How to Save Money in All Aspects of Your Business

Running a rental business can be difficult. There are many moving parts and often it feels like not enough time in the day to handle them as you should. One thing you can do to elevate some of the pressure is to cut costs without cutting efficiency. That can come in many ways, so LandlordStation has gathered a few tips for you below to help you find the best place to focus on so that you can start saving money.

  • Save on Taxes – If you forget or don’t know what to deduct from your taxes as a landlord, you’re throwing money away. There’s a set of deductions that landlords can take advantage of that could save you quite a bit each year.
  • Save on Insurance Premiums – Your rental will need to be insured, but you’ll want to make sure that you’re not paying more than you should be for what you’re receiving when it comes to your monthly premiums.
  • Save on Electricity – Some landlords cover utilities, some do not, but if you are handling even part of the electrical bill for your rental, you’ll want to make sure you find the best deal available.
  • Save on Landscaping Costs – Certain locations have bad droughts at during the warmer months of the year and water is rationed. Landscaping that does not require a great deal of water to keep up will help you cut down on watering expenses.
  • Save on Upgrades – If you’re planning on upgrading your rental anyway, you may want to look into certain eco-friendly upgrades that can save you money in the long run.
  • Save on Maintenance
    • Preventive – Maintenance emergencies can be expensive, and while you should always have some money saved back for those occasions, you can help to save that money by keeping up with preventive maintenance.
    • Tips – If you keep up on small maintenance issues you won’t find yourself having to do major repairs nearly as often. A touch-up job here may keep your paint looking fresh longer or a carpet cleaning could prolong the life of the carpet in your rental. 
    • Using Daily Sites to Cut Costs – Sometimes saving money means getting creative. Instead of paying top price for quality work, you may want to check daily deal sites to find coupons so that you can receive top quality work for a fraction of the cost.

How to Make Your Rental a Safe Place

Promoting safety in your rental will help protect both your investment and your reputation. If your tenants are committing crimes in your rental, it could potentially make you liable, depending on the type of crime. While it can be difficult to make that judgement call before really getting to know them, there are a few ways to protect yourself against criminal activity and the legal situations that that can bring about.

Screen Every Incoming Tenant – A thorough tenant screening process is one of the best defences that you can put into place for your rental business. The tenant(s) that you accept into your property will have full access to it without a great deal of supervision, so it is imperative that you know who these people are to the best of your ability. A credit, criminal, and eviction report may not provide 100% certainty, but it will give you insight into how they approach debts owed and if they have had any prior run-ins with the legal system.

Know the Limitations of a Background Check – Everything in this world has a limitation, but the limitations of a criminal background check can be very frustrating to a landlord trying to protect their investment from people that might cause trouble if accepted as a tenant. There is no central database for these records, which makes collecting them difficult in some cases. Records may not make it into a search or they may take a bit longer for the county to provide them, but part of protecting your property will come with understanding how to work around these limitations.

Reasons Why a Record May Not Show – There are valid reasons why a record may not show up in a traditional background search. Part of protecting yourself against surprises down the road will come through understanding the limitations and finding ways to work around them. This article provides a few additional reasons to the above article.

Accepting a Tenant With a Record – While you should always have policies in place as to what you will and will not accept in terms of credit, criminal, and eviction history, there are certain considerations you should make before you simply throw an applicant with a criminal background out.

HUD Guidelines for Criminal Records – The US Department of Housing and Urban Development issued a set of guidelines within the last year that may affect how you approach applicants with a criminal record. While those with a criminal record are not considered a protected class, per se, HUD’s reasoning behind the new changes is that denying someone based entirely on their criminal record may lead to discrimination against race or color.

Illegal Activity Warning Signs – As previously noted, criminal background checks may be missing information, so you’ll want to make sure to keep an eye on your rental property. You may have accepted the best tenants you’ll ever have, but if you start seeing warning signs of illegal activity, you’ll want to at least take a closer look.

Spotting Drug Dealing/ Manufacturing Signs –  Drug dealing and manufacturing can be a very dangerous brand of criminal activity that you will want to watch out for. If your rental gains a reputation for drug trafficking, it may be difficult to rent it again once you get the delinquent tenant out. 

Tenant Mediation – As a landlord you may often have a tenant come to you with a complaint about another. If it’s something small, or a complaint about non-compliance with the lease, you should have a set of policies that direct how to handle the situation. If the complaint is criminal in nature, you’ll need to know how to handle it with the utmost care.

Evicting Problem Tenants – One reason that you may choose to go through the eviction process is to handle a tenant that has broken the lease that you signed with them. This could come in the form of non-payment of rent or it could be that you’ve discovered illegal activity in your rental. If you decide to pursue and eviction, be careful that you take all of the necessary legal steps.

Promoting Safety in the Rental – Part of protecting your rental will be to promote safety with your tenants. Criminal activity inside the apartment or house is not the only concern. You’ll want to make sure that law-abiding tenants living within your rental feel safe in their home as well.

The Best Accounting Tools That Can Transform Your Rental Business

As a landlord, it is likely your days are filled to the brim with tasks that you are required to perform. You quite possibly have a full-time job, family and home of your own. On top of that, you have a rental property plus tenants to take care of, too. It can be very difficult to manage everything, and if you lack organization, it can feel very stressful.

Image courtesy of spice4life.co.zaNo matter how busy you become, it is extremely important you keep up to date with the accounting side of your rental property. This is a factor that can determine success or failure of the business. On a smaller scale, you could be missing out on receiving money. However, the bigger consequences could result in accusations of tax fraud and evasion. This can cause irreparable damage to your company’s reputation.

Fortunately, when it comes to the financial side of the rental business, there are several great accounting software tools landlords can utilize to support various aspects of their business. They can help you to save time and money as well as stay organized. In this blog post, we review the different options available to you, specifically looking at them from the perspective of a landlord.

The essential features you must look for are:

  • Ease of use
  • Security of the platform

Beyond that, you will find that most of the accounting software options differ slightly. There are choices available for various budgets – we will break each down here.

Essential Accounting Features for LandlordsImage courtesy of cdn.ttgtmedia.com

We are going to look at 3 of the best accounting software choices as well as our own rent collection service and assess which are the most useful for landlords.

The three accounting options all include the following 3 features:

  • Basic invoicing and management of expenses
  • Syncing with bank transactions
  • Reporting (including sales reports and ongoing tax overviews)

1. Wave

One of the most well-known and loved online accounting software solutions is Wave. Here is what they have to say about their service:

Running a small business is different. We get it.

The more successful you get, the more distractions you have: chasing payments, tracking expenses, managing employees and taxes.

At each step, Wave makes it easy. [source]

Image courtesy of lh4.googleusercontent.comWave is pretty much free, except for their payroll and payments options. The software allows you to quickly and easily create and send professional, slick-looking invoices and receipts. You can collate your transactions into easily digestible reports, providing that your bank or payment provider supports it. This even includes PayPal, which connects seamlessly with Wave.

Notable time savers include the option to set up recurring invoices, automated reporting and receipt scanning, which virtually eliminates manual data entry. The software is ad-supported, but these don’t impact the service too much.

Wave is great for landlords because it allows you to keep track of payments, bills and expenses at a glance. You will know quickly if your rent has not been received on time and take swift action.

Wave is cloud based and offers fantastic business support online with blog posts, articles and tips for entrepreneurs.

2. FreshBooks

Image courtesy of technologyadvice.comFreshBooks is another easy-to-use accounting software option that is incredibly popular with small businesses. Here is what they say about their service:

Small Business Accounting Software

Designed For You

FreshBooks makes your accounting tasks easy, fast and secure.

Start sending invoices, tracking time and capturing expenses in minutes. [source]

You can try FreshBooks free for 30 days. Thereafter, it will cost you around $20 for the basic package. It offers everything Wave does, including a payroll add-on if needed. The main differences are that transactions have to be manually imported from your bank or payment provider when using FreshBooks.

The main benefit that FreshBooks has over Wave is a time tracker. This may not be useful to you as a landlord, but if you have another business and want to keep an eye on where you spend your time, this could be what you are looking for.

With seamless connection between the mobile and desktop versions, you can track your time throughout the day, attaching chunks of productivity to a specific task or client. When it comes time to draw up an invoice, it is simple to attach detailed time records.

Another add-on offered by FreshBooks is printed invoicing for those tenants who request this feature. FreshBooks takes care of everything for you, so there is no need to worry about making it to the post office on time.

Their site is super-informative with webinars and other free information that is useful for entrepreneurs.

3. QuickBooks

Image courtesy of intuitglobal.intuit.comQuickBooks is probably the best known online accounting solution, as it is well established and has been around for a long time. Therefore, it’s no surprise it pretty much offers a one-stop shop for your accounting needs, many of which are useful for landlords. Here is their quote:

Easy accounting software.

Built for your small business.

Approved by accountants. [source]

This option is great if you are looking to grow your business. It imports transactions from your bank or payment provider quickly and continually checks for new transactions to process. Reports are slick and easy to read.

Features include bill management, invoicing and tax. While you can try QuickBooks for free for 30 days, you will need to move onto one of their various payment plans, which varies depending on the features you prefer. Plans typically range from $10 to $40 per month.

QuickBooks offers a small business center which shares hints, tips and advice. It has proven very popular with business owners using this service.

4. LandlordStation.com

Here at the Landlordstation, we tailor our accounting software specifically to the needs of landlords, and we focus particularly on receiving rental payments – which is, after all, a very important aspect of your rental business!

Our online rent payment solution electronically collects rent payments, application fees and more. This will streamline the process of collecting money for you and also maintain records automatically. Our software is easy to set up, and integrates with your existing account dashboard, so you can stay organized even if you have multiple properties. Our primary aim is to save you time and money. No longer is there a need to send rental reminders to your tenants or to queue at the bank in order to make deposits.

Once you have set up a secure bank account on our secure system, each tenant is given a unique login and they can make payments directly to the system. They even have the option to set up recurring payments, meaning they no longer need to remember to make payments.

We cover all eventualities, however, and send email reminders to your tenants when rent is due. They will be notified automatically when their payment is received. If a payment is late, we will tell them, too. In addition to the rental payments, our system is also useful for miscellaneous payments and deposits, for example.

Take a look at what Alex P., a residential broker, had to say about the LandlordStation’s rent payment service:

I love the organization! My tenants pay rent online and I can keep all of their signed documents completely organized by property so that I don’t worry about names getting mixed up.

Summary

There are numerous software accounting options available to you, and often the choice will come down to your personal preference regarding the offered features. The solutions we have reviewed in this post today are affordable for most budgets and will undoubtedly save you time and money in the long-run. It may be beneficial to take advantage of the free trials to see which works for you and which is best suited to your business needs. Of course, as a landlord, your needs will be quite specific, with rent collection being high on your wish list.

A red flag to be aware of are systems requiring time-consuming data entry. The great news is that any of these accounting software tools will help you keep a close eye on the movement of money into and out of your rental business. This will prove useful not only when it comes time to file taxes, but also if you are considering expanding. The financial data can be analyzed and used to determine if you are in a position to take on further loans to purchase more property and expand. Even if that is not your goal, it is essential for the smooth running of a business of any size to remain organized when it comes to finances.

How Landlords Can Make Use of Smart Home Gadgets

Image courtesy of blog.pegasuslighting.comDoes the phrase smart home gadgets conjure images of sci-fi fantasy to your mind? If so, it might come as a surprise to learn that the homeware market has been slowly filling up with techno-toys that could actually be perfect for use in rental properties. There are numerous gadgets that could be useful to landlords and tenants alike, and they are more affordable than ever.

The smart home gadgets we will look at in this blog post fall into four main categories:

  • Energy Saving
  • Damage Prevention
  • Security
  • Safety

They offer quick solutions that can make life easier and save time and money over the long run. They have a great novelty value, too, and may give your rental property the edge in desirability when looking for a new tenant. Let’s take a look at what is available….

Energy Saving Smart Home Gadgets

The first smart home gadgets we will look at are the energy savers. These can be particularly useful if you charge a rental fee inclusive of utility bills. Small changes add up to big savings over time.

Smart Lights

Smart lights allow you to save electricity in several ways, ranging in budget. It’s possible to devise a full smart system with a hub, which will detect human activity and respond by turning lights on and off, room to room. This is, of course, not cheap; however, there is a more cost effective option that doesn’t require a hub and can be controlled from a smart cell phone. Bulbs, such as the LIFX model, simply replace your existing bulbs allowing you to set a lighting schedule from your phone, making it less likely for your tenants to fall asleep with the house illuminated, for example. These cost approximately $30 per bulb.

Smart Thermostat

There are various phenomenal smart thermostats available to purchase that are sleek, smart, intuitive and energy saving, too. We like the Nest Learning Thermostat, which automatically adapts with your lifestyle and the changing seasons. It programs itself within a week and is quick and easy to install. It can be controlled with a smartphone which provides reports on how much energy has been saved each day. Costs are about $250.

Smart Water Heater Timer

Smart water heater timers, such as the Aquanta, are another fantastic option to save energy and money. “Heat water when you need it, save money when you don’t. The Aquanta retrofittable water heater controller brings your electric or gas water heater out of the basement and into the palm of your hand to heat water only when you need it.

Again, this device offers the convenience of control from a smartphone and can be matched to the living schedule of your tenants to ensure maximum efficiency. These are rather affordable, starting at only $150.

Smart Faucet

A smart faucet is great for saving water, and it may surprise you just how much that might be! This SmartFaucet TM claims it could be a savings in excess of 15,000 gallons per unit per year. The smart faucet sets to your preferred temperature and works with a constant flow function, activated without needing to turn on the faucet valves … 100% of unused water is conserved. And, according to their website, the need for a contractor to fix leaky faucets is eliminated with this product!

Installation of the Smart Faucet™ device will also instantly solve a leaky faucet problem, without the need to call a plumber, providing additional water and cost savings.

Image courtesy of techomebuilder.comThermal Leak Detector

A thermal leak detector, such as Black & Decker’s model detects wall surface temperature, enabling you to spot hidden energy leaks. It’s claimed that by fixing these leaks, a savings of up to 20% on overall heating and cooling energy costs can be achieved. This will cost approximately $26 and could be great value, especially if you own a number of units.

Damage Prevention Smart Home Gadgets

The smart home gadgets in the damage prevention section are the ones that could save you the most money in terms of avoiding costly repair bills. These products allow you to monitor water leaks, freezing and humidity, which are often hidden problems, until the real damage is obvious.

With a smart water detector, such as this one from Roost, you can stay ahead of the game.

Image courtesy of wonderopolis.orgOUTSMART WATER WITH OUR WATER AND FREEZE DETECTOR

Smart multi-sensor designed for home protection.

The Roost Smart Water and Freeze Detector is a Wi-Fi-connected, multi-function sensor that detects major home problems like water leaks, humidity and freezing/high temperatures.

The beauty of this for landlords: you can be notified directly via your smartphone if water, humidity or a severe drop in temperature are detected. This will allow you to stay on top of issues, preventing costly damage due to frozen pipes, silent leaks or mold issues. This smart device is also very affordable and runs on batteries.

Security Smart Home Gadgets

As a landlord, you have a legal responsibility to take reasonable measures to assure the safety of your tenants. The smart home gadgets in this section will help you to achieve just that.

Smart Home Lock

With a smart home lock, and/or doorbell camera, such as the one offered by August, you can lock and unlock your door, create virtual keys and images.indiegogo.comsee/speak with guests from your smartphone.

This could be quite useful for landlords, as it allows you to provide access to contractors remotely, when needed, but there is the potential for this technology to breach the tenant privacy boundary.

Smart Security System

A smart security system, such as this one offered by Canary, is the ultimate in security gadgets, described as the “all-in-one home security system you control from your phone. It’s built to learn and sends intelligent alerts with HD video and audio directly to your phone.” This option is pricey, but may be necessary if your rental unit is in a high crime area.

Safety Smart Home Gadgets

The safety of both your tenants and your property are of utmost importance, and the following smart devices can save a life or even just a trip. As a landlord, you should be  always thinking about legal implications of not taking safety seriously in your rental properties, as well as the heartache associated with not installing devices such as these.

Smart Detectors

Smart safety devices, such as smoke and carbon monoxide from Birdi, pride themselves on reacting quickly to fires, carbon monoxide leaks and even natural disasters, while minimizing the case of false alarms. In the event of an emergency, loved ones and emergency services can even be notified.

An elegantly-designed and powerful smoke and carbon monoxide alarm + air quality monitor that keeps you healthy and safe. Our proprietary smoke detection sensors minimize false alarms while our precision air sensors uniquely track pollution, including PM2.5, CO2 as well as temperature, humidity and ambient light.

The devices can be controlled with a smartphone, and there is even an option to automatically receive new batteries through the post when the old ones need replacing. One detector costs about $119, and considering it’s long life span, could be money well spent.

Solar Powered Path LightsImage courtesy of img.grouponcdn.com

The final smart device we’ll review is the lowest tech one on the list, but could save a fortune in legal bills. Solar powered path lights can prevent a fall showing you take the safety of your tenants and their guests seriously.

They’re affordable and so easy to install, usually a case of sticking them straight into the ground. These lights can be easily relocated and are, of course, powered by solar energy, meaning no wires are necessary and no electricity costs. Recent upgrades in technology mean that the light emitted is brighter than previous models.

Summary

It may seem unlikely at first glance, but we have seen here that smart home gadgets can prove invaluable to landlords for use in rental properties. The technology is becoming more affordable, and the money saving capacity can’t be ignored.

Many of the products offer intuitive, next generation solutions to old problems. They work simply, making life easier and keeping you in the loop about your investment property. Whether you’re looking to save energy and reduce your utility bills, stay on top of potential damage to pipes and leaks, avoid legal bills or ensure the safety and security of your tenants, there is a smart device for you.

The LandlordStation Guide to the Legal Do’s and Don’ts of Screening Tenants

Landlords, we understand how long it can take to choose your rental location, find your ideal unit, organize the funding and prepare the place so it’s ready for tenants … every step of that process costs you money. We realize your goal is to have someone living in your unit as soon as possible! Of course you want to start immediately receiving rent, so you can start to earn money on your investment.

However, we’re here to warn you to not rush the last step: finding a tenant. Choosing the “wrong” tenant can be a devastating blow to your rental business and can cause enormous damage to your rental property!

Unfortunately, the worst case scenarios – such as non-paying tenants who don’t take care of your property and refuse to leave – do happen! While it is impossible to guarantee you can always avoid this situation, careful and thorough tenant screening can go a long way in helping to find a solid tenant, allowing you to protect your investment, as much as possible.

The only problem is that screening tenants is a legal minefield. Many landlords inadvertently break housing laws and expose themselves to potentially crippling legal action. This blog post has been created to help you navigate the law governing tenant screening so that you can find the right person to live in your rental unit, without breaking the rules. Here are the do’s and don’ts you need to know.

Do Investigate Housing Laws on Rental Limits

Before you begin advertising and screening potential tenants for your rental property, take valuable time to research the specific laws in your state. There may be restrictions on the rent you can charge, the security deposit you can ask for and, certainly, on the screening criteria you can use to decide on the successful tenant to move into your property. To learn the rights of tenants in your state, click on this link.

Image courtesy of thebudgetnistablog.comDo Decide a “Rent to Income” Ratio

When you’re ready to advertise for tenants, decide upfront on your basic requirements. This will ensure you can weed out the majority of callers immediately without investing too much time into the process. A useful first screening determinant is a rent to income ratio. Many landlords decide that their tenants must be earning at least three times the rental amount.

Do Conduct Initial Screening Over the PhoneImage courtesy of interviewsos.com

When you advertise your vacancy, ask interested candidates to call. This will allow you to discuss your basic requirements and conduct an initial screening quickly and efficiently. This way you won’t waste their time and you will also save yourself hassle, too.

Don’t Ask Discriminatory Questions

When screening potential tenants, you must always be aware of questions that may be discriminatory. You may not refuse to rent your property based on any of the following factors: race, color, national origin, religion, sex, familial status or handicap. These are known as the protected classes.

Do Meet the Prospective Tenant

Once you have conducted your initial screening, it’s beneficial to meet with the prospective tenant at the property. This gives them an opportunity to see if the property is suitable for their needs and also gives you an insight into the kind of person they are, too. Be aware of answering questions such as, “Is the area safe?”

Anything you reply here could be considered misleading. In this instance, it would be better to suggest that the individual researches police statistics and visits the location at various times to make their own decision.

Do Request an Application Fee and Permissions

If both the potential tenant and you are satisfied to proceed with the application following the meeting, send an application form, with requests for permission to complete background checks, and also collect an application fee. This will give you everything you need to start the full screening process.

Do Follow a Set Process Every Time

Be sure you stick to the same process every time, for every single potential tenant and keep records of your findings. This keeps the application process fair and consistent. It protects you in the event of legal action brought about by the potential client, and it also helps you to compare results from different individuals.

Do Complete a Credit Check

A credit check will provide you insight into the financial responsibility and spending habits of a potential tenant. You’ll learn their history of late payments as well as any debts they may have.

Do Complete a Criminal Check

You want to keep your property and other tenants safe from harm, so be sure to conduct a search of any convictions over the last seven years.

Do Check Employer References

Employer references are important, as you want to know that your potential tenant is able to pay their rent on time every month. A steady income is a good indication of reliability here. Look for three years employment history and the current wage. It is useful to phone the current employer for this information.

Do Check Landlord References

When it comes to landlord references, be aware of the potential for false details to be given. Try to use specific information from the application form to verify the accuracy. Ask for information about the duration of the lease and whether the payments were made on time each month.

Do Check Personal References

With personal references, there will virtually always be an element of bias, as the prospective tenant will provide the contact information of family and friends. Don’t let this put you off however, we recommend you still follow up and make these calls, as the information can be useful.

Image courtesy of tempay.comDo Use Social Media

Social media can be a very useful tool for landlords to use when screening potential clients. It can be used to verify the general details that have been provided on the application form. It is also a great way to determine if the individual has pets.

Always keep in mind that information shared on social media may not be true, and, above all, be very careful of breaching the potential tenant’s privacy. Any information that you inadvertently discover regarding protected classes may not be used at all in your decision making process.

Don’t Fall for Emotional StoriesImage courtesy of s3.hdstatic.net

When deciding on the right tenant to move into your rental property, make sure that gut instinct or tugs on your heart strings aren’t playing a part. Choosing the best tenant is essential for the smooth running of your business, so it’s imperative you have a sound basis behind your final decisions.

Do Take Full Deposit

When you decide on the right tenant and agree on a date for them to move into the property, don’t be tempted to accept anything less than the full deposit and full first month’s rent before they enter the property. 

Image courtesy of insuranceage.co.ukDon’t Hand Over Keys Until Everything Is in Place

Only once the full process is complete, contracts are signed and money is in your account, should you hand over the keys to the property.

Summary

Every landlord wants to secure tenant that will pay their rent on time, every time and respect their property; therefore, it is essential to thoroughly screen each prospective tenant. This can take time, but it’s worthwhile, if you want to avoid potential future legal action and hassles with eviction. At LandlordStation, we offer a quick and easy online tenant screening service saving you a tremendous amount of the hard work. The whole process can be started with just an email address, and we take it from there … it’s that simple.

Your prospective tenant can input their sensitive personal data without you needing to get involved. Once the details have been given, we conduct checks on the following:

A full report is then sent to you, so you can make a quick informed decision to approve or reject from there. It can be as simple as that to find great tenants, protect your investment and stay within the law!

What Does the Eviction Process Really Cost You?

Evictions are a landlord’s worst nightmare. If you’ve been through the process, you know this from experience. If you haven’t, you likely know from other landlords’ experiences.

There is nothing enticing about going through what can be a long, expensive, and drawn-out process to force a tenant from your rental. If it’s come to this, it’s a safe bet that you’ve reached your limit with them, but what is the true cost of an eviction?

For your tenant, an eviction on their record can affect their credit score and limit their options on rentals in the future. An eviction judgement will be available to future landlords, employers, or anyone else that would search their public records. The eviction will remain on their report for, on average, about seven years.

Those are a few things that it will cost the tenant, which can be a major hindrance to them moving forward (and a good deterrent to keep them from breaking the lease in many cases!), but what does it mean for you as the landlord and property owner?
 

Why Do Evictions Happen?

An eviction will, in most cases, boil down to a breach of some kind in the lease.

This can show in a variety of ways. Your tenant may be late in paying rent, be involved in criminal activity of some kind on the property, damage the rental property, or refuse to rectify some other action that they’ve taken in direct violation of the lease.

While they may have what sounds like a valid excuse for their behavior, the key is to keep things in perspective for your business. If they do not pay rent, there is a good chance that it will hurt your ability to pay on the mortgage or to keep up with needed repairs for the property.

A tenant that commits a crime on the property opens the landlord up to legal action against them as well as the tenant.

Damage can be done to the property in a variety of ways including, but certainly not limited to, unapproved pets scratching up floors, too many people living in the rental, smoking indoors without permission, and so much more. If you’re particularly unlucky, you may have a tenant that stretches the boundaries of creativity when it comes to the damage that they leave in their wake.

Noise complaints, threats against other tenants or neighbors, and other issues that are likely covered in your lease can cause a major problem for you as a landlord if they continue unchecked. In the end, if the tenant refuses to work with you or if the situation opens you up to liability, an eviction may become imminent.

 

Do’s and Don’ts of an Eviction

As with all legal processes, you will want to check your local eviction laws to make sure that you are crossing every t and dotting every i.

There are few things as exasperating as getting to the end of an eviction process (also referred to as an Unlawful Detainer Case) and having the case thrown out on a technicality, which will put you back at the beginning. In general (with the understanding that local laws may differ from state to state and sometimes even from county to county), an eviction process will look something like this:

  1. The tenant violates the lease in some way. What that violation is will depend on how you approach the next step.
  2. Provide your tenant with a written warning. While there may be a specific instance in which you are legally able to jump directly into the eviction process, most states will require a written warning that allows the tenant to rectify the problem before the eviction begins.
  3. If they do not correct the problem at hand, you will need to provide them with a Notice of Eviction. You will want to make sure that you follow your local laws on how this should be delivered and keep careful records.
  4. Eviction notices allow a time period for the tenant to cure the problem, but once the allotted time has passed, you will need to file the appropriate paperwork with your court system. (There will be fees involved here, but we’ll get to that in a bit.)
  5. Next you should get ready to attend court. Make sure to have everything filed correctly and all of your evidence organized. Even if the tenant doesn’t show up to the hearing, you will need to, and you will need to be prepared, with documents in writing and verification of the dates they were delivered.
  6. The eviction date will be set if the judge rules in your favor. In the best case scenario your tenant will leave by that date. You may need to contact the sheriff’s department if they do not.
  7. If the tenant owes you money, you may wish to try to recover some of those lost funds.

That is the best-case scenario. There are plenty of places in which a stubborn tenant can cause trouble and add stress to the process.

The thing to remember is that you cannot control them, but you can control your process, and one surefire way to set yourself back is by performing what is considered a Wrongful Eviction. Here are just a few things to avoid during an eviction so that you make sure to stay on the right side of the law:

  1. Never change the locks to the rental while the tenant is still occupying the unit.
  2. Never threaten or bully the tenant in any way.
  3. Never remove their property from the unit.
  4. Never shut off the unit’s utilities.
  5. Be careful about accepting partial rent.*

 

The Cost of an Eviction

Monetary Cost

Evictions can be costly with fees at every turn, loss of rent, and more. Even if you are on top of things and begin the eviction process the moment that your tenant is outside of their grace period for rent, you will still be out that rent plus what would have been owed for the duration of the eviction process. This could be anywhere from five weeks to three months.

On top of this you will have the court fees to pay. These can range anywhere from an average of $400 to $750 or more, depending on your state and local process, and that is just for the fees.

If you’re considering hiring a lawyer to help with the case, you may be looking at anywhere between $500 to as much as $5,000 if the tenant decides to try to contest the eviction in court.

If you let your frustration get the better of you and chose to wrongfully evict the tenant (also referred to as a “self-help eviction” because the landlord takes it into their own hands to force the tenant out without going through the legal process), you will find yourself back at the beginning of the process all over again, paying the same fees over, and possibly be required to pay the tenant’s fees as well.

Once you have won the eviction case, you are still not done.

There will be a time set by the judge that the tenant must be out by, but if they’re not, you may have to contact the sheriff’s office to have them escorted off the property. That could cost you around $50, depending where the rental is located.

Once they’re out, the cleanup begins. It’s a fair bet that if you have had to remove a delinquent tenant that they will not go to any great pains to leave the rental in the same state that they found it in. There will be tenants that may even leave some of their possessions behind, and in many states you are not allowed to simply toss or sell these items. You are required to store them for a length of time in case the tenant comes back to reclaim them.

You will also need to change the locks, which can range depending on if you hire a locksmith or do it yourself. With storage fees, cleaning fees, locksmith fees, and any repairs that you have to make to damages done, even if you have a security deposit from them you can see how it starts to add up in a hurry, and that’s after the eviction judgement has been passed and you’ve shelled out potentially thousands of dollars to go to court.

Other Costs

Evictions are expensive, though it’s not limited to a monetary expense. If you are a single landlord without the support of a property management firm behind you, you may feel overwhelmed by the stressful situation.

Evictions cost time, energy, and they take focus away from other things that need to be done.

You will need to set aside time for collecting evidence, for the court date, and all of the other little details you will need to make sure you have put together. If you have never been through an eviction before (or even if it’s just been a while), and you choose not to hire an attorney to help, you will need to make sure that you take the time to thoroughly research the laws in your area or you may find yourself right back at square one, which as we mentioned earlier, will cost both time and money to go through the process again.

You may receive phone calls at all hours from frantic tenants that realize that they’ve let the situation go too far and are now angry with you or they may shut off communication altogether, leaving you to worry about the state of your rental that they are still living in. Even if they are difficult to reach, you’ll need to make sure not to harass them, though, or you’ll open yourself up for trouble in the eviction process.

 

What Are Your Options?

All in all, evictions are a nasty business. The tenant is being forced out of their home and you are being put through the financial and emotional stress that comes with an eviction and finding a new tenant to fill the unexpected vacancy. If there is any chance that you can avoid the eviction, you should.

The first step to avoiding an eviction is a thorough, detailed tenant screening. This should include a credit, criminal, and eviction report to give you a well rounded view of the rental applicant’s history and reliability. You should collect references from the tenant, verify employment and income, and watch out for the warning signs of a potentially poor tenant choice.

Once you accept a tenant that has been vetted, you will need to make sure that you have a solid lease. You should never allow a tenant to move in without first signing the lease with them, legally binding you both to the landlord-tenant relationship and safeguarding your business. The lease will detail out what is expected from both parties, including rent, policies, maintenance expectations, etc etc… If eviction becomes inevitable, a solid lease will help you in the legal battle.

Your diligence should not end when the tenant moves in. You will want to remain aware of any signs that could give you a heads up that your tenant will break the lease. If your tenant cuts off communication with you suddenly or you see signs that they are making a move long before their lease is up but they haven’t said anything, you’ll want to be ready.

There may be select times in which it is more financially reasonable to offer to pay your tenant to leave rather than go through the eviction process. Depending on the situation and how much the tenant is willing to accept to keep their credit history in a bit better shape, this can prove to be a reasonable option to consider.

 

Conclusion

In the end if the tenant is costing you money and won’t leave you may not be able to avoid an eviction. It’s part of the rental business and managing your own properties. The key is to learn from the experience. Your first eviction process may feel like you’re shooting in the dark, but it’s a learning experience. Take a deep breath, do your research, speak to other landlords that have been through similar situations, and seek legal advice if you’re unsure of something.

 

* Some local laws may stop you from accepting partial rent during the eviction press or supplimenting that lost rent by subletting any part of the property

Cut Property Maintenance Down to Size With These 5 Steps

Purchasing a rental property and finding a suitable tenant is only the beginning of your journey as a landlord. With such a large investment it is important to keep your property in great shape – you should be in this for the long haul after all. The 2 main keys to building a successful rental business are:

  • Maintaining your investment property to keep its value steady
  • Keeping your tenants happy and the rent coming in

You can, of course, choose a ‘reactive’ approach where you wait until an issue arises, and you receive a harried phone call from your tenant with an urgent need to fix something. However, this is not something that we would recommend if you want to avoid gray hairs and large unexpected bills.

The best option is to treat your investment property like a car. Inspect and maintain it regularly, dealing with small repairs as they arise. It may sound like a lot of work, but it will ultimately save you time and money in the long run. Here, we share our 5 simple ways to keep the maintenance of your rental property under control.

Step 1 – Regular exterminations to prevent infestation of insects and rodents

Image courtesy of www.illhostinginc.comWhen it comes to pest control, the best case scenario is to prevent infestation. This can be achieved with regular treatments, which some professionals suggest should be done monthly, although quarterly treatments can also be very effective. If you choose to enlist professionals to complete the regular exterminations these visits are often affordable, although it is possible to conduct them yourself with a little research.

The costs involved are minimal compared with dealing with an actual outbreak of rodents or insects, which could, in the worst cases, damage the infrastructure of the property or chase away your tenants.

The Bug Man demonstrates the best control tactic for bugs with available options depending on your budget.

“The best way to get rid of bugs and keep them under control is to invest in regular treatments. If you want complete elimination of bugs, choose our monthly plan. If you need treatment for pests like spiders, ants and millipedes that you see less frequently, choose a bi-monthly plan.

Need affordable control? Try our bi-monthly seasonal plan to eliminate seasonal pests like wasps, ladybugs, box-elder bugs and more. Finally, if you only have pest issues in spring and fall, try our bi-annual treatment. Or, if you don’t mind the occasional pest but have flea, rodent or bat issues, check out our one-time plan.” [source]

Step 2 – Check for leaks and water damage

Image courtesy of www.debkelly.comRegularly inspect your investment property for leaks and water damage, both internally and externally. Particularly after heavy rain, ice and snow, you should take the opportunity to inspect the drainage around the house to ensure that water is flowing away as it should. Take a look at the masonry for cracks and other signs of weather damage. Regularly identify any potential issues with the gutters around the house – something so simple that can prevent a host of issues. Take a look at what Patch says about the importance of maintaining clear guttering.

“Clogged gutters can wreak havoc with the natural drainage of water away from your home. This can result in damage to fascia, soffit, roofing or even begin leaking into your home. Additionally, water damage can ruin the very foundation of your home – something you NEVER want to happen.

Some of the many benefits of gutter cleaning include:

  • Prevent water damage to your home
  • Avoid nesting areas for termites, birds, mosquitoes and other insects
  • Prevent destruction of expensive landscaping
  • Maintain value and beauty of your home

After rain, you should also take a look inside the house for soft spots on the roof, ceilings and walls, which could indicate there is a leak. Additionally, your regular inspections should include checking around windows, showers, toilets, basins and boilers for signs of water. These are the typical spots that can spring a leak, and it is best to be aware of them as soon as possible.

Ongoing leaks can be very costly from 2 perspectives: the cost of increased water usage as well as the hidden damage that water may cause. This can be anything from mold (which may require a removal specialist) to issues with the foundation of the building.

Image courtesy of www.housedoctors.comStep 3 – Examine the integrity of grout and caulking

Grout and caulking are what you will find in the joints between tiles and the cracks between the trim and siding or masonry. Unfortunately, these products do not last forever. Due to the nature of their work, they are regularly exposed to water and lose effectiveness over time. Be sure you don’t overlook these seemingly small details when you inspect your rental property. In order to keep the seals watertight and prevent leaks, you should include caulk and grout in your regular maintenance checklist and refresh whenever necessary.

Step 4 – Test all safety equipment around the houseImage courtesy of www.paragonstl.com

As a landlord, you have a legal duty to uphold your tenants’ legal rights to live in a safe environment. This means that you must install smoke and carbon monoxide detectors as well as fire extinguishers. Installation is not the end of your responsibility, though; it is important that you test the safety equipment on a regular basis to ensure they are working properly.

Such maintenance can save lives, so make sure you don’t skip this step. In the event the equipment fails when needed, you may even find yourself facing legal action. So, don’t drop this ball!

Step 5 – Regularly maintain filters, coils and closed water systems

Image courtesy of www.homestructions.comDon’t neglect the unseen parts of the systems keeping your rental property ticking. This includes cleaning the filters in forced air systems, such as air conditioning, and vacuuming refrigerator coils. Also, flush out closed water systems annually to clear any sediment that could cause problems over time. Of course, you can enlist professional help with this if required.

Keeping everything in good working condition is usually a simple task and can help appliances last for years longer than if you neglect them. When they are running efficiently, it often helps to stop bills from creeping up, too.

Don’t forget the garden

While you are inspecting your rental property, don’t overlook the garden. While it may seem superfluous to the essential running of your landlord business, there are legitimate reasons we suggest it.

Keeping the patio and walkways clear and free of tripping hazards not only keeps the property looking neat and tidy, but will also prevent any potential legal issues should the tenant fall and injure themselves. If the yard is kept trimmed, you can reduce the likelihood of infestations; keeping garages clear also removes safety hazards.

This is not an area to be taken lightly. Landlords are frequently found liable for injuries that occur on their premises even if it is a guest of the tenant that is hurt. Take a look at what Nolo.com says on the subject:

“To be held responsible for an injury on the premises, the landlord or property manager must have been negligent in maintaining the property, and that negligence must have caused the injury. All of the following must be proven for a landlord to be held liable:

  • It was the landlord’s responsibility to maintain the portion of premises that caused the accident.
  • The landlord failed to take reasonable steps to avert the accident.
  • Fixing the problem (or at least giving adequate warnings) would not have been unreasonably expensive or difficult.
  • A serious injury was the probable consequence of not fixing the problem (the accident was foreseeable).
  • The landlord’s failure — his negligence — caused the tenant’s accident.”

Summary

Protecting your investment through regular maintenance of your rental property is a sensible strategy. With frequent, continual, small repairs and preventative measures, you can keep your asset standing strong and holding value for years, which is essential if you intend to make a good profit a few years down the line. Of course, in the immediate term, regular property maintenance will keep your tenant happy (and paying rent) as well as protect you from any legal issues.

If it feels like too much of an effort, you can even hire property managers who will inspect the properties on your behalf and keep up with the repairs for you. Whichever option you decide on, protecting your investment in this way is a good business practice and should not be overlooked.

Is Your Rental Ready for Winter?

It’s that time of year again. The temperatures begin to drop and you’ll see the first flurries of the season.

There’s a dusting on the roofs, on the grass, and on the tops of the cars left out the night before. The snow can be beautiful, but as more and more of it comes, it can cause a real problem, especially if you are a landlord and property manager.

As beautiful as snow – and even ice – may look from your window with the fireplace going behind you, it can cause some serious damage if you’re not prepared.

Even light ice and snow, if it sticks to more than rooftops and the grass, can cause slip hazards.

If you own an apartment complex or have outdoor stairs of any sort on the property, they could become very icy and dangerous, leading to potentially serious injuries if your tenant or a guest takes a tumble.

Locks on the doors and gates might freeze shut, making it hard or even impossible for your tenant to leave the property.

Piles of snow may also keep them housebound, if their car is snowed in or if the snow is piled in front of the door so that they can’t leave.

Water in the pipes that freezes may cause them to burst and too much snow on top of a roof can, eventually, cause it to collapse in due to the weight.

In the same way, branches become brittle with too much ice weighing them down and can damage cars, roofs, or passersby that are unlucky enough to be walking under at just the wrong time.

Don’t let the dangers of the colder months overwhelm you. There are precautions that you can take both before and after the snowfall to protect your tenants, your rental property, and everything inbetween.

Preparing for Snow and Ice

While you likely won’t be in the home when the freeze hits, as a landlord and/or property manager you can prepare your tenants to take care of the rental for you.

Your lease should detail out who is responsible for what.

If you own an apartment complex, you are likely responsible for de-icing stairways, common walkways, and possibly even a parking lot if you have it.

If you rent out a single-family home, your tenants will likely be responsible for these things.

Either way, it should be detailed out in the lease from the beginning so that everyone can be on the same page.

Make sure to check your local laws (both state and county) to ensure that your lease matches up.

One of the first things you should do as winter approaches is to schedule a time with your tenant to drop by the property.

You’ll want to check the furnace, the smoke alarms, and carbon monoxide detectors.

You don’t want the heat giving out during a snowstorm or find that a smoke alarm or carbon monoxide detector has gone bad the hard (and dangerous) way.

When you drop by, you may consider providing your tenant with a written reminder of their responsibilities for the colder months.

Include tips and tricks that you have learned over the years to better help prepare for it.

If the temperatures are forecasted to drop below freezing that night, leave the faucets dripping. That will help to keep water moving through the pipes so that they are less likely to freeze. It doesn’t do you or your tenant any good to have a frozen or burst pipe. You’ll need to call a repairman and, depending on the pipe that burst, they may find themselves without water for a short time.

You may also want to detail in this letter (especially if it’s the first freeze for them in the rental) what you will provide and what you will not.

If they do not have access to snow shovels, you may consider having one that you can lend to them.

They should keep salt, sand, or even kitty litter to help melt the ice.

If they’re looking for a quick way to remove large areas of snow out of your pathway, consider laying out a tarp down before the snowfall starts to catch it. If this is done over a walkway or driveway, it can be moved the next morning after a heavy, overnight snowfall.

Snow shovels and snow blowers will also help clear walkways and driveways after the snow has fallen and keep the snow from freezing to the concrete.

Check with them to see if they have experience removing the snow.

If you have a snow blower that you’ve left on the property for them to use, make sure they are aware of both how to operate it so that they do not damage the machine, as well as best practices to make sure they remove the snow efficiently.

The last thing they’ll want to do is battle a snow blower first thing in the morning just so they can get to work and end up late because they weren’t certain how to use it.

Ways to Help Your Tenant

When applicants come to look at your rental to compare it to others in the area, you’ll want to make sure yours stands out above the rest.

If you live in a location where snow can become a real problem, this is a place that you can shine.

Check out the following projects that you may wish to consider to make your rental property more desirable, especially during the long winter months:

  • Make sure all doors and windows are sealed. Drafts caused by loose doors and windows can drive the electricity bill for the property up as the tenants attempt to warm the unit.
  • Update out-of-date heating systems. If the heating system in your rental still works, but not efficiently, you may consider updating that system. Newer units are less likely to break down in the middle of a freeze, giving your tenants an extra layer of security.
  • Clear the driveway. There are a few options here. If you live close to the rental and you’re a do-it-yourself kind of landlord, you may offer to help them dig their car out in the morning. If not, you may wish to simply have someone on hand to call for that. While it’s a nice gesture to have a referral for this kind of work, you may consider paying to have this done, adding an extra perk to your rental that may not be provided with another.

Winter affects parts of the country very differently.

While rentals in New England may have already seen their first big snowstorm and expect more to come, rentals down in Texas may simply have to take a few precautions on the occasional overnight freeze.

You’ll want to approach your own rental with your local climate in mind, but regardless of where you live, there will be steps that you need to take to protect your rental and the tenants that live there.

Where to Start: The First Steps You Should Take as a New Landlord

As a first-time landlord, you want to get organized from the beginning to make your life easier.

Once you’ve decided to take the plunge into owning rental properties, your next steps will determine your chances of success.

1. Utilize Property Management Software

Keeping records of all your payments and expenses is an essential part of being a landlord.

Tax time will go much smoother if you have organized data, and you’ll be more likely to increase your deductions if you have maintained your records all year instead of scrambling last minute to find receipts.

You may also use property management software to advertise your property as available on listing sites, send and receive documents, collect rent online, and more.

It often helps you streamline your process and limits the number of programs you use to keep up with the aspects of your rental business so that things do not become mixed up.

2. Learn State Laws

Take some time to read the laws on tenant-landlord relations applicable in your state.

While this may not be the most entertaining reading you could do, it will help you know what is allowable and what isn’t.

You don’t want to accidentally overstep your boundaries because you weren’t aware of current regulations.

Always keep in mind that while some laws are federal laws and will cover everyone, there are often state and even city laws that you will be required to know as well.

Make sure that you do not cut corners when it comes to keeping up with the legal side of property management.

3. Inspect the Rental Property

While you probably had an inspection completed when you purchased the property, you’re now looking at it through the eyes of a landlord and prospective tenants.

Consider updates that need to be made to attract tenants and keep them long-term. Look at the appliances and think about replacing them if they are older and not energy efficient.

Make sure the carpet or flooring is in good shape and that all windows and doors work properly.

Take a look at the exterior as well.

The outside of the unit will be the first thing that the potential tenant sees when they look over the property, and their first impression may be a deciding factor if they apply or not.

It will be easier to rent your property if everything is in working order and not too old.

4. Meet the Tenants

If you’ve purchased a rental property that already has tenants, you’ll want to make meeting them one of your top priorities.

Introduce yourself and make sure they know how to contact you.

Let them know if any changes will be made in the near future.

Having a new landlord can be a frightening concept for some people and may cause them to look for a new place.

To prevent this from happening, take time to get to know your tenants.

5. Be Insured

If you didn’t get insurance coverage as part of your purchase, make sure you do it now.

You’ll want to protect your investment in case of damage.

You’ll also want to maintain liability coverage for your property for injuries or damage to tenants or guests.

Even if you obtained a policy when you were financing the property, you may want to review it now to determine if you need higher coverage.

Also make sure that you have the correct coverage.

Some policies are meant for property owners that live at the property and may not cover damages if you are not a resident in that home.

Check with your policy and make sure that it allows for renters.

6. Determine Maintenance and Payment Schedules

Now is the time to set up a business that’s efficient and productive.

Decide who will be responsible for maintenance — whether you’ll take care of all issues or hire someone.

Set up a list of contractors and companies to call for various issues, such as heating or air conditioning, plumbing and electrical problems.

When you work with one company, it will respond faster when you have a work order.

You also want to decide about payment.Set up a payment system that works for you and your tenants.

You may want to hire an outside company to manage payments and late notices.

You’ll also want to have an accountant to deal with your finances if you have multiple properties.

You may even find it beneficial for your accountant to take care of a single property if you plan to expand in the future.

Start out your business on the right foot, and you can eliminate many of the problems landlords face.

You can focus on keeping your tenants happy or finding new tenants and making money from your property.

What Is a Rent Stabilized Increase

In New York City and other urban areas where the free market rental rates can be higher than what some residents can pay, rent stabilized units are available at varying levels of vacancy.

These units are not controlled by landlord-tenant negotiations or the free market conditions of scarcity.

They are instead governed by a controlling board or group that oversees how much a landlord is allowed to raise their rent every year.

If an apartment, flat, single family home, or other rental unit does not have rent stabilization, then most jurisdictions allow a landlord to raise the rent on that unit to whatever amount they want.

If a tenant doesn’t have a rental agreement in place that guarantees them a specific rate, then they are forced to either pay the new rate, leave voluntarily, or face an eviction process.

Rent stabilization avoids much of this, but that doesn’t mean tenants in these units won’t face an increase amount of rent.

What is a rent stabilized increase?

It is a specific percentage that the governing board or group states is allowed for all stabilized rental contracts over a specific period of time.

It Is Possible to Have a 0% Increase

Rent stabilization is often based on factors like the local unemployment rate, annual average household income, and other economic factors.

The supervising board or group will allow a rent increase based on the increase or decrease of those factors.

If a community is struggling to find employment and household incomes are low for a year, then a 0% increase may be a very real possibility.

Most rent stabilized increases tend to be in the 2-5% range.

One exception to this rule is if a landlord is charging less than the maximum rent amount allowed.

They are allowed to raise the rent to the maximum during the next period, no matter what the rent stabilized increase happens to be.

Tenants may not be able to control how much they pay in rent from year-to-year in many situations, but rent stabilization increases do limit the damage in high population urban areas.

Most increase demands are received with 60 days’ notice, but it is up to each tenant to know what they may be expected to pay in the next 12 months with this type of living situation.

Contact your local authority with any questions.