The Involuntary Landlord

Sticking to What You're Good At! Monday Minute 3_21_11

 

I know you think you are good at everything - let's re evaluate!

Termites! Yuck! Thursday tip for 3-17-11

 

Termites happen! Don't get caught with all your termite eggs laid in the basket of your rental home. Get a bond and maintain it!

6 Mistakes that cost Involuntary Landlords Thousands of Dollars

I talk to people every day that have rental property they wish they could sell. Unfortunately they have joined the realm of “involuntary landlords.” Managing rental property seems very simple, but like any business venture, there are lots of things to know and the learning curve is steeper than it looks. I have helped clean up a lot of messes for these fine people and here is a list of some common mistakes. If you are making these same mistakes, maybe you could use my help.

 

1. Not performing routine maintenance on their home – Owning a home is an expensive proposition. Maintaining a home properly can cost a lot of money. Failing to do so is guaranteed to cost a lot of money. A properly maintained heating and air conditioning system can last three times as long as a neglected one. Ignoring a small water leak can lead to a mold problem and you don't even want to investigate the cost of a big mold problem. A tiny crack in your basement wall can be a sign that the foundation walls are in danger – do you really want to ignore them? You may have a tenant, but you really need to look after your own home.

2. Not visiting the home – One of the first homes I ever managed was outside of Atlanta in Lawrenceville and was owned and self managed by a lady in Virginia. When I saw the house for the first time, she had not been there in over two years. To this day it is the shining example to me of what a bad tenant can do to a house. Broken windows, holes in drywall, fixtures ripped from their mountings, dirt and debris everywhere – if you can imagine it, this home had it. Just a semi-annual visit would have stopped this issue in its tracks and saved her thousands of dollars. If you live too far away to visit your tenants 2 or 3 times a year, you really need some help with your property.

3. Allowing rent to be paid late consistently – Late rent happens. If you have tenants long enough, you are going to accept some late rent. When it becomes a habit, however, you need to be proactive and find out why. Late rent is usually a symptom of some other malady and left unchecked can quickly turn into “unpaid” rent. Landlords and managers should have a system for dealing with late rent and follow the system. Enforce late fees, send written demands, make phone calls – whatever you have decided to do. Show the tenant that you take late rent very seriously and you will move to the top of the list of who to pay first. Let it slide and you will find yourself on the bottom.

4. Having a rigid “No Pets Allowed” policy – 80% of renters have or want a pet. Do you really want to market your home to only 1 of 5 potential tenants? Stop thinking of your home as “your home” and start thinking of it as an investment. Every day your home sits unoccupied costs you money. Even two weeks of vacancy time will cost you more than the average “bad” pet will cost you and most pets are pretty good. Accept pets with a pet deposit and see your home rent much faster.

5. Asking for an above market rent – This is incredibly common and very costly. Determining market rent is simple. Find out what homes like yours have rented for recently in your area. That's the market rent. It doesn't matter how much your mortgage is or how much you spent on repairs, paint and carpet. Your home isn't that much nicer than your neighbor's. I know you think it is, but you're wrong. Don't be confused by what people are asking for their homes, either. All that matters is what people have actually paid. If you can't find the information, don't guess. Call an expert. If you price your home too high it will sit empty and you can't afford that.

6. Leasing without a written agreement – This is just stupid. I know hundreds of people and about four are welcome to live in my property without a lease. I don't care who it is, put your agreement in writing. A standard lease is available in any office supply store or online for a few dollars. Not having a written lease can cause you thousands of dollars, not to mention the stress!

 

This list is far from complete. The landlord game really seems simple until it isn't. Don't get fooled. Read some books, get some advice, do your homework or just break down and hire a professional. It's very likely that if you own rental property your time is worth more than you would pay your property manager.

 

In Atlanta, call the Best Atlanta Property Management Company – Absolutely Affordable Property Management. Find us online at www.absolutelyaffordablepropertymanagement.com or call us at 770-682-7735. We keep more money in our client's pockets every day.

 

For tips and advice, visit www.InvoluntaryLandlord.com. We post vlogs every Thursday and Monday, so visit often.

 

Monday Minute - Save thousands and get inside your home!

 

In this version of the monday minute we talk about HVAC systems and how you can save thousands of dollars over the lifetime of yours. Brought to you by the BEST Atlanta Property management Company, www.absolutelyaffordablepropertymanagement.com. 

Thursday Tip for Landlords - Setting the Rent Amount

 

Setting the rent is more than matching it top your mortgage statement. If you aren't competitive, your home will sit empty while the mortgage company continues to expect their payments.

Monday Minute 3-7-11

 

Thursday Night Tip forLandlords

 

Pets - Gotta Love 'em!

It's Not a War

©2007-2009 Chris Compton

One of the biggest issues I deal with as a property manager is the “us vs. them” mentality of my landlord clients. This is a normal state of mind for new landlords. If you are a landlord and you find yourself feeling this way, take a deep breath and repeat after me:

It’s Not a War

It’s not a war. Your relationship with your tenant is going to go a long way towards determining the profitability of your rental property. You need to always try to put yourself in the tenant’s shoes before you make a decision. You should make every decision not just thinking about the short term financial implications of your action or inaction, but also the effect on your relationship with your tenant and how that effect might affect his tendencies to pay the rent on time, maintain the home in the way you hope he will, and renew his lease.

Am I suggesting that you bend over and take it whenever the tenant asks for a concession? Absolutely not. What I am recommending is that you take a hard look at your decisions with an eye on the horizon.

Remember when you were learning to drive and you naturally looked at the road just over the hood of the car? You were useless at responding to curves, squirrels and any other pathetic creature or object that got in the way. Hopefully you have learned to drive looking off into the distance, seeing anything that might impede your path and reacting well in advance to make sure you reach your destination safely.

Landlords need to have a similar mindset. Look down the road. If your tenants want to paint the living room, it is perfectly natural for you to have concerns. They probably aren’t painters. They may well get paint on the floor and the trim. They will certainly pick a color that you would not have picked. But so what? The right answer is, “Yes Ms. Tenant. Feel free to paint the living room. You are paying to live there and I want you to feel like the home belongs to you. Just remember that I expect the home to be returned in the same condition I gave it to you. If you don’t think you can do a professional job, you may want to hire someone. If you pick colors that will make it hard to rent to another tenant, I may insist you return it to its original color. Does that sound reasonable?”

Handling it this way empowers your tenant. They have the situation in their hands. They feel like owners. Owners take care of their property. If you are concerned that they will not remember the agreement, put it in writing. Detail the conversation on paper and ask them to sign a copy for their protection. Tell them you know they will feel more comfortable with written permission.

Other situations have more immediate financial impact on you. Maybe the dishwasher won’t drain. Every time they run the dishwasher it fills up with water until water and soap spills out onto the floor. A new dishwasher is going to run you between $300 and $700 dollars installed. That seems like an awful lot of money and it’s tempting to ask your tenants to wash the dishes in the sink, but think down the road. If the tenants are paying $1000 monthly and the dishwasher costs $500, you can see what a two week vacancy would do. Go ahead and get the dishwasher taken care of. The sooner the better.

No matter how good your tenants are, occasionally they will do something to upset you. Sometimes they will do several things in short order and you will begin to think you are in a war. Take a deep breath, count to ten and think about what is fair. Then do just a little bit more. If  you have any questions concerning property management, landlord/tenant issues, general real estate concerns or just need the best possible team managing your North Georgia Property, call me personally at 770-682-7735.