Frequently Asked Questions for Residential Properties.

 

I’ve never rented my house before. How does Property Management work?
When you hire Capital Management, we take the time to thoroughly explain the entire process to you so you are at ease. Most of the common questions are listed below, so please take your time reading this page. Because we tailor our services to meet your needs, our spectrum of services is vast but here is a vague description. Basically, we handle everything for you.  We make sure that your property is being taken care of.

Will you manage my property?
Capital Management’s policy is that if we deem the property to be in such disrepair or in an area where our staff members are at risk, we will not accept the management contract. Quite frankly, I place the safety of my staff members first.

Why do owners choose property management?
Many owners choose property managers for various reasons but mostly economic. Property managers can simply do a better job of managing than most owners because of training and experience. Professional property managers are more likely to locate, screen and negotiate leases having more favorable terms, thus improving the properties economic cash flow.  Even owners who have the training and ability to do an excellent job managing their own properties will choose a management company. Why? The reason is the value of the owner’s time. Most owners have better things to do. A surgeon’s time is better spent in the surgery room than collecting rents, accounting for repairs and scheduling with contractors.   

What are the financial benefits of hiring Capital Management?

• Increased Rents
• Reduced Vacancies
• Reduced Tenant Damage
• Reduced Repair Costs
• Reduced Expenses
• Prolonged Economic Life of the Property.

What will my property rent for?
The first step is to conduct a Rent Survey. Using an objective Rent Survey of properties currently on the market, we determine the high and low rent in the neighborhood and the average. We also take into account the condition of the property and of the properties in the survey. We recommend placing the rent amount within the high and low range. The higher the price selected over the average, the more likely the process will take longer to obtain a tenant. By placing the rent below the average and closer to the lowest rent, the quicker a suitable tenant will be located. Once we determine a rental amount we make every effort to obtain that amount.  If we are not obtaining calls, appointments, or suitable qualified applications we recommend lowering the price by approximately 5% after two to three weeks. We then change all advertising and follow the same strategy.

Who determines the rent amount?
Neither the property manager nor the owner determines the rental amount. The rental amount is determined by market demand. If you think your property is "different" or "better" than competing properties and you price it higher than those competing vacancies, you will soon find out if you are truly able to get more rent. If the market answers yes, that is great. If your property does not rent quickly, well… then take our advice and price it appropriately.

How long will it take to rent my property?
Our goal is to rent your property within 30 days. By following our pricing strategy (see the preceding question) that should be achievable. An overpriced property may never rent. Your property manager is the best person to talk to about how to get the job done in 30 days. Talking your property manager into a higher rent to better cover your costs will probably result in a longer vacancies

How do you screen for good residents?
We require a detailed written application from each adult and photo identification. All applications are carefully screened for credit, rental and ownership references, and income. A credit check will reveal hidden addresses, pay history and liens. If the credit history passes our requirements we will verify all addresses lived at and talk to the owner and or landlord about those previous tenancies. We also have access to tax records so we can verify ownership of previous property and a "Reverse" phone directory allows us to determine who owns the telephone number(s) that are provided. We will also verify employment and income levels. No applicant will be approved until all questions are answered to our satisfaction.

How is advertising handled?
We start the marketing process at the time we receive a 30-Day Notice from your resident or at the time we sign you up for management. It’s a fact that a majority of people start their searches online. So we empathize our online marketing. Your property will appear on our website as well as various other public sites such as Craigslist, Kaboo, Rentals.com and a host of other rental databases. We also place a sign on your property giving the drive by rental prospects.  Approximately 1 out of 3 prospects come to us from signage at the property.  Finally, we can put your property in the local newspaper.

What should be done to prepare for a new tenant?
Clean, Clean, Clean. The walls should be clean or better yet freshly painted (or appear freshly painted), carpets clean with no tears or loose areas, clean appliances, clean kitchen and bathrooms, and clean or new blinds. Finally, the yard should be in good condition in both front and back. We are happy to inspect the property for you to help get the most out of your renovation dollars.

How is maintenance handled?
Residents are instructed to call, email, or write to us with needed repair requests. We then deem if the repairs are necessary and or appropriate.  If we agree that repairs are needed and the  repair amount is with-in the approved budget we then will make the necessary arrangements. If the item in question is above the set spending limit we then contact you for approval and get quotes from at least three licensed vendors (contractors).

Who handles problems during the night, on weekends, and holidays?
The property manager in charge or a staff member on call. We will talk with the resident to determine what the emergency is and how to proceed. Many times the problem is solved over the phone. If not, we then go to the property to cease any further damage from occurring until the necessary repairs can be made.   

What are habitability requirements?
Our policy is that if we deem the property to be in disrepair or in an area where our staff members are at risk. We will not accept the management contract. The law states that the owners of residential property must adhere to the health and safety codes established by state and local authorities. Most often they are enforceable by the local, city or county building departments. Failure to maintain your property to these standards may subject you to fines, lawsuits, or the shutting down of your rental.

 Civil Code §1941.1 A dwelling shall be deemed untenantable for purposes of Section 1941 if it substantially lacks any of the following affirmative standard characteristics: (a) Effective waterproofing and weather protection of roof and exterior walls, including unbroken windows and doors. (b) Plumbing or gas facilities which conformed to applicable law in effect at the time of installation, maintained in good working order. (c) A water supply approved under applicable law, which is under the control of the tenant, capable of producing hot and cold running water, or a system which is under the control of the landlord, which produces hot and cold running water, furnished to appropriate fixtures, and connected to a sewage disposal system approved under applicable law. (d) Heating facilities which conformed with applicable law at the time of installation, maintained in good working order. (e) Electrical lighting, with wiring and electrical equipment which conformed with applicable law at the time of installation, maintained in good working order. (f) Building, grounds and appurtenances at the time of the commencement of the lease or rental agreement in every part clean, sanitary, and free from all accumulations of debris, filth, rubbish, garbage, rodents and vermin, and all areas under control of the landlord kept in every part clean, sanitary, and free from all accumulations of debris, filth, rubbish, garbage, rodents, and vermin. (g) An adequate number of appropriate receptacles for garbage and rubbish, in clean condition and good repair at the time of the commencement of the lease or rental agreement, with the landlord providing appropriate serviceable receptacles thereafter, and being responsible for the clean condition and good repair of such receptacles under his control. (h) Floors, stairways, and railings maintained in good repair.


What happens if the resident does not pay the rent?
If your resident does not pay rent as agreed we will make contact with them soon after the rent due date. Our due date is normally the 5th of the month. If we cannot get a satisfactory answer we will make arrangements to serve a 3-Day Notice To Pay Rent or Quit. Once the three days pass we will submit the notice along with the existing rental agreement to a local attorney. This will start a process known as an unlawful detainer. It may include a court trail, but normally does not. The resident may move at any time, we may obtain a court order to move the tenant with the assistance of the local law enforcement, or we may obtain a stipulated judgment where the resident is ordered to pay back all monies owed, including future rents, or face an eviction without another judgment. You are responsible to pay for all legal fees.

What happens if the tenant bounces the rent check?
As soon as we receive notification that a rent check has bounced, we immediately notify the resident that the rent is now owed along with a late fee. From that point forward and for the next six months all rent checks must be in the form of a cashiers check.
If necessary we will serve the tenants a Three Day Notice to Pay Rent or Quit. Most residents end up clearing the check but it may delay your statement and funds.

Can you help me if I already have a resident?
Absolutely; depending on your lease contract, we may need to continue using your lease until it concludes or we may be able to amend the lease to our specifications.

What if my tenant is behind on rent?
If the tenant is behind on their rent we can take the necessary steps to either get them to pay or evict. Many residents suddenly find a way to pay the rent or move out as soon as they hear that a management company is in place to follow through with all collection issues.

Who pays for repairs after a resident moves out?
Upon a tenant leaving we do a final inspection of the property. Because we have digital proof and documentation of the properties condition before, during and after, we can determine who is responsible for any repairs. The tenant is responsible for any damages except those deemed normal wear and tear. We will charge the resident's deposit for damages above normal wear and tear, and cleaning. If the resident's deposit does not cover the costs, then the owner needs to pay the balance. In that event, we will bill the resident and turn them over to collection if the amount due is not paid promptly.

What bills can you pay and when?
We can pay bills associated with your property including maintenance, utilities, taxes, insurance, Home Owner Associations and mortgages. After the rent is collected and has cleared, we first pay the mortgage(s). Then utilities, HOA fees (if any) and other bills in order of importance. Afterwards we send statements and checks to the owners. Most owners receive their monies by the 20^th of the month.  

Do you hold funds in reserve?
Yes. This is a requirement of our management agreement. Most owners’ opt to have a percentage of the monthly rent deposited into this account to cover any charges, maintenance or property bills. The amount is determined by mutual agreement.

Who holds the residents security deposit?
No exceptions are made to this rule. We hold the resident's security deposit in our trust account or your reserve account until the end of the tenancy. The deposit can only be used for cleaning, or repairs upon termination of the lease. We do not allow the deposit to be used in lue of the last months rent.

The Money Question? When do I get my statement and money?
All rents are due on the first and considered late if received after the 5th of the month. Most checks are mailed to you by the 18th, but you can choose to have an early check and report sent to you for a small extra charge. Since rent checks must clear the bank, we do not send monies out until we have confirmation from the bank that the rent check has cleared.

What liabilities do I have?
As the owner of the property you could be held liable for known and some unknown conditions at the property. In most cases your fire/liability insurance policy will cover you adequately. You should discuss with your insurance company the amount of recommended limits for your situation.

 Why do I need to add Capital Management to my insurance?
Our management agreement with you, which is the same as most other management companies, has an indemnity clause. Most Insurance companies will add the property manager as either additional insured or name the manager as an interested party to the policy at no extra cost. This is important to do as you want the insurance company to protect both you and Capital Management in the unlikely event of a lawsuit.

Who actually handles my property and how do we communicate?
You will be assigned to a property manager. You may meet with them to sign up your account or by appointment at any time. You will get a letter from our office giving you the managers contact information including phone number and email address. Email is the preferred method of contact with our office.

What if the resident breaks the lease?
There are allot of variables here. First off, if the tenant gives notice and is willing to negotiate a settlement, we will normally accept these on an individual case by case bases.

 If the resident moves without notice, this is a different matter entirely. We will take possession and contact you. The remaining time of the lease will be billed to the resident as it becomes due. The law states that an effort must be made to rent the property at the same rent rate in order to mitigate the past resident's liabilities and enforce the lease they signed. If no funds are paid by the past tenant, we will turn the amount owed into collection. If the problem escalates, we recommend contacting an attorney.  Luckily, we have yet to have this problem.

How often do you check on my property?
During a vacancy we normally show your property 2-3 times per week. While rented, we schedule your property for a quarterly inspection. We check to make sure that the property is being maintained in a favorable fashion and that any maintenance items are addressed prior to them failing. At this time we also photograph the property to document the condition, so we have before during and after.  

Why should I use your company vs. another?
Hopefully you can see that Capital Management is a valued asset for your portfolio. Our staff consists of some of the highest and most respected individuals in the industry. We also more than just a management company, we are a total source for all of your real estate needs. From Management, leasing and consulting to sales. We offer more than just about anyone else.

How long do we sign an agreement for?
Our property management agreements are for a one year term.   

Do you have any references?
Yes, but please understand that our clients value their confidentiality. Once we receive your request we will contact two active clients and ask them to contact you.

Can the resident get my phone number and address if I use you?
NO! We take confidentiality very seriously. We will not release any information about you to anyone without your approval. Be aware that anyone can access public records. That and the internet can be a very informative place.

What does all this cost?
As an example for a single family house that is vacant, we charge ½ of the first months rent as a tenant placement fee. This is an all inclusive fee. Unlike our competitors we don’t charge anything else on top of that, such as advertising. Our management fees range from 6%- 9%, again all inclusive. Costs vary depending upon several factors, such as type of property or properties and the services desired. Because we tailor our services to meet your needs, our fees vary accordingly.  I highly encourage you to contact us to determine a price.

Are you the cheapest?
No. Our rates are very competitive within the industry. A vital difference is that we don’t hide our fees or advertise a low rate just to add hidden fees afterwards.

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