Most of us have a general idea of what residential property management is. You have a house, you want some extra cash, so you partner with a tenant that needs a house in exchange for paying rent. Simple, right?
Anyone that’s rented out a home knows it can get more complicated. The further you get down the road of becoming a landlord/investor, questions surface that you didn’t know you didn’t know. In North Star’s experience matching tenants with homeowners, we know that depending on your investment priorities, answers to these questions won’t be the same for everyone. For some, maintaining the home in perfect condition is king. Others want to maximize their cash flow. And some folks just want to know the home is in good hands and not on fire, while sipping margaritas and collecting their auto-deposited rent check.
If you’re considering investing in a new rental property or leasing out an existing property, there are two traditional options: hiring a property management company to take care of everything – from screening applications to maintenance to rent collection – or taking care of everything yourself. Luckily, you have a third option, because North Star Property Management offers an in-between service if neither of those options are exactly what you need. While we are happy to manage most local properties for you for a monthly management fee, we also offer what we call “owner-managed” services.
Our owner-managed leasing service combines professional property management with the personal relationship and close attention of a homeowner managing a property directly. Another name for this service is tenant placement. Our owner-managed service includes marketing, screening applicants and writing the lease agreement with the sole purpose of handing the property back to the owner to manage for the life of the tenancy.
Jim H. has 7-8 rental homes in and around Oregon and has worked with North Star for over 10 years under our owner-managed service tier. Although he plans to convert his properties to North Star monthly management once he’s ready to retire, he recommends North Star’s owner-managed service for anyone that’s handy. Jim thinks that the personal contact with his tenants helps keep his landlord/tenant relationship positive. He has been a builder for over 40 years and built many of his rental houses himself. Tenants call him for “all kinds of stuff,” and as long as he’s in the area, he can pop right over and take care of requests quickly.
As referenced by the North Star Managed vs. Owner Managed Services Chart on our website, both services are the same through move in day. We assess the property for the best rent rate, screen tenants and schedule showings, approve applicants, negotiate and write the lease, and meet with the tenants for a move in orientation on move in day. That’s when the two services differ. If North Star is managing the home, we set the tenants up for automatic rent payments on our online portal, instruct tenants on how to complete online maintenance requests and access our 24-hour repair emergency line. We manage payments, enforce the lease, and coordinate maintenance all the way through the move out, turnover, and next lease (or hand it back for sale or your return). North Star does not manage these tasks for owner-managed properties.
The most significant advantages we hear from our owner-managed clients versus North-Star-managed clients is that owners are able to save money on monthly management fees, exert more control over maintenance requests, and develop a more personal relationship with their tenants. Some owners cut costs by making repairs themselves or asking residents to deduct a tenant-paid repair cost from rent.
For our North Star managed clients, the benefits are inversed. Some owners want a more arms-length relationship with their tenants and appreciate having a more businesslike setup for their investment property. They appreciate all the finances being automated; tenants have the ability to make rent and deposit payments online, and owners receive their monthly deposits electronically as well. Our detail-oriented maintenance team reviews each repair request with a balanced eye toward limiting expense as well as keeping the home in the shape that merits a high end rental property. Clients of a North Star managed property also recognize continuing education hours earned by our team, maintaining our detailed knowledge of the often-changing local and statewide landlord/tenant law regulations. We put a lot of work into ensuring a smooth relationship between landlord and tenant, which is reflected in the cost of that monthly management service. Most of our owners pay an 8% monthly management fee that’s deducted from the rent.
Tony L., who owns an investment home in Lake Grove, had a different experience from Jim. Tony began his relationship with North Star managing and transitioned to owner-managed after about 2 ½ years. As a first time landlord, Tony wanted to take some time and become more confident in knowing what management entailed before venturing out on his own to manage the property. His next priority was making the most financially from his investment, which meant saving the cost of the monthly management fee. His advice to new landlords? “Find the right fit with tenants and the relationship will go smoothly. North Star can help with that, and I intend to rely on them to help me find the right tenants next time around. They do a great job and make things really easy, both for transition management as well as handling tenant relationships on a monthly basis. I’d say pick the right services that work for you, and North Star can help you.”
Still can’t decide what works best? Take this quiz and find out which service fits your needs better:
As a landlord, I’m comfortable:
- Saving money each month on management fees
- Collecting rent from my tenants
- Performing a property inspection while tenants are living in the home
- Talking with tenants about how to use the appliances in my home correctly
- Having full control over every repair cost, from small to large
- Pursuing a rent payment and late fee if rent is late
- Working out a plan for tenants to break the lease if they need to move out early
- Getting a call for a leak at the property late at night
- Inspecting the property after move out and refunding tenants in accordance with Oregon landlord/tenant law
If you answered yes to these questions, you’re a great candidate for North Star’s Owner Managed Service. But if you need more help deciding which option is best for you, please reach out to your leasing agent. They are here to help you determine which choice is best according to your goals in property investment. Rest assured that whichever service you choose, North Star Property Management is the best place to start your rental journey.
