1. What is the screening process for new tenants?
2. Do you pay my mortgage and HOA?
3. What happens in case of an emergency?
4. Should I allow pets or smokers?
5. Can you assist me in the sale of my property?
6. How do I handle utilities at my home? Do I pay, or does the tenant pay?
7. What if I want to rent my property furnished?
8. Can I see a copy of my listing?
9. What do I need to do before I leave my home in care of McGrath Real Estate?
1. What is the screening process for new tenants?
We conduct a thorough process when screening each applicant. This is one of the most important parts in the management process, ensuring you will have a good tenant who takes care of your home and pays rent on time. Every individual over the age of 18 will be required to fill out an application and must become party to the Lease (Each tenant is “Equally and Severably responsible under the terms of the Lease”).
The screening process includes:
- Pull Credit Report — We check tenant credit reports, analyze the report and classify it as excellent, good, fair or poor. We look for evictions, collections, public records, bankruptcy or any late payments, accounts closed by grantor, accounts written off as P&L, etc. We also compare high balances with credit limits. How much of their available credit are they using? If it is 90%, they may have a weak credit score despite not having negative accounts. If it is 10% they may have a good credit score even with small number of accounts.
- Employment Verification — We verify tenant employment and make sure they work where they say they work and are legally employed.
- Income Qualification — You want tenants that are financially qualified to rent your home. When we verify the prospective tenant’s claimed income with their employer, we apply a rent-to-income ratio to qualify your tenants and ensure they are capable of paying rent.
- Landlord Verification — We also contact the tenants current and, sometimes more importantly, their previous landlord verifying the tenant’s history of payments. Did they have any late payments/bounced checks? Did they take care of the property and give proper notice they were vacating? Would they rent to them again?
- Google Tenants — With the vast amount of information you can now find on the Internet, we feel it’s important to “Google” the tenants if possible. “Googling” the applicant is more likely to show positives than negative, but it sometimes helps us to understand who is moving into your home. We have found an applicant’s college papers, awards and positions, and photographs in uniform with glowing testimonies.
We are required to present all applications to you, good or bad. Once we have compiled all this information you get an email, phone call, or both with the details, and we guide you through your decision to accept or deny.
2. Do you pay my mortgage and HOA?
We recommend you set-up automatic payment to these entities and pay them yourself. We do not pay our clients’ mortgages or HOA payments. With the advent of electronic banking, homeowners have greater control of their mortgages with less effort.
In most circumstances, we don’t pay our client’s HOA payments because Homeowners Associations are increasingly reluctant to receive payments from third parties. Some associations are not prepared to recognize or accept payments from anyone other than the owner. Some HOA managers claim this is because of increased financial privacy laws enacted post-9/11 (Patriot Act, etc). More associations are taking payments online, simplifying and safeguarding the homeowner’s financial transaction. The Associations that do not take online payments are often smaller self-managed associations with no professional staff processing the checks. At times they do not recognize checks from property managers, or they do not keep track of them as well.
3. What happens in case of an emergency?
McGrath Real Estate Services, Inc. fully understands that emergencies happen anytime. We make sure that our tenants always have an expedited notification process in case of an emergency. We have a dedicated staff which monitors an “emergency pager” 24 hours a day, 7 days a week. A tenant can contact this number and our on-call staff personnel will contact them to determine if the situation is an actual emergency (there is a big difference between a leaking faucet and a pipe burst) and the nature of the issue. After an initial diagnosis they determine the appropriate individuals to send out to the property, whether it is a plumber, HVAC technician, water extraction specialist, etc. We determine, based on the findings of the specialist, what actions would be in the best interest of our owners to limit damage to the property, personal harm, and/or unhealthy conditions and also try to eliminate unnecessary costs. We would also like to note here that McGrath Real Estate does not charge a repair fee to the tenants (unless the damage was caused by direct affect or negligence of the tenants). We feel this discourages your tenants from addressing small issues and reporting them to us, which could potentially lead to further damages and higher cost repairs at the property.
4. Should I allow pets or smokers?
Pets and smokers are not protected classes under the Fair Housing Act, so you can discriminate against both, but we recommend the following:
- Pets — McGrath Real Estate finds that about 70% of tenants have pets. By automatically not allowing pets, you are potentially limiting yourself by eliminating over half of your market demand. We suggest you allow pets on a case-by-case basis, this way if you don’t mind small pets or maybe a dog over a cat you can make the decision after reviewing the rest of the information on the applicant. Some of our best tenants have been pet owners, and considering pets “case-by-case” allows smart landlords more flexibility in selecting the best tenant and lease terms by staying open to more market demand.
- Smokers — All McGrath Real Estate leases specify that the residence will be maintained as a non-smoking residence. This means that tenants are not allowed to smoke inside, but are legally allowed to smoke outside the house. We feel that smoking inside the house creates some liability issues and has potential to do damage to the property if heavy smoking causes a lingering smell that can’t be removed.
5. Can you assist me in the sale of my property?
Absolutely! Although McGrath Real Estate Service’s core business is property management, we have many experienced sales agents that are licensed Realtors. Active participation in residential sales for 30 years has allowed us to serve you better. It has given us a competitive edge in property management as well as allowing more capital investment in technology that can bolster our property management services. A strong background in property management also gives us better insight on helping investors to purchase properties with better rent-to-value (R2V) relationships, and starts the investment process with a fluid transition from purchase to lease. Although we normally recommend a long-term real estate strategy and hope you hold onto your home for as long as you can, when the time comes, we’d be happy to help you sell your property, perform a 1099 exchange, assist you in the purchase of another real estate investment, or help you buy the home of your dreams!
6. How do I handle utilities at my home? Do I pay, or does the tenant pay?
When choosing McGrath Real Estate Services, Inc. as your property manager your first thing to do regarding utilities is to have the bills sent to us. To do this you contact the utility companies and have them send the bill with the following information:
“YOUR NAME”
c/o McGrath Real Estate Services, Inc.
761-C Monroe St. #100
Herndon, VA 20170
The tenant will be responsible for all utilities that are not included in the HOA/COA fee. The tenant is supposed to make arrangements to have utilities in their name as of their possession date. However, there are situations where this is not possible (such as a tenant moving in on a Sunday). When and if this happens, the tenant will have the utilities switched into their name and a final bill for your account will be sent to us. We examine the bill and determine what charges the tenant is responsible for and bill them for that amount.
7. What if I want to rent my property furnished?
McGrath Real Estate does not manage furnished properties. This is our policy, and we have very good reasons for it. Leaving personal property behind creates more liability issues for landlords. It can become an expense/nuisance if the tenant wants “some,” but not all furniture. Furnished rentals promote short-term leasing and represent a very small percentage of the market pool of tenants. It is also nearly impossible to manage or inspect for damage on furniture, or to make sure nothing is missing at tenant check-out. Double-check that you are not leaving behind any personal property or other non-fixtures. Don’t even leave behind cleaning supplies. You are now running a rental business. It would be a shame to start your business with a poor impression on your first customer (the tenant), and/or to have to pay someone to remove miscellaneous junk left behind because you didn’t have time to get to it.
The only things you should leave behind for your new tenants are:
- Filters for the furnace and air returns (if applicable)
- Home Owners Association documents and appliance manuals (kitchen drawer)
- Keys and garage door remotes should be left with your property manager
- The best thing to leave behind for your Tenant(s) is a clean house in good repair with all appliances working and a property manager to call if they are in need. Sometimes, a small “Welcome” gift basket is also a nice touch!
The only things you should not leave behind for your new tenants are:
- Do not leave your new contact information in the house or anywhere for the tenant. It may seem like a good or friendly idea, but many Landlords have regretted this. If you are interested in further discussion on the pitfalls of direct communication with your Tenant(s) — consult your property manager.
8. Can I see a copy of my listing?
Of course! You should be able to see a copy of your MLS listing featured on our website. You may also request a copy of your listing from the marketing department. We are open to your suggestions on editing the listing to market the best features of your home.
9. What do I need to do before I leave my home in care of McGrath Real Estate?
Refer to the Current Client Resources found on our website. Pay particular attention to the section about preparing the home so it is in top condition. This will set the expectations for prospective tenants and attract more applicants, allowing you more discretion when selecting tenants. You will also need to have the utilities placed “In care of McGrath Real Estate Services.”
