It has been more than a year since COVID-19 became a full-fledged pandemic. Its effects continue to be felt in different industries, including real estate. Given the shelter-in-place orders and physical distancing guidelines that ensued in its wake, it has been challenging to conduct real estate transactions. Landlords, in particular, can all agree.
Restrictions have it made harder to manage properties, especially for landlords who don’t live in the vicinity of their real estate investments. Fortunately, one solution presents itself: professional property management.
What is it and how can it help you manage your real estate investments in the time of the COVID-19 pandemic? Continue reading to learn more.
What is property management?
Property management is the act of hiring a professional third-party (a company or an individual) to manage your real estate properties, whether they’re residential or commercial.
A property manager acts on your behalf to safeguard the property, maintain, if not increase, its value, and generate a steady stream of income from it. The manager’s responsibilities are wide ranging, including but not limited to the following:
- Screening and evicting tenants
- Creating and signing of leases on behalf of the property owners
- Setting and collecting rent
- Maintaining the property
- Managing the budget
- Preparing property reports
- Enforcing rules and regulations
- Settling tenant disputes
Why is property management important?
Property management services are in high demand because of three major reasons:
- Marketing services
- Consistent cash flow
- Property operations
Cash flow
There is more to property management than collecting the rent. In order to ensure a steady stream of revenue, property managers must do the following:
- Setting the rental rate is the most important of these responsibilities. This involves extensive local market knowledge. A property manager will study the standard rental rates for similar properties in the market in order to come up with a competitive rate. But profit is not the only factor to consider.
- Calculating costs, including overhead expenses, maintenance, and taxes, is equally important. Establishing the right rental rate ensures profitability while covering the property’s operations without turning away tenants. This is almost an art that a professional and experienced property manager should have down pat.
- Ensuring that occupancy rates remain low after establishing a competitive rate to achieve steady cash flow. To accomplish this, a property manager must be stringent in screening tenants. For a property to consistently earn revenue, it should have long-term paying tenants unless the property is a short-term vacation rental.
Marketing services
In order to attract potential tenants, it is important to promote the rental property. This is done through smart marketing campaigns.
These days, word-of-mouth marketing is no longer enough. An experienced property manager or company knows this. And more likely, they have already built a network through which they can advertise their rentals.
Property managers and companies often use a mix of traditional and digital marketing methods. Aside from advertising in various social media platforms like Facebook, Twitter, and Instagram, they can also advertise in traditional print publications to reach the widest audience possible.
Seamless property operations
Lastly, property managers are essential to administer the operations of the property. Rental properties are big business. To consistently turn a profit, day-to-day operations should be seamless. It is a huge, hands-on task that property managers and companies can take without breaking a sweat.
Maintenance, rent collection, tenant screening and retention, and making sure the property meets local and state requirements and guidelines are all part of operations. Some landlords can handle such responsibilities but things can get overwhelming very quickly, especially with bigger or multiple properties. For property owners who live out of state or abroad, overseeing operations from a great distance can be next to impossible.
How to find the right property manager
Handling property management matters during the COVID-19 pandemic can be stressful, especially if you’re doing it on your own or you’re nowhere near the vicinity of your property. If this is your situation, a professional property manager or company can step in and do the work for you.
Below are several tips that will help you find a property management company or manager you can trust in Culver City.
- Get referrals
- Lay out scenarios
- Ask them to come up with a plan for your property
One of the best ways to find a professional property manager with an excellent track record in Culver City is through referrals. You can get referrals from the real estate agent who helped you purchase your rental property. Friends and family who have real estate investments might also be able to recommend a few names. In case you fall short of referrals, go online to search for property managers and companies based in Culver City.
Once you secure referrals, check their names in the Real Estate Commission and Better Business Bureau to find out if their companies are licensed and have good business practices. Make a shortlist of companies or managers that meet your qualifications. Get in touch with them to ask about their availability. If they can accommodate your property management needs, schedule an interview, which could be in person or through a video meeting.
During the interview, ask about each candidate’s credentials and experience. How long have they been managing properties? Do they work alone or with a team? What is their approach to property management? How many properties are they currently handling?
After asking the standard questions, dig deeper. The ideal property manager is a creative thinker, an efficient problem solver, an effective communicator, a skilled negotiator, and a diplomatic enforcer. You can tell if a candidate embodies the skills you require based on their response to the different and unique scenarios you lay out.
Cover a range of topics, from tenant screening and retention to evictions. Ask how they’ll respond to each situation and take notes.
Begin by telling them about the rental property you own and what you hope for it. Then, ask them what they can do to advance your goals. How will they find and screen tenants? What is their marketing plan for your rental?
This proposal doesn’t need to be specific nor extensive. A general plan for your property should suffice. Include this in your list of considerations for deliberation.
Property management issues encountered during the pandemic
When the COVID-19 pandemic started last year, peoples’ lives changed almost immediately. States were forced to keep a close eye on their borders. Lockdowns were put in place, deterring people from going out to conduct their business. Companies and businesses shut down, resulting in record unemployment.
How did landlords fare? What were the issues they faced in light of the pandemic?
- Late or missed rent payments
- Marketing and property visits
- Maintenance and communication
- Creation and enforcement of safety measures within the property
As unemployment rose and companies that soldiered stopped hiring, tenants found themselves unable to pay their rent regularly or fail to pay their rent altogether. As such, property owners were unable to collect what was due them.
This situation also created a moral dilemma. Should landlords press delinquent tenants or declare a moratorium on evictions? If they go for the former, will tenants be able to pay if they just lost their jobs? If landlords choose to evict, will they be able to find new tenants fast? And if landlords hold off on collecting rent, where will they get the money to maintain the property, finance their operations, and make payroll?
The very act of rent collection itself has been affected by the COVID-19 pandemic. Landlords have been forced to adopt new payment models to comply with public health and safety guidelines. On the bright side, this change has made paying and collecting rent more convenient for both property owners and their tenants.
Because of local stay-at-home policies and lockdowns, landlords are also unable to show their properties to prospective tenants. This can hinder potential tenants from committing to the property as some people consider it important to personally see an apartment before they rent it.
Luckily, virtual tours are becoming commonplace. It’s not hard to put together one, too. People can use free smart phone applications to create virtual tours of their properties. In lieu of in-person meetings, landlords are meeting with prospective tenants through video conferencing platforms which can be arranged at the convenience of both parties. These adjustments have made it possible for landlords and tenants to conduct their transactions safely.
Taking real estate businesses to the digital space, however, has its share of challenges, too. Not everyone has access to teleconferencing tools or even a stable internet connection. And as more property owners market their rentals online, the space can easily be saturated with options. Standing out from competition can be challenging, which has forced landlords to be more innovative in their marketing and presentation.
Public health and safety guidelines have also had an impact on communication and supply lines. Since one of the major responsibilities of a landlord is to maintain the property, the pandemic might have delayed repairs, upgrades, and other operational tasks.
Moreover, some tenants don’t feel safe or comfortable letting outsiders into their units to make repairs. This can result in further delays. Others take matters into their own hands, opting to do the job themselves. If done incorrectly, this can lead to more damage and issues.
Speaking of communication, landlords need to be more responsive than ever during these times. Being available 24/7 to address tenant concerns and respond to emergencies immediately can stretch them thin. Needless to say, this can have a negative impact on the landlord’s overall well-being.
To lessen the risk of coronavirus transmission, landlords and property managers have been compelled to create a set of safety guidelines for tenants and staff alike. It is easy enough to refer to the local public health and safety guidelines, but tweaking these restrictions to meet property needs and tenant concerns can be challenging.
For instance, are tenants allowed to allow guests into their units? Are they required to use masks in common areas? For apartments, are tenants allowed to use facilities such as gyms or lounges? If so, is there a limit to the number of people that can use an amenity at any given time? Will property managers require tenants to receive their packages outdoors? How often should the staff sanitize common areas and surfaces?
Enforcing these rules and guidelines is also a challenge. Landlords may encounter stubborn tenants who feel that these restrictions infringe on their personal freedoms.
Overcoming property management hurdles in the time of COVID-19
How can landlords and property managers overcome issues brought about by the COVID-19 pandemic? Here are several tips you can consider as you strategize.
- Make flexible payment plans
- Provide helpful resources
- Keep communication lines open
- Set realistic expectations. If a tenant has an issue they would like resolved, such as repair work, don’t make promises. Give them a realistic timeframe and let them know that delays are to be expected. It also helps to provide regular updates to keep your tenants in the loop.
- Open different channels for communication. Use social media and messaging platforms to make announcements or talk to your tenants. For instance, you can create a Facebook group where tenants can also make announcements. Consider opening more options, such as an official chat room on platforms like Telegram.
- Document everything. Make sure all agreements, not just during this time period, are signed and documented. Think about using email services that allow all parties to review the documents at their convenience and sign them electronically.
- Communicate clearly. Do not issue vague details during discussions with tenants or property managers. State all necessary points as clearly as possible and ask questions if necessary to ensure everything is well understood. Recap the main points at the end of a meeting.
- Follow up. Make sure to follow up with your tenants and contractors, especially if a response has still not been given past the agreed-upon date. Do so as politely and as concisely as possible as some people can easily feel like they are being rushed and pressured into giving a response.
- Phrase property guidelines positively
Given the disruption that the COVID-19 pandemic caused to the economy, it is best to create flexible payment terms. Reach out to your tenants and talk about their current financial situation. From there, assess their capability to pay their monthly rent and discuss their options.
There are several things you can do to provide relief and retain tenants. If a security deposit was part of the lease agreement, consider using that to fill one month’s worth of rent. This will help give your tenants time to find the funds for the following month’s rent.
If turning a profit is not an issue, consider deferring payments for a specific period of time. This, however, should be backed up by a repayment plan that is well-understood by the property management and the tenant.
Methods for making payments should also be expanded. If the lease agreement states that rent should be paid in person, present other payment options and communicate these to your tenants. If online payment is not possible, consider setting up a secure drop-off box outside the property management office.
As a property landlord, you can support your tenants by giving them resources specific to their situation. For instance, let a financially distressed tenant know about temporary relief, unemployment benefits, and loans that can help them through these trying times.
Keep your tenants updated with the latest news about the COVID-19 pandemic. If the local community has scheduled initiatives and programs, make sure to announce these to your tenants as well.
Communication is extremely vital, not just in settling disputes, but in avoiding them altogether. It will help ease the burden of property management and increase the tenants’ trust in their landlord or property manager. Here are some of the things you can do:
“No smoking in the premises” and “Wear your face mask in the common areas at all times” can sound bossy and off putting. And when tenants are inundated with a constant barrage of reminders starting with “No” and “Don’t,” their rental property may feel unwelcoming and claustrophobic.
Instead of using imperative sentences for health and safety reminders, phrase them as positively as possible. For instance, say “Thank you for not smoking in the premises,” or “Please wear your face mask in the common areas at all times.”
Your property management partner in Culver City
With over 30 years of experience, Martin Feinberg from Keller Williams Santa Monica is the property manager that every real estate investor in Culver City is looking for.
Martin offers a full suite of property management services in Culver City, Mar Vista, and Westside Los Angeles. On top of that, Martin has an excellent track record of real estate sales, having sold over 1,200 properties in Culver City, Beverly Hills, and the Los Angeles area.
Find out if Martin Feinberg is the best person to handle your property management needs. There is only one way to find out. Call 310.729.6573 or email martin(at)martinfeinberg(dotted)com today for all your property management needs.
