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Introduction

Authority Property Management Inc. is a property management firm owned and operated by a
husband and wife team with over 26 years of combined experience as full-time Property Managers in
Shasta County. We both hold a California Real Estate Broker’s License and provide property
management services in Northern California covering as far North as Lake Head, California, and South
into Northern Tehama County. We pride ourselves on our ability to create and maintain great
relationships with the owners with whom we do business, and our top priority is to take care of our
clients with only the best services. Property owners deserve great communication, quick response
times and the utmost care of their properties and tenants. We are passionate about what we do and
get excited to be involved in other’s success in investing. When deciding to rent out your home,
please know we are here to help and will be there for the entire process from beginning to the end.
We make owning rentals simple.

Sell or Rent. What direction should I take?

This is a great question, and we are asked this often. To answer this question, several pieces of
information should be considered before making a decision. We can help you to identify the pertinent
information and provide recommendations to assist you in making a decision.

Why is the home no longer needed?

There are a lot of reasons this can occur. Change in family size, change in jobs, upgrade, change in
school districts, divorce and or marriage, etc. This information is helpful for us to know and
understand so we can take into consideration whether or not the property owner may need to return
to the home in the future.

Retirement Plans

We recommend property owners look at how this opportunity may or may not fit into their long-term
retirement needs and plans. With owning rental properties, there is a need to get a strategy in
motion. Rentals can be held short term, 1-5 years, or long term to enjoy the cash flow in retirement or
the future. There are several strategies to consider, and we can help you understand which ones may
be best for you.

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How does my property align with the rental
market?

Deciding whether or not a home will make an excellent rental property is our specialty. We will help
you determine if the property is in a desirable area if repairs or upgrades are needed, how much rental
income you can expect, and how long it will take to rent the property. Our many years of experience
ensure these are all questions we can answer for you so that your situation and options are clear.

Can the home be sold at a reasonable price?

Sometimes there is an obvious answer to this question when it comes up after the home has recently
been on the market for sale. If the home was on the open market and no offers were tendered, it is
likely it will not be sold without reducing the price dramatically. If that is the case, your listing agent
will share with you what would need to occur to produce a sale. Another option to consider would be
whether the home could be sold under a short sale if the property owner cannot afford to hang on to
it. It is rare for us to recommend a short sale these days. Between increasing rents and improvement
in the economy, it is only a matter of time before the property makes it into the green. If it is
determined that selling the home is the best option for the property owner, how can a property
manager help the owner move forward? Like many Property Managers, we choose not to do any
selling so that we can remain focused on our primary objective, which is to be a successful property
management company. That being said, we will help you find a great fit when it comes to hiring a Real
Estate Broker to get your property sold. We refer to trusted Real Estate Brokers so we can help ensure
you meet your goals and have a positive experience.

Why Should I hire a Property Manager and what
do they do?

Owning rental properties can be very exciting and a great way to secure your retirement income and
ultimately, your future. Countless homeowners choose to hire property management teams to
manage investment properties in order to ensure their success and our team of qualified Property
Managers work hard every day to maximize the full return on your real estate investments.

First and foremost a Property Manager can save you time, energy and money. When you hear
someone suggest you should buy a rental property, they typically don’t talk about the part-time job
with a schedule you don’t control that comes along with it. Property Managers allow you to keep your
freedom. An excellent Property Manager will have systems in place to handle not only the obvious
but the surprises as well.

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Preparing the Property for Rent

There are a lot of moving parts to get a home ready to rent. Cleaning, repairs, upgrades and safety are
all items that must be addressed. There are many county codes and requirements when renting out a
home. You will also need to be compliant with state regulations and civil codes. It must be ascertained
what is required to ensure the property owner is in compliance with all of the rules and current laws
when renting a home. Successful and licensed Property Managers will help to ensure you stay out of
trouble in this area. They should also be able to make recommendations on upgrades you can make in
the home to ensure you get top dollar rents and keep vacancies to a minimum. Believe it or not, there
are some upgrades and custom paint colors that can make your unit harder to fill. Our investors
depend on us to visit the property and help them understand what is needed or not needed for it to
be a great rental. We prefer to handle the property visit before an owner even makes an offer to buy
a property. This allows us to give them the full picture, so there are no surprises once they close
escrow and own the property. This also helps us create and prepare a plan to the unit is move in
ready right away, minimizing the vacancy and maximizing the rents.

Marketing a Rental Property

Marketing equals profit. We have said many times; we see more money lost in the days vacant than is
lost by not getting the maximum rent. You want to make sure your Property Manager does much
more than just placing a sign in the yard. An invested Property Manager should be advertising online
in multiple locations. At Authority Property Management, we believe a Property Manager should
have a strong internet presence, advertising on various websites and truly reaching those who are
ready to rent. We advertise our properties on over 50 different websites, Craig’s List, and our website.
We also offer walk-through videos on many of our properties.

Qualifying Potential Tenants

We believe homes and apartments should be shown in person. Yes, you can just give them a key and
let them look at it on their own, but you don’t get to the bottom of things to see if they will make a
good fit. Ultimately, picking the wrong tenant can reduce the profit margins for the property to zero.
Much effort should go into the vetting of any potential tenant or tenants, and a good Property
Manager will look at the following: rental references, credit check, background check, income and
ability to pay and rental references. Last but not least a general sense of the situation. An experienced
Property Manager will typically have a general feeling or a ‘gut’ feeling as to whether or not the tenant
will be a good fit.

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Why Vetting Tenants Is Important

A Case in Point:

A year or so ago I got an opportunity to meet with a particular property owner and spend some time
talking about our service and the cost associated with our service. We talked at great length about
what sort of best practices are needed to find the right tenant. We also spent considerable time
talking about how our properties are managed. Ultimately, the property owner decided to go it
alone. They found some folks that seemed very nice. The folks provided a credit report they had
acquired themselves and given to the property owner (now believed to be a fake credit report). These
friendly folks also had a conversation with the property owner about the experiences of moving and
talked them into lowering the deposit to only $500.00 The problem with that is the rent was
$1,200.00 so the deposit would not cover much in this situation. The tenants moved in and paid for a
few months and then just stopped. The property owner waited a week or two to see what would
happen and then finally reached out to the tenants. It took much effort to connect with them. The
tenants shared a story with many details of hardship and bad luck circumstances. They assured the
property owner they would be caught up shortly. The property owner waited a while longer. The
tenants are now a few months behind, and the owner is covering the cost of the loan without rent.
After everything had been said and done, the property owner was without rent for five months. Legal
fees and other expenses totaled around $2,000.00 and, last but not least, the house was returned in
rough shape, needing lots of cleaning and a few repairs. The above situation cost the property owner
about $9,000.00 If this had been managed properly, this would have never happened. Remember
the fake credit report? Even with that mistake, a trained professional handling this situation could
have reduced the overall cost by 70%. That's before taking into account all of the property owners
time and energy. This is just one example of how Property Management does not cost but Pays.
At Authority Property Management we obtain our credit reports from Experian and never allow a
prospective tenant to provide their own. Our background search includes criminal offenses, sex
offender search, traffic violations, eviction search and a judgment search. After that is complete, we
obtain rental references and verify salary and income. As you can see, there are many important
details when finding and approving a tenant, not to mention all of the laws and regulations that need
to be followed. It is time-consuming but well worth it in the end.

Lease Creation and Negotiation

Leases and or rental contracts are created to ensure each party has a clear understanding of their
obligations and responsibilities. This is of the utmost importance as this tool may be used to settle
any disagreements or, in some cases a lawsuit, in the future. A Property Manager must have the
knowledge and skills necessary to negotiate, create, and deliver a lease or contract to protect the
property owner’s interest. There are often legal disclosures, as per Civil Codes, that need to be
provided at the date of signing. You or your Property Manager must be up to date on all of these.
Lease renewals are another part of leasing. You or your Property Manager must be able to handle the
releasing side as well. Re-leasing requires negotiating a new rent price and term, bringing the
property owner and the tenant back into a contract.

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Accounting and Records

Property Management companies are required to keep good records and books. Many types of
records must be maintained. On the financial side, you have tenant payments, owner payments and
the payments of any bills or work-related payments that are issued. You, also have to document work
requests and how they are handled. A good Property Manager should allow you access to these
records through an online portal or send them out by email. Finally, it is a reality you may end up in
small claims court with a tenant who is disputing the move-out. A good Property Manager will collect
and maintain all documents and photos related to the property and tenant which could be the
difference between winning and losing in court.

Rent Collection and Other Monies

Your Property Manager is responsible for collecting your rent, security deposits, and late payments. At
Authority Property Management, we take this very seriously. We follow a strict set of policies with our
tenants when receiving rents and we offer several ways for residents to make payments. They can
come into our office and make a payment directly or use our online portal. Property Managers should
have several convenient ways for tenants to pay. It is also important for you to ensure your property
manager is holding trust funds in a non interest-bearing account that is insured by the FDIC. We
believe this is a must, and you can count on us to have this handled correctly.

Local, State and Federal Laws

There are a variety of Federal, State and local laws pertaining to the renting of real property. Some
address funds held in trust for a tenant or tenants, others involving the habitability of the property.
We, as your Property Manager, will ensure we stay current with all laws and regulations and keep you
protected and in compliance.

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Maintaining the Property

One of the biggest complaints we hear from tenants is the landlord just will not fix anything. Believe it
or not, one of the primary reasons a tenant will move is a lack of repairs. We know for the most part
property owners do want the rental homes kept in good condition. So why do property owners
struggle in this area? For those that choose to manage their units, they quickly realize repair needs
come at all different times of the day and night and have a direct impact on the owner’s personal
time. Murphy's Law ensures that repair calls come in at only the worst times. Calls come in when you
are asleep or on vacation; when you are at your child's soccer game. None of these circumstances are
ideal and can result in an owner putting off repairs for some time. Another huge issue for the
property owner is not having a network of vendors they can count on to handle things right away. It
can be daunting to look up telephone numbers for three plumbers only to call and have none of them
answer. Or better yet, their message says they will call you back within the hour. This leaves the
property owner feeling like they must allow the first plumber to respond to get the emergency
handled. This situation does not leave any room for negotiating a reasonable price. Wait, there's
more. You have never met the vendor. Will they treat the tenant with kindness and courtesy, do they
have insurance and are they qualified to make such repairs. There is a lot of repairs, and for a
property owner many parts of it can be unfriendly or have you feeling worrisome.

Based on our many years of experience as Property Managers, we believe it is best to keep properties
in excellent condition. Affording the owner the opportunity to get above market rents and lower
their vacancy rate, while keeping the property profitable. We have a network of trusted vendors that
often give us special pricing due to our volume. A Property Manager should never take a commission
on work that is done unless you have agreed to pay one up front. We never take a commission on any
work that is done, as we see that as part of common property management. We will field calls from
your tenants, communicate issues to you and dispatch vendors promptly. We would not hire a vendor
to do your repairs that we would not trust to make repairs in our home.

Move Outs and Deposits

There are several important factors to consider when handling a tenant security deposit refund after
they have moved out. There are required timelines and disclosures that must be addressed starting
when the tenant gives notice. Many states have laws specific to the amount of time you have to
refund the tenant's deposit and or provide them an accounting of to what the deposit was applied.
Some rules dictate the application of charges deducted for tenant damages requiring owners to be
well versed in the definition of reasonable wear and tear. Paint and carpet have a useful life, and that
must be accounted for when determining a tenant’s refund and or charges. An owner or their
Property Manager will need to be highly educated to keep from having disputes during a tenant move
out and deposit refund. A good property management company will have an attorney they can
consult for advice at any time.

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What risks are involved when renting out my
property?

Owners decide to rent out properties for many reasons but they should also consideration the
following risks before making that final decision:

Missed rent payments
Tenant does not maintain the home or report issues when they arise
Lease violations by Tenant
Conflicts with H.O.A. rule, resulting in fines
Unauthorized Occupants
Damage to the home or unit
Contract violations
Unlawful Detainers action

These issues can be costly but working with an experienced and professional Property Manager can
lessen or limit your risk and provide "piece of mind."

How an Experienced Property Manager Can Help

An experienced Property Manager should have comprehensive systems in place to handle the
management of any property, and these systems should be highly detailed in nature. The following is
a list of the specific methods we have in place at our firm:

Tenant Acquisition
Rent Collections
Coordination of Maintenance & Repairs
Coordination with Vendors
Delivery of Legal Notices
Payment of Repair & Maintenance Bills
Monthly Accounting for Owners
Income and Expense Statements
Direct Deposit To Owner Bank Accounts
Owner Access to Internet Portal.

There is a host of other issues and surprises that can come up when managing rental property. A
successful Property Manager should be able to address those matters in a timely and accurate
manner. As Property Managers with more than two decades of combined experience in the field, we
have efficiently and effectively managed many emergencies and special situations, saving our property
owners countless hours of worry and thousands of dollars.

Need more advice or have other questions? We would be happy to discuss your personal situation and
get your questions answered.

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