Landlord FAQs


Table of Contents



Contents

  1. 1 What is taking place the first week of management
  2. 2 For how much can my investment property lease?
  3. 3 What needs to be done to my house before it is ready to rent?
  4. 4 How will you find tenants for my house? How long will it take?
  5. 5 Can Keyrenter Property Management help me buy or sell investment property?
  6. 6 How can I best understand my Owner's Statement?
  7. 7 How do you handle showings?
  8. 8 How does a lease-to-purchase (LTP) or Lease Option work with Keyrenter?
  9. 9 What are the fees I pay for management and leasing services?
  10. 10 How do I pay management fees?
  11. 11 What are your statement periods and when should I expect to see rents paid from a tenant?
  12. 12 When can I expect to receive rental income?
  13. 13 Where can I find invoices for bills and expenses?
  14. 14 Can I see my property while the tenant's living there?
  15. 15 What is considered “Normal Wear-and-Tear”?
  16. 16 How often should I repaint my rental home?
  17. 17 How much notice does a resident have to give before they can properly vacate a property?

What is taking place the first week of management

The focus during the first week is on preparing the rental for leasing.  Data entry, pre-list inspection (determining if anything needs to be fixed), taking pictures and video tours, writing marketing descriptions, posting ads, and beginning the showing and screening process.  A lot of effort and time is put into this first week in order to rent your property quick.

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For how much can my investment property lease?

Your lease rate is going to be determined by several market factors including the condition of the property, location, and the rental rates for competing homes in the immediate area. Unfortunately, the markets that dictate lease rates vary vastly from the markets that influence value of properties. Please contact our office and we can discuss this with you as it relates to your specific property.

What needs to be done to my house before it is ready to rent?

The better condition that a house is in, the better quality tenant that it will attract. Your home must be left in professionally cleaned condition as the tenants will be paying a security deposit which can be used to cover any needed cleaning upon their move-out. Your Property Manager prefers to arrange this cleaning to insure that the cleaning guidelines are strictly followed. The carpets must be freshly cleaned and all debris and personal belonging removed from the house.

It is not necessary to paint automatically, but you should consider painting any room that has dirty or marred walls. A neutral color is best. Your Property Manager will be happy to discuss any necessary repairs or painting with you. Neutral window coverings such as blinds should be left, but not curtains that match a particular bedspread or couch. Tenants moving into a rental property do expect some sort of window coverings to be provided for privacy and safety.

The tenants are generally requested to maintain the yard in the condition it is provided to them. Therefore, the yard should be freshly mowed, weeded, trimmed and the leaves and debris removed.

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How will you find tenants for my house? How long will it take?

This is the a very common question from property owners. Unfortunately, there is no way to predict how long a property will remain on the market, even in the best market conditions. However, we work diligently to rent the property as quickly as possible, typically under 30 days. What is important to remember is that the most important objective is to have “a quality tenant.” We would much rather deny 2-3 applications before approving one since bad tenants will only create more expense and another unwanted vacancy; therefore, waiting for the “right tenant” is worth the additional time it can take to rent the property.

Can Keyrenter Property Management help me buy or sell investment property?

Yes!  We are constantly assisting our clients to either sell their rentals, or buy more investment properties. With competitive rates and innovative strategies, we guarantee to save you money and maximize your return! Give our team a call today!

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How can I best understand my Owner's Statement?

Your monthly owner's statement provides you with a lot of great information about the financial performance of your property. Although it may not look like other statements you are used to, it will quickly make a lot of sense.  Watch the video below for an explanation of how to best understand your statement. 

http://www.screencast.com/t/SQLkn2EJ5Q

How do you handle showings?

Occupied Showings
When a unit is occupied by either the property owner (prior to moving out) or a resident (after they gave notice), unlike many companies, we will do many pre-vacancy leasing activities to reduce vacancy time.  When we advertise the unit for rent, we will also disclose that it will remain occupied until an availability date.  Showings are handled by scheduling appointments with the occupant and the prospective resident.  The prospective resident will view the unit by the current occupant allowing them access.  Often times a Keyrenter representative is not present for these showings.
Vacant Showings
In most cases, we do our vacant through a secure lockbox verification process. This allows tenants to view the home at their convenience which will reduce vacancy time, reduces leasing costs, allows more viewings, and tracks who’s viewing and when.
How are Lockbox Showings Secure?

  • Registration Process
  • Personal info and credit card info on file
  • Person must be on site to get code
  • Code only works for 1 hr.
  • Only good from 8am - 8pm 7 days per week.
  • They have to check in and out.
  • We check on the home regularly
  • In the extended time we have been doing this we have not had issues with security or vandalism, in part because the tenants are on the hook.
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How does a lease-to-purchase (LTP) or Lease Option work with Keyrenter?

A Lease-to-Purchase (LTP) can be a mutually beneficial situation for a property owner and a tenant.  Like in most leases, the advantages and protections are weighted more heavily on the side of the owner however, there are reasons why a tenant would want to explore the lease purchase.  

  1. Benefits to the Owner:

    1. The owner is able to set a minimum purchase price up front so in case the property depreciates, the sale price will never dip below the threshold.  The purchase price is the greater of the minimum pre established price or the appraised value at the time of purchase. This will allow the owner to receive top dollar for the property. Commissions for an LTP are only 3% of the sale price (if we represent both sides), rather than the typical 6%. The tenant/buyer will pay for all seller and buyer closing costs and fees with the exception of agent commissions.

    2. The owner will receive 75% of a fee called the “Down Payment” which is a fee and is not held in escrow.  The other 25% is commission to Keyrenter.  This fee is generally 2% of the anticipated sales price.  This fee is non-refundable and will simply be a reduction to the purchase price at the time of purchase.  It will not be funds transferred back to the tenant/buyer to be used as down payment funds.  In essence, it is a fee for the First Right of Refusal.

    3. Often a higher rental rate can be charged.

    4. The tenant/buyer will assume much more maintenance responsibility with the exception of major systems and structures.  All general upkeep and maintenance is taken care of by the tenant/buyer.

    5. LTP tenants generally take better care of the property because they have more financially and emotionally invested.  

    6. Generally the leases are longer terms, 2-5 years depending on the agreement. They are also less likely to walk away from the property in the middle of the lease.

    7. In many cases the tenant is more qualified and will have less chances of ending in eviction.

    8. 90+% of LTPs do not actually convert to a sale at the end of the term.  Thisis because most enter a LTP agreement due to credit/borrowing constraints and are generally not in a better credit/borrowing situation when the LTP comes due.  The result is more money up front, during the lease, and a property better cared for with maintenance paid for by the tenant.

    9. The owner’s rights as a landlord are still very prevalent.  Inspections and other important functions can still be performed as with a standard lease.  Also, the tenant must still pay on time and abide by the same rules and regulations as with a standard lease.  The Owner can still evict a tenant for non payment, nuisance, etc. which all null and void the agreement and forfeit any rent credits or prepaid down payment.

  1. Benefits to the Tenant/Buyer

    1. The tenant is able to have a sense of security in knowing the owner can not sell to another party during the lease. This can be a big deal as many tenants have had their home sold out from under them, or do not want to chance losing the home they love and have grown attached to.  Because of this, many LTPs are written up and negotiated after the tenant has been occupying the property for sometime under a standard lease.

    2. Often times a portion of the rent (often 5%) can be applied as a reduction to the purchase price in the form of Rent Credits upon exercising their right to purchase.  

    3. The Down Payment is applied as a reduction to the purchase price upon exercising their right to purchase.  

    4. The tenant is often given more flexibility and latitude to decorate, modify, and customize the property to their liking.

  1. How the Lease-to-Purchase (LTP) Works

    1. With both a willing and qualified tenant/buyer and owner, an LTP agreement is prepared and negotiated as follows:

      1. Minimum Purchase Price:  Prior to delving too deep into the negotiations, we MUST first establish what the owner’s minimum purchase price would be.  This is critical as it will provide a baseline for the tenant and manager to work within and determining if it would be a good fit for all parties involved.  The owner may have a mortgage and other obligations which the sale is subject to and must be satisfied through the sale.  Keep in mind that the owner’s net payout from the sale will be the purchase price less 3% commissions, the prepaid down payment, and any applicable rent credits.  

      2. Prepaid Down Payment: We will determine what amount is appropriate to pay as a prepaid down payment. This is the fee paid upfront by the tenant/buyer for a first right of refusal.  Generally an appropriate fee is 2% of the sales price but this amount can vary based on the financial position of both the tenant/buyer and owner, and the motivation of the owner.  It is not recommended to accept a down payment less that $3,000 except in rare situations.

      3. Monthly Rent Credit: It is not required to have a portion of rent applied as a reduction to the sales price at the time of the future sale, but it can be a great way to increase rent on the front end and to sell a tenant on the concept.  This amount is generally 5% of the rental payment and is often added on top of the advertised rental rate.

      4. Lease Signing: Once all terms and misc. items are negotiated and agreed to by both the tenant/buyer and the owner, the tenant and managing Broker sign the LTP Agreement.

      5. Purchase Closing Window: In addition to the lease term, we will establish an appropriate window of time in which the real estate transaction for the property must close.  For example, if the lease term is for 2 years, we may set the closing window for the same 2 year period, or we may extend it 2-3 months after to take escrowed time into consideration.In the event the property appraises for less than the minimum purchase price, the owner would be required to return 50% of the Prepaid Down Payment but not any of the monthly rent credits.

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What are the fees I pay for management and leasing services?

Below you will find an overview of each of the fees you may be charged for management and leasing services.  There may be some exceptions depending on the terms of your management agreement.  All fees are deducted from the property owner's portfolio income as it is available (some exceptions may apply) to avoid an owner having to make a payment and increase their work and involvement. 

Management Fee:  This fee is generally a percentage of collected rental income, although it may be a flat monthly fee in some cases.  This fee includes general management services from rent collection, client/tenant relations, lease enforcement and oversight, and many general activities which often come up in the management process.

Leasing Fee:  A leasing fee is charged to a property owner each time a vacant unit is leased to a new tenant.  This fee includes the advertising of the unit (unless a separate advertising fee is agreed to), answering of calls from prospective renters, scheduling of showings, periodic vacancy inspections to check condition and security, screening of applicants to find the best possible tenants, negotiating terms, drafting and executing a signed lease agreement, collecting funds, setting up accounts, and creating positive relationships in the process.

Lease Renewal Fee:  A lease renewal fee is charged to a property owner once a lease with an existing tenant is renewed for another term.  This covers the back and forth communication, audit of accounts, preparing of documents, and execution of a new lease.

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How do I pay management fees?

Management fees are deducted from your monthly income.  Only in the event that your expenses are greater than your revenue will we need for you to make a contribution.  Contributions to your account can be made by logging into your owner portal.


What are your statement periods and when should I expect to see rents paid from a tenant?

Our accounting period is from the 11th of the prior month to the 10th of the current month (ie, May 11th - June 10th). We are very consistent with these dates.  

Statements are sent out via email and uploaded to the owner portal on the 10th of each month or the next business day.  If the 10th lands on a Saturday, statements may be sent on the previous Friday.

Unlike many management companies that pay their clients at the end of each month, we initiate payments to our clients via ePay along with statements on the 10th of each month (same rule applies for weekends and holidays).  Payments go through a 3rd party ACH processing company which takes between 2-4 business days for the payments to settle in our client's accounts. 

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When can I expect to receive rental income?

Unlike many companies who pay their owners on the 20th of each month, we close each accounting period on the 10th and all payments to our clients are initiated on the 10th or the next business day if a holiday or weekend. There are many reasons for this. We receive rent payments from tenants through the 5th of each month before they incur late fees, we use rental income held to pay for any of your expenses, invoices, etc from your account. This process from funds clearing and all payments being made generally takes until the 10th of each month.  Due to the volume of our clientele and to be as efficient as possible, we initiate processing of all payments to our clients on the 10th of each month (or the next business day if holiday or weekend).  Since processing is handled through an intermediary ACH handling company, there is a period of time required to verify accounts and deposits.  Once your payment is initiated for direct deposit, you can expect to see funds in your account between 2-4 business days, usually the 13-15th. 

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Where can I find invoices for bills and expenses?

We make invoices available for our clients on their Owner Portal through our website. By logging in they can navigate to the Bills tab, view a bill's detail, and click on the View Invoice button. Having invoices available can be helpful for record keeping and tax purposes.

Can I see my property while the tenant's living there?

After all of the inspections we provide to you, if you still feel like it is important to personally visit the property, all we ask is that you coordinate this through our office and allow for your property manager or assistant property manager to coordinate and accompany you. Please review your agreement to see if a charge may be assessed for our time, gas, and efforts to accommodate. We do not enter the property and recommend the owner not enter the property except for inspections, in emergency situations or when repairs have been requested by the resident. If you sign up for our inspection program, Keyrenter will conduct interior/exterior inspections of the property every six months. History has shown that repeated disturbances prompt residents to become unhappy and not be as willing to renew their leases. We usually try to give the resident 24 hours notice before we enter unless it is an emergency situation.

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What is considered “Normal Wear-and-Tear”?

Normal Wear and Tear means the deterioration that occurs based upon the use for which the rental unit is intended and without negligence, carelessness, accident, misuse, or abuse of the premises or contents by the TENANTS, their family, or their guests. We consider the following items as Normal Wear and Tear: nail holes used to hang pictures, minor spot painting between tenants, traffic wear in carpet, carpet replacement after 5-7 years, scuffed hardwood floors, sometimes minor cleaning between tenants, worn toilet seats, re-keying or replacement of worn locks, blind replacement due to sun damage or paint flaking, caulking or any other similar maintenance.

How often should I repaint my rental home?

There is no clear-cut answer to this, but here is a good rule of thumb. When the paint starts having a lot of touch up, stains from normal wear-and-tear that can’t seem to clean out, and/or peeling, it’s most likely a good time to repaint to help keep your values up and attract great tenants. Usually this happens in a 5-7 year period.

How much notice does a resident have to give before they can properly vacate a property?

Our lease provides that the resident give a minimum 30 day written notice that the lease will be terminated.