Five of many that we definitely want to put on your radar to avoid. Hi, I am Judy. I'm Ernesto.
And welcome to the Navigate Property Management Show. The Navigate Property Management Show. That's what we landed on.
The best show on YouTube. Best. You know how I know that? How? I don't know, but I'm just going to go with it.
I'm Bel... believing I'm believing it will be the best property management show. The best property management show for sure.
Yeah. A hundred percent. So are you bought in to the name?
Cause this has been sort of a back and forth. I mean, we own navigate management company, right? We've always talked about highlighting the name to change it to like sort of property management. Cause it's a little bit more specific.
So I think moving in that direction makes sense to navigate property management show. Navigate property management show. You're here.
welcome. Thank you. Thanks for being here.
And we're excited. So today we're going to be talking about a few different things. Obviously it's a podcast format. It's a show.
So we're going to talk about a few things. There are five things that we want to highlight that landlords should avoid. Right. Before we go into the five things that landlords should avoid, I want to talk a little bit about how we've earned our stripes and taking this opportunity to share with people everything we've learned because we've learned the hard way, right?
It's true. You have a young dude from New York. He was trying to sharpen his teeth through real estate investment, selling real estate investment properties, and then moving into a pretty large property management company, starting like on the support team. And then finally moving into owning a property management company.
Yes. Essentially right now, what we're saying is these aren't just five things we pulled out of nowhere. Like we've been there, we've seen it, we've done it. It still hurts.
One of them still hurts. Share with you what we've learned. So the audience, the people, tell the people what they want. They need to know. Tell the people what they want.
Honestly, this probably isn't what they want. They don't want to know about these things. They want to avoid.
Exactly. You want to know about it. You don't want these.
These are the things that we want landlords to avoid. Don't do it. We did it for you already. You don't have to do it.
Tell me a little bit about what qualifies you to say, hey, I own a property management company. What experience? Tell me a little bit about your experience in real estate. As anybody knows, owning something, you can be perfectly detached.
So my experience in real estate started long before even a property management company. You were working in investment real estate. I was.
And buying properties and selling properties. I was a salesperson. Yeah, I've been in sales.
I sold him. He bought it. Anyway, I was in sales. I was in sales. And I actually was in a job that wasn't the best fit at the time.
And Ernesto and I were having an afternoon chat. And he said, why don't you just... come work with me in investment real estate.
And so I don't know anything about investment real estate, really. I just see what you're doing. And he said, that's okay.
The good news is I don't have time to teach you, but I know some people who could. Strategy, right? I was pregnant, which I basically was the first 10 years of our marriage, but I was pregnant and I was like, you know what, let's do it. So I started working with someone that has been in the investment world for a very long time. I paid my dues, which if you know anything about real estate and you've been in it for very long, it is much more of almost like a trade type of training than going to school type thing.
I worked with someone for quite a while that was very good at what they did. Saw a lot, both on market, off market, and then also started to really connect with investors and individuals that had needed property management through that process. Yes. I was there for maybe a year and a half, at which point... I had moved from the buying selling side of investment over to just catching individuals that were purchasing properties as rentals and then tossing them over to Navigate.
You were selling multifamily, single family, large portfolios. Yeah. What type of things were you running into?
What did you learn? What stuck out during that time, that tenure? My tenure.
I think what really stuck out was that it honestly seemed like investors were on one of either side of the spectrum. Either they've been doing this forever, like they got this, They have a property manager, they have 200 doors, and they have their own infrastructure and everything else. And they got there pretty quick, or they didn't really know much at all. And so they were depending upon me, upon my team to help guide them in even what they were trying to buy, what they're trying to do long-term, what it was going to look like as far as a long-term hold, managing this property, what sort of returns they could expect.
I talked about the bottom line last time, helping them go through the numbers. to see what their bottom line was going to be. I think that really stuck out to me. One side or the other. There wasn't a whole lot of in the middle, which was where Navigate was really able to fill that gap for the people that I was working with because I could send those clients or those landlords over to Navigate and know that they'd be taken care of.
Or we could connect to those clients that did know what they were doing and at the same time know that coming over to Navigate navigate what they were getting from the navigate team is what they expected because they didn't know so that's where i cut my teeth in real estate worked with a couple of different teams right before i came over to work at navigate full-time we had a heck of a year sold upwards of 20 25 million dollars worth of investment real estate alone in one year and then my lovely husband here said i need you full-time yeah we had gone through a buyout I had two business partners. We really needed somebody to spear. I was doing business development. I needed to transition over to operations and I really needed somebody to focus on the business development portion of navigating. Client care.
Yeah. Client care. Client relations. Don't ever do blah, blah, blah. Don't do that.
We're on the camera. But that's okay. Well, they're seeing your personality, which is really good.
But that's important. That's client care. Client care. So yeah, I think I've been doing property management pretty much since I was eight years old, to be honest with you. If you look at it from that lens, my grandfather owned real estate in Brooklyn, New York.
And my mom was essentially what they would consider like the super or the supervisor or the landlord. And I would go with her to go collect rent. And I think that was when I first sparked interest in property management or owning properties really is what sparked my interest. Right.
Landlady, landlord. is the proper term. I looked it up and I was like, oh, wow, that's nice.
Must be nice. I think that's good information to know. I guess for the listeners, watch slash watchers, viewers, really watchers. Watchers.
If you're watching this. If you're watching. Our listeners and our viewers, we identified five things. We have seven things that we want to be able to pull from.
depending how this conversation goes, because I'm sure there'll be another part two, five more things. Five more things. Right. So these are the top five.
And then we have the second five and then the third five. So the first one is lease term. The first big one is lease term.
So one of the things we would suggest, and this is our opinion because I've seen people trying to sign longer leases. And, but the first one, what we recommend is a 12 month lease. That is our go-to term.
Why do we do 12 month? leases. Yeah. Judy. Ernesto.
The reason that we do 12 month term leases is because number one, the market is always going up in North Texas. There's no reason to not allow your property and your rent to continue to increase along with the market. Now we're not talking about if you have a good resident going up an additional five, 7% every year, or what was that?
2021 when we saw. rents going up by 8% to 12% in some areas. If you have a good resident, you want to keep them.
But the reality is your taxes are going up, your HOA fees go up, things go up every year, and so you want to be able to increase the amount of rent that you're receiving. The second reason, major reason, is that it really does give you an easy and even, it should be fairly comfortable for your residents, an easy and non-obtrusive reason to just stop by the property. Hey, it's renewal season.
Just want to stop it and make sure everything at the property is working well so that when you stay, everything at your property is great again. Just get an idea of how the property's treating the residents, make sure they're happy, make sure they have what they need. Because ultimately, we've talked about this before, but the most expensive thing you can have as an owner is a turnover. And to think, I know that some landlords may think that if I do a 12-month term lease, what happens if they move out?
Well, if they're going to move out, they're going to move out one way or the other. Even if they have a 24 month lease, if you have a resident that is unhappy, they're going to move out and then they have to break the lease. And that is a whole nother can of worms. So keep your residents happy, get in there to see what's going on, increase your rent. Those are the main things that I think about with your 12 month lease.
And then of course, not having to deal with the potential of breaking a lease because things do happen that you don't expect. Yes. I think obviously you clearly communicated all of those points. I think just to provide a little bit of reassurance to landlords specifically, as far as the concern of like they're going to leave. Most of the time residents leave because they're not treated well.
Right. Repairs and things of that nature. So I think that's one of the other points that we have in here. And it's maintenance. We'll get there.
We're going to get there. The second one, the second big point is choosing to be friendly or the resident's friend. versus being their landlord. I use the term stern. Judy was like, that's too strong.
But to define stern, right, is to be straightforward, accurate in your communication. It's to set proper expectations, to hold people accountable to the expectations. Anyway, being stern, I don't think that's too negative.
But you thought when you heard the word, but what other word would you use there as far as stern is concerned? I guess my thought was, you know, when you're working with a resident, You want to set good expectations, even things like, hey, resident, if you text me or call me, let's say you don't work with a property management company, right? And you're just an individual landlord.
It seems to me like a lot of times landlords that are too reactive to residents are almost like scared that they're going to leave or something or like what happens? So it's a different world in property management. I'm sorry, you finished your point. Yeah.
So it's one of those things. Hey. I'm so glad that you're renting our home.
If you reach out to me during the day, I will try to respond. Give me 24 hours to process it. Maybe see what I need to do to help you. But as soon as you give a resident like full access, like they text you at noon on their lunch break and you happen to be in a meeting and as soon as you come out of the meeting, like you text them right back, they start to expect an immediate response. And the reality is you can't always give an immediate response.
Neither do you want to because all of a sudden now you have, I don't want to call residents children, but it's almost like having another child, right? There's a level of expectation and also understanding that sometimes we tell our kids, I'm not your friend. I'm your parent.
Yes. Okay. So push that over to business.
I'm not your friend. I'm your landlord. I provide something for you.
It's still a business transaction. Essentially, nice is not always good. Good is not always nice.
you have that business relationship. Now, I diverse, you are the one that has been a consistent property manager. So when you see choosing friendly over nice or stern over possibly giving, how does that compute for you?
There's a conflict here, right? Because you want to be friendly. You want to be what people consider nice. Right.
Like I have a great property manager. I have a friendly landlord. Yes. And then the second aspect is you have to hold them accountable. if it's the first and they haven't paid rent yet the second i'm gonna call and i'm gonna be nice on the third i'm not gonna be nice assume hey i need to know exactly when you're gonna be paying rent right unfortunately i'm gonna have to send a three-day notice to vacate i really don't want to have to take that route but you've already built rapport with them and that's the important thing that's why a lot of these things you have to think about on the front end what does that really look like for us i love what you just said there i'm gonna have to send a three-day notice i really don't want to do that yeah so you can be stern and also be compassionate.
Yeah. I think you have to have empathy for residents and especially you never know the financial situation that may be going through and things of that nature. So you want to engage. A lot of times I'd say, Hey, this is unusual. I haven't, this is the first time I've seen you not make a payment on the first what's going on.
Is everything okay? So obviously leading with being friendly, which is important. This is a relationship business on all levels.
So that would be my feedback. For sure. As far as pointing landlords in the right direction, when we're talking about pointing landlords in the right direction. How many landlords over the year, over the years, how many landlords over the years do you think you have spoken with that the reason they ended up moving over to a property management company was because they were lenient once and then they were lenient twice. And then all of a sudden, two years down the road, they seem like good residents, but they never get their rent until after the 10th.
Yeah. We have a client right now that came over. I know, I was thinking about that.
But like, I feel like-Just recently, yeah. I feel like we hear that a lot. Yes, I would say most of the time, that's what you're hearing. Either they don't know how to handle the expectation that the residents are placing on them, then they're concerned about exposure and liability and all of these different things.
So at the end of the day, I would say to just button this up for the second point is understand that there's a give and take here. I'm going to be as friendly as possible. However- What the lease outlines is how we're going to hold you accountable. That's extremely important. The third thing that landlords want to avoid is setting up anything less than a 60-day notice to vacate.
Yeah. Can you share with the landlords out there why that's important? If you are going to win in the game of property management and investment, the number one thing you need to be thinking about is preparedness.
So many times we hear from landlords, that year was terrible. I lost money. It's an investment.
It's going to happen from time to time. You're going to lose money. But the best thing you can do for yourself as a landlord, as a property management company is be prepared. So that 60 day notice, it gives you time to prepare.
Hopefully your resident leaves the house in great condition, simple turnover. But what if it's not? What if there's something that's broken down while they were there? We waited to get something fixed until they move out.
You need to start financially preparing for that move out. You also need to start thinking about what is it going to rent for this time around? What time of the year is this? Running comps.
Running comps or reaching out to your trusted realtor. Or your property manager. Or your property manager. Finding out, again, being prepared. Okay, what can I expect two months from now when this property goes on the market?
What can I expect to get for rent? Is this the busy season? Even as an individual landlord, are you going to have a hard time possibly finding vendors if it's July 15th to go in and do a turnover in a timely manner?
So does that mean your property is going to be off the market for another week or two because it takes longer to get it ready after they move out? There's just so many variables with a move out. And the other thing is whether you're a property management company and you need to get this property on the docket so your property manager can prepare well and be ready to go.
Or if you're an individual and you're thinking like they've lived here for a few years, I'm sure they're going to stay. You may be having family vacation the next month. So. Yes.
Preparedness. 60 days, two months. to prepare for the move out.
Preparedness is the name of the game. Yes. From a property management perspective, how does that 60 days allow you to serve the clients best?
Yeah. At Navigate, it's really important for us to try to get a notice of vacate as early as possible. We're doing a lot of things in the background, right? And there are certain portions of the land lording process that we call under the microscope.
And the notice of vacate is part of the turnover process for us. Yeah. We're running comps.
We're trying to look at historical, like... how old are the carpets? If this person's been living there for five years, we're already preparing to figure out what color paint do we want within the property? Are we going to continue to keep the carpets?
Most likely we're going to be changing over to heavy duty vinyl. That's what we've been encouraging a lot of our clients, the landlords to kind of transition into. So you just get an opportunity to really sit back and think, how do I strategize?
Also, you may want to sell. Right. So you get an opportunity to think about that.
Yeah, that's the worst, right? When it's like, oh, I only have 30 days and the market stinks and I don't want to rent it and I actually want to sell it. Yes, absolutely.
No time to prepare. That's stressful. So that's point number three.
Let's move into point number four, which has a lot to do with leasing. It does. Right.
Before the resident even gets keys or puts down a security deposit. which is what's point number four? Income and employment verification. Yes. Okay.
Judy's historically has been over leasing and everything. So she knows how to look at things for fraud and all these different things. It's absolutely amazing. But anyway, tell us about why this is important. It is more important now than it has ever been every other day.
Something in my inbox, email, little Photoshop letter, little letter from Photoshop. What? Photoshop.
Yeah, like they give you employment verification. They have their friend create it in Photoshop. Or they give you their friend's phone.
They create an email like mcdonalds at gmail.com. You don't like that one? My favorite is, hey, I'm calling for this employment verification.
Or someone answers the phone and says, hi, this is Sarah. I'm like, I'm calling for an employment verification. Oh, yes.
Who are you calling for? Yes. I'm like, what company are you with?
Who are you calling for? I'm like, okay. Never mind.
I haven't actually had to make one of those type of phone calls in a very long time. What I was actually saying was every other day I have something in my inbox about the rise of fraud, identity theft. Guys, AI and like voiceovers and weird stuff like this and real estate, like it is scary.
It is like I'm getting chills. It's legitimately scary. Like all the stuff I read about people taking advantage of others. So in this day and age. So your income and your employment verification is so important.
You need to have a couple, at least two or three different layers being able to verify that. And the first thing that I would highly encourage anyone to do, this is what we do, is get some sort of an additional check. whether it's through Experian. There are plenty of different things out there that an individual landlord could use.
We not only use Experian for our credit checks, we also use it for an employment verification. So what a potential resident has to do is actually put their bank account information into Experian. We never see it. And then Experian does a check on their bank account as well as their name.
their social security number, that sort of history, and tells us historically how much money they've made, how much money they're making right now, where those deposits come from, which is awesome. Any sort of credit or like banking or work agency that has ever reported sending them money, which is very helpful. And then also projects how much they're going to make in the future. So that's probably a little bit much for an individual landlord.
But anything that you can do to double verify income. So just a bank statement is not good. Photoshop, right?
A pay stub, three months of pay stubs. No, I need more than that. I need a professional phone number and email.
A couple of different ways to verify income versus just one. Yes. That's really good. Guys, you heard it from the expert.
I don't have anything to add to that, clearly, because it takes repetition and you've done 5,000 leases, who knows how many. Yeah, so many. But ultimately, why is that important?
What's the reason? They can pay their rent. It's an extremely important component for sure.
So point number five, make sure to complete a move-in evaluation. That's the term that we use. A move-in evaluation before the resident moves in, before you give them the keys. Mr. Property Manager, that thing that you sent me about why I'm not getting my security deposit back is bogus. Because when I moved into that house...
Everything was already jacked up and it was filthy. And we actually left the house in better care than it was when we received it. Yeah.
And then what would you tell a resident who tells you that if you've done a good move-in evaluation? What would you tell them? I would tell them, oh, I'm sorry to hear that. Can you send me some photos of what you're seeing right now? That's the first thing that I would do.
That's extremely important. And that's why we have, we take videos and photos, right? And a lot of it is because we're going through a few of them.
Could be in a single day. And you just want reference points. But for landlords, you want to have those photos.
You want to have proof. Proof of how I handed you the property and making sure that they take care of it. Because it may not raise a flag now for you or you may not.
It may not be important the week that they move in, but it will be important three days after they move out. And you've deducted those things from their security deposit. That's a major liability. That's a really good thing to think about, again, with being prepared. At what points...
in a residence lease, would you go back and look at the move-in photos? What are the different times that you have referenced those, not just at the end of the lease when they move out, but in between? Oh my, water heater is not working. You want to go and take a look at the age of the water heater, right?
You can know if it's electrical, if it's gas, right? Sometimes landlords are, what was it? Was it an electrical? Was it gas?
Sometimes you're just not, you don't memorize every portion of your property. You don't want to go out there or have to send somebody out there just to see. Where's the water turn off?
All of these different things. Maybe they painted the walls a slightly different color and you're like, wait, was it painted this color? So it's really good to reference these different things, but it could be in the middle of a lease.
It could be during renewal time at any given time. When they submit a maintenance request, typically we're having our team go back and look at the photos first, right? Okay, hey, my dishwasher is not working, which a lot of folks don't realize this.
During move out, you'll have residents who switch out appliances as well. Those are called professional renters. Professional renters.
Yeah, professionals are usually good. Landlords, be careful with professional renters. It's true.
We've seen a lot. We haven't seen it all, I don't think. No. Hope not. No, we definitely haven't seen it at all.
Because I've seen some YouTube videos that I'm like, no, thank you. Yeah. Those are the five of many that we definitely want to put on your radar to avoid.
Let us know if you want us to do a move out evaluation, a move in evaluation, a before and after, a make ready. We want to continue to put out content. It's extremely important, especially for the landlords, to help continue to build you up through this specific show.
Yes. It's an educational show. For landlords and their children.
And hey, before you go, make sure to like and subscribe and share. You told me last time there were two things, but there's actually three. Actually, we learned that when we started to send out the video.
We're like, yo, there's a few things that we need to be doing. that we're not doing. No more a couple, now a few. Yes. Three things.
Subscribe, share, and let your children watch our show that is educational so they can learn about property management. Property management. Yes.
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