Renowned Property Management Broker-Owner Recommends Tenant Pro

How to Get Into Residential Property Management

Six years ago, I purchased an investment property and started renting it, but I didn’t know what I was getting into. Dealing with tenants was a nightmare because I had no idea how to choose the right renters. After writing check after check to the mortgage company for an empty rental property, I realized that I had to educate myself.

Today, I own 16 properties and manage about 50 other properties for clients. This affords me a more consistent paycheck, and I’ve reached many lofty financial goals. Now I choose which hours to work, and most important, I’m building long-term relationships with my clients. When you work with buyers, they’re typically out of your life after the closing. In property management, I get to know the family, and because I’m building a referral network, it leads to purchases and listings.

There’s much to know about property management and yet there’s so little education available for those who either manage their own properties or someone else’s. To anyone thinking of getting into property management, I offer this advice:

1. Go by the Book and the Bank

First, you need to check with your broker to make sure he or she will allow you to practice property management for clients. Once you’re given permission, your brokerage company will need to establish several additional bank accounts, such as a property management escrow account to hold tenant security deposits and advance rents, and a property management operating account, in which rents will be deposited and monies paid out to owners. The accounts help you account for all funds. For example, money you collect you have to deposit within three days. At a Florida Real Estate Commission (FREC) meeting, I witnessed a property manager lose her real estate license because she accepted a post-dated rent check. I’ll never forget it.

2. Assemble a Team of Pros

A good real estate attorney is an essential member of your property management team. He or she can draft leases and represent owners through the eviction process, if needed.

You’ll also need a good screening company to check out prospective tenants. Before a tenant moves into a property, have him or her fill out an application and give you a signed, written authorization for your screening company to run a credit report, look for past eviction records and do a background check (including criminal history). The application should also include a work history, so employment can be verified. (For those who aren’t approved, always remember to send them an adverse action letter explaining how to obtain a free copy of their credit report.) Some screening companies to consider include www.Tenantverification.com, www.tenantscreening.com and www.ASAPscreening.com. Each company offers different levels of screening for various prices.

You’ll also need a source for forms and notices. There are books you can buy, but I generally download my forms from PlanetRealtor.com (there are about eight) and from www.uslegalforms. com.
Also new: move-in, move-out and tenant payment Wizards simplifying those repetitive functions. It requires the manager first to answer a few questions to complete each process.

3. Continue Your Education

The most important part of your team is you, so invest in your education. The Florida Association of Realtors® (FAR) offers several property management courses through local associations. You can also buy books that refer to property management and the law. Check your local board store to find out what’s available or go to PlanetRealtor.com and look in the Planet Realtor store. You can also go online and download Chapter 83 of the Florida Statutes, otherwise known as the Landlord Tenant Act, at http://www.leg.state.fl.us. Search the phrase Landlord Tenant Act in the “Statute Search 2005” window and read the act thoroughly and familiarize yourself with any updates. If you’re unsure how to interpret something, contact your attorney or call FAR’s Legal Hotline at (407) 438-1409.

4. Get a Good Software Program

Property management software is a must. It can save you time by helping you prepare tenant billing, automatically deducting your property management fees from the bill and printing checks for owners. It can also remind you when leases are nearing their ending dates, and help you print out important notices for tenants.

There are many programs to choose from, including Tenant Pro, Rent Roll and Yardi Systems. They’re online and some offer a free trial download. I chose Tenant Pro because it’s userfriendly, reasonably priced ($600) and it automatically reminds me when leases are about to expire. When you buy a program, don’t forget to include tech support: It’s a good benefit to have until you get familiar with the software.
The company also enhanced the letter-writing feature, integrating with Microsoft Word to produce 45 customizable letters and agreements.

5. Promote Services and Properties

When your team and technology is ready, start advertising for new rental properties to manage and sending mailings to absentee owners looking for new property management customers. Once you convert a lead into a new listing by having the owner sign a property management agreement, start advertising the property. I spend about $500 per month on advertising in local newspapers, such as our local PennySaver, which generates most of my rental calls. We also dedicate a page on our Web site (http://www.totalrealty. cc) to rental properties, with information about square footage, etc, and we place “For Rent” signs in the yard of each rental property.

6. Balance Owners and Tenants

Be sure to let owners know what they can expect of you without overestimating the duties you’ll perform. Explain the process, give the owner an estimation with the time frame for renting the property, and explain how you get paid and from where the money comes. We prefer to interview property owners in person, but we’ll do a phone interview if necessary.

Even though your loyalty lies with the owner, the tenant is your customer as well. If a tenant calls and requests a repair, tell him or her when to expect the service provider. If a tenant hasn’t paid rent on time, send him or her a reminder or place a courtesy call. Sometimes, tenants just forget — but you don’t want to wait until the overdue payment turns into a problem or a possible eviction.

7. Apply the Golden Rule

I’ve found that simply treating others as you would want to be treated works wonders in this business. When the lease end is approaching, ask people what they’re going to do. One tenant said she wanted to purchase a house — that house, if possible — so I contacted the owner who did want to sell. Once owners are comfortable with you and you’ve shown how you can make things easy for them, they might buy additional investments through you. And they’ll likely refer you to their family, friends and coworkers. Remember, property management is a niche, and not everyone is cut out for this kind of work. But if you’re a good manager, word about you can spread fast.


Cynthia DeLuca is broker–owner of Total Realty in DeLand. In 2002, she became an instructor for the Florida Association of Realtors® (FAR) and has written a property management course for FAR as well as Graduate Realtor Institute (GRI) courses for the Nevada Association of Realtors. DeLuca is 2005 president of the West Volusia Association of Realtors.