Q. How long have you been in business?
A. Evergreen Property Management, Inc. was established in 1987 and has been in business for almost 30 years! Per the U.S. Small Business Association, 1/3 of businesses will fail within the first two years, 1/2 of businesses fail within five years, and 2/3 of businesses fail within 10 years. Evergreen Property Management, Inc. has far exceeded those numbers. This is largely due to our belief that “integrity is the essence of everything successful.”
Additionally, we have adapted and have grown our policies, procedures, and practices as we’ve faced new opportunities over the years. Many lines of our management agreement, our lease, and pieces of information that are fundamental to our business practices have grown out of real experiences. Our owners and residents are beneficiaries of so many years of experience and growth.
Q. What types of properties do you manage?
A. We manage apartments, condos, townhomes, single family, multi-family and student-friendly rentals.
Q. How did you happen to go into business?
A. I was making more money in my spare time working in real estate than I was working full-time in my accounting practice. Working full-time in accounting felt too much like ‘work.’ Real estate and property management was not only fun for me, but it gave me a practical outlet to help others, an opportunity to create a business founded on integrity, and still enjoy a challenge and the excitement of problem-solving in an ever-changing field.
Q. Do you own any rentals yourself?
A. Yes, I own a partial interest in several apartment buildings and single-family houses. Early in my career as a CPA, I had purchased a handful of houses and managed them myself. Eventually, I sold my accounting practice and went full-time into real estate and property management.
Q. How did you learn to manage the property?
A. Initially, I think I learned property management by the ‘seat of your pants’ method. Every ‘problem’ that came up became an opportunity to learn to do things better. The longer I managed a rental, the longer my lease became. I learned what needed to be included to protect the business, our owners, their properties, and our residents.
Q. Have you taken any courses on property management?
A. I have taken numerous classes along the way and have read a number of books on property management. Furthermore, several years ago I obtained the designation of Certified Property Manager (CPM).
The designation as a CPM is awarded by the Institute of Real Estate Management (IREM), whose members include more than 16,000 real estate managers nationally and internationally. In fact, IREM’s members manage real estate in 29 countries around the world. Only individuals who have met rigorous requirements in areas of education and experience are awarded the designation of CPM. The coursework alone took a year and a half to complete.
In Fort Collins, there are only two firms that manage residential properties for the general public and individuals that have obtained the designation of CPM – we are one of them.
In addition to all of this, I take an average of 50 hours of Continuing Professional Education classes each year. I am also still a Certified Property Manager.
Q. Do you hold any management designations?
A. I am a Certified Public Accountant, Colorado Real Estate Broker and a Certified Property Manager. While I no longer practice accounting, I do keep my license active by taking courses in accounting. I also keep my license active by taking courses in accounting which are relevant to property management.
Q. Are you a member of any property management organizations?
A. I am a member of the National Association of Residential Property Managers and the Institute of Real Estate Management. I am also a member of the National Association of Realtors, the Colorado Association of Realtors, the Fort Collins Board of Realtors, and Information and Real Estate Services.
In asking these questions, I am ideally looking for a manager with at least 10 years of experience and someone who has owned rental property themselves. I believe managers who own property themselves are more thoughtful about managing cash flow because they have an owner’s perspective. I don’t want a property manager to be flippant in their decisions since technically it isn’t their money. If they hold professional designations, I want to know what it took for them to get it. There are designations that are given out that take less than a week to earn, and others which take a year or more to obtain. For stability and coverage, I think a company needs to have more than 100 units and a minimum of two employees.
Marketing and Tenant Selection
Q. How are tenants screened?
A. Whenever possible, we collect more than one set of applications. This enables us to select the most qualified set of applicants to process first, and then we have backup applicants in the case the first set falls through. In addition to basic personal information, we request addresses and contact information from previous rental companies/landlords so we can verify that our prospective residents have excellent rental history. We also require income history, cosigners if applicable, and at least two pay stubs from the previous 30 days (or a letter offering employment which then verifies income). Lastly, we require a photo ID so we can run a thorough credit and criminal background check.
Additionally, if we receive a set of applicants who have great rental/income/employment history, but for any outstanding circumstances that could be at risk to the owners, we protect our owners by taking a double security deposit.
Q. What screening methods do you use?
A. In addition to a background check through TransUnion Credit Retriever, we verify gross household income is at least 2.5 times the amount of rent and applicants must meet the required debt to income ratio. Certain felonies, violent or sexual offenses or a pattern of criminal charges will result in automatic denial.
Q. How do you set rents?
A. For most of our properties, rents are set in January of each year for the upcoming leasing season. If we take on a property in the ‘off-season,’ we recommend initially creating a shorter lease so it comes due in the peak of the season, and the property will be on target to get the most profitable rental rates for the following lease term. When setting rental price points, we research what we received for similar properties that we currently manage, as well as look at comparable properties that are currently on the market for rent. Other factors we take into consideration are vacancy rate percentages, population growth numbers, and the amount of new residential construction that is taking place. This helps us to determine current and future market rents.
Q. When do you start marketing a property for lease? Do you market properties in advance at the end of a lease for a new tenant? Do you pre-lease? How far in advance?
A. We time our leases to come due in the summer months, but many times, we acquire properties that need to be rented at various points from September through April. If a property is vacant, or a lease is expiring soon and will be vacant imminently, we get those on the market immediately. Ideally, we like to have upwards of 60 days’ notice to get a good run at finding a new renter so the property isn’t sitting vacant between residents.
For leases already on the summer cycle, we start our pre-leasing/lease management process in February so we have everything spoken for well ahead of August 1st. The result is that by the middle of April, we may have renewed 80% of the people that are going to renew, and then we start marketing for new tenants. You may wonder why we would start marketing a property in April that won’t be available until August. In our experience, the best tenants (who generally stay the longest), are looking well in advance of when they need to move. Our suspicions were confirmed by a study conducted by Multifamily Pro with the help of management expert, Ed Kelly.
They examined the records of 200 residents and found a distinct trend. The group that moved in within 21 days of their application stayed a significantly shorter time than a second group that moved in between 21 and 60 days from the time of their application. However, a third group who began looking, or made their choice, more than 60 days in advance of their move-in date continued their tenancy for a markedly longer time than either of the other two groups. Our experience would suggest that these tenants are also more organized, have specific criteria of exactly what they want in a home, are willing to pay a little more, and will also stay for a longer time. It only makes sense that they will stay a longer time because, after all, they found a property that was exactly what they wanted!
Q. What qualifies a tenant to rent from you?
A. In a nutshell, we are looking for a history of stability across the board. Factors such as steady income, positive rental history, history of home ownership, positive credit history, no felonies and no sexual offenses are items we deem important.
Q. What factors would cause you to decline a tenant?
A. Please refer to the screening process, but a few things that would result in an automatic denial are negative rental references, money owed to previous landlords and utility companies, evictions, recent bankruptcies, civil judgements, large amounts of unpaid collection items, felony charges/convictions, other criminal charges for violent acts, and serious drug offenses.
Q. How do you market your rentals?
A. Our website (www.ftcrent.com) shows up high on Google searches for rentals in the area, and it receives a high volume of traffic from prospective residents. We also post our available properties to Craigslist, NorthernColoradoRentals.com, Apartments.com, and RentLinx.com, which feeds out to a variety of different rental websites on our behalf. Additionally, we receive lots of positive word of mouth advertising – 33% of the new tenants we get each year were referred to us by current or previous residents at properties managed by Evergreen Property Management, Inc. Lastly, the old ‘For Rent’ sign in the yard never hurts!
Q. Tell me about your leasing process.
A. Once we have an approved application, we schedule a time for the tenant to sign the lease and provide the security deposit. We go through the entire lease agreement with them so that everyone is up-to-date about terms and expectations before move-in. After that, new residents pick up keys on their scheduled move-in date, we provide them with a move-in packet, a copy of their lease, helpful local information with phone numbers and tips, information about how and when to pay rent, and information about how to submit maintenance requests. Lastly, first month’s rent and pet deposits are collected at that time.
Q. How long does it take you to fill a vacancy?
A. It depends on the property, price, and time of year. If we are marketing a property well in advance of a vacating date, we may start advertising at the highest end of the market to see what interest we get, and then we’ll discuss gradually lowering the price until we have a qualified resident and signed lease. If we are taking on a property which is already vacant, our objective will be to fill the vacancy with a qualified resident as quickly as possible. To do this, we generally recommend pricing a unit or home competitively, because nothing will cost you more than a property sitting vacant. Owners who agree to pricing recommendations from the leasing department have the highest success rate. On average, we usually have properties leased within 30 days.
Q. On average, how many showings does it take to rent a property?
A. Depending on the property, we average four to six showings before a property is leased.
Q. Do you ever call a prospect back after a showing for feedback?
A. Yes, we regularly call our prospective residents to ask for feedback. We want to know what our strengths are, as well as areas in which we can improve customer satisfaction. There are studies that strongly suggest that the best tenants are looking well in advance of the date they need to move. Personally, I would want a manager who is going to have a tenant lined up before the property is empty; and the further in advance, the better. I also want to have a good sense that property managers are thorough and cautious in their selection of tenants. In terms of the number of showings it takes to lease a property, I think four to six showings are a good range. Fewer showings than that and owners may be underpricing the property.
Q. Typically, how long are your properties vacant between tenants?
A. In the past, we have been right around three to four days. However, this summer we were right around five days due to the amount of turn-over maintenance that needed to happen over the last week of July. It’s better to give ourselves an extra day or two to make sure the property is completely ready for move-in and tenants have a positive experience!
Q. When do you schedule make-ready work? (Before or after the residents have moved in)?
A. We perform pre-move out walk-throughs ahead of time so we have our punch list ready to go before the current resident moves out. The inspections we conduct at the beginning and end of a resident’s lease term help to determine the condition of the property and any damages that may have occurred. In doing this, most items can be addressed before turnover, which helps to reduce time between residents. There are always things that come up once we can see the unit vacant, but the pre-move out walk-through gives us a good idea of what needs to be done to set up our turnover schedule. There is rarely a good reason for a property to sit vacant for any more than three weeks. Unfortunately, a surprising number of managers let that happen. Our average time between residents is one week. Last year, half our properties turned over in just four days! Many owners have seen increases in their income by up to 11% (without increasing the rent to their tenants) because of our tightly-run turn-over process.
Q. How many rental units do you manage?
A. Just under 700 throughout Northern Colorado.
Q. How many property management staff work in your office to manage rental units?
A. Several sources on the Internet have said that a residential property management company should have one employee for every 50-70 units they manage; I think 70 is too high and things probably won’t be completed as expected. One employee for every 50 rentals might seem like too many rentals for one person to handle, but not by much. As of right now, and in anticipation of our next growth spurt, we are a touch overstaffed. We currently have one full-time employee per 42 units that we manage, which will serve us well as the next busy season approaches. We are used to giving each property a high amount of person attention.
Q. If a tenant doesn’t pay rent (or otherwise breaches the lease), what do you do?
A. For a late rent, and if a resident has not previously set up a payment agreement with our accountant, we will send out a ‘3-Day Notice for Compliance.’ These demands are also used for other lease violations, along with a system of follow- up procedures to ensure compliance. If that isn’t effective, we will always try to come to a termination or sublease agreement. Finally, if that isn’t an option, we use eviction as a last resort, as it can be rather time and cost prohibitive. An eviction usually takes three to four weeks and a minimum a $600. Again, we always use this as a last resort. Fortunately, evictions rarely happens and as I mentioned earlier, 9 times out of 10, we can gently coax a resident out.
Q. How often do you inspect the properties you manage?
A. About once a quarter, we conduct regular walk-throughs for our properties, but if you factor in maintenance and leasing visits, on average, we are in most of our properties about six times per year. This helps us to monitor unreported maintenance items, unauthorized occupants and/or pets, housekeeping issues, lease violations, etc. We also look to do preventative maintenance and/or upgrades to cut down on our turnover time, especially if a resident should decide to vacate, which also improves resident satisfaction. We keep regular eyes on our properties more than any other company in town.
My experience has shown that if a resident gets more than 30 days behind in rent, they will never catch up. We inspect properties four times per year, and more often if there is any reason whatsoever to do so, such as falling behind on rent.
Q. How do tenants make maintenance requests?
A. We receive about an equal number of maintenance requests submitted via phone calls, as well as emails. We also have an incredibly convenient online service request option for all residents with non-emergency requests. Our answering service is available 24/7, with a live representative answering for all after-hours and weekend emergencies.
Q. On a typical maintenance request, how long is it before someone goes out to make a repair?
A. Minor requests are typically addressed within 24-48 hours after we receive the request. Additionally, we do not charge for coordinating the work with the companies we contract with. If a resident should call with an emergency, a Maintenance Technician will be sent out immediately.
Q. Do you have any maintenance staff? If so, how many technicians do you have?
A. We currently have eight full-time Maintenance Technicians and Cleaning Associates on staff. They can handle almost anything that comes up day-to-day, aside from major projects such as water heater replacements, furnace replacements, roof replacements, etc. Our employees are screened in the same manner that we screen our applicants for our properties. We’ll review their resumes, and they go through an extensive interview process with our maintenance and human resource manager.
Q. Do you ever ask the resident if there is anything that needs to be done at their place?
A. Yes, that is part of the regular walk-through process. Also, anytime a resident comes to the office, we ask them how everything is going at the property.
Q. For which jobs do you hire a professional contractor?
A. We hire a professional contractor for major replacement items as mentioned above, as well as severe pest issues, window replacements, full exterior paint, chimney issues, driveway replacement, certain electrical issues, etc.
Q. When do you get quotes for jobs, and when do you simply send someone out to do the work?
A. We allow our owners to set a monetary threshold for maintenance projects. Some owners like to be contacted every time a maintenance request is initiated, and some choose to be contacted if a job is going to cost over ‘X’ amount, i.e. over $1,000. A standard base is $200-$300. If we need to use a vendor, we can provide up to three quotes upon request.
Q. How expensive does a job should be for you to contact an owner before doing it?
A. We like to give that choice to our owners so you can set a comfortable limit for your property.
Q. What are your rules for contractors entering or being inside occupied rental units?
A. Only vendors and in-house technicians we know, trust, adhere to our standard of behavior are permitted to enter properties. Maintenance is always scheduled with tenants ahead of time, and if they prefer to be present when a technician or vendor comes by, we do our best to accommodate their request.
Q. Do you require workmen to provide proof of public liability insurance?
A. Yes, and we also require proof of workmen’s compensation. One of my biggest concerns is to ensure that anyone who does work on a property is covered under workman’s compensation insurance. I can’t emphasize this enough. I also want to know repairs are being completed in a timely manner and competent people are handling the work.
Q. What insurances do you carry?
A. We carry all insurance coverage listed below:
- Errorsand Ommisions
- Public Liability
- Employee Theft
- Workman’s Compensation Insurance o General Business Insurance
- Non-Owned Vehicle Insurance
Q. What do you do to prevent your electronic data from being lost?
A. We have systems in place to secure and back up our servers and to protect our passwords.
Q. What controls do you have in place to prevent embezzlement and theft from your clients?
A. Good insurance can cover a multitude of errors. However, I have read articles that have said that when companies lost their data, most go out of business in six months or less! With as much money as management companies handle, good internal controls are important.