Boise Property Management Blog

Part 3 - How to Manager Your Manager

Melissa Sharone - Tuesday, July 9, 2019

Thank you all for your great feedback on this series of posts summarizing Tony's presentation with the AVID Investors Club in June. In Part 1, Tony discussed the importance of selecting the right property manager and ancillary services. Part 2 described some of the areas that Tony is really involved in the management of his own rental properties.  In Part 3, Tony discusses maintenance, inspections, and an inadvertent phenomenon that can occur with property managers.  Finally, he discusses building your team when investing and managing your real estate assets.


Maintenance:

When it comes to maintenance, Tony explained he leaves the property manager alone. When it comes to inspections, many property managers offer periodic preventative maintenance inspections.  Tony believes these types of inspections are beneficial and save the investor money in the long term by taking a proactive approach with maintenance.  Also, property managers should do regular exterior visual inspections by driving by to check items such as the yard and roof condition.  Again, Tony leaves the property manager alone and his involvement is only based on actions initiated by the property manager.  Although not as frequent, Tony walks his own properties as well.  Tony states he tends to identify future capital improvements, not necessarily maintenance issues.  Tony does not view move-in inspection reports and the only time he really analyzes move-out inspections reports is when there is a lot of work and expense involved, or a decision to repair or replace is needed.


Tony tends to use the property manager's preferred vendors.  Property managers have a relationship with the contractors, should be receiving a volume discount, and have an idea of the quality of workmanship. The cost of labor, office and warehouse space, and supplies are going up, so the cost of maintenance has gone up.  It’s a hard pill for Tony to swallow.  Except for above budget or large capital expenses, Tony doesn't require multiple bids.  It slows the process down and can inconvenience the tenants too long.  With that said, Tony explained there is a shortage of contractors in the Boise area now.  Many contractors aren't doing bids right now because they have so much work.  They have to make sure to keep up with the guaranteed work in their queue, and taking time away from guaranteed projects is a challenge when it is for a potential job they may not get.  There is another issue with multiple bids and the example Tony used in his presentation is the best way to explain it.  "We have a licensed trade contractor who has always been the cheapest for work within their trade".  Not once has a competing bid been lower.  Nonetheless we have clients who request competing bids.  Well after asking these different companies for bids, but never awarding the job to them, the contractors no longer want to provide bids, or they just throw out a high number so they can move on."  With that being said, Tony agrees sometimes it makes sense to pay a service charge to receive 2nd opinion, or consider different equipment brands, to save money.


Sometimes a property investor can find what appears to be a cheaper contractor.  It's not always the case, as the cheaper option doesn’t always mean the same quality of workmanship.  The contractor may charge a lower per hour rate, but maybe they take 2 hours to do a 1 hour job.  The biggest issue with investor contractors is the contractors generally do not have the appropriate licenses, registered as a contractor with the State of Idaho, and do not have the appropriate insurances.  Also, does anyone have history with the contractor and know the quality of their workmanship? 


Double Edged Sword:

As Tony pointed out, investors should be involved to a degree in the management of their investment properties.  Investors need to ask questions, discuss options, and work with their property manager on making good decisions.  Both the property manager and investor need to keep these discussions on point, professional, and respectful.  When Tony discovers what he believes to be a mistake, or maybe thinks a different action should be taken, he doesn't call the property manager and blame - he calls and discusses.  After hearing the entire story, most often Tony agrees with the decisions that were made.


However, not all owner's respond in the same way.  An investor’s response to their property manager’s recommendations or discussions can create a learned behavior, which can cause problems.   Here is what Tony said during his presentation.  "If you yell at your property manager every time they call, the property manager will call less.  If you deny every recommendation the property manager makes, they may stop making recommendations.  If you tell your property manager you are broke, they may try not to alert you about every little thing.  If you cause paralysis by analysis over everything, it's going to affect communications from the property manager and obviously the biggest problem is action is never taken or is delayed way too long."



Building your team:

Below is a list.  However, in each and every case you need to identify an expert in each trade who has experience and knowledge when it comes to residential income properties.  For example, you may have used a really good home inspector for when you bought your personal home.  However, when buying a multi-unit rental, you may want to consider a professional property inspector who has experience with these types of properties.


1.  Lender

2.  CPA

3.  Real estate attorney

4.  Real estate agent

5.  Property Inspector

6.  Title/escrow officer

7.  Property manager


Stay tuned for Tony's bonus material, which is the material he prepared but didn't present for time co


Melissa Sharone

President, First Rate Property Mgmt

Melissa@frpmrentals.com

How to Manage your Manager Part 1 of 3

Melissa Sharone - Tuesday, June 25, 2019

Earlier this week, Tony Drost spoke to the AVID Investors Club on How to Manage Your Manager.  Since Tony owns First Rate Property Management and FRPM manages all of his rentals, the attendees were expecting Tony to state "If you need to manage your manger, maybe you need a new manager".  Not so.  Tony explained to the group that although he allows the property manager to do their work, there are parts that he is very active.  "There needs to be some check and balances" said Tony.  "I let the property manager do the day-to-day work and I play the role of the asset manager.  I keep my eye on the big picture."   A good property manager performs hundreds of tasks that the investor should not be involved with.  A good example is tenant screening.  Tony believes that the investor should review the property manager's screening criteria, and if acceptable, let the property manager do their job.  However, there does need to be a good fit between the investor and the property manager.  "Along with a good fit, comes TRUST", says Tony.  Without a high level of trust, the relationship will likely not work out, or at a minimum, always be strained.


Selecting a property manager:

Tony said the first question from most perspective clients is, "What do you charge".  Although price is very important, Tony recommends that it not be your first question and explains further later in his presentation.  Tony suggests landlords do their due diligence and to create a list of services they are looking for.  He provided the group with two links to help investors with some questions and scoring criteria to shop property managers.  https://www.boiseproperty.management/management-tips and https://www.boiseproperty.management/comparison-chart.  Price needs to be worked in the equation and Tony admits that pricing is no longer easy to calculate.  It's like the banks anymore.  Banks offer free checking, but you get charged if you go below a minimum balance.  You get charged for over drafts, returned checks, hard copy statements, ATM fees, inactivity fees, and the list goes on and on.  They even charge when you deposit cash.


Property managers learned that the first question a perspective client ask is "what's the management fee?"  So many property managers lowered their management fee and created a list of fees similar to what the banks do.  So, it's important to review the entire management agreement and add it all up.  Generally what you find, is that once all added up, the "effective management fee" (management fees plus all other fees) costs you more.



Ancillary Services:

Everything has become specialized these days.  Look at the medical field.  Tony's family is full of doctors dating back to the 1800's.  Tony recalls that his Grandpa and Uncles seemed to be able to fix anything and everything that came to them.  Today, you go to the family doctor who refers you to a host of specialists.  With property management being big business these days, Tony said that there are hundreds of support systems for property management that all focus on their specialty and they all come at a cost.  Who pays for it?  Who benefits? and Who profits from it?  A couple of examples provided were (1)  Petscreening.com are experts in screening applicant's pets and support/companion animals.  (2)  Filter Easy is a company that recognized that tenants do not replace their furnace filters on a regular basis, so they provide a service that delivers the proper filter at the proper time for the tenant to replace.  (3)  Renter's Liability is another product that benefits both the tenant and the property owner.  (4)  Property inspectors and property inspection reporting has really progressed, but also has become very expensive.


Next week Tony discusses the areas that he plays an active role in along with some areas that he stays completely out of and trusts the recommendations from the property manager.


Melissa Sharone

melissa@frpmrentals.com

Virtual Tours with 360 Cameras

Jim Sharone - Tuesday, April 2, 2019

We recently made an investment to improve our marketing for upcoming rental units. While this will supplement our current marketing plan, we feel that this new technology will add a great deal of value to our prospective tenants and property owners, while injecting a little fun!

Prospective tenants can tour a rental from the comfort of their own home and mobile devices. While we still feel that it is important to physically show a property, this new technology allows renters to get a good feel for the rental unit. This can be especially important for people who live out of state and are basically renting a property sight unseen or people who are too busy to physically see a property. Additionally, we pre-lease a majority of our rentals, so this added feature becomes even more of a benefit.

We think that this new technology gives the property an added marketing lift. The technology gives a high-quality, 360-degree view of every room of our available rentals and allows the user to navigate the entire property. This definitely sets us apart from other properties and/or companies and should reduce the number of days a rental is on the market.

Like marketing photos, it’s important to create the virtual tours when the property is vacant and rent ready. As we mentioned earlier, we do pre-lease most of our properties, meaning we have a new tenant in place before the current tenant vacates. And generally, the tenant wants to move in the moment the cleaners are finished. We don’t want our owners to lose a day of rent so that we can go take new photos and a virtual tour, so it’s understandable that we may not get the opportunity to shoot new photos and a create a virtual tour for every property right away.

Do you remember the classic search books “Where’s Waldo”?! Well we thought we would add an element of fun to the new technology by hiding a miniature Waldo somewhere in every virtual tour. We are hoping that this will increase the amount of prospective tenants taking the virtual tours, improve our SEO (search engine optimization), and increase the fun!


Isn’t technology great?!


Can you find Waldo?!   

https://jim-frpmrentals-com.vr-360-tour.com/e/Lm0BaZaAUHU/e



Jim Sharone, Vice President

Jim@frpmrentals.com


The Value of Employee Development

Julie Tollifson - Monday, March 18, 2019

As a successful property management company not only in the Boise area but among many property managers in the nation, First Rate Property Management understands the importance of continuous improvement. In fact, our company's vision statement is, "Maintain recognition as the most reputable property management company within our industry through continuous improvement".  In any business the value of continuous growth is crucial in its success. When you first think of continuous improvement, the first thoughts that come to mind are process, product/service, and people.


I’d like to narrow the focus of continuous improvement to our employees. We work hard to provide our employees the opportunity to develop professionally. Through the National Association of Residential Property Management our employees are able to network among the best, gain creative ideas, and acquire education designations. These designations include Residential Management Professional (RMP®), Master Property Manager (MPM®), & the widely respected Certified Residential Management Company (CRMC®). These opportunities allow for innovative growth in the company, industry, and leadership ability of each of our team members.


CRMCMPM -1RMP


First Rate Property Management is extremely proud to be the only property management company in Idaho to have 2 MPMs on staff and  we also have the most RMPs on staff totaling 4. We are also 1 of 3 in all of Idaho that holds our CRMC® designation. 


Tony Drost MPM® RMP®

Melissa Sharone MPM® RMP®

Kristen Curtis RMP®

Jim Sharone RMP®


The development and education of our team members enables a positive work environment, streamlined communication internally and externally, and forms a company prepared for growth to come organically.


Julie Tollifson

Leasing Team Leader

Julie@frpmrentals.com