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Property Management Blog

Why You Should Not Use Excel for Accounting

Wayne Hartigan - Friday, December 02, 2016

The accounting software of today in no way resembles the awkward software of yesterday. Today, most software products are designed with the end-user in mind, and include easy system navigation, intuitive data entry screens, and system tutorials to make it easy to learn your way around the system.

If you’re using Excel to run your property management business, you may want to consider the following:

Excel’s Primary Functionality is NOT Accounting

Excel’s primary function is creating spreadsheets, not processing transactions, or producing financial statements. Yes, it can be used for those things, but typically with accounting software; not in place of it. As a result, users will spend an inordinate number of hours entering Excel data manually, because it does not have the capability to share data. So anytime your tenant pays rent, you’ll be posting that payment in your checkbook, your accounts receivable journal, and your tenant record. With regular accounting software, you post it once.

Propensity for Errors Increases

The lack of a central database and no double entry accounting system in Excel also means a lot more repetitive data entry. And each time you have to re-enter the same data, the likelihood of making an error increases dramatically. Also consider that without the safeguard of a double entry accounting system, it’s very easy to end up with out of balance accounts.

Lack of a Reliable Audit Trail

Accounting software has become valuable to business owners because of the ability to ensure that data is accurate and secure. Excel offers no such protection; meaning that formulas can be changed, entries accidentally (or purposely) deleted, and transactions erased, all without leaving a trace of the original entry behind.

Ease of Use - Or Lack Thereof

While it’s fairly simple to create spreadsheets in Excel, making it a functioning accounting program requires another level of skill that most Excel users will never attain. Creating an invoice, printing a statement, or processing a financial statement in Excel can take up valuable time, while accounting software allows you to create those items in minutes.

Make the switch and upgrade to a complete accounting program. I use Yardi Genesis and am quite pleased with its capabilities.

If  you would like further information regarding this topic, contact us at info@arrowmanagement.com

What is a Service Animal?

Wayne Hartigan - Thursday, December 01, 2016

Service animals are different from pets, and even if you don’t allow pets in your rental property, you are legally required to allow service animals. These are often dogs, but they can be any type of animal at all. You might have a tenant with a doctor’s note that says a rooster, snake, guinea pig or ferret is necessary for that tenant’s physical or mental health.

Documentation

The first thing you need to do when a tenant tells you a service animal is necessary is to ask for documentation to support that claim. Most people will have a letter from a doctor or a therapist prescribing the animal for some sort of disability or health problem. It’s permissible for you to call the practitioner and confirm they treat your tenant and wrote the letter.

Deposits and Fees

While you might charge a pet deposit or a fee for tenants who move in with their pets, you cannot do that with a service animal. Don’t try to increase rent on tenants who need a service animal and do not ask them for a larger deposit or a pet fee. This is illegal.

Breeds

In many cases, your pet policy will restrict the breeds of dog that you allow in your properties. However, when it’s a service animal, you have to allow whatever breed the tenant happens to have.

Lease Agreement

Make sure your lease agreement addresses service animals and what you require from tenants who have them. You cannot legally prevent tenants from having a service animal when they have the proper documentation, but you can require them to clean up after those animals and to provide proof that they have been vaccinated and spayed or neutered.

 

You don’t want to get into legal trouble with service animals or support animals. If you’re not working with a property management company and you’re unsure of how to handle tenants who need service animals, contact us at info@arrowmanagement.com for assistance and additional information.

Do I Need Pet Insurance for My Rental Property?

Wayne Hartigan - Thursday, December 01, 2016

Pet insurance is a valuable option for rental property owners and can provide protections that standard landlord insurance no longer includes. Many tenants in Pasadena have a dog or a cat, so protecting yourself against the liability that can come with animals is essential when you’re a landlord.  In addition, you should include in your pet policy.

Over the years, insurance companies have been restricting the coverage they offer for animal-related incidents such as dog bites. You can still add dog bite coverage to your policy, but moreover we recommend you require your tenants to have renter’s insurance that covers dog bites. You should also require that the tenant lists you on the policy as a co-insured.

When you are included on the renter’s insurance policy, you’ll be aware of any changes in its terms, and you’ll know if your tenant cancels the policy or there is a lapse in coverage. Have your attorney review the verbiage in your lease so you can be sure that dog bite coverage is required for tenants who have pets. The lease should protect you against any liability regarding animals because any pet can hurt a person. Make sure you have the proper coverage.

Finally, when your tenant renews a lease, make sure you get a new copy of the tenant’s insurance policy, which covers dog behavior.

If you have any questions about pet insurance requirements and what we recommend, please contact us at info@arrowmanagement.com.

Why My Property Manager Needs To Be Additional Insured

Wayne Hartigan - Wednesday, November 30, 2016

Insurance is provided as protection to prevent loss in the event of an unforeseen circumstance. No matter what sphere of insurance you are speaking of, the ultimate goal is immunity. As a Landlord, you deserve a sense of wellbeing knowing that your Property Management Company is just as protected as you are.

Many home owners inquire as to why Property Management Companies require they be listed as “Additional Insured” on their landlord insurance policy. This is because experienced Property Managers are aware of the civil liability issues that can and do unfortunately arise in the leasing and managing your investment home.

Their goal is to protect their clients and eliminate financial burden.

Property Managers do carry Professional Liability Insurance more commonly known in the field of Real Estate as E & O Insurance. This specific type of coverage protects against: negligence, fair dealing, misrepresentation, and inaccurate advice; however, E & O policies exclude protection against civil liabilities. Property Managers are at a loss for obtaining civil liability coverage because they do not have ownership in the real estate they manage. If a civil law suit were filed, the Property Management Company would be without indemnity against the legal claim. This loophole actually puts you, the landlord, at a risky disadvantage. Reality is that the Property Manager is contracted and ultimately employed by the owner, who bears sole accountability for the property in litigation.

The solution to this obstacle is as simple as listing your Property Management Company as additional insured on your Landlord’s Insurance Policy. This formality will close the gap in coverage and mitigate the financial risk. Several insurance companies will add this inclusion to your existing Landlord policy at no additional cost. Be certain when making this addition to your policy that the Property Management Company is specifically named as “additional insured” on the declaration. Being listed as “additional interest” or “additional party” will not extend the coverage you are seeking. Be very clear when discussing what you are require from your insurance agent and then rest assured in confidence knowing that you have adequate coverage on your policy.

 If you have any questions about this or our property management services, please contact us at Arrow Management Company and we would love to talk with you (626)796-4926 or info@arrowmanagement.com.

 

Pasadena Property Management: Pet Policy

Wayne Hartigan - Wednesday, November 30, 2016

 

Pets are a big part of our lives, and Pasadena, CA which is a very pet-friendly town. Lots of folks have pets and want to live in a rental property with their pets. We recommend having a pet policy in place. At Arrow Management Co, we will consider accepting one dog or one cat. We do put restrictions on the animals. For example, we have breed restrictions. We will not take Pit Bulls, Dobermans or any other breeds that are considered vicious. We can set weight limits when necessary and we always require additional security deposit when tenants move in with pets. Depending on the property and the location, that pet deposit could be between $250 and $500. The other nice thing about accepting pets is that they can pay their own rent. So, you get the opportunity to make a little more investment money with your rental. Most pets include an additional pet rent of between $10 and $25 per month.

Our philosophy is that by allowing pets, you will open your doors to more renters. We don’t like taking in new puppies or kittens, but if you have a tenant with good references who has lived responsibly in properties with a pet, you might want to consider accepting the tenant and the pet.

There are positive aspects to allowing pets, beyond the greater pool of renters. Most tenants with pets stay in the property longer because they will not want to find another rental. These tenants are also happier on average because pets relieve stress. Also, as we mentioned, you will get extra income from the pet rent. 

 

Remember that assistance animals are different from pets. They have legal protections. If a physical or mental disability requires a tenant to have an animal, you have to allow it. If you have any questions about our pet policy at Arrow Management Company, or you would like more information for your own investment property, please contact us at info@arrowmanagement.com, and we’d be happy to help you.

4 Tips for New Landlords and Property Investors in Pasadena

Wayne Hartigan - Wednesday, November 30, 2016

Fair Housing

First, make sure you understand fair housing. There is a list of categories you need to know because you cannot discriminate against certain groups of people. Some of them are obvious – you know you cannot discriminate based on race, religion, creed or marital status. Other categories are not so obvious. For example, you cannot discriminate against someone with an assistance animal. This is not just a Seeing Eye dog but a companion animal. Someone who needs comfort from a dog and has a note from a doctor is protected by fair housing. You cannot charge an extra deposit for that animal. That’s an area that most landlords are unfamiliar with but should understand.

Tenant Screening

The fair housing laws make it essential for you to have written screening criteria. Provide that to any applicants and make it very clear to them what is expected once you do a background check. Look at credit information and any collections activity. You’ll want to see if they have any landlord collections and if they were ever evicted. When checking criminal information, don’t just look at the local area but anywhere they lived. We do nationwide searches. When you’re verifying employment, get recent pay stubs. Ask for rental references. For single family homes, we require at least two years of verifiable rental history. That’s because there’s a little more care involved in taking care of a single family home.

Unexpected Expenses

Always have funds on hand for those unexpected expenses. If a water heater goes out, make sure you can replace it quickly and promptly. We recommend having at least one month of rent on hand for those expenses. If your tenant decides to not pay rent or can’t pay rent, you’ll need that extra cash to cover insurance, your mortgage and other expenses.

Inspections

Our final tip today is to consistently perform inspections. You can tell quite a bit when you go for that inspection. You might do a great job up front when screening, but changes can happen. A tenant can lose a job or a new, unauthorized tenant can move in, or they may add a pet. Sometimes tenants are unfamiliar with needed repairs. They might not recognize a running toilet as a maintenance need. Your inspection can save you from future expenses. 

These inspections can also be helpful when you are deciding whether you should offer a lease renewal. You’ll have the opportunity to find out if they are taking care of the property and the yard. If you have any questions or need help with property management, please contact us at Arrow Management Company (626)796-4926 or info@arrowmanagement.com.

How Does Arrow Management Company protect your Investment?

Wayne Hartigan - Wednesday, November 30, 2016

One of the greater reasons to hire a property manager is to ensure your investment property is being properly cared for. Today, we’re going to explain how your property manager will protect your rental home for you.

Inspections

Regular inspections are a great way to protected your investment. At Arrow Management Company, we like to do two annual inspections every year. You can tell quite a bit from these inspections, and we are often looking for housekeeping issues. We can also determine whether any unauthorized roommates or pets are living there. These inspections are a great opportunity to look for repairs that we might need to do. We have found that it saves our owners a lot of money in the long run when we notice minor repairs during an inspection that can be quickly taken care of. It protects you from more expensive repairs later.

Screening

Thorough screening of tenants is required to protect your investment. We have had a few cases where owners place their own tenants in a property but they don’t take the time to do a thorough background check You have to check criminal history, landlord references and employment. We always check for past evictions so we know what kind of tenant we are getting and because we want to protect your home form a bad tenant.

Insurance

Having the right landlord insurance policy in place protects you and your investment against potential problems. If there is an unfortunate incident and someone gets hurt on your property or there is property damage to your home, you want to make sure there is adequate coverage in place.

Continuing Education

When your property manager is on top of all the latest laws and requirements, your investment is protected against legal and compliance issues. All of the forms and laws change frequently, and you need to have someone who is educated on these matters. Dispute resolutions is also helpful. Property managers can negotiate with tenants on your behalf and handle any court matters that might come up.

Technology

Maintaining current and up to date software is an important protection at Arrow Management Company.

The best way we can protect your investment is by reducing vacancy and finding qualified tenants. If you have any questions about this or our property management services, please contact us at Arrow Management Company and we would love to talk with you (626)796-4926 or e-mail info@arrowmanagement.com

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Smoke Alarms: Installation, Testing, and Maintenance

Wayne Hartigan - Tuesday, November 29, 2016

California’s Health and Safety Code requires that on or before January 1, 2016, all residential buildings must be equipped with a smoke alarm in each bedroom and any other sleeping room. Those smoke alarms must be approved by the State Fire marshal and must be installed in accordance with the manufacturer’s instructions. Existing alarms need not be replaced unless the alarm is inoperable. Unless prohibited by local law, battery-operated smoke alarms are acceptable. State law does require hard wired smoke alarms be installed in existing units when work is done to the unit that requires a permit and when the value of the work totals $1,000 or more.

Beginning July 1, 2014 California law requires that battery-powered smoke alarms sold in California must have a non-replaceable, non-removable battery that will last for at least 10 years. The law does, however, create an exception through July 1, 2015. A property owner, managing agent, contractor, wholesaler or retailer that has smoke alarms in stock or on order, which do not have 10-year battery life, can continue to install or sell them through July 1, 2015.

Beginning on January 1, 2015, in addition to the 10 year battery life (which begins July 1, 2014), all smoke alarms or combination smoke alarms sold must have four additional features: (1) display the date of manufacture; (2) Provide a place on the device where the date of installation can be written; (3) Incorporate a hush feature; and (4) Incorporate an end-of-life feature that provides notice that the device needs to be replaced.

Rental property owners are responsible for testing and maintaining smoke alarms. If you would like more good information about how to effectively manage your investment property, please contact us at info@arrowmanagement.com.

 

How to Advertise Your Property for Maximum Exposure

Wayne Hartigan - Wednesday, November 09, 2016

Online Advertising

Make sure your property listing is all over the Internet. Today, people use the web and they are not so interested in looking at print advertising. The most effective way to advertise is with the Internet and it’s important to get the property out there.

Professional Photos

Take good, professional high quality marketing photos. Make sure you have pictures of the front and the back of the house, and take good interior pictures. You really want to showcase your property and make people interested in seeing it.

Current Representation

When you’re posting photos and writing descriptions, make sure you’re providing current information about the property. You don’t want to provide photos from when the house was renovated. While those might be nice pictures, they don’t tell the true story about what the property currently looks like. You don’t want to provide false advertising.

Video Tours

It’s a good idea to do a video tour. This allows tenants who are not in the area to get an accurate feel for the property and its layout. Before shooting your video, be sure there is adequate lighting. Introduce where you are when you’re in the property and taking the video. This is excellent information for a prospective tenant.

Signage

Use professional signage. Writing your name, phone number and a brief description on a piece of cardboard is not a good way to introduce your property to renters. It tells tenants you’re not so interested in renting the home, or it gives them a poor idea of what they can expect when they live there.

Flexible Showings

Have a flexible showing schedule. Tenants might not be able to see the home during the day because of work responsibilities, so make sure you’re available to show evenings and weekends. Be there when the tenants can be there.

If you would like more good information about how to effectively manage your home, please contact us at info@arrowmanagment.com.

What is Rent Ready? Property Management Advice

Wayne Hartigan - Wednesday, November 09, 2016

A property is ready for the rental market when it is clean, repaired, inspected and appealing to potential tenants. There are several things that need to be done in order to get your rental property into this rent ready condition.

Professional Cleaning

First, your home must be professionally cleaned. There are several items that are commonly missed by landlords when they’re trying to get the place ready for the market, like ceiling fans, light fixtures, vents and baseboards. Make sure those places are cleaned as well. Have the carpets professionally shampooed. This sets a standard for your tenants and you will expect clean carpets at the end of the tenancy as well.

Turn On Utilities

Have the utilities on before the tenant moves in. This will allow you to inspect the property and also ensure that the tenants will have no trouble moving into the home. Once their lease begins, they can have those utilities switched into their own name.

Repairs and Maintenance

All the necessary repairs and updates must be completed prior to a tenant moving in to the property. You don’t want to have to make these repairs while the tenant is living there. Check light bulbs to make sure they’re working and replace any that aren’t. This allows you to provide a functional and habitable home to the tenant. At the end of the lease, if those lights are not working, you can replace the light bulbs with the security deposit. Fresh paint is always a good idea. You don’t want any scruffs, scratches and holes in the walls before a tenant moves in.

Compliance Issues

For the home to be rentable, you need to make sure all the compliance issues are met and satisfied. Different places have their own rules, especially pertaining to things like smoke detectors and carbon monoxide detectors. Make sure you know the rules and follow them. If you have any questions about how to get your home rent ready, please  contact us at info@arrowmanagement.com.


Wayne Hartigan
CERTIFIED PROPERTY MANAGER ®
Arrow Management Company

Phone: 626-796-4926
Fax: 626-796-3375

Our Address:
107 S. Fair Oaks Ave., #324
Pasadena, CA 91105
info@arrowmanagement.com

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