3 Property Management Facts That Might Surprise You

Property Management Facts

Whether it’s renting your old home or buying and selling small single-family apartments, property management is one of the most diverse areas in the real estate industry.

No wonder like so many individuals you have decided to invest your time and energy in this growing industry. This can be a very worthwhile investment for you but there are a few interesting property management facts that you should consider.

Here are some tips that will set you on the right path.

1. Property Management Facts about Industry Growth

Property Management is one of the fastest-growing sectors in the housing market. Especially when it comes to single-family rentals. These have outgrown both family-owned and multifamily housings over the past few years.

However, the entire property management sector has maintained an unprecedented expansion rate in the last few years. No other section of the real estate market has seen this kind of growth.

2. You Can Outsource the Work

Maybe you got into property management or are getting into property management because you want to earn semi-passive income.

However, you may be wondering if you’re getting any form of passive income since you’re doing or will be doing so much work. You’re responsible for daily overseeing, routine maintenance, repairs, and even property visits. Not to mention the administrative, legal and marketing aspects.

Well, what’s great is that with property management services now offering to do these tasks, you can outsource many of them. You can also purchase software to assist you. This means less work for you.

3. House Keeping Rules You May Have to Deal With

In some states, you may have a liability to protect your tenants and guests from secondhand smoking. This can be perceived as a breach of warranty for habitability, a nuisance or trespass depending on where the property is located.

One way to avoid this is to go smoke-free on your property or to state in the contract that smokers must use a designated area for smoking. Make sure the designated area is far away from the building. If other tenants can still smell smoke, you can be held liable.

You need to decide how you are going to handle pets on your property. Like smoking, you can either prohibit it or allow it under certain conditions. Otherwise, you may find yourself on the wrong end of a dog bite lawsuit.

Make sure a pet agreement is in your lease and that it clearly states that the animal is not vicious. You can also charge fees to tenants who have pets. This will help you to bring in extra cash.

Property Management and You

Whether it involves renting or leasing a home, there a few property management facts that you should know before entering the business. There is quite a bit of work to be done but once you streamline your property management duties there will be much less for you to do.

If you would like some help with real estate acquisition, please contact us.

Not on My Property! A Property Manager’s Guide to Evicting Squatters

evicting squatters

Owning rental property can be a great source of extra revenue. Unfortunately, sometimes your renters outstay their welcome (and their rental agreement).

When this happens, you have squatters.

There are many reasons why someone refuses to leave when their time is up, but as the property owner, you must be sure to take the right steps in evicting squatters.

It can be a time-consuming process, but you need to do things correctly to protect your property.

Read on for how to get rid of squatters.

Squatters vs Trespassers

The first thing you need to determine is if your unwanted guests are squatting or trespassing. The laws vary from state to state, but generally, a squatter is someone who stops paying rent but continues to live on the property. This includes roommates or someone who is subletting.

Squatters usually have some type of bill or regular mail that is delivered to that address showing their name. The most common are utility and cable bills.

Trespassers are those who have occupied a vacant building and refuse to leave. Trespassing is a criminal matter and the police should be called right away.

Squatting is a civil matter and the process is a little more complicated.

Eviction Notice for Squatters

You will need to serve an official eviction notice to the squatters. You need to check the legal requirements in your area to make sure it is carried out properly.

If the eviction notice does not work, you must then follow up with a lawsuit. This will in essence charge them with illegal use of the property. Again, make sure the paperwork is filled out correctly and you will need to be at the eviction hearing.

How to Get Rid of Squatters

If you win the case, there is still the problem of having them removed if they refuse to comply. However, with the court’s decision in your favor, you can then call the local police and they can assist in getting them out. There may be a fee for this service.

Unfortunately, there are often items left by the squatters. The majority of it will probably be trash, but in the event there are personal items, do not immediately throw those things away. Be sure to check the local laws regarding their property so you do not get in any legal trouble yourself.

If you are interested in becoming a rental property manager, but need more information, here are some important facts to know.

Preventing the Problem

The best way to reduce squatters is a great screening process for tenants. Ask for, and then call, references from previous landlords. Verify their income and employment status, and definitely check their credit score. A background check is also a good idea.

There is even a national database that records eviction histories. Make sure your potential new tenant is not on that registry.

In the tragic event of a tenant’s death, here are the steps to follow.

Evicting Squatters: Patience Is Key

While the incidence of squatters is not high, it can be a lengthy process to overcome. As soon as you become aware of the situation, take action. Do not wait for them to do the right thing.

Evicting squatters may be one of the least favorite things about having a rental property, but knowing how to handle it will keep you one step ahead.

If you are looking for a real estate agent, we are your source.

Your Complete Guide on How to Handle the Death of a Tenant

lease obligation after death

An unexpected death is always tragic and hard to work through. While the emotions surrounding this kind of loss can be difficult, there’s also a wealth of logistical issues that one might have to work through as well. Dying, as they say, can be complicated. This is certainly the case when a tenant passes away. This is a somber topic and one that every landlord hopes they don’t have to deal with. But it does happen, and it’s important to understand the lease obligation after death.

What is the tenant lease obligation after death? Read on and we’ll walk you through everything that you need to know.

Get Written Confirmation

You will likely find out about the death of your tenant in one of two ways.

You will either be notified by a family member or next of kin. Or, you yourself might discover the deceased individual at your property. This is a rare occurrence, but it does happen

If you are the one to discover the body, it’s essential that you notify the police immediately. They will handle the notifying of the family and will come to do an official report. 

Following the removal of the body, you will need to ask for a copy of the report so that you have written notice of the death of your former tenant. 

This can be a very difficult time for everyone involved. Remember to be sensitive and generous during this time when dealing with the family, who are likely to be very overwhelmed and emotionally affected.

What Happens to the Lease?

Many people assume that a lease ends with the death of a tenant, but in many states, this isn’t so.

It’s important to look into the laws in your area in regards to leases and tenant deaths.

More than likely, ownership of the lease will pass to the next of kin. A landlord usually has the right to ask the family for the remainder of what was owed to the lease. However, a compassionate individual will likely come to a compromise with a family about how much they will be owed.

Removal and Resetting of the Property

A landlord has no right to enter a home and begin the removal of the deceased’s property.

In most cases, you will need to work with the family, who has a right to the items and belongings left behind.

It will be up to them to remove the items in a timely manner agreed upon in discussions following the death. If there is no family or next of kin, you should contact your state for instructions on how to deal with abandoned tenant property.

Tenant Lease Obligation After Death

The death of a tenant can be hard on both a family and a landlord.

It can be hard to know what the proper steps to take are. The above information should help you to navigate this difficult period and understand the lease obligation after death.

Need more real estate advice? Check out our blog for more information.

5 Must-Have Property Management Tips for Beginners

property management tips

Current statistics reveal that rental units comprise about 30% of the housing market. But with the rise of short-term rentals like Airbnb, lots of people are joining the ranks of property managers. 

If you’re new to property management, there are a few things you must know! Keep reading for 5 must-have property management tips for beginners. 

1. Do Your Due Diligence

Most of the problems you’ll run into when it comes to property management are due to bad tenants. Make sure you understand leasing laws in your state. Then set high standards and screen your applicants. 

Be aware that you can’t discriminate based on age, race, and other factors. But you can deny potential tenants for bad credit. If a potential renter’s story doesn’t add up, be wary. 

2. Use a Written Lease Agreement

Never rely on a verbal agreement. Always have a written lease signed by both parties. It’s worth paying a real estate lawyer for an iron-clad lease. 

Make sure the lease is based on your state since every state has different rental laws. Both you and the tenant should defer to the lease if any questions arise. Spell out all potential issues in the lease. 

3. Make Payments Easy

Make rent payment easy for your tenants by setting up an online payment system. The easier it is, the more likely the rent will arrive on time each month. Beware of shoddy online rent collection agencies. 

Do your homework and find a reputable company or another easy way for your tenants to pay. You can require online payment in the lease unless you live in California. 

4. Inspect Quarterly and Make Repairs

Inspect your property every 3-4 months. The key to keeping any home in good repair is regular maintenance. Don’t expect your tenants to do any maintenance on the home. 

Respond to maintenance requests as soon as possible. It’s not fair to keep tenants waiting on repairs. 

When it comes to inspecting, know the law. You can’t enter the premises without giving your tenants “proper notice.” Each state has its own laws. 

5. Never Withhold Deposit Without a Good Reason

The deposit is for actual damages. Never withhold the deposit without a documented reason. 

You can withhold the deposit for excessive damages beyond normal wear and tear. If the tenant owes you rent or late fees, you can use the deposit.

Make sure you can document actual material or financial damages if you keep any of the deposit. 

Welcome to the World of Property Management

These five tips will take you a long way in the world of property management. Always screen your renters by running at least a credit check or using a screening company. 

Always use a written lease and require online payment in the lease. Online payment is easier for your tenants too. 

Inspect the property on a regular basis and do any repairs or maintenance. Never enter the premises without first giving notice to the tenants. At the end of the lease, always refund the deposit unless there are documented damages. 

Does property management sound overwhelming? If you need some help, give us a call. 

3 Tips for Developing a Rental Property Investment Strategy in 2020

rental property investment strategy

About 36% of millennials and 30% of baby boomers prefer to invest in real estate over stocks. They would instead invest their extra cash in long term rental property than put it into the stock market. 

You, too, can successfully invest in real estate. The key to success is having a well thought out rental property investment strategy. 

Try one of these three tips for creating your investment strategy for 2020. 

1. Create a Five Year Plan 

The height of property flipping may have passed, but that doesn’t mean you can’t make money at it. You need to have a longer-term plan. 

In the past, house flippers would buy, improve, and sell all within a few months. These days, house flippers will plan to hold the property for about five years. 

They’ll make improvements slowly over that time while also making money renting the home out. The goal is to have the home’s value appreciate during that time. 

If done correctly, the rental income should cover the cost of the home during the five year improvement period. You shouldn’t be in the hole when you go to sell. 

2. Keep It Long Term 

Just because the real estate market is red hot doesn’t mean you have to sell. Maintaining your rental property creates a positive cash flow. You can maintain this income over many years and have passive income well into your retirement years. 

The advantage of this is that you can depreciate the value of the property. This will help to lower your yearly tax liability. 

For some, the ending of the depreciation period marks when they’ll sell the property. For others, it’s the monthly income that’s important. 

Remember to set aside money for yearly property maintenance and improvements. That way, you can get the highest price for your property when you do finally sell.

3. Choose a Sale Trigger 

For some investors, they go into a property knowing that they’ll sell when a trigger happens. This trigger can be anything that you choose. 

You could hold onto the property until your child goes to college. Then sell and use the money to pay for their school

Or maybe you’ll hold onto the property until it needs a significant repair. The first sign that it needs a new roof or HVAC system means it’s time to put it on the market. 

For others, they know it’s time to sell when they’re ready to move to their dream locale. They’ll hold onto their property until it’s time to retire. Then they sell it all and invest in their retirement property. 

Create Your Rental Property Investment Strategy

Which one of these ideas will work for your rental property investment strategy? Remember, the most important thing is to choose a strategy that you’re comfortable with and makes the most financial sense. 

If you’re looking for a short term investment, then the five year flipping strategy may work the best. If you want long term passive income, then our second tip may work better for you. Or you could choose a trigger that signals it’s time for you to sell. 

Contact us today and let us help you create a property management plan for your rental property.