Bev Roberts Rentals – Closed Labor Day

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Dear Landlords & Tenants,

Bev Roberts Rentals will be closed on Monday, September 3, 2018 in observance of Labor Day.  We will return to regular business hours on Tuesday, September 4th at 9:00 AM EST. As customary, we will remain available by phone and appointment. Many of our resources also remain available while the office building is closed: The outdoor drop-box is checked daily. Online portal access is available 24 hours-a-day.

Tenants… Due to the Federal Holiday, please be aware of the lease terms:  “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

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Why are Certified Funds required in Real Estate transactions?

Close up of hands giving house model to other hands with money.What are certified funds?  I’m buying/renting real estate and the company wants me to bring “cash or equivalent” or “certified funds.” Why can’t I just write a personal check?  The money is there!

Relax! The purpose of this blog post is meant to give a simple explanation of why “certified funds” are required in your real estate transaction and how to acquire and present them to the real estate office.

Certified funds are just that. They are a form of payment that is guaranteed (or certified) to clear, be valid, and are non-revocable.  When making certain types of transactions, such as real estate transactions, it’s required that the payment method used will satisfy the contractual obligations. To do this, certified funds will be required, usually in the form of:

Specifically, personal checks are NOT allowed, as the account may not have sufficient funds or they can be cancelled. Credit cards are NOT allowed, as the transaction may later be disputed or reversed. Checks sent by a bank bill payment service are NOT allowed, as they are the same as personal checks.

Simply put, once certified funds are issued, they cannot be recalled or cancelled by the bank.  The bank that wrote the cashier’s check or money order must by law, honor and pay the amount due in the document.  Therefore, it is the same as handing a person the equivalent amount of funds in cash.

Cash is, well, cash. It is absolute funds, and value has is transferred immediately to the holder.  There is no issuing bank to recall the funds.  It is the absolute transfer of value when given from one person to another.

1Personal checks, on the other hand, must “clear” the issuing bank before the payment is deemed absolute.  This could take as long as a week or more.

Certified funds are required because it assures that the funds are good, valid and present at the closing of the transaction and release of keys.  A closing is set for a certain day and if, for example, a personal check is presented, the company will have to wait at least 10 business days before giving the seller or landlord their proceeds.  If the seller or landlord does not receive their proceeds for weeks past the closing date, well, the parties have not really closed on the agreed upon date, right?  Therefore, keys cannot be released to the buyer or tenant. In order to ease this issue, certified funds are required so that proceeds may be disbursed to the seller/landlord, commissions to agents, etc. Real estate is a major investment worth hundreds of thousands of dollars and can potentially cause all parties stress; however, certified funds give the assurance that funds are good and will clear to let money and keys go to the various parties entitled.

Where can I get a certified funds?

Here are some of the top places to get a certified funds, beginning with the cheaper options, that you may use as a guide.

  • Walmart: The big-box store offers money orders from MoneyGram, a money order provider, at a cost of 70 cents each for values up to $1,000.
  • Money transfer agents: You can buy money orders from companies such as Western Union and MoneyGram at convenience stores, drugstores, supermarkets, check-cashing outlets and elsewhere. The Western Union money order fee, as an example, is around 99 cents; charges vary by location. Single money orders are usually limited to less than $1,000.
  • U.S. Postal Service: Money orders to be sent within the United States are $1.20 for up to $500; $1.60 for amounts over $500 up to $1,000. There’s one exception: Military money orders, issued by postal military facilities, are 40 cents. An international money order with a value of up to $700 costs $8.25.
  • Banks and credit unions: Financial institutions sell money orders for around $5 each, with values typically up to $1,000. They often waive fees for customers with premium accounts.

5 Habits You Didn’t Know Were Essential for Landlording

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There’s no such thing as landlord school.

Most landlords just do a little reading online and dive right in. Which is fine – but it also means many new landlords are ill-prepared for the work of being a successful landlord.

Far too many landlords fail to bring a level of professionalism to their landlording side gigs. Sure, this can lead to some irked tenants, but the person who suffers the most is the landlord — in the form of shoddy returns.

My partner and I teach a property management course to mom-and-pop landlords. Here, we again and again return to a few simple themes. Most of these themes revolve around prevention, discipline, and staying several steps ahead of the irregular-but-expensive events that ruin returns.

Here are five habits that landlords need to develop if they want maximum profits and minimum headaches!

Related: How to Be a Landlord: Top 12 Tips for Success

1. The Unflinching Enforcer Mindset

A few months back I analyzed whether you should keep your home as a rental or sell it when you move. The first thing I talked about? Whether you have the disposition and discipline needed to be a landlord.

Tenants will push against your boundaries. Your job as a landlord is to firmly and professionally defend those boundaries.

That means enforcing your lease agreement — to the letter.

Rent doesn’t come in on the first? Send an unofficial late-rent reminder. Rent doesn’t come in before the legally-mandated grace period ends? Send an official eviction-warning notice.

They still don’t pay after the required waiting period? File in court for eviction.

You’ll get sob stories, often with literal sobbing. Many people bend and give their tenants leeway — and then they give some more leeway.

If you do this, you train your tenants to believe that the rent is not their most urgent bill. So why would they ever pay it on time when they have other bills they need to pay in which excuses are not an option?

Enforce your lease agreement and your tenants will know that they can’t get away with whatever they want. They’ll know the rent is their highest priority because you will enforce the late fee and evictions.

If you can’t do that, you will lose all credibility with your tenants. You’re better off investing your money in a REIT.

2. The Discipline to do Recurring, Scheduled Work (Even When it Doesn’t “Feel” Necessary)

Landlords have monthly, semi-annual, and annual work they should be doing.

As we discussed above, every month you need to stay on top of your tenants about rent. Set reminders on your calendar if need be. Every six months, you need to inspect your rental units. Semi-annual inspections should be written right into your lease agreement.

It doesn’t feel urgent. It’s not a frantic midnight phone call about a burst pipe. So, most landlords don’t do it.

But again, it comes down to setting expectations with your tenants. Send a loud, clear message that you care about the property, you care about the lease terms, and (if you do it right) you care about the tenants.

Check that they don’t have unauthorized people or pets living there. Make sure they’re keeping the property clean. Confirm that they’ve changed the air filters.

And use that face time to build more of a relationship with your tenants: Ask about their jobs, their kids, their lives.

Then, every year, you need to raise the rent. Many landlords wring their hands and fret about it, but the alternative is allowing rents to fall below market value — then hitting your tenants with a too-drastic rent hike all at once.

Related: I Asked Landlords for Their Best Tips: Here Are 6 Recurring Secrets to Success

3. Budget Like a Business (Because You Are One)

As a landlord, you’re a small business owner, whether you think of yourself that way or not.

The expenses involved in owning a rental property are largely hidden, because they’re irregular (but big when they happen). Expenses like turnovers, repairs, vacancies.

Here’s what rental property cash flow looks like visually – smooth periods, interrupted by huge spikes in expenses.

What does that all mean for you as a landlord? It means you don’t want to be that chump standing there with his jaw hanging open asking: “How am I supposed to pay for this $5,000 roof bill?!”

Here’s how: by setting aside money every month for these potential expenses. In a word, by budgeting.

And while we’re at it,if you ever want to retire with your rental income, budget your personal finances too. What’s the point of all the hard work building (and managing) your rental portfolio if you’re just going to turn around and spend it all on new shoes and dinners out?

If you want to get ahead, both as a landlord and as a person, get comfortable (and disciplined!) with your budgeting.

4. Think Long-Term to Vanquish Vacancies

Turnovers are where most of the work and costs involved in being a landlord lie.

You’ll have to repaint the unit. Maybe re-carpet it. You’ll have to go through and fix all the little things that the outgoing tenants either messed up or just lived with. Then there’s the lost rent, even as you continue carrying the costs of owning the property.

In other words, you have to spend money that you wouldn’t have had to if the tenants had stayed.

Then there’s the stress and headaches and work of advertising for new tenants, coordinating with contractors, screening tenants, signing a lease agreement, doing move-in and move-out inspections, etc. It’s labor. If you have a property manager, they’ll charge you dearly for that labor.

Speaking of tenant screening, your goal is not fill the unit as quickly as possible with an acceptable tenant. Shift your thinking to the long term, and instead make it a priority to fill the unit with a high-ROI, low-maintenance, long-term tenant.

You want someone who will be low-impact and treat your property with kid gloves. Someone who will pay the rent on time every month so you don’t have to chase them. Someone who will stick around for the long haul so you don’t have to worry about all the costs and headaches involved in a turnover.

5. The Meticulous Mindset: Records, Documentation & Attention to Detail

I’m just going to say it: If you’re not the anal-retentive type, hire someone to manage your rentals who is.

You need to be exacting in your record keeping, your documentation, and your attention to detail. For example, did you walk through the unit before your renters moved in to document the condition with them? Did you both sign the condition statement? Did you take photos with timestamps of every room from every angle?

Then what did you do with the photos and documentation? Is it stored securely on your computer or in your file folder where you can access it at a moment’s notice?

I’ll stop beating this horse; you get the idea. Active landlording is not a good fit for the laid-back and leisurely. There’s nothing wrong with hiring a property manager if you don’t have this meticulous personality type – the important thing is the self-awareness to acknowledge the bad fit and outsource your property management.

You’re in Business — Be Professional

Effective landlords have effective habits, that revolve around thinking long-term and embracing minor headaches today to avoid massive headaches tomorrow.

Keep a friendly but professional distance from your tenants; they’re your clients. Set a budget for expenses like you’re a professional, because you are. Set recurring reminders on your professional calendar, and then follow through actually execute them!

Catching a theme here? The landlords who succeed are the ones who bring professionalism to their rental management.

And if you can’t be professional, hire a professional.

Source: Bigger Pockets