Understanding the Property Management and Property Leasing Process 

Below is an overwhelming amount of information about property leasing and property management.  Please take some time to review the information, and then feel free to contact me with any questions you might have.

Before we get into the nitty-gritty of the general property management information, let?s begin with two scenarios that are very common.  The first scenario is the call we receive from a Landlord who has investment property in the area we serve, and is looking for leasing and management services.

The Initial Call from the Landlord

I personally take anywhere from 3 to 5 calls per week from Landlords who are searching for a property manager.  These calls may be from individuals that have recently become investors, or from experienced Landlords with years-and-years of rental property experience.  Most of these calls last 20 minutes or more and a wide variety of topics are covered, from the fees we charge for leasing and management, to our philosophies on property management and dealing with tenants, vendors and Landlords.

Frequently Asked Questions (FAQ?s)

Here are some of the most frequently asked questions and the answers we provide to those questions.

Who Do You Work For?  Great question!The Texas Real Estate Commission and Texas Law requires that every REALTOR® disclose Information About Brokerage Services to prospective clients during our first conversation of substance or our first face to face meeting.  Basically, the information explains the fiduciary obligations the REALTOR® has to a client or a customer.  A client is someone that has signed a representation agreement with the Broker, and the Broker or REALTOR® is then working in the best interests of the client.  If there is no representation agreement, the prospect is a Customer, but is still to be treated honestly by the REALTOR® or Broker.

How much will you charge me for leasing and property management services?  Well, this is a question that is not easily answered.Our charges are basically property driven, meaning that we evaluate each property in our management portfolio, and determine the special needs of the property and the amount of work we feel will be required on our end.  As a general rule of thumb, our leasing fees run anywhere from 80% to 100% of a months rent.  As an example, if your property leases for $1,000 per month, the fee for leasing the property (finding you the most qualified tenant for the property) may be $1,000.  This may seem to be excessive, especially if you have leasing and management experience in other parts of the country.  But, here is what happens to that $1,000; it pays me, it pays another REALTOR® (in most cases) for presenting the qualified applicants to us, and it pays for any advertising we feel may be required.  You need to make it attractive to a professional leasing person to show the property to prospective applicants.

As far as the cost of managing your investment property, we charge anywhere from 8% to 15% of a months rent, again depending on the expected degree of difficulty we anticipate.  As a general rule of thumb, if you are trying to make a decision about becoming a Landlord and trying to determine your monthly or annual cash flow, I would use a monthly management fee expense of $100.

TO RECAP, PLEASE REMEMBER that you are hiring a Property Management and Leasing Professional to provide you a valuable service.  On the leasing side of the equation, the most important thing we can do for you is to find you the most qualified applicant for your investment property, and on the Property Management side of the equation, the most important thing we can do for you is to enforce the terms of the lease.

How long will it take to lease my property?  My standard answer to that questions is, if I knew the answer to that question (therefore being able to predict the future), I would be in a different line of work.  My real answer to that question is, if the property is in good shape and it is priced well, it should lease within 45 days.  The condition of the property and the price/value perception on the part of the prospective applicant will drive the decision of the prospect.

Do you lease or manage properties near my investment property?  Austin and the surrounding areas cover a lot of territory, and we do manage properties in Hays, Williamson and Travis counties, but not in every possible neighborhood.We do, however, have the tools available to provide you with accurate information concerning property values, leasing rates and marketing strategies to provide you the services you demand.

More Frequently Asked Questions will be added soon!

The Decision has Been Made, What is the Next Step?

Okay, after careful consideration and deliberation, you have decided to hire Austin REAL Pros to represent you as leasing agents and Property Managers for your investment property.  What is the next step in the process?  Almost everything in the process can be handled by e-mail or FAX.  We will gather information from you (including Tax ID numbers or Social Security Numbers so the taxable income can be reported to the government), and prepare the Leasing and Property Management Agreement.  The agreement will have been completed according to the specific terms and conditions we have mutually agreed upon, and we will most likely e-mail that agreement to you.  We will also provide you with a form called the Owner?s Notice Concerning Condition of Property which is basically the landlord?s disclosure of the property condition.  If the property was built prior to 1978, you will also be provided with a Lead Based Paint Addendum.  This is basically a disclosure that the property was built before Lead-Based paint was removed from the market, and we will provide the new tenant with valuable information about protecting their family from Lead-Based paint.

Once we have received the signed representation agreements and access to the property, we will make another visit to the property and complete our own inventory of the property, using the Property Managers Inventory and Condition Report.  During that visit to the property, if the property is vacant, we will take that opportunity to photo the property from various angles, and put the lease signs and lockbox on the property.

Advertising the property is an art in and of itself!  Traditionally, newspaper advertising was the most productive means we had to market the property, but times have changed!  Honestly, newspaper advertising is probably the most expensive and least effective way we have to market your investment properties for lease.  THIS IS AUSTIN and we are totally wired!  Prospective tenants are really incredibly savvy, and they can log-on to our websites and see exterior and interior photos of your property.  They can also log-on to a number of other search engines to locate the property of their dreams.  All of our listed properties get plenty of internet exposure.  We will also list the property on CraigsList which is a free service and community driven.

All of this if good, but to tell you the truth, the most effective way we have of advertising your property for lease is the sign we will put in the front yard.  Old habits never die, and there is no better way for a prospective tenant to find the home of their dreams, than by driving through the neighborhoods where they want to live!

What is the Application Process Like to the Prospective Tenant?

Once a prospective tenant has contacted us and made arrangements for a personal tour of the property, the terms and conditions of the lease will be discussed with them, and they will make their decision about applying for the property.  They will be provided with a copy of our qualifying criteria so we can determine if they are a good fit for the property.  If they pass that hurdle, the next step if to submit the Application and the Agreement for Application Deposit and Hold on Property.  Both of these forms must be filled out by all prospective tenants for the property, and returned to us for processing.  When the applications are returned, we expect the application deposit (which will become the security deposit once the application is approved) to accompany the applications, as well as the application fees we use to process the applications.  If they do not provide us with certified funds for the application deposit, we may process the applications, but the property will not be removed from the active leasing market.  You know the old saying, money talks?

This is when we begin doing our due process on your behalf.  The verification process takes anywhere from 24 to 72 hours to complete, based on many factors.  The more complete the applications are, the easier the applications are to process and verify.  Once we have done our due diligence, we will contact you to present the application for your approval.  If we get to this point, it means that we have verified all the pertinent information, and we feel that the applicants would be suitable tenants for your property.

After you give us your approval of the applicant, we will contact wither the applicants REALTOR® or the applicant themselves to inform them that the have been approved for the property.  We will then make arrangements for them to come into our office and formally sign the lease.  We always try to get the applicants into our office within 48 hours of the approval, just as a matter of policy.

During the lease signing, they will be presented with many more forms for their signature.  To begin, they will be presented with the Information About Brokerage Services document, so they will understand that we as a company were working in the best interests of the Landlord.

They will then be presented with the lease itself.  The Residential Lease is a 14 page document, which addresses most issues that will be of concern to both the tenant and the Landlord.  Both the tenant and the Landlord generally feel that the document is in favor of the other, so we as property managers feel that it is a relatively fair and un-biased document!  If the applicants have pets and the Landlord has agreed to make the property available to tenants with pets, the new tenants will sign a Pet Agreement.  Additionally, if they are moving into a property that was constructed before 1978, they too will be presented with the Lead-Based Paint Addendum, and they will also be provided with valuable information about protecting their family from Lead-Based paint hazards.

Depending on the tenant?s move-in date, they may be asked to return to the office to complete a new-tenant orientation, or it may be done on the same day as the lease signing.  Whatever the timing is, this is the time that we will present the Landlord?s rules and regulations to them, as well as the Tenant?s Inventory and Condition Form, Maintenance Request Forms and policies and procedures for emergency and regular maintenance.

Thanks for your attention up to this point, and let me know if you have any questions!

Managing Your Investment Property

Conscientious management of your investment property and maximizing the return on your investment is the most important thing we can provide to you when you hire Austin REAL Pros, REALTORS® to manage your property.

Enforcing the terms and conditions of the lease is basically what we are paid to do for you in the Property Management field. There are hundreds of details to be addressed in Property Management, and we have the experience and expertise to handle them all.

We pride ourselves in the fact that we restrict our Property Management services to ?like minded? owners; property owners who believe tenants deserve a good home in exchange for a good rental fee. Here are just some of the benefits you will receive when you place your trust, and your property in the competent hands of Austin REAL Pros, Inc.

• Bonded and Insured Vendors: All of the vendors we use to complete maintenance of your property are bonded and insured. Vendors who take the extra steps and expense necessary for these certifications, prove to us they are serious when it comes to providing us the higher level of service we require. In addition, with every service invoice, vendors are asked to complete a property questionnaire, noting any evidence of pets on the property, evidence of smoking on the property, and any evidence of abuse or misuse of the properties components.

• Monthly Routine Maintenance: Small repairs are more cost effective than large repairs. We encourage tenants to let us know about small maintenance items, instead of waiting. Avoiding deferred maintenance makes better sense to the owner's bottom line.

• 24 Hour Emergency Maintenance: An air conditioner never quits at a convenient time, and a toilet never backs up during normal business hours. Never fear, we will direct the problem to our on-call vendors, and the problem will be solved without even waking you from your sound sleep!

• Periodic Drive-by Inspections: You can sometimes (but not always) tell the interior condition of a property by the exterior condition of a property. If the exterior is well maintained by the tenants, it is a good bet the interior is also being well cared for.

• 24/7 Property Information: As far as we know, no other Property Management offers this service in the Austin area. You can log-on to our website, 24 hours a day, seven days a week, and check on your property status. You will be given personal access to a password protected property page, which will provide you with current property information, including repairs contemplated and completed, a recent property photo, and copies of your monthly property statements. Personal Service with a Hi-Tech Delivery!

• Prompt Disbursement of Monthly Proceeds: You will not have to wait on your monthly rental proceeds. We make every effort to insure your funds will be received no later than the 15th of the current month.

Advertising 

Appropriate advertising is an essential part of successfully managing residential property.  It is ARP?s philosophy that prospects come from many different places and we do not want to limit a property?s ability to attract a tenant.  We would prefer to be aggressive in out efforts.  Although ARP provides many different free advertising choices, there are also other types of advertising at reasonable costs.  Owners are given choices as to the type and frequency of advertising they wish.  Owners may currently choose from the following advertising outlets and/or will be placed automatically. 

Austin American-Statesman, $45 for three line classified ad

Yard sign installation, Free

Multiple Listing Service, Free

Office Hot Sheet, Free

Bi-Weekly FAX to Realtors® Free

Internet Web-Site, Free 

Application Processing Guidelines 

Austin REAL Pros does not select tenants on a first to apply basis.  Applicants are screened by a disinterested third party for satisfactory responses to the categories listed below and the best applicant for the property is selected.  Any variance to the items listed below must receive owner approval prior to accepting the applicant. 

Applicants must provide completed Texas Association of Realtors® Residential Lease Application as well as TAR Agreement for Application Deposit forms.  Before a property will be shown pending, certified funds for application fees ($35 per applicant over the age of 18 years), plus the application deposit must be received with the Application forms.

Texas Apartment Association applications will also be accepted by Austin REAL Pros.

Income Verification 

General guidelines for income qualifications are that the resident(s) combined income is greater than or equal to three-times the monthly rental rate.  This gross multiplier may be adjusted taking into the following considerations: 

Length of Employment ? Minimum of two years is required.

Source of Income ? Guaranteed Sources versus commissions.

Job Stability ? Continued future employment with company.

Years in Industry ? Has applicant recently switched careers? 

The stronger the applicant ?scores? in these areas, the more lenient you may be with maintaining three-times the monthly rental amount. 

Credit History 

The purpose of the credit check is to help determine the manner in which the applicant dealt with his/her debts and whether they pose the possibility of a future problem due to the over extension of credit.  Things to look for on the credit report include: 

Percentage of Credit Used ? The closer to 100% of credit, the riskier.  Unused credit provides for a cushion during hard times.

Payment History ? Current status is preferred.Be sure there are not a large number or 30. 60 or 90 day late pays. This is a Red Flag for a late paying tenant. 

Bankruptcy ? Chapter 7 = Debt elimination 

Judgments ? Any judgment for non-payment of rents is an automatic disqualification.

Past Residency 

This area on the evaluation is probably the most critical and informative.  It is important not only to screen the applicants current residence, but the previous as well (minimum two years previous tenancy).The previous landlord(s) are often a better source of information if the applicant is creating a problem at their current or previous addresses.Items of importance include: 

Timely payments?

Number of late payments?

Any three day notices served?

Was proper notice given to vacate?

Any complaints?Frequency?

Was deposit refunded in full?

Would they be accepted to re-rent?

Criminal Background Checks 

Criminal background checks are obtained for each applicant over the age of 18 years.  This background check is obtained from the City, County and State of current residence and from the City, County and State of applied residence.  Not all findings from the criminal background check will be cause for automatic disapproval.  These findings will be considered on a case-by-case basis.

Terrorist Background Check 

Based on the events of the recent past, new data bases are being developed almost daily.When possible, the third party verification bureau used by Austin REAL Pros cross references applicants to see if their names appear on a Terrorist Alert Listing.  These data bases are not fool-proof, and the results from these checks are evaluated on a case-by-case basis.

Quality Assurance Standards 

The following categories contain minimum property standards for properties managed by ARP.  Maintaining property standards will enhance and protect our owners, tenants and the reputation of ARP.  These Quality Assurance Standards (QAS) must be followed at all times.  This policy should be explained to all owners, tenants, vendors and fellow employees/associates, and be understood by all parties.  Compliance with QAS will include all new properties, interim property inspections, annual reviews and inspections, and move-in and move-out inspections.  Properties not meeting these standards are to be documented with notice to the Property Manager and given sixty days to come in compliance or all steps to transfer the account out of the ARP portfolio should be taken.

Exterior Conditions 

Structural ? Property is to be structurally sound. 

Roofs and Gutters - Roofs must be free of leaks and in good repair.Gutters, if applicable, are to be clean and free flowing. 

Windows and Locks ? All window glass must not be broken or cracked.  All windows and window locks must be operational. 

Doors and Locks ? All exterior doors are to be in sound condition and weather tight.  All locks are to be re-keyed between occupancies (according to Texas Law), and to be operational at all times. 

Paint ? Siding and trim paint is to remain free of peeling.  Any peeling paint on homes built prior to 1978 should be addressed for the possibility of Lead Based Paint immediately. 

Lighting ? Exterior lighting is to be provided on perimeter areas where hazards may exist.All burned out bulbs are to be replaced immediately. 

Landscaping, Trees, Miscellaneous Appearance ? Landscaping is to be well maintained and at all times provide a neat appearance.  Mowing and watering of lawns, trimming shrubs and flowers, and cutting back of trees as may be required from time to time.All personal property, trash receptacles, and disabled cars are to remain out of sight.  All debris is to be removed no less than monthly.

Interior Conditions 

Heating System ? All properties are to be equipped with an adequate heating system meeting local building codes and be in good repair at all times.  Defects are to be repaired immediately. 

Electrical System ? All electrical is to remain in good repair and meet local building codes.  Any exposed wiring or defective outlets, switches, or fixtures should be immediately repaired. 

Plumbing System - All properties are to be supplied with hot and cold running water.  Plumbing fixtures are to remain free of leaks and be operational, and water heaters should be set to meet local building codes and be equipped with a pressure relief valve. 

Appliances ? All appliances left remaining on the premises are to be maintained in good working order.  Defective appliances are to be repaired/replaced immediately.

 Smoke Detectors ? Properties are to be equipped with at least one approved and operations smoke detector in each sleeping area of the property, and with at least one approved and operational smoke detector in a central location of the property.  Any defects in equipment, including poor batteries, should be repaired/replaced immediately.

 Flooring ? All flooring materials are to be clean and maintained in good condition at all times.  Flooring, including carpet, vinyl and wood is to remain free of rips, tears and gouges. 

General ? Premises are to be clean and free of debris at all times.  Property is to be turned over to incoming residents with the highest standard of cleanliness at all times.

The pursuit of 100% compliance with these QAS should be continued at all times.  Compliance with QAS will help to insure that our clients and competitors see ARP and Quality as being synonymous.  Further clarification of these standards may be obtained through the Property Manager. 

Maintenance Requests 

All properties should be maintained to meet the Quality Assurance Standards that have been established.  When it becomes necessary to perform maintenance on a property, time should be taken to see that requests are processed properly and that work is completed satisfactorily. 

All maintenance requests MUST BE IN WRITING, unless it is an emergency situation.  An emergency is defined by any condition causing a threat to the health of an ordinary tenant, or a condition causing damage to the property. 

Encourage tenants to use the Maintenance Request forms provided to them at the New Tenant Orientation meeting.  Maintenance requests may be delivered in person, by mail, or by FAX. 

Screen requests for accuracy and duplication.  If the request is not clear, contact the tenant for further information about the request. 

Should it be anticipated that repairs will exceed repair limits, inform the Property Manager immediately, for owner contact and approval. 

Schedule with an appropriate Vendor for the completion of the work 

Work should be completed within a reasonable period of time.

Emergency Maintenance ? 24 hours

Routine Maintenance ? 72 hours

Make Ready Maintenance ? five days 

Follow-up with the tenant for proper completion of the work, and/or schedule an inspection of work performed prior to forwarding the invoice for payment. 

All open work orders should be reviewed by the Property Manager monthly to verify status and estimated completion.

MANAGE YOUR INVESTMENT PROPERTY? 

As a company, Austin REAL Pros has worked hard to develop a reputation for providing professional and comprehensive leasing and management services.  We place great importance on meeting the needs of both our tenants and property owners.  We pride ourselves on working with like-minded property owners, and limit our management portfolio to properties that provide a good cost/value relationship to both the tenant and the property owner. 

Some of the services we provide include, but are not limited to the following: 

• Management in a proactive, not reactive style
• Clear and easy to read monthly financial accounting statements to owners
• Preventive maintenance programs to promote long-term tenant and property value retention
• Periodic drive-bys and photographs
• Aggressive marketing in a wide variety of print and electronic media
• Effective communication alternatives (voicemail and e-mail) to accommodate your schedule for your convenience
• Professional agents and property managers with industry-specific training, subscribing to a strict code of ethics and with special expertise in residential leasing and property management
• New tenant orientations to cover guidelines and our expectations of them and their responsibilities during the term of the lease contract
• Computerized access to all available properties in the Austin area
• Supra II key safe systems for accessing and protecting your property
• Contracted professional tenant screening services provide unbiased, comprehensive background checks on all prospective tenants
• State promulgated forms that are updated on all prospective tenants

Leasing Your Investment Property

Landlords come in all different shapes and sizes, and we at Austin REAL Pros are proud of the fact that we take all the different wants and needs of our clients into consideration. We are well versed in dealing with owners of multiple units, as well as single unit owners. Every circumstance is different, and we tailor our service to the individual.

The most important thing we do in this section of the Leasing/Property Management equation is to find you the most qualified applicant for your property. There are several steps involved in this process:

• Marketing: Your property will be made available to the entire Austin rental market through a variety of sources, the most important of which is the Leasing Management System of the Austin Board of Realtors Multiple Listing Service. When necessary, we will advertise your property in various print media, and all of our lease properties enjoy featured exposure on our state-of-the-art Internet web site.
• Qualifying Criteria: We use some of the most stringent qualifying criteria in the industry. We require applicants to furnish us with a minimum of two years of rental history, two years of work history, and the combined household monthly income must be three times the property rent.
• Background Checks: We verify all of the above criteria using a disinterested third party verification service. In addition, we check personal credit histories, and we obtain criminal background checks on all occupants of the property who are 18 years of age or older.
• Final Tenant Approval: We never forget whom we are working for. Once we have completed all the necessary verifications, we will arrange a convenient time to present the tenant information to you, and ask for your tenant approval. If, during the verification process, we determine the applicants do not qualify, we will typically inform you of that fact, and proceed with the next applicant.

You are the boss of every transaction we perform for you. The bottom line is yours, and we never forget that.

RESIDENTIAL QUALIFYING CRITERIA FOR PROSPECTIVE TENANTS OF AUSTIN REAL PROS, INC., AND THEIR OWNER'S

Thank you for the interest you have shown in leasing a property through Austin REAL Pros, Inc. In order to ensure that all parties to the transaction receive the same information, we have developed this list of qualifying criteria for the properties in our management portfolio, as well as those owner's that we represent on a 'lease listing only' basis.

We require all applicants be able to verify the following criteria:

Two years worth of verifiable leasing or mortgage history.

Two years worth of verifiable work history.

The combined income of the applicants must exceed three times the rental rate.

In order to process your rental applications, you must provide the following:

The completed Application for Rental and the Agreement for Application Deposit. These forms are available from us or from any Realtor with whom you are dealing. If co-­signors are required to meet the qualifying criteria, complete applications from the co-­signors are required. 

Separate certified funds checks for the Application Deposit and the Application fees, made payable to Austin REAL Pros, Inc., unless otherwise specified. Austin REAL Pros, Inc., does not accept cash or personal checks for these funds.

All occupants over 18 years of age must complete applications.

Applications fees are $35 per applicant.

Our background checks are performed by a disinterested third party, and include the following verifications:

Verification of Social Security Numbers

Verification of Drivers License Numbers

Verification of birth date

Full credit check

Past and current verification mortgage or lease information

Past and current verification of work history

Criminal background check

Thank you again for your interest in one of our properties. It is our job to approve deserving applicants, while at the same time procuring the most qualified applicants for our listings. If you have any questions about our qualifying or company policies, please feel tree to contact us directly, or the Realtor with whom you are associated.