When William Howell got an opportunity for a fellowship at Stanford University, he assumed he would rent out his four-bedroom home in Chicago's Bucktown neighborhood through the housing office at the University of Chicago, where he is a professor of political science.
But when there were no takers for the house, which is in an unfamiliar neighborhood to visiting faculty and is some distance from the campus, he, like a growing number of owners across the country, turned to a property manager for single-family homes.
"In order to make the finances work, we wanted to rent," said Howell about his family's West Coast year.
"We worried about a whole bunch of things that could go wrong," he said, recalling that as a teenager he lost his dog when tenants, who didn't get along with the pet, put it down during the year his family went abroad.
It was important that everything was in place when the family returned, Howell said.
To ensure that would happen, Howell hired Revolution Management, a young Chicago firm that's typical of the burgeoning number of such services in Chicago and around the U.S.
Founded less than two years ago by John Ketner, a Chicago sales agent for @Properties, the company manages 15 residences in the city, from Lakeview to Pilsen. Ketner said he sensed a need for residential property management when an architect client who was being sent to the Middle East asked for help in renting and maintaining his Chicago home.
Revolution found a qualified tenant and helped Howell with the relevant paperwork for the equivalent of one month's rent. While he was out of the city, the company, for a monthly fee, collected the rent and was the tenant's key contact.
Managing single-family homes and condos, though common in resort areas and places with a significant number of second homes, has been a rarity in Chicago until recently.
Jim Merrion, regional director for Re/Max Northern Illinois, said only one in every 20 or 25 realty offices had such services five years ago. He estimates twice as many offices offer management services today.
The reason: When the real estate market stalled, many sellers found they needed to move but could not sell, he said. Lenders struggled with a growing inventory of foreclosure homes that needed oversight, and investor-buyers snapping up housing bargains need help filling and maintaining the property as well, he noted.
Membership in the National Association of Residential Property Managers, which provides education and networking to single-family home managers, has doubled in the last five years. A Chicago chapter was formed this year.
Michael McCreary, president of McCreary Realty Management, in Marietta, Ga., and a 30-year veteran of single-family property management, said the group's membership has exploded as brokers and realty agents realize they cannot live on sales commissions in the current market.
"When someone has to leave an unsold home behind when they are relocated, the question is, 'Who are we going to trust to take care of it?'" said McCreary, whose company manages 300 homes for 175 owners in Atlanta's northwest suburbs.
So many newcomers getting into the business, however, means owners have to do their homework before signing a contract, McCreary said.
In general, most single-family-home managers charge a month's rent to advertise and to identify qualified tenants. Owners then pay a monthly fee, which, on average, runs from 8 to 15 percent of the monthly rent, for duties ranging from rent collection and paying homeowner assessments to more complicated matters such as managing major events like a flooded basement.
The specific services, fees and terms of a contract can vary, as will the expertise, personal service and commitment to property management.
Although third-party property managers in Illinois and many other places must be licensed, McCreary urged owners to interview several companies and only those with a top rating from the Better Business Bureau.
In the interview, ascertain how long the firm has been in business, staff size and where they operate.
"Ask where the firm finds qualified tenants, how they are screened and what are steps that will be taken if a tenant fails to live up to the rental agreement," McCreary said.
Most single-family-residence managers concentrate in a specific geographic area to efficiently and regularly check on the properties. Think twice about hiring a firm that does not work regularly in your neighborhood or is some distance away. Even if the firm has an excellent reputation or cheaper rates, you will be better served by a manager who can easily check on the home daily or most days of the week, he noted.
Ask about all imaginable contingencies and what you will be charged. How will the manager deal with unforeseen crises such as broken water pipes or a flooded basement? If the furnace goes on the fritz or the air conditioner breaks down, does the manager have established contacts and the clout to get a repairman for timely service calls?
He also suggested finding out how the company conducts business. Is it primarily a manager or does it sell homes as well? If there is a sales uptick, what takes precedence?
Finally, how will the manager let you know what is going on? How can you contact the manager with questions or concerns?.
The importance of good communication became apparent to Deanna Houston, of Orlando, Fla., last spring. She and her husband have rented out a two-bedroom condo in Hyde Park since Houston took a corporate job in Florida several years ago.
Aware of the Chicago's stringent tenants rights ordinance, Houston said they hired a property manager because "we wanted someone who knew the laws" and "we wanted (the condo) treated with TLC" because the couple hopes to live there in retirement.
Houston hired a young residential management company when she and her husband left Chicago. They paid about 10 percent of the monthly rent for the service.
All went well until the tenant gave notice of intention to leave in May. Houston found that each time she called the management company, she was dealing with a different person. There were unsettling mix-ups with the ad for the unit. The condo did not rent for several months, yet when she called the number in the ad, no one answered or returned her inquiry.
After paying the service more than $1,000 to prepare the unit for a new tenant, she was unhappy to be told by an acquaintance who had seen her condo that the carpet needed cleaning.
"I spent so much time I felt like I was managing the managers. It was just wearing us out," she said about her decision to terminate the service. "I don't know whether we were too small and fell through the cracks or whether we were out of their area. I believe their business is concentrated in another part of the city."
In any event, she has decided to forgo a property manager and will rent and oversee the condo herself.
But for Howell, who returned to Chicago from California in September, hiring a property manager was a good decision.
"I am pleased," said Howell, because in additional to collecting rent and arranging for snow removal, the manager replaced and installed an odd-size microwave, solved a water problem and smoothed a tenant-neighbor issue, all hard issues to deal with long-distance.Copyright © 2015, Los Angeles Times