Residential Property Owner & Real Estate Investor FAQ's
I have my property managed by 33rd Company® Property Management, can you save me money?
Yes. In most cases we have found that our fees are more than offset by our ability to obtain higher rents, less delinquency, lower vacancy rates, lower repair costs, and a faster turnaround of vacating units. In short, your cash flow will be better than if you try to manage all of the day-to-day burdens yourself. The Owner can also usually write off these management expenses and get a schedule E tax deduction for these services. Our services help to PROTECT your investment, ENHANCE your cash flow, and SAVE your valuable time. You will be better off with Professional Property Management... Especially when that management is from a company that also is an owner / investor!
Do I lose control of my property once you start to manage it?
No. We work for you, and with you, and guide you in setting the parameters not defined by law. We are also real estate investors, and will help you through the management, tax, accounting, and even resale or 1031 conversion of your investment property.
Do you manage only residential property?
We are specialists in the management of single family residential properties. Our Property Management services also extend to 3 bedroom townhomes and Condos.
Do you charge the tenant a security deposit? What about a pet fee?
Yes. Our policy is that the security deposit is typically one month's rent. Pets are not allowed without your permission. When pets are allowed, an additional pet fee of typically $500 is required for each cat, dog or other animal. Any damage above and beyond the pet deposit remains the tenant’s responsibility. The pet deposit is used to offset the costs of a mandatory steam cleaning that is done on your carpet after the Residents vacate.
What happens to the tenant's security deposit? Do you send it to me?
No. In compliance with Minnesota Law, the tenants are entitled to receive interest on their security deposit during the time it is held by the Property Manager. We hold security deposits in escrow during the tenancy, and credit interest to the tenant at move-out. The move out checklist documents the condition of your property at Lease termination. Any damage expenses beyond normal wear are deducted from the security deposit along with any other money owned by the tenant. The balance is returned to the tenant within 21 days of move out.
The new legislation is confusing. Do you keep up with all the changing rules and regulations?
Do you insure my property when you manage it?
No. You maintain your own personal Property insurance coverage (either an amended homeowner’s policy for residence rented to others, DP3, or a Business Owners Policy (BOP)). We recommend that you obtain loss of use coverage in the event the home is damaged and becomes uninhabitable while being repaired or rebuilt in the event of damage. This will protect you from lost rental income. You should also insure personal property not part of the dwelling (refrigerator, washer, dryer, etc.), and should also obtain, at a minimum, a $500K umbrella liability coverage in the event of physical injury on your property while the home is rented. We require that we are named as an additional insured under your rental property policy. You should also check to see that you have coverage during extended vacancies as some rental insurance policies only cover 60 day vacancies. Contact your insurance professional for more information on rental property coverage to ensure that you are fully covered for all of the risks and issues facing rental property owners. We will gladly recommend insurance companies interested in writing insurance on your property. We stipulate in our Lease that the Tenant is required to obtain renters insurance to cover only their possessions in the event of damage.
Will I know what is going on with my property?
Yes. We will communicate with you throughout our contract. We will contact you at reasonable times to discuss repairs and notify you of any tenant requests to vacate. Plus, throughout the contract, we will keep you aware of other issues that may arise. We summarize all activities occurring with your rental property each month.
Do you inspect the home during the tenancy?
During tenancies, we will perform periodic irregular external property surveys (drive-bys) to identify exterior tenant damage, Lawn or Snow care lapses, or other lease violations. We may also schedule an interior inspection/survey of the property if there is cause to believe that there may be tenant damage occurring inside the home (i.e. visible exterior damage, neighbor or Association noise or other complaints, late rent, or lease violations, etc.).
For homes under management, Owners are encouraged to sign up every 3 to 5 years for a Full Home Inspection from a Licensed Home Inspector. A Full Home Inspection can help owners identify maintenance problems or looming concerns like aging roofs, leaking window panes, rotting sills, or the need for maintenance (i.e. exterior painting, etc.).
33rd Company would be happy to refer Owners to a high quality Licensed Home Inspector and generally such services run about $300 to $500. While 33rd Company leasing agents and property managers may occasionally report obvious non-tenant caused maintenance issues during and between tenancies, our property inspections are limited to identifying tenant damages, and should not be relied upon as comprehensive Home Inspections.
During vacancies, you will need to check up on your property to ensure that your water is turned off, and that your heat is functioning in the winter months as we do not provide regularly scheduled visits to your property while we are showing it to prospective tenants. We recommend Owners winterize their homes when they are vacant during winter. Our property visits during vacancies are limited to scheduled tenant showings, and may not be sufficient to catch sudden freezing from a furnace failure in winter. You should also ensure that the yard is mowed and snow and ice are removed during the times that the home is vacant. We can arrange for these services if requested by the owner. You should also notify us of any maintenance issues or repairs that may be required or desired during vacancies so that they can be addressed before the new tenants take possession.
Do you qualify all applicants that want to rent my property?
Yes. Our application is designed to generate complete information from each prospective tenant. We process all applications and verify criminal background, rental history, employment history and income verification, credit history, and also check the sex offender and Methamphetamine database. We have specific Guidelines
for tenant screening that are consistently and fairly applied to all applicants. In general, an applicant must have good rental history (not from friends or relatives), have three (3) times the rent rate in verifiable household income, possess an acceptable credit history, and have no criminal background to qualify.
Do you guarantee the tenants that you place in my rental property?
Yes. Because of our commitment to place the best tenants in every market that we serve – we also provide one of the longest tenant guarantees available nationally. We have a Limited LIFETIME tenant guarantee on EVERY tenant we place in a rental property. We wouldn’t be able to offer that guarantee if we didn’t have the proven processes and record of success in managing rentals over the long haul.
Do you advertise vacancies?
Yes. We start marketing the vacancy as soon as we receive notice from the tenant of their intention to move. We know where to advertise most effectively to find the best tenants, quickly. We will produce better prospects sooner, and will minimize vacancies, which is likely your biggest expense. We know the rent values, vacancy factors, and time on the market in your area. We will sometimes place a sign on the property. We then advertise in the local community and web-based resources, and additionally disclose the availability to our relocation network, and through a Realtor referrals network. Advertising costs are passed on to the owner, but will be your most cost effective investment in finding a responsible, high quality tenant quickly. We also pay commissions out through our relocation and real estate network, which is included in the leasing fee.
Do you handle problems late at night?
Yes, 24 hours a day, 7 days a week. Tenants are given our number when they move in and in the case of an emergency they are directed to call us 24/7. We will talk with the tenant to determine how best to proceed. Many times we can solve minor problem over the phone, and initiate a scheduled non-emergency repair.
Can I still use my favorite Plumber, HVAC Company or Handyman?
Yes. We will be happy add your preferred vendors to our database for your property for those vendor you have a working relationship with. They will need to be identified and processed prior to the first tenant taking occupancy of the property.
Before an owner preferred vendor can perform any work at the property they must:
- Complete a Vendor Application Packet
- Provide license and insurance information
- Clear a criminal background check
- Provide copies active insurance (as required)
- Provide workman's comp coverage (as required)
There is a fee of $100 per vendor charged to the Owner (if not paid by the vendor) for adding and maintaining a preferred vendor in our database. This covers the cost of vendor screening, maintaining and updating records, providing required IRS end-of-year tax preparations for 1099-MISC for payments made to this vendor. Please allow up to 3 weeks to process a vendor’s application. As with all maintenance activity, the standard coordination fee applies preferred vendor charges to off-set the cost of maintenance request troubleshooting, processing work orders, service call coordination with the active tenants and processing invoices. All invoices shall be provided to 33rd Company to insure that the work is completed and reconciled properly. Please contact your Property Manager for more information on this service.
Do you pay the bills for me?
Yes. We will gladly pay for repairs for you from owner funds. There must, of course, be sufficient cash flow from the property to cover such expenses and we may require you to set up a reserve fund for this purpose or send a check to cover the expense. Recurring bills like utility bills during vacancies, association fees, or mortgage payments are paid directly by the owner. EFT / Bill pay systems are available to owners to directly pay bills conveniently and reliably. Owner should also contact utility companies to set up a landlord account so that utilities automatically revert back to the owner at the end of each tenancy during the short intervals between tenants so that the utilities remain on at all times.
When do I get my monthly statement and check after the tenant pays their rent?
Rents are due on the 1st of each month, and there is a short grace period. Sometimes, however, tenants pay late, or if payments are received by check, they may take a few days to clear the bank. We make every effort to collect delinquent rents in the event of a late payment. To ensure that all tenants' rent payments clear the bank, owners' monthly statements are typically posted in your on-line owner folder on the 10th of each month, or next business day if this date falls on a weekend or holiday. Cash ACH/EFT distributions to owners are subsequently posted typically on the 15th of each month, or next business day. We will perform an ACH direct deposit into your bank account with the proceeds from your rental payment, less maintenance, repair, and management fees. As required by Internal Revenue Service regulations, we will prepare and submit a 1099-MISC form showing the total gross rent income that we collected on your behalf during the year. A copy of this form will be posted to your Owner folder
as well as sent to you in January. We also summarize all of your annual repair, improvement, cleaning, and other rental costs as required so you can quickly and easily file your tax return.
Are your management fees competitive?
Yes. Our Full Service Management fees for residential properties extremely competitive, and we offer the highest quality Management Services that help you maximize your cash flow. We do not charge set-up fees for onboarding properties with existing tenants. We feel we offer some of the lowest fees and the best service available in the Twin Cities area. We do not charge a management fee while your property is vacant. We also pay referral commissions out through our relocation and real estate network, which is included in your leasing fee. Just like with some discount Real Estate brokers, if you don't offer referral or market rate buyer agent commissions, you will not get the marketing exposure you need to bring tenants. We have found this formula to be very effective in finding and placing qualified tenants, which reduces your biggest expense - vacancies.
We have the BEST management services available to protect your most valuable asset.
Your BEST Choice in Property Management INLCUDES:
- LIFETIME TENANT GUARANTEE (The best in the industry, see website for details)
- LOWEST Delinquency Rate Nationally (Less than ½% eviction rate)
- Longest Tenancy (currently averages 3.2 years – which minimizes turnovers)
- Shortest “Managed Vacancy Time” 5 days between tenants
- Full Security Deposit reconciliation
- Owners name is NOT on the Lease, protecting you from liabilities
- Experience, Experience, Experience! We have been in business since 1993.
Better Management… Better Results… 33rd Company, Inc.
Contact us TODAY for a current list of Property Management fees and services.
Does your management agreement give you exclusive right to sell my property?
No. We can sell your property if you would like us to, but it is not a requirement of our management contract. We will provide facilitation services for you and your tenant in the event that an agreement to buy the property is arranged by us. We charge a nominal sales commission for arranging this type of sale.
Are you licensed?
Our Property Managers and Real Estate Agents are licensed by the Minnesota Department of Commerce. We are also a licensed Minnesota Real Estate Brokerage Company, and a licensed Residential Contractor.
Can you start managing my properties today?
Yes. We can start the process immediately. Contact us today to set up a no obligation consultation to discuss your property in detail.
If you have a question that was not answered here or require further information about our services, please feel free to contact us at (651) 777-5500 or by e-mail at: firstname.lastname@example.org
and we will gladly respond within 24 hours.
How can I budget for long term expenses with a rental property?
Great Question. Many investors and commercial property managers create a reserve study and map out expected expenses (i.e. roof replacement in year 10, carpet replacement in year 6, etc.). In that way, they can establish a long term budget for these expenses, and build up a reserve fund from incoming rents (i.e. $100 per month) so that by the time these projects come due, there is sufficient reserve money to cover them. Some property owners also simply take out equity lines of credit on their properties so they have available funds in order to cover these extraordinary expenses.
Knowing the approximate age and lifespan of your property’s components can help tremendously in creating a long range budget. The National Association of Home Builders has created a Study of Life Expectancy of Home Components
. This study helps individual residential property owners qualify the life spans of most components like roofs, flooring, and appliances, and helps investors and landlords to qualify a long range budget.