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Property management is a challenging business where the property manager serves two different sets of customers with conflicting needs.  As a marketer for a multi-state property manager, I have witnessed the razor-sharp line that a property manager has to  walk in his place between the tenant and the landlord.  At times, it can sometimes seem impossible to stay the course of this line, and I'll share my insight into why that is.

The business of property management is one where the landlord compensates the property manager to relieve them of the burden of owning investment property (a.k.a, managing tenants).  The late night phone calls with repair requests, the destruction to property, the late payments, not to mention the screening of and securing decent tenants - these are all part of the burden that the property manager bears.  The owner, usually, doesn't want to deal with the tenants, fixing up the property, or worry about collecting money.  Usually, the property owner wants to make his investment by purchasing the property, and then simply collect checks by handing over the property to the property management company.  In other words, they don't want to do the "dirty work".  Despite this unenvious position, the property manager must do the bidding of the owner in order to get paid.  If the owner feels that the service is not up to his standards, he can take his business to the next property manager in the area as switching costs are typically not that high.

On the other hand there is the tenant.  The tenant wants a place to live.  The tenant usually values the property over the property manager, and thus has no loyalty to a property manager, so long as he gets the place where he wants to live.  The tenant pays the rent that goes to the property manager, that goes all the way back to the property owner, which is the ultimate goal of the whole value chain.  Along with the value, the tenant also poses the majority of risk in the relationship.  A bad tenant can cost a landlord (and a property manager) significant cost - both monetarily as well as in time and resources.  Destruction, illegal and illicit activities, late payment, non payment, legal proceedings, and damage to reputation are all potential outcomes that a landlord and property manager risk with any given tenant.

The property owner counts on the property manager to procure tenants that are reliable - both in paying rent and in maintaining the property.  In order to keep a stream of quality tenants in the pipeline, the property manager must not only market to prospective renters, but also create a situation for a successful, and mutually beneficial rental relationship.  On the other hand, the tenant counts on the property manager to be fair in the leasing process, and then once a lease agreement has been entered - to fix issues with the property, communicate clearly, set expectations, and to be treated fairly.  Yes, in a demand market there is typically plenty of prospects in line if one tenant doesn't work out.  This leads some property managers to value little the relationship between the property manager and tenant - treating the tenant like a commodity that can be easily replaced.  However, that is a dangerous game in today's online world where an upset tenant (or even a prospect for that matter) can damage a property manager's reputation on various forums.

However, even a property manager with the best intentions can be caught in the middle of a landlord vs. tenant dispute.  Thus is the case in property maintenance requests and tenant selection.  A tenant can raise a request with a property manager over any, we'll say a leaking faucet for this example.  Usually, a property manager has an agreement in place with an owner over an amount that a property manager is authorized to spend in order to fix a problem.  In the case of a leaking faucet, the property manager can call one of their contractors over to the property to perform this type of simple repair.  However, what if the contractor discovers something major, that would costs thousands of dollars in order to repair.  This issue may cause discomfort to the tenant, yet the property manager can't have it fixed without the authorization of the owner.  Herein lies the problem.  Go search for reviews on Yelp, Thumbtack, or Google, and you'll see examples of tenants complaining about how a property manager didn't "fix an issue" to their satisfaction.  In some of these cases, the tenant is justified to complain about poor service.  However, in many cases, the tenant is complaining about something that the owner is ultimately responsible for, yet the property manager is the one that takes the hit for the owner.  The same can be said for tenant selection.  I've read many reviews of people complaining that they weren't awarded a property, or didn't get to view it.  In many of these cases, the property could have already been under contract as decided by the property owner.  Again, the property manager takes the heat.

So what's the point?

The point is that you shouldn't assume that every decision made on a given rental can be attributed to the property manager.  The buck stops with the landlord, and in many cases that  is exactly what happens.  Maybe that's just another part of the job of a property manager, but tenants out there should understand how it works before blasting their property manager on a review site.  If the goal is justice for a mishandled rental, then a poor review directed at the property manager may not serve that justice.  In my opinion, opening up a clear dialogue with the property manager is always the proper course of action.  Know your rights, and see that the property manager (and owner) honors them.  The threat of action (whether legal or damage to reputation) is typically all that is, needed to force compliance.  Hopefully, knowing your rights, and knowing how it works, will help you have a much better experience with your current and future rental properties.

thumbtack incGoldenwest Management has just been ranked in the top 3 property management companies in Vista, CA by Thumbtack, Inc.  This is great to hear as our San Diego office is still so young compared with other management services in the area.  Despite the newness of the office, this ranking shows that our service level in the San Diego area is viewed as top notch.  The system that we use, and processes developed over time (not to mention the fantastic people we employ) from our Phoenix and Las Vegas offices have translated well into the Southern California market.  Thank you, Thumbtack, and thank you to all of our wonderful clients!  Feel free to checkout the listing below.

Property Management Companies - Vista, CA

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The first labor day was celebrated in 1882 in New York City.  Back then, it was less of a celebration, and more of a demonstration for workers' rights.  We can, in part, thank the founders of this movement for the 8 hour work day, child labor restrictions, and other advances in labor-related legislation.  For more information on the Labor Day Holiday, checkout some Labor Day facts here, some Labor Day Opinion here, and/or Labor Day Origins here.  Also, if you are curious about how the holiday weekend affects the rent grace period, checkout our article on the topic.

Happy Labor Day from the GWM family!

 

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Let me open this post by highlighting the recent news coverage for Yelp.  The most recent lawsuit against Yelp alleges fraudulent reviews and extortion practices by Yelp.  This is on top of a class action lawsuit brought against Yelp in 2013 by a group claiming, among other things, that Yelp was pushing them to produce more reviews in order to maintain Elite status.  Before going on, let me level set for those not familiar with Yelp.  Founded in 2004 Yelp is an online community of business reviewers.  The idea behind it is that any customer of a business can find a forum for expressing their views on a business, and have those reviews go public in real-time.  The concept is great, and in an idealistic setting, seems like a very democratic and just system.  However, in reality it is anything but.

Money could be Affecting Yelp's Reviews

Yelp is a business, and like any business, needs to make money.  The main driver behind the business, now, is in business accounts.  Through these accounts, Yelp offers enhanced business profiles, more photos, more videos, and better search rankings - all at a fairly substantial price for a small business.  Regardless of the cost, this seems like a fairly obvious business offering.  However, after that the value proposition dips into a very gray, if not black area, when it comes to ethical business practice.  There are many that allege that Yelp is requiring these business accounts in order to suppress negative reviews (or even get positive reviews "recommended").  Others allege that the minute a business stops paying Yelp, that some of the reviews they earned through their payments to Yelp disappear.  Others allege that people having nothing to do with a company have the ability to post "recommended" reviews on a company, having never actually done business with the company.  Thus, competitors, or even paid agents could post poor reviews on the competition.  All of these are very valid reasons to treat Yelp reviews with a grain of salt.

Is Yelp even Accurate?

If you were doing your research on Goldenwest Management, and you went on Yelp to checkout reviews, you might be alarmed.  As of writing this article, GWM's Las Vegas office averages 1.5 stars and Goldenwest's Phoenix office averages 2 stars.  Needless to say that, out of 5 stars, those are not good averages.  Yet, does this tell the whole story.  Going to Goldenwest Management Las Vegas's home page on Yelp indicates that there are 9 reviews.  However, if you dig deep into the back pages of Yelp, You'll notice that there are 18 reviews suppressed by Yelp's algorithm.  Goldenwest Management Phoenix's Yelp Home page has 4 reviews posted, but doing a little digging shows that there are 12 reviews suppressed by Yelp's algorithm.  How these ratings show up on the Home page or in the back pages is one of the reasons why Yelp is being sued.  Is this the way people truly feel?  Is it because a company didn't pay them to do business?  Is it because a competitor wanted them to look bad?  You can decide.

Is Yelp Good for every Industry (especially Property Management)?

Another thing to consider in the property management business is where the reviews are coming from.  Landlords and property owners have a very different criteria of selection than renters.  Yet when you go to Yelp, you notice that landlord and tenant reviews are intermingled.  Worse, landlords are usually grossly outnumbered by renters on Yelp.  Besides, how many tenants out there are seriously going to rave about what an awesome property management company they have?  This type of customers is, more often than not, complain about the company.  Even if this is the usual case where the property manager is acting on behalf of the landlord's wishes (which they have a fiduciary duty to do), the tenants don't get a chance to review an individual property owner.  Rather, their only interaction is with the property management company.  As it should be too.  A good reason for having a property manager is to shield property owners from interfacing with problem tenants.

The bottom line is that you should conduct your diligence with an elevated vetting process.  Interview the agents, get ratios on agent to properties, years in business, etc.  If you are holding millions of dollars in property assets, or even just a single property, that is way too much value to risk on a debatable Yelp review.

What do you think?  We'd love to hear your Yelp stories!

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Landlords beware.  There is a bizarre and nerve-racking trend going on in certain states like California where squatters are taking advantage outdated laws to live rent-free.  This little loophole in real estate law gained exposure in a recent incident involving an Airbnb landlord and tenant.  In this particular case, an Airbnb tenant refused to leave a Palm Springs condo after his month long-lease.  Not only did he refuse to leave, but he told the landlord via a text message that "he was legally occupying the condo" and threatened to press charges against the landlord.  The dispute is ongoing, and according to the San Francisco Chronicle, the landlord, likely, have to pay thousands in legal fees and follow a 3-6 month eviction process in order to remove the squatter.  Needless to say, this is a setback for the landlord, whom works as a physical therapist and owns just the one property in Palm Springs.

How to Prepare for Squatters

Squatters come to inhabit properties in many forms.  Some look for vacant properties, break in, and try to take advantage of the long, drawn-out foreclosure or escrow proceedings.  Others, like the Palm Springs squatter, are using less regulated services like Airbnb and Craigslist to gain entrance to the property, and then, basically, refuse to leave.  In states like California, where laws tend to lean in favor of tenants, there is no quick and simple way to deal with squatters.  The optimal outcome is to catch the culprit before giving them access, or to catch them early on in the process.  To do this, the first set of precautions one should take is to inspect and monitor properties.  This includes the escrow process for newly acquired properties.  Ensure that no one is hiding in the property before signing off on a sale.  If the property is sitting vacant for any extended period of time, make sure to check in on it regularly.    The next precaution to take is to implement a screening process to weed out sketchy characters (see our article on tenant selection).

How to get Rid of Squatters

It's virtually impossible to completely mitigate the risk of renting to a squatter.  Screening will certainly lower the risk, but smart schemers have a way to gaming these screens.  Once the a squatter has been identified in the property, the best thing a landlord can do is to serve notice as soon as possible.  It is important to do so by the book (See our article on the eviction process for some help), so make sure to follow the rules of your state when doing so.  Depending on the state, this notice can be 3 days or longer to exit the property.  If this doesn't result in the squatter leaving, then there will be legal proceeding, including a trial.  It's best, at this point, to hire a lawyer to help convince a judge that the squatter has no right to live at the property.  Ultimately, the judge can rule in favor of damages awarded to the landlord, and finally for the removal of the squatter, where a law enforcement officer will physically remove him or her from the property.

Unfortunately for landlords, some of the laws  written around tenants and landlords were created to help individual tenants from abuse of wealthy, more powerful, property owners.  The laws tend towards the edge cases where landlords have abused tenants in the past.  They aren't all relevant or fair in today's society, and especially aren't all fair for property owners trying to earn income or build that nest egg for retirement.  Getting involved civically to change these laws would be a great, long-term, step to change some of the unfairness, but otherwise one has to play with the hand that has been dealt.  Hopefully, an incident like the one in Palm Springs won't happen to you, but if it does, make sure that you are prepared.

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The 4th of July typically generates thoughts of fireworks and vacations.  While this is something to celebrate, let's not forget the amazing courage and sacrifice, not only from our soldiers, but from our founders, politicians, and all of those that helped start our great nation.  Thank you, also, to all of those that have helped us keep our independence along the way.  From the Goldenwest Management family to yours, we wish a happy Independence Day!

Also note that our offices will be closed for the holiday, but if you have a property management emergency, please call our emergency hotline.

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This is is the time of the year when we, in the southwest, have to be very careful of wildfires.  The 4th of July fireworks celebrations make a difficult job even more difficult for Firefighters.  If you are planning some backyard theatrics for Independence Day, please make sure that you plan for a safe celebration.  There is a great article and infographic from Propertyware that lists some simple steps for fireworks safety.  We have some of the key tips listed here, but feel free to check out their website for more details:

  1. Don't break the law - check to make sure that fireworks are even legal in your area.
  2. Make sure there is plenty of clearance - Don't light fireworks in a wooded area, near a fence, house, etc.  Use common sense and make sure there is plenty of room to light without catching something on fire.
  3. Keep a source of water available just in case - Water hose, buckets, etc. are good things to have on hand
  4. Don't let children ignite fireworks alone - This is an activity that can easily go wrong.  Make sure there is adult supervision at the least
  5. Don't pick up lit fireworks - If a firework doesn't ignite properly, don't try to touch it, stand over it, etc.  Give it plenty of space and douse it with that water you have handy if you really think something went wrong with the ignition

We don't recommend anyone have home fireworks demonstrations, but if if you have to play with fireworks, use your common sense.  Please don't turn a celebration into a tragedy.  Best of luck and happy 4th of July!

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I recently saw an expert from @legalrealestate answer a question from a Tenant.  Though I normally agree with the advice given on this site, and from these experts, this information was patently incorrect. The question was, "...if the rent is due on the 1st of the month and the lease allows for a (3) day grace period, can you pay after the grace period without penalty when the grace period falls on a Saturday, Sunday or Holiday?"

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The answer is NO, and this has been backed up by the courts (at least in the counties where GWM manages property). The court's logic is this: The Tenant is given the grace period of 3 days without penalty (and Landlords, don't try to hold the Tenant to late fees if they pay within the first 3 days of the month – you will lose in court - gotta have a grace period), even though most leases say that “Rent is due on or before the 1st of the Month..” The courts almost exclusively force Landlords to have this grace period because often times the 1st of the month falls on a non business day (holiday or weekend). For this reason specifically, if the 1st is on a Saturday or Sunday, Tenants are allowed to pay the following business day without penalty…and of course, the grace period allows this to happen without penalty.

Now for those Tenants trying to get one over on their Landlords, they will try this move: The 1st of the month is on a Thursday, the grace period would extend to the weekend, and for good measure lets say Monday is a holiday (say Labor Day weekend)…the Tenant would literally pay on the  6th of the month! This is obviously a ridiculous interpretation of the law for the benefit of paying almost a week late, and the courts agree…but why?

The Landlord Tenant-Laws recognize that rent should only be collected on a business day and not on a weekend or non holiday.  The court will even allow this rent to be mailed in.  However, what the court won't do is treat the grace period as if it were the same as the 1st of the month (or the day the rent was due without penalty).  The court does not give the “grace period” the same weight and therefore does not accept the argument that the rent should be without penalty if paid outside the 1st of the month and listed grace period.  As a side note, at a minimum the grace period should be through the 3rd day of the month (although technically a Landlord can make the grace period as long as he or she wants).

In this rare of exception, common sense rules the day: rent is due on the first, and because that day can happen to fall on a holiday or weekend, the Landlord gives the Tenant and extra few days to pay.  Landlords, it's up to you how you want to handle this, but we don't like the precedent this sets when tenants start playing these kinds of games with our landlords.  The rules are the rules,  and tenants should expect to pay the penalty when they try to skirt them.  Tenants, please ask your property management company or landlord for clarification if you think you'll have an issue with late penalties and the grace period rule.

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It's no secret that real estate can be a great investment.  A property, over time, will gain value as debt is paid down.  This leads to a nice sum of money owed to the owner when he or she chooses to cash out on it.  Of course, there are some deviations from this formula, like the real estate bubble of the previous decade.  Which, if one purchased property at the peak of the bubble (2005-2006), and then had to sell after the bubble burst, they likely didn't garner a great return on their investment.  Property owners in Phoenix, especially, took a big hit during this time with the huge volume of properties that flooded the market from rapid new development.  This left a sour taste in many property owners' mouths when their nest eggs lost more than half the value of just a few years before.  Fast forward several years, and it's become more clear that long term trend of gaining value is still holding.  Property owners/investors are back to realizing their investments.

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This is where property management can help you maximize the value of your property. in Phoenix,  property managers help ensure that you obtain the maximum rent the market will allow.  They also help recruit great tenants that will take good care of the property and help hold the property value.  If the tenants don't, they help protect the owners from damages by putting contracts in place, inspecting the properties, and remediating issues before they get out of hand.  This is a valuable service in Phoenix where there is a lot of rental turnover require a lot of maintenance.  Many property owners trying to perform all of these actions on their own become overwhelmed, or just tired of it after years and years of self-managing properties.  This shouldn't be a reason to sell what will be a great investment over time.  Rather, it's a time to get help.  Good property managers have systems in place from working for years  in the industry, and aside from providing these management services can also be a trusted advisor to you in the real estate market.  If you are a property owner in Phoenix, and self-managing one or more properties, consider all of your options, and the benefits of using a property management service.  We think you'll be happy you did!

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Lets be honest, if you have ever been a Tenant in a rental property, one of the biggest questions is "how much should you get back of your security deposit?" Landlords and Property management companies struggle with this question as well, as the formula for deciding can be somewhat complex.

Lets start with some basic assumptions:

If you didn't have pets or children or if you didn't throw wild frat-like parties in the property, we can assume that the home has a decent chance of normal usage.

If you didn't hang an unordinary amount of pictures, punch holes in the walls, or smoke in the house, we can assume there are no major damages to the interior.

If the blinds still work and aren't chewed up, the air filter was changed regularly and you were smart enough to take all your personal possessions (whether you wanted to or not) with you when you moved out means you are probably in good shape.

There are a few last items that you should do to protect yourself and make sure you get the most money refunded from your security deposit.

  1. Have the home and the carpets professionally cleaned once all your personal possessions are out…show the Landlord and/or Management company the receipts (heck, make a copy for them).
  2. Change out all burnt out light bulbs.
  3. Make sure smoke detectors have fresh batteries.
  4. Change the air filters.
  5. Remove all weeds from the yard.
  6. Schedule the utilities to be shut off on the last day of the lease.

Look if you do these things, you control the price.  If you leave this to the management company or landlord, don't be surprised when the deductions are outrageous. Here are a few examples:

  1. If you don't have the home or carpet professionally cleaned, rather you just clean the home yourself, you can't prove that you actually cleaned the home and you may not be abiding by the lease terms. Not to mention, you will be stuck with the price of a random overpriced contractor (this will be a recurring theme).
  2. Contractors have to make a living, so even though you can change the air filters, batteries and light bulbs at your home for less than $25, the contractor has to go see the damage, then drive to home depot, front the money to purchase all the materials, and then take the time to actually make the repairs. What might normally be $25 can turn into $100 in the blink of an eye.
  3. If you leave your satellite dish, there are broken screens or there are dead plants, chances are you are going to pay some ridiculous amount to get this fixed.
  4. If you don’t turn in all the keys and remotes that are listed on your lease – there is probably a “rekey” fee in addition to the cost to make a copy or new key.

There are always going to be questions on what is “normal wear and tear” and this usually come into question with the condition of the walls and floors (or more appropriately paint and carpet) upon move-out.

Major stains are going to make it easy for a Landlord or Property Manager to charge the Tenant for replacement. The Landlord can charge the Tenant “per room” so if each room has a major stain, then be ready for a big bill.

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Painting, specifically touch up patching and painting is the toughest to call. Usually Tenants make it easy on Landlord’s by trying to do the touch up on their own…and they fail miserably. If there only a few nail holes in a room, and the holes are small, there usually will not be any charge. Tons of nail holes will probably require a charge.

There are also rubs on walls or miscellaneous marks that are going to require the same attention. Look if there are one or two or its minor in a room, you shouldn't have anything to worry about…if they are all over, well then get ready.

Lastly, remember that you should take a lot of pictures of the property on your way out. That being said, if you don’t do the same thing, and fill out your move-in walk thru or property condition statement in detail, then it won't matter. Now remember, if you go overboard or write down things that are excessive in your Move-in Walk thru statement, be ready for you not to be taken seriously…by both Landlords and the Courts.