Posted by Teresa on March 4, 2011 under Landlord Tips | 
Sometimes landlords simply can’t fill a vacancy, despite market data that shows vacancies are low and would-be renters are finding it hard to find a place to live. Have you ever had a vacancy that should have been filled, but after many showings you have no bites?
Consider these reasons you’re having trouble filling a vacant rental:
Price: Have you checked the rents in your area lately? Perhaps yours is just too high for the number of bedrooms, bathrooms and amenities your rental property offers. Do your homework and adjust the rent if you have to. Try rentometer.com to compare your rent to others in your city—and even in your neighborhood.
Location: Is your rental property too far from public transportation and shopping? While there’s not much you can do to make a poor location better, you can promote other advantages of the location. Is there a park or walking and biking trail nearby? Is it a walkable neighborhood? What about a neighborhood market? Think about other factors you can educate potential tenants about. What would make you want to live there? And don’t expect the location to sell itself—that’s your job!
Utilities: Most tenants want cable and high-speed internet. Wireless is even better. If you don’t offer the latest and greatest technology, you could be losing tenants for that reason alone. Inquire with your cable and internet service providers to see what they can do to upgrade your property and bring it into the 21st century!
Looks: Take a hard view at how your rental looks from the outside and the inside.
- Does it look inviting?
- Are there dead shrubs outside and broken window blinds inside?
- Does it need a paint job?
- Are carpets worn out?
- Do the fixtures and lighting need an upgrade?
- If it’s been awhile since you spruced up the place, it could be costing you money as potential tenants turn it down.
Finally, when you’re showing the unit, ask potential tenants if they can picture themselves living there. It doesn’t hurt to find out what they’re thinking, and you’ll learn very valuable information. If they offer an objection, find a way to overcome it—and fill that vacancy!
Pre-screen all tenants as part of your standard application process. Background and credit checks will help ensure you rent to qualified tenants. For more landlord resources, including forms and information on tenant screening, turn to E-Renter.com.
Posted by Teresa on February 22, 2011 under Housing Trends |
The Obama administration recently revealed its proposal to reduce Fannie Mae (FNMA) and Freddie Mac (FMCC), the mortgage giants that have enabled homeownership for millions of Americans. The report offered three options for replacing the two agencies.
It also makes it clear that rental housing will remain a priority as more renters enter the market in coming years. In the white paper, the government recognizes Americans are giving up homeownership in favor of renting. With a record 37 million rental households and a possible 4.4 million additional by 2015, it’s not something that can be ignored—and the administration is not.
“Americans should have choices in housing that make sense for them and their families. This means rental options near good schools and good jobs,” the report states. It further indicates that finding ways to maintaining funding to the rental market will be “critical.”
One proposed action is expanding the Federal Housing Administration’s support to the multifamily industry, including developing programs to serve hard-to-reach segments, including the smaller properties that comprise one-third of all rental apartments. The report noted that half of renters spend more than one-third of their income on housing, while a quarter spend more than half; a commitment to affordable rental housing is indicated, although the term is not defined.
The National Multi Housing Council, a trade group, responded that reform is needed in the single-family sector, that Fannie and Freddie’s multifamily programs were not part of the financial meltdown and that “they are a vital capital source for the rental housing sector.”
Posted by Teresa on September 19, 2010 under Tenant Screening & Background Checks |
As we all wait for the economy to fully recover from recession, we’ve heard reports of landlords skipping over essential steps in the tenant screening process. Thorough tenant screening is one of the best investments a landlord can ever make—some suggest that it can help you avoid about 99% of the problems landlords have with their tenants. When prescreening tenants, don’t skip over two essential pieces of background checks: verifying tenant income and employment. 3 Reasons to Verify Every Tenant’s Employment and Income 1. Not all tenants tell the truth. Tenants reflect the whole of our society, and your potential tenants are a mix of honest, dishonest, professional liars and ex-cons. When they tell you where they work and how much money they earn, they might be telling the truth—or they might not. Verifying employment and income is the only way to know for sure. Landlord Tip: Be wary if the tenant insists you talk to a certain person at their place of employment—they could be directing you to a friend who is posing as the employer. 2. Having money doesn’t equal having a job. A nice car, expensive clothes and shoes and armfuls of jewelry can all be purchased on credit. A landlord we know was conned by a nicely-dressed applicant and signed a lease with her. Later, she found out that she had been laid off six months earlier from the employer she listed on the lease application. Making a quick telephone call to the employer would have avoided this situation. Landlord Tip: Look up employer telephone numbers yourself, either online or in the phone book. Some tenants will provide false information. 3. Keep your tenants safe from harm and your business safe from risk. Verifying income and employment helps you avoid renting to tenants involved in criminal activities. It’s easy to be impressed by a tenant with cash in hand to pay your security deposit and rent. But failure to verify a tenant’s source of income—with paycheck stubs, income tax returns (in the case of self-employed applicants) and phone calls to his or her employer—is almost asking for trouble to move into your rental property. Landlords who fail to screen properly have been held liable for harm suffered by neighbors or other tenants. Landlord Tip: Be prepared to submit a written request for information. Many employers will not provide salary info over the telephone. Don’t be in such a hurry that you can’t invest the time necessary to obtain complete information. Prescreen Tenants for Complete Peace of Mind The best way to be sure you’re renting to a qualified tenant is to prescreen all rental applicants. 100% online tenant screening is easier than ever — and it can reduce your risk!
Posted by Teresa on August 9, 2010 under Landlord and Tenant FAQs, Rents and Deposits |
When a tenant informs you that they will not be renewing their lease, provide them with move-out instructions. Written notice of your expectations is always a good idea when it comes to dealing with tenants.
What Should Move Out Instructions Cover?
- The first item should be that a written move-out notice is required from the tenant. This helps clear up any possibility of confusion over dates and terms of the move-out.
- Ask the tenant to provide an address to which you can return the security deposit, after deducting legitimate expenses for repairs or cleaning.
- Inform the tenant you will be contacting them to conduct the move-out inspection. Let them know this is not optional: you will need the tenant to be present to initial and sign the inspection list.
- Let the tenants know that according to the terms of the lease, the unit must be returned to the same condition it was in when they moved it. If they’ve painted a different color on the walls, they need to repaint it. If they don’t clean the unit thoroughly, you can hire cleaners and deduct the fee from the tenant’s security deposit. Any damage repair costs will also be deducted from the deposit.
- If there is a fireplace in the unit, let tenants know they must have it professionally cleaned before moving.
- Tenants might not know that the last day of the lease is the day they must be out. Inform them that any extra days will be charged a prorated amount of their monthly rent. To calculate daily rent, divide the total rent by 30.
- Ask the tenant to set the thermostat at whatever temperature you prefer.
- Utilities need to be transferred to you or turned off, according to what works for you. If ther is another tenant lined up, then obviously you don’t need to turn them off. Let the tenant know to inform the utility companies, including gas, electric, cable, water and sewer, of the last day they will be in the space. Warn them not to have the utilities transferred or turned off until the end of the last day of their lease.
- Let the tenant know where to leave any extra trash and where to drop off the keys.
One thing landlords can count on is that eventually, all of their tenants will move out. Whether it’s a good thing or bad, it can be a smooth process when you’re organized and approach each move-out the same way.
Posted by Teresa on August 5, 2010 under Housing Trends |
Personal finance news site WalletPop.com reports today on the ten worst places to live in the U.S., based on (among other factors) the unemployment rate, climate, health data, crime rate and number of foreclosures.
And recently, DailyFinance.com shared how 24/7 Wall St. combined unemployment rates with foreclosure figures for the first half of 2010 to come up with the ten worst real estate markets in America.
How do the two lists compare? As expected, California has a number of entries on the “worst real estate market” list, but only two for the worst place to live list—taking the number one and number six spots.
In this town, even the cemetery is bankrupt
At the top of the “you don’t want to live here” list is El Centro , CA, because it has the highest unemployment rate in the country—at 27.5%, it’s just ahead of Yuma, AZ. Of course, the city’s location just over the Mexican border means the unemployed are mostly field laborers, with fluctuating employment rates typical for that sector.
Los Angeles made the list because of its terrible pollution, but is cited for its awful traffic problems too. Perhaps the two are related?
On the top ten worst real estate markets, California can boast numbers three through seven, with Modesto, Merced, Riverside, Stockton and Vellejo, respectively. But that’s not all—Bakersfield takes the number nine spot, too. Yes, California is a mess, with state budget cuts helping to drive unemployment rates in these cities to between 15.7% and 17.3%.
What doesn’t happen in Vegas? Jobs!
Las Vegas also shows up on both lists: it’s number one for worst real estate market, and number four for worst city to live. With neighborhoods standing completely empty and a 12% foreclosure rate for 2009, home prices continue to fall. Paired with an unemployment rate of 14.5 %, there’s not much happiness going around in Vegas.
Over on the east coast, Florida is represented on both lists; with Miami number nine in worst places to live; Cape Coral-Fort Myers and Port St. Lucie showing up as numbers two and ten for worst housing markets. Miami is right behind Detroit on Children’s Health magazine as worst place to raise a family, due to crime, education, economics, cultural attractions and health issues. On top of that, there have been nearly 40,000 foreclosures in Miami. Just up the road, Port St. Lucie’s high unemployment rate at 13.4% and foreclosures at 3.05% make for one tough real estate market.
Lists like these can work to a real estate investor’s advantage. Some experienced landlords (with nerves of steel) have experienced success by purchasing investment property in down markets. Reports of $10,000 homes in Detroit, MI (number three on the list of worst places to live) are common. And as the auto industry begins its rebound, the up-and-down cycle could be turning up again. Smart investors tread carefully into depressed markets, with eyes wide open, looking for deals.
Posted by Teresa on August 4, 2010 under Landlord and Tenant FAQs, Landlord Tips |
When rental units sit empty and you’re starting to feel desperate, it can be tempting to lower your standards and sign a lease with the first tenant who shows you the money. Experienced landlords might remember doing just that—and living to regret it.
Rather than leasing to a tenant who doesn’t meet your qualifications, try to figure out why your units aren’t renting. Fix those issues and you might find the right tenant will come along sooner than you think!
10 Possible Reasons Your Rental Units are Vacant
1. The rent is too high. Check the market. Do your homework. In most markets, tenants have lots of choices. Reducing your rent is better than collecting zero rent.
2. The condition of the rental is not acceptable to good tenants. Does it look pristine or shabby? Are the railings solid or wobbly? Does the property need a coat of paint? New lighting fixtures? Ask yourself if you’d pay your rent to live there.
3. You are letting good tenants walk away. If you have a qualified applicant, don’t let them get away! Close the sale.
4. You’re not marketing the property enough. Expand your reach. Create appealing ads with great descriptions and get them out there. Put signs on the property (make sure they’re in good shape). Put arrow signs on the corners if it’s allowed.
5. The right tenants aren’t seeing your ads. Who is your ideal tenant? Where do they hang out? Whether it’s the laundromat down the street, a nearby coffee shop or Craigslist, put your ads where your best tenants will actually see them.
6. You’re not making it easy for potential tenants to reach you. Do you have a website, email and cell phone? Does your phone plan have texting? A lot of young people use texting over talking, and Gen Xers and Baby Boomers are more likely to email.
7. Your building or property manager has a bad reputation. If your current tenants are not happy with either, they are probably telling others. Ask them.
8. Your competition is giving tenants a better deal. Are there “free rent” signs on nearby properties? Find out what your competition is doing and match or beat them.
9. Your property management company (is it you?) is not doing its job. Take a hard look at how successful the rental management has been. Too many vacancies are not acceptable. And is you decide to replace them, make sure you put up “under new management” signs on your property!
10. The property looks unsafe. Visit your properties at night. How is the lighting? Are there people hanging around? Do shrubs and trees cover the windows? Fix these problems for your current tenants and potential tenants will feel safer, too.
If none of these factors apply, then you need to do some investigative work. Potential tenants won’t tell you why they decided not to sign your lease—they just go away. Follow up with the next interested, qualified tenant who disappears. Find out why they don’t want to live in your rental property. Poll your current tenants to find out what they like and dislike about living there. You need to know what’s wrong before you can fix it!
Posted by Teresa on March 5, 2009 under FCRA Issues, Tenant Credit Checks, Tenant Screening & Background Checks |
Steering Clear of Problem Tenants
Managing rental property is no easy task. Why make it harder than it already is? After all, your properties are only as easy to manage as the tenants who live in them. Employing best practices consistently on each and every rental is the key to managing income property smoothly—and avoiding discrimination issues, too. One way to avoid trouble is to check potential tenants’ credit and criminal history.
Is it Legal to Check a Tenant’s Credit History?
Absolutely. Renting property brings monetary and legal risks to the property owner. You need to mitigate risk wherever you can, and checking credit history is a great way to do so. As part of the rental application, your prospective tenant can agree to a credit check with a signature. You’ll know for sure if the applicant is a good risk—or one to stay away from. Even a tenant with a great credit history can miss paying rent on time—but again, the idea is to lessen that risk by choosing the best possible tenant.
Remember that all information you learn from a credit report must be held in strictest confidence, and never shared with third parties. Your applicant may have a right to the report—check your state’s guidelines and the Fair Credit Reporting Act (FCRA) to be sure you are compliant. If you reject an applicant for credit reasons, you must advise them in writing. Consider having a reputable, professional tenant screening service handle your background screening to ensure you are within the guidelines of the FCRA.
What Will a Tenant Screening Credit Check Tell Me?
The credit check will reveal how promptly the applicant pays credit cards and loans, plus any outstanding judgments or bankruptcy filings. Look for a good record of responsible finances, and see if the applicant appears to be living beyond their means. Conservative spenders will be more likely to survive an emergency or job loss without major upheaval—like breaking your lease agreement.
The credit check will also reveal previous addresses—compare these with the application and investigate any inconsistencies. There could be a simple explanation—or the prospective tenant could be hiding something.
Is it Legal to Check a Tenant’s Credit History?
While you don’t have a legal duty or obligation to do so, you may certainly include criminal history in your tenant screening process. Keeping your property, other tenants, and yourself safe from potential damage is well worth it. These reports typically cover records at the county or national level; different reports are available in different states. Check with a professional tenant screening company for details.
The important thing to remember is to be consistent: screen all applicants in the same way, each time. Making an exception could be reinterpreted as discriminatory—and it could literally open your doors to potential problem tenants. A clear policy of running criminal background checks on all applicants is the best protection for you, your other tenants, and the community.
Next Post: Renewing Leases
Posted by Teresa on March 1, 2009 under General |
Verify Before You Hand Over the Keys to a New Tenant
As Landlord, You’re in Control
As a landlord, you know only too well that you cannot control your tenants’ behavior, or that of their guests. You can’t control the occasional damaging wind storm or unexpected tree limb on the roof. But in the beginning, at least, of the landlord/tenant relationship, you are in complete control: as long as you comply with all applicable housing laws, you alone decide who is approved to rent your property. There are a number of factors you may use to decide whether to reject an applicant. Today we’ll look at employment and income.
Smart Landlords Verify
The rental application should contain the following information that you must confirm prior to approving the applicant: current and previous addresses, current and previous employment, income, Social Security and driver’s license numbers, plus personal and rental references. You can do this yourself or with a professional tenant screening service.
Verifying Employment and Income
You can simply call the employers listed on the rental application; however, many employers are hesitant or have policies against releasing information over the phone. You may need to request verification in writing. It’s not a bad idea to have this information in writing as a matter of procedure. You want to be sure your prospective tenant is currently employed, and has a reliable work history.
You can also ask the applicant to provide proof of employment and income, such as pay stubs. Don’t neglect to verify these with the source of the income to be certain they have not been falsified—or even fabricated completely. For sales or commission-based income, review at least six months worth of paystubs, or have the applicant supply you a copy of their previous year’s tax return. Ask for verification of any other sources of income to be used toward rent payments, such as child support or alimony. If any stated income cannot be verified, you do not have to include it when determining minimum income requirements.
When to Be Suspicious
Be wary of business phone numbers supplied by the applicant if they don’t sound like legitimate businesses when you call. Likewise, be suspicious if the applicant insists you speak only to a certain person—they could be a real HR clerk, or they could be a friend who will supply false information. Certainly, legitimate businesses don’t always answer the phone properly, but let your intuition be your guide—it will tell you whether you need to dig a little further.
You should also be on guard if your prospective tenant has plenty of cash for security deposits and first month’s rent, but no verifiable sources of income. If income is inconsistent with obvious spending patterns, be cautious. Cash without proof of income, or extreme spending on a low income could indicate illegal activity. You don’t want to have problems down the road with either a tenant who can’t pay rent regularly or with criminal activity on your property.
Prescreen Tenants for Complete Peace of Mind
The best way to be sure you’re renting to a qualified tenant is to prescreen rental applicants. It’s easier than you think to do this online —plus, you’ll reduce your risk and your stress level!
Next Post: Checking Tenant Credit and Criminal History
Posted by Teresa on February 25, 2009 under Fair Housing Act, Landlord Tips |
The Fair Housing Act
You are required to comply with The Fair Housing Act (FHA) if you rent private housing, housing that receives Federal financial assistance or State/Local government housing. Essentially, if you rent any property whatsoever, you must follow the laws established under the FHA.The FHA prohibits discriminating on the basis of race, color, religion, sex, national origin, and family status. It also prohibits discrimination on the basis of disability. Under this section, owners of rental properties are required “to make reasonable exceptions in their policies and operations to afford people with disabilities equal housing opportunities.”
Who is considered disabled?
The Americans with Disabilities Act (ADA) defines an individual with a disability to be
“a person who has a physical or mental impairment that substantially limits one or more major life activities, a person who has a history or record of such an impairment, or a person who is perceived by others as having such an impairment.”
Pretty broad definition! And, the ADA does not specifically name all the impairments that are covered (it’s probably a very long list).
Making exceptions
So, if you’re a landlord, you are required to make “reasonable exceptions” to ensure disabled folks are not discriminated against. For example, even with a “no pets” policy, you may be required to make an exception to accommodate a service or companion animal. While a dog wearing a special red “service animal” vest or a wheelchair-pulling canine are pretty obvious, other companion animals are not so easy to spot.
You might think a deaf tenant would always be allowed to keep a dog to help out when the doorbell or phone rings, or the fire alarm is activated. Actually, a court decided that a dog owned by two deaf women had never been trained to assist them in any way, and therefore was nothing more than a “house pet”—and the landlord won its case.
[Bronk v. Ineichen, 54 F.3d 425 (7th Cir.1995)]
In another case, a dog with no training as a service animal was found to be therapeutic solely because of his “innate qualities.” The tenants were allowed to keep him. In still another case, a mentally disabled tenant was not allowed to keep two birds and two cats “for companionship.”
[Auburn Woods Homeowners Ass’n v. Fair Employment and Housing Commission, 121 Cal.App.4 1578, 18 Cal.Rptr.3d 669] [Janush v. Charities Housing Development Corp., 169 F.Supp.2d 1133 (N.D. Cal, 2000).]
What’s a Landlord to Do?
Because court rulings on this topic are as varied as the genetic makeup of a pound puppy, it seems there are no hard and fast rules to follow. Consider the following general guidelines, and remember: this is not legal advice! Every jurisdiction is subject to individual case law, so always seek the advice of your attorney for specific questions on your local laws, as well as FHA and ADA.
The law protects both physically and mentally disabled individuals. Don’t assume a person is not disabled based on appearance.
Not all trained service animals wear special vests or harnesses. Don’t assume a prospective tenant’s animal is not a service animal based on appearance.
Highly trained service animals, as well as companion animals who might not be specially trained, are not considered “pets.” Therefore, a “no-pet” policy would not apply.
Emotional support animals provide just that service—emotional support—to their owners.
It is reasonable to ask for proof of disability and need for a service/companion animal from a tenant’s physician or other health care provider in cases where the disability and/or need is not obvious.
It is reasonable to require all animals living on your property to be properly vaccinated and to follow any and all rules regarding leashing, waste disposal, etc.
While you cannot discriminate under the FHA, you are perfectly within your rights to screen all prospective tenants’ background and credit history.
Sources: Americans with Disabilities Act, Fair Housing Act, Fair Housing Institute
Next post: Verifying Tenant Income
Sometimes landlords simply can’t fill a vacancy, despite market data that shows vacancies are low and would-be renters are finding it hard to find a place to live. Have you ever had a vacancy that should have been filled, but after many showings you have no bites?
