Renters Today: How to Prepare Your House for Success

The 2015 rental market has proven itself to be the worst rental cycle in the last 10 years in McGrath’s experience. Later in this issue of the McGrath Quarterly we look at the market in review and discuss more in depth the reasons why and expectations for next year. However, one common theme arose when looking at the properties that were still successful in renting quickly and for higher rent and those that were stagnant or in some cases rents even went down, and that was that presentation sets expectation.

A common remark that we hear is that when a general maintenance request comes in from a tenant, oftentimes the landlord will say “well yes that door is sticky but we lived with it for 15 years, the tenant can deal with it too.” And the landlord has a good point, they did not mind the sticky door and it is not essential to the functionality of the home so why should it be fixed? What McGrath has seen developing now for the last several years but in particular it effected the 2015 market is, that renters and buyers in our market area (DC Metro) have much higher expectations than say, renters 20 years ago and they are much more aligned to what buyers expect on the sales market. They want the homes fresh, clean, and upgraded and the kicker is – they can find that elsewhere for the same price. Yester-years renters are not today’s renters.

As an owner of a property and a Landlord, we typically find that when a client leaves the property they have it showing in great shape living roombecause of course they still live there, then when the Client leaves the property we advise that they have it professionally cleaned and prepped for the new tenant, many of our clients follow this advice and leave a superior looking product to be marketed on the open rental market, and that is rewarded by a property that rents faster and for more money (there are other factors at work there including time of year but that is another topic to discuss). However when the next leasing cycle comes around, the property may not be showing in as good as condition. Perhaps your tenants don’t tidy the home as well as you did, or they have begun packing and the home is cluttered. These are things that are beyond our control and while the McGrath Real Estate agent who is assigned to your property will meet the tenant at the property and go over expectations (it has also been added to our lease so tenants acknowledge again that they will keep the property in as good condition as possible during marketing), there is still a lot of uncontrollability there that we must contend with. What we can control is setting expectations for the next tenants to rent the home and making sure the property will be properly prepared for them as well. That will create another positive and successful tenant/landlord relationship. So how is this to be accomplished?

The McGrath agent who visits your property before it goes on the market is required to provide a “Property Assessment”. McGrath has a phone app that the agent fills out in the field and once completed, goes to our leasing and marketing team. Its purpose is to document the current condition and note any possible security deposit issues as well as general maintenance that may be needed regardless of whether it is a deposit issue or not. These comments will be shared with you before your property goes on the market. Hopefully the news will be good and you had the perfect tenant who never wore shoes in the house and didn’t hang a thing on the wall and never cooked a day in their life, but realistically that’s not going to happen. Realistically, the agent is going to say the paint in the high traffic areas is looking shabby, that the appliances are about six years old and look dated, that the carpet is starting to show wear and tear. Perhaps some of that might be a deposit issue but it is unlikely. General wear and tear includes scuffs on the walls and slight bunching of the carpets, these are items you cannot charge for but they will have a negative impression on a new prospective tenant.
As a Landlord you are a small business owner. You product is your house and as such there are costs associated with maintaining your product. Many of these items can be written off on your taxes as expense to maintain your investment (if you are looking for a tax professional to confer with regarding your taxes please contact Lindsay Curtis for recommendations). It should not be looked upon as a negative that you must spend money to maintain it, it’s a reality of all business owners and an opportunity to invest some money in your property for the return of a higher qualified tenant who will better maintain your property. We have a saying, a rat’s nest attracts rats and the last thing we want is for your house to show as a “rats nest”

McGrath recommends that Landlords consider painting the property (complete painting not touch up which often times looks worse than if you had done nothing at all) at least between every two tenants but it is highly recommend it be done between every tenant. Sometimes this is not necessary because you had that tenant I mentioned above who never hung a thing on the wall, in that case BONUS, but it is better to expect, that it be done every time. Occasionally you may be able to deduct some from the tenants deposit but this should not be an expectation either.

We also recommend setting the right precedent and requiring a property be professionally cleaned completely (not just carpets as required in the lease) not only when you leave but added to the lease as a requirement for all future tenants. This again is about ensuring a level of care is put into making sure the property will be turned over to a new tenant in the best condition it can be. Lastly, carpets are another common item to keep an eye on. As it stands they are required to be professionally cleaned between tenancies. Even with a professional cleaning, it should be expected that carpets will need to be replaced between every two to three tenancies. Again the wear and tear that happens just from tenants moving in and out, means they might not last as long as they would have had you lived in the house the entire time. Carpet replacement is not a huge expense but makes a BIG impact when a prospective tenant sees brand new carpet or notes in a listing that the carpet will be replaced before they move in.

patioThe next level of recommended maintenance is making upgrades to properties that don’t necessarily effect the functionality as much as the items listed above. This includes adding granite countertops to a kitchen and/or bathrooms, updating outdated light fixtures, and even updating cabinets among other things. These items can be more costly but last longer and will be instrumental in helping rent your property for quicker and more money. Tenants are looking for modern, updated products – basically the same as they expect as a Buyer, and for low investment value you can update these items to help you achieve your rental financial goals and eventually your sales financial goals.

This year McGrath Real Estate found that properties that were updated and showed well were always the first ones to rent, and the only ones to rent for more than they had the year before. Properties that were outdated or not cleaned (including painting/carpet) properly were the ones to sit for longer than normal days on market and eventually rent for the same or less than in previous years. Several of our clients did take the initiate to update their properties during tenancy and were rewarded with longer term tenants who were paying more and were more qualified.

If you wish to discuss preparing your property for marketing success in further detail, please contact our Leasing Department at and they will get back to you with a time to discuss. If you have projects in mind that you’d like to start getting estimates for, please contact the Repairs Department at

Why We Like Picky Tenants

moving inSo you have a picky tenant and you’re not happy with the barrage of requests? McGrath completely understand your frustrations, and suspicions, particularly when you made so much effort to present the home. It is also human nature to assume the worst particularly when you are thousands of miles away and unable to put your eyes on things. In some cases, tenants can just be picky. Sometimes picky tenants are preferable, particularly over an apathetic tenant, as the picky ones tend to treat the home as if it were their own. At the expiration of the lease the property is more often than not returned in very good condition by the “high maintenance” picky tenant. As your property manager, we have no financial or any other incentive to respond to repair and maintenance concerns and would prefer your experience to be nothing but smooth sailing. However, we do recognize your tenant as your customer, and try to be responsive and professional to their issues. Like all businesses, your business requires customer service and you have hired us in part to provide that on your behalf to your customer. We have found this consideration is more often than not reciprocated by tenants through their care and respect of the home. It also counts big at lease renewal time.

By no means are we saying that you should acquiesce to all of your tenant’s requests. Oftentimes there is a middle ground where both parties can be happy and the relationship between Landlord and Tenant remains strong. For example, your tenant wants the old chandelier in the dining room replaced but the one in there is working just fine. We have seen several examples of compromise which have worked out to the benefit of both parties and resulted in the tenant renewing their lease rather than moving out.

Every situation is different and as your agent and property manager we will advise you with our experienced opinion. Sometimes, a small concession here and there will provide you with more reward in the end. For more information on Repairs and the repairs process please contact the Repairs Department at

Reflecting on the 2015 Rental Market

What will life be like in the year 2016? This year is full of promise, potential, and opportunities with upside for you optimists out there – and a bad start to the year for any of us watching our stock and mutual fund portfolios beat down on a weekly basis so far this year. While the future always has some uncertainty to contend with, lets reflect on what happened in the Northern Virginia rental market in 2015 and what it might teach us so we can be better prepared for success in 2016.

In a statistical review on the MRIS Realtor database of all property management firms that serve the Northern VA marketplace and leased more than 20 homes in 2015 (21 property management firms in the survey), we are pleased to announce that McGrath Real Estate Services navigated through a tough 2015 rental market with the lowest-average “Days on Market” (DOM) for the 10th consecutive year. Good statistics get better when we combine the finding of the lowest average DOM with the highest average rents among all those firms in 2015. We found more qualified tenants faster, and at higher rent values on average than any other firm in the region in 2015. We started 2015 as the property management firm that delivered the best results in our region, and we finished that way too. As our client you deserve no less. Thank you again for allowing us to serve you as your property manager.

McGrath Real Estate 359 $2,497 38
PPM 321 $2,220 49
Peake 238 $2,158 49
Promax 153 $2,166 45
Brown-Carrera 147 $1,610 39
Home First 174 $1,991 48
WJD Management 113 $2,186 45
Patriot Properties 93 $1,932 59
Elite 49 $2,087 42
Condo1 42 $2,207 40
Property Specialists 55 $2,265 56
Propman 24 $2,053 52
Flat Fee 79 $2,078 42
PM Advisors 177 $2,276 47
Mid-Atlantic Property Management 44 $2,234 56
Real Property Management Pro’s 249 $2,099 45
Residential PP 36 $2,280 44
Choice 100 $1,936 43
TOTAL 2453 $2,105 47
Although we may have had the best leasing performance in the region, the simple truth is that when comparing 2015 to 2014, the same leasing performance indicators showed an increase in DOM for every management firm. That’s says something about the rental market.In 2014 it took us an average of 31 days on the market to find a tenant, but in 2015 it took an average of 38 days. On average it took all of the same surveyed firms 19% longer to find tenants in 2015 than in the previous year, and an eye-opening 54% longer on average in 2015 when compared to 2013. Many of our clients (especially those that had their property for rent in the second-half of 2015) experienced the “sting” of extended time on the market and vacancy and possibly rent reduction that typically accompany extended days on the market.

While in the business of being a landlord, together we need to adjust your market strategy to adjust to the changing dynamics in the marketplace (up or down) and you should expect some level of guidance on ways to improve your chances at landing a quality tenant while maximizing annual rental income. It is easier to digest some of our recommendations than others – for example, being amenable to considering tenants with pets on a case by case basis can open up the tenant market into your demand pool if you were against considering pets before because now more than 60% of Americans (and renters) are pet owners. So, while it may not be ideal, nor a comforting thought to consider tenants with pets renting your home – if you decline to even consider pets on a case-by-case basis you will have ruled out more than half of the tenant marketplace that could be interested in your home. Other significant decisions related to positioning your property for leasing success:

  • Pricing the property relative to the Active comparable properties in the market now (not compared to what rent you achieved before, or what a neighbor rented for before, etc)
  • It is critically important not to lose sight of how the home shows (fresh, appealing, clean, well-kept, functional) as well as capturing the home showing its best with professional photography that will present the home more attractively to gain the interest of potential tenants. Do not hesitate to invest in your own success when it comes to property preparation between tenants.
  • Seasonal impact – yes, the time of year that your property is on the market will affect the demand and possibly the final outcome in renting your property and there are some “timing strategies” that you can employ after consulting with us within the full context of your timing intentions.
  • Other “differentiators” – what other features can your home promote that differentiates it from the rest of the competition seeking those good tenants in the same price range?

There are many variables at play that affect the rental market in any marketplace (interest rates and confidence in sales market appreciation can cause tenants to become buyers or vice versa, job growth or loss in a region can affect housing demand, and the supply of new choices or other housing compared to the demand at the time your property is on the market), and the recent increase in supply of apartment buildings and high-rise condos has affected certain parts of the condo market in Northern VA in recent years.

There has been a strong supply increase of condos in North Arlington along the orange-line, also in Reston Town Center with the arrival of the metro along with the surge in popularity of the Town Center there, and not inconsequentially, massive new development in the Potomac Yards area of South Arlington/North End of Alexandria. As an example of how the new supply (and maybe weakened demand) has affected the Potomac Yards area – there are twin buildings called “The Eclipse” these buildings represent individually owned condos that have had a healthy demand to rent (and purchase) since they were built in 2006. Over the last four years we have seen tremendous growth and new supply of condos, apartments, and townhomes within a 1-mile radius of the Eclipse. This has nicely developed the area, but also increased traffic, and more significantly provided a surge in the number of rental choices potential tenants have when evaluating where they want to live and how they want to spend their rental money while considering this area. In researching data on MRIS we found that for this building in particular, looking at 2 bedroom units that rented in 2013 vs 2014 vs 2015 (through any brokers that listed units, not just McGrath Real Estate properties):

  • 2013: There were 19 two-bedroom units listed in the Eclipse and they rented for an average close price of $2686, with an average of 40 DOM.
  • 2014: There were 20 two-bedroom units listed in the Eclipse and they rented for an average close price of $2536, with an average of 59 DOM.
  • 2015: There were 14 two-bedroom units listed in the Eclipse and they rented for an average close price of $2590, with an average of 97 DOM.

Averages are averages, but based on same-unit, same-building comparisons, if you had a condo here in 2015 it took more than twice as long to secure a tenant and you earned about $100/month less than you did just two years prior in 2013. This example isn’t intended to encourage panic or to suggest you sell your condo – it is just about understanding the market dynamics and, in this case, the strong supply increase in the vicinity has made it harder to produce the same leasing metrics as were achieved before. Your property can perform better than the average if you position your property for success by understanding how the market changed last year combined with a keen understanding of how to compete for a quality tenant at the time your property goes back on the market –  and utilizing our guidance together we will better your odds for success when the time comes. We are pleased that over the last ten years we have has consistently given our clients the edge in reduced vacancy time while delivering higher than average rents. But what we are more interested in is year 11-  2016. Internally we are modifying some leasing procedures (as we always try to do) to improve our performance further.

Even if your property is in the “upper echelon” of rental homes, there have been some market shifts that apply to you. You may have a big home or elite townhome in a neighborhood that is desirable and your home has a great combination of modern upgrades or maybe a stunning lake view. The rental market in 2015 has been different in this price range too for several key reasons.Supply shift: While the demand/interest for a quality home is still healthy, there have been more choices (increase in supply) of high-end homes for rent in our marketplace in 2015 than in recent years. The quality of the excess supply is also high (it is nearly impossible to rent a home for over $3000/month now if the kitchen doesn’t have granite, if the master suite doesn’t have good closet space or its own remodeled bathroom, etc) there are more quality choices for tenants on the market so while they can be picky, it gets to be more competitive for landlords to land those tenants. We saw extended days on market for listings across the board this year – and one of the major reasons is the increase in inventory of quality properties (not just more rental properties, but more of the rental properties were cleaner, fresher, shinier, and otherwise at a higher presentation standard).Market Absorption: Along with the supply shift, the “market absorption” of the demand base has also changed. The demand is still there, here below you will find some examples of how it has changed:

  • Exxon Mobil (who used to have their U.S. Head Quarters in Falls Church near the Dunn Loring Metro/near Fairfax INOVA Hospital) moved their U.S. HQ to Woodlands, TX. The Exxon Mobil employees centered around the former Falls Church HQ transferred to Texas in Spring/Summer 2015. This has had a major impact on the high end rental market in 2015. Every summer our marketplace would normally receive an influx of 25-50 new Exxon Mobil execs looking for homes seeking a 2-4-year lease term in the $3000-$6000/month range between Ashburn and Arlington. While missing the influx hurt a little bit (that represented 25-50 high end rentals that didn’t get absorbed this summer), the transfer of existing Exxon tenants out created 70-100 more luxury rental vacancies, AND also the more-permanent Exxon Mobil execs that had owned homes in Northern Virginia (and those of which for whatever reason decided to rent out their high-end home instead of sell it) also added inventory to the elite-rental market between Ashburn and Arlington. This single corporate move really affected the local rental market by removing some of the demand and adding to the supply which shifted the luxury rental market by 150 to 200 property surplus. Not big numbers when we are talking about a major Metropolitan area like DC, but remember, most of this change was in a micro-economic impact region of luxury home rentals in this triangular area between Great Falls, Chantilly, and Arlington which did have a major impact on that sub-market (as well as the sales market for those execs that sold instead of becoming landlords).
  • Embassy pricing and location shift: Every year McGrath Real Estate works (not exclusively, but as a preferred agent for) the Canadian Embassy and the Australian Embassy and their officers assigned to work at the Pentagon on joint-military programs or at the embassy as diplomatic staff. For the last twelve years our office has worked with a dozen to two-dozen different officers each year. In recognizing that McGrath Real Estate does not have an exclusive agency relationship with these embassies, even if we are a preferred broker, this means that in any given year there are between fifty and seventy new officers seeking accommodation in the DC region as leasing-demand represented just through these two embassies. In the summer of 2015, the housing allowance the Canadian Embassy allowed their officers was down 10-15% compared to years prior. Six years ago we represented a Canadian military attaché ranked as a General and also the Canadian Rear Admiral and they were allotted a housing allowance of $6000/month for rent. This past summer, we represented another Canadian Embassy Admiral and his housing allowance was cut back to $5400/month – this spending cut on housing was consistent across the board for their officers. So, while we experienced that the demand was still there from the embassy tenant market pool, the price range that this market segment absorbed was lower in 2015 than in previous years.
    Most foreign embassies select their housing before the school year and they are out of the market by the end of August. The exception tends to be embassies representing countries in the Southern Hemisphere (Australians, New Zealanders, etc) who typically move in the months of December thru February. In working closely with the Australian Embassy officers, we have learned that over the next three years they are tripling the size of their diplomatic and military staff delegated to Washington DC (demand shift up!). Worth noting: Most Aussies (except higher level officials) are going to have an allowance of around $3500 to $4000/month. The higher-level officials are closer to $5400/month but there are much fewer in that market segment. Also, most embassies want their officers inside the beltway (within 15km of their work location). The idea here is that the embassy tenants out there representing a “piece of the demand pie” in our region have stiffened their budgets for their own reasons and that affected the absorption of high end homes that used to draw from that target market when embassy budgets allowed it – this caused a negative version of the “trickle-down effect” on rental housing prices.
There is still healthy demand across the Washington DC region for rentals, the demand and supply has just shifted at a micro-economic level based on housing-type and location as well as in certain demand segments. McGrath Real Estate has consistently delivered the best market results and leasing metrics for ten years running, and we can translate that into value for you! So, whatever 2016 brings know that we have our finger on the pulse of the market, we are confident we will again deliver the optimal results for those clients that allow us to guide them to that success!


There is still healthy demand across the Washington DC region for rentals. The demand and supply has just shifted at a micro-economic level based on housing-type and location as well as in certain demand segments. Tenant expectations have changed over time as well (see our “Picky Tenant” article in this newsletter). What will not change is this: whatever the market brings in 2016, we will seek to understand it, translate it and position your property to better perform within it than it would have if you had chosen any other property manager. That is our commitment to you and that is the value for which you employ us to produce. When we report to you at the end of 2016, we expect to report that we lead our industry for the 11th consecutive year in “Days on Market”.

New Owner Indoctrination with McGrath Real Estate

This video is intended for those of you who have not had the opportunity to sit down with McGrath Real Estate and talk about our services. Most of the challenges we face here are around the confusion over how property management works and the expectations that landlords have about what will happen. Based on the successful landlords we have worked with over the years, we have found that those who understand how we work have a higher likelihood for success.

Team Approach

McGrath Real Estate specializes in each phase of property management, and we have a team approach. The traditional property management model is based on one property manager who does all phases of property management for you and your property. There are some advantages to the singular point of contact system, but there are also a lot of failures in that system. We have evolved to a team approach because it offers more depth.

Inspection Team

The Inspection Team focuses solely on inspections. That’s all they do every day. You can expect several inspections per year, including a move out inspection if you have been living there and you are preparing to leave. This inspection also gives us the opportunity to learn about your property. We’ll know the filter sizes and what kind of keys are needed. We’ll know how the house works. We transfer that knowledge to our move in inspection with your tenant. Our Inspection Team also conducts an interim inspection four to six months into the lease. Free inspections are conducted for due cause. If a neighbor calls to complain about four dogs or the homeowners association contacts us about violating one of the policies, we will schedule an inspection if we have credible information that tells us the tenant might not be abiding by the lease. A move out inspection with the tenant at the end of the lease will also be conducted. If a responsible tenant renews the lease, we’ll inspect once a year. Our Inspection Team is specifically designed and tasked with performing these inspections. They are trained and experienced in this part of management.

Repair Coordination Team

Another team we have working for you is our Repair Coordination Team. We are not performing the repairs. McGrath Real Estate hires third party contractors so we have no financial interest in the maintenance that’s done on your home. We can also use your preferred contractors as long as they are licensed and insured. We communicate with the tenants because they are your customers in the property. The tenant has a single number to call if there is a repair need, and it’s answered 24 hours a day. The tenant will be heard and the need will be logged and tracked. A contractor will be assigned to the repair or providing an estimate. Serving your customer is crucial to our management process.

Accounting Team

We also have an Accounting Team. The cash flow process is important. The tenant pays between the first and the fifth of the month, and we will reconcile your escrow account between the fifth and the eighth. Normally our clients see rent proceeds posting to their account between the 10th and 11th of the month, depending on when the weekend falls or if there’s a holiday. This is not just property management; this is managing your money. We put a lot of care into managing your property and your money. There will be online statements so you can see the receipts from vendors, pictures of the work and other information. At the end of the year, when you’re wondering about taxes, we will provide a 1099 that shows your rental income and we’ll also provide a list of expenses that were paid through your escrow account. We’ll report those sums back to you to make your tax preparation process simpler.

Leasing Team

Our Leasing Team is responsible for reducing your vacancy time, getting the most rent possible and finding the best tenant. With this team’s focus specific to these activities, we get better advertising and people who understand market value. Your tenants will be well-qualified and your leases will be re-negotiated properly. The metrics and results we have seen have been excellent. We went to this model eight years ago and in that time; we have had the lowest average days on market of any property management firm in Washington, D.C., Maryland or Virginia. We also have the second average highest rents in Virginia. That’s a powerful combination that works well for you. Understanding the market helps us bring our property owners these results. You’ll get recommendations on how to prepare your property for rent and how you should price it. What you’re willing to do is directly related to getting your property rented quickly for a high price to a great quality tenant.

Client Advocates

Instead of calling one property manager, you’ll have a list of teams to contact, depending on what you need. You’ll use your Leasing Team until there is a tenant in your property. Once the property has rented, we will introduce you to your Client Advocate. Our Client Advocate Team is similar to that singular point of contact system where you have one property manager who is assigned to you. Their job is not to perform inspections or coordinate repairs. They are not the people advertising your property or screening tenants. This team is responsive to you. This depth of service and specialization in each phase of property management has really benefited our clients.

Strategies for Landlord Success

Understand the rental market and the type of tenant you will attract. Presentation sets expectation. If you want higher prices and good tenants, present your property as one of the best in the neighborhood. Attract the type of tenant you want. Rats’ nests attract rats. Nice properties attract nice tenants. If someone is okay with a home that has stains on the carpet and marks on the walls, they won’t care about maintaining the property themselves.

Location has a huge impact on renting your property, but any property can be successful in the location that it’s in when the landlord and the property manager prepare the property for success. Physically, you can upgrade and clean it. You also need to understand the rental values. Those change. One of the secrets to McGrath Real Estate’s marketing and leasing success is the activity-based pricing model. This is based on three reasons that a house will not rent:

  1. If you don’t get enough people in the door to see the house, it will never rent. People need to see it.
  2. If the property does not show well, it will not rent. It cannot smell funny or look dirty. It has to meet the criteria of high quality tenants.
  3. If the property is not priced correctly, you will not get any rental offers.

Reducing the price is sometimes necessary, but we have a more scientific approach. Informed consumers select the product that offers them more. Understand your competition. Your home might be great, but what are the other choices that consumers have? That may be school districts, updates and other factors playing into a consumer’s decision. We can price as high as we can realistically expect for your location. Maybe we can even set a new record. But you need to make your property distinct. Use this activity-based pricing model to attract renters and offers.

Vacancy is your enemy. Nothing is more expensive than vacancy. Look at it from annual cash flow. If you find a tenant today who will move in tomorrow at $2,000, you’ll make $24,000 over a year. If you want a rent that is $2,200 a month, you might find a tenant who will pay that, but it will take you two months to find that tenant. This gives you $22,000 over the year. It’s better to take $200 less per month with this example.

You can also use this model when you’re placing tenants. If one tenant will start paying rent tomorrow and has two dogs, and you have another tenant without pets who can’t move in for two months, the person with the dogs will earn you more money. You’ll also get an additional pet deposit, which is normally around $500 for one animal and maybe an additional $250 for the second animal. You have a buffer against the risk of pet damage. A no pet policy will lose you money. Between 60 and 65 percent of the tenant market has pets, so saying no pets will rule out more than half the marketplace. Don’t limit your chances for success. Remove your liabilities and maximize your opportunity for reward.

The first 60-75 days of you leaving your property and getting it on the rental market are the most expensive. Prepare for that. You won’t collect rent immediately and maintenance and utility costs will be your responsibility. You’re paying for the water and the heat and the lawn maintenance. When you have a tenant moving in, there is a leasing commission to pay. That’s not paid up front; it’s taken out of the first month’s rent. There’s also a new tenant moving into the property and they will live there differently than you did. A good rule of thumb is during a normal year, budget $1 for every square foot of property you have. This property, whether you’re an investor or this was your home, you have a customer in the property and part of what we expect out of them is to pay rent on time and fulfill lease obligations. They expect from you that things will be working and functional. Prepare for success by understanding what needs to be addressed and taking care of the things that come up.

These are some of the things you need to know to be successful as a landlord. For more information, please contact McGrath Real Estate.

Why Vacancies are the Biggest Risks for Landlords in Arlington, VA – Property Management Education

Today at McGrath Real Estate, we are talking about your biggest expense as a landlord. Most of the concerns we hear landlords talk about are their worries about getting a good tenant who will pay rent and respect the property. They also have concerns about the contractors that are hired, and whether they will charge too much for repairs. Both of those are legitimate concerns, but they’re manageable. The biggest risk, however, is vacancy. That’s where you should direct most of your concern. Vacancy is your largest expense, and you need to manage it effectively.


Often, we meet with landlords who look at what another property may have rented for and compare their property to that one. So if that property rented for $2,000 a month, the landlord who is pricing his own property might think higher rent is appropriate because his home has an extra fireplace or half bath or some other component. These things will not necessarily translate into rental value. They can translate into appraised value if you’re selling, but not into rental value.

We recommend you think of it like this: at different times of year, there are different numbers of people in the rental pool looking for properties. At any point, you can get at least one good candidate who is looking for a property like yours. So look at it competitively. You are in business and you’re competing with other businesses and other landlords and properties. Look at what’s available today and what those properties are like and how much they are renting for. If you were the tenant, which property would you choose? Make your property the best competitive value. This will limit your days on market, your vacancy and your biggest potential expense.

Operating Expenses

When your property is vacant, you’re paying more in operating expenses. For example, you’re paying for utilities that the tenants usually pay. So the cost of vacancy includes not receiving revenue from rent and higher expenses.

Days on Market

Today, tenants have the opportunity to be more educated through the Internet and search sites. They know what’s on the market and they can see how long properties have been on the market. Often, there’s a perception that there must be something wrong with a property if it’s been on the market too long. They’ll think other people don’t like it, which tells them there’s a reason they shouldn’t like it either. So, the property does not get their full attention and there isn’t enough interest generated.

Avoiding vacancy will maximize your revenue. It’s a big expense for an owner and it should be targeted in your management plan so you can avoid it. If you have any questions on the best way to manage vacancy, please contact us at McGrath Real Estate.

Benefits of McGrath Real Estate – Northern Virginia Property Management

At McGrath Real Estate Services, we have been providing help to homeowners and landlords for over 30 years. Today, we’re sharing some of the things you need to know if you’re renting out a property. We always say that you need to treat your rental property as a business. Sometimes, landlords are not sensitive to the components of a business that need to be addressed in order to be successful.

Regulatory Requirements

Your rental property operates in a highly regulatory environment. When landlords are unaware of the rules applying to the rental property, they are likely to negatively impact the operating results of the property. Landlords who do not pay attention to the laws and regulations can also put themselves at risk for a lot of personal liability.

Product and Service

Having a rental property means having a product. The efficient operation of your property will affect the results of your product. You also have a customer, like any business. As a landlord, your customer is your tenant. Customers require service, so make sure you are providing excellent customer service to your tenants. This is often overlooked and one area that can cause a great expense to landlords. At McGrath, we always ask tenants why they are leaving when they give us notice of their intention to move out. Sometimes they are buying a property or getting transferred out of area. We want to make sure their reason for leaving is not because of a lack of customer service or a lack of care with the property. Not a lot of businesses can be successful when they treat their customers as enemies or nuisances.

Business Management

All businesses require management. Whether you are hiring a property manager or performing tasks yourself, management needs to be organized and efficient. Property management includes collecting rent, leasing the property to qualified tenants, arranging for cost effective repairs and being available for emergencies that happen day or night. You need to know what you will do to collect rent if it isn’t received on time. At McGrath, we say that good property management is the result of good procedures. Those policies and procedures need to be carried out consistently.

There is a cost to professional property management, and there are also costs involved when you do it on your own. Balance those costs and remember that regardless of what the expenses are, there are certain things that will need to be done. Decide what is more effective and beneficial to you and remember that costs are not only measured in money; there is also time, knowledge and operational efficiency to consider.

If you have any questions about property management and how we can help you run your rental home as a successful business, contact us at McGrath Real Estate Services.

Spotlight on … Leasing

The Leasing team is the first point of contact that you’ll have in the leasing and managing of your home. At this point you’d have already met with one of our Management Consultants, Brian Chevalier or Tommy Chambers. They have explained our philosophy on property management and gone over our policies, as well as answered any questions or concerns you had. Once you’ve signed up with McGrath Real Estate Services, the pressure is on! Next we immediately begin the leasing phase of your home. Securing a responsible, quality tenant is the single most important factor in a positive rental experience. The McGrath Real Estate leasing philosophy is a three pronged concept that attributes successful leasing to the following aspects: pricing the home at market level, showing quality and providing the home with acceptable exposure to garner an application. So what does that mean and how do we do it?

  • Pricing: If this is your first time on the market then part of your property management consultation with Tommy or Brian included a detailed market analysis and pricing recommendation. For clients who have already successfully rented the property and are now in the renewal and remarketing process, your first correspondence will be with Jessica Stinnette, our Marketing Director. Jessica has been with the company since 2003 and in that time gained an extensive knowledge of rental rates and market conditions throughout Northern Virginia. She will provide you with a detailed market analysis as well as an explanation and her expert recommendation on where to most effectively price your property. Once you have decided on a price, Jessica creates and lists your home on the active market. When the home is about to go on the market we immediately assign one of our leasing agents  to be your “stand-in” and show the home. Their first order of business is to visit the home and conduct a “Leasing Assessment”.
  • Leasing Assessment: The “leasing assessments” occurs every time a property goes on the market. We found that when the owner was still in the property, the home would show fantastic because the owner had an incentive to show the home in it’s best light. There was less control over showing quality after the first initial marketing stage and a tenant was the one residing in the home. McGrath implemented the “walk-through” to identify any issues before the home is activated, take marketing photos for the listing and to educate the tenant on what is expected of them during the time your home is on the market. In 2010, McGrath Real Estate had an iPhone “app” specially designed to streamline the process and ensure all useful information was captured. While this report will not be given to you directly, if an issue is identified you are immediately notified and a plan of action is formed. We’ve found the “walk-through” to be an excellent way to set expectations with the tenant and allow our Agents to be personally familiar with your home. Once a home has been given the “all clear” by your leasing agent, the home is ready to be activated on the market!
  • Showing Activity: Now that your home is active, many owners feel bewildered not knowing how things are going. In 2015, we began working with the Centralized Showing Service. Not only does this streamline the ability to set up and confirm appointments with your tenants (by giving them one number that will be their point of contact, most tenants feel better about not taking random calls from Realtor’s all the time) it also gives us an online dashboard for you to be able to login and see showings that have occurred, any feedback that was received and any future appointments. We have found this to be a huge benefit to our clients and our tenants.

110726175921182Through the years we’ve found that if those three aspects are in sync, the home will rent quickly. This careful attention to detail has led to McGrath having the lowest days on market of all property management firms in the area, reducing your vacancy costs. When an application is submitted it is sent to our processing department.

Our processing department (which performs the rental application processing and tenant screening) is a very organized and detailed.  They use their detective skills to investigate and ensure that the applicants are people that we want to rent your home. When the application comes in we check that the lease length works for your timeline. We are very cognitive of the seasonal aspects of the rental market and ensures that leases end when it is most advantageous to you. The first order of business is to pull the applicant’s credit score. If there are any red flags (late payments, lots of inquiries, collections, liens, judgments) we dig further as well as look up the court records to further define the discrepancies. We have found that credit score is one of the best indicators of how a tenant will pay for rent. It goes without saying, the higher the credit the more reliable tenants tend to be.

Next, we will check current AND previous landlord references going back up to ten years. Previous landlord references can be of more value than current. If they are bad tenants, it’s possible that the current landlord will say anything to get them out of their property. Previous landlords will be honest since they have nothing to lose. As an extra precaution, we always verify through tax records that the person they list as the landlord actually owns the place; after all, we want to make sure we’re speaking to the correct person. Lastly, we verify employment and stated income, making sure that they financially qualify and that their job stability is good. We use a qualification rate based on tenant’s rent amount to income.

Once all information has been verified the application will be submitted to you by one of our Leasing Directors. They will give you a breakdown of all aspects of the application as well as our recommendation. If we believe the application is worth considering, but not to your best advantage, they will give you our recommendation for a counter offer, many times with a higher rent or longer lease. If you choose to accept the application, they prepare the lease and sends it to the future tenant for signature as well as coordinates the move-in with our Inspections Department. Organization and follow through are key in this stage of the game. Lastly, the lease is signed and sent to you for ratification.

We understand the stress and confusion that packing up your home can entail particularly if you’re moving overseas or across country. We recognized that many of our clients felt bewildered by the process of putting their home on the market for rent while coordinating a new stage in their life so we implemented the Owner Pack-Out. The purpose for meeting you is to gather information such as parking space numbers, HOA rules and information, confirmation you have added McGrath Real Estate Services for “in care of” status to your utility companies, tag hose bib cutoffs for outside spigots as needed, and any other pertinent information. In addition, we will guide you towards solutions for items that may need to be addressed, including repairs and maintenance, cleaning, etc.  This is an opportunity for you to give instructions on how to clean certain surfaces for counters and floors, any specific or unique features of the home that need to be passed on to the future tenants. At the end of your check out your home has officially come under McGrath management! Once this happens your transition begins to the Client Advocate who will guide you through your time with us. If you ever have any questions or comments for the leasing team never hesitate to email them at

What is Discrimination? Landlords and Fair Housing Law

In 1968, the first national Fair Housing Law was passed as part of the Civil Rights Act of 1968. At this time the purpose of the act was to protect African Americans and other minorities from discrimination in the housing and rental market. Since then, the protected classes have expanded to protect millions of people and prohibit discrimination based on race, color, national origin, religion, sex, familial status or handicap. States have the right to expand on the bill to include other protected classes as they deem necessary, Virginia has also included “elderliness.” Additionally on a local level, counties have the right to protect certain classes if they wish. Arlington County, Falls Church City, and Alexandria City also protect those against discrimination based on sexual orientation.

According to the Department of Housing and Urban Development there are approximately 2 million discrimination claims filed every year. The instance of discrimination is likely much higher but people do not file claims. McGrath Real Estate has designed our application presentation procedures to make sure you are never put into a position where you might discriminate. There are serious repercussions for people who discriminate. On the federal level they include:

  • To compensate complainant for actual damages, including humiliation, pain and suffering.
  • To provide injunctive or other equitable relief, for example, to make the housing available to complainant.
  • To pay the Federal Government a civil penalty to vindicate the public interest. The maximum penalties are $16,000 for a first violation and $65,000 for a third violation within seven years.
  • To pay reasonable attorney’s fees and costs.

Of course, it is McGrath Real Estate Services, Inc.’s intention to never allow any of our clients to knowingly or unknowingly violate Fair Housing Law. Below we’ve explained what each protected class covers and situations we’ve seen where discrimination was attempted.

  • Race: It is illegal to discriminate based on someone’s race. According to the Real Estate Board of Virginia, this is the most common instance of discrimination. We do not disclose the race of an applicant and never request it. Also,
  • Color: It is illegal to discriminate based on the color of someone’s skin. We do not provide you with the names or pictures of any applicant who wants to rent your property.
  • National origin: It is illegal to deny renting to someone because of the nation of their birth. Our rental application does not ask applicants where they are from.
    • In some circumstances the prospective tenants are Foreign Nationals coming to this country for a designated period of time, usually while in the service of their government, exactly like all our Foreign Service owners are elsewhere in the world! If this is the case, then we will disclose to you their employment with a foreign government, but you cannot use the country of their employment as a reason to deny.
  • Religion: It is illegal to discriminate based on an applicant’s religion. The application that McGrath Real Estate uses does not request they disclose their religion and we never ask.
  • Sex: It is illegal to deny renting to someone because of their sex. There is an exception to this law, though it rarely affects our clients, but if you are advertising for a shared living space, you can discriminate against sex. What that means is if a woman was looking for a roommate, she could specify that only women would be accepted because she is also residing in the home. Again, this rarely affects any of our owners.  McGrath Real Estate does not provide names of applicants in our application presentation to avoid any discrimination based on sex.
  • Familial status: Familial status protects people who are married, single, and those with children or those who do not have children. Unless a facility is a senior or retirement facility, it may not refuse to rent to families with children. Senior and retirement facilities for individuals over 55 or 62 may however, lawfully, refuse to rent to families with children.
  • Handicap: This provision makes it illegal to discriminate against people with disabilities, both physical and mental. This includes, but is not limited to psychological disorders, emotional and mental illnesses, learning disabilities and recovering drug addicts and alcoholics. There can be several instances where this can come into play, for example, if a prospective applicant is wheel chair bound, you cannot discriminate based on that. Also, most importantly you must allow them to make reasonable modifications to their unit if such modifications will allow the disabled person full enjoyment of the premises, AT THEIR EXPENSE. They will also be required to return the premises to its previous condition after they move out. Landlords with “No-Pet” policies would be required to allow a tenant with a registered service animal to keep the animal in the home. You could not discriminate based on a seeing-eye dog that the applicant must have. The only condition is that the applicant must disclose to you his or her disability and the need for the service animal.
  • Elderliness: Under this protected class a housing provider could not deny a housing opportunity to someone because they are older than 55. While we do know the ages of our applicants, we don’t provide them to you. That being said, this has rarely ever been an issue at McGrath Real Estate.
  • Sexual Orientation: This is only applicable for homes in Arlington County, Alexandria City, and Falls Church City. Currently 15 states have passed fair housing laws protecting sexual orientation, which includes sexual orientation and gender identity, though Virginia is not one of them. McGrath Real Estate does not ask for this information and will never provide it to you, regardless of what county your property is located in.

Many times clients ask us why we do not provide more detailed information about each applicant to them in our application presentation. It makes sense, you’re allowing someone to live in your home, of course you want to know everything about them! The reason is we want you to avoid making a decision based on discrimination. There is a really fine line that can be hard to see, especially when we’re talking about who is living in YOUR home. This is why you have McGrath Real Estate Services to guide you through the process and ensure that you have a good tenant living in your home. If you ever have any questions regarding Fair Housing Law, please feel free to contact our Leasing Department at

Considering Renting Your Home? How to Choose a Property Manager

If you are considering renting your home there are several initial questions that come to mind; how much will my home rent for? How will I find a good tenant? How do I handle a repair request? When considering becoming a Landlord, understanding all that entails is important. Renting your home is a huge decision for any homeowner, and serious research is required. Whether you are considering doing everything yourself or hiring a professional property management company specializing in Northern Virginia Real Estate, McGrath Real Estate Services, Inc. encourages you to ask yourself, “Can I give the time, effort and commitment to being a landlord?”

There are certain tasks that all landlords must accomplish such as deciding at what price to Considering Renting Your Home? How to Choose a Property Manageradvertise your home, determining maintenance to improve showing quality, coordinating showing the property, vetting possible tenants, creating and executing a lease, performing inspections, collecting rent, handling needed repairs and maintenance, preparing end-of-year tax forms, handling tenant requests and issues and determining security deposit issues. These are the basic tasks that all Landlords must accomplish, but what happens if your tenant does not pay rent? What happens if your previous neighbor calls to complain that the lawn is never mowed? What if the air conditioning goes out in the middle of a heat wave?

Choosing a property manager must be treated as a business decision. For a landlord, their home is likely the biggest investment they’ve made in their lives. For the renter, the property is the roof over their head, where their family comes home to everyday. Hiring a professional to balance the needs of both parties, all while acting in the homeowners’ best interest, could undoubtedly be the best decision any homeowner could make.

So you’ve decided to hire a professional, now what? Initial internet research gives you several firms in your area that work in property management. Perhaps you’ve read reviews online to see how others have felt about their services. Now it’s time to sit down and meet with each firm’s representative and decide who is the best pick for you. This is your opportunity to interview them on their firm and the services that they will provide. There are many important aspects of management that you need to know and to help you make your decision, we’ve compiled a list of questions you need to have answered.


  • How long has your company been in business?
  • How many properties do you manage?
  • How many staff members do you have and what are their job functions?
  • Where are most of the properties located?
  • What other properties do you manage in my neighborhood/area?
  • What professional organizations do you belong to/participate in?

Cost of services

  • Fees – Leasing & Management Costs
  • How much is charged for leasing the property?
  • What type of advertising/marketing is included in leasing fees? What is charged in addition to the leasing fees?
  • What is the management fee while the property is rented?
  • Are there any fees charged when the property is vacant?
  • What other services provided in the management of my property could be charged for?
  • Are any expenses passed through to me? Examples may be legal representation, insurance claims, communication costs, fees for attending HOA meetings, costs for obtaining additional estimates, or fees for coordinating/overseeing major home improvements.
  • What if I want to terminate/transfer services to another company? Are there any fees
for doing this?

Management Services

  • What does your management service encompass?
  • Look for a sense of mission in your discussion instead of a litany of tasks.
  • The mission is to pro-actively serve your interest as defined by the terms of the lease
and within the framework of the management agreement.
  • Tasks include:
  • Establish a good rental rate for your property, and keeping it occupied.
  • Collecting the rent in a timely fashion. What are your procedures when a tenant doesn’t pay?
  • Handling maintenance or repair calls
  • Handling of insurance claims
  • Providing accurate periodic financial statements to you. How often?
  • Inspection of property. How often? What do they look for?

Maintenance and Repairs

  • When is an owner consulted before spending on repairs? Are their limits or policies on how to handle certain repairs and emergencies?
  • How does the company ensure competitive pricing of repairs?
  • Does the management company have a financial stake in any of the companies it uses for repair and maintenance?
  • Does the management company evaluate and re-evaluate performance and pricing on the contractors they use? Do they compete bids?
  • Ask if you can, or if you should, use your own, preferred vendors for the property


  • Ask for copies of the various documents in which the management company uses including the Property Management Agreement, and lease forms. Read the management agreement with care and question any portion that is not clear to you. A landlord checklist or handbook can be very helpful in providing you clear expectations on what you need to do to prepare your property for success.


  • How do you determine what the rent on my property should be?
  • Ask for a list of properties comparable to yours in terms of location, size, quality on which the company has rental information.
  • The Multiple Listing Service (Previously MLS, now called MRIS) is the best method of outreaching to potential tenants, not only do you broaden your market reach, but you also reach a more qualified tenant pool. At what point does my property get listed on MRIS and what makes my property stand out more then my competitors?
  • Does your company work with Foreign Embassies on finding stable, long-term tenants? What other information should I know about renting to foreign clientele?
  • How many properties did you rent in the previous year and what were the average DOM (Days on Market) for all of those rented properties? This tells you if the firm is introspective and shows measurable results of their marketing program’s performance and effectiveness.
  • In today’s internet savvy world with potential tenants looking for immediate satisfaction for their need to find a home, townhome or condo for rent – it is important that your property is effectively marketed on the web. There are a million real estate websites that do a million different things and reach many different audiences, but some websites are much more effective than others. Does your property management candidate use to reach the military? Do they take advantage of CraigsList? Find out what web sites they use to leverage the power of the internet to find a good tenant for you!

Tenant Selection

  • What measures do you take to ensure that you are getting a good tenant?
  • Most companies verify employment and income, order a credit report as well as check with landlords and current employers.
  • What are the income qualification ratios?
  • How long does it take to process an application? (This can be a crucial factor in winning/losing applicants for your home over another).
  • Ask to contact current or previous clients as references. Also ask for names of former clients who may have returned from their assignments and are now living in the area and could offer useful insight into their property management experience.


  • How does your company protect client information, data, and documents?
  • Do you shred or throw away documents? How do you protect your computer system data (bank account information, etc.)?
  • What measures are taken to ensure accurate accounting of escrow accounts?
  • What is the most frequent area of friction that occurs between you and your clients?

The Magic Questions

  • Is the firm introspective? What are they doing to measure and evaluate the metrics of success (for you, and for themselves)?
  • What is the firm doing to improve?

Once you have determined who your property manager will be, find out what you can do to prepare them so they can be successful for you. Help establish your relationship. This is as important as anything else you can do. Be one of their favorite clients! Then you will have the most productive and profitable results.

Repairs You Shouldn’t Try at Home

Your move out date is fast approaching and as you’re scrambling to get your belongings packed, secure housing somewhere else and prepare your home for the move out inspection you realize that there are several holes in the wall that will need to be fixed. You might think to yourself “I’ll just go to Home Depot and patch that myself”… stop before you do this!

The reality is if you are not a professional in wall repair you will more than likely make the punctured area worse. McGrath Real Estate Services, Inc. does not require that any hole the same size or smaller than a number two pencil be patched. This encompasses normal nails used to hold picture frames and wall coverings. Any hole larger than that will need to be fixed or it is a security deposit issue. A perfect example of a hole you should have a professional contractor fix is the hole left behind from wall-mounted TV’s.

Many renters do not realize all that will need to be done to properly repair a hole in the wall. Also, whether you know the exact color of the wall or not, a fresh touch up job many times looks worse because the existing paint has changed slightly due to light and day to day life in the property. While you may have thought you were saving a few extra dollars by touching up yourself it turns out you pay much more because now the whole room must be repainted and it will be deducted from your security deposit. McGrath recommends that for any repair you are not qualified to fix that you have a professional repair the issue to ensure you receive your full security deposit back. If you have any questions regarding a possible deposit issue or inspections related issue please contact our Inspections Department at