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How Much Is My House Worth?

“How much is my house/property worth?

This is almost always the first question that I am asked when interviewed.  Everyone wants to know what their property will rent for and they typically want an answer before we even start discussing management.

Several factors need to be considered before a price range can be established.

  • Size
  • Condition
  • Age
  • Amenities
  • Location
  • Competition
  • Market

Size:

The size of the unit  is not just the number of bedrooms and bathrooms; it includes the square footage.  A 1500 Sq. Ft., 4 bedroom, 2 bath home may rent for less than an 1800 Sq. Ft., 3 bedroom, 2 bath home.

Condition:

Prospects are not going to pay top dollar for a rental with poor upkeep or deferred maintenance therefore affecting the rent.

Age:

Newer homes can generate more income than older homes that offer the same number of bedrooms, bathrooms and square footage.

Amenities:

Does the property come with a dishwasher? Central Air? Fenced Yard? Family room? Garage?  All of these factors need to be considered to accurately valuate the property.

Location:

Is the property in a part of town with a bad reputation or surrounded by neighboring homes that are not well cared for?

Competition:

Other companies have a similar units listed.  What are they charging?

Market:

Regardless of the above factors you need to make sure that the market can sustain the rent you will charge.  Collecting a lower monthly rent may not be ideal but it is better than having a home sit vacant for months.

Written By: Erin Trojanowski (Assistant Licensed Property Manager)

www.kahlerpm.com

Importance of an Application

Question: 

They seem like nice people, why do I need to run an application?

Answer:

Looks can be deceiving!!!

Your rental application should consist of:

  1. First of all, a current credit report of ALL applicants over the age of 18.
  2. Landlord reference checks on ALL applicants over the age of 18.
  3. A current criminal background check on ALL applicants over the age of 18.
  4. Finally, Income verification of ALL applicants over the age of 18.

A current credit report is like a picture…worth a thousand words!  The report will tell you if your applicant is diligent in paying their bills.  It will show you that they do not have any past collections with property managers/landlords and/or utility companies.  It will also reveal if the applicant has been honest and provided you with all of their past addresses.

  • HUGE right???

Calling all past landlords is time intensive.  The general rule of thumb is to look at the 2nd (3rd and 4th) most current landlord references.  A current landlord may give you bogus information to, either, keep the tenant or because the tenant upset them by moving.  Really, not everyone is honest…landlords included. Because of privacy laws and the fear of being sued most Landlords will not give you information unless you can fax/email signed authorization from the prospect.  Also, you must ask very specific questions.  Any ambiguous or broad questions will not be answered.

  • The credit check may reveal addresses that the applicant did not disclose. A simple search will reveal the owner of that property so you can research a contact method for that person resulting in additional landlord references.

It is nearly impossible to obtain a current criminal history.  It can be done but it is expensive and requires appropriate contacts.  HUD does limit the use of a criminal background check (you can view HUD’s ruling here).  Still, you can use this information to formulate your decision, only if your Rental Policy Statement is clearly outlined.

You want to know that your tenant can pay their rent right?  You may collect pay-stubs, bank statement and/or tax returns but is the applicant still working for that company? Make sure the provided proof of income is the most recent.  The applicant could have quit the job.  It is imperative to call and verify employment.

Clarity is key…your applicant must be aware of what information you plan to collect and what you will do with that information.  You have a duty to inform them of your requirements.  The result…the applicant will most likely be able to determine the outcome, as a result saving everyone some time.  MOST NOTE WORTHY…the applicant must sign a release for you to collect this information so as you can provide that to your sources.

Obtaining all of this information on one or more applicants takes time.  If you interview a property management company or a background screening company that tells you that their application turnaround time is less than 48 hours you need to run the other way.  Consequently that you will not get the comprehensive landlord reference check and the complete criminal background check.

To learn more about our tenant screening process call us today.

Written By: Erin Trojanowski (Assistant Licensed Property Manager)

www.kahlerpm.com

Why Should I Pay a Property Manager?

Whether you have one property or six different properties you may ask yourself why you need a property manager when you can do the job yourself.  Let me ask you a few questions to help you determine why a property manager may be your best bet.

  • Do you have the resources/knowledge to realistically price your property?
  • Do you have the resources to effectively market your property for Lease?
  • Do you have expert knowledge in the Federal Fair Housing Act?
  • Do you have the time to show your property to prospective tenants?
  • Do you have the means/time to run a complete application including current credit report, check landlord references, verify income and run a criminal background check?
  • Do you have a Lease that abides by the current laws and protects both you and the tenant?
  • Do you have time to complete a comprehensive move in inspection complete with extensive, room by room notes and pictures?
  • Do you have training and knowledge in Landlord/Tenant Law?
  • Do you want to answer maintenance calls 24/7?
  • Do you have expert technicians to call if the basement floods or the furnace fails at 2:00 AM?
  • Do you have time and/or means to chase down unpaid rent?
  • Do you know the steps to properly evict a tenant from your property?
  • Did you do that extensive, room by room move in inspection for use at move out?
  • Do you know the laws in regards to notifying and refunding a security deposit?
  • Do you have the means, contacts and/or time to efficiently turn your property?
  • Do you have access to a collection agency or the means to collect any unpaid charges?

We can answer YES to all of the above questions.  If you cannot answer yes to all of the above questions we can help.  Call and hire KPM today!

Written By: Erin Trojanowski (Assistant Licensed Property Manager)

www.kahlerpm.com 

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