Protecting Vacant Properties From Vandalism

Most rental properties undergo a vacancy period at some point, whether they’re between tenants or yet to be rented.

Vacant property is a frustration and concern for landlords because the owners aren’t earning income during this time, and the house becomes at risk for potential problems like vandalism.

A study by the US Department of Justice revealed that 4.4% of homes in 2005 were vandalized.

Vacant homes tend to be more likely to be affected, but there are a variety of ways to protect vacant properties from vandalism:

Keep the Property in Great Shape

A vacant property should have the yard maintained regularly, as this appeals to potential renters and unit also signals that there are people frequently moving in and out of the property.

Property owners should tend to the grass and gardens, keep sidewalks shoveled in the winter and remove leaves from the gutters.

Add a few personal touches, such as welcome mats or seasonal flags, so the property does not appear vacant.

Leave the Lights On

Lighting is another important factor in keeping vandals away.

The small cost of keeping utilities on between tenants allows the lights to be kept on, deterring vandalism, and makes it easier for potential residents to tour the property.

Outdoor motion-activated lights flooding the yard and a few interior lights create the illusion that the house is occupied.

Install a Security System

Installing a security system can be pricey, but compared to having vandals destroy a home, this initial investment can actually save you money in the long run.

According to the FBI, property crimes in 2012 resulted in an estimated loss of $15.5 billion.

Future tenants can also use a monitored security system, adding to the property’s value and giving landlords an additional feature to promote.

Monitor the Property

Security systems are valuable, but nothing beats a real, live person.

Landlords need to visit the property often and not on a predictable schedule.

Potential vandals may watch the property for a few days before the actual crime takes place, so the landlord making random checks is an important deterrent.

Stop by at various times to make adjustments to which lights are on, check that all the window latches are locked and note any projects that may need attention.

Also, gather up mail or flyers at each visit and ask the showing agent to assist in getting rid of these flyers as well.

Junk mail building up is a shining beacon to those looking for vacant properties.

Ask the Neighbors

Neighbors living near a vacant property are probably just as anxious to see the property filled as the landlord.

It’s always a good idea for the landlord to make positive connections in the community, so let the neighbors know of your plans to find a new tenant and ask if they can assist in watching the house.

Leaving a business card with contact information is a good idea so your information is readily available.

Vacant properties are not the stuff of landlords’ dreams, but they are a natural part of the business.

Signs of activity, security systems, lighting and personal visits help prevent vandalism to vacant properties.

Landlords should remember that marketing strategies, well-written rental ads and a presence on rental websites are important in making sure that the property does not stay vacant for long.

Rental Property Deductions

Owning a rental property means that you are a business owner and property owner at the same time. Because of this, the owner must be aware of key rental property deductions that you can take every year to help manage your tax liabilities. It is important to remember that these deductions are not the same as depreciation, which happens to your existing structures and value improvements that occur over a specific period of time.

1. Travel Expenses Can Be Deducted

The easiest deduction to take when you travel to your rental property to care for it is the standard deduction, which gives you a certain amount per mile. You can also keep track of actual expenses over the year. Make sure to save all of your receipts and keep an odometer log.

2. Any Emergency Repairs Can Be Deducted

That phone call at 2am might not be a pleasant experience, but it is a pleasant deduction when tax time comes around. Most emergency repairs qualify as a deduction instead of for depreciation. The only exceptions would be if you had to install a new appliance, like a water heater, or a new roof instead of repairing the existing structure. This deduction includes labor.

3. Property Taxes are Always Deducted

Whatever property tax you need to pay on your property can be deducted as an expense on your taxes. In some jurisdictions, all large item taxes, including sales taxes, can also be deducted. This would mean if you replaced the water heater, you’d have to depreciate the appliance, but you might be able to deduct the sales tax.

4. Loan Expenses are Always Deductible

Anything that you need to pay in order to obtain a mortgage or a loan to help your rental property get amortized into the life of your mortgage. It is your interest that is deductible. Don’t deduct your entire mortgage payment, however, because the principal you pay down is not deductible.

5. Sometimes Lawn Care Qualifies as a Deduction

The issue at hand is whether or not the work is actually improving the value of the home. Routine lawn care, like mowing, weeding, or fertilizing are all considered expenses because it is considered maintenance. If you hire a lawn care specialist to install a retaining wall, however, this would not qualify as a deduction.

6. Losses From Theft are Always Deductible

Even if your insurance company has covered your losses, they may still be deductible if you experienced an overall financial penalty. This typically happens through the deductible on the insurance policy and if there is any value gaps between the replacements value of an item and the depreciated value of the stolen item. While you’re at it, don’t forget to deduct your insurance premiums too.

7. Fees or Assessments to Care For Common Property are Deductible

This would include HOA fees, condominium fees, or other payments that are made to help a community or a neighborhood is well-maintained. Just make sure to keep good records so that you can prove all of your deductions should questions be asked of your tax return. By doing so, you’ll be able to maximize the value of yo

Four Must-Haves for New Landlords

You’re ready to take on your new role as a landlord, and you’re motivated to be successful.

Equipped with the right tools and mindset, you can successfully manage your property, ensuring that your place remains well maintained and your tenants are pleased with their new abode.

These four must-haves will make your tenure as a landlord easier and more successful.

1. Detailed, Signed Lease

Get everything in writing before you hand over the keys.

A well-executed lease clearly outlines the rental agreement between you and your new tenants.

Should questions arise, both parties can defer to the lease to find clear answers.

Thus, a thorough and detailed lease is essential.

Draft an ironclad lease that includes the following information:

  • Names of all occupants
  • Start and end dates of the lease
  • Detailed fees, including monthly rent, security deposit, pet deposit, and cost of vacating early
  • Expectations for landlord and tenant regarding interior and exterior maintenance
  • Restrictions, from pets or long-term guests to cars parked on the street
  • Expectations when the tenant moves out, whether the tenants need to fill holes in the wall, clean carpets, or hire a cleaning service

2. Reliable Maintenance Services

Part of your responsibility as a landlord is to maintain the house. Your lease should outline those repair and maintenance activities, and you should be prepared for these inevitable problems to arise.

If you don’t plan on tackling the repairs and maintenance yourself, have a trustworthy team on call when a problem arises.

A general handyman can be helpful for sporadic and unexpected problems, such as a door that won’t latch when closed.

You’ll also want a trustworthy plumber in case a toilet runs or kitchen leak occurs.

Call your electrician when an appliance zaps out or lights unexpectedly blink.

Finally, if your lease states that you’re responsible for lawn maintenance, you will want to find a lawn care company to mow the grass and weed any planting areas.

By having a team of contractors on hand, you can quickly address any issues as soon as they occur.

Your tenants need working appliances and lights and functioning plumbing, and it’s your responsibility to promptly address any repairs.

3. Efficient and Open Communication

You can excel as a landlord if you are accessible. It is essential to maintain open lines of communication, and the communication starts with you.

Provide your tenants with a phone number and email address so that they have multiple ways to reach you.

Ask for the same contact information from them.

When you hand over the keys, ask your tenants how they prefer to be contacted – by phone or email – for any housing-related questions or concerns.

Respond to voicemails and emails promptly, ideally on the same day you receive messages.

Even if you cannot take care of a repair the day your tenant reports it, your efficient response to the problem shows that you’re willing and able to help.

4. Property Insurance

Even though you aren’t living in your rental, you still need to protect it.

Property insurance is available specifically for landlords and allows you to protect your investment in case of damage.

Landlord insurance is available on all property types, including duplexes, single-family homes, and row homes.

Landlord insurance coverage varies depending on your policy, but you can choose policies that cover everything from vandalism and natural disasters to personal injury and loss of rents.

Best Payment Options Landlords Should Accept for Rent

Regular, on-time rent payment is critical in ensuring your business remains profitable and running smoothly. Sometimes, however, rent isn’t paid – from lack of funds, travel, or just forgetfulness. Offering a variety of options might be a good solution to helping your tenants stay on track.

Let’s first start with the old standbys – check and cash. While these can save on processing fees, they do present a few important drawbacks:

CHECK PAYMENTS

A check is a secure and convenient way for tenants to pay in advance and not have to meet you in person. However, if the tenant does not have the funds in their account, you can’t collect and they get fined, further compounding their ability to pay.

CASH PAYMENTS

While there is no fee required, no chance of a bounced check due to insufficient funds, and it might be easier to manage for tenants without a bank account, accepting cash payments for rent is not a widely accepted practice for several reasons:

The payment isn’t traceable so discrepancies cannot be proven, tax season may be more difficult, and it will require you to make time every month to meet with one or more tenants for collection and to deposit the cash.

In addition, many tenants prefer not to deal with cash or checks. Providing additional options is essential for attracting their business.

Offering the option to pay by ACH, credit, or debit cards can help you avoid the issues mentioned that come with cash and check, but there are a few other benefits as well:

ACH PAYMENTS

Some banks will allow ACH transfers, but often landlords will use a property management platform to request and accept rent payments, especially if they would prefer the tenant covers the additional cost to pay online. Your tenant can set up their bank account online and the funds are transferred from their bank to yours so that you can avoid physically handling cash and checks.

But just like payments made by check, you may receive a NSF (non-sufficient funds) alert from the tenant’s bank if they do not have the funds to cover the payment.

CREDIT CARD PAYMENTS

Some tenants welcome the opportunity to pay by credit as it could buy some time if they are short on cash one month.

Others will find this an attractive option because they can rack up substantial rewards points this way.

Offering this convenience can go a long way in helping a potential tenant choose your property over another.

DEBIT CARD PAYMENTS

A debit card might be a good middle ground between a check and a credit card.

There is no extra verification period (like for an ACH payment). The funds are transferred quickly and the tenant doesn’t need to have a credit card, just a bank account.

This offers convenience to the tenant and, therefore, more confidence for a landlord that payment will be made on time.

Do I Need A Real Estate License To Manage Property?

Professional licensure requirements in the United States are intimidating to many novice property managers.

Many times, if a property manager is working for a larger company, the company will make these requirements clear.

Both a company and its employees can receive hefty fines, mandated continuing education, or worse if an individual at the company is practicing without a license.

However, if property managers are starting out on their own, they don’t have that kind of guidance and may not even ever take into account that they need a license.

What’s worse, whether a property manager needs a license – and how he acquires that license – varies from state to state.

Each state and the District of Columbia sets its own laws by statute, which are then interpreted as needed by the individual state’s real estate board or equivalent, resulting in widely disparate laws.

Furthermore, calling up the state’s licensing board about the finer points of licensure requirements may not result in a useful answer.

Curious property managers may be able to ask their questions directly of the board and get an answer to their practice question, depending on the state.

But many boards refuse to answer pointed questions about licensure on the grounds that they cannot give anything that can be construed as legal advice or advice about individual cases.

Ignorance Is No Excuse

As a rule of thumb, no matter the state, all professionals are expected to know the licensure requirements of the state where they work.

 In other words, the burden is on them and any company they’re affiliated with, and not on the licensure board.  

Property managers should make sure they do their homework about licensure requirements and stay abreast of new developments, whether via news sources or the licensing board’s website.

In most states, property managers need to have a real estate broker’s license.

In addition, some states may have requirements for a property manager, or a real estate broker more generally, to be affiliated with a company, or licensure requirements may be less stringent if the professional is with a company.

Yet again, it’s a good idea to check with the state in question.

However, some states (as of this writing, Idaho, Kansas, – for residential property management – Maine, Maryland, Massachusetts and Vermont) do not require a license for property management.

Still other states and districts (D.C., Montana, South Carolina and South Dakota) require a license that is specifically for property management rather than including property management as a subset of real estate.

Some states, though not many, have still other requirements for managing a community association.

How to Get a License

The requirements for getting a license – what the individual needs to do – vary from state to state as well.

Most states require that an aspiring licensee be of age (over 18 or over 21).

Often licensees need to take courses and pass an exam, although these requirements may be waived if the licensee can practice law in the state.

Once the license is issued, keeping it up usually involves paying a fee on a regular schedule and possibly also taking continuing education.

Specific courses may be mandated by the state, or the license’s first renewal may not require CE, so be sure to check.

If this is all still confusing, check to see if there’s a state-level professional real estate organization that can clarify, or contact the licensing board with questions.

Even if it seems clear, or especially if there are rumors that the licensure requirements may be changing, it’s never a bad idea to get in touch with somebody to be sure.

It only takes a minute, and the consequences of unlicensed practice can be serious.