photo by hillaryfox by Canva.com

Houses for Rent vs. Apartments for Rent: Investing and Property Management

Tue, 04 May 2021 14:30:02 GMT

Investing in rental real estate—for lease-signing tenants, not vacationers—can provide a reliable stream of income. Owning houses for rent has pros and cons when compared to apartments for rent. One is not better than the other. Instead, just as renters might prefer a house or an apartment, it is a matter of preference and priorities.

Whether seeking out rental property as an investment, or debating if you should sell or rent out a single-family home that you already own , you will need to deal with tenants and maintain and manage the property. For any landlord, the advantages and challenges of houses for rent vs. apartments for rent are worth exploring.

What Type of Landlord Do You Want to Be?

Owning rental real estate is a business, and like most businesses, comes with a substantial to-do list of tasks . A landlord can sometimes save some money by self-managing property. But that means taking on maintenance, rent collection, and tenant screening themselves. If the landlord has a full time job or doesn’t live nearby, even a single home will be hard to manage without help.

Hiring a property management company is another option. Many people think that management companies are only for large apartment complexes, but this is not the case. Even landlords who have just one house to rent can pay a management company to take care of all of the details.

This is how many people in the St. Louis region handle single-family rental property. For example, all around Scott Air Force Base in Illinois, military families buy homes that they must leave when they are deployed to another state or overseas. It is common for them to hold onto the home for a few years and return after their assignment ends. In the meantime they rent out their houses, providing a great option for families new to the area (for example).

Or, anyone might decide to keep a home when the market is depressed and they have trouble selling it. Until the market improves, or the military family returns to the area, they can hire local property management companies to find tenants, maintain the homes, and collect the rent. Professional property management companies provide a nice investment opportunity without the need for personal involvement for any rental property owner.

Finding Renters and Avoiding Vacancies

Driving through a neighborhood, it is not obvious who rents and who owns the homes. Advertising a house for rent is a necessity, unlike an apartment complex with a rental office or the ability to simply post a sign with contact information for potential tenants. Management companies can handle advertising available homes and screen applicants, or owners can do it themselves. Screenings are a crucial part of the rental process .

Finding good tenants who take care of the property and pay their rent on time is not easier or harder when renting a house as opposed to an apartment. But the tenant profile might be slightly different. The fact that houses tend to be in neighborhood settings, are larger with more bedrooms, and often have yards and garages, means they are more likely to draw families with children. These people may want the stability of a home where their kids can play and ride bikes, and settle into a school.They may be looking for something quieter, for example, than a city-center apartment near the hustle and bustle of an entertainment district.

One drawback of owning a single house instead of a multi-unit apartment building or even a duplex is that vacancies will hurt the owner’s bottom line more. The revenue for an empty home is zero. For a multi-family dwelling, there will still be other tenants helping cover the owner’s mortgage, taxes, and other expenses.

Sharing the Workload

The landlord is responsible for maintenance and upkeep of an apartment building. This could include landscaping, shoveling snow, and mopping or sweeping hallways. If they provide coin-operated laundry facilities, they will need to maintain those too.

With houses for rent, the tenant might take care of some of the maintenance. They may be responsible for mowing and keeping the yard neat. They might bring their own washer and dryer, so that is theirs to maintain along with keeping the entire dwelling clean. Something like changing furnace filters might be up to them too. These things would be spelled out in the lease with the owner’s expectations and details about who will pay. For example, the landlord might provide a lawnmower or reimburse the tenant for furnace filters.

The landlord or their property management company still needs to respond to repair requests and emergencies at a house for rent. But compared to an apartment, much of the upkeep might be in the hands of the tenant.

Buying and Selling

In most cases, it will cost less to buy a house than an apartment building. But buying a house to rent out is different than buying a house to live in. It is considered investment property, so most lenders will insist on a 20% down payment.

Apartments as an investment have the advantage of “economies of scale”. Property taxes, insurance, etc., may not be much different for a house vs. a small apartment building, but just as it does with vacancies having several tenants to help cover the costs makes a difference. There is the chance to, that there will be tenants living in an apartment at the time of the sale . A house may take longer to find a tenant and start making money.

Selling a house that was a rental, however, is often easier. Prospective buyers might be people wanting to live there, another investor who will continue to rent it, or even the tenant who has taken a liking to the place. In fact, a rent-to-own agreement can be drawn up, allocating a portion of rent each month toward the purchase of the home.

If a landlord owns several different single-family houses, they also have the ability to sell off one or two and keep the remainder of their portfolio intact. An apartment building may be a harder sell, and needs to stay as one entity.

Houses for Rent vs. Apartments for Rent: The Tenant’s Perspective

Whether a house for rent or an apartment for rent is more appealing depends on the tenant.

Apartments, especially ones with on-site property managers, offer tenants the ease of moving in or out without much hassle. Maintenance and problems are handled routinely. Utilities might be included in the rent amount, and even if they aren’t, it is usually cheaper to heat and cool an apartment than an entire house. And luxury complexes might include amenities such as a concierge, pool, gym, tennis or basketball courts, and playgrounds.

Houses for rent offer different advantages. Tenants can get more square footage with more bedrooms and bathrooms. They may also have a basement, laundry room, garage, and yard that are their own and not shared with neighbors. Privacy in general is better in a house without thin walls or noisy corridors.

Renting a House or Apartment

Both houses and apartments have a lot to offer renters, depending on what they are looking for. Whether a landlord can find a good tenant has less to do with the type of rental and more to do with its location and how well it is maintained. For help with property management in the St. Louis area that includes maintenance as well as marketing, background checks, writing leases, and collecting rent, contact Select Leasing & Management. We will help fill your house or apartment to make the most of your investment.

Cover photo by Ravitaliy by Canva.com

Selling a Property With Tenants—What Landlords Need to Know

Wed, 03 Mar 2021 19:39:03 GMT

Selling a rental property is a bit more complicated than selling one’s own home. Not only will the house or apartment building change hands, but so will the management of the tenants living there. To ensure a smooth transition for everyone, landlords need to know their rights and responsibilities when selling a property with tenants.

Many of the decisions and steps involved in selling a rental property hinge on whether there are tenants living in the units, or if they are empty. There are pros and cons to both situations, depending on the scenario. In many cases, the property can change owners with renters barely noticing a change in their daily lives. Other times, it might make sense to have them move out before selling.

Keeping Tenants Happy While You Sell

When a buyer is interested in the property for investment purposes, having tenants in place can be a strong selling point. Rent revenue is guaranteed for the new owner as soon as the purchase is complete.

Tenants, however, may be concerned when they hear their home is about to be sold. Their lives could be disrupted for showings, appraisals, and inspections while the house or apartment complex is on the market. Added to that is the uncertainty about how things might change under new ownership.

If a landlord has worked to cultivate a good tenant-landlord relationship , they stand a better chance of getting the cooperation they will need for a smooth sale. There are some actions they can take to help:

Transparency

Landlords in Missouri are required to notify tenants in writing of new ownership. In I llinois, the law states they must do so within 10 days of the sale . Aside from the legal requirements, no one likes to be blindsided, especially when it comes to their home and living conditions. Depending on the relationship, landlords might want to consider keeping renters in the loop well before the sale is final.

Documentation

Any communications about the pending sale should be in writing to protect both the landlord and the tenant. For example, if access is needed to the property for a showing or appraisal, the landlord should inform the tenant in writing.

Notice

In the same way that landlords must give ample notice to tenants that they will be entering the house or apartment for maintenance and repairs, they must do the same to show the unit to a prospective buyer. Give at least 24 hours notice and make expectations known: For example, do they need to leave the residence while the real estate agent is there? Try to limit appointments and work with the tenant’s schedule as much as possible.

Incentives

Acknowledging the tenant’s inconvenience by offering an incentive is helpful. A temporary reduction in rent or offering to hire professional cleaners so the property is always ready for viewing can help compensate tenants for their trouble.

Purchase Option

When an owner starts to think about selling a single-family rental property, they may need to look no further than their renter. If approached with the offer, a tenant may have the means and desire to purchase the home. Not only does this save the seller the trouble of putting in on the market, the tenant does not need to prepare for showings or consider moving. All that is necessary is a real estate agent’s help to draft the purchase agreement and handle the closing. It is worth it to the seller to bring up the possibility with the renter.

Ideally, the tenant screening process has found great renters who are pleasant and take good care of the property. But landlords must recognize that even good tenants may be unhappy or even angry about the prospect of a potential sale. Selling a property with tenants will be more difficult if tenants are uncooperative.

If tenants become a problem that could disrupt the sale, or if they were undesirable renters in the first place, it might make sense to postpone a sale until the unit is empty. Obviously, this will be more difficult for a multi-unit property as opposed to a single-family home.

Honoring the Lease Agreement

A lease is a binding legal document . It doesn’t end just because the rental property is sold. When selling a property with tenants, the terms of their lease and all of the tenant’s rights listed in it, stay in effect until the end date. An owner hoping to sell can not force the tenants to leave. It also means the new owner can not change the terms and raise the rent or impose a new rule when they take over.

When it is time to renew the lease, however, they can choose to do whatever they like. This could mean a rent increase, requiring a tenant to pay their own utilities (even if they were included under the previous agreement), or prohibiting pets where they were once allowed. But as long as there is an existing lease, all parties are bound by law to follow it.

Selling an Empty Rental Property

It might seem easier to sell an empty house or apartment building. Once tenants move out and the space is empty, there is an opportunity for deep cleaning, repairs and upgrades like painting or new carpet—all of which could be attractive to a buyer.

Whether a current leaseholder is a pro or a con depends on the buyer. Without a tenant, there is no immediate rental income, and they will need to market the property and find their own renters. This can mean additional work and the possibility of the apartment sitting vacant for a few months.

If, however, they plan to make substantial changes to the property, or significantly adjust the price, an empty building might be appealing. Also, buying an occupied rental property means “inheriting” another owner’s tenants. If a seller has been lax with screening practices and the type of renters they allow, it can turn away potential new owners. Buyers may be hesitant to take on renters who break rules, do not take care of their apartments, are late with rent, or cause trouble for the other tenants.

When a building is empty, buyers can start from scratch with brand new tenants, rather than trying to work around or force changes on people who live there.

As mentioned above, it is illegal for either the current owner or the buyer to evict tenants without a valid reason . Instead, those wanting to start with an empty apartment must wait for the lease to end, then simply not renew.

An owner can, however, offer incentives for a tenant to leave their lease early, such as forgiving past-due rent or offering a relocation allowance. There may also be a clause written into a lease for “lease termination due to sale.” This isn’t standard language in a lease, but if the owner had the forethought to include it, they may be able to offer a buyer a vacated apartment.

The Advantage of a Property Management Company

An owner who uses a property management company has several advantages when selling a property with tenants. The relationship with a reputable company such as Select Leasing & Management can be an effective marketing tool when finding potential buyers. In fact, the property management company may have other clients to whom they can recommend the property.

If the new owner decides to keep the same management company, this can reassure tenants that things will be “business as usual” with a manager they already know.

A management company can also assist with scheduling showings and inspections and other communications with the tenants about the potential sale. In the event that incentives are offered or a tenant is asked to leave their lease early, the company can be an effective go-between to make it happen.

Completing the Sale of a Property With Tenants

When a sale goes through with tenants who will be staying in the home, both the buyer and the seller have certain responsibilities:

The buyer takes over the existing lease and can not change it.
Any security deposits are transferred from the seller’s account to the buyer’s account. The tenant should receive the security deposit back when they move, minus damages spelled out in the lease. If they do not get it back, they may file a lawsuit against either or both of the owners (former and new) for reimbursement.
Notification about the sale should be delivered to all tenants in writing.
Tenants must be furnished with the new owner’s contact information and details regarding rent payment, maintenance requests, and any other pertinent information.

Selling a property with tenants isn’t only possible, one already filled with good tenants can be extremely appealing to the right buyer. Sellers must be sensitive to their renters’ needs and know their rights and responsibilities. When they do, they will have a much better chance of completing a sale that works for all parties involved.

Cover photo by pixelshot by Canva.com

7 Challenges of Owning Rental Property in 2021

Tue, 05 Jan 2021 15:30:01 GMT

Every year, housing experts make predictions about what to expect in the rental market. In 2020, the fallout from the pandemic and natural disasters in some areas of the country have added to the challenges of owning rental property.

In 2021, landlords will face many of the same issues as they always have. But in many cases, renters’ situations have changed drastically. This means some of those issues will shift in the coming year, taking on greater importance and urgency. We’ve prepared the following list for property managers and those owning rental properties, so they can be ready for what’s to come.

1. Meeting Renter’s Requirements

Remote work and stay-at-home orders have people spending more time under their rented roofs than ever. It doesn’t take long for a tenant to learn what they love—and hate—about their living space.

One challenge for property owners in 2021 is tenants’ increased demand for amenities, convenience, and a specific type of property. Renters are seeking out larger apartments and single-family homes to give their family the space it needs to work, attend school online, and relax at the end of the day.

Obviously, there’s little a landlord can do about the size of a rental property they already own. But if they’re considering adding to their portfolio, it’s a good thing to keep common tenant concerns in mind. In 2021, expect renters to look for places with home office space, more amenities like higher-end kitchens, and in-unit laundry hookups. Being near a gym or restaurants may be less important than an on-site exercise space and nearby grocery store.

2. Not Your Typical Tenants

In 2021, landlords may have to rethink how they look at prospective tenants. Many more applicants may be self-employed or part of the gig economy. For the first time, they may be getting interest from people who were evicted due to job loss during the pandemic.

Background checks are as important as they always have been, but traditional screening might not tell the whole story. For example, was an applicant’s eviction based on non-payment after years of being an excellent tenant? Did their bad payment history correspond to losing a job after several years of steady employment? There is a difference between someone getting back on their feet after a stretch of bad luck and a truly bad tenant.

Listening to a prospective tenant’s story with an open mind can help a landlord find good tenants whom they may have overlooked in the past. They may also want to start requesting character references in addition to the usual forms. It’s also important to learn how to verify self-employment details. Landlords must also be careful when turning down an applicant. For example, some cities or states may prohibit rejecting tenants based on the source of their income. Turning away someone who receives government assistance might be illegal during the pandemic.

3. Making the Mortgage While There’s a Moratorium on Evictions

At the time we’re writing this, there’s a federal moratorium on evictions until the end of 2020. There’s no telling how long this could last, or if some states will pick up with it once the federal government lifts the ban. This is welcome news for renters who may have lost their ability to keep up with rent during the pandemic.

Unfortunately, what’s lacking is federal financial relief for those owning a rental property. Most states, however, are offering some form of grants and other protections to help landlords.

The challenge in 2021 for many landlords will be figuring out ways to pay the mortgage if they can’t collect rent. The good news is that this is just a pause of evictions. Once lifted, landlords will be able to demand back rent from tenants. At that point, expect a flood of evictions hitting the courts. Landlords will then need to come up with the resources to serve those evictions.

It’s important to note that renters are expected to make partial payments in order to be protected by the moratorium. And landlords can still evict people guilty of other violations such as destruction of property or illegal behavior.

4. Unpredictable Rental Rates

If they’ve lost money in 2020, landlords may be tempted to increase rents by a greater than normal amount in 2021 to make up for it. A spike in rent could be a bad idea for a couple of reasons.

First, the landlord must consider the local housing market. If the rent was hard to collect in 2020, overpricing the unit compared to similar offerings won’t help. And remember, an apartment collecting a lower rent is better than one that’s vacant.

There may also be temporary local or state regulations on raising the rent, even if there is an annual increase written into a lease. It is best to check on the rules for possible rent freezes in the local market before announcing an increase.

5. Flexibility on Regulations

In 2021, property owners should be ready to lift or ease some of the restrictions that are written into their leases . People everywhere have had to adjust their lifestyles due to the pandemic and the economic turmoil it’s caused.

In order to keep good tenants who are able to pay their rent, landlords may want to reconsider their stance on certain rules. For example, a tenant may want to add a roommate to the lease agreement to help with living expenses. Or, they may need to move out. The landlord could consider a sublease, even if they typically wouldn’t. Switching to a short-term or month-to-month lease could give a tenant incentive to stay. It will keep rent rolling in for the time being, rather than insisting on a long lease that could force a tenant to move.

Coming to an agreement with a good tenant is a chance to build a good relationship , which could ensure that they continue to rent for years to come.

6. More Technology Than Ever

Online services will be essential in 2021. Many landlords already offer automatic electronic rent collection and online maintenance requests. If they don’t, now is the time to get these technologies set up. Due to COVID-19, doing business without face-to-face contact is more important than ever before. It’s safer, quicker, and easier for both tenants and landlords.

The pandemic has also made viewing apartments online more common. Virtual video tours and a lot of online photos can attract new tenants. The need to make an appointment to view an apartment in person may bring only the most interested applicants, saving landlords time and reducing their exposure to the virus.

Filling out applications online is already common in some markets, but expect it to become the norm in 2021.

As for rental houses and units themselves, tenants will be looking for high-speed internet, for work, school, and streaming services. Landlords might want to invest in upgrading their technology in 2021 to anticipate the growing need.

7. Tenant Safety and Security

Safety and security are always a top item on the list of tenant concerns. Good locks, intercoms, and lighting are important for everyone’s personal security. That will be true in 2021 too—with a few new twists.

Due to the pandemic, tenants will expect more extensive cleaning and sanitizing in shared areas of the property such as the lobby or laundry room.

Finally, some larger buildings are taking steps to revamp their lobby areas to accommodate the increase in food, grocery, and package deliveries. Some are installing parcel delivery lockers for each tenant as a safe and secure way to get their online orders.

Be Prepared for the Unexpected

This year has had more uncertainty than any in recent history. Our best advice for those owning rental property is to keep an open mind and stay flexible in 2021. It’s unclear how long it will take to get the pandemic under control and for the economy to bounce back.

That said, we still see rental real estate as a worthwhile investment for those who can stay the course. Times might be tough right now, but there will always be good tenants out there who need reliable landlords. If you would like to discuss ways to get help managing your rental property challenges, Select Leasing and Management would love to hear from you.

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Is Property Management Without a License Illegal in Missouri?

Wed, 02 Dec 2020 21:16:27 GMT

Owning rental property is a business, and as a result, there are rules and laws that apply. Professional property managers in Missouri have a number of requirements involving fair housing laws, tenant rights, and in some municipalities, occupancy permits. It may come as a surprise that the state requires a real estate broker’s license too.

Does that mean you’re breaking the law if you’re managing rental property without a license? Not necessarily. It’s true that some property management tasks require a real estate broker’s license. But the rule doesn’t apply to everyone and there are a lot of exceptions.

Who Needs a Real Estate Broker’s License—and Who Doesn’t?

In Missouri, anyone performing certain property management services is required to have a real estate broker’s license.

This does not apply, however, to individuals who self-manage their own property. For example, a person with one, two, or even ten houses or apartments can do his or her own management without a real estate broker’s license. Likewise, if the owner forms an LLC for the units and employs someone to handle those management tasks, that person does not need a license since they are working directly for the owner.

There are also some limited property management activities that are exempt from licensing. An owner can contract with an unlicensed individual or company to perform clerical tasks, hand out and collect leases and lease applications, show rental units to prospective renters, and arrange for and schedule maintenance and repairs.

The licensing requirement comes into play for companies or even individuals who are in business to provide more comprehensive services. Duties that include leasing, renting, or listing properties, finding potential renters, and negotiating terms of leases and rental agreements require a license from the Missouri Real Estate Commission . Without proper licensing, companies and property owners may be subject to fines and penalties.

Some property management companies work under the umbrella of a licensed real estate broker. This is the case with Select Leasing & Management and its parent company Berkshire Hathaway HomeServices Select Properties . Select Leasing & Management’s operations are covered by Berkshire Hathaway HomeServices Select Properties’ license, and no additional licensing is necessary.

License Requirements

To obtain a real estate broker’s license, individuals must comply with the following:

Must be at least 18 years old
Provide fingerprints
Have a salesperson license from the state of Missouri for 24 of the preceding 30 months
Complete a 48-hour pre-exam broker course from a real estate school with state accreditation
Complete the Missouri broker exam (both portions)
Apply for the broker’s license within 6 months of completing the broker course

What About Association Managers?

This topic often leads to questions about condo association managers. Are they allowed to do property management without a license? The duties they perform are often limited to common property within the complex rather than the leasing of units. Even if there is some overlap with traditional property management, in Missouri, community managers are not required to have a real estate broker’s license.

Not All States Are the Same

There are many reasons that an owner might hire a property management company rather than self-manage his or her properties. One common reason is that they do not live nearby, or even in the same state. When managing out-of-state properties, it’s important to know the state’s requirements in regards to licensing. The fact that the owner is not a resident of the state is not a valid excuse when it comes to complying with the law.

Let’s look at how Missouri licensing rules differ from its neighbors to the east and west as an example of just how varied licensing rules can be from state to state.

Missouri

Property owners (and their direct employees) may manage without a real estate broker’s license.
A property manager may be responsible for limited tasks without a license.
Property managers must have a real estate broker’s license to rent, list, or procure prospects.
Community association managers do not need a license.

Kansas

Property managers need a real estate broker’s license for commercial property only .
If the property manager has at least 5% ownership in a commercial property, they do not need a license.
Community association managers do not need a license.

Illinois

Property owners (and their direct employees) may manage without a real estate broker’s license.
A property manager may be responsible for limited tasks without a license.
Property managers must have a real estate broker’s license to rent, list, or procure prospects. They may obtain a leasing agent license instead but must be sponsored and employed by a licensed broker.
Onsite managers are exempt from licensing.
Community association managers do not need a license if they are not compensated for the job. If they are paid, they must obtain a community association manager license if the property has more than 10 units.

If You’re Hiring a Property Management Company

Property management companies are a great idea for rental owners who can’t—or don’t want to—handle the day-to-day chores of operating rental property. They can take care of very important tasks like tenant screening and upkeep.

A manager or company with a real estate broker’s license has gone the extra mile to ensure they are operating a professional and compliant business. The same goes for one that has partnered with a licensed real estate company. It can give an owner peace of mind that their interests are protected from fines and penalties that could be imposed by the authorities.

Landlords need to find one that can not only manage the to-do list but complete it in an economical and cost-efficient way. But their search must also cover a company’s compliance with the local laws and regulations. In Missouri, that means a property manager with a real estate broker’s license.

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How to Tell if Your Property Management Company is Worth It

Tue, 03 Nov 2020 14:50:25 GMT

There are two types of rental property owners: Those who manage their properties themselves and those who hire someone to do it. Both groups can find themselves asking “Are property management companies worth it?”

The do-it-yourself-ers ponder if they should invest the money in a property manager, while many who already use one wonder if they’re really getting their money’s worth. The ROI on a property management company can definitely be worth it...if you know what to look for and hire the right one.

Why Use a Property Manager

Some property is owned strictly as an investment. The owners have no intention of being landlords and assume from the start that someone else will handle day-to-day operations. Others, however, don’t mind taking care of things themselves. These people usually own fewer, smaller properties where self-management is a realistic option.

Owners often come to a crossroads, where their circumstances change or self-managing becomes too much for them. Some signs that it may be worth it to hire a property management company :

Adding more properties to the portfolio
Living too far away
Juggling management duties and a full-time job
Being physically unable to do the work
Wanting more leisure and family time
Simply not wanting the hassles of being a landlord

How Property Management Companies Add Value

According to an article on businesswire.com , the two things that cause rental property owners the most stress are maintenance and tenant relations. They’re the main reasons why people decide to hire a property management company rather than managing by themselves. Both are time consuming, and if neglected can cost money—or diminish the property’s ability to make money.

Maintenance

Property managers can handle the routine upkeep of a property, including cleaning common areas, mowing grass, and shoveling snow in the winter. Preparing rental units for new tenants by cleaning, painting, and refurbishing is a necessary and time-consuming task. They can also take care of both scheduled and emergency maintenance and repair requests for the tenants. This is all accomplished either with an on-site maintenance crew or a network of subcontractors they can hire for specific projects.

Tenant Relations

Management companies can take care of everything tenant-related including advertising for new renters, doing background checks , drafting leases, and enforcing rules and regulations. They are the point-of-contact for the tenants for everything. They often invest time in creating good relationships with the tenants . This is ideal because happy tenants stick around and renew their leases.

Administration

Property management companies are in charge of collecting rent, but can also offer a host of other administrative services. They can provide monthly financial reports, analyze the local market, and advise on projects that will attract more tenants.

Taking care of all of these tasks is a difficult job for a DIY landlord with multiple tenants. It also requires certain skill sets that not everyone has: handyman, accountant and marketing director. Add to that the difficult interpersonal aspect of reprimanding rule-breakers or kicking someone out.

How Property Management Companies Charge and What it Costs

Property management companies typically charge a fee between 8% and 12% of total rental income. They are also reimbursed for expenses, either by providing receipts or a flat fee that covers their costs for supplies and labor. Some use a reserve account that they can draw upon for expenses and to pay their subcontractors.

Cost is a major concern, but property owners should look at what they’re getting for their money. An owner who hires a company based solely on price may be disappointed in the level of service. And a DIY owner might get frustrated and overworked, thinking they can’t afford to hire someone.

Both must look at the value a company can bring to their property. The owner with the cheap property manager might see tenants leaving and his property getting rundown. By paying a bit more, he or she could get a company who works harder and maintenance and tenant relations.

The do-it-yourself landlord should consider this: If they think they’re already paying for property management, they’re wrong. What they’re not spending in dollars, they’re spending in time. If they didn’t need to take care of the property, what would they do with those extra hours in the day? Work on other investment opportunities? Spend more time with family or enjoying a hobby? Take a vacation or spend a holiday without the worry of an emergency phone call? Time spent managing a property is a labor cost. The cost of that labor could be redirected to a property management company.

Red Flags that Your Property Management Company Isn’t Worth It

Property owners who use a property management company should look out for the following situations. They could indicate that the company they’ve hired isn’t providing the best bang for their buck.

Tenant Vacancies

Keeping the vacancy rate low is essential for a rental property to turn a profit. When a property management company can’t keep good tenants, or can’t find new ones, that’s a problem. It could mean that they aren’t doing enough to market the property. It can also be a sign that the rent is out of step with the market. Keep an eye out for complaints and tenants who don’t renew their leases. There could be a problem with the management staff’s attitude or responsiveness to requests.

Rundown Property

A property management company’s failure to address maintenance and repairs can degrade the properties value and turn away tenants. The longer things are left in disrepair, the more time and money it will take to get them back in shape.

Bad Tenants

If a property management company isn’t doing appropriate background checks or maintaining rules and regulations, the rental units could be filled with bad tenants. Bad tenants cause damage, pay their rent late or don’t pay at all, and sometimes break the law on your property. The eviction process is expensive. Better to hire a company that finds renters who won’t become a problem.

Lack of Communication

If you don’t hear from your property management company until a problem gets out of control, or they bother you with every little thing, you might want to consider a new company. Good property managers strike a balance between the two—alerting you about important issues, but taking the initiative to handle routine tasks. How much, or how little communication you’re comfortable with is something that should be discussed when hiring a property management company.

Hidden Expenses

Before signing a contract with a property management company, be sure to know exactly how billing and expenses are handled. For example, if you’re paying a flat fee per unit, do you still pay if the unit is vacant and not bringing in any rent revenue? Will they provide you with invoices for reimbursement or charge a flat fee for maintenance supplies? Will they get bids from several vendors for big projects—and will you make the choice or will they? Ironing out all of these details ahead of time will cut down on the surprises. A company that isn’t transparent about these matters upfront is a big red flag.

What to Do if You’re Not Getting Your Money’s Worth

Rental property is too big of an investment to hand over the reins to a company who won’t do a good job for you and your tenants. The profitability of the investment depends on finding someone you can trust to add value.

If you suspect that your property management company isn’t worth what you’re paying them, or if you’re considering hiring a property manager for the first time, start by reading our article Choosing a Property Management Company: The Questions Some Hope You Won’t Ask . Or contact us at Select Leasing and Management. We can help you sort out exactly what you and your tenants need.

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How to Build a Better Tenant-Landlord Relationship

Tue, 15 Sep 2020 16:46:46 GMT

A landlord who takes the time to establish good tenant-landlord relationships won’t have any trouble getting good renters who want to stay. So what's the secret?

You might think a landlord’s business is all about buildings. But it’s really about people. And while the relationship between landlords and tenants is an interpersonal one, it is also wrapped up in the legal contract established with the lease. Landlords need to find a good balance between friendly and professional when dealing with their renters.

Landlords and tenants don’t need to be best friends, but there must be respect and cooperation on both sides. How well the two get along matters more than you might think. A good relationship makes the environment pleasant for everyone—the landlord, the tenant, and even the neighbors. Tenants who get along well with the building owner tend to care more about taking good care of the space. On the flip side, disagreements and conflict might make them more likely to break rules or mistreat the property.

The most important thing a property owner can get from a positive relationship is good tenants who stay. But complaints about the landlord are often the reason renters choose to move. Here are some tips to make sure your tenant-landlord relationship gets off on the right foot—and stays that way.

Choose Tenants Carefully

The foundation for a healthy tenant-landlord relationship begins before the tenant even moves in. A thorough screening process is essential to help weed out potentially bad tenants. There’s no guarantee that someone with impeccable credit and great references will be a good tenant. Their relationship with the landlord can still go sour. But choosing wisely (while following all fair-housing and non-discrimination laws, of course) can place people who “fit” the property and who are most likely to get along with the landlord and the neighbors.

Avoid Conflict By Setting Clear Expectations

Clarity about the rights and responsibilities of both the tenant and the landlord starts with a good lease. A lease that goes beyond the basic information to lay out the expectations for both parties can avoid confusion and misinterpretation of the rules. For example, some tenants may decide to make modifications like painting, removing carpet, or hanging shelves without first getting the landlord’s approval. Including detailed expectations in the lease will make clear what is and isn’t allowed. The same is true for policies regarding pets, quiet hours, subletting, etc. If rules are broken, the landlord has legal recourse— if it’s in the lease. Likewise, the tenant’s rights are protected if the landlord doesn’t hold up their end of the agreement.

Get to Know Your Tenants, But Know Your Boundaries

As the old saying goes, you catch more flies with honey than vinegar. Being friendly and welcoming goes a long way to build a good relationship between a landlord and a new tenant. Be careful not to pry or get too personal, but a bit of small talk can help a landlord get to know his or her tenants. They might share a bit about their family, job, or hobbies. Remembering these small details can provide insight—and something to chat about in the future. But don’t overdo it! Showing too much interest and asking too many personal questions can come across as nosy or even worse—creepy.

To keep a good tenant-landlord relationship, respect tenants’ privacy, and keep your personal opinions to yourself. Giving unsolicited advice about the company your tenant keeps or wondering aloud how they can afford the new car when their rent is sometimes late, is intrusive and will do nothing for the relationship. Remember that unless they are breaking the law, violating the lease, or someone is in danger, your tenant’s personal life is none of your business.

Share Your Knowledge

Whenever you can provide helpful information, it helps build a better tenant-landlord relationship. New renters especially will appreciate learning details about the building and the neighborhood. Let them know when the laundry room is busiest or the best times to find nearby street parking. And sure, they can find the nearest grocery store or pharmacy on their phone. But you can offer restaurant recommendations or first-hand intel about which local dry cleaner or mechanic you think does the best job.

Keep Communication Flowing

Keeping the lines of communication helps the tenant-landlord relationship. Tenants need to know the best way to reach the landlord. If the landlord has a preference (phone, text, email) they should make that known, along with a separate way to report emergencies, if there is one. The method of communication isn’t important. It just needs to be easy and effective for the tenant.

Explain the proper procedure for reporting maintenance issues. Responding to requests right away, even if the work can’t be done immediately, can help build the tenant-landlord relationship. There’s nothing more frustrating to a tenant than wondering if their message was received and if and when the issue will be resolved.

Landlords can get frustrated, too, if they’re not informed of problems right away. Make sure there is an established process for reporting issues. If tenants feel their requests are ignored, or they are accused of causing the problem, they may be hesitant to say anything. Remember that maintenance and repairs are part of building management and don’t blame tenants for normal wear and tear or unintentional damage.

A few days or a week after a repair is made, some follow-up communication helps to cement the relationship. Check in to see if everything is working well again. Tenants will appreciate the opportunity to let you know if something still needs attention.

Unless it’s an emergency, laws often require landlords to give a certain amount of notice before entering a tenant’s dwelling for repairs or maintenance. Failure to follow these rules is not only illegal but a breach of trust. And nothing will erode a relationship faster.

Things that will impact tenants directly, such as an upcoming rent increase , should be communicated as soon as possible and not sprung upon them. A thoughtful and considerate landlord will inform tenants about other matters as well. For example, giving some warning before construction on the property, that the pool will be closed for a few days, or that there will be new hallway lighting installed, can build a sense of community by helping tenants feel informed about what’s going on.

Honesty is the Best Policy

Even if the news isn’t what a tenant wants to hear, honesty can help the tenant-landlord relationship. If a repair can’t be completed right away, explain why, and give them a realistic date when it will be done. Let them know, for example, if you’re waiting on a permit, a backordered piece of equipment, or if there are several other tenant issues ahead of them on the list. And obviously, emergency issues will be your highest priority.

As the promised “done” date approaches, be sure to communicate any further delays. Sincere, straightforward answers to their concerns will show that a landlord is someone who can be trusted and will earn them credibility.

Security, Safety, and Proactive Maintenance

Tenants appreciate a landlord who cares about the safety and security of the premises. Well-lit grounds, good locks, a working intercom system, and walkways cleared of snow and ice are a few ways to build the tenant-landlord relationship. Fixing things like wobbly banisters or buckled carpet as soon as they’re noticed will prevent accidents and show residents they’re being cared for.

Proactive, preventative maintenance plays a big part too. The best landlords anticipate the needs of a building and its tenants. Not only is it good for tenant-landlord relations, but it can also save money on future repairs. Keeping a schedule, for example, to inspect and repair various aspects of the building on a regular basis rather than waiting for things to break is a good idea.

Getting Help with Tenant Relations

A landlord who takes the time to establish good tenant-landlord relationships won’t have any trouble getting good renters who want to stay. The secret is to be compassionate but firm and keep in mind the rights and responsibilities of both parties.

Relationships between tenants and landlords can be tricky, though, and not everyone is cut out to deal with the range of personalities encountered in a community of renters. In that case, a professional leasing and management company can be a great option. Property managers like Select Leasing & Management have years of experience dealing with all types of tenants and every situation imaginable. Consider hiring an expert to build a better tenant-landlord relationship for you.

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What Every Lease Should Have In It: The Basics, and Beyond

Tue, 01 Sep 2020 15:40:42 GMT

Leases and are legal contracts between landlords and their tenants. Their purpose is to outline the rights and responsibilities of both parties when renting property.

There are basic elements that must be included in every lease:

Names and contact information
Start and end date of the lease
Rent amount, when it’s due, and payment options
Security deposit amount
Rules and regulations

But landlords should consider adding additional information. Vague, incomplete language in a lease can be subject to either side’s interpretation. The goal is to be as clear and thorough as possible to avoid misunderstandings and disputes. Adding some details can ultimately save money, drama, and legal headaches if problems arise.

Tenancy Information

A landlord has the right to know exactly who is living on his or her property and do background checks on each of them. While a lease can be in just one person’s name, if the primary renter has roommates or a partner, the lease should include the names and contact information of all adults living there.

This creates joint and several liability for all of the renters on the lease. That means that each is responsible, not only for their own share of responsibility but for the group. So if one roommate leaves or refuses to pay rent the other must come up with the full amount. Likewise, if there is damage to the apartment, it doesn’t matter to the landlord who did it. They will both be held liable for repairs.

St. Louis Landlords: St. Louis rental properties require a Certificate of Inspection from the Housing Conservation District that assures they are safe and meet all appropriate codes. St. Louis County has a similar permit called a Residential Rental License. Based on square footage and the number of bedrooms, part of the licensing process dictates how many people can live in a dwelling. This alone is a good reason to know exactly who will be residing there and add them to the lease.

Term of Lease

One year leases are the most common, but any length of time is possible. A rental agreement is almost identical to a lease but for a shorter term, typically month-to-month. It’s normally assumed that a rental agreement will automatically renew each month unless either party gives notice. Leases, on the other hand, need to be renewed and re-signed again at the end of each term.

St. Louis Landlords : Although we recommend written contracts, in St. Louis, a month-to-month lease doesn’t need to be in writing. A verbal agreement can be legally binding. However, the law does allow the landlord, if they choose, to require the tenant to give 30 days’ notice before moving out.

To avoid confusion, it’s a good idea to spell out that a lease will not be automatically renewed. As the end of the lease approaches, the landlord can inform the tenant of any changes they plan to make to the new lease, such as a rent increase. This gives the tenant time to decide if they will stay and renew or move out. If there will be a change such as a new roommate, it also gives the landlord the opportunity to add their information to the lease.

The point of adding this information to the lease is to prevent surprises for both parties when the lease is up. The tenant is aware that they will need to re-sign and that the landlord might change rent or rules at that time.

Rent Details

The amount of rent is listed in a lease, along with the date it is due each month. Payment options should be included, for example, an address to send a check or money order, a dropbox in the building, instructions on direct deposit. If the landlord does not want rent paid in cash, it should be stated in the lease.

I t is also a good idea to include information about penalties for late payment or fees for bounced checks. Laying this out in advance can give tenants the incentive to pay on time, or at least not be shocked if they’re billed for extra charges.

St. Louis Landlords : As a courtesy to tenants, many landlords offer a grace period after the rent’s due date. The rent can be paid within that time without incurring a late fee. There is no law in St. Louis requiring landlords to do this, although they can if they choose. If they decide to stick to a strict due date, outlining late fees in the lease is even more important.

Security Deposit

A lease will detail the amount of the security deposit required to move into a rental property. Landlords can use the money if repairs or cleaning are necessary when the tenant moves out. The remainder, or all of it, is then returned to the tenant. This does not normally count the usual wear-and-tear: Things like carpet cleaning, painting, or other minor maintenance are usually expected between tenants and are not a sign that the property was abused.

Consider adding very specific language about the tenant’s rights and responsibilities with regards to the security deposit. For example, can they tell the landlord to keep it in exchange for their last month’s rent? Many landlords don’t allow this, as they won’t get reimbursed if there is property damage caused by the tenant. How long will the tenant need to wait to be reimbursed after moving out? Exactly what is considered “normal wear-and-tear” and what will require payment out of the security amount? Will the landlord produce receipts as proof of things that were fixed? Will there be a walk-through before occupying the apartment to record flaws that are present upon moving in? All of these points will let the renter know exactly what to expect.

St. Louis Landlords: A maximum of two months’ rent can be asked of tenants in St. Louis. The law also requires that the money be paid back within 30 days of the renter moving out. The landlord can’t collect “non-refundable” security deposits. They can, however, charge other one-time non-refundable fees if they apply, such as a pet cleaning fee.

Utilities, Repairs, Maintenance, and Appliances

A few maintenance items are found in a typical lease:

Who pays the gas, power, water, and trash bills?
What is the procedure for submitting repair requests?
By law, tenants must notify the landlord of building code violations. If they are not repaired in a reasonable amount of time, they can withhold rent payments.

St. Louis Landlords : The laws in St. Louis say that landlords in the city must provide trash receptacles for all tenants.

Beyond that, the landlord can get as detailed as they would like in the wording of the lease. These are some things that a landlord might consider including:

By law, the landlord does not have the right to enter a rental unit. When it’s necessary, how much notice will they give the tenant?
How quickly will they respond to repair requests? In many states, if they do not fix something within 14 days, the tenant can fix it themselves and deduct the amount from their rent payment.
Who owns and is therefore responsible for the appliances. For example, the landlord may own the stove and refrigerator, but the tenant might bring in their own washer and dryer. The landlord would not be responsible for repairs to those machines.
What maintenance is the responsibility of the tenant? The renter of a single-family home may need to mow their own lawn or hire someone to do it. The landlord, however, might supply the mower. Or, the landlord may mow, landscape, shovel snow, etc.
The tenant may or may not be allowed to make certain modifications to the home. For example, tenants might be allowed to paint the walls any color they wish or change light fixtures or window treatments with the landlord’s prior approval. But they could not, for example, do any major remodeling, or add extra locks that wouldn’t allow the landlord entry.

T he landlord can add whatever restrictions he or she wants to the lease, as long as it complies with federal, state, and local laws and codes. The point is not the rules themselves, but the fact they are in writing so there are no assumptions made by the tenant, leading them to do something against the landlord’s wishes.

Rules and Policies

Landlords must comply with HUD’s fair housing laws and any other state and local laws, but beyond that can run their property however they like. They can put rules in place, and if a tenant breaks them, they have the legal right to make them stop or face eviction. The lease gives landlords the opportunity to spell out exactly what they expect. Some things they are not permitted to do are turn off utilities or lockout a tenant, even for nonpayment of rent.

These are some policies that a landlord might add to their leases:

No smoking inside the unit.
No pets. Or, if pets are allowed, is there a limit to the number or size? There may be a non-refundable pet cleaning fee. They may insist on a leash policy or require waste to be discarded in a specific place.
Tenants are responsible for the behavior of their guests and must ensure they will follow the rules of the property.
Tenants are forbidden from subleasing the property. If it is allowed, the landlord may require advance notification and allowed to run a tenant screening on the new renter.

The landlord must approve and may limit the type of home-based businesses allowed in the rental unit. An appointment-only accountant may be fine, but they may deny drum lessons.

St. Louis Landlords : In St. Louis, a landlord doesn’t have to specifically ban illegal activity in the wording of their lease. The law allows landlords to expedite eviction proceedings if tenants are involved in the use or sale of illegal drugs, gambling, or prostitution. They can get a court order to remove the tenant in as little as ten days.

Severability

One piece of “legalese” that every lease should have in it is a severability clause . This means that if anything in a contract ends up being unenforceable or illegal, the rest of the document still stands. This protects landlords from inadvertently put something in a lease that is overruled by existing laws.

Let’s say an inexperienced St. Louis landlord’s lease requests a security deposit equal to three months’ rent. Just because the law says they’re only allowed two months’, doesn’t mean the tenant can then break any of the other rules in the lease and, for example, pay only half their rent.

Getting Help With Leases and other Management Issues

Landlords need to know a lot about the rights and responsibilities that go along with renting property. Leases can get complicated with the legal wording that will protect both the landlord and tenant. If something happens that the landlord doesn’t like, there’s little that he or she can do about it if it’s not spelled out clearly in a lease.

Property management companies such as Select Leasing & Management are a practical alternative to trying to figure it out on your own. They are well-versed in St. Louis leasing laws and are experienced in writing leases for all types of rental properties.

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7 Things Every St. Louis Landlord Should Know

Mon, 24 Aug 2020 19:55:15 GMT

Rental property owners need to master a number of skills, especially if they plan to manage the rental units themselves. The job can be equal parts handyman, accountant, and lawyer. Property management in every region has its unique characteristics. Here are 7 things every St. Louis landlord should know.

1. Unique St. Louis Architecture Can Add to Expenses

St. Louis has an eclectic architectural style. There are large modern apartment complexes, but there are also huge Victorian and Italianate homes that have been sectioned into apartments, small two- and three-unit row houses, and cozy brick gingerbread houses for rent.

Older St. Louis homes come with some challenges for the landlord. For example, many old St. Louis houses still have knob and tube wiring . While not necessarily dangerous, this old electrical system will not support the needs of modern electronics. Updating electrical and plumbing in old buildings is costly, but might be necessary to attract tenants. Basements are also common in the St. Louis region. A leaky basement can be a constant source of headaches, even if it’s only used for laundry facilities or tenant storage.

2. Midwest Weather is Not Your Friend

Speaking of leaky basements, being in the Midwest means St. Louis gets its share of heavy rain and springtime snow-melt. Foundation issues due to this excess moisture are common in the region. The occasional storm with damaging winds, hail, and even tornadoes are something that midwesterners take for granted. Water in the basement, hail-damaged roofs and siding, and downed tree limbs can take up a lot of a landlord’s time and money.

St. Louis enjoys (or some might sy endures) all four seasons. Hot, humid summers and cold, blustery winters are common. Functional and efficient HVAC systems and good windows are a must for a St. Louis landlord’s properties.

3. Rules Differ in St. Louis City vs. St. Louis County

The city of St. Louis is unusual because it is not part of any county but instead operates both as a city and its own county. St. Louis County is a separate county from this entirely, surrounding the city to the north, west, and south. The county is comprised of more than 170 different cities. There may be different rules for landlords to follow, depending on whether their rental property lies within the city limits, in the county, or elsewhere in Missouri.

One example of the difference is in licensing and permits. While landlords in Missouri aren’t required to have a license to rent property, the units themselves may be subject to inspections and occupancy permits with each new tenant. The procedures and fees for these inspections vary, but their purpose is to make sure a property is safe and meets all of the appropriate code requirements. City properties are subject to a Housing Conservation District Inspection. In the County, it’s called a Residential Rental License. A St. Louis landlord should know the details of what the building’s municipality requires. Failure to comply can result in hefty fees.

Counties and municipalities can have specific rules about things like the number of people allowed to occupy a rental property, whether a landlord must allow a tenant to sublease, and even how many and what types of notices are required before eviction proceedings.

4. Missouri Tenants Have a Lot of Rights

Missouri has strong tenant protection laws. St. Louis landlords must know what they are and are not allowed to do.

Landlords must comply with the fair housing laws outlined by HUD, as well as their state and municipality. In essence, these prohibit discrimination based on race, color, national origin, religion, sex, family status, or disability. A tenant can be rejected for bad credit history, negative references from former landlords, or past behavior, such as a history of not paying rent.
St. Louis landlords should know the rules of security deposits. For example, a maximum of two months’ rent can be required. Repayment must happen within 30 days of leaving, and money can’t be held back for things that are determined to be normal wear and tear.
Landlords can’t enter an apartment without giving the tenant advance notice.
If repairs aren’t made in a timely manner, making a dwelling unsanitary or unsafe, the tenant has the right to withhold part of their rent payment.
There are specific rules about how to raise the rent for tenants. You can read more about that here .
Missouri law requires landlords to disclose the presence of lead-based paints in rental units.

These are just a few examples of things that a St. Louis landlord should know. Encroaching on a renter’s rights can lead to a lawsuit. The St. Louis Landlord and Tenant Handbook can help with these details.

5. Know When and How to Evict

Evictions are unfortunate, but they’re sometimes necessary. A St. Louis landlord should know when it is their legal right to evict a tenant. A formal eviction requires a lawsuit be filed, a judgment obtained in court, and the sheriff to execute the eviction notice. Even though it may seem that Missouri laws favor tenants, there are some “deal breakers” that allow landlords to make bad tenants leave the property swiftly.

Certain lease violations, subletting without consent, or illegal activities such as possession or sale of illegal drugs, gambling, or prostitution allow a landlord to vacate the premises with only 10 days’ notice.

The best way to avoid evictions is to do a thorough screening and background check of all potential tenants. It can save a lot of headaches and money to know you are renting to someone reliable and conscientious.

6. Being a Landlord Will Probably Cost More than You Expect

Before launching into renting properties, a St. Louis landlord should know what it will cost them. As each point on our list has pointed out, certain aspects of renting in St. Louis—or anywhere—can cost time and money.

Property owners must know the local rental market. They need to determine a fair rental price that will cover all of the repairs, maintenance, and administrative costs that come along with running a rental property, not to mention the mortgage, taxes, and insurance. And obviously, they will want to make a profit rather than simply breaking even. Taking on a mortgage for a rental property will affect an individual’s credit rating. It may be more difficult to borrow for their personal home or additional properties.

7. You May Not Be Able to Do it All Yourself

It’s worth noting that being a landlord isn’t all about money. Choosing to manage the property themselves will take a lot of time and effort. One small rental house might not be a big deal, but there can come a time when doing your own property management can be a bad idea.

Every St. Louis landlord should know that there is help out there in the form of property leasing and management companies. Hiring a company like Select Leasing & Management is an efficient and economical way to ensure that things are run the way they should be.

A property management company will screen tenants, handle repairs and maintenance, rent collection, and even evictions if need be. They stay informed about the latest state, county, and municipal laws and regulations, so you never have to worry about compliance issues. In short, they know the things that every St. Louis landlord should know.

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The Best Property Management Companies Should Have These 11 Things

Fri, 07 Aug 2020 16:11:46 GMT

Many rental property owners quickly find out that managing a building all by themselves is more than they can handle. This is especially true if they have a full-time job, own several properties, or live far away. They need to find a good property management company to take care of day-to-day operations.

Owners first must decide what type of management help they need, depending on the number of units. Aside from a single rental house or duplex that might require only a handyman for occasional repairs, most larger apartment buildings need a management company that takes care of everything . The same goes for multiple single dwellings. In searching for someone for the job, owners must look for someone who is knowledgeable and experienced. But how can you tell? Keep in mind that the best property management companies should have these 11 things.

1) Diplomacy and Renter Relations

Property managers must be able to communicate and get along with all types of people. Renters need someone they feel comfortable dealing with, who respects them and listens to their issues, and takes them seriously. If tenants have a good relationship with the manager, they are more likely to stick around.

Find a property manager who is both personable and professional. They need to be friendly and helpful, but must also be willing to settle disputes and enforce rules and regulations. And they absolutely must know and comply with Federal Fair Housing Laws.

2) Not Afraid to Get Tough

Unfortunately, a property manager’s job isn’t always pleasant. They must sometimes deal with tenants who don’t get along, don’t pay their rent, break the rules, or engage in criminal activity. An effective property management company will have experience in handling these difficult situations and not be afraid to intervene when necessary.

Depending on the problem, they may need to diffuse a conflict between neighbors, start eviction proceedings , or get law enforcement involved. The important thing is that they do not shy away from the hard choices that sometimes must be made in order to protect the other tenants, the property, and the landlord’s financial interest.

3) Communication and Feedback

Some landlords may choose to leave all decisions and day-to-day operations to the property manager, while others may want to be more involved. Even if the owner doesn’t want to do anything but sit back and collect the rental revenue, the best property management companies are good at keeping them informed when they need to be.

Landlords may not need to know every little thing that happens at the property, but some things are significant and should be reported. For example, an owner should know if a tenant has slipped on an icy sidewalk (there could be a lawsuit), or if there is a water leak that must be fixed again and again (this might signal an upcoming expense to fix it once and for all), or if a problem tenant has wrecked an apartment (repairs and a possible eviction might be in order).

4) Accounting and Financial Reporting

Property management companies can handle the financial side of renting, including rent collection, banking, and handling security deposits. As part of these accounting tasks, they should also be providing detailed financial reports to the property owner.

Owning rental property is a business and an investment, so keeping track of revenue and expenses is essential. One big selling point for deciding to use a property management company is having someone else handle this paperwork that will become important at tax time. (By the way, read this article to find out if property management fees themselves are tax-deductible.) Find someone whose bookkeeping is thorough and accurate, and gives the information needed to make informed financial decisions.

5) A Great Staff and List of Subcontractors

Because they are responsible for the repairs and maintenance of the rental units, property management companies hire part-time or full-time staff, or subcontractors (or a combination) to do the work. Not only is it up to them to find people who are capable of doing good work, but they must also prove that they can be trusted. After all, these people will be entering tenants’ homes.

The best property management companies will screen workers and do background checks. They will vet them to make sure they are using licensed, bonded, and insured professionals with the skills necessary to do the work safely and correctly.

6) Marketing Skills and Knowledge of the Competition

The best property management companies have a handle on the state of the rental market in the area. They know the going rate for apartments and what attracts the best renters.

Find a property manager with a good track record for finding tenants who are most likely to renew their leases year after year. Insight into things like improvements that can capture the attention of new tenants, or why renters are moving out, and when it’s appropriate to raise rents is an invaluable asset in a property management company.

7) A Proactive Approach

Dealing with current problems is essential, but looking ahead is important too. The best property management companies are constantly looking for ways to improve and enhance the property. This could mean something small like noticing that the all-weather mats by the front door are worn, or something major, like suggesting it’s time to have the roof replaced.

Find a property manager who doesn’t just wait for things to break, but thinks proactively to anticipate what will be needed in the short and long term. Looking ahead can save money, as big-ticket items can be worked into the budget. For example, addressing a leaky pipe as soon as it begins to drip is cheaper (and easier) than waiting until it bursts and floods the basement!

8) Performance Goals

Working with a property management company should be collaborative. Both the company and the owner should discuss and agree upon what needs to be done. But the best property management companies set their own performance goals. For example, if a landlord does not specify a time-frame for all repair requests to be addressed, the company does not just assume they can let things slide.

Look for a property management company that sets high standards and holds itself to them. If they impose rules such as responding to tenant requests within 24 hours or striving for a limit on the time a unit remains vacant, they are showing their commitment to the property and the owner.

9) Standard Operating Procedures

It’s important for property managers to have standard operating procedures to follow. The best property management companies have them in writing so there is no question of how things are to be done. Rules are consistent for every new tenant, maintenance provider, and employee of the management company. Without SOPs, managers may make decisions based on their gut or a whim. They run the risk of treating some tenants better or worse than others, allowing some people to break the rules, or randomly changing the rules—in other words, flying by the seat of their pants.

Find a property management company that has clear, concise standard operating procedures. They must also be willing and able to incorporate procedures that are requested by the owner. Good SOPs ensure that things happen according to pre-agreed-upon plans.

10) Tech Savvy-ness

The best property management companies use technology to help streamline operations. All types of software and online services are available for managing rental properties. These include online background checks , automatic rent payments, and maintenance-logging programs, to name a few.

In this day and age, there’s no excuse for using outdated, manual methods of managing property and dealing with tenants. Find a property management company that is familiar with and offers these time- and money-saving tools.

11) Value

Property management fees can vary widely, so owners must look at the value of the services they are getting. Fees should include the basics of tenant screening, preparing units, repairs and maintenance, and drawing up leases and collecting rent. Beyond that, owners must examine what is included and what might cost extra. For example, are there additional charges for emergency repairs? Are cleaning supplies included in the monthly fee, or will they be billed separately? And if there is a fee per apartment, what happens if it’s vacant?

There’s no right or wrong answer to these billing questions. Owners and property managers can agree on whatever works for their particular partnership. What is important is to find a company that is clear and upfront about what value they can provide for their fee. The best property management companies offer reliable service for a fair price, without hidden costs and surprise up-charges.

Finding the Best Property Management Company in St. Louis

It’s a property management company’s job to act as a go-between for the landlord and the tenants. In fact, tenants may never even meet the person who actually owns the building. Instead, all of their interaction will be with the apartment manager or management team.

We can’t stress enough the importance of finding a company with these 11 traits. Select Leasing & Management has these and more. Call us today to find out why we’re the best for you!

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Real Estate Investing vs. Property Management

Mon, 08 Jun 2020 14:53:37 GMT

Real estate investing can mean owning one single-family rental house, or hundreds of apartment complexes. It can be an extra source of revenue on top of a work salary or a full-time job and business. Whatever the scope of real estate investing, it should not be confused with property management.

Many rental real estate owners have no interest in being a landlord. The property is simply an investment for them. Those owners typically hire a property manager to handle the day-to-day operations. As their portfolio grows, they may also need the help of a real estate investment manager. These professionals handle the financial and strategic side of real estate investing. Real estate investing, property management, and real estate investment management serve three distinct functions.

Real Estate Investing or Investment Management?

When someone owns a property other than the home where they live, they are engaging in real estate investing. They are the owner and landlord of the house, apartment, or commercial space. They take on the financial risks and rewards that come along with that role.

An investor might start out with just one rental unit, planning to buy more in the future. As their portfolio of properties grows, the situation could change from a simple opportunity for some extra income to a full-fledged business. Real estate investment companies come in all sizes. It might consist of just one individual, or it might be a huge conglomerate traded on a stock exchange.

When real estate investing expands and becomes a business, the owner might need to hire a real estate investment manager. This person or company doesn’t own a stake in the properties themselves, but works for the owner to oversee their portfolio of properties. It is their job to create a strategy that will bring the owner the best return on their investment.

Someone with only a checking account wouldn’t need a financial manager or wealth manager, but someone with a portfolio of various stocks, bonds, mutual funds, and retirement accounts might. In the same way, an owner with only a few properties may not need an asset manager. One with multiple real estate assets will benefit from having an expert help them get the most from their investment.

What is Property Management?

Property management, on the other hand, is not only for real estate investing companies. Even a landlord with just one rental house may want to hire a property manager. A property manager’s job is to take care of the needs of the renters and maintain the building. The owner may live too far away, or not have the time, ability, or desire to do the work necessary. The more properties in a portfolio, the less likely it is that an owner can handle their management.

A reputable management company will always do what they can to protect the owner’s investment by finding reliable tenants, keeping the property in good shape, reducing expenses when possible, and sticking to a budget. It is important for owners to find one they can trust .

A typical full-service property management company would include these services:

Find tenants. Property managers may take care of advertising and showing rental properties, screening applicants and doing background checks, and providing the necessary lease paperwork and tenant rules and regulations.
Prepare rental units. Property management companies either employ or sub-contract various tradesmen to get rental units ready for new tenants. Carpenters, HVAC techs, painters, etc. will work to get apartments or houses ready to rent.
Collect rent. Property managers are often responsible for rent collection and the associated accounting and banking. They will also typically handle late notices and start eviction proceedings if necessary.
Handle maintenance requests. Tenants are usually instructed to contact the property manager during emergencies or when repairs are needed. As with preparing units for new tenants, the company will provide the appropriate worker to take care of the problem.
Upkeep and maintenance. The property manager takes care of the exterior of the building as well as any public spaces such as a pool, laundry room, hallways, or workout space. They will mow grass, shovel snow, and sweep on a regular basis.

What Does a Real Estate Investment Manager Do?

While property management revolves around the renters and the physical space, a real estate investment manager’s main job is to strategize and give advice on how a real estate investor can strengthen their portfolio and increase revenue. Some of the services they provide are:

Monitor the real estate market. Real estate asset managers will watch for trends in the market and make suggestions about properties to buy and sell. They may keep an eye out for specific types of dwellings that will fit into the strategy for the portfolio. For example, one portfolio may stick to only single-family homes, while another might benefit branching out to acquire an apartment building.
Work with lenders. Through their relationships with various lenders, the real estate investment manager will work to secure financing on the owners’ behalf. They will shop for favorable interest rates and do the negotiating and administrative work.
Negotiate leases and property agreements. They will draw up the appropriate legal documents to protect the interest of the owners.
Maximize property value. They will help steer decisions toward what will maximize the value of the asset. For example, they may suggest repairs and improvements on one property versus another. Or they may advise adding amenities like a pool or workout room based on what renters are willing to pay more for in a certain area.
Market the property. Many asset managers will work with a leasing team to market the rental in a way that is most appropriate in the region with a goal to reduce vacancies and increase revenue.
Budgeting. The asset manager will be responsible for capital and operations budgets and a financial strategy that will minimize costs and maximize value. They will provide long-term financial projections and cash flow management.
Hire a property management company. To further lighten the administrative load on the investor, the real estate asset manager might find and interact with a property management company for them.

Do You Need Real Estate Asset Management or Property Management?

There is some overlap in the services provided by a property management company and a real estate asset management company. Either one may take on marketing or budgeting tasks, but that’s where the comparison ends.

Real estate asset managers focus on the big picture. They are like the generals in a war room, mapping out an overall strategy to meet the goals of the real estate investor. Property managers are the boots on the ground. They are on-site, carrying out the orders to take care of whatever needs to get done.

Not everyone involved in real estate investing needs a real estate investment manager. But anyone with more than a few properties should consider a property management company. In the St. Louis area, Select Leasing & Management has years of experience helping landlords shorten their property management to-do lists .

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Is Doing Your Own Property Management a Bad Idea? Answer These 6 Questions

Mon, 04 May 2020 17:57:12 GMT

Just like the owners of any other business, people with rental properties are always interested in ways to lower expenses. One way they might try to save money is by doing their own property management.

Is doing your own property management a bad idea? Taking care of everything yourself certainly can be a lot of work, but for the right person in the right circumstances, it might be worth it. On the other hand, there’s a lot to be said for letting seasoned professionals do a lot of the “heavy lifting” when it comes to day-to-day management.

So: Do you have what it takes, or are you better off hiring a property manager or management company? We’ve put together a list of questions to ask yourself before you decide.

How Many Rental Units Do You Own?

Obviously, maintaining and managing one rental unit yourself is a lot more realistic than managing hundreds or even a dozen. It’s simple logic that the more properties owned, the more work they will be to take care of.

The tipping point for the number of units where it becomes overwhelming will be different for everyone. Owners must ask themselves how much time and effort they are willing and able to devote to their tenants. Some things to consider that will affect the decision:

Are they holding down a full-time job in addition to managing the property?
Do they have children or family obligations that take up a lot of time?
Is the property in good repair, or is there always a lot to do?
Do the tenants take good care of the property and do some of the upkeep?

An owner may start with one property and have no trouble keeping up with everything that must be done. Adding a few more units to the real estate portfolio can completely change things. The property management to-do list can seem never-ending and out of control. When a landlord reaches that limit, it’s time to get help.

Do You Live Nearby?

When a landlord lives in one half of a duplex and rents out the other, it’s easy to pop next door to take care of a problem or do a repair. The further away the rental property is, the harder and more time consuming this becomes. Beyond a certain distance from the landlord’s home, DIY property management just isn’t practical.

Tenants expect landlords to be responsive to issues and available in the case of an emergency. If they don’t live near enough to the rental property to get there quickly, they will need to find someone else to step in when needed.

People invest in rental real estate all over the country. They often have no intention of shouldering the burden of managing the property themselves. No matter where a property is located, they can hire a management company or individual to take care of tenants’ day-to-day needs.

Do You Have the Time to Advertise and Screen?

Vacant properties don’t bring in any money, but the owner still needs to pay the mortgage. The landlord needs to find someone to move in as quickly as possible.

In addition to cleaning the unit and fixing anything that needs attention when someone moves out, the unit will need to be listed wherever rentals are advertised in the area. This could include social media, websites like Craig’s List, a community bulletin board, or in a local newspaper. Video tours and high-quality photos to show off the property’s best features have become common in many markets. While many of these avenues are inexpensive, they have to be eye-catching to attract potential tenants. It can take some time and talent to get it right.

Even though virtual tools are popular, it’s unusual for someone to sign a lease for an apartment or house without seeing it first. This means landlords have to make themselves available to show the property, possibly to multiple candidates.

Once there are people interested in renting the property, the application and screening process begins. Screening potential tenants is critical for finding good tenants and avoiding renting to bad ones. A thorough check includes looking carefully at their financial and criminal backgrounds, as well as checking with former landlords and character references.

Tenant screening is an expense that can’t be avoided. Owners must also take the time to examine the data the background checks provide, making their decisions about which tenants to choose, while not breaking any discrimination or fair housing laws.

Are You Handy?

Property management includes routine maintenance as well as repairs when something breaks. When owners commit to doing their own work on their rental units, they need to be a jack-of-all-trades.

Ongoing upkeep takes the form of many regular tasks:

Mopping and vacuuming common areas
Cutting grass and landscaping
Shoveling snow
Cleaning and removing trash
Painting

Repairs and maintenance jobs will have them wearing many different hats:

Electrician
HVAC repairman
Plumber
Appliance installer
General handyman

If the property owner does not have the time, physical ability, or skill to do these things alone, he or she will need to hire a reputable person for each job that arises. This is particularly true in the case of an emergency. Landlords should get used to interruptions, as they may get calls at all hours of the day or night. Whether it’s 3 am or during their child’s birthday party, they often must respond right away. A broken window or broken pipe flooding the basement won’t wait until a more convenient time.

Even if nothing is preventing landlords from doing all of these things themselves, they may simply have no desire to do them. Taking on the work of even just one rental unit in addition to one’s own home can take up a lot of time and energy.

The bottom line is that tenants need to be taken care of, so these things must be done no matter what—either by the landlord or a third party.

Are You Prepared to Get Tough?

Unfortunately, renting homes comes with some risk. Landlords may have to cope with tenants who don’t pay their rent on time, damage the property, or cause trouble for the other tenants. These situations can put an owner in the uncomfortable position of having to confront the renters or even call the police or start the eviction process.

When tenants don’t follow the rules, landlords may sometimes have to “be the bad guy” to ensure In order to ensure the condition of the property, the safety of other tenants, and the success of their rental business. Not everyone is cut out for the role of rule-enforcer.

A property manager can relieve this burden from an owner. They can collect rent and handle raising it when the owner chooses. If they have an office on-site, they can address problems and rule violations right away. And if it is necessary, they typically have experience in initiating evictions .

Do you have a head for business?

A lot of time will be spent on accounting and administrative paperwork when doing your own property management. Collecting rent, paying bills, and keeping track of security deposits will be a regular occurrence.

It is necessary to make sure insurance policies are up to date and the building is in compliance with all codes. Landlords must also keep informed about laws and statutes dealing with rental real estate to ensure they are following all local, state, and federal regulations. Failure to do so could mean fines or even criminal charges.

Handing Off the Property Management Duties

Do-it-yourself property management is a lot of work on many different fronts. A landlord must:

Be willing and able to do the physical work of taking care of the building
Have the interpersonal skills needed to deal with all types of people
Know about proper business practices and keep good records.

Rental property owners who lack these skills to do their own property management should think seriously about hiring a property manager or company like Select Leasing & Management. An experienced company like Select can take charge and handle everything we’ve discussed.

Whether you decide to continue taking care of some tasks yourself, or hire someone to handle it all, start here to learn all about how property management companies work .

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The Property Management To-Do List

Tue, 07 Apr 2020 17:59:18 GMT

The business of owning rental real estate can be lucrative, but it is also hard work. Finding tenants is just the beginning. Landlords have an extensive property management to-do list that they must constantly maintain.

Landlords can choose to go it alone and do all the work themselves, or they can hire a property management company. Professional property managers like Select Leasing & Management have the experience and the staff to take care of all tasks necessary to keep rental properties running smoothly. For owners who decide to manage their own properties, here is a checklist that will help.

Getting Ready to Rent

Before anyone moves into a rental space, there are things the landlord must think through. If a building has been purchased with tenants already residing there, some of these decisions may carry over from the previous owners.

Set rates. Determine what similar rental units are going for in the area and choose a rate that is competitive but will still make the venture profitable.
Draft rental policies. Decide if you will allow smoking, pets, and subletting. Do you want to limit how many people can occupy an apartment? Will you let renters make improvements like painting the walls? Write up clear rules covering the things that matter to you, making sure they follow local and federal anti-discrimination laws.
Advertise. Market the property in the preferred way(s) for your area: online ads, social media, print publications, or a combination. Highlight the property’s best features and amenities to attract potential tenants.
Screen Tenants. Ignoring tenant screening is a mistake . Select the right renters by putting their applications through a thorough screening process that includes credit checks and criminal background checks.

Prepping the Dwelling

There are several things that a landlord needs to do to the rental unit before it is ready to be rented. This applies to preparations for the first-ever tenant and every new tenant after that. These tasks are easiest to accomplish while the unit is empty. Owners need to make sure there is plenty of time between move-in and move-out times to get them all done, even if that means some time when the apartment is vacant.

Cleaning. The rental unit must be thoroughly cleaned from top to bottom before a new tenant moves in. Anything left behind by a departing tenant should be disposed of. Unless the apartment has been shown to potential renters while it is occupied, it is best to complete this before it is advertised.
Paint, floors, and window treatments. The condition of these things needs to be assessed and they need to be taken care of if necessary. Many landlords will repaint walls between tenants. Some will also replace carpet and blinds. If they don’t need to be replaced, they should at least be added to the list of things to clean.
Appliances. Check that the stove, refrigerator, dishwasher, and washer and dryer are in good working order. They will need to be fixed or replaced before the tenant moves in.
Electric, plumbing, and HVAC. Every light switch and outlet should be properly wired and grounded. Make sure there are no leaky pipes, the toilets flush, and sinks are not clogged. Test the heat and air conditioning, no matter what season it is. All of these things are essential to the livability of the space.
Safety and Security. Not only is it smart to have working smoke and carbon dioxide detectors, in most municipalities, it’s also the law. The safety of the tenants, as well as the property itself, is at stake if these are missing or broken. The rental unit should also have reliable locks on windows and doors. Features such as a locked and secured lobby area or an intercom system should be tested and in good working order.
Repairs. Make sure that anything in the apartment that is broken gets fixed before a new tenant arrives. Loose doorknobs, cracked windows, and nail holes in the walls should all be repaired. You’ve chosen a terrific way of integrating images and text into your website. Move the image anywhere you want in this container and the text will automatically wrap around it. You can display events can add text that describes the image you’ve selected or simply use the image for decorative purposes.

Taking Care of the Building

Whether it is a single-family house or multiple apartments in a large building, the structure and the property it sits on is the landlord’s responsibility to maintain. There are ongoing tasks that must be done on a routine schedule, as well as large projects that may only be needed occasionally.

Structure. Schedule periodic assessments of the roof, exterior paint, brickwork, steps, etc. Repairs or replacements should happen as needed.
Grounds. Routine maintenance such as mowing the lawn, shoveling and salting walkways, and landscaping are necessary. For single-family dwellings, this might be left up to the tenant. If that is the case, the responsibility should be outlined in the lease agreement. Some allowances, like providing lawn equipment or reimbursing for gas might be made so the tenant can perform these tasks.
Public areas. Maintaining public areas of an apartment building must be done on a regular basis. Hallways must be mopped or vacuumed, lobbies cleaned, litter removed, and trash cans emptied.

Keeping Tenants Happy

Landlords have the responsibility of taking care of tenants’ needs while they reside in the rental home. They must be ready to take on these tasks if and when they arise.

Repair requests. Tenants need to be able to contact the landlord or property manager if things break. It is up to the landlord to see that things get fixed or replaced.
Emergency calls. Sometimes these repair issues can’t wait. Unfortunately, calls could come in at any hour if a pipe burst or a window gets smashed. The landlord will need to deal with it immediately.
Mediating conflicts. Hopefully, all tenants get along, but if a renter has problems with the other tenants in the building, they may complain to the landlord. It may fall to the landlord to intervene, especially if the complaint involves a tenant breaking the regulations laid out in the rental agreement.

Tenant Transitions

Having procedures in place for when one tenant leaves and another moves in will encourage smooth transitions.

Walkthroughs. Consider doing a walkthrough with the departing tenant, and another with the new tenant. These inspections will determine if the former tenant has left behind a mess or damage that will void their security deposit. It will also assure the new tenant that all of the steps to prepare the dwelling (above) have been followed.
Change locks. All locks and security codes need to change before handing over the keys to each new tenant.
Transfer utilities. When tenants are responsible for paying their own power bills, the landlord may want to assist them in making sure the accounts get transferred in a timely manner.

Accounting and Administrative Tasks

There is a lot of administrative work that goes along with owning rental property, too:

Rent collection. Landlords are responsible for making sure that rent is paid on time. Make electronic payment options available if possible. Keeping thorough accounting records and sending late notices go along with this task.
Security deposits. Collecting, keeping track of, and refunding security deposits is important and should be done in a timely manner.
Pay bills. Bookkeeping to pay the mortgage, taxes, maintenance and repair workers, and supply vendors are essential. If the rental property is a large building with a lot of expenses, this can be time-consuming. Hiring a bookkeeper might be necessary.
Insurance. The building must be insured, but so must the landlord. Landlord insurance policies exist to cover not only the property but the owner’s financial liability if something were to happen to a tenant on the premises.
Enforce policies. If there are written policies in place as we suggested above, it is up to the landlord to see they are followed. If tenants break the rules, take the necessary steps to correct the behavior or seek action to remove the tenant.
Comply with laws. Keep informed about, and stay in compliance with, all current laws and regulations on the federal, state, and local levels.

Getting Help With Your Property Management To-Do List

As you can see, the list of things to do for a landlord is extensive. Even if the owner has just one single-family home to rent, they may lack the time and resources to manage it.

Some situations that make self-managing rental properties difficult or impossible are:

Juggling property management with a full-time job
Physically unable to do the work
Living far away from the rental property
No desire to deal with tenants
Disorganization
Wanting the property as an investment only

If any of these apply, you should seriously consider hiring a property management company. Select Leasing & Management has several useful resources to help you reap the benefits of being a landlord, without shouldering the burden all by yourself. Find out what services property managers provide , how much it will cost , and how to find the best one to fit your needs.

Cover image by towfiqu ahamed barbhuiya by Canva.com

How Property Management Companies Work

Tue, 17 Mar 2020 18:06:16 GMT

Owning and taking care of rental properties can be a full-time job. It’s difficult for owners or landlords to keep up with maintenance, rent collection, accounting, and occasional emergencies… especially when owning more than one property. Those who can’t or don’t want to do everything themselves might benefit from hiring a property management company.

While every company is different, most follow the same basic principles. Knowing how property management companies work, and what to expect from property management companies on a month-to-month basis, can help an owner decide whether they need one and help them search for the best fit.

What Do Property Management Companies Do?

Property management companies lighten the load for property owners by taking on a variety of tasks . Landlords pay them to handle both routine operations and emergencies. The exact list of what will be delegated to the management company will be spelled out in a contract, as well as payment terms (more on that later).

Companies might have their own staff to do the work, or they may use different vendors for projects that need to be done. Many do both. For example, a company could employ a handyman who does small repairs, mows the lawn, and vacuums the hallways. They could also hire a professional carpenter, plumber, or cleaning crew for bigger repairs or to get a unit ready for a new tenant.

Typical duties offered by property management companies include:

Screening new tenants and doing background checks
Cleaning units to prepare them for new renters
Drawing up lease documents
Collecting rent, banking, and bookkeeping
Responding to maintenance and repair requests
Maintaining grounds and common areas (lawn care, snow removal, sweeping, etc.)
Advertising and showing apartments to prospective tenants
Handling late payments, tenant disputes, and evictions if necessary

Depending on the level of involvement a landlord wishes to have, property management companies may do some of these things or all of them. Some owners, for example, wish to deal with tenant screening themselves to ensure that those living in their rental homes meet their personal standards. (Note that all leasing must comply with the Federal Fair Housing Act , prohibiting discrimination.)

There are also full-service property management companies who will do it all. When property managers take on these tasks and do them well, it takes a huge burden off of the property owner. They have someone else to rely on for ordinary things as well as unpleasant tasks, such as starting eviction proceedings and handling bad tenants.

Of course, this doesn’t mean the owner won’t know what’s going on at the property. There should still be ample communication with the company, and the owner should have final say in big decisions. But in many cases, there is little for the landlord to do other than watch for the direct deposit of rent revenue in their account.

Do I Need a Property Manager?

Sometimes, investors who know how property management companies work have hired one before they even make a purchase. Others may consider hiring one after trying to do everything themselves.

There are situations where it is clear that hiring a property management company is a good idea:

Owning multiple rental units, especially in different locations. This may make it impossible for one person to handle themselves. Even one or two homes or apartments may be too much as the landlord gets older.
The landlord may live far away from the property. There must be someone on-site or nearby to handle tenant needs.
Landlords may not want to be employers. By working with a property management company, they avoid having to be responsible for hiring, paying, and filing tax documents for employees.

There is often a tipping point when the cost of a property management company becomes “worth it.” The value isn’t only in dollars, but also the time and effort that the owner is spending on keeping the property running effectively.

What to Expect From Property Management Companies When it Comes to Cost

Property management companies charge rental owners for their administrative and maintenance services. Exact costs vary depending on what property management companies do for the owners, but payment terms will be spelled out in a contract . Every company usually follows similar guidelines .

Usually, property management companies are paid between 8% and 12% of the property’s rental income. An owner should be sure they understand if this will be rent due or rent collected. This is important, as there is often difficulty getting tenants to pay on time. It is preferable to pay the company only for what they actually collect each month.

The contract should also spell out what will happen with vacant units. If a management company is paid the same amount whether there is a tenant or not, there may be little incentive for them to find a new renter.

On top of a percentage of rent, owners usually pay additional amounts for other expenses like repairs, advertising, credit and background checks, and accounting. This might be a flat fee charged each month, or an itemized bill for expenses. This usually depends on the number of properties covered by the contract.

For example, the company managing a small apartment building with four units might have one on-site maintenance man. The owner might receive a monthly bill based on actual receipts submitted by the handyman. On the other hand, with a large number of units, or a larger property management company, the owner is more likely to be charged a flat fee. The paperwork necessary to track specific expenses will simply be too cumbersome for a large operation to handle.

A number of normal monthly expenses are included in a flat fee. If there is something out of the ordinary, for example repairing a burst pipe, or replacing a unit’s refrigerator, the owner may be billed separately. All of this should be spelled out in the contract so the owner is not blindsided by a bill for a big-ticket item or project.

Often, a property management company will require a reserve account to be set up by the owner. This allows them to pay for expenses out of the account without having to wait for payment from the owner. How the account will be funded and used is another part of the contract. It’s important to know exactly what to expect from a property management company before signing the agreement.

How to Find the Right Company

Statistics show that there are over 275,000 property management companies in the U.S., employing more than 825,000 people. When an owner decides they need to hire one, they have plenty to choose from. Knowing what to expect from property management companies can help to find one they can trust.

The ideal property management company forms a true partnership with their property owners. They take good care of their tenants while also looking out for the owner’s best interest, all while following state and local laws.

Our blog post 5 Things You Should Know About Property Management Companies in St. Louis can help you narrow down the search. At Select Properties Leasing & Management, our professional staff is trained to offer world-class support to owners and tenants in the greater St. Louis area. We welcome your questions about how our company works and how hiring a property management company can work for you.

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Post originally published March 17, 2020

Can a Property Manager Raise Rent?

Mon, 03 Feb 2020 21:35:16 GMT

There are a lot of great reasons for a property owner to hire a property management company. As agents for the owner, property managers can find and screen tenants, handle administrative paperwork, collect rent, and take care of maintenance and upkeep. Companies like Select Leasing & Management in St. Louis have the know-how and manpower to handle all of the day-to-day tasks for landlords who either can’t—or don’t want—to do it themselves.

Owners delegate certain rights when they hire a property management company. One right that we discussed in a previous post is the ability to start eviction proceedings. Managers, even if they’re not on-site, are in a position to know when eviction actions are necessary.

Another task that makes sense to delegate is raising the rent. In many cases, property managers have the authority to research market rates and raise tenant rent amounts accordingly.

Guidelines for Raising Rent

While property management companies can raise the rent, they can’t do it without the landlord’s knowledge and permission. But it is technically possible for them to include wording in their contracts that gives them the authority to do so. When finding a company to manage rental properties, owners must read the terms of the agreement carefully to make sure an unscrupulous manager isn’t able to raise rents without the landlord’s knowledge (and maybe even pocket the extra profit for themselves!).

In most cases, raising rent will either be initiated by the landlord or suggested by the management company. Either way, both parties will be aware and in agreement about the amount and timing of the increase.

Whenever a rent increase is put in place, it must follow state and local laws and regulations. Although St. Louis isn’t one of them, some areas of the country have rent control laws where very strict rules exist about when rent can go up and by how much.

More typical are laws about how much notice tenants should have. For month-to-month leases, renters must be given 30 days notice of a rent increase. When there is a fixed-time lease in place, rent can’t be raised until the lease is up for renewal.

Management companies also have the right to increase the amount of a security deposit. For example, if the rent is $1000 a month and there is a deposit in place for two-months’ worth ($2000), when rent goes up to $1100, an additional $200 can be billed to get the security deposit up to $2200.

Good and Bad Reasons to Raise the Rent

It seems obvious that when a landlord’s costs go up, so should the rent. But expenses should only be part of the equation. The most important factor in deciding on a rent increase is the local market. Owners and property managers must strike a balance between paying the bills and keeping rents in line with other comparable properties in the area.

Tenants may question the need for an increase, especially if they think it’s excessive. Higher utility costs, insurance, or taxes may be impacting the entire local market. If you are keeping pace with other buildings in the area, tenants will often find that moving will not necessarily get them a better deal.

Sharing the reasons for a raise in rent can help renters understand and accept the change. If the property is undergoing renovations and upgrades, or adding new amenities, tenants might be more accepting of an increase. There is no guarantee that every tenant will stay, but it helps to be open and honest about the costs of keeping the property a desirable place to live.

Landlords who steadily raise rents without maintaining the building should beware. Tenants are sure to become frustrated with apartments where things don’t get fixed but the price keeps going up. If renters are leaving, it could be time to hire a property management company to improve upkeep, or find a new one.

And remember: Raising the rent to force certain tenants out is unacceptable, and may be illegal. It should never be done to discriminate or retaliate against tenants in any way.

Keeping Tenants Happy When Rents Go Up

No renter likes to hear that their rent is going up. But it can go smoothly if the property manager handles it properly. Here are some tips to make it easier for everyone:

Put the rent increase in writing. In some places, this is required by law, but even if it’s not, it’s a good practice to follow. Receiving written notice will avoid misunderstandings or claims that the renter didn’t know about the change.
Give plenty of notice. Even though the law may only require 30 days for month-to-month renters, try giving 60 or 90 days. Renters will appreciate the heads up so they can adjust their budgets for the new expense. If they decide to move out it gives them a head start on their apartment search.
Remind tenants about payment options. If renters use automatic payments, prompt them to contact their bank about the change. Whether the bank sends the wrong amount, or a tenant sends a check with the old amount out of habit, it is up to the property manager to chase down the balance due. Reminders can reduce the need for that extra chore.
Opt for gradual increases. Tenants are more likely to accept a 2% increase each year, rather than paying a steady amount for five years and suddenly having a 10% jump.

Most tenants understand that as prices increase all around them, so will the cost of their rental property. When property managers have to raise the rent, it is best to do it in a straightforward, honest way. When the renter feels that the amount is reasonable and that their home is being well cared for, they will be much more likely to stay.

Can Property Management Companies Evict Tenants?

Tue, 07 Jan 2020 21:37:24 GMT

Welcome Back to The Select Leasing & Management Blog!

If you are a property owner, the one thing you hope you never have to deal with is the eviction of tenants. It does happen, however, and there is a set legal process that needs to unfold. One of the primary benefits of a property management company is that they can handle the eviction process for you, saving you time and some potentially unpleasant interactions with your former tenants.

How Does a Property Management Company Have the Authority to Evict Tenants?

Most property management companies will have you sign a contract where you declare them to be an agent on your behalf. Being an agent simply means that they have the authority to act on your behalf as a landowner. For example, they can start eviction proceedings and even appear in eviction court on your behalf.

(Note that you do not waive these rights for yourself. You still have the discretion to evict and to appear in court—just be sure that, if you are using a property management company, you are working with them on these issues!)

What Might Trigger an Eviction?

Most often, an eviction occurs because there has been a breach of lease (or breach of contract). The most common breaches include:

Failure to pay rent in a timely manner (or at all)
Engaging in illegal behavior on the premises
Endangering others on the premises
Destruction of the property
Breaking specific terms of the agreement (for example, having to do with smoking, pets, etc.)

This list is not exhaustive, and those who have been landowners for some time have probably seen even more wild cases leading to eviction.

These cover what is called eviction with cause. In short, the tenant has done something wrong, or failed to do something they were supposed to do, and are thus in breach of lease.

Most cities and states require that the landowner or management company send at least one letter to the tenant(s) stating how the situation can be remedied. For example, if the tenant has not paid rent, the landlord is required to send a “Pay or Quit” notice, telling them what amount of rent is past due and needs to be paid to stop eviction from going forward. A “Cure or Quit” notice outlines what steps need to be taken to be compliant with the lease—for example, repairing damaged property, ceasing smoking in the building, finding a new home for a pet, etc. Once the letter is delivered, most cities and states also require a “reasonable timeframe” for the tenant to pay or fix the problem—usually 30, 60, or 90 days.

In some states, it is legal to give an eviction without cause if the tenant is month-to-month (i.e., does not have a lease). This means that the landowner does not specify a reason for wanting the tenants to leave. The law usually requires that the tenants be given a suitable warning time so that they can find new accommodations (again, 30 to 60 days is typical, but local laws vary). This is much more rare but sometimes happens when the landowner wants to sell the property or make room for tenants willing to sign a lease.

Why Use a Property Management Company for Eviction?

Establishing that a property management company can handle an eviction is easy; it’s just a matter of what the law allows, and what the management company is willing to offer as a service. The real question is: Is it a good idea to have a property management company handle evictions for you?

There are several reasons why landowners do find it valuable to use property management companies in cases of eviction:

The legal process. The process of evicting a tenant is often complex, requiring that certain steps be taken at certain times. What those exact steps and timing are vary from state to state, however, and even from city to city. It helps to have the process handled by a property management company that is familiar with state and local laws concerning eviction, and that has experience taking the appropriate steps.

The time involved . Delivering letters, appearing in court, filing the appropriate paperwork...these all take time. A property management company can do these things more efficiently while freeing you to do other things.

Confrontation . Let’s be honest: Eviction is nasty business. For many landowners, hiring a property management company means they don’t have to deal with angry tenants. (And somebody else gets to be “the bad guy.”) This means less stress and anxiety for all.

Note that, for some companies, eviction is an additional cost on top of monthly fees. Eviction itself is costly, and most property management companies are not going to cover this cost. That said, it is almost always worth it, as potential lost rent is often more than the cost of an eviction.

Are You Looking for Experienced Property Management in the St. Louis Area?

If you have multiple rental units in the St. Louis area, Select Leasing and Management can help manage your units, including handling evictions. Whether you live in the area or own your properties remotely, we’ll help you maintain your freedom while getting the most out of your investments.

Contact us today to schedule a time to discuss your situation with our professional property managers. We are confident our solutions can help you succeed!

Are Property Management Fees Tax-Deductible? (and Other Tax Questions Answered)

Tue, 10 Dec 2019 21:30:31 GMT

Welcome Back to The Select Leasing & Management Blog!

It doesn’t matter if they have one rental property or 1,000. In the eyes of the IRS, landlords are like any other business owner and need to pay taxes on their profits. Luckily, costs associated with the property, including property management fees, are tax-deductible.

As the owner of rental property, it’s important to know about tax liability issues. Knowing what counts as income, and what is, and is not a tax-deductible expense will help eliminate surprises when it’s time to file a tax return.

We’ve explained in other articles how a property management company can make landlords’ lives easier. They can also simplify things when it comes to preparing for tax time.

DIY vs. Property Management Companies

Property management fees are tax-deductible, whether a landlord takes care of the property himself or hires a management company to do it. The difference is that in addition to all the day-to-day work, a do-it-yourself landlord is also responsible for keeping track of all of the expenses they incur. That means tracking every penny they pay for supplies or to hire someone to do repairs or maintenance.

On the other hand, when a landlord hires a company to manage a building, calculating property management fees is easy. It is simply the total they paid to that one company during the year. The management company may charge a flat fee each month or may invoice separately for certain projects or supplies. The burden of tracking all the details falls to the management company for their own tax purposes.

Tracking their own income and expenses will add extra paperwork for the landlord, but it can be done. The important part is recognizing what can be deducted and having the receipts to back it up. The last thing anyone wants to do is pay more tax than they need to. Knowing the rules will help ensure they’ve done everything possible to reduce their tax bill.

The taxable income for a rental property is a straightforward calculation. It is simply the amount of rent collected, minus deductible expenses.

What is Considered Income for a Landlord

Most landlords use the cash method of accounting. This means that they report income and expenses in the same year that they are paid. So, in addition to regular monthly rent received, the income also includes any security deposits. It’s common to require first and last month’s rent. Even though the last month’s rent is technically for a future year, it should be reported in the year it was received from the tenant.

Some landlords make arrangements with tenants to collect services in place of rent. For example, a tenant might offer to mow the property’s lawn all summer in return for a month or two of rent. In this case, the landlord would claim the amount of rent as income, even though he didn’t receive a check. But he can also claim the same dollar amount as a maintenance expense. The net taxable income is zero.

In the case of shared ownership, each owner claims a portion of the income (and expenses) equivalent to their ownership percentage. For example, if two people share ownership equally, they would each claim 50% of the total rent collected as income on their individual tax returns.

Deductible Expenses for Rental Property Owners

Landlords are entitled to tax deductions for much of the money they spend on their rental properties. Deductible expenses include maintaining the land, the structure, and the individual rental units. But other “costs of doing business” can offset income too.

Repairs and Maintenance Expenses

Any time a property owner needs to fix something for a tenant, the expenses are tax-deductible. Let’s say the pipes are leaking under a tenant’s kitchen sink. The cost of the new pipes can be claimed on the landlord’s tax return, along with all of the hardware needed to do the job. If a plumber is hired to do the work, the plumber’s bill can be added too.

Costs for general maintenance are deductible too. Cleaning and upkeep of common areas, utilities, landscaping and mowing, parking lot and sidewalk maintenance, snow removal, service on laundry room equipment—if it involves keeping the property in good condition for the tenants, it can be claimed on a tax return.

Instead of going into specifics about what can be claimed, the IRS rules simply state that the expenses claimed must be “ordinary and necessary.” This leaves some room for interpretation, but in general, expenses should be in line with what is generally accepted in the industry. For example, if the landlord replaces a broken doorknob and claims $2000 for parts and labor on a tax return, an IRS audit could be in his future.

Operating Expenses

As we’ve stated, running a rental operation is a business, and there are many expenses that go along with keeping it running smoothly. These are the areas where it is most beneficial to hire a property management company. Companies like Select Leasing & Management in St. Louis have the personnel and expertise to take these tasks off of the property owner’s hands.

Advertising available units is a tax-deductible expense. So are fees for credit and background checks of potential tenants. A landlord can claim legal fees associated with writing their leases, as well as eviction proceedings if necessary. These are all services that are typically included by management companies.

Expenses of Property Ownership

Finally, the costs of actually owning a property are tax-deductible. This covers mortgage interest, property taxes, and depreciation expense.

Major capital improvements or additions made to a property are not treated the same as repairs of maintenance. Some examples of capital improvements include adding units to an existing apartment building, installing a pool, or even a new roof. When something extends the life of the property, or changes it for another use, the cost must be depreciated over several years, rather than claimed as an expense in the year the money is spent. Only the amount of the current year’s depreciation is tax-deductible, instead of the entire project.

Property Management Companies Simplify Things

Property income and expenses are recorded on Schedule E of the property owner’s tax return. If a landlord owns only one rental unit, calculating his own taxes may not be too difficult. If they own a number of properties, it will become more complex. The same goes for landlords who manage things themselves instead of hiring a property management company.

Consider a company like Select Leasing & Management. They take care of the routine management of your rental properties. And when tax time comes around, your income and expenses will be easy to calculate.

It is usually best to contact an accountant to prepare the tax return or to at least ask advice. The goal is to minimize the amount paid to the IRS. Finding every available tax deduction for property management fees is the key.

How Much Are Property Management Fees? And What's Reasonable?

Tue, 15 Oct 2019 19:23:06 GMT

Welcome Back to The Select Leasing & Management Blog!

Let’s discuss the elephant in the room: Many property owners reject the idea of hiring a property management company because they are afraid of the fees. They don’t just ask “How much are property management fees,” and then open their checkbook. They want to make sure they are getting the most out of their investment…and that the fees they are quoted are reasonable.

To understand what goes into property management fees structure, it helps to understand what fees typically cover (or should cover) and how to calculate their true value (which is your return on investment).

What Property Management Fees Cover

Different property management companies can offer different service packages, but there are some property management services that are pretty typical across the industry. These include:

Tenant screening and background checks.
Preparing units for rent.
Drawing up the leases.
Collecting rent and keeping accounts.
Handling maintenance requests.
Assisting with grounds (snow removal, lawn care, etc.).
Compliance with state and local laws.

In addition, many companies offer one or more of these services as well:

Marketing and advertising.
Property evaluation.
Property inspections.
Policy consulting.
Online portal (for paying rent, reporting maintenance issues, etc.).

The fees that a property management company charges, then, cover the labor and materials for these services, including the technology needed to report to you every month.

Select Leasing and Management’s Fees

All that said, the fees that management companies charge can vary wildly. Most charge a portion of the rent you collect, though some might have a flat-fee or sliding scale. Because there is so much variation, we’ll simply hold out our own company as an example.

The fee structure for management services here at Select Leasing and Management is simple, by design. We charge 10 percent of the monthly rent. So what you pay depends on how much rent your property earns. This way, our fee scales with the number of properties managed and what kind of rental rates you can manage to charge for them, guaranteeing that you’ll get a predictable (and fair) share of the income.

Beware of Up-Charges and Hidden Fees

We are also proud that we do not charge “special fees” for services that are by-demand (and not monthly). For example, suppose a tenant calls in the middle of the night with an emergency that needs a response right away. Some management companies consider this an “additional” service, and so an extra fee appears on your bill at the end of the month—and it can be an exorbitant one.

A more responsible pricing model makes reasonable predictions about these kinds of events and builds them into the pricing. While this might make your fees look higher initially, you actually save in the long run, due to that kind of careful planning.

Return on Investment (ROI) of Property Management Services

You shouldn’t just look at management fees as an extra expense, however. Fees for property management are an investment. Let us explain:

Getting the most out of your property requires good tenants and happy tenants. Good tenants pay their rent on time and tend to take good care of your property, whereas bad tenants might stiff you on rent, damage the property, or even cost you money to process an eviction.

Likewise, happy tenants will tend to stay where they are, happily renewing their lease and perhaps even recommending your property to others when there is a vacancy. Unhappy tenants do not do this.

We can use these facts to think about the expenses that you incur with bad or unhappy tenants, and that you avoid with good, happy ones:

Cost of carrying a vacant property
Turnover costs (cleaning fees, inspections, customer background checks, etc.)
Repair costs (commonly repairs in floors and walls, plumbing, electrical, and appliances)
Added maintenance costs
Marketing and advertising costs
Interest lost due to delinquent rent

To calculate your return on investment, calculate each of these costs 1) without proper management, and 2) with management, plus the fee. Here’s a sample calculation:

In this case, it’s pretty clear that using property management saves money over not using it. But by how much?

Simply subtract the total cost of management from the cost of maintaining the property without management, then divide by the management fee. Here, that’s:

$7750 - $5900 / $2400

Which is $1850/$2400, or about 77 percent return on your investment. Just for comparison, the stock market has an average return of about 15 percent and doesn’t even top 22 percent in a good year.

Understanding Your Property Management Fees

Of course, the above are just sample numbers to play with. You will need to do some research to figure out your own costs, Then do your calculation. You can use our fee structure to see what is, or is not, worthwhile for you as a property owner.

And if your property happens to be in the St. Louis area, go ahead and contact us. We want to make your property, and our management of it, a worthwhile investment for you.

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Why Skipping a Tenant Screening is a Costly Mistake

Thu, 19 Sep 2019 18:03:00 GMT

What You Can and Can’t Screen For

Landlords can not deny housing to people based on race, color, national origin, religion, sex, familial status or disability. The U.S. Department of Housing and Urban Development’s Fair Housing Act makes these forms of discrimination illegal. Some states have added protections based on marital status, gender identity, and sexual orientation.
That said, in most states it is fully within a landlord’s rights to set their own requirements for tenants, provided they do not include the groups protected by the Fair Housing Act, and that the same requirements apply to all candidates. Some common reasons for rejection are criminal convictions, prior evictions, bad references from employers or past landlords, poor credit history, or insufficient income to pay the rent. Property owners can also specify that renters be nonsmokers and do not own pets.

Valid Concerns for Landlords

Every new lease has a certain level of uncertainty. Someone who seems conscientious and responsible might be a horrible tenant. Meanwhile, someone who comes across sketchy might be a model renter. Effective tenant screening offers valuable insight into prospective tenants so a landlord doesn’t need to make judgment calls based solely on intuition.
The questions about prospective tenants that are most important to landlords are:

Dangers of Not Screening Tenants

Failure to thoroughly screen tenants can expose your property and other tenants to risks. Here are some of the potential consequences of accepting problem tenants:

Rent and Eviction Costs

A renter who has some temporary financial trouble and pays late once or twice might be acceptable as a tenant. Someone who is chronically late or seriously in arrears is another story. Failure to pay rent on time is a frustrating and costly situation for property owners. And if it comes to the point of needing to start eviction proceedings, it gets even more expensive.
A good tenant screening needs to include credit data and employment information to ensure that the renter is able to afford the unit.

Repairs and Maintenance

Maintaining a rental property and making occasional repairs goes with being a landlord. Some tenants, however, make this more work than others, costing property owners a lot of money. It is difficult to gauge how well a new tenant will take care of the rental.
Observing if the candidate is neat in appearance during an interview might offer some clues. Even the condition of their car might help. But first impressions can be deceiving. Gathering and checking references from former landlords during screening can give a much more accurate picture into what they will be like as tenants. Did they keep the apartment clean? Did their children or pets cause damage? Were they rough on the appliances and fixtures? References are a valuable resource.

Safety Risks

Renting to criminals or sex offenders could pose a personal threat to a landlord’s other tenants. That is not to say that people with prior troubles with the law are automatically bad tenants. The important thing is to know the facts before handing over the keys.
If you learn of criminal activity from a background check, find out more about the circumstances so you can judge the risk level of renting to the individual. For example, a 40-year-old man with a family and a steady job who was in trouble for a fight at age 20 might be a low risk for trouble. Someone recently released from prison for multiple violent offenses is worthy of more caution.

Legal Liability

Let’s say a landlord doesn’t do a background check and unknowingly rents to a criminal. If that person then commits a crime against other tenants on the property, the landlord could be sued for negligence. Ignorance of a tenant’s past is not a reasonable defense. Property owners owe their tenants a reasonable expectation of personal safety. A thorough background check can save you from future legal headaches.

What Does a Tenant Screening Show

Landlords can interview prospective renters and ask them these and other questions, but there’s no guarantee that they’ll tell the truth. Having a standard tenant screening process is a better option. Tenant screening gives a landlord verifiable data to help them make their decision. And if they must deny an application, screening records can be valuable proof that the decision was not discriminatory, but was instead due to another documented reason.
Here are the things that a good tenant screening will do:

Financial Responsibility

Tenant screening verifies income and employment. It will also examine an applicant’s credit background. This typically includes the credit score, any bankruptcies or foreclosures, existing loan amounts and whether any collection proceedings are taking place. A person’s credit background can measure the likelihood of making payments on time.
A full credit screening will require the applicant’s social security number. It is legal to ask for it, but it is also common for people to refuse. This could be for valid reasons such as the fear of identity theft. A landlord could settle for a copy of a credit report obtained by the individual instead. It’s up to the landlord if this along with verification of employment and prior landlord references is enough to assure them that the rent will be paid.
Most credit checks will also show any eviction proceedings, even if the tenant won the case. This is important information for the landlord to follow up on. Details of the case might help make the decision to deny or accept them as renters.

Criminal History

A criminal background check will search available databases for criminal behavior. Landlords can typically find out the type of crime, and the amount of time served if convicted. Sexual offender registries will also be checked in a thorough screening.
State and local databases will reveal felonies and misdemeanors. Federal records will include data from the DEA, FBI, Homeland Security, and ATF, among other agencies.

References

Requiring and checking personal and professional references gives landlord valuable first-hand information about the prospective tenant. They can often “fill in the gaps” not covered in an application. For example, a previous landlord might tell you that a tenant with five kids and two dogs is actually an ideal renter. Or that the seemingly quiet single guy often has loud parties that disturb the neighbors.

Honesty

Possibly the most important thing a tenant screening shows is the trustworthiness of the candidate. If they have lied on the application or were not truthful in the interview, a screening will reveal it. A landlord will be much more likely to give a renter a chance if they are upfront about their past mistakes from the start.

What Does Tenant Screening Cost?

Landlords can screen tenants themselves. It will take time to phone references and there may be fees to access the databases necessary to get thorough background information. This may work if there are only one or two units to rent, but once you have more than that, it can be a full-time job.
Another option is to use a tenant screening service. Some popular agencies are RentPrep, SmartMove, MyRental, Cozy, and TenantAlert. These and many others offer packages costing from about $19 to $30 for a basic report.
Each company includes different statistics in its basic report. Additional information such as a credit check or eviction data might cost extra. Likewise, some, but not all, verify social security numbers, bankruptcies, and sex offender registries. Before signing on with any of these agencies, it is wise to do some research to find out exactly what you’re paying for. Landlords must decide what criteria are most important, and see which company covers them.

Consider a Property Management Company

Hiring a property management partner like Select Leasing & Management can provide the best solution, especially when the number of units makes do-it-yourself screenings impossible. Not only do they screen tenants for you, but they also have the personnel for day-to-day management, upkeep, and repairs.

Tenant Screening is the Smart Thing to Do

Landlords have the right—and the responsibility—to protect their property and other tenants. Denying an applicant based on past issues is not discrimination. If an individual’s past behavior points to potential problems, their application can be legally rejected. Thorough tenant screening is the best way for a property owner to get the information necessary to find the best possible tenants.

What Services Do Property Management Companies Provide?

Thu, 08 Aug 2019 18:33:00 GMT

What exactly is taking up all that time? And do property management companies handle all, or just some, of those activities? What kinds of services do property management companies provide, anyway?

Essential Property Management Services

These questions are a little difficult to answer, because every management company offers a slightly different basket of services. For example, some management companies provide an online portal for landlords and owners to see tenant statements; others do not, handling all accounts internally.

We have found, however, that there is a “core” of services that almost every property management company offers. (Indeed, if a company did not offer one of these services, it would be cause to dig further and find out why it did not):

Tenant screening and background checks. Seasoned landlords will tell you: Most of the mistakes they have made stemmed from not doing their due diligence when it came to screening prospective tenants. A thorough screening should include not only background and credit checks, but employment history, previous rental history, and expected living arrangement (family, pets, etc.).

Preparing units for rent. Units need to be thoroughly cleaned before a new tenant takes possession, and any outstanding maintenance issues need to be addressed. Local ordinances might also require an inspection, especially if the unit has been unrented for a period of time. (In St. Louis County, for example, an occupancy inspection is always required when a new tenant moves in, and again annually if you apply for the Housing Choice Voucher Program.)

Drawing up the leases. Most management companies have a template for leases. These cover all parts of a rental agreement, including rent to be paid, security deposits, maintenance agreements, disclosures (for example, lead paint disclosures), policies on late rent, instructions for moving out, and so on. Leases need to be signed by all parties and are legally binding documents.

Collecting rent and keeping accounts. Management companies will often handle the collection of rent and, if needed, the application of late fees. They will inform a landlord if rent is not being paid, in violation of the lease.

Handling maintenance requests. It is a landlord’s responsibility to keep the property in a safe and livable condition. Part of this is handling all reasonable maintenance requests. These can be simple items, like replacing light bulbs or installing new locks, to larger and more pressing projects, such as fixing a burst pipe, removing pests, or repairing fire damage. These need to be handled in a timely manner, and many require the help of a licensed professional.

Assisting with grounds (snow removal, lawn care, etc.). Not only does a well-maintained exterior help with curb appeal, but it also keeps the property grounds safe, too. This means removing ice and snow in the winter (if those things are typical for your area) and keeping plants well controlled (removing weeds and trimming overhead branches) in the spring and summer.

Compliance with state and local laws. State and local laws will be very specific about all of the above: They will specify when inspections need to happen, how and when maintenance is to be performed, and even what care your grounds will need in order to avoid being labelled a “nuisance” property. A good property management property needs to be up on these ordinances in order to serve you best.

Other Common Property Management Services

In addition to the above, the following services are also pretty typical :

Marketing and advertising. When you have vacant units, how do you get them filled? Where do you advertise? What kind of tenants do you want to attract? It helps to have a professional think about these things. It’s a nice luxury, being able to pick and choose your tenants from a pool of high-quality, responsible prospects!

Property evaluation. It can be hard determining a fair rental rate for your property. Set the rate too high, and your units will sit empty, draining your bank account. Set it too low, and not only will you leave money on the table, but you might not attract the best possible tenants. A good property management company will look at the rents of comparable units in the area, consider upgrades and improvements to your property, determine what the market will bear, and give you a fair rental valuation.

Property inspections. Some management companies offer their own inspections in addition to arranging for inspections from the local government. These management inspections can be useful, both for anticipating code violations so they can be addressed ahead of time and for suggesting improvements that can increase the value (and hence rental income) of a property. For example, would a new coat of paint be helpful? Updated locks? Better landscaping? Sometimes small improvements can pay for themselves in less than a year, given the potential for higher rental rates.

Policy consulting. Should you allow pets? Can you rent to a smoker? What is a reasonable “grace period” for accepting late rent? An experienced property management company has seen all sorts of policy decisions play out and can advise you as to the pros and cons of each.

Online access. With today’s technology, there’s no excuse for not giving landlords and tenants access to their accounts, with up-to-date information. Renters should be able to see how much rent they owe, put in maintenance requests, and generally communicate with the property manager. Landlords should be able to see how much rent they are owed, how much has been disbursed, and how much profit they are making on the property.

Freedom. This isn’t a service, per se. But one of the main reasons people seek out a property management company is to get their freedom back. They can live or travel elsewhere, knowing they do not have to “stay local” in case there is an issue with their property. They can also sleep easier at night, knowing that all maintenance requests will be handled, and all dealings with local departments will be done “by the book.”

Are You Looking for Experienced Property Management in the St. Louis Area?

If you have multiple rental units in the St. Louis area, Select Leasing and Management can help you with the above services. Whether you live in the area or own your properties remotely, we’ll help you maintain your freedom while getting the most out of your investments.

Contact us today to schedule a time to discuss your situation with our professional property managers. We are confident our solutions can help you succeed!

Renting to Tenants? The Best Type of Property to Lease in St. Louis

Tue, 29 May 2018 20:46:00 GMT

We often get questions about the best type of property to own when you want to lease that property to tenants. Today, we’re talking about what types of homes will earn you the most money as an investor.

Property Management St. Louis: Location is Important

The most important thing to consider when you’re renting out a property is location. We all know that location is key in any type of real estate investment. An up and coming neighborhood can give you the return on investment that you’re looking for when you’re renting out properties.

Property Management St. Louis: New Homes vs. Older Homes

A newer home will often be easier to rent than an older home. Look for properties built after 1978. They have a higher return rate because there won’t be any issues with lead based paint or galvanized steel piping. Also, they just have fewer repairs in general.

Property Management St. Louis: Size Matters

Maximizing your ROI – Tips by a St. Louis Property Manager

Tue, 22 May 2018 20:06:00 GMT

We have some ideas on how to maximize ROI for your rental property, and today we’re sharing some of the things that can help you earn more on your investment.

Property Management St. Louis: Tenant Placement

One thing that’s important to maximizing ROI is being selective with the tenants you choose to live in your home or apartment. This is important because if you choose tenants that may not have a very stable rental history, they are likely to move out in a short amount of time. That will cause your ROI to go down. You want tenants with a record of paying rent on time, taking care of properties, and following the terms of their leases.

Property Management St. Louis: Repairs

Another important aspect to maximizing your ROI is making sure there are no small repairs left to be fixed. Those small repairs that are often left to linger can easily turn into bigger and more expensive repairs over time. Pay attention to maintenance needs.

Property Management St. Louis: Updates and Upgrades

One more thing you can do to earn more money on your investment property is to update smaller items over time. That can amount to big rewards. Pay attention to things like landscaping, and change your paint every five years. This will bring you higher rental prices and more tenant interest over time. Those things are sure to increase your ROI.

Should You Get a Home Warranty? Property Management St. Louis

Tue, 15 May 2018 16:44:00 GMT

Should you get a home warranty? This is a question that we hear a lot from landlords, so today we’re discussing whether or not you should have a home warranty for your rental property.

Property Management St. Louis: Protecting Appliances

A lot of times, it makes sense for landlords to have a warranty, especially if your property has a lot of major appliances that would be expensive to repair or replace. Most home warranties cover all of these appliances, from refrigerators to washers and dryers, and everything in between.

Property Management St. Louis: Access to Vendors

Another benefit to having a home warranty is that you won’t have to spend a lot of time finding a good vendor for the repair that may be needed at your rental property. Instead going out and finding a maintenance person to service these appliances when they break down, you can call your warranty company, and they will send someone out for you.

We can help you decide if a home warranty makes sense for your rental property. If you have any questions about home warranties or anything pertaining to property management in St. Louis , please don’t hesitate to contact us at Select Leasing & Management.

Hiring a Property Management Company vs. Self Managing in St. Louis

Wed, 09 May 2018 15:48:00 GMT

We hear a lot of horror stories from landlords who are self-managing their rental properties. ...

We hear a lot of horror stories from landlords who are self-managing their rental properties. People take it upon themselves to manage their own properties, but problems can often arise. There are a number of benefits to hiring a property management company rather than trying to handle everything yourself.

Property Management St. Louis: Legally Compliant Leases

If you hire a professional management company, we will take care of the leases, which are in legal form and can protect you in the event of a resident being evicted. Sometimes landlords who self-manage will download generic leases off the internet, or use rental agreements that are not legal or enforceable in St. Louis. When you have a professional property manager handling your leases, you know you’re getting the right forms and the best protection.

Property Management St. Louis: Fair Housing Laws

There are also fair housing laws. Many owners don’t understand fair housing laws, and they get into legal trouble when they advertise or lease a property in a way that violates fair housing. While you may not intend to discriminate, some of the terminology you use or the processes you follow might be seen as discriminatory.

So, it’s a benefit to hire a management company to take care of these issues. We have the proper legal forms and the best resources for any tenants living in your property .

How to Reduce Tenant Turnover – St. Louis Property Management

Tue, 01 May 2018 22:12:00 GMT

Many times, we hear property managers say: happy resident, happy property. There is a lot ...

Many times, we hear property managers say: happy resident, happy property.

There is a lot of truth to that phrase, so today we’re talking about reducing tenant turnover. If you can keep your turnover low, you’ll earn more money on your investment property. There are a few things you can do to keep your best residents.

Property Management St. Louis: Timely Maintenance

If a tenant has an issue with their home or apartment, take care of it right away. You need to respond to all maintenance and repair requests as soon as you can. This helps residents to feel comfortable within their own home and safe in their environment.

Property Management St. Louis: Communication

Open communication is the key to retaining good tenants. Please make sure you maintain an open communication policy with residents. They should feel comfortable coming to you with questions and concerns.

Property Management St. Louis: Community Events

Why a Good Tenant Screening Report is So Important in St. Louis, MO

Tue, 27 Feb 2018 16:27:00 GMT

Your experience as a landlord will usually depend on the type of tenant you place ...

Your experience as a landlord will usually depend on the type of tenant you place in your property. A good tenant will bring consistent rental income, and a bad tenant will only increase your risk of late rental payments and property damage. At Select Leasing & Management, we have a detailed and comprehensive screening process that every applicant must go through before renting one of our properties. Today, we’re sharing some of the most important elements of tenant screening.

Tenant Screening Report and Background

Once we receive a tenant application, we begin the screening process. We use two out of the three major credit bureaus to run a background check. We screen for common convictions and prior evictions . This is important because you don’t want a tenant in your house who has prior evictions.

Tenant Screening for Credit

We also screen for credit scores. You need to know what kind of credit a tenant has so you can make decisions about how much of a security deposit you will collect. Deposits should depend on a tenant’s financial behavior in the past.

How to Raise the Rent – Property Management St. Louis

Tue, 20 Feb 2018 17:33:00 GMT

When you want to raise the rent in your St. Louis rental property , you have to do it at the right time and consistently with all your residents. Today, we’re sharing some guidelines for effectively raising the rent at your properties.

Property Management St. Louis: Annual Renewals

If your resident’s yearly lease is coming up for renewal, you have the perfect opportunity to raise that tenant’s rent. The standard of living increase is generally about three percent every year. So, you want to stay within a one to three percent rental increase. If you raise the rent too much, you run the risk of losing good tenants and facing vacancy costs.

Property Management St. Louis: Raising Rent Consistently

When you have more than one rental property and more than one tenant, it’s important to stay consistent. If you go up two percent for one tenant, make sure to go up two percent for all your tenants.

Property Management St. Louis: Shorter Tenancies

Tenant Responsibilities in a Single-Family Home in St. Louis

Tue, 13 Feb 2018 16:26:00 GMT

When a tenant is renting a single family home, it can be a challenge to decide what the landlord should be responsible for and what the tenant should manage. Today, we’re talking about tenant responsibilities and what should be expected.

Property Management St. Louis: Outdoor Maintenance

One of the biggest responsibilities a tenant will have is indoor and outdoor maintenance of the home. When it comes to the exterior, lawn care and winterizing are especially important. This can be snow removal in the winter or mowing the lawn in the summer. Anything that’s necessary to keep the house in pristine condition should be on the tenant responsibilities list.

Property Management St. Louis: Indoor Maintenance

Taking care of the inside of the home is something else tenants need to think about. This would include all the general housekeeping; things like turning the utilities on in the tenant’s name, changing smoke detector batteries when necessary, and changing the furnace filters. You want your tenant to keep debris clear of the air conditioner and change the light bulbs that burn out.

4 Most Common Tenant Complaints and How to Handle Them in St. Louis

Tue, 06 Feb 2018 17:14:00 GMT

Responding to tenant complaints is part of being a landlord or a property manager. Today, we’re sharing four of the most common complaints residents may have.

Property Management St. Louis: Slow Response to Maintenance

If a resident has a maintenance issue, we recommend you complete the repair within 48 hours. If it’s an emergency, you need to respond right away. Emergencies might include a lack of air conditioning in the summer, the heat going out, or not having electricity. At Select Leasing & Management, we make sure these things are taken care of immediately.

Make sure you have a consistent phone number for residents to use in case there is an emergency. Someone should be available to respond to emergencies 24 hours a day.

Property Management St. Louis: Lack of Communication

It’s important to have open lines of communication with your residents. Keep them up to date with what’s going on in the building and in the area around them. Always get back to them as soon as possible when they leave a message or send an email.

Property Management St. Louis: Noisy Neighbors

Sometimes, a tenant will be disturbed by noisy neighbors. As long as the property manager knows what’s going on, the issue can be addressed. A good manager or landlord will talk to the disruptive neighbors and try to find a peaceful resolution. You can also add quiet hours to your lease, so that everyone keeps the noise down between the hours of 10 pm and 6 am.

Property Management St. Louis: Pest Control

Have a preventative maintenance plan set up once a month for pest control to come out to any of your rental properties. This decreases the number of issues that arise with insects and pests. If a resident has an issue, we can send pest control out to take care of any immediate problems.

4 Benefits of HOA Board of Directors Partnering with a St. Louis Property Management Company

Wed, 29 Mar 2017 21:48:00 GMT

Property Management St. Louis: Community Guidelines

We will ensure that all of your rules and policies are clearly defined and consistent. We’ll provide the communication channels needed to make sure your community’s covenants, guidelines, and restrictions are being enforced and followed. We will also maintain the consistent enforcement of your rules, which will include scheduled and unscheduled visits to your association. Part of our management services includes making recommendations to deal with any complaints. These may be conflicts between a homeowner and the association or complaints between two homeowners. We will come up with the best solutions for handling these complaints and reaching an appropriate resolution.

Property Management St. Louis: Financials

Our team will deal with every aspect of your financials, including the collection of monthly and annual fees. We can also handle bill payment, and provide accurate and detail records of all these transactions. We will come up with an annual budget and make sure it’s followed. You’ll receive monthly financial reports that are transparent and clear.

Property Management St. Louis: Maintenance

Benefits of Having a St. Louis Property Management Company Manage Your Rental Property

Wed, 22 Mar 2017 17:32:00 GMT

There are dozens of reasons that explain why having a professional property management company is good for you. There are a lot of benefits, and today we’re talking about some of the main benefits: getting your time and your life back, and having less stress associated with your St. Louis house for rent.

Property Management St. Louis: Saving Time and Preventing Headaches

As property managers, we save you the headaches that often come with rental properties, and we also save you time that you can use to enjoy your life. For example, it can be a full time job to track down rent payments and collect fees and deal with tenant complaints. If you don’t have the time or the resources to do these things right away, your income could suffer and so could your tenant retention.

Cost versus Service

It might seem like there are so many costs associated with hiring a property management team , that it’s better to save the money and do it yourself. However, you actually make more money in the long run when you have a good property manager, because everything is run efficiently. You don’t lose money on things like property damage from bad tenants, long vacancy periods, or expensive repair bills. It takes time, effort, and money to deal with the things that we can handle for you. We will make sure repairs are done when needed and preventative maintenance is attended to so your property remains in excellent condition.

How Much Does Property Management Cost in St. Louis?

Thu, 27 Oct 2016 18:05:00 GMT

People are always asking what it costs to have a St. Louis rental property professionally managed. At Select Leasing and Management, we cover the entire metropolitan St. Louis area, as well as St. Charles, Lincoln County, and Jefferson County. So we know that fees and costs can vary. However, you have to look at this not as a St. Louis property management cost, but a service that’s offered to you and brings you peace of mind.

Property Management St. Louis: Costs vs. Services

Our fee structure is pretty simple. We charge 10 percent of the monthly rent. So what you pay depends on how much rent your property earns. It’s important to remember that this fee includes any of the services your St. Louis house requires. If a tenant calls in the middle of the night or has an emergency that we need to respond to right away, there’s no extra charge to you. We don’t upcharge anything or tack on additional fees and hidden costs. Our services are available 24/7, and we are always quick to take care of your needs. Our owners are the most important to us.

Tenants Renting St. Louis Houses

We also like to keep your tenants happy. If your St. Louis tenants are happy, they will be far more likely to renew their lease, and that’s going to save you money on vacancy and turnover costs. When tenants can work with professional property managers , they know that their needs will be addressed, and they appreciate the professionalism we possess.

Home Inspection Guidelines for Self-Managers in St. Louis

Wed, 12 Oct 2016 17:19:00 GMT

There are several different types of inspections you will have to do when you manage ...

There are several different types of inspections you will have to do when you manage your own St. Louis rental property. Today, we’re explaining what those are and how to prepare for them.

Inspections St. Louis: Occupancy

First, determine whether your municipality requires an occupancy inspection. If so, that needs to be ordered as soon as possible because it can sometimes take up to six weeks to get an inspector out to your St. Louis house. All of the required repairs will need to be completed before a tenant can move in.

Move-In and Move-Out Inspections

When you have a St. Louis tenant ready to move in, you need to get together for a move-in inspection. At this point, it’s good to walk through the home and take photos that will document the condition of everything. Go through a move-in inspection checklist with the tenants. When the inspection is over, it’s important that you sign that inspection report and have your tenants sign it as well. Record the photos so you have documentation. Then at the end of the tenancy, you’ll need to go into the property and do a move-out inspection.

After that inspection, you’ll need to compare the difference in the property condition at move-in and move-out. This will help you determine how much you’ll deduct from the security deposit that you collected from the tenant. In most cases, you have 30 days after the completion of the lease to return that deposit.

Owner’s Portal

Pet Policy Basics – St. Louis Property Management Education for Landlords

Wed, 05 Oct 2016 23:03:00 GMT

When you’re leasing your St. Louis rental property, you’ll need to decide whether you want to allow pets. It’s your decision as a homeowner, but at Select Leasing & Management, we always recommend that you do, simply because of the large number of St. Louis tenants who do have pets. As long as you have a great pet policy in place, you’ll be able to protect your home against any potential pet damage.

Benefits of Allowing Pets

When you decide not to allow pets, you’ll have to prepare for a decreased pool of potential tenants. That means you’ll have a longer vacancy time, and you may need to accept less money for your property. We have found that generally, people with pets stay longer in the property. Pet owners typically make great tenants.

Setting a Pet Deposit

You can do one of two things with your pet deposit. Some landlords will charge a non-refundable pet deposit. We like to make our pet deposits half non-refundable and half refundable. This gives tenants the opportunity to get something back if they take better care of the property while living there with their animal. It provides incentive.

Pet Restrictions

Pros and Cons of Renting Out Your Home – St. Louis Property Manager Explains

Wed, 28 Sep 2016 20:42:00 GMT

Owning a St. Louis rental property seems like an easy job. You might think that ...

Owning a St. Louis rental property seems like an easy job. You might think that all you have to do is collect rent from tenants and allow them to pay your bills. We are looking at the pros and cons of owning rental property, and how hiring a St. Louis property management company can be beneficial to taking care of your properties and your tenants.

Pros of Renting Out a St. Louis House

One of the biggest things in the pro column is that you will receive regular income. You have the benefit of letting others pay your mortgage. Another pro is that you will have some tax advantages. Costs like your property management fees and other expenses will be tax-deductible. As your property gains in value, it will give you additional long term security. When the property is finally paid off, you’ll have a lot of investment income and a valuable asset.

Cons of Renting Out a St. Louis House

Where to Advertise Your House for Rent in St. Louis

Wed, 21 Sep 2016 23:17:00 GMT

Advertising St. Louis rental properties needs to be strategic, especially when you want to generate as much interest as possible in your St. Louis rental property . Today, we’re sharing some tips on where to advertise your home.

Advertising Online

First, do as much online advertising as you can. Most St. Louis tenants will look online for the available rental housing options. That’s the first showing, so make sure your photos are a good representation of how the home looks. Anyone can take a creative writing class and make the home sound beautiful. But pictures say a thousand words. So make sure they are accurate and show the positive aspects of the home you are trying to lease.

Advertising Offline

Next, St. Louis advertising has to include offline platforms as well. This might include a sign in the yard or flyers that you can hang at schools, churches, grocery stores, and other public places. The goal is to let people know that you have a St. Louis house available for lease.
Another way to think about offline advertising is by placing ads in print publications like newspapers and magazines. Most local newspapers have online and print versions, so getting your property this exposure will help you reach people who read the physical paper and look it up online.

Property Management St. Louis

5 Tips for Landlords on Handling Property Maintenance in St. Louis

Thu, 15 Sep 2016 16:28:00 GMT

As a landlord, you need to take care of the maintenance in your St. Louis ...

As a landlord, you need to take care of the maintenance in your St. Louis house, and today we are sharing some tips that will help you keep that property well-maintained and in excellent condition.

Be Proactive

Do all the things that will prevent major issues from occurring at your home. That means fixing the leaky faucet, trimming the trees away from the house, and making sure you don’t end up with emergencies in the middle of the night.

Take Advantage of Warranties

We partner with a lot of companies offering homeowner’s warranties. If you have an HVAC system or a water heater go out, the warranty helps because you pay a deductible and the warranty company will give you an allotment to use towards repairs.

Working with Professionals

Working with a professional St. Louis property management company comes with a number of benefits. We have vendors who we work with consistently because of their high work quality and the reduced rates we get in exchange for the volume of work we provide. So while Uncle Bob might think he can come over and fix everything to save you some money, it’s not the best way to run a business. Using professionals is important, and a company providing property management in St. Louis can help demonstrate that you get what you pay for.

Timeliness

When a tenant submits a maintenance request, it cannot be acknowledged and then forgotten. Contact the tenant and explain you understand the problem. Then, you need to be quick about getting the repair made.

Determine Responsibility

There are lots of exciting things about being a landlord, but some complex and frustrating things too. If you have any questions about your St. Louis rental property, please contact us at Select Leasing & Management .

5 Golden Rules for Real Estate Investing in St. Louis

Tue, 05 Jul 2016 16:43:00 GMT

There’s a big difference between being an average real estate investor and an outstanding real estate investor. If you’re looking to maximize your success with rental properties, we have some words of wisdom for you. These are the five golden rules for better real estate investment.

Location, Location, Location

This rule isn’t a new one, but you need to understand what it really means. When you’re looking to invest , make sure you buy something that is located in a good school district. If you’re in a better school district, you’re going to attract better tenants who will not want to move around as much. Your investment options must cover high performing schools. You also want to consider nearby recreation opportunities. Look for trails, parks, and entertainment. A rental property near highway access will also help you attract commuters.

Maintenance Condition

Before you rent out a property, most homes will need a municipal inspection. Make sure your property is clean, ready to show and has all the necessary maintenance completed. A higher quality home brings in higher quality tenants.

Communicating Professionally

You need to be able to communicate respectfully and professionally with your tenants. If you hire a property management company , we can cover the communication between you, the owner, and your tenant . You’ll be free from developing personal relationships that can interfere in your business. We can also enforce the rules and protect you better.

Growing your Portfolio

By being a part of the Berkshire Hathaway network, we help our investors search out homes that meet their needs. We’ll help you decide what to do with your portfolio, whether you’re ready to grow or looking for residual income in your retirement.

Hire a Good Property Manager

Should I Invest in St. Louis Real Estate?

Tue, 28 Jun 2016 17:28:00 GMT

If you’re an investor wondering whether you should buy rental properties in St. Louis , our answer is that you absolutely should. Not only is it a great time to buy real estate in general, it’s especially a great time to buy in the St. Louis market.

St. Louis Ranked First for Fast Growth

St. Louis has been ranked as the number one city for fastest growing start-up companies. Our area has out-performed Silicon Valley, New York, and San Francisco. That’s pretty exciting for investors who are looking for the next best place to buy property.

Cost of Living Impacts Revenue

In St. Louis, the cost of living is extremely competitive. It beats out any other city in the country. This means a number of important things for you, as an investor. It means that a lot of millennials and other high quality tenants are moving to the area, and they are going to look for long term places to live. So, you’ll have an outstanding tenant pool from which to find renters. You’ll also be able to purchase property at a competitive price, ensuring that you’re able to cover your mortgage expenses every month as well as taxes, insurance, and a reserve for maintenance costs. Because of the reasonable cost of living, you will likely still have some cash flow coming in, and your asset will grow in value.

Hiring a Property Manager to Help with Maintenance and Tenants

5 Common Reasons to Evict a Tenant – Property Management St. Louis

Tue, 21 Jun 2016 23:08:00 GMT

Landlords are sometimes unsure about whether or not they have the right to evict a tenant that they no longer want in their rental property. There are five pretty common reasons that property owners evict tenants. You’re pretty safe in removing a tenant if you find yourself in one of these situations.

Rental Payments and Eviction

Probably the majority of evictions are due to late rent payment or a lack of rent payment. When you have a tenant who pays rent late, or is consistent in paying rent late every month, you can lawfully evict that tenant from your home. You also have the right to evict if you have not received any rent at all after it’s due. For this type of eviction, you’ll want to move quickly so you don’t accumulate several months of missed rent payments.

Policy Violations and Eviction

Your lease agreement includes several policies which your tenant agrees to follow. So if you have a no smoking policy and you find your tenant is smoking in the house, you have grounds to evict. If there’s a pet policy in place and the tenant violates that pet policy, you can also move to evict. The tenant needs to follow the lease.

Evicting for Lease Violations

It’s not only the policies and procedures in your lease that a tenant needs to follow. Any written part of your lease that is ignored or violated provides you with a reason to evict your tenant. Make sure you know your lease so you can be aware of what the tenant can and cannot do.

Illegal Use of Your Property

You can always evict a tenant if you discover that illegal acts are being committed in your property. If the tenant is selling drugs, stockpiling firearms, or running an illegal business out of the home, you can evict.

Selling Your Property

How Hiring a St. Louis Property Manager Saves You Money

Tue, 14 Jun 2016 21:12:00 GMT

Successful landlords and investors know that hiring a local leasing and management company comes with several advantages. While many property owners are concerned about paying a management fee every month, professional companies can actually save you money. Here are a few reasons you should consider it.

Better Tenants Bring More Rental Income

A professional property manager will help you find higher quality tenants. The advertising and marketing resources a leasing company has will attract the best people from the rental pool. Then, we make sure we screen those tenants well and allow you to make the best decision on who is going to take care of your home. Bad tenants will cost you money. They may stop paying rent, they can damage your property, and ultimately, you may have to evict them.

Maintenance Costs Are Lower with Professional Management

When those maintenance requests come in, property managers can share the negotiated pricing they get from their best vendors. The vendors and contractors we work with are insured and bonded, and they take care of the work quickly. This responsiveness will satisfy your tenants. Satisfied tenants often lead to a longer lease period. This means fewer vacancy and turnover costs for you.

Accessing Higher Rental Rates

A property management company can make sure you are able to maximize the rental rates in your area. We research the current market and take a look at what kind of competition is out there. This will help you get more money each month to handle your investment.

Reduced Liability Protects Your Income

Security Deposits 101 – What St. Louis Landlords Need to Know

Tue, 07 Jun 2016 21:30:00 GMT

There are legal requirements to how much of a security deposit you collect and how long you wait to return it to the tenants after a lease period has ended. Landlords are often unsure about how to handle security deposits, so make sure you know and comply with the law.

Collecting a Security Deposit

The first task is to determine how much of a security deposit to require from your tenants. The state of Missouri allows you to collect no more than the equivalent of two months of rent. So, if your monthly rent is $1,000, your security deposit cannot be any higher than $2,000. When you’re trying to decide how much to ask for, you need to consider a couple of things that will be different from tenant to tenant. Consider their credit history and their rental history. These things will impact whether you need to request more or less in a deposit. You also have to consider whether they have pets. Most landlords will collect a higher deposit when tenants are moving into the property with dogs and cats.

Holding the Security Deposit

At Select Leasing & Management , we collect the security deposit when the tenants sign the lease. Once we have the funds, we turn them over to the property owner. You’ll need to hold them until the end of the lease period. Use a separate account for these funds. This is not your money; it’s your tenant’s money.

Returning the Security Deposit

Why Work with Select Leasing & Management in St. Louis, MO

Thu, 02 Jun 2016 16:00:00 GMT

When you’re looking for leasing and property management services in St. Louis, we have a few reasons to hire Select Leasing & Management. We know that your goal Is to save time and money and achieve peace of mind when it comes to your rental property. Our efficient team can provide that to you in a couple of different ways.

Robust Marketing Strategies

Our team puts together a strategic marketing plan that helps us attract high quality tenants through online advertising and through our relationships with fellow Realtors in the area. When we receive inquiries from interested potential tenants, we handle those calls and respond promptly. Then, we meet them at the property to provide a tour and answer any questions. This saves you time because you won’t have to meet with unqualified tenants.

Enhanced Tenant Screening Process

Our enhanced screening process ensures that we find the best quality tenant for your home. We look for responsible tenants who have a history of paying rent on time, taking good care of properties, and following the terms of their lease.

Select Leasing and Management

How to Determine Rental Prices that Get Units Filled and Still Make a Profit

What to Charge for Rent: Too Much vs. Too Little

Determining What a Rental Property is Worth

Calculating Property Expenses

Assessing the Local Market

Special Features

Pricing a Rental Property Fairly

1% Rule

Rent Control Laws

How a Property Management Company Can Help

Landlords Must be Prepared for Emergencies. Here’s How a Property Management Company Can Help

What Counts as an Emergency?

Anticipating and Preparing for Rental Property Emergencies

Preventive Maintenance

Equipping the Property

Educating Tenants

Having a Plan

Immediate Availability is Crucial During a Crisis ﻿

Recovery and Restoration Keeps Your Investment Up and Running

Hiring a Property Manager to Handle Emergency Preparedness for Landlords

How a Property Manager Can Help You Avoid a Slip and Fall Lawsuit

Can a Tenant Sue a Landlord After a Slip and Fall Accident?

How a Property Manager Can Help Prevent Lawsuits

How a Property Manager Can Help Prevent Lawsuits

They Can Get to the Property Quickly

They Make Fall Prevention a Priority

They Make Repairs and Have Great Relationships with Trusted Vendors

They Schedule Routine Inspections

They Prepare Lease Agreements that Minimize Slip and Fall Lawsuits

Hiring a Property Management Company Can Take a Lot of Legal Weight Off of Your Shoulders

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Landlords: Here’s How to Deal with Rental Property Damage

As a landlord, you know that routine maintenance and repairs take up a lot of time and money. Additional rental property damage—beyond normal wear and tear—can stretch your budget and your patience to the breaking point.

Normal Wear and Tear and Unavoidable Rental Property Damage

Who Is Responsible for Fixing Damage to a Rental Property?

Landlord Responsibilities

Tenant Responsibilities

Steps for Dealing with Rental Property Damage

Security Deposit Rules

Landlord Insurance

Your Best Defense Against Rental Property Damage

The Role of a Landlord vs. a Property Management Company

When many people think of a landlord, they picture someone who fixes things that are broken, handles complaints, and collects rent. But if that’s the case, what is a property manager?

What is a Landlord?

What is the Purpose of a Property Manager?

Help Finding Qualified Tenants

Know How to Fix Things, or Who to Call if they Don’t

Prepare Vacant Units for the Next Tenant

Understand Landlord-Tenant Laws

Track Down Rent Payments

Keep Track of Finances

A Rental Property Management Company Can Help Landlords Enjoy Their Investment

7 Things Landlords Frequently Forget to Check During a Tenant Background Check

The Importance of Tenant Screening

Ground Rules for a Tenant Background Check

Things Landlords Frequently Forget to Ask During Screening

1. What are the names of all occupants?

2. Have you ever broken a lease or been asked to move?

3. What is the status of prior arrests or convictions?

Following Up With References and Past Landlords

4. Did the tenant have a pattern of breaking rules?

5. Did the tenant ever refuse access to the apartment?

6. Was the security deposit returned in full?

7. Would you rent to this tenant again?

Getting Help with Background Checks

How to Write a Lease Termination Letter

Reasons for Terminating a Lease

Termination Notices and Missouri Law

Components of a Lease Termination Letter

Property Management Companies Can Handle Terminating a Lease For You

6 Most Profitable Renovations for Landlords

Most Worthwhile Renovations on a Rental Property

In-Unit Laundry

An Extra Bathroom

Durable Flooring

An Aesthetic and Functional Kitchen

Small Changes That Can Make a Big Impact

Enhance Curb Appeal

Improve Security

Immediate Availability is Crucial During a Crisis

Seasonal Refresh