How do I Pick a Good Property Management Company? (Part 1)

Posted on March 21, 2012 by Nicholas Garrison

So you have decided to rent out your house or you are going to purchase property to rent and you don’t want to manage them yourself. So how do you pick your property management company.

1. Choose a company that has a management team in the market your property is in.

Sometimes large real estate firms have a property management division, and the offices are in another city that is not a part of your community. You need someone who knows your market and has a system to keep an eye on your property and tenants.

2. Make sure the company answers the phones either immediately during business hours or responds within a couple of hours.

When someone is looking for a house to rent, they want to talk to someone right away. In some cases they will not even leave a message if they don’t talk to someone. Make sure you know what there practice is for answering the phone. If you are using a realtor to market your house, they are less likely to catch that call every time. You want a company that has a dedicated number for all inquiries.

3. Make sure they have a good plan for handling maintenance?

Is there maintenance in house or do they use outside vendors. What is their markup if they use an outside vendor? A rule of thumb is between 10-20% markup. If a tenant has an emergency such as a broken pipe, do they have an emergency contact number where someone is available 24/7.  How do tenant communicate a maintenance problem and what is their response time? With technology today a tenant should be able to log into a portal and submit maintenance requests.

4. Make sure they are doing more than just listing the house in the MLS.

Do they just list it in the Real Estate Multiple Listing Service or do they market on all the different available internet sites such as Oodle, Craigslist and the like. They should have a way to syndicate your listing to multiple sites. More and more tenants are utilizing the internet to find their rental house.

5.Make sure they have a plan to inspect the property at least monthly on the exterior and a thorough inspection annually.

This can vary some companies do an annual inspection where they go in and check everything.  This is something that you can negotiate with the company. At AAA Home Rentals in addition to an annual inspection we also do a monthly drive by. We do this at the first of each month. This not only allows us to get a visual of the property, but if the tenant is late on the rent we can post a notice right on their door.  If the house is vacant I recommend a drive by weekly.

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Why do I need to have Renters Insurance?

Posted on March 21, 2012 by Nicholas Garrison

Renters Insurance does more than just protect your belongings. It protects you against damages caused as a result of mistakes caused by you as a tenant.

One example I like to use is that of a tenant who had the misfortune of burning down one of my houses. They left a pot on the stove that resulted in a fire that destroyed the property. They did not have Renters Insurance. And because of this fact. They could be sued by my insurance company for their neglect. Renters Insurance protects you against that.

Of course there are also stories of families who lose everything they owned in a fire and had to look for hand outs and support from different agencies. Renters Insurance will protect you against this as well.

So if you are a tenant it is wise to purchase renters insurance. It is very inexpensive.

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How to find a house to rent.

Posted on March 19, 2012 by Nicholas Garrison

There are many different ways to find rental housing. Here is a list of a few.

1. Contact a local real estate agent to have them check the MLS for available houses.

2. Check to see if your area has a local website that lists available rental houses. In Coweta County we have something called www.AccessCoweta.com

3. Check your local newspaper.

4. You can also of course do a Google Search to see what comes up from the different search engines.

5. Drive through the neighborhood where you want to live and look for “For Rent” signs.

These ideas should help you find that house. But a word of caution if you call someone and they don’t return your call. Chances are they probably won’t return your call if you have a problem after you move in.

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How to screen properly for tenants

Posted on March 18, 2012 by Nicholas Garrison

So you have a house you want to rent, what is the proper way to screen for a good tenant. The first thing of course you are going to want to do is get an application completed with prior landlord information going back at least two landlords or  more. You want to go back at least two and call them because the current landlord may give a good referral just to get rid of the tenant.

You will  also want to verify employment and the best way it to talk directly to the HR department at the place of employment and not necessarily the prospects contact that was given. A direct supervisor may be a friend and you may not get the whole story. In some cases you may need to fax the company a Verification of Employment. You will find these forms available at TheLPA.com.

Once you get a completed application you will also want to see a copy of their driver’s license and verify it against previous address to insure that they are who they say they are and lived where they said they lived.

You are also of course going to want to run a credit check. There are various services out there that for a fee you can obtain a credit check. One that I have used in the past is www.citicredit.net.  But before you do make sure you have a signed application from every applicant over 18 years old and run a credit check on each of them. You will also want to run a background check. Your local sheriff’s office can do this for a fee.

I charge $50.00 for an application fee. This may sound high but it helps wean out the non serious applicants.

By doing a thorough screening you will have a better chance of getting a good tenant. I put a lot of importance on prior landlord and employment history.

 

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Different ways to collect rent?

Posted on March 17, 2012 by Nicholas Garrison

There are several ways today to collect rent. You can use the old fashion snail mail and have the tenant mail you a check each month. This may be appropriate if you just have a couple of houses. My only suggestion is that if you do it this way that you have a P.O. Box so that the tenant does not have your home address. You really don’t want your tenant showing up at your home with your rent or dropping by to complain about something. You need to protect your privacy. I utilize a Pak Mail store and my tenants can come in there as well and drop off the rent. The employees there know to put it in my mail box.

Another way is to have a separate bank account that tenants can deposit rent into and you can sweep the money out of the account as it comes in. I have done this before and I will have the tenants put an extra couple of cents on the end of the payment in order to identify the property. For example if the address is 219 and their rent is 1000.00 I will have them deposit 1000.19 which tells me what house it is for. I normally use a bank that has multiple locations to make it convenient for the tenant.

You can also utilize an online property management software that has a payment processing application. Your tenant can then log into a portal and make their rent payment. But be very careful here, many of these companies are very slow to transfer the funds into your account. In fact may take as long as 4 days after it is paid to pay you.

I have also heard of landlords who will go by the tenants house and pick up rent every month. This allows them to have an opportunity to once a month see how the property looks and let’s the tenant know when they have to pay the rent. If the tenant does not have the rent the landlord can then give them an immediate notice to pay or quit.  Of course, this depends on the laws of the state in which you live.

You can of course use ACH. ACH is an electronic network for financial transactions in the United States and stands for Automatic Clearing House. You can Google ACH to find companies that offer this  service and the rent is automatically pulled out the tenants account at either the end of the month or the 1st of the month depending upon your lease.

My favorite so far has been to utilize a service provided by Intuit. The makers of Quicken and Quickbooks.  On a monthly basis my tenants receive an invoice by email where they can click on a link and enter their bank account information to pay their rent. If they pay today the money will be in my account within a day or two at the most.  It also reminds them that rent is due.

 

 

 

 

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Are you ready to Lease out Your Home?

Posted on March 16, 2012 by Nicholas Garrison

Renting out a house you have lived in for several years can be hard. You probably have fond memories, holidays, birthdays and gatherings with friends. You took pride in the way you kept it up. However, when you rent it out you need to remove all the emotion and leave it behind. Because now you are operating a business and the house is now a device that generates revenue and the tenant is a paying customer

You do not have the same rights to the house you had when you lived there. The tenant now has the right to use. You can not just walk in when ever you want.

Before you rent it keep in mind that you may not be happy with the fact that the tenant does not keep it up the same way you did.

You may get calls from nosy neighbors telling you that the tenant had a party and there were a lot of cars there. Or the tenant put up a swing set in the back yard. Some neighbors are just trying to be helpful and some may not like the fact that the house is now a rental property. (I think some people would rather have a house be vacant or go into foreclosure than be a rental house.)

Then of course there is the financial concerns. What kind of reserves do you have in case the house is vacant for a month or you have to replace a HVAC system or a water heater?

Do you have the funds to replace carpeting that a tenant destroyed or repaint every 3-4 years.

Today most lenders will not lend on another house unless you have 6 months reserves set up for your rental property.

Just a few things to consider and there are many more before you rent your house.

 

 

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When to answer the phone?

Posted on March 14, 2012 by Nicholas Garrison

Being a landlord can turn into a 24 hour 7 day a week job if you let it. You have tenant prospects calling and current tenants that think you are available at all hours.  But there are ways around this.

Don’t get me wrong answering inquiries for rentals is critical to keeping your properties rented. We live in an instant gratification society.  At WWW.AAAHomeRentals.com we answer inquiries pretty much from sun up to sun down.

For tenants we don’t believe it is necessary to be available 24/7 unless it is an emergency. So how do you do that?

  1. Have all of our tenants numbers identified in your phones
  2. Have an emergency number (purchased through a company called Ring Central that you have a caller id attached to that will tell you if you are receiving an emergency call.
  3. Request that all non-emergency needs are sent via email or if you utilize an online property management tool such as Buildium you can have them submit their request through their tenant portal
  4. Make sure they know what your hours of operations are.
  5. Answer non-emergency calls during normal business hours.

We are in a service business, however just like everything else we want to have a life outside of work. Follow some of these ideas and you will start to see benefits and get enjoyment out of property management rather than stress.

 

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Is renting Section 8 right for you?

Posted on March 13, 2012 by Nicholas Garrison

I am one of landlords that loves Section 8 which is the housing choice voucher program the federal government has for assisting very low-income families, the elderly, and the disabled to afford decent, safe, and sanitary housing in the private market. Since housing assistance is provided on behalf of the family or individual, participants are able to find their own housing, including single-family homes, townhouses and apartments.

So why do I love Section 8.

  1. I always get paid.
  2. Most of my Section 8 tenants take care of my properties
  3. Tenants tend to stay in houses for a longer period of time.

So what are some of the draw backs.

  1. Well #1 is you have to keep your house in good shape.
  2. You have to obey the governments.
  3. You could end of having a bad tenant who trashes your house.
  4. Sometimes it is hard to get anyone at the Housing Authority to return your call

So let’s address each one. If you are a good landlord the first one is easy. Now sometimes it is harder to comply in older houses just because things as simple as having window screens on all the windows maybe hard to do. But if you have homes built in the 90′s and newer that is not normally a problem. I have in some cases replaced windows in some of my older houses in order to comply with Section 8.

As far as obeying the rules, learn them up front. Most Housing Authorities have classes for landlords and you should probably attend them.

Now as far as a bad tenant. Let me say this I have had more problems with non-Section 8 tenants than with them.  There are good and bad in every group.

Now as far as the communication goes. I am still trying to figure that one out. But when I do I will let you know.

The choice is up to you. If you rent quality housing Section 8 is definitely something to consider. If you don’t then maybe you should look for your tenants elsewhere.

 

 

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How to Be a Good Neighbor?

Posted on March 11, 2012 by Nicholas Garrison

When you have a rental house normally the neighbors are not real happy with you. In fact I have had “For Rent” signs disappear from the front of my houses a few times. The reason is the the fact that in general home owners look down on renters. Kind of classifying them as second class citizens. This of course is far from the truth. (I will save that for a later blog)

While most renters take very good care of a house there are exceptions and unfortunately those exceptions become the overall perception of the home owners who live in the area.

So how do you mitigate the damages?  One of the best ways I have found is to make friends with the neighbors. Stop by their homes and tell them you want to be a responsible landlord and that should they see anything unusual going on to let you know. Most will be very happy to call you if something goes wrong. In some cases you could get more calls from neighbors than tenants. But keeping the neighbors in the mix can really help give you an extra set of eyes.

The other thing it may do is give you another source for finding new tenants. Sometimes they may know someone who is looking for a house and steer them to you!!

Another thing we do at AAA Home Rentals is perform a drive by of all our properties once a month. This gives us the ability to inspect the exterior of the property and get anything out of the ordinary handled.

So be a good neighbor.

 

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You Get What you Pay For!!!

Posted on March 10, 2012 by Nicholas Garrison

When you decide to rent your house the condition you have it in will determine the type of tenant you get. If you have things that are broken or maybe the carpets are not as clean as they may need to be or it needs to be painted.

There are a lot of houses on the market and renters can be somewhat choosy. If the good well paying tenant see that your house in need of work they may decide that you as landlord are not very responsible for the upkeep.

The less than pristine tenant may say this is okay and hey the owner is not taking very good care of it so why should I. It leads to more damage and repairs that will be needed down the road.

How can you expect a tenant to take good care of your rental property when you don’t?

Keeping your rental house in good repair and clean will help you attract the kind of tenant you want. It will also make it much easier to identify damage when you do that move out walk through.

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