REAL TALK RENTALS

When Does the Property Manager Actually Take Over?

Speaker1: Coming up on today's episode of Real Talk Rentals, the tenants are ready to move in. The deposit's been paid. What happens now? Welcome to Real Talk Rentals, a podcast brought to you by NQ Property Management. We're here to give you all the tips, secrets and tricks that go into owning a successful rental property. My name is Ben and I'm going to be your host, and I am joined, as always by my co host Eric Dixon, the go to expert on all things property management and rental in Arizona. And this episode we're joined by a very special guest, Ryan Haueter. Not hotter, as I often say. He's got over 20 years of property management experience and he's the director of property management here at NQ Property Management, overseeing the management of over 3500 homes. So we're going to jump right into it. This week, we're going to be talking about what happens now that a tenant has been placed, security deposit has been paid. It's time for them to move in. What happens when we take over from there? And I'll throw that out to you guys.

ERIC: All right. Hey, we're going to. Let's go to the special guest first. Welcome, Ryan.

RYAN: Thanks for having me. Long time listener. Yeah.

ERIC: No, but. But, yeah. Ryan, let us know what happens after the deposit's paid. At least here in our environment. Deposits paid. They are moving in, let's say, next week.

RYAN: Yeah. Yeah. So, I mean, we do the move in checklist, that type of thing. We like to really establish something with the tenants to make sure they know our expectations. We know their expectations. Just to get that set up. Owners are start get their monthly draws around the eighth or ninth of the month. We have access to their technology so they can look in, see any maintenance work orders, so forth on on their end. So they really have kind of a pulse whenever they need. And then obviously we're there as our main point of contact to reach out for any issues or questions.

ERIC: Cool. No. One thing that came to mind, you know, all of that stuff starts when they move in between the time the deposits pay to lease. What I've loved to do over over the course of the last ten years is doing the move and inspection. So and we've gone through different variations of that over over time, but document it before they move in. So it's super easy on the move out when they when they move out and we do the security deposit disposition and stuff like that. As Ryan was saying, that this must have been like 2013. It's almost ten years ago. I was doing the moving inspections myself. I signed the owner up, I'm leasing the property, then I'm doing the move in. And I actually did the move in with the tenant, unfortunately one time. And we walked in and we were in like an inch and a half of water. The whole entire unit is flooded and it was my friend's property. So he's like, Oh great, signed up, my friend. I think what happened is when the previous tenant moved out a week prior or the cleaners or something came and somebody left some water on and it was over a week of dripping in there. So oh boy, had we not done the moving inspection, the tenants would have just picked up keys at the office or something and then called us livid. Right. Because I was able to catch it before they moved in all their stuff in. At least we were able to get it rectified. We found them a new house, actually. So. But but the other stuff, let's see. I mean, we set up things like the rental sales tax account. I'm trying to think the all the other stuff that happens right before they pay their first month's rent and then that's when the maintenance call starts and that's when, you know, as far as Ryan is concerned and his team, they're on call 24 seven, doing maintenance at nights, weekends, holidays, collection of rent, paying, the collected rental sales tax and stuff like that.

RYAN: Yeah. And you'll even have that occasional owner in fact, they're one of my owners. We've we've had for years. His name is James. He had a couple of properties in Mesa. I'm really good friends with him, so he'll appreciate the story. But we had just moved tenants in and he had come back and said, Hey Ryan, you know what? I'm retired now. I've got time. I'm just going to take these back and kind of deal with these on my own. And I'm like, okay, well, our door is always open. It was 30 days later, he's calling me saying, Ryan, this one tenant, he's calling me daily for maintenance stuff. And most of this is his his responsibility. And then my other house, they haven't paid rent yet. What do I do? Can I go lock them out? I need to get an attorney. And he's just like, you're right. It's it's 75 bucks a month. That's more than a nice gym membership. That's totally. I was wanting to go fishing and golfing, thinking I'm going to just collect rent and be done with it. He's like, I take this headache back. So it is something that there's a process to it. Were there just so you have free time to live your life, do your job?

Speaker1: I think that's a that's a common misconception you get, is that and I know I had this most misconception before I started here is that all the hard stuff's in the beginning, like doing the tenant application and stuff. And once that's done, you guys don't do anything, right? Well, no.

ERIC: I think our sales department, they get this call all the time. They're like, Hey, could you just place the tenant and I'll manage it myself? And we're like, Well, we don't offer that. But I'm curious why you think you want to do that. They they do say that. They're like, well, the hard part is screening the applicant, getting the lease signed, getting them to move in to the contrary is what Ryan said. It's like, no, the work just started. They moved in and now we're it's up to us to make sure it's a smooth process.

RYAN: Yeah.

Speaker1: Yeah. It's everything that you. You don't realize that if you have one good tenant that never calls you and it's perfect, you're like, This is easy. And then you get a different tenant in there who calls every single day and wants you to come down and personally look at, you know.

RYAN: Change my light bulbs.

ERIC: Yeah, Yeah. And I think the tenants, they treat it differently when it's an owner that owns it themselves, managing it themselves bug you a little bit more. They'll text you a tenant night when it's a third party legitimate company that they're we're obviously responsive and we're going to do things by the book. But it's different. It's not it's business, it's not emotional.

Speaker1: Yeah, we've talked about that before. Putting that buffer. Even if you're going to self manage taking that.

ERIC: Yes that the expectation.

Speaker1: That that activation like don't be calling me at midnight because they Well things come up for sure.

ERIC: Boundaries man for.

Speaker1: Sure. Well that kind of rolls into I guess the next question which is let's say you get a tenant in their place, everything's good, collect a couple of months rent and then something comes up. Maintenance related. What does that process look like? If I'm a, you know, owner and the pipe burst at my house and there's water everywhere, what happens in that scenario?

ERIC: Well, we're in the middle of one right now. So two nights ago, you know, we had crazy, crazy storms right here in Gilbert, Arizona, Gilbert Mesa area and four basements of a four plex flooded. You know, I just saw the videos yesterday. Right. So that happened in the middle of the night. You know, maintenance coordinators are on call, property managers are on call taking this call that Haitis basements are flooding out. And meanwhile, the owner, he's home sleeping. He's actually traveling, enjoying his life. And our maintenance, maintenance team restoration companies, contractors, they're up in the middle of the night handling everything. And then he gets a call the next morning. Hey, just so you know, your whole property flooded insurance claims and it turned into this big it is this big deal. But, you know, it only it only got taken care of smoothly because somebody was on call and went through the process. All four tenants are taking care of their place where they need to be. And you know that that happened 24 hours ago. So it's just fresh and fresh in my mind.

Speaker1: Yeah, right. Yeah. Even from a self management perspective, like you would probably like if I'm that guy and I'm on vacation, it's not that I'm being malicious by taking that phone call, I just figure, you know, it's 12:00 and I'm on vacation. You know, I'll get back to them.

ERIC: Yeah. Why are they calling me over.

Speaker1: And over and over? You don't realize that we're getting hit with, like, a borderline hurricane, right? And that, Yeah, the place is flooding, so it helps to have somebody on call at all times for sure.

ERIC: And I bring that up just because it's fresh. Right, But. It's whether if you self manage just so you know you're on call 24 seven. If you hire a third party management company they should be on call 24/7. And if they're not, that should be one of the qualifiers. Okay. What happens on a night, a weekend or a holiday? And between different teams and so forth, we have it covered and it's a tough thing. 4th of July weekend, Christmas weekend, Thanksgiving. I mean, you have to be on call. So, yeah, we've worked at Ryan's, been doing that for, whatever, 15 years, you know, being part of that schedule and that managing that.

RYAN: Yeah. Well, and you have to have those expectations up front with the owner too. We have a maintenance reserve for that reason. Hey, there's going to be emergency stuff that comes in. All of your contractors need to be licensed, bonded, insured. If that's not happening, you're opening yourself up for more lawsuits issues down the road. Oh, they installed these blinds and they fell on my child who's who's covering that?

Speaker1: You know what kind of blinds?

RYAN: Yeah, you see, you've seen it all. So that that's a crucial aspect. And so having that set up already with your owners, knowing, oh, if this happens, I know X, Y, and Z is going to take place and I'm taking care of.

Speaker1: Maybe you can speak a little to when you say maintenance reserve, what is that exactly.

RYAN: For? Yeah, so I've seen all sorts of different maintenance reserves. We currently have a $300 maintenance reserve. It's just for anything that might might be covered on that where we say, hey, we're going to just send out a vendor to take care of this. We'll keep you posted if there's issues or if it needs an estimate. Sure. But mainly it's just set up.

Speaker1: In that like middle of the night flood scenario, you can call somebody. Yes. Even if so-and-so is on vacation, you can't get a hold of.

RYAN: Them on work. And we really that's that's the main goal is we don't want to bug you. We want you gave us this. We want to take care of it. Sure you want to set it and forget it. And yeah, we don't want that headache. We're the we're here to solve your headaches.

Speaker1: And it's the to the tenants benefit too, because it's not like, hey, I know the blinds just fell on your kids, but I'll have to call you back when I get a hold of the owner.

RYAN: You know?

Speaker1: Exactly right. You can act right then. Yeah.

ERIC: Well, and I've been on the put on my my landlord hat. Not owning a management company. Right. Is the landlord. I get the same exact email from the maintenance coordination team of the property manager. That's like, hey, your the HVAC system is not blowing cold air. We're sending somebody out. If it's over 250 or 300 and $350, whatever that threshold is, we'll let you know. And if I don't hear anything, I already know. Hey, it was less than the threshold tenants were taken care of same day, you know, And it's just a piece of mind factor, you know? Right. Ryan hit it on the nail, too. With the nail on the head, I should say, with licensed bonded, insured contractors, you know, with managing so many homes. We have every story in the book. Right. But we actually had a vendor accidentally lit the building on fire. Right. And to no fault of their own, it was an accident, freak accident. But they were licensed, bonded, insured, and everything was covered. You know, stuff got got fixed actually rather quickly. And had they not been licensed, it'd be like, hey, I'm going to wash my hands of this. Yeah. And it's the owner's fault. It's the property management company's fault. So more of a warning to those that have management companies. Make sure that is a question you ask them. You know, do you require your vendors to be licensed, bonded and insured? Yeah. And if they're like, well, you know, sometimes. But you know, people are hard to.

RYAN: Find And I get a pretty good deal over here for.

Speaker1: Yeah. My buddy Zach. Yeah, really good at fixing HVAC.

ERIC: Right When I was signing owners, I'd be like, Hey, there's the Craigslist special, You know? It's like, yeah, they'll get it done for half the cost, but if anything goes wrong, that dude disappears. And so anyway, that should just be a pre qualifier as you're interviewing management companies or determining even if you self manage, do not save the 20% or the $20 or whatever to use the guy that's unlicensed.

RYAN: Yeah, right.

Speaker1: I mean, that's a perfect segue. I guess next to the next question is how often should an owner expect to hear from a property manager? So tenants moved in and everything's good. Should it should we be hearing all the time or is it?

ERIC: Well, Ryan, how often do you talk to all your owners?

RYAN: I was going to say the owners don't want to hear from me, basically. I mean, in an ideal world I, I joke, but I've got an owner, Dan Valenzuela. I love him to death. He's got like five properties with us. But I'll call him just to say. Now, Dan, there's nothing wrong with your properties. I have to open like that. Sure. Because he knows. All right. What broke this time? What's going on?

ERIC: He's got you saved in his phone and he's like, Oh, no, I don't.

RYAN: Yeah. And so, yeah, the goal is the no news is good news in this industry. I mean, the rents coming in, We don't need to tell you if it's late, if they're having maintenance issues, anything like that. So we really are set up in a way where, hey, there's some stuff if you want to check online and your owner portal, that type of thing, you're more than welcome to view. But unless there's something going on with your property, we're not going to bug you.

ERIC: Now, this goes back again to when I was signing up our clients, you know, doing the sales and getting new management contracts. They would ask this word for word what Ben said, you know, how often am I going to hear from you? Should I expect like every.

Speaker1: Monday or.

ERIC: Tuesday, like noon, whatever? And I'm like, hey, honestly, the less you hear from us, the better things are going, Yeah, you know, And they're like, Really? You know? I'm like, Well, you're going to hear from us once a month, no matter what with your monthly statement, Right? Right. It's not a phone call. It's not a text, but it's hey on cue has collected the rent. We're dispersing this less, the fee or whatever. So if that's all you hear from us, that means the tenant paid rent and you got your money and there's no maintenance issues. And they're like, Well, yeah, the less I hear, the better. So if I hear from you 12 times a year with statements, your tenant paid rent and there's no maintenance issues, right? Yes. The what they don't know is let's just say Ryan's working with a with a tenant and maybe they are having issues paying rent and he's having to follow up with them, text them, email and call them seven times and he chases down rent. Does all this work, but he doesn't call the owner every time he talks to the tenant, Right? He doesn't say, Hey, just so you know, the tenant texted me last night and said they're having trouble bringing in rent. You know, now, if it gets past the fifth and all that, of course he communicates that. But what doesn't get communicated to the owners every time is all of those tedious communications and everything with all the with all the tenants, that's the owner doesn't want to hear that stuff. They don't. They think they do, but they do.

RYAN: Well, and there's there's that trust you have with the owners. I've got a couple owners that have quite a few properties, you know, 20, 30 plus type thing. And they I know what they expect. And so there's stuff, hey, I know what he wants on this price for lease renewal. I'm not even going to bug this owner and you'll build those relationships. And so they just know, hey, you know, they're going to take care of it. I don't even wake me up for this type of thing.

ERIC: I mean, we were prepping for the podcast, kind of looking at it, the overview, and you brought up an owner I won't say his name on here, but he's been with us for ten years, you know, And it's actually Ben's neighbor, I found out this week. But but it's like been with us for ten plus years and we haven't talked to him hundreds of times. You know, it's just as issues come up, you know, and hit the biggest news he he's had in the last ten years is his property manager changed a couple of times over ten years. Yeah.

Speaker1: And he stopped me to talk about it at the mailbox.

ERIC: And so the one thing again and just going back to I know a ton of our listeners manage themselves or they're kind of accidental landlords as we call them, you just have to ask yourself, what's your time worth? You know, us in the industry, our time is worth this communication. It's our career, it's our job. You hired us to do it right. This is it's not annoying for us. This is our job. If I'm a landlord and I was not in this industry, I'd be like, is my time worth more than they're charging me to be on call 24 seven to do all the the bookkeeping and the statements that I need to give to my CPA and do all this stuff. And most of the time it's not. And it's you're jumping over what's the say? You're jumping over pennies or jumping over dollars to pick up dimes or whatever. You know, you're really not getting ahead.

Speaker1: Right. All right. Well, I guess then last question. Let's say you're an owner who wants to be a little more involved. Are you allowed to go look at your property or are you allowed to talk to your tenants? Well.

ERIC: This Segway is actually going back to the last question, Ryan. And I know another one of our property managers or two others that I know of that have. So we manage maybe 20 or 100 units for some of these owners. Right. And instead of them going to the properties, which we'll get to in just a second, but it's also the phone calls you have scheduled, like a cadence of phone calls. And I know one I did with the owner yesterday that they call every Monday or every other Monday, and they say, hey, let's just talk about my 24 properties. Let's knock everything out. The lease renewals. What are the other things you guys talk about?

RYAN: Yeah, just kind of check in on what what's vacant, you know, what's the activity going on on that, you know, those types of reports. But yeah, real, real quick and and fast.

ERIC: Yeah. So, so then segueing into what you were saying, some of the owners are like, Hey, can I meet you there tomorrow? Can we just show up? And I'm sure Ryan has some good ones because over the years I've gotten calls from tenants that are like, Hey, the owner just showed up and basically barged in. Yeah, what's going on? We're like, fire alarm, you know?

RYAN: Yeah, well, I have another good friend. His name's Sean. He's got one over in Tempe, and he was in town and he's like, Hey, can, can I just swing by the property? And, and I actually called, reached out to the tenants, followed the protocols, but I told him I'm like, Hey, Sean, I'm saying you're a family member coming. I'm not telling them you're the owner. Do not give them your information. Anyway, he shows up. He calls me after. He's like, Ryan, I'm so stupid. But we got we had such a good relationship. I told him I was the owner, gave my contact number. Oh, yeah. Anyway, sure enough, this last December, they reach out to him. Hey, things are tight with Christmas. Can. Can you do anything with rent this month? He calls me. He's like, Yeah, it was so awkward. I ended up giving them $200 credit, told them, Just work with my property manager going.

Speaker1: Forward.

ERIC: Because I'm blocking your number.

Speaker1: Yeah, exactly. It's totally and you can understand for the tenant, it's not like for them, it's like, Oh, well, you showed up here. Yeah. You obviously want a relationship, right? You came to meet me.

ERIC: So yeah, of course.

Speaker1: I'm going to call and text you and ask you these things. Yeah.

RYAN: And that's really kind of a light example. We've had others where the tenant tries to to pit the property manager next to the owner and. Sure. Hey, well the owner said they would have a vendor here and we don't know anything about it and it's a he said she said it's it's a nightmare that.

ERIC: There are some clients that you wonder why they hire us based because you're like, Wait, you want to talk to the tenant, You want to do all the maintenance, you want to do this. So basically you just want a statement every month.

RYAN: Yeah.

ERIC: You know, And they're like, Well, yeah, that's that's kind of what I want. Okay, that's a different way to do things, But it's kind of designed to like, we'll take care of you, get your time back, see what your time is worth, and hire us to to handle it or hire. You know, there's listeners in other markets that we're not even an option, and that's fine. There's great property management companies in every market, right? But just you've got to weigh out what your time is worth. You know.

Speaker1: And I know we here at on Q have this and I know other property management companies do but there's there's ways to get eyes on the property without showing up there and giving your phone number. We have an inspection process where you can literally have an inspector go do a formal walkthrough, take pictures and they can log in and see these things so they don't have to show up in person.

ERIC: No, it goes another level because we've had owners that are like, you know, a routine inspection. You know, there's a there's a program for it. They'll be like, Why don't I just pay for a flight? I'll come down, I'll come walk at myself. I'm like, okay, let's just talk about this real quick. Your flight, even on sale, dude, is like 100 bucks round trip. It's really probably three or 400 your time, right? Invested in doing it. Your hotel, your rental car, food. And it's like, dude, for X amount. Our inspector will go out there, document it, send it to you digitally and it's taxed our fees technically tax deductible anyway. Yeah. And they're like, Oh, you'll do that. And so, you know, part of our issue is we need to educate our owners and let them know like, hey, this is a service that that can save so much time, so much energy and peace of mind, you know, that the house is isn't trashed.

Speaker1: Yeah. And it takes which we we've said I feel like every episode it takes the emotional attachment this our inspectors yeah they don't have the same emotional attachment to the home that you do when you walk in.

ERIC: Yeah.

Speaker1: Yeah. If you used to live there you can't believe they put a couch in TV. This room like this was my kid's little room or whatever. The inspectors come in and they're. They're efficient and formal. They're going to take the required pictures and you'll be able to see it all and without making those judgments. In person in front of a tenant. Yeah.

ERIC: And it's kind of going full circle. So at the beginning we were saying, Hey, we do a in inspection. At the beginning you do a move out inspection at the end. Those are kind of the bookends. And then like Ben was saying, those those routine inspections is we call them routine inspections. Some people call them spot inspections or Middle-East inspections or whatever. And then you have this chronological order of of the property. So it's like, hey, that routine inspection from two years ago does not match the one we did now. So we know what the timeline was there. And we've had to create I mean, we're talking about stories, but the routine inspections, they've also seen it all between Oh yeah, they're like, you're not supposed to have pets, but there's like two dog bowls and a cat.

Speaker1: Tree and you won't let me in that room. And there's something scratching at the door.

ERIC: No, I mean, the other thing I love the routines for personally is the smell test. So it doesn't come across on photos. And the inspectors like just say, you know, it smells like smoke, cigarette smoke or. Sure. Or whatever, or it smells like pets in here. Yeah, like, that's weird. It smells like pets because they're not supposed to have pets, you know? And so we sent, you know, ten day notices, friendly reminders about air filters. Hey, the the landscaping needs kept up little simple things that save the relationship rather than digging them on their way out.

RYAN: Right.

ERIC: And so it's also it's for the tenant's good, too.

Speaker1: Yeah, absolutely. All right. Well, I think that about wraps it up, right? I feel like we covered it pretty well on Ryan. You feel like you're day in and day out is covered pretty well.

RYAN: You nailed it all. Yes.

Speaker1: All right, Well, then, that's it for us this time. Thank you. Make sure you like and subscribe to the podcast wherever you get your podcasts. And we'll see you guys next time you.