As many of you know I have been very involved in professional organizations for Property Management.  By participating and being involved I learn more and grow not only professionally but personally.

April 12-15 in Concord at the Hilton, the California Chapter of NARPM (National Association of Residential Property Managers) had their annual state conference.  There were classes the first 2 days for those who want to enhance business skills in marketing, office procedures, and owner-client relationships.  The conference kicked off on Wednesday.  Throughout the 2 day event there were serveral workshops covering such topics as how to use  Social Media, Fair Housing, Risk Management (insurance), Starting the Difficult Conversation, Business Practices to help increase revenue, offer excellent customer service and so on.  In place of a key note speaker the first day we had a session that reviewed the new FTB (franchise tax board) 7% out of state withholding tax that property managers must comply with as agents for the owner.  We also had a networking session that produced some real laughs.

The networking session question was, “You thought you’d heard everything until….”  2 stories stand out.

1.  Tenant calls property management office complaining that the heater doesn’t work, his wife has to wear a sweater to bed when they make love….property management company sent maintenance out and there was nothing wrong with heater…

2.  Tenant calls property management office with plumbing back-up, plumber is sent out, and in the process of snaking the plumbing the next door neighbor comes running out of the house screaming that she knew the house was haunted…apparently the snake came up through her toilet and was whipping around and caught the shower curtain and was spinning it in the air!

Humor is what gets any of us through the bad days and it is fun to be able to share these crazy stories.

Our key note speaker the second day was a legend in our community.  Mark Kreditor from Texas.  He has a degrees in music and is able to put property mgmt lyrics to well known songs to keep us all in stitches.   He shared with us his thoughts on the Stimulus of the Economy and how it relates to Property management.

As a current board member for the state I had the opportunity to attend the First Timers breakfast where I got to meet new members to NARPM and their first conference.  It is really inspiring to me to meet other property managers and hear their experiences and find out how they decided to become part of our family.

I can only tell you that NARPM is the first and only professional organization I have ever been a member of that truly made me feel welcome from the first day and each time I see old friends.  They gladly share their experiences, tips and tricks and are always available if you have a situation or question you just aren’t sure how to handle.  The thought is there is more than enough business to go around so there isn’t the feeling of being competitors as much as being professionals who want to do what is right and help others in the field.  A perfect example is the last day of the conference there is always a breakfast and at this breakfast we network and share forms.  Attendees bring with them handouts of some of the forms they use in their office that have been especially helpful.  Why recreate the wheel?  I can’t tell you how many ideas for services, better ways of streamlining my office procedures or added text to my management contracts that I have gotten from fellow property managers.

I would like to encourage anyone that is a property manager or thinking of becoming a property manager to attend a local chapter meeting, or state or regional conference.  I think once you meet some of the members you will be convinced of the importance of getting involved.  Many members are former past presidents of local, state and national boards, are authors of property management books, teach and speak to professional organizations, and continue to run businesses in their local communities.

Our vendors are a large part of our success as well and this year for the first time we had them in the conference room with us instead of a separate vendor exhibitor room.  The feedback was overwhelmingly positive.  They were able to mingle with us in an informal setting and got to hear first hand the presentations and topics of interest to us as business owners.

For more info about NARPM or to find a local chapter go to:  www.narpm.org

Please check out my website at www.PortolaRentals.com if you are interested in properties in Santa Cruz or have rentals in Santa Cruz, CA.

Kathleen Richards

Well I am on Z and covered all topics related to Property Management through the alphabet and then some.  Hope you have found the topics timely and of interest. 

Zero Sum Gain (break even), Zap Your Energy, Zombie, Zen, Zest for Life

Zero-Sum-Gain – break even is at least where you want to be with your investment property and well on your way to positive cash flow.  We all have negatives at time with rental properties but it shouldn’t be a long term condition.  Even with write-offs you don’t want to be losing money indefinitely. 

Zap Your Energy – Yes, property management can do this.  I even have my days.  However, if you have systems in place, follow the procedures you have set and keep on top of accounting and maintenance, work to build a good relationship with your tenant you should rarely be in a state of feeling Zapped or Zombie like.

Zombie – this is how you might feel after doing a large turn over, or remodel.  This isn’t how you should feel managing your rental.  You don’t want to be in a place where you are going through the motions.  If you are then you aren’t minding the store and treating the rental as a business which if you have been reading my entries you now know this is a constant theme with me.  Your rental IS a Business.  If you are feeling like a Zombie – then hire a good property management company to take over for you. 

Zen – This is where you want to be headed with your rentals.  Yes, I live in Santa Cruz, CA and this term is probably better understood than elsewhere.  You want to be managing your properties in a way that it fits into your life, is a balanced part of your life, it shouldn’t become your life because that is when people get fed up and just sell.  People forget their longterm goal for their investment and business and often just call it quits.  Again, by following the tips and advice in this blog you will be able to manage rental properties and hopefully have a balanced relationship with your rentals.  Getting you as close to Zen as possible.

Zest for Life – remember when you inherited the property or bought your first rental?  I do.  I was so excited.  It was my first big investment, my first step into diversifying my investments away from Mutual funds and adding real estate into my portfolio, it was my first step towards my retirement planning.  My first rental was also real, physical, something you could touch and actively participate in.  I was so excited about remodeling, painting, making it mine and honoring my husband’s 96 year old grandma who had lived in the home most of her life and had passed away with no one in the family wanting to purchase the house it became my first real estate purchase.

You want your rentals to be part of an overall plan and something that should still get you excited about your goals and future.  I still have a tangible sense of responsibility for taking care of my properties.  I feel responsible to my tenants to provide a nice place to live.  I feel responsible to myself to manage my investment well.  My goal in buying my real estate was to keep it for the long term and have them as part of my retirement plan.  It was never to buy and flip.

In the past 20 years I have remodeled over 12 homes, and loved it.  I got into property management because of my business background, organizational abilities and exceptional communication skills.  I finally listened to friends and family who kept saying, “why don’t you do property management as a business”?  I took their advice, tested the field, and found I loved it.  I have been blessed to be able to buy a 20 year old business from someone who was retiring and over the past 5 years I have been able to add my own touch to it, go out on my own, build my portfolio and staff and create amazing relationships with my clients, tenants, vendors, employees and the community at large along with finding a career that is challenging every day.  I truly learn something new daily.

I have found my Zest in Life and love to share my experience and best business practices.  I teach at Cabrillo Community College, and at other Real Estate related events.  Hope to see you in the future at some of these workshops.   Look for future postings of classes and workshops.

Please check out my website at www.PortolaRentals.com if you are interested in properties in Santa Cruz or have rentals in Santa Cruz, CA.

Kathleen Richards

Successful Landlording

Twice a year I co-teach this class with Karen Calcagno, Linda Murphy and this year with Paige White through the Cabrillo College Community Extension program.

Yesterday, March 6th, was a full day with 15 attendees.  I am so pleased to find investment property owners willing to educate themselves about the process, and their responsibility to being a successful landlord.

The 1 day course covers:

•  Do you have the skill set/personality to be a landlord?
• Advertising the property
• Screening potential applicants/tenants
• Fair Housing Requirements – Do’s and Don’ts
• Preparing the property to rent
• Showing the property
• Application/Credit/Lease
• Relationship Tips and Tricks
• Dealing with problem tenants
• Maintenance
• Security Deposits & Move -Outs
• The law – brief overview
• Code Enforcement
• Financing investment properties
• System setup – how to get organized
• How to hire a property manager
• Where to find help

The course comes with a binder to help landlords get organized, provides materials covering all the topics outlined, along with actual lease, addendums, and application form to use.

As a former teacher, and university instructor, I love being in the classroom and helping self motivated people get the info they need to be able to meet their goals.

At the end of the class we did a quick take away from each student and I was pleased to see that they got it!  They all walked out the door with the essentials of what they need to do and keep in mind.

I started out the morning stating that managing property is a Business and if they take that position from day one it will be so much easier mentally, physically and financially to do it themselves.  Afterall, owning an investment property is expensive.  They need to know their bottomline and future goal for what they want from the property.  Do they want to pay it off and have an income stream in retirement, do they want to build equity and do a 1031 exchange in the future, do they want to hold and sell in 5 years, do they want to pass this property down through their estate?

Linda Murphy, with RPM Mortgage reiterated the exact thing when thinking about what type of financing you will want to get on the property.  Linda shared with everyone that interest rates are low but unfortunately investors are being penalized for what happened in the past and that the points that are added onto loans for investments properties really add up so it is imperative to know your future plans when looking for financing because it will be expensive on the point side to get the loan.

Paige White, City of Santa Cruz, Code Compliance, shared some invaluable information about how landlords get into trouble with the City.  She offered solutions and made it clear that as a Code Compliance Officer she is all about being proactive to help owners not to punish them.  Her primary responsibility is to ensure that properties are safe and habitable.

Karen Calcagno, Advantage Family Business Center, shared with us her 35 years as a property owner, business owner and her expertise in building and maintaining relationships.  Everything discussed in the course always went back to having good relationships with tenants, vendors, neighbors and other family members who may c0-own the property.

What I brought to the table was my professional and personal experience as a property manager and landlord.  I covered the Do’s & Don’t of being a landlord, the Tips & Tricks to make life easier and if self-management isn’t for you then how to find a good property manager to handle it for you.

Students at the end of the class received a certificate of completion that will benefit them if they ever get a Code Compliance complaint they can show they took our class and the City will work with them to resolve the issue.

If you would like to contact any of the presenters:

Karen Calcagno, 831-475-4479, www.advantagefamilybusinesscenter.com

Linda Murphy, RPM Mortgage, 831-818-7075, www.rpm-mtg.com/lmurphy

Paige White, City of Santa Cruz, www.cityofsantacruz.com

Please check out my website at www.PortolaRentals.com if you are interested in properties in Santa Cruz or have rentals in Santa Cruz, CA.

Kathleen Richards

Law, Lease & Listen

Law – bottomline follow it.  There are lots of books out there and professional associations here are some links:

1. California Apt Assoc. Become a member.  This is a great organization.  They regularly have classes on legal matters, Fair Housing Law, Leases and Addendums to download etc. www.caanet.org
2. Institute for Real Estate Management – IREM – www.irem.org
3. National Assoc of Residential Property Mgrs – NARPM.  Become a member.  I am very active in this organization.  There are professional designations, classes, conferences etc. www.narpm.org
4. Nolo Press has a series of books.  I have them on my bookshelves. www.nolo.com

Lease – Have a current and legal one.  You can get wonderful leases and all kinds of rental forms that are regularly updated by attorneys through www.caanet.org become a member.

Listen – Can’t stress this enough.  If you look at your rental as a business and try to remove your emotions from it you will be a more successful property owner/landlord.  As owners who lived in the property we are willing to over look or live with certain things but when you rent the property it needs to be rentable and acceptable to the tenant.  Afterall, they are paying money to live there and expect things to work and not have a jerry rigged fix.  Example:  electrical outlets need to have coverplates.  The skylight that drips in the rain needs to be fixed.  It is unacceptable to tell the tenant to put a pan under the dripping spot.  By actively listening you will build a good relationship and have good communication with your tenant.

Please check out my website at www.PortolaRentals.com if you are interested in properties in Santa Cruz or have rentals in Santa Cruz, CA.

Kathleen Richards

The two topics today are Filing System & Fair Housing.

To be organized and to be able to document everything associated with managing a rental you need a filing system and it doesn’t really matter what system you use – just have one.  I will tell you what I have both personally and in my business.

Filing System:

Use binder to house your lease, maintenance log, communication log.  I have a finder so I can quickly pull and find the things I need to know most.  I also have a file cabinet with a file for each property that is where invoices, bills, insurance, property taxes, mortgage statements get filed.

In my business:  we have locked file cabinets with a file for every property that has 5 dividers in it.  Each section is labeled – Tenant, Owner, Invoices, Communication, Property General Info.  I also have an separate owner file if an owner has many properties.  All files are locked up daily.  I have online file folders with each property address and an owner file.  This is where I put all scanned documents, communication with tenants and owners and any items that get emailed to me.  My plan moving forward is to scan all leases and management contracts so I have those on line as well.

For individuals keep your filing system easy, simple so you will actually use it.  I started out with complex spreadsheets and then just went with a simple bank ledger method that listed each entry just like you would in a checkbook.  I print this list at the end of the year and give to my CPA.  It is stapled to the front of an envelope for the property and inside the envelope is all the documentation, receipts etc that the account may need to review for more detail.

Fair Housing Laws:  You need to know the law.  California is a tenant right’s state.  If you follow Fair Housing Laws you will stay out of trouble and court.  On the first page of my application I have a paragraph that reads as follows:

Management welcomes all applicants and supports the precepts of equal access and “Fair Housing.” Management will not refuse access to any housing, accommodation, or other interest in property or otherwise discriminate against an applicant on the basis of age, sex, race, religion, marital/familial status, physical or mental handicap, color, creed, ethnicity, national origin or sexual orientation.

I have taken many classes on this topic.  The CAA  (california apartment assoc) offers classes on this topic. www.caanet.org for more info about Fair Housing http://www.hud.gov/local/ca/homeownership/fairhsg.cfm

I once had an owner that lived in a duplex (elderly lady) and I found the perfect tenant for the unit next door and they had perfect credit, met all the criteria to rent, and had a toddler.  Owner refused to rent to them because they had a child.  This is against the law.  I immediately closed my account with this owner, and drove to her duplex, knocked on the door and handed her they keys and the final statement.  I also advised the applicants that they were well within their right to file a complaint.  They didn’t – being the nice people they were.

Fair Housing is to be taken seriously and you need to know the law.  If you work with a property manager they need to know the law and if you are a property manager you had better know the law since you are representing the owner of the property.  Property Managers have a higher burder to bear and rightly so.

Check out my website:  www.PortolaRentals.com and review my application and criteria form  By the way, it is law to post the fair housing poster in your office….

Kathleen Richards