Let Our Real Estate Company Provide Tools for Property Management
Our North Carolina Property Management Company Offers
Over 30 years of experience in all aspects of Residential Sales and Property Management. We understand that your home may be your largest and potentially most valuable asset. We strive to provide service which keeps you from feeling as though your property is a liability. We also understand that one day your rental property will be on the sales market, and we remain focused on maintaining the market value from both a rental and sales perspective. Your rental home is one of your most important investments but it does not have to be one of your most exhausting.
We are a full-service Residential Real Estate Company and when it is time for you to stop being a Landlord, we will be here to represent you in the sale of your home. It is our greatest privilege to assist our property owners with the investment portion of their real estate endeavors, eventually assisting also to realize any gain on your property when you one day sell.
As a Landlord, the most important thing you should know is that above all else, a Property Manager is there to reduce your liability.
In North Carolina, leases are governed by North Carolina Landlord Tenant Law and other regulations. This is a large collection of laws and regulations that all landlords, individuals, and licensed property managers must follow. Team Harris is a licensed North Carolina Real Estate Company specially trained on these laws and regulations. To ensure your rights and the rights of your tenants, we have detailed systems and procedures in place which we adhere to on your behalf.
This information goes through the steps from the initial signing of the Property Management Agreement to lease renewal and collection procedures. The information is broken down into 7 parts:
- Renting and Moving In
- Renewals and Move Outs
- Work Order Procedures
- Collection Procedures
- Receiving Payments & Planning Ahead
- What can go wrong?
In our initial meeting we will review the Property Management Agreement and services with you. Once we are hired we will work with you to make sure your property is ready for the market (or transition an existing tenant into our systems and culture).
If owner-occupied or vacant, we will conduct a walk through to determine what repairs should be made in addition to what is listed on the Owner Rental Preparation Checklist (see below). Please note that whenever a property is vacant it is the responsibility of the owner to have all utilities in their name. We require active utilities on all vacant properties, unless otherwise agreed to in writing.
Once your property is market ready, we will advertise the property in multiple places to prospective tenants as well as Realtors®. We will advertise commission for Realtors® starting at 10% of the first month’s rent for a qualified applicant, if the applicant signs a lease. (A similar incentive may be offered to agents referring landlords and properties into Team Harris Property Management.)
A professional sign will be placed in your front yard (if permitted). You will show your house while you still occupy it (the same is true for tenants in tenant occupied homes). You will always be notified in advance of someone wishing to see your home while you occupy it. Once vacant, keys will be signed out of the rental office and vacant house checks will be performed.
Monthly management fees are 10% of collected rents. Once we are managing the property and have rented it, there will be much more frequent communication with the tenant than the landlord. While you will receive regular updates on your property through our online maintenance and accounting system, you will only need to get involved when asked for approval of certain things. The monthly fees cover management accounting, regular maintenance management, and Tenant Landlord compliance. There are additional fees for services outside of the typical management agreement, and you can review those on the Owner Fees Addendum.
It is important that you not run any advertisements yourself, even posting things on your social media accounts. You are welcome to share any of our ads, but to not add or remove any information from them. All advertisements for properties must comply with complex Fair Housing Laws and we must audit and approve all marketing. We are also required by North Carolina law to maintain and keep copies of all marketing for three years.
We are often asked about certain things being left in a property. We discourage washers, dryers, and hot tubs from being left at or in properties. This goes the same for mowers and any other equipment. As the Landlord, you will be responsible for anything you leave behind. This includes repair, disposal and replacement of these items if they fail to function. You may also be responsible for anyone being hurt by anything you leave behind, which is the main reason we discourage these items. Please only leave a refrigerator, stove, dishwasher, microwave, or other “built-in” items.
Owner Rental Preparation Checklist
- All keys to each door and lock. Please have all exterior house locks work with one key
- All remotes, fobs etc. left in a kitchen drawer and inventoried for agent
- Insurance Information per Property Management Agreement provided to agent
- Carpets Professionally cleaned (with receipt for file)
- House Cleaned to Team Harris Standards (see Move-Out Inspection guide)
- Home Warranty Information, see the Home Warranty Addendum
- Copy of any Association Documents to Team Harris
- Walk-through report completed
- Document changing of batteries or installation of new smoke and CO2 detectors in the house (smoke detectors older than 10 years must be changed per law). Batteries must be changed prior to ANY new tenant moving into a property.
2. Renting and Moving In
All Prospective tenants will fill out an application. Upon receipt of that application we go to work to determine if the applicant is qualified. We run a credit report, criminal checks, and check the national sex offender database on all applicants over the age of 18. If the tenant does not meet or exceed our leasing criteria, then we may confer with you whether to accept or deny the tenant. We will not be able to release any credit reports or applications to you, and you will sign an authorization of any tenant who does not meet our criteria.
The deposit is due and lease is signed upon acceptance of the applicant. Tenants will be educated as to policies and lease conditions. We will upload a copy of the lease to your online portal. We will collect, process, and hold the security deposit in a compliant North Carolina Trust Account.
Rent payments will be collected and directly deposited into your account. You will receive your funds days earlier via this method. If you request hard checks be mailed, you will do so in writing prior to the tenant’s first rent payment.
The day of move in, the tenants pay their rent or pro-rated rent, are given the keys, and a Move-In Inspection form. This form is for them to document anything that is not working properly or is damaged. We will conduct a move-in inspection ourselves prior to tenant occupancy (a move-out inspection may double as a move-in inspection in certain circumstances).
We have many services that are add-on services to benefit our Homeowners at no cost to them. We add or remove these services at our sole discretion. Examples of these programs are tenant filter delivery and professional pet screening. Tenants may incur a fee for these services, and Team Harris may keep any fees to offset the costs of these added value services.
3. Renewals and Move-Outs
Approximately 90 days prior to lease expiration, we will contact you to discuss renewing the current lease and any rent increases that we deem appropriate. We will ask if you are interested in the sales team doing a market analysis of your home to provide you with up-to-date sales information or do an investment review. We will then send a notice to the tenant explaining to them what has been decided.
If a renewal is decided upon, then a lease renewal signing and walk through are scheduled. If they decide to terminate we will go back through the pre-rental steps. A notice of intention to move-out is required at least 30 days prior to the move-out date. If the lease is terminated, then a final walk-through will be conducted and any damages will be deducted from the tenant’s deposit. An inspection report will be uploaded to your owner portal with our notes for your review.
(We conduct annual walk-through inspections for each lease renewal, and there are no other regularly scheduled walk-through inspections of the property, but we drive by rental properties to look for any indicators of issues. If there are any issues with tenant breach of lease, walk-through inspections will be scheduled as needed. We do not charge Landlords for additional walk-through inspections for breach of lease issues.)
If Team Harris deems it necessary or prudent to rekey all entry doors of the house prior to new tenants taking possession of the property, this cost is the responsibility of the owner. We have been through this in court, and this cost cannot be charged to a prior tenant except in a few rare situations.
4. Work Order Procedures
Work orders or repair requests are entered by the tenant through their online portal (or called into our 24/7 emergency maintenance number). Upon receipt of a work order, you will be notified, but will not need to take any action unless there is an estimate to be approved or there is a previously agreed upon protocol. Please be mindful that in the best of circumstances you will be notified in advance of repairs however there will be no guarantee of advance notice, especially in emergency or region wide situations (such as a heatwave or hard freeze).
When work is completed, an invoice will be entered, and a copy will be sent to you for reference. The invoice will be paid from the next month’s rental proceeds and a monthly statement will be uploaded to your owner portal. If rent proceeds will not cover the monthly expense, you will deposit funds directly into your owner ledger through your secure Owner Portal. (Please note: for tax filings, original invoices are not needed. We will provide you with a year-end expense statement and 1099 income form for the IRS.)
5. Collection Procedures
Rent is due on or before the 1st and considered late if afterward. Late fees, by state law cannot be charged until the 6th. If we do not receive the rent, then the tenant is contacted and a demand for the rent is made. You will be notified if your tenant has not paid rent, and if still not received by the 10th, we may file paperwork with the Magistrate to initiate an eviction.
It is our experience that our thorough applicant screening, setting clear expectations and good communication with tenants cuts down on our need to initiate eviction procedures. We believe in solving issues before they escalate whenever possible.
6. Receiving Payments & Planning Ahead
Although many tenants pay by the 1st of each month, many others make the 5th their mental deadline to pay. Final rental deposits are made the first banking day after the 5th of each month. The following 3-4 days are spent processing invoices, reconciling accounts, and preparing owner proceeds to be sent. Our goal is to process homeowner direct deposit payments on the 10th day of each month (or the following banking day), but we do not know when those deposits will reach owner accounts. You will receive notification of owner payment processing on our end once complete.
Being a landlord requires some solid fiscal budgeting. We recommend a 3 month supply of mortgage payments set aside to cover any vacancies, unforeseen repairs, etc. Remember that we are required by NC law to keep your house in fit and habitable condition, whether or not you authorized the repair or correction. A funds reservoir will reduce your stress if issues arise while your property is rented.
We also strongly recommend that you have an account to pay your mortgage out of that does not require the income rent. Please plan ahead and never rely on a current month’s rent to pay that month’s mortgage payment.
7. What can go Wrong?
The honest answer to this question is anything can go wrong. Through decades of experience, we have learned ways to minimize the chances of things going wrong, but there is always risk.
What are the indicators that something may be or soon may be wrong? The obvious answers are non-payment of rent and extreme weather/natural disasters/pandemics. The not-so obvious signs that may indicate an issue: changes in communication with the Tenant, exterior house maintenance issues noticed on drive-by checks, communication with neighbors/HOA managers/municipal officials/code enforcement/police reports).
As markets shift and change, we see different threats to our landlords while other issues are more perennial. A common threat to Landlords (one that is often started with good intention) is introducing yourselves to your tenants. We strongly discourage any direct communication between the homeowner and tenant. Homeowners and tenants will often agree to things that put both of their rights and recourse in jeopardy if things do not go perfectly during the tenancy. We will not be able to evict or advocate for the homeowner if we have not been a party to any portion of a conversation. Please never place yourself in this situation. Over the years we have seen entire cases thrown out of court because we were unable to advocate for our owners. We will never give your contact information to a tenant. Please do not do it yourself, even if you meet them.
We are tasked with determining damages charges to a tenant; another risk is a homeowner who delays this process for any reason. The law is very clear that if we do not account to the tenant within 30 days of end of lease, then we cannot charge the tenant for ANY damages and they will be entitled to their full security deposit. There is a special exception if a home is badly damaged and requires extensive estimates and repairs, but exceptions cannot be used at will.
A very important threat is also delayed repairs to a property while it is under an active lease. If a Landlord delays repairs (this can be as small as a safety issue such as replacing a faulty smoke detector). A tenant may be able to sue for treble damages, actually being awarded more than the rent paid on the residence. Landlords that interfere with or slow down the repair process of their rental property (oftentimes hoping for a “better estimate” or “having a friend who can do the work”) are actually putting themselves in a financially risky situation. As a landlord you will be responsible for any legal fees for yourself and any we incur due to your actions or inactions.
Statistically, we have a very low eviction rate, less than 2%. We know that our success rate is due to a strong vetting process of our tenants. It is also due to clear communication and expectations with our tenants and landlords from the beginning of our relationship. If a tenant needs to be evicted, we are able to file for eviction in many cases for breach of contract. We are not able as property managers to file cases against tenants for collection of damages (debt). In case there are past due rents, or damages that a tenant owes after leaving a property, we utilize a third party collection agency.
Whether we are dealing with tenants in breach or a disaster, we know that in order to minimize financial losses to our Landlords, we must act swiftly. We have systems and a strong team in place to address a myriad of issues. We have seen much in our over 30 years of property management, and experience in this business is priceless.
While there are many things we do as your property manager, remember that our highest priority is to reduce your liability by ensuring you and your property are compliant with NC Landlord Tenant Laws, Federal Fair Housing Laws, and other laws or rules that go into effect permanently or temporarily by local, state or federal authorities. This includes accounting for security deposits, income and expenditures with monthly and annual reporting, as the financial reporting process is also controlled by NC Tenant Landlord Laws and some federal rules.
Another important thing we do is maintain a strong network of third party vendors who are competent and reasonable in their fees. We have multiple vendors in each area of specialty, we regularly review fees and charges to make sure they are remaining competitive and we require all vendors to be insured and bonded. We do not allow uninsured vendors to work on your property. As a landlord, your home must be repaired by insured vendors. If a repair done by an uninsured vendor is faulty and causes physical or financial damage to a tenant, you will be personally liable vs. the vendor being liable. As a landlord, you should never have an uninsured vendor work on your property.
Additionally, because we are a full service real estate company specializing in all things related to residential real estate, we have a different view from most property management firms. We know that one day your property will be sold. We consider our advice and recommendations to you under the assumption that you will want to take advantage of prime market value for your property instead of just selling to another investor at a deeply discounted price. We have represented many landlords for over 25 years, and while many others are shorter-term landlords, our goal is always the same…that you have the best experience possible while realizing the highest gain possible when you decide to sell your property. We look forward to working with you through all the various stages!