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Q1: When is the best time to market my property in Carlisle, PA?
A1: The market is the most active from May to August. That being said, many Army War College students receive their orders in February and March so, if you know your rental will be available in the summer, February is the time to get listed on the military rental sites for maximum exposure. You'll want to advertise at least one month before your rental will be available. You never want your property vacant from September through April as the market falls off significantly when most renters are situated for the school year.
A1: The market is the most active from May to August. That being said, many Army War College students receive their orders in February and March so, if you know your rental will be available in the summer, February is the time to get listed on the military rental sites for maximum exposure. You'll want to advertise at least one month before your rental will be available. You never want your property vacant from September through April as the market falls off significantly when most renters are situated for the school year.
Q2: Where will my property be listed?
A2: The short answer: online. The specific sites and ways each property is listed constantly evolve and is ultimately up to the owner. There are also a few "tricks of the trade" and ways to advertise that we'll discuss during the onboarding process, especially to target certain demographics. A listings advertised broadly can exceed 50 listing sites.
A2: The short answer: online. The specific sites and ways each property is listed constantly evolve and is ultimately up to the owner. There are also a few "tricks of the trade" and ways to advertise that we'll discuss during the onboarding process, especially to target certain demographics. A listings advertised broadly can exceed 50 listing sites.
Q3: How can I get the lowest possible management fee?
A3: The largest factor you can control is the condition of your house. Management fees go up if managers feel a property is going to create a lot of headaches. If there are lots of issues or looming upgrades / renovations, a manager can expect more maintenance calls and contractor coordination which will bump up the management fee or incur a-la-carte costs. On the other hand, if a property is in great shape and requires little to no noticeable work, an agent will usually manage for less. Other ways to lower the management fee might be out of your control such as property age, number of units being managed, and proximity to the management team's home base.
A3: The largest factor you can control is the condition of your house. Management fees go up if managers feel a property is going to create a lot of headaches. If there are lots of issues or looming upgrades / renovations, a manager can expect more maintenance calls and contractor coordination which will bump up the management fee or incur a-la-carte costs. On the other hand, if a property is in great shape and requires little to no noticeable work, an agent will usually manage for less. Other ways to lower the management fee might be out of your control such as property age, number of units being managed, and proximity to the management team's home base.
Q4: What's the difference between a leasing fee and a management fee?
A4: Simply put, a "leasing fee" pays for the front end and renewal tasks: finding, vetting, and signing up-to-date leases with the best possible tenants who hopefully lease long-term and keeping an eye on the market and communication lines open during renewal time. "Management fees" are charges for the day to day tasks associated with managing your rental, most importantly inspections, but also tenant inquiries, maintenance requests, contractor coordination, sit visits, renovation coordination, 24/7 emergency availability, rent collection, dealing with tenant disputes, and many more administrative tasks. We are proud to offer all inclusive management packages. Make sure to carefully read all contracts as included services may vary.
A4: Simply put, a "leasing fee" pays for the front end and renewal tasks: finding, vetting, and signing up-to-date leases with the best possible tenants who hopefully lease long-term and keeping an eye on the market and communication lines open during renewal time. "Management fees" are charges for the day to day tasks associated with managing your rental, most importantly inspections, but also tenant inquiries, maintenance requests, contractor coordination, sit visits, renovation coordination, 24/7 emergency availability, rent collection, dealing with tenant disputes, and many more administrative tasks. We are proud to offer all inclusive management packages. Make sure to carefully read all contracts as included services may vary.
Q5: Why am I being charged yearly for a leasing fee (aka finder's fee) even if my agent isn't finding a new tenant?
A5: While a leasing fee for a tenant who renews may seem counterintuitive, it ensures your goals are aligned with your management teams' goals. If a management company gets paid more when your unit is turned over than if it's rented for multiple years with the same tenant, this creates a conflict of interest between the landlord and manager. Here are a few reasons why no leasing fees for renewals might hurt your property and bottom line:
Now consider the brokerage who's receiving a leasing fee each year, regardless if tenants stay or go. This management team is incentivized to find the best possible, longest term tenants from the get-go. Think of a yearly leasing fee as your investment in making sure good tenants are leased from the start so you don't have to go through the re-renting process more frequently. The landlord has less vacancy, loss of income to turnover expenses (e.g., repairs, renovations, utility bills, etc.), and the uncertainty of finding and placing new tenants. The longer your tenant stays, the more profit both owner and management make.
Still not seeing the benefit of a leasing fee based on lease length, including renewals? Let's put it in numbers. Choose between Agent A and Agent B. They both charge 10% for management. For leasing fees,
Agent A charges 8.33% yearly, based on gross rent collected. This seems more expensive.
Agent B charges 8.33% only in years when Agent B must find a new tenant. This seems like a better deal.
Now consider the following scenario:
Agent A leases your property, and the first tenant stay for 5 years. This is an ideal scenario for the landlord.
Agent B leases your property, but each year the tenant leaves, and Agent B finds a new tenants. Agent B does an excellent job - there's only 2 weeks average vacancy between tenants each year.
Landlord A chooses Agent A, and Landlord B chooses Agent B. Here's the breakdown of what each party will make over 5 years:
A5: While a leasing fee for a tenant who renews may seem counterintuitive, it ensures your goals are aligned with your management teams' goals. If a management company gets paid more when your unit is turned over than if it's rented for multiple years with the same tenant, this creates a conflict of interest between the landlord and manager. Here are a few reasons why no leasing fees for renewals might hurt your property and bottom line:
- Management companies that only require leasing fees for listings have an incentive to get your property back on the market, which usually leads to more vacancy. Vacancy is the #1 loss of income for landlords. Turnover is almost always a bad deal for owners. Even if there is no lost income between tenants, properties that are turned over more likely have more wear and tear and increased risk with each new, unknown tenant.
- If the brokerage also manages your property, this creates the possibility that a management team may, intentionally or otherwise, create a less than ideal management experience for existing tenants. This is because the management team is financially incentivized to find new tenants, with new leasing fees, rather than retain existing tenants.
- Management is encouraged to place tenants, even non ideal ones, as quickly as possible. This can be terrible for landlords who are left with bad tenants, because, even if you part ways with a brokerage who placed subpar tenants, most contracts require payment at the time of leasing. Even worse, the bad tenant could "ghost" you, and you've already paid a leasing fee based on rent you aren't even collecting.
- Long term tenants is the goal of most landlords, but managers whose entire leasing fee is earned and paid after the first lease may have little to no concern about the longevity of the tenants placed.
Now consider the brokerage who's receiving a leasing fee each year, regardless if tenants stay or go. This management team is incentivized to find the best possible, longest term tenants from the get-go. Think of a yearly leasing fee as your investment in making sure good tenants are leased from the start so you don't have to go through the re-renting process more frequently. The landlord has less vacancy, loss of income to turnover expenses (e.g., repairs, renovations, utility bills, etc.), and the uncertainty of finding and placing new tenants. The longer your tenant stays, the more profit both owner and management make.
Still not seeing the benefit of a leasing fee based on lease length, including renewals? Let's put it in numbers. Choose between Agent A and Agent B. They both charge 10% for management. For leasing fees,
Agent A charges 8.33% yearly, based on gross rent collected. This seems more expensive.
Agent B charges 8.33% only in years when Agent B must find a new tenant. This seems like a better deal.
Now consider the following scenario:
Agent A leases your property, and the first tenant stay for 5 years. This is an ideal scenario for the landlord.
Agent B leases your property, but each year the tenant leaves, and Agent B finds a new tenants. Agent B does an excellent job - there's only 2 weeks average vacancy between tenants each year.
Landlord A chooses Agent A, and Landlord B chooses Agent B. Here's the breakdown of what each party will make over 5 years:
Agent B makes slightly less than Agent A over 5 years, but Landlord B makes significantly less than Landlord A.
In this scenario, Agent B does a great job of filling vacancies but isn't keeping tenants around. Even that small amount of vacancy reduces Landlord B's bottom line while increasing Agent B's bottom line, not even considering other turnover costs.
Now, let's say Agent B keeps the same tenant for five years. Instead of gaining money for doing a better job for the landlord, Agent B loses $4,000 over 5 years. Agent B's financial incentive is clearly for more turnover.
Both agents only lose $100/mo for vacancy, but Agent B loses $1,000 per year if the property isn't listed. It would take 10 months of vacancy in between tenants for Agent B to find it more advantageous to retain the current tenant. Meanwhile, Agent A is always trying to keep the best tenants for the longest period, because Agent A only loses money when the property is vacant.
This scenario doesn't even include the other drawbacks of turnover such as:
Structuring commissions on a lease-based finder's fee, regardless if it's a renewed lease or a new lease, allows us to offer all inclusive management packages with no hidden fees or agendas, because we're confident management and client goals are aligned. For this reason, we don't accept listing contracts that do not continue to pay leasing fees throughout the duration of any tenant's lease term, including renewals and extensions.
In this scenario, Agent B does a great job of filling vacancies but isn't keeping tenants around. Even that small amount of vacancy reduces Landlord B's bottom line while increasing Agent B's bottom line, not even considering other turnover costs.
Now, let's say Agent B keeps the same tenant for five years. Instead of gaining money for doing a better job for the landlord, Agent B loses $4,000 over 5 years. Agent B's financial incentive is clearly for more turnover.
Both agents only lose $100/mo for vacancy, but Agent B loses $1,000 per year if the property isn't listed. It would take 10 months of vacancy in between tenants for Agent B to find it more advantageous to retain the current tenant. Meanwhile, Agent A is always trying to keep the best tenants for the longest period, because Agent A only loses money when the property is vacant.
This scenario doesn't even include the other drawbacks of turnover such as:
- Two weeks per year of vacancy, after 5 years, has likely pushed your lease starting date out of the ideal range, thereby decreasing the potential tenant pool.
- Landlords may choose to renew with difficult to manage tenant to avoid new listing fees. This tends to cause more severe property damage that can exceed what's held as a security deposit, and receiving compensation for related repairs above and beyond the security deposit can be tricky. In addition, troublesome tenants may end up at the bottom of the management team's priority list, creating an even worse environment for the tenant and the landlord's investment.
- Many management companies who don't charge full leasing fees for renewals may bury additional charges to make up for the difference (e.g., maintenance, inspection, eviction, vacancy, early termination, and software fees). While a 100% leasing fee at renewal may be a hard pill to swallow, the gradual erosion via vacancy or frequent smaller expenses from a manager whose goals aren't aligned with yours often adds up to similar or higher expenses. Beyond that, your investment may end up with more maintenance visits than necessary because a management team who marks up maintenance is trying to make up for the lost leasing fee.
- The managing Broker's liability continues whether renewing or finding a new tenant.
Structuring commissions on a lease-based finder's fee, regardless if it's a renewed lease or a new lease, allows us to offer all inclusive management packages with no hidden fees or agendas, because we're confident management and client goals are aligned. For this reason, we don't accept listing contracts that do not continue to pay leasing fees throughout the duration of any tenant's lease term, including renewals and extensions.
Q6: Why should I list my Property Management Broker as additionally insured?
A6: This is an important risk management strategy for the landlord and the Broker. It provides a unified defense against any litigation, often streamlining the legal process and potentially reducing legal costs. The managing brokerage takes on risk when acting on your behalf to help lease and manage your investment, so adding them fosters a more secure and collaborative working relationship.
While we carry our own insurance, it doesn’t extend to the actual rental or issues surrounding it (e.g., fire, flooding). Without being additionally insured on the landlord's policy, legal situations can be more time consuming and costly. Most insurance companies recommend adding a landlord's Property Management Brokerage as additionally insured. It's in their client's best interest, and there is typically no additional cost. This also helps ensure the Broker can track if the homeowner's policy lapses. Contact your manager for a referral to agents who can set you up with insurance specifically catered to rentals. Find a more in depth analysis here.
A6: This is an important risk management strategy for the landlord and the Broker. It provides a unified defense against any litigation, often streamlining the legal process and potentially reducing legal costs. The managing brokerage takes on risk when acting on your behalf to help lease and manage your investment, so adding them fosters a more secure and collaborative working relationship.
While we carry our own insurance, it doesn’t extend to the actual rental or issues surrounding it (e.g., fire, flooding). Without being additionally insured on the landlord's policy, legal situations can be more time consuming and costly. Most insurance companies recommend adding a landlord's Property Management Brokerage as additionally insured. It's in their client's best interest, and there is typically no additional cost. This also helps ensure the Broker can track if the homeowner's policy lapses. Contact your manager for a referral to agents who can set you up with insurance specifically catered to rentals. Find a more in depth analysis here.
