Happy owners, happy tenants — it all starts with the right property manager.
You would never turn your home over to a stranger, so choosing a property manager shouldn’t be any different — finding one you trust is vital.
“You are entrusting probably one of the biggest investments you’ll make into the hands of someone else, so you want to make sure you feel confident that they’ll handle things the way you want them to,” says Grace Langham, CEO of Nest DC, an award-winning boutique property management firm in Washington, D.C.
Dependability and trustworthiness are two key points all homeowners should keep in mind when assigning their home or condo to the loving care of a third party. But before handing over the keys, consider these six other factors to help you find the right property manager.
With so many players involved — owner, tenant, and manager — communication is critical. Some owners prefer lots of updates, while others want few. Regardless of your desired amount of communication, the quality of it is crucial.
A property manager’s availability and response rate get to the very heart of their job. In your initial contact, look for clues about their speed, courtesy, and availability.
“Once signed on, a good manager will do what it takes to keep you in the loop, whether you prefer emails, phone calls, or texts,” Langham says.
When it comes to renters, a property manager’s duty is twofold: Find quality residents, and ensure they are treated fairly.
Happy renters often stay in a residence longer, and are more reasonable when things break. That said, finding good residents requires legwork.
“Bad tenants can be one of the most costly things for an owner,” says Nathan Miller, president and founder of Rentec Direct, a property management software company.
Evictions are expensive, especially when owners are forced to forgo several months’ rent, and damage can be costly. That’s why running a credit check and performing a background screening for criminal and eviction reports are musts, according to Miller.
Property management fees tend to be fairly standard, Miller says — usually between seven to 15 percent of a month’s rent, but most often around 10 percent. Sometimes, a condo may cost slightly less than a stand-alone house because there’s less home and yard to maintain.
The owner is also on the hook for maintenance costs, and often pays a finder or leasing fee — up to a full month’s rent — when a new resident moves in Ask if you will still be charged, even if the unit stands empty.
Some property managers also charge a lease renewal fee and sometimes tack on a project management fee when dealing with excessive bureaucracy or paperwork, such as insurance claims. Verify the fee structure and services provided before signing any contract.
House visits and other specs
When it comes to inspections, a property manager should be proactive. That means taking a peek at your property no less than once (and maybe even twice) a year to ensure that everything is in good shape.
Such time-consuming tasks mean it’s important for a property manager to maintain a reasonable caseload. Miller says his ideal property manager oversees between 500 to 1,000 properties. “Once they get above that size and they’re managing many, many thousands of units, you’ll lose the personal touch,” he says.
Finally, you want to find a property manager that specializes in a type of unit: single-family homes, apartment complexes, or high-end houses, for example.
To maximize a home’s earning potential, property managers should know how to deftly market a unit so that it doesn’t stay empty long. This includes everything from posting it on well-known rental websites to taking quality photos that make it pop.
Miller says the property manager should also ensure a home is leased at market rent, and analyze that rate semiannually. You want to know you’re not being shorted income by charging too little.
Finally, the proper software can indicate that a management firm has what it takes to succeed. “We’re lucky to be a company that’s eight years old,” Langham says. “We started with all this technology that’s really friendly to the millennial generation, which is a lot of the renter base.”
Collecting rent and submitting maintenance requests via an online interface makes interactions between all parties a breeze, meaning owners and tenants can move on with their busy lives. After all, at the end of the day, that’s what having a property manager is all about.
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Who foots the bill when the maintenance issues roll in? It depends, so get to know your tenant rights.
One of renting’s major benefits is that you don’t have to worry about upkeep, maintenance and expensive repairs. So when things go bad — your dishwasher stops working, the roof is leaking or the bugs just won’t go away — your first call is usually your landlord.
But how do you know what’s really their responsibility and what falls to you? And what do you do if they refuse to handle the repairs?
Read on for the most common rental issues and how to get them fixed quickly.
Water damage & mold
Easily one of the nastiest discoveries you can find in your home, mold is a common problem — especially in humid or rainy climates. And while most mold doesn’t cause health problems, some types can cause respiratory issues, headaches and allergy symptoms.
Since there’s no easy way for the average tenant to know if the mold in their home is dangerous or not, it’s always best to ask your landlord to get rid of it.
While there’s no federal law that dictates mold exposure limits in rental housing, some states and cities have put guidelines in place. But, even if your state doesn’t have specific mold regulations, your landlord is still responsible for providing safe, livable housing.
In addition to requesting that your landlord remove the mold, make sure they find the source of the mold, whether it’s a leak in the roof or around the windows, failing plumbing, or a basement that’s not watertight. If the underlying water damage isn’t addressed, the mold will likely return.
The one time a landlord may be able to reject your request for mold remediation is if they believe it’s a result of your behavior — if you don’t keep your home well-ventilated, don’t clean regularly or run a humidifier too much.
Your landlord is responsible for keeping any appliances that came with the unit in good working order. They’re also required to do the preventive maintenance that keeps your appliances up and running, like replacing worn hoses or servicing the air conditioner.
If you brought some of your own appliances, like a microwave or a washer and dryer, you’re typically responsible for repairing and replacing them.
Perhaps the most important appliance your landlord is responsible for is your furnace. Local and state laws require landlords to provide adequate heating, so if you’re having trouble keeping your home warm, reach out to your landlord immediately.
In some warm-weather states, landlords are also required to provide air conditioning. It may not be required in other states, but if your unit has air conditioning, your landlord is required to maintain it.
Remember when we said that landlords are required to provide tenants with a safe, livable space? That includes pest-free living, but there are a few more gray areas with pests than with other maintenance issues.
Whether your landlord is responsible or not depends on a few factors, including the state you live in, the type of rental unit and the type of pest. For example, in some states (but not others), landlords are legally required to manage bedbug infestations, which are an increasingly common issue.
In some states, landlords are responsible for all pest control, unless you’re renting a single-family home and they can prove that the pests are a result of you not keeping your home clean.
No matter where you live and what local and state regulations are, let your landlord know about any kind of pest as soon as possible. A good landlord should want to address these issues quickly to avoid having them spread to different units.
What if my landlord isn’t cooperating?
In a perfect world, your landlord would fix every problem, without issue, in a timely manner. But in the real world, that doesn’t always happen.
Consider these tips for getting landlord repair issues handled quickly and completely:
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Find out if teaming up to buy a second home is right for you and your pals
Given the current strength of the dollar abroad and the fast-moving real estate market at home, you may be thinking about buying a second home at your family’s tried-and-true vacation spot, on a sunny beach, or near your favorite ski destination. But what can your budget realistically get you?
If what your vacation-home fund allows is more fixer-upper than dream home, going in on a purchase with friends or family could be a great way to get much more home for your money. If you’re considering going this route, here’s how to get started.
1. Decide if it’s right for you
“The number-one reason to consider buying a house with friends is that it lowers your investment amount,” advises Bryant McClain, director of sales and marketing at Itz’ana Resort & Residences. “Unlike timeshares or fractional ownership opportunities, when people go in together and buy a property at market price, they enjoy the equity gains of the traditional real estate market.”
McClain also points out that the best candidates for shared property are those who want to use the home a few weeks a year, then rent out the home the rest of the time. (Just be sure you’re correctly set up to do so.)
Owners also have to be comfortable sharing ongoing expenses, like property management fees, utilities, insurance, and repairs.
2. Lay the legal groundwork
To protect all owners when the unexpected happens, and to avoid hurt feelings and strained friendships, McClain recommends hiring an attorney to set up an LLC, then purchasing the home through that company.
“Owning a property with friends or family is all fun and exciting on the front end, but what happens three years later when somebody wants out?” says Bryant.
Your attorney can draft an operating agreement that clears up expectations on everything from how utilities are shared to how a buyout would work if one owner wanted to sell and the others didn’t.
3. Start searching
Keep in mind that the vacation-home market moves quickly, and with multiple stakeholders needing to agree that a property is the one, it’s best to decide on your shared criteria before you start looking.
This is especially important if you’re searching from afar or if one person will be doing most of the home touring on behalf of the group. That way, when you find the right home, you can put an offer together quickly.
“Treat the whole transaction like a business,” suggests Bryant. “Make a spreadsheet with potential homes, list pros and cons, and ask everyone to vote — that’s where having an odd number of owners comes in handy.”
You should also enlist a local real estate professional with expertise in the destination where you’d like to buy. That person is best qualified to help you identify homes that are a good value, that will perform well in the local vacation rental market, and that are in locations likely to appreciate.
There’s plenty of legwork between “Hey, maybe we should buy a home together” and signing on the dotted line, but if you find the right people to partner with, approach it like a business transaction, and act quickly when you find the perfect home, you’ll be sitting back and enjoying your dream home before you know it.
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Few things are more polarizing in the real estate landscape than the idea of a rent increase. Landlords are typically ecstatic over the possibility of increasing their income, whereas tenants are, well, less than enthused. The said, a good rental property owner needs to know how to navigate the waters of a proper rent increase with finesse and ease, at least if they want to maximize their profits.
How To Notify Tenants Of A Rent Increase
To be perfectly clear, the process for notifying a tenant of a rate increase will vary by state, so be sure to check with the proper authorities before moving forward with an increase of your own. That said, most states will require landlords to give “proper notice.” Again, the length of time is different from state to state, bust most seem to follow a 30 day rule, meaning landlords need to tell tenants they intend to initiate a rent increase at least 30 days before doing so. The notice must be in writing, and some states even require the notice to be sent through certified mail.
Determining Your Rent Increase
There is only one thing more important to tenants regarding a rent increase than the reason why prices are rising: how much they are rising. I highly advise against increasing the rent arbitrarily; don’t simply throw out a number without any reason to back it up. Not unlike making an offer on a property, you are free to throw out any number you wish, as long as you can cite a reason for doing so. In other words, don’t simply increase the rent because you can. Instead, determine why you are increasing the rent, and base your new price on the resulting data.
With the exception of rent controlled living spaces, homeowners and landlords have a legal right to raise their rent if it doesn’t conflict with a current lease. More specifically, landlords can’t carry out a rent increase in the middle of a lease, regardless of whether it’s year to year or month to month.
Landlords can raise the rent as long as they give proper notice, “which in most states is 30 days,” according to NOLO. As a result, most landlords will be able to raise their tenant’s rent as long as they tell them at least 30 days before their current lease ends. Of course, each state will coincide with different laws, so check to make sure you are in compliance with the laws in your area.
There is also no limit to the amount a landlord can increase their rent, but not so fast. It can be quite easy to want to increase the rent as much as possible, but I’d most likely advise against it. While a significant rent increase cane look attractive to landlords at first, you need to think of the repercussions; namely, those that involve your current tenant leaving at the end of their lease.
Instead of increasing the rent as much as possible, first land on a reason why you are increasing it in the first place, as it’ll act as your starting point. If for nothing else, the rent increase should be justified and proportionate to the reason why. If, for example, you are intent on increasing rent to compensate for a higher cost of living, the increase in rent should be just enough to cover it — nothing more, nothing less.
Rent Increase Laws
Let’s make one thing abundantly clear: rent increase laws will vary depending on whether or not the building is zoned in a rent-controlled area. More specifically, rent-controlled and rent-stabilized areas are subject to the rules set forth by local municipalities. The local governing bodies in charge of regulating rent-controlled homes are responsible for deciding how often and how much rents may be increased. That said, rent-controlled homes and apartments are basically the exception, and not the rule.
In reality, the majority of homes are not governed by a rent-controlled body, meaning the rules pertaining to rent increases aren’t exactly set in stone. In fact, you could argue that rent increases are subject to whatever the market will handle without actually breaking. Landlords are within their right to raise rents as much as they see fit. In fact, the loose laws around rent increases are what gave rise to rent-controlled zones in the first place.
While there aren’t too many restrictions on how much a landlord can raise rent, there are some on the amount of time they must give tenants. Most notably, landlords can’t raise rents without warning; they must abide by the rules set forth by their own state. More often than not, tenants must be given at least 30 days notice before the rent increases. According to NOLO, “the rent increase notice must be in writing; in some states, certified mail is required. Oral notices are ineffective in most states and, unless you specifically agree to the rent increase, you are not obligated to pay it.”
Perhaps even more importantly, rent increases can’t be enacted over the course of a current lease. Landlords have no choice but to abide by the rules laid out in the signed lease, and can’t increase rent until the lease is over.
How To Justify A Rent Increase
It is never a good idea to propose a rent increase without the proper justification. You had better have a good reason for increasing the rent you expect your tenants to pay, or you could find yourself with a problem down the road. And while you certainly have every right to increase your rent, some reasons are less likely to anger tenants than others. Here’s a few of the most accepted reasons for a subsequent increase:
Justifying a rent increase has more to do with providing a reason the tenant can understand, and maybe even sympathize with. That way, they are more likely to accept the new rate, provided it isn’t absurd. Conversely, landlords that can’t justify a rent increase will most likely find their request met with more opposition than they would have appreciated. The idea here is to identify a cause an effect: circumstances changed, so you need to raise the rent — it’s as simple as that.
Rent Increase Summary
Rent increases are nothing less than a touchy subject for everyone involved. On the one hand, renters are never going to be happy about having to pay more for a place they are already living in. On the other hand, drafting a rent increase letter addressed to your tenants is a process that must be met with empathy and justification. If for nothing else, there’s a way to increase rent, and there’s a way that’ll cause more problems. To see to it that your efforts side with the former, make sure you take the appropriate steps when it does come time to carry out a rent increase.
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One of the first questions for people entering the landlord game is whether to hire a property manager or manage the new rental themselves. As with everything in life, there are positives and negatives to each strategy. So let’s run through the issues that go into making this decision.
First, the property you buy will most likely need some renovations. You’re going to have to be in charge of this yourself and get bids, shop for materials, make decisions, etc. And it will cost more than you think — probably a lot more — and it will take longer than you think, probably a lot longer.
Before you purchase — and this is best to do during your home inspection — try to get an experienced investment property owner to come with you, and maybe a contractor, to get a better estimate on those costs. Provide a healthy contingency of cost, like 50 percent, and a time contingency of 100 percent in your schedule. Better to be safe, than surprised.
Pros and cons of managing
Once you get the property closer to rent-ready status, you’ll need to make some decisions on whether you manage the property yourself, or hire someone to manage it.
Pros – Managing the property yourself allows you to keep the best control of your tenants, service their issues, keep good relations with them, and keep a better watch on the property. It will also save you somewhere between 8-and-10 percent of rental income and probably dramatically increase the chances that you will keep it occupied.
No management company has anywhere near the incentive that you do to keep it rented and to keep your tenants long-term. You’ll learn quickly that when faced with a vacancy, you’ll jump to get it rented. You will also save yourself one-half month or a full month’s rent in fees for handling the re-leasing process yourself.
But … you will also learn it is a lot of work!
Cons – The negatives about managing the property yourself are best seen in three separate scenarios: Renting it when it is vacant; what it takes in terms of monthly management; dealing with more serious issues when they arise.
It’s a lot of work!
Once the tenant is in place
If you put your property in good condition for rental, this part of the process is the easiest. Some properties and tenants are a breeze, but I’d guess that you’ll have to deal with about 3 to 5 minor issues per year (like the neighbor’s dog is barking). Figure on at least one more major issue, like calling a plumber or electrician. Overall, this process is not too taxing — if the property is in good shape and you follow the advice that follows.
Here are some tips to ensure things go well:
If you follow those tips, it should lower the hassle of owning rental properties.
Major issues can occur, too. So if your tenant stops paying, or there’s a major flood, or fire, you have to deal with it regardless of whether you have a property management company. And it’s going to be a lot of work and time involved, especially if the property is far away.
Overall, learning the management side will probably best teach you the ins and outs of owning real estate, save you some money, and probably make your properties more profitable because you’ll treat tenants respectfully and keep the units occupied.
Property management company handling the issues
There are many quality property management companies that can do a great job for you. As noted above, they probably charge 8-to-10 percent and a half month’s rent for re-leasing. They will handle the above issues for you, except when major issues require your input — or checkbook!
But the most important first step is to interview several rental companies. Call references, get copies of their insurance and make sure they have the proper type and adequate insurance in place.
Once you make the decision on which property management company to hire, keep on a friendly and professional basis with your manager. Things will go wrong but just because you are paying for management doesn’t mean you can blame the property management company. Part of your role is to inspire them to help handle the issue and obtain the best possible outcome.
If you’re super busy with your regular life, but own property or properties, a management company could be a good idea. You’ll still be pretty involved, if for no other reason except to maximize your value and keep those nice, consistent rental checks coming to pay the bills!
Keep in touch with the management company, the tenants, inspect the properties every once in a while, and do your best to help get it rented when there’s a turnover in tenants.
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In 2018, the internet has become the starting point for almost every real estate search. Regardless if you are a buyer or a renter you will probably start your housing search somewhere online. As a landlord, it is essential that you understand there is immense competition and do everything to make your listing stand out. It is not enough to simply throw your listing online without giving it any thought or strategy. A listing without quality pictures and sharp descriptions will leave you wondering why your phone isn’t ringing. The internet and popularity in real estate specific websites aren’t going away any time soon. Here are five tips to help take advantage of the internet and make your online listing stand out.
Your online presence is something that must be treated with seriousness. The quality of your property listing can help find good tenants who want to stay as long as possible. Spend a little more time creating the right ad that says everything you want about your rental.
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