Teaching a Resident Manager What’s Important
August 1, 2009
Teaching a Resident Manager What’s Important
Need an onsite manager? You are right to be concerned that your manager won’t operate the way you want, and could actually create problems for you. You have to delineate precisely your expectations and requirements, and provide a system where he or she can meet those expectations.
Plus, there is little more frustrating than having a list of requirements, but having no way to accomplish them, or having a different idea about procedures and goals. To save you and your manager grief, tell him or her what is important.
Three factors enter into and interact with one another in owning and managing rental property: tenants, building conditions and income. Income is dependent on the interaction between tenants and building conditions, so if your concentration is on the first two factors, and the third will take care of itself.
Handling of repairs
Who does repairs? Does the manager handle either making or arranging for repairs, or is it your job as landlord? If the manager is responsible, what is dollar limit to which he or she have the go-ahead?
What needs to be checked daily, weekly, monthly, semi-annually and annually? You can’t expect the manager to make the same decisions you would. Preventive maintenance checklists are vital. If you have a manager with considerable experience, it behooves you to get his or her advice and counsel on this piece.
Keeping good tenants
What is your good tenant retention system? You need one, you know. And that is one of the primary jobs of any resident manager. It involves a system of follow up with notes, phone calls and thank you’s to and for tenants who are the kind you want to keep living in your rental properties. You might even consider bonuses to managers for tenant lease renewals.
How do you take applications? What forms and identification do you require from applicants? At what point do you offer an application to a prospective tenant? What exactly do you say to every person who calls on the phone and/or views an apartment? This procedure is inestimably important. Never, ever turn the application process over to the whims, moods and prejudices of a resident manager.
Application processing can either put you on the wrong end of a Fair Housing complaint or guarantee good tenants, depending how it’s handled. It must be the same for everyone who could possibly be construed as a prospective tenant.
Verification and screening
Who does the verifications and who does the screenings? Gary Miller, Vice President of Residential Properties for American Property Management in Portland, Oregon, says his company uses the following process:
“They [managers] don’t approve the applications. All the rental agreements are brought to this office. There’s a verification form that’s filled out, and the manager has to call and verify all the information and make a recommendation about whether the application is approved or rejected. Then we run credit checks, look everything over, and he make sure that everyone is following our guidelines. And we may then require a last month’s rent, a higher security deposit, or we might just approve it or reject it.”
That system works well for American Property Management. Think about using it yourself. It reduces the lack of objectivity in the application process if you are performing the screening. Just be sure to provide a checklist for your manager for the verification process.
Part of your screening process for resident managers must be their strict adherence to both the letter and principle of the Fair Housing law.
Forms are a necessity. Even if you don’t have a complaint form that your tenants fill out, your manager needs to write down every conversation, phone and in person, with tenants who have a complaint. Your apartment or landlord association should have a form that is designed for just that purpose.
Training is essential
Gary Miller explained the training that American Property Management requires of its managers:
“All of our new managers have a fairly extensive in-house training program. We have guest speakers every two months who speak on topics such as recycling, marketing and sales, and things like that. We have a gentleman who tours the properties with them and shows them where all the emergency shutoffs are, how to turn in work orders, how to do checklists. Another man spends several hours with them, showing them how to screen applicants, and fill out the forms.”
Just because you hire an onsite manager for your building doesn’t mean that you can abdicate operational responsibility. In fact, you may have even more of a job—managing the manager. Even so, you have every bit as much responsibility for the orderly operation of your apartment building. They won’t know what’s important unless you tell them.
About the Author: Bob Cain
Some 30 years ago Bob Cain went to a no-money-down seminar and got the notion that owning rental property would be just the best idea there is for making money. He bought some. Trouble was, what he learned at the seminar didn’t tell him how to make money on his rental property. He went looking for help in the form of a magazine or newsletter about the business. He couldn't find any.
Always ready to jump at a great idea, he decided he could put his speaking and writing skills to work and perform a valuable service for other investors who needed more information about property management. So Bob ferreted out the secrets, tricks and techniques of property management wherever he found them; then he passed them along to other landlords.
For over 25 years now, Bob has been publishing information, giving speeches, putting on seminars and workshops, and consulting for landlords on how to buy, rent and manage property more effectively.