Blog > 15 Minutes with Paul Ward - Property Management 101
The property management industry is healthy and thriving in 2022! In fact, it may be one of the strongest sectors going forward into the next 5 year period. In this episode, Paul will walk us through the basics of property management for everyone who has rental property, is considering expanding into rental properties or even the simply curious.
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Show Transcript
Michaella (00:12):
Hi, this is Michaella, and this is 15 minutes of Paul Ward. I am a member of the Home and Ranch Team based out of Ventura County, California.
Paul Ward (00:22):
Hi, Michaella.
Michaella (00:23):
Hey, Paul, Good morning.
Paul Ward (00:25):
Good morning. What are we talking about today?
Michaella (00:27):
We are talking about property management.
Paul Ward (00:29):
Wonderful. That’s a topic that I like to talk about, so I’m glad we’ve got a good topic.
Michaella (00:36):
So, I know you’ve been a realtor in Ventura County for over 20 years, but do you also have experience as a property manager?
Paul Ward (00:44):
I do. It’s not a full time occupation for me, but it is part of the services that we offer, so I’ve got many years of managing my own properties as well as properties for other people.
Michaella (00:58):
Awesome. I know that property management industry is healthy and thriving in 2022. In fact, it may be one of the strongest sectors going forward into the next five year period. So this episode, I’m excited to discuss the basics of property management for anyone who has a rental property and is considering expanding into rental properties or is just simply curious.
Paul Ward (01:22):
Yeah.
Michaella (01:22):
So while this episode will focus on answering the basic questions about property management in Ventura County, Paul will delve deeper into the topic in upcoming episodes, so don’t forget to hit that subscribe button. So, Paul, to begin, can you tell us more about your experience as a property manager in Ventura County?
Paul Ward (01:39):
Sure. So basically I jumped right in managing a property that I bought with some other people. And it was a five unit apartment building. So you know, just kind of school of hard knocks and you get all walks of life that apply to live in rentals. Folks that are transitory, you know, moving into the area; new to the area . Folks that are hoping to save to buy a home. Folks that are long term renters that have no desire to own a home, they just like renting or rent for whatever reason. So all walks of life come through rental properties. But the big issue for me is to screen the tenant properly. You gotta do your due diligence before that lease is signed, and if you do it the right way, you’re going to absolutely avoid lots of hassles down the road.
Michaella (02:48):
Oh, wow! So in addition to that large five unit building, do you manage also like private family homes or single family homes?
Paul Ward (02:59):
Yeah, so that just the beginning many years ago and I no longer have that property myself, but I do manage other properties that I own and then manage properties for other other people. So you know, it’s kind of a broad range of properties from big homes that pay big rent to, you know, tiny little studio apartments or one bedroom condo and everything in between. So again, it’s not something that I advertise but it is a service that, as a licensed realtor, I’ve been providing for a long time.
Michaella (03:46):
Oh, wow. That truly does spread across a wide variety of properties and people and experiences. As as a property manager, what are some of the services that you provide?
Paul Ward (04:00):
Well, the main service is to find new quality tenants when there’s a vacancy. So this is something that most clients don’t wanna do. So they’ve reached out to us to help with that service. So finding quality tenants when there’s a vacancy (and) also to get those, what I call, “The midnight leaky toilet” calls.
Michaella (04:24):
<Laugh>.
Paul Ward (04:25):
You know, you’re paying for a service because you don’t wanna do it yourself. It’s not rocket science. It is something that most people can do. They just don’t wanna do it. So when a tenant calls about a problem, you have to assess that problem and of course, have the contact people to call to take care of that issue. Also, you need to determine very quickly, is this an emergency? Is this something that has to be taken care of immediately or is this something that can wait? So if it’s a Friday evening and there’s a water heater leak that’s an emergency. Right? If it’s a Friday evening and there’s a light out in the bathroom and I can’t reach it to change the light bulb; as long as there’s another light in the bathroom that’s not an emergency, so that might be able to wait until Monday. So you need to be able to assess the severity of the issue to determine how you have to handle it.
Michaella (05:35):
What are services that you use to find those quality renters?
Paul Ward (05:40):
Well, we have a whole host of services that we put together over the years. Handyman that are available on short notice, you know, electricians, plumbers, roofers, gardeners. Housekeeping, you know, when there’s a vacancy, I like to call my preferred cleaning ladies and do what I call a, “One time clean.” This is kind of a top to bottom, disinfect the house as much as possible (type of clean). Where they’re wiping down drawers, they’re cleaning out the refrigerator, they’re wiping all the blinds, wiping the window sills you know, really getting the house ready for the next tenant. And then depending on how long a tenant has lived there do we need to get a painter? Do we just need to steam clean the carpet, or does it need to be changed?
Paul Ward (06:34):
Or do we wanna replace the carpet with maybe vinyl plank floors and then never have to worry about carpet again? What kind of upgrades do we wanna put in the home between tenants? So there might be an opportunity for the landlord to take the property to the next level and raise the rent. You know, people really like nice, nice appliances, nice things, modern kitchens. So if the kitchen is from 1985 you’re not gonna get the same rent as the kitchen being remodeled last year. So a period between tenants is a good opportunity to go in there and make those upgrades to take your property to the next level. And it also increases the value of the property if you eventually wanna sell it.
Michaella (07:26):
That sounds like a win-win.
Paul Ward (07:28):
Yeah, absolutely.
Michaella (07:31):
Nice! When you’ve had tenants move out, have you had any unexpected surprises?
Paul Ward (07:40):
Absolutely. Yeah. So you know, having done it for this long, you’re always gonna have stories. And pretty much most of the time we’re good at screening but every once in a while somebody slips through the cracks and their references are positive, their credit score is positive, their employment’s positive, but for whatever reason they’ve talked a good game, but the actions don’t follow the words. And we’ve had to go in there and face some real surprises where their pets have caused serious damage or, you know, two guys wrestling and they decided to bust a hole in a bedroom door, you know, leaving all kinds of stuff in the kitchen sink for the landlord to dispose of, leaving a full bar of booze; moving out in the middle of the night. So all of these things have happened over the years, but more often than not we’re pretty good at, screening and avoiding those types of situations. But I certainly do have a few horror stories, as I’m sure most property managers do if they’ve done it for any length of time.
Michaella (09:10):
Wow, that sounds wild.
Paul Ward (09:14):
It is wild. I mean, nothing really surprises me anymore. But still you just kind of wonder how people can live like that, you know?
Michaella (09:28):
If you do have a renter that falls to the cracks. Do you also get involved in lease enforcement or rent collection?
Paul Ward (09:35):
No, so I have kind of a hybrid model of property management. I am not actually managing the landlord’s money. I, I handle all of the time consuming activities, but the landlord is still in charge of the dollars received. So I’m able to charge less because I’m not acting as an accountant to the landlord. But if the tenant is not paying rent for whatever reason we can work out a payment plan, or if they decide that they just, for whatever reason, they’re not gonna pay rent, then we do work with local attorneys to handle evictions. I have a local attorney on cell phone that I can call him and they’ll answer the phone. We have to go through the whole process.
Paul Ward (10:41):
I mean, this is California, so we have to give the, ‘Three day notice to pay or quit.” If they don’t pay rent in that timely fashion, then we have to go to the next phase, which is the ‘Notice of Eviction.” It could take a good six to eight weeks to get them out of the unit. Then they might even wait till the very last moment when, you know, the sheriff will come and escort them out of the house. That’s only happened twice in 20 years. But some very interesting situations. One of those two actually had her uncle paying rent for a year and a half and everything was like clockwork. He would pay the rent on time, and what ended up happening was he died and she pretty much immediately stopped paying rent. So it took couple months to get her out of that unit.
Michaella (11:46):
Oh, gosh.
Paul Ward (11:47):
Yeah.
Michaella (11:47):
So you’ve listed so many things from finding quality tenants to finding handymen to getting the right attorney on board. Is this something that anyone could do? Manage your own property?
Paul Ward (12:04):
You can. Yeah. If you own the property, you absolutely can manage the property. If you do not own the property, you really should have a real estate license. But if you’re not handling the owner’s money in any way, then you can actually manage properties.
Michaella (12:29):
Oh wow. If someone out of state bought a property in California, could they self manage it or…?
Paul Ward (12:38):
Yeah, but there’s a benefit to being local. I actually own some properties or co-own some properties I should say, out of state and do not manage those myself. I mean, technically I could, but I think that there’s a benefit to having eyes and ears local. You wanna be able to assess the situation if the tenant calls about whatever issue you need to be within a reasonable distance to go see what’s going on. If you’re more than 50 miles away you know, depending on how much free time you have, it can be be a hardship to manage a property from any kind of distance.
Michaella (13:24):
Absolutely. That makes total sense.
Paul Ward (13:26):
I think it’s worth the service. I mean, honestly, if you’re not local, you’re really not gonna be able to keep up on it. I mean, you might think you are, but people get busy and you know it can be time consuming at times, but also there might be periods of time where there’s not much to do. I mean, it just kind of ebbs and flows. And different properties typically get more attention than others. That might be related to the age of the property. It might be related to the personality of the tenant. It could be a combination of those factors. So in my experience, the squeaky wheel always gets ttheo grease and it just seems like the same properties are the ones that are squeaking and other properties not much is needed.
Michaella (14:17):
Wow. There’s so many moving parts.
Paul Ward (14:21):
There really are. Also, I find that everything happens at once. <Laugh> Most of the properties are occupied, well, they’re mostly always occupied, but then you might have boom, boom, boom, three people in a week that tell you that they’re moving out. So you gotta roll with that, and all of a sudden you’re posting a slew of rentals. And this is not my full-time thing. This is just a part-time service that we offer to folks here locally.
Michaella (15:00):
Oh, nice. Wow. So we’ve gone over the importance of finding quality renters, the importance of having someone local who knows all the local services that are available, the legal services as well as maintenance and cleaners. And it just goes to show you, there’s just so much involved with property management. I mean, you said you could do it yourself, but it’s a lot.
Paul Ward (15:25):
It is a lot. Again, I really bring it back down to the screening process. You know, I just had a horror story two days ago where a potential client called me. She was a referral and she rented to somebody just kind of like that person on the surface. They connected on a one to one personal level, but she didn’t do the proper screening. Now the tenant has decided pretty much immediately after moving in that she’s not paying rent. And there were some red flags from what the the owner told me. There were certainly some red flags that could have been avoided if proper screening had been done before she let the lady move in,.I referred her because she’s gonna have to now do the eviction. Of course I told her I could help in any way I can, but at this point she’s gonna have to evict that tenant.
Michaella (16:35):
So thank you so much for coming in today and telling us all about property management, letting us know the nitty gritty and the details. I’m looking forward to future episodes.
Paul Ward (16:46):
Absolutely. We can certainly delve more deeply into some of the facets of property management, you know, other future episodes.
Michaella (16:57):
Right. That’s all the more reason for for everyone to go ahead, hit subscribe, and Farm Talk is available wherever you get your favorite podcasts.
Paul Ward (17:05):
Absolutely. Thank you, Michaella.
Michaella (17:08):
Thank you. Oh, and we wanna thank our sponsors real quick.
Paul Ward (17:12):
Absolutely. We wanna thank The Escrow Hub and The Money Store.
Michaella (17:18):
Great. Thank you. I’ll see you next week.
Paul Ward (17:20):
All right, sounds good.