The Real Estate Podcast

What You NEED to Know About Managing Properties (Basement, Condos, Townhouses, and More!) | EP299

In today's episode, Steve Bruman and Ariel Kormendy dive into property management, discussing the ins and outs for tenants and landlords. From key concerns to best practices, we've got a wealth of information to share. Watch Episode 299 now so you don't miss out! ************************ 0:24 – Intro 2:18 – The Birth of KT Property Management 9:00 – Building Relationships Through Leases 11:46 – Landlords' Most Common Concern: Getting Paid 15:08 – Covering Property Damages 16:31 – Tenant Screening Process 18:23 – Handling Suspicious Applications 22:40 – Property Maintenance Issues 25:14 – Replacing Furnace and Water Filters 27:54 – Outro/recap ************************ Want more real estate podcast discussions? Watch it here: youtu.be/uLhNb8fdHt4 Listen to it here: http://www.soundcloud.com/ktrealty Catch clips and highlights of the show here: http://www.instagram.com/kormendytrott ************************ Our Social: Instagram: www.instagram.com/kormendytrott  YouTube: www.youtube.com/user/kormendytrott  Facebook: www.facebook.com/kormendytrott  Twitter: www.twitter.com/KormendyTrott Soundcloud:http://www.soundcloud.com/ktrealty  LinkedIn: www.linkedin.com/company/ktrealty  Pinterest: www.pinterest.ca/KormendyTrott  TikTok: www.tiktok.com/@kormendytrott?lang=en ************************ In 2011, Ariel Kormendy and Adrian Trott formed The Kormendy Trott Team, now often referred to as KT (thanks to our logo!). The foundation of KT is built on providing unmatched value and attention to detail in everything we do. From our ever-expanding, comprehensive list of exclusive services to our expertly trained team, you will receive the highest level of care throughout your entire real estate journey. Originally a team of two in Milton, Ontario, the KT Team has grown into a large team of exceptional REALTORS®, a client-care department, and now includes KT media, KT Commercial and KT Property Management to provide our clients with a complete lineup of genuine, professional, and proven services across Halton Region, Peel Region and the surrounding Regions within the Greater Toronto Area. We’d appreciate it if you’d subscribe and follow us for behind-the-scenes footage, real estate tips, industry secrets, exclusive listings, KT Confidential - the real estate podcast, and more!

Duration:: 31m
Broadcast on:: 02 Aug 2024
Audio Format:: mp3

Welcome to episode 299 of KT Confidential, the real estate podcast. Today, Steve Bruman and I are talking about property management, tenants, landlords, covering a lot of information. So if that's something that is of interest to you, you don't want to miss this episode. Let's go. Well, welcome back to the final episode before we release our renovated podcast. Ooh, that's exciting. Can we for that one? That's good. That's going to be the big one. It is. So for those of you listening, you're going to want to watch the next few episodes, we are transitioning into our new, we haven't officially titled it. It's a podcast living room, and we're calling it the renovated podcast because we are renovating the whole thing, a new look, a new name, a new brand, and that's going to be for episode 300, which means we've been doing this podcast for over five years. If I math around five years. Yeah, we'll say five. We'll round up. Yeah, no, it's over five years, almost six years. So you are my guest today for the last time in this beautiful kitchen. Look at that, eh? The old G in the old podcast. And the same to the old G. And at the same time, I get to make a preliminary announcement. I wasn't going to do it, but we haven't made it official to the world yet, official internally, but not official to the world of your promotion to manager of rentee. That's exciting. I'm really excited for that. A clause in the background. Yeah. So for those of you that haven't followed KT property management, which was started out of necessity in 2009, Jesus 2019, five, five years ago, 2009. Yeah. Five years ago, we started KT property management out of necessity. We had people that wanted to purchase investment properties, and we couldn't find a property management company that we trusted. It was very difficult to have people return calls, right? Or the level of service that was being provided wasn't what we needed. We needed somebody to be hands-on full service and give us the peace of mind that if we were referring our clients out that they would be well taken care of. That's what we pride ourselves on as service, right? Of course. I want to make sure. Yep. And we couldn't find said company. So we decided that we would start our own. And five years later, here we are. We've gone through a rebrand. So KT property management is now known as rentee, our E-N-T-I. So you can go to rentee.ca and check us out. And what do we do? Well, we're a property management company full service. We collect rent electronically. We source tenants. We screen tenants. We take care of repairs. We take care of basically everything that you as a landlord don't want to take care of. Or don't have the time to. Don't have the time to. And we make it as hands-off for you as much as you want. If you don't want to be hands-on at all, you don't want any phone calls. You don't want the hassle, the aggravations. We take that all on and the money just ends up in your account. And it's peace of mind that you've got a local, fully insured, trusted team that's taking care of the property for you, making sure that it's in good condition, maintained well, etc. And we have grown substantially to where we're managing many residential properties now in Alton Region, Peel Region, Hamilton Region, Wellington Region. So it was time for us to grow even more. The rebrand has been successfully completed. And part of that was the rest of the team is at capacity for that side of the business for that business. And Steve is, I'm going to stroke your feathers a little bit. He is customer service number one. He's also our longest tenured employee, just celebrated seven years. Seven years. Seems like yesterday. Right. It does, honest. So seven years, does very well as a realtor. He's still keeping his realtor status. He's still a realtor, but now will dedicate a portion of his time and his life to managing and overseeing rentee. And much like you told me, well, so the story is I had this, I had an ad out to hire for this position. I never saw that. No, never saw it. And when I had some internal chats with some of our staff, your name kept coming up as the perfect fit. And I think I called you almost immediately and said, hey, what would you think about this? First, you said, don't think you're crazy. I think that's what you said. Yeah. Maybe. And most of my great ideas are usually a bit out there. And anyway, so we had a good chat and you said that you were actually really excited about some that opportunity and that you wanted to, I actually told you were headed into a long weekend. And I said, take some time to think about it and whatever. And my response was, well, I don't remember what your response was, but what I remember is I came back to the office because I stepped out to make that call and I came back. And I'm like, let me take Steve for dinner and maybe feed him a drink or two. And let's have a good, good heart to heart chat. Yeah, as we did, because we've been very close for the past seven years. So I think I know you very well. And we went out for a nice dinner. And what, what really hit home that we made the right decision and you're making the right decision was when you told me that Barb, your wife, the night before when you were telling her that Renty is expanding and we're bringing on a new person, she told you that that's the perfect job for you. Yeah, she said, I'm, why don't I go for it? My first words, you're crazy. But that's always my first words to her. But no, I'm kidding, honey, I love you. Yeah, but I thought about it. And I said, yeah, so pretty, pretty nuts that the next day I had this epiphany and called you to gauge your interest on it. So it was meant to be the stars are aligned. And, well, not yet. You haven't officially taken over yet. You're in training still. You've got a three week vacation coming up to Paris, you're going to Paris. Yeah, it's to lose. And going with the whole family. So you're your kids and grandkids and excited wife. And you've never been to that part of the world. And you've never taken a trip that long in your life. So you're going to go, you're going to relax. And then you're going to come back and take on this new role. Super excited. Can't wait. So you do a lot of leases. Mm hmm. That I do. You do a lot of representing tenants, a lot of representing landlords, right? A lot of realtors. Not in our team. I'm talking in general. Yeah. Don't like to deal with leases. Yeah. I hear that often from when I'm speaking to potential tenants. Yeah. And they come up and they tell me, yeah, I've sold my home and I want to rent for a bit. I said, great. Congratulations. Are you working with your current realtor to help you find? No, they can't be bothered with leases. That blows my mind. Right. I don't know. Do you think it's a time thing, an effort thing, a money thing? A combination of everything. Right. Absolutely. And spending too much time. It's a lot of effort. It is paperwork. Oh, it's super a lot of effort. And especially if it's in different areas that they're not used to and stuff like that. That's another thing. But basically, it's time and effort for them and money. You don't make a lot as we know. Yeah. On leases. But you're harnessing these relationships with these people. At the end of the day, I'm a realtor. Somebody needs a place to live if they're buying or selling or renting. It's my job to help them get that property. Yeah. And you've done a tremendous job with harnessing those kind of relationships. In fact, you just did a deal that closes very soon. Where you helped that tenant rent their first property in this country. Then that place wasn't suitable any longer. And you helped them find their next rental. They've been there for a little while. And now they reached out and you helped them purchase their first property. How exciting is that? She's super excited about the whole process. I'm really super excited for her for the opportunity for her to get her new place. But just the constant staying in contact with her and she always reaches out to me. That's what I love about this business. Helping people at the end of the day. I get paid, I get put money bread on the table. But being able to be part of that, it's a great feeling. Look, I'm sweating. I'm so nervous. It's awesome. Okay. So we're going to transition to the Q&A part of this specific podcast, which is some relevant questions. I have not read through the questions, but you're going to ask me a few questions and I'm going to answer them to the best of my ability. They are focused around. I'm assuming tenants and landlords rent. Yeah, exactly. So I noted them because I am a little bit nervous. So forgive me. So my first one is, what are some of the most common concerns you hear from landlords about renting out their properties? In fact, I had this conversation with a potential client this morning and they have a, well, it's a town home that they've owned for years. They have quite a bit of equity in it and are looking to upgrade. Sometimes in that situation, we find people consider the option of keeping that home and renting it out and then trying to qualify using the rental income to help them on the new houses, the new homes mortgage. Right. And I was asked the questions, you know, what are the pitfalls? What are the downsides? And they also told me their concerns and their concerns were getting paid because if somebody misses their rent payment, then that affects their ability to pay potentially on their residential property on their residential home, right, their primary residence. And then they're also fronting the money to pay for everything on the rental property that was supposed to be covered by the tenant. So the number one concern is always getting paid. And they specifically talked about the fact that they had a friend who had a tenanted property and the tenant did not pay for quite a long time. We have a lot of, I don't know if we still hear a lot of stories about that, but, and I'm assuming going back to COVID, I mean, for COVID reasons, we heard a lot of stories like that. And every once in a while, I hear a story about that, right? Tenants not paying. And it's those few tenants that don't pay. And then obviously, it gets into media. And then the landlords hear about this. And rightly so, I mean, landlords want to make sure they're protecting their interests. So I'm assuming there's a lot of due diligence on the landlords and the landlords agent on vetting these tenants, right? Yeah, that's a huge part of the process. And that's exactly what I said to them. I said, because we talked about our services on our team and with Rantee, and how we have the ability of taking it from A to Z. And the important part is at the A is at the start of the process in sourcing the right tenant, vetting that tenant, making sure that documentation has been thoroughly reviewed, making sure that you've got that interview with the tenant so you can meet them and have a face to face, have a conversation. So you're you're trying to mitigate your losses before they become losses, you're trying to mitigate any future issues ahead of time. And so that's a huge component. And that usually is the number one concern from landlords is, you know, what happens if if they don't pay, right? And then the next thing would be damage, right? Landlords are often concerned about the tenant damaging the property and how they're going to leave the property when they vacate. And, you know, things happen. Sometimes damage does happen. Wear and tear for sure does happen. So as a landlord, you have to expect to potentially repaint, potentially update things as you go, things break, there's wear and tear. So you have to take that into account and into your budget as as a landlord as an investor in real estate. And that's same can be said about your primary residence, especially if you have kids. Things are going to get damaged, things are going to need to be repainted, things need to be updated, plumbing fails, electrical, you know, sometimes needs some work. So anything that revolves around a house on a piece of land, you're going to need to maintain it. You're going to need to maintain it. Yeah. Okay, next question. My next question. So the first question, landlords biggest concerns getting paid and then damage to the property. Tenants screening. We'll talk about that. What's the process for screening potential tenants? And what are the key red flags to watch for? So that's a good question. So I won't go through it all because it is quite extensive. And there is a lot of fraudulent applications that we're seeing now. As a team, it's surprising how many documents come past our desk and we see there's something not right with this. And we could you can tell right almost from a get go, right? With just supporting documents there. It's just often some of the wording, the spelling, maybe the way the documents altered a little bit. Yeah, the alignment of the documents. So it's little things like that. What was the second part of the question? And what are the key red flags to watch for? So key red flags are often if there are stories that are not aligning. And that's why the interview process, whether it's virtual or in person interviewing the potential tenant is important to try and cross reference, cross check some of the information from the supporting documents, whether it's how long you've lived there, how long you've been at your job, how much do you make per hour, just reiterating what's already on those documents, but having them say it because if they haven't rehearsed it and potentially if they bought because you can go now online and buy tenant application packages that are completely fraudulent and somebody is being paid to create these documents for you, you get this package and all of a sudden you just send this package to your realtor. And those are your supporting documents to apply for a rental. And we're talking fake credit reports, fake job letters, fake pay stubs, all of that stuff. Other red flags are when you get a job letter that doesn't look like a job letter. And I always say Google search everything cross check and Google phone numbers, email addresses, names, companies, websites, all of that. But sometimes we see job letters, you can't find the company. You can't find any information about the person, the phone number, the email address. Now given certain industries like contractors, there are some contractors that they might be a plumber. And the plumber works on his own. He's been a plumber for years. He's not very tech savvy or she. And they just have this little, little business. And they had to hire somebody because they're busy because they've been in it for 40 years and they needed help. And their job letter is some chicken scratch on a, on a piece of paper. That happens from time to time. But if all of a sudden you have a logo, you slap a logo on a quote unquote business letterhead. If I can't find your company name, your email address, your phone number, or your website by googling, how legit is this company? So that could potentially be a red flag. And then what kind of pay stop are they getting from this company? Yeah. Is it through a normal payroll type of system? Or again, is it some chicken scratch? Or are they? So you want to cross check these things? I often ask for bank statements to cross reference the deposits. Yeah, that's a good one. So if you don't have those statements, how does, where's that money going? So a couple of red flags there. Other things that I look at, and I've, I've talked to the whole team about this, and you'll remember when, when I did some training on this, if, if I'm looking at an offer from a tenant, and without having a discussion with their realtor about the structure of the offer, and the offer comes to me representing, again, I'm representing the landlord, I'm getting an offer in from, from a tenant and their realtor. And they're automatically offering to pay six months in advance. Yeah. Well, why are you offering to pay six months in advance? So the first thing that I do is, and I know you do the same, is you now do a deep dive as into why they think they need to make their offer more attractive, because that's what they're doing, right? They're making their offer more attractive by giving X amount in advance. Especially if they're the only offer, right? Right. If they're not competing against any. If they're not competing against any other offers, and sometimes even if they are, why are you giving six months in advance? And then all of a sudden you find their credit score is, you know, 500, and, or they've been out of work for a few months, or they, you know, whatever, there's something wrong in that situation. So that's definitely a red flag. Yeah. And I, and I get that from tenants sometimes, when I'm first speaking with them, do you think they'll accept six months in advance? Like, well, hold on a second, back up. Let's go through the process. Let's talk about what you have, what you are all about. First, before you start bombarding me with this right away, it's like red flag, you know? Yeah, something's off. Yeah. So, or they could just be down on their luck and tried somebody else before, and they couldn't get a place and, you know, they're just trying anything to get a place. Trying to make it more attractive. Yeah. Yeah. That does happen. Everything is different, right? So you're careful. Property maintenance. Okay. So what's the typical maintenance issues that a landlord should be prepared for when renting out their unit? I think we talked a little bit about this in the last podcast when Adrian and I were chatting about the smokers in one of our properties, the closet smoker. She finally came out of the closet. She was forced out of the closet by another tenant, which so I don't understand because if I think you're talking about the husband didn't, the husband was complaining about somebody else or smoke was coming in from somewhere else. So there's four units in this building. How does the husband not know his wife doesn't smoke? Does not smoke. Sorry. How does his husband not know that she smokes when they're living together? Yeah, I don't know. I don't know. Yeah. He complained about another tenant smoking in the building. Yeah. And we did our due diligence and that tenant swore up and down. We went and we inspected no smoke and he was I rate and it turns out it was actually his wife that was smoking behind his back. Anyways, typical maintenance things that a landlord can expect, you just kind of talked about it. Whether it's your investment property or your primary residence, things happen, things have wear and tear, things age. And you have to expect also the unexpected, whether it's because of natural causes like a windstorm and, well, look at all the flooding. Look at all the flooding in Toronto. So I'm sure a bunch of rental properties were damaged with all of that water. So those are some of the unexpected, but you have to expect the unexpected. That's my biggest recommendation to landlords is expect the unexpected and have money put aside for the unexpected times. So it's not affecting your life. And you have to be able to obviously pay for those things, especially if they're emergency items or necessity items, but normal maintenance things. So, you know, smoke and CO detectors, they have a lifespan. So anything that has a lifespan is definitely something to keep in mind. It can be things like cartridges for the filter for the water. The filter for your waters, the fridge and those kind of things you may want to invest in because you can't rely on the tenant either to replace these things, even though a lot of the agreements will say you, Mr. Tenant or Mrs. Tenant, are responsible for replacing the furnace filter. Yeah, but do you want to make sure for $12 a filter that the filter is getting replaced? Because that's prolonging the life of your furnace. But to that point, a regular maintenance would be sending the HVAC technician out every year and doing a proper service to the furnace, proper service to the air conditioner. Just like they would be on their primary residence. Exactly. Treat? Same thing. Well, that's a good point. Treat your investment property the same as you would your primary residence. Just somebody else is living there. So if caulking, which is a regular maintenance item, is needed around your sink and your bathroom area at home, maybe it's time to do it on your rental property as well. That's a good tip, right? Every time you're going to do a maintenance thing on your home, well, maybe I should check my residential investment property. Yeah, cleaning out gutters. Same thing. If you have a property where there's a lot of trees and leaves, cleaning out gutters, getting those trees trimmed, making sure they're not a nuisance or a hazard. We're going through some of that right now. That's why I'm smiling. Yeah. Landscaping, keeping the curb appeal. The nicer the home is, the better it maintained that the home is, the easier time you're going to have as a landlord because you're going to attract better tenants. People are going to want to stay there longer. If the place is a shithole, people are going to want to move out. People are going to feel like, oh, I shouldn't pay this month because you haven't done your job. Oh, and they won't maintain the property at all. And then they don't care about it. Exactly. So you're going to attract what you put out. Yep. 100%. Some great tips. We'll wrap it up and tell me your level of excitement. Tell everybody what excited you about taking on your new role and why you decided to go down that path. So I'm really excited. First of all, because I started with you guys seven years ago, I was super excited to help this team grow to where it is today. Yes, because you were our first hire, right? And I want to be there for rent as well. I know I wasn't part of KT property management, but the idea of helping this because you've got it to a certain level now, and you have a vision, and I want to see it grow even more. So I want to be part of that. Plus, I love helping people. This gives me something else to learn about and to help. Why not? It's a perfect fit. And everybody here is so excited about everything else that we're doing. I just want to be part of it. And you definitely have the passion for helping tenants and landlords. It's a beautiful marriage because now you have the ability to help these people from A to Z and oversee it all. And I think it's a wonderful marriage. And I'm looking forward to the next seven years. Oh, easily. Yeah. And just a really quick tip. So not quick tip, but a quick comment. When I was speaking with one of my lease clients who just bought a house when she found out that KT property management was taking over. She was happy because nothing against the landlord, but she preferred to deal with a professional company. So she was super excited for that. And knowing that what we do and how we service everything, it just shows volumes as to what we can do. So I'm super excited to be part of that. Wow. We are super excited to have you a part of that. Thanks for sitting in on the podcast today. Again, for those of you listening and watching, first of all, you can listen wherever you stream your podcast, you can watch on our YouTube channel, which our website might be changing a little bit for that right now. It's kt confidential.ca. But we've got something big, something huge coming in the next episode. So you won't want to miss that one. Drop us a comment if you have any experience that you can chime in from the landlord tenant perspective. You want to give Steve Bruman a congratulations on his promotion. We'd love to, we'd love to hear from you all. Thanks for listening. Thanks for watching. And we'll see you next week for the big reveal. The big reveal. I'm excited for that too. Bye bye. Bye bye. While I kind of had an outro in the podcast, but let's give Steve Bruman some love and congratulate him on his promotion. If you have any comments or questions about being a landlord, property management, being a tenant, we'd love to hear from you. And next episode is episode 300. The renovation of the podcast has almost been completed. And we're going to reveal it to you next episode. So don't miss that one. We'll see you then. (beep) [BLANK_AUDIO]