A Property Manager's Tips Before Closing on an Investment Property

Closing on your first investment property but not sure what to review during due diligence period and before closing? Stay calm, we have interviewed a property manager to get an expert's tips on how to facilitate a smooth closing. 

Ask For A Tenant Estoppel 

Asking for tenant estoppel is a great way to cover your tracks, and avoid future dilemmas over a tenant's lease. One thing an estoppel does is provide proof of cash flow. More importantly, estoppel prohibits a tenant from going back on their lease and making an argument that their lease should be changed. Also, this will bring to light any issues or promises that the seller has with the tenant and make sure that you as the buyer are made aware before closing. 

Ask Seller For Actual Expenses

Many times the "projected" numbers are far off from the actual expenses that a property may have. Obviously, an owner may not be forthcoming with the actual numbers, however, it is still worth a shot. You never know the actual costs until you do thorough research. It may be wise to get to know the owner and figure out if you can trust him or not. This can help confirm if your initial underwriting (or investment analysis) is in-line

Complete a plumbing inspection 

Plumbing issues can be costly. Typically, an inspector's process does not include an inspection of the underground sewer system. One thing to ask your inspector is if they can complete any underground plumbing camera inspection. If not, no worries! We always recommend getting a specialist out there to make sure the entire sewer is not caved in, has breaks major clogs that could cause issues in the near future. 

Have Your Future Property Manager Go to the Property Before Closing 

Having a reliable property manager is a necessary investment, and figuring out who it is going to be is a very wise thing to do before closing. A solid property manager will know exactly what to look for in a property. They will find costs that will be incurred in the future, that you may not have realized on your own. Generally, an experienced property manager will have a great perspective on what can and can't be done to a building, and what problems will occur in the future.  Here at Pearson, we have excellent property management, and more information on this can be found here.

What to Know About the 2021 Illinois Rental Payment Program

The Illinois Development Authority will be accepting applications for the Illinois Rental Payment Program (ILRPP) on Monday, May 17 at 9 a.m. 

As an emergency rental assistance program, ILRPP is designed to help Illinois households that are unable to pay rent due to the COVID-19 pandemic. The program is funded by a $500 million grant that will help thousands of renters avoid eviction so they can remain safe during the pandemic.

Grant Information

The maximum grant amount is $25,000 per tenant and the approved amount will be given directly to the owner. Applicants are eligible for up to 15 months of assistance, paying up to 12 months of missed rent payments and up to three months of future rent payments. The coverage period is June 2020 through August 2021.

Application Process

The emergency rental assistance is free to tenants and owner/housing providers so there is no application cost. To receive funding, both the owner and tenant must submit a joint application and provide valid email addresses, a long with additional household information to apply. If the application is approved, the grant will be paid to the owner/housing provider in the form of a check.

Owners are highly encouraged to reach out to tenants to discuss the application process and begin preparing materials. Your property management company should also be able to assist in connecting with tenants. 

Additional Program Details

For additional information on the Illinois Rental Payment Program, including eligibility and documentation requirements, please visit www.ihda.org/ilrpp. All ILRPP applications must be submitted online at ILRPP.IHDA.org and will be accepted starting on Monday, May 17. 

Housing Provider Frequently Asked Questions: CLICK HERE
Tenant Frequently Asked Questions: CLICK HERE

Spring Cleaning Tips to Improve Rental Property ROI

There’s nothing better than Springtime in Chicago. The weather gets warmer, flowers start to bloom, and people are outside ready to enjoy the sun. Spring is also the start of renting season. For rental property owners this means seasonal maintenance and building updates. To help owners maximize renting season, we’ve put together a Spring cleaning checklist that will help improve ROI for rental properties.

External Maintenance

Clear Debris:

Gutter and downspouts clogs are very common after fall and winter. Inspecting and clearing out gutter debris is a critical step to avoiding external building damage. This can be done with a garden hose or owners can contact their property management company to take care of any larger issues.

Boost Curb Appeal:

Spring season means warm weather, and warm weather means that people will be spending more time outside walking around. One of the easiest ways an owner can boost property return is through landscaping and creating curb appeal. This includes trimming trees, planting flowers, power washing the building, and creating an overall welcoming environment. Not only will the curb appeal attract new potential renters but it will also keep current residents happy.

Inspect Roofing:

Cold Chicago weather can cause shingles to loosen up, allow rain to seep into the foundation, and cause major problems. The cold also means animals are looking for spots to keep warm and the roof to a rental property is an easy target. This is why it’s important for property owners to have the roof inspected every spring. They should be on the lookout for water damage, loose shingles, and any potential access points for animals. This maintenance will also help prevent bugs and insects from nesting under the roof when they emerge with the warm weather.

Internal Maintenance

Building Updates:

Spring cleaning extends to more than just clearing out clutter. Properties that have common areas like a lobby, mail room, hall entrance, workout space etc., should be thoroughly inspected and considered for updates. Building updates are a great way for owners to improve property ROI and can be as simple as repainting or adding interior décor. When a space looks fresh and modern, it boosts property appeal, attracts new renters, and improves the building’s overall status. A more luxurious feel/look to a property provides owners the opportunity to adjust the cost of rent to match the new features.

HVAC & A/C Checks:

Air conditioning systems can be affected by the low winter temperatures. This can cause problems when residents decide it’s time to start up the A/C so a proactive approach is best. A/C maintenance includes things like checking panels, pipe insulation, outdoor coil, and filter replacement. Changing furnace and A/C filters ensures that residents are getting the most from the property’s HVAC systems and can prevent costly repairs in the future. These small but necessary maintenance tips will help maintain current tenant relationships and gives them the opportunity to leave positive feedback which can attract future tenants.

If you’re a home owner ready to sell, check out Pearson Realty Group’s tips for getting your home ready for the market. Click here to learn more 〉〉

Update: Illinois Eviction Moratorium

Governor Pritzker extended the Illinois eviction moratorium to April 3, 2021. Executive order 2021-05 was signed on March 5th and included both an extended moratorium and made a change to the procedures for evictions.  

What’s new:

Imminent threat / Dangerous Tenants case: Once a landlord receives an Illinois Tenant Declaration from a tenant, they may only proceed with the eviction if the tenant: 

• Pose a direct threat to the health and safety of other tenants 

• Are an immediate and severe risk to the property

 This means that emergency evictions can move forward even if a tenant is a “covered person” under the executive order. 

Who is a “Covered Person”:

Tenants are considered a “covered person” if they meet all four of the following:

1. INCOME: At least one of the following applies to me:

(i) I expect to earn no more than $99,000 in annual income for Calendar Year 2020 (or no more than $198,000 if filing a joint tax return), or

(ii) I was not required to report any income in 2019 to the U.S. Internal Revenue Service (IRS), or

(iii) I received an Economic Impact Payment (i.e., the stimulus check) pursuant to Section 2001 of the CARES Act.

2. INABILITY TO MAKE PAYMENT DUE TO COVID-19: I am unable to make a full rent or housing payment due to a COVID-19 related hardship including, but not limited to, substantial loss of income, loss of compensable hours of work or wages, or an increase in out-of-pocket expenses directly related to the COVID-19 pandemic.

3. BEST EFFORTS: I am making my best efforts to make timely partial payments that are as close to the full payment as my circumstances permit, taking into account other expenses that I must pay (e.g.,food, utilities, phone and internet access, school supplies, cold-weather clothing, medical expenses, child care, and transportation costs, including car payments, maintenance, and insurance); 

4. AT RISK: If evicted, I would likely become homeless, or be forced to move into and live in close quarters in a new shared living setting because I have no other available housing options.

 

Additional Protection to Renters:

Chicago’s Eviction Protection Ordinance was approved in June 2020 and is still in effect. The ordinance requires that landlords extend a seven-day cooling off period if tenants respond to the five-day notice with a Tenant Notice. The tenant has to prove unpaid rent stems from financial hardship that are caused by the pandemic. The Ordinance is meant to help protect tenants from loss of shelter, while protecting landlords by requiring tenants to pay rent.

What happens if rent repayment negotiations fail?

Tenants who are served with an eviction notice after failing to pay rent are covered under the COVID-19 Protection Ordinance. The ordinance does not apply to other material breaches of the lease agreement. This does not mean that tenants are free from paying rent. They are still responsible for outstanding rent balances.

If a landlord decides to move forward with eviction fillings over unpaid rent, they will need to prove to a judge that they made an effort to work with the tenant first. Landlords must show they entered good faith negotiations with the tenant including repayment plans or mediation efforts.

However, landlords should be mindful that even after proving a willingness to accept late payments the eviction process may not proceed. Additionally, in order to accept partial payment the landlord must back out of the eviction process and start over with a new five-day notice. Landlords must also have a letter that requests “strict compliance” with payment deadlines.

What about the CDC’s temporary eviction moratorium?

Since Illinois has a moratorium on residential evictions that provides the same/higher level of public health protection than the CDC’s order, the CDC’s moratorium does not apply. However, if the moratorium is not extended after April 3, 2021, the CDC’s order will apply. This would provide a temporary hold for qualifying IL renters for almost two more months.

Click here to read the full executive order.

What to know about Illinois eviction moratorium

Now nine months into the pandemic, it’s clear that the housing market has fundamentally changed for renters, homeowners, property managers, and housing providers. Property manager Jenny Coopmans says the toughest part of her job now managing rent collections. “We have to make sure we can collect enough funds to keep the properties afloat. Owners are still responsible for mortgage payments, maintenance, insurance and other costs associated with the upkeep of the building,” she says.

There’s a lot to keep up with from federal orders to the state's eviction moratorium and local legislation changes. We’ll cover the latest updates so that you can prepare for what's ahead.

When will evictions resume?

In an executive order, Gov. Pritzker first put a moratorium on evictions starting on March 20. Since then, he’s opted to extend the order every month as it nears expiration and on October 16, the governor did just that. At a press conference, he stated, “Remember, nothing really has changed in terms of the effect of COVID-19 and its effect on the economy, its effect on people’s jobs and their ability, or inability, to pay their rent or mortgage.” So for now, this means the statewide moratorium on evictions for non-payment will last until November 14.

To be clear, the moratorium only prevents the court filing and enforcement of evictions, renters must still pay rent. There are some cases where the court will permit evictions but only when a tenant is breaking the law, posing a threat to others, or causing severe damage. These types of evictions are less common because they’re harder for housing providers to prove in court. So, the majority of eviction cases are due to non-payment.

How does the eviction moratorium from the CDC apply to Chicago?

In September, the CDC issued a moratorium on evictions until the end of the year. The CARES Act also had a moratorium on evictions, but it applied to much fewer properties and tenants. The CDC’s order includes all residential properties that are occupied by tenants who are receiving government assistance, have had their income impacted by the pandemic, or if they’d be homeless if evicted. Right now, the governor’s order is what applies to Illinois. The larger federal order would only come into play if the state’s mandate expires for good in November.

What does the COVID-10 Eviction Protection and Fair Notice ordinances mean for property managers?

The challenges of the pandemic brought Chicago’s housing issues to the forefront of the city’s agenda. Many policy makers called for changes to protect the fragile market, and while the ordinances primarily protects renters, they do have provisions that everyone should know.

This summer, the City Council approved the eviction protection ordinance which requires landlords to make a “good faith” effort in situations of non-payment. This means a conversation about payment plans or involving a third-party mediator. The ordinance also protects housing providers by requiring tenants to pay rent. Typically, a tenant has five days to respond to a landlord’s intention to file an eviction. A separate mandate, the Fair Notice ordinance which passed at the same time, extends that period to a total of 12 days if the tenant indicates they’ve been affected by COVID-19. It also requires that landlords must give 60 to 120 days notice (depending on how long the tenant has lived there) to tenants for non-renewals or rent increases.

Most of the measures put forth by policy makers have focused on preventing a wave of evictions. Coopmans says that owners need to be taken care of, too. “It’s crucial to provide assistance to both renters and property owners,” she says.

How Commercial Receiverships Work

What is a receivership?

Receiverships typically begin when a mortgage loan goes into default due to lack of payments from the commercial property owner. Similar to a home loan, once the property is in default a lender will likely initiate foreclosure proceedings. As the property goes into foreclosure, a lender will want to limit the bank’s liability and ensure that:

• The value of the commercial property isn’t damaged in any way by the borrower

• Any income for the property is being put towards the loan and maintaining the property only

This is where a receiver comes in to play. The receiver is requested by a lender and appointed by the court. They act as a neutral third party and it’s their job to meet the above objectives and are responsible for managing the property until the foreclosure is complete.

Additonal reasons for a receivership?

In addition to defaulting on a loan, a commercial receivership may be entered if:

• The value of the property is enough to satisfy the loan debt

• Waste has been committed on the property

• The government is foreclosing on the property to reconcile back taxes

What is a receiver?

As stated above, a receiver is a neutral third party individual or company that was requested by a lender and will be in charge of managing the property throughout the foreclosure proceedings. While the request comes from a lender, the receiver takes direction from the court only and acts in the best interests of both lender and borrower.

Above all, receivers are required to:

• Honor and uphold the contractual rights of the tenants in the commercial property

• Safeguard the welfare of all tenants and guests

• Continue to manage ongoing operations and expenses

• Make all commercially reasonable efforts to maximize profitability from the property

• Exercise its best efforts on behalf of the lender and borrower.

What is in their scope of work?

• Maintain & secure the property (i.e. vandalism or damages)

• Negotiate and pay property expenses and taxes

• Sell the property (with court’s permission and additional party consent.)

  • Selling a property before the foreclosure ends can produce more net proceeds than a foreclosure sale. By agreeing to the preforeclosure, the defaulting borrower might be able to avoid a deficiency judgment

• Take over the bank account associated with the commercial property

• Establish itself as new management

• Manage new and current leases and collect rental income

• Make necessary repairs, work with local government to address any violations, and oversee any ongoing construction

How does a receiver get appointed?

Receivers are appointed by the court upon a lender request. Lenders are given the right to request a receiver upon most commercial mortgages when the borrower defaults. Depending on the case, some courts find a default to be sufficient enough grounds to grant an order of receivership. However, others require more proof that it is necessary. 

Advantages of a receivership

• A receiver will assist a lender in recovering funds by protecting the value of the commercial property.

• Depending on the skill of the appointed receiver, a property’s value may even increase- which both a borrower and lender can benefit 

Disadvantages of a receivership

• Lender and owner lose control of the property, its income, & potentially its disposition

• Receivers can be costly to hire and the lender is required to cover the cost of whomever the court appoints.

Overall, each commercial property is different making it important to weigh the potential liabilities. Does construction need to be done? Has management been abandoned and for how long? Are there any environmental concerns? Does the commercial property require marketing for tenants? From there, a decision can be made on if a receivership is worth pursuing.

Fall To-Do List For Property Owners

The Chicago winter season will be here before we know it! If you are a property owner you may be thinking about how you can save on your rental building expenses this winter. Not to mention keep your residents happy. PRG Management is here to help with a list of to-do’s that might save you a headache on those brisk, snowy days. 

Schedule inspections and winterizations. 

Have the roof, exterior, HVAC, and plumbing inspected. An exterior inspection could save you big on cash and time. Loose shingles, TPO, and siding could make way for sneaky leaks from melting snow and ice. Making sure your HVAC and plumbing is up to par will ensure you’re properly providing for your residents and potentially save you from any unexpected safety issues or damage over the season. Winterize your sprinkler system and pool. Protect the systems from freezing and therefore, yourself from any added expenses when you’re ready to bring your exterior back to life in the spring.

Perform any needed maintenance and make repairs. 

Consult your current maintenance requests for any items that could be worsened or made more difficult by inclement weather. Repair any loose siding, shingles, or TPO roofing before being further damaged by wind or water. Check on any underground plumbing before the ground freezes to avoid unnecessary expenses. Clean out the gutters to prevent leaks, rotting, and pest infestation from leaf and debris build up. Before it gets cold replace all furnace filters and do any needed furnace cleaning so residents and the property are ready for low temperatures. Consider insulating the pipes to save on utility costs and prevent a pipe burst.

Talk to your tenants.

Lastly, be sure to contact your tenants about doing their part in protecting their home. Remind them that furnaces should be set at no lower than 60 degrees to help keep pipes from bursting. On extreme days, have them leave sink cabinets open to give pipes more direct access to heat. Suggest they cover the interior of windows with an insulating film to further deter cold, keeping their heating bill down. Discuss any protocols for an extended absence so you can be certain the property is looked after. Make sure they know how to best reach emergency maintenance, should it be needed.

Get started early!

We never know when winter will really set in so get started on your Fall to-do list right now! Your residents will appreciate your proactiveness; your team will thank you for saving them time out in the cold; and you and your wallet will rest a little easier.

How to Increase the Value of a Rental Property

Rental property owners should always be thinking about how they can increase the value of their property. Improvements don’t have to break the bank to make a difference.

Simple things like preventative maintenance and general property management will increase the value of a rental building and decrease tenant turnover. It will also give owners the opportunity to charge higher for rent and attract new tenants, all of which will help their bottom line. Here are 6 easy ways to increase the value of a rental property.

Update Curb Appeal

Your rental doesn’t have long to make a first impression. Potential tenants are more likely to be drawn to a property that looks put together and taken care of. Aesthetic improvements such as power washing, repainting window shutters & doors, and landscaping, are inexpensive and will go a long way.

Additional ideas to step up your curb appeal and attract tenants to your property:

• Plant new grass.

• Paint the exterior.

• Trim back trees and shrubs.

• Install planters in front of an apartment building.

• Pour new concrete or install new pavers or bricks.

Prioritize preventative MAINTENANCE

Perhaps one of the most important ways to increase the value of a rental property is by conducting regular inspections and maintenance. A key way to increase returns is through preventive maintenance. Small things like changing filters, cleaning off A/C compressors, and clearing gutters will save owners thousands of dollars in HVAC and foundation repairs. Providing thorough maintenance between tenants and with current tenants can go a long way with lease renewal and increasing referrals.

Add Popular Amenities

Amenities are highly sought after by tenants. To keep up with the competition, owners can do things like:

• Invest in quality washers and dryers and make the space as inviting as you can. Adding tables or offering free wifi can help even if the room is unfinished.

• Make sure the rooftop space is kept clean and reflects that it is looked after. Adding small items like chairs, benches or flowers make the space more appealing and worth more to prospective tenants. 

• If there isn’t a rooftop/patio, build out a communal garden area. Depending on the size, include a seating area for residents to enjoy or allow them to grow their own plants. It creates the sense of community that many tenants look for and is a great asset for increasing the rental value of a property. 

• Maximize existing spaces. If the building has a basement that just needs to be cleaned out, do so, and then make storage available to tenants.

Focus on pain points

Property pain points go hand in hand with preventive maintenance and should be a priority for owners. Common pain points include:

• Kitchens: replace old/outdated appliances and increase appeal by update counters, old wallpaper, and even cabinet knobs.

• Bathrooms: faucets and pipes go through normal wear and tear so its important to maintain them before they turn into a larger problem.

• Windows and Roofing: leaky or run down windows can be a deal breaker for tenants. Swapping out old windows/roofing not only improves the look of your property but also help lower the cost of utilities.

These kinds of upgrades can be marketed to attract quality tenants and will reduce tenant turnover. Additionally, it gives owners the opportunity to charge higher rent since they will have a higher quality product.  

Always Evaluate the Market

It is important for owners to know what their property is worth at all times. Property managers are skilled in market evaluations and can help you price your property correctly. If you’re an owner in need of a rental valuation, you can request a free rental proposal from PRG Management. Learn More ⟩

In addition, rental season fluctuates so owners should price units accordingly. Fewer people are looking in the winter so offering a prorated discount is a wise choice and will bring in more prospects. Then, once renewal comes along, increase the rent back to the normal, non prorated amount. When doing this, it is important to make sure the tenant is aware that the price will be increasing. The increase should still be in line with the market and not be so much that it pushes the tenant to leave.

Screen & Communicate with Tenants

Fixing up a rental property won’t go very far if tenants are unreliable. This is where a property management company comes in handy, as they have access to the top screening technology. Doing credit checks and basic background checks will help owners find reliable tenants and decrease turnover.

Additionally, it’s important to communicate with current tenants. Keep them in the loop when building maintenance is being done and let them know they’re being heard and are a priority. When a service request is submitted, they should be responded to so they know it’s being worked on. A frustration that tenants express is when they’re left wondering whether or not a message was received and what’s being done about it. By prioritizing communication, owners will cut down on turnover and will increase referrals.

Top Questions when Interviewing a Chicago Property Manager

As a top Chicago property manager, here are the questions we as a firm are asked the most in the market.

How long are you locked into a contract?

At PRG Management, all management contracts are month-to-month unless otherwise stated or negotiated. We provide a professional service to our clients and we understand that our jobs are to take headache off our client’s plates.

However, contract terms are not always presented during the time of the proposal. Many owners are locked into services for a set time period. Make sure to understand how long the property manager will require you to stay with their service.

WHAT TYPE OF PROPERTIES DO YOU SERVICE?

• Residential Rentals or Multi-Family

• Mixed-Use

• Commercial

  • Retail

  • Office

  • Industrial

• Condominium Associations

• Homeowner Associations

• Townhouse Homeowner Associations

• Banked Owned/Distressed Real Estate

  • Commercial And Residential

What property management software or online tools do they provide?

With the growing number of online and computer-based tools in property management, staying up to date with a powerful marketing and tracking software is very important in the industry. One thing that investment property and homeowner association clients regularly fail to ask during the interviews with new property managers is what type of software or technology the property manager utilizes. As time goes on, any property without powerful and state-of-the-art technology will fall behind and have increasing headaches in management.

At PRG Management, we understand that our service is directly related to time available for the property manager to organize and coordinate value-add projects around the property. Any property manager without the proper tools will spend more time on day to day activities (and therefore less on additional wish-list projects), or need to charge more to be profitable in the industry.

All residents should have a smartphone app, be able to pay online, and view financials that are updated in real-time 24/7/365. In addition, residents are able to track work-orders submitted and see updates as they come in. This allows for better communication and improves transparency rather than using an online form that gets completed but often leaves the tenant in the dark regarding any updates.

Is there any markup on maintenance or kickback from vendors?

Markups and Kickbacks are a common occurrence in property management. All owners should know whether or not a property manager is profiting from any repairs or maintenance at their property. A markup gives improper incentives to the property manager, making it more about saving costs for the owner which can lead to a conflict of interest if the owner is not aware of these up-charges. If a markup is understood by the owner or a cost is added to reimburse a property manager for their expenses, markups or kickbacks can work. At PRG Management, no property manager can accept a kickback from a vendor, utility, or service provider.

Are there other property management costs In addition to the management fee?

Many owners sign up for property management services and find that there are several additional expenses that were unknown and added without anticipation. While most owners have conversations with property managers about what they charge, to ask this question indirectly, every owner should know how their funds are being allocated on top of the standard fee (if any).

At PRG Management, to decrease our management fees and align our costs with our services provided, we have structured our fees to include a few line items. This allows us to avoid overcharging clients that do not incur these additional services and also avoid under-charging those clients that are costing additional time/resources. Find out more here for a detailed proposal and discussion on how we intelligently structure our management fees for a win-win partnership between owner and manager.

Is the owner responsible for marketing costs of the rentals agent?

Most of the costs that a property manager incurs are passed through to the owner. One cost that many rental owners do not project (beyond rental fee) is marketing costs for their property. Owners should ask if the For Rent signs, photography, and 3rd party listing technology or MLS fees are an owner expense.

At PRG Management, our leasing agents include and take on the risk of the listing fees for individual units. For larger properties that require a custom or commercial-grade signs or listing fees, all associated costs are discussed with the owner. Additional marketing costs are also dependent on the leasing fee and are approached by a case-by-case basis that always requires owner approval fist.

What financial reports does the property manager provide?

Many property managers send (or should send) rent proceeds on a regular basis unless the owner requests no distributions. But where do these numbers come from? How will your accountant file your taxes in the new year? Every property manager should provide a Rental Owner Statement to Rental Owners that includes details on the expenses and all incoming and outgoing line items. For HOA board members, the property manager should send an income statement on a monthly basis.

At PRG Management, our tools allow owners to view financials online, updated real-time on a 24/7/365 basis. Also, additional reports include a delinquency report, balance sheet, reconciliation report, unpaid bills, and transaction detail or summary.

How frequently and what time of the month do owner distributions occur?

For investment property owners, it is important for the investor to know when their distribution will be sent. As funds are collected by a property manager, there is a period of time where the accounts need to be checked and reconciled for accuracy. Typically once an accounting period closes (end of the month) a bank reconciliation occurs for all checks and deposits over that period of time. Once this is finalized, the owner draws can occur. Make sure to understand your property manager’s process before agreeing to services.

Do you require a reserve or deposit for the manager to hold in their account?

Typically property managers hold funds on account for expenses that may come up after an owner distribution is sent. Property managers are not banks or lending institutions and do not have the ability to front expenses on behalf of their clients. Sometimes these reserves are dependent on size or number of units.

What is your lease renewal and rental marketing process?

Vacancies are a large cost of any rental owner. Understanding when the tenant’s lease is expiring and how soon the property manager markets the rental for lease is crucial in increasing the profitability of any property.

As a Chicago property manager, no tenant is allowed to receive their lease renewal offer greater than 90 days from their lease expiring per the Chicago RLTO. After some time to think, review, and accept (or deny), the property should be marketed between 30-60 days prior to lease expiration.

With the growth of COVID-19 in 2020, we understand that it’s not always possible to execute this marketing period, and not every property will be at 100% occupancy. At PRG Management, our general rule is to market every property 60 days in advance to lease expiration. Contact us to find out more about our experience, best practices, and how our leasing partner, Pearson Realty Group, helps to limit owner vacancy.

What kind of lease do the tenants sign?

Standard lease terms do not always protect owners from risk and clarify tenant vs owner responsibility. This can cause the owner additional expenses for repairs or maintenance. At PRG Management, we have experience dealing with and preventing issues from all types of situations that we layout in advance of any tenant taking possession of their property.

Are your property managers licensed?

All community association managers are required to be licensed with the State of IL. Any person performing a licensed activity per the IL Real Estate Act of 2000 is also required to be licensed. Know the difference between licensed and unlicensed activities and whether or not your property manager is properly licensed. This also includes leasing activity.

Online Tools for an Easy Owner Experience

The goal for most property owners is to maximize the profit of their investments, as well as maintain and increase the value of their properties. However, owners can find themselves bogged down in tasks like collecting rent payments/fees, managing complaints and repairs, property preparation, and vendor coordination. So to help owners focus on what’s important, property management companies provide owners with a suite of online tools for an easier owner experience. Here are a few ways those tools help owners maximize their return on investment.

Landlord Communication & Transparency

Communication between owners and property managers is key to a successful working relationship. With online tools like Buildium, property managers can easily share financial reports and important building documents that owners can access at any time. Owners can also keep up on the latest maintenance updates, vendor efficiency, and payments. Reach out to our property management team to see how else owners are kept in the loop.

Marketing Tools

Finding the right tenants and minimizing vacancies can be a primary stressor for property owners. This is where property managers come in handy. They are skilled in rental marketing and use expert tools to create rental ads, take high-quality photos, and host open houses even virtually. They also have local real estate knowledge and will be able to help you set a competitive rent price. Hiring a property manager with marketing experience can help fill your property sooner and reduce the time it sits vacant.

Tenant Communication & Retention

Without the right online tools, tenant communication can feel like a full-time job. Property managers have access to technology that allows them to reach out directly to tenants and solicit feedback on a large scale. While face-to-face conversations are valuable, following up online allows managers and owners to easily organize feedback and make decisions with all of the information in one place. That way, property owners and managers can ensure the updates made to units have a proven return on investment.

Additionally, management software needs a human touch. If renters aren’t shown proper attention or feel like they are being heard in their requests, they may look elsewhere. By tailoring responses and creating a personalized customer service experience, renters are motivated to stick around, and strong relationships help to build and grow a sustainable business. 

Tenant Screening

Property managers use online tenant screening for quick and easy tenant screening to fill vacancies with the right people. By allowing a management company to handle tenant screening, property owners will be shielded from rental scams and will have more reliable tenants. This kind of experience takes time and insomuch means avoiding bad tenants, scams, and lawsuits. Thorough tenant screening is arguably one of the most significant benefits a property management company will provide.

Easy Payments

Confirming rent payments and juggling the paperwork for a property’s expense payments (insurance, maintenance, taxes, etc.) is very time-consuming. Rather than property owners taking on this stress, a management team has the right tools for an easier owner, tenant, and vendor payment experience. Streamlining the payment process through online automation helps keep the books organized and maximize the owner’s return on investment.

Reach out to one of our skilled property managers to learn more about PRG Management’s tools for owners and tenants.