Experienced property managers on Oahu know that one of the key items to their client’s success is to have well maintained properties. This results in shorter vacancy periods, less turnover, and fewer complaint calls from tenants. Unfortunately, its not always easy to convince the property owner that they need to invest in new kitchen cabinets, change out the old bathroom sink or rip up the ten year old carpet. Oddly enough, the one person who should want to decrease the amount of time it takes to lease a property and to have tenants who stay in the property longer is often times the one preventing you from trying to help them.
How can I get my client to understand what needs to be done?
Its hard to getting someone to hear what they don’t want to hear. A technique that works really well is to identify what your client does want to hear. Generally, this would be along the lines of making it easier to find a tenant quickly, less complaint calls or possible prolonging the lease. Start off by letting the client know that you have a way to improve in one areas and it can by done by... which will result in...
While the property owner still might not like what you have to say, they will at least by more willing to listen and consider your proposal. The information you present to the client is key. What are they interested in and how do they think? Is this someone who’s a whiz with numbers, or do they like reading and lots of literary examples? As a property manager, you have to frame your recommendation to match the client’s way of thinking.
Property owners who are good with numbers will respond better to something like this:
"If we were to replace the carpeting for $1500, we would most likely be able to lease out the property in about four to six weeks. In addition, we would most likely get more in rent. But if we don’t the property will probably take six to eight weeks to find a tenant and most likely we will get $100 less in rent. So you see, holding off on replacing the carpet will cost you $1200 in rent plus an additional two weeks in advertising expenses, utility bills, etc. So in the long run, you are better off replacing the carpet. You will break even after the first year."
Investors who prefer detailed examples would respond better to a story:
"Picture this, you are looking to buy or rent a house for yourself. You come up to this cute property with a nice yard. So far you are feeling pretty good, but then you walk into the home and see the worn carpet. It’s faded in the hallways, the stairway has a grayish appearance, it looks like it’s compacted to the ground, and it feels like you are walking on concrete. The first impression you get is that the carpet is old and now the rest of the house start to look old and outdated. Yes, you may have replaced the refrigerator and freshly painted the property, but the carpet stands out so much that you don’t even notice the other things that may have been updated. So you see, the carpet has a tremendous impact on how the property will show and the impression it will give to prospective tenants."
What can I do to get my client to accept the repair bids I have gotten?
Most property owners want to feel like they are getting a lot of value for their money. Vendors will typically provide you with an itemized bid listing each line item separately with a total. If they don’t, its worth asking them to do this for you in order to make it easier to compare their prices to other vendors. Taking some of the small repair items like repairing a towel bar or patching a hole in the door can easily be grouped into other larger items like paint. While the paint costs will go, it also increases the amount of items that are being included with the paint estimate which improves the perceived value. Its easier for a property owner to accept higher paint costs as they expect this to be someone costly versus trying to convince them it costs $30 to replace a door knob.
Another useful strategy is to break down the costs of the repairs:
"A handyman will need to go to the hardware store to pick up the parts and then drive to the property, which will take about an hour with traffic. They will then spend two hours painting plus and an additional hour replacing light bulbs, installing a new kitchen faucet, and caulking the bathrooms. It will take a total of four hours to complete all the repairs. They charge $45 per hour, so the labor cost will be $180 plus the materials which are an additional $175, for a grand total of $355. After looking at their bid, they are only quoting you $325 which is less then I would normally expect to see."
While landlords in Hawaii generally do not want to spend money on unnecessary repairs, with the property information and the right presentation, property managers are able to convince property owners to update their property. This ultimately will make your job easier and your client happier.
October 3, 2013