Scratched-Up Rentals: Possible Win-Win for Tenants & Landlords?
A few years back, my wife and I were fortunate enough to take a trip to Barbados. Due to the many things we wanted to see on the island, it made sense to get a rental car. When I Googled how American tourists fared driving there, the information that spit out was that driving was fine with two caveats: they drove on the left side of the road which made things trickier, and if we went off the highways, the local roads were narrow and could be challenging. We didn’t plan on going to any remote places, so I didn’t think much of the second issue.
However, when we got to the rental car agency and they went through the costs associated with bringing back a damaged car, I got a little nervous. I started moving past the shiny, newer convertibles and went to the shabby, scratched-up section of the lot. My eyes landed on a weathered, small model that had taken some rough driving in its day. I picked it out and we drove off.
On the next to last day of our trip, we took the car up to some tourist spot on the top of the island. While driving there, the sky began to darken and the winds started to pick up. When we got there, the tourist spot was closing due to the weather and we were thirty minutes away from our hotel. It turns out a hurricane was forming and power wound up going out across the whole island. Everyone was being let go from work and the roads quickly filled up with bumper-to-bumper traffic. This was not good for a tourist driver!
Google Maps was working and it started to give us off-the-beaten path directions to avoid the traffic. I dutifully followed them and we were now on the local narrow roads where locals were speeding home. My comfort level was now really low. Cars were speeding by us on the right side of the road and our clearance from them could be measured in inches. To create more space, I was hugging the left side of the road. Unfortunately, I got too close to a curb and resulting in some tire and wheel well damage. I was praying that we could just get back in the vicinity of the hotel and not be left in the middle of nowhere in a full-blown hurricane. Fortunately, the car was able to continue on. My prayer was answered and we were able to leave the car on the side of the road near the hotel.
When I called the rental car agency the next day, they were pretty busy and said they would pick the car up at some point. I was wondering what my deductible was and how much of this car I was going to wind up buying. But when I finally heard back from them, they said there was no issue- “No problemo! Things are good.”
I didn’t ask any questions, but I have to assume the car’s condition at pick-up left me a lot of room for damage.
I bring up this story because as Charlotte property managers we are tasked at fixing up homes prior to new tenants moving in. If tenants are asked if they want new carpet and painting prior to taking possession, probably most would immediately answer “Yes! Definitely!” But is that really what they should want? Sometimes it’s worth a discussion based on their future security deposit return.
New carpet and painting will undoubtedly look great! But it starts a new cycle on their useful life (we generally use a 7-year wear schedule). If a tenant moves out after one year, there is an expectation that the new paint and carpet would have incurred one year of normal wear and tear and be useable for another six years. Any wear and tear fix-up expenses outside of one year (a small amount of damage) would be deducted from the security deposit (or billed back if the wear and tear costs exceeded the security deposit). And costs for these items have really shot up in the last five years!
Recently, we had a rental home with a very worn wood floor that we hadn’t refinished for over a decade. It was scratched-up heavily in a few places. I asked the incoming tenants if they preferred that we refinish the floor or if they wanted the peace of mind that we would not be charging them for any new scratches on it. If we finished the floor (a costly repair) prior to them moving in, they would need to be very careful with it. They opted for peace of mind and some well-placed rugs.
Rental homes that are scratched-up can be used to create win-win scenarios for tenants and landlords alike. Not coming home to a hefty rental car repair bill saved having a shadow cast on a really nice vacation!
Happy Landlording!
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5-Star Review Skepticism: Old-Fashioned Way Best to Find Good People?
My skepticism of customer reviews has been growing for some time. I think customer reviews started out well and became very useful to find good people, but have been spiraling down for years for a variety of reasons.
I believe the first reason lies in the sheer ubiquity of customer review requests. If I talk to any person on the phone, I’m getting some combination of e-mail, text, and personal plea for a 5-star review. And it is not just once in a while; it is becoming part of most business interactions. It’s a job put on me by companies and they make me feel guilty if I don’t comply, and comply positively. The volume of reviews has watered-down legitimate performance feedback.
Another reason is how the on-line review system has been gamed. Corporations hire “review help” companies to improve their on-line reviews. They send out surveys to every person that does business with the corporation and then turns the positive, 5-star reviews into “official”, posted reviews. The less positive reviews get scrapped. This has made reviews less and less reliable.
Many reviews border on fantasyland. The 1,000 positive reviews with one company with only a handful of negative reviews? How is that even possible? People tend to be negative! Everyone is so overwhelmingly overjoyed with an overwhelming number of companies? People don’t generally seem that effusively happy to me…
Or how about companies that arbitrate between two parties with competing interests? It would be like reviewing a judge (or a property manager with their landlord and tenant clients!). If a guilty verdict was given, the prosecutor would be giving the judge 5-stars and the defense would be giving the judge 1-star. That makes sense. Now is it possible that both parties think justice was done and might positively review the judge? Sure, it’s possible. But 1,000 times? No one is that good!
If there is one scoop of ice cream left and my oldest son and daughter both want it, how would I always get a great review from both of them? One is going to love me and the other is going to be upset. I figure to get 5 stars from my daughter and 1 star from my son (or vice-versa). Doesn’t that make sense?
So… if on-line reviews are trending to be less and less reliable, where do Charlotte landlords find good people to work on their homes? We are all in need of them!
In the old days, people in need of a service would ask a friend. “Who mows your lawn? Are you happy with them?” There are certain friends everyone has that they know are up-to-date on certain things. They tend to give out the 5-star referrals!
In property management, the same goes for finding excellent vendors and tenants. I’ve always had success when asking our favorite vendors if they could recommend good people in other industries. And when great tenants recommend their friends who are moving into town, I’m almost positive they will be good tenants too before even running their applications. Good, reliable people tend to congregate with people like themselves.
Are on-line reviews useless now? No, but I think they are getting there. I’d argue they need to be taken as a piece of information and handled with a healthy degree of skepticism. I think it is better to focus more on the comments than the star count.
Smart landlords realize that while newer search methods for good people can be moderately useful, old-fashioned methods can be more dependably 5-star worthy.
Happy Landlording!
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A Thanksgiving Rental Home Vendor Question: “What Do You Even Do???”
Property managers have a lot of things under their purview. Different types of things break or need to be serviced on a rental home. Most are handled by specialists in some regard who know how to work within the confines of what landlords require (no gold-plated toilets, please). And sometimes it can be tough to find specialists who are a good fit.
One of the vendors that has historically been a difficult find for BDF Realty is a good, reliable lawn company. When the service area is as large as the Charlotte-Metro area, it’s understandable that not every company works everywhere we have rental homes; it’s tough to justify driving 20 minutes to mow one stray lawn! Then properties are constantly in flux (vacant ones need to be mowed and rented ones don’t, and this changes constantly); this can be administratively difficult to keep straight as their weekly routes need to be constantly updated due to our needs. Not being able to work due to rainy days adds another wrinkle of difficulty to keeping yards look consistently good. Finding one, let alone several, companies that can accommodate us has been challenging. Then they need to be reasonably priced, reliable, friendly, have sound accounting to boot!
In my quest I stumbled on to a lawn company and met with the owner. He was a nice guy, easy to talk to. He ran a smaller shop and thought he could help us out. We started to send him our properties.
Shortly after, I noticed that I stopped hearing from him except when he acknowledged he received our house changes and sent us invoices. Occasionally, he would let me know he saw something askew at a house that we might want to check out. But for the most part, he went dark on BDF Realty.
But the yards were always mowed! We stopped getting calls from tenants and agents complaining about overgrown lawns that hadn’t been cut for weeks. The bills showed up on time and accurately. We weren’t paying for lawns that were still on the schedule when they had previously been taken off the master list. The landscaping part of the business seemed to be quietly humming along.
If I hadn’t been in the business of trying to find good lawn companies for so long, I might have thought something was wrong. “Why don’t I hear from this guy? Why do we pay him so much money? Should I be pitting another lawn company against him? What does he even do that’s so special?” But experience and age gave me appreciation on what a gift this peace of mind was. He really kept us clean from a lawn service perspective. I appreciated it!
From a Charlotte property management perspective, this is what we aim for. We want to be like our lawn service provider, keeping all of our clients clean. The question of “What do you even do?” is one I hope every client has. That usually means that the rent comes in every month, tenant leases are regularly extended, house turns are smooth, tenants are calm and satisfied, and the property management side of the business is quietly humming along. When it looks easy from the outside, it’s running as designed.
Speaking of… A special “Thanksgiving” shoutout to our vendors who do such tireless, great work every day for our tenants, clients, and us. I could ask the question, but I know what you do!
And a thank you, as always, to our clients- if it weren’t for you, there would be no BDF Realty.
Happy Thanksgiving & Happy Landlording!
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Take it From NFL Quarterbacks: Be Thankful for Your Vendors
“…the Chiefs quarterback opted to go big with his show of appreciation for his offensive line with this year’s presents. Mahomes hooked up his protectors with sets of TaylorMade golf clubs, complete with custom bags featuring their jersey numbers and a box of balls for good measure.”
(Nick Selbe in Sports Illustrated: 12/21/22)
“Hi, I’m Dan Marino, and if anyone knows the value of protection, it’s me. So I take care of the hands that take care of me with Isotoner gloves.”
(Ace Ventura 1994)
“Rejoice always, pray without ceasing, in everything give thanks; for this is the will of God in Christ Jesus for you.”
(1 Thessalonians 5:16-18)
Every year I see articles talking about what Christmas presents NFL quarterbacks give to the members of their offensive line (typically around 10 guys). Looking at past gifts from the quarterbacks below, they seem to be pretty nice items and run the gamut:
Mac Jones (New England Patriots): Bitcoin
Carson Wentz (Indianapolis Colts): Bourbon, some meats, & Yeti coolers
Jalen Hurts (Philadelphia Eagles): Louis Vuitton travel bags
Dak Prescott (Dallas Cowboys): Air Jordan 11 Retro sneakers
These are not cheap gifts. When your livelihood (and long-term health!) depends on these offensive lineman preventing defenders from taking your head off, it is imperative to make sure they know they are appreciated. And now all the starting quarterbacks in the league make it a point to give nice gifts to the guys that try to keep them upright every game.
On that vein, I was listening to a video the other day and the instructor was talking about running a property management company. He reasoned that the main component of success was the ability to retain tenants; then he began his discourse into specific reasons why tenants did not re-sign their leases. The #1 reason, by far, was that repairs were not completed in a timely fashion. He argued that fixing things promptly is the silver bullet to keep tenants. Landlords can try other things like offering gift cards or flat screen TV’s as lease re-sign bonuses, but they offer little benefit if a tenant’s heating system hadn’t been functioning for 3 weeks the previous winter (like a now ex-neighbor told me recently had happened to him). To his point, most dissatisfied tenant’s Google reviews against property managers stem from delayed repair resolutions.
How does a landlord avoid lingering repair issues? First of all, work orders must get off the landlord’s desk and be directed to the appropriate vendors ASAP. Then, it’s all about vendor quality that will drive tenant satisfaction and property management success.
So, the lesson is… hire great vendors! Hire vendors who care. Hire vendors that realize that having the heat go down on a Friday afternoon means that it is going to be an awful weekend for the tenant if the work order is pushed until Monday. I’m amazed (and thankful!) that many of our vendors voice disappointment when they can’t get there the same day or a repair they made didn’t hold. They have empathy that it could be their families who are shivering at night or have no working plumbing. It takes a servant’s heart to put someone else’s family before your own.
Once a landlord finds these core, caring vendors and puts them to work, it is time to play the role of the thankful NFL quarterback. I’m not sure that necessarily means Louis Vuitton travel bags or TaylorMade golf club gifts (maybe some Isotoner gloves?), but I’d recommend the following four things we try to give our vendors:
- Loyalty: We give most of our business to our best vendors and keep it there
- Payment: We make sure invoices are paid consistently, in full, and when expected. They should be able to worry about their jobs, not exerting energy to collect due funds from us.
- Grace: Everyone messes up from time to time. Taking off people’s heads for honest mistakes isn’t going to help anyone. And when you do this long enough, you know that grace is a two-way street.
- Thankfulness: Let them know how much you appreciate their effort on a day-to-day basis. We all like to feel like what we do is noticed positively.
NFL quarterbacks may have millions of dollars to shower their guys with Bitcoin “thank you” gifts, but sometimes the smaller gestures above can go even further. Give thanks and take care of the hands that take care of you!
Have a wonderful Thanksgiving & Happy Landlording!
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