Once we obtain a qualified tenant for your home, we charge a “Success Fee” equal to one month’s rent. Our monthly management fee is a flat $120.00 per month only charged when the home is under an active lease agreement. This fee does not increase if the rent increases nor is it charged if your home is vacant, the tenant skips, or the tenant is evicted. We charge no setup fees, consultation fees, or trip charges for maintenance or repairs.
There is no additional charge or renewal fee if the tenant renews the lease agreement.
The State of Minnesota requires a Property Management company to be a licensed Real Estate Company with the Minnesota Commerce Department. It also requires that all Property Managers hold a valid Minnesota Real Estate License and be supervised by a Licensed Real Estate Broker. Therefore, all our Property Managers have a license with Commerce and are supervised by a licensed Real Estate Broker.
No. The Property Management Agreement runs concurrent with the lease agreement and can be renewed each time the lease expires if the client agrees. If a new tenant must be found, the Success Fee is charged again. However, no success fee is charged for a lease renewal, and our lease renewal rates have been approximately 70%.
No. We currently manage 1–4-unit properties in good condition. Not all property will qualify, so the first step is to visit your property & determine if it fits our quality standards. We will inspect for condition and give you feedback on what must be completed before marketing and showing the property. The property must show well before beginning any showings or the property.
Our services include rent collection, monthly reporting, and payment to the client, facilitating payment of association dues, facilitating payment of utilities (if any), facilitating rental licensing and inspection, issuing of an annual certificate of rents paid (CRP’s), coordinating maintenance calls and facilitating payment, coordinating warranty service, coordinating one-year warranty work, eviction actions, and facilitating collections and collection actions.
We do not pay taxes, mortgage payments, or insurance.
Your association covers some items, but it is essential to understand where the association’s coverage stops. We cannot advise on insurance, but it is important to have coverage for liability, loss assessment, and other essential building and personal property coverage. Please consult with your insurance agent or contact our agent, Katie Halpin, with State Farm at 952.476.8080.
We collect a security deposit designed to cover damage to the home. Damage to the home is not limited to only the damage deposit. The tenant is responsible for all damage to the house regardless of the amount of deposit.
State law requires that all security deposits not be commingled with other funds and be deposited into a Real Estate Trust Account (RETA). Our trust account holds all security deposits for our clients. Any interest earned on this account is passed to the State of Minnesota per State Law.
State law currently requires 1% interest on damage deposits, which is a cost paid by the client and expensed on the monthly reporting at the end of the tenancy.
Our lease requires the tenant to pay all court costs and legal fees for an eviction action. If the tenant is evicted, the costs are taken first from the damage deposit and then collection to collect the balance. On occasion, parking or other costs may have to be billed to the client unless the court will allow us to add that to the court costs, but we charge no fees to the client for an eviction action, unlike most of our competitors.
Our lease requires that the tenant pay our attorney fees and court costs for any collection action. However, not all judges will award this in court. If requested by the client, our staff completes the court cases until a judgment is obtained. Then, the case is turned over to our attorney for collection. Our attorney charges a 40% contingent fee for any funds collected but only gets paid if collected. We charge an hourly rate of $75.00 per hour for the court hearing and preparation for the hearing. This typically results in 1-3 hours.
It often takes months or years to collect on a judgment, but the judgment will eventually be paid unless the tenant files bankruptcy or leaves the country. A Judgment is valid for ten years, after which time it can be renewed for another ten years, and so on.
As part of the Property Management responsibilities, we coordinate all maintenance and repair visits. If there is a cost for the repair, it will be billed back to the client the following month. We will facilitate payment on the client’s behalf for service work up to $275.00 without contacting the client. Anything over $275.00 requires Client approval before the service work can be completed. The exception to this is emergencies, commonly relating to a non-working furnace or broken pipe. We do not charge any trip charges to resolve maintenance or repair calls.
Our lease requires a 60-day written notice from the tenant before vacating the property, or 30 days written notice if a month-to-month lease. Once we have received this notice, we will contact the client with this information. Since the current Property Management Agreement will expire when the lease expires, a new Property Management Agreement can be entered into if the client chooses to. Once this agreement is executed, a new lease may be completed by the tenant.
We will complete any work billable to the tenant, such as carpet cleaning, cleaning, or repairs. Any paint touch-up due to normal wear and tear is NOT billable to the tenant. We can complete this work for you at our $75.00 per hour rate if you choose. We are very efficient at this process and know-how to complete the painting without repainting the entire home. If the tenant completed painting on the home without written permission, then the painting required to paint back to the original color is billable to the tenant.
On or before the 15th of each month, we send the client a detailed report of income and expenses for each property under management. This report may be sent via email or regular mail, depending on the client’s preference. The client will also receive a check or direct deposit for the rent received less the monthly expenses. In addition, by the end of January, we will send the client a year-end summary for tax purposes.
We use a tenant screening agency for all applicants. We screen for credit, employment, rental history, Telecheck (bad checks), national eviction actions, and national criminal history. In addition, the applicant must meet our qualification requirements to be approved.
We are sensitive to the cyclical housing market in Minnesota so that the lease term can vary. Most of our lease agreements are for 12 months. However, it is not uncommon for us to write a lease longer than 12 months to avoid a lease expiration during a slow year. Because of this, often a lease written in the autumn months is commonly extended beyond12 months (typically 16-20 months). In general, we do not offer or recommend short-term leases or month-to-month leases, but the client makes this decision.
Once we have a signed lease, we will change the utilities billing to Midwest Realty Services listed as the Landlord and set up the utilities in the tenant’s name. Once the tenant vacates, the billing will revert to Midwest Realty Services, at which time we will facilitate the payment for the client. One note, the tenant, MUST call the utility company for the name change to be completed, which is often problematic. We may have to make several contacts with the tenant or utility company to complete this process. Also, association dues are always the client’s responsibility and never passed onto the tenant; however, we will facilitate the monthly association dues for the client if requested.
The tenant is responsible for any fines associated with the property for which they are at fault.
The two most important factors are Price and Condition. If the home is priced higher than comparable rental properties in the area, the home will not rent. In addition, if the home does not show well or has condition issues, it will not rent. It is imperative that carpet cleaning or replacement, thorough cleaning, repairs and maintenance, all blinds installed, and paint touch-up is completed before showing the property to prospective tenants. We strive to have high-quality properties available in the Twin Cities rental market. It is also essential to understand the home must have window coverings and a garage door opener.
The current rental market is robust, so marketing times have been shorter in recent years. Most homes take less than 30 days to find a qualified tenant; however, if you price the home above what we suggest or do not resolve condition issues with the property, it can take longer. In addition, the time of year can lengthen how long the process will take, with many tenants choosing to wait until warmer weather to move.
All of our marketing will include the use of “Rent to Own.” This gives the tenant the first option to purchase the home and a monthly credit of $100.00 per month that can be used to buy the home. The rent credit is a client-paid credit typically used towards the tenant buyer’s closing costs as the lender permits. Rent to Own is a flexible program providing the tenant with the first option to purchase at a future date but not locking the tenant or client into a purchase price or purchase date.
The simple answer to this is No. You must choose a company that has the data to support the rent amount that they are suggesting. This can be obtained through the current inventory of managed homes or analyzing the market to compare the competition in that area. If your home is priced above the market rent, it will take much longer to complete the process. Of course, the most important factor to consider when choosing a Property Management company is service, reputation, and cost.
You may cancel the Property Management Agreement before the home being rented simply by requesting cancellation in writing and by paying the advertising costs that we have incurred in marketing your home. Because we have negotiated with our advertisers, our typical monthly fee for all advertising sources is around $99.00 per month but can vary slightly in some cases.
Yes. However, it is essential to speak with your tax professional concerning tax benefits on rental property. Your income greatly affects the benefits, so it is important to understand how this will affect any write-offs that your rental property may provide.
Yes. We are members of the National Association of Realtors and Minneapolis Area Association of Realtors.
