References: What to say and how to say it

My former tenants frequently use me as a reference when they switch apartments. I think it is because I am both a landlord and a real estate broker; they think I can talk the talk.

Well I can, but a lot of the landlords and agents who call me can’t.

Here are the two worst types of reference check calls I get:

1.The caller doesn’t know who he/she are talking to:

I had an agent call me about a tenant who was moving out of my unit.
He: Was the room was clean when she left?
ME: she hasn’t left yet.
HE: Was there any damage after she moved out?
ME: She hasn’t moved out, so I don’t know.
After the second time, he got it that I could not speak about after the tenant moved out because the tenant was still there. He then asked questions that I could answer about paying on time and taking care of things.

2. The caller “leads the witness”:
I frequently get calls that go something like this:
HE: Sally Smith was a great tenant, right?
ME: good enough.
HE: She always paid on time.
ME: Pretty much.
HE: Any problems?
ME: What kind of problems?
HE: She was quiet, right?
ME: yes. HE: She left everything in good order.
ME: good enough.

When this happens (and it has a number of times), I get that sinking feeling that this mediocre tenant just got a new apartment. Rental agents do it, and so do landlords. The caller had already decided to take this tenant and wasn’t listening. He had plenty of room to ask for details; he avoided doing so. If the tenant was not a bad tenant, I don’t press the issue. If the tenant was a problem, I would have to force the information on him.

So, what should a landlord be asking and who should the landlord ask?

First, what.

You want information on consistency.
How long did the tenant stay in previous apartments and previous jobs? Was there a lease, did he/she move out before the lease was up? Is the tenant steadily employed? Punctual and reliable at work?

You want information about responsibility.
Did the tenant report problems in the apartment? Did the tenant over-report problems in the apartment? Does the prospective tenant take initiative at work? Is the tenant a good problem solver?

The financial stuff.
Of course, a landlord needs to find out that the tenant is employed at a level that supports the rent. You need to know the job is not about to end. You want to know that rent has been paid on time at his or her previous apartments.

Who you ask will have a bearing on whether you get useful answers:
Talk to previous landlords. The current landlord has an incentive to invite a troublesome tenant to move into your apartment.

Talk to supervisors at work, not just the human resource department. You will get at better idea of character that way.

One more thing: Be consistent. You must ask the same questions about any tenant or risk being charged with discriminatory behavior towards someone in a protected class. Write a script for yourself. Keep a record.

What does your script look like? You can do better than “He was a great tenant, right?”

Article originally posted by Rona Fischman in www.boston.com

Building a Plastic Square Bubble

I love making upgrades and repairing empty apartments. Any dust that you create doesn't end up being an a issue to anyone except you and the crew. However there are times when repairs need to be made on occupied premises or a long term tenant is due for an apartment spruce up. Until recently I would haul dozens of drop clothes, reams of plastic and rolls of low tack masking tape and proceed to block off and cover surfaces to keep an occupied apartment clean and dust free. But now...........

I finally invested in the "ZipWall Dust Barrier System" This has to be one of the best purchases I have ever made. For years I put off buying what amounts to 4 telescoping poles because I felt the "system" was too pricey. Boy was I wrong. The ZipWall system paid for it self the first day of use, which happened to be Today!

Set up was takes minute as opposed to a few hours of "securing the worksite".
The ZipWall tension spring loaded poles allow you to create a plastic square bubble prevents dust from spreading through out the home. Subsequently, clean up is a zip. And best of all there are no upset calls from sneezing tenants.


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The Difference Between Deadbeats and Tenants Having a Problem

Deadbeat Characteristics

Rude
Party a lot
Cause problems with other residents
Have no respect ei. throw garbage off the balcony
Just moved in never paid rent
Don’t care, don’t even come to the office or call you when late with rent.
You can expect dirt & damages
Also a Deadbeat will try to emotionally manipulate you


Hard Time Tenants Characteristics

Apologetic
Have no outrageous social problems
Have a tenant history with you
Will make small payments as they can
Won’t generally cause problems with other residents
Will seek you out and discuss exactly what is going on and prove it…
Will often move if they can no longer make the rent payments.
Generally will pay you every single red cent they owe you.
Just tell you the facts

Here is Where Membership Can Save You Money

The Bargain Outlet offers a exclusive Landlord Program recognizes anyone who is a member of a local landlord housing, real estate association or owns multiple properties.

Some benefits are:
3% DISCOUNT on Every Purchase and

10% Discount on the following volume purchases.

• 500 sq. ft. Porcelain Tile
• 5 Water Heaters
• 500 sq. ft. Wood Flooring • 50 Lin Ft. Counter Tops
• 500 sq. ft. Natural Stone • 5 Kitchen or Bath Faucets
• 5 or More Replacement Windows • 5 Toilets
• 5 Pedestal Lavs
• 24 Tubes 10.1oz. Caulking • $5000 Worth of Cabinets
• 24 Tubes 10.1oz. Adhesive • 6 Steel Door Units
• 20 Cartons Self-Stick Vinyl Floor Tiles • 10 Interior Door Units
• 10 Interior Door Slabs
• Full Roll Carpet (Uncut, Shrink Wrapped) • 4 Patio Doors
• Full Roll Carpet Padding (Uncut, Shrink Wrapped) • 20 Locksets

Tip: to avoid slip and fall claims

One of the ways landlords encounter premise liability–”slip and fall” and related personal injury claims, is while showing properties to prospective tenants.

One reason for this is the property tends to be in transition, whether it’s a simple paint job or more serious repair work. It may have been some time since the landlord visited the existing tenant.

To play it safe, anticipate any hazards, and if possible, schedule tours during safer times.

For instance:

Schedule showings late enough in the morning that sidewalks are shoveled and slippery hazards removed.

Check in with the existing tenant to be sure pets are away from the unit and and there are no boxes or furniture blocking exits or stacked precariously.

Stay in close contact with any contractors or maintenance workers who may be working on the property, and make certain items like stair railings are in place and property functioning.

Watch for construction materials, debris, and equipment that may be located in the rental unit.

Don’t show the property if it has just been treated for pests or has other fumes.

Moving up the property ladder

Recently, a current landlord asked advise about purchasing another income property and whether or not it was the way to go. I have always been of the opinion that property is a good investment. Moreover, profitable and reliable property investments are rarely based on just one property, and aren’t usually achieved by buying and holding just one property. Instead, investors should aim to move up the property ladder, whether to diversify investment, increase profit or increase the size of properties to accommodate pets, children, aging parents or all of the above.

If you have already bought your first property, you’ll still vividly remember how difficult it was to get up onto that first rung, however, the hard part isn’t over. It can often be just as difficult to move up to the next rung on the property ladder as it was to get up onto the first one, which is why you need to keep these tips in mind.

Buying and Selling at the Same Time in the Same Price Bracket

Property prices are fluid across time and across different sectors of the market – where the first home market may be experiencing a boom and properties in this price bracket are in high demand (and therefore highly priced) premium properties may be getting heavily discounted. Therefore, if you are looking to move up the property ladder, you have to keep in mind that if you are buying and selling at the same time, in the same price bracket that you are going to be experiencing both the good and the bad of the market at the same time too.

For example, if you are looking to sell your property which has gone up in price 10% in the last 12 months, that is great news as a seller. However, all the other properties in your price range have likely gone up 10% in the last 12 months too, so if you are looking to buy in the same bracket, your equity will have evened out. Luckily, when you are looking at moving up the property ladder, you are also usually looking to move up in the price bracket too so those differences and movements can work in your favour if you look for them.

Value Versus Costs

The value you would get from moving up the property ladder also has to outweigh the costs of that move, either now or in the future. Therefore, start by having your current property valued so you know the exact amount you have to work with in equity, and whether you can find the next property on the ladder which will truly increase your net worth. Unfortunately you may be unpleasantly surprised by the valuation of your current property as some areas of the market are still experiencing a downturn, so you may find a better path up the ladder if you wait out the downturn in your market.

When adding a new property to your portfolio there are also a number of fees and charges to consider, such as:

Stamp duty. Can be a percentage of the purchase price or a set amount depending on your state or territory and your price range.

Mortgage fees. When you buy a new property you’ll need a new mortgage which will come with new valuation fees, application fees, administration fees, legal fees and probably even some ongoing fees.

Deposit. Whether you use your own cash or the equity in another property, your deposit is going to cost you around 10% of the purchase price of the property. Remember that the larger your deposit, the lower your loan to value ratio and if you are able to drop your LVR to 80% or less, you can usually avoid paying lender’s mortgage insurance.

Repayments. Your move to a bigger and better property to move you up the ladder will likely also mean bigger repayments so make sure that your budget allows you to maintain your new position on the ladder, and that you don’t come crashing back down.

Interest. You also need to make sure that your new loan is affordable now and into the future because while interest rates are low while the economy recovers, you need to stress test your loan too, so see whether you’ll still be able to afford your new repayments if interest rates were to go up one to two percent.

Long Term Goals

Moving up the property ladder is not something you should try and do too fast, and you should set long term milestones to achieve in your path to the top. Therefore, remember that if you are already on the first rung of the ladder, you are well on your way, so be patient and don’t worry if your valuation hasn’t come back as high as you would have liked.

In the meantime keep saving and maintaining your current loan. This means keeping current on your repayments and paying more than the minimum where you can to increase the equity in your property. A great way to save when you have a home loan is an offset account, as you’re unlikely to earn more interest in a traditional savings account than you are paying on your home loan, but the funds in an offset account directly reduce the amount of interest you pay on your home loan at the same time.

Rental Property Quick Fixes

by Michael Monteiro

When it comes to tiny property repairs, a molehill can very easily become a mountain if it’s not resolved quickly.
Whether you’re a DIY kind of person or would prefer to have a contractor or handyman take care of your property’s repairs, time is of the essence.
Not only is it important to take care of repairs and maintenance quickly for your tenants’ sakes, but also for your bank account’s. In so many cases, a little problem that goes unaddressed can turn into a big, expensive problem not so far down the line.
Budget for the unexpected.
Setting money aside for those unexpected repairs that always come up sooner or later is one of the smartest moves you can make as a landlord. No matter how good your intentions are, it’s almost impossible to move on any repair quickly if the funding simply isn’t there.

Move quickly, no matter how innocent an issue appears.
Cracked plaster? Leaking roof? Chipped window? All of these are examples of “little” issues that are easy to set aside, but will only grow with time. Cracked plaster can easily begin to crumble, resulting in a much bigger mess. A leak can expand and run rampant, causing significant water damage. A tiny window chip can quickly spread, leaving no other option than a complete window replacement.

Maintenance and small repairs go hand-in-hand.
There are some maintenance duties that count just as much as repairs, and should be performed just as efficiently. Cleaning gutters on a bi-annual basis, for example, is critical. Sure, it may not seem like the most pressing job, but you’ll save yourself a lot of money in the long run. Other regular maintenance work that staves off big repairs includes: draining your water heater (once a year); cleaning stove grease filters (every time a tenant moves out); and turning off the water for exterior water faucets (every year when the temperature dips below freezing).
Keep the basics on-hand.If you choose to take the DIY route when it comes to repairs and maintenance, make sure you have the basic tools you’ll need to complete a range of tasks on-hand. You’ll be much more likely to take care of things quickly if everything you need to do it is easily accessible. Click here for tips on putting a basic home repair tool kit together—and, of course, you can add to this kit over time.

Have a professional in mind ahead of time.
Much as it pays to budget for problems before they happen, it also pays to research handyman and contractor options ahead of time. If you already know exactly who the man for the job is, you won’t have to waste any time once the need for a repair crops up.
Repairs don’t have to be a big deal. But they may well become one if not addressed in a timely manner. Having a plan of action in place before repair items ever arise and a no-holds-barred attitude about addressing them immediately is a great way to save yourself a lot of money in the long-run.

Michael Monteiro works for Buildium LLC, maker of online property management software and landlord software for professional property managers, condos and homeowner associations (HOAs) and is author of the The Buildium Property Management Blog.

Tax Tips for Income Property Owners

Landlords can greatly increase the depreciation deductions they receive the first few years they own rental property by using segmented depreciation.

Careful planning can permit you to deduct, in a single year, the cost of improvements to rental property that you would otherwise have to deduct over 27.5 years.

You can rent out a vacation home tax-free, in some cases.

Most small landlords can deduct up to $25,000 in rental property losses each year.

A special tax rule permits some landlords to deduct 100% of their rental property losses every year, no matter how much.
People who rent property to their family or friends can lose virtually all of their tax deductions.

Dealing with Flooded Basements

As noted in the previous post, Governor Deval Patrick declared Massachusetts was in a state of emergency after 2 major rains storms this past month of March. If your basement has undergone a flood, the first step is to remove the water. If the flooding is minor, then all you need to do is mop the wet areas up with a mop or old towels. However, if the flooding is major, it’s time to bring out the big weapons.

If you don’t have one of the following: portable sump pump, wet vacuum, or wet shop vacuum, go to the store and purchase one or see if you can borrow one from someone that you know. Additionally, places are available where you can rent these. Look in your local telephone book for contact information if you decide to rent the equipment.

You need to consider a few things when determining which equipment you are going to use. The sump pump will require an outlet for the water to be removed. Realize that if your basement is flooding, then the existing drains in your basement may be inaccessible for draining purposes. You will probable need to obtain a long hose to attach to the sump pump so that you can hang it out the window and as far away from the home as possible.

If you select the wet vacuum, realize that it will only be a matter of minutes before you have to empty the holding receptacle. The wet shop vacuum will hold more water, but it will be heavier and more difficult to empty, especially if you are trying to empty the water outside of the home. Make your decision wisely.

Once you have the equipment that you need, begin to remove the water. The best place to begin is most likely the area that is going to sustain the most damage if the water sits. Another option is to begin on the highest section of the room where the water is the lowest and work your way in to the larger pools of water.

If the rain has stopped, open the windows to allow moisture in the air to escape. This will help with the drying out process. Once the water has been removed from the floor of the basement, it is time to begin drying the area as completely as possible ass quickly as possible.

If your heating system has not been affected by the flooding, turn the heat to a higher setting to help with the drying out process. However, remember to open the windows to allow the moisture in the air to escape. Using heat will evaporate the water into the air and the air will become humid and dense with moisture.

Consider using fans to circulate the air and speed up the drying process. Place the fans in such a way that the air is blown away and out rather than into the room. This will help to prevent the growth of mild and mildew.

Another option to speed up the drying out process is to use a dehumidifier. It’s important to close the windows and doors when using a dehumidifier so that it works properly. Keep an eye on the dehumidifier’s holding container and empty it as frequently as is necessary. Once the dehumidifier no longer extracts any moisture from the room, place it in another area of the basement and begin again.

You may need to call in a professional if your heating system sustained water damage. Most likely, your homeowner’s policy requires that it be cleaned by a professional prior to operating it again.

Tips for Avoiding Wind Damage to your Properties

Extreme winds brought on by tornados, hurricanes, thunderstorms, and winter storms can cause serious damage to property and may very well place you or others at risk. Don't wait until it's too late. Wind-proofing your properties is a smart way to prevent damage. Below is a checklist can help you evaluate your needs.

During high winds, wind speeds fluctuate and winds may change directions. This puts enormous pressure on all parts of a building. Keeping your house well sealed on the outside will prevent wind from getting into your home and causing damage. In addition, debris carried by high winds can penetrate your home, causing damage and possible injury.

Start at the Top
The roof is one of the most vulnerable parts of your house. The connection between the roof and walls must be strong enough to resist the "uplift" effect of strong winds. Have a building professionally inspected, and install specially designed metal connectors that are appropriate for your roof type (gabled or flat) and wall construction (wood or masonry).

Make sure the roof sheathing is properly installed. From the attic check to make sure the nails penetrate the rafters or trusses. You may need to renail some of the sheathing.

Protect the Windows and Doors
Windows should be protected to reduce the risk of damage or injury caused by flying debris and pressure changes. Here are some options: permanent storm shutters or temporary plywood covers. In the event of an emergency, permanent storm shutters can be quickly and easily closed to protect the windows. Temporary plywood covers are more economical, but are less convenient and attractive. Don't forget to cover any glass sliding doors, French doors, and skylights.

Check to be sure your entry door is secured with at least three hinges and a deadbolt security lock. Solid wood or hollow metal doors are more likely to resist wind pressure and flying debris.

Don't Forget the Yard
Trim the trees around your house that could pose a threat by falling or hitting your home. Put away any yard furniture, barbecue grills, tools, toys, and anything else that could become a flying missile. If you are planning to plant new trees in your yard, try to choose varieties that can withstand high winds.

Garage Doors
Garage doors (particularly two-car) are also vulnerable to damage from high winds. If installing a new garage door, be sure to get one that's designed to withstand high winds. For an existing door, there are fitted bracing kits available to provide additional support.

Web Based Property Managment Software

While there are many excellent accounting software programs out on the market today. The generic one size fits all application wasn't quite meeting the my needs as a property manager. Subsequently, I began the process of evaluating property based software and came across really great web source that reviewed many property software programs. You can visit www.thereibrian.com for a complete evaluation of property management software.

Many of these software programs offer a 15-30 day free trial. After reading all reviews, I chose a FREE web-based service called Rentec Direct. For a nominal fee you can upgrade your account for an enhanced version however the basic services that Rentec offers are outstanding. Set up for the units I have was very quick and user friendly. Once information is uploaded you can easily generate online reports that reflect profit and loss. Best of all since the software is web-based you have access to your files from any where you can get online. Additionally, you can set up tenant portals, so that your tenants can pay their rent online, check their account, and communicate with you online. Below is a description from www.rentecdirect.com

WHAT WILL RENTEC PROPERTY MANAGEMENT SOFTWARE DO FOR YOU?

*Full bank, property and tenant accounting to keep your record keeping simple and accurate.

*Automatic ACH (electronic draft) support to automate and simplify receiving tenant rent payments.

*Publish vacancies online, complete with pictures, details and pricing.

*Tenant Screening provides you the security of knowing the history of each tenant you place as well as if they have past challenges paying bills.

*Online file management allows file storage related to tenants or properties safely and securely online

*Manage other recurring transactions such as: utility billing, landscaping or supplemental fees you may charge your tenants and let the software automatically generate the charges whether you're at a computer or not.

*You'll be up and running quickly making good use of the software without the expensive training required of other property management applications. The software is so easy to use you'll be up and running in 5-10 minutes.

*Easily manage tenants, their accounting and settings.

*Online software access anywhere in the world for you or your tenants With a single click, print a complete tax report of expenses associated with one or all properties to hand to your accountant at tax time.

*Many management reports to show your property performance.

*At a glance stats and graphs of current and historical property performance.

*Tenants have a special login to the management software to view their balance, when their rent is due, and ability to place repair requests.


RENTEC DIRECT IS FREE!

When we say no risk, we mean it! All the basic functions necessary for a landlord or property management firm to manage rentals is included in our basic product which is free! We're not offering a time limited demo like everyone else, we're giving away the basic fully functional version of Rentec property management software for free. No obligation whatsoever. Our free version even includes our new file library to store and backup your important files online (online backup companies and desktop software charge for this, we include it at no cost). Take a product tour today to discover how valuable this software is for property managers / landlords.

News Article "Accepting Late Payments Can Land You in Court"

Accepting Late Payments Can Land You in Court

by Bill Gray

There are many reasons why you shouldn’t allow a tenant to pay rent late, but the legal implications must always be at the top of the list.

Unfortunately, by being the nice guy or gal, and accepting late rent payments, you might be establishing grounds for a Fair Housing lawsuit.

Last year, I sat in on a seminar given by Milwaukee landlord-tenant attorney Tristan Pettit, where I learned that case law has been established that says you cannot accept late payments from one tenant and not accept late payments from another.The Fair Housing Act makes it illegal to “set different terms, conditions, or privileges for sale or rental.” By accepting late payments from one tenant and not another, you may be violating the law.

Any trip to court can be precarious and expensive in terms of time and money. You can never be certain of what the outcome of a court case or dispute is going to be. Any good attorney will tell you that avoiding court altogether is always preferred.

To compound the issue of being sued for a Fair Housing violation, consider what you are doing to the terms of your lease by habitually accepting late rent. Let’s say your lease requires the rent to be paid by the third of the month. But for the last six months, you have accepted the rent on the fifteenth.

Suddenly, in the seventh month you put your foot down and demand the rent be paid by the third, but the tenant ignores you and continues to pay the rent on the fifteenth. In the eight month, you file for eviction when the tenant again is late with his or her rent.

If the tenant were to hire a savvy attorney to represent them, the attorney could easily argue that you had amended the terms of the lease by accepting the rent late the first six months of the lease. Not only could this force you to continue accepting the rent, it could cause a counter suit.

Enforce the terms of the lease and require that the rent be paid on time—from each and every tenant. Doing so may keep you out of court.

The information contained in this article is provided for informational purposes only, and should not be construed to be legal advice. Consult a local landlord-tenant attorney to discuss your specific situation.
The information contained in this article is provided for informational purposes only, and should not be construed to be legal advice. Consult a local landlord-tenant attorney to discuss your specific situation.

Email me your tenant screening and tenant debt questions.

Bill Gray

www.thelandlorddoctor.com

Bill@thelandlorddoctor.com

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