Posts Tagged Landlord

MANAGING RENTAL PROPERTIES FOR OTHERS – Statements and Payments to Owners

Monthly Statements

 One of the purposes of property management we was to provide accurate accounting for our Owners, and part of that is to provide them with monthly statements.  As we mentioned previously, a property management firm must set up and maintain a “Fiduciary Trust” bank account for all of the monies for the properties it manages to flow through.  In our company, we had the rent revenues as well as mortgage, HOA dues, maintenance and a multitude of other expense payments for over 320 properties flowing through this account.  Keeping it all straight is paramount!

Regardless whether you manage one property for an Owner or five, you will need to provide all of your Owners with a monthly statement.  This statement spells out all of the income, expenses, disbursements to or from the Owner, operating profit or loss, and the beginning and ending cash position for each individual property for each month.  You will send out each statement, along with copies of all invoices paid for the period and the Owner’s check (assuming they have positive cash flow) or advice of deposit in their account.

Cutoff times and statement dates

 This has been an issue that was a difficult one for us to get our arms around.  We all have different needs, and while we were building the company, like any other fledgling small business, we attempted to accommodate everyone’s needs.  Some Owners needed their disbursements by the 10th of each month and others were OK so long as they received it before the first of the month.  Consequently, we set up two statement dates for our Owners; one on the 10th and the other on the 25th.  This became very labor-intensive as we found ourselves always dealing with statements and statement issues.  We later learned that if people want your service, they will adapt to your processes and procedures, so we changed to one statement date of the 25th for all of our Owners.  OK, we still had some of our oldest clients, (some had been with us for many years and others had been on this earth for many years and others . . . both!) who we maintained a 10th of the month statement date for their convenience.  Though that number continued to decrease!

We set up our statement date of the 25th of the month so that we could manage our clients’ expectations as well as exceed them.  You remember I mentioned that most of our Owners needed their funds before the 1st of each month?  Well, that is why we set up the 25th as the date we specify in our contract.  We promised that they will always have their money by then.  Now, to exceed their expectations; internally, we worked with a 20th statement date.  Due to the calendar and the tricks it plays on us from time to time, we may miss that and go to the 22nd or so, but with few extenuating circumstances did we ever miss the 25th and nearly all of the time we exceeded it!  Which of course kept our Owners happy!

It is all well and good that we talk about a statement date of the 25th. So what?  What that really means is that behind the scenes we have to have a cutoff date for all transactions between the 15th and the 17th of the month, depending on where the dates fall on the calendar.  That means all rents have to be in; all payments made including mortgages, taxes, HOA’s and even security deposit refunds.   Otherwise, we will need to run a supplemental statement for that property for that month.  If we don’t, there would be a gap in the information on the statements from month to month.

 

If this information has been helpful to you there is a lot more where it came from!  Visit our website for more books, videos, downloadable e-books and live seminars near you.

Thank you for reading!

Pat & Kris

, , , , , , , , , , , , , , , , , , ,

Leave a comment

MANAGING RENTAL PROPERTIES – Owners and What Type of Properties to Manage

While you will have your ways of doing business and many regulations that you cannot stray from, to be successful managing properties for others, you will need to know how to adapt and work with their personalities.  That is not to say that you be totally co-dependent on your Owners, but learn how they like to do business and make your best efforts to conform your practices to their idiosyncrasies.

Our philosophy is that the Owner has hired us so that they don’t have to deal with the day-to day-issues of managing properties.  We try to spare them the gory details of the everyday stuff, but then involve them in the bigger decisions.  At what level your Owner wants to be involved in the details, you will have to just learn and figure that out.  We suggest when you are having your initial conversations with your Owners that you ask them some qualifying questions on this subject before you enter into a management agreement.

Qualifying questions for potential Owners

1)    While we will always attempt to contact you whenever we have to spend money for service, we normally will respond to a service request under $100.00 without having to speak directly to you.  We may leave a voice mail or an e-mail to let you know what is going on.  Does that work OK for you?

2)    Do you have e-mail?  Are you willing for us to use e-mail as our primary method of communication?

Their response will give you a better idea as to whether or not you should do business together.  If they aren’t going to be happy with you, you certainly are not going to be happy with them!

Types of Owners

 The Involved Owner:  Some Owners are very detail oriented and want to be involved in many aspects of the management of their property.  Others want to be involved to a fault and may attempt to micro-manage or second-guess your actions.  You may find yourself asking the question “Why does this person want a property manager?”  There are a couple of issues at play here;

1.) Some people are simply very involved until you have proven that you are trustworthy and they are convinced that you indeed have their best interests at heart.

2.) Others are simply control freaks and no matter what you do, will be in your business all the time.  With this second type of Owner, you will have to do some soul searching as to whether or not this is a positive situation for you.  If it works OK, then great.  If not, then there may be another property manager out there who it works fine for.  That may be the best solution for both of you; to end the relationship sooner rather than later.

The Uninvolved Owner:  On the other end of the spectrum, we have Owners who don’t want to hear about their property.  They just want a monthly statement and a deposit in their bank account.  The less they hear from you the better.  While this type of Owner has a lot of positive attributes, this is the Owner that you also want to be very proactive with. You don’t want to pester them with details . . . remember, they hired you so they wouldn’t have to deal with all that stuff.  However, be proactive with your communication with them, and this is true for all of your Owners.  Document your actions in writing either by sending them an e-mail or by leaving them a voice mail and documenting it in a communication log.   How technologically savvy they are will determine which method of communication you use.  The uninvolved Owner can be a bit disarming at times.  Don’t think their seeming lack of involvement means a lack of interest.  The truth is they are very interested in the outcome of your management of their property.  Continue to keep good records and keep them informed, even if they appear uninterested.

Be Dialed In to the Type of Properties you are Willing to Manage:

 While this is a personal decision, we want to share some pros and cons we have observed in this area.  We are not making a character judgment about any of the groups listed below.  These are simply our observations as a result of our experiences in working with all of the groups.

 White Collar Properties:

Also defined as high-end properties, these can attract very good renters.  These renters have typically owned expensive homes and as a rule will take very good care of your property.  On the other hand, our experience is that the high-end renter can have a very entitled mentality and can be difficult to work with.  Things like requesting and scheduling maintenance, seemingly pretty simple things can become very challenging with these tenants.  Another aspect of the high-end tenant is that if you don’t meet their expectations, they do have the resources to come after you legally. White collar renters will typically have more financial resources and are executives or self employed.  You will find them to be fairly well insulated from an economic downturn.

 Gray Collar Properties:

These are properties in the middle of the economic spectrum rented by the gray collar worker.  What is a gray collar worker?  I’m glad you asked!  It is typically a middle management person; the manager of the local electronics, or grocery store.  This renter is generally conscientious and will take care of your property.  They are typically regular people and most all adults in the home are working full time.  They are generally easier to work with than the white-collar renter when it comes to requesting or scheduling maintenance work.  They possess moderate financial resources and will be somewhat insulated  from an economic downturn.

 Blue Collar Properties:

This renter is at the lower end of the economic spectrum.  They usually work in the trades, i.e., construction worker, car mechanic or truck driver.  Generally, all adults living in the property work full time.  They are also just  regular people and are generally easier to work with than the white-collar renter when it comes to requesting or scheduling maintenance work.  They possess more limited financial resources and will be the first tier to be affected from an economic downturn.

 Don’t Let Fear Deter You:  If at anytime during your due-diligence/interviews with an owner you get that gut feeling that this guy just ain’t going to work out . . . heed the warning!  This could be anything from not having a good connection with your communication or that he wants you to manage a type of property that you are not set up for.  We are all different and there is nothing to be ashamed of in that.  There are people that I am just too different from and will have difficulty doing business with in a way that will make them happy.  Conversely, there are people out there that are just different enough from me that they would have a tough time keeping me happy either.  Embrace your differences and rather than being fearful that you will lose face or be embarrassed, nip it in the bud!  Do both of you a favor and save a lot of heartache and hard feelings; decline to do business with them.  Perhaps you could refer them to another property management firm.

So, how do you do that?  I learned a great technique from my pastor, of all people.  I simply tell the prospective owner that based on our conversations, it is apparent to me that we may not be a great fit for one another.  There are a lot of great property management companies out there and I am sure that one of them would be a better fit for their needs than I can be.  I wish you the best of luck.  And . . . don’t let them talk you into it . . . you know what your gut just told you!  HEED THE WARNING!!

Thank you for reading!!

Pat and Kris Larkin

For more information and resources for profitably managing your rental property visit our Website

, , , , , , , , , , , , , , , , , , , , , , , , , , , ,

Leave a comment

RESUMES AND MARKETING YOURSELF IN TRANSITION


 

Let’s assume that your construct confirmed your suspicion that you would be well suited for a career in property management, what are the next steps.  How do you put together a resume which will convince the people hiring that you are a good bet in property management even though you may not have as much experience in the field as some of the other applicants for the same position?

Resumes and marketing yourself is a vast subject and to do yourself justice you will really want to take advantage of some of the information that is out there which will take you to a much higher level of detail than we will here.

We do, though, have a lot of experience in the hiring side of things . . . both from the perspective of the employer as well as the employee.

In today’s wide-open Internet world, the possibilities for you to market yourself to countless numbers of people are nearly endless.  It is really just marketing.  Experts tell us that you only have seven seconds to make your first impression and that is why a great format for communicating to the decision makers is so important . . . scratch that . . . it’s imperative.

In my travels I have finally come across a resume format that literally turns heads.  I’ve even had interviewers at the end of an interview say to me, “This resume looks great, it really got my attention.  Where did you get it?”  So in the spirit of sharing my stuff, I am sharing it with you.

Resume:

First you start with what I call the “Billboard” section of the resume.  Remember the 7 seconds to make a great first impression?  That’s what the billboard is all about.  Please refer to our sample resume in the appendix at the end of this chapter to see what I am talking about.

Billboard – This at the top of your resume and it is going to give a quick snapshot of who this great applicant is (you).  It will contain the title of the general position you are seeking and then a short (perhaps two lines) summary of who you are and how wonderful you are. Next part is just words in bold type that describe your skills and talents.  Below this section is a section describing even more incredible skills and talents you have.  I say that a bit tongue in cheek, but it is true, you need to be selling yourself and this is the place to do it.

Selected Career Highlights –  This is where you list the previous positions you have held at various companies.  Be careful here.  Remember, you are not going to write this, as you would have when you were looking for another job in your old industry.  You are changing industries so you need to find similarities between your previous positions and the one you are seeking.  If you were a purchasing manager for a medical supply company and you want to be a property manager, you will want to find the things like: Balanced multiple projects simultaneously or Relate quickly and easily with all diversities, personalities and business levels.  Tell what you did, such as: Contracted with major pharmaceutical companies balancing multiple priorities continually.

Don’t misunderstand me, I don’t want to put words in your mouth and I don’t want you to be dishonest.  Tell the truth or you won’t be able to own it.  Be sure and tell the part of the truth that won’t distract them and will show them the part of you that they want.

Be sure to limit your information per company to four or five bullet points in your first listing and less for the subsequent listing.  This is of course unless one of your subsequent listing has the most in common with the position you are seeking.

You will want to continue to list previous positions to show at least the last five years of employment and, ideally, your entire career.  You will need to balance this with length of your resume.  Perfect world length is one page; I think 2 is OK, but I recommend that you not go over that.

Other Relevant Experience, I use this section in my resume for a position I held many years before the last job listing on my resume because it showed particular relevance to the position I was seeking but, did not fall into comfortable chronological order with the others.

Education – Just list the schools attended and degrees earned.  If you didn’t finish college, as I did not, just list the schools you attended. I don’t call attention to the fact that I didn’t get my degree.  The people looking at this are smart and will ask you about it if it is important to them.  If it is a non-starter for them, then it is.

Professional – List your licenses, any and all Trade Associations you belong to, or special training seminars you have attended, and computer skills along with particular software you are proficient with.

Personal – You don’t want to make this too long or too personal.  Just list your marital status – any children and what you like to do on your time off.  Sitting on the sofa sucking down beers while watching the game probably wouldn’t be a good idea!

References – I subscribe to the idea that in your first exposure to folks, your mission is to make that great first impression.  It is not to overwhelm them with paper work.  I don’t include references with my resume but I do tell them that I will provide excellent ones if they would like.  Again, if this is an important issue for them, they will ask.

 

Hopefully, this has been helpful to you.  For more information and resources about transitioning your career to Property Management go to our website.

 

See you next time!!

 

 

 

, , , , , , , , , , , , , , , , ,

Leave a comment

Rental Property – Demographics – Which Property Should you Buy?

Buying or even thinking about buying a rental/investment property brings up a lot of questions: What area should I buy in? What rental price range should I go for?  Who is the best renter to rent to?  Hopefully, the following article will help to answer some of these questions.

What Properties Should I Consider?

While this is a personal decision, I want to share some pros and cons I have observed in this area.  I am not at all making a character judgment about any of the groups listed below.  These are simply my observations made as a result of experiences in working with all of the groups. 

White Collar Properties;

Better defined as high end properties, can attract very good renters.  These renters have typically owned expensive homes and as a rule will take very good care of your property. 

On the other hand, my experience is that the high end renter can have a very entitled mentality and can be “challenging” to work with.  Things like requesting and scheduling maintenance, seemingly pretty simple things can become very challenging with these Tenants. 

Another aspect of the high end Tenant is that if you don’t meet their expectations, they do have the resources to come after you legally.

 The white collar renter will typically have more financial resources and are executives or self employed.  You will find them to be fairly well insulated from an economic downturn.

Gray Collar Properties:

These are properties in the middle of the economic spectrum, usually rented by the gray collar worker. 

What is a gray collar worker?  It is typically a middle management person; the manager of the local electronics, or grocery store. 

This renter is generally conscientious and will take good care of your property.  They are typically regular people and most all adults in the home are working full time.  They are generally easier to work with than the white color renter when it comes to requesting or scheduling maintenance work. 

Gray collar renters possess moderate financial resources and will be somewhat insulated from an economic downturn.

Blue Collar Properties: 

This renter is at the lower end of the economic spectrum. 

Typically, working in the trades, construction worker, car mechanic or truck driver.  Generally, all adults living in the property work full time. 

They are regular people and are generally easier to work with than the white color renter when it comes to requesting or scheduling maintenance work.  They possess more limited financial resources and are typically the first tier to be affected from an economic downturn.

These are gross generalizations of people groups and of course there will be many exceptions to the comments made above. 

Also, try to remember, that we are all very different people and each of us is better suited to deal with a particular people group than perhaps, another.  If you seem to get along best with people in the “white collar” segment then you need to consider that seriously.  You always want to play to your strengths.

Pat Larkin, together with his wife Kris, owned and operated one of the largest residential property management firms in Orange County, California.  Additionally, he has been successfully building, developing and managing properties for over 30 years.

After selling their property management business in 2009, Pat and his wife founded and developed “Manage To Make Money” which is a resource for property managers providing Books, Documents and Forms, Live Seminars, E-Books, Free Webinars, Tips and Private Consulting.  Visit their website at: www.ManageToMakeMoney.com

, , , , , , ,

Leave a comment

Rental Property – Buying the Right One – Guidlines

Buying or even thinking about buying a rental/investment property brings up a lot of questions: What area should I buy in? What rental price range should I go for?  Who is the best renter to rent to?  Hopefully, the following article will help to answer some of these questions.

What Properties Should I Consider?

While this is a personal decision, I want to share some pros and cons I have observed in this area.  I am not at all making a character judgment about any of the groups listed below.  These are simply my observations made as a result of experiences in working with all of the groups. 

White Collar Properties;

Better defined as high end properties, can attract very good renters.  These renters have typically owned expensive homes and as a rule will take very good care of your property. 

On the other hand, my experience is that the high end renter can have a very entitled mentality and can be “challenging” to work with.  Things like requesting and scheduling maintenance, seemingly pretty simple things can become very challenging with these Tenants. 

Another aspect of the high end Tenant is that if you don’t meet their expectations, they do have the resources to come after you legally.

 The white collar renter will typically have more financial resources and are executives or self employed.  You will find them to be fairly well insulated from an economic downturn.

Gray Collar Properties:

These are properties in the middle of the economic spectrum, usually rented by the gray collar worker. 

What is a gray collar worker?  It is typically a middle management person; the manager of the local electronics, or grocery store. 

This renter is generally conscientious and will take good care of your property.  They are typically regular people and most all adults in the home are working full time.  They are generally easier to work with than the white color renter when it comes to requesting or scheduling maintenance work. 

Gray collar renters possess moderate financial resources and will be somewhat insulated from an economic downturn.

Blue Collar Properties: 

This renter is at the lower end of the economic spectrum. 

Typically, working in the trades, construction worker, car mechanic or truck driver.  Generally, all adults living in the property work full time. 

They are regular people and are generally easier to work with than the white color renter when it comes to requesting or scheduling maintenance work.  They possess more limited financial resources and are typically the first tier to be affected from an economic downturn.

These are gross generalizations of people groups and of course there will be many exceptions to the comments made above. 

Also, try to remember, that we are all very different people and each of us is better suited to deal with a particular people group than perhaps, another.  If you seem to get along best with people in the “white collar” segment then you need to consider that seriously.  You always want to play to your strengths.

Pat Larkin, together with his wife Kris, owned and operated one of the largest residential property management firms in Orange County, California.  Additionally, he has been successfully building, developing and managing properties for over 30 years.

After selling their property management business in 2009, Pat and his wife founded and developed “Manage To Make Money” which is a resource for property managers providing Books, Documents and Forms, Live Seminars, E-Books, Free Webinars, Tips and Private Consulting.  Visit their website at: www.ManageToMakeMoney.com

, , , , , ,

Leave a comment

Property Managment Fees – Know What to Expect

Managing rental properties is not for everyone.  When you make the decision to hire a property management company to manage yours, the information can be overwhelming and confusing.  This article will help to “untangle” the sometimes convoluted fee structures property managers use.

When you bought your rental property, more than likely, you did your homework to try and figure out whether or not it was the right deal for you.  Similarly, when we bought our property management company, we did a lot of due diligence also and learned that there are two basic types of property management fee structures out there: 1.) Low Base Fee and 2.) The All-Inclusive Fee.  Which one you choose has a lot to do with what services you may need.

The Low Base Fee is just as the name implies . . . it is a low fee for minimal services.  This fee structure provides for collecting rents, screening Tenants, writing leases and paying you, the owner, any funds left over at the end of the month.  The range of rates charged for this type of a property manager is between 4% and 6% of the monthly rent.  For a property Renting for $2,000 per month, assuming a rate of 5%, the fee adds up to $1,200 annually  ($2,000 per month X 12 months X .05).

The thing to watch out for with Low Base fee structure is the “Lease Up Fee” or “Leasing Commission” as many refer to it.  Most Low Base Fee property managers do NOT include this cost in their fees and they can double your property management fees right off!  If you figure a 5% leasing commission (which is common), that is another $1,200 per year just for the lease up fee!  Another thing to watch out for is that some of the Low Base Fee property managers may also charge a fee for any payments they make on your behalf; mortgage, property taxes, HOA dues, so do your homework!

The all-inclusive fee structure on the other hand, pretty much includes all of these fees in it’s single fee.  Now, don’t misunderstand me, at 8% to 12%, the all-inclusive fee structure usually will be higher than the low-base fees structure at first glance.  But when you add up all of the extras and compare them most times the all inclusive fee structure will work out to be less money.

One other thing to consider when assessing property management companies and their fee structures: the all-inclusive property manager typically pays the lease commission out of their pocket… up front.  So, they have a vested interest in finding you a good renter who will stay in your property for more than a year.

On the other hand, the property manager who charges extra for a lease-up fee or leasing commission each time they rent your property, has a vested interest in the other direction… to have you pay them the commission every year.  This could translate into more of a cavalier attitude about finding you a long-term renter.

In summary: If you will be performing some of the property manager functions like leasing your own property, paying your mortgage, insurance and property taxes then, the low-base fee structure may be best for you.  Conversely, if you don’t plan on having anything to do with managing your property, for instance if you will be living out of the area for a while; the all inclusive fee structure may be better suited for your needs.

If you found this article interesting, you can view a short video at: http://bit.ly/eWcFid

After selling their property management business in 2009, Pat and his wife founded and developed “Manage To Make Money” which is a resource for property managers providing Books, Documents and Forms, Live Seminars, E-Books, Free Webinars, Tips and Private Consulting.  The website is: http://www.ManageToMakeMoney.com

, , , , , , , , , ,

Leave a comment

Eviction Attorney – How Do You Find a Good One?

If you are serious about managing rental property, you will need a good eviction attorney on your team.  This article will give you some tips on just how to find a good eviction attorney. In a previous article we posed the question:  How do you collect rent?  And the answer was three things; !Get a Good Eviction Attorney, 2. Get a Good Eviction Attorney and 3. Get a good Eviction Attorney!  Gee, that is all well and good but how do you find a good eviction attorney?  Let’s start there.

We recommend that, if at all possible, you need to go from personal reference; from a friend or your local Board of Realtors or Apartment Association.   If that isn’t a possibility for you then check your local yellow pages or search the web in your area.  Once you have the names there are three things you will want to make sure of: 1. That they only do evictions (unlawful detainers) or at least it is a regular part of their business.  You don’t want a family law attorney who will do one for you “this time”. 

Your eviction attorney should be well versed at the ins and outs of evictions, changes in the law and so on.  if they are not, when pitted against a “professional Tenant” (a Tenant who know the laws and how to navigate between them) they will lose you valuable time in getting your property back.  Next, check their references.  You want to make sure that they have done a good job for others they have done work for.  Remember, you aren’t necessarily looking for a “nice” eviction attorney…they need to be tough and assertive.  Our eviction attorney wasn’t particularly nice to us…but he was good at his craft!  Finally the third thing is to have your eviction attorney in place BEFORE you even rent your property . . . or at lease before you need them.  As we discussed in our article “Collecting Rent” having the eviction attorney is essential in collecting rent if you have a Tenant that is slow to pay…he will help to back up any threats (promises)  you have to make to your Tenants.

In summary: when looking for an eviction attorney, just you would in any trade; you want to find the best expert you can to be on your team.  Be sure they are well versed in evictions (or unlawful detainers).

To view a short video on this same subject go to: http://bit.ly/eopPc1

, , , , , , , , ,

Leave a comment

Rental Property – Collecting Rent

Collecting rent is really the “Ground Zero” of managing your rental property.  If you are not receiving rent from your Tenant, then you can’t pay your mortgage, do maintenance (at lease not from your rent revenues) . . . . it can put quite a strain on the whole rental property system.

 Collecting rent is really one of the main focuses of managing rental properties.  After all, if you are not collecting rent, then a whole other set of actions have to come into play, like evictions and so on.  But before you get to that point, when your tenants are not paying their rent on time, many times, they need some prodding or “encouragement”.  The form of this “encouragement” that I recommend is issuing a “Three Day Notice to Pay Rent or Quit” which, essentially is a threat.  I am telling my tenant that if you don’t pay rent within three days, I am going to evict you. 

 First of all, let’s talk about what the three day notice to pay rent or quit really is; as I said before, it is a threat.  I like to think of it more like a promise . . . here is my resolve . . . this is the hill that I am willing to die on.  This is my business, and I am sorry if you are having problems paying rent but if you don’t, then I will have to start the eviction process.  The Three Day Notice is really much more than a threat or a promise; in many states, it is a legal requirement.  In many states you cannot start the eviction process unless you can prove that you have served the Three Day Notice AND three business days have passed since you did serve the notice.

 We are all familiar with the mother who makes the ever-familiar threat to her kids: “I’m counting to three . . . don’t let me get to three!”.  She is threatening them with who knows what if she should ever get from 2-1/2  to 2-3/4 all the way to three!  Just like that mom, we have to be prepared to act on our threat or just save ourselves the effort and let the Tenant be in charge of paying rent whenever they please.  This is why I strongly recommend that you have a good relationship with a reputable eviction attorney . . . to back up your threat should you need to.

 We have initiated the eviction process many times but followed through all the way to a full eviction very few times.  Again, having that relationship with a good eviction attorney is worth it’s weight in gold when it comes to showing your resolve to your Tenants.   Keep in mind, now that we have started the process, we have incurred some attorney fees and the Tenant will have to pay his rent, any late fees AND whatever the attorney fees at that time in order to be reinstated and stop the eviction process.

 In summary, you will have to show your resolve to your Tenants when it comes to collecting rent.  Having a good eviction attorney on your team is a good way to show them you mean business!

 To view a short video on this same subject go to: http://bit.ly/du4p43

 The subjects of collecting rent, three day notices and eviction are covered extensively in the new Property Management Training Program; Manage to Make Money . . . . the Real Estate Series.  This new series has been developed around the book: “Manage to make Money . . . Your Guide to Profitably Managing Rental Properties – 2nd Edition” written by Pat and Kris Larkin.

, , , , , , ,

Leave a comment

DON’T “UNWITTINGLY” ALLOW YOUR TENANTS TO MOVE IN EARLY

Few of us would ever allow our Tenants to move in before their lease begins but . . . many of us do unwittingly!

 Would you ever knowingly allow your Tenant to move into your property early?  Perhaps unwittingly.

Think about this scenario for a minute:  You have rented your property and the lease begins on the 1st of the month which is a Sunday.  For our convenience, many times, we may be inclined to give the Tenants the keys on a Friday or Saturday, so that we don’t have to do it early Sunday morning.  What happens so many times is that the Tenant is excited about their new place and now that they have the keys they go by just for a look . . . just to “breathe it in”.  When they get there, they remember those two boxes in the back of the car . . . “Gee, if I get those out, then I can start with an empty car on moving day.” Once those boxes go from their car to the house or condo, technically, they have “moved in”!

Now, let me ask you, what is the effective for their renter’s insurance?  Chances are, it doesn’t take effect until the 1st.  why would it start sooner?  Without that date (the now NEW move in date) being covered in their lease or their renter’s insurance being in effect . . . you, the Landlord, are liable for any damage, or injuries they may occur during that time between when they moved the boxes in until the lease start date on the lease!

To solve this issue, we always wrote the lease to begin on the day we gave them the keys and, required the Tenant to have their renter’s insurance effective on that date also.  You don’t necessarily need to charge them for the extra days rent . . . just cover yourself legally and from a liability perspective.

In summary, think through the date relating to move in dates and “possible” move in dates.  You might just save yourself some heartache.

 To view a video on this same subject click on this link:  http://bit.ly/flzcQR

, , , , ,

Leave a comment

ALWAYS . . . GET A CREDIT REPORT

Screening prospective Tenants can be difficult but here are a couple of tips that will help you to minimize your risk of getting a bad Tenant.

 One of the main elements in screening your Tenants is to get a credit report. There are many other ways to check out your tenants but a credit report will do the best job of surfacing potential issues in their ability to pay rent and in general will help you to sort through your applicants. You can get a credit report in a couple of different ways; First, is to have your prospective Tenants run their own credit report. But be careful, free credit reports are available but rarely have a credit score. A credit score is key. Without the credit score you are subjected to reading through reams of credit information… some good and some not so good and having to figure out if this applicant is a good risk or not. The credit score will do all of that for you. Secondly, you can find many companies on the web that you can sign up with to run credit reports for your applicants. These companies will of course check you out first to be sure that you are trustworthy enough to be dealing with such sensitive information and that you will get the proper authorizations from your applicants.

 As to what credit scores are good and bad; that depends on your market but I can give you some very rough ideas: a stellar credit score is 800+ and a score in the 500 range is going to be due to a lot of late payments, possibly judgments or even a bankruptcy.  If you are renting high-end properties, you probably would not want a Tenant with a credit score below 700.  If you are renting blue collar properties or low income properties scores in the 600’s would be “golden”!

 In summary, a credit report will “tell the tale” about your Tenants. Be careful though not to be too restrictive; these are tough economic times we live in and you need to hear everyone’s “story”.

 To view a short video on this subject go to: http://bit.ly/eCprVn

, , , , , ,

Leave a comment