How do you handle the holding of tenant’s security deposits?
LRC recommends that tenant security deposits be held in our Bank trust account, with deposit reconciliation occurring after tenant vacates the property. Any tenant-required repair costs will be deducted from the deposit with the remaining deposit balance returned to the tenant. Bank trust accounts by law do not pay interest. Both tenants and owners will receive the deposit reconciliation.
How does LRC handle necessary repairs?
We ask that owners agree to LRC authorizing needed repairs under $400, with any repairs above $400 requiring owner’s prior approval. If the owner would like to pre-approve all required repairs, we can modify the management agreement to accommodate this. We choose the best vendor for the job, at the most reasonable price. Vendors are paid from collected rents on the unit, with a monthly accounting of income and expenses sent to owner. If owner’s account balance is insufficient to pay the necessary repair and the monthly positive cash flow from the unit won’t cover the repair, owners may make payments to their account electronically or mail or wire funds. Some maintenance items are the responsibility of the tenant such as; replacing burned-out light bulbs, changing furnace filters, changing batteries in smoke detectors, and lawn care if there is not a hired landscaper and the property is not a condominium with HOA maintained common areas.
Does LRC lock-in the owner on long-term contracts?
We ask that owners sign a property management agreement which allows either party to cancel the management contract with a minimum of 30 days written notice. We do not charge owners a marketing or services recovery fee upon cancellation. It is our goal for you to be pleased with our services and for you not to cancel your contract, but we understand that things change in life. You may also decide to sell the property down the road.
How do you qualify prospective tenants?
The prospective tenants complete our rental application and give us an authorization to run credit reports, background checks, verify previous tenancy, and verify employment and income. We ask for current pay-stubs to verify income, and contact employers to make sure they are currently employed. Tenants may actually be disabled or retired and still qualify for tenancy based on verifiable income, and we verify income in those cases as well. Once our background checks are completed, we are in a position to approve or decline a prospective tenant. There must be lawful reasons for declining a prospective tenant, and LRC will properly document declinations.
Do I get to say who I want as a tenant?
You can specify whether or not you want tenants with pets, although there are some laws requiring landlords to allow tenants with service dogs and/or comfort pets. It can be a gray area on that topic. Condo associations may also have restrictions on pets such as dogs over a certain weight, and/or restrictions on dog breeds. You cannot say things like you only want single tenants, or tenants without children. You cannot discriminate against any protected class under federal housing laws or local fair housing laws. For these reasons we feel that it’s best that you allow LRC to handle the tenant screening and acceptance process, and we will keep you informed on who we choose, how qualified they are, etc. LRC has created and distributes our “Rental Policies” to prospective tenants, which gets attached to our rental application. We will provide you with a copy of these policies with your signed property management agreement.
How do we determine the rent for our property?
When we take an assignment to manage a property, LRC goes over a property questionnaire with the owner and conducts a market survey for similar rental properties in the area. We will make recommendations for the proposed rent, and will ask that the owner approve the rental structure.
Should we get month-to-month rental agreements, or one-year leases?
This is at the owner’s preference, however we would recommend that single family residences be put on one-year leases, and apartments, condos and townhomes be put on month-to-month rental agreements. The reason for this is that it can be more difficult and time consuming to rent a larger single family house (making a one-year lease preferred), and it can be less time consuming to rent an apartment or condo. Also, if you have a problem or loud tenant (more of a problem with apartments and condos due to proximity of neighbors), it is easier to move them out when there is a month-to-month agreement, just needing a 30-day notice to vacate. Tenants generally do not like to move, so if they are happy with their residence they are likely to stay, even on a month-to-month agreement. Again, the property owner decides which term they prefer.
Who handles the marketing and showing of our rental property?
Included in our leasing fee of $495 for residential properties is the marketing of your property on numerous local and online rental publications, a partial list of which is on our “Property Management Page” of our website. We will field calls and emails from prospective tenants, and will personally show the property to tenants. We do not hand-out keys to your property. We will also place a “For Lease” sign in the window of apartments and condos, and a standing “For Lease” sign in front of single family residences.
How often are property inspections done?
Single family residences are inspected on the exterior at least each six months, and on the interior at least once per year. Condos and townhomes are inspected at least once per year, as the home owners associations are responsible for maintaining the property exterior including landscaping. Apartment properties are inspected regularly as we visit the properties for repairs and unit showings. Owners will receive copies of all property inspection reports along with any recommend repairs or improvements.
How is our property prepared for rental?
We recommend that your rental property be in good, clean condition and ready, or near-ready, for occupancy when showing to prospective tenants. The nicer your property is maintained and looks, the higher the potential rent. Fussy, particular tenants can actually make very good tenants. If you are out of the area, LRC can help in coordinating repairs, improvements and cleaning by 3rd party vendors prior to showing the unit.
When will I receive the positive cash flow from my property?
LRC structures rental agreements to have the rent due on the 1st of each month. There is a 5 day grace period after which a late fee is assessed (on the 6th). We collect the rent plus any payable late fee, pay property expenses including property taxes, insurance, HOA dues, and necessary repairs, and forward the positive cash flow to owners generally between the 10th and 15th of each month along with the monthly statement. We need to wait for rental checks to clear before forwarding positive cash flow payments to owners. We do not pay owner’s mortgage payments. We believe that your personal credit is very important to you, and therefore leave that function to owners.
Will we receive a 1099 tax form for rental income received?
Yes, with your year-end income and expense statement we will include a 1099 tax form listing your rental income after expenses for the year.