Frequently
Asked Questions and Answers
Q:
Should I be searching for a Professional Property Manager?
A: Today, Real Estate still remains one of
the best investment opportunities available. However, if you are holding
income-producing property for cash flow or appreciation purposes management,
either locally or at a distance can become a significant burden. In
Q:
What costs are involved in the placement of a Tenant?
A: Property Source Realty charges the following fees for the
placement of a Tenant:
1. Set-Up
Fee: Since there are numerous documents involved in setting up your
account including application and/or registration of required
state/city licenses, we charge a one-time set-up fee of $150.00.
2.
Reserves: Property Source Realty requires a $100.00 reserve in your
Operating Account if the property has a Home Warranty in place. If there
is not one, the reserve is $500.00.
3.
Commission: This fee is equal to seven percent (7%) of the Total Gross
Rents as stated in the Lease Agreement. For example, if the Tenant signs
a one year lease with a rent of $1,000.00/month, then the commission is $840.00
1,000 x 12 = $12,000 x .07 = $840.00
THE SET-UP FEE AND RESERVE ARE DUE AT
TIME THE PROPERTY MANAGEMENT AGREEMENT IS SINGED. WE WILL NOT START
ADVERTISING YOUR PROPERTY UNTIL FUNDS ARE RECEIVED. The commission is not
collected until a Tenant is placed in your property. We will simply take the
commission amount from the first month’s rent and send any remainder to you
within five (5) business days after the move-in date. However, if
the first month’s rent is not enough to pay the commission, you will need to
send us a check for the balance IMMEDIATELY. PSI has the right to
delay the Tenant’s Move-In until payment is received.
Q:
How long after closing will it take for a Tenant to be placed in my property?
A: Our goal is to have a qualified Tenant move-in to your
property as soon as possible. Unfortunately, Property Source Realty is
unable to guarantee an exact time frame. We can, however, guarantee that we are
100% dedicated to placing a qualified Tenant in your property and will do whatever
it takes to minimize the time your property is vacant.
Q:
Am I involved in the applicant screening process?
A: Applicant screening is part of the service provided you by
Property Source Realty. We will accept and process the application based
on the guidelines outlined in the attached explanation of our Tenant Screening
Procedures. Please be assured that we will keep you informed every step
of the way.
Q:
What costs are involved in the maintenance of my property before it is tenanted?
A: To maintain the curb appeal of your house, we have
contracted with a landscaping care service to maintain the front and backyards
a minimum of twice a month in the summer, and once a month in the spring, fall
and winter. Pending the size of the lawn, number of shrubs, etc. the
landscaping care service charges a minimum of $40 per visit. Upon completion of
service, an invoice will be emailed, faxed and/or mailed to you with a request
for payment within 14 days of receipt.
Q:
Am I responsible for utilities when the property is vacant?
A:
Yes, you are responsible for utility
services when the property is vacant. We will gladly provide these
numbers for you.
You will not be responsible for payment of utility
services during the time the property is occupied. If the Tenant fails to
pay for services, their services will be disconnected. Please note,
however, that there are some cities/companies that will charge the Owner of the
property for any unpaid balances.
Q:
Is it possible to receive the monthly rent payments on a specific calendar day?
A: All rents are due on the first of each month and late on
the second. We have no control of when the “first” falls on the calendar
nor when the Tenant pays their rent. In addition, we have to wait for the
Tenant’s check to clear the bank before the Owner’s check can be issued.
Therefore, it is not possible for us to guarantee that you will receive your
check in the mail by a specific date.
In the unfortunate event a Tenant’s
check is returned/not honored by the bank, we will not be able to mail payment
to you until we collect funds from the Tenant to satisfy the returned check and
all applicable fees.
Q:
Who do I speak to if I have a question about the status of the Tenant’s rent
payment and/or any other issues I may have on my property?
A: Each property is assigned to a Property Manager. You
will be notified who this person is at the time you sign the Property
Management Agreement. He/she will be the point of contact for all
questions regarding monthly rent payments and any other issues you may have.
Q:
Do I receive the deposits paid by the Tenant at move in?
A: It is the policy of Property Source Realty that any monies
paid by a Tenant for Security, Cleaning, Pet and any other deposits will be
deposited and held in a non-interest bearing Escrow/Trust Account. Given such,
the deposit will not be mailed to you; it will be held in an Escrow/Trust
Account until the Tenant moves out. If the Tenant satisfies the lease,
does not owe any monies, and did not cause any damages to the property at the
time of move out, then their deposits will be fully refunded to them within 14
business days. If the Tenant moves out with a balance due on the
account or caused damages to the unit, the deposit will be applied to the
balance due and/or repair costs and any remainder will be mailed to the Tenant.
Q:
What happens if my Tenant pays rent late?
A: When a Tenant pays rent late, which per the lease is after
the 2nd day of the month, a late fee is assessed to the account. We
will contact the tenant by phone and/or email to inquire about the status of
the payment, followed by the mailing of a 5-Day Notice to Pay or Vacate via
certified mail. We will also notify you via email of the tenant’s delinquency.
Within five (5) days of the email, you will receive another email and/or a
phone call to provide an update of the status of the tenant’s payment.
If a tenant fails to satisfy the full
balance due, to include the applicable late fee, by the 10th day of
the month, we initiate the eviction process by contacting an attorney. In
the state of
The Security Deposit paid by the Tenant
at move in will be applied to any unpaid balances, to include legal fees, on
the account at the time of move out. It is the responsibility of the
Owner to pay for any unpaid balances due to Property Source, Inc. that exceed
the Security Deposit within fourteen (14) days of the invoice date. Furthermore,
after the eviction process, it is the Owner’s obligation to collect any unpaid
rent/balances from the Tenant by use of a collection agency or any other method
permitted by law.
Q:
If the Tenant has a warranty/maintenance issue, how is this handled?
A: In the event a non-warranty
issue is reported, we will contact a contractor to provide you an estimate for
the repair. The estimate will be emailed and/or faxed to you for approval prior
to making the repair. You will be billed directly for the repair and required
to remit payment within fourteen (14) days. Failure to remit
payment may result in the deduction of the repair costs from your next payment
for the property, plus a $25.00 service/convenience fee.
The Tenants are informed to contact our office to report any
warranty/maintenance issues. Our priority is to have the
warranty/maintenance issue resolved in a timely manner. If the property
is under the builder’s warranty, a repair request is submitted directly to
them.
Q: What happens when my Tenant moves
out, eviction or not, and the property need to be prepared for a new Tenant?
A: Your Property Manager will conduct a
move out inspection of the property to determine the costs of painting, carpet
cleaning, damages, etc. This estimate will be emailed and/or faxed to you
within five (5) days of the tenant’s move out. Your written approval is
required to begin the repairs. Please keep in mind that the sooner
repairs are completed, the sooner a Tenant can be placed in your property.
If the Tenant
paid a deposit, the available amount of the deposit will be applied to the
balance due to cover the expense of the repairs. Any remaining balance will be
directly billed to you; payment will be required within fourteen (14) days.
Utilities: It is common for Tenants to have the
utilities disconnected when they move out. It is your responsibility to
ensure the utilities are restored in order for any repairs to be completed.
Q: Will I be
charged a fee if the Tenant renews their Lease?
A: Yes, there is a Flat Fee of $250.00 for processing the
new Lease Agreement.
Q: Do we need to pay rental sales tax
and get a business license?
A: Each city has a tax that is applied to rents
received. The tenant pays the tax in addition to their monthly rent.
Some cities do have business license requirement for each landlord while other
will allow us to use Property Source Realty license.
Q: Are you required to register your
house as a rental with the State?
A: Yes, every home that is used as rental property MUST be
registered with the Maricopa County Assessors Office. Property Source Realty
relieves you of this burden and contacts the State on an annual basis and
updates your file.
Q: Should I allow pets and smoking?
A: Property Source Realty has stated in their lease that NO
pets or smoking will be allowed in the homes, unless otherwise approved by the
owner. If an owner is debating about allowing pets or smoking, we suggest that
they not allow them, however it should be understood that in today’s market
allowing a pet will definitely open the door to tenant prospects. Pets usually
have an extra $250 non-refundable fee they are accepted. If a tenant has an
assistive animal due to the tenant being legally handicapped then the owner
MUST allow the assistive animal with no deposits required. By Federal Law the
animal, is considered another human.
Q: How do I handle a Home Owners
Association (HOA) violation and who pays for it?
A: If the tenant causes a violation of the Rules of the
Association, we request that the owner fax the violation to our office
immediately. Once we receive the violation, we contact the tenant and send them
a copy of the notice and a letter that explains what needs to be done to repair
the violation. Depending on the violation, we will inspect the property to
assure the violation is repaired. If a second violation occurs and the owner is
fined by the HOA, then the tenant will be billed on their account for the
violation. Note: The owner will pay the violation so a lien is not placed against
the home by the HOA. If the tenant fails to reimburse the owner for the
violation, then the fee will be deducted from the tenant’s security deposit at
time of move-out.
Q: How do I get my home into management
with Property Source Realty?
1. Call
the office and set an appointment with one of our property managers do a walk
through with you to determine rent ability and monthly price.
2. Read over and
complete the management agreement.
3. Make arrangements for keys, remotes, etc. to be
delivered to the office.
4. Property will need to be cleaned and
made ready to rent as soon as vacated. Owners will need to make arrangements
for lawn service, pool service, etc to be taken care of for any time lapse
should there be one between tenant occupancy. Property Source Realty can
take this burden off your shoulders for you.
5. Property will be placed on the market after the home is
completely ready for move-in.
SAMPLE DISBUREMENT UPON TENANT MOVE-IN
(12
MONTH LEASE @ $1,000/MONTH WITH 2% RENTAL TAX)
SECURITY DEPOSIT: $1,000.00
CLEANING DEPOSIT:
$ 250.00
PET DEPOSIT: $ 250.00 (NON-REFUNDABLE) INITIAL
TOTAL
CHECK FROM TENANT: $2,520.00
AMOUNT HELD BY PROPERTY SOURCE INC IN BROKER’S TRUST ACCOUNT:
SECURITY DEPOSIT:
$1,000.00
CLEANING
DEPOSIT:
$ 250.00
TOTAL
AMOUNT HELD: $1,250.00
DISBURSALS
CHECK
#1:
$
100.00
MANAGEMENT FEE
CHECK
#2:
$
310.00
LANDLORD *
CHECK
#3:
$
20.00
TRANSACTION
PRIVILEGE TAX (TPT OR RENTAL TAX)
CHECK
#4:
$
840.00
LEASING FEE
LANDLORD MAY OR MAY
NOT GET A CHECK THE FIRST MONTH THE TENANT MOVES IN.
IT WILL DEPEND
ON HOW MUCH RENT IS COLLECTED AT THE MOVE IN.