Landlords, is Laminate Flooring the Way to Go in Rentals?

Posted by Teresa on October 4, 2011 under Landlord Tips | Be the First to Comment

Laminate flooring can be easy to care for, long lasting and practically indestructible—which should make it a great choice for rental properties. However, landlords who are experienced in dealing with laminate flooring have differing opinions. If you’re considering using laminate flooring in your rentals, read on for some pros and cons, provided by actual landlords.

First, the Cons:

• Laminate floors are good in moist areas, but won’t tolerate standing water, or you’ll soon have separation in the seams.
• Laminate flooring can be fairly expensive.
• The floors can tear when moving heavy items, such as refrigerators.
• Cheaper level flooring will show wear in heavy traffic areas.
• It cannot be refinished or sanded.
• The surface can be slippery, with a risk of falling tenants or children.
• High traffic homes, like rentals, may not be the best fit for laminate flooring products.

Now for the Pros:

• Laminate floors look great.
• They can attract a higher level of tenants.
• Laminate costs less than hardwood.
• They are easy to install.
• The variety of wood species available is higher than ever.
• Some are warranted for 20 years or more.
• Laminate floors are easy to maintain.
• They don’t buckle, stain or warp.
• The finish is often scratch-resistant.
• Laminate often holds up better than carpet.

So there you have it. Some landlords have installed laminate successfully, while others say tile, vinyl plank flooring or  inexpensive carpet work better for their rentals.

Back to School: Where is the Best College Rental Market?

Posted by Teresa on August 17, 2011 under Housing Trends, Rental Market | Be the First to Comment

Real estate investors have long been active in college towns for a number of reasons. Rentals are often short-term and dealing with younger students as tenants can be problematic, but when mom and dad co-sign the lease, they tend to pay the rent on time every month.

College enrollments are up, and on-campus housing is in short supply. Demand for rentals is high and vacancies low, so rents are generally healthy. All told, college students who need a place to live can be excellent prospective tenants—and rental property in a college town can be a great opportunity, if the terms and price are right for you.

Move.com recently published a list of the best university cities for real estate investment. Here’s how their ratings shook out:

• Boston has over 50 colleges and list prices have dropped nearly 3% since last June. Rents are on the rise.
• Nashville’s average rents are higher than the average mortgage of $770.
• Chicago’s median list price is down over 16% since last June.
• Washington DC’s average mortgage for a median-priced home is around $1,530.
• Houston has low-priced inventory and some top-ranked colleges. Average mortgage is about $710.
• South Bend is home to Notre Dame and the average mortgage payment is around $990.
• Atlanta’s median list price is down 13.68% from last June, and lower than the national median.
• Baltimore is home to Johns Hopkins University, with median prices down 7.72% since last year.
• St. Louis, MO ‘s median list price is also lower than the national average, and mortgage payments average around $670.
• Syracuse is home to Syracuse University, as well as several other colleges. Median prices are down and the average mortgage payment is around $630.

College towns have a ready-made pool of renters, and generally, the rent money is not a problem. Manage the property correctly, and you could have a successful investment for years to come.

6 Tips For More Effective “For Rent” Ads

Posted by Teresa on May 17, 2011 under Marketing for Landlords | Be the First to Comment

Even though the rental market is strong, you still want to do all you can to fill a vacant rental unit—while attracting the best possible tenant. Here are six tips to help you write a more effective rental listing that can accomplish both of these goals:

1. Write a Great Headline. Instead of the boring basics, like “3BR 2 BA Home for Rent” try getting more creative: “Dream House. Great Neighborhood.” “3 BR Home, Walk to Trader Joe’s.” “2 BR New Upgrades, Pets Welcome.” “3 BR 2 BA, Fireplace and Big Sunny Rooms.” Get noticed!
2. Target Women. That’s right—if you know how to catch a woman’s attention, you’ll have a better chance of closing the deal on a new lease. Studies show that women are signing home sales and rental contracts in larger numbers than ever. What do women want to hear that you can include in your rental listing? Walk-in closets. Security system. New appliances. Stainless steel appliances. Quiet appliances. Extra-large tub. Sunny patio. Close to trails. Plenty of storage. Light-filled rooms. Hardwood floors.
3. Include the Walkability Rating. Have you ever heard of WalkScore.com? It’s a site that scores a property’s walkability, including how close it is to shops, grocery stores, libraries and other amenities renters want. Just enter the rental property’s address and you’ll have a score that will appeal to potential tenants who want to avoid the traffic, congestion and parking problems that come with driving a car.
4. Describe the Neighborhood. include the area’s best qualities, like cozy coffee shops, parks, bus stops, Laundromats and bakeries. More and more tenants will be choosing their next home based on the proximity of all the places they want to be. Just be careful about pointing out churches to avoid the appearance of limiting tenants to a certain religion, which violates the Fair Housing Act.
5. If You Allow Pets, Say So. Don’t wait for a potential tenant to call and inquire. Many pet lovers will skip your ad if it doesn’t state that pets are welcome.
   
6. Use Over-the-Top Terminology. For example, why say, “clean” when you can say immaculate? Why not tell folks your place is ready to move in and a must see? And if it’s quiet, lovely and charming why not say so? Sell it.

Tips For Buying Investment Property

Posted by Teresa on March 1, 2011 under Landlord Tips | Be the First to Comment

Taking the plunge into rental property investment? Here are some tips to consider when searching for your first property.

• Know how long you’ll own it. If you’re in for five years, you don’t want to invest a ton of cash into big-ticket items, like a new HVAC system, roof or major structural repairs. On the other hand, if you plan to own the property for 20 years, you’ll most likely need to make some major improvements. But that’s okay, since you’ll be holding a longer-term investment and will have a chance to recoup the costs.
• Know the type of investment that fits you best. Is it apartment buildings or single-family homes? Do you want to be a long-term landlord, or buy and resell quickly?
• Location is crucial. Just like when you open a business, you want the best location possible. Well, your investment property is a business, so the same thinking applies. A large pool of potential renters, such as a college town or higher-population area, is the first indicator of a great location. Next, look for nearby public transportation, recreational opportunities, shopping areas and a low crime rate.
• Leave emotion out of the equation. Most investors don’t fall in love with rental properties. The only thing that should matter is how the numbers shake out.
• Plan, plan, plan. Get your finances in shape long before you’re ready to buy. Meet with your financial advisor, lawyer and insurance agent to carefully scrutinize the assets you can devote to this investment, as well as the protection from risk and liability you’ll need.
• Don’t pay too much. Negotiate for the best price you can get up front. If you overpay for an investment property, you’ll never recoup your money. Again, the numbers are the only thing that matters when buying investment property. If they don’t work on a particular property, walk away.
• Learn your market. How does an investor know when the numbers make sense? It depends on your market. There are formulas you can try, such as paying no more than six to eight times the first year’s rents. Another formula we’ve seen is to pay no more than 70% of the price the property would be worth after making all the necessary repairs and upgrades after purchasing it.
• Make sure rents will cover your out-of-pocket expenses. Mortgage, insurance, taxes, maintenance repairs and a percentage to cover vacancies must be paid out of the rental income so that the property at least breaks even.

Disclaimer:
This site is intended to provide useful information. It is not intended to provide professional financial or legal advice and cannot substitute for professional advice. Seek independent professional advice from a competent licensed professional before acting upon any information contained herein.

Security Deposits: Some General Guidelines

Posted by Teresa on January 5, 2010 under Landlord Tenant Lawsuits, Landlord and Tenant FAQs | Be the First to Comment

Where are landlords required to place security deposit funds in FDIC-insured institutions? Are you allowed to earn interest on your tenant’s security deposit, or must you turn interest over to the tenant at the end of the lease? How long are you legally allowed to hold the deposit after your tenant moves out?

Every state has its own laws regarding how landlords handle security deposits. As a rental property owner, you must be familiar with your state and local regulations.

Here are some general guidelines that can help keep you on the up-and-up in most states. Dealing with your tenants as fairly, openly, and honestly as possible is the first step to keeping security deposit headaches to a minimum.

Interest: In many states, landlords with a minimum number of units are required to place security deposits in interest-bearing savings accounts. Some require separate accounts for each tenant; others allow one account, but no comingling of the landlord’s own funds. If you reside in one of these states, you have the choice of paying the interest at the end of the lease, or for long-term tenants, paying the interest once or twice a year. With interest rates currently low, the total interest earned is not much. We know a landlord who gives his tenants their interest checks each year in December—just in time for the holidays.

Rent vs. Deposit: Do not confuse the two, nor allow your tenants to do so. Rent is rent. The security deposit is meant to cover the property owner’s expenses if the tenant fails to keep the property in good working order or to cover tenant damages. If a tenants gives notice and expects you to keep the security deposit as last month’s rent, you may have grounds for eviction. Clearing up the tenant’s misunderstanding is probably a simpler way to go, however. Tip: be sure to include clear language in  your lease about the amount of the security deposit, when and under what circumstances the tenant will receive it after the lease ends, and that it may not be used in lieu of rent payment.

Deductions: A move-in inspection and checklist, compared with a move-out inspection and checklist, will likely dispel any conflicts over deductions for cleaning, repairs, and damages. Conduct the move-out inspection with your tenant. Point out items that must be replaced or repaired. Obtain their signature to prove they were present and agree to the list of damages. Then, be reasonable about costs—recover your expenses, but don’t gouge your tenants.

Time Limitations: Landlords must deal with security deposits in a timely manner after the tenant moves out. It’s not fair to drag the process on indefinitely, keeping the tenant’s money tied up. Do the right thing and deal with damages, send an accounting of what was deducted from the deposit, and include a check for the balance to your tenant as soon as possible. Besides, most states require landlords to supply an explanation within a certain number of days.

Second Chance: Times are tough for almost everyone. Why not be an exceptional landlord and help your good tenants keep more of their hard-earned money? After the move-out inspection, set up a second walk-through to give the tenant a chance to right the wrongs you point out. Most tenants are capable of performing minor repairs and giving the unit a good scrubbing. Clearly communicate your expectations and give the tenant a chance to meet them.

Do You Charge Tenant Application Fees?

Posted by Teresa on December 30, 2009 under Landlord and Tenant FAQs, Rents and Deposits, Screening and Background Checks | Be the First to Comment

If one of your New Year’s Resolutions is to increase your cash flow, one way to do so is through application fees. Landlords and property managers use these fees to recover their expenses for background screening, credit checks, and the time it takes to vet a potential tenant.

If you’re really lucky and have several applicants for the same unit, you may opt to screen the best (on paper) applicant first and, upon approval, refund the fees to the remaining applicants. Or, you can screen all at once and choose the strongest applicant. In this case, the other applicants would not receive refunds, since the background check on each was conducted.

If you decide to keep tenant application fees to cover expenses, avoid issues with applicants by stating very clearly both verbally and on the written application that fees are non-refundable. You’ll also want to determine your policy for refunding fees in the event the tenant changes his or her mind about going through with the rental agreement.

Obviously, a landlord would want to avoid accepting any deposit funds until all background screening has been completed and the tenant’s application approved.

Check your state and local laws for guidance—laws vary greatly and you could face limitations on keeping fees and/or time constraints for returning them. If your application fee policy is questioned, be ready to prove expenses with accounting records. Keep the application fee on a different line item from security deposits and rents in your books.

Smart—and honest—landlords also avoid questions of integrity around fees by only accepting applications for rental units that are truly available, and by doing some initial screening prior to running the tenant background check. If the applicant’s income is below your minimum, do everyone a favor and just turn down the application.

What Do Tenants Want?

Posted by Teresa on December 28, 2009 under General, Housing Trends, Landlord Tips, Marketing for Landlords | Be the First to Comment

Higher rental inventories and overbuilding, plus foreclosed homes and job losses combined to create one tough rental market in 2009—and it’s predicted to continue through 2010.

So what will make your rental property stand out from the rest? With tenants in the driver’s seat, asking for lower rents and other amenities, what can landlords and property managers offer them? What do quality tenants want?

Price, price, price: Tenants want to be sure the rent is in line with the going market rate.

Location, location, location: Parents want to be close to their child’s school. Most everyone prefers to be close to their work. Students like to be close to campus and to nightlife. Families want to be close to parks, grocery stores, downtown, the library—you get the picture. Convenience is a big factor.

Cleanliness: A spotless rental unit will appeal to everyone.

Fitness facilities: Apartment complexes with a bright, clean fitness room with newer equipment that works properly will score higher with most tenants.

Garages: A garage with an automatic door opener is a big draw to most mid-to-upper income tenants.

Appliances: Dishwashers are almost a must. Everybody loves washer/dryer hookups. And if your rental has the washer and dryer as well, it will be scored higher than one without.

Closets and storage: People need space to store their stuff. Lots of closets inside, plus decent outdoor storage for their toys are most appreciated by higher-income tenants.

Accessibility: For older renters and those with physical limitations, easy access to the property shows that you care (and for certain properties, is mandated by law).
Think about the type of tenant you want to attract, and add the improvements that will attract them. If your rental unit already has everything your target tenant wants, make sure your advertising says so!

End of Year Safety Tips

Posted by Teresa on December 23, 2009 under Landlord Tips | Be the First to Comment

As we close the books on 2009, here are some tips to keep your rental properties in good condition and your tenants safe:

While it’s not cold everywhere in the winter, frozen pipes are not unknown to even Florida landlords. So if you know freezing temperatures are in store, check your pipes! Call your tenants and remind them to leave a little water dripping and the under sink cabinet doors open.

If your tenants celebrate the holidays with indoor trees and exterior lights, it’s a good idea to stop by and check that overloaded circuits are not a concern. Too many house and apartment fires are started by Christmas trees. Your rental agreement should clearly state what holiday lighting is allowed—but a personal inspection is also a very good idea.

Make sure your tenants are not using space heaters improperly—if at all. Portable and fixed space heaters are associated with nearly 22,000 residential fires each year in the U.S., with approximately 300 deaths. They should not be used to warm beds, dry clothing, thaw pipes, or cook food. They can be dangerous, and should be avoided. If heating systems function properly in your rental units, there should be no need for space heaters.

If you allow smoking in your rentals, this is a good time to remind tenants of proper disposal of smoking materials. No smoking in bed; no placing cigarettes on counters or windowsills. Encourage tenants to extinguish cigarettes under running tap water.

Check your insurance coverage for water damage and fire. In fact, the end of the year is a good time to schedule time with your insurance broker or sales representative to review all of your coverage. You do not want to find out you’re underinsured after something catastrophic happens.

Keep your peace of mind by keeping your rental property and your tenants safe into the new year!

Real Estate Investment Property: Where to Buy

Posted by Teresa on December 21, 2009 under Housing Trends, Landlord Tips | Be the First to Comment

Some real estate investors are always looking for the next hot market for rentals. Others prefer to keep their purchases of investment property close to home—so they can better manage their properties. Still others are sitting this market out—waiting for home values and rents to stabilize before even thinking about buying additional properties.

Here are a few ideas to consider if you’re going to be searching for investment properties.

• Values exist in almost every city or town. Look for older, yet safe neighborhoods that are obviously kept up by owners. Lower home prices often mean better cash flow
• Keep your eyes and ears open for activity. Is your city is planning a rezone of a particular area? Is a previously designated commercial district going residential? Or is an improvement project planned for a particular area? Knowing what’s going to happen can make a big difference In whether an area is poised for rental property growth or decline
• Areas that have been devastated by overbuilding and plummeting employment are ripe for the picking. Bargains will abound in depressed housing markets like Las Vegas and larger cities in California.
• If you’re considering buying away from where you live, add in the cost of a property management company to your calculations.
• Go where the jobs are. The idea is to pay attention to announcements of large-scale hiring, plant openings, or relocations. Examples are the new Boeing plant to be built near Charleston, SC, or the purchase of the prison in Thomson, Illinois by the federal government. You can even set up a Google alert to tell you when any mass hiring article hits the internet! When the picture starts improving, notice what states have the highest jumps in employment rates.
• Go where the students are. We’ve covered the pros and cons of renting to students before. But the rental markets in college towns tend to be more stable—students will always need a place to live, which is a big plus!