10 Ways to Be a Great Landlord

realtor-keys-couple-home-landlord-300x214It is upsetting when we get tenant complaints as a landlord.

It is hard work renting apartments or homes to tenants and it takes people skills and management skills. Many times our goal as a landlord is to simply avoid tenant complaints. But there are principles, if properly used, that can reduce or eliminate tenant complaints. Do you know what it takes to be a great landlord?

By Richard Montgomery

Reader’s Question – What makes a great landlord?

Question: Monty, My husband and I own about 75 units in 25 plus buildings.

He has a good day job and I manage the apartments. We have been expanding slowly for over 20 years. This is not easy work. Over the years we have had tenants occasionally complain about different things but we always shrug it off as sour grapes or “they don’t get it.”

Yesterday we got a complaint letter that several tenants signed, which is upsetting. What makes a good landlord?

Answer – Managing apartments is hard work

Monty’s Answer: Owning and managing apartments is very hard work. The environment and working conditions vary considerably based on location and size of the city. As a portfolio expands the management responsibilities expand as well. Management practices must be tailored to the environment, the clientele and working conditions. That said, there are a number of principles, if properly utilized, can reduce or eliminate complaints. This leads to less turnover, less management intervention and happy employees and occupants.

No. 1 – Treat tenants respectfully

We all know high maintenance people. Whether late with the rent, a sharp tongue or simply unreasonable, being respectful can be difficult. There are many resources to learn more about techniques to employ when dealing with difficult people. Getting More is a book that teaches readers how to negotiate respectfully. The National Association For Community Mediation is a place where you can take classes on dealing with difficult people, and YouTube.com has many videos on the subject.

No. 2 – Be true to your word as a landlord

As an example, when you say it will be fixed on Tuesday, fix it on Tuesday. This may sound more difficult to deliver on, than it actually is to deliver. This involves work on the part of the landlord to identify a person, or multiple people, who can deliver on fixing the problem right the first time . They have to be organized and talented enough to stay on a schedule. It is creating a mindset to build an organization the right way. Every person involved in that “being true to your word” process must understand it and be trained and supervised to be able to carry it out.

No. 3 – Keep your property in top shape

Preventive maintenance, timely repairs by qualified people and utilizing products best designed for the job will pay dividends. If paint peels, paint it. When an air conditioner breaks down, fix it or replace it. If you have no funds to do this, then something is wrong. Do you have a replacement repair fund you pay into monthly?

No. 4 – Be picky about accepting tenants

It is always tempting to “take a chance” on a prospective tenant as you want the income. On the other hand, if they move in and become a collection problem you have gone backwards. Review your rent-up procedures and alternate background check services. Most landlords will occasionally get stuck. It is part of the business, but if it is happening too often, you can improve. Also stay up on the latest guidelines from the U.S. Department of Housing and Urban Development.

No. 5 –  Run it like a business

Many issues that affect some landlords can be minimized. An example is a move-in/move-out report, using it will be a breath of fresh air. A visit on move-out day can often reduce problems before they happen. If the tenant expects you to be there and understands you are going out of you way to help them get their security deposit back in 3 days instead of 2 weeks, most will appreciate it. Include your house rules as a part of the lease and let them know before they sign a lease that you enforce them.

No. 6 – Train and manage employees and contractors closely

When bringing a new employee or new vendor into a relationship with you and your company, an orientation booklet and specific training to set the desired expectation is vital. It is even better if that conversation takes place as part of the interview process. One of the most common complaints in apartment management is often directed toward a specific employee.

No. 7 – Pay your vendors on time

The old saying “fast pay makes for good friends” is an important part of holding a good team together.

What kind of a message does a contractor or employee receive with slow pay when you really need them?

No. 8 – Stay close to the business

It is your responsibility to know how your buildings are being managed.

Being on the premises regularly and talking to employees, contractors and tenants allows you to keep a pulse on the happenings.

  • Are the neighbors getting along?
  • Did the contractor finish painting the floor as agreed?
  • Did the Jones’ move-in go as planned?

No. 9 –  Be fair, consistent and follow through on what you promise as a landlord

When this principle is in place the tenants, employees and contractors know they can expect this level of treatment in a relationship with you and your company.

It is natural that they will reciprocate in kind.

While the tenant does not have the same motivation as the others, it is your job as the leader to mentor and teach your employees to live the principle.

No. 10 – Think like a steward

A steward is defined as someone who manages another’s property.

The idea is to see yourself as a temporary custodian who will diligently care for the property until such time as it is passed to the next “steward.”

And, you want to pass it on as a better property than when you found it.

The examples provided with each of these 10 ways to be a great landlord tips are just one of many examples that could be applied.

Conclusion

The examples provided with each of the 10 examples of how to be a great landd are just some of the many examples that could be applied. It is not easy, but if a property owner practiced each and every one of the ten principles, it would be extremely out-of-place for a tenant or tenants to find a reason to complain.

Source: rentalhousingjournal.com

How to keep squatters from destroying your investment

55645224_s-300x300Unwanted guests, or squatters, can cause considerable damage to rental properties and leave landlords with large clean-up bills.

Unoccupied rental properties can be targeted by squatters, causing major headaches for landlords.

If a squatter breaks into a vacant rental property and lives there illegally, it can potentially result in damage to the property and subsequent loss of rental income for landlords while the damage is being repaired.

We have seen situations where a squatter has broken doors and windows to force entry into a property, punched holes in walls, ripped up carpet and sprayed graffiti throughout.

Depending on the circumstances, there may be a delay between a squatter leaving the property and the property being fit to re-let, which can result in additional costs for the landlord.

There are a number of preventative measures that can be put in place to reduce the risk of squatters at your rental property:

Increase security

Regardless of whether your property is occupied or not, security should be front of mind.

Install deadlocks on external doors and fit security screens to accessible windows, as they can deter unwanted guests from breaking in.

Having an active local or back-to-base alarm system in place can also help keep your property secure while it is vacant.

Visit the property regularly

Landlords should formally conduct a final property inspection when a tenant leaves the property.

Outgoing condition reports with supporting photos and videos can be used as evidence if there are any further outstanding issues once the tenant has vacated the property.

If the property is vacant for an extended period of time, make it a priority to visit regularly to ensure it remains in good condition.

Consider hiring a gardener to maintain the exterior of the property. Uncut grass, leaves covering pathways and overgrown foliage can make it obvious that the property is unoccupied, and may make it an easy target for squatters.

Make the property look lived-in

Unwanted guests may scope out properties that appear empty.

If your property is vacant, it’s best to give the impression that it is being lived in to keep squatters at bay.

Installing automatic motion sensors or timed lighting systems is good idea as they will give the impression that someone is home when the lights turn on.

Clearing old newspapers from the front yard/driveway and removing uncollected mail are simple ways of making the home look occupied.

Landlords may also want to tell a trusted neighbour that the property is vacant. Neighbours can keep an eye on the property and alert you to any suspicious behaviour.

Appropriate landlord and building insurance

A good landlord insurance policy should protect landlords against malicious damage to the property, such as damage to carpets or blinds.

However, damage to the building itself may be at the landlord’s expense unless they have a suitable building insurance policy in place.

Building insurance may offer protection of a landlord’s rental income if the property is damaged and can’t be tenanted for a period of one to 52 weeks.

If you’re concerned there’s a squatter living in your rental property, contact the police immediately.

Source: rpmonline.com

Will Landlords Have to Answer for Awful Neighbors?

27915554_s-300x199The Obama administration is close to issuing a rule that could give tenants grounds to sue their landlords for discriminatory conduct by their neighbors.

Last year, the U.S. Department of Housing and Urban Development proposed a controversial rule that would establish liability under the Fair Housing Act for housing providers that fail to address discrimination against their tenants by third parties — including other tenants. The Fair Housing Act prohibits refusing to sell or rent a dwelling to any person because of race, color, religion, sex or national origin.

The Office of Management and Budget concluded its review of the proposal earlier this month, one of the final steps before a rule becomes final, according to the agency’s website. Often rules become final within 30 days of clearing the OMB review.

There’s no guarantee the liability provision will make the final rule, especially in light of objections from public housing authorities and landlords. A HUD spokesman confirmed the rule was forthcoming but declined to comment on its final contents.

The rest of the proposal establishes standards for HUD officials and judges to use when considering complaints of hostile-environment and “quid pro quo” discrimination, which occurs, for example, when a landlord conditions continued housing on sexual favors from a tenant.

Under the proposed rule on liability, “a management company, homeowner’s association, condominium association, or cooperative” could be in violation of the Fair Housing Act if the housing provider “knew or should have known that a resident was harassing another resident, and yet did not take prompt action to correct and end it.”

A housing provider could take a range of corrective actions, including written warnings, moving or evicting a harassing tenant or reporting him or her to police, the proposal says.

The National Association of Housing and Redevelopment Officials, which represents the managers of more than 80% of the nation’s public housing, said in a December letter to HUD that housing providers lack the resources and reach to police their tenants’ interactions, leaving them vulnerable to lawsuits under such a rule.

“There is a great concern that this rule will make [public housing authorities] mediators between neighbors who are having disagreements,” a policy analyst for the group wrote.

The Council of Large Public Housing Authorities argued in a separate letterthat a landlord can’t be held liable under the Fair Housing Act absent an intent to discriminate, saying the proposal “improperly expands the reach of the FHA beyond the scope authorized by Congress.”

“Scenarios where tenants may potentially harass other tenants on topics that are not related to the terms of tenancy or where the harassment may not take place on the property are particularly worrisome,” the letter says.

The National Low Income Housing Coalition, which advocates for people who receive or are in need of federal housing assistance, said the rule proposal was in keeping with the duty of housing providers to ensure “habitability.”

“Any suggestion that this rule will unduly burden housing providers is exaggerated,” the group said in a letter last year to HUD.

Source: The Wall Street Journal

Did you list your home “For Rent By Owner”?

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What Can I Deduct or Withhold From a Security Deposit?

The rules for handling and deducting from a security deposit are commonly misunderstood. This article will clarify the legitimate reasons for withholding all or part of a security deposit from a tenant.

Best Practices for Withholding a Security Deposit

It’s a common scenario: your tenant pays you a security deposit before moving in, which gives you some peace of mind that the money will pay for certain items or damages when the tenant moves out.

When move-out day arrives, the tenant says they left the unit spotless, but the floor wasn’t even swept. Or worse, there are broken windows, an unidentifiable sticky liquid all over the fridge, and a clogged shower.

The general rule is that a landlord or manager can only withhold deposit monies for actual damages, material or financial. Meaning, you can deduct money if they owe you past due rent and fees, or caused damages beyond normal wear-and-tear.

State laws vary greatly, but there are generally some statues that regulate the basics such as:

  • whether or not you must put the money into an interest-bearing account,
  • if you can or cannot commingle such deposits with your personal or business accounts
  • what you can or can’t deduct from a tenant’s security deposit
  • the timeframe in which you must return the deposit or supply written notice of why you aren’t returning all or part of it.

Things to Remember:

  1. Always fill out an “Inventory/Condition Checklist” before the tenant moves-in so that there is a baseline for comparison.
  2. Provide the tenant with an itemized receipt of any deductions before returning any money.
  3. Take plenty of pictures of the damages and overall condition after each move-out.
  4. Follow your state’s rules and timelines for returning the deposit.

Let’s talk about some basic general rules for deducting and withholding deposits.

Breaking the Lease

You can’t automatically keep a deposit just because your tenant abandons the lease or breaks a rule in it. Again, you must have actual damages to offset your claims against the deposit.

If the tenant leaves you high and dry with unpaid rent, utility bills, late fees, and parking fees, then you could withhold some or all of the deposit to cover the debt. A lease is a contract, and if the tenant breaches it, you can take them to court if they don’t pay.

Practically speaking, unless the debt is multiple thousands of dollars, going to court is often more trouble than it’s worth. Even if you receive a judgment, you still have to collect it from the former tenant. Most landlords opt to keep the security deposit and look for a suitable new tenant.

Abandonment and Unpaid Rent

If the tenant abandons the lease and stops paying rent, you almost certainly will have a claim because it takes a few weeks, if not months, to find a replacement tenant. Your previous tenant would still be responsible for rent during that time, and if he/she didn’t pay, then you could withhold the deposit to offset the unpaid rent, and sue them for any remaining balance.

Note: if you keep a month’s worth of rent from the deposit, but don’t actually have a vacancy that is a month-long, then you would need to give back any overlapping funds.

Since most security deposits cover only one or two month’s rent, it’s important to start eviction proceedings as soon as possible if the tenant makes no attempt to pay.

If you’re not familiar with the eviction process in your area, hiring an attorney is wise. It’s not okay for the tenant to forego paying the final month’s rent under the assumption you’ll apply the security deposit to it – so don’t use the deposit for last month’s rent.

Normal Wear and Tear

Every property suffers some normal wear and tear, and you can’t deduct that basic upkeep from the security deposit. If the tenant cleans regularly, then the landlord is always responsible for normal wear and tear.

The general rule of thumb is that a landlord is not allowed to deduct from the tenant’s security deposit for “normal wear and tear”.

Normal wear and tear typically includes the following:

  • General rug wear
  • Sun-faded wallpaper or paint
  • Nail holes in walls from picture hangings
  • Bathroom mirror desilvering
  • Appliances no longer working, but not due to misuse
  • Warped windows or doors, due to temperature or age
  • Dirty draperies or blinds

Texas, as well as other states, define “normal wear and tear” as:

“…deterioration that results from the intended use of a dwelling…but term does not include deterioration that results from negligence, carelessness, accident or abuse of the premises, equipment or personal property by the tenant, by a member of the tenant’s household or by a guest of the tenant.”

Meaning, if a tenant was simply living in the property the way it was intended, and did not damage anything by means of abuse, negligence, accident, guests, animals, or lack of normal cleaning, then a landlord has no right to any deposit deductions. Since HUD doesn’t have an official list of acceptable deductions, landlords have to go by their state rules (if any exist), personal experience, and their gut feeling.

Property Damage

If your tenant or their guests cause excessive damage to the property, you can use the security deposit toward repair or replacement. Some damage is fairly obvious, such as big holes in the wall or floor, or broken fixtures. Other conditions, not so immediately apparent, are also deductible from the security deposit.

These could include but not limited to:

  • Missing smoke or carbon monoxide detectors
  • Flea extermination, if a pet lived on the premises
  • Broken or missing window blinds
  • Appliances broken due to negligence.
  • Dirt and filth as a result of in adequate clean
  • Any damages caused by lack of common sense or improper use (like sliding down a stair handrail)

Even if you find some excessive damage after the deposit was returned, you can still send an invoice to the tenant. However, the chances of receiving that money is slim to none.

Cleaning

If you have to pick up and dispose of a few minor items after the tenant is gone, that’s not grounds to withhold part of the security deposit. And quite honestly, it’s just not worth the effort to deduct money for a few items. However, if the tenant left junk and trash all over the place, or food rotting in the fridge, that’s a different story.

Many leases specify that a tenant should leave the property in “broom clean condition,” or terms to that effect.

I’ve never really liked this term because a tenant could potentially sweep the apartment, but leave the stove, fridge, and closets a complete mess. Without more specific language in the lease, you’ll eventually regret using the term “broom clean”.

Painting

Many landlords repaint the interior of the rental property to attract a new tenant. It’s routine and usually performed every few years, so you can’t deduct the costs of hiring a painter or purchasing paint from the security deposit.

However, if the tenant painted the walls some hideous shade or drew “art” on them, the cost of repainting is deductible – but only for the affected rooms. The same holds true if the repainting is necessary because the tenant or guests smoked in the dwelling, causing staining on the walls.

Likewise, if the tenant painted without your permission (lease clause required), you would be able to deduct the cost of a painter and supplies to return the wall to its original color compared to when they moved in. Although, if the paint color is neutral and nicely executed, then you might want to consider thanking your tenant for painting!

Provide Receipts

Make sure to document all the necessary repair work to prove your expenses. In most states, such documentation is required above a fairly nominal monetary amount ($126 in California).

If you deducted money and the funds are unsubstantiated, the tenant may take you to small claims court. Many times, the tenant can be awarded 2-3 times the deposit amount if you wrongfully withheld anything.

 

Source: landlordology.com

 

Our office will be closed on Labor Day

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Dear Landlords & Tenants,

Our office will be closed on Monday, September 5, 2016 in observance of Labor Day.  We will return to regular business hours on Tuesday, September 6, 2016.  As customary, we will remain available by phone and many of our resources will remain available while the office building is closed.  The outdoor and indoor drop-boxes will be checked daily.  Online portal access is available 24 hours-a-day.

Tenants… As a friendly reminder, please be aware of the lease terms due to the Federal Holiday:  “All rents shall be paid in advance on or before the first day of each month.  Tenant shall pay the late fee if any rental payment is five days or more late.  Tenant understands and agrees postal delays, envelope post-mark dates, bank discrepancies, online payment system errors, weekends or holidays, or any other pretext does not constitute a waiver of late fees.”

We hope that each of you have a safe and happy Labor Day!

Sincerely,

The Bev Roberts Rentals Family