The Property Manager (PM) and the Property Management Plan - Part 2

[amurthy]

(Please pardon the formatting, or rather, the lack of it ... Thanks. Read on) Folks,
I`m writing to initiate some discussion around the involvement of a Property Manager in the investment process.
I concur with several comments (incl. Don`s & Peter`s at various occasions) on the importance of a Property Manager, who can truly function as a trusted partner in taking an investment property from where it is to where it should be.

As such, here are some thoughts (in multi-part format) on my views for your consideration & comment; as well as references.

Part 2 - What can the PM bring to the relationship? (my view)

I`d imagine that a PM who carries the requisite licenses and has been in the business for a length of time would probably have a training program in place, have built up professional affiliations & associations; and perhaps he could bring ...

• Experience from previously executed examples of `Property Management Plan`

• • How the PM took other properties from their `As-Is` state to their `To-Be` (true potential) state
  • Systems for handling, say ... (list not exhaustive)
  • Advertising & marketing
  • Leasing
  • Bidding for services & hiring outside vendors ... existing service contracts with vendors?
  • Reporting, Accounting & software capabilities? ... In-house accounting department? … no. of people, areas of focus etc. Samples of the accounting reports? References to existing banking relationships.Handling emergencies - fire, flood or bloodHandling maintenance requests - e.g. web-forms that tenants can log into & submit requests?Handling rent collection - web-based money-transfer arrangement with tenants & the Owner?Managing operating budgetsEstablishing policies & proceduresHandling legal procedures & evictions? - Agencies used for evictions, criminal checks, and credit background checks etc.

Questions? Comments? Advice?
Part 3 follows ...
Thank you,
/am

 

[Nir]

why was your other post deleted? it was a good summary. I added a comment yesterday but the entire thread was removed.

 

[amurthy]

Sorry about that - I wanted to re-write the document incl. the header, but there doesn`t seem to be a way of doing so other than to delete & repost

Will be reposting shortly.

 

[amurthy]

Part 3 – Expectations of a Property Manager … my view
(Please pardon the lack of formatting at times ... Thanks. Read on)
Folks,

I`m writing to initiate some discussion around the involvement of a Property Manager in the investment process.

I concur with several comments (incl. Don`s & Peter`s at various occasions) on the importance of a Property Manager, who can truly function as a trusted partner in taking an investment property from where it is to where it should be.

As such, here are some thoughts (in multi-part format) on my views for your consideration & comment; as well as references.

I make no claim at all to be the creative genius that came up with all this by my ownsome-lonesome.

I`ve digested a lot of material; and used and compiled information from a variety of sources, books, people, and a few of my thoughts to come up with the list.

That said, I`m feeling a little stymied that most of the `property managers` (with very few exceptions) aren`t looking so much to truly `manage` a property; but more to coast along in a steady state & collect rent cheques on a regular basis (and charge a % for doing so).

Which even I, with my (very) limited experience could possibly do. So, what is the `value-added` that I`m looking for from the PM, to bring to the table?

In truth, I`m looking to engage with a PM who is not just a `maintainer`/ `sustainer`, but a `transformer`.

... Someone who, on the basis of experience of previous `transformations`, can see & articulate a vision of the potential that a property can truly & realistically achieve; and then creates & executes the Property Management Plan ...

I believe that the true reason to engage a PM, like any other specialist is to become a force-multiplier and a true partner; rather than a `rent collection agent` who charges x%. Obviously, the money required to undertake the transformation comes from the Owner; but the ideas, experience and roadmap should come from the PM.

For this to be a true partnership, both the PM and the Owner should have some skin in the game. Compensation should be based on a graded, performance-based scale (measured in terms of progress on targets for revenue, expense and cash flow); ... the highest level of performance for `adding value` should result in the PM being compensated better than just a `sustainment` level of performance (rent collection agent) with minimal `value-added`.

Thoughts? Comments? Any people that you`d consider referring?

Part 3 – Expectations of a Property Manager … my view

I`d like to be able to count on the PM for the following ...and I`d like your thoughts, comments & suggestions

[*]Daily management & problem solvingFirst & foremost, for the PM to be able to draw on previous experience in developing and implementing a sound & comprehensive Property Management Plan l-->The PM`s ability to use this experience to create, implement, monitor and refine a PM Plan for the specific property to take it from As-Is to To-Be, in a manner where progress can be measured; and to proactively address the root-causes of problems.

• What are your thoughts & experiences in this regard?

• The PM`s ability to solve problems as they arise on a day-to-day basis without affecting the Owner`s time or money, barring exceptional circumstances
  
• Handling staffing issues
  • Leasing Role – For the PM to deliver all aspects of successful leasing including customer service, sales, fair housing policies etc, and bring to the table, the knowledge, skills, experience, tools and techniques required to do so successfully
    
  • Maintenance Role – For the PM will provide a Maintenance Team/ handyman on call to address issues; and also to bring units to `rent-ready` condition within X days when a tenant leaves.
    
  • Leasing the property
    • For the PM to undertake the advertising required to keep the property 100% occupied (or close) at market rents by choosing the `right residents` with background checks
      
    • For the PM to carry knowledge of which advertising vehicles obtain results, and will develop the promotions & messages to get the job done
    
    Increasing Cash FlowFor the PM to be accountable to increase the cash flow of the property, and to undertake steps necessary to meet this objective, be it driving by the competition or calling surrounding properties or other means necessary.
  
  Legal & contractsFor the PM to carry the knowledge required to file the appropriate reports & documents with the various levels of government (national, provincial, municipal)
  
  For the PM to carry templates for leases, eviction notices, pet addendums etc in accordance with the laws.
  
  For the PM to ensure that all residents without exception have read and signed the required paperwork and are apprised of the rights & duties of the Tenant and the Landlord.

Maintenancefontc-->[*]For the PM to maintain the landscaping, paint the building and the units, ensure all appliances within units are in good working order and undertake all the routine activities (incl. Fixing leaky faucets, creaky doors, blown fuses or light-bulbs, stained carpets etc) that will make the property a desirable location to live in.

[*]For the PM to receive, manage and complete all work orders for existing tenants, clean the carpets, manage snow removal on all walkways (how frequently?) during the winter months to ensure tenant safety, manage lawn mowing and landscaping on a weekly basis during the summer months, manage trash storage and pickup; and meet with all contractors for repairs.

[*]For the PM to deliver work that requires the services of plumbers, electricians, carpenters, carpet-cleaners, landscapers, painters, eaves-trough cleaners & so on; and to carry pre-negotiated service agreements with various service providers

[*]Rent Collection

• To collect all rents by the 5[sup]th of each month.
  
• Paying the Bills
  • To be accountable for collecting & depositing rent into the designated bank accounts by the 10[sup]th[/sup] of each month; and for paying all the bills on time, including monthly bills as well as other bills that occur less frequently.
    
    To ensure that every expense line item on the operating budget has bills attached to it.
    
    Managing the BudgetTo be accountable to manage the property`s Operating Budget on an ongoing basis using a detailed chart of accounts; and to ensure that all income and expenses have been posted by the 10th[/sup] of the month.
    
    To prepare & submit an analysis of the detailed

• • statement of Income & Expenses and perform Variance Analysis against the budget, with clear & concise explanations and suggestions for variances, good or bad.
  
  EvictionsTo handle evictions to the letter of the law.

Customer Service (I believe that this plays a huge part in making the property a desirable place for continuing tenants ... your thoughts?) To provide multiple channels (incl. Web-form, telephone, fax, email) at any time round-the-clock for the residents to communicate with a problem or an emergency.

[*]To attend to the request within 24 hrs for all non-emergency maintenance requests, and immediately for emergencies that involve fire, flood or blood; and in case of an emergency, to be present on site immediately, and co-operate fully with the authorities and assist the families of the victim.Your thoughts, comments, suggestions?

Thanks,

/am

PS: Thanks for your patience; and if you have references, I`d be glad to connect with some of your partners who`ve worked well with you.

 

[housingrental]

I might be misunderstand but what discussion were you hoping for? You`ve posted job duties not questions or items to debate?

 

[amurthy]

Hi Adam,

A subsequent post (Part 3, posted under this thread itself) outlined what I`d hope to obtain from partnering with a PM.

I was looking for:
- Feedback from Investors who have partnered with a PM who brings these attributes (or a subset) to the table,
- Positive experiences that some readers might`ve had with specific PMs in the Toronto region, and
- References to any PMs in the Toronto region with whom readers might`ve had positive experiences

Regards

 

[housingrental]

Cool
I`ve turned around many vacant, under rented, in need of TLC, poorly managed properties. I`d suggest many quality pm`s should be able to help you with that but you have to have the funds

Email me with your portfolio info and I might be able to point you in the right direction for a reference depending on the specifics of what you have. (I don`t serve downtown Toronto)

 

[amurthy]

Thanks, Adam - unfortunately I don`t have your email ID, so can you pl. send me an email to [email protected].

Regards,
/am

 

[housingrental]

Sure