isittime 100min€¦ · 10/5/19 8 management agreement clause #3 reoccurring inspections,...
TRANSCRIPT
10/5/19
1
Is It Time To Offer Property Management
To Your Clients?
PropertyManagementSystem.org
Pros & Cons
1
Business Models
2
Income Streams
3
Differences
4
Next Steps
5
Copyright 2019 - Marc Cunningham
Pros & Cons
Copyright 2019 - Marc Cunningham
PROS:1. Recurring Revenue
Copyright 2019 - Marc Cunningham
PROS:1. Recurring Revenue2. No accounts payable
Copyright 2019 - Marc Cunningham
PROS:1. Recurring Revenue2. No accounts payable3. Complimentary
Copyright 2019 - Marc Cunningham
PROS:1. Recurring Revenue2. No accounts payable3. Complimentary
4. Revenue Streams
Copyright 2019 - Marc Cunningham
CONS:1. Operational challenges
Copyright 2019 - Marc Cunningham
10/5/19
2
CONS:1. Operational challenges2. High liability
Copyright 2019 - Marc Cunningham
CONS:1. Operational challenges2. High liability3. Highly regulated
Copyright 2019 - Marc Cunningham
CONS:1. Operational challenges2. High liability3. Highly regulated4. Thankless
Copyright 2019 - Marc Cunningham
Business Models
Copyright 2019 - Marc Cunningham
1. Lease Only
Copyright 2019 - Marc Cunningham
1. Lease Only2. Full service mgmt
Copyright 2019 - Marc Cunningham
1. Lease Only2. Full service mgmt3. 1 entity or 2?
Copyright 2019 - Marc Cunningham
1. Lease Only2. Full service mgmt3. 1 entity or 2?4. Short term vs long term
Copyright 2019 - Marc Cunningham
Income Streams
Copyright 2019 - Marc Cunningham
10/5/19
3
Ancillary Business Services
Copyright 2019 - Marc Cunningham
Ancillary Business Service:
A non-primary function of the company that enhances the main service
Copyright 2019 - Marc Cunningham Copyright 2019 - Marc Cunningham
Successful Companies:
Copyright 2019 - Marc Cunningham Copyright 2019 - Marc Cunningham
Owner-Clients
1. Management Fee
Copyright 2019 - Marc Cunningham
Owner-Clients
1. Management Fee
2. Leasing Fee
Copyright 2019 - Marc Cunningham
Owner-Clients
1. Management Fee
2. Leasing Fee
3. Maintenance Income
Copyright 2019 - Marc Cunningham
Owner-Clients
1. Management Fee
2. Leasing Fee
3. Maintenance Income
4. Marketing
Copyright 2019 - Marc Cunningham
10/5/19
4
Owner-Clients
1. Management Fee
2. Leasing Fee
3. Maintenance Income
4. Marketing
5. Misc ServicesCopyright 2019 - Marc Cunningham
Tenant-Clients
1. Application fee
Copyright 2019 - Marc Cunningham
Tenant-Clients
1. Application fee
2. Lease admin fee
Copyright 2019 - Marc Cunningham
Tenant-Clients
1. Application fee
2. Lease admin fee
3. Late fee
Copyright 2019 - Marc Cunningham
Tenant-Clients
1. Application fee
2. Lease admin fee
3. Late fee
4. Pet fees
Copyright 2019 - Marc Cunningham
Tenant-Clients
1. Application fee
2. Lease admin fee
3. Late fee
4. Pet fees
5. Lease change feeCopyright 2019 - Marc Cunningham
Differences
Copyright 2019 - Marc Cunningham
Differences
1. Two sets of clients
Copyright 2019 - Marc Cunningham
Differences
1. Two sets of clients
2. Level of authority
Copyright 2019 - Marc Cunningham
10/5/19
5
Differences
1. Two sets of clients
2. Level of authority
3. Mindset
Copyright 2019 - Marc Cunningham Copyright 2019 - Marc Cunningham Copyright 2019 - Marc Cunningham
Differences
1. Two sets of clients
2. Level of authority
3. Mindset
4. Consistency / Systems
Copyright 2019 - Marc Cunningham
Next Steps:
Copyright 2019 - Marc Cunningham
1. Licensing
Copyright 2019 - Marc Cunningham
1. Licensing
2. Mgmt Agreement
Copyright 2019 - Marc Cunningham
1. Licensing
2. Mgmt Agreement
3. Lease Agreement
Copyright 2019 - Marc Cunningham
1. Licensing
2. Mgmt Agreement
3. Lease Agreement
4. Accounting / Trust
Copyright 2019 - Marc Cunningham
10/5/19
6
1. Licensing
2. Mgmt Agreement
3. Lease Agreement
4. Accounting / Trust
5. Applicant screeningCopyright 2019 - Marc Cunningham
New PM business checklist
Copyright 2019 - Marc Cunningham
5 Characteristics of Successful
PM Companies
Copyright 2019 - Marc Cunningham
1. Don’t take every owner
Copyright 2019 - Marc Cunningham
1. Don’t take every owner
2. Know their numbers
Copyright 2019 - Marc Cunningham
1. Don’t take every owner
2. Know their numbers
3. Focus on profit, NOT door count
Copyright 2019 - Marc Cunningham
1. Don’t take every owner
2. Know their numbers
3. Focus on profit, NOT door count
4. Create & follow systems
Copyright 2019 - Marc Cunningham
1. Don’t take every owner
2. Know their numbers
3. Focus on profit, NOT door count
4. Create & follow systems
5. Make problems go away
Copyright 2019 - Marc Cunningham
9 Common Owner Issues
Property Management Agreement
Copyright 2019 - Marc Cunningham
10/5/19
7
Marc Cunningham is not licensed to practice law. Any information provided in this presentation, whether verbal or written is provided for example purposes only and is not legal advice. An attorney should be consulted before relying on any information herin.
Copyright 2019 - Marc Cunningham
Q1:Who should approve the tenant, the property manager or the owner?
Copyright 2019 - Marc Cunningham
Q1:Who should approve the tenant, the property manager or the owner?
The Property Manager
Copyright 2019 - Marc Cunningham
Management Agreement Clause #1
Owner grants to Agent the following authority which Agent will exercise at Agents discretion:… Agent shall have sole responsibility for establishing the terms and conditions for tenancies of the property, including but not limited to approving applicants, …..
Copyright 2019 - Marc Cunningham
Q2:How can I oversee and deal with all of the maintenance headaches effectively?
Copyright 2019 - Marc Cunningham
Q2:How can I oversee and deal with all of the maintenance headaches effectively?
Have a maintenance tracking system in place, and charge for it.
Copyright 2019 - Marc Cunningham
Management Agreement Clause #2
Any vendor invoice may be billed to Owner at a rate of cost plus ___%, or at current market rate, as determined by Agent.
Copyright 2019 - Marc Cunningham
Q3:What do I do when my owner asks me to do things outside the scope of my management services?
Copyright 2019 - Marc Cunningham
Q3:What do I do when my owner asks me to do things outside the scope of my management services?
1. Define Your Scope of Services
2. Charge for it
Copyright 2019 - Marc Cunningham
10/5/19
8
Management Agreement Clause #3
Reoccurring inspections, representation at court hearings, depositions, homeowner meetings, property tax assessment appeal hearings, insurance claim related paperwork, city or county building inspections, and other exceptional building, property or resident related events are not covered by the monthly management fee……
Copyright 2019 - Marc Cunningham
Management Agreement Clause #3
… Normal property management services also do not include showing property to real estate agents, inspectors, appraisers, or prospective buyers. Should agent perform services not included in the normal management fee, a fee of $___ per hour, with a one hour minimum may be assessed at Agents discretion.
Copyright 2019 - Marc Cunningham
Q4:What do I do when my owner wants to be called in advance of any repair expenditures?
Copyright 2019 - Marc Cunningham
Q4:What do I do when my owner wants to be called in advance of any repair expenditures?
Set expectations
Copyright 2019 - Marc Cunningham
Management Agreement Clause #4
The expense to be incurred for any one item of maintenance; excluding work on hot water heaters, HVAC systems or roof; shall not exceed the sum of $______ unless such expense is specifically authorized by Owner,….
Copyright 2019 - Marc Cunningham
Management Agreement Clause #4
…..or is incurred under such circumstance as Agent shall reasonably deem to be necessary. Such repairs shall be made by Agent at Owner's expense without Owners prior approval.
Copyright 2019 - Marc Cunningham
Q5:What should I do if my owner wants “no pets”, but the applicant has a service animal?
Copyright 2019 - Marc Cunningham
Q5:What should I do if my owner wants “no pets”, but the applicant has a service animal?
Set expectations
Copyright 2019 - Marc Cunningham
Management Agreement Clause #5
Owner understands that state and federal law govern “service animals” and “emotional support animals”, and those animals are NOT legally considered pets, and therefore pet policies do not apply.
Copyright 2019 - Marc Cunningham
10/5/19
9
Q6:What should I do if my owner asks me to do something unethical or illegal?
Copyright 2019 - Marc Cunningham
Q6:What should I do if my owner asks me to do something unethical or illegal?
End the relationship immediately
Copyright 2019 - Marc Cunningham
Management Agreement Clause #6
Agent may terminate this agreement at any time with a written notice to Owner.
Copyright 2019 - Marc Cunningham
Q7:What should be the length of term of the management agreement?
Copyright 2019 - Marc Cunningham
Q7:What should be the length of term of the management agreement?
30 Days /Month-To-
Month
Copyright 2019 - Marc Cunningham
Management Agreement Clause #7
This agreement shall commence on __________ and shall automatically renew on a month-to-month term until either party terminates by providing at least 30 days written notice prior to the end of the month to the other party.
Copyright 2019 - Marc Cunningham
Q8:How do I get my owner to agree to changes in my management agreement?
Copyright 2019 - Marc Cunningham
Q8:How do I get my owner to agree to changes in my management agreement?
Don’t require a signature for changes
Copyright 2019 - Marc Cunningham
Management Agreement Clause #8
At the expiration of the initial and any subsequent term of this agreement, all terms and conditions are subject to change by Agent, with a 30-day notice to Owner.
Copyright 2019 - Marc Cunningham
10/5/19
10
Q9:How often should I inspect my owners property?
Copyright 2019 - Marc Cunningham
Q9:How often should I inspect my owners property?
1. One time per year
2. Don’t overpromise!
Copyright 2019 - Marc Cunningham
Management Agreement Clause #9
Agent may, at agents option, complete an annual property condition report at a fee of $___ to Owner
Copyright 2019 - Marc Cunningham
Resources
NARPM.orgIREM.orgPropertyManagementSystem.orgPM Facebook Groups
Copyright 2019 - Marc Cunningham
www.PropertyManagementSystem.org
Copyright 2019 - Marc Cunningham