legal vs. illegal suites

[derekchien]

Let say you have a fire in your illegal basement suite. Your insurance company will not pay. It doesn't matter how safe you think your property is, or how careful you are in terms of managing your property. Insurance company only cares if it's legal or not. Illegal things doesn't stand up in the case of law. It's just like if you have illegal terms in your contract, it is not enforceable by law.

 

[aersol]

@andyr



Did you ever find a management company?

 

[andyr]

I ended up buying a property that didn't have a suite in it and then I am in the process of putting a legal suite in. So I ended up with Libertas, but they fired me because I asked too many questions. So I am on the search for another.

 

[BlaineBradley]

Andyr,



What do you mean they fired you because you asked too many questions??? Can you expand on that?

 

[andyr]

@BLAINEBRADLEY



I was intentionally being vague as I don't want to stir the pot and they are still technically my property manager for 30 more days or until I find a replacement. For now, lets just say I required more feedback on the marketing process than they were prepared to give. In the future, I now know I need to be more clear on my expectations before hiring another property manager.

 

[RedlineBrett]

[quote user=andyr]@BLAINEBRADLEY



I was intentionally being vague as I don't want to stir the pot and they are still technically my property manager for 30 more days or until I find a replacement. For now, lets just say I required more feedback on the marketing process than they were prepared to give. In the future, I now know I need to be more clear on my expectations before hiring another property manager.




We have 'fired' numerous clients as well. There are other threads on this, but when dealing with PMs for single family investors need to understand that it's a volume business. If clients don't fit nicely into the systems of the PM it's often not in the economic interest of the PM firm to change their systems to accomodate that one client.



I think a better approach for you would be to canvas the available PM firms and find one who has systems in place that align with your primary concerns, rather than 'be clear on your expectations' and expect the new firm to measure up to them. I think you will be frustrated again.

 

[andyr]

@RedlineBrett



I do recognize it is a volume business, and was trying to be hands off as much as possible. Perhaps if the process was explained better upfront than I would have had less issues. I don't think it was unreasonable to ask why a tenant was not shown the property when they wanted to see it. Or to ask for feedback so that I could adjust the rent or ad to reduce unnecessary inquiries, but perhaps I am wrong. It seemed to me that I was seeing a great deal of interest in the property, but no results and no explanation from the PM. Trust, I think, is earned and a little more work is needed for a new client than an exisiting one. It is the same in the accounting business that I am in and we are in a volume business as well.



Now that it is rented they likely wouldn't hear from me again until it needs to be rented again. I would rather focus on my newborn son, my school courses, and work.

 

[RedlineBrett]

[quote user=andyr]@RedlineBrett



I do recognize it is a volume business, and was trying to be hands off as much as possible. Perhaps if the process was explained better upfront than I would have had less issues. I don't think it was unreasonable to ask why a tenant was not shown the property when they wanted to see it. Or to ask for feedback so that I could adjust the rent or ad to reduce unnecessary inquiries, but perhaps I am wrong. It seemed to me that I was seeing a great deal of interest in the property, but no results and no explanation from the PM. Trust, I think, is earned and a little more work is needed for a new client than an exisiting one. It is the same in the accounting business that I am in and we are in a volume business as well.



Now that it is rented they likely wouldn't hear from me again until it needs to be rented again. I would rather focus on my newborn son, my school courses, and work.





I have a feeling your PM would be hearing from you after you got your first statement back I know REIN members quite well...



Did you ask about leasing communication with owners up front?

Were you promised detailed feedback anywhere in the agreement?



I can't comment on your current PM's policies and proceedures but in our contracts it allows us as the PM to set the rent without consent of the owner. We made this decision for a number of reasons but it's not the only option out there. One of our competitors allows owners to communicate directly with the agent that is leasing the unit... at additional cost of course. Other companies work like realtors do on buy/sell... so lots of hand holding and nothing happens without approval of the owner... but do you really want that if you want to focus on other things, or do you want someone to get it done for you so you don't need to worry about it? it's a fine line and everyone is a little different...



What might seem like a perfectly reasonable request (and yours are) can often not be accomodated by a low fee PM across every client in their portfolio, and they set their policies and proceedures accordingly. We always give new clients the benefit of the doubt but if we are speaking with them at length month after month and it becomes obvious we can't meet their standards and still make money then we have to have that tough talk with them...

 

[andyr]

You don't know what you don't know. I didn't realize at the time I needed to ask about what communication I would be receiving. I do now. Live and learn. It seemed obvious to me that I would get some feedback, but apparently not. They have a great website, but unfortunately it doesn't tell you about the lease inquiries. I may be dreaming, but having that information on there would be amazing and then they would probably never hear from me!



I don't know why you said I would contact them when I received my first statement? I received it and didn't have any complaints (well I was a little annoyed as it felt like I got the tenant myself). I have never complained about the price assuming that is what you mean. I know that is a typical complaint, but I would rather spend the money and focus on getting more property. I guess the only monetary concern I ever had was spending money on advertising. I would like to know that the money is spent on proven sites and you would know that better than I would.



Interesting about setting the rent by the PM. I know Don recommends we set the rent, and my concern would be a lower rent makes it easier for you to rent, but digs into my pocket. There would definitely need to be a huge trust here.



I should also state, that I advertised on Kijiji myself, answered the tenants questions, got my friends to show the property, and I set the rent and utility amounts. I got exactly what I wanted without the tenant batting an eye, despite the PM telling me the rent was too high. So, I don't think the rent or utilities were too high.



AND... I think I officially stirred the pot. Wasn't my intention. I was just answering the question I was asked

 

[RedlineBrett]

[quote user=andyr]I don't know why you said I would contact them when I received my first statement? I received it and didn't have any complaints (well I was a little annoyed as it felt like I got the tenant myself).


This was more of a light hearted jab at REIN members as property owners. I work for dozens of them. They're tough clients that come with high standards for service. Nothing wrong with that. We make the investment of time and service at the beginning to earn that trust, as it's seldom for REIN clients to only have one property. But I could see how a PM that is not familiar with the REIN crowd could have a tough time.



[quote user=andyr]

Interesting about setting the rent by the PM. I know Don recommends we set the rent, and my concern would be a lower rent makes it easier for you to rent, but digs into my pocket. There would definitely need to be a huge trust here.


For new business we do allow owners to set the starting asking rent... it is their place afterall. However we reserve the right to do the deal based on our judgement. The reason we went this way is because the rental market moves so fast we have too many lost deals while waiting to hear back from the owner regarding yes or no to a tenant, or going back and forth with questions. Tenants don't care, they often have a weekend to sign a deal and that's it. Also, frankly, we know the market better than most owners do. Seasoned REIN investors on the top of their game would be able to tell you market rates, but most owners do not, and we need to set our policies accordingly. It helps owners avoid the common mistake of sitting vacant the first month because they shot for the moon. We don't get paid if the unit isn't leased same as owners, so our interests are aligned there.



Also, what are you going to do when you have 20+ doors... most owners at that level don't want the back and forth.



[quote user=andyr]I should also state, that I advertised on Kijiji myself, answered the tenants questions, got my friends to show the property, and I set the rent and utility amounts. I got exactly what I wanted without the tenant batting an eye, despite the PM telling me the rent was too high. So, I don't think the rent or utilities were too high


Sounds like you did all the work... not sure what you needed a PM for!

 

[BlaineBradley]

Andyr,



The reason I asked the question is that I'm sure I have seen that company at Rein events. I assume they would follow the Rein system and have appropriate systems in place from advertising, showing, screening potential tenants, the rental agreement, dispute resolution, to the repairs and maintenance to your property (if needed). If they have any track record in the business, they should not have to re-invent the wheel with each new landlord. As a landlord, you should know what you are paying for and the fees for said service...



On another note, you said it best. Let the PM manage your property and you spend your time doing what you like (family time, course work, golfing, etc.). A PM should lessen your time with the property, not increase it...



As far as setting the rent, the PM is supposedly the expert. Some quick due diligence will give you a range. If the PM's suggested rent is too low (in your opinion), what is special about your unit that makes it more valuable...