Do I have to use a property manager?
Are there any problems associated with having a friend manage my rental property?
How do you establish fair rent?
How long will it take to rent my property?
How do you select or screen tenants?
How and where do you advertise an available rental?
Should I allow pets in my rental property?
How long of a rental should I accept?
Do I have to pay Hawaii General Excise Tax (GET) on rental receipts if I am not a resident of Hawaii?
What can I expect to net each month?
How do you handle authorized and non-authorized repairs?
How do you handle the late or non-payment of rent?
Do I have to use a property manager?
No, providing you are not an absentee owner. However, if you are an absentee owner, Hawaii law sates that you must designate a local agent to act on your behalf that resides on the same island where the rental property is located. The local agent need not be licensed in real estate providing they are acting as an agent for only one owner. Therefore, you could have an unlicensed friend manage your rental property on Oahu providing they provide this service only for you.
If you do manage rental property on Oahu as an absentee landlord, we strongly recommend you conform to the law and designate a local agent to act on your behalf. It costs a tenant only $35 to submit a dispute to small claims court. When you are violating the law and you incur tenant problems, our experience indicates the result is usually an out-of-court monetary settlement to the tenant in addition to probably uncollected rent in order to avoid small claims court.
Are there any problems associated with having a friend manage my rental property?
There are a number of laws, rules, mandatory disclosures, etc. that apply to property management. If a “friend” is not working in the field on a full-time basis, it is very difficult to remain up-to-date on property management issues. Violation of some of the rules such as the Federal Fair Housing Act can create major problems and penalties. As the property owner, you could be liable for the actions of an unlicensed “friend” acting as your agent. Our experience indicates that the management fees saved by using a “friend” are usually expensed by the owner many times over by way of unnecessary vacancies, below market rents, uneconomical repairs, unusual expenses, incomplete or missing forms, etc.
How do you establish fair rent?
Supply and demand dictate fair rent. We use our personal experience coupled with currently advertised rents and input from other property managers to arrive at a recommend or fair rent for you to set.
How long will it take to rent my property?
This is probably the most common question we are asked and the most difficult to answer. In most cases, our recommended fair rent is designed to provide you a rent-paying tenant within a two week period. However, if within the first week of vacancy we get poor or low demand, we will call you with the feedback and recommendation. We do everything possible to secure a qualified tenant and the highest possible rent.
How do you select or screen tenants?
This can be very complex as there are both Federal and State laws dealing with tenant discrimination. We consider this one of the most important steps in property management. Initial screening is conducted through series of questions asked of prospective tenants prior to even showing them a property. Assuming they are shown the property and desire to rent it, the next step is to have them submit a formal application. One of the key factors to us in their formal application is their rent to income ratio.
After receiving their formal application, we conduct a rental audit on tenants using one or more commercial credit checking companies. Therefore, if the tenants have a history of late payments or other rental problems, there is a good chance it will be disclosed. We also obtain a credit report on tenants indicating if they have good credit history.
The formal application requires references and the names of prior landlords; these are researched as applicable. There are also a number of intangible factors taken into account in approving a specific tenant. Good tenants are worth this careful selection process. They pay on time, maintain properties, and are good neighbors. It adds up to getting a good return on your investment.
How and where do you advertise an available rental?
We have found the best source to be, by far, the daily newspapers particularly the Honolulu Advertiser (morning). We submit all applicable listings to the military housing offices and frequently use condominium community bulletin boards. We also maintain an updated prospective tenant data base. Many times we can fill vacancies without having to advertise.
Should I allow pets in my rental property?
It is often difficult to find suitable rental on Oahu that will allow pets. Many pet owners, therefore, will pay a premium rent. On the downside, pets can destroy carpeting, yards, etc. We believe pets are an item that should be discussed on case-by-case basis. We have a special pet addendum to protect your interest if you do decide to allow pets
How long of a rental should I accept?
Most long-term rental are written for a one year period. In most cases, we do not recommend a rental period longer than a year for two reasons. First, the rental contract is binding. If for some reason, you want the tenant to vacate earlier so that you can sell the property or move back into it, the rental contract has precedence. The tenant has the right to remain in the property for the entire length of the rental contract. Second, fair rents may increase. You may be able to charge the same tenants an increased rent at renewal time.
Do I have to pay Hawaii General Excise Tax (GET) on rental receipts if I am not a resident of Hawaii?
Yes! Both you and your property manager are liable to ensure the GET is actually paid. The GET is current 4% of the gross rent. Normally, we fill out the applicable forms and submit GET as a service to our clients.
What can I expect to net each month?
Your rental income will be the tenant’s gross rent less the 4% GET and our normal 10% management fee less any expenses paid by us, less any payments (mortgage, etc.) we make on your behalf. We require all owners to maintain a minimum balance of $300 at all times for emergency repairs. Depending upon the amount of recurring bills that we pay for you (mortgage, association dues, property taxes etc.) the reserve balance will reflect the amount needed. Therefore, if we have expensed funds on your behalf (e.g., advertising), we build your balance back to $300 from rental receipts.
How do you handle authorized and non-authorized repairs?
We attempt to obtain authorization from owners prior to making any repairs. However, emergencies occur at times that necessitate immediate action. We have developed an excellent working relationship with a number of repair personnel, plumbers, handymen, etc. Most of them are very experienced working with rental properties and keeping costs reasonable. Frequently, they are able to provide us expert input as to whether a problem was caused by tenant abuse or normal wear and tear. Because we provide them a considerable amount of business, they are usually fairly receptive to unscheduled work that needs to be done quickly. Many of them provide better rates to us than would be available otherwise.
How do you handle the late or non-payment of rent?
We have wrestled with this problem for several years balancing the rights of the owner, the legitimate reasons a tenant may have for falling behind in the rent, and the expense of taking action against the tenant. Based on our experience we have implemented an automatic series of letters (starting with a 5 day demand letter and ending with a notice of eviction.) We have found this system works well in getting the tenant to pay their rent and/or voluntarily vacate the premises. We keep the owner informed of our actions and will stop the process at any point if so desired by an owner.
For other questions or inquiries, you may contact us at:
Complete Rental Management, LLC
1188 Bishop St, Suite PH2
Honolulu, HI 96813
Phone: 808-536-4082
Fax: 808-537-3016
Email: info@completerentalmanagement.com
|
