Category Archives: Property Management

The more experience I have as a property manager the more aware I am about trees and your income property.  Look, trees are expensive.  Some types of trees are adept at getting in to your sewer pipes.  (Think willow trees.)  Some trees are extremely fragil.  (Think Bradford pears.)  And any tree is subject to  carpenter ants, lightning. etc.

Taking a tree down can cost upwards of $4,000.  That can wipe out an entire year’s cash flow.  We have a cottonwood tree in Independence, MO right now that was struck by lightning this spring.  It’s now crippled and dying and becoming a hazard to the house we manage and the house next door.  $3,400 is the estimate to take it down.  Ouch.

And it’s not like just anyone can do tree work.  A 30′-40′ tree needs to be worked on by a professional.  A professional who is bonded, licensed and insured. And check those references.  You simply don’t want the liability of damage should things go badly bringing down a big tree.

I’m not saying you should buy only barren prairie houses.  I am saying you should be aware of the trees.  What kind of trees?  How large?  How old?  How close to the house? (Too close to the house and they can contribute to foundation problems.) Just pay attention.  That’s what I’m saying.

When using a professional (or not so professional) property manager you need to watch your money.  Here at KC Property Manager we stress to the employees that a lot of sins can be forgiven.  You can miss an inspection or even choose a wrong tenant candidate (two great applications and the one that was chosen just does’t work out) but you simply cannot, under any circumstances, mess with an owner or tenant’s money!

I cannot tell you how many ways there are for property managers to steal from their rental property owners.

• Not doing the work they promise for their fees.
• Mis-allocation of monies.  (Say the property manager had some work done on one of his houses but had the contractor write down the address of one of your houses.)
• Unreported rents.  (Telling you the tenant moves in next month when in fact the tenant has already moved in and has paid rent.)
• Marking up bills when they say they won’t do that.
• Negotiating kick-backs from vendors and contractors on work performed.

These are just a few of the ways our current landlords have told us they have been taken advantage of in the past.  As a guy that deals with other people’s money all the time, I can tell you there are ways even beyond these.

How to avoid being taken advantage of?

• Make sure your property manager uses a cloud based software program that allows you or your accountant to monitor monies in and monies out. Yes, this software can be manipulated but it usually leaves a trail.
• Don’t be afraid to hire an independent set of eyes to drive by your property every once in a while and see the general condition.
• Get on the phone.  Talk to your property manager every once in a while. Get to know them and then trust your gut.  If they aren’t answering questions, or worse, not returning your calls you might get immediately suspicious. 

Listen, there is no full proof way to make sure you aren’t ever the victim of dishonest business practices.  Crooks have more time to figure out their schemes than you have.  But use some common sense and intuition when it comes to monitoring your money.

There is never a dull moment in property management.  Just when you think you have everything under control, rain happens.  The kind of storms we get here in the Kansas City area can really cause havoc with their wind and rain.  Here in the Olathe area last Sunday we ended up with about 3 inches of rain in about 9 hours. Two heavy downpours added up to those 3 inches.

Of course, with that amount of water this going to be runoff and therefore, some water in basements.

Why do people finish off basements?

I mean, I did in my house.  But I didn’t use drywall and great carpet.  So every once in a while when it does get a little wet I dryvac it up and move on.  But when a basement has plush carpet and drywall and the sump stops or the sewer backs up or there is rain pouring in from the window wells that are flooded, well, you get the picture.

So just when you think you have everything under control, property management wise, here comes a storm, or snow, or broken trees.  Now granted, we manage 200+ homes and this isn’t happening to all of them.  But every time here is storm you can bet we have some work to do on 3-4 houses.

Let’s talk roaches and your rental properties.  Disgusting, right? Yes!  So pay attention.

We recently took over a 5 unit apartment here in Olathe, KS.  The owner bought it from a well known local slum lord and to his credit he is working hard and putting in dollars to improve it.  Changing windows, adding working fire alarms and repairing siding is the easy part.  But getting rid of the roaches, if there is an infestation, is work.  And it’s gross.  And it’s costly.

TRUE STORY

Right after we took it over we had a new tenant ready to move in in no time.  But as he was moving in he wouldn’t even put a box down because we had one of the units exterminated the day before because the tenant complained about some “bugs” and when he got there they had run to his apartment where there were no chemicals.  So naturally he took his box back outside and refused to move in and demanded his security deposit back and a termination of his lease.

We asked for 24 hours to evaluate and had a pest control guy go through and he said “This is the worst roach infestation I’ve ever seen.”  Well, that’s not good.  (We let the new tenant out after the inspection.)

It’s a several week process  to get rid of the majority of these critters and it takes all 5 units cooperating to get it done.  And with this case it looks like it’s going to take eviction of one of the tenants to get rid of the roach “harbor”.

Roaches are a problem if you have unclean tenants.  You add unclean tenants to a multi-unit investment property and you have potential to have tenants complaining, yelling and then leaving.  Don’t let unclean tenants in and monitor to make sure they don’t become that way.

In this case this all gets chalked up to improvements since he had to do a lot of work anyway.  But it was an unexpected headache with big financial consequences for this rental owner.

Yes!  Yes!  Yes!

I’m going to say it again and again and again until people start listening.  In the state of Missouri your property manager is supposed to have a real estate license…it’s required.

Once again I know of a situation because someone was crying on my shoulder about how their property manager took their money and now they cannot find them.  Shockingly, this Missouri property manager was not licensed and so they didn’t have their checking account registered with the State of Missouri.  The truly sad thing is that tenants don’t know to ask and seldom to even rental property owners ask.  Even sadder is that a great many of the property managers operating in Missouri don’t even know the truth and argue in earnest that they do not need a real estate license!!!

I guess ignorance must be bliss.  Well, until someone loses big.

I the State of Missouri to be a legal property manager you must have a real estate license and operate under a broker.  See here and here.  Don’t want to read through all the rules but want to verify?  Just call the Missouri Real Estate Commission at 573.751.2628.

Note:  In Kansas a property manager for residential property need not be licensed.