The Importance Of Hiring A Good Property Manager

Property Managers are professionals

Property Managers are professionals. They have a responsibility to increase the investment return of their clients. The next important criterion is tenant selection which is becoming increasingly difficult. Most property managers have a tenant screening formula. Some managers will not rent to tenants whose income is less than four times the annual rent at the minimum. Others look to a good landlord history and a credit score in excess of 600.

Such stringent standards are not feasible in todays economic climate. Some renters can still be found who meet these criteria but these are few and far between. Todays manager seeks a compromise. This could be interpreted as lowering of standards but in the current market, collecting, understanding and interpreting tenant data is critical. Tenant selection in the current financial crunch is more an art than a science. In the last few years that housing and employment has gone on the rocks many consumers have seen their credit scores plummet. But they are victims of the times and this does not necessarily make them suspect renters. How does a manager tell?

Property Managers have their task cut out in renting out properties and are forced to rely on past experience and an old-fashioned gut feeling. Rick Smith is a Bay Area realtor with over 2 decades of real estate experience. He has been witness to the changing cycles of the housing industry and more especially the ongoing slump. Rick Smith has recently diversified into residential property management in certain areas. Investors and residential property owners in Santa Clara and San Mateo Counties are assured of professional management by his company.

Property Management Professionalism

Making money from rental property entails managing it well. This is a new field to many investors who either do not have the necessary know-how to manage a property effectively or do not have the time or the skills that property management requires. In the circumstances an investor is well advised to appoint a property management team who takes care of day-to-day running. A property manager also screens new tenants and assumes responsibility for rent collection. At times this becomes difficult when a tenant becomes delinquent with the rent. The property manager then has to decide on the next step which might include eviction, a task no investor relishes.

Pitfalls of Short Sale Negotiation

Todays market offers an enormous opportunity to real estate professionals in short sale negotiations. However the negotiator should guard against the attendant legal risks. Some of these are:

Loan Forgiveness and Deficiencies: Negotiation and settlement of a deficiency is often overlooked. An experienced short sale negotiator will bargain for the release of the property lien and the original personal debt secured by the loan. Unless this is legally tied up the lender may not forgive the personal debt and start collection action.

Misrepresenting Tax Consequences: In 2007 the federal government enacted a law where mortgage debt forgiveness by a lender would not be counted as income by the IRS. However this provision is limited and varies from state to state, and it does not apply in all circumstances.

Misrepresenting the treatment of Secondary Debt: It is commonly believed that when the primary lender approves a short sale, all debt is automatically forgiven. This is not necessarily the case. Those who hold second deeds of trust do not usually forgive the debt and retain the right for recompense at a later time. Instead of writing off the entire debt they frequently sell the remainder to a collection agency which will aggressively pursue the borrower. These second loans are often the means by which sellers are caught by surprise a year or so later when the collection agency contacts them.

These are some of the many pitfalls in a short sale negotiation which an experienced negotiator will guard against.

by: Sharon

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