As a landlord, you have a lot of things to worry about. Are you letting the correct person rent from you? Are you staying on top of maintenance issues so that they won’t cause more problems down the road? Are you abiding by both federal and local laws? The last one can be difficult, because laws are always changing and evolving, sometimes without you knowing. If you own a rental in one area and live in another, there may be different legal expectations for the county that your rental is in. Never assume that local laws are the same in two different places without verifying.
We can’t note every legal issue that you may ever run across, but LandlordStation has gathered a few tips to help get you started when it comes to legally approaching your tenants.
Top 7 Pitfalls – There are general precautions that you can make when you choose to become a landlord and accept a tenant into your rental. Take a look at these to see how to protect yourself against some more common mistakes.
Know the Law – Part of avoiding legal pitfalls is knowing the law. Even if there is not a federal law in place on a subject, double check your local laws.
Know When to Hire a Lawyer – Hiring a lawyer can be an expensive avenue to take, but that doesn’t mean that there aren’t times when it is necessary.
Federally Protected Disabilities – As a landlord and property manager you will need to be aware of what disabilities are legally covered and how to best approach an applicant/current tenant with disabilities.
Lead-Based Paint Disclosure – Part of your responsibility as a landlord and property manager is to provide a safe and habitable environment for your tenants. If your rental unit is old enough, there may be lead-based paint on the walls, which could be hazardous to your tenants’ health.
Tenants That Expect You to Mediate – You may own a collection of units/houses close together or you may have a set of tenants that are roommates, but if you put more than one person in close quarters, there are bound to be disagreements. Some of those disagreements may turn into something that they expect you, as their landlord, to handle.
Noise Complaints – The complaint may be about your tenant or from your tenant about a neighbor, but no matter the situation, a landlord will need to know how to approach a noise complaint.
Threats from Tenants – If you receive a threat from a tenant, no matter if it’s a threat of violence against you or another tenant or a threat of legal action, you will need to handle the situation with care.
Tenants that Hoard – You may have a tenant that you find does not keep your rental up to shape. There are certain steps you can take to work with a tenant that hoards.
Drug Dealing – Drug dealing and/or manufacturing could cause a great deal of damage, and you’ll want to handle the situation quickly and legally.
Tenant Screenings & Privacy [Part One I Part Two] – Tenant screenings are one of your first lines of defence against tenants that will turn delinquent, but a tenant screening will provide you with very sensitive information that your applicant may not wish you to share with just anyone. While some things may be handled with a few commonsense approaches, others have legal ramifications if you do not follow the letter of the law closely.
Owner Move-in Evictions – There may come a day when you or a family member needs to move into your rental, but there is a tenant already living there. Your local laws may dictate how you will need to approach this situation.
You likely go through a rigorous screening process when you accept a new tenant into your rental. This should include a credit check, criminal and eviction check, reference checks, employment and income verification, contacting previous landlords, and possibly more. You put time and a lot of effort into these checks to make sure that the person that you’re accepting is not only going to pay their rent to you on time, but will take care of your property like it is their own. Why, then, would you want to risk opening your property up to unscreened tenants?
Your tenants (the ones that you went through the effort to screen) may bring others into your rental for a variety of reasons. They may have a significant other move in, a relative or friend that has hit hard times, or perhaps simply a new roommate that they haven’t mentioned. In some cases, they may even be trying to sublet your rental without telling you. Whatever the case, having unscreened tenants living in your property can be dangerous, so it’s best to know how to handle the situations as they come.
The Dangers of Unscreened Tenants – There is a reason that you have gone to all the effort that you have gone to in order to screen your current tenants. There are dangers in allowing a person to live in your rental investment that you know nothing about, and they don’t all rest on the rent check coming in.
Tenants’ Rights for Visitors – While you may worry over some tenants allowing “visitors” to essentially become unscreened tenants living in your rental property by letting them stay too long, you will need to be careful not to trample on your tenants’ rights to accept visitors while they’re renting from you.
Long-Term Visitors – If you find out that your tenant is going to have or has had a long-term visitor, that doesn’t mean that it is the worst case scenario. Check out these tips on handle the situation as smoothly as possible.
Unscreened Significant Others – You may have a tenant that has a significant other that wishes to move in after the lease has begun. If so, you would rather be alerted to this than have them try to sneak around you.
Subletting through AirBNB or Home Away – Temporary subletting, as through a site such as AirBNB, is becoming a popular new trend to provide travellers with cheaper lodgings and tenants a bit of pocket money when they may be away from the property anyway, but what does it mean for a landlord?
Renter’s insurance. You have probably heard about it, but what does it have to do with you as a landlord? Why should it concern you whether or not your tenants take the time to protect their property?
At first glance, it is clear to see why many landlords do little more than suggest that tenants take out adequate renter’s insurance, but once you understand the benefits of such a policy, to both the tenant and also to you as the landlord, you may start to think differently about it
Renter’s insurance can be extremely valuable when it comes to protecting your investment. By ensuring the cost of damages to property within the leased property are covered, it protects your tenant’s wealth, allowing them to continue affording rent payments, even in times of crisis.
What Is Renter’s Insurance?
Renter’s insurance is a form of property insurance that covers the possessions and liability of a tenant within a rental property. It does not cover the dwelling itself or the structure.
What Does Renter’s Insurance Cover?
In general, renter’s insurance provides coverage for the tenant’s property in case of theft, fire and stormwater, providing replacements and in some cases alternative living arrangements if necessary. It can also protect a renter’s personal liability in situations where their actions (for example, flooding from a bathtub) have caused accidental damage to a neighbor’s property and possessions, especially when they are subject to a lawsuit for such damage. The amount of coverage depends, to some extent, on the value of their belongings which is often underestimated by individuals.
“Many renters underestimate the value of their possessions and would be surprised by how much it would cost to replace the items they have accumulated,” says Emily Lyons, a Liberty Mutual property insurance expert.
“It can be helpful to suggest that your tenants walk from room to room and take a full inventory of their possessions. It may come as a surprise when they add it all up. A typical renter’s insurance policy will cover up to $15,000 in property damage and $100,000 in liability coverage.”
It is important to be very clear with your tenant from the start that your landlord’s insurance does not cover their possessions at all and is simply there to cover the building structure. You can also mention that certain situations are unlikely to be covered by their renter’s insurance policy. This may include earthquakes and flooding in areas prone to such scenarios.
How Much Does Renter’s Insurance Cost?
Compared to the massive benefits derived from renter’s insurance, the cost of a renter’s insurance policy is minimal – around $200 per year – and is equivalent to the average price of a pizza delivery for a month’s policy. In some cases, tenants can even receive discounts for holding multiple policies with one firm, such as renter’s insurance and vehicle insurance.
How Does Renter’s Insurance Benefit You as a Landlord?
As a landlord, you will already have insurance in place to cover your investment on the rental property, so you can be forgiven for thinking that renter’s insurance is not something you need to worry about. While it is true that the main benefits are for the tenant, you will be extremely grateful in the event of accidental damage to your property by the tenant if such insurance is in place.
Numerous rental insurances will cover the cost of cleaning up a property after it has been damaged by fire or water, for example, as well as replacing destroyed items. This means covering the cost of removing and disposing of damaged furniture and appliances … something that could be time-consuming and costly for you.
The costs involved in even a small fire can add up quickly, so it’s a relief to know that renter’s insurance is activated in these instances. “Soot and odors from a household fire can penetrate many areas and damage paint, carpet, upholstery, drapes, clothing and other belongings. Even a small stovetop blaze can cause smoke and soot damage far beyond the actual burned area, and this damage can be hard to remove. Soot is oily and easily stains household textiles, while smoke penetrates deeply, even into the spaces inside walls. If not properly deodorized, smoke odors can reoccur.”
If renter’s insurance is not in place, it is likely that the tenant will expect the landlord to deal with the cleanup. In some scenarios, tenants may feel it is easier to simply move out and leave the whole problem to the landlord to deal with. This is a real headache, especially in conjunction with losing the income stream from rent.
It is very difficult to protect yourself as the landlord if this occurs. Looking for legal support to force the tenant to pay will cause further delays in getting your property back to a livable condition, and that has to be your main priority.
Protecting Yourself from Lawsuits
Uninsured renters can find themselves in great financial difficulty following unexpected damage to their property, or subject to lawsuits themselves if they have caused damage to a neighboring property, for example. In instances such as these, the obvious place for tenants to turn for assistance is their landlord. Sadly, past evidence has shown that tenants are more likely to bring a lawsuit against a landlord if they are unable to replace property or pay for the cost of repairs.
No matter how thorough your screening process, don’t think this would never happen in your situation. Cases involving tenants suing their landlords are becoming increasingly common. Finding themselves in a dire financial situation could be all the motivation needed for a tenant to blame negligence on your part for the damage that was caused.
Enforcing a clause stating that renter’s insurance must be in place will protect you from such desperate measures on their part and, of course, protect you from costly, stressful and time-consuming legal issues.
Protecting Your Investment
Even if your tenant does not actively come after you with a lawsuit following loss or damage to their possessions, you may find that unexpected emergencies cause financial loss to you. Replacing expensive property can amount to far more than most people expect, negatively impacting your tenant’s cash flow.
Remembering that renting your investment property is a business, you must always keep in mind that receiving timely rent payments is essential to a successful strategy. Anything that renders your tenants unable to pay rent is a sizeable problem for you. For many landlords with one or two properties, the monthly cash flow is all that is available to cover mortgage payments. Delays can be a huge concern, jeopardizing your ability to pay the loan on your investment property and leading to issues with the lender. Your credit rating may even be affected, negatively impacting your ability to grow your business by investing in future investment property.
So, protecting the wealth of the tenant is another way that renter’s insurance can help landlords to protect their own wealth! Nothing affects your return on investment (ROI) more dramatically than fixing up your investment property after your tenant caused accidental damage and ran away.
By now it should be evident to you why renter’s insurance is so valuable to you as a landlord. While your tenant’s liability is protected, as well as their possessions, you are also more likely to experience less stress as well as a reduced financial strain in the case of an emergency.
The great news is that you can actually make renter’s insurance a requirement within your lease agreement, providing both you and your tenant with protection and peace of mind. You can even include additional terms requiring the landlord to be named as “additionally insured” on the policy. Many landlords report that a clause regarding renter’s insurance has kept their relationship with their tenants strong and healthy despite difficult circumstances. Communication tends to remain open when neither party is forced to blame the other.
In brief, renter’s insurance offers fantastic, affordable benefits for your tenants. Additionally, you as the landlord also reap the rewards. Renter’s insurance translates to reduced risk, fewer worries and less time wasted. You must agree, that is priceless! It is certainly worth the effort to make renter’s insurance part of your tenancy agreement in order to maximize your profits and protect your rental income in the long run … no matter what issues arise along the way.
For many millennials completing college, reality strikes with an ugly blow. After years of studying towards their dreams, the truth can be stark. Numerous people are left wondering what went wrong, with no idea how they will ever afford the typical American lifestyle.
Heavy debt from studies, coupled with high expectations from family and friends, places an unfair burden on individuals to accept a less than ideal career path and little time for outside pursuits. It is no surprise that people are rebelling against these expectations and looking for an alternative.
As this tide of millennials looking for a different way of life grows, people are turning to real estate as the answer. They are discovering that it is possible to develop a healthy stream of passive income through investing in rental properties. In their role as landlord, they have far more control over their life, and with a little ground work, they are discovering that the life they had dreamed of may still be within their grasp. The great thing is that this technique isn’t limited to Millennials.
Why Is Passive Income So Appealing?
“Passive Income is money that you earn without having to work for it. When you earn interest on a savings account, you are earning money passively; it accrues whether you’re working or not.” ~ J.D. Roth
Passive income is simply a stream of earnings acquired without exchanging time in hours. In other words, money that comes to you, without you doing work for it. Once the structure of the particular business is in place, the income will continue to pay, with minimal (or even no) effort on the part of the owner. It is, of course, a great idea to include a passive income flow as part of your overall retirement plan.
When it comes to real estate, a passive income is achieved through acquiring properties and then renting them out. The rental income should cover the costs of paying the mortgage, as well as insurance, management fees and any other maintenance requirements.
Being free from the burden of exchanging your time in hours for money allows you to be in control of your life. Many have successfully set up passive income streams, allowing them to pay off crippling debts, enjoy additional travel opportunities, engage in an enviable work-life balance and even retire at a young age.
How Is This Different from Flipping Homes?
Building a passive income through real estate is different from a business involving flipping homes (in other words buying property to fix up and then selling quickly for a profit). Investment in rental property is a longer term strategy, which is generally less risky than flipping homes.
When buying property to sell, there is a lot of work and stress involved that can’t be considered passive since a considerable input of time is required in order to make a profit at the end of the deal.
Becoming a landlord certainly involves time at the beginning of the process. Finding the right property, screening the tenants etc. requires effort in the beginning, but generally once everything is in place, the income should stream in regularly without hassle.
Investment in property provides gains in the long term as property value grows with generally better outcomes than investment in stocks. When you consider that this asset growth occurs in the background, while the rental income provides real cash in the present, it becomes an attractive proposition.
How Can You Afford to Invest in Real Estate?
At first glance, people are put off by the perceived high barriers to entry to becoming a landlord. But, it isn’t as difficult as you might think.
Several companies offer affordable mortgages and with in-depth research you can find competitive deals. It makes sense to speak to a broker to find out the specifics of the loans that are available and then be ready to negotiate.
When it comes to choosing a property, know your maximum price and keep a cool head to avoid paying more than you should. You should aim to purchase property below market value, an achievable goal if you are armed with the right information.
The secret to a good rental property investment is to conduct thorough research into the area you would like to purchase, looking at what is already being rented and the figures involved there. House sale prices are readily available, and you can find out average rental rates quite simply. It can be useful to pose as a potential tenant to enable you to see what is on the market and learn from landlords, too.
If you find that conventional funding routes are not an option to you for various reasons, don’t give up. There are various other ways to raise capital, including finding a silent partner who is willing to invest privately or investing in a Real Estate Investment Trust (REIT). This fantastic option allows you to take the first step into your landlord career.
How Much Income Does Rental Property Generate?
Rental property is a real way to generate passive income, but just how much is a question that needs to be looked at carefully. It is wise to consult a financial expert in order to map this out accurately, but here are the basics.
You will need to create a financial forecast, looking at the costs involved in purchasing a property, alongside the income, paying special attention to the cash flow.
After balancing the initial purchasing fees, monthly mortgage payments, expenses, taxes, insurance and repairs against the monthly rental income, you should be able to identify your passive income for a single unit.
It is unlikely that the income from a single unit will be enough to set your goals alight – so once you have the single unit income amount, work out how many times you will need to multiply it in order to achieve your desired income. A very rough estimate is that 10 properties will bring in $5,000 per month.
This is, of course, only going to provide you with an estimate, as unexpected costs do arise and occasionally tenants don’t behave as we would hope – but with allowances made in the “costs” for such discrepancies and adequate insurance in place, you should find that this figure is a good indicator of your income stream.
Is Rental Income Really Passive?
Is it really accurate to say that rental income can be passive, considering the amount of work and research required in the early stages?
I would say 100% yes, as the ongoing work involved is minimal and can be largely outsourced. It is hard work to start with as it is vital to make the right choices for a successful long-term investment strategy, but once that is done, you can pretty much sit back and relax.
Most landlords set up systems allowing their rental business to run smoothly even while they are relaxing on the beach! Fixing up the house can be outsourced to contractors while you simply oversee the process. Once that is accomplished, there are fantastic companies dedicated to property maintenance who will run routine inspections on your property and handle any repairs that are needed. This frees you up from sourcing last-minute contractors and worrying about the workmanship and rates they charge. Maintenance companies develop relationships with multiple contractors, so you are unlikely to be overcharged or mistreated
Additionally, you can outsource the tenant management as well. This can include sourcing and screening tenants, drawing up and signing contracts, obtaining deposits and even dealing with late payments and evictions. These are the aspects that several landlords find the most stressful, so for a monthly fee you can conserve your energy and hand this over to a professional company.
Of course, for both property maintenance and tenant management, you should do your homework before deciding on what company to use. Ask for referrals and speak to other landlords to find out their experiences with the various companies. The monthly rate may be negotiable as well so don’t just sign up with the first option you find.
The initial work required to “set up” investment in a rental property can be difficult, there is no denying that. It is essential to make early decisions carefully, after substantial research – but the potential to bring in serious passive income once the systems are in place is huge!
This is a great option to consider if you want to enjoy more free time without the pressure to work constantly simply to escape debt and make ends meet. Making an investment in rental property has risks, as with all forms of investment, but it can provide the money to live life on your own terms in the short-term, while building your capital wealth over time. Isn’t it time you looked into it?
Making the decision to become a landlord is a big one, calculating the risks involved in purchasing a property and balancing that with rental income requires a degree of trust that the rent will, in fact, come through. Rental income is, of course, essential to the equation, so late payment is an issue that should not be taken lightly.
The key business of being a landlord is to make money on your investment in rental property. Losing money, and wasting time chasing money you are owed is stressful, not to mention detrimental to your cash flow.
Unfortunately, tenants are only human, and as such, it can be extremely difficult to predict how they will behave. Tenants paying rent late is something most landlords deal with occasionally, and it can be a distressing time. Fortunately, there are a number of measures you can take to prevent late payments from occurring, and if they do, to regain control of the situation by ensuring payments resume as quickly as possible with minimal disruption.
Steps to Prevent Late Payment of Rent
There are a few early steps you can take to minimize the risk of tenants paying late. It all starts at the tenant screening stage. It is essential to have a robust system in place, ensuring you choose financially responsible, employed individuals to inhabit your rental property and protect your investment. This should not be rushed; taking the time to follow up on references can make all of the difference.
Once you have handpicked the best possible tenant through your screening process, you should communicate all of your rental terms clearly – including payment particulars such as due date and late fees. These items should be incorporated into the lease agreement to prevent confusion and ensure you are protected from a legal standpoint.
Deciding how much to charge as a late fee is often something landlords struggle with. The first thing to consider is whether there are local laws governing upper limits for such charges. Whatever happens, don’t be tempted to waive the late fee, no matter what situation has caused the late payment.
Receiving late rental payments is an inconvenience that should be avoided as much as possible. One available tactic is to charge a relatively steep late fee, within the limits of any local laws, which should act as a deterrent to your tenants and prevent late payments from becoming a habit.
Why You Must Take Late Payments Seriously
You are probably aware of the costs incurred if your mortgage payment to your lender is delayed, regardless of the reason for your late payment. Additionally, late charges are only part of the story as your credit rating may also be damaged. Therefore, it is more than a mere nuisance when rent does not come through on the date you are expecting it. Take a look at the following excerpt from nolo.com about what you can expect to be charged if you pay your mortgage payment late.
“If your mortgage payment is late, you may be charged a late fee. Most mortgage contracts include a grace period of ten or fifteen days after which time the loan servicer will assess the fee. Late fees can only be assessed in the amount specifically authorized by mortgage documents. (The late fee provision is usually found in the promissory note.) Generally, the late fee will be in an amount equal to 4% or 5% of the overdue payment.
State law may limit the late charge amount. If the state limit is lower than what the loan documents allow, it will generally override the loan documents.
Late fees can quickly stack up, adding hundreds of dollars to the amount you owe the lender.”
Once you are put in the position of being owed your rent payment, it also adds a strain on the landlord-tenant relationship. Confrontation can feel awkward, and often people find the situation highly stressful. The issue can be further exacerbated by habitual late payments. For this reason, it is important to take a hard line … and stand by your decision.
What Action to Take When Rent Payment Is Late
When the due date for rental payment comes and goes without receipt of money, it is time to take action. The important things to remember are:
Be firm but fair
Keep communication lines open
Be professional at all times
Treat all of your tenants the same
Control your emotions, not getting angry, panicked or sucked into sob stories
Never threaten your tenants
Be timely in starting the eviction process
Keep in mind the history of the tenant, in terms of adhering to the tenancy agreement, and their track record of paying rent. Establish whether the late payment is a one-off event, or if it is the result of a significant issue that will likely escalate into further late payments down the line.
Some individuals simply aren’t responsible enough to manage their finances well and don’t take their rental due dates seriously. Take a look at a few of the more amusing excuses landlords have received over the years from their tenants. It isn’t fair that these problems are passed onto you!
1 I had a flat tire so I can’t pay my rent/can’t get to your office.
2 The government hasn’t mailed my check yet and I don’t know when I’ll get it.
3 I just got out of jail so I didn’t work last week.
4 I lost my job.
5 My daughter had a baby.
6 My power bill is too high – can you lower my rent?
7 We just bought a new car.
8 They messed up my check at work.
9 The banks are closed by the time I get off work so I can’t get your cash.
10 How much do you need today?
11 My (insert yet another family member) died and I have to go out of state to the funeral so I won’t have time to come by.
12 The check shouldn’t have bounced. The money was in my account when I gave it to you.
13 I’m not even really that late.
14 My (fill in the family member) took the money out of my purse.
15 I had to use the money to fill up my gas tank or I couldn’t get to work.
Always keep a close eye on the due dates for your rental payments so that you are not caught unaware when tenants are late. In the event that payment is not received by the expected date, act quickly, stay calm and keep confrontation to a minimum.
The first action to take is to reach out to the tenant, informing them that you are aware the payment is late and establishing when you should expect to receive your money. The method of this initial contact is a topic of debate among landlords. Some prefer to make a phone call, while others feel that a visit is the best way to go. The decision ultimately lies with you and depends on what you are most comfortable with.
Whatever you decide to do, it is wise to keep a record of the interactions between you and your tenant. This should include promises made and reasons given so you can follow up if necessary. A written record will also ensure you are legally protected if you are ultimately forced to start eviction proceedings.
When it comes to late payment of rent, you should regard the issue as a serious one and more than a mere inconvenience. Use robust screening methods to prevent late payments wherever possible. If it does happen, do what you can to discourage further late payments by enforcing late fees and remaining firm.
At the same time, you must always act professionally and remember that being a landlord is a business. Your tenants must always be treated with respect and dignity – regardless of how they may appear to disrespect you. Stay within the limits of the law, record everything and be ready to start eviction proceedings if necessary.
Ultimately, late paying tenants are not something you should have to accept, and the good news is they are not the norm. Most tenants respect the terms of their lease agreement and pay on time, every time. With the guidelines provided in this article, you have the tools you need to deal with the problem if it arises.
In many locations, the rental market is highly competitive with many people choosing to become landlords, investing in properties to rent. Of course, vacant properties don’t translate to income, so the landlord’s goal is to avoid vacancies.
Fortunately, there is an easy way to attract tenants to your property over other choices … landscaping the gardens. A beautifully landscaped piece of land will make your property desirable, giving it ideal curb appeal enabling you to maintain your rent price at a reasonable rate, so you don’t miss rental opportunities over the months. And, the great news is that it’s possible to landscape affordably!
This article will cover the four main ways you can landscape your rental property, that will bring the most value to your investment without breaking the bank. Plus, we know how valuable your time is, so these options will require minimal maintenance, and will stay looking great for years to come.
Landscaping Option One – Covering Ground Space
One of the things that can detract from the overall appeal of a property is a wasteland of bare earth surrounding it, especially if junk has accumulated there. It is essential to clear any rubbish from around your rental property – hopefully that goes without saying!
Empty ground space can be covered in a number of ways, and the landscaping suggestions below are easy to maintain, affordable and attractive:
Ground can be covered with upcycled paving stones, which can be placed in a mosaic, irregular or systematic pattern, depending on what you have available and the look you would like to achieve.
Seams between the pavers can be filled with moss, to give the space a finished look.
Gravel is an inexpensive way to fill an empty space of ground to give it a more finished look. You can choose various colors to suit your style.
If you prefer the look of planted ground, lawn is generally not the most cost effective choice, as it can be expensive and requires a lot of water to maintain as well as maintenance requirements to keep weeds under control.
Try thyme or lamium instead of grass, as they are inexpensive to purchase, spread quickly and look great … thyme smells wonderful, too.
If you’re opting for a planted space, add a layer of mulch to save money over time. Mulch helps the soil retain moisture, plus it cuts down on weeds and requires less watering.
Landscaping Option Two – Choosing Plants, Trees and Shrubs
Annuals vs Perennials
When choosing plants to include in the landscaping of your rental property, it makes sense to look for perennials, which return to flower every year, without any additional time, money or work from the tenant (or landlord!). They are generally more expensive initially, but over time, this investment pays for itself.
Many landlords also choose to include annuals in their landscaping, as this reduces the initial expenditure and you can, therefore, create a lush garden full of color for less. If you decide to incorporate annual plants in the garden of your rental property, why not look for those that drop seeds which will potentially provide you with more plants the following year, with no effort! Ideas include poppies and sweet peas.
Trees and Shrubs
If you would like to include trees or shrubs in the garden of your investment property, start with younger, slow growing varieties, which are far cheaper than established options. It makes sense to include trees, as they can add value to your property, beyond the aesthetic appeal.
“One of the non-aesthetic ways a tree can improve the quality of life on your property is by saving you money. A good “shade tree” can dramatically impact a home’s air conditioning requirements by blocking direct sunlight in the summer. The American Power Association estimates that effective landscaping can reduce a home cooling bill by up to 50%. Then, in the winter, your trees (especially Evergreens) can help block the wind, saving those precious BTUs.
American Forests claims that trees placed appropriately around one’s house can reduce the need for heating by 20% to 50%. Other benefits of a tree-lined property include their ability to keep erosion in check by virtue of their extensive roots, although you’re unlikely to appreciate the value of this service like you might from the energy savings. Trees also absorb carbon dioxide, converting it to sweet, sweet oxygen. Two mature trees alone put out more oxygen than one human being consumes.” [source]
Another thing to keep in mind when choosing plants and trees, is to look for native species, which are naturally more suited to your climate, and will require less care. If you would like to install a watering system to protect your investment in plants, consider installing a soaker hose which will keep your garden watered with ease. Plus, they use less water than watering cans or sprinklers.
Finally, be sure to shop around when looking for plants, as different nurseries will offer different prices and you may be able to save a considerable amount of money through negotiation, especially towards the end of the season. However, make sure you plant your purchases at the right time to give them the best possible chance of thriving.
Landscaping Option Three – Creating Additional Living Space
A superb way to add value to your rental property via landscaping is to create additional living space, bringing the outdoors, indoors. This can transform a home for a tenant, and keep your property highly desirable.
Robust seating areas with a fire pit are one option, otherwise dining spaces with outdoor tables and chairs are also useful, if your climate allows for it. These extra touches will provide tenants with an idea of the type lifestyle they can enjoy on your property. If there is already a porch, a pool or a patio, be sure to make the most of that.
Landscaping Option Four – Adding A Designer Touch
You can also transform the outdoor spaces of your rental properties easily – adding touches that can look as though a designer has come along and waved their magic wand. Enhancements can be done for far less money than you might imagine and can look highly effective. Here are our top three designer touches that you can include in your landscaping to add value to your investment property, keeping tenants knocking at your door:
Choose One Color
Sticking with one color, or a limited palette throughout the design of your investment property landscaping is an easy way to create a designer effect. The color can be echoed throughout the planting, gravel, pavers, planters, edging and so on … the only limit is your imagination. This can look absolutely fantastic, and costs no more than choosing multicolored options.
Make Unique Planters
Planters can look great in a garden, and are useful to manage the spread of certain plants, and are the only option in some limited spaces. The problem is that planters can be quite costly and are generally all the same kind of style. However, with a little creativity, many discarded items can be upcycled to make great looking planters. Wine barrels, tires and pallets are just three options that can be sourced cheaply from reclaim yards. The following instructions from Crafty Little Gnome show just how simple it can be to create beautiful planters from tires.
1) Get several tires. If you don’t have any old tires lying around, try Craigslist. People will be begging you to take their old tires or you could call auto shops. They will probably have tires they can give you, too .
2) Take your tire and cut away the inner part of the rubber. Use the natural grooves in the rubber as a guide. If you ever bought one of those fancy Ginsu knives that claim to cut everything from steak to slabs of marble, now is the time to dust if off and put it to good use. Please be careful. Nothing ruins a fun DIY project faster than a trip to the emergency room!
3) Now, you are going to flip your tire inside out. This is more difficult on tires without rims. Use your feet for support and pull the trimmed edge up. Consider calling a friend with big muscles over to help. The older the tires are, the easier this will be.
4) Tires with rims are slightly easier. Flip the tire upside down so the trimmed side is face down. Sit in the middle and pull the sides up with all your might.
5) Now that your tires are inside our give them a good spray down with the hose and clean off all the gunk.
6) If you want to paint your tires, now is the time to do so. Make sure they are very clean and dry before painting. I like my tires rather plain which is why I left them au naturale. A Google search will bring up numerous ideas for inspiration for bright, fun colored tires that look like flowers and such.
7) Place your tires where they will have a permanent home. The tires without rims won’t have bottoms, so they will not be easily moved. Tires with rims have a bottom, so the dirt won’t spill out completely. They will however, be quite heavy.
8) Fill your tire planters with potting soil and add your favorite plants.
Ornamental grasses are an inexpensive and modern way to bring a designer touch to areas that would benefit from planting. Blue oatgrass, flax or zoysia are all beautiful choices that are very easy to maintain.
With increasing competition in the rental market, one way you can increase the curb appeal of your investment property is with attractive landscaping. This is yet another role for you to play as landlord, but it can be easier than you think!
With these simple ideas to fill empty space, choose affordable plants, create additional living space and add designer touches and you will find that you are never left with a vacant property. Plus, our suggestions are low-maintenance, so your investment in time and money will pay dividends over the years.
Purchasing real estate is thought to be one of the wisest decisions when it comes to investment of money, and becoming a landlord is one way to ensure you are able to receive an ongoing income from your investment, while your capital wealth continues to build.
Of course, it is not as easy as the last paragraph describes! Investing your hard earned cash should not be done lightly, any decisions should be made after substantial research and consideration. However, many individuals take the time to research their purchase carefully, enlisting the advice of experts in the field and still make mistakes that can be extremely costly in the long run.
For this reason, we have compiled six of the most common pitfalls that landlords tend to stumble into when it comes to investing in real estate. Once you know what these mistakes are, which frequently cause problems for landlords, you will be aware of what to watch out for, and you can make your investment decisions wisely.
Mistake Number One – Deciding As You Go
The most serious mistake many landlords make, is not putting a full plan of action together before they start. Instead, they simply make decisions as they go along on the journey of choosing and investing in real estate – and all of the aspects that go along with that.
It is a far better idea to have a complete plan in place before financial decisions are made, and that should cover the location, type of property, budget for offer price, renovations and so on. By failing to adequately research their options and plan for all eventualities, landlords leave themselves more vulnerable to risks.
This mistake can be extremely costly when issues arise that landlords hadn’t considered, for example, unexpected problems with the structure of the building that has been purchased.
Mistake Number Two – Allowing Emotions to Rule
The second pitfall that tends to swallow landlords whole is allowing emotions to take the reins with regard to decision making. While it is easy to say that real estate should be regarded as a business with everything considered calmly and rationally, we all know how it feels to be “sucked in.” In some circumstances, the heart tries to rule the head.
But while we are all human, real estate is one situation where landlords must consciously control emotions, and consider decisions carefully from all angles. The “get rich quick” schemes, for example, can be tempting, especially when they are marketed in a shiny must-have package, but often these schemes really are too good to be true and are little more than a scam.
Another example in which landlords must watch their emotions, is in submitting an offer for a rental property. A sizable part of the long term profit is made at the point of purchase, so landlords must stay strong and stick to the budget that has been set. Paying below market rate for a property should be the goal.
Mistake Number Three – Ignoring The Advice Of Experts
Landlords are required to excel at a number of roles in order to make their real estate business a success, but the great news is that they don’t have to do it all alone! Unfortunately, many landlords fail to depend on the experts for advice in certain specialized areas of the rental process, and as a result, costly and largely avoidable, mistakes are made.
There are many experts that can help landlords with various factors, such as a real estate agent to provide details about recent sales values, a broker to explain the finer details of a mortgage and an attorney that can advise you on legal matters. While certain aspects can be completed without the input of an expert, it is always valuable to ask questions and complete research with the help of individuals inside the industry. The best case scenario is to build a team around you, of professionals that you can trust.
Mistake Number Four – Relying on Inaccurate Estimates
When it comes to making plans in real estate, numerous decisions are based on estimates that are made along the way. These include an estimated purchase price for a property, plus the cost of renovations, the final rental fee and even the health of the local economy on the whole.
It is impossible to assess the cash flow of a real estate investment accurately in advance due to the number of estimates that make up the foundation of the financial plan.
While this has to be accepted to a certain degree, it can be a pitfall for landlords when they rely on the estimates too heavily, taking the figures that have been drawn up as fact. The best way to handle the uncertainty of the estimates is to input accurate numbers into financial forecasts as soon as they are established. It can also be useful to build strong relationships with contractors and tradesmen, so that any quotations for renovations can be viewed as solidly reliable. This will be extremely useful when it comes to deciding on the viability of a property that needs work done to it. Always overestimate costs, and underestimate profits to a certain degree, this will provide a margin of error that could make all of the difference to your budget.
Mistake Number Five – Forgetting The Importance Of Cash Flow
Another mistake many landlords make is in focusing on the bigger, long term picture of their investment and forgetting the importance of cash flow. This can crop up in several ways including:
Failing to prepare for unexpected costs
Paying too much for property/tenant management
Failing to plan for vacancy
The costs of owning a property are constant, including the mortgage, taxes, insurance, maintenance and advertising for a tenant. Of course, it is necessary to balance the incoming cash with the outgoing costs, otherwise the landlord will find themselves in trouble very quickly, and the long term gains can be lost due to short term mistakes, which may eventually damage credit ratings and even lead to losing the property. Long term gains need to be balanced with short term needs in order to make the deal a success.
Mistake Number Six – Failing to Complete Due Diligence
With the real estate market becoming increasingly competitive, deals often move quickly and investors can feel rushed through the process, cutting essential corners such as signing contracts and conducting research. This is one pitfall that can be disastrous for landlords and can result in losing substantial amounts of money.
The key is to take time to complete adequate due diligence regarding the real estate deal in order to minimize the risks of the investment. Nothing should be taken for granted. For example, it should not be assumed that newly constructed buildings will have no defects. Unfortunately, the opposite is often true due to pressurized deadlines on the builders.
There are many common mistakes that landlords make time and again, and they can be extremely costly to rectify. Fortunately, these can largely be avoided, simply by taking the time to research decisions thoroughly, reaching out to experts for advice as much as possible.
We recommend that landlords plan ahead in their real estate decisions, and avoid making decisions as they go, in order to be fully prepared for the investment business, completing adequate due diligence along the way.
This leads us perfectly to the reminder that the business should be run rationally and not controlled by emotions. While it can be easy to be carried away by how we feel around a deal, the viability of decisions should always come first.
Landlords should turn to the advice of experts to help them with this, working with a team of individuals across the industry is the best way to conduct business. A real estate agent can offer insights into properties coming onto the market in the best locations at a price that is right for you. In addition, a broker can walk you through the confusing array of loans that are available for landlords, and an attorney can save you a fortune in the long run, by keeping you inside the law in your choices.
Within your team, it makes sense to have a contractor that can help to provide accurate estimates of any work that is required. This will help you avoid the mistake of relying on inaccurate estimates of costs. The best way to handle this pitfall is to always remember that estimates are just that – inaccurate figures that should not be taken for granted.
This should help to keep the cash flow in check, which is something that landlords should have a close eye on at all times. Remembering that the short term cash health of the business is as important as the longer term profits. With this in mind, it should help landlords avoid the most costly financial mistakes, so they can save money and make their real estate business a success.
Depending where your rental is located, you may have a difficult time snagging the best tenant when it comes time to put your property on the market for a new lease. Your rental may be in great shape and you may be a top notch landlord, but if there are many rentals in the area then you will have competition. One of the ways that you can receive a higher number of applicants is to avoid putting too many limitations on the property. Take a look at the following articles and weigh your options carefully.
Renting to Smokers – There are some landlords that will put their foot down completely when it comes to renting to smokers, but that will limit your potential tenants that can apply to your rental. While you will need to make the best decision for your property and your business, you may consider making a compromise.
Renting to Individuals with a Criminal Record – You may receive interested applicants that have a criminal record. While this should cause you to pause and look a little deeper, it doesn’t necessarily mean that they are a bad investment.
Renting to Individuals From Out of Town – People move for many reasons, and if they are moving from out of town you may not be able to meet them face-to-face until they are a ways through the process. There are other ways to make sure that you are doing your due diligence.
Renting to Individuals Without a Credit History – It can be frustrating when you run a credit check on someone and it comes back blank. If your applicant does not have a credit history (or a recent credit history), it is a little more difficult to judge their potential as a tenant in your rental, but it’s not impossible.
Renting to Military Personel and Veterans – If your rental is located in a military town, you may find that quite a few of your applicants are servicemembers or veterans.
Renting to Section 8 – You may have heard stories that make you hesitant to jump into Section 8 housing, but there are some great advantages in working with Section 8 tenants.
Renting to Tenants with Pets – While pets can potentially cause damage to a rental unit, there are perks that come with allowing a tenant with a dog in your rental.
Avoiding Scams – When you list your property for rent, you will want to protect yourself against scams.
You may be looking to buy your first rental property or just the newest one to add to your portfolio, but when it comes to sinking money into an investment you will want to make sure that you make the best choices available to you.
Know How to Break into Real Estate – When you first start looking into investing in real estate you will need to make sure that you understand it. Set your goals and expectations accordingly.
Lining Up Financing – The two main options for funding your next real estate investment will usually boil down to taking out a loan or using cash to fund the investment. Like with most things, there are pros and cons with either direction that you take.
Crowdfunding – While the two main options for financing are usually a loan or cash, there’s a new trend that has popped up amongst real estate investors.
Low Cash Options – You may think that you’ll need quite a bit of cash to be able to get into the real estate business. This is not always the case.
Top 4 Mistakes – You can have all of your financing set up, but you will lose money if you don’t watch out for these top four mistakes that many new investors make when they buy a rental property.
Passive Income – While being a landlord isn’t necessarily an easy job, it is considered a passive income because you are, many times, earning an income even though you are not actively working on the property.
Residential vs Mortgages Geared Towards Rentals – Some people become landlords out of necessity rather than going out and buying a property with the intent to rent it out. If you have inherited the property or you are renting your home rather than selling it, make sure that your current mortgage allows you to rent to the property out.
Where to find a Mortgage for a Rental – Finding the right type of mortgage is important when you are looking to finance your investment, otherwise it may fall through last second.
Requirements for a Mortgage – When you are making a bid for your next rental property you will want to move quickly so that you do not lose out on a good deal. Understanding what will be considered during an application for a mortgage will help.
It can be an uncomfortable moment when your tenant stops returning calls and emails. It may be completely innocent. They may have gone on vacation, found themselves too busy to return your call quickly, or a number of other things that will not affect their timely payment of rent. If you’ve been in the rental business for any length of time or have heard any horror stories, your mind might wander to less-than-innocent possibilities in which your tenants have packed up their belongings and moved out without notice, leaving you on the hook for damages done and rent left unpaid. That’s a place that no landlord wants to find themselves in if it can be helped, but LandlordStation has gathered a few tips and tricks together to help you approach the situation in the best way possible.
Sudden Loss of Communication – There are many reasons why a tenant may cut off communication, either intentionally or accidentally. Make sure you don’t jump to the wrong conclusion first off, but also don’t take too long to act if you can’t reach them.
Follow These Steps – You need a balanced approach with a tenant that shuts off communication with you, but these steps should help you make sure that you don’t find yourself in a bad position as a landlord.
Determining Abandonment – As a landlord you will need to find out if the tenant has legally abandoned your property and then take the appropriate action from there.
Understanding Judgement Collections – Choosing to seek out a judgement collection against your former tenant is one way that you may recover overdue rent or damages that a tenant leaves if they vacate your rental early. If you’re thinking about going this route, make sure you understand what all that includes.
Seeking a Judgement – When a tenant skips out and leaves you with the bill, there are legal routes that you can take to receive a chance to regain at least some of what you are owed.
Reporting a Judgement to a Credit Bureau – Even if a tenant abandons your property, leaves with rent due and damages unpaid, there is a certain route that you must take to report a judgement to one of the credit bureaus.
Picking a Collection Agency – You may wish to work with a collection agency to receive the money owed to you. If so, you will need to know how to choose the right one.
Working with the Collection Agency – If you have never worked with a collection agency before, you may wish to take a look on these tips so that you know what to expect from the experience.
Keep it Legal – A tenant that leaves without warning can be frustrating, but you don’t want to let your frustrations cause you to approach the situation in an illegal manner. Your best chance to regain some of the money that you’ve lost on that tenant will come by handling it within the law.
Tracking Down Their New Address – There are a variety of reasons why you may need an old tenant’s new address, but if you are going to file for a judgement against them, you may need to be able to contact them directly.
Warning Other Landlords – If a tenant breaks their lease with you, skips out owing money, and/or causes damage to your rental, there’s a good chance that you’ll want to make sure that any future landlords that they try to apply with don’t meet the same fate as you did. Be careful how you approach warning others.