What Property Owners Need to Know about the ADA

People with disabilities often struggle with everyday activities that most of us take for granted. The ADA (Americans with Disabilities Act) was created in 1990 to help make life easier for disabled people.

The ADA applies to rental properties as well, and landlords should be aware of pertinent ADA guidelines. Some of the laws vary depending on when the property was built. Homes, apartment and condos for rent that were built before the ADA took effect (January 26, 1990) have slightly different requirements than those constructed after this date. All landlords should be aware of the ins and outs of the Americans with Disabilities Act in order to stay compliant.

Reasonable Requests for Modifications
At this time, every rental property, regardless of when it was built, allows for disabled tenants to make reasonable requests for accommodations and modifications to the residence related to their disability. Disabled renters may also ask landlords to make changes to the property policies or rules in ways that help to make life easier for them pertaining to their disabilities. An example of such an accommodation might be giving them priority for the most easy-access units, such as those located on the first floor.
Rental property sidewalks, doors, entryways, and hallways must be accessible to disabled persons. Both interior and exterior common areas must also be compliant. However, requests for special elevators, ramps, and financially expensive and difficult to achieve modifications by disabled tenants is not mandatory under the ADA. For example, a tenant’s request for a personal elevator would be considered unreasonable; however, designating a few “disabled only” parking spaces in the parking lot is both fair and financially viable for most landlords.

Properties Built Before the ADA Took Effect
Properties that were already in existence before January 26, 1990, abide by different rules than properties built after this date. The focus is on the public areas of multi-unit properties. These properties are required to remove any obstacles to access by disabled tenants wherever possible and readily feasible; that is, not requiring too much expense or undue difficulty for the landlord.

Properties Built After the ADA Took Effect
Rental properties that were built after ADA regulations went into effect in 1990 must ensure access for disabled persons to designated common areas such as on-site laundry facilities, the rental office, public restrooms, and lounge areas that are meant for residents and their visitors. However, the interiors of rental units are not subject to these requirements.

Financial Responsibility
When it comes to major personal interior modifications of units made by a disabled renter, the cost of these changes and updates must be taken care of by the tenant. They may also have to bear the costs of restoring the unit back to its original state if and when they decide to move out; however, this can be negotiated with the landlord, who may want to keep the modifications to the unit in some cases.

That said, ADA rules state that landlords must pay for the “reasonable accommodations and modifications” made after a request by the tenant. Anything beyond reasonable is the responsibility of the tenant. Again, while a handrail installed in the bathroom and non-slip paint on a porch are reasonable requests of landlords, a brand new elevator or stair lift in the unit would be the tenant’s financial responsibility.

How to Best Approach Maintenance Issues in Your Rental

How to Best Approach Maintenance Issues in Your Rental

 

  • DIY vs Calling a Pro – Many landlords chose to get into the business because they can handle many maintenance problems themselves. There will be some issues, though, that will require a professional that has been trained in that field.
  • Find Your Approach – Maintenance problems will happen, so it’s best to have a general idea what those major issues are most likely going to be and to have a game plan for if/when they happen.
  • Easy Solutions – There will be certain maintenance concerns that have very easy solutions that will not require a contractor to come out. If you can handle it easily on your own, why spend the money to call someone?
  • First Impressions and Exterior Maintenance – The first thing that a potential tenant will see when they drop by to look at the rental is the exterior. Make sure that what they see is neat, tidy, and well maintained or they may simply move onto the next rental and bypass yours entirely.
  • LeaksA small leak can be irritating, but a big leak can cause major problems in your rental. Water damage can be costly in more than just what it takes to repair the damage. If your tenant cannot live in the rental during the time the repairs are taking place, you may be out rent payments as well.
  • Mold
    • Avoiding Lawsuits – Mold can cause a variety of health problems, and if your tenants believe that you have not lived up to your duties as a landlord, you could be on the wrong end of a lawsuit.
    • How to Get Rid of Mold – If mold does manage to get into your rental unit you will want to know how to get rid of it.
  • Squirrels in the Wall – Squirrels may be cute from a distance, but you don’t want them taking up residence in your rental’s attic or in the walls.
  • Trustworthy Contractors – Finding a good contractor can make or break a repair job. You’ll want to find someone that is trustworthy and can get the job done.
  • Onsite/24-Hour Maintenance – If you have multiple units, you may consider hiring someone who can provide 24 hour maintenance and live onsite.
  • Avoiding Negligence Lawsuits – When you accept a tenant into your property you will (hopefully) sign a lease with them. This is a legally binding agreement between you both. If you fail to keep the residence in a habitable condition, your tenant may have a case for a negligence lawsuit.

 

How to Manage Your Rental from A to Z

Learning how to manage your rental properties through trial and error can be costly in the property management business. Even if you’ve been in the business a while, there are always new problems that may pop up over time and ones that you will want to find a way to avoid long before they become a possibility. We’ve compiled ten tips below to hit the high points of managing your rentals beginning to end.

  • Make Sure you’re Ready – If you are looking at buying your first investment property or adding to your portfolio, you’ll want to make sure you’re financially ready to take that step.
  • How to Start – Starting out as a landlord can be overwhelming. There are so many small things that you should know, and possibly more that you don’t even know that you should know. Take a look at this article to make sure you’re covering what you need.
  • Tools of the Trade – When you’re getting ready to put your rental up for lease, you’ll want to make sure you have done the appropriate amount of research to ensure that potential tenants know that it’s the best option on the table for them. There are some great tools to help you in that research.
  • Tenant Privacy -During the application and tenant screening process you may gather quite a bit of information from your applicants. Some of this information will be very sensitive, such as social security numbers and other identifying information. You will need to make sure it is safe and protected.
  • Understanding Landlord Harassment – There may be times when a landlord needs to contact the tenant for something or even enter the home, but be careful that your actions aren’t viewed as harassing the tenants or keeping them from enjoying their home in peace, or you may find yourself in trouble.
  • Preventative Maintenance – From time to time a repair will need to be made on the rental home that you own, and you should have an arrangement with your tenant so that they know that they need to alert you to this. Even so, preventative maintenance can save you a lot of money in the long run.
  • Major Repairs – Preparing for major repairs on an occupied rental can be troublesome, but sometimes you have no choice. There are several things you will need to decide, but it’s best to work with your tenants to make sure that everyone is on the same page and you cause them the smallest amount of inconvenience possible.
  • Negligence Lawsuits – When you accept a tenant into your rental home it is likely that you both sign a contract, agreeing to a set of rules between you. If you purposefully neglect something in that agreement, you may find yourself at the other end of a lawsuit.
  • Outgoing Tenant Checklist – Tenant turnover can be a very rushed time, but you don’t want to let your outgoing tenant fall through the cracks just because you’re focused on your incoming tenant.
  • Selling a Rental Property – There may come a time when you decide it’s time to sell your rental property. If so, there are several things you should think about before putting it on the market.

How to Choose the Best Management Option for Your Rental

When you choose to invest in a rental property, one of the many decisions that you will need to make is how you will manage it. Some of that will depend on the location of the property versus where you live and how actively you wish to be involved in your investment. The decision between hiring a property manager and managing the property yourself is one you will need to weigh carefully, and to help you with that, LandlordStation has gathered some helpful articles for each scenario to help make sure that you have all the information in front of you that you’ll need to get you on your way to making an informed decision.

Hiring a Property Manager

  • Timing – You may be having trouble deciding if you need a property manager or not. There are pros and cons to hiring someone to help and to choosing to tackle the project on your own, but a lot of it boils down to timing and knowing when it’s the right time to hire a property manager.
  • Individuals vs Comapnies – If you decide that you want or need to hire someone to help, one of the next decisions that you’ll need to make is if you would prefer an individual or a company to handle the day-to-day work of property management.
  • Know What to Expect – Part of deciding if it’s time to hire a property manager is knowing what you should expect from a property management company. Not only will this help you decide if you need help in these areas, but it will help you understand what you should be looking for in a property management company if you start interviewing them.
    • Knowing How Much a Property Management Company Will Charge – A property management company or single property manager should be able to provide you with the details on how they charge for their services, but this article should give you a general idea what is commonly charged.
    • Make Sure They’re Insured – If you have never run a property management business for yourself, you may not know what they should be insured for. Make sure that any company that you hire is covered.
  • Social Media and Property Management
    • Social Sites Property Managers Should Be On – Social media is a great way to do some checking into a property management company before meeting with them. You can get a general idea of how they do business and what they focus on.
    • Online Reputation – If the property management company is online, you may find out a bit about their reputation by looking through that information and what others have said about them. Keep in mind that one disgruntled customer does not necessarily mean that they run a bad business.
  • Know When It’s Time to Switch – When you hire a property manager, the assumption is that it will make your life a little easier. If tenants start reaching out to you or you have trouble contacting your property management company, it might be time to look about hiring a different one.
  • Legally Terminating a Contract – It’s a good thing to remember that a property management company works for you. Even so, you likely will have a contract with them, so if you decide that you need to split ways, make sure to do it legally.

Managing Your Own Property

  • Full-Time Property Management –  Many landlords choose to manage their rental properties on the side of their main job, but there may come a day when you consider jumping into property management full time. Make sure you’re ready.
  • Being Your Own Property Manager –  If you choose to tackle the property management side of your rental business alone, there are a few things you should be aware of.
  • Build Your Understanding – While you will learn many lessons simply by managing your rental property, you will not want to neglect the research that goes into taking on this responsibility. There are several great books written on the subject of property management that can help you find your best approach.
  • Research – Part of taking on the property management side of your rental business is doing to research for a new property. If you handle the research correctly and detail out what you need to know about the area surrounding your investment, you can take your property management business to the next level.
  • Accounting – Proper and detailed bookkeeping is a must for any landlord and property manager. Check out these five tips to help you keep everything in order so that nothing slips through the cracks.
  • You Don’t Have to Do Everything – Just because you choose to take on your own property management doesn’t mean that you have to tackle every single job yourself. There are certain things that may be a bit easier to delegate out.
  • Think about Property Management Software – One way to ease the burden off of yourself as a single landlord and property manager is to invest in property management software. This can help you in everything from tenant screening to marketing to rent collection.
  • Network With Other Property Managers –  Learning from your own mistakes can be expensive in the property management business, but if you choose to network with others that have been in the business longer you may find ways to avoid more common mistakes.

4 Fantastic Ideas to Landscape Your Rental Properties on a Budget

In many locations, the rental market is highly competitive with many people choosing to become landlords, investing in properties to rent. Of course, vacant properties don’t translate to income, so the landlord’s goal is to avoid vacancies.

Fortunately, there is an easy way to attract tenants to your property over other choices … landscaping the gardens. A beautifully landscaped piece of land will make your property desirable, giving it ideal curb appeal enabling you to maintain your rent price at a reasonable rate, so you don’t miss rental opportunities over the months. And, the great news is that it’s possible to landscape affordably!

This article will cover the four main ways you can landscape your rental property, that will bring the most value to your investment without breaking the bank. Plus, we know how valuable your time is, so these options will require minimal maintenance, and will stay looking great for years to come.

Landscaping Option One – Covering Ground Space

Image courtesy of minimalisti.comOne of the things that can detract from the overall appeal of a property is a wasteland of bare earth surrounding it, especially if junk has accumulated there. It is essential to clear any rubbish from around your rental property – hopefully that goes without saying!

Empty ground space can be covered in a number of ways, and the landscaping suggestions below are easy to maintain, affordable and attractive:

  • Ground can be covered with upcycled paving stones, which can be placed in a mosaic, irregular or systematic pattern, depending on what you have available and the look you would like to achieve.
  • Seams between the pavers can be filled with moss, to give the space a finished look.
  • Gravel is an inexpensive way to fill an empty space of ground to give it a more finished look. You can choose various colors to suit your style.
  •  If you prefer the look of planted ground, lawn is generally not the most cost effective choice, as it can be expensive and requires a lot of water to maintain as well as maintenance requirements to keep weeds under control.
  • Try thyme or lamium instead of grass, as they are inexpensive to purchase, spread quickly and look great … thyme smells wonderful, too.
  • If you’re opting for a planted space, add a layer of mulch to save money over time. Mulch helps the soil retain moisture, plus it cuts down on weeds and requires less watering.

Landscaping Option Two – Choosing Plants, Trees and Shrubs

Annuals vs Perennials

When choosing plants to include in the landscaping of your rental property, it makes sense to look for perennials, which return to flower every year, without any additional time, money or work from the tenant (or landlord!). They are generally more expensive initially, but over time, this investment pays for itself.

Many landlords also choose to include annuals in their landscaping, as this reduces the initial expenditure and you can, therefore, create a lush garden full of color for less. If you decide to incorporate annual plants in the garden of your rental property, why not look for those that drop seeds which will potentially provide you with more plants the following year, with no effort! Ideas include poppies and sweet peas.

Trees and Shrubs

If you would like to include trees or shrubs in the garden of your investment property, start with younger, slow growing varieties, which are far cheaper than established options. It makes sense to include trees, as they can add value to your property, beyond the aesthetic appeal.

“One of the non-aesthetic ways a tree can improve the quality of life on your property is by saving you money. A good “shade tree” can dramatically impact a home’s air conditioning requirements by blocking direct sunlight in the summer. The American Power Association estimates that effective landscaping can reduce a home cooling bill by up to 50%. Then, in the winter, your trees (especially Evergreens) can help block the wind, saving those precious BTUs.

American Forests claims that trees placed appropriately around one’s house can reduce the need for heating by 20% to 50%. Other benefits of a tree-lined property include their ability to keep erosion in check by virtue of their extensive roots, although you’re unlikely to appreciate the value of this service like you might from the energy savings. Trees also absorb carbon dioxide, converting it to sweet, sweet oxygen. Two mature trees alone put out more oxygen than one human being consumes.” [source]

Don’t Forget….

Another thing to keep in mind when choosing plants and trees, is to look for native species, which are naturally more suited to your climate, and will require less care. If you would like to install a watering system to protect your investment in plants, consider installing a soaker hose which will keep your garden watered with ease. Plus, they use less water than watering cans or sprinklers.

Finally, be sure to shop around when looking for plants, as different nurseries will offer different prices and you may be able to save a considerable amount of money through negotiation, especially towards the end of the season. However, make sure you plant your purchases at the right time to give them the best possible chance of thriving.

Image courtesy of gardenbuilders.co.ukLandscaping Option Three – Creating Additional Living Space

A superb way to add value to your rental property via landscaping is to create additional living space, bringing the outdoors, indoors. This can transform a home for a tenant, and keep your property highly desirable.

Robust seating areas with a fire pit are one option, otherwise dining spaces with outdoor tables and chairs are also useful, if your climate allows for it. These extra touches will provide tenants with an idea of the type lifestyle they can enjoy on your property. If there is already a porch, a pool or a patio, be sure to make the most of that.

Landscaping Option Four – Adding A Designer Touch

You can also transform the outdoor spaces of your rental properties easily – adding touches that can look as though a designer has come along and waved their magic wand. Enhancements can be done for far less money than you might imagine and can look highly effective. Here are our top three designer touches that you can include in your landscaping to add value to your investment property, keeping tenants knocking at your door:

Choose One Color

Sticking with one color, or a limited palette throughout the design of your investment property landscaping is an easy way to create a designer effect. The color can be echoed throughout the planting, gravel, pavers, planters, edging and so on … the only limit is your imagination. This can look absolutely fantastic, and costs no more than choosing multicolored options.

Image courtesy of cdn.gardenloversclub.comMake Unique Planters

Planters can look great in a garden, and are useful to manage the spread of certain plants, and are the only option in some limited spaces. The problem is that planters can be quite costly and are generally all the same kind of style. However, with a little creativity, many discarded items can be upcycled to make great looking planters. Wine barrels, tires and pallets are just three options that can be sourced cheaply from reclaim yards. The following instructions from Crafty Little Gnome show just how simple it can be to create beautiful planters from tires.

Materials:

  • Old tires
  • Knife
  • Paint (optional)
  • Potting soil
  • Plants

1) Get several tires. If you don’t have any old tires lying around, try Craigslist. People will be begging you to take their old tires or you could call auto shops. They will  probably have tires they can give you, too .

2) Take your tire and cut away the inner part of the rubber. Use the natural grooves in the rubber as a guide. If you ever bought one of those fancy Ginsu knives that claim to cut everything from steak to slabs of marble, now is the time to dust if off and put it to good use. Please be careful. Nothing ruins a fun DIY project faster than a trip to the emergency room!

3) Now, you are going to flip your tire inside out. This is more difficult on tires without rims. Use your feet for support and pull the trimmed edge up. Consider calling a friend with big muscles over to help. The older the tires are, the easier this will be.

4) Tires with rims are slightly easier. Flip the tire upside down so the trimmed side is face down. Sit in the middle and pull the sides up with all your might.

5) Now that your tires are inside our give them a good spray down with the hose and clean off all the gunk.

6) If you want to paint your tires, now is the time to do so. Make sure they are very clean and dry before painting. I like my tires rather plain which is why I left them au naturale. A Google search will bring up numerous ideas for inspiration for bright, fun colored tires that look like flowers and such.

7) Place your tires where they will have a permanent home. The tires without rims won’t have bottoms, so they will not be easily moved. Tires with rims have a bottom, so the dirt won’t spill out completely. They will however, be quite heavy.

8) Fill your tire planters with potting soil and add your favorite plants.

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Plant Ornamental Grasses

Ornamental grasses are an inexpensive and modern way to bring a designer touch to areas that would benefit from planting. Blue oatgrass, flax or Image courtesy of thosbakerblog.comzoysia are all beautiful choices that are very easy to maintain.

Summary

With increasing competition in the rental market, one way you can increase the curb appeal of your investment property is with attractive landscaping. This is yet another role for you to play as landlord, but it can be easier than you think!

With these simple ideas to fill empty space, choose affordable plants, create additional living space and add designer touches and you will find that you are never left with a vacant property. Plus, our suggestions are low-maintenance, so your investment in time and money will pay dividends over the years.

Top 10 Amazing Ways to Protect a Rental Investment

Protecting your rental property can take many forms. There are mistakes to be avoided, scams that you will want to stay clear of, the possibility of damage done to the property, etc etc… Your best bet is to get ahead of the issues before they happen, and make sure that you know how to properly protect your investment.

  • Avoid Common Mistakes – In real estate investment, some mistakes could cost you quite a bit of money. There are more common mistakes that would be best to avoid.
  • Know What to Expect – The difference between success and failure can boil down to preparation. Part of that is knowing what to expect and knowing how to avoid any common mistakes.
  • “Real Estate Guru” Scams – It’s always a good idea to seek out advice so that you can make the best decisions possible in your real estate investments, but be careful that you are looking to the right places and people for that advice.
  • Safely Applying for a Mortgage – When you apply for a loan you will be providing very sensitive, personal information. Check out these tips on how to protect yourself from identity theft during this time.
  • Protecting Your Vacant Property – There will often be a bit of time between an outgoing tenant and an incoming one, and this will leave your property sitting vacant. You will want to make sure that it will be protected.
  • Uses of a Security System – Security systems installed in a rental can help protect both your property and the tenants that are living there, as well as make your rental more profitable.
  • Renters’ Insurance – As a landlord you will have your property insured, but you may consider requiring renters’ insurance as well so that your tenants and their belongings are covered and protected.
  • Protecting Your Property With a Lease – When you accept an applicant as a new tenant you will want to sign a lease with them. This is meant to protect both parties involved and detail out what is expected.
  • How to Handle Late Payments – If your tenant doesn’t pay their rent on time you may have trouble paying the mortgage on the home or the upkeep. Make sure that you know how to handle late payments.
  • Protect Your Property During an Eviction – An eviction can be a stressful time for both landlord and tenant, but you’ll want to make sure that your rental property is protected.

Is Your Landlord Insurance Worth the Monthly Premium?

Landlords, we know you have a great deal to contend with. Maintaining a property, paying the mortgage, keeping the tenant happy … these are just three items on a very long list. Most landlords have a career and even family responsibilities to handle, too. So, when it comes to landlord insurance, it might be tempting to simply find a well-priced deal and sign on the dotted line.

We are here to tell you that by spending even a brief amount of time researching the particulars of the insurance policy, is an absolute must. Don’t be fooled into thinking that all policies are the same.

Many people don’t realize that landlord insurance is completely different compared to standard homeowner policies, where the policyholder actually lives on the property, but rentals are considered to be a greater risk for insurance companies. It’s simple: Tenants are not invested in a home in the same way the owner is; therefore, they may not treat it with as much respect.

Oftentimes homeowners have been caught when they fail to notify their insurers that they have moved out of home and are now renting it. The problem is, if you fail to distinguish your insured home as a rental property, the policy may not pay out when you may need it to. So, be sure to protect your investment and know that you are covered with adequate insurance.

To save you unnecessary headaches and cost, we have compiled a list of the five critical clauses that your rental insurance absolutely must cover.

Dwelling Coverage

Image courtesy of architectureartdesigns.com/Dwelling coverage, sometimes called “dwelling insurance,” is the part of your homeowners insurance policy that helps to pay for the rebuilding or the repair of the physical structure of your home if it’s damaged by a covered hazard.”

This is the main purpose of your housing insurance, and protects you in the case of structural issues, major plumbing problems and acts of nature (including hurricanes, earthquakes, riots, fire, break in, vandalism). The specifics will depend on your policy, so take the time to determine exactly what is covered. Various locations may exclude coverage during certain strong weather situations, for example.

The key point to look for here is whether you are receiving a guaranteed replacement cost, or GRC. GRC means that your property would be replaced and rebuilt in the event of structural damage, as opposed to you only receiving the depreciated value of bricks and labor, for example.

You should also be aware of the terms DP1 (basic), DP2 (broad) or DP3 (special), which identify the level of dwelling and fire coverage that a policy offers.

The DP1 is a “named perils only” policy which only insures those limited perils specifically named in the policy. Unfortunately, a covered perils list that only includes fire, lightning and internal explosion is not much of a policy at all. To broaden the list, the DP1 allows an insured to add an Extended Coverage (EC) perils endorsement to increase the number of covered perils to a total of 12. These nine additional EC perils include Riot, Civil Commotion, Explosion (external), Vehicles, Smoke, Aircraft, Hail, Windstorm and Volcanic Eruption.

The Broad DP2 form, like the DP1, is a “named perils only” policy and contains all the perils provided under the Basic form. The additional protection you will find on the DP2 form include coverage for damage from Burglary, Weight of Ice and Snow, Collapse of Building, Falling Objects, Freezing, Artificially Generated Electrical Current, Glass breakage, Accidental Discharge of Water and Steam,  and damage from Sudden and Accidental Tearing, Cracking, Burning or Bulging of steam or water systems.

Special form or DP3 has the same “named perils” coverage as on the DP2 form for personal contents but adds open perils coverage on the dwelling and other structures. Open perils means that coverage will be provided, unless it is specifically excluded in the wording of the policy. This significantly expands coverage on the real property compared to the DP2 and, coupled with losses paid on a “replacement cost basis,” makes the DP3 policy the most comprehensive of the three dwelling forms.

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2. Water DamageImage courtesy of architectureartdesigns.com

Research the level of coverage you are offered for water damage, beyond that of the pipes and heating system. Excess water can cause catastrophic damage to your home, so this is something that should be carefully considered. Flood water, heavy rains and even backed up sewage may not be covered by your base policy … find out how to add this to your insurance depending on your location.

All it takes is a few inches of water to cause major damage to your home and its contents. This interactive tool shows you what a flood to your home could cost, inch by inch.”

3. Legal Liability

Image courtesy of careerjunction.co.zaIt can be easy to overlook just how vulnerable you are as a landlord when it comes to the law. Your agreement with your tenant means that you have certain legal responsibilities for their safety, as described by NOLO below.

Under most state and local laws, landlords must offer and maintain housing that satisfies basic habitability requirements, such as adequate weatherproofing, available heat, water, and electricity, and clean, sanitary, and structurally safe premises.

Local building or housing codes typically set specific standards, such as the minimum requirements for light, ventilation, and electrical wiring. Many cities require the installation of smoke detectors in residential units and specify security measures involving locks and keys. Your local building or housing authority and health or fire department, can provide information on local housing codes and penalties for violations.

If a tenant feels that you have failed to meet any of these responsibilities, they may choose to sue you, which can be a very costly experience. Therefore, it’s wise to check, in advance, that your landlord insurance covers you in these instances, with legal fees, settlements and even medical costs.

4. Fair Rental Income Protection

Image courtesy of i.forbesimg.comFair rental income protection is something that you can choose to add to your basic landlord insurance. This will cover the cost of lost rental, in the event of repairs or an emergency. This does not protect rental income in situations such as eviction or non paying tenants, however.

If you can’t rent out your property because it’s damaged, you’re losing valuable rental income. With Fair Rental Income protection, if your property becomes uninhabitable because of a covered loss, you’ll receive compensation for the rental income you would have received. This covers the time required to either repair or replace the rental unit — up to a maximum of 12 months.Allstate.com

While this is a very useful safety net, it is important to balance the increase in premium against the potential benefit you will receive from this.

5. Personal Property Protection

Image courtesy of howtofurnish.comPersonal property protection is a great addition to your landlord insurance if you are renting a furnished property. The majority of landlords rent empty units, but it is still useful to consider if you are supplying carpets and curtains, as these are covered in addition to any furniture. Again, it is wise to examine how much this clause will add to your monthly premium before you make any firm decision.

If the tenants are renting the property unfurnished, it is advisable for them to take out tenant insurance to cover their property, as well as any protecting their liability for any damage that they may accidentally cause to your property. The National Fire Protection Association found the average loss from a house fire was $19,500, which could drive your tenant into significant debt, rendering them unable to continue paying rent, even after the property is habitable again.NFPA.org

Tenant insurance is so useful to landlords, that many include it as a condition in their tenancy agreement, as there is no legal requirement for tenants to have this insurance otherwise.

Summary

When it comes to insuring your rental property, it’s best to take the time to ensure you are sufficiently covered. The amount of time, energy and, of course, money that you have dedicated to this investment must be protected in the case of accident or emergency. Here we have covered five key areas in your coverage to be aware of, and as policies are not created equal, it is prudent to dig further than the headline when you are choosing a policy. Levels of insurance coverage vary, as explained regarding the differences between DP1, DP2 and DP3, for example.

Determine whether you will receive the cash value or replacement value for any damage. It’s vital you understand the finer details of any policy in which you are enrolling, before disaster strikes. The average cost for landlord insurance on a small unit is only $500 per year, and this may be classed as a business expense. It is a small price to pay to protect your investment, and the right insurance could prevent the kind of loss that damages your financial future.

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.

Guide to Screening Tenants

Bonus: How to Read a Credit Report

Choosing a new tenant can be overwhelming, especially if you’re a new landlord or have had the same tenant in a property for several consecutive years.

It’s always good to remember that while vacant properties cost you money, delinquent tenants can cost you more.

While renters are looking for the right property to rent, as a landlord and property manager, you are looking for the right tenant for your property.

Not every applicant will be right for your property.

That’s okay. Don’t get discouraged.

A good game plan will help you streamline the process and take some of the stress of choosing a new tenant from the equation.

Screening a Potential Tenant

Tenant screening is an absolute must when you are looking for a new tenant to fill your property.

If you skip this vital step you are opening yourself and your investment up to terrible losses that could severely hurt your income.

Knowing who resides in your home begins with an application.

You may choose to use a physical version that you can hand to the applicant when you meet with them or, more likely, an online version that allows you to save time and paper.

Gathering application fees to run full tenant screenings on every single person that shows interest in your property can be difficult and time-consuming, so begin with a prescreening.

This begins with letting your applicants know what your expectations are.

Your listing should include information such as the rent rate, smoking policies, pet policies, and any credit/income requirements that you may have.

Letting your applicant know these things up front shows them that you are going to be honest with them and will allow them to bow out gracefully if they know that they will not be the right fit for your property.

You should have all of your policies in writing and they must apply to all residents that apply.

Sticking to your policies that you’ve created will help to hedge against appearing as if you are discriminating against an applicant.

Meeting an applicant face-to-face allows you to handle several items of business.

As the second round of prescreening, it allows you a chance to ask questions, give a quick tour of the property, and collect the application fee for the full tenant screening.

While this does not always hold true, if an applicant shows up late, does not have the full fee on hand, or is untidy in their appearance, you may think twice about them as a future tenant.

Do keep in mind that just because an applicant appears to be everything you’d ever hoped for, this is no reason to skip the tenant screening.

It is your first line of defense.

A full tenant screening should include a credit, criminal, and eviction report.

This will give you a fairly well rounded view of the history of person that wishes to rent your property from you.

You’ll want to watch for negative tradelines that indicate late or non-payments, as well as bankruptcies and collections owed on.

When you read over a credit history it is always a good practice to look at the details and not focus entirely on the score or recommendation given.

Verifying employment and checking with prior landlords are also part of the screening process, though a tenant screening company may not cover these.

Even so, if your applicant passes the credit, criminal, and eviction check, you still should not leave these two things to chance.

The sad truth is that people do lie about their income and past experiences.

An eviction may not be on the records yet if it is in the process of being filed for the property that they are currently in or the landlord may have decided to take another route that might not show on a typical tenant screening.

Reaching out to employers and asking for pay stubs help to give you peace of mind that the applicant is gainfully employed.

Checking with prior landlords (usually two or three back) ensures that they are not trying to slip past your safeguards.


If you’re on the fence between two or three qualified tenants you may have a difficult time choosing between them.

Some landlords are turning to social media for an alternative form of tenant screening, but you should always be careful with this.

While it may give you a great outlet to check on an applicant’s lifestyle – are they partiers? Tidy? Slobs? – and if they have any pets that they may or may not have mentioned to you, a landlord or property manager should tread carefully so that they do not appear choose one applicant above another using something that may be deemed illegal according to the Fair Housing Laws.

If you choose to take this route, make sure you are up-to-date with all of the laws associated with it. Social Media is a great tool, but you don’t want to risk landing yourself in trouble.

Follow the Law

There are local and federal laws that dictate the process that you will need to follow to find, screen, and accept a tenant.

While the federal laws will cover the country, you’ll also want to check in on your state, county, and even city laws to make sure that you are fully informed.

Ignorance is not an excuse that can be used if someone claims that you’ve broken the law as a landlord or property manager, and it can cost you in money, time, and reputation.

These laws are meant to help you both, so being fully aware is a must.

They are consistently changing and updating to meet the needs of landlords and tenants and better help to regulate that relationship.

The Fair Housing Act touches on situations from the moment that you start marketing your property and all the way into the actual tenancy and was put into practice in 1968.

It has been updated as different situations arise.

On whole, it’s meant to keep people from being turned away from housing based on race, color, national origin, religion, sex, familial status, or disability, though some local laws will add to these, so it’s best to make sure that you are well aware of all laws that apply to your property.

You will want to be very careful in how you word your advertisements for your properties as well as what questions that you ask those that apply.

If you even appear to be leading them in one direction or another – for example, indicating that an apartment close to the playground would be better for the applicants when you find out that they have children and not offering to show other properties as well – that may be seen as discriminatory.

Refusing a disabled applicant reasonable accommodations such as a service animal in a property that does not allow pets may also be seen as discrimination.

There are also exemptions to the FHA that might com into play.

Once you have found an applicant that appears qualified and has passed the pre-screening, you will need to receive permission to run a tenant screening on them.

While criminal checks are performed on public criminal records, it is a good practice to be upfront and clear with what kinds of reports that you will be running on your applicant.

You will need direct permission to run a credit report.

Some tenant screening sites make it easier on you by reaching out to the tenant directly for this permission, but you may consider keeping a signed permission slip on file for your records as well.

State-specific documents such as these are easy to purchase and download online.

Finally, once you have chosen the best applicant to become your tenant you will sit down with them to sign the lease.

This is a legal document that should always be signed by both parties before the tenant is allowed to move into the property.

The lease will dictate what is expected from all parties involved so that if there are any questions at a later date, you may refer back to the document. 

This will be one of the most important ways (aside from the screening process itself) that you’ll protect your property and your investment.

It legally binds you both to the promises made and will help to simplify your landlord-tenant relationship.

Conclusion

Finding that perfect tenant can be stressful, but you’ll find the policies that work best for you with each time that you go through the process.

Speak with other landlords and ask advice. While learning from your own mistakes is a necessary part of growing your business, learning from others so that you can avoid the mistakes that they made is even better.

Choosing a great location that will appeal to the types of tenants that you’d like to attract, going through a full and detailed tenant screening process, and abiding by the laws set up to govern the landlord-tenant relationship will help set you and your new tenant on a smoother path and encourage a great working relationship.

Bonus:
How to Read a Credit Report

When you open your rental property up to a person it is safe to say that you’d like to know that you are making the best choice in the tenant that you accept.

You have gone through the first steps of the screening process: you have asked the interested individual to fill out an application, have spoken to them briefly about their qualifications, and have collected the screening fee.

This process has likely helped to narrow your pool of applicants down to a serious few and now it’s time to look over their credit and criminal repors.

If you are a new landlord or are switching the service that you use to run tenant screenings, you’ll want to make sure that the tenant screening that you order provides, at minimum, a full credit report and a nation-wide criminal check.

Some HOAs that your property may be apart of may require a certain level of criminal check to be performed in order to rent to an individual within that community.

Overall, it’s safer to conduct a full, nation-wide criminal search rather than rely on your applicant to provide you with accurate information of the areas that they have lived in.

A credit report may include somewhat varying information, but you should look for one that includes a credit score, tradelines, and public records (which should also include collections).

Below we’ll go through what is included in each of these, as well as a few other options you may wish to persue in a credit history.

For consistancy’s sake, we will be using LandlordStation’s sample report, though if you pull a report directly from a credit agency it may be formatted differently.

Credit Score

A credit score is provided by the credit bureau that the report is pulled from. For LandlordStation, this is Trans Union.

There are three major credit agencies in the United States, and while those scores may differ slightly depending on the information found in the agency’s database, they should be fairly similar.

Credit scores tend to range from around 300 to 850, though 800 is considered near perfect.

The tradelines found below the credit score will detail out what information the credit bureau has used to formulate the score itself.

Most tradelines will affect the score up to seven (7) years and will affect it less and less with each passing year.

In other words, if the year is 2015 a negative tradeline from October of 2014 will weigh heavier against the credit score than a negative tradeline from October of 2010.

Score factors are often detailed out next to the score provided.

These are notes that the credit agency will provide that explain what went into their calculations.

There will be times that no score is provided.

If a score cannot be calculated, this often means that the individual does not have an extensive or recent credit history.

Individuals that pay in cash, do not use credit cards, and do not take out loans will likely have a very bare credit history and a score may not be available for them.

This does not necessarily make them a poor canidate, though you may wish to focus more on other forms of screening (such as references and their criminal and rental history).

If your applicant claims that they should have a credit history or they find a discrepency in the history that was provided, they should contact the credit bureau immediately.

Credit Summary and Tradelines

A credit summary will be where you will see the summarization of the different items found on the credit report. The tradelines will be the details of that summarization.

There are five (5) catagories under the summary on LandlordStation’s credit reports.

1.    Closed with Balance – This will be a summary of any tradeline that was closed with a balance still open. It may have been a loan or a credit card. The reasons that it was closed before it was paid off may vary, and those details will be found in the tradelines.
2.    Revolving – A revolving balance will change. This is not a set amount, such as a loan, but one that is often being paid on and added to such as a credit card. The important thing to note here is the percentage of the debt that is being used at any given time. A person who have been approved for $100,000 of revolving credit and is using $10,000 is in a much better position than one who is approved for $5,000 and is using all $5000 of it.

3.    Installment – Installment balances are lines of credit that will be paid in installments, such as an auto loan or a student loan.
4.    Mortgage – Lines of credit for a mortgage stand apart from other installments.
5.    Open – The open category is simply anything that is still active and has not been shut down either by the creditor or the invididual that the report is being run on.
Under the summary the individual and total amounts will be listed for the balance, high credit, and monthly payments.

Tradelines will provide details on the information under the credit summary.

Each tradeline (both open and closed) will provide information on the name of the creditor, the loan type (ie if it is a credit card, auto loan, student loan, etc etc), current rating (meaning if it is currently being paid on, if it is late, etc), the balance, if any money is past due, and what the credit limit is. It will also note the high limit, meaning the most owed on that tradeline.

This will include any fees associated with late dues.

Dates will be provided for when the tradeline was opened, closed, and also when it was most recently reported to the credit bureau.

Collections

Collections are lines of credit that were shut down by the creditor and the debt was sold to a collection company.

The collection company may be awaiting payment, and if so it will be noted in this section of the credit report.

The collection section of the credit report will note the name of the original company owed, the balance owed (this should be looked at for the current balance over the ‘past due’ section), the high credit, and the agency that currently holds the debt.

The collection will have a date opened section that will show when the tradeline was placed for collection, and if it has been paid and closed it will note that next to the open date.

If the collection shows a balance and does not have a paid or closed date, it likely is still an outstanding debt owed.

As of 2014 medical collections do not impact a credit score as heavily as other collections might.

Public Records

Public records will include any legal proceedings that affect the applicant’s credity-worthiness.

This may be a civil judgement, a tax lien of some kind, or any number of things.

These are all considered negative marks against the applicant’s credit history.

Other Options

Some credit reports will offer various other options such as previous address history, known aliases, and employment history.

This information can be vaulable when fact-checking your potential tenant, as they will often provide this information on the application that they bring to you.