This entry was posted on Wednesday, April 11th, 2007 at 6:28 am and is filed under Property Management, Lessons. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
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April 11, 2007
Continuing from Lesson 25, we were told more stories about our instructor’s vast rental experience and actually covered some of the material regarding how to be a property manager and deal with renters/
We were told that it is difficult to budget for property management. This is true as stuff happens. Things break, and cost money to repair. Utah does NOT require one to maintain anything other than code violations and threats to life and safety.
Class started with a small argument as the teacher accused on the students of illegally managing other people’s property without a license. Agents seem bitter about this, since it probably seems unfair that they had to get their licenses, but hundreds of people manage illegally without doing so.
Our instructor confessed that Utah has less use for property managers than other states, as people here are very do-it-themselves…’cheapskates’ as he called them.
The rental market (like the home market) is hot right now. Rents are up roughly 25% over the last 6 months, and our instructor confessed that he plans to bring his rentals up to $700-800 for 2 bedroom units.
This is quite a bit higher than the $500 that many of these units were renting at two years ago.
He smiled as he told us that he likes to have his secretary call the larger apartment complexes and feign interest in learning the next year’s rent, and then he prices his rents slightly lower.
We were told that we can judge if our rent is too high or low based on the amount of demand and interest shown in a given price. Our insctructor told us that he’s tried to avoid renting BYU approved places in Provo, because BYU requires all sorts of difficult requirements of landlords (including prohibiting court action on tenants).
This can be difficult, as mediation tends to assume that both sides deserve something, so if a landlord is owed rent, chances are mediation is only going to get a partial collection.
He told us that he’s now in the process of buying a 24plex, which caters to immigrants, who he exclaimed are his favorite tenants.
He explained that the best way to check on a potential client and always get your rent is to charge $20-35 for a background check (which our instructor then credits to the rent if they pass). This he claimed, will discourage many undesirable applicants.
We were reminded that in order to keep good tenant relations we should in fact ALWAYS charge late fees. You must be uniform in your treatment to all tenants or risk offending the others.
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