Property Management Advice for Investors: Lessons in Tenant Screening

As an investor myself, I think it is important to provide real property management advice for investors. Particularly important are some valuable in lessons in tenant screening. Oh, where to begin. But first…

How I Became My Own Property Manager

I never intended to manage my own investment properties–I sort of fell into that role as a bootstrapping investor and learned the hard way. Unlike the mature markets in Fairfax and Arlington Counties, the market I invested in (in Virginia’s Shenandoah Valley) doesn’t yet offer cost-effective residential property management for small investors like me. So, I had to plunge in and learn by trial and error. From becoming a social media tenant sleuth to learning how to sniff out good contractors, every bit of wisdom I gleaned cost me time and money. And along the way, I learned some pretty expensive lessons. I think a few of those lessons are worth sharing with other investors and would-be landlords.

Like a lot of people new to real estate investing, I got my foot in the door by using a combination of home equity loan and savings to purchase several tiny income properties at a time when prices seemed to be rebounding after the lows of 2009 and 2010. My goal was to net some income each month and (hopefully) to see some appreciation in a burgeoning market, over five or six years of ownership.

I joined a real estate investors’ networking group and sought out the best advice I could get. “Don’t lose money each month” was what it boiled down to. And what was the surest way to lose money? Bad (as in nonpaying and/or destructive) tenants.

The Tenant Problems Begin

I had a little problem, however. The houses I had purchased came with tenants (and leases that had more than six months left on them). While I felt a bit nervous about my rough-around-the-edges tenants, I figured I could manage them if I just stayed on top of things. And maybe I’d even end up with a good tenant or two. It could happen, right?

Wrong. From the beginning, I had problems with all my tenants. Problems collecting rent and problems with maintenance. Problems with town ordinance violations and problems with neighbors who didn’t care for my tenants’ habits. The best of the lot were the elderly couple who moved out in the middle of the night the week after I bought the house. They took a couple of major appliances with them and disappeared without a trace. But they did vacuum before leaving, at least. Which was very thoughtful of them.

Screening Tenants

So, I set out to find me some new tenants. I wrote an ad for Craigslist, uploaded some pictures of the cute little Cape Cod house, and clicked Publish. I figured before I even took an application I’d do whatever initial screening I could. I’m a journalist, after all–and I know my way around digital research.

About five minutes went by before the first eager inquiries started rolling in. I cracked my knuckles and started right in on the Facebook sleuthing–which my teenaged daughter informed me was more appropriately named Facebook-stalking. But hey, after the great midnight appliance heist, one couldn’t be too careful, I told her. I was only performing my due diligence as a responsible landlord and investor.

First up: Delilah Shuttleworth (not her real name). She was a hardworking young mom, she informed me–just making it on her own due to her positive outlook while looking out for her darling toddler, who was the joy and light of her life. She had included a couple of photos with her inquiry, which backed up that persona. The head shot looked like it might have come straight out of the annual church directory. Awwwww. And another one pushing her chubby little two-year-old on a swing. Sweet. Oh, and she wished me a “blessed day” in her closing.

Using Social Media for Initial Tenant Screening

On to Facebook. There was Delilah in the profile pic–but with a ferocious animal print ensemble rather than the Peter Pan collar I’d seen in her email. Plenty of photo albums available for public viewing. And, lo and behold, nearly all of them show her downing shots (or unconscious). And right at the top of her profile is a request for money for the incarcerated boyfriend. (It even came associated with an app called JPay. The smarter way to pay inmates.) One friend commented that she’d maybe make a donation to the cause if Delilah would pay her back from last Friday night. Delightful Delilah had snarled back at her with a string of four-letter words that’d make a sailor blush.

Three hours later, I’d completed Facebook research on all Craigslist responders whose emails provided last names. And I’d determined that they were quite a fun-loving, free-spirited, photo-sharing bunch–but alas, not exactly tenant material.

The Tenant Problems I Never Anticipated

I’d subsequently learn a number of tricks in ad copywriting to keep me from even having to do that up-front Facebook detective work. Asking for a work email, mentioning online payment policies, requiring a preliminary application to be considered for a showing, indicating that a broker would be in touch to take application fees, etc. Those measures helped me at least to filter applicants for minimally stable jobs, up-to-date financial practices (such as having a checking account), and incomes. And subsequent credit checks (using the application fees) helped further refine the list, of course.

What were the debacles and time-sucking inconveniences my screens didn’t help me uncover? A history, in one case, of creating “lawsuit traps” and suing people. A drug addiction. A hoarding problem. An employer who went out of business the week after the lease was signed.

What a Professional Property Manager Offers

Would a professional property manager have been able to spot and avoid these problems? Maybe not all of them. But in placing tenants on my own I’ve come to realize one important thing: As a landlord, even when I tell myself I’m keeping emotional distance, I am still too close to the situation to maintain objectivity. I am proud to be providing renters with affordable housing, and I truly want to place tenants who seem to satisfy my criteria.

But it’s more than pride in placing tenants. There’s plenty of fear in this landlord job too. I fear seeing one of my houses sit empty, because of the drain to my bank account (and thus my ability to do things like meet all my own bills, plan vacations with my kids, or grow my primary business). Finally, I have little time for the extra care an empty house requires of me.

No, I’m not objective about my properties–or the tenants who want to live in them. How could I possibly be?

I am emotionally involved in my own properties–no matter how many screening techniques I learn or how much wisdom (and healthy skepticism) I gain. If my market had offered me an experienced property manager specializing in single family homes, I have no doubt that I’d have been better off hiring someone to bear that responsibility (and maintain that unblinking eye to the bottom line).

A property manager with years of insight into tenant issues, applicant red flags, and local employers could have avoided many of the traps I fell into in my push to keep my houses from sitting vacant.

Not to mention saving me hours of time being horrified yet strangely fascinated by applicants’ lives on Facebook.

If you would like to learn more about WJD Management, please review our comprehensive Management Program guide. If you are ready to rent your home, feel free to take advantage of our exclusive FREE Rental Market Analysis. Finally, don’t forget to connect with us on social media! Follow us on FacebookTwitterLinkedInInstagram, and Pinterest for tips, ideas and updates.

Flat-Rate Property Management in Northern Virginia: The Pros and Cons

Wondering about Flat-Rate Property Management in Northern Virginia? Most owners have wondered at one point or another whether flat-rate property management in Northern Virginia is worth it, and we are here to tell you, like anything else, there are pros & cons.

So you’re going to be out of town for the next few years, and you’ve decided that instead of selling your Northern Virginia home, you’d like to put it on the market for rent. You’ve already decided that professional property management is a strategic cost in which you’re willing to invest (for reasons including peace-of-mind, tenant screening, marketing, maintenance, etc.); and you’re on the lookout for a property management firm.

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Property Management in Old Town Alexandria Virginia

Are you looking for real advice about property management in Old Town Alexandria Virginia? We’ve got the advice you need for property management in Old Town Alexandria, Virginia.

How much does it really cost?

You live in Alexandria, Virginia, and you recently learned you’re being transferred overseas for the next couple of years. You’re excited about the big new transition. There’s one problem, though: To keep your house, you know you’ll have to become a landlord. Which means somehow dealing with rent collection each month, the intrusion of 2 a.m. phone calls into your sound sleep when something breaks, the paperwork at tax time, the hassle of finding good contractors to fix stuff, etc., etc.

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How to Interview and Hire a Property Manager in Northern Virginia

Wondering how to interview and hire a property manager in Northern Virginia? Here are questions absentee and Foreign Service homeowners should ask.

Curious about how to interview and hire a property manager in Northern Virginia? Local Realtor Carolyn Connell knows a little something about the professional property management needs of Absentee and Foreign Service homeowners. She not only specializes in Foreign Service relocations–she has experienced a few herself. Here’s what Carolyn had to say about the special needs of Absentee and Foreign Service families who decide to rent out their home while living out of the area or overseas. This information is also relevant to traditional homeowners, investors, government and military personnel and families! Here is how to interview and hire a property manager in Northern Virginia.

How to interview and hire a property manager in Northern Virginia.

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WJD is Best of Fairfax in Property Management 2019

Looking for the Best of Fairfax in Property Management?

Fairfax Award Program Honors the Achievement

FAIRFAX October 21, 2019 — WJD Management has been selected for the 2019 Best of Fairfax Award in the Property Management Company category by the Fairfax Award Program.

Each year, the Fairfax Award Program identifies companies that we believe have achieved exceptional marketing success in their local community and business category. These are local companies that enhance the positive image of small business through service to their customers and our community. These exceptional companies help make the Fairfax area a great place to live, work and play.

Various sources of information were gathered and analyzed to choose the winners in each category. The 2019 Fairfax Award Program focuses on quality, not quantity. Winners are determined based on the information gathered both internally by the Fairfax Award Program and data provided by third parties.

About Fairfax Award Program

The Fairfax Award Program is an annual awards program honoring the achievements and accomplishments of local businesses throughout the Fairfax area. Recognition is given to those companies that have shown the ability to use their best practices and implemented programs to generate competitive advantages and long-term value.

The Fairfax Award Program was established to recognize the best of local businesses in our community. Our organization works exclusively with local business owners, trade groups, professional associations and other business advertising and marketing groups. Our mission is to recognize the small business community’s contributions to the U.S. economy.

SOURCE: Fairfax Award Program

CONTACT:
Fairfax Award Program
Email: PublicRelations@businessawardsdecision.net
URL: http://www.businessawardsdecision.net

Alexandria Property Management 101

Looking for a lesson in Alexandria Property Management 101? If you own property in Alexandria, our special Alexandria Property Management 101 was written just for you!

A Primer for Relocating Alexandria Homeowners

Alexandria is always a sought-after location for rental properties —though it’s a sprawling area that encompasses both inside-the-Beltway territory and commuter neighborhoods further afield. For most Alexandria properties–whether condos, townhouses, or single family homes–it’s not hard to attract metro-area tenants. But the majority of homeowners I talk with want to know what they should do — besides relying on location alone to attract top tenants.

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What Does a Property Manager Do?

We are often asked, “What does a property manager do?” It’s a great question—and we have a simple answer for it:

“We do everything you’re going to have to do if you don’t hire us!” Here are a few of those challenging tasks…

Find the Right Tenant

Make a mistake on your choice of tenant and you’ll pay for it—in time, money, and possibly legal troubles. Placing a good tenant yourself actually requires a series of steps.

You must first determine the fair market rental value for your home before advertising for a tenant.

    1. Once you have determined the rent you’re going to try to get, it’s time to advertise.  You can use Craigslist (or other similar classified ad sites) where listings have to be renewed every week. Or you may engage a Realtor who will list your property with the Multiple Listing Service, create the lease, maybe conduct a move-in inspection and then walk away from the transaction.If you list the home yourself, you’ll need to be extremely careful that your advertisement does not violate any of the multiple state and federal Fair Housing requirements.
    2. Once you have found an interested party, you must qualify them to be certain they are a good credit risk. Their employment must be verified, as well as their rental history (with references obtained from current and previous landlords). And if your applicant’s credit score and debt to income rations are not within an acceptable range, you’ll have to start the search all over again.

Write a Good Lease

After successfully qualifying the tenant’s application, it’ll be your job to write a lease that’s both legally compliant and completely enforceable.

What does that mean, exactly? First, you’ll have to determine whether your lease will be governed by Virginia Common Law or the Virginia Residential Landlord and Tenant Act. And then you’ll have to make certain that the document contains all of the appropriate requirements for your property and is legally enforceable.

Once that’s taken care of, there’s the matter of the security deposit. It must be placed in a separate escrow account, where it has to remain untouched throughout the tenancy, unless it’s used to offset tenant damage. Comingling of funds is a great way to wind up with a serious legal problem!

Fix Things that Break

If something breaks, leaks, bursts, or simply goes kaput—it’s up to you to determine the cause of the problem. For example, did the eight-year-old washing machine die of natural causes (thus constituting reasonable wear and tear), or did it stop running because the tenant abused it? Either way, you’re going to have to fix it. And if it was the tenant’s fault and they’re going to be charged for the repair, you will bear the responsibility of thoroughly documenting the cost with a legitimate contractor’s invoice.

The same same holds true, by the way, for any damage the tenant may cause throughout the tenancy; do-it-yourself invoices are typically not honored by the courts should the tenants take issue with them.

Collect Rent—and Handle Evictions

In the event the tenant stops paying rent, you must do your best to collect it by sending written correspondence and making phone calls. When all that fails and you determine that you must evict them, the law requires that the tenant be sent a legal notice instructing them to pay or vacate the premises. Following that measure, a lawsuit must be filed in court. At the time of the hearing, you or your representative will have to appear before the judge. If the court rules in your favor, you must coordinate the actual eviction with the sheriff’s office and provide the necessary manpower to remove the tenant’s belongings.

Keep Track of Income and Expenses

Finally, there’s the task of accounting. Tracking the income and expenses for your rental property is not merely a good financial habit—it’s the law. You must keep track of all gross rents collected and report this income to the IRS on a specific schedule (form), attached to your 1040. You must also keep track of all legitimate expenses to offset the income when you file your tax returns. The IRS is noted for thoroughly vetting these itemized deductions (and auditing when they flag inconsistencies). So, it’s critical that all of your expenses be recorded and thoroughly documented.

So, what does a property manager do? All the stuff you’ll have to do yourself in the absence of a management professional–market research, advertising, tenant screening, legal document creation, rent collection, escrow accounting, maintenance and repairs and more–while also keeping you on the right side of the law and out of the courtroom.

David Norod is the principal broker of WJD Management. He enjoys keeping his 400+ property owners up to date on the best ways to keep their homes rented and running smoothly. When he’s not managing properties, he’s playing classic rock in local clubs with his band Off The Record.

WJD Management Awarded 2019 Fairfax Small Business Excellence Award

WJD Management is pleased to announce they have once again been awarded the Fairfax Small Business Excellence Award in Local Services for providing outstanding customer service in Fairfax!

Earlier this year, WJD Management was pleased to be selected as a recipient of the 2019 Fairfax Small Business Excellent award for 2019. The Fairfax Small Business Excellence Award Program vets local businesses through a combination of data from local business owners, trade groups, professional associations and other business advertising and marketing groups. Winners are recognized for providing exceptional customer service in the Fairfax community and surrounding metropolitan area.

In order to qualify for the Fairfax Small Business Excellence Award, WJD Management had to demonstrate the ability to use their best practices and implemented programs to generate competitive advantages and long-term value. According to the local business award committee, WJD Management is one of the exceptional companies that “enhances the positive image of small business through service to customers…and help make the Fairfax area a vibrant and vital place to live.”

The Fairfax Small Business Excellence Awards was established to reward the best of small businesses in Fairfax. The organization works exclusively with local business owners, trade groups, professional associations, and other business and marketing groups. Their mission is to recognize outstanding contributions by small businesses to the U.S. economy.

Arlington VA Property Management: A Checklist for Homeowners

You have questions about Arlington VA Property Management? We have answers. 

Here’s Our Checklist for Arlington Property Management & Relocating Arlington Homeowners. Arlington is a hot area for rental properties–and in most cases it’s easy to attract applicants eager to rent inside the Beltway. But many Arlington homeowners wonder whether they could do more to attract the best tenants in the region. After being asked countless times by landlords for tips on what’s worth spending money on and what’s not–here’s our handy checklist for relocating Arlington homeowners.

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How to Find the Best Property Management Company in Northern Virginia

Are you looking for the best property management company in Northern Virginia?

If you’ve landed on this page then chances are, yes, you are looking for the best property management company in Northern Virginia. Well, let us give you some candid information and advice about the property management industry. Assuming you are a homeowner or real estate investor who is looking for the best property management company in Northern Virginia, there are a number of overall factors to consider when hiring a property management firm, many of which are addressed in our other informational articles. However, there are three immediate factors to consider – online reviews, if the property management company also sells real estate and the organizational structure of the property management firm.

First you have to know how to approach online reviews.

How Much Should You Trust Online Reviews About Property Management Companies?

These days, online reviews have become an invaluable resource because they provide a way for potential customers to learn about a company from past and existing customers. However, online reviews do pose a problem in that users can also post negative, fraudulent or even fake reviews which of course do not paint an accurate portrait of businesses. Additionally, even if a business owner responds to reviews of this nature, it does not result in a change of the overall star rating. This problem plagues the entire property management industry and is created by both prospective tenants as well as former tenants.

But why? Why do prospective tenants and former tenants take to social platforms, often enlisting friends and family, and post negative, fraudulent, fake or misinformed reviews? The answer is simple: Their rental application was declined for any number of reasons – excessive debt, bad landlord reference, low credit score, etc. Or they disregarded their end-lease requirements and either did something they should not have done or failed to do something they should have done and forfeit some of their security deposit as a result.  Even though the property management company acted as per the direction of homeowner to decline a rental application or forfeit a security deposit, these individuals blamed the property management firm, i.e., they shot the messenger.

You see, one of the most challenging aspects of property management is tenant screening. This is one of the many reasons why smart homeowners choose to mitigate that risk and have their property professionally managed by a licensed and credible management company who is a member of NARPM and NOVA NARPM. We actually culled through reviews of property management companies from all across the country and found that most major and credible companies have similar one-star reviews from both prospective and former tenants. If you do enough research, you’ll notice the same thing. The language, length, and tone of these reviews becomes very familiar. You’ll see a lot of words in all caps, long rants which rarely include any tenant accountability.

WJD Management has a tried and true method of qualifying prospective tenants which you can read about here. The information we obtain is presented to the homeowner and the homeowner makes the decision to accept or decline the application. There are a wide variety of circumstances which can result in a declined application but regardless, some prospective tenants take it personally, become angry and vindictive and head for the nearest social media platform to tell the world about how unfair we were to them. In truth, we were just looking out for the homeowner’s best interests.

When a former tenant leaves a negative review about us it’s nearly always because they did not receive a full refund of their security deposit. In these instances, their actions or lack thereof resulted an expense for the homeowner which was reimbursed from their security deposit. Although these funds were paid to the homeowner, the reviews all infer that “the property management company stole our money.” And here again, we were only looking out for the homeowner’s best interests. So, you can see how these situations can be challenging, and how it’s also a good indicator of why you should hire a professional property management company to manage your rental property. When doing research, you’ll really need to read these negative reviews with a grain of salt, especially if you see a lot of positive reviews otherwise. Further, a few negative reviews may actually be a good thing because they indicate that the property management company was generally looking out for their homeowners.

Okay, so you’ve read lots of reviews about different local property management companies and there seem to be quite a number of similarities. Now what? Well, first and foremost you’ll need to determine if the property management firm has a vested interest in real estate sales.

Does the property management firm have a vested interest in real estate sales?

If the property management firm you interview has a real estate sales arm, you must contemplate some issues that may not be obvious during your search for the best property management company in Northern Virginia. You’ll need to find out if they will require you to use one of their real estate agents if you decide to sell your property. You may also have to consider what happens if a tenant would like to purchase your property. Will you owe the property management company a commission in that instance?

The most important question by far however is whether the real expertise of this property management firm is in management or in sales. The answer to this question is an accurate indicator of not only the quality of the service you will receive but also of the choices that may or not be available to you later as a seller.

It may seem like we’re telling you this to convince you that WJD Management is the best property management in Northern Virginia, but the truth is we are the only property management company that specializes exclusively in residential property management. We are the only licensed real estate brokerage in our area that does not have a real estate sales arm. What that means is that property management is all we do–we do not accept homes into our managed inventory with the hope of generating a future sale. When we need to find a tenant for one of our homes, the property is listed by our own Principal Broker. We do not farm the listing out to as real estate agent – who may be completely unfamiliar with your home – as many of the property managers with the larger “branded” companies in our area do. Moreover, because we do not engage in real estate sales, 100 percent of our company’s resources are dedicated to managing the homes in our inventory. It is no secret that the other property management firms in our area typically invest minimal resources for their property managers because they believe the real money is in selling real estate as opposed to managing it. And yet ironically, when sales slump, these firms look to their property management activity to keep their doors open.

What does the organizational structure of the property management firm look like?

One final consideration is the actual structure of the property management company. Does it employ the traditional “portfolio” arrangement or the newer “departmental” arrangement as WJD Management does? Although sound arguments can be made for both styles, we feel the portfolio style has some limitations which are overcome with our departmental structure. With a portfolio property management company, the homeowner is assigned a “property manager”. This individual may also be assigned to as many as 200 other homeowners. The property manager is mostly responsible for maintenance. This means that he or she is probably not involved in the marketing activity when a tenant must be found and must rely on others to answer such questions as “Why hasn’t my home been rented yet?!” In addition, this means that he or she may have to rely on someone else to address legal issues when a tenant states “I don’t care what you say, my lawyer says I have grounds for breaking my lease!” This also means that he or she probably cannot answer specific accounting questions such as “Why was I charged a double management fee this month?!” The list goes on.

Our departmental structure includes experts within each of the five modules that the best residential property management companies should consist of. These modules are marketing, leasing, maintenance, inspections and accounting, and in the best-case scenario, they are all “under one roof”. WJD Management has a Principal Broker with over 30 years’ experience in determining rental values and listing area homes for rent. We have Leasing Managers who thoroughly vet all prospective tenants before we hand them the keys to your home and who are intimately familiar with each of the many covenants of our lease. We have Maintenance Managers with many years of experience who work with licensed, bonded and insured contractors as opposed to “handymen”. We have Property Inspectors who faithfully take an in-depth look at your home every six months. And we have a Comptroller with an MBA who is also a certified tax consultant. Tying it all together is our exclusive, proprietary software which shares the information from each module with every member of the WJD team. So no matter what your question or concern may be, it can be addressed by practically any staff member or if necessary, immediately referred to the appropriate modular expert.

At WJD, we understand that as a homeowner or investor, naturally, you are looking for the best property management company in Northern Virginia. We hope that our candid advice and 30+ years of experience helps you to make a better and more informed decision about who you hire to manage your rental property. Additionally, if you are in the military, a foreign-service official, or a government employee, you may find this information particularly valuable because you may be overseas and unable to devote the time needed to thoroughly research Northern Virginia property management firms. Also, be sure to read our reviews – there you’ll find a longstanding list of happy homeowners and tenants as well as a few folks who apply to our above explanation of online review problems in the property management industry. Thank you!


If you would like to learn more about WJD Management, please review our comprehensive Management Program guide. If you are ready to rent your home, feel free to take advantage of our exclusive FREE Rental Market Analysis. Finally, don’t forget to connect with us on social media! Follow us on FacebookTwitterLinkedInInstagram, and Pinterest for tips, ideas and updates.