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Archive for the ‘Rental Property Management’ Category

Property Management is a Big Job – Get Some Help

March 28th, 2011

If you have a home or apartment that you want to rent out, it might not be something that you want to do on your own. That’s especially true if you don’t live in the same city or town as the rental property. You can’t just drive past it and check to see whether the tenants are keeping up with the place, and you won’t be available to go by and fix things if there are problems. With that in mind, you may want to consider a property management company. Your first thought might be that it’s expensive, but it actually isn’t when you take into account everything that the management company does for you.

When you need something fixed at the property, or if the tenant is late with the rent, you don’t have to deal with it. It’s not your problem, and you can simply focus on the things that you’re doing in your own life rather than be concerned about what’s taking place at your rental property. If you have more than one property, that’s an even better reason to allow a company to manage them for you.

It can be difficult to keep track of a lot of rental properties, and hiring a company that is set up for that sort of thing is one of the best ways to be sure that your rent is collected on time and that any problems with the property are promptly taken care of. You don’t have to go it alone, and you don’t need to be afraid to buy rental properties because you’re concerned about how you’ll manage them. Go out and invest, and then find a great company that can help you take care of any properties you purchase.

Turning Houses into Homes

December 3rd, 2010

photo credit: (Bill and Mavis) – B&M Photography

Unsurprisingly, many articles offer advice detailing how property managers can decrease tenant turnover. After all, tenant turnover is expensive. Even a low turnover rate of two to three percent can cost thousands of dollars in lost revenue. Besides having to repaint, clean the carpets, and perform general maintenance, the property manager can lose months of rent and must go through the hassle of looking for a new tenant.

Many of the articles focus only on limited aspects of keeping tenants in their houses. They talk about personalizing service, responding quickly to complaints, keeping the house in good repair, and offering incentives to renew a lease. All these things are good ideas. However, what most of these articles say, but do not really explain, is how to market a home as community and not just a house.

As anyone who has moved to an unfamiliar area can attest, adjusting can be difficult. You may not know anyone, where to eat, or what fun things might be available. Helping residents find these things can make a big difference. Find out what things interest them and help connect them with local organizations. Whether it is sailing, rock climbing, or just getting them a plot at the community garden, getting your resident invested in the community is one of the better ways to prevent tenant turnover. Asking neighbors to introduce themselves to your tenants can help, too.

One quick caution: It is possible to be too attentive and actually be irritating to a tenant with your attempts to be useful. However, that being said, it is always better to be over attentive than neglectful. The best way to prevent this mistake is simply to pay attention to your renter. Listen respectfully and, if it seems like your attentions are not welcome, take a step back and let them find their own way.

Rules Surrounding Rental Property

November 24th, 2010

photo credit: juhansonin

Many people considering investing in real estate to use as rental property think it’s a relatively simple way to make money. They imagine that once they buy the real estate, they’ll find tenants, have them sign a lease and then sit back collecting rental checks every month. However, this isn?t the case since there are many rules and regulations involved with renting property that the owner must be aware of before he leases it.

First, while investing in real estate to rent to tenants is an excellent way to make money, it’s important to know that the regulations surrounding rental property vary from state to state and can be complex. There are issues involving how much notice you must give a tenant before entering the property, what constitutes a late rent payment, and how much notice a tenant must be given before they face eviction. Unfortunately, in today’s economic climate, concerns over late rent payments and possible eviction are very valid.

There are also simpler, but still important, rules regarding issues such as what stays in the house once the tenants vacate, whether or not pets are allowed and how clean tenants must keep the property. After these rules are decided upon, they must be enforced in the event that a tenant that does not follow the rules and regulations agreed upon in the lease.

When property owners are unsure of the rules and regulations to enforce and the laws regarding rental property in their area, they may want to contact an expert. A little preparation and education before actually renting the property can mean the difference between making huge profits and losing money. Experts in property management can help. They can inform property owners of countless rental issues and also help enforce the rules and regulations of the rental agreement, making the real estate investment a profitable one.

What’s Needed on an Application Form for Tenants?

March 30th, 2010

If you are responsible for choosing tenants for a rental property either as part of your work or for your own investment property, it’s a good idea to have an application form ready for potential tenants to fill in. One or two pages is usually enough, but there are several pieces of information which are particularly important to include. Try to ask for all or most of the following on your tenant application form:

All the basic details – name, date of birth, current address and telephone number.
Current workplace and how long they have worked there, plus the name and contact details for a workplace referee.
Salary details and, if applicable, information on other income that the tenant receives.
How long they have lived at their current address, and the contact details for their current landlord if applicable; if not, details of a previous landlord are also useful to have.
Information about whether the potential tenants have children or pets.

It is important to conduct the tenancy application procedure fairly, and by giving each potential tenant the same application form to fill in, you can easily show that you are asking everybody for the same information – that’s much easier to do in a tenancy application form than by interviewing them or just having a chat.

Keeping Good Records For Your Rental Property

March 25th, 2010

There are all kinds of bits of paperwork that your property manager is taking care of if they are looking after your rental property investment. Before you decide whether you would like to take on the management yourself, consider if you’ll have the time and energy to be responsible for maintaining all of these kinds of records:

Record of rent paid by the tenant, including the dates and the amounts; if the tenant falls behind in the rent, you will need to write letters or send breach notices to them and keep doing so until they pay.
Lease agreements and inventory reports for the start and end of each lease.
Records needs for tax purposes: for example, detailed listing of any repairs or maintenance carried out on the property, and a full list of all other expenses occurred, such as taxes or utility charges not paid by the tenants; you need to file all the relevant receipts for these items in some organized way in case they are needed later.
Depreciation records of the value of the property and sometimes of the value of particular items inside the property, depending on state laws and depending on whether your property is leased in furnished or unfurnished condition.
Government or legal documents – for example if electrical safety inspections are required at particular intervals, you need to make sure you have the up-to-date inspection reports organized.

photo credit:?sflovestory

Keeping Your First Home As a Rental Property

March 19th, 2010

When you are ready to trade up to your second home, it is worth considering the idea of keeping your first home as an investment property which you can rent out. Of course, this is not always financially possible, depending on how much equity you have in the house and how much you are going to spend for your next home, but it is definitely worth sitting down and doing the figures before you dismiss the idea.

There are several factors to consider when you are deciding if keeping your first home as an investment rental property is a good idea. First up, you should check whether it is the kind of property that will rent easily and to good tenants. If not, then you may as well use your equity to invest in a more suitable property, but remember that buying and selling all costs money, so you may not necessarily end up better off.

You should also consider whether there are renovations or improvements needed before the property can be rented out, and how much these will cost. However, if you plan to sell the home instead, it is often advisable to make minor improvements anyway, so you may end up doing them anyway.

Finally, make an estimate of the incomings and outgoings for the home if you turn it into a rental property. Get an up-to-date estimate of the amount of rent you should be able to charge, and check your own records to see additional costs such as annual rates and maintenance costs. If the figures add up, then go for it.

Screening Potential Tenants for your Rental Property By Email

March 10th, 2010

I had an interesting experience recently, when I needed to find new tenants for my small rental property. Not interested in paying huge rates to advertise in the local weekend newspaper, I found a well-used online website to advertise at a much cheaper rate, uploaded a few photos and the details of my property, and waited.

It wasn’t long before the replies from potential tenants started rolling in. Since it was advertised online, most of the potentials chose to reply using email, which was actually great for me – it was easy to collate the information about them and arrange a viewing with several of them at once.

As I read their emails, I found myself immediately screening them into good possibilities and bad. I discovered you can tell a lot about a person by what kind of email they write in reply to such an ad – whether they bothered to write a coherent message or just sent me a text-message style query without the normal politeness or niceties you’d expect. I arranged to meet some from each category, and interestingly the ones who hadn’t been professional about their communication with me generally turned out to be unreliable – and I figure if they can’t turn up punctually to a viewing, then they may also find it hard to pay their rent punctually. Those who treated their response to the ad more professionally certainly gave me a better overall impression – and it’s one of those responses who’s become my now reliable tenant.

Choosing Tenants: Information vs Instinct

March 3rd, 2010

When it comes to choosing the right tenants for your investment property, you won’t always get it perfectly right. However, there are two important parts of selecting the most appropriate tenants, and that involves both gathering information, and using your instincts.

Information is power, of course, so make sure you get your tenants to complete an application form, or tell you in an interview, about their basic rental and employment history. Check in with their employer to make sure they really work there, and call their previous landlord to make sure they usually pay the rent regularly.

Of course, there are ways for tenants to get around this – if they’ve been making late payments for rent, then they’re unlikely to give you the contact details for that landlord, and it’s not so easy for you to know if they’re telling the truth when they say they’ve been staying with a friend for a few months or living with their parents – both of whom aren’t going to tell you otherwise. That’s why using your instinct is also important. Do you get a good impression of the prospective tenants? Are they professional in their communication with you? Do they dress in a way that fits their occupation? Using your instincts is just as important as gathering the facts, and you should combine them to decide on the best tenants for your property.

Deciding on Landlord’s Insurance

December 23rd, 2009

After owning a small studio apartment for nearly ten years, I recently had it fully renovated and was ready to get new tenants in. When I looked around at the brand new kitchen and bathroom and the furniture that looked nicer than the stuff in my own home, I panicked and rang my insurance company immediately to get landlord’s insurance. It was quite a lot more expensive than I’d anticipated, but I said yes anyway.

Looking back, I’m not sure if it is worth it. The policy I’ve got covers just a few situations, including rent default by the tenant (although usually I’d be able to evict the tenant and use their bond to pay the default rent first); damage caused maliciously be my tenant (always possible, though I hope I can choose better tenants than that) and replacement cover for the contents of the apartment that I own – all that nice new furniture. But the high excesses – for example, if you claim for rent default, the excess is four times the weekly rent, so you have to be claiming for a couple of months to make it worthwhile – mean I’d probably rarely use the policy.

There are bound to be better landlord insurance policies out there. And there are no doubt quite a few which are an even worse deal than mine. But it definitely pays to look into the details before you pay up.

Avoid Responsibility for Crime on your Property

December 8th, 2009

Landlords risk the possibility of being held responsible for criminal acts that occur on their property. Limit the chance of being liable in this situation by taking preemptive steps and then reacting appropriately if something does occur.

Security Laws

It’s important that landlords start with an awareness of state and local laws regarding tenant safety and then follow those laws to the T, installing proper locks, lighting and other safety precautions.

Tenant Education

Provide tenants with an information sheet that gives them tips to help prevent crime, you may even want to incorporate this information into regular newsletters, common area bulletin postings, and tenant meetings. Keep tenants vigilant and cautious as well.

Listen

Listen to tenants, professional contacts, local governmental officials, police officers or anyone who talks about crime in the area. Learn about the most common types and frequency of crime in your area and take steps to prevent it. Follow up on tenant security issues as promptly as possible.

Handle Tenants

If you have tenants engaging in illegal activities it’s important to take steps to immediately remedy the situation. Even if a tenant is paying rent on time and doesn’t require a lot of attention, if they’re committing crimes on your property and you know about it you can be held responsible. They’re also inviting an unknown quantity onto your property which could be catastrophic.

photo credit:?conner395