Pay Your Property Manager

Over and over again here at Ad Astra Realty – KC Property Manager we take over properties for owners who have been using property managers that they believe haven’t been doing the job.  Well you know what?  You need to pay your property manager.

One of the firms we take properties over from is a low cost property management firm here in Kansas City.  I know the owner.  I like the owner.  But he charges too little.  Way too little.  He cannot staff properly and therefore he cannot do the things a property manager need to do in order to;

• Look after your property
• Make deferred maintenance recommendations
• Pay the owners on time, every time
• Negotiate favorable vendor prices
• Return most rental inquiries (no one hits 100%)

The job of property management takes a lot of man hours.  Man hours (or woman hours) have to be compensated.  If price is your only consideration when choosing a property management firm you get what you deserve. I’m not saying that the most expensive firm is the best.  But I am saying that there is a floor at which a property manager can actually look after your property properly.

Should you wish to discuss your income property management with us, just give us a call today.  Ask for Jimmy.

Ad Astra Realty
KC Property Manager
913-839-2953

Maintenance and Property Management

Maintenance is by far, and it’s not even close, where most of our time is spent in property management. Why?

• Everyone has different expectations
• Houses are constantly deteriorating
• Trees
• Sewer lines
• Where trees and sewer lines intersect
• Tenant turn-over
• Bad weather

But nothing, aside from tenant selection, is as important.  Proper maintenance keeps up the value of the house.  Proper maintenance attracts a better tenant. Proper maintenance keeps repair costs down when it’s time to sell.

If you haven’t figured maintenance, and updating, into your costs of owning residential income property, you need to go back and do so.  Because selling a “melting ice cube” doesn’t leave much at the end.

The Supreme Court, Disparate Impact and Property Management

Well, in the opinion of this author, we’ve moved yet another step closer to hell.  Today the Supreme Court ruled that Disparate Impact lawsuits for discrimination can move forward and are part of the fair housing acts enacted in the 1960s. This is a HUGE expansion of fair housing and I’m not really sure it can be defined.  And that is what make me nervous.

I am all for the seven protected classes that fair housing protects.  No question. And we are very careful to not violate those classes.  But now the definition of discrimination has grown so broad that I don’t know when we’ll be discriminating and when we wont.

See this link for an example.
http://www.kentucky.com/2015/06/25/3917235_supreme-court-opens-door-to-housing.html?rh=1

Here is the important paragraph:

A “disparate impact” arises when a practice produces different effects across racial groups, even if the practice wasn’t racially motivated. For instance, if a mortgage lender establishes borrowing standards based on income and net worth, and some racial groups are less likely than others to qualify for loans under those standards, this could result in a disparate impact

And I had a Kansas City housing official tell me about a year ago that in his opinion (now green-lighted by the Supreme Court) that because I refuse to lease homes to people with violent criminal pasts and that disproportionally people of color go to jail because of violent criminal behavior that I am discriminating against people of color under the broad definition of “disparate impact.”

Here is the scary, scary thing. It doesn’t have to intentional.  And we all know it doesn’t have to be really even proven in civil court.  So regardless of the fact that I won’t rent to a white guy with a criminal past I may still be discriminating under disparate impact because I won’t rent to a person of color with a criminal past.

Where does this stop?  Read carefully and think about the two examples given. Then take time to shiver.  Government has taken another step into allowing housing to become a populist right.

Again, to answer some of the arguments I can already hear, I am not discriminatory. Not in my nature.  But I’m not stupid, either.  This will be used against property managers, landlords, realtors and lenders to the tune of hundreds of millions (billions) of dollars in lawsuits.  And that will “trickle down” into your expenses, too.

Fully Understanding Investment Property

There are so many moving parts to fully understanding investment property that it is easy to get confused and overwhelmed.  But relax, just like algebra, it’s not all that difficult once you break it down in to little bite sized pieces.

The next series of blog posts will include the following subjects;

YOUR CRITERIA
YOUR TEAM
YOUR ACQUISITION
YOUR PROPERTY MANAGER
YOUR EXIT STRATEGY

In the following posts we’ll discuss each of these in detail to help you understand how you should really think about investment property whether it’s in Kansas, Texas or California.  We’ll talk about realistic expectations versus guru-seminar fantasy.  At least from what I see here in Kansas City.  As a professional real estate broker and property manager with Ad Astra Realty I can tell you what really happens out on the street.

Property Management in Kansas City

I have to tell you that property management in Kansas City is going to get better and better because of Ad Astra Realty, Inc and our inclusion to a professional group called NARPM.  That is National Association of Residential Property Managers.

My real estate license was granted to me in May of 2002. And I have been a member of NAR (National Association of Realtors) ever since.  But I don’t really get much sense of value from it.  Just sayin’.  So that is pretty much what I expected when I joined NARPM.  I was hoping for a little education about property management.  What I got was a group of professionals who, while competing with each other for every dollar, are also striving to make property management better through education and cooperation.

It is my belief as owner/broker of Ad Astra Realty, Inc, that our owners and tenants deserve the finest property management services that could possibly be available in Kansas City.  I know we are the best when it comes to working with investment property buyers and sellers looking for rental properties. And now I am more assured than ever that we are on track to be, hands down, the best property management firm in Kansas City.  We probably already are.  But with continued education, I know we are.

This may all sound a little self-promoting or overly excited.  But property management is the crimp in the hour glass when it comes to your rental properties and I’m determined to open that crimp.

Automated Showing Solutions for Our Property Management

Ad Astra Realty, Inc is happy to announce we’ve come up with an automated solution that will allow for more scheduled appointments for your rental properties, few no shows, feedback and so much more.  We’re very excited to move to the next level of property management here in Kansas City. Want to know more?  Just give Chris a call at 913-568-1579 or take our KCPropertyManager.com website out for a spin.  Pretend you are a tenant and see what you think.

Tenant Behavior

I’m not a psychologist.  Nor am I able to speak in absolute maxims because let’s face it, no two people are alike.  But there is a pattern to tenant behavior.  Here are some of the things I noticed in the eighth years I have managed other people’s property.

Change Over
Any change over is fair game for downright deceitful behavior.  It’s amazing how any new owner is showered by tenants with “promises” the other, previous landlord had made.  Heck, we’ve had a fake receipt given to a new owner this last go-round.  I guess the tenant didn’t think that a fake receipt for the equivalent of four months of rent wouldn’t be verified by the previous landlord. Fortunately the previous landlord still has his receipt book. But we see variations of this over and over and over again when we take over new rental properties either through our property management business or our investment property sales division.

40%-50% of Rents Comes In “Just in time”
A great many of our 252+ tenants pay their rent early.  Sometimes as much as a week early.  But the greatest majority of our rents come in on the last day and a half before the late fees kick in.  Our late fees kick in on the 6th of the month.  We’re thinking about new leases saying the late fees kick in on the 4th of the month.  I’m sure the money would then all arrive on the 3rd. Just human nature?

Impulse
Working with tenants is different than working with buyers/sellers in this aspect;  Buyers and sellers, in general, tend to calculate and plan their next moves while tenants tend to be more impulsive.  They want to see a For Rent house “right now, I’m out front” or they need to move “immediately” even though the lease doesn’t end for another four months, etc.  But that’s the beauty of short term commitments, right?  I’m not saying the tenants are wrong to be more short term on their thinking.  It goes with the leases. You have to adapt to that.

Quality of Housing
Tenants want the same things as buyers.  They want clean, safe housing and good schools and convenience to local amenities.  Some owners and landlords seem to think that these things are not as important to tenants because they’ll be living their less time, most likely.  But it’s simply not true.  We have tenants, many of them, that could purchase homes if they chose to do so.  But they like the convenience and mobile nature of leasing. Make no mistake, however, that they want as nice a house as they can afford. They want the same things buyers want when it comes to those issues.  Deliver them a quality house and you’ll most likely get a quality tenant.