Some people assume property management is nothing more than collecting checks. If it were that easy, we’d be out of business. It’s not that simple.
Just filling a property can take 40 hours of work. And with regular property use and tenants come additional time-consuming issues that may not be on your radar.
Here are the tasks a property manager takes care of for you.
Working with insurance companies is always time-consuming. After disaster strikes, it takes persistence and patience to file and resolve a claim. Repairing anything from hail to tornado damage is a process. First, you file a claim. Then you coordinate a time for the adjuster to visit. They send a bid. You find a contractor to complete the work. Check the work. Collect funds from the insurance company. Pay the vendor. Whew.
It requires a lot of follow-up, paperwork, and documentation. And if you don’t stay on top of the situation, no one else will move you through the process.
Filing a claim under a home warranty can also be extremely frustrating. When you call, you’ll probably sit on hold for 30+ minutes, only to find out the warranty expires soon. So any claim must be expedited to fit within that timeline.
Also, there’s no guarantee of coverage. So they send out an assessor (hopefully within that timeframe), who tells you if the problem is covered. And you pay about $70 for that assessment.
Plus, if something like the A/C is broken, the tenant probably calls you for an update every hour. And you’re stuck waiting on the home warranty company before you know what to tell them.
After-Hours Emergency Calls
Home emergencies don’t respect the boundaries of a 9-5 workday. If a pipe bursts or a roof leaks, tenants need to place a call immediately. This could be during dinner or at 3:00 a.m. Either way, it requires you to stop what you’re doing (or wake up!) and deal with the issue.
As you manage a property, you have to follow the rules and regulations the city has set for rental properties. You’ll first have to register the property as a rental with the city. Then you need to stay up-to-date on property codes.
For example, Texas Property Code requires keyless deadbolts and peepholes in every exterior door, including the garage. Sometimes a DIY landlord doesn’t even know about those kinds of regulations.
Properly Holding and Dispersing Security Deposits
Security deposits must be kept separate from your funds. In fact, co-mingling funds is illegal. So it’s necessary to hold deposits in an escrow account.
There are also regulations on how you use a deposit. Basically, you can’t use it for anything (including missed rent) until after a move-out inspection. When it’s time to return those funds, there’s a legal process for that too.
Security Deposit Itemization
If you pull from the deposit, you’ll create a security deposit itemization. There are only certain items permissible to expense. Then you must document time-stamped photos (as proof of the previous condition versus the condition after the tenant) and invoices of the exact work done. If you lack proof and the tenant takes you to court, you’ll probably lose.
As you invest yourself in a property, you’ll also invest your emotions. This means that sometimes it’s tough to separate yourself from the home and the tenants you chose. But tenants must be kept accountable to their contract. They signed it and they need to follow the letter of the law. If you know your tenants and you’ve invested in your property, you may let some issues slide.
As a neutral third party, a property management group more easily holds tenants accountable and objectively evaluates needed repairs. They can handle those situations professionally without giving in to unreasonable requests for exceptions.
DIY rentals don’t qualify you for the Texas Real Estate Commission Resident (TREC) lease. TREC leases protect the owner. Sure, there are other contracts out there (some you can download online), but this contract has been tested. And it’s only available to managed properties.
Without this type of iron-clad lease, you may find yourself paying for items that should be handled by the tenant. For example, if they break a door or window, that’s their responsibility.
Also, the TREC lease covers specifics that you may not think to address. Regulations on fish tanks, water beds, snakes, hoofed animals, aggressive dog breeds, and kerosene lamps are all included in this lease. Insurance won’t protect against certain incidents. And you don’t want to foot the bill for the damage these items cause.
It would be extremely costly to have a lawyer draw up a new lease to cover these nuances. Rather, using a TREC lease gives you a tried and true document that’s been revised to cover the issues necessary to protect your investment.
DIY rentals aren’t as easy as they look on TV. Flipping a house isn’t a cakewalk, remodeled homes are always rushed, and budgets aren’t realistic. If you’re looking to rent your property, venture in with your eyes open. Then use a property manager to take care of the rest.
Interested in learning more about the Property Management Services we provide? Contact us today for a FREE consultation.