Tag: Rental Property

Cover Your Asset

Here’s a look at the typical timeline of the average American resident:  Phase 1. Graduate college. Get first REAL job. Buy first house. Adopt a dog.  Get married. Have first child. Realize that the first ‘home sweet home’ is just too small.  End of phase 1. Now, phase 2 may not be as typical as phase 1, but it’s a great route to follow:  Buy new home. Decide to build retirement portfolio. Keep first home as a rental property.

If you were able to follow phase 2 as listed above or are deciding at a later phase in your life to acquire rental properties, make sure you have your asset covered.  I sat down with my Property Manager and our long-time Maintenance Professional to devise a check-list of opportunities to maintain your/our long-term investments. Some people may have an obsession with recreating the 1986 blockbuster Money Pit, but that is not in our list of recommendations.

So what should you look out for to make sure your home is tip top?  First and foremost, if you are purchasing a home as an investment, listen to the home inspector carefully and follow his/her list of recommendations.  Moving forward, here are our top 22 items to keep in mind:

  • Keep water out – make sure caulk is not failing anywhere water exists (interior and exterior)
  • Have HVAC system serviced yearly
  • Have the sewer cleaned out yearly on older homes (especially with clay piping)
  • Have tankless water heaters serviced annually
  • Running toilets should have all rubber parts replaced
  • Ensure sump pump is working properly
  • Ensure all doors and windows seal properly to keep the weather out
  • Change air filter frequently (consider providing this service to tenants if it is hard to access)
  • Ensure spring hinges are working properly on door between the garage and the house
  • Replace weather stripping that is wearing
  • Seal granite countertops
  • Refinish hardwood floors when the finish is visibly wearing
  • Replace washer hoses (especially rubber) when needed
  • Ensure CO detectors, fire extinguishers and smoke detectors are working and not expired
  • Re-seal grout in showers
  • Trim trees and bushes away from the home
  • Don’t forget about the outside
    • Touch-up/paint your home
    • Replace rotted wood
    • Make sure everything is caulked and sealed
    • Ensure drainage/grading is pushing water away from your home
    • Stain fence/real wood deck when it no longer repels water (typically every other year)
    • Have roof inspected after wind/hail storms
    • Have gutters cleaned yearly (where mature landscaping exists)
    • Lubricate all moving parts on garage doors yearly
    • Ensure garage door seals to keep water out

“We spend thousands of dollars on a depreciating asset (car) and take it for regular oil chang-es, check-ups, and take it to the car wash every time it gets dirty, but we spend hundreds of thousands of dollars on a home and don’t do anything to it.”  – Bob, handyman

It is a best practice to make sure everything in your home is functioning properly. Don’t forget higher quality products typically last longer!


Brought to you by Sondra Lockett-Cameron, Marketing Manager for TJC Real Estate and Management Services. 

TJC Real Estate & Management Services • 303.324.6988 • info@tjcrealestate.com

Your Neighborhood Realtors® Since 2005

© 2019

Paying the Price of Landlord Mistakes

There are many types of landlords in the renting world:  

  • The Hands Off Landlord
  • The Nosey Landlord
  • The Mr. Fix It Landlord
  • The Let’s Be Friends Landlord
  • The Slum Lord

If you are already a landlord, then you can probably relate to the one or more of the titles (and hopefully not the latter one).  Though all of these different types of landlords may have their own unique way of handling their rental(s), there are some processes and some laws that shouldn’t be ignored.  Not heeding this advice may cost you more than just a headache down the road.

There are many facets to running a tight, profitable, somewhat grief-free rental property.  Here is a list of 5 of those components that will definitely save you time and money:

  1. Know the Landlord-Tenant Law in your state
  2. Research your HOA Bylaws and Policies
  3. Practice Fair Housing to the ‘T”
  4. Inspections, Inspections, Inspections
  5. Find Great Tenants and keep them happy

In this article, we will touch base on each of these items, but stay tuned for a series of blogs in the near future that will dissect each topic and dissolve any trepidation or skepticism that may surface at the mention of these concerns.

Landlord – Tenant Law

Every state implements different laws regarding the relationship and processes of the Landlord and Tenant.  It is within your role as a landlord to know and execute the laws accordingly. Did you know that if a tenant takes their landlord to court for lack of receiving their security deposit on time that they can sue their landlord for up to 3x the security deposit itself?  Here are a few more examples of Colorado Landlord – Tenant Laws:

  • Security Deposit In most instances, it is the responsibility of the landlord to return any refundable security deposit back to the tenant within 30 days after they move from the premises.  

★ Tip:  Doing a pre-move out inspection once the tenant gives their notice will allow you to assess possible damages and prepare by scheduling quotes for such repairs prior to move out.  This step will assist you in saving valuable time during that 30 day period as some vendors may not be as speedy as you would like at the time you need them most.

  • Abandoned Property – If a former tenant leaves items behind, it is state law that the landlord give the former tenant a 15 day written notice before selling or disposing of their property.
  • Warrant of Habitability – A tenant has the right to terminate a lease if the home is lacking some rather simple items (and of course the landlord does not oblige) such as:
    • Locks on exterior windows and doors
    • Adequate number of trash receptacles in good condition
    • Extermination of a rodent or vermin infestation

HOA Bylaws and Policies

Oh the HOA….unless you are sitting on the board of an HOA, you probably cringe every time the acronym is mentioned.  Don’t get me wrong, the

HOA’s serve a purpose, but that doesn’t mean that they are all created equal or easy to work with.  Know the laws as a property owner as well as for your tenants.

  • Move In Fees – Many (most) interior multi-family units have some sort of move-in process and fee/deposit required upon move-in and reserving the elevators.  
  • HOA Dues – Though it is tougher for your HOA to foreclose on your property these days due to non-payment, they can definitely restrict your tenants’ privileges such as receiving their annual community pool pass. Don’t be that landlord. Pay your dues.
  • HOA Rules –  You will get at least one warning before a violation fee is issued, but it will save everyone a lot of distress if the rules are known up front.  Typically, if your tenant(s) keep their porches tidy, don’t smoke, pull their weeds, put trash in proper place and doesn’t use the wrong grill on their balcony, then everyone should be good, but rules can change, so stay informed.
    • Tip: Know your rules and pass them along to your tenant prior to move in, better yet, with a copy of their lease.

Fair Housing Laws

Let’s keep it simple.  It is unlawful to advertise for or make the decision to rent a property based on race, color, sex, familial status, handicap, national origin or religion.  For ALL the details, it would be wise to take a class and/or read more HERE.

Inspections

So you found the PERFECT tenant.  They were SO nice. They pay their rent every month, ON TIME.  They never submit maintenance requests, AAHHH! A year later, they give their 30 or 60 day notice just like their lease states.  Everything is rolling along as you dreamed it would until you visit the property for the first time in over 11 months. OUCH! The weeds have overgrown, the fridge has been leaking for, well, a very long time, the hardwood floors are wrecked, and the east side outer window sills are rotting off your home due to last season’s bad hail storm and the lack of paint that was barely attached.  Completely the tenants’ fault? No. 60% your fault and/or doubtlessly avoidable? Yes, probably. The tenants should have maintained the lawn and reported the leak, but if you would have visited the home at least once every 3-6 months, you could have been more prepared and possibly have caught a couple of the problems before they were beyond repair.

  • Tip:  It should state in your lease that the lessor has the right to enter the home at any time during reasonable hours for the means of inspections, improvements or re-renting the property.  We always give our tenants a 24 hour courtesy unless it is an emergency and it is also wise to take in account the tenants’ right to quiet enjoyment (which should also be stated in the lease).

Find a Great Tenant! And keep them happy…

This last component to successfully managing your rental investment with as little grief as possible is to find a great tenant and do your best within reason to keep them happy and at arms’ length.

  • Take enough time to market your property.  It is in our lease that 60 days notice to vacate is required which allows plenty of time to find a new tenant.
    • Use this time wisely and utilize proper advertising techniques from the get go: good photos, precise description and free online advertising such as Zillow and Craigslist.
    • Don’t take your first applicant if they are not what you are looking for in terms of pets, credit score, rental history, etc.  Just make sure you are complying with Fair Housing laws and staying consistent with all prospective tenants.
    • Make sure you are off to a good start with your new tenant:
      • House is professionally cleaned and the maintenance checklist is up to par.
      • All communications have been clear, prompt and delivered with a kind, professional tone.
    • Keep home in good working order throughout terms of lease.
    • Take any complaints with an open ear.  If your tenant is disgruntled, listen first.  Then try to come to a mutual agreement. It will make everyone’s life easier in the end.

If you live in Greater Denver area, contact TJC Real Estate and Management Services for a complimentary consultation.  We are unique in the industry as we are a one stop shop for real estate investors. TJC can help with the acquisition, property management, and asset management. Our goal is to create a long-term relationship that helps your asset(s) grow, as well as, provides stable, long-term ROI. We are happy to assist you on your journey to become a successful real estate entrepreneur!


Schedule an appointment today to discuss your property management questions!

Brought to you by Sondra Lockett-Cameron, Marketing Manager for TJC Real Estate and Management Services and Distinctive Properties.

TJC Real Estate & Management Services • 303.324.6988 • info@tjcrealestate.com

Your Neighborhood Realtors® Since 2005

© 2018

 

Managing Your Rental Investments

MANAGING YOUR RENTAL INVESTMENTS

Like any investment, keeping your current rental, buying a new rental property or converting your current home into a rental, may seem like a leap of faith, and to some degree it is.  In today’s market, given the low interest rates and record high rental rates, it is the perfect way to diversify your investments, but with rental properties, there are many moving parts that can make or break your investment.

Rental properties are versatile as you may have them for short-term or long-term investments.  No matter the length, there is the deep lying concern that may linger in your subconscious: should you manage the property yourself or hire a reputable property management service to eliminate the guesswork and hassle of being a landlord? Neither decision is an easy one to make and both will have costs involved.  As we have all heard before, “Time is money” and this saying definitely rings true with being a landlord. Now it is up to you to know which route is best for your present and future endeavors of being a landlord.

The Big Picture

Let’s first lay out some scenarios as well as a list of priorities that go hand in hand with owning a rental property.

Scenarios:

  1.   You don’t mind having your family dinner interrupted or be woken up in the middle of the night to handle of maintenance call of no heat or a water leak.
  2.  You have the time and resources to advertise a property, conduct showings, complete the screening process, prepare a lease, execute a move-in inspection, and ready a property for a prospective tenant.
  3.  You are wanting to expand your portfolio of rental properties in the area.
  4.  You have one or more rental properties and live out of the city or state.
  5.  You are working full-time or trying to enjoy the golden years of retirement while doing your best to make the most out of your rental investment.

Priorites:

  •      ***Best return on investment***
  •      Time on market and/or vacancy
  •      Rent pool and advertising reach
  •      Screen prospective tenants
  •      Getting prime rent
  •      Having a professional lease
  •      Legal services and possible evictions
  •      Handling tenant challenges, HOA communication and maintenance requests
  •      Finding trustworthy and quality vendors
  •      On-going property upkeep
  •      Collecting rents and security deposits
  •      Returning security deposits upon assessing possible damages
  •      Accounting/Taxes

Let’s Dig Deeper

Now let’s look at some qualifying questions to make sure that you have the fair ability to get your best return on your investment if you were to manage the property yourself:

  •      Do I have the time to answer and take care of maintenance and tenant challenges?
  •      Am I willing to answer after hour maintenance emergency calls?
  •      Do I have the skills to handle most common maintenance requests?  If not, do I know trustworthy and quality vendors?
  •      Do I have time to advertise the property, organize showings, show the property, and screen tenants effectively in order to acquire qualified tenants, appease current tenants, and keep vacant time to a minimum?
  •      Do I have time to manage on-going property upkeep in order to prolong the quality of the home?
  •      Do I have time to collect rents and manage the security deposits?
  •      Do I have the knowledge of HOA regulations, tenant-landlord laws, and means to keep correct records for taxes/accounting purposes?

So to keep it simple, if you fall into scenario 1 or 2, understand the pertinent priorities to owning a successful rental property and said yes to at least half of the qualifying questions, then it probably wouldn’t make sense to hire a property manager.  But just in case you are curious why hiring a property manager can in fact save you money, then please, keep reading.

It’s Real

First you will see the typical costs of allowing a reputable property management company to manage your investment.  Second you will find a condensed list of what to expect when owning a rental property. All in all, the burden of the costs can be greatly counteracted by allowing a professional to handle the burden of the expectations (along with the other great ROI benefits linked in the next paragraph).

The Cost

You will usually pay:

  •      about 10% of the monthly rent as a management fee
  •      50% of a leasing fee every time the company finds new tenants
  •      possibly $100-$300 misc fees per year
  •      Average of 1-3 days vacant time.
  •      Hands off experience, except for brief communication regarding maintenance items, lease renewals, and new leases.
  •      Remember that you will also pay for all maintenance costs, but do not hire a company that upcharges on these costs.

The Expectations

Here are a few examples of what you should expect when owning managing your rental investment:

  •      A new tenant or renewal every 1-2 years.
  •      Fresh paint every 2-3 years.
  •      New carpet every 5-7 years.
  •      New water heater every 10 years.
  •      The possibility of dealing with flood, hail, fire or tenant damage.
  •      The possibility of some tenants having different expectations of quality compared to yourself or previous tenants.
  •      In current market, rent increase every year.

Let the ROI Begin

Now how would a property management company actually become an investment and increase your ROI instead of being a liability and expense?  Click here for the top 10 ways hiring a reputable property management company can save you (time and) money.

All in all, hiring a property management company may not be the best move for every landlord, but if it does make sense for you, they will be able to assist you with the balance of being rent ready without eating too much into the bottom line.

If you live in Greater Denver area, contact TJC Real Estate and Management Services for a complimentary consultation.  We are unique in the industry as we are a one stop shop for real estate investors. TJC can help with the acquisition, property management, and asset management. Our goal is to create a long-term relationship that helps your asset(s) grow, as well as, provides stable, long-term ROI. We are happy to assist you on your journey to become a real estate entrepreneur and hands off landlord!

Schedule an appointment today to discuss your property management questions!

 


Brought to you by Sondra Lockett-Cameron, Marketing Manager for TJC Real Estate and Management Services.

TJC Real Estate & Management Services • 303.324.6988 • info@tjcrealestate.com

Your Neighborhood Realtors® Since 2005

© 2018

 

Top 10 Reasons to Invest in a Property Management Company

Top 10 Reasons to Invest in a Property Management Company.

Now how does a property management company actually become an investment that will increase your ROI instead of being a liability and expense?  Here are the top ten reasons to hire a reputable property management company to take care of your rental investment.

  1. A professional lease that has been tried thousands of times (sometimes in court), will contain the necessary items and verbiage to protect the landlord and hold the tenant accountable on matters that have been found invaluable to a landlord to include: pets, smoking/damage, notice to vacate, showing process, etc.
  2.  Showing coordinators and agents assure that every call and inquiry is answered in a timely manner which will increase your prospective tenant pool which allows for higher possibility of qualified tenant which usually equals less damage and lost rent.
  3.  Showing a property while still occupied allows for possibility of less vacant time, but does require managing your schedule, tenants’ schedule and prospective tenants’ schedule which can take up a lot of time if you are handling this on your own.  Time is money!
  4.  Property Management companies typically have more resources and a larger following as well as market experience.  Combine all this will usually equal a higher asking rent.
  5.  Industry experience and/or legal team on retainer will save you money on legal advice.
  6.  Have you ever handled an eviction?  Let the professionals take care of it.  It is time consuming and can get messy very quick.
  7.  Property Managers have their favorite maintenance vendors on speed dial.  Due to the high volume of use, service call and product discounts are common which should be handed down to the homeowner.
  8.  The above will not just pertain to current maintenance needs, but also ongoing upkeep to maintain your investment for longevity and prime market rent.
  9.  Have you ever worked with an HOA?  Enough said.
  10.  Knowing and understanding the tenant-landlord laws can keep you from going to court or help you win in court over tenant disputes or security deposit damage disputes.

All in all, hiring a property management company may not be the best move for every landlord, but if it does make sense for you, they will be able to assist you with the balance of being rent ready without eating too much into the bottom line.

If you live in Greater Denver area, contact TJC Real Estate and Management Services for a complimentary consultation.  We are unique in the industry as we are a one stop shop for real estate investors. TJC can help with the acquisition, property management, and asset management. Our goal is to create a long-term relationship that helps your asset(s) grow, as well as, provides stable, long-term ROI. We are happy to assist you on your journey to become a real estate entrepreneur and hands off landlord!

Schedule your complimentary appointment with us today!


Brought to you by Sondra Lockett-Cameron, Marketing Manager for TJC Real Estate and Management Services.

TJC Real Estate & Management Services• 303.324.6988 • info@tjcrealestate.com

Your Neighborhood Realtors® Since 2005

© 2018