$2.88M Baseball Cards & Rents: Prices Too High?
“’It’s no good, it’s no good!’ says the buyer- then he goes off and boasts about the purchase.” (Proverbs 20:14)
The ex-NFL football player, Evan Mathis, made headlines earlier this year when he sold his mint condition, 1952 Mickey Mantle baseball card for $2.88M. $2.88M! That’s $2,880,000.00 for a small piece of cardboard for those scoring at home. It seems to be a lot of money for something that doesn’t love you back, you can’t live in or drive, and really shouldn’t eat.
When I collected baseball cards as a kid, I would have died to have a card like that. I thought I was going to make it big with my 1986 Topps Dwight Gooden card (even though the 1984 was the one to have), 1986 Donruss Jose Canseco “Rated Rookie” card, and the 1988 Kevin Seitzer Fleer rookie card. Alas, my dreams of million dollar baseball cards were undone by mass production, drugs, steroids, and fading play. The value of even my best baseball cards for consistent players on the straight and narrow are worth very little now, even 30 years later.
But somehow Evan Mathis got someone to pay him $2.88M for one of his. Wow!
As a Charlotte property manager, I’ve been seeing a real estate version of this play out in the past couple of years. Rents have been going up steadily almost everywhere which has skewed the old values of what particular houses in different areas would rent for.
For example, we had a rental house that rented in the $800 range in a non-desirable area last year. A new owner took over the property, did some improvements, and wanted to rent it in the $1,300 range.
We talked about it and the conversation went something like this:
Owner: How about renting it at $1,350 a month? As the expert, what do you think?
Me (expertly replying and wearing my glasses): The data I just pulled up would not support that price. It looks like a much larger house rented for $1,150. There has never been a house in that area that rented that high…
Owner: Hmmm… well list it at $1,350 anyway.
Me (expertly): Okay.
Ultimately, the house rented for $1,350 and was on the market less than a week. So much for the “expert” opinion…
In hot markets, it’s really tough to gauge how much properties will actually rent for. Beauty is in the eye of the beholder and it gets exacerbated by perceived scarcity.
Years ago, I made the decision to adopt the rental pricing policy of “I recommend, but the owner can ultimately pick the listing price.” I go off of data and will typically recommend what I feel the existing market pricing will allow. However, that’s not always right.
Evan Mathis could have heard that expecting to get $3M for his 1952 piece of cardboard with Mickey Mantle’s photo on it was lunacy. But someone, somewhere is bragging about buying it. And he’s bragging as well!
Happy Landlording!
Learn MoreWhy You May Want to Reject Cam Newton as Your Next Rental Tenant
“I could be wrong on him (Lamar Jackson), and I hope I am. I hope he succeeds as a quarterback. But I also go back to, if he’s going to miss, why is he going to miss. You don’t make a living as a quarterback running in the National Football League,” Polian said. “Cam [Newton] is the exception. You try to take exceptions and say they’re the rule: they’re not. Bill Parcells taught me that a long time ago. Parcells often said, if you have one or two exceptions on your team, you’ll end up with a team full of exceptions. You can’t make a living with those guys. You get one every now and then but it’s hard to do it.”
(Former Indianapolis Colts General Manager Bill Polian on ex-Louisville quarterback and current 2018 NFL draft prospect, Lamar Jackson)
Predicting the success rate of college football players coming into the National Football League is hard. It’s so hard, in fact, that talent evaluators who do this for a living at the highest level are frequently wrong; and they don’t get fired because everyone expects them to be wrong! The key in their profession is to be right more often than they are wrong, especially on the most important and expensive positions, like quarterback.
Bill Polian, quoted above recently, is in the NFL Hall of Fame largely because he evaluated talent better than his peers. He makes the point that Lamar Jackson is extremely talented; he won the Heisman Trophy 2 years ago as the best player in college football! But much of his productivity was based on his electric running of the football. His passing, however, is not overly accurate and great accuracy is typically what makes quarterbacks successful in the NFL.
Now the Carolina Panthers quarterback, Cam Newton, is an exception. He is an awesome quarterback (2015 NFL MVP- go Panthers!) but is not an overly accurate passer. But his ability to run is what gives him the edge over other more accurate quarterbacks.
Polian just doesn’t believe that exceptions are a solid way to build a football team.
I believe it is the same way with rental tenants. We screen prospective tenants on credit scores, criminal background, income, and past landlord reports. Sometimes tenants have some poor results in one or more of these areas. This can be understandable; sometimes bad things happen to normally reliable people and an argument can be made that they shouldn’t be unacceptable to landlords based on an unfortunate life occurrence (job loss, illness, divorce, etc.).
However, should a prior eviction or bankruptcy be ignored? How about bad credit or a non-positive landlord report? Isn’t it possible that the prospective tenant is an exception and will actually be a great tenant going forward?
Yes, it is possible. And we’ve had many tenants who fit this mold over the years.
But it is also true that the tenants we’ve had that had great credit scores and landlord reports almost always are great tenants for us. And the ones that we’ve had issues with seem to have had some areas that they were less than stellar in when we’ve ran their applications.
Property management can be really easy when the houses are filled with great tenants who care for the homes and pay their rent on time. Conversely, it can be really difficult when they don’t.
Cam Newton is an exception that worked out well for the Panthers (and hopefully Lamar Jackson will be one too in the NFL). But counting on exceptions to work out well to fill the entire team is a tall bill (so says another Hall-of-Famer, Coach Bill Parcells).
Be careful on how many exceptions are approved as tenants in your rental homes. Cam worked out well, but no one was positive he would when he first got drafted. We all want to give exceptions the benefit of the doubt, but it is a far riskier play than sticking with safer, traditional candidates.
Happy Landlording!
Learn MoreInterview with the Rental Late Fee Police Commissioner
“The lease is the lease. If you don’t like it, don’t sign it.”
(RLFP Commissioner Hank Smith)
Moderator: I have the privilege of being here today with Hank Smith, the longtime rental late fee police commissioner. He and his team at the Rental Late Fee Police (RLFP) are in charge of enforcing late fees on monthly rental payments. Most standard leases dictate that rent is due on the first of each month and is considered late if not received by the fifth of the month; the late fee amount is usually 5% of the total rent due. The RLFP makes sure that this late fee is enforced. As you can imagine, his job doesn’t help him win any popularity contests…
So… Mr. Smith, or Hank…
Hank: Please refer to me as Commissioner… it’s a title I’ve certainly earned.
Moderator: Of course, Commissioner. My apologies…
Hank: I’m never short on getting apologies, especially on the 6th of each month!
Moderator: OK… we’ll get right to it then. Some people have called you and your policies “heartless” and “ruthless”. How do you respond to that?
Hank: I have a heart and I don’t know any Ruth’s. So, “no” and “yes” is how I’d respond to that.
Moderator: I think that they mean you are unfair and aren’t very nice about it.
Hank: Well, I’d certainly take issue with that! The boys & gals at the RLFP are about as fair as it gets. If your rent is paid by the 1st, you’ll never hear a peep from us. Even if you wait until the 5th, there will be nary a word. Now when the 6th rolls around, that’s why we’re employed, my friend. We are called to spring into action. Nobody likes giving a quarter to the librarian either.
Moderator: I think part of the discontentment stems from the lack of grace on being 1 or 2 days past due and still incurring the whole late fee.
Hank: That’s the most ridiculous thing I’ve ever heard! 1 or 2 days late? 1 or 2 days late is actually 6 or 7 days late! How many days do you want? 10? 15? How about 30 days? Or how about just paying whenever you feel like it? People like you are what is wrong with this country!
Moderator: Easy, Commissioner… As I’m sure you can empathize, don’t shoot the messenger.
Hank: Fair enough. Sorry about that… I get a little fired up sometimes. But, I mean, we’re already giving you a grace period of 5 days past the real due date of the 1st of the month; that’s 120 hours, 7,200 minutes, 432,000 seconds… No matter how you cut it, that’s a lot of grace! You want more grace than that, then pray to Jesus- he’ll give you all you want! But the RLFP will only give you 5 days- sorry.
Moderator: But sometimes the check gets lost in the mail and there are holidays to think of…
Hank: If you’re looking for me to defend the postal system, you’ll be waiting a long time. But why even risk mailing a check? There are so many other instant payment options out there- BillPay, direct debit, direct deposit, on-line payment, etc. I mean, if you’re hungry, you don’t need to wait for a chicken to show up on your front yard, just drive to Chick-Fil-A!
Moderator: Interesting analogy… But why do property managers and landlords want to get rich off of late fees?
Hank: Get rich? Is that a joke? Check out what kind of cars your property managers and the RLFP are driving versus what our other real estate brethren are driving (with no late fees, mind you). You need a whole lotta late fees to add up to upgrade from a Corolla to a Mercedes.
Moderator: Then why charge late fees at all?
Hank: A. I don’t charge them- I’m just enforcing the lease. B. If there is no penalty for being late, then who knows when the cows will ever come home? I mean, landlords need to make their mortgage payments at some point. Very few of them are just stuffing the rent dollars into their pockets.
Moderator: Commissioner, thank you for your time. Any last words for our audience?
Hank: Great! I’m outta here… I can’t believe they make me do this PR stuff- what a load of hogwash…
Moderator (interrupting): You’re still on the air, Hank… Any last words?
Hank: Oh… Pay your rent on time & Happy Landlording!
Learn MoreChristmastime in Charlotte Real Estate: You May Be Sorta Rich
“Holy Moley! I’m sorta rich!”
(Long-time Charlotte real estate investor)
I was surfing the Charlotte MLS doing some “research” this morning (aka wasting time looking at home values in neighborhoods I’ve worked in) and was truly amazed. I can’t believe how much Charlotte properties have shot up in value in terms of both rental and sale prices!
Here is some background on where I’m coming from. I started working in Charlotte real estate in 2003 and saw a hot market until about midway through 2007 when the mortgage market (and our economy) was decimated. This caused home and rental prices to drop until there was a market resurgence 5 years later in 2013. Rental and sales prices have been on a consistent upwards trajectory since then.
However, even before 2008, relatively inexpensive Charlotte investment opportunities were abundant. What did you want? “Starter homes” from $80-$120K were plentiful, but so were tons of homes in less desirable areas that could be had for $10K – $60K. And then in a bad market from 2008-2012, really great deals were there for the taking if you had money and really good credit.
When I look at the market now in 2017, all of the Starter homes have climbed to $150K+ and they all rent north of $1K. The $10K – $60K home market is gone. When I searched for those houses in the MLS today, there were 6 available (the lowest being around $40K and all being sold “as-is”- likely meaning they need a lot of rehab). There are only two (2!) rental homes under $900 available in Charlotte as of this writing. So putting two and two together, these formerly valued homes of $10-$60K are probably now renting for over $900/month. Hmmm…
For full disclosure, I am only using data from the Charlotte Multiple Listing Service (CMLS); I’m sure there are many houses that are for rent that do not list them on CMLS. But the 7,000+ Realtors in Charlotte do list their properties on it, so it is a good (and regularly cited) source of information. And the numbers I listed are for the City of Charlotte only and not the surrounding towns which would add some additional lower cost housing supply.
But still…
Only five years ago, I remember seeing several Charlotte houses in the $10K range; some of which were in the now hot “North End” district. I had people wanting to sell some 2 BR/2 BA condos for $30K that were 5 minutes out of Uptown Charlotte. I was “too savvy” of an investor to go for those deals!
Now you are a winner if you bought at those prices. If you are holding them, you’ve got a nice equity build up and a great rental cash flow. And if you sold them, you made a nice chunk of change. Well done!
In conclusion, if you bought any real estate in Charlotte prior to 2013, you may want to take a fresh look at your portfolio. You may be sorta rich.
Merry Christmas & Happy Landlording!
Learn MoreGood or Bad Home Warranty Company: Who’s Taking the Call?
“My mom always said life was like a box of chocolates. You never know what you’re gonna get.”
Forrest Gump
I like to play basketball at the local recreation center. I often wind up with “Jim” on my team which I’m ambivalent about (and don’t ask Jim what he thinks about having me on his team…). What I mean is that some days, having Jim on my team is a pleasure. He’s a virtual scoring machine; he just doesn’t miss any shots! I feed him the ball and just watch him go to work. We’ll call that “Good Jim”.
But then there is “Bad Jim”. I’m not sure if he has a split personality, or if he and his wife have an “on again/off again” relationship, or what, but other days he just doesn’t have it. He is disinterested, doesn’t play any defense, passes up easy shots, and turns the ball over constantly. Frankly, it’s disheartening. I feel like we are destined to lose when Bad Jim is on my team.
Do you want to know what reminds me of Jim? Home warranty companies. Some of our Charlotte property management clients utilize them to handle their repairs.
For the uninitiated, home warranty companies charge owners an annual fee (usually around $500) to handle any repairs. So when tenants have an issue, we (or the tenants) call the home warranty company, pay a service call fee (usually $50 -$100), and they will send vendors to fix any major component or appliance issue in the home (including, if necessary, the replacement of them) that are due to normal wear and tear. It doesn’t sound like a bad deal, especially for an older home.
But, like Jim, there is “Good Home Warranty Company” and “Bad Home Warranty Company”.
When Good Home Warranty Company is on, the vendor they put us in touch with gets back to us right away, schedules with the tenant, and takes care of the issue. It can be a good experience (though it makes it difficult to establish any type of service record with a particular company as their vendors change often).
But when Bad Home Warranty Company shows up, it makes it really tough on the property management company and the tenants. We recently had a refrigerator that took around 35 days to get fixed from the initial call(!) and an air conditioning issue that took a week to resolve (a long time to put up with excessive heat in the South during the summer!). The problem is that the home warranty companies have a vendor list and they send you one that you have to work with (and some are not so reputable). Sometimes these vendors call you back right away and other times they wait for days. As a property manager, it’s tough to push vendors you don’t know and have no prior relationship with.
Fortunately, 95%+ of our clients do not use home warranties. It allows us to use our own vendors who we have worked with for years; we use them because all of them care whether our tenants have to spend the night without air conditioning or don’t have a working stove to cook with. I think it’s important to have strong teammates who you know consistently have your customers’ best interests at heart.
Jim is a nice guy, but just not someone I like to have on my basketball squad because he’s too erratic; I never know if Good Jim or Bad Jim is going to show up at the gym. I feel the same about using a home warranty company. Not knowing whether Good Home Warranty Company or Bad Home Warranty Company is taking the call makes either of them difficult to rely on.
Happy Landlording!
Learn MoreHigher Rental Rates Could Be a Problem for Landlords?
It’s been a busy season for property management in Charlotte. The market is hot, activity is high, and rental prices continue to escalate.
So this sounds like good news in our arena! Higher rents, bigger profits for landlords, and faster turn-around times to fill rental homes is the new normal. Property managers are looking great! Everyone is happy!
Well, maybe not everyone. Tenants are seeing rents go up dramatically and they generally aren’t making much more money to offset the increase. This is really making some of our traditional tenant screening criteria, like debt-to-available-credit and rent-to-income ratios, go off the charts of even marginal acceptability. Truthfully (and this comes from screening a lot of applicants over the past few years), many of the applications didn’t have great ratios to begin with then. But as rents have moved up, things have begun to look even worse. Example:
Tenant makes $3,500/month. Old rent was $900/month and the rent of the new house they want is $1,250. Credit card debt is $8K out of $10K available.
For the rent to income ration:
$900/$3,500 = 26% (pretty good- we try to keep it around 25-33%)
$1,250/$3,500 = 36% (marginal)
But the real kicker is more of a common sense question. If the prospective tenant isn’t living within their means with almost maxed-out credit cards with a $900/month rental rate, what happens when the rent goes up $350/month?
Some landlords might say, “So what? I’ve got enough problems of my own. Let them deal with it.” But I’m reminded of a quote from the billionaire John Paul Getty:
“If you owe the bank $100, that’s your problem. If you owe the bank $100 million, that’s the bank’s problem.”
So if we slightly revise this for the Charlotte property management genre:
“If your tenant’s car breaks down, your tenant has a problem. If your tenant is living paycheck-to-paycheck and has no cash reserves or available credit and his car breaks down and he can’t make rent, that’s the landlord’s problem.”
So what’s the answer? Well, I actually have two for you, and you won’t like one of them. In fact, I’ll put it second so you would read a little longer before abandoning this blog.
- Screen a lot of tenants and don’t compromise your standards. However, this is easier said than done. When your rental home is sitting empty and you already have done 20 showings that generated 10 applications and you haven’t accepted any, you’re tired because it’s a lot of work. And by the way, expect angry phone calls and e-mails because prospective tenants DO NOT like being turned down.
2. (Gulp) Price the rental house at the lower end of the market. I know, I know- I’m hearing it already:
“But, Brett, that’s heresy!! I’m here to make as much money as possible! Do you understand how investments work? I’ll give to charity on my own! Top dollar or new property manager!”
That’s harsh.
We recently had a rental home where we ran through 7 relatively bad applications in a few weeks. We were priced near the top of the rental rates in the area. We lowered the rent $45.00 and received two great applications that were both easily approved. Now they lovingly share the house together (kidding- we sadly had to turn one away). Good tenants find good deals.
When I’m running comparables on rental properties, it seems like the large institutional investors always have filled their properties for the highest rental rate (by a good margin). It’s seriously impressive and I almost feel like less of a man because I wouldn’t even attempt some of the rental rates they have asked for (and gotten!).
But, being that some of them are public companies, they had to release their occupancy and eviction rates to their investors. They had a 25% eviction rate (1 out of every 4 tenants!). That’s really high. Evictions are expensive. Their model works because they can spread these expenses over thousands of units at higher than market rents. However, this wouldn’t work well economically (or emotionally) for the typical landlord who owns south of 5-10 units. One eviction can really hurt.
Higher rental rates are limiting the “safer” tenant pool. Screen wisely and (at least think about) keep the line at the rental rate.
Happy Landlording!
Learn MoreRental Home Marketing: Kim Kardashian or Jennifer Lawrence?
“There are pitfalls, lack of privacy, loss of privacy, and that’s not for everyone. For me, I can handle it.” Kim Kardashian (60 Minutes, October 2016)
“I teeter on seeming ungrateful when I talk about this, but I’m kind of going through a meltdown about it lately. All of a sudden the entire world feels entitled to know everything about me, including what I’m doing on my weekends when I’m spending time with my nephew. And I don’t have the right to say, ‘I’m with my family.’ … If I were just your average 23-year-old girl, and I called the police to say that there were strange men sleeping on my lawn and following me to Starbucks, they would leap into action. But because I am a famous person, well, sorry, ma’am, there’s nothing we can do. It makes no sense … I am just not OK with it. It’s as simple as that. I am just a normal girl and a human being, and I haven’t been in this long enough to feel like this is my new normal. I’m not going to find peace with it.” Jennifer Lawrence (Vogue, September 2013)
So, fame is a mixed bag. So many people work to be rich and well-known, and then realize they just want to be residential property managers (OK- not true- but it sounds like Jennifer Lawrence may potentially be convincible if we were able to get her at her lowest point).
But who cares about us? What about our rental properties? Should they be like Kim Kardashian, “handling” (if “handling” and “relishing” now mean the same thing) the pressure of being well-known? Or like Jennifer Lawrence, shunning the spotlight?
In Kim’s world, our property manager is a marketing dynamo! The rental property is on every website imaginable! We see people using our marketing ad as a screen saver. The magazine racks at the grocery store have publications with our property in there! #502THEMainStreetCharlotte is trending and its master bath has its own Twitter handle! Strangers are liking our home on Facebook and we’re getting rental inquiries from abroad! Strange men are following our employees to Starbucks to get the inside scoop (“It even has dual vanities??? Crown molding! I couldn’t even tell from the revealing Instagram photos!”)! The management office looks like it is having a telethon.
In the J Law (as the insiders refer to her as) world, the rental property would be left alone and no one would even know it was available.. “Shhh… it’s a pocket listing, I think.” The only way to find it is to do an exact address search on www.BDFRealty.com (and if you mess up on spelling or spacing, you’re probably out of luck…). Digital tumbleweed blows through your rental ad’s corridors.
So the Kardashian marketing method, though unnecessarily audacious, is probably the best plan to get a good renter quickly. But what about if your rental marketing is producing the privacy J Law craves and is your new normal?
Try these things:
- Google “rental homes in your town” and post the rental ad on the top 3 websites that allow you to do so.
- Get the property on the local MLS that Realtors use
- Put a sign up in the yard
- Post the rental to your social media accounts
Here’s a bonus: make sure your property maps correctly on MapQuest and Google Maps. We’ve occasionally run into some J Law results in our marketing, and upon some research, realized that the mapping companies had the rental property showing up on an ISIS air field (OK- not really- but you get the point).
“There’s only one thing in the world worse than being talked about, and that is not being talked about.” Oscar Wilde
Keep up with the Kardashians and Happy Landlording!
Learn More
Trump’s Cabinet Means You Should Invest in Charlotte Real Estate
The stock market will always go up eventually. Historically, it keeps happening. Most wealthy people (aka the people who make the rules- check out Trump’s cabinet of billionaires) have much of their wealth tied up in corporate ownership (stocks). It’s almost a sure thing. If the stock market crashed and stayed down permanently, our country would be in mayhem. And the dollars under the pillow and gold bars stashed in the attic wouldn’t mean much. Food would be the main currency.
So why do investors get fearful when the stock market goes down? It will go back up, right?
After 9/11, the stock market tanked. Billionaire New York City Mayor, Mike Bloomberg, had a message for his constituents. He essentially said,” People always ask me for investment advice so they can become billionaires. I don’t often offer it, but today is different. Take all of your available money and buy stocks now.”
The Dow dropped to under 9,000 in 2001, and almost to 7,000 in 2002. It is now over 20,000. Too many powerful forces have a vested interest in the stock market doing well for it to flounder long.
Charlotte’s population is forecasted to go up 50% in the next 10 years. All of those people need a place to live. Statistically, 2/3 will buy and 1/3 will rent. Housing demand will continue to drive rents and prices higher.
So, investing in real estate in Charlotte is a slam dunk? As much as investing in the stock market is, especially with a Trump administration.
So that leads to 2 questions:
- When is a good time to buy in Charlotte?
For long-term holds, anytime really should be fine. The best time to buy is when the market gets hammered (see 2008-2012 when we didn’t get many buying inquiries, but many of our clients were looking to unload their homes and became reluctant landlords). For short-term holds and flips, this might not be a great time as competition is fierce for good properties; it’s clearly a seller’s market now. But financing is easy and historically cheap right now.
- Where should I buy in Charlotte?
Once again, for long-term holds, anywhere within city limits will work; really the surrounding counties seem pretty good too. When I was a newbie investor 10-15 years ago, my first two purchases were in areas that were considered “war zones”. I bought them very cheaply ($27K & $39K) and now they are considered to be in “hot areas”. Note: I wouldn’t recommend this, especially for newer investors. The fix-up and tenant issues were challenging and I wished I didn’t own them for years due to the headaches. But there are plenty of Charlotte houses that are in better areas that will make coveted rentals for years and years. I’d recommend buying houses that are more expensive (the market is pretty good at pricing houses based on risk). The homes I bought over $100K were much easier and safer investments that have also appreciated.
Much like investing in the stock market as a whole, Charlotte real estate is a great long-term hold that doesn’t require a large amount of analysis. And Trump’s cabinet members (and President Trump himself) own a lot of real estate too…
Happy Investing & Landlording!
Learn MoreCash Bloodletting from Rental Home Subletting
A house on my street is a rental home. The owner had a long term tenant who always paid on time and was an agreeable guy. It seemed like a good situation.
However, every few months I would see moving trucks parked in front. I wondered if the tenant was moving out, but sure enough, days later I would still see his human-size dog running out his front door (as I would shield my 2-year old son from his “affections”). The tenant hadn’t gone anywhere.
So what was going on?
The tenant was a serial subletter. He would rent out rooms to strangers. It seemed like a good way to make extra cash being that he travelled a lot for work and lived alone (besides the aforementioned gigantic dog).
But something went really wrong recently. The tenant didn’t click with the newest subletter and they got in a physical altercation due to undone housework. His dog attacked the subletter (poor guy!) protecting his owner and the subletter needed an ambulance.
An ambulance, several police officers and animal control showed up at the house and the subletter wound up getting a restraining order against the tenant. Now the tenant was not allowed to go to his rental home. I had a new neighbor, and not one who was actually on a lease. However, due to the legal system, he had rights to the house and the tenant was essentially homeless because of the restraining order.
It was a mess for the owner. The subletter had to be evicted (which took a month or two) and it left the owner out thousands of dollars.
So, is subletting evil?
Generally-speaking, yes, I wouldn’t recommend it. However, if done properly, it can work well to keep a house occupied.
The two ways to avoid subletting bloodletting:
- Be involved. If a tenant wants a subletter (and this is applicable for any new home occupant), a rental application needs to be run. Owners need to know exactly who is going to be living in their rental home.
- The new occupant needs to be on a lease and the security deposit situation needs to be addressed (who has rights to it now?).
As a landlord, it’s easier to just let tenants do their thing as long as rent is coming in (like in this instance where it happened for years without incident), however it can come back to bite (pun intended).
As a Charlotte property manager for many years, we’ve picked up many good tenants from allowing tenants to add additional occupants to their lease. However, we’ve never budged on the two criteria above.
Don’t let subletting turn into a mess. Control the situation, run a rental application, and (if approved) get them on a lease!
Happy Landlording!
Brett Furniss is a property manager at BDF Realty (Charlotte Residential Property Management), the trusted real estate advisor for Charlotte landlords & Home of $100 Flat Fee Property Management. BDF Realty utilizes their innovative Pod System for exceptional customer service in residential property management, home repairs, and home sales for single-family homes, Uptown condos, and town homes in the Charlotte-Metro Area. Contact Us Today!
Learn MoreWesley Snipes’ IRS Case for Rental Home Inspections
Wesley Snipes is a great actor. Watching him in White Men Can’t Jump, Major League, and other films is some good theater.
But Wesley got some bad advice at tax time in the late 90’s. His accountants told him there was a loophole that would allow him to avoid $7M in taxes; in fact, he didn’t even have to file tax returns. He thought that sounded pretty good. And besides, everybody knows the IRS isn’t really paying close attention with the sheer amount of returns they have to log every year.
Well, the IRS was paying attention. And they got Wesley’s attention with a 3-year prison sentence that ended in 2013.
It was sad for everyone: his many fans, his accountants (who received even stiffer jail sentences), the IRS who had to use limited resources to prosecute his case, and especially for Wesley (who had reputedly earned over $40M from 1999-2004).
There were a lot of questions in Wesley’s case, but one almost undeniable certainty- Wesley’s tax returns now are the most truthful and timely documents he files every year.
This logic spills over into residential property management and periodic home inspections. If landlords can show tenants that they are paying attention to what is going on in the house and whether maintenance is being done, they will undoubtedly get a better conditioned house when the tenant eventually vacates.
So, yes, this means going over to and inside the rental house. I’d highly recommend giving the tenant a week or so notice of when the home inspection is and letting them know what you are specifically planning on looking at (e-mailing them a list is helpful).
Q. What should a landlord include in their home inspections?
A. Anything they care about.
Some general things I care about:
- Do the keys still work?
- Is the lawn and landscaping being kept up?
- Are the air filters being changed?
- Are the fire and CO detectors still there on each level of the house and are they functional (aka is the tenant changing the batteries when they die?)
- Is the home clean?
- Does it smell like smoke?
- Is there evidence of a pet if there isn’t supposed to be one?
- Does anything look weird?
Feel free to add anything else of interest. I also think conducting the home inspections twice a year (roughly on month 3 and month 9 of the lease) works well. Paying attention is good, stalking is bad.
Wesley has some well-maintained tax returns now and periodic home inspections should lead to some well-maintained rental homes.
Happy Landlording!
Brett Furniss is a property manager at BDF Realty (Charlotte Residential Property Management), the trusted real estate advisor for Charlotte landlords & Home of $100 Flat Fee Property Management. BDF Realty utilizes their innovative Pod System for exceptional customer service in residential property management, home repairs, and home sales for single-family homes, Uptown condos, and town homes in the Charlotte-Metro Area. Contact Us Today!
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