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LEASING (RESIDENTIAL)
Q. How does Peak Commercial Property Services
rent/market a property?
A. Keeping your investment rented and your vacancies
to a minimum is all about exposure. That's why we use a
variety of advertising options to maximize the exposure,
including property signage, putting the property on the MLS
(multiple listing services), newspaper/print advertising in
various local publications, and advertisement on our website.
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Q. How long will it take to rent my
property?
A. Because the Phoenix area is a very competitive
rental market right now, getting a property rented is all
about presentation. While there are no guarantees, there are
certain things that can be done to maximize a property's curb
appeal, which gives it a better chance to be rented if the
asking price is competitive for the area. Generally speaking,
a vacant property priced competitively in good condition
should rent within 5-6 weeks; sometimes more and sometimes
less.
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Q. What is the screening process for
tenants before they are approved to moved-in to the property?
A. A potential tenant's screening is a combination
of factors, including the applicant's credit score, their
employment history, their residence history, and their
verifiable personal references. All factors are checked and
verified. A Tenant is not necessarily disqualified if they
have credit issues, especially if they have a steady job and a
good residence history. In the case of the applicant's
approval being on the "borderline", the decision to
approve/reject the applicant is made by the Landlord.
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PROPERTY MANAGEMENT
Q. Why use a property manager?
A. A property manager's job is to maximize the value
of the owner's investment, and handle the headaches and
day-to-day operations so the owner/investor can spend time
doing things they enjoy.
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Q. What are the responsibilities of
a property manager?
A. Primarily, the property manager has the following
responsibilities:
- Provide tenant monthly billings & all rent
collections
- Full accounting services; provide owner with detailed
monthly financial statements
- Maintain good communications between Landlord &
Tenant
- Handle maintenance/repair issues
- Monitor lease to ensure Landlord/Tenant compliance
- Make regular inspections of the property
- Handle any eviction issues and/or other legal issues
- Lease-up of vacancies; Qualify/screen potential tenants
for approval
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Q. When are owner distributions
made?
A. Owner distributions are typically cut around the
10th of the month after rents have been collected and the
mortgage payment has been made. These dates are a general
guideline and can be modified to fit a particular investor's
needs. Another option available for the investor would be
direct deposit of their monthly distributions, which can be
easily set up with the bank.
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Q. When owner repairs are necessary,
at what dollar amount does the property manager contact the
owner/landlord for approval?
A. Typically it is around $250 for residential (for
commercial it is typically around $1,000-1,500), but Peak is
able to work with an investor's particular needs.
Q. What kind of accounting /
reporting is done?
A. Our property owners can access our website and
"log-in" to check the status of their investment at
any time. Of course we also forward any owner proceeds and
monthly financial statements to our clients which detail all
income and expenses for the month. Our monthly statements are
user friendly and easy to read & understand. For the
owner's convenience, Peak prepares a year-end account summary
to assist our client's tax return preparation.
Q. How much additional money should
an Owner leave with the property manager for emergencies?
A. We recommend the Landlord leave $300-500 extra to
cover small repairs that arise from time to time (for
commercial properties the amount would be $2,500-5,000).
Obviously, if a larger expense comes up, the Landlord is
contacted to discuss the situation.
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Q. What are the insurance
requirements for the Tenant & Landlord?
A. The Landlord is required to carry general
liability and hazard insurance to protect against fire,
flooding, and other natural disasters. The Tenant is required
to carry a "Renters" policy, which covers the
contents and personal belongings of the Tenant inside the
property. The Landlord's hazard coverage amount should cover
the replacement cost of the dwelling; the Tenant's coverage
amount on a Renter's policy needs to cover any personal
property of the Tenant.
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Q. Who is responsible for
repairs/maintenance and how are maintenance issues handled?
A. Typically the lease provides the Tenant is
responsible for the smaller repairs items (toilets, sinks,
etc) and the Landlord is responsible for the larger expense
items (A/C, roof, etc.). We offer 24/7 phone service for
emergency repairs and obtain the owner's approval before
moving ahead on any major repairs.
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Q. Who will be managing my
investment?
A. A property manager will be assigned to handle
your investment. Our experienced staff handles all maintenance
issues, tenant requests, and makes routine inspections of your
property to insure resident compliance. All of our efforts are
aimed at maximizing the value of our client's property by
attracting high-quality residents, reducing maintenance costs,
and providing effective tenant retention.
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Q. What happens if I want to cancel
property management services?
A. We have a hassle free policy where the investor
simply provides a 30-day written notice and we will transfer
your account to the new property manager. There are no
penalties or long-term contracts that an investor needs to be
concerned about.
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REAL ESTATE INVESTING
Q. Can Peak Commercial Property Services help me
find an investment property for purchase?
A. Absolutely. Peak has a CRIR on staff to help meet
your investment goals. Our principals in the company are
active real estate investors themselves, having purchased,
managed, or built dozens of residential properties over the
past several years. We take the time to actively listen to our
client's goals/objectives and we have a proven track record in
working with distressed properties which includes
buying/selling properties in foreclosure, buying properties in
bankruptcy, and purchasing properties through a short sale
from a lender.
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Q. Why is real estate considered to
be a great investment?
A. Real estate has several advantages over
stocks/mutual funds/bonds:
- Cash Flow - Depending on your down payment, it is
very possible to have a good positive cash flow. Of course
this is tougher with "no-money" or low-down
deals and the larger the down payment on the investment,
the better cash flow your investment will provide.
- Appreciation - Phoenix is a strong real estate
market. Using a conservative appreciation rate of 5%
annually on a $150,000 purchase, the value of the property
after Year 5 is now $191,442, an increase in the
investor's equity position of over $41,000. If your down
payment on the property was 10% ($15,000), your return on
investment would be well over 100%, which is tough to
beat, whatever the investment.
- Leverage - Real estate is probably the only
investment that you can borrow most of the value of the
investment, in some cases up to 95-100% LTV
(loan-to-value). This is the reason banks/lenders will
make loans on real estate all day long, but will not loan
money to an investor has a "hot tip" on a stock.
In other words, you have to have $100,000 saved up to
invest in $100,000 worth of stocks/mutual funds. Contract
that to real estate where you can control $100,000 in real
estate with as little as a 3% ($3,000) down payment (and
often seasoned investors can buy with no money down!).
- Tax Advantages - Another advantage to real estate
investing is you can deduct a good majority of your
expenses associated with your real estate investment.
These items include management fees, maintenance,
insurance, mortgage interest, real estate taxes, etc. Of
course you also get to depreciate the cost of the
investment (building only, not the land) over a 27.5 year
life span.
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