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Chattanooga Property Manager Fees And Pricing


Spencer Sutton - Thursday, May 10, 2018

Are you interested in learning more about Chattanooga Property Management Fees and Pricing?

Renting property can be a good source of income for many people, but there may be some risks and problems if you don’t have any experience managing your property. One of the most important questions we are asked all the time is “What are Chattanooga property management fees and pricing?”

Chattanooga property management fees and pricingNew investors often try to diversify their assets into real estate as a source of regular income here in Chattanooga, Tennessee. Many times, they can find the property to buy but have trouble understanding the complexities of managing rental property.

If you are considering using a Chattanooga property manager, this article will help you understand the most common fees and pricing strategies.

In this post, we will walk you through the different pricing structures you will encounter in your research.

Leasing Fee

Many Chattanooga property management companies will charge what’s called a leasing fee once they have placed a new tenant in your home.

Usually, these fees will cover a variety of items:

  • Expenses of advertising the property on their marketing channels
  • Analyzing and screening of the potential tenants
  • Scheduling tours of the property to prospective renters
  • Preparing leasing paperwork

These fees may also cover a commission for real estate agents for placing the tenants on the property.

The fees vary depending on the property management company you choose but can range from one month’s rent to a flat charge. Some companies may give you options based on different pricing packages. That’s what we do here at gkhouses.

Our least expensive package, which we call our Silver Plan, has a leasing fee of one month’s rent and our most expensive package, the Platinum Plan, doesn’t have a leasing fee. The actual fee may vary based on what your property manager of choice is offering.

When you think about it, these fees are insignificant compared to the potential risk of losing income from the property by having no tenants for months while you try to advertise and screen tenants yourself.

The price of one month’s rent can cover hours of planning and work, and alleviate your stress about making the wrong tenant decision or by accidentally breaking some obscure landlord-tenant law. Paying the leasing fee and leaving all of those issues in the hands of professional Chattanooga property managers can be a wise decision!

Management Fee

The management fee is the primary fee that covers regular daily management of the property.

This fee can cover many services for your tenant and property:

  • Processing and collecting rent
  • Communication with tenants
  • Coordinating repairs for your property
  • Annual property inspections cost

This management fee can vary from the type of services that are provided by your property management company. It is important to choose the payment condition that will work best for you.

In the past, it has been charged within 8-12% of your monthly collected rent or in some other cases; it can be in the form of a monthly flat fee. Rates of those charges vary by location and Chattanooga Property Manager.

Some Chattanooga property management companies might charge only during tenant occupancy. In this case they will stop the management fee when the tenant vacates the property.

Other property managers will charge a fee throughout the vacancy and provide you with additional services during that ‘turn’ time.

It all depends on the property management agency you choose. Some might offer you special pricing for the specific list of services that they provide.

Renewal Fee

As we mentioned before, a majority of property managers charge a leasing fee. This is for new tenant placement to cover the expenses of paperwork for leasing or re-leasing the property when it becomes vacant.

The renewal fee is a lesser fee charged when the management company is successful in getting the tenant to sign another year lease.

Our renewal process begins 120 days before the lease anniversary. We reach out to our owner and ask if they would like to renew the lease with their tenant. If they do, we begin reaching out to the tenant 90, 60, and 30 days before the anniversary to have them renew the lease.

Other companies may have different strategies, but this strategy works for us. It’s also during this time when we advise the owner on if they should raise the rental rate or keep it the same.

Maintenance Fees

When planning to create a profitable investment in rental property, you must consider the expenses of repair and maintenance. People who are new to investing in rental property might lose more money than they expect if they have a DIY approach. Or worse yet, lose a tenant over poor maintenance habits.

Many Chattanooga property management companies offer services considered to be preventive measures. Some of the preventative services we offer our owner are bi-annual HVAC inspection, filter and battery checks, and gutter cleaning.

It’s important to consider these optional services when thinking through the long-term nature of rental property.

When you have a trustworthy property manager for maintenance of your rental property you should expect quality from their maintenance. This includes a realistic estimate, stellar craftsmanship, and a guarantee to fix anything that might go wrong after the repair is completed.

For instance, we have a guarantee of quality for up to 12 months, and all of our work is performed by a licensed and insured professional. You may pay more than ‘Chuck In A Truck,’ but you will avoid the possibility of faulty work and unnecessary liability.

Depending on the agency you choose to work with, you can expect them to provide maintenance services by either a third party supplier or their in-house crew.

At gkhouses, we do both. For the more common repairs like plumbing, electrical, heating and air, and general carpentry, we will use our in-house staff.

For other jobs outside of our expertise or less prevalent, we will use a trusted vendor.

Miscellaneous Fees

Evictions – Unfortunately, evictions are a part of owning rental property. In the unfortunate case that you end up needing to evict your tenant, you will need to pay several fees:

  • Court costs
  • Attorney fees
  • Set-out fees

In Chattanooga, you can expect to pay approximately $300 and then any additional set-out charges.

Additional accounting charges – In some cases, an owner may request special accounting services from their property manager. In those instances, you can expect a fee for handling these items. These may include paying bills, mortgages, HOA dues, or similar services.

Most typical services bring no additional fees.

Conclusion

Property management prices in both downtown Chattanooga and all up the Tennessee River are quite reasonable. However, it’s important for you to educate yourself so that you can predict cash flow.

Every property management company in the Chattanooga area has different approaches. You will need to focus on the type of service that most fit your specific needs.

If you would like to learn more about our Chattanooga property management fees and pricing, you can visit us here. And please reach out if you have any questions whatsoever.

Little Rock Property Manager – How To Choose The Best One For You


Spencer Sutton - Tuesday, April 3, 2018

Little Rock Property Manager – How To Choose The Best One For You

Many people find owning property to be a satisfying and efficient way to earn a monthly income. It can be their primary source of funding, a way to bulk up their child’s college fund, or a side business that helps supplement earnings from a more traditional job. And choosing the right Little Rock Property Manager for your property is one of the most important decisions you can make when it comes to safeguarding this income.Little Rock Property Manager

One essential quality of a good Little Rock property management company is consistent, timely, and clear communication. But what else should you take into account?

First, we recommend that you make a list of what you want in a Little Rock property manager. This list doesn’t need to be complicated. However, the act of writing down what you’re looking for often helps streamline your search. It aids in being as efficient as possible when narrowing down your options.

A list is also a great way to help build awareness of what your goals might be when it comes to managing your house. Many people like to write their ideas down because it makes it easier to get the ball rolling and makes the process much less daunting.

Here is our list to get you started:

Budget

The first step in beginning to look for a property manager should be taking a peek at your budget. This is also a good time to consider what your goals are one, five, and ten years down the line.

Are you looking to take on more properties as funds come in, or are you happy with the house(s) you already own? Do you want to make a certain amount annually to put into your daughter’s medical school fund?

Do you want to earn enough to get a tan every winter on that Caribbean Island you and your husband discovered last year?

Don’t worry—you don’t necessarily need the answers to all of these questions.

Making specific, quantifiable goals is the first step to success. And knowing what you want in the future can help you select the property manager who will help you achieve these goals, no matter how far away the goals seem now.

You’ll also want to consider how much you’d like to pay for the peace of mind that comes with having someone take care of your rental home. Depending on your circumstances, think about how much baseline profit you’ll need to make each month to meet your expenses.

Location, Location, Location

There are nearly 40 different neighborhoods in Little Rock. You could consider choosing your Little Rock Property Manager based on their familiarity with the neighborhoods your properties are located in, or their expertise in residential (versus commercial) property.

At gkhouses, we specialize in residential property management and don’t manage commercial properties. If you are looking for a property manager to handle both, you can find them in Little Rock.

Marketing

How much marketing do you want your Little Rock Property Manager to do? Would you like a more tech-savvy manager who might incorporate various social media platforms to recruit tenants, or would you prefer someone more old school?

How aggressive do you want the advertising to be?

Who is your ideal tenant, and how would this property manager help you find this kind of tenant?

Tenant Handling

How extensively do you want the tenant screening to be? How involved would you like to be in the process?

One major benefit of hiring a Little Rock Property Manager is that you don’t have to deal with the hassle of collecting rent each month. Especially if you own multiple buildings, ensuring each tenant is paying promptly can take up a lot of time.

Managers also coordinate background checks, check references, run credit checks, and review applications. This will help assure that you have the best tenant possible.

Building Maintenance and Upkeep

What kind of maintenance services does the property management company offer? Are their vendors licensed and properly insured? Would you like around-the-clock maintenance? Is there a general contractor on the payroll, or is this labor outsourced?

You might also think about the age of your house, and how often it will likely need repairs.

A newer home will likely require less attention than an older building, though of course, this is not always the case.

Does the Little Rock property management company primarily deal with newer condos and single-residence homes, or are many of their properties more than two decades old?

Accounting

What kind of accounting services does the company offer? What is the reporting system like? And how often would you like financial reports of your properties?

Do they have anyone on staff responsible for the accounting function? Or is it more of a ‘one-man-show’ where the owner wears multiple hats?

Your money is important, so this question is one you need to explore until you’re satisfied.

Experience

Do you want a property manager with a decade of experience in Little Rock? Maybe you are fine with someone with less experience, but a more outgoing, aggressive personality.

Other Considerations

Property managers handle a lot of loose ends, and the time you’d spend on these little issues can certainly add up.

For instance, when’s the last time you checked the Arkansas fair housing laws? What bases do you need to cover when it comes to ensuring your paint meets legal standards?

Are there any mold issues in your home, and what would your options be if a tenant did find toxic mold?

What if a tenant were to bring a lawsuit against you? This is something a property manager can help with.

Property managers are also well versed when it comes to landlord/tenant laws, which can become complex. This is especially true when it comes to the various state and federal litigation.

Do you have a painter you can depend on? What about an electrician, or a repairman?

Property managers have worked hard to build relationships with other vendors—if they don’t have one on staff already—so that you can rest assured that the pricing is fair and that the quality of the work is high.

How do you feel about writing up lease agreements? A Little Rock property manager can help with this as well, providing a time-tested, consistent, detailed lease that covers all of the bases. This way, you won’t have to use a lawyer or worry about missing an important component in the document that could end up costing you in the long run.

In the end, it helps to clearly define your goals as you begin to find the right Little Rock Property Management company for you. We find that the relationship you build with your property manager is key when it comes to owning property and meeting your financial goals.

If you would like to learn more about our property management services, visit our Little Rock page and find out if we might be a good fit for you!

2017 Birmingham Real Estate Market Review


Matthew Whitaker - Wednesday, February 14, 2018

The numbers for the Birmingham Real Estate market are in and they are fascinating!

If you can believe it, the real estate sales market in Birmingham, Alabama is even hotter than it was back at the time of the real estate market crash in 2007 and 2008.  Take a look at these graphs from the Alabama Center for Real Estate (ACRE).

The median sales price for a Birmingham home is up almost $30,000 from the high in 2006.

Check this out.

Average days on market is way down.  Even down compared to the height of the real estate bubble.

Homes listed is also way down.

What does that mean for the rental investor?

  1. There is a natural churn of rental homes right now.  We are experiencing it with our portfolio as I’ve heard other managers are.  People who were reluctant landlords can now sell their home since sales prices are up.
  2. There is still a need for rental homes.  43% of household heads rent.  That is up from 35% in 2006 which was the height of the bubble.
  3. Where are these new renters coming from?  Easy, baby boomers getting out of homeownership.  (Yes, you read that right).  And Millenials who are delaying homeownership.
  4. Bottom line, there is a need for more housing units and they are being built at a staggering pace right now.

Click this link if you’d like to see the full ACRE Report.

 

The Blueprint Podcast Teaser


Matthew Whitaker - Friday, May 5, 2017

I was fortunate enough to get to be on David Lamb’s, The Blueprint Podcast.  Check out this teaser for it he just posted.  The show will post on Monday.

The Blueprint Podcast Matthew Whittaker of GK Houses




David Lamb sits down with Matthew Whittaker of GK Houses. GKHouses started at the beginning of the 2008 housing market crash. They have since become the largest property manager in Birmingham and ope…

Alabama home sales continue to climb


Matthew Whitaker - Wednesday, December 21, 2016
Home sales continue to climb in sweet home Alabama.
Home sales continue to climb in sweet home Alabama.

Alabama has continued to enjoy growth in its home sales market.  It is up almost 8% over November of last year.  This is great for investors who are looking to capture some appreciation in addition to a well cash flowing market.

Check out Bryan Davis’ article if you’d like to see more industry data and see the Alabama Center for Real Estate’s forecast for the upcoming year.

Shoe Dog


Matthew Whitaker - Friday, December 9, 2016
As an investor, your goal is to reach the mountain top.  Find out what Phil Knight warns you about that mountain top.
As an investor, your goal is to reach the mountain top. Find out what Phil Knight warns you about that mountain top.

I recently finished reading the book, Shoe Dog, by Phil Knight the founder of Nike.  For anyone who loves entrepreneurship and the idea of growing a business, his story is a fun one to read  .

One part of the book stuck out to me which I think is applicable to those of us who are investors and/or building a business.

At the end of the book, when Nike goes public, Knight mentions that he doesn’t feel relief.  Nor does he feel stress.  What he feels most is regret.

For the guy who built Nike from a distributor of Japanese “Tiger” shoes to one of the largest shoe companies in the world, to feel regret when his company “made it,” seemed a bit odd to me.

The book goes on to say that the reason he feels regret is because he wishes he could build it all over again.

I think that is very important for those of us who invest and “build things” to remember.  Far too often we are waiting on reaching the next step in our businesses to make us happy, and here is a guy who has reached the ultimate step and his only wish is to be exactly where we are . . . still building it.

It has been told to us a million times, but I think it is worth repeating.  Enjoy the journey, because when the journey’s over you will realize that the fun was all in that journey.  If you don’t take a step back and appreciate that, you will get to the end and realize all you’ve missed.

That is a horrible thought.

Bill Passes Placing Responsibility of Garbage on Tenant in Jefferson County


Matthew Whitaker - Wednesday, November 23, 2016
It is never fun to open a letter from the city and realize you owe them hundreds of dollars.
It is never fun to open a letter from the city and realize you owe them hundreds of dollars.

While the focus has been mostly on Donald Trump, our newly elected President, one amendment passed in Jefferson County, Alabama that affects landlords and tenants.

The bill now says that tenants are solely responsible for garbage at the home.  This is a change from the norm, where in places like Fairfield, if the tenant didn’t pay, then the landlord was stuck holding the bill.  I’ve personally paid hundreds of dollars for this to keep a lien from being placed on one of my houses.

If you’d like to read the bill you may do so here.  If you’d like to hear a well done back story from Fox, you may see that here.  If you’d like to read the results, you may do so here.

We’d also love to answer any questions about how this might affect you!

The Seasonality of Leasing a Home in Birmingham, Alabama


Matthew Whitaker - Wednesday, November 16, 2016
The seasonality of leasing in Birmingham AL
The seasonality of leasing in Birmingham AL

I just got off a phone call with another property manager in Birmingham who was asking me about the seasonality of leasing homes in the City.  It brought to mind one of the first questions people ask when they call us is, “How quickly can you lease my home?”

The seasonality of the leasing season has a lot to do with the answer to the question most prospective owners want to know.

So what does the leasing season look like in Birmingham?

Hot times – February, May, June, July, August, November

Cool times – January, March, April, September, October, December

Why the “Hot times”? – The obvious times people lease homes are during natural breaks in their lives.  The most natural break is traditionally when children get out of school.  Thus the May – August dates.  What is so interesting is how the school year still affects when others move even if they don’t have kids.

For people who are “post school” and “pre-kids” they still fall into the cadence of needing a rental house at the same times of the year, because they get out of school, lease a home for a year, then the lease keeps either renewing and/or ending in the summer.  Then if they move, they are keeping a consistent cadence till they decide to purchase a home and get out of the rental world altogether.

The less known months for leasing a home are more about avoiding the holidays than they are about trying to strategically move at a good time.  November is all about people getting in the new home BEFORE the holidays.  February is after the holidays and typically when a lot of people file their taxes and receive their income tax returns – this affords them the cash they need to pay a deposit, first month’s rent and pay to move.

If you have any specific questions about your home and/or when we think it will lease, please reach out to us.  We’d love to help.

Ode to Wayne McGinnis


Matthew Whitaker - Thursday, November 10, 2016

Wayne hugging Bryan for the last time - these two appreciate a good hug.Thanks Wayne, we are going to miss you.

No, Wayne didn’t die everyone.  He is headed off to pursue his passion of construction with Doster Construction.  We wish him lots of luck and hope he will come visit us . . . but he has to bring lunch when he comes.

Wayne has been with us for almost three years.  He was an integral part of the growth we experienced over that same three year time period.  His knowledge of the construction and home maintenance will be sorely missed.

He’s headed south to Orlando.  He maybe secretly going to work for Disney World and just not telling anyone.

Wayne is funny and passionate.  Doster is getting a great guy.

Wayne hugging Bryan for the last time – these two appreciate a good hug.

 

How Much Should I Budget for Home Repairs Every Year?


Matthew Whitaker - Tuesday, November 8, 2016

If it doesn't make dollars, it doesn't makes "sense". How much should you expect to spend on maintenance for your rental home?

If it doesn’t make dollars, it doesn’t makes “sense”. How much should you expect to spend on maintenance for your rental home?

One of the hardest conversations we will have in our relationship with our Clients is the call where we tell them that something is broken and we need to spend their money.  I often tell people who ask about our industry, “If you can make that call, you can make any call.”

Many savvy Clients have asked on the front end what they should expect or budget for a yearly maintenance expense.

I’ve been managing my own homes since 2004 and managing for others since 2008.  I had a general idea of how much money each house was spending, along with the factors that cause that to go up or down, but I had one question that I wanted to check first . . .

How much can the average homeowner (who lives in a home) expect to spend?

Then naturally, you could expect to spend MORE than that with a tenant in the home; since as a homeowner, you probably do some of the work yourself.  Also, you own the home, so you aren’t as naturally hard on it as the average tenant.  We are speaking in complete generalities, but I hope you get my point.  We have great tenants, but the average doesn’t take care of the home the way the average homeowner who is living in that home takes care of it.

While doing some research, I ran across an interesting article that did a great job (based on my experience) of explaining the factors that affect the yearly maintenance of a home and some general formulas to work with.  They were startlingly close to what I was thinking, so I decided to include it here versus regurgitating the information they so eloquently provided.

Here is a link to that article.

While the 1% rule and the Age Rule (both cited in the article) are a great start, I think it is most important to point out all the other factors that affect the maintenance costs.  When people ask me this question, my first response is . . .

1. How old is the home?  Older homes simply cost more to maintain.  This is one place I differ from the article.  I don’t care how well you’ve taken care of the home, a home that was built 100 years ago will cost more to maintain than a home built 5 years ago.

2. When was the last time you updated the major systems of the home – electrical, plumbing, hvac, roof, etc?  These major systems are big ticket items and can move the needle very quickly on how much you spend on the maintenance.

3. Where is the home located?  This speaks to the type of tenant who traditionally will live in the home.  If you have a low income person who lives on a monthly subsidy, then chances are they run the air twice as much and flush the toilets twice as much; i.e. causing these types of items to wear out much faster.

Being prepared for us to call you for a repair item can make all the difference in the world.  Homeowners who live paycheck to paycheck should actually consider not renting if a phone call to tell you about a $750 item is going to keep them from having Thanksgiving that year.

If you have questions about your current situation or would like to find out more about budgeting for maintenance items and rental property, please reach out to us via the link below.  We’d love to help.

Contact a gkhouses Representative

Are You an Entrepreneur Bean Counter?


Matthew Whitaker - Saturday, November 5, 2016

Are you tired of simply counting the money and reporting the information to the decision makers? Do you want to be a decision maker at a company and help it scale? Are you an entrepreneur that happens to be a CPA or have a Finance degree?

gkhouses.com, Birmingham’s largest and fastest growing property management company, is looking for a future Team Leader who will be an integral piece to pouring gas on our current growth in Birmingham and Nashville and will help us open operations in different cities.

We need someone that thinks both analytically and strategically, is confident (but not arrogant) and has a deep understanding of the creation of accounting and reporting systems and processes.

If this describes you, then we need you on our team.

None of our accounting systems are rocket science, so I won’t go into explaining them. We just need the right team member with an accounting background.

WHY?

We’ve found that our accounting department is a great way to train the future leaders of gkhouses.com to go run other markets.  Who else understands the KPI’s, ROI’s, P&L’s and the PDQ’s?

 

Click here to apply for this job

Why WHO We Hire Should Affect WHO You Hire (Post #3 – Our Leadership Development Program)


Matthew Whitaker - Thursday, November 3, 2016
Gray Hall, our Leasing Coordinator, working hard leasing houses.
Gray Hall, our Leasing Coordinator, working hard leasing houses.

This is my third and final post on the WHO of our business.  In my previous posts, I’ve discussed our hiring process and and also discussed how we onboard new team members.

This post is the one I feel like is the most important.  This post is all about leadership development of our team.

I always tell our team, I can teach you how to manage a home pretty quickly; what I’m unsure of is how long it will take me to teach you to be a leader.  That is why at the first of the year, we decided to implement our first ever weekly leadership development meeting.  It began with us simply just reading a book together.  Our first book was Today Matters by John Maxwell.  The reason we chose this book is because of something John actually says in the book, “The hardest person to lead is yourself.”

What our leadership development time together has turned into is something I would never have imagined.  It is a way for our current leadership team to share real company issues with the people in the meeting and get their feedback on how they would handle it if they were the leader.  Real world situations that they will run into in the future when they are the leader somewhere.

This team has also done an awesome job of working ON the business.  We learned this phrase from another book we read called E-Myth by Michael Gerber.  The team is learning how to take a step back from their day to day role as a person working IN the business and evaluate how we can do things better here at gkhouses.  We’ve made some real upgrades to the business through their ideas, that became projects.

We’ve devoured tons of books together too, as we’ve maintained the ongoing discipline of reading a book together.  Some other books we’ve read and the lessons we’ve learned are below.

1. Traction by Gino Wickman – We currently run the Traction model within our organization.  This is not so much about how we manage a home, but about how we manage the business.

2. Good to Great by Jim Collins – By far my favorite book, this book takes “great” companies and compares them to their counterparts who are “good”.  The goal is to see what great does that average doesn’t and glean information about running our business from that new information.  We’ve had some really fun discussions about what our Hedgehog Concept is.  If you haven’t read the book, do yourself a favor.

3. Multipliers by Liz Wiseman – My favorite book of 2016.  This book takes an indepth look at what makes a great leader based on years and years of research in a ton of different companies.  Liz did a great job of not just doing the research, but also painting a wonderful picture of what a real leader looks like.

I’m continually amazed at what the team has learned from the books we’ve read this year.  I’m looking forward to seeing how much they grow the remainder of the year and all of next year.  These are exciting times at gkhouses.

So this concludes my 3 part series.  My goal in doing this?  Simply to help you understand that you aren’t hiring us for price (although we’ve got some pretty darn good ones).  And, you aren’t hiring us for a slick sales presentation (although it is pretty slick).  I hope you hire us for the people we work hard to hire.

 

Why WHO We Hire Should Affect WHO You Hire (Post #2 – Teaching the Talent)


Matthew Whitaker - Wednesday, November 2, 2016
Here is our Director of Marketing, Spencer Sutton, rocking out to some tunes while he is building a webpage for our new pricing plan.
Here is our Director of Marketing, Spencer Sutton, rocking out to some tunes while he is building a webpage for our new pricing plan.

In my last blog I gave you some insight into how we find talent.  Much like finding the right tenant takes tons of time and sometimes going through tons of people, finding the right talented people to work with you takes very much the same approach.

The next step in the process is training that talent.  It does us no good to find them and not have a set system for bringing them into our business and getting them up to speed on our processes as soon as possible.

So how do we do that?

We’ve basically bought into the book, Scrum.  This book is actually written to describe how software engineers can write relevant software in a much more intentional and meaningful way – thus reducing the amount of time it takes to write a software program.  We’ve decided to take the same principles the book teaches and apply it to onboarding a new team member.

The principles of of our onboarding “scrum” are this . . .

1. Decide everything that needs to be taught.  The first step in our process is to figure out all the tasks that we need to teach the new team member.  We simply brainstorm a list and put it into an excel spreadsheet or (in our case) an Asana project.

2. Decide how much effort it will take to teach the task.  We do this by scoring the task based on the Fibonacci Sequence.  It is important to determine how much effort so that we can measure how long it will take to train the person based on how much of the “score” is done on a weekly basis.  If you know how much score someone is completing, you can back into how long the training will take.

3. Decide who is responsible for teaching the task.  Once we’ve defined the task and how much effort it will take to teach, we are very intentional about who is going to transfer the information to the new team member.

4. Decide which tasks will be taught week  one.  We don’t try to measure out which weeks each task will be taught.  We simply start with week one and focus on a certain number of tasks.

5. The goal is to get the new team member operating without anyone else having to be there.  This method is only effective when we are able to move through each task to its full completion and the new team member is able to work autonomously on the task without any oversight.  This allows the person teaching the task, or whoever has been performing the task, to move on and start accomplishing other objectives and tasks for the team.

Our method for onboarding a new employee has drastically reduced the time it takes to get a team member contributing to the team (a HUGE plus for both the team and the individual) and has also reduced the overall time it takes to get them fully functional in the new role.

Next post, I’m going to discuss our ongoing leadership training designed to get our team members able to go run a new market for us.

Halloween Party Day 2016


Matthew Whitaker - Monday, October 31, 2016

I’m a pretty competitive person.  After our team building afternoon, I realized we have a lot of competitive people.

Today we spent the afternoon eating lunch and playing games.  We have a number of Millennials on our team.  They love to play a game.  They are pretty dang good at it too.

Here are are a few pictures and a video from this afternoon’s games of “Kan Jam” and “Spike Ball”.  If you’ve never heard of either of these games, I had not either till today.

file_000-7
Spencer and Nick taking a break from the festivities.
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Nick and Gray Hall competing in Kan Jam
Benji Dyson and Duncan Murphy playing Kan Jam.
Benji Dyson and Duncan Murphy playing Kan Jam.
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A little Spike Ball action if you zoom in.

 

Why WHO We Hire Should Affect WHO You Hire (Post #1 – How We Interview)


Matthew Whitaker - Thursday, October 27, 2016
This is a shot of our team at our weekly meeting - done every Tuesday morning.
This is a shot of our team at our weekly meeting – done every Tuesday morning.

I don’t really want you to pick us as your property manager because we are cheaper than other property managers.  While our prices are competitive and probably cheaper than most in town, I beg you not to choose us because of price alone.

I also don’t want you to choose us because we appear slicker than the competition.  While it is true we work very hard on our “image” to the public, choosing us based on the feeling we give you would just be wrong.

Lastly, don’t choose us because you really like our nice sales people – completely.  We do have very nice people (looking at you Nick Goudreau) helping you get acquainted with how we work, but don’t choose us based on their niceness alone.

I want you to choose us based on one thing that isn’t really obvious when you visit our website or just speak to one of our team members. . .

I want you to choose us because we work terribly hard to find the best people we possibly can (1st), then train them to manage your home (2nd).

That is why, WHO we hire, should affect WHO you hire.

I’d first like to give you a little background about our hiring process.  It has 4 steps to it.

1. The phone interview.  This interview is designed for us to get a glimpse of the candidate to see if they appear to be a surface match with our values and the job we are currently hiring for.  We’ve predetermined the values and skill set we are looking for then attempt to match them as closely as possible during this one hour interview.

2. The 2 – 4 hour face to face interview.  This interview is for us to dig into their relevant school and work history and better understand if they’ve developed the skills it takes to be on our team.  This is typically done by 2 or 3 team members here at our office.

3. The lunch interview.  This interview is done by 3 completely different team members who have not invested the time with the candidate and won’t have a bias for pushing him/her through.  They have a completely different agenda and set of questions that are more situational in nature.   “What would you do if . . .” is typically how these questions start.

4. The reference check.  We don’t like to take the candidates references at face value.  After 3 interviews, we have a pretty lengthy list of people we’d like to discuss past job performance with.  We deliver those names and ask the candidate to set up the phone calls for us.

As you can see, we take hiring very seriously.  We’ve put a focus on what Jim Collins in Good to Great calls, “Getting the right people on the bus.”  Unlike most, we don’t have warm bodies filling seats at gkhouses.  Every hire is very strategic in nature.

My next blog will cover how we train team members to handle the day to day management processes.

ACRE and Continuing Education for Property Managers in Birmingham


Matthew Whitaker - Thursday, October 13, 2016

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As a property manager in Birmingham, Alabama, I’ve struggled with finding great places to receive continuing education. Most courses taught in and around this area deal with sales agents. Those don’t really have any value to me.

What I’ve done in the past is travel to Nashville or Atlanta to find classes that are property management specific.

Recently, the Alabama Center for Real Estate (ACRE) and the Institute of Real Estate Management (IREM) decided to hold a yearly conference with 6 hours of continuing education to help people like me.

Check out this video of our most recent conference!

Birmingham Home Sales Market Hot


Matthew Whitaker - Monday, October 3, 2016

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The Birmingham home sales market continued its hot streak through the end of the summer months. Posting a year over year high of 27% over August last year. All this is according to the Alabama Center for Real Estate (ACRE).

The big question for our industry is, “What does this mean for rental home investors?”

I posted a screen shot of a graph depicting sales over the last 16 years, because I think it is interesting and tells a pretty good story. It shows the cyclical nature of demand. As you can see, we were in a similar market back in 2003 and 2004.

If I was a rental home investor . . . and I am . . . I’d be watching where the trend goes from here. It is my opinion that we are currently in a very healthy climate, in terms of buying and selling. Though, with the pickup in demand, it does make it harder for you to find good deals to purchase.

The median home price according to ACRE was $180,000, which is actually down from last August when it was $185,000.

That median home price is still very favorable to rental home investors, given Birmingham has consistently had high average rents relative to this median price. That, along with favorable property tax bills, continues to make Birmingham one of the top places to purchase rental homes.

Click here if you’d like to read the whole report from ACRE.

Your Property Manager is Charging You a Percentage of the Monthly Rent? That is so 1990


Matthew Whitaker - Friday, September 30, 2016

vector illustration of hand holding money to invest in own house in sketch style

The real estate game is changing quickly. Much like the internet has changed many industries, real estate is undergoing a change to a “new normal” that will leave a great number of property management professionals out of the game.

You are already seeing it in the real estate sales industry.

The internet has provided, previously unavailable, transparency to potential buyers and sellers of homes. In the “olden days” if you were interested in purchasing a home you would be required to find an Agent to find out what was even on the market. Your Agent would disappear and come back with a list of homes that met your criteria and you would spend all day Saturday driving around looking at them. All this, not knowing till you arrived at the home that the kitchen was two kinds of ugly and there is no way you would move to a home built on the side of a cliff.

As you well know that is no longer. We have the ability to peruse thousands of homes for sale at our fingertips and typically we know more about the home before we see it than the Agent does.

My how times have changed.

Today you hand the Agent a list of properties you’ve already prescreened and want to see. The Agent makes the arrangements and you spend less than half a Saturday looking at properties and the rest of the day reliving the two you really liked in pictures and virtual tours on the internet.

The management industry, albeit much smaller and much slower to move, is undergoing a shift that will have as huge of an impact on those of us who manage homes.

In the past, it was standard for the property manager to charge a percentage of the monthly rent as a management fee.

And we did the same thing!

It wasn’t until recently that we took a step back and asked the question, “Why?”.

To better explain it, I want to tell you a story about a newlywed couple who lived out of town from their family who was celebrating Thanksgiving for the first time – just the two of them. The wife was busy making dinner, when before she put the ham in the oven, she cut the end of the ham off.

The newlywed husband thought that was odd, since he had never seen his mother do that and (because he was newlywed and didn’t know any better) decided to ask her, “Why?”.

Truth is the new wife didn’t know the answer to that question, but thought that there must be a plausible reason, because her mother had always done it. So, they decided to get to the bottom of it and call home to find out the answer to their riddle.

Everyone was over at the mother’s house for Thanksgiving, so they were excited the newlywed couple called. After talking with the whole family, the wife got back on the phone with her mother and posed the question which had previously stumped her . . . Why do we cut the end of the ham off before we put it in the oven?

To her amazement, her mother didn’t know the answer either. In fact, she had just always done it and never really thought about it . . . because that is what HER mother had always done.

Since it was Thanksgiving, her mother was also present. So she put down the phone and went and posed the question to her mother.

This time she did get an answer.

What was the reason? The grandmother’s oven was too small to fit the whole ham, so she would cut the end of the ham off to fit it in the oven.

And that is the reason managers charge a percentage of the monthly rent . . . it is because managers have always charged a percentage of the monthly rent. That is the answer.

What most managers will attempt to tell you is that it takes longer to manage a more expensive home.

That has not been our experience after managing almost 1300 homes. In fact we believe that the time spent to manage a home is a little more like a bell shaped curve.

If the home rents for very little or a whole bunch (bottom 10% or top 10%), then it requires more time. But, the other 80% take about the same amount of time, effort and energy to manage.

So, when one of our new team members (who wasn’t affected by the end of the ham being cut off) began asking the question, “Why?”; all of our senseless arguments of things we’d heard and learned over the years fell by the wayside when faced with the actual facts and data.

That is why, we’ve decided to move to a flat fee pricing model.

What’s so interesting is that for most, this will actually improve “the deal” for them. We have owners calling now who would have paid 10% in the past, now paying an effective 4-5% on higher end homes. That saves them hundreds of dollars and . . . this is perhaps the most important point . . . there is no drop in service.

That’s right . . . there is no drop in service.

The question I would ask me in this case is, “How can you afford to discount the price and still offer the same service?”

My answer is very easy, just like in my first example, the market is mispriced. Meaning we’ve been charging the same thing for so long, you, the consumer, don’t know any different.

That’s nothing against you. Heck, we didn’t realize it till someone who didn’t have a long history in the industry pointed it out to us. Sometimes it just takes some fresh eyes.

Think about this . . . Owners were paying the same amount for management services since before there was even computers. Property managers were manually posting a ledger by hand and sending out paper checks with a typewriter written statement.

Are you going to tell me that you should pay the same for management services as you would for something as manual as that?

Today we can click a few buttons, which produce hundreds of owner statements to their email and then pay them by dumping the money directly into their account.

Bottom line . . . don’t overpay for services in the new economy. Managing rental houses is not like it was in 1990, so why are you paying for it like it is?

Building a Property Management Team


Matthew Whitaker - Tuesday, September 27, 2016

business, people, cooperation and team work concept - close up of creative team sitting at table and holding hands on top of each other in office

There are no loan wolf successful people. One of my favorite quotes from John Maxwell is his response to people who say they are “self made”. He explains how sorry he is because if they are self made then they haven’t accomplished a whole lot and explains that great things are done with a team. Property management is no different.

Who is on our property management team?

1.  An eviction attorney – Yes, no matter how much we underwrite applications and look for the right tenant, situations do change and some tenants go from being great to being very poor tenants in need of eviction. Because the landlord-tenant laws are very specific, it is always best to turn it over to a legal professional to handle this process.

2. Third party application underwriter – We believe it is best to remove us from the equation when underwriting an application. We solicit the help of a company who does nothing but underwrite all of our applications according to a criteria we determine. That way, we aren’t subject to the whims and stories from tenants that some landlords fall so hard for.

3. Property management software provider – We use a number of different software applications to manage our properties. The most important is the management accounting software we use that is industry specific to single family rental homes. Our provider is a team member, because we are constantly calling them up and asking clarifying questions about how to handle certain situations in the software.

Building the right property management team will help you be much more successful as you navigate the waters of managing single family rental homes.

If you have specific questions about any of our providers, I hope you will reach out to us and ask us those questions. We’d love to help.

What is a 7 Day Eviction Notice in Alabama?


Matthew Whitaker - Saturday, September 10, 2016

Question mark drawn in chalk on a blackboard

Nobody wants to have to evict a tenant. The original intent of the lease is that you would provide them a place to live and they would take care of that place and pay you rent . . . monthly . . . the whole thing . . . and on time.

Somewhere your tenant forgot that they had to take care of the place or pay you rent or worse BOTH.

If you are like many people talk to in this business, you’re probably kicking yourself for letting this go on much longer than it ever should have. If it makes you feel any better, if you’ve been in this business for any measure of time, you’ve let a tenant carry on way too long.

So you need them out of your house?

The first step in evicting someone in Alabama is the 7 day notice. I’m going to cover some quick elements to make sure remember, but as always, I’m not an attorney, so I always suggest consulting one before making any legal moves.

There are really two reasons in Alabama to evict someone.

The first is for “nonpayment of rent”. This is fairly obvious why you are evicting them.

The second is for “material breach of lease”. This is a catch all phrase for everything else. Meaning they have violated some other portion of the lease document . . . this could mean destroying the house, having people living in the house other than who is on the lease, etc.

I break these two down, because it used to be a big difference in the type of notice that was posted. Previously, under the Uniform Residential Landlord Tenant Act in Alabama, you were required to post a 7 day notice for rent and a 14 day notice for material breach.

They updated the law a few years ago and this is no longer the case. You post a 7 day notice either way.

So that is where I get to my first tip . . . Have one notice that covers both.

Our notice has the heading:

NOTICE OF RENTAL AGREEMENT BREACH
DUE TO NONPAYMENT OF RENT AND/OR MATERIAL BREACH OF LEASE
 

And in the body, it goes on to include both of them again in the first paragraph:

You are hereby notified, pursuant to 35 -9A-421(b) Code of Alabama that you are in noncompliance with the terms of your rental agreement for failure to pay rent and or a material breach of the lease for the premises now occupied by you, being situated at_______________________________________________________________________________________________.

My second tip is that a 7 day notice doesn’t end on the 7th day . . . it ends on the 8th. Here is the language from our eviction notice:

Your rental agreement will terminate upon the expiration of seven (7) days after the receipt or posting of this written notice, if you fail to pay or cure the material lease breach prior to the expiration of the seventh (7th) day.

__________________________________________________________
_________________________________________________________
My third tip is that you can’t terminate the lease by posting the notice. The lease doesn’t actually get terminated until after the 7th day the tenant has not “cured” the breach. Meaning, they have not fixed the problem.

Here is the next paragraph from our notice laying this out:

If the full rent is not paid or material breach cured, Demand is made upon you to deliver possession of the premises at the time of termination of your rental agreement (7 days after receipt or posting of this notice), otherwise, an eviction action will be filed against you.

Your failure to surrender possession of the premises will be deemed a willful noncompliance of the rental agreement for which the Lessor will seek a judgment for possession of the premises and all damages allowable under Alabama Law.

Additional rent charges may continue to accrue as due and owing under the terms and conditions of the rental agreement.

Fourth tip, only take certified funds at this point. We actually tell them this in the notice.

ALL PAYMENTS MUST BE MADE BY CASHIER’S CHECK OR MONEY ORDER ONLY

Tip number 5, to cover your rear end, include debt collection language. Here is what we have:

**We will assume this debt to be valid, unless it is disputed within thirty days after you receive this letter. If you dispute this debt, or any portion thereof, we will obtain and mail to you a verification of the debt or a copy of any judgment, if you send us a written request within this thirty day period. Also, upon written request within this thirty day period, we will provide you with the name and address of the original creditor, if different from the current creditor. This NOTICE, however, may require you to take some action prior to the thirty days, OTHERWISE, unlawful detainer proceedings may be instituted AGAINST you. This letter is an attempt to collect a debt, and any information obtained will be used for that purpose. This communication is from a debt collector.

Lastly, to make it as official as possible, have the notice notarized.

The next thing we need to cover is how to serve it properly.

While posting a notice can feel like a really weird thing to do, when you put it on the door, you must make an attempt to get someone to the door and hand deliver it to them. There is no requirement for you to come back if nobody is there, but you must make a good faith attempt.

If nobody is home, you may post it on the door where they are most likely to enter and see it. This is typically the front door.

I also suggest you take a picture of it to prove that you were there and served it. It is crazy the things people will say when they are attempting to get out of paying you rent.

Properly posting the notice in our experience gets MOST tenants to pay and/or fix the issue. We have very few tenants who will take an eviction all the way from the 7 Day eviction notice to them being set out by the sheriff.

What Makes You Different?


Matthew Whitaker - Thursday, August 25, 2016

Choice and decisions: businessman thinking with question marks written on adhesive notes stuck to a brick wall

This is the question every property manager is attempting to answer . . . when a potential client is calling and asking about their services. What makes you different from other managers? Why would I choose you over the 3 or 4 other managers I’m talking to?

We absolutely love it when this question gets asked! Very few other managers have put specific thought and some intentionality behind this question and it is something we have spent a LOT of time thinking about. Why WOULD you want to be a client of ours? Or, better yet, why would you NOT want to be a client of ours?

Wouldn’t it be important for you to know our “flavor” of management before you choose to do business with us?

If that is something you are interested in, I implore you to read on!

We sat down about two years ago now and thought about this question. This is not one we wanted to take lightly, because we felt that our management strategy was something we would build our business around for quite some time.

What came out of that meeting was what we call the “Three gk Uniques”.

Unique #1 – Communication. When clients come over from other property managers, this is the biggest reason they come over . . . lack of communication.

It is interesting to see the dynamic of a new landlord who is calling and asking about services for the first time. They generally want to know the answers to what I call “The big three” . . . How long will it take you to rent my home? How do you keep from renting it to the wrong person? AND How much does it cost to do that?

However, once we’ve rented your home, the questions all shift around communication. How do you communicate? How often do you communicate? What forms do you communicate with?

At gk we use 3 forms of communication with our Owners . . . phone, email and reports. Let’s take a look at each one.

Phone. We currently have an “Owner’s Only” line that was created about three years ago when as our leasing call volume went up, Owners began having a hard time getting in touch with us. We realized how important it was to continue to answer our Owner calls, but had to solve the dilemma of sorting through the 95% of calls who were not Owners. That is how we came up with the Owner’s only extension.

And that is exactly what it is . . for Owners only. Occasionally, a sneaky tenant will get through on the line, but we do our best to deflect those to the appropriate place.

We, additionally, have engaged the services of a call answering service called “Call Ruby“. Many of you have been very excited about the attitude on the phone and I tend to agree, they have an awesome attitude. Call Ruby has really become part of the team. They are so much a part of the team, that sometimes our Owners will get confused that they aren’t in our office and don’t know certain information. Either way, we’ve seen them as a tremendous asset to our business and getting you to the right person in our company when you call.

Email. We love to have everything in writing. And, despite what people are saying, email isn’t going anywhere. When you send an email to us, it goes into our ticketing system and that ticket is assigned to the appropriate person to handle the ticket.

The reason we came up with this fix is two-fold. First, Owners wanted a single point of contact. The only challenge with that for us was that we managed departmentally and we have specialist working in each department. The same person wouldn’t answer a leasing question who would answer a question about your repair bill. Thus, the support email was born. Secondly, when it goes into the ticketing system, we can run all types of metrics on how quickly our team is getting back with you AND ensure that emails don’t get overlooked and never answered.

So what happens to an email when it comes in? First, it is tagged and connected to your profile in our system. Next, it is read and assigned to one of our team members – the person they deem the best to answer that question. Then it is answered by one of our team members. The cool thing is that once it gets answered by one of our team members and sent to you via email, any email back to us from you on that matter will go directly to the person handling the ticket. So the process of assigning only happens once. Lastly, we close the ticket when we feel like the matter is closed. BUT, if you email us back, then the ticket is reopened.

Reports. One of the best ways we’ve found to communicate with our Owners is by delivering to them reports – whether that be Owner Statements or Inspection Reports – that are accurate and occur on a regular basis.

Our Owner Statement Day in Birmingham is currently the last Wednesday of the month. That means we deliver the statement into your inbox on that day. And we work VERY hard on maintaining that day.

Many of you remember Snowpocalypse 2015 . . . that occurred the day before Owner Statement Day and we STILL got the statements out! Whew! That is how important us delivering what we promise on time to you is.

Unique #2 – Uncomfortable Transparency. Trust is the foundation of any relationship, especially when you have someone managing most people’s single biggest asset.

It always surprises me that Owners will turn over their home to someone based on price alone. While we have some of the most aggressive prices in the business, I beg you not to choose us just because of that.

Would you turn your keys to your Ferrari over to someone to professionally drive it based on price? No way! You would want some credentials. Why would you treat your home any differently?

This unique allows us to build trust with our Owners. They don’t expect us to be perfect . . . well most of them don’t. But what they do expect is us to tell them the truth. Even when it is hard and ESPECIALLY when we mess something up.

I tell our team that a screw up is the best thing to tell an Owner because it helps build that trust. Now we don’t want to screw up all the time . . . but that falls more under incompetence.

Uncomfortable transparency is a byproduct of our core value, Integrity. It is something that we hire team members on and something we fire team members if they ever violate.

It is very important to us.

Unique #3 – Celebrate the Tenant. Your home isn’t, by itself an asset. It is the combination of your home and the RIGHT tenant that is the real asset.

This unique came from my good friend and industry veteran Robert Locke in Atlanta, Georgia. Robert used to own Crown Real Estate and Property Management and was explaining to us last summer how he had kept a tenant for 10 years.

We got so excited about the idea of our Owners having long term, paying tenants who take care of the home, we decided to go “both feet in” on his philosophy of celebrating the tenant.

What does that mean tangibly? We recently invested $1,000 in gift cards in different denominations to tenants we noticed being exceptional tenants. Perhaps they are like clockwork paying rent. Maybe we drove by their house and their yard looks like a fairway. For some, we noticed that it was their birthday.

We were very excited about how well this was received by our tenants. While nobody held us on their shoulders and threw us up into the air, we consider it an investment that we will continue to do on a quarterly basis that will hopefully pay huge dividends in keeping tenants for a really long time.

Another way we tangibly celebrate the tenant is by making it up to them when we screw up. There are times when work orders take too long or we forget something on their move in and it causes a real disruption in their lives. We see those as opportunities to let them know that we recognized that we messed up and not only rectifying the situation, but going above and beyond by sending them a card and typically a gift card.

Lastly, celebrating the tenant is also an attitude that we carry. Many managers tend to look down on their tenants. We seem them as the reason we have a job.

At gkhouses, we believe that you must standout and be passionate about certain things and not attempt to be all things to all people. We are passionate about these “Three gk Uniques” and talk about them almost daily.

What we hope is that like minded Owners will find us and be willing to partner in a relationship by letting us manage their home.

If you have questions or would like to find out more about our services, please reach out to us . . . we’d love to hear from you.