FORBES: Eight Reasons You Shouldn’t Manage Your Own Investment Properties

1Purchasing an investment property is an exciting business venture. If your building is in good shape and you find the right tenants, you stand to earn a lot of money from your rental units.

At first it may seem like a good idea to manage your own property and retain full control over costs, tenants and income. However, self-management can often be a headache: When something breaks down or your tenants are late with rent, you bear the sole responsibility to address it.

Hiring a third-party property management company can be worth every penny, especially if you’re looking to grow your investment business over time. Members of Forbes Real Estate Council shared eight common scenarios in which it makes more sense to outsource your property management tasks.

1. If Real Estate Investing Is Your Side Hustle

If an investor has a full-time job and they are investing as a side hustle, I would suggest hiring a property manager from day one. If the investor is fully focused on real estate investing, it makes sense to bring in a third party once they reach 10 units. At that point, their time is better used looking at more deals versus collecting rents or dealing with tenant maintenance issues. – Ali Jamal, Stablegold Hospitality

2. If You Lack Housing Expertise

Investors should not manage their own properties in situations where they are not familiar with the type of housing being managed. For example, with affordable housing, there is much compliance involved and making a mistake can result in fines. In that scenario, property management is best left to third-party companies that specialize in affordable housing. – Nathaniel Kunes, AppFolio Inc.

3. If You Want To Maximize Your Time As A Passive Investor

Your time is valuable, and technology is opening up many outsourcing options by connecting investors with qualified professionals in property management and skilled labor. Take advantage of every opportunity to maximize yourtime. In fact, investment platforms are allowing people to diversify across several properties without ever picking up a hammer. – Nav Athwal, RealtyShares

4. If You Need To Fill In Skill Or Resource Gaps

Each investor’s access to resources and prior skills and knowledge needs to be reviewed before providing this type of recommendation. It needs to be personalized. An investor who is a handyman likely doesn’t need to pay someone to make repairs. Finding the right tenant can make or break success, so evaluating candidates may be the best area to have help, particularly at first. – Michelle Ames, HorsePower Team Texas/Independent Realty

5. If You Don’t Have Time To Learn The Laws And Run It As A Business

Outsourcing will avoid legal liabilities from Fair Housing and Fair Credit Reporting Acts, state landlord-tenant laws and local regulations. Property managers will have resources that can perform services for less. You’ll also be less likely to lose income from tenants who don’t pay their rent or rents that end up being below market. – Alex Hemani, ALNA Companies

6. If Your Properties Are Located In Different Markets

Using third-party management is usually advisable when properties are located in different markets, as well as when owners don’t have the time or skills required to manage the property effectively. While it is tempting to save the 7-8% management fee typically paid to property managers, there are a host of tasks they take care of to keep the property occupied, cash-flowing and maintained. – Gary Beasley, Roofstock

7. If You’re New To Being A Landlord

You should hire a third-party manager if you’re new to being a landlord and don’t completely understand local ordinances and leasing practices, or don’t have all the contacts needed for repairs and maintenance items. A good third-party manager will know all of the above and you will learn them over time. – Lee Kiser, Kiser Group

8. If You Want To Scale Your Investment Business

If you want a large income property portfolio, don’t self-manage beyond one to two years. After that time, you will be better able to understand “a manager’s perspective.” Your highest and best use isn’t faucet repair or replacing bathrooms. It’s researching geographic markets and establishing competent teams. If you self-manage, ask yourself better questions like, “How scalable is this?” – Keith Weinhold, Get Rich Education

Source: forbes.com

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How Tenant Screening Changed In 2017

1One of the most important things that property owners and landlords can do to prevent problems with renters is to conduct a thorough tenant screening. The best tenant screening reports cover areas like criminal record, eviction history and credit score. Without it, landlords increase their risk of dealing with tenants that have a history of unpaid rent, costly damages and evictions.

However, there were two major changes in 2017 that affected the way that landlords get information from tenant screening efforts.

National Consumer Assistance Plan

The National Consumer Assistance Plan (NCAP) is a joint venture between the three credit bureaus, Equifax, Experian and Transunion. The plan stems from a settlement in 2015 between more than 30 state attorneys general and the three major credit bureaus.

The goal of NCAP is to boost the accuracy of the information on the credit report, among other things. One of the ways they plan to do this is by decreasing the reporting of such public records such as tax liens, parking tickets and civil judgments. So how does this affect landlords?

The new reporting changes are especially critical for landlords because evictions are civil judgments and as of July 1, 2017, they disappeared from credit reports of any prospective tenants. If tenant screening companies provide landlords with just a credit report as part of an applicant’s background check, the landlord will have no insight into that person’s rental history.

Landlords need to check with their tenant screening service to ensure that they are now using an alternative source to discover any eviction judgments on an applicant. There are several national companies that do provide information on forcible detainer and unlawful detainer judgements for tenant screening companies. It’s now the only way that landlords can get information on prior evictions.

Because of the extra cost involved in using a national eviction search, many tenant screening companies are increasing their fees and passing the cost on to their clients. Landlords may have to charge more for their application fees (if allowable in their state) to cover their own costs.

Any landlord that wants a thorough background check on an applicant must ensure that the tenant screening service they now use includes this separate eviction search.

Equifax Breach

One of the country’s largest credit reporting companies experienced a data breach that compromised information for more than 145 million customers. The company experienced unauthorized access to data from May through June and key identity information was accessed, including names, birthdays, social security numbers, driver’s license numbers and more.

Because of the massive potential for identity theft, many consumers placed a freeze on their credit report. With a freeze, potential creditors are unable to access someone’s report without the consumer removing it temporarily. This prevents anyone from opening a line of credit with that information, including identity thieves. However, it also prevents landlords from accessing the info they need to get a complete picture of their applicants.

Landlords need to be aware that identity theft and fraud will be on the rise as a result of the data breach, affecting innocent applicants. They should also know that because many people have put a freeze on their report, their tenant screening company may not be able to access anything without consent.

During the application process, landlords can make things go a little more smoothly with any applicants that have set up a freeze. Many tenants don’t think about unlocking their credit report for a background check on a rental home. Landlords can ask applicants or include a reminder on the application about lifting the freeze temporarily. If the applicant can’t or won’t lift the freeze in a timely manner, landlords may have to move to the next applicant.

Despite the freeze on a credit, landlords should never change their tenant screening practices. When looking for the best tenants, landlords need to get a good idea of what kind of renter an applicant will be. Proper tenant screening will always save landlords time, damages and money. However, in 2017, these two factors just made it a little more difficult for landlords and tenant screening companies to get the background information they need.

Source: realtybiznews.com

Abandonment of Rental Property

bill-new-100What to Do if a Tenant Abandons the Property


by Attorney William BronchickLegalwiz.com

Have you ever had a tenant leave in the middle of the night or the middle of an eviction?  Did you ever wonder what to do?

Basically when a tenant abandons the property, you do not need to file an eviction or wait for the sheriff.  You can change the locks.  As for the tenant’s stuff, in most states you can simply toss it.  You should check your state or local law to see what your legal obligation is to store the items for the tenant.

HOWEVER…

If you are not certain whether the tenant has abandoned the property, you should not change the locks.  If you have the keys, you could enter the premises, but KNOCK FIRST.  Whether or not the tenant has abandoned is often a judgment call, looking at a combination of factors, such as:

  • Did the neighbors see them move?
  • Are the utilities shut off?
  • Did the tenant put in a change of address at the post office?
  • Is there any significant furniture left?
  • If you have access, are there sheets on the beds?

In some cases, the tenant has been arrested or is in the hospital, which would explain why he hasn’t been around.  Or, maybe the tenant has moved, but left behind some furniture to pick up later on.  Even if the tenant is not sleeping there, they are still “in possession” if they have their personal belongings in the unit and have not shown an intent to abandon these items.

Some states have specific laws regarding PRESUMPTIONS of abandonment.  For example, Connecticut law states:

Sec. 47a-11b. Abandonment of unit by occupants. Landlord’s remedies.
(a) For the purposes of this section, “abandonment” means the occupants have vacated the premises without notice to the landlord and do not intend to return, which intention may be evidenced by the removal by the occupants or their agent of substantially all of their possessions and personal effects from the premises and either

(1) nonpayment of rent for more than two months or
(2) an express statement by the occupants that they do not intend to occupy the premises after a specified date.

You can find a state by state guide to landlord tenant law by clicking here. If you do intend to claim abandonment, take pictures, gather evidence and cover all bases to prepare for a possible wrongful lockout claim.  If you have ANY doubts, call your landlord-tenant attorney and do the proper legal eviction proceeding.

The Landlord Protection Agency would like to thank William Bronchick for supplying the article above.

About the author…
William Bronchick, Esq. is an author and attorney who regularly presents workshops and do-it-yourself seminars at real estate and landlord associations around the country. He is the president and co-founder of the Colorado Association of Real Estate Investors. Bill specializes in all forms of asset protection and is the author of several great home study courses.

Read more articles by William Bronchick at Legalwiz.com.

Source: The Landlord Protection Agency, Inc.

Ask the Attorney: Replace the carpeting?

ask-the-attorneyThe Landlord Protection Agency®presents John Reno, Esq.,a highly experienced Landlord – Tenant attorney based on Long Island, NY.

Q:  Dear Mr. Reno:

If the carpet in my rental home is 10 yrs old but in good condition, do I have the right to demand our tenants to pay for the replacement of the carpet if they allowed their dog for 2 1/2 yrs to urinate all over it throughout the entire house so much that it went through the padding into the sub flooring? Professional carpet cleaning services said it would be impossible to clean it.

Dean Loftis, Mississippi

A: Yes, you can, but why change it if they’re still there?

Legal Disclaimer
The Landlord Protection Agency’s “Ask the Attorney” column is for informational purposes only. The questions answered by Mr. Reno on this site do not constitute an attorney – client relationship and are not to be considered legal advice. Not all questions will be answered and some may appear in the LPA Q&A Forum.
The Landlord Protection Agency recommends that you seek legal advice before using any of the material offered on this web site, and makes no guarantee on the effectiveness, compliance with local laws or success of any of the material offered on this web site. The Landlord Protection Agency is not engaged in rendering legal advice.

Ask The Attorney – Screening Question

ask-the-attorney

The Landlord Protection Agency®presents John Reno, Esq.,a highly experienced Landlord – Tenant attorney based on Long Island, NY.

Q:  Dear Mr. Reno:

I have a couple applying for my rental. The gentleman has a good credit history but his girlfriend’s is horrible. If I just have him on the lease and he leaves the rental due to a break-up, do I have a big problem getting her out of my house? What would I have to do? We are in Maryland.. Thanks. Jane W., MD

A: It’s a package deal. You like’em as a couple, or you don’t. Does his responsibility outweigh her lack thereof? That’s your call. Leaving her off the lease doesn’t help you- it only helps her. That would give her the right to occupy the residence as his companion- but no liability for rent. Bad move.

Legal Disclaimer
The Landlord Protection Agency’s “Ask the Attorney” column is for informational purposes only. The questions answered by Mr. Reno on this site do not constitute an attorney – client relationship and are not to be considered legal advice. Not all questions will be answered and some may appear in the LPA Q&A Forum.
The Landlord Protection Agency recommends that you seek legal advice before using any of the material offered on this web site, and makes no guarantee on the effectiveness, compliance with local laws or success of any of the material offered on this web site. The Landlord Protection Agency is not engaged in rendering legal advice.

Evicted Tenant Still Owes Money

ask-the-attorneyThe Landlord Protection Agency®presents John Reno, Esq.,a highly experienced Landlord – Tenant attorney based on Long Island, NY.

Q:  Dear Mr. Reno:

My tenants were evicted due to non-payment of rent. They did pay a portion but unable to provide full amount due. I want to try and recover the balance owed plus some damages left after moving, cost of not being able to rent due to time it will take for repairs, and cleaning fees. Most, if not all issues, are covered in signed lease. How and where do I go about this? Thank you. Carol – PA.

A: The tenants are no longer in possession so the eviction court has no jurisdiction. It’s a small claims court case now. Twenty dollar filing fee. Good Luck.

Legal Disclaimer
The Landlord Protection Agency’s “Ask the Attorney” column is for informational purposes only. The questions answered by Mr. Reno on this site do not constitute an attorney – client relationship and are not to be considered legal advice. Not all questions will be answered and some may appear in the LPA Q&A Forum.
The Landlord Protection Agency recommends that you seek legal advice before using any of the material offered on this web site, and makes no guarantee on the effectiveness, compliance with local laws or success of any of the material offered on this web site. The Landlord Protection Agency is not engaged in rendering legal advice.

Tenant Hurricane Procedures

1

Please only call Bev Roberts Rentals when absolutely necessary, so that we may keep our lines open for emergency concerns. Please refrain from calling to get storm updates. Our team is currently getting inundated with phone calls and emails. It’s not that we don’t want to hear from you, we appreciate the concern and covet your thoughts and prayers right now. We understand that everyone is worried about Hurricane Irma, but per the North Carolina governor, Roy Cooper, “It’s too soon to know how North Carolina will be impacted.” Please keep in mind that this is our home too – so our team takes this very seriously! Many of us have lived here though numerous storms and hurricanes, so understand there is a “wait and see” period with hurricanes requiring patience. Do not panic when you see headlines declaring a state of emergency. The state of emergency allows us to get a plan activated and the teams and equipment in place in case the hurricane makes landfall in North Carolina.

Instead of calling, please use the links below for Bev Roberts Rentals information updates. Bev Roberts Rentals works hard to keep tenants and landlords informed – prior, during and post storm. We recommend everyone monitor Bev Roberts Rentals here:

Facebook: https://www.facebook.com/bevrobertsrentals/

Tenant Preparation Procedures:

Stay tuned to the local news media and follow all recommended precautions and instructions. We would like you to take a few minutes to review the hurricane plan we utilize.

  1. Log into your Tenant Portal and review your contact information. Please inform us if any of this information needs updating. Each manager utilizes this information to notify tenants of important changes, problems and/or issues.
  2. Take photos of the home and your contents at their current state for insurance purposes. After the storm, inspect the home for damage, take photos, and report damage to Bev Roberts Rentals. If possible, submit photos via the online Maintenance Request system.
  3. Please write down the below contact information for your property manager, and keep it in a safe place: Bev Roberts: (919) 630-3882 or bev@robertsrentals.net, Craig Brockman: (919) 609-3131 or craig@robertsrentals.net, and Nick Roberts: (919) 244-1649 or nick@robertsrentals.net
  4. Turn off main water to house if a pipe leak is noticed. If you smell gas, turn off main gas valve.
  5. Anchor or shelter outdoor potted plans, awnings, patio and lawn furniture, grills, and trash and recycling receptacles.
  6. Turn off propane tanks.
  7. Close all windows.
  8. Do not open refrigerator unless necessary. In case of lengthy power outages, remove food from refrigerator prior to spoiling to prevent odor damage. Empty ice bucket to prevent damage to floor from melting ice.
  9. Insert wedges in sliding patio doors; if not protected, damaging winds will lift them off their tracks and blow them into the house.
  10. Lower radio and television antennas, protect satellite dishes.
  11. Close all outdoor electrical outlets.
  12. Secure garage, porch doors, and storm doors.
  13. Purchase a flashlight (do NOT use candles) and extra batteries.
  14. Charge all cell phones.
  15. Unplug electrical equipment.
  16. Do NOT tape or board up windows. This can actually cause more damage to the windows or siding of the house.
  17. If you are instructed to evacuate the home by local authorities: If possible, please notify Bev Roberts Rentals, lock all doors, turn off main breaker, turn off main gas line, turn off main water supply to the home.