IsItTime 100min€¦ · 10/5/19 8 Management Agreement Clause #3 Reoccurring inspections, representation at court hearings, depositions, homeowner meetings, property tax assessment

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Is It Time To Offer Property Management

To Your Clients?

PropertyManagementSystem.org

Pros & Cons

1

Business Models

2

Income Streams

3

Differences

4

Next Steps

5

Copyright 2019 - Marc Cunningham

Pros & Cons


PROS:1. Recurring Revenue


PROS:1. Recurring Revenue2. No accounts payable


PROS:1. Recurring Revenue2. No accounts payable3. Complimentary


PROS:1. Recurring Revenue2. No accounts payable3. Complimentary

4. Revenue Streams


CONS:1. Operational challenges


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CONS:1. Operational challenges2. High liability


CONS:1. Operational challenges2. High liability3. Highly regulated


CONS:1. Operational challenges2. High liability3. Highly regulated4. Thankless


Business Models


1. Lease Only


1. Lease Only2. Full service mgmt


1. Lease Only2. Full service mgmt3. 1 entity or 2?


1. Lease Only2. Full service mgmt3. 1 entity or 2?4. Short term vs long term


Income Streams


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Ancillary Business Services


Ancillary Business Service:

A non-primary function of the company that enhances the main service

Copyright 2019 - Marc Cunningham Copyright 2019 - Marc Cunningham

Successful Companies:

Copyright 2019 - Marc Cunningham Copyright 2019 - Marc Cunningham

Owner-Clients

1. Management Fee


Owner-Clients

1. Management Fee

2. Leasing Fee


Owner-Clients

1. Management Fee

2. Leasing Fee

3. Maintenance Income


Owner-Clients

1. Management Fee

2. Leasing Fee


4. Marketing


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Owner-Clients

1. Management Fee

2. Leasing Fee


4. Marketing

5. Misc ServicesCopyright 2019 - Marc Cunningham

Tenant-Clients

1. Application fee


Tenant-Clients

1. Application fee

2. Lease admin fee


Tenant-Clients

1. Application fee

2. Lease admin fee

3. Late fee


Tenant-Clients

1. Application fee

2. Lease admin fee

3. Late fee

4. Pet fees


Tenant-Clients

1. Application fee

2. Lease admin fee

3. Late fee

4. Pet fees

5. Lease change feeCopyright 2019 - Marc Cunningham

Differences


Differences

1. Two sets of clients


Differences


2. Level of authority


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Differences



3. Mindset

Copyright 2019 - Marc Cunningham Copyright 2019 - Marc Cunningham Copyright 2019 - Marc Cunningham

Differences



3. Mindset

4. Consistency / Systems


Next Steps:


1. Licensing


1. Licensing

2. Mgmt Agreement


1. Licensing

2. Mgmt Agreement

3. Lease Agreement


1. Licensing

2. Mgmt Agreement

3. Lease Agreement

4. Accounting / Trust


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1. Licensing

2. Mgmt Agreement

3. Lease Agreement

4. Accounting / Trust

5. Applicant screeningCopyright 2019 - Marc Cunningham

New PM business checklist


5 Characteristics of Successful

PM Companies


1. Don’t take every owner



2. Know their numbers




3. Focus on profit, NOT door count





4. Create & follow systems





4. Create & follow systems

5. Make problems go away


9 Common Owner Issues

Property Management Agreement


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Marc Cunningham is not licensed to practice law. Any information provided in this presentation, whether verbal or written is provided for example purposes only and is not legal advice. An attorney should be consulted before relying on any information herin.


Q1:Who should approve the tenant, the property manager or the owner?


Q1:Who should approve the tenant, the property manager or the owner?

The Property Manager


Management Agreement Clause #1

Owner grants to Agent the following authority which Agent will exercise at Agents discretion:… Agent shall have sole responsibility for establishing the terms and conditions for tenancies of the property, including but not limited to approving applicants, …..


Q2:How can I oversee and deal with all of the maintenance headaches effectively?


Q2:How can I oversee and deal with all of the maintenance headaches effectively?

Have a maintenance tracking system in place, and charge for it.



Any vendor invoice may be billed to Owner at a rate of cost plus ___%, or at current market rate, as determined by Agent.


Q3:What do I do when my owner asks me to do things outside the scope of my management services?


Q3:What do I do when my owner asks me to do things outside the scope of my management services?

1. Define Your Scope of Services

2. Charge for it


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Reoccurring inspections, representation at court hearings, depositions, homeowner meetings, property tax assessment appeal hearings, insurance claim related paperwork, city or county building inspections, and other exceptional building, property or resident related events are not covered by the monthly management fee……



… Normal property management services also do not include showing property to real estate agents, inspectors, appraisers, or prospective buyers. Should agent perform services not included in the normal management fee, a fee of $___ per hour, with a one hour minimum may be assessed at Agents discretion.


Q4:What do I do when my owner wants to be called in advance of any repair expenditures?


Q4:What do I do when my owner wants to be called in advance of any repair expenditures?

Set expectations



The expense to be incurred for any one item of maintenance; excluding work on hot water heaters, HVAC systems or roof; shall not exceed the sum of $______ unless such expense is specifically authorized by Owner,….



…..or is incurred under such circumstance as Agent shall reasonably deem to be necessary. Such repairs shall be made by Agent at Owner's expense without Owners prior approval.


Q5:What should I do if my owner wants “no pets”, but the applicant has a service animal?


Q5:What should I do if my owner wants “no pets”, but the applicant has a service animal?

Set expectations



Owner understands that state and federal law govern “service animals” and “emotional support animals”, and those animals are NOT legally considered pets, and therefore pet policies do not apply.


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Q6:What should I do if my owner asks me to do something unethical or illegal?


Q6:What should I do if my owner asks me to do something unethical or illegal?

End the relationship immediately



Agent may terminate this agreement at any time with a written notice to Owner.


Q7:What should be the length of term of the management agreement?


Q7:What should be the length of term of the management agreement?

30 Days /Month-To-

Month



This agreement shall commence on __________ and shall automatically renew on a month-to-month term until either party terminates by providing at least 30 days written notice prior to the end of the month to the other party.


Q8:How do I get my owner to agree to changes in my management agreement?


Q8:How do I get my owner to agree to changes in my management agreement?

Don’t require a signature for changes



At the expiration of the initial and any subsequent term of this agreement, all terms and conditions are subject to change by Agent, with a 30-day notice to Owner.


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Q9:How often should I inspect my owners property?


Q9:How often should I inspect my owners property?

1. One time per year

2. Don’t overpromise!



Agent may, at agents option, complete an annual property condition report at a fee of $___ to Owner


Resources

NARPM.orgIREM.orgPropertyManagementSystem.orgPM Facebook Groups


www.PropertyManagementSystem.org

[email protected]


mailto:[email protected]

Documents

IsItTime 100min€¦ · 10/5/19 8 Management Agreement Clause #3 Reoccurring inspections, representation at court hearings, depositions, homeowner meetings, property tax assessment