June, 2009:

I recently received this email:

Will,

What all kinds of assistance do you provide? Do you check the background and credit of the perspective renter? If work needs to be done what happens? I know that the carpets will need to be cleaned before the renters would move into the place. Does one have to use your people to do any work necessary? What happens if I were to need a new renter, would your service handle that too? I have never used a service such as yours before, so I have a lot of questions.

Thanks for your help.

Sincerely,

(name withheld)

Like most property managers, our services to the landlord are broken into two different jobs. The first task that landlords ask us to perform is often the task of finding a renter–to describe, explain and memorialize how we find your renter, write and sign a listing agreement.

The listing agreement is not unlike the listing agreement a homeowner signs when he or she sells a house. The listing agreement is what lets us put a lockbox on the door. We need a listing agreement to put the property in the MLS (multiple listing service).

The listing agreement describes the terms and conditions under which we get paid. We  get paid only if and when we find a renter. Most agencies charge between one-half to a full month’s rent to get this service done. If our client is using our property management services, we let the client set the fee, but we take the time to explain how agents get paid.

Like all listing agreements, the listing agreement will set a term or time period and then expires. In the past few years I can’t remember having an expired listing agreement as we push hard to rent quickly.

Once Condo Alexandria or another agency finds a prospective tenant, we take an application and proof of income. We then pull a background check to make determine a recommendation regarding the applicant. If the tenant can afford the property and has a good payment history we give a positive recommendation. If the tenant has a questionable credit history or if the tenant can’t afford the property, we advise the landlord that we have an application but do not recommend proceeding with a lease. In some cases, we can provide solutions to guard the landlord against potentially problematic tenants, but still find a way to move forward with the applicant.

After we are settled on a tenant, we prepare a lease and have it signed by the landlord and tenant. This is the end of our duties as a listing agent.

But that’s when our duties as a property manager begin. As a property manager, we collect the rents and make payments to the landlord as described in the property management agreement. From time to time, we respond to service calls from the tenant, dispatching appropriate handymen, electricians, plumbers, etc. to solve the problem. When this happens, we deduct the cost of these services from the rent collected and pay the landlord the remainder. From time to time we make inspections of the property and we occasionally recommend maintenance or upgrades.

Unlike some property managers, we  collect fees only when the property is occupied. No rent equals no charge.

If the property needs to be prepared prior to leasing, we can and will make some efforts to put the property in order. Some properties need a little clean-up to prepare for market. We don’t charge for managing a clean-up. We simply pass the cost without mark-up back to the landlord. We will take some deposits from the landlord as required to take care of this clean-up.

Some properties need something more than a clean-up. When a property needs a renovation, we may charge a fee to manage construction and clean-up to put the place in order.

Eventually the renter moves out and we’ll need a new renter. At that point, we’ll sign a new listing agreement and start the process again.

We manage houses, townhouses and condominiums. We bring a special expertise to condo management because we know how condos operate, but we don’t limit our business to condos.

It’s hard to describe everything we do in a format like this, but that’s what we do in a nutshell. There are additional services and limitations I’ll describe when we go through the agreements, but this should be enough to get you started.

About the Author — Will Nesbitt is the principal broker of Will Nesbitt Realty and maintains Condo Alexandria. Will specializes in condos, townhouses and single family residences in Alexandria, Arlington, Fairfax County, Crystal City, and Kingstowne. Will resides in Belle Haven Estates just outside Alexandria VA in Fairfax County.