FAQ for Rental Home Owners
How long has your company been in business?
The company was founded in 1987.
How do you generally advertise vacancies?
We utilize several paid and free listing websites in addition to our website where prospects contact us when they want to find a rental. We also share rental commissions with other agents often utilizing the Multiple Listing Service. This generates tenant referrals. Most local real estate agents know we are easy to work with and always place our clients first which means leasing each vacant unit to the first qualified applicant as soon as possible.
As the owner of a rental property, what is the number one way to save on my state and federal income taxes?
You should obtain a complimentary cost segregation analysis. You may be able to defer paying both state and federal income taxes for several years and increase your cash flow substantially. See: CSAReports.com for information.
Does Pacific-Realtors.net belong to any professional organizations?
We are members of the Apartment Owners Association of California, the California Association of Realtors, and the National Association of Realtors.
What is your rent collection policy?
Rents are prorated so they are always due on the first day of the month. We allow a three-day grace period before a late fee is charged. We will deliver a three-day notice to pay or quit by the fifth day of the month if the rent is not paid.
How much is the late fee and who receives it?
As of 2020, the late fee is $50. It’s payable to Pacific-Realtors.net to partially compensate for the extra time spent in dealing with late paying tenants.
What form of lease do you use?
We use the California Association of Realtors lease form. It does an excellent job of protecting the landlord while being respectful of tenant’s rights. It’s the most widely used lease in California.
Who sets the standard for preparing my rentals for the market?
While all rentals must be habitable as defined by California law, you as the owner make that decision unless you prefer to allow us to use our own professional judgment. It’s important to consider that highly qualified applicants will rarely accept a rental that has not been freshly painted and professionally cleaned from top to bottom. Less qualified tenants are usually not as particular. If owners want quality tenants, they must invest in repairs, paint, and cleaning.
In your experience, how long does the average tenant stay in properties you manage?
While we don’t keep statistics, our best estimate is between 3 and 4 years. Some move because they are buying a home or relocating out of the area.
Who pays for credit investigation and background reports?
Applicants pay this fee directly to the company we select. When the report is complete, it is emailed to our office.
Who handles evictions for your company?
It’s is extremely rare that we are required to evict a tenant. If it becomes necessary, we use outside legal counsel that has expertise in landlord-tenant law. If you have an attorney that you prefer, we will utilize that attorney.
Do you use licensed contractors for all work?
We use licensed contractors for jobs of $500 or more as required by law, but often use handymen to do smaller jobs in order to save our clients money. Many handymen are equally skilled as licensed contractors, and sometimes even more skilled, while charging less. All workers are required to have a business license, workers compensation insurance for their employees, and liability insurance.
Will you use vendors and contractors that I select?
Yes, assuming they are available to provide quality service when needed by your tenants and have a contractors license if required by law. They must also provide proof of insurance like all workers that perform maintenance services on properties we manage.
Will you call me before spending money for maintenance at my property?
We will call you if the work is discretionary. If the work required is not discretionary, we will promptly send a qualified contractor or handyman to perform the required work. California laws regarding habitability are very strict and favor tenants over landlords. Our goal is to make certain that your property meets all legal requirements. For items up to $500, we expect that you will trust our good judgment in dealing with the requirements of your tenants.
Do you meet contractors and vendors at the buildings you manage when they are working on a property?
Sometimes, but generally, no. We make every effort to utilize contractors and vendors that are trustworthy and reliable so that we are not required to pass additional labor costs on to our clients.
Do you routinely take photos of properties before they are occupied by tenants?
Yes. For your protection and ours, we take appropriate photos.
How many bids do you obtain for work to be done?
We generally obtain bids only for jobs exceeding $1,500. Contractors that do high quality work at a reasonable price are in high demand and do not make money generating bids. Management companies that waste the time of contractors find that the best contractors will make themselves unavailable to those management companies and their clients. Consequently, we obtain bids for larger jobs only. We expect contractors to treat our clients fairly, and we are rarely disappointed because they all want a continuing stream of work.
Do you ever have tenants perform minor jobs at the properties you manage?
No. If we were to do so, the tenant would become an employee under California law. We would be required to provide the tenant with workers’ compensation insurance which is expensive.
How often do you visit properties you manage?
It varies. We make interior inspections only when one of our maintenance workers reports to us that we should inspect the interior of a residence. We do not inspect the exterior of condominiums that are investor owned and currently rented. Other properties are inspected monthly from the exterior. The landscape and maintenance companies we hire are also asked to report to us anything that requires our attention in their opinion.
When you hire contractors to do maintenance work at managed properties, do you add a fee on to the cost they charge?
How do you handle security deposits?
Generally, for one to four unit properties, we place the security deposit into a trust account so we can promptly make any repairs and perform any required cleaning when a tenant vacates. Under California law, we have only 21 days in which to account to the tenant and return any unused security deposit. For larger properties, we hold in trust only enough funds to cover reasonable estimated repair and cleaning costs for a few months. The difference is held by our client.
Do you manage and lease furnished properties?
No. Furnished properties tend to attract short-term tenants. We believe it is in the best interest of landlords to attract long-term tenants.
When do you distribute checks to building owners?
Usually about the 8th or 9th of each month. Most rent checks are received and deposited between the 1st and 3rd day of each month and it usually takes checks two to three days to clear.
How much of a cash reserve do you typically hold?
For single rentals, we want to hold enough funds to cover all costs for a month in the event that a renter’s check is returned unpaid. For larger properties, we evaluate the cash flow with the owner and arrive at a reasonable amount.
Do you perform rent surveys for your clients?
Yes. We generally do a survey of local rents at least annually for our clients, but we are constantly monitoring our competition.
Will you review our insurance coverage?
Yes. We have an insurance administrator who will review your insurance policies annually and will make recommendations.
What property management software do you use?
We use Appfolio which is a first-class software designed specifically for property management companies.
How often do you generate financial reports?
You will receive a comprehensive financial report on approximately the tenth day of each calendar month, and a year-end report that you can provide directly to your tax preparer.
Can you track building operating expenses for each individual unit?
Do you earn money on your trust accounts?
All trust accounts are non-interest bearing accounts. However, accounts do earn analysis credits that offset bank charges.
Will my tenants be able to pay on-line?
What is the length of your management contract?
Generally for six to twelve months. After the initial period, either party can terminate the agreement with a 90 days written notice.
What happens if our assigned property manager is unavailable when we need him or her?
We always have a backup manager for every property and every manager has an assistant who is knowledgeable about every property.
Do you recommend month to month rentals?
No. Long term rentals are more cost effective for apartment building owners. Turn-over increases operating costs, including wear and tear that is not reimbursable. One year or two year leases reduce operating costs and attract the best tenants.
How do you make certain your staff complies with the fair housing laws?
Our staff has been trained in all areas of fair housing. They fully understand that all people must be treated equally without regard to age, race, ancestry, national origin, color, religion, sex, sexual orientation medical condition, handicap, familial status, marital status, or source of income. We take the fair housing laws very seriously. We will also train your employees in fair housing.
How do you save clients money when you’re managing their rental properties?
There are several ways: (1) By minimizing your exposure to lawsuits, (2) By obtaining volume discounts from contractors and vendors who know we have been in business since 1987 and provide lots of work to those who provide quality work at competitive prices, (3) By training and carefully supervising on-site employees, (4) By minimizing vacancy rent losses by simply treating tenants fairly and with respect, and (5) By addressing small maintenance issues quickly before they turn into expensive repairs.
If we decide to sell our rental property, can you assist us?
Absolutely. We have investors who regularly inquire of us whether we know of anyone who wants to sell their rental property. We have been a licensed brokerage company since 1987.
Are management fees and leasing fees tax deductible?
While we don’t generally provide tax advice, it is safe to say that management fees and leasing fees are tax deductible. Our affiliate, Nationwide Accounting Services can assist you with tax returns and advice.