by Theresa Bradley-Banta
I could you tell you some stories about multifamily property management gone badly. Really, really badly. Take the property manager who responded to questions about numerous financial discrepancies in his reports with, “Typos?”
I kid you not.
Or, the property manager who led a property of ours from a 97% occupancy to a 69% occupancy—almost overnight.
But let’s talk about something more positive. Like some proactive things you can do to lead your multifamily property manager and avoid having similar horror stories of your own. Knowing this information puts you in the driver’s seat—exactly where you should be as the property owner.
Multifamily Property Management Checklist: Start Here
Some management items will be of immediate concern such as “life safety.” Do you need to arrange for inspections or service? Do you have the following and are they functioning as designed?
- Building and individual unit security systems?
- Common area and entry cameras?
- Common area lighting including parking, halls, stairways, exits and entries?
- Smoke and CO detectors in all resident units?
- Proper fire safety equipment (to code)?
Verify that all testing and certifications are current.
Also verify that the building is in compliance with local, state and national housing codes.
Other items, while not as critically important on day one, should be addressed as soon a possible. For example, you’ll want to create a marketing and leasing plan covering:
- Leasing fees and bonuses
- Tenant lease renewal dates
- Vacancy analysis
- Market and submarket research such as leasing trends; demographics; market sizzle (the in thing that your market renter wants); and a targeted leasing campaign
- Average market rents and target rent timeline
Your immediate goals for week one are to get rents collected; assess vacant units and develop a plan to bring them on line; get the property clean looking and presentable; and initiate marketing with front signage, website and flyers.
But Wait . . .
Before you begin any management activities at your property, be sure you have a signed property management agreement.
A quick note about this. Your property management company will have an agreement they like and use with all of their clients. That doesn’t mean it’s a good contract. In fact, I’ve seen managers who don’t really understand their contract.
Sometimes what you’ll be asked to sign is a document that’s been cobbled together from multiple sources.
My opinion? Less is more.
You have the right to make changes to a property management agreement, or to substitute an agreement you are willing to sign. Be clear about costs, fees and how the parties can terminate the agreement. (Obtain a sample property management agreement here. We’ll add you to our mailing list.)
It’s Your Job to Lead Your Multifamily Property Manager
Now that you’ve given your immediate attention to the items above, here’s the rest of the property management checklist.
Review these items with your property manager. And always remember, most property managers are professionals and may have some excellent management ideas that you haven’t thought of.
Be receptive to the ideas and suggestions of your team.
Building and Common Areas
- Curb appeal and common area cleanliness get immediate attention
- Order new signage, banners and marketing materials such as leasing flyers
- Ascertain that all common areas are free of obstruction and all flammable or hazardous materials are properly stored
- Establish communication protocols for weekly and monthly property management reports; in-person meetings; maintenance, leasing and staff; and community relations
- Set policies and procedures covering pets; guests; rent payment due date; late fees and collections; rental concessions (if any); common area rules; property emergencies; and security and life safety matters
- Set eviction policies
- Set rental policies. Will you allow pets? Assisted housing or Section 8? Smoking? Etc.
- Establish tenant screening guidelines
- Approve tenant forms: tenant application; tenant lease; notices to evict; collection letters; and management announcements or notices; etc.
- Define duties and goals of on-site manager
- Define duties of maintenance and leasing personnel
- Distribute change of management letter covering where and how to pay rent; resident incentive and referral programs; and any exciting management news or developments
- Provide online tenant portal for rental application; rent payment; resident lease agreement; and other documents
- Create tenant welcome packages
- Post balance due letter to tenants, if needed
- Establish community rules
- Draft property maintenance plan covering repairs, unit turns, resident notifications and response times
- Review status and consistency of preventive maintenance
- Review mechanical system functions under fire mode and staff familiarity
- Ensure mechanical systems and piping are properly labeled
Marketing and Leasing
- Design marketing materials for property website, print and online rental ads and flyer
- Develop property branding
- Provide marketing material such as floor plans, photos (exterior and interior), and the contact person for leasing inquiries
Additional Sources of Income
- Introduce resident utility bill back system upon expiration of tenant lease. Initiate monthly flat or variable charges for utility usage.
- Identify untapped sources of revenue such as fees for services like storage, parking, bike repair, pet cleaning, etc.
Accounting, Financials and Reports
- Review and approve all property reports currently in use by management: Rent Roll; Profit and Loss Statement (P&L); Balance Sheet; Cash Flow Statement; Delinquency and Collections; Aged Accounts Payable; etc.
- Set cost and expense guidelines for annual unit caps and expense thresholds where approval is needed such as a cap for any single repair or expense
- Approve property rent roll which should include amount paid; delinquency or balance due; current and market rents; and lease expiration dates
- Conduct a rent roll audit against leases, look for discrepancies and solve. Check that all leases are dated (otherwise a case could be made they never expire at all); tenants have received lead paint disclosures (if not, it could mount to large fines); and security deposits and other fees have been collected
- Open operating and reserve account(s). Also complete bank signature cards
- Open escrow account for tenant security deposits
- Prepare historical utility consumption analysis
Misc. Takeover Items
- Prepare notification of new management to vendors, advising them of intent to review and rebid contracts
- Review lease renewal dates with third-party services such as laundry facility services, roof advertising, etc.
- Notify all utilities of change in management
- Obtain full lease files from prior management
- Issue master keys, secure key box
- Complete unit inspections: CO detectors, appliances, bath, toilets and tub, water damage (if any), plumbing, electric, heating/cooling controls, etc.
- Review pest control history, determine treatment plan if needed
Your property manager should have a takeover checklist too. It may include items such as:
- Arrange to have management company’s name included in policies, worker’s compensation, public liability and other forms of liability coverage
- Obtain new vendor insurance certificates naming new management company
Don’t forget, you are the property owner. It’s your job to manage your investment asset and to manage the team you’ve entrusted to care for that asset. For more guidance, take a look at How To Manage Your Multifamily Property Manager.