position realty

Position Yourself For Success

4 Ways to Spot a Problem Tenant

When renting a property to someone, unfortunately, you have to be a little judgmental. As a part of your job, you have to be attentive to people’s characteristics and background/history in order to determine if they are the best candidate to rent your property to. Most of the time, a majority of the people you may come across to rent to are decent and good candidates that will end up not being of any trouble at all. While this may be the case, however, this doesn’t mean that you won’t encounter a prospective tenant that could be a problem at some point in your career.

Dealing with someone who shows interest in your property but also displays signs that they could prove to be problematic in the future is not easy by any means. Despite this, if you pay close enough attention, you’ll be able to spot the signs early enough which will ultimately make the process easier. If you are a landlord/property manager nervous about detecting the signs of potential problem tenant, check out my five warning signs below!

Before we delve into how to spot the signs, first, it’s important to recognize what the laws are regarding you, the tenant and your jobs. Lindsey Schober of Zillow makes an important note, stating, “Each state and municipality has unique laws and ordinances. Make sure you have a clear understanding of your landlord rights and responsibilities, tenant rights, and the basic workings of specific notices and eviction procedures. Work with an attorney to set up your policies and procedures.” Once you have a decent understanding of your rights as a landlord as well as the rights of any of your tenants, you will not only feel more confident about the selection process, but you will also feel better about handling a tenant in the case they pose a significant problem.

Now that you have an understanding of your rights and responsibilities, you can easily spot these five problem signs of a potential tenant:

1. Payment History/Credit: One of the determining factors when renting a property to someone is having a decent or good credit score. Though it may be unfair at times, many property managers and landlords use credit scores as a means of determining whether or not a tenant can be reliable in their payments and responsible while living in your property. A warning sign of a bad tenant can be a hesitancy to conduct a credit score or a credit score that shows a history of late payments. According to the staff at Upad, if you think you may have a problem, “Speak to the tenant and ask them if there’s a problem and remind them that the rent should always be paid by the due date. However, if you get a couple of late payments in a row, you should ask them directly if they’re having difficulty with the rent and discuss how you can sort this out.”

2. Friend/Family Member: You may be asking yourself, “what could be so wrong about having a friend or family member as a tenant?” Having a friend or family member as a tenant isn’t an instant horror, however, it can be dangerous. Have you ever heard of the phrase, “don’t mix family and business”? Well, there is a reason why that phrase exists. Unfortunately, in some cases when this happens, it becomes hard to uphold your status as the landlord and makes it harder for you to keep your relationship separate. In the long run, try to avoid this so you ultimately don’t ruin a relationship!

3. Criminal History: Background checks are wonderful things; they tell you anything you could want to know about a possible tenant to help narrow down your selection process. If a prospective tenant has a criminal history that makes you uncomfortable, in a majority of states, you can deny them based on their past criminal offenses. However, in states like California, you cannot discriminate against those who have been convicted of nonviolent crimes, according to Erin Eberlin of the Balance.

4. False Contacts: In almost all cases, most landlords/property managers ask for at least one or a few references to help in evaluating a tenant. Most people do not have a problem with this, however, those who can potentially be problem tenants may provide false contacts like friends or family members to pose as references to make themselves look better. To combat this, Chris of LandlordTalking notes, “One of the best ways to avoid this scam is to ask for multiple landlord references, including the current landlord. Come up with some preliminary questions to ask the contact during the interview. What will seem like small talk may actually tip you off to a fraudulent reference.”

While the process of evaluating a tenant may be difficult and exhausting, to notice the signs of a potentially bad tenant will only prove to help you in the long run. As always, good luck!

Position Realty
Office: 480-213-5251

Five Steps To Avoid Illegally Evicting Your Tenants

One of the biggest risks related to owning investment properties is dealing with an eviction. If a tenant doesn’t pay rent, the simple answer is to evict him.

To a seasoned investor, however, it’s never that simple. Actually evicting a tenant is an extremely complicated and expensive process, and one that should always be avoided.

An eviction is an official legal proceeding, complete with a formal process that needs to be followed exactly in order to have your tenant move out and relinquish the property back to you. Failure to follow your state’s laws on a legal eviction can result in delaying the eviction date, losing a court hearing or owing the tenant money.

Rental property owners will benefit from understanding the legal eviction process in order to protect themselves from breaking the law should they ever go through the process. I also hope to instill the idea that addressing an issue with a bad tenant takes a lot more energy than simply evicting him. I want all investors to understand the importance of finding good tenants and sticking to the lease terms, so you can minimize the risk of dealing with an eviction.

Let’s first take a look at the difference between an illegal and a legal eviction.

An illegal eviction involves:

• Changing the locks.

• Putting your renter’s belongings on the curb or in the garbage.

• Threatening the tenant with an eviction or increased fines.

• Turning off utilities or other services.

A legal eviction includes:

• A court order.

• Official notices.

• Appropriate communication.

• Adherence to state laws.

• Patience.

What Is An Eviction?

An eviction is a lawsuit, sometimes known as an unlawful detainer lawsuit, that a property owner files against a tenant in order to regain possession of a property. Once an eviction lawsuit is filed with the court and a judge rules in favor of the eviction, the property owner can work with law enforcement to remove the tenant by an agreed-upon date per the eviction ruling.

In order for a property owner to win an eviction ruling, the property owner must prove that the tenant violated a lease term, that he gave proper notices to the tenant to fix the violation and that the proper eviction process was followed.

Reasons To Evict A Tenant

A tenant can lawfully be evicted for:

• Failure to pay rent.

• A lease violation (like illegal use, subleasing, unauthorized pet, etc.).

• Damaging the property.

• Threatening the safety of other tenants, neighbors, the property or community.

• Breaking other local housing laws, as outlined in the lease agreement.

A property owner cannot evict a tenant because of personality clashes, minor disagreements or annoying behaviors. If you establish a reasonable need to evict a tenant, you should act immediately and follow your state’s guidelines for a legal eviction.

The Eviction Process

Here is a general overview of the standard eviction process:

1. Establish a legal need to evict a tenant:

Tenant violates a lease term, like failing to pay rent.

2. Notify the tenant:

Landlord provides an official notice to Cure or Quit to the tenant. A Cure Or Quit Notice notifies the tenant of the violation and tells the tenant to either fix the violation within a certain amount of time (cure) or move (quit). This notice should be taped to the door and mailed via certified, first-class mail. You will need to prove in court that you did your best to notify the tenant of the potential eviction proceedings.

In some cases, a property owner or manager can file an eviction with the courts without giving the tenant time to remedy the problem. Such is the case if the property or other people are in immediate danger.

3. File with the court:

If the tenant does not fix the violation outlined in the notice and does not voluntarily move out, the landlord can proceed with filing an eviction lawsuit.

After filing an unlawful detainer lawsuit with the local courthouse, you will receive a date for your eviction hearing and the court will notify the tenant of the summons. Depending on which state you live in and how busy your local courthouse is, this hearing can be anywhere from one week to a few months from your filing date. If it takes a few months for your eviction date, you have to let your tenant continue to live at the property until a judge rules otherwise. Often, a tenant will not pay rent during this time. If this is the case, let’s hope you have a good lost rent policy with your landlord insurance provider.

4. Court hearing:

At the court hearing, you will need to provide proof of the reason for eviction, and that you gave the tenant an official notice to cure or quit. It is also a good idea to bring copies of the lease, rent payment records and records of all communication you have had with the tenant.

If the judge rules in your favor, you will be able to move forward with an eviction by contacting your local law enforcement to escort the tenant out on an agreed-upon date, if needed.

5. Regaining possession of the property:

On the date determined by your eviction hearing, you will officially regain possession of the property. You are allowed to change the locks and proceed with managing any abandoned tenant property per your state’s laws at this time.

As you can see, moving forward with a legal eviction involves a lot of time spent dealing with your local courts. You have to be patient with the court’s timelines and rulings. You also must keep all your communication with your tenant professional during this time, which can be challenging if you are frustrated with your tenant’s behavior.

Evictions are risky because of the unknown timeline from the filing date to the date a tenant will actually be required to leave the property per the court order. The time and money associated with moving forward with an eviction demonstrate the need for approving only the most qualified tenants for your property, minimizing the risk of eviction.

Position Realty
Office: 480-213-5251

Is It Time To Hire A Property Manager For Your Rental

It’s a question that arises sooner or later for most landlords: “Should I manage my own rentals, or outsource the work?”

Keeping on top of rental maintenance is vitally important for any landlord. But for most, it’s not exactly something they enjoy. After all, being on call 24/7 for any repairs and maintenance issues that arise can get tiring after a while, even for the most resilient landlord. Then there’s the issue of time. While in the beginning, doing cleaning, painting and small plumbing jobs might be fine, once you’ve got a few rentals under your belt you’ll quickly find that management can escalate into a full-time job. No wonder 62% of landlords in one recent survey claimed that maintenance was their biggest pain point.

If you find yourself struggling to fit it all in, hiring a property manager is something that may have crossed your mind. But is outsourcing your property management always the best solution? When does it make sense to go it alone, and when should you think about bringing someone else on board?

If you’re on the fence, here are a few questions that can help you determine whether a property manager is the best option for you.

Do I have time to manage my property?

If you’ve reached a stage where you dread answering the phone because you don’t want to deal with yet another tenant maintenance request, it may be time to outsource.

In my line of work, I see it all the time: landlords running themselves ragged, trying to do it all. They have a few properties, but instead of creating passive income streams for themselves, they’ve simply acquired another job — a full-time one at that.

Don’t let your dream of owning rental properties become stifled because you can’t afford to put any more hours in at your properties. Instead, consider outsourcing to a reputable rental management professional who will be able to oversee the properties in your stead.

Do I want to expand my rental property portfolio?

If your goal is to own five, 10 or more rental properties, outsourcing is the fastest way to get there. This is especially true if you’re finding that maintenance and repairs are starting to keep you from high-level tasks like finding and assessing new investment opportunities and properly overseeing your property portfolio.

Will I invest in markets outside of my local area?

While many landlords start out with properties in their own hometown, if you’d like to grow your portfolio, you may wish to take advantage of up-and-coming markets or opportunities that are better than what’s available in your own backyard. However, being a long-distance landlord can bring its own set of unique challenges, even for experienced landlords.

If you’re thinking of investing in an out-of-town property, hiring a professional property manager who will be your eyes and ears on the ground can free you up from the stress that’s often associated with long-distance landlording.

Will a property manager help me be more profitable?

Finally, is hiring a property manager a financially smart decision? If you have one or two local properties, it might make more sense to oversee them yourself. But often, professional landlords find that hiring a property manager to oversee their rentals enables them to invest in more properties than they’d be able to otherwise, helping to maximize returns.

Finding A Reputable Property Manager

Much of your rental property’s success is contingent on how well it’s managed. For landlords who are thinking of outsourcing management or maintenance, finding a reputable and qualified professional is crucial.

Be sure to do your research upfront. Read online reviews. Ask for referrals. And, much like conducting an interview, ask your prospective property managers qualifying questions to ensure you end up with a great match. Here are a few questions you should ask:

1. How much experience do you have?

First, you’ll want to ensure that you find a professional who’s experienced and knowledgeable — one with a proven track record of success. Consider asking how many rental units they are currently responsible for. A low number could indicate that they’re new to the game, or perhaps struggling.

2. How do you structure your fees?

Concerns about cost is one of the main factors that keeps people from outsourcing. And naturally, this should be one of the first questions that you ask. Generally, monthly fees are either fixed or a percentage of the rental yield, often 8-12% of the monthly revenue. Optional packages and additional services could impact the cost, though, so make sure you’re aware of their fees before you commit.

3. Are there any fees when the property is vacant?

If you find a company that charges you while the property sits vacant, be careful. Property managers should have an incentive to keep your rental occupied, and if they’re being paid regardless, then that incentive goes away.

4. How do you screen tenants?

Any property manager worth their salt will not only screen tenants thoroughly, but also have airtight policies and procedures in place to ensure that they do so in a way that’s in compliance with the Fair Housing Act.

5. What’s your average vacancy rate?

Reducing vacancy times is key to maximizing your returns. A reputable property manager should know their average vacancy rates, and will be more than happy to inform you of them. Anything within the two- to three-week window is outstanding.

At the end of the day, the decision to outsource comes down to your personal preferences and investment goals. While first-time landlords can certainly benefit from the cost savings of doing their own work, for experienced landlords, offloading the day-to-day tasks to a professional is something that often makes sense. Many landlords find that it’s a pivotal turning point in their investment career — the decision that’s responsible for allowing them to reclaim their time and focus on growing their investments.

Position Realty
Office: 480-213-5251

How to Attract Renters Using Smart Tech

If you own or manage a rental property, you probably know how hard finding the perfect tenants can be. Attracting the right people to your space is key, and smart tech can help you grab their interest and show yourself to be a prepared and mindful landlord.

Make your space feel modern and updated
Fully updating older rentals is expensive and time-consuming, and it may not be a possibility for you based on your personal budget and time constraints. However, many prospective renters want to see a space that is updated and fresh, even if the building itself is a little older. One way to bring a modern edge to your space is adding in a dose of smart tech with a few well-integrated items.

Smart lightbulbs allow users to adjust lighting conditions to their own preferences. Some come with customizable colors, while others can be dimmed and have their light warmth fine-tuned using a mobile app. There are even smart bulbs which can be voice-controlled. Showing these features to prospective renters can be an impressive touch.

You can also show off things like smart thermostats, which allow for remote control and scheduling, and smart switches, which can help add even more control to existing devices and lights. Plugging items like lamps into smart outlets adds some smarts to even the most mundane appliances, and will create a cutting-edge feel in even a dated home. Best of all, these can save both you and your renters money over time.

Help prospective renters see the possibilities
Especially in short-term rental situations, it can be hard for prospective tenants to picture their lives in a rental space. As a property owner, you can use smart tech to help them get a clearer view of how personalized their stay in your space can be.

Smart speakers with virtual assistants bring some intelligence and control into a space in one compact package. Renters can voice-control other smart tech using the smart speaker as a hub, and they can ask for music, weather, search results, shopping, games, and a whole lot more. These virtual assistants, such as Alexa and Google Assistant, can help renters feel more at-home and control more of the space.

Create a secure environment
When moving to a new place, many renters may feel some anxiety about unfamiliar living situations and neighborhoods. Using tech like smart smoke alarms, leak sensors, and home security systems, you can create an environment that keeps you and the renters in the loop about any potential threats and get ahead of potential dangers with remote warnings. It’s important for potential renters to feel secure, and you can provide that by showing you’ve put time and effort into creating a safe place for your tenants.

The key to using smart tech to attract renters is to make sure you’re in-tune with potential tenants’ needs. Making a space feel up-to-dated, personal, and safe will attract high-quality renters to your property, and can be the beginning of a strong rental relationship.

Position Realty
Office: 480-213-5251

What Landlords Can Do To Avoid Evictions

Evictions are at an all-time high. Pulitzer Prize-winning sociologist and mass eviction researcher Matthew Desmond placed the number at 2.3 million for 2016, offering a combination of reasons: Soaring housing costs coupled with flatlining incomes have come together to make rental properties that much more unaffordable to average families.

More than ever, families are squeezed between the income they produce versus the rent and housing costs they must meet.

In other words, the climbing eviction rate is unsustainable.

Though there are economic and structural reasons for this uptick, there are also tangible steps that landlords can take to attenuate that rise — effective ways landlords can avoid evictions.

Adopting A Proactive Approach

Evictions are not only destructive for tenants. They also negatively impact landlords, too. Neither party benefits from the eviction process. Tenants are tasked with the challenge of securing a new home. For landlords, the eviction process can take weeks or even months of time, cost and stress. It’s in the interest of both parties to avoid this outcome.

Landlords who mishandle the eviction process may receive a countersuit, action that can bury your case into a deeper, more insipid legal quagmire. Landlords must take a proactive, measured approach to avoid this outcome. When I say proactive, what I mean is an approach that prevents evictions in the first place and that puts the risk in your favor.

Create conditions in which the landlord-tenant relationship is healthy, open, honest and, most importantly, reciprocal. Remember — landlords are bound by their obligations as much as tenants are. Even though landlords own the property, they cannot take the law into their own hands. I’ve seen too many cases in which landlords have done precisely that.

A proactive approach is one that manages the concerns of your tenant in a timely, reasonable manner. It’s an approach that reduces landlord-tenant tension. It’s also an approach that seeks to avoid a reactionary response.

In many cases, evictions take place in unnecessary circumstances. Perhaps the tenant has a reasonable case for late rental payments. Perhaps landlords can adopt a more moral approach, one that seeks to understand and come to a sensible, long-term resolution that benefits both tenant and landlord. It doesn’t always have to result in eviction proceedings. Evictions should be avoided whenever possible.

Evictions are, of course, the action of last resort — both tenant and landlord should come to that realization if a dispute, no matter how small, comes to the fore. It’s not always the fault of the tenant. Landlords should realize this and act accordingly.

Always Meeting Obligations

Of course, there are situations in which eviction proceedings are wholly unavoidable. Even then, though, landlords should reflect on how that situation has arisen.

Landlords should ensure that their tenant is of the highest possible standard. Necessary background checks must be performed before leases are signed. It’s simply not enough to take a passive, distant attitude. It never works. But conducting those extra checks can, in the long term, save you weeks if not months of time, stress and cost by avoiding the eviction process. Invest the necessary time upfront, and it always pays off.

Even when things go awry, landlords should think about how that situation has come to pass and what steps, if any, they can take to avoid the same situation developing in the future. Again, it’s often down to being proactive and tackling every potential source of tension and discord in the landlord-tenant relationship.

The perilous increase in eviction rates of late casts a wider shadow over the landlord-tenant relationship, giving us greater cause to reflect on what landlords can do to prevent this often needless outcome. Landlords must be proactive along three fronts:

1. Landlords should guarantee that their tenant comes with the lowest possible risk. Conduct necessary, extra background checks.

2. Landlords should meet their obligations and ensure the landlord-tenant relationship is healthy, free from both hostility and tension.

3. Landlords should be flexible where necessary, seeking a long-term resolution for whatever the source of tension may be.

In cases where all three strategies fail, eviction proceedings are unavoidable. In these circumstances, landlords should always conduct themselves in accordance with the relevant state and local legislation and the tenancy agreement – a professional approach that seeks to streamline the eviction process, while also protecting the landlord against potential counter suits.

Some evictions are avoidable. By appreciating that fact for what it’s worth, landlords can do more to help their situation (and tenant) in both the short and the long term.

Service Animals and Emotional Support Animals: What You Need to Know

Businesses from airlines to restaurants to taxis are finding themselves in hot water due to their lack of understanding the rules governing service and emotional support animals.

It’s important that organizations – and especially, small businesses – know when and how to accommodate people with service animals to ensure that everyone has the safest and most pleasant experience with your company as possible.

Service Animals
According to the Department of Justice, service animals are classified, as a dog – and vary rarely, a miniature horse – that has been “individually trained to do work or perform tasks for an individual with a disability. The work task(s) performed by the dog must be directly related to the person’s disability.” A service dog can be trained to assist an owner with a disability with any number of task from helping someone who is blind navigate walking streets to picking up items for someone with acute arthritis to activating a life-alert button for someone who has epilepsy.

Service animals are not required to wear any type of vest or carry certification, so they may not always be easy to identify by just looking at them. Businesses can ask if a dog is a service animal and what work task they have been trained to perform, if it is not obvious. However, they are not allowed to demand any verification for the dog or inquire about their handler’s disability.

Service dogs are also protected under the Americans with Disabilities Act(ADA) and can accompany their handler to any public place – including office buildings, coffee shops and airplanes, provided they are under control and not a threat to others. Under the ADA, businesses must make “reasonable modifications” of their policies to accommodate trained service dogs. Companies can be fined for violating the rights of people with service animals.

A good way for businesses to think about service animals is as an extension of their owners. The dogs are trained to help their handlers with tasks they may be unable to perform alone. As such, businesses are not allowed to subject service dogs to any fees or restrictions that might apply to regular pets – such as cleaning or transportation fees. Hotels must also allow service dogs and their owners to stay in any room, not just “pet-only” rooms. Essentially, if a human is allowed somewhere, service animals are likely allowed there, too.

Emotional Support Animals
The rules become a bit more challenging around emotional support animals – also known as therapy animals. Emotional support and service animals are not one in the same. The role of an emotional support animal is to provide comfort to its owner and it is not trained to do any specific task. Any animal from a dog to cat or a bird or guinea pig can be considered an emotional support animal and are not covered under the ADA. These animals are considered effective in helping those who suffer from anxiety, depression or even PTSD.

To qualify, owners must receive an approval letter from a mental health professional that the animal provides a therapeutic benefit, and be able to provide that letter if a business requests it. Emotional support animals are allowed in the cabins of airlines at no extra charge and in any rental that falls under the Fair Housing Act, but that is the extent of what federal law requires.

Local laws vary for therapy animals, so it is best to check on the rules in your area before establishing your company policy. For instance, California has more extensive legislation protecting emotional support animals, but New York City isn’t so generous. For instance, in New York employers and landlords must make reasonable accommodations for support animals if you have proper documentation, but they can reject the animal if it poses a threat to the health or safety of others, or if the animal poses a danger of substantial property damage.

California creates three types of support animals with separate rules. The definition of a service dog and an emotional support animal are the same. But a psychiatric service dog is a dog trained to help a person with a mental disability. The tasks it is trained to do is waking someone with clinical depression and making them get out of bed, responding to a panic attack, or alerting an owner to erratic behavior if someone has a bipolar disorder. The protections for this level match those of a regular service dog.

If you do ever encounter a service dog or emotional support animal that is out of control – barking loudly, misbehaving or endangering the safety of other customers – it is perfectly acceptable to ask its owner to bring the animal under control. It is also acceptable to ask them to remove the animal if they are unable to control it. Just as you wouldn’t be expected to allow a human to behave erratically in your place of business, you are not expected to allow a service dog or therapy animal to act that way, either.

Three Misconceptions About Renters’ Insurance

When most people think of insurance, they likely think of some more popular types of policies such as health insurance, auto insurance, and even homeowners insurance. One form of coverage that’s not talked about as often is renters insurance. In fact, with only about 40 percent of renters holding policies, it’s not surprising that there are actually several common misconceptions people have about renters insurance policies.

To clear some things up and show why renters insurance policies can be a smart investment, here are three misconceptions and why they’re wrong:

“Renters insurance only covers your home”
Yes, easily the biggest misconception about renters insurance involves the very fundamentals of such policies. Specifically, tenants seem to think that renters insurance is intended to cover the physical structure of their homes. Since most renters aren’t responsible for these types of damages (their landlords are), they may assume there’s no need for coverage.

In actuality, renters insurance isn’t so much about your home but what’s in it. When you purchase this particular policy, what you’re covering is all of your possessions in the event that they’re damaged or stolen. Moreover, in most cases, the items don’t even need to be in your home at the time they’re damaged in order to be covered.

Other benefits of renters insurance can vary but may include things like liability coverage in the event someone is injured on your property and displacement reimbursement in the event you need to temporarily vacate your home. As a result, renters insurance is a far more comprehensive product than most people may realize.

An average renters insurance policy costs about $15 a month and can go as low as $10.

“It’s insurance, so it’s expensive”
Given the high prices associated with health insurance, auto insurance, and other policies, it’s easy to see why so many people would assume that renters insurance was equally as pricey.

That’s why you may be surprised to learn that studies peg the average renters’ insurance policy at just over $15 a month. This number can go as low as $10 a month in some areas, although prices in more storm-prone regions can be closer to $20 a month. Still, considering the benefits of these policies, it’s likely worth the relatively low price.

It should also be noted that there may be ways to save on your renters’ insurance policy as well. A popular example is the ability to bundle your renters and auto insurance policies in order to secure a discount on one or both. Additionally, with many companies now offering renters insurance policies, a simple way to save is to shop around and compare quotes in order to get the best deal.

“Your policy doesn’t cover the full replacement cost”
This one is actually true in some cases, but it all comes down to whether you have a replacement value or actual cash value (ACV) policy. While it’s true that an ACV policy will factor in things like depreciation and usage when determining how much to pay out on your claim, replacement value policies will provide you what you need to buy the claimed items new. Because of this, although your premium may be a bit higher, it’s often worth it to opt for a replacement value renters insurance policy.

Contrary to some misconceptions and myths that are out there, renters insurance not only provides important and valuable coverage but also comes at an affordable price. As a result, if you rent and don’t yet have a renters insurance policy, perhaps it’s time to protect your stuff and get covered.

Top 5 Mistakes Landlords Make with Their Investment Properties

Managing an investment property is no easy task. It may sound like big money, but if you are not prepared it can turn into a huge money pit. As a landlord, you have a big responsibility to the property as well as the tenants. One small misstep could end up costing you valuable time, energy, and money. That is why you must make sure you do your homework before jumping in. Do as much research as possible. If you look up the latest real estate trends in the area or ask a local expert, you will be able to find enough information to help you make the best decisions when it comes to your investment property. Unfortunately, many landlords want to get started so quickly that they do not think before they invest. Here are the top five mistakes that landlords make with their investment properties:

1.Choosing the Wrong Tenants

This is one of the biggest mistakes you can make as a landlord. If you are renting your property out to a stranger, you must take the extra steps needed to make sure you get the best possible tenants in your property. If you do not know them very well, there are certain precautions you can take. Have them prepare the following:

a) Application Form: Have prospective tenants complete a written application form. This will include standard renter’s information such as names, numbers, employer, previous residences, income, etc. Each adult who will be living in the property would need to fill one of these forms out and minors can be added as well. They would sign that all the information they provide is accurate to the best of their knowledge.

b) Credit and Background Checks: Tenant screening is a great way to see how financially stable your prospective renter is. Credit reports often show if someone has been late on payments and the amount of debt they already have. A background check is very important, not just for your peace of mind, but also in consideration of the neighborhood. You would not want to rent the property out to a convicted criminal. It would compromise the safety of the area and could also bring down the property values.

c) Referrals: Asking for referrals from past landlords and current employer is a great way to go the extra mile in finding the perfect tenant. If the applicants have not be great renters in the past, then they probably would not move forward with their application if referrals are needed. A referral from an employer would also give you confidence that the tenant is gainfullyemployed and able to make a monthly payment.

2. Failing to Create a Thorough Lease Agreement

Creating a good lease agreement is where part of your research will come in handy. Many landlords will print the first form they see on the internet. Unfortunately, this form could be outdated and only relevant for a certain location. Make sure to find an application that has all your stipulations and current local regulations spelled out. Some tenants will comb through the entirety of the agreement to try to catch something that the landlord missed to exploit it. For this reason, it is very important that you create a thorough lease agreement. Be sure to add any rules specific to your property in an addendums section.

3. Lack of Communication

If you make yourself unavailable to your tenants, you are doing them and yourself a disservice. Your office should always be open and you should always be available by phone. Sometimes, home emergencies will come up and your tenants will need your ‘okay’ or your help to get the issues resolved. It can range from something small, like a door coming off its hinges, to something huge, like a flood or leak in the plumbing. The sooner you can get back to your tenants, the better for them and you. The longer you let an issue go, the more difficult it will be to fix a problem and the more resentment your renter could have for you. You want to make sure that your tenants have a good experience so that they are not criticalof you to future renters. This is especially important this day and age where you can review anything and anyone on the internet.

4. Setting the Rental Rate Too Low or Too High

Make sure you are setting the rental rate within the correct range for the property’s age and location. There is such a thing as setting the price too high and too low. If the rent is too high for the area or for how old the property is, no one will want to live there. The longer your home sits unoccupied, the more money you are losing each day. In the same vein, you do not want to set the rent too low. You may be able to get someone into the home quicker, but you could be leaving a lot of money on the table. The whole point in taking on an investment property is to make money. The best thing you can do is look at other rental properties in the area. Try to stick within the range of rental pricing you see in the neighborhood.

5. Delaying Eviction Process

If you do find yourself in the position of having to evict a tenant, try to get the process started as soon as possible. You can expect it to take about 30 days from start to finish, but many times, it is delayed because tenants will come up with excuses. As soon as you can tell there is a real issue, you should begin the process. The longer you wait to get it rolling, the longer it will take. The longer it takes, the more money you will be losing. It is important to note that the tenant is still legally obligated to pay the back rent owed to you. However, if a tenant has opted not to pay rent up until this point, you may be out of luck trying to collect it from them in the future.

Being a landlord is a tough role! If you avoid these common mistakes that most people make with their investment properties, you should have an easier go at it. The main thing to remember is that the more research and preparation you put into renting out your property, the more return you will see on your investment.

10 Rehab Tips That Increase The Value Of Your Property

You need to keep your investment property repairs to a minimum to stay profitable. You also need to keep your properties in good shape to attract tenants or buyers. There are the basic improvements, such as carpet and paint, but these can still costs thousands of dollars. The following are some inexpensive ways to improve your investment properties with very little cash.

10 Budget Rehab Tips That Boost The Value Of Your Investment Property

1. New Electrical Switch Plates

This is such a minor, yet overlooked improvement. Most rental owners and rehabbers paint a unit and leave the old, ugly switch plates. Even worse, some even paint over them.

New switch plates cost about 50 cents each. You can replace the entire house with new switch plates for about $20. For the foyer, living room and other obvious areas, spring for nice brass plates. They run about $5 each – not much for added class.

2. New or Improved Doors

Another overlooked, yet cheap replacement item is doors. If you have ugly brown doors, replace them with nice white doors (you can paint them, but unless you have a spray gun it will take you three coats by hand).

The basic hollow-core door is about $20. It comes pre-primed and pre-hung. For about $10 more, you can buy stylish six-panel doors. If you are doing a rehab, the extra $10 per door is well worth-it. For rentals, consider at least changing the downstairs doors.

3. New Door Handles

In addition to changing doors, consider changing the handles. An old door handle (especially with crusted paint on it) looks drab. For about $10, you can replace them with new brass finished handles. Replace the guest bathroom and bedroom door handles with the fancy “S” handles (about $20 each).

4. Paint/Replace Trim

If the entire interior of the house does not need a paint job, consider painting the trim. New, modern custom homes typically come with beige or off-white walls and bright-white trim. Use a semi-gloss bright white on all the trim in your houses.

If the floor trim is worn, cracked or just plain ugly, replace it! Home Depot carries a new foam trim that is pre-painted in several finishes and costs less than 50 cents per linear foot. Create a great first impression by adding crown molding in the entry way and living room.

5. Replace Front Door

You only get one chance to make a first impression. A cheap front door makes a house look cheap. An old front door makes a house look old. If you have nice heavy door, paint it a bold color using a high-gloss paint. If your front door is old, consider replacing it with a new, stylish door. For about $125, you can buy a very nice door.

6. Tile Foyer Entry

After the front door, your next first impression is the foyer area. Most rental property foyers are graced with linoleum floors. Many homes in Tampa, FL also have an outdoor porch that would benefit from new tile. Consider a nice 12″ Mexican tile. An 8ft x 8ft area should cost about $100 in materials.

7. New Shower Curtains

It amazes me that many landlords and sellers show properties with either no shower curtain or any ugly old shower curtain in the bathroom. Don’t be cheap – drop $40 and buy a nice new rod and fancy curtain.

8. Paint Kitchen Cabinets

Replacing kitchen cabinets is expensive, but painting them is cheap. If you have old 1970’s style wooden cabinets in a lovely dark brown shade, paint them. Use a semi-gloss white and finish them with colorful plastic knobs. No need to paint the inside of them (unless you own a spray gun), since you are only trying to make an impression.

Americans spend 99% of their time in the kitchen (when they are not watching TV). A fancy modern faucet looks great in the kitchen. They can run as much as $150, but not to worry – most retailers (Home Depot, Lowes, Home Base, etc) often run clearance sales on overstocked and discontinued models. I have found nice Delta and Price Pfister faucets for about $60 on sale. And don’t forget to check eBay!

9. Add Window Shutters

If you have ugly aluminum framed windows, consider adding wooden shutters outside. They come pre-primed at most hardware retailers and are easy to install. Paint them an offset color from the outside of the house – (e.g., if the house is dark, paint the shutters white. If the house is light, paint them green, blue, etc.).

10. Add a Nice Mailbox

Everyone on the block has the same black mailbox. Stand out. Be bold. For about $35 you can buy a nice mailbox. For about $60 more, you can buy a nice wooden post for it.

People notice these things and buyers love them! As a real estate investor in Tampa, FL or anywhere else in the world, staying mindful of these easy and cheap fixes can help your profitability soar.

Position Realty
Office: 480-213-5251

Traits to Look for in a Potential Tenant

Finding a good tenant is essential, but it can also be tricky. It requires more than just putting an ad on the internet. To find a great tenant for your rental property, it pays to know what makes a good tenant.

So, we’ve created a list for you. These are 8 traits to look for in a potential tenant.

1. Openness Toward Background Checks It’s important for you as a landlord to know who you are renting to before you rent out your property. This is because you never know when a tenant is going to be reliable and worthwhile or seriously problematic.

A tenant background check is important for the following reasons:
• To find out if they have a criminal record • To choose the best tenants from your pool • To check their work history • To make sure that they will comply with your rules • To confirm your tenant’s rental history • To know which questions to ask during screening • To confirm their identity

2. Reasons for Moving Tenants move for various reasons. For example:
• To change their neighborhood • They had problems with neighbors • A job change/relocation • The need for more space • They had problems with their previous landlord

Contacting their previous landlord isn’t 100% reliable, as some might throw an array of unjust accusations. The only option is to ask them directly. Granted, the tenant may lie but some of the reasons are quite straightforward and oftentimes completely honest answers.

3. Personal Behavior You should call up tenant’s previous landlords to ask how they were personally. Good questions to ask them include:
• Did the previous tenant pay the rent and on time? • Did they do a reasonably good job of taking care of the rental property? • Was the person disruptive towards neighbors? • Was the unit clean and in good order when the tenant left? • Was the tenant evicted?

4. Ability to Pay Rent This is a no-brainer. The prospective tenant should be able to pay rent without struggling. To verify whether they can afford the price of the rent, you need to look at their proof of employment.

Look for a tenant who has good job prospects and a steady, reliable income. A good rule of thumb is that the price of rent shouldn’t exceed 30% of the tenant’s income.

Some red flags to look out for include a person who has long periods of unemployment or if the person changes jobs often.

5. Cleanliness A good tenant maintains cleanliness. It’s every landlord’s dream to get a tenant who will take good care of your property. You obviously wouldn’t want a person who is going to let trash pile up on the patio or leave food remnants building up in the microwave.

You can get a better idea of the way they would maintain your property if you get a glimpse of their car or if they allow you to meet them at their current residence. You could also include a cleaning clause in your lease as well.

6. Subletting When you are a landlord, it’s important to protect yourself against as many potential risks as possible. This is the same reason why you have to do a proper tenant screening before renting out your property in the first place.

But should you allow a tenant to sublet? Subletting happens when an existing tenant lets all or part of their home to someone else.

Allowing subletting is risky. Some tenants want to sublet as a way to earn extra cash or to avoid paying rent on a vacant apartment. Also, there’s no guarantee that they would pay as much attention to the tenant selection as you did.

It would be counterintuitive to be okay with your tenant getting a couple of tenants of their own.

7. Roommates It’s important to know how many people are going to be living with your renter. The tenant might be planning to move in with their significant other or even their entire family.

Should you allow roommates, here’s how to do it smoothly while protecting your investment:
• Consider updating your occupancy limit • Be prepared to consider a unit switch • Be cautious about creating new lease terms • Require potential roommates to be screened as tenants

8. Plans for residence Your final layer of screening is a simple practicality test. If they have a job nearby, verify that your house is not an impractical distance away. If they have a family, check that there is a room for everyone in the home. If they have a pet, confirm that they are willing to conform to the pet clause in your lease agreement.

Generally, tenants will have an excellent plan for residence, but it never hurts to check.

If your prospective tenant possesses most of these traits, then they are a great candidate for a long-term renter. They will most likely keep the home in good condition, and that they will be responsible and well-behaved.

Position Realty
Office: 480-213-5251

Info