Why is a Property Team Important?

“Great things in business are never done by one person. They’re done by a group of people” Steve Jobs

Whether you have one building or several thousand units, you need your team to keep things moving. That team includes your roofers, plumbers, painters, and handymen. Don’t forget your real estate attorney, your CPA, and your Apartment association. They all play a part in the operation of your building on a day-to-day basis. You may use a property management company and you may have a resident manager who collects rent and handles day-to-day business such as meeting workers, showing vacant units, and responding to calls from existing tenants and prospective new tenants.

IS A RESIDENT MANAGER REQUIRED?
Apartment buildings with 16 or more units are required to have a “responsible person’ living on the premises. So what is a “responsible person”? Some cities have determined the minimum required hours for a manager and posted those hours, but, in most cases, it is undefined. What do you need a manager to do and what hours should they be available?

NEW LAW
As of January 2023, Resident managers are required to be paid minimum wage for their services. State minimum wage is $15.50 per hour, but just as with Rent Control ordinances, many cities such as Los Angeles and Santa Monica, and even unincorporated areas of Los Angeles County, have imposed their own minimum wage which may be higher. The higher wage will be the one you need to pay to stay within the law. The City of Los Angeles, for instance, requires $16.04 per hour.

RENT CREDIT
Most resident managers receive a rent credit as a part, if not all of their compensation. The state of California is allowing 2/3 of the ordinary rental amount to be credited. In other words, if you had an apartment that usually rents for $2,000. per month, the MAXIMUM rental credit would be $1333.33. There is even a law LIMITING the amount an on-site manager can be charged for rent. That amount is $847.12 for an individual and $1253.10 for a couple

ALWAYS DOCUMENT EVERYTHING
You may need to consult your attorney to get the best wording for your manager’s contract, but it will be money well-spent (and a business expense) So don’t be afraid to check with the Apartment Association and your attorney, so that you get it right the first time.

“The nicest thing about teamwork is that you always have others on your side.” Margaret Carty

What we at PRS PROPERTIES CAN DO. We can discuss with you the current rents in your area and supply you with comparable rental prices for similar properties. Before you hire a manager, make sure the compensation is fair to you! We can also look at your building for changes that might allow you to get a higher value in order to create value without huge expenses for your building. We can help you to get the maximum value for your property, should you decide to sell, or the maximum return if you are planning to keep your building.

We always have many investors who are looking for “as-is” properties and are willing to purchase with low rents, a moratorium, or even with a problem tenant in place. We have put together numerous transactions over the years which involve properties that are not listed for sale. Many investors are in 1031 exchanges and need to identify a replacement property before their 45-day identification period runs out.

Should you decide to put your property on the market, we will put together an aggressive, targeted, and professional campaign to get your property sold fast. We have been doing this for over 40 years, and we will use all the tools available to bring you the most dollars at closing. If you are thinking of selling or are just curious about the value of your property, don’t hesitate to give us a call.

Remember – KNOWLEDGE IS POWER!