Category Archives: Property Management

All things concerned regarding property management

Landlord Quick Tip – Don’t Take Any Chance!

Restoring a rental unit after a tenant leaves, and getting a new tenant in is a very busy time. But combining routine maintenance with property tours can quickly lead to disaster for a landlord.

When giving tours to prospective renters while the property is being worked on, pay extra attention to keeping everyone safe. Arrive ahead of the scheduled time and walk through the property, outside and in, to look for hazards — like tools, chemicals, or other dangerous conditions. Have workers take a break for a few minutes, or take other necessary steps to make the tour safe.

Check closets, kitchen cabinets and other concealed areas to make certain nothing will fall out and injure a would-be tenant.

Follow the same advice when showing a property while the current tenant is still there. Arrive early and make sure there are no hazards like slippery floors, fumes or wet paint, and ask tenants to confine or temporarily remove pets.

Make sure smoke and carbon monoxide detectors are still functioning during this period.

Don’t overlook hazards outdoors, like slippery steps or falling debris.

Also, make sure the property insurance remains in effect, and that any contractors working on the property are insured.

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ARMLS RENT Check™ – Feb 19, 2013

Metro Phoenix Rental Market Snapshot

Median Lease $:  $1,075 vs $1,095 of Jan 2013, -1.8%

Average Lease $:  $1,237 vs $1,237 of Jan 2013, flat

Avg. Days on Market:  55 vs 47 of Jan 2013, +17%

Rent Check Quotient™: 49% vs 41% of Jan 2013, +19.5%

Rent Check Quotient™ (RCQ™) is derived by dividing the # of leases by the # of closed sales

Elevated lease activity is stoked by high foreclosures, which turn home owners into renters, and investor sales into rentals rather than owner occupied houses. Sales inventory shortages also drive potential homeowners to rent rather than purchase.

All above stats are for single family homes rentals. Condominium and apartment rentals are not included.

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Landlord Quick Tip – Strengthen Your Lease Agreement

3 Easy Ways to Strengthen Your Lease Agreement

For those times when tenants becomes a problem, landlords need their lease agreement to stand up to the test. These 3 problems come up routinely in legal disputes, but can be easily avoided. The trick is to clean up the lease before a tenant signs:

1. The names of the occupants in the rental don’t match the names on the lease

It seems simple, but this is a frequent problem for landlords looking to enforce a lease to collect unpaid rent or evict a bad tenant. In order to enforce any provisions in the lease, each adult occupant should be listed as a tenant. In addition, each of those occupants have to sign the written lease. Otherwise, a landlord may not be able to enforce legal rights, or easily reclaim the property for a new tenant.  Make sure everyone signs using their legal name — the names and the signatures must match. Sometimes the lease is reviewed online and the negotiations are via email. That can make it hard to determine whether you have a signed lease. Don’t let e-signatures or online forms jeopardize your legal rights.

2. The security deposit terms are unclear

Many landlords find themselves in court over security deposit disputes. One issue that comes up frequently is the actual amount of the deposit. Also, questions arise over whether a separate pet deposit was allocated, what the deposit is for, and when it is to be returned. Arizona Landlord and Tenant Act allows landlord to collect no more than 1.5 month of rent as deposit. Be sure that the security deposit is clearly delineated from any other fees, especially any non-refundable fees.

3. The lease is not tough enough on crime

More and more cities are passing ordinances making landlords responsible for tenant crimes and disorderly behavior. In many cases, these laws require landlords to take legal action against a tenant in order to avoid fines. It is important that the lease give the landlord that flexibility with problem tenants.

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Landlord Quick Tip – Handling Repair Requests

Here are some tips for getting a handle on tenant maintenance and repair requests:

  1. Every repair request should be documented. If possible, a repair request form should be used. Note the date and time when the request is received. If requests are taken over the phone, make a written note of the conversation in the property file. Repair requests need to contain enough information to determine how urgent the problem is and how to prioritize requests. A landlord or manager needs to know who to send in to fix the problem and when.
  2. Respond quickly to every repair request. Evaluate the urgency, and give the tenant an estimated time for the scheduled repair. If the request is a low priority, at the very least assure the tenant that the request has been noted and will be completed at a later date.
  3. Follow up after the service date to see if the tenant is happy with the repair.
  4. Vendors need to be vetted before they get access to tenants’ units. Not only do they need to be safe, but these workers need to be briefed on proper customer service.
  5. When tenants are present during repairs, they tend to add on other requests directly with the vendor. Make sure vendors are trained to stay on task and not run up the bill on undocumented repairs.
  6. Avoid situations where tenants request repairs or maintenance directly from a vendor, or supervise repairs.
  7. Some tenants persist in requesting repairs that appear frivolous. These tenants will never be happy, and can spread their dissatisfaction to others, or to prospective tenants over the Internet. Consider whether it may be financially prudent to offer to terminate the problem tenant’s lease early and look for a more suitable tenant.
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Landlord Quick Tip – Damage-Proofing Your Rental

You put a lot of money into your rental investment, so it makes sense to put some time upfront into making your rental property as damage-proof as possible.

That way, you’re not spending thousands of dollars rehabbing the home after every tenant.

Here are some great ideas to help you maximize your return on investment:

  • Get rid of the carpets – Estimates show that carpets last only three years before they need costly and time-consuming steam cleaning. Tile, laminate flooring or vinyl are easier to clean and show less damage, and they’re not much more expensive than carpet when you take the frequency of replacement and cleaning into account.
  • Remove luxury, non-essential items and systems – Examples include water softeners, humidity systems, reverse osmosis systems, security systems, and swing sets. These items are often costly to maintain, repair, and replace. Save yourself the hassle!
  • Keep the landscaping simple and maintainable – Plant native, drought-resistant plants and grasses that require little water and are slow growing. You can also install a simple irrigation system in order to keep the plants watered without having to rely on your tenants. Desert landscaping is the idea but not just rocks on the back yard which is less attractive to most tenants.
  • Paint walls with satin or semi-gloss paint – Stick to one or two colors throughout the home. Egg-shell or similar low or semi gloss paint is more durable and easier to clean. But stay away from high-gloss since we have too much sunshine here in Arizona and high-gloss makes the wall too shining.
  • Install door stops and closet door bumpers – These will go a long way to reduce dings and dents on the walls.

As a rental property owner, you want to maximize your income. By spending a little more upfront, such as tile or paint, you can avoid more costly repairs down the road.

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ARMLS RENT Check™ – Jan 22, 2013

Metro Phoenix Rental Market Snapshot

Median Lease $:  $1,095 vs $1,095 of Dec 2012, flat

Average Lease $:  $1,245 vs $1,237 of Dec 2012, +0.65%

Avg. Days on Market:  47 vs 44 of Dec 2012, +6.82%

Rent Check Quotient™: 41% vs 46% of Dec 2012, -5%

Rent Check Quotient™ (RCQ™) is derived by dividing the # of leases by the # of closed sales

Elevated lease activity is stoked by high foreclosures, which turn home owners into renters, and investor sales into rentals rather than owner occupied houses. Sales inventory shortages also drive potential homeowners to rent rather than purchase.

All above stats are for single family homes rentals. Condominium and apartment rentals are not included.

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Landlord Quick Tip – Hold or Fold?

The state of Arizona provides the landlord with 15 days — after a tenant moves out to do an accounting for the security deposit.

Yet, some landlords feel inclined to return the deposit right after the tenant moves out. Occasionally, a landlord will even promise a quicker turnaround as an incentive for a new tenant.

Unfortunately, it’s not uncommon to discover damage after the final walk-thru, especially if the tenant knew about the problem and tried to conceal it. For instance, one landlord shared how a tenant had asked to install a shade over a custom window because the room was  too sunny in the mornings — or so the tenant said. The shade was down during the final inspection. It wasn’t until the landlord happened to be out back that he discovered the window was cracked.

Three common sense for move out walk through:

  • Make sure all utilities are still on or you want to turn them out for the walk through.
  • Bring along the move-in checklist which serves as the baseline of normal wear-and-tear of the property.
  • Invite the tenant to join the move-out walk through. Don’t just do it yourself, you want the tenant to agree on your findings.

Arizona’s Landlord and Tenant Act deal a good hand to landlords by offering a little bit of time to find any damage a tenant may have left behind.

Don’t fold too soon — or you could lose out.

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Landlord Quick Tip – Avoid Hoarding

Hoarding — the obsession to collect and retain too many belongings — is a dangerous practice that costs landlords. Hoarding causes property damage, encourages pest infestations and other health risks, and compromises the safety of the tenant and those around them.

To avoid hoarding in your rental properties:

Include “anti-hoarding” provisions in your lease, like specifying that stairwells, hallways, exits, patios or balconies, and vents must all be kept clear; storage is limited to the spaces provided; and, prohibiting stockpiles of flammable materials that become fire tinder. Reserve the right to evict a tenant who cannot abide by the rules.

Limit the overall number of pets that can reside in the unit, subject to eviction.

Perform frequent inspections to ensure that pathways are clear and the property meets fire and building codes.

 

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Landlord Quick Tip – Decorating for the Holidays

It’s easy to get swept up into the “spirit of the holidays” but when that spirit includes holiday decorating on rental properties, landlords can quickly fall on a slippery slope when it comes to Fair Housing complaints.

Remember, religious beliefs are protected under anti-discrimination laws. What that means on a practical level is far from clear, but here are some tips to consider:

Religious discrimination rules distinguish between “common” areas like the leasing office, elevators or lobbies, and private residences.

In common areas, avoid overtly religious symbols, like nativity scenes and crucifixes. Courts have found other familiar holiday decor to be “religiously neutral” and therefore a safe bet for decorating. These includes trees, menorahs, Santas, candy canes, lights, and wreaths.

Don’t create the impression that one religion is favored over others. Someone entering  for the first time should not be able to pick up on a religious preference, and existing tenants should feel welcome to participate in any celebration or observance. For instance, if residents request equal exposure in holiday displays, include those symbols along with any others.

Within the private residence, allow tenants to display their personal religious symbols. That may include the outer face of their front door.

Call your lawyer if there is any doubt or question about what is appropriate. Fair Housing complaints are expensive to deal with, even if you win.

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7 Property Management Mistakes To Avoid

Whether you hire someone to manage your investment property or do-it-yourself, there are some key property management mistakes you want to avoid.

Sometimes being penny wise is being dollar foolish. Owning property is a long-term investment with the building, the land and the tenant so planning ahead is important.

Here are some tips to help you along the way:

1. Screen and Interview Tenants. Do your due diligence, have the tenant fill out a rental application, collect the fee for a credit report, criminal background check and call to confirm employment. Remember when doing your tenant background check, fair housing laws require that what you do for one you do for all, be consistent. And get a copy of the ID to make sure you know who you are dealing with.

2. Hiring New Contractors Every Time is a Big No-No. You want to create a relationship with the local contractors where when you have a problem you call them and it gets done. Shopping around for the best price all the time will just cause you headaches and more time in the long run. So find someone local that has been in business for a while and knows what they are doing, create a relationship and stick with them.

3. Hiring Unskilled Workers to Save Money. This will just come back to haunt you. They probably have no insurance, no or little experience, no guarantee on work done. On top of all this no background check, who knows who you are hiring, this could be a huge safety issue.

4. Letting Tenants Do Their Own Maintenance or Repairs. This is almost as bad as hiring unskilled workers, it might seem like an easy way out but this could lead to further damages, more repairs and you could be liable for damages or injuries.

5. Failing to Do Routine Inspection and Repair. Owning property has a lot to do with preventative maintenance. In the short term it will cost a little and in the long term save you much. Routine inspections can help you spot problems before they become huge and shows the tenant that you care. Depending on the age of the property you can do yearly inspections, bi-annually or quarterly.

6. Communicate with the Tenant. You need to keep open communication with the tenant; e-mail is the best since it is documented. If you have any concerns you reach out, if there are any problems tell the tenant to let you know ASAP. This will create a sound landlord-tenant relationship.

7. Do Not Wait Until the Last Moment to Renew the Lease. Talk to your tenant 60 to 90 days before the end of the lease to see what their plans are. Also communicate if there will be an increase of rent and if so why. Remember this is a two way street where you want it to be a win-win for both parties.

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