When is rent due?
Rent is due on the first of every month.
When do I receive my monthly distribution?
Owners usually receive rents around the 15th of each month, and you can expect them to arrive no later than the 20th of each month.
Do I get charged a management fee when the property is vacant?
Nope. We get paid when you get paid, so we do not charge management fees while the property is vacant. All the more incentive for us to help you get it rented!
What is a trust account?
A trust account is a special FDIC insured checking or savings account. The funds in a trust account may belong to the tenant, property owner or another party, but they are being held for a very specific purpose that all parties involved have agreed upon. Funds in a Trust account can only be used based on the agreement that exists between the parties involved. Here’s an example: Vesta Hawaii Property Management may keep the tenant’s security deposit in a trust account. If the tenant damaged the apartment or otherwise violated the agreement, ownership of the funds within the trust (the security deposit) will be transferred from the tenant to Vesta Hawaii Property Management in accordance with the lease terms.
How and is the security deposit used?
The security deposit belongs to the tenant up until the time that she moves out of the property. It can be used towards unpaid rent, late fees and other charges that are outstanding in their account, and repairs for damages caused by the tenant, but it cannot be used for anything else. The law prohibits us from using the security deposit before the tenant moves out of the property.
How do I pay for repairs, management fees and other expenses?
While the property is rented, we can utilize the rental income to cover any expenses that come up, unless the rent is not enough to cover all the expenses. If this happens, it is usually only for larger repairs. The first step we would take in this situation is to negotiate payment terms with the vendors who can make the repairs. It’s not unusual for vendors to accept payment over a period of two or three months on larger jobs. However, not all vendors are able to do this, and in some cases, you may have to deposit funds in the account in order to cover all the expenses.
If the property is vacant, it will not have a steady income flow, and we will need funds up front before we can incur any expenses. This will help us to ensure that we can pay all third-party vendors in a timely manner.
What happens if the tenant does not pay their rent?
1. If the tenant does not pay rent by the first, they will be charged a $100 late fee.
2. We attempt to contact the tenant by phone and email to inform them that they are behind on their rent.
3. Usually on the 5th of each month, we will then send the tenant a “5 Day Notice to Pay or Quit.” This notice is telling the tenant that they have 5 business days to come up with the rent or move out of the property and turn in the keys. The 5 days does not start until the following business day after the tenant has received notice. This can be delayed if the 5th falls on a holiday or weekend.
4. After 5 business days, we will contact the tenant in another attempt to collect rent.
5. If the tenant does not comply, we will submit a request to the court for an eviction.
6. At this point, we will contact the tenant once more in an attempt to collect rent prior to a hearing.
7. The court will assign a hearing date for both parties to present their case. The judge will determine whether or not there are sufficient grounds to grant the request for an eviction. It can take several weeks before a court date is set.
8. If an eviction is granted, the tenant will then be served the eviction notice.
9. After providing the tenant with sufficient notice, the sheriff will go out to the property along with a locksmith of their choice, and they will tell anyone in the property to vacate. The sheriff will then change all the locks.
10. After the lockout, the locksmith will make the keys available to us, which is a process that can take several days. Once we have the keys, we will immediately evaluate the property’s condition. At this time, we will let you know if any work must be done in order to market the property again. We must give the tenant at least 15 days to collect their belongings, if any are left behind.
Who gets the late fees?
All late fees are retained by Vesta Hawaii Property Management to cover our costs to collect the late rent.
What is the process when tenants move out?
Once a notice to vacate has been provided by either the owner or the tenant, we will send a tenant a letter containing a checklist of the things they need to do prior to moving out of the home:
a. Last month’s rent still need to be paid because we cannot use the security deposit towards last month’s rent
b. The utilities must remain on in the tenant’s name until the date after the scheduled walkthrough, so we can test all the amenities when they turn in the keys
c. The carpeting must be professionally cleaned, and the tenant must provide us with a copy of the receipt
d. The property must be thoroughly cleaned, paying special attention to:
i. Baseboards and doors
ii.Windows, Blinds, and Screens
iii. Appliances, inside and out, including underneath
iv. Light fixtures and ceiling fans
v. Toilets, faucets, tubs, showers, sinks, and other water fixtures
vi. Inside cabinets and drawers
vii. Floors and countertops
viii. Plate covers and face plates around light switches, outlets, etc.
ix. Sweeping out garages, lanais, balconies, and porches
e. The yard must be left in clean condition:
i. Trimming and pruning any plants and grass at the property
ii. Removing any trash or debris in the yard
iii. Pulling any weeds
iv. Replacing and dead or missing plants
f. Repairing any damage that may have been caused by the tenant, which may include:
i. Patching large holes in drywall
ii. Replacing any burnt out light bulbs or bad batteries
iii. Cleaning and replacing all air filters
iv. Securing any loose towels bars or toilet paper holders
g. Contact the post office to provide them with a forwarding address
What is the reserve balance for?
The reserve balance will be held in our trust account, so we will have funds available to cover general expenses that may come up in between rent payments.
What happens if my account falls below the reserve balance or I do not have enough funds to cover an expense?
In the event that the account balance falls below the required reserve balance, the owner must fund the account either with the next month’s rent or making a deposit into the account via check or electronic deposit.
When do you send out year end tax information?
All year in tax paperwork is prepared in January and will be made available to you no later than January 31. We will do our best to get this information out to you as quickly as possible. You will receive a year end statement, profit and loss statement, and a 1099 all of which will be made available online through your Owner’s portal.
What is the GE tax?
The state of Hawaii requires owner’s to pay a tax on all rent income (similar to a sales tax). The current tax rate 4.5% and it is paid quarterly. We can arrange to make GE Tax payments for you at no extra cost to you. If you do not have a GE Tax number, we can obtain one for you. There is a $25 filing fee for the process.
What is a HOA?
HOA stands for Home Owners Association. They consist of homeowners in a neighborhood or a building, such as condos which the homeowners have established rules and guidelines that each unit owner in the community must follow. These rules can vary from community to community and there is usually a monthly or quarterly assessment to cover the costs of the Homeowners association which goes towards maintaining common areas, administrative costs, legal fees incurred by the association, etc.
How are maintenance requests handled?
Tenant’s can place a maintenance request via email, over the phone, coming to our office in person, or thru our website. Once a request is received, we try to trouble shoot the problem with the tenant but if a service technician needs to go out to the property ,we make these arrangements and contact you so that you are aware of the problem. For small repair items, the technician will usually take care of these right away to avoid a second trip charge for having to go back out to the property. On large repair projects, we will obtain estimates for your consideration. If its an emergency such as a water leak, we will act as quickly as possible to correct the problem to minimize any loss in rent.
Why does Vesta Hawaii not retain copies of keys?
Retaining copies of keys increases the landlord’s liability. If something were to happen at the property where there are no signs of forced entry, the landlord can be accused and potentially held responsible. As a result, we have been advised by both our attorney and insurance carrier not to keep copies of keys.
We find that the most frequent question we get regarding this policy is how do we handle emergency situations. In the event of an emergency, we have the right to enter the property at which time a locksmith would be hired to pick open the lock in order to give us access to the home, which is an extremely rare occurrence
Why do I have to provide a courtesy pest treatment?
When a tenant is moving into a property, it is difficult to hold them responsible for maintaining it in a certain condition if the property was not given it to them in that condition. As a courtesy, all tenants are given a onetime courtesy pest treatment so that a standard can be established after which the tenant must maintain the property pest free. There are certain situations which the owner may have to pay for follow up treatments such as termites, severe bee infestations, etc.
Why do I need to have the property professionally cleaned before a tenant moves in?
The tenant is required to have the carpets professionally cleaned once a year and again before they move-out. If the carpets are not professionally cleaned before they move-in, it makes it very difficult to enforce this requirement. In addition, professionally cleaned carpet has a significant impact on how clean the property feels overall. Carpet that is dingy or dirty causes the home to feel the same way which can make it hard to rent out.
Why should I consider pets and what is your pet policy?
In Hawaii, there are a lot of landlords who do not accept pets making it harder for pet owners to find a place to live. By considering pets, you increase the number of prospective tenants who would be interested in your property making it easier to rent out. In addition, a landlord can require the tenant to pay a slightly higher rent amount if the tenant has a pet which helps offset the risk.
Why can’t I take more than 1 month worth of rent as a security deposit?
The State of Hawaii only allows the landlord to collect first month’s rent and up to one month worth of rent as a security deposit.
Why does Vesta Hawaii hold off on listing a property until it is in marketable condition?
First impressions are key when it comes to renting out property. You only get one shot at a first impression which is one of the biggest reasons why we hold off on listing a property until it is ready. The last thing you want is for a great tenant to go somewhere else because the property was not ready for someone to move in. Another important reason is that it makes it more difficult to lease out the property thus increasing how long the property sits vacant.
Why does Vesta Hawaii need to be listed as an additional insured on my insurance policy?
Our attorney and insurance provider have advised us to be listed on all insurance policies. Being listed as an additional insured extends the protection you are given to us. In addition, it also allows us to file claims and speak to your insurance company on your behalf.
Why do I need to keep the utilities on while the property is vacant?
During the leasing process, the tenant is required to view the property before submitting an application. The purpose of this is to give the tenant a chance to inspect the property and test the appliances. In order to fully inspect the property, the tenant’s needs to be able to test the appliances, air conditioning systems, etc.
How do you determine the amount my property should rent for?
To determine fair market rent, we compare the property to others in the area looking for patterns showing what other homes similar to yours have been renting for. We factor in the age, size, number of bedrooms/bathrooms, appliances, and whether or not it is furnished. While special upgrades such as granite countertops and wood flooring are also considered, these upgrades generally do not have a significant impact on the monthly rent.
How long does it take to lease out a property?
The length of time it takes to lease out a property can vary due to the location, condition, and asking rent price. In general, if the property is in good condition and it is priced right, it should rent out within 2 or 3 weeks after being listed. However, if the property is overpriced or it is not in good condition, it will usually take longer.
Can I get a discount in my monthly management fee?
In general, we charge a 10% monthly management fee based off of gross rent. However, if you have multiple properties, an apartment community, or a high-end luxury rental, please feel free to contact us and we would be more than happy to see what options are available for you.
How much notice do I have to give to the tenant for them to move out?
The state of Hawaii requires landlords to provide the tenant with at least 45 days’ notice to have them move-out of the property.
Can I sell the property while a tenant is in it?
A property can be sold while it is tenant occupied. Be mindful that we have to respect the tenant’s privacy. If you were referred to us by another real estate agent, we recommend contacting them to discuss the possibility of you selling the property. Depending on the time remaining on the lease, you may be responsible for management fees due to early termination of the management agreement once the property is sold. Please review the Property Management Agreement and contact us with any questions.