Property Management
R. H. Thackston & Company REALTORS can offer you the benefit of experience: business, legal, accounting, marketing and sales for your rental and investment properties. The team of professionals we have worked with for decades has seen it all and can help you put together a realistic plan to help you build your Rental and Investment Property Portfolio in today’s unbelievable business environment. We can help you work through your idea and turn it into a viable plan or help you evaluate the pitfalls before you sacrifice your nest egg, your nest and yourself.
Nothing is more common in the small business of Rental and Investment Property Portfolios than a lack of planning. Long range, short range, goal setting, financial, handling of personnel – you name it – the average Entrepreneur is great at exciting ideas and handling the challenges of new business in all regards except these little details. The philosophy of “build it and they will come” runs strong in the species and they will come, the tenants, the tax man, the lawyers, the employees but not necessarily the profits.
There are three basic patterns we see with Rental and Investment Property Portfolios: I own it but can’t sell it right now; I own it and want the current income and future equity and I own it and want to re-organize it so I can sell it and receive make a profit as quickly as possible. We can help with all three. R. H. Thackston & Company REALTORS can help with all three.
I own it but can’t sell it right now:
This is the most common reason for the average person to own rental property right now. Let’s face it, the real estate market has been anything but fun since before 2008 and the crash in values since the Fall of 2008 has left many honest and genuinely hard working individuals in the difficult situation of either selling their real estate at a massive loss or turning their property back to their lender. Sadly, many have chosen to turn their properties back to their lenders. This is particularly unfortunate since many of these properties could have been rented to qualified tenants who would have taken reasonable care of the property and provided reasonable cash flow to the owner and preserved the owner’s credit and ultimately their equity as well.
Depending upon what level of involvement and assistance an owner is looking for we offer two basic kinds of service: we can advertise, show, screen and consult on the selection of tenants and you as the owner will manage the property once it is rented, collect rents and help your tenants with any of the day to day issues associated with living in your property OR we can advertise, show, screen and consult on the selection of tenants and we will manage the property once it is rented, collect rents and help your tenants with any of the day to day issues associated with living in your property. Obviously the fee varies for these two levels of service; in our case it may also vary by condition and location of your property. When you call us we will be happy to provide an initial consultation on your property and discuss specific terms.
I own it and want the current income and future equity:
This is the most traditional of reasons for having Rental and Investment Property Portfolios. Many of our best clients and friends over the years have focused on this as a way to build their families wealth and security for the future.
It actually works!
We can help you in several ways in building and managing this kind of portfolio: we can help you find properties that match your criterion as to location, type, condition and cash flow as well as help you set up an initial business plan for obtaining tenants or servicing those you already have in place. In this case it’s not that property owners can’t sell, it’s that they don’t want to sell. Typically in this situation there is a more consultative aspect to our service but we can advertise, show, screen and consult on the selection of tenants and you as the owner will manage the property once it is rented, collect rents and help your tenants with any of the day to day issues associated with living in your property OR we can advertise, show, screen and consult on the selection of tenants and we will manage the property once it is rented, collect rents and help your tenants with any of the day to day issues associated with living in your property. When you call us we will be happy to provide an initial consultation on your property and discuss specific terms.
I own it and want to re-organize it so I can sell it and receive make a profit as quickly as possible:
This can be the most rewarding and trickiest of all three types of property management we see. This is very common with Commercial Real Estate and/or Mixed Use Commercial real Estate in Central New England. The normal time scale for this kind of activity where multi-family properties are involved is one to two years; in situations that involve mixed use commercial or strictly commercial a longer time horizon should be planned on more in the five to ten year time horizon. Most small investors are not prepared to work with these kinds of time horizons and as a result rarely get involved in this level of project. This type of project can also involve significant risk as the time horizon can stretch through multiple business cycles and lending environments and can be severely impacted by a lack of liquidity at any number of points in the process.
Outline of factors that should be considered in ANY Property Management Relationship:
The following is the Outline of my Property Management Course that is essentially an organized list of all the factors that should be considered in Property Management situations.
Property Management – 101
I. Course Description:
The focus of this course is on agents acting as Property Managers representing property owners. This course is designed and intended to provide a basic level of residential property management issues. The content will improve licensee awareness of legal issues and management techniques so licensees can be of greater service to both property owners and tenants. Many licensees have limited property management training and background and often find themselves as “Accidental” Property Managers. This class will review issues not normally covered in depth elsewhere in general real estate training specifically focusing on residential properties of four or less Rental Units. The class will provide three hours of classroom based continuing education.
II. When is a Property Management Relationship established?
A. Relationship is between Principal and Broker
B. Intentional and Un-intentional Property Management
C. Exempted Individuals and Entities
D. Written and Oral Property Management Agreements.
III. Define relationship between property owner and Property Manager
A. Unbundling of rights and responsibilities between manger and owner.
B. Responsibility of Manger.
C. Responsibility of Owner.
IV. Owner and Agent working together to create a management plan
A Define terms
B. Agree on a system
C. Establish Cash Management Plan.
D. Establish Reporting Periods
E. Establish Goals
V. Risk Management & Maintenance Costs
A. Plan should include regular review Maintenance Costs
B. Maintenance Costs
1. Establish a maintenance cost and Deprecation Schedule
2. Establish a program of review and updating
C. Plan to avoid Risk
1. Working with Insurers
2. Working with Owners
3. Working with Tenants
VI. Managing Venders & Contractors
A. In Reporting
B. Insurance Requirements
C. Qualifying Vendors and Contractors
D. Employees
1. Compensation
2. Management
E. Contractors
1. Compensation
2. Management
VII. Record Keeping
A. Applications
1. Accepted
2. Rejected
3. Waiting List
B. Leases
1. Perfected
2. Non- Perfected
C. Financial Records
1. Income
2. Expense
3. Security Deposits
VIII. Determining the Mechanics of Tenancy
A. Concept of Bundle of Rights and Ownership.
1. Leasehold Estates
2. Tenants at sufferance
3. Holding over
4. Tenants at will
5. Recording of Leasehold
a. Limitations
b. Advantages
c. Disadvantages
6. Voluntary Termination of Tenancy
7. In-Voluntary Termination of Tenancy
IX. Understanding and respecting agency law in property management.
A. Agency Disclosure
B. Landlord Representation
C. Tenant representation
D. Nature and scope of written agreements for source
1. Property Owner
2. Property Lease
X. Fair Housing in New Hampshire Rental Housing
A. Review Title XXXI RSA 354-A et al
B. Review FAQ’s New Hampshire Commission For Human Rights
C. American’s with Disabilities Act
D. Equal Credit Opportunity Act
E. Lead Paint
XII. Protecting Tenants at Foreclosure Act
A. FDIC Notice
B. Public Law 111-22 Division A Title VII
