There were two items on the May 20 Monticello City Council meeting related to renting out the city-owned residential property located at 14432 190th St. This is located near the airport.
The first item was hiring a property manager. The agreement before the council was with Steve Reyhons at a rate of $200 a month.
Reyhons “owns several rental homes and has the time and capability to perform basic property management for this property,” noted City Administrator Russ Farnum.
Among his list of duties would include finding and screening proposed tenants, maintaining the property, handling service calls, minor repairs, and documenting tenant complaints.
“He will also be the first in line of communication for repairs and maintenance that may be required,” continued Farnum.
Farnum said he spoke with the two real estate businesses in town to seek their interest in performing such duties; both declined.
However, the realtors offered that the typical fee for a property manager is usually 10 percent of the rent.
The council felt that hiring a property manager was not something that had been discussed before now.
“Was this in the budget amendment?” asked Council member Mary Phelan.
While she was not on the council when the city purchased the property, she was under the impression, she said, that the city would handle such responsibilities, including contacting the appropriate contractor when an issue came up, such as a plumber or electrician.
“Now we’re incurring an extra $2,400 a year for someone to manage this property?” she asked. “It feels like a bit oversold.”
Farnum admitted there were no in-depth discussions about hiring or not hiring a property manager.
“He’d (Reyhons) be in charge of working with the tenant on a daily basis,” he said. “Make sure rent is paid and handle evictions if we need to go to that level of enforcement.”
Furthermore, Farnum said he had no intentions of taking on this role himself, nor passing it on to other city staff.
“Three-year farm leases on farm ground and 10-year hangar leases are pretty easy for me to handle,” he told the council. “The day-to-day stuff when you get into a residential setting is not something our staff can really handle or has the capability.”
Phelan was still opposed to the idea, adding paying a property manager on top of $15,000 in property taxes a year on the property.
“I have a real issue bending stuff and making it look good,” said Council member Dave Goedken of not hearing about this issue sooner. “I don’t believe anyone mentioned anything about a property manager. This is a surprise for everyone.”
Council member Candy Langerman said hiring a manager is no different than the city going to a realtor to sell a piece of property.
“This would take away from their other responsibilities,” commented Mayor Wayne Peach of passing the duties onto city staff. “This is for more than just a water leak.”
The contract with Reyhons includes a 30-day notice of termination, if the council felt the need to terminate early, including no penalty for early termination.
“It’s just not how I envisioned this working,” Phelan reiterated.
The council approved the hiring of Reyhons by a vote of 4-2, with Phelan and Goedken opposed.
The city previously set the rent for the house at $2,200 a month, with a deposit of $2,200. Farnum said he’s finding that perspective renters don’t want to pay that price.
“We’ve had three to four phone calls (on the property) and no real interest in the property,” Farnum noted. “People have unique situations. It was too much house for one person.”
The rental agreement also includes a one-year lease, with no penalty for proper notice if the tenant chooses to vacate early.
“We were hoping to get $2,20 to $2,400 (in monthly rent),” he told the council. “That seems too high.”
Farnum said Reyhons suggested the $2,000 range. A realtor on the airport board further suggested $1,600 to $1,800.
The house was built in 1994, containing three bedrooms and three bathrooms. All appliances are included except a washer and a dryer.
“I don’t think $2,300 to $2,400 is underselling the property,” remarked Farnum. “I just think that it’ll be hard to get that in this area.”
Goedken said is worth setting a low rental rate or setting it higher to attract a good tenant who would take care of the property. He said he doesn’t want to see tenants come and go every six months.
The council approved a rate of $1,950, including a deposit in the same amount.