Welcome to our “Ask a Property Manager” series. Here, we’ll answer frequently asked questions and give you some insight into how we deal with common property management situations. Here are some of the ways we deal with rent collection, late payments, unit turnovers, and evictions.
For background, here’s what the average turnover in our market/portfolio looks like.
We develop a strategic management plan with each of our owners. With that said, based on that plan, property, and the market, turnover can vary. On some properties, we may be undertaking a strategy to bring below-market units to market rents knowing it will lead to turnover. But across our portfolio average tenant turnover is roughly 20% per year.
Our fundamental business philosophy is grounded in hospitality-based services. This philosophy directly impacts how we manage people’s homes and empower communities. Our goal is for tenants to love where they live and to reduce turnovers of units at or near market rents.
How do you prevent late payments?
The key here is meeting the renter where they are and eliminating any friction in the payment process. When dealing with rent collection, it’s important keep it simple and seamless. At Charlesgate Property Management, we have a proactive process to minimize late payments (including automated payment systems) and a robust follow-up process.
This has allowed us to deliver industry-leading late payment rates of less than 2% across our portfolio and dramatically reduce the risk of evictions.
How do you deal with evictions and what are the associated costs?
If the need arises, we quickly serve tenants with a 14-day notice to quit if payment is more than 15 days late in a given month to preserve our rights to start the eviction process. At the same time, our lines of communication are always open with a hospitality-based mindset to continue to work towards friendly, prompt payment. In cases that can’t be amicably resolved and we have to go through the eviction process, we work with a great team of experienced tenant/landlord law attorneys through the eviction process. The legal fees may be recoverable from the tenant, but the overall process typically takes around 60 days and costs about $2,000.
What does the turnover inspection process look like?
Our team of maintenance techs is trained to do thorough walkthrough inspections post-move out and document their findings in full on our property inspection software. They take photos and closely document property conditions and each report is saved in our system for future reference as needed. The property manager reviews all inspections, and any indications for damages beyond normal wear and tear are immediately brought to the attention of the property owner.
What is the cost, on average, for refitting after turnover?
This partly depends on the business management plan and how staffing is allocated, whether it’s on-site or not. We can walk through scenarios with you, contact us, and let us know a little about your property!
Generally speaking, the amount of the unreturned deposit due to damages and the deposit held usually cover in-unit damages. Historically, we’ve had a low percentage of retained deposits that are not sufficient to cover the cost to repair damages. Typically, held deposits have been sufficient to cover damage costs.
Ultimately, what is important is having a thorough tenant approval process and a good management process to build a strong community and reduce the risk of bad tenants and damages. It is also very important to understand the nuances of what can be deducted from a security deposit and what is not allowed to be deducted.
Speaking of unreturned deposits, are these typically contested?
Yes, this is becoming more common as tenants have more access to online and free resources to understand their rights as tenants. That’s why we make sure to conduct systematic walkthroughs to save photos and notes upon turns to use in case the deposits are contested and any deposits you plan to not return are clearly documented and fall within what is allowed per Massachusetts state laws.