Property Leadership Frequently Asked Questions
Do you handle evictions?
If this is your first question, I highly suggest that you rethink your commitment to growing a rental portfolio. Evictions happen, but they should be few and far between. This should be the last thing on an investor's mind. But, since you asked -since opening in 2019, we have not been forced to file a single eviction. We are glad to say that we have had a 100% success rate with receiving rental income. But, as long as death, divorce, and loss of employment exist, there is always a chance for a tenant to default on rent. These things are never planned but do happen and can happen anytime. We are prepared to take the necessary steps to collect rent and remove the tenant if it comes to that. Yes, we take care of every step in the eviction process.
Are any costs involved outside of the 10% fee?
The service fee is 10% of the rental income that we receive. In addition to this, you pay a one time $100 set up fee. This fee is not paid up front, but rather withheld from your proceeds after the first month’s rent is paid. It is paid only once per property, no matter how many times 256 Realty leases the home.
Most companies charge a fee or a percentage of the rent each time they lease the home to a new tenant or re-lease to a current tenant. Do you charge anything like this?
No, the $100 setup fee per property is paid once and only once. We do not accept any payment for re-leasing a property or finding a new tenant. If a company charges this, I would have to question their motive for keeping good relationships with tenants. It is a fact that it is much more profitable the less a home is turned over. Normal wear-and-tear charges for owners are unavoidable.
Do you do routine inspections?
We do inspections twice in 365 days. We do not go overboard with inspections unless we have reason to. It can easily become a burden on the tenants if we keep interrupting their daily lives for no reason. It can also become a major reason they do not renew the lease and lease renewals are in most cases very beneficial to you as the owner. We want tenants to live like the house is theirs. After all, it is their home, not ours.
Can I do inspections with you?
This is not possible. If you get involved the tenant may see that as an opportunity to ask for special accommodations with rent, lease terms, upgrades to the house, etc. They can also see it as a chance to get your contact info and go to you directly for requests. I have seen many instances where this scenario leads to the owner getting calls and requests, which is what you are paying us to do. As the owner, you are certainly entitled to visit the property as often as you like, but 256 Realty will not be a part of it. We will be glad to assist with the arrangement for you.
Can I handle repairs and maintenance in the house or choose my own vendors?
First, let me issue the same warning as the previous answer. However, if you have the skills and wish to save some labor expenses, you are welcome to make your own repairs. I suggest that you do not disclose to the tenant that you are the owner. Simply refer to yourself as the maintenance person. We will certainly use vendors of your choosing if you have someone you prefer. Just make sure to get us the names and contact information. We also work with Home Warranty companies. Be sure to provide us with your home warranty information (company and policy number) so we have it on hand when an issue arises.
How do you screen applicants?
We have a thorough screening process that includes review of the applicant’s credit report, rental or homeownership history and employment/income verification. We run additional checks if necessary to make a final decision. Our screening processes is largely what sets 256 Realty apart from management companies.
Can I be involved with the screening process?
First, there is a potential violation of fair housing laws if you deny an application if it is for a reason that discriminates based on any of the 7 protected classes (race, color, religion, sex, familial status, national origin, disability and age). I often hear owners say they “don’t want a certain type of renter” or “don’t want a family with kids.” These are dangerous statements to make and we could face potential fines and further punishment from the US Department of Housing and Urban Development if found guilty of discrimination. We are familiar with fair housing laws and understand that you may not be, which is a good reason to let us handle approving and denying applications. Also, you are paying us to handle this so why would you want to spend your limited time trying to learn something that is included in our service fee? We trust our evaluation process much more than we trust your opinion of whether an application looks credible or not.
How much of the rental process do you handle?
Every bit of it. Once you sign a leadership agreement and turn the keys over to us, we take pictures and place the place the home on the market. From there we set up showing, lease the property, collect and disburse rent to you, handle inspections, take care of maintenance issues and everything else that can possibly be involved. We complete the move-out process as well once the tenant vacates at the end of the lease. You literally do not have to do anything with the rental process.
Can you recommend vendors for the work I need to do in order to make the house presentable?
Yes, due to our relationships with preferred vendors, we can usually have them take care of cleaning, painting, landscaping and maintenance issues for your home. Theses are all dependable vendors that have proven themselves and their work to 256 Realty. You will need to sign the leadership agreement and provide the proper funds to us so we can pay the vendors once the work is completed. The expenses will be reflected on your monthly statement.
Do I have to re-key the locks in between tenants?
We always re-key locks between renters. We have a preferred locksmith that can get to it quickly. They will not change locks but rather re-key the existing locks. The cost is normally $75-$90 depending on the number of locks. Yes, this is necessary. Would you feel safe knowing that a stranger may have a key to your house?
Can other agents (not associated with 256 Realty) show my house?
Your rental property will be listed on the MLS so other agents can show their clients. If that agent brings an applicant to us that we approve, the agent is due a $100 referral fee. You are responsible for paying this. This is fairly common and is a small expense to find a qualified tenant.
When do I disconnect utilities from my name?
Never! We require the renter to provide verification that they have taken over the utilities before we give them the keys. You do not have to do a thing.
Who is entitled to receive late fees for rent paid past the due date?
Just like regular rent payments, delinquent charges are passed along to the owner, with 256 Realty collecting the standard 10%.
How soon do you expect to respond to emergency and non-emergency repairs?
We respond to emergencies immediately. Our team is always on standby to take tenant requests. Non-emergency requests are scheduled timely, depending on the urgency of the issue.
Do renters have to obtain liability insurance?
Yes, we do require that they show us proof of insurance before they receive the keys.
What if I supply a refrigerator but a tenant wants to bring their own?
Many renters have their own refrigerators and want to use them. In these cases we normally move the unit to the garage or storage area and leave it stored there for the duration of the lease.
Can I ask for a “no smoking policy” in the lease?
Paying for damages related to smoking is covered under Lessee Obligations section in the lease. There is no need to add more wording to the lease.
Can we strictly say “no pets” in the advertisement for the rental?
We can clarify “no pets” in advertising. You can be as strict as you want with pets. However, a "no pets" advertisement may significantly reduce the ability to lease the property. We prefer to have the final call on pets. We always analyze the applicant's likelihood of maintaining the property with a pet in place.
Can we limit the size of pets to no more than 25-35 pounds?
Yes, you can limit the weight for animals. The terms for pets are completely up to you. You can limit to certain breeds, ages, weights, etc. However, you cannot rule out pets that are “service animals” for the renter. If the renter provides written acknowledgement from a doctor that the pet is a service animal then you cannot reject the pet. You also cannot charge a fee for the pet. This rejection violates the Americans with Disabilities Act and/or the protected class of disability under the Fair Housing Act.
What are your methods for advertising rentals?
First and foremost, we put all rentals on valleymls.com. This is the North Alabama multiple listing service that all licensed agents and consumers use to search available properties. Active listings syndicate from this site to other popular consumer search sites such as zillow, trulia, homes.com, etc. The ad will be removed once the property leases. We also put the property on our company website.
Can I receive rent by direct deposit?
Yes, you will receive all deposits directly to your bank account. It is the only method of payment we offer. Every owner must complete and sign the direct deposit form and attach a copy of a voided check from the bank account you wish to use.
Will I receive a monthly statement?
Yes, you can access your monthly reports, leases and any other data at any time through the owner portal in Buildium.
When will I receive the rental payments?
Payments are disbursed to your bank account on or around the 7th day each month. Rent is due on the 1st and late after the 5th. We will distribute the funds on the 7th, assuming all incoming payments have cleared.
Do you serve properties in all areas of Madison County?
We handle homes in just about every area of Madison, Huntsville, Decatur and Athens. Our average rental home leases for over $1,000. However, we are willing to take properties slightly under this amount based on several factors such as marketability, turnover frequency and characteristics of the home. We do have the right to turn down leadership of any property for any reason.
I hope this answers most of your questions. Please understand that even though our lease attempts to protect owners and we do everything we can to provide quality service and peace of mind, there is always a risk with owning rental property. Anything can happen. Tenants with an excellent prior rental history, great credit and a well-paying job can change course without notice due to health issues, divorce or other relationship problems, changes with employment, death, etc. If you have read through these questions and still have tons of “what if” questions, then owning rental property may not be the best solution for you. It isn’t for everyone. You must be okay with accepting a certain level of risk and trusting in me and the rest of the property leadership team with your home.
If you are comfortable after going through these questions, then please contact us below about going forward.