The Debilitating Affects of Rental Concessions

The Debilitating Affects of Rental Concessions

At some point in time most property managers have had to think about concessions. It might be a discount on the rent for the first few months or even allowing a tenant a few months rent-free on signing a lease. Some property managers prefer a small giveaway. But during a hard economy when most property managers are feeling pressure on the bottom line, are rental concessions a wise move? There is no yes or no answer to this question but every property manager has to carefully consider the situation before making a decision on the way to go. Here are some questions you need to answer for yourself:

How will concessions affect your revenue?

What will concessions do to your bottom line if you choose a financingroute. For example, if your rental is $1,000 per month and you offer a discount of $50, your income stream is $950 and not $1,000 to the bank which doesn’t help with your financing goals. A concession fills up your apartments but does not contribute to your bottom line. A concession can grind down the value of a property pretty fast. If you want financing to replace a worn carpet or redo the landscaping, an eroded revenue stream doesn’t help.

What are your competitors doing?

Concessions are like a contagion. If word gets around that one of your competitors is offering concessions you feel obliged to do the same. This is a disease in many markets, but you have to make your decision based on hard facts and stick with it. You have to know your market when it comes to concessions. Tenants will come to you and use what your competitor is doing as a bargaining ploy. You have to know how to handle that and dig your heels in.

How will concessions affect your current tenants?

Tenants who have signed a lease recently for full rent will naturally be upset if a new tenant is given two months’ rent free. Tenants already in residence will feel undermined and an impression might be created that the owner of the premises is in some form of distress. But when the market is tight like it is at present because of social engineering, regulations, and high taxes, property managers will be asked for concessions and if that is the practice all around then they might have to concede.

Residents that receive these financial gifts are also instructed by management not to be too loose with the lips when meeting and talking with existing residents but this information will surface eventually and could undermine certain relationships.  

Another factor is that concessions could affect the standard of tenants which property managers rent to. A lower security deposit and a couple of months’ rent free might attract just the wrong type of tenant.

A third factor is that if the manager if offering new tenants a concession it might have to be extended to existing tenants in order to retain them.

Finally if you do decide to extend concessions, make sure you are not violating any laws likely to run you into legal problems.

Talley Properties

Talley Properties is an experienced property management firm in the Charlotte region of NC. In over three decades it has been providing property management services this company has seen a number of ups and downs in the rental property market. It has evolved its own formulas to counteract pressures in difficult times.

Three Cast-Iron Strategies to Keep Your Tenants

3 Cast-Iron Strategies for Tenant Retention

Tenant retention is the key to maximizing net operating income. It’s plain to see why because on every occasion a tenant leaves there are a whole lot of additional expenses involved. You have to repaint and repair the premises, advertise them and in some cases offer free rent incentives. Add to that the revenue lost during the period the premises were vacant.

It’s precisely for this reason that tenant retention and lease renewal ranks high on the development strategies which property owners and managers of multi-family properties adopt as a cost-effective measure. This is not just when the going is good but always.

You can go online to find a basket of solutions for retaining tenants like gift cards, raffles, and providing free WiFi in common locations like the laundry area and so forth. These will always be appreciated as will amenities and friendly service, but sometimes the basic things are forgotten.

What is the real cause behind tenants moving out?

A study conducted in 2010 concluded that tenants opted out of renewing their leases for reasons which were within control. The vast majority of them made the decision because of poor customer service by way of unsatisfactory handling of maintenance requests and a lack of response to their concerns. Here are three cast-iron ways to help you improve your tenant renewal record.

Better Communication

                There is nothing a tenant would like better than to know that their concerns are being taken seriously by property managers and homeowners. Ongoing communication with tenants is crucial during their period of residence. Keep them informed of all events such as construction issues, or scheduled maintenance. This sends a signal to the tenant that you care. Tell them about your proposed plans for upgrades and improving amenities. Highlight the positives to give them a reason to renew their lease when it comes to an end.

Swift Maintenance and Follow-Up

Conduct a tenant satisfaction survey at regular intervals. It’s a fantastic tenant retention tool and helps with improvement planning as well. A survey will give you an insight into what your residents need to improve the quality of their lives. It also helps an owner or property manager identify projects which will benefit the tenants and by extension themselves. It is also another way to attain feedback on earlier projects how well they were received and how well they have delivered. A structured approach like this helps generate satisfaction, dedication to service, and intrinsic value all of which significantly counts toward lease renewal.

Update Your Website

Today we live in a world of information access at our fingertips. Most of your tenants would prefer to use the Internet to acquire updates on their issues. Most people today first try to resolve an issue on a company’s website before resorting to other avenues. When they are able to succeed they derive a sense of satisfaction. If residents are able to attain a status update on a maintenance issue they develop a sense of empowerment and a feeling of pleasure.

While property management is undoubtedly a service business, keeping a tenant satisfied and happy is the key to tenant renewal.

Setting the Bar Higher

No one is more aware of the significance of tenant satisfaction than Talley Properties of Charlotte, NC. This property management company has been providing excellence of service in and around the Charlotte area for over three decades now. When it comes to tenant service and satisfaction Talley Properties goes the extra mile and then some. This is why their lease renewal record is second to none.

What is an Apartment Cosignor Guarantee?

What is an Apartment Cosignor Guarantee?

Property management companies and landlords invariably establish certain criteria for a prospective tenant. The landlord will typically examine an applicant’s income and examine his credit history to reassure himself that the person is able to meet the rent. The credit history will also provide an insight into how well the applicant manages his finances. Additionally the landlord might order a total background check to obtain a grasp of the person’s personal history and to know whether there is anything in it which sends out warning signals. These precautions are taken by a landlord or property manager to avoid having to face an ugly situation where a person might not pay the rent, damage the apartment, or perform illegal activities in it.

Financial Support

An apartment cosignor is a person or entity who stands guarantor for a rental or lease agreement. Sometimes a landlord or property manager might insist on an apartment cosignor for a particular tenant who plans to lease or rent an apartment and whose credit history might not be quite up to scratch. It could be something in the prospective tenant’s financial background which does not quite meet the required standards for renting or leasing the apartment.

Risk Involved

The cosignor assumes the liability to meet a rental obligation which may be outstanding and stands guarantee for any damages which may occur over and above the security deposit. Such contingencies arise when the tenant of an apartment defaults and causes damage to the premises. A cosignor guarantee can be sued by a property management company or a landlord for any money owed as if that person was the primary resident. The cosignor’s credit could also be impacted in certain jurisdictions if the primary renter fails to meet his/her financial obligations.

Character Support

Sometimes a tenant’s income or background might not meet the criteria the landlord has set, or the tenant’s income might not be adequate or he might have a poor credit history or no credit history at all. In such cases the landlord may consider renting or leasing the apartment provided the tenant is able to bring an apartment cosignor who is financially stable. The landlord will apply the same tests to the cosignor. If the cosginor qualifies, he/she will have to sign off on the agreement and agree to meet all obligations should the tenant default.

Worst Case Scenario

A person assumes several risks when cosigning on an apartment lease or rental. The most noticeable is if the primary tenant defaults on his rental obligations or damages the apartment and refuses or is unable to pay for such damages. The problem arises when the cosignor is not informed until a suit is filed against the tenant where the cosignor is cited. Apart from being involved in a lawsuit where the cosignor is not the primary defendant, the judgment and lawsuit can also reflect on the credit report and damage the credit rating of the cosignor.

The new Perception of Property Management

The new Perception of Property Management

What a property manager does today is vastly different to what he would have done a decade back.

Modern management companies and multifamily managers go beyond the traditional perception of bill paying and rent collection. The property manager of today arranges insurance, develops marketing plans, provides tax information, designs renovation plans and collects bids, manages, hires and motivates staff, improves landscaping, oversees maintenance services, oversees security of the property, reports income and expenditure and ensures compliance with federal, state and local regulations.

To achieve these tasks property managers of today have to evaluate changing market conditions and respond to them, keep abreast of new technological developments and find new ways to increase income. Simultaneously they have to maintain a client relationship, the lifeblood of the business.

Adapting to Contemporary Conditions

Of late, many external factors have impacted the way property managers work. With an increasing complexity in government legislation, licensing requirements, lender regulations, environmental concerns, insurance requirements, and more complex accounting and taxation norms, managers have been forced to specialize. Additionally, the explosion in real estate related investment trusts and huge real estate companies has crafted a consolidated marketplace.

A consequence of this consolidation is the enhanced application of branding where companies develop a unique identity founded on management services which translate through all properties. Property managers become integral to developing a branding image for a company and maintaining it.

The key to surviving economic meltdowns is branding strategies. A positive brand identity helps to retain tenants whereas a negative image will do precisely the opposite. So it is crucial to ensure that customers experience a positive involvement with a particular brand all the time. Since it falls within the purview of the property manager to maintain robust tenant relations, they have to develop plans to resolve tenant or service provider issues swiftly and efficiently.

The Right Amount and Kind of Communication Pays Off

A case in point is a problem resolution program which a particular property management company has in place which makes customers aware how the company fast-tracts complaints and problems through the management process. By keeping customers aware, more complaints are settled without having to resort to litigation, arbitration, or external mediation.

Property managers had to adapt to the changes in the local leasing market. Leasing lead times began to increase. As lease rates rose, so did government regulations on renovation and construction while technology issues became increasingly complex. It became imperative that tenants witness space ‘ready to go’. Property managers had to adapt to work with leasing personnel of the clients to anticipate needs of tenants and make infrastructural and other changes before concluding a lease.

A Company that is Leading the Way

Talley Properties is a property management company based in Charlotte NC. It specializes in high-end to mid-range residential and commercial properties in and around the Charlotte region. It is one of the oldest management companies in the region having provided service to the community for over three decades. Since the company was founded it has witnessed incredible change in the property management arena. However, it has successfully adapted and risen to the challenges. This flexibility and focus on efficiency is what has enabled Talley Properties to retain its position as the premier property management company in the area.

Things You need to Sort out before You Hire Your Property Manager

If you are a homeowner or investor and have decided that a property manager is best for you, you need to go about hiring one. It is a wise decision especially if you are a rookie investor or have bought a property that is far from where you live, or you have another job and don’t have the time to devote to your property.

Know Your Property

Property management is a demanding task. It requires time and consistency. You need to visit the property on a regular basis, not merely to collect the rent, but also to see that it is cared for and if any urgent maintenance is required. You have to be something of a handyman if you want to look after your property, or else know some of the reliable local contractor in the vicinity and what they charge so you are not taken for a ride.

Circumstances Change

Another feature all property managers must have, and that includes owners and investors, is tact and patience when dealing with tenants. While screening every potential tenant is a must, that’s no guarantee that you will not have trouble at a later date. You might have to face a variety of situations like non-payment of rent, damage to the premises, poor maintenance, noisy parties, accommodating more residents than is allowed in the lease agreement, and conducting questionable activities on the premises such as talking trash to someone who drives an SUV because it uses too much fuel. This is considered an annoyance and harassment. You have to be able to maintain your cool in these situations yet handle it firmly and tactfully. Not everyone is up to it.

Questions You need the Answers To

When hiring a property manager here are some questions you need to ask so you both understand each other:

What is the fee charged?


Most property management companies charge a management fee which typically ranges between 4 and 10 percent of the gross monthly income. It has to be clearly understood that this is not on rent due but on rent actually collected. This protects the owner from having to pay management fees when the property is vacant and drives the manager to ensure that it is vacant for the least possible length of time.

What services does the management fee cover?


Some companies charge a very low management fee which typically includes rent collection, but charge extra for other services provided. You need to be very clear about this point with your property manager. If you decide on a low fee and services extra then find out what the charges are for services like tenant placement, maintenance handling and assistance with taxes or anything else that might be required. You might just find that a low management fee isn’t such an appealing deal after all.

Property Management Services in the Charlotte NC region

Talley Properties of Charlotte NC is a property management company which specializes in high end to mid-range property in and around the Charlotte region. It began offering property management services in 1981 since when it has been the preferred choice of thousands of property investors and absent owners. This is a well-established management company with its own systems in place. It offers either full-service management or service-based and has a set fee structure so there’s no ambiguity when dealing with them.

Do I really need Property Management Services?

Do I really need Property Management Services?

Every investor’s circumstances are unique. But there are some common situations which many investors face which should help you decide if you need property management services, or if you want to go the solo route. Here are some searching questions which might make you see your position more clearly:

How far is the rental property from where you live and how often can you schedule regular visits?

The further you live from your rental property the more difficult will be your visits both in terms of travel time and costs. If you live near enough you can schedule regular maintenance visits. A visit every month should be an inflexible part of your schedule to keep on top of things and to avert middle-of-the-night crises. Can you handle this long-term?

 

How well do you cope with stress?

 Be honest – property management is demanding, are you up to it? Property management is an onerous task which will test your patience to the limit. How well will you be able to cope with the pressure situations which come with the job? Even a relatively straightforward task such as rent collection every month can be stressful. How will you react to some typical situations common to rental property management?

 

Your tenant is quarrelsome by nature and frequently gets into skirmishes with neighbors or other tenants

You receive complaints about noisy and violent domestic disputes

You tenants conduct questionable businesses or activities on the premises

They have noisy all-night parties

They repeatedly violate local regulations and antagonize your HOA

They try to smuggle in animals (certainly exotic ones which should be outlawed) or extra tenants

They damage the property

They hold back the rent because they know the ropes and are looking to squeeze every dollar out of the actual owner

 

Do you have the time or inclination to handle it?

 Even an experienced investor can find managing his property can be stressful and demanding. At times everything seems to go wrong together and you might have to be on call 24/7. Now if you hired an experienced property management company they would know how to handle it and have dedicated manpower to do what’s needed.

 

How much property maintenance and repairs experience do you have?

 When a crisis arises you have two choices – either you handle it yourself or you hire someone to do the job for you. Are you able to identify the problem and would you know whom to call? Maintenance contractors and handymen are expensive and you could just wind up hiring someone who is unethical, or not up to the job and burn your fingers, apart from a hole in your pocket. Repairs and maintenance are an integral part of property management and unless you can handle this effectively you’ll land in real trouble. A dedicated and proficient property management company has a string of known handymen they can rely upon or might just have their own personnel if it’s a large company.

 Experience

Talley Properties of Charlotte, NC is one of the oldest and most reliable property management companies in the area. Over the years it has established its own systems and has a well-established infrastructure in place. Talley Properties is known to be the preferred choice of many investors who have multiple rental properties in and around the Charlotte region.

Security Deposits and How to Handle Them

The rules and regulations governing security deposits are much misunderstood by both landlords and property managers. Part of the confusion stems from the fact that these laws vary from state to state. Many states limit the amount of deposit which can be held, but the amount varies according to the state.

What security deposit can you hold in North Carolina?

In North Carolina where Talley Properties operates, the rules are briefly as follows:

For tenants who occupy on a week-to-week basis the maximum is two week’s rent

For tenants who occupy on a month-to-month basis the maximum is a month-and-a-half’s rent

Beyond month-to-month, the maximum security deposit which the tenant can be asked to pay is two-month’s rent.

In addition the tenant could be asked to pay a reasonable amount as pet deposit. Pet deposit is non-refundable.

Do you have to pay interest on the security deposit?

Another factor is that in some states the landlords or property managers are required to pay interest on the deposit. As a safeguard:

In North Carolina the amount must be deposited in a trust account in a financial institution or licensed and insured bank located in NC.

Alternatively the landlord/property manager could decide to post a bond for the security deposit amount within the state. After that a trust account can be opened outside the state.

In North Carolina the landlord/property manager must inform the tenant within thirty days of the name and address of the financial institution or bank where the deposit is being held, or the insurance company which posted the bond.

What if I have broken the rules?

The landlord/property manager might be denied the right to keep the security deposit if these rules are violated so it’s important to know the rules that prevail and abide by them. If the right to security deposit is lost and the tenant causes considerable damage, there is no remedy. What’s even worse is that a judge could rule against the violation which might cost the landlord/property manager two or three times the amount of the deposit which will have to be paid to the tenant.

What are the reasons for you to withhold a security deposit in North Carolina?

Some of the reasons are:

If the rent is unpaid

If utility bills are unpaid

If the lease is breached

The cost of re-renting the property

If the tenant has to be evicted the cost of moving and storing the tenant’s possessions

Court costs

If the tenant has run up any unpaid bills which could cause a lien against the property

When is the tenant’s security deposit to be refunded?

In North Carolina generally within 30 days of the tenant moving out the landlord has to return the security deposit in person or by mail unless there are deductions when the period can be extended.

Talley Properties

Talley Properties of Charlotte, NC is an icon among property management companies in the region having been in the business for over three decades. Because of its efficiency and satisfactory services, the company has now expanded its area of operations to management of commercial and residential rental properties into the surrounding counties.

How to Increase the Rental Value of Your House

How to Increase the Rental Value of Your House

With the economy in stagnation, it is hard to believe that some parts of the real estate market are looking up. There is once more a surge in buying and renting properties and you should strike while the iron is hot. There is stiff competition in the rental market and you should make sure that your house grabs the eyeballs of prospective tenants. And how? Increase the rental value of your house with some quick and easy renovation work.

Get a pro to inspect your house. Ask a property management consultant to inspect your house and suggest changes that will increase its appeal. The experienced and reliable contractors at Talley Properties, Inc. of Charlotte, NC, do a thorough inspection job and identify all that that needs to be fixed, patched, sealed, replaced, or repaired so that you can command a higher rent for your house in almost pristine condition.

Get a paint jobdone. A house in shipshape order not only entices prospective tenants but also fetches you a higher rent. And one extremely cost-efficient way to make your house look like new is to have a paint job done. Freshly painted rooms and exterior walls look clean and enhance the appeal of your house.

Check the roof and repair/replace if necessary. The quality of your roof is a key determinant of the amount you can charge as rent. It is after all, one of the most critical structural components of your house. Check for leaks, weak joints, and mold and mildew growth and act on what your property management consultant advices.

Fix the electrical issues. This often is overlooked in a renovation or makeover simply because the wires tend to remain concealed. But faulty electrical works are potential fire hazards and pose risks to life, limb, and your property.

Fix the plumbing issues. A dripping faucet or a leaking pipe will shoo away prospective tenants. So make sure that you comb the house thoroughly for plumbing issues before showcasing your property to agents and/or potential tenants.

Get rid of any eyesore. To make your house more inviting to prospective tenants, you may need to spruce up the interiors. Besides a customary paint job, you can think about pulling down any eyesore like a garish wallpaper, a threadbare carpet, or a rundown fireplace that serves no purpose but manages to clutter your room. These are less expensive measures to add appeal to the interiors than many other renovation and/or makeover projects.

Get a landscaping facelift. Do not raise your eyebrows at this suggestion. Your garden and/or the front yard are actually what that will create the all-important first impression in a visitor’s mind. Your backyard is crucial too if you want to extend that pleasant impression. So make sure that you have the weeds pulled out, the broken fountain replaced or removed, the fence painted, and the swimming pool cleaned and disinfected before you invite prospective tenants. And relax, you do not need to ship exotic plants from half way around the world to beautify your lawn.

The above are some of the most basic renovation jobs that you MUST complete before attempting to rent out your house – if you want to rent it out faster and for top dollar. This will not only increase the value of your property in the market but will also attract tenants.

A Firm in the Know

Talley Properties have been in the business of rental property management for more than three decades now. With so much experience and an in-depth knowledge of tenant needs, it is not surprising that homeowners in the area trust them implicitly to give their houses THE makeover that will ultimately attract tenants – awesome tenants.

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