Securing Vacant Properties

As the foreclosure rate swells, an unprecedented number of properties are being left vacant for months on end, posing unexpected challenges for property managers. Even the best efforts to secure and maintain a site—whether a home or a large-scale masonry building—can’t prevent break-ins, making the process a full-time job

“It’s a constant effort, and you’re usually one step behind the vandals,” says Alan Mallach, a senior fellow at the National Housing Institute (NHI). “It’s likely there’s a fair amount of property managers finding themselves in situations that are either more expensive or more difficult than they anticipate.”

Siriano Property Management has had their fair share of vandalism. The company is located in southern Michigan, an area hard-hit by unemployment and the housing crisis. A maintenance crew was recently painting one of its vacant duplexes, and returned to a vandalized space.

“The next day when they returned, the toilet had been stolen and the fridge was gone,” says Jodi Bopp, who works as an office manager for Siriano. “We were really surprised because the apartment is in a better part of town.”

Property theft has become so commonplace that, according to Bopp, the company now only buys used appliances to offset the cost of having to replace them.

“Dealing with property that’s already been vandalized and stripped is a real problem,” says NHI Executive Director Harold Simon. “Whoever is managing it really needs to be on top of it, meaning they need to go out there quickly before vandals get to it, they need to secure it, they need to clean it and keep it looking as good as they can.”

“Since vacancy is such a potential problem and the rate of foreclosures is so high, property managers have to be prepared or they will be overwhelmed by the problems,” he says. “You have to staff and plan accordingly.”

Securing your properties
Homes and commercial properties alike are vulnerable if they’re in poor, urban areas. While nothing can completely prevent break-ins, certain measures can make them less likely. Mallach discovered this when he worked in real estate development and was responsible for hundreds of empty properties.

Because a few pieces of plywood nailed across a door doesn’t offer the most security, property managers must look into more effective ways to secure their properties. Mallach points people to industry specs for boarding homes in the area and recommends spending money on additional prevention.

“More expensive measures are well worth it,” says Mallach. “In some cases, like a large apartment building or commercial building in a tough area, you might literally seal up entrances to first floor windows with cinder blocks.” Because plywood sheets are prone to rot and deteriorate, try using a more sophisticated, semi-permanent metal treatment.

Securing property can entail a wide range of services:

• Locks: Changing locks; installing a lock box to allow access to a third party; installing a padlock, slide bolt, or other locks
• Exterior care: Snow removal, lawn maintenance (mowing, weeding, and trimming), removing abandoned vehicles and winterizing swimming pools
• Winterizing: Draining plumbing and heating systems; clearing water system; and labeling all winterized items
• Follow-up: Inspections due to hazard or casualty insurance claims, repairs or rehab work

Build relationships with the local police, as well, and if there is a break in on a Saturday night, a crew should be sent over as soon as possible to re-secure the property.

Some managers are coping by lining up contacts with companies before problems arise. Someone managing 60 vacant properties, for example, might consider hiring a full-time carpenter and assistant or clean-out crew. But before hiring any contractors, ask around; find out if they deliver quality work—and on time.

It also helps to be known in the community. “Make sure you have a really good maintenance crew you can trust, and make sure you have a good relationship with the people in the city you’re working around,” says Bopp.

Finally, stay informed by tracking mortgage defaults, break-ins and sheriff sales in surrounding areas. “Foreclosures and sheriff sales tend to have a spillover effect on the properties around them, and it’s important to track where they’re happening,” Mallach says.

Here are some additional steps you can take:

• Stay in touch with code enforcement offices to monitor violations.
• Make sure contractors are aware of all requirements and timeframes.
• Provide photo documentation of any services completed.
• Abide by Federal Housing Authority preservation guidelines and county code requirements.