Managing Your Rental Property

I'm now with a new company

noreply@blogger.com (Ray Anderson) — Sun, 23 Sep 2007 06:04:00 +0000

Although it was a bit nerve-wracking to move from a company that I've been with for almost 11 years, I managed to make the transition without too much trouble. As a matter of fact, I had a blast.

My first day on the job was as the newbie at the company picnic. Not too shabby!

My co-workers and my superiors all are very nice. They laugh a lot and they try to inject as much humor into a work day as is possible. That's especially nice in these trying days of a slumping real estate market.

I'm very glad that I moved; I made the right decision.

Ray

Tomorrow is my last day with my old Company

noreply@blogger.com (Ray Anderson) — Mon, 17 Sep 2007 19:05:00 +0000

Tomorrow, Tuesday, will be my last day with my old company.

Actually, I've not been to the office since last Thursday - I also took off half of that Wednesday, although I did teach my real estate course from 6 - 10 pm on Tuesday.

Since I hadn't taken a single day of vacation in the last four years, I've had a ball staying home with my wife and just having fun. We've been taking walks in the park, doing some shopping and going out for a coffee or lunch. I could get used to that routine, but I am looking forward to my new responsibilities with my new company.

Since I'll be starting on Wednesday, my first day on the job will be to hobnob with my new fellow employees at the company's annual picnic in Annapolis, MD. Not a bad way to start with a new employer.

After that, I think life will be very busy. This new company sought me out and I suspect that I'll have more work to do than what my relieved-of-his-duties predecessor was able to accomplish.

I'll also be responsible for the CEO's 28 personal rental properties. Talk about being close to the power!

My next post here should be within a week after I've had an opportunity to work myself in.

Ray

I'm changing companies

noreply@blogger.com (Ray Anderson) — Sun, 09 Sep 2007 23:04:00 +0000

I can't believe it. After almost eleven years with my present company, I've allowed myself to be wooed away to a competitor.

I'm not the type of employee who hops from job to job. As a matter of fact a head hunter once told me that I had mismanaged my career by not changing jobs every 2 to 3 years to position myself better.

This time, however, I took the bite. I wasn't looking, and I was rather taken by surprise when I was contacted by top management of the new company. They knew about me (wow!) and they wanted to talk to me about joining their team (double wow!)

At about the same time, my present company started to realign itself in ways that did not match my professional expectations. Having been very successful, my present company has opted to become a franchiser and sell most of its office locations to independent investors. Not a bad idea, actually, in this market.

More disturbing, however, is the fact that corporate does not really understand property management and may be thinking of letting it go. Silly, silly, silly! Property management is MAKING MONEY RIGHT NOW where sales are not!

In any case, on September 19 I'll start my new position with the new company. Let's hope that I've made the right decision.

Ray

New Trick for breaking lease

noreply@blogger.com (Ray Anderson) — Sun, 03 Dec 2006 02:07:00 +0000

I see that tenants are using new tricks in an attempt to break their leases. One that I've seen used more often recently is the County-Inspection scam.

The scam starts when the tenants wants to vacate the property before the end of the lease. They'll call the County for a property inspection in order to find county code violations with the home. This, they hope will allow them to vacate under a constructive eviction whereby the house is condemned and the tenant is allowed to break the lease without a financial penalty.

The only defense against this scam is to document that every reasonable tenant complaint has been addressed. I won a recent court case because the tenant was unable to show that any of the faults that the county inspector found had ever been sent to us. As the owner's agent, we were not held accountable for problems that were not known to us. I quickly countersued the tenant for destruction of the property. We won and the tenant lost his security deposit for the damage to the property.

Ray

Pets or No Pets

noreply@blogger.com (Ray Anderson) — Sun, 26 Nov 2006 17:22:00 +0000

Whether to allow pets or not tends to be a tough decision for many landlords. Make no mistake about it, every pet will cause some wear and tear on a rental. If people cause damage, pets certainly will.

The question is, how much wear and tear is acceptable.

The number one cause of pet damage is urine. The odds of a pet urinating at one time or another on a carpet or a hardwood floor are surprisingly staggering. The pets may be housebroken, but excitement, illness or a host of other reasons will ultimately prompt such an accident.

If caught early, and if the accident spot isn't a place of recurrence then any one of the commercially available enzyme treatments should suffice. On areas that are frequented, replacement of the carpet may be necessary with the accompanying treatment of the flooring below with an encapsulating chemical such as Kilz(TM). Hardwood floors may need to be sanded and resurfaced. On those occasions where urine has soaked into an untreated wooden floor, the afflicted section may need to be replaced.

Checking for urine accidents is relatively easy. Foremost, the nose is a good indicator, but for those who need a more refined tool, a portable black light will quickly indicate accident spots since urine flouresces under a black light.

In the yard, dogs will also create problems. During urination, a female will squat and create brown spots throughout the yard where the grass is killed by her urine; a male will find a bush and ultimately kill it with his urine.

And yet, the landlord has to recognize that limiting access to tenants without pets grossly reduces the number of applicants who will apply. The pet industry is an $8 billion business that caters to many people, many of whom are renters.

One way to minimize the landlord's potential damage is to increase the security deposit by an adequate amount. This, too, is an art, since raising it too high will make the rental less desirable to renters with pets.

If pets are a possibility, depending on what types they are, how big they are and whether they're fixed or not, a landlord should consider advertising the rental with pets on a case-by-case basis.

Ray

Beware of Rental Applicant Scam

noreply@blogger.com (Ray Anderson) — Sat, 25 Nov 2006 19:25:00 +0000

I've received two of these emails now. In both cases the emails were prompted by an advertisement that I ran for my rentals. The emails were sent by individuals who claimed to be British subjects, looking to transfer to the US for their very high paying jobs. The messages would go on about how much they liked what I'd said in my ads about the properties, and that since they were unable to personally view the properties, they wanted to make application to them.

So far so good.

They went on to say that since they were British subjects (doubful) that they would not be able to pass my traditional background check with its accompanying credit check, and that they would overcome that burden by paying the full year's rent up front with certified funds.

OK, that works for me.

Let's say that the monthly rent would be $1,750 for a nice townhome, somewhere in Fairfax County. The total amount due for a full 12 months would then be $21,000. After acknowledging the specifics of the rental agreement, I was informed that certified funds for this amount would be forthcoming.

And indeed, the registered letter would arrive with a certified check in the amount of ... $31,000?! A quick email to the applicant, asking why the extra money was sent, would be answered with, "Oh my god, I'm sorry ... I made a mistake. Please deposit my check and send me certified funds back for the overpayment."

The scam was that the applicant's certified check was bogus, but an American bank wouldn't know that for a good two weeks since that check would have to be cleared through a British bank. In good faith, and not wanting to wait for the applicant's "certified" check to clear, I was to immediately go to my bank and issue a good certified check in the amount of $10,000, the overpayment, and send it to the crook. About two weeks later, my bank would then advise me about the bogus certified check, but by that time my good check would have been cashed.

Fortunately for me, I had read about this scam and opted not to reissue a refund until the applicant's check cleared, which, of course, it did not.

When I tried to reestablish contact with my overly-anxious rental applicant I did not receive any responses.

Be aware!

Ray

Tenant Applicant Research Tool

noreply@blogger.com (Ray Anderson) — Sat, 25 Nov 2006 19:25:00 +0000

There are many different research tools on the internet that allow landlords to check on rental applicants. One easy, free tool is anywho.com which allows anyone to either locate (or confirm) someone's address by entering their name and city, or to perform a reverse look-up by entering an applicant's phone number and receiving a corresponding street address.

I should add that this service does not work for cell phones or with telephone numbers that have been tagged as "unpublished" by their owners.

Ray

Bad Sales Market = Good Rental Market

noreply@blogger.com (Ray Anderson) — Sat, 25 Nov 2006 19:07:00 +0000

You've been living in a bubble if you're unaware of what's going on in the real estate sales market. There are still sellers in the market who wish that things would return like they were in 2004 and 2005. Dream on!

The good news for landlords is that potential buyers who are now completely turned off by buying a home, still have to live somewhere and their only option now is to rent.

I've noticed in my business that rentals are up, up and up, not only in the number of people who are looking to rent but also in the amount of rent that landlords can get. Because of this new upsurge in rentals, it's now more so than ever to have one's leasing systems in order.

One of the top, free advertising outlets for landlords is Craigs List. You'll be able to advertise your rental for seven days and you'll be able to include up to five different pictures of your rental for absolutely no money! After seven days, the ad falls off and you'll have to repost it ... Big Deal!

In my opinion, Craigs List is much superior to any other advertising medium, including the local newspapers.

Click on this link, http://washingtondc.craigslist.org/ and go to apts / housing to set your ad ... you'll thank me later.

If you're leasing your property in the cold weather months, try for an 18-month lease instead of the traditional 12 months; it'll end the lease term in a more favorable, warm month that will make it easier for you to rerent your property.

As landlords, our times are here, now. Fix up your rentals and get the word out and start moving into a positive cash-flow environment.

Ray

New Lease for Northern Virginia

noreply@blogger.com (Ray Anderson) — Wed, 15 Mar 2006 21:29:00 +0000

I've just read a draft of the new proposed lease for Northern Virginia. The lawyers are at it again, I guess, because this lease is so very legalese, I wonder whether some of my immigrant tenants (and owners) will be able to understand it.

It strikes me that this new lease is going to be complex just for the sake of being complex.

Ray

Quick Move Tenants

noreply@blogger.com (Ray Anderson) — Mon, 27 Feb 2006 22:49:00 +0000

Although it seems to be contra to what you would expect, it has been my experience that tenants who can move in to a rental on a dime, can also move out as quickly.

I've always had a pretty good experience with tenants who thought of moving as a monumental headache. Think about it. Once they've moved in, they don't want to move out again unless they're extremely uncomfortable. It is these tenants who grow roots who are also the easiest to raise the rent on (in moderation, of course) without fearing that they will not renew their lease.

Something to think about!

Ray

Common Elements in renting your property

noreply@blogger.com (Ray Anderson) — Sun, 26 Feb 2006 18:50:00 +0000

There are a number of elements that are common to all residential rentals.

Clearly one of the first items to look at is the actual rental unit itself. Whether it is a single family detached home, a townhouse or a condo, you will need to know how competitive your unit is in today's rental market.

Knowing how competitive it is, is merely a function of knowing how much rent you can ask for and not shy away rental applicants. You'll have to compare that against your expenses, especially your monthly loan amount.

The condition of your rental will also determine to a large degree what type of a tenant you're going to attract. Not every rental unit is a palace and there is a lot of business to be done with renters who are less than kings and queens.

What time of the year it is when you start to market your rental is also important. Knowing when the peak of rental traffic moves through your town is the difference between a rented unit and a vacant one.

I'll touch on all of these items in the very near future.

Ray

Why this blog?

noreply@blogger.com (Ray Anderson) — Sun, 26 Feb 2006 18:21:00 +0000

Managing your own rental property can be downright frustrating and potentially legally complicated. There are many preconceived ideas about how to properly manage a rental that can get an owner into trouble, and I thus was compelled to try to add my knowledge to the overall pool.

I am a licensed managing real estate broker in the Commonwealth of Virginia, working as a full-time, professional property manager of residential and commercial rental property. I'm also active in a number of property management related professional organizations. I know this business.

Why, then, would I write a blog about how an owner could manage their own property without my professional assistance?

The reasons are many-fold.

First and foremost, I anticipate that owners outside of the general Northern Virginia area, and thus not potential clients, will read this blog.

Second, not every potential owner in Northern Virginia will meet *my* requirements for me to manage their rental property. I can still help them, however, with some relevant information.

And third, there will be those owners in Northern Virginia who will have thought about managing their own property, who will, after reading this blog and other readily available information, decide that there is too much at stake and therefore would much rather go with the services of a professional property manager.

One of the things that I can promise you now is that the field of property management, even if for only one property, is considerably more complex than might be expected.

I hope you'll like it.

Ray