What you should expect from your property management company
What you should expect from your property management company. Can a property management company make a difference in the performance of an apartment investment? Absolutely.
What should an owner expect from a property management company? Let’s suppose that you’ve purchased a 12-unit apartment in San Francisco and escrow just closed today. Here’s what you can expect from Centerstone Property Management after you enter into a management contract with us.
1.Copies of all the leases should be in the hands of the management company so we can enter the tenant information into our computer records.
2. On the day escrow closes, a letter announcing the transfer of ownership and the new management company is sent to all the tenants.
3. Information from the escrow closing documents including current rents, vacancies, security deposits, last rental increases, and date interest on the security deposit was last paid will be documented in the tenants’ ledger. If interest on security deposit has not been paid in the past, such will be done in the future on the tenant’s anniversary date of initial occupancy. Ditto for the rental increases per San Francisco Rent Ordinance.
4. Centerstone will enter information from the Final Escrow Closing Statement into the accounting system to prepare a Balance Sheet for the owner.
5. Within the next few days, a letter from Centerstone Management Company will be sent to all tenants explaining the tenant/management relationship, where rents should be paid, office hours, emergency numbers, etc.
6. Centerstone will transfer all utilities (electric, gas, garbage, water), loan payment and insurance billing to the new owner as well as accounts with any vendors who perform regular duties on the property, such as, fire extinguishers, fire alarm systems, pest control, elevator, coin operated laundry, etc.
7. We’ll prepare a financial budget for the property so money is accumulated for the property taxes, loan and insurance payments as well as other repeating vendor fees, vacancies, maintenance and capital improvement requirements.
8. Centerstone will arrange for janitorial, elevator, pest control, fire alarm system maintenance/montoring, fire extinguisher tank refill, landscaping, laundry and other necessary building maintenance services.
9. We’ll arrange for our management company to be listed as additionally insured on the building insurance policy to protect the owner when we act on their behalf as their agent.
10. A Centerstone representative will visit the property and make visual inspections of the common areas and list any items that need immediate attention. Other items which will need attention in the future will also be noted. Health and safety items will get particular attention.
11. We’ll do a key check of the entire building.
12. After giving all tenants reasonable notice, unit inspections will be performed with particular attention to health and safety items.
13. A Centerstone rep will meet with the Owner(s) to discuss capital improvements and the possibility of performing a pass through of their cost to the tenants.
14. Our accountants will examine the operating expenses to identify areas where the expenses could be reduced without a reduction in tenant services, e.g. energy-efficient light bulbs, garbage containers, time clocks, low-flow water devices, temperature reductions on building water heater, solar equipment, efficient boiler systems, etc.
15. We’ll explore opportunities to increase building revenues by adding laundry facilities or legal (sprinklered) storage rooms.
16. Upon 30-day vacancy notification from a tenant, Centerstone will send a letter to the tenant explaining the vacancy process. They’ll be informed that they cannot use their security deposit as their last month’s rent, that the unit must be left as they found it (except for normal wear and tear), etc. An inspection of the unit will be conducted prior to tenant vacation to inform the tenant of what charges they can expect for billable damage, unapproved painting, etc. At these inspections, we’ll also note the extent of work that may have to be done on the unit, such as repainting, floor refinishing and, especially on units that have been occupied for decades, carpet or kitchen cabinet replacement, with calculations for any corresponding increase in rent to market.
17. When the unit is vacant we’ll do a walk through and make a detailed list of items that have to be completed before the unit can be considered “rent ready”. This list will include smoke and carbon monoxide detectors, areas in need of fresh paint, floor refinish or replacement recommendations, door stops, new door locks, GFI devices in the bathroom, low-flow devices on water fixtures, suggested replacement of toilets with 1.6 gallon/flush units, properly-functioning heating system, mold elimination, clean shower curtains, Venetian blinds on windows, adequate closets in the bedrooms, clean appliances, clean light fixtures, and other items that allow your unit to achieve market rent for the area of town in which your building is located.
18. When the unit is “rent ready,” we show it by appointment only. This appointment, usually offered between 5:00pm - 6:30 PM, is extremely important if you want to minimize your vacancies and obtain maximum rent for the unit. At this time, the prospective tenant is given handouts that include an invitation to live in the building, a description of the unit, a list of the amenities, and an application to rent the unit.
19. Credit checks on prospective tenants will include a check of County records for any previously recorded evictions.
20. Centerstone keeps leases for San Francisco tenants up to date with all of the tenant ordinances that continue to change from year to year. We allow cats and service dogs on premises. Tenants on the lease are the Master tenants - subsequent tenants are allowed if a Master tenant remains and the subsequent tenants are subtenants and leave when the last Master tenant leaves. A new lease will be drawn at market rent for the remaining subtenants who want to stay on to become the new Master tenants.
21. The Owner will receive a monthly Income and Expense Statement that is sent on the 10th of every month for the previous month. This statement includes a Balance Sheet, Income Statement, Expense Statement, Accounts Payable and Tenant Ledger.
22. Centerstone will perform normal duties such as rent collection, issue 3-Day Notices if necessary, call or letter a tenant if partial rent is received, pay bills, send Owner’s disbursement, answer tenants’ questions and repair requests, respond to tenants’ complaints, arrange for repairs and maintenance, obtain estimates for improvements, inspect vacancies, levy annual rent increases, pay annual interest on tenants’ security deposits, arrange for County inspections of units and common