Best Landlord Practices

It’s a competitive market out there. How do you attract and — more importantly — keep great tenants? For me, there’s a simple answer: show them you care about them and the home they’re renting. Here are some things I try to do on a regular basis:

  • Make sure every unit is clean and in great, working condition before showing to prospective tenants. I always supply shower curtains, toilet paper, and entry rugs for “starters.”
  • Maintain the exterior of the home. Trim bushes, pull weeds, paint when necessary. When your tenants see you taking care of the outside, they’ll be more likely to take care of the inside!
  • Tell your new tenants about the positive points of the neighborhood — locations of parks, schools, grocery stores, etc.
  • Review all points in the lease and make sure they understand and agree with how you run your business.
  • Be available to the tenants. I respond quickly to every call and text during my waking hours. This sets me apart from other landlords or management companies who are lax about returning calls.
  • Take care of repair issues promptly. Again, I try to get someone on the repair the same day if at all possible, which shows my tenants I care about them.
  • Let them know you appreciate them! Every year at Christmas, I deliver a small (food) treat to each of my tenants, and wish them a wonderful holiday season.

Some of my tenants have been with me for years, and I love it when my good tenants refer other good tenants to me. When you treat people fairly and with kindness (not leniency — there’s a difference!) they often return that favor. The Golden Rule lives on ……

Renting to Friends and Family

As a landlord, how do you feel about keeping your business separate from your personal life? Would you rent your property to a friend or relative? On the surface, it seems like a fantastic idea … you know and like each other, so it makes sense, right? You get to help  someone you care about, and fill a vacancy as well. Perfect, right?

Not so fast! Yes, there are upsides to the situation but let’s think about the possible downsides:

  • What if they feel entitled to special “perks” because of their relationship with you? Asking for upgrades you hadn’t planned on?
  • What if they end up being total slobs who don’t keep the home up to the standards you normally expect and demand of your other tenants?
  • What if they get behind in the rent and expect you’ll “let them slide” indefinitely?
  • A friendship/relationship can end up in ruins over situations like these. Are you willing to chance it?

These are just a few issues that can arise when you rent to friends or relatives. This hasn’t come up in my experience but if it does, I’ll have an honest conversation with them before moving ahead with the tenancy, for sure!

Four Best Rental Upgrades

As finances allow, I try to improve my rental units, adding value where I can. Here are the four best places to put your money, if you’re looking to “up your game:”

  1. Flooring: if you’ve done carpet in your main traffic areas, upgrade to ceramic tile or a sturdy laminate. I prefer ceramic because it’s more durable, if it’s installed correctly. Most of my tenants still prefer carpet in bedrooms (it’s warmer), but I like tile in living areas, kitchens and baths.
  2. Kitchens: if your cabinetry is well built, but just dated, prep it and give it a face lift with some semi-gloss white paint and new hardware/drawer pulls. Cheap but effective! Also, the big box stores sell granite look-alike patterns for replacement counter tops. Nice look, easy on the bank account.
  3. Bathrooms: I’ve been replacing my flimsy tub surrounds with porcelain tile. Longer lasting, nicer looking, and easy to clean. And for $250 or less, you can replace your tired-looking bath vanity and counter top.
  4. Exterior: I probably should’ve put this as number one! If the outside of your unit looks like crap, the better applicants may just drive on by. I’ve been working on sprucing up my exteriors. Installing new windows, washing vinyl siding, planting perennials and some shrubs, painting window trim, etc.

If you improve your rental, you can demand higher rent, and you’ll also attract tenants who are looking for those upgrades. So, you’re getting higher rent, tenants are getting a nicely appointed apartment … everybody’s happy!

HUD News ….

Elizabeth Gibson at EZ Landlord Forms contacted me with this somewhat alarming news from HUD, so thought I’d share her article with other landlords who might be impacted by the effects of what’s written/implied in this proposed rule change:

proposedfederalrulechangehaslandlordsfeelinganxious

Every quality rental property owner upholds the fair housing and anti-discrimination guidelines espoused by HUD, and makes those clear to tenants who rent from them. But making discriminatory actions (by tenants) the responsibility of the landlord seems unfair and unrealistic …

Definitely an issue that needs to be followed!

 

Best Little Utility Knife Ever

Struggling with my Stanley utility knife, trying to cut through the stubborn plastic surrounding a new Kwikset door lock set — you’d think they were worth thousands of dollars! — I decided I just needed a new blade in it. Got the screwdriver out, fumbled around and installed the new one … annoying.

Anyway, the next time I was at my local big box store, I asked an employee which knife  he’d recommend, and he immediately pulled his out of his pocket and gave me a demo on the spot. I was instantly impressed. Of course, I had to get the red one — it was nicer looking than the black one.  🙂  Here it is:

img_4929

It’s ergonomic and lightweight, but strong enough to cut through thick plastic and other materials. And best of all, when the blade gets a little dull, you just press a little button on the handle, and it releases the current blade. You can turn it around and use the other end, or insert a new one, in seconds. No wasted time! And it was about $8.00. Money well spent, for sure.

Another great tool to add to my list of must-haves. Buy a Husky utility knife for your own tool collection, you won’t regret the purchase!

 

Enforcing the Lease

When I mentor new investors, I encourage them to create an airtight lease. This is of prime importance, for landlords everywhere. The lease doesn’t have to be 10 pages long, contrary to popular belief. Many of those lengthy contracts contain what I call “legal schmegal” language, and the tenant’s eyes gloss over half way through the first page. It’s ridiculous.

I combined and condensed a couple leases and changed the language into laymen’s terms, and I’m really happy with the results. Of course, I had my real estate attorney take a look, to make sure I’d covered all the necessary bases. He was impressed with the brevity of it, and gave me a thumbs up.  🙂

So, great, right? Well, yeah, but what good is it if I don’t enforce it? When I started out in rental properties two decades ago, I wanted to think the best in everyone. I allowed people to slide on their rent, thinking they’d get it caught up as promised. My trusting attitude and naivete came back to bite me … big time. I was losing money faster than I was collecting it. Terrible!

A lease is a meaningless piece of paper if you don’t follow it. I had an excellent lease but it wasn’t helping me! I had to have a serious talk with myself and get on a better track, or I was going to go under. Now, if a tenant falls behind, we make a plan (in writing) to get caught up quickly. If it doesn’t happen, the tenant is moving or evicted.

And, this isn’t just about late rent. It has to do with every single clause in your lease. Noise violations, police visits, not keeping the apartment/yard clean, etc. Plan your lease carefully, and make sure you’re willing to follow every item in that document. It’s the basis of your rental life — your “burnout prevention plan” is built around that lease and your willingness to be the enforcer!

Surprising Trend

When everything collapsed in the housing market here in 2008, US investors took advantage, knowing the situation wouldn’t last forever. But foreign investors also took note and jumped in.

The surprising player was China, however. Prior to 2010, investment from there was negligible but between 2010 and 2015, Chinese buyers spent around $93 billion on homes, condos and other investment properties! And finally, in 2015, those buyers surpassed Canadians as the predominant purchasers of investment properties here. I was astounded by this fact. (Springer, R. (2016, Sept-Oct.) Staying Power, Think Realty, pp. 12-14).

Interestingly, they tend to buy in our more expensive markets like New York City and California, although Texas and Florida are also high on the radar. And the trend is expected to continue. Why China?

  • I didn’t realize this, but the government there doesn’t allow their people to own homes — they can only “lease” them from the government. (Ugh!)
  • People there with extra monies see our dollar as more stable than their yuan, and also see our social and political landscape as much more stable than theirs.
  • They like the rebound our real estate market has made in the past few years and expect that to continue.

China now has the highest number of billionaires in the world, and is second only to the US in the number of millionaires. They’re sending their children to universities here because they feel the education is superior, and there’s a federal program available (EB-5 Program) whereby a number foreign investors  can immigrate here if they’ve bought real estate. Some of them purchase homes and have their children live in them while attending school.

So, it all makes sense on a number of levels. If you’re a Chinese national, have the extra cash and want to improve your investment portfolio … the US market holds a lot of opportunity.

(P.S. This isn’t a commentary on immigration! I don’t do political stuff on this blog, just real estate related content. Politics drives me crazy, especially right now … )

Tordon!

With 22 rental units in Indianapolis, there’s a lot to take care of, including exterior trimming and cutting. I have my tenants take care of the grass cutting, but two or three times a year,   I go down there and cut back tree limbs, shrubs and weeds that have gotten out of control . It’s not a job I enjoy, but it needs to be done.

In a couple weeks, I’m having a tree guy go to six properties and do some major trimming. I have limbs overhanging roofs and gutters, etc. He’s also going to cut down several mulberry bushes that are growing in fence lines at a few of my properties. Annoying! Mulberries are nuisance bushes that grow like crazy, and the berries attract flies…more annoying!

So when I was talking to him about the mulberries and how to kill them, he suggested I buy a  product called Tordon. The nice thing about it is that you squirt it on. I’ve used Fertilome Stump Killer in the past, and I applied it to the exposed cut surface with a sponge brush, kind of labor intensive.

So after he does his “cut down” and I do mine, I’ll apply Tordon. I bought several quarts of it from http://www.treestuff.com.  It’s also effective on poison ivy, and I have a couple of big vines that I’ll attack with it.

Buy some, and say bye bye to those nuisance trees and bushes!

Flash From the Past

When I began buying rental properties in Indianapolis, cell phones weren’t common. Most people who needed to “be available” at the drop of a hat wore pagers.
All my tenants had my pager number, and contacted me that way when they had a repair or rent issue. There were days when I’d be working at one of my rentals,IMG_8989 and I’d get four or five pages in a four hour period. Here’s a sampling of how that would go:

  • My pager would start beeping while I was in the middle of a project at one of the rentals.
  • I’d put everything down, lock up, hop in my car and head for the closest pay phone.
  • After fishing in my purse for 50 cents, I’d put it in the slot. The pay phone would eat the money, but I wouldn’t get a ring tone. Dead.
  • On to the next closest pay phone.
  • Find another 50 cents, get out and realize the phone cord’s been ripped out.
  • On to the next closest pay phone.
  • Finally, one that works! But my tenant doesn’t pick up. Ugh ….

And imagine the hassle when it’s 10 degrees outside, or pouring down rain. What a blessing it was when I was able to lose the pager and rely on the cell phone. What a luxury to be able to stay put and keep working, while taking care of issues that might arise during the day!

Driving by this old pay phone took me back 15+ years and I just had to stop and take a look at it. Technology can be frustrating at times, but it certainly saves us time and energy.

Oh, and take a closer look at the picture … how about that doorway to nowhere on the second floor of the house in the background? LOL

 

Welcome, Felons?

In a recent phone call from a prospective tenant, Robert’s last question of me was, “So, do you rent to felons?” When I asked what his felony was, he replied, “Strangulation.” I told him I’d have to talk to my owner, and suggested he call me back in a couple days. (I’m the owner, of course, but keeping that fact private has saved me time, stress and hassle through the years.)

HUD Secretary Julian Castro recently released a 10-page statement, warning property managers, agents and landlords they can be held liable for discrimination if they deny tenancy because of criminal records.

He wants to protect the fair housing rights of people who are re-entering the housing market after leaving prison. He claims that colorblind policies — like screening all applicants for criminal background checks — have a discriminatory disparate impact on minorities that are arrested at rates higher than their proportion of the general population.

So, even though barring tenancy to felons serves a nondiscriminatory, legitimate purpose for our neighborhoods, we may be putting ourselves at risk to do so!

And although Robert never called me back, let’s assume I had rented to him, and three months later, he fought with and strangled my tenant on the other side of the double. Was it my responsibility to protect the neighbors? Would that tenant have the right to sue me for negligence?

Although I’ve given second chances to some who’ve had run-ins with the law, I’ve always had a policy of not renting to people with felonies. I’m a single woman, I work alone much of the time, and I care deeply about my neighborhoods and tenants. With this new missive from HUD, maybe a conversation with my real estate attorney is in order …