Organization in Your Life as a Property Manager

When it comes to property management, organization can help keep you moving steadily and smoothly forward.

Whether you’re in the middle of tax season or simply keeping up with files on tenants, it’s best to have a steady protocol that you follow throughout the process.

Start with your screening process.

Once you’ve placed your add for your rental you’ll start to receive calls and emails that show interest in the property. While there is certain information that you cannot choose your next tenant based on, there are plenty of details you can look into that will help you choose.

Have each applicant fill out the same application for you so that you are not asking different groups of people different questions.

Once you receive these applications you can begin your pre-screening process to weed out the applicants that will obviously not fit with your property.

Is your rental non-smoking? You can deny any applicant that says that they smoke on their application.

After you run a tenant screening report on them, did you find that their credit score is below what you’re willing to accept?

Make sure to have a list of requirements already written down so that no one can claim discrimination.

Saving Time

If you own multiple properties and/or have another job on top of being a landlord/property manager, you’ll probably find yourself hoping to save time where you can.

Driving all over town to meet with a new tenant to sign paperwork can be troublesome, especially when you find that either you or the new tenant have forgotten a piece of the paperwork and you’ll have to meet again.

You may wish to invest in a service that provides access to electronic signatures so that you can simply email the lease or any other paperwork to the tenant and they may email it back.

This saves time and money in gas and printing costs.

Saving Space

You’ll want to keep detailed files on each tenant that passes through your property.

While they’re there, you’ll be building the file.

Hopefully they’ll come in, live peacefully, and leave without any need to use it in any sort of legal action against them, but should you need to file an eviction you’ll want to be ready.

Choosing to store files securely online is becoming increasingly more popular the obvious reasons in that it saves space and it makes those files easier to search.

You may have the name, but shifting through draws of papers for your tenant may become tiresome.

If you have it files online you may simply click the search tool to find what you’re looking for quickly and easily.

As you continue on in your career you’ll learn your own tricks and pick up on those of other landlords and property managers.

Use these to your advantage to make sure you are not wasting your time needlessly.

Can Landlords Dispose of Abandoned Property?

If your tenant moves out and leaves items behind, state and local laws govern what you can do with the abandoned property.

So, before you sell your prior tenant’s television, it’s important to learn about your legal obligations.

 

Lost vs. Abandoned Property

Before making any plans, make sure that your tenant has abandoned — not lost — a piece of property.

If you find a ring in a medicine cabinet, for example, it’s possible that the item was misplaced and not abandoned.

In this case, you have an obligation to attempt to contact the previous tenants so the ring can be returned.

If the tenants cannot be found, but it is likely that the item was lost, the landlord may have to relinquish the item to the local police or sheriff.

However, if it’s likely that the property was abandoned, the owner will be able to keep, sell, or dispose of any items according to state law.

Notification Requirements

Most states require that you notify the tenant that he or she has abandoned items on your property.

Unless state statutes specify otherwise, a certified letter is often the best way to complete this step.

The letter should list the items that were abandoned, as well as tell the former tenant how to claim them and the time period in which he has to do so.

Waiting Periods and Storage Requirements

States with notification requirements will also specify how long you must wait before disposing of any items.

These time periods can vary widely.

Delaware state statutes require a seven-day waiting period to allow tenants to claim abandoned property after an eviction, while Vermont requires that a landlord wait 60 days.

Most states will also allow you to charge a reasonable storage fee that the tenant must pay before his or her items are returned.

Some states will also allow you to charge a removal fee.

If you intend to charge these fees, you should specify the amount in the notification letter you send.

Abandoned Property Disposal

Even after the waiting period has passed, state laws will specify what you can do with abandoned property.

Some states will allow you to sell, destroy, or keep any items.

Other states require that landlords hold a public sale for any items that exceed a certain monetary value.

Some states — including California, Florida, Connecticut, and Wisconsin — specify that any profits from abandoned property sales must be remitted to the state or town government.

State law may also allow the tenant to claim any proceeds from the sale of his or her property, as long as the claim is made within a certain time frame.

Other states require a public sale, but will allow you to keep the proceeds after a waiting period.

If your prior tenant still owes you money, the state statute may allow you to deduct the amount owed from the proceeds of any property sales.

Hawaii, Kansas, and Maine all allow landlords to deduct back rent from an abandoned property auction’s profits.

Researching State and Local Laws

Before removing any possessions from a rental, you must research your state and local laws thoroughly.

Most state websites have the applicable statutes published online.

If you don’t follow your state’s laws, your tenant could sue you for damages.

When researching laws, be sure to follow the correct guidelines.

Statutes may distinguish between property abandoned during an eviction versus property that was left after a tenant voluntarily moved out.

Residential and commercial rental property may also be governed by different laws.

Some cities have local laws that supersede state law.

To avoid any problems, landlords should document their actions carefully and keep any pertinent records.

This documentation should include a copy of the notification letter and receipts for any costs associated with selling and/or storing the abandoned property.

How to Fix a Flat Roof Leak

Any roof can leak, but the flat roof provides a rather intense challenge. If you want to know how to fix a flat roof leak, then the first step is to find where the leak is occurring from an exterior standpoint. Just because the water dripping through the ceiling doesn’t mean that directly above that leak is where the water is coming in from the roof. Here’s what you’ll want to look for on the outside.

Where Are the Low Spots?

Flat roofs tend to be built with a number of layers of tar and felt. Although the roof is flat, it isn’t perfectly flat. As the building settles, there will be low spots that begin to develop. It is in these low spots where the greatest potential of leaking happens. Usually this is pretty easy to see once you get eyes on the problem. Remove any water that may still be present and allow the surface dry.

Do You Have Any Cracks?

Once the roof has dried, will want to make sure you brush away any debris that may be in potential leak area. As you are doing this, you will want to look or any cracks that might be in the felt of the roof. Will also be looking for places where the tar may have not sealed the roof properly. This usually is in the form of a blister within the tar.

Did You Find a Tar Blister?

If you found a blister, then take a sharp knife and slice it open right down the middle. You need to go to the full depth of the bubble. Remove the edges of the blister and then mop up any water that may be contained within the bubble. You may need to let the edges of the blister dry after this and some blisters may be so large that you need to propped the edges up.

Is It Too Cold or Too Wet to Dry the Roof?

In some climates, it can be virtually impossible to let the roof dry on its own. You can supply artificial heating methods to encourage the process. Propane torches or portable heaters will work, but make sure you take all appropriate safety measures so that you and your building stay safe.

Seal up the Roof Once you Have Eliminated the Issue.

Whether you have found a crack or a blister, once it has dried, it is important to seal it up. Use roof cement along the bottom edges of any loose felt first and firmly pressed down so that the roof becomes flat once again. Using galvanized nails, affix any loose layers so that you have a firm repair. Then cover the nails and the repair site with another layer of roof cement to prevent future leaks from occurring. A flat roof is sometimes a necessity. The good news is that you don’t have to live with a leaking roof, even if it is flat. Use the steps to repair your situation and you will know how to fix a flat roof leak.

Eviction Moratorium: What This Means for Individual Landlords

This is the second post in our series exploring the impact of the eviction moratorium. You can check out the first post here

On September 4, 2020, a temporary national eviction moratorium on evictions for nonpayment of rent was announced by the Centers for Disease Control and Prevention (CDC) and the Department of Health and Human Services (HHS). The order was introduced to help renters who were unable to pay their rent due to the impact of the pandemic. It was originally set to expire on December 31, 2020 but had been extended several times before being allowed to lapse on July 31st, 2021. On August 4, 2021, the CDC Director signed an order extending the moratorium once again. This federal order extended the protection of tenants in certain counties through to October 3, but has since been blocked by the Supreme Court.  

In this post we are exploring what the moratorium has meant for individual Landlords.

Unpaid Rent = No Income

The biggest impact the moratorium has had on landlords is also the most obvious – landlords have been left with no income from rent payments yet, in many cases, they were still responsible for their own mortgage, taxes, and other bills. 

According to a study by the Aspen Institute, around 15 million people are currently behind on their rental payments and, according to the National Equity Atlas, those households owe over $21 million to landlords. 

While some landlords may have emergency funds in place to cover one, maybe two months of missed payments, very few individual landlords will have funds in place to cover multiple months of unpaid rent.

Unlike corporations, businesses, and agencies, individual landlords are likely to only own 1 or 2 rental properties. So, while tenants are required to pay accrued rent when the moratorium is lifted, it may be too late for individual landlords. Especially those who don’t have other properties generating rent and other means of income, if they are unable to make their own mortgage payments, they may lose their property through foreclosure.

Little To No Relief Reaching Landlords

There has been little to no relief reaching landlords so far. Despite Congress allocating $46 billion to assist, only a fraction of those funds have reached tenants, and even less has reached landlords, according to Treasury Department data.

There appears to be two main reasons for this: 

  1. Confusion surrounding availability of relief.
  2. The process requires the cooperation of the tenant.

Confusion Surrounding Availability of Relief

According to the Urban Institute, more than half of renters and 40% of landlords are unaware that aid is available to them, so are unlikely to be applying for relief. In addition, uncovering what is available isn’t straightforward. The same report from the Urban Institute states that, “Less than 6% of landlords and 11% of tenants indicated that they applied for federal emergency rental assistance.” This indicates that even when landlords and tenants are aware of these funds, there is still another stumbling block in the process. 

Each state has its own system and process for distributing funds. Some states require the landlord to start the application process and the tenant to complete it. Others require the tenant to start it. The need for states to put new systems in place and the fact that they are also dealing with staff shortages due to the pandemic have caused significant distribution delays.

Uncooperative Tenants

The process of claiming available funds does require tenant cooperation. Some landlords have reported that their tenants are refusing to complete the application forms.

For some tenants, online-only applications can pose a barrier, especially for those who are not tech-savvy, who are aging or who do not have easy access to the internet. Others are simply overwhelmed to the point of inaction.

Penalties For Landlords

Another way in which the moratorium has impacted landlords is in the penalties for failing to comply. A landlord who evicts their tenant despite having received the written notice of their status, can face up to a $100,000 fine and 1 year in jail. Combined with undergoing months without receiving rental income, the financial implications of the moratorium add up quickly for landlords.

What Happens Next?

The extended moratorium was to remain in effect until October 3rd, but on August 26th the US Supreme Court stated that the CDC did not have the power to impose the moratorium and as such, the extended moratorium was blocked.

What will happen now is uncertain and is likely to vary state by state. It is thought that there may be delays in many states as they work through the backlog of eviction cases.

How To Price Rental Property

The amount that you’re charging for rent will either attract tenants to your listings or it will repel them.

If you set the rental price too low, then you won’t get the right value for your property.

Prospective tenants might even be suspicious.

Set the rental price too high and you won’t get any takers!

That’s why knowing how to price rental property in your specific market will help you have a successful and profitable experience.

What Is the Most Common Method of Rental Pricing?

Many rental property owners will price their rentals based on the sales comparison approach.

This approach will place a relative value on the property based on a common and easy to understand metric.

Square footage is most often used, but the number of bedrooms and bathrooms is sometimes used as a metric as well.

If other landlords are charging $1 per square foot in rent, then it’s easy to figure out what your 1,500 square foot single family home will get in rent.

It is important to remember, however, that this approach is just a base line number.

Homes that are run down or are in poor neighborhoods won’t usually command the average price.

Homes in higher priced neighborhoods bring other perks that can raise price rentals.

Capital Asset Pricing Is Also Effective

With capital asset pricing, you’re valuing the risks versus the rewards of your own finances instead of looking at what the market can sustain.

It’s based on the return on your investment that you need to meet certain budgetary landmarks.

If you want a 5% return on your investment, then you add 5% to the expected monthly costs you’re paying for a rental property, including taxes and maintenance, and that’s how much you charge.

A similar approach is called the Income Approach.

Instead of looking at the overall return that can be achieved, however, the rental property owner is looking at income benchmarks that can be achieved.

The one downfall of both of these methods, however, is if you have high costs that are associated with property ownership.

If your costs are higher than other property owners, then your rent will be higher and you’ll get fewer tenants.

The Cost Approach Might Be the Most Effective

In the cost approach, the valuation of the rental property is based on what it is actually worth.

The land values are combined with the property improvements and then the best use scenario is then considered to set the price of rent.

If your property is in the country away from everyone else and there’s a lot of land to use for farming, then there may be more value than a 1 bedroom apartment under this scenario and so more rent can be charged.

As long as you keep rental prices within a competitive range, you’ll be able to fill your properties with good tenants that will pay their rent on time.

This will give you the income that you need and help you maximize your profitability.

Tips For Cutting Down on Rental Property Leaks

The average cost to repair water damage is $1,200, and taking on this cost will eat into your profits as a property owner.

Not only does water damage lead to the need for repairs, but it is also possible for mold to grow when water is left to seep into the walls of your rental property.

The best way to avoid costly repairs is by taking preventative measures before you rent the property out.

Here are some ideas that will help you lower your ongoing maintenance costs.

Keep an Eye on Water Costs
If you are footing the bill for water, you will be able to examine fluctuations in water bills each month.

If a tenant suddenly uses a significantly higher amount of water, there may be a hidden leak that needs to be fixed.

As soon as you notice fluctuations, ask your tenant if there is a reason for the spike in the water bill.

If there is no known cause, set up a day and time that you can inspect the plumbing in the property to determine why water usage has suddenly gone up.

Check Toilet Performance
When you do not live in a property, it can be difficult to determine whether problems with the toilet exist.

When you are doing work on the property before allowing a tenant to move it, be sure to flush the toilet throughout your time in the home.

Listen for the sound of continuously running water; if you hear it, there is a problem with the tank.

The cut-off valves connected to the toilet should be checked to ensure that they are properly installed.

Check the Pipes
Each time your rental property is vacant, you should check the pipes to determine whether there is any corrosion or warping that needs to be addressed before a new tenant moves in.

If you have long-term tenants living in the property, an annual maintenance check that includes an inspection of the pipes is recommended.

Inspect Hidden Areas For Water Damage
Hidden areas that are susceptible to water damage should be inspected on a regular basis.

Any time you are in your rental property, ask tenants if you can inspect under sinks, near the refrigerator and near the dishwasher to determine whether leaks may be occurring.

Call in a Professional
While do-it-yourself maintenance could be cheaper, any errors on your part will cost you more money in the future.

An annual inspection by an HVAC professional is recommended for your property, and these inspections will review performance related to water heaters and heating and cooling systems to determine whether these appliances may be susceptible to causing leaks.

Open Lines of Communication
The best way to detect a leak before it becomes a major issue is living in the property, but you do not have this luxury.

Encourage a positive and open line of communication with your tenants to ensure that they will alert you if there is a problem with leaking pipes.

Providing prompt maintenance service not only keeps your tenants happy, but it also cuts down on the costs that you will incur in relation to maintenance issues.

Maintaining a rental property represents a significant expense associated with owning investment properties.

Maintenance is one cost that you can keep down by taking preventative steps, and the tips for avoiding leaks that are outlined above could keep you from putting thousands of dollars into damage repair and mold remediation.

 

Pros and Cons of Month to Month Lease

Although the security of a 12 month or longer lease can be a good thing when you’ve got a quality renter occupying a property, it can be a nightmare when you’ve got a problem tenant. Having a problem tenant on a month-to-month rental plan makes like a lot easier because it means less legal maneuvering to get them out of your property. There are some other benefits to this type of lease, but there are some disadvantages as well. Let’s take a look.

The Pros of Having a Month to Month Rental

You can make changes to a lease easily with this type of rental agreement. Many communities require just 30 days notice to a tenant for you to change the rules on your property. That means you can revoke a rule about pets if you wish, implement a non-smoking policy, or create other reasonable stipulations that work with local laws to better protect your property.

This also includes being able to change the amount you charge for rent with proper notice as well. As long as there are no restrictions in your community regarding rental amounts, you can set a new rent when you need to do so instead of having to wait for the end of a guaranteed lease. Just don’t price yourself out of the market.

The final benefit of this type of rental situation is that it gives you flexibility to reclaim the property if you wish. If you decide to transition from a rental to making that property a permanent address, then you won’t have to wait long to do so. For renters who are transitory as well because of work, these agreements will help them secure a good place to live as well, giving you extra income opportunities.

The Cons of Having a Month to Month Rental

The benefits that you receive are similar to the benefits your tenants receive. Just as you can change the rules of the lease with proper notice, they can vacate your property with a proper notice of the same amount of time. If you don’t work on building a relationship with your tenants, then you’ll likely find a vacant property in your portfolio.

There is no termination charge for breaking the lease either. If your tenants decide to just move out, then they won’t owe you for any additional months of rent and may not even owe you anything for the cost of finding new tenants.

The return on your investment may also be lower with these short-term leases. If you’re having to pull multiple credit reports, background checks, and other pre-screening tasks, you’re losing money. Even if you have tenants pay for the application, it still takes time to run these reports and as a landlord, your time is definitely worth money.

A month-to-month lease may work well in certain situations, especially when rental pricing is rising in a local market. When demand is high and options are short is the best time to utilize this option. You can then transition to a 12 month or longer lease if occupation rates begin to decline.

How to Protect Your Property in an Eviction

Eviction is never a prospect you want to face, but it’s sometimes a necessary evil.

One of the scariest parts of removing tenants from the property, especially if you think they’re going to fight it, is the fact that they are living in your property.

There’s no telling what kind of damage they can do from the time you tell them they need to be out to the time the sheriff comes to actually remove them from the property.

There are a few steps you can take to protect your property in the event of an eviction.

 

Insurance

You should already have landlord insurance on the property, but if you don’t, get it in place before you send notice to the tenants about an impending eviction.

This insurance is different from landlord liability insurance as it protects the property against damage.

Some policies also provide a loss-of-use payout for the time period the unit is unusable if the tenants damage it.

This helps to protect you against cash-flow issues that occur when malicious tenants decide they aren’t going to take an eviction quietly.

Bankrate.com recommends you don’t rely on your homeowners insurance for this situation, as the insurance company may choose not to cover commercial use of the property, and they won’t provide loss-of-use coverage.

 

Work Out Arrangements With the Tenants

Eviction proceedings aren’t particularly expensive in the grand scheme of legal processes, but it is money that you might not want to spend, especially if you’re dealing with tenants refusing to pay rent.

Talk to the tenants to see if this is a temporary setback that’s stopping them from paying rent, or if it’s a bigger problem.

If they are unable to meet their financial obligations, consider working out a deal where you pay them some of the money you would use on the eviction filing and the applicable amount of their security deposit to facilitate their leaving the premises without a fuss.

This is a tactic often used by banks that are trying to get families to leave homes that are in foreclosure, and it provides an incentive for the tenants to leave the property intact and undamaged.

 

Get All Your Ducks in a Row Before Filing

Retain a lawyer or understand your local eviction laws inside and out before you start the process.

You don’t want to have a misstep at any point in the process because the eviction process is fast and streamlined unless you don’t follow procedure.

If the tenants know this, it’s easy enough to get the case dismissed, and you have to spend the time refiling.

You don’t want to give them a significant amount of time to retaliate against the property, so doing it right the first time is essential.

 

If you have documented proof that the tenants are planning on damaging the property due to the eviction, or they are a danger to the property or others, explain your concerns to the court.

You may be able to accelerate the eviction process in order to minimize potential damage to your home.

How to Get Started as a Landlord

Becoming a landlord can be an exciting and lucrative decision, yet beginning the process can be overwhelming for some. While regular monthly income and being your own boss are perks of the job, there are a few things you should keep in mind when renting a property for the first time. The landlord must take vigilant steps to ensure the property is well taken care of, the renters are comfortable and satisfied with their home, and any laws regarding landlord-renter relations are upheld. When you first start out, all of this may make your head spin, but you’ll soon find being a landlord is a very rewarding job.

Assessing the Property

Whether you already own a property or you are looking for a property to buy and then rent out, several factors play roles in assessing your property’s value like location, size, and interior. A property in a good neighborhood demands more rent for its good location. Moreover, if there are recent renovations such as a new master bathroom or back patio, for example, your property will fetch a higher price. Be fair in your pricing but also make sure you still profit in the end.

Your Property, Your Rules

Once you have decided on the price of your property, you must set forth guidelines about what you are willing to allow. This could range from allowing pets, prohibiting smoking or allowing the renter to make minor changes, like painting a room. The leasing contract should be explicit about anything you do not feel comfortable with inside your property. Making your stipulations known to the tenant beforehand will help you avoid any problems in the future. If the tenant and the landlord both know what they are in for in the beginning, the relationship will be much smoother.

Finding a Tenant and Reviewing a Tenant Application

Vacancies will only cost you money, and getting tenants into your property and keeping them there is key when seeking long-term success as a landlord. First, have a tenant fill out an application form and cross check all the tenant’s information to make sure there are no discrepancies. Next, you will need to verify the information which can easily and quickly be done with online tenant screening. This process varies from state to state, with some states requiring you go back five years. But tenant screening will raise any red flags about the tenant’s past such credit history, renting history and criminal records. Request references from former landlords or employers in the application to paint an even clearer picture of the prospective tenant.

Maintaining the Property

Once a tenant has been found, it is the responsibility of the landlord to quickly fix any problems that may arise. Whether it’s a leaky pipe or a broken appliance, responding quickly to a tenant’s problems will ensure a positive tenant/landlord relationship. Some choose to hire property management companies to take care of small matters like these; however, if you hire a third party, it eat into your monthly profits. Being helpful when needed will go a long way with your tenants so try to be around when you are needed, but otherwise give the renter their space as if it were their own home. Happy renters are likely to re-sign a lease, keeping your monthly profits steady and consistent.

5 Home Repairs To Handle for Your Tenants

Your tenants have needs — including maintenance on the space that they rent from you. If you’re lucky, you have reliable contractors who are always available when your tenants need them. However, you may have a maintenance contractor with a busy schedule and takes awhile to get to minor issues. Instead of making your tenants wait, improve your landlord-tenant relationship by handling some small repairs on your own. While you may also offer tenants the option of handling small-scale repairs, it’s better for your peace of mind and quality assurance to take care of all repairs. When attempting repairs on your own, it’s vital to know building codes and other regulations in your region. After reviewing those, you can handle simple maintenance tasks quickly and efficiently.

1. Minor Cracks in Cement

There are a few repair options for small cracks in the cement or mortar of a sidewalk or brick staircase. Mortar cement is a type of material that allows you to repair cracked pieces without chipping it away from the base material and setting it up again. This is particularly useful for securing bricks back into place on a walkway, and handling smaller cracks. If you have large-scale cracks, mortar mix is not particularly hard to apply to the affected areas, although chiseling off the existing mortar may take some time.

2. Minor Plumbing Issues

You don’t need a plumber for every minor problem you run into. A common issue among tenants is a clogged drain. There are a few options for taking care of clogs, but one of the easiest is to use a hair catcher. This is a long, thin piece of plastic with teeth on the sides that you simply put down the drain and then pull back up. The teeth are barbed on one side and catch all the hair stuck in the drain. A hair catcher handles clogs that some caustic cleaners aren’t able to break through.

3. Drywall Repair

Scrapes and minor holes are part of normal wear and tear on a rental unit. While these are not usually high-profile repairs that affect your tenants’ quality of life, it is still important to address them. Wall repair kits allow for quick set up, sanding and painting. While these kits take different forms, one of the most common types provides wire mesh to go over the hole. This mesh is then covered with spackle material, which hardens and covers the hole in the wall. Once the spackle sets for 24 to 72 hours, it can be sanded down and repainted to match the rest of the wall.

4. Air Filter Replacement

If you have a central heating and cooling system, you have air filters located behind the vents in each room in the house, which often get overlooked. A dirty filter affects the air quality of your rental unit, and in some extreme cases can lead to allergic reactions from your tenants. Replacing the air filters only requires the simple removal of the vent cover and swapping in the new filter, which installs without additional tools. Consult the manufacturer’s instructions to determine how often filters need to be changed.

5. Water Heater Adjustments

Your tenant may complain about water that is too hot at the top end, or too cold overall. If they have access to the water heater, they may want to adjust it on their own. Since the water heater is an expensive piece of equipment and you may need to adhere to temperature guidelines set by local building codes, handle this type of request yourself. This also gives you the opportunity to check on the water heater for routine maintenance, helping you identify any potential problems down the road that you may need an experienced repairman to come fix.