Property Management

How Can You Get Rid of Gnats?

Filed Under: Property Maintenance, Property Management

Gnats are irritating and can cause health issues. According to Orkin, gnat bites can cause skin swelling and itchiness. If you continuously scratch, you can develop an open sore, which can lead to bacterial infection.

As a property manager, it’s important to proactively have a prevention strategy. If there is an infestation, you should act on it quickly, since it can grow quickly. For example fruit flies, which are a type of gnat, can lay up to 500 eggs at once.

What Are Gnats?

Gnats are small winged insects. Some common examples would be fruit flies, drain flies, and black flies.

They tend to like moist areas and organic stuff. Some examples of things they like, according to WebMD:

Overripe fruits and vegetables
Decaying plant matter
Fungus

How To Know If You Have A Gnat Infestation

You’ll typically see a group of adult flies around standing water, fruit and vegetables, or plants. It varies based on the type of gnat. For instance, Fungus gnats tend to hang around windows and glass doors. Since they can’t fly long distances, it’s a sign of an infestation close by.

If you have an infestation, identify the places where they live and make it less hospitable for gnats. Since they like moisture, they’re likely to be in the kitchen, bathroom, or around standing water such as overwatered plants or water bowls for your pet.

Something you can do:

Clean the area around sink drains, pour hot water into the drain to keep it clean of debris.
Another good mixture is white vinegar and hot water to keep the drain clean.
Bleach can be used in your drain with plenty of water. Don’t use it if you have a septic system, since that causes damage.
Do not overwater houseplants
Fix leaky faucets, so there is no standing water

How Can You Get Rid of Gnats?

There are a variety of solutions to get rid of gnats that vary from natural remedies, store-bought chemicals, and also professional pest control firms.

1) Natural remedies such as vinegar gnat trap. You can get a bowl full of vinegar and mix it with a couple of drops of dish soap. You can cover it with plastic and poke holes in the plastic big enough for the gnats to enter. The gnats are attracted to the vinegar, but then they can not leave and drown.

According to US Government Research (National Renewable Energy Laboratory) , mustard meal can also help control Fungus Gnats.

2) You can buy gnat traps from the store. They’re usually sticky and yellow. They attract gnats, and they get stuck to them. You can also buy spray from your retail store; just be careful around pets and kids.

3) You can also get a professional pest control firm which can be very effective. You can set up a regular maintenance schedule with them so the infestation doesn’t reoccur. According to Angie’s list, you can expect treatments to cost anywhere from $150 to $250.

How Can You Prevent A Gnat Infestation?

You can prevent an infestation by:

Doing regular maintenance
Getting rid of things that attracts gnats
Having a gnat repellent strategy

1) Regular maintenance is being aware and doing the basic things to prevent an infestation.

Keep drain pipes clean of debris that attracts them.
Don’t overwater your plants
Keep kitchen surfaces clean
Seal entry points from the outside of your house around windows and doors.
Take out trash regularly

2) Getting rid of things that attract gnats is an important prevention step. Sweet and fruity scents are something that attracts gnats.

3) The best gnat repellent strategy is to not be an attractive place for them. Try to have standing water, drain pipes with food bits, the kitchen-counter should be clean, and garbage should be taken out regularly. Beyond that, there are smells gnats do not like, such as peppermint, vinegar, lemon, lavender, and garlic.

Frequently Ask Questions on Gnat Infestation

How do I get rid of gnats from my drain?
The best way is to keep your drain pipes free of food bits and organic matter that they feed on. Regularly pour hot water with vinegar down the drain.
How can I get rid of gnats in my yard?
Getting rid of gnats from your yard is a great way to prevent them from entering the house. The two methods are to let your lawn and water dry between waterings. You can also hang traps in your yard.

Sources:
https://www.orkin.com/pests/flies/gnats/gnat-infestation
https://www.webmd.com/a-to-z-guides/gnats-what-to-know
https://www.angi.com/articles/gnat-exterminator-cost.htm
https://www.nrel.gov/docs/fy05osti/35333.pdf

How to Get Rid Of American Cockroaches or German Cockroaches in Your Rental Property

Filed Under: Business Management, Property Maintenance, Property Management, Property Management Software

Roaches can make your rental property less attractive and lower the ROI If it’s a vacant unit, it makes it less attractive and harder to rent.

It’s also a very common problem, according to the US Census Bureau, 14 million homes have reported seeing a roach infestation over a 12 month period.

Here is some data on likelihood of Roach Infestation versus No infestation based on these signs in the home.

It’s important to be proactive to prevent infestation, hHowever if you have an infestation, it’s critical to act fast to take care of it. You also need to consider the kind of pest control remedies you’re comfortable with: Do you prefer natural pest control remedies? Do you have pets? Does it have to be pet-safe? Do you want to work with a professional pest control firm, keeping in mind costs?

What are the Characteristics of American and German Cockroaches?

German and American Cockroaches are the two most common types and are the hardest to get rid of according to Orkin. American Cockroaches are ½ inch longer than German Cockroaches. Both types prefer warm and moist locations. The German variety tends to gather in Kitchen and Bathroom, while the American variety prefer basements, drains, and crawl spaces.

The German variety is most common and reproduces quickly. One of the main problems they cause is spreading bacteria wherever they travel.

What Can You Do To Prevent a Roach Infestation?

There are several steps to deal with this effectively:

Regular monitoring to look for infestation
Preventing infestation

Tenant and Property Manager Responsibilities

As a property manager, you should communicate with the tenant on their role and responsibilities and yours in monitoring, preventing, and dealing with infestation. Communicating this upfront will help start your relationship with the tenant on good footing.

1) Regular monitoring – establishing a regular schedule with your tenant for unit inspection, whether it’s weekly, monthly, or quarterly with an inspection form looking for infestation is great practice. Having property management software that includes event based calendaring that automatically setups tasks between your tenant and yourself can help automate this.

2) Preventing Infestation – Roaches are attracted to food sources, water, and dark warm hidden spaces. Incenting your tenant to keep things tidy, especially the kitchen counter should be clear of food debris and damp water. You should be proactive about fixing leaky water pipes. While vinegar doesn’t kill cockroaches, it’s a great repellant and great at preventing infestation.

Getting rid of an infestation, what are roach killer solutions?

How should we proactively deal with infestation? If there is a roach infestation, the tenant should notify you right away, and it should be dealt with immediately. The longer you wait, the harder it becomes to get rid of the infestation. You can try three different types of remedies:

Natural home remedies
Store bought chemical remedies
Hiring a professional pest control firm

One other consideration in all this is that there are pets involved. You want it to be pet friendly.

1) Home remedies are very attractive since they are safer compared to chemical treatment. Baking soda, boric acid, and diatomaceous earth are the most common home remedies. The good thing is Diatomaceous earth is pet safe.

2) Store bought chemical methods are very effective, but its critical safety guidelines are followed if you have pets or children. Some common solutions are Advion cockroach gel bait, Combat roach killing bait, and glue traps. Please read the label carefully if you have pets and children; typically, don’t allow them in the space where you’re sprayed for at least 2 to 4 hours. Make sure anything you place to prevent roaches is not reachable by them if possible.

3) Professional pest control firms can be very effective. If you set up a regular schedule they can prevent an infestation from ever happening. They have access to commercial-grade solutions and treatments. According to Angie’s list, you can expect it to cost anywhere from $100 to $600.

Conclusion

Having a great relationship with your tenant is required so you can take a joint proactive approach to prevent infestation, such as regular monitoring, and a quick action plan to resolve an infestation is key.

You can lower your expenses and maximize your rent by creating a cockroach free environment for your tenant.

Frequently Asked Question on Roach Infestation

What smells do roaches hate?
Roaches dislike essential oils such as Tea Tree Oil, Eucalyptus Oil, Lavender Oil, Peppermint Oil, and Rosemary Oil. They also dislike some plants such as Rosemary, Mint, and Chrysanthemum. Some spices and fruit are also natural repellants, such as cinnamon, lemons, and oranges. So having these around could be a great way to discourage roaches.
How long can roaches live without food?
Cockroaches can live for a month without food. So you should regularly clean your kitchen counter.
How long can roaches live without water?
Cockroaches can live for up to 12 days without water. So making sure you have water drops in your kitchen and bathroom and fixing leaking faucets is key to preventing infestation.
Will bleach kill roaches?
While you can drown a cockroach in bleach. It’s not the best solution since it’s harmful to humans and pets. There are more natural, safer solutions, like baking soda.

Sources:
https://www.orkin.com/pests/cockroaches/german-cockroaches/german-cockroach-vs-american-cockroach

https://www.angi.com/articles/how-much-does-cockroach-extermination-cost.htm

https://www.census.gov/library/stories/2021/04/how-many-american-homes-have-pests.html

How To Get Rid of Ants in Your Rental House or Apartment

Filed Under: Business Management, Property Management, Property Management Software

As a property manager, it’s never pleasant to get a call from your tenant that there is an ant infestation in your rental property. Ant infestations can happen suddenly and grow fast.

They are irritating for your tenants and also can cause problems for you. Ants are known to contaminate food; they can even damage wiring and electronics.

What Types of ants Commonly Affect Houses?

According to the University of California, there are various common types of ants that can invade a house. Here are a few of the common types:

While some varieties live outdoors, they will come inside the house for food and take it back to their ant colony. As you can see, the most common types of food you need to store away securely are Sweets, Fats, Greasy Foods, and Proteins.

Why Do You Have Ants in Your House?

Ants need food and water just like us.. The most likely cause is that your rental property has water they need or the food they’re attracted to is too accessible to them. Here are five things to watch out for:

You have sugary foods accessible to them. A great way to take care of this is to keep the kitchen clean and use sealed containers they can not access.
Make sure greasy surfaces are cleaned up in the kitchen counter, stove top, and garbage container.
Ants need water. So you should clean up water spills and fix leaky faucets and pipes.
Decaying wood is the perfect hideout for ants. Whether it’s a wood pile next to your house and dry wood siding, this is something to watch out for.
Finally, look at how they can enter your house from outside and seal them. Window, Door, or cracks in your foundation.

What Can I Do to Prevent an Ant Infestation?

Now that you know what attracts ants to your property, there are simple strategies you can implement with your tenants to prevent an infestation:

Get rid of their food supply – make sure you clean up your kitchen regularly, so there is nothing sweet available and all grease has been wiped down.
Get rid of their water supply – promptly pick up any water spills, fix leaky pipes and faucets, and do not leave water accessible to them.
Close of entry points – check the exterior of your property for cracks and holes and seal them.

There are also natural repellents that discourage ants that you can use to discourage ants:

Borax is used as a cleaning product and insect repellent. You should be careful and follow safety instructions. It can be harmful to children and pets.

Diatomaceous Earth dries out the oils in an ants body. But it can be an irritant, so do wear gloves and a mask when handling it.
Glass cleaner has an odor that removes the scent that ants use to get to food sources.
Red or black pepper is a natural deterrent since ants find the smell irritating.
Peppermint oil helps repel red ants. But be careful around cats.
Citrus fruit or Citrus Oils also helps repel and kill ants.
Vinegar mixed with water as a cleaning solution is effective. Ants do not like the smell of vinegar, so it acts as a deterrent.

How Do I Get Rid of Ants? Are Ant Sprays Effective? How do Ant Traps Work?

You can always go to your retail store for chemical spray and Bait Trap. There are popular sprays such as from Raid that are effective. But be careful because some of the chemicals can be harmful if you inhale or eat. So carefully monitor your children and pets.

If you have a carpenter ant infestation, you are probably looking for the best carpenter ant bait, to get off them. Bait traps work by attracting them, and the ants then take harmful chemicals back to the ant colony, which gets rid of the ants.

You can always use a professional pest control firm. According to Angie’s list, that can cost anywhere between $80 to $500 based on infestation size.

Conclusion

Ants can disturb your tenants’ experience with your rental property. Both you as the property manager and your tenant have a role to play in preventing an issue. The best way is to know what attracts ants and keep them away from your house.

Frequently Asked Questions on Ant Infestation

What Smells Do Ants Hate?
Ants typically don’t like the smell of citrus fruits, peppermint oil, lavender, black or red pepper. A great way to prevent an infestation, which could require using harsh chemicals, is to create a repellent for ants by making sure these fragrances are in your home.
Does Vinegar Kill Ants?
Vinegar does not kill ants. But by having vinegar, it neutralizes the smells ants use to get back to their colonies and lessens the infestation.
Does Cornmeal Kill Ants?
Cornmeal does not kill ants, but is helpful. Cornmeal if eaten by ants is not digestible. So they can starve to death if they eat no other food. But only if that is most of their food. If they eat other things, this is less effective.

Sources:
https://www.orkin.com/pests/ants

https://ipm.ucanr.edu/m/pn7411-3.html

https://www.angi.com/articles/how-much-does-it-cost-get-rid-ants.htm

https://www.census.gov/library/stories/2021/04/how-many-american-homes-have-pests.html

How to Prevent Mice in Your Rental Property

Filed Under: Business Management, Property Management, Property Management Software

One of the most unpleasant calls you can get from your tenant as a property manager is that there are mice in the property. To get rid of mice and prevent them from appearing again, it requires teamwork from both of you.

It’s also a very common problem, according to the US Census Bureau, 14.8 million homes have reported seeing a roach infestation over a 12 month period.

Here is some data on likelihood of Rodent Infestation versus No infestation based on these signs in the home.

It requires preventive measures, such as a mouse repellent strategy that makes the rental property less inviting. If there are mice already in the property, there is a solution to get rid of the mice already there.

What Causes Mice in the Property?

Especially during cooler months, mice look for warmth. So the risk is higher during the autumn and winter time. If you have cracks and openings in your house through the wall, window, basement, foundation or attic, you are more likely to invite mice.

Also, if you have good nesting material such as insulation, cotton, or feather in a pillow that is also attractive.

Finally, food is the other reason for mice to enter your house. Things such as unsealed pet food, open garbage cans, or just open food containers are very attractive to mice.

What Are Natural Repellents for Mice?

First, do all the obvious things. Seal entries into your. Inspect your house for cracks and openings to seal.

Get rid of food sources, by putting all food away in metal or heavy plastic containers. If it’s a paper container or light plastic, mice will be able to get in and get the food supply.

There are smells mice hate, such as peppermint oil, cayenne pepper, and cloves. Try to infuse those fragrances throughout the house.

Other smells that mice hate are smells of cat urine and urine of other predators. You can mimic this with ammonia, if you want a stronger smelling solution.

Other ways to get rid of mice? What is the best mouse bait?

Simple traps like a ‘snap trap’ with the best mouse bait peanut butter work, but obviously they are messy. Typically, it involves a quicker demise for the mice without longer suffering.

There are also electric traps that kill mice with electric shocks. They are effective but can be expensive.

There are also sticky glue mouse traps, but mice can learn to avoid them over time.

You can also use store bought chemical solutions and take precaution when using them around children and pets.

Finally, you can always use a professional pest control service, according to Angie’s list, that can cost from $180 to $600 but can be effective. But it can vary based on the size of your house.

Conclusion

Mice once they infiltrate are hard to get rid of. The best strategy is to seal your house so it’s hard for them to enter. Also, don’t provide any food or shelter source for them.

Frequently Asked Questions on Mice Prevention

What smells do mice hate?
Mice are known to hate smells like peppermint, clover, and Cayenne pepper. They also hate the smell of Ammonia, since it smells similar to cat urine.
How long can mice live without food?
Mice can survive 2 to 4 days without food. So if you eliminate their food sources, it’s a very effective mouse repellant strategy.
Do mice learn to avoid mouse traps?
Mice will learn over time to avoid traps. At first, it’ll be new for them, but over time they learn.

Sources:

https://www.orkin.com/pests/rodents/mouse-control/mouse-deterrents

https://www.fixr.com/costs/mouse-exterminator

https://www.census.gov/library/stories/2021/04/how-many-american-homes-have-pests.html

The Ultimate Guide to Running a Property Management Company

Filed Under: Business Management, Property Management

Once you start a property management company, the day-to-day running of the business can overwhelm you. If you are not organized and process-oriented you’ll spend all day fighting emergencies and not be able to grow your business.

Understanding the Basics of Property Management

It’s important to know what property management companies do and how to make it an efficient process. There is typically a monthly rhythm to the business with specific activities at different times of the month:

Rent Collection
Dealing with late tenant payments
Sending out owner payments and reports
While maintenance and repairs can happen throughout the month, you can deal with vendor payment at a specific time of the month.

Finding new tenants for vacant units and gaining new owner clients are important revenue-generating activities that happen throughout the month and have to be prioritized.

By thinking about your business in this manner, you can potentially create an organization with specialized roles to scale your business.

It’s important to master key business processes to run and grow your property management company:

Monthly tenant rent collection and communication process
Monthly owner communication and payment process
Property maintenance tasks to minimize repair
Monthly financial accounting
Filling vacant units with great tenants in minimal time
Finding property management owner clients to grow your business
Build a variety of revenue streams beyond property management fees.

Running your property management company efficiently:

According to NARPM survey data (National Association of Residential Property Managers), the most successful property managers (those in the top quadrant of profit margin), have most of their growth come from more profit per unit versus growing the number of units (doors) under management.

Property Management Net Profit from Unit Growth vs Profit per Unit

Two Key Measurements to Ensure maximum profit margins

So how do you get into the top quadrant of profit margin? Well, two key indicators are your efficiency in labor and your efficiency in leasing:

How much staff (labor cost) do you need to manage doors under management?
What is your leasing cost to fill a vacant unit?

The top quadrant of property managers has a labor cost of 30.2% compared to the industry average where labor cost 43.7%. This also translates into more doors under management with smaller teams. You can see the difference with top-performing firms.

Door per Team Member Property Management

Another key metric to consider is how much it costs the property manager in terms of leasing wages and leasing commission compared to leasing fee earned. You can see from the table below there is a huge performance difference of a top performing company.

Leasing Profit for Property Management

In order to become a top quadrant property manager in terms of profitability, it’s important to keep your tenant happy so they stay for a long time. You should also make sure your owners are happy with your service so you can charge a premium property management fee and they see the value.

Running a Property Management Company – Key Processes

You have to pay attention to and optimize the following key processes:

Monthly tenant rent collection and communication process
Monthly owner communication and payment process
Property maintenance tasks to minimize repair costs
Monthly financial accounting
Filling vacant units with great tenants quickly

Monthly Rent Collection Best Practices

Monthly rent collection is one of the most important regular activities for your business. It should run a regular process with key steps:

One of the most important regular activities is collecting rent from your tenants. It’s important to make it convenient for your tenant to pay rent in a variety of ways. Giving your tenants the ability to pay rent online via ACH or credit card is important.
Automate Rent Payments: Provide tenants the option to set up automatic payments to avoid missed deadlines.
Communicate status of payment to tenant: Use Late Rent Notices and Rent Receipts.Beyond making it easy, it’s important that your tenant realizes you will enforce the lease and timely payments are expected. If they’ve paid, sent them a rent receipt to give them positive feedback. If they haven’t paid on time then having an attorney-approved and a Late Rent Notice that is automatically sent out via Email and SMS is also critical.
Track payments accurately: Maintain detailed records to identify late payments and follow up appropriately.

Typically the majority of your rent collection should happen in the first few days of the month based on lease terms you’ve signed with your tenants. It’s important you have good record keeping so you know which tenants are late and communicate to them appropriately, including potentially a late rent notice, followed by more stringent communication if needed by a certain day of the month (typically the 5th to 10th of the month). If you have not received rent.

SimplifyEm Late Rent Notice

Owner Communication and Payment Process

As a property manager, you are responsible for managing their properties. You should communicate how their properties are doing on a monthly basis and pay them their balance after all expenses (including your property management fees) have been deducted on a regular basis monthly. You should have a systematic monthly approach to this:

Communicate to your owners with a professionally company-branded owner report that details how their property performed financially.
Promptly disburse their funds. Transfer owner payments after rent clears in your bank to ensure accuracy.
If there is or will be a vacant unit, give them a prompt action plan. This will help strengthen their trust in you.
Set expectations with agreements on fees and payment schedule. Typically you want to send the owner report and owner payment after the rent has been collected and cleared in the bank (meaning the rent check didn’t bounce). Most property managers schedule this process between the 7th to 20th of the month. Set the expectation with your owners on the schedule.

SimplifyEm Owner Balance

Another key document to manage expectations is the property management agreement you sign initially with new owner clients. It sets expectations on fees you’ll be charging, when they should expect monthly owner payments, as well as your and their responsibilities.

Property Maintenance Tasks to Minimize Repair Costs

It’s important to have regular maintenance activities for your property so small maintenance issues don’t become major repairs.

It’s good to have a regular schedule for different types of maintenance. For example:
1. Monthly Maintenance Tasks – Inspect HVAC filters, test smoke alarms, check for leaks.
2. Quarterly Maintenance Tasks – Inspect roofing, clean gutters, service heating systems.
3. Annual Maintenance Tasks – Full property inspections, pest control treatments, review safety compliance.
If you have a trusted vendor you work with for this such as gardeners, plumbers, or handymen it’s great to have them set up as vendors in your property management software.
It’s important to have the ability to have a communication center so that you can reach your vendors for emergency repairs as needed via phone, email, SMS and directly
Issue work orders through your software to your vendors Email and SMS, to streamline the process.

Monthly Financial Accounting Making Sure You’re Audit-Proof

Beyond taking care of recording activities with tenants, owners, and vendors, you need to make sure your bookkeeping is audit-proof. The best way to do that is to consistently do a 3-way reconciliation. It should be done at least monthly, although you can decide to do it daily or weekly.

This process ensures that your financial transactions are complete and up-to-date. It involves making sure your bank statement balance matches your financial book balance and also matches your client (owner) balance.

Having property management software that automates this reconciliation process is critical. This is one of the key elements your state’s auditor will ask of you if you’re ever selected for a financial audit.

Filling Your Vacant Units Fast with the Right Tenants Quickly

It’s critical that you know when a unit is going to be vacant. So that you can advertise the vacancy and get the unit ready for occupancy. You can get the right applicants for the vacancy and learn about their background. The faster you can fill the vacancy, the lower your leasing cost, and the more profitable your leasing fee income will be. You can learn more about this in our ultimate guide to finding the right tenant.

Strategies to Grow Your Property Management Company

Keeping your current owner clients happy is the key to having a profitable property management company. If you want to turbocharge growth, it’s important to focus on two additional key business processes:

Finding property management owner clients to grow your business
Build a variety of revenue streams beyond property management fees.

Acquiring New Property Owner Clients

Requires a variety of marketing and sale activities:

Advertising campaign for new owner clients
Call campaigns for new owner clients
Advertising campaign for existing owner clients (for additional units or referrals)
Call campaign for existing owner clients (for additional units or referrals)

It’s best to experiment with all and see what’s most effective. Here are costs to acquire additional units to manage. You want to try to get to the top quadrant:

Unit Acquisition Cost Property management

What is critical is to know how much it costs you to acquire a unit and compare that to the lifetime value of that unit (how much revenue you will typically earn from a unit). The lifetime value of the unit is made up of your earnings from the unit, and typically, how long you manage a unit.

If your lifetime value of a unit is $10,000, you can afford to spend enough to get a new owner client so that it’s still profitable for you over the lifetime.

You can see the Unit Lifetime value for property management companies and assess where you fit:

Lifetime Profit Property Management

Finally beyond the CAC and LTV for acquiring an Owner client, you have to understand why they choose to use a property manager and why they choose not to use a property management service and do it themselves.

According to Peter Lohman here are some factors:
Why owner clients choose to use a property manager:

Making property management easier
Boosting profitability
Reducing legal risks

Reasons owner choose not to use or stop using a property manager:

Decline in service quality
Fee Increases
Tenant placement delay

Building Multiple Revenue Streams Beyond Management Fees

This is the secret sauce to turbocharge your property management company’s revenue growth.

Property management companies charge PM fees; however the most successful companies provide many other services and provide additional value to their owner and tenant clients.

Notice the difference in where revenue comes from for the most profitable property management companies versus the least profitable:

Ancillary Fee - Property Management

Some of the ancillary fees to consider according to NARPM:

Application Fee
Leasing Fee
Renewal Fee
Other Owner Paid Fee
Other Tenant Paid Fee
Owner Maintenance Coordination Fee
Vendor Maintenance Referral Income
Other Fees

Leveraging Technology to Streamline Your Property Management Business

SimplifyEm property management software can help you easily manage your key business processes and handle them at scale. So when it comes to managing your vacant units, tenants, owners, vendors, banking and accounting. You can handle them seamlessly with easy to use software like SimplifyEm whether you’re managing 8 units or 8,000 units. So it allows you to grow your business without growing your labor cost as much.

Mastering Property Management for Long Term Growth

In conclusion, running a property management company can be very profitable, but it requires you to be great at operations, marketing, sales, and accounting. If you pay attention to each key monthly process and make sure it’s efficient and scalable and are learning from best practices in the industry, you could have great long-term success.

Frequently Asked Question (FAQs) on Growing a Property Management Company

What is a property management company?
A property management company oversees the daily operations of rental properties on behalf of property owners. Responsibilities include tenant management, rent collection, property maintenance, and financial reporting.
What are the key responsibilities of a property manager?
Property managers handle marketing, tenant screening, lease agreements, rent collection, maintenance coordination, financial reporting, and legal compliance.
How do I start a property management company?
Starting a property management business involves:
1. Obtaining the necessary licenses and certifications
2. Setting up a legal business structure
3. Building a network of property owners and tenants
4. Implementing property management software
5. Developing streamlined processes for efficiency
What challenges do property management companies face?
Common challenges include tenant disputes, late rent payments, property maintenance issues, legal compliance, and managing multiple properties efficiently.
How can I make my property management business more efficient?
1. Use property management software for automation
2. Establish clear policies and procedures
3. Develop strong tenant screening processes
4. Create a network of reliable maintenance professionals
5. Stay updated on local real estate laws and regulations
What software can help with property management?
Software like SimplifyEm helps with tenant tracking, rent collection, maintenance scheduling, financial reporting, and more.
How do I attract property owners to my business?
1. Build a strong online presence
2. Offer competitive and transparent pricing
3. Provide excellent customer service
4. Use referrals and networking to gain trust
What legal requirements must I meet?
Depending on your location, you may need a real estate broker’s license, business registration, insurance coverage, and compliance with landlord-tenant laws.
How do I handle difficult tenants?
Have clear lease agreements, document all interactions, follow legal eviction procedures if necessary, and use mediation when possible.
How can I scale my property management business?
1. Automate tasks with software
2. Hire a reliable team
3. Expand marketing efforts
4. Offer additional services like property maintenance or real estate consulting

For more details and tools to simplify property management, visit SimplifyEm.

Sources:

https://www.narpm.org/docs/NARPM_FinancialPerformanceGuideOverview.pdf

https://www.peterlohmann.com/blog/the-property-management-trends-report

How to open a Trust bank account for a property management company – Step by Step Guide

Filed Under: Business Management, Property Management

Why do property managers need a trust account?

You are required to open a trust account as a property manager. This is critical to ensure your clients funds are handled properly and legally. In many states it’s a legal requirement, failure to do so can lead to fines and loss of license.

A trust account is essential for keeping client funds separate from property manager’s business finances. It ensures transparency, legal compliance, and property fund allocation. These accounts typically hold:
Security Deposits – Funds collected from tenants and help until the lease ends.
Rent Payments – Monthly rent received from tenants and distributed to property owners.
Maintenance Reserves – Money set aside for property repairs, emergency fixes, or routine maintenance.

By maintaining a dedicated trust account, property managers can prevent commingling of funds, ensuring financial integrity and avoiding legal issues.

However it can be difficult to set up since a lot of bank employees don’t know about this type of bank account.

Step by Step process to open a property management trust account:

1) Choosing the right bank for a trust account – Typically a bank that provides trust account services and also FDIC insured. Ask to speak to a business banker to let them know you’re trying to set up a property management ‘Client Trust Account’. If they are not familiar with that sort of bank account, look for another banker.

2) Required Documents for a property management trust account – You’ll generally need the following documentation in order to open the account:

Business License – Ensures you are licensed for your state.
Trust Agreement – Typically this is the property management agreement you signed with the owners
Corporate Paperwork – If you are an LLC or corporation, you’ll need your articles of incorporation.

3) Naming the account correctly- The account name must depict that you are holding other people’s funds: “[Property Management Company Name] Client Trust Account”

You should ensure with the bank that its a business checking account, FDIC insured, beyond the account name it registered with the Broker as a trustee.

4) Using Property Management Software for compliance- that maintains accurate records of funds tied to each tenant, property, and owner. It should allow for bank reconciliation and 3-way reconciliation in an automated fashion.

Opening a trust account is an essential part of starting a property management company. You are legally obligated to manage your clients funds in a legal, transparent manner, without commingled funds.

Frequently Asked Questions – FAQs on Trust Bank Accounts for Property Managers

What is a trust account for property management?
A trust account is a separate bank account used by property managers to hold client funds, such as rent payments and security deposits, ensuring proper handling and compliance with legal requirements.
Why do property managers need a trust account?
Many states require property managers to use trust accounts to prevent the commingling of client funds with business funds. Failure to comply can lead to fines, penalties, and even loss of license.
What are the steps to open a trust bank account?
1. Choose a bank that offers trust accounts for property managers.
2. Gather required documents (business license, EIN, property management agreements, etc.).
3. Ensure compliance with state regulations regarding trust accounts.
4. Open the account and designate it as a “Trust Account.”
5. Set up proper bookkeeping and record-keeping systems.
What documents are needed to open a trust account?
Typically, you will need your business license, Employer Identification Number (EIN), a property management agreement, and possibly a state-specific trust account certification.
Can a personal account be used instead of a trust account?
No, using a personal account can result in legal consequences, as trust accounts are designed to keep client funds separate and ensure transparency.
Are trust accounts subject to audits?
Yes, many states require regular audits to ensure compliance with regulations. Keeping accurate records is essential.
What happens if I don’t open a trust account?
Failure to maintain a trust account can lead to penalties, legal action, and potential revocation of your property management license.

For more details, visit SimplifyEm.

Sources:

https://dre.ca.gov/files/pdf/OpeningTrustAccount.pdf