Monthly Archives: December 2013

5 New Year’s Resolutions to Make You a Better Landlord in 2014

As the New Year arrives, everyone focuses on making personal and professional resolutions aimed at looking at the past and applying those lessons toward a better future. As a landlord, it’s a good opportunity for you to make some changes to improve how you run your business.

Making New Year’s resolutions for landlords is an effective way to list your priorities for your rental properties and identify areas that need your attention.

Here are 5 New Year’s resolutions for landlords that you can do to really make a difference in the coming year:

Resolution #1. Take time and spend money to find good tenants

Good tenants are the critical component of making your business a success.

Taking the time to find ones that will respect the property, pay on time and stick to the rules is imperative. Make the commitment to perform thorough tenant screenings on applicants to reduce the risk of getting into a contract with renters who won’t work out.

If you haven’t been happy with your current tenant screening process, it’s not too late to make some changes starting now. Also, don’t forget to make sure you do your homework when choosing a tenant screening company to handle your background checks.

Resolution #2. Say goodbye to bad tenants

Make the decision to stop tolerating bad tenants.

Tenants who are a drain on your resources, cost you money and bring down your business don’t deserve any more breaks in the new year. Getting rid of bad tenants will solve a lot of your problems, so be assertive and commit to action when they violate the lease agreement. Choose between non-renewal of the lease, notices to pay or quit when they are late, or notices to comply or quit when they cause trouble.

Resolution #3. Streamline landlord tasks

Your time is valuable, so stop wasting it.

Technology allows landlords to streamline many of the processes that used to take lots of time or lead to mistakes.

Maybe you are currently driving to the bank all the time to deposit checks. Instead, set up electronic deposits from the tenants to your bank account.

Maybe your residents are filling out maintenance requests by hand and dropping them at the office. Instead, update your website to include an electronic maintenance request.

Maybe you are still holding on to that cell phone you bought 5 years ago that is slow to text and doesn’t include handy apps like calendars, appointment reminders and GPS mapping. Instead, get a smart phone and simplify dozens of tasks immediately.

Choose at least one new way harness the power and convenience of technology and make your life a little easier.

Resolution #4. Review relationships with services and contractors

You need service companies and contractors you can depend on.

When you have a problem with your rental property, the service companies you work with need to be prompt, affordable and flexible. Whether it’s the plumber, exterminator or carpet cleaner, take the time to evaluate your current contracts, rates and other aspects. Then, make appointments as needed to renegotiate so that both of you are getting the best out of the relationship.

If you haven’t been happy with a service but are holding on out of some kind of loyalty, get tough and start shopping around for something better.

Resolution #5. Plan for quality upgrades

Never let your rental properties look run down or outdated.

Take a look at each property and determine what kind of an upgrade your property needs. Keeping your rental properties updated and comfortable has  many benefits, such as attracting higher quality tenants and maintaining the property’s value.

Depending on your budget, you can look at new carpet, upgrading an appliance, invest in landscaping or something else that will boost the property value and each tenant’s overall happiness with the unit.

Celebrate the New Year by resolving to be a better landlord, a better businessperson and enjoy a better quality of life, because your well-run rental properties are full of good tenants! Happy New Year and good luck with your own New Year’ s resolutions.

What are your landlord-specific New Year’s resolutions? We’d love to hear them , so let us know what they are in the comments below. (Don’t forget to share this article!)

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How to Stop Your Rental Property from Becoming Party Central

One of the most frustrating parts of being a landlord is dealing with out of control tenants and their out of control guests. There is no more significant event that highlights this frustration than when a tenant decides to throw a party.

When there’s a “kegger” on your property, the likelihood for damage, noise complaints and injury increase dramatically. In this article we’ll explain what you can do to keep your rental property from becoming party central and drastically reduce the risk of damage and liability.

Restricting Drinking on the Rental Property

Drinking parties can lead to rowdy, destructive behavior, and violations of noise ordinances. A smart landlord will make sure there are restrictions in place and the tenant knows them before moving in. As long as the lease agreement clearly states that the rental property is a no-party zone, the tenant must comply or face eviction for failure to comply.

While you may not care if the tenant drinks responsibly in the privacy of the rental unit, you must be clear that full-fledged parties that serve alcohol are simply not allowed. Especially in college towns, landlords should make sure that parties and “keggers” happen elsewhere, not on their property. Besides the potential for damaged property, underage drinking can be a concern and it is possible that a landlord can be held liable for it.

Use Specific Wording in the Lease Agreement

For landlords that feel strongly about controlling large-scale drinking in their rental units, the lease agreement is the best way to keep things under control. Take steps to keep the environment quiet and friendly before it’s too late by including strong wording in the lease agreement.

Wording in the lease agreement should address a limit on the number of guests on the property to a certain number (say no more than 10 without permission from the landlord). It should also stress that illegal activity, such as underage drinking or disorderly conduct, will result in immediate eviction proceedings.

Don’t be afraid to use specific language in the lease agreement that clarifies that use and possession of alcohol is permitted in the privacy of the rental property. Specify that “keggers” and parties involving large amounts of alcoholic beverages and include large numbers of people and an excessive amount of noise are strictly prohibited.

Follow Through on Lease Violations

When you discover that a large party has taken place on your property or is currently in progress, you can take action to ensure that the tenant will reap the consequences.

If the party is going on at the moment, you can call the police and they will come and take care of the situation. If there is any underage drinking going on or other illegal activity, the police can put an end to it and you can start eviction proceedings. Make sure you document the events, from the first phone call complaining about noise to what the police officer tells you.

If you decide to handle it yourself, make sure your tenant knows that you will call the police immediately if they and their guests do not stop immediately and leave the premises. Let the tenant know that this is an official warning and if it happens again you have no choice but to start the eviction process. Write up a few paragraphs of what happened and what you did about it and put it in the tenant’s file as a warning.

When you’ve decided that your tenant has violated the lease agreement, you can create an official notice for the tenant to vacate the property due to violation the lease agreement. Post the notice on the tenant’s door and also mail it to the tenant’s address. Begin the eviction process through the proper legal channels.

Photo credit: DoYouGotInsurance.com

Using leverage of legitimate written threats of police action or eviction, you’ll send a message to partying tenants that you are serious about maintaining the quiet enjoyment of the property for neighbors and other tenants. You also show that you are interested in protecting your property from potential damage due to excessive partying.

Has any of your current or previous tenants thrown parties in your rental? What actions did you take against him/her (or them)? Share this article and let us know in the comments below!

Photo credit: DoYouGotInsurance.com

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Do you know an association manager worthy of the Manager of the Year award?

Today's blog is not written for people who currently have or have had problems with their association managers. Naturally, there are those people and those problems out there and past blogs (and future ones to be sure) have discussed and will discuss what can and should be done when those difficulties occur.

However, today's blog is written for those lucky communities who have an unsung hero in the form of their community association manager. You know the type to whom I am referring-the manager who makes the directors' and members' lives a lot easier not only with their constant preparation and attention to detail but also as a result of his or her personality and passion for what they do.

A great manager can make the difference between a dysfunctional community and a highly functioning community. A great manager can make the difference between having to pass a special assessment for budget shortfalls and not having to do so. A great manager can create a community where the residents are happy, property values are high and life is good.

Showing someone your gratitude usually reaps innumerable benefits to the grantor as well as the grantee. So the question is: do you know of any great community association managers who deserve a little recognition? I know of many who deserve to be recognized and now is your chance. The Manager of the Year is a national awards program sponsored by Association Reserves to honor community association managers who are inspired, inspiring and creative leaders for the communities they serve.

Two lucky managers will win $5,000 each for the best On-Site Manager and the best Portfolio Manager. Managers can nominate themselves or they can be nominated by someone else. Nominations are open until January 15th. Winners will be broadcast on May 14, 2014.

For more information about this national awards program, please visit www.ManageroftheYear.org.

Good luck to all the unsung community association manager heroes out there!



When Should Landlords Refund Rental Security Deposits to Tenants?

Landlords have the right to collect a security deposit from tenants when they move in. As a landlord, you must hold the deposit in a secure account in the event that the tenant causes damage to the rental property or fails to pay rent. Essentially, the security deposit allows you access to reserve funds to protect your property investment.

Time Limits on Refunding Security Deposits

When your tenant gives proper notice and turns the rental property back over to you, you are obligated to refund the security deposit to the tenant within a certain amount of time. Once you gain possession of the property again, you must do a thorough inspection, and perhaps perform repairs for any damages.

You don’t have all the time in the world to do this, however. These tasks must be done quickly so you don’t exceed your state’s laws on refunding security deposits. Most states require landlords to refund the deposit in full if there are no damages, or a partial refund with a detailed list of damages and deductions from the full deposit.

Real Examples from Coast to Coast

While all states have laws that require landlords to refund security deposits within a set time period, they vary in the number of days. Here are some examples of laws from different states:

Alabama

Alabama law allows landlords 35 days after the lease or tenancy has ended to send a full refund of the security deposit or a reduced amount with an itemized list.

California

Landlords must return the full deposit or partial with deductions no later than 21 calendar days from the day the tenant turns in keys.

Massachusetts

In Massachusetts, the law requires landlords to return either a full security deposit or the balance after deductions plus a list within 30 days after the tenancy terminates.

Michigan

All landlords must return the tenant’s security deposit with a statement of any damages within 30 days after tenants move out.

Washington

On the day the rental agreement ends, the landlord has 14 days to postmark the security deposit refund or a list of deductions from the full total.

Escrow and Interest

Some states and municipalities require landlords to hold the security deposit in escrow, where it can collect interest. When landlords refund security deposits to their tenants, they must also pay out that accumulated interest.

Check your state and municipal laws to see what you as a landlord are obligated to do when it comes to security deposits and interest. Maryland, Pennsylvania and the city of Chicago are examples of places that require landlords to keep security deposits in an interest-bearing account and pay the interest to the tenant at the end of the residency.

Whose Money Is It?

The important thing to remember is that the security deposit belongs to the tenant and as a landlord, you must ensure that their money is safe and that they receive it in a timely matter once the tenancy is terminated properly.

The only part of the security deposit that belongs to you is what it takes to cover unpaid rent, damages to your property. You must carefully document all the deductions to prevent misunderstanding between you and the tenant, and avoid being taken to small claims court for misuse of funds.

What are the security deposit refund laws like in your state? Please share this article and let us know your experiences with security deposits in the comment section below.

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The Best Reason to Invest in Real Estate

Even though I deal with trading stocks and bonds a lot more often than real estate, the latter is by far my preferred investment.  It’s nearly impossible to be a successful stock picker but there’s some real skill that goes into being a savvy real estate investor.

A lot of these folks have their reasons for buying properties: flipping, rental income, and so forth. However, coming from a financial background, I like real estate for another reason: risk-free capital appreciation.

Real estate is the only investment where you can put down a fraction of the asset’s value yet you still receive 100% of the returns.  In typical investments like equities, you buy 10 shares for a total of $1,000 and if the stock goes up 10%, you’ve made $100.  But that’s not the case with real estate.

My Real Life Example

I put down 20% or $56,000 on my first property three years ago and since then my property has appreciated by about 25%.  In a normal investment world, a 25% return on your money in 3 years is pretty awesome, that’s just over 8% a year.  But in the magical real estate world, 25% appreciation can mean a whole lot more depending on what your down payment was.

Since my property went up from $280k to $350k and my initial investment was only $56,000, I saw a 125% return in just 3 years.  If you thought 8% was a decent return, how does a 42% annual return sound?

Risk and Return Related

In the investment world, risk and return are always related.  If someone told you today that they could guarantee you a 5% return on your money, you would know that they are full of it.  If there was such an investment, the market would respond and you would see risk free products like CD’s and bonds adjust upwards accordingly.

So when I look at a real estate down payment from an investment point of view, if I put more money down then I should be rewarded for that increased investment.  Since I’m now risking more of my money, there should be a higher return.  But as we saw from my earlier example, that’s definitely not the case.

There’s an inverse relationship between your return and the amount you’ve invested.  Your return would actually go down the more money you have invested and it would go up the less you’ve invested.  This is one of the main reasons why I prefer a lower down payment.  There’s obviously risk to to this strategy since the property could go underwater more easily, but I think it’s worth it.

Ultimately, there are a lot of good reasons to invest in real estate.  There’s going to be some volatility here and there just like with any investment medium. However, any time you can make money without risking your own money that is a good investment in my book. And to me, that’s the best reason to invest in real estate.

What’s your reason for investing in real estate? Why did you get started and what kind of success (or failure) have you experienced? Let me know in the comments below!

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How Living Christmas Trees Can Boost Rental Property Value

It isn’t often that a single purchase can bring you holiday enjoyment, be good for the environment and boost property values, but when landlords invest in living Christmas trees, everyone benefits.

Real estate experts agree that landscaping is an important part of evaluating the value of a property. It’s no secret that the thoughtful placement of trees, shrubs and plants is one of the smartest and most impactful ways to increase curb appeal and increase the value of the real estate.

Although it takes a little more planning, the cost of a living Christmas tree becomes an investment in your rental property’s landscape, which is a lot better than wasting money on a cut tree that you take to the curb when the holidays are through.

What is a Living Christmas Tree?

Living Christmas trees are evergreens that come with roots intact. It’s becoming a popular choice for the environmentally conscious instead of purchasing a cut tree. Living trees are generally sold at nurseries or tree farms a month or so before Christmas, depending on your climate.

Although living Christmas trees cost more than cut Christmas trees or artificial trees, they create less waste and are much more valuable in the long run. When you plant your living Christmas tree outside, you’ll enhance the landscape of your rental property, positively impact the environment and be reminded of nice Christmas memories for decades.

5 Tips on Choosing a Living Christmas Tree

There are several factors to consider when getting a living Christmas tree, so before you head out to the nearest nursery, make sure you understand what’s in store.

  1. Do some research on the types of trees that do best in your rental property’s area and climate. Some trees are better suited to arid regions while others need more moisture.
  2. Decide where your living Christmas tree will eventually be planted on your rental property. Some evergreens can grow as tall as 40 feet with a width of up to 15 feet, so decide where the best spot is on the property before you regret it in a decade or so.
  3. Make arrangements for getting the tree into your house. Living Christmas trees are heavier than cut trees as the roots and soil are still in place, plus the soil must be kept moist. It’s not uncommon for living Christmas trees to weigh up to 150 to 200 lbs.
  4. Check with your local extension office for the best time to plant evergreen trees. In some climates, you can plant whenever the ground isn’t frozen, but in more northern states, you’ll have to store and care for the tree until spring.
  5. Get a healthy, fresh-looking tree with a quality root system from a tree farm or nursery. Seek out a smaller tree in a big pot, one with firm, green needles that don’t drop when you run your hand along the branches.

5 Tips on Caring for a Living Christmas Tree

You’ll need to care for your living Christmas tree to keep it healthy until you can plant it on your rental property. For the few weeks you have it in your home, follow these tips on caring for the tree.

  1. Plan on a slow transition from outdoors to your home. Extreme temperature changes can shock the tree, so leave it outdoors in a sheltered spot like an unheated garage, unfinished basement, shed or the south side of your house for about three days before you move it indoors.
  2. Keep the soil around the root ball moist at all times. Check it daily with your fingers to ensure it is not dry and crumbly. You can use a watering can or hose, but make sure to pour slowly so you don’t wash the soil away from the roots. Placing crushed ice around the trunk of the tree above the root ball is another way to slowly water it throughout the day.
  3. Move the tree into your home after three to four days in its cool, outside location. Don’t let the tree stand near heat vents or it can dry out.
  4. Opt for fewer lights when you decorate a living Christmas tree. Go ahead and decorate as you normally would, but make the decision to use less light strands because they generate heat, which leads to drying. Go with LED lights, which are cooler than more traditional lights.
  5. After the holidays, transition the tree outside in reverse. Place the living Christmas tree in a cool but sheltered place for three or four days, while keeping the root ball moist.

When you are ready to plant your living Christmas tree at your rental property, follow the basic planting instructions in this video.

Would you consider a living Christmas tree next year as a way to both help the environment and invest in your property? Please share this article and let us know how you feel about this “growing” trend!

 

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Landlords or Tenants: Who’s Responsible for Removing Snow?

When you rent out your property to tenants, there are so many details to go through that snow shoveling and snow removal may not be your top priority to discuss. However, it’s an area that causes many landlords and tenant disputes and could even lead to a potential lawsuit in the form of personal injury from a slip and fall.

If you aren’t sure who is responsible for shoveling snow, do some research to get to the bottom of it and then have a discussion with your tenant about who bears the responsibility for snow removal from the property.

State Snow Removal Laws

The responsibility for snow removal is often determined by state law, so a lot depends on where you live and where your property is. Many states, such as Massachusetts and Pennsylvania, specify that the owner of the property is responsible for snow removal has only so much time to remove snow. Often, the time frame is within 24 to 48 hours after the snow has stopped falling. State and municipal laws may also include specifics about snow removal that include not just shoveling or plowing, but also putting down salt, for example.

Other states, such as Ohio and Illinois, specify that the occupants of a rental property are responsible for snow removal, not the landlord. The laws usually outline a specific time limit for removing snow once it has stopped falling, again usually within 24 to 48 hours after the storm.

Municipal Ordinances on Snow Removal

Municipalities may also implement ordinances about snow removal that require either owners/landlords or tenants to clear snow despite what the state law does or doesn’t include. For example, the state of Illinois does not have any law requiring a property owner/landlord to remove snow and ice, however the city of Chicago does. So a landlord looking at the state law (occupant responsibility) would face penalties because of the city’s requirements (owner/landlord responsibility).

Some municipalities regulate snow removal responsibility based on the type of rental property. For example, the ordinance may state that for rental properties with three or more units, the landlord is responsible, while snow removal for a single family rental house is the responsibility of the tenant.

Snow Removal in the Lease Agreements

Proper wording on the lease agreement can help eliminate a lot of confusion on who is responsible for snow removal. The lease agreement should reflect the state or municipal laws on snow removal and clearly define any details concerning time and so forth. If your lease agreement doesn’t include language about  snow removal responsibilities, create an addendum that expressly discusses it and make sure both of you sign it. Implement new language into the lease agreement upon renewal.

Do you live in the snow belt? How do you handle snow removal at your rental properties? Please share this article and let us know your snow removal situation in the comments below!

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Is Secondhand Smoke Impacting your Community? Take CAN’s Up In Smoke Survey.

Picture this:

It is a beautiful Florida day. There is a light breeze blowing, the sun is setting, and it is cool enough to enjoy sitting out on the patio of your condo. You are all set up to sip a cool glass of wine with some friends when your neighbor steps out to enjoy a pack of cigarettes. 

Or how about this:

You are walking to your mailbox to pick up your mail and your path takes you by a neighbor walking her dog and smoking.

Or even this:

You are sitting in your living room watching TV when you smell the cigarette smoke coming through from your neighbor's unit.

While smoke is a natural part of life emanating from candles, cooking and the occasional tobacco product, excessive second-hand smoke is becoming a growing problem for many communities. Over the years we have received many inquiries from condominiums, cooperatives and HOAs struggling with the issue of excessive second-hand smoke impacting their residents and employees. Bearing in mind that it is currently difficult and expensive for associations to successfully intervene when residents complain about a neighbor's excessive smoke invading their units, balconies, the corridors and other common areas, CAN is asking for your input in this short survey.

Has your association confronted the issue of second-hand smoke and how have you dealt with it? Do you believe that an association should have tools to intervene when excessive second-hand smoke becomes an issue or is this an area that associations should avoid?

For the communities that have this issue, it creates a serious impact on their residents' lives.  

While we have heard from many CAN members that this is a complicated issue, how many of you believe that a legislative change making it easier to amend your documents to regulate or prohibit smoking is warranted? 
Please use the following link to take CAN's Secondhand Smoke survey. We will be running this survey until January 10th. We will then compile and report on our findings.

http://cansecondhandsmoke.questionpro.com/




20 Affordable Christmas Gift Ideas for Tenants

Whether you want to thank your tenants for taking care of your property, or are simply filled with the spirit of the season, giving Christmas gifts to tenants can be a lovely gesture. It’s a nice way to build goodwill and hopefully encourage longer tenancies. However, deciding on exactly what to give tenants can become overwhelming and expensive.

As a landlord, you want to strike just the right tone between business and personal, while keeping things affordable. Keep the gifts non-personal and strictly professional–essentially a nice gesture between business associates.

Here is our list of Christmas gift ideas for tenants grouped for both simple and moderate budgets.

10 Simple Gift Ideas for Tenants

  1. Calendar
  2. Sports water bottle
  3. Stationary set
  4. First aid kit
  5. Container of gourmet food, like chocolates, popcorn or candies
  6. Mugs with a bag of coffee, hot chocolate or hot cider
  7. Bottle of windshield de-icer and ice scraper
  8. Loaf of fresh bakery bread and bottle of local honey
  9. Decorative glass jar full of candy
  10. Muffin mix with muffin tin

10 Moderate Gift Ideas for Tenants

  1. Potted plant
  2. Movie tickets
  3. Sporting event tickets
  4. Gourmet food basket
  5. 72-hour emergency kit
  6. Holiday flower arrangement
  7. Reusable canvas bag filled with treats
  8. Bottle of wine or champagne
  9. Fleece throws or blankets
  10. Welcome mat

Of course, gift cards enclosed in a greeting card may be the most appreciated gift of all and you can tailor the amount on the gift card for each tenant to best fit your budget. Consider gift cards to grocery stores, restaurants, gas stations, movie theaters and other retailers.

What are you giving your tenants this year? Please share this article and let us know your thoughtful and affordable gift ideas for tenants in the comments below!

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