Property Management: Changes for the Better in 2021?
“Everything in moderation, including moderation.”
Oscar Wilde
“…The man who fears God will avoid all extremes.”
Ecclesiastes 7:18
Let me start off by saying I’m not a big clothes shopper.
I was minding my own business the other day at home and my phone buzzed. I looked down at an alert from Amazon Photos with the “From 10 Years Ago” tag; it was a photo of my beautiful wife and I on a date at a Panthers game (awww…).
Two things struck me:
- Look at that guy with his gorgeous, flowing mane of hair (what happened???)!
- The UNC sweatshirt and wooly I was wearing looked eerily familiar… When I glanced in the mirror, I realized I was currently wearing the same exact outfit. I tend to view these things from an optimist perspective (I still fit in my clothes- nice going! Carolina blue really has always really accentuated my eyes…) as opposed to reality (Buy some new clothes, cheapskate!).
OK, sometimes things should be changed; buying some new attire from time to time never hurt anyone.
And sometimes not changing things can hurt people. In 2020, COVID made changing certain in-person business practices necessary for safety reasons; this really accelerated the use of certain technologies in property management, especially self-showings, video virtual tours, and virtual lease signings. These methods have been used and adopted by many in the industry to varying degrees:
- Self-Showings: This is where a prospective tenant is able to access keys through a lockbox to show themselves a property without a company representative being present.
At first take, it seems risky to have strangers in a vacant home when they could just take desired pieces of the property with them when they leave. But this trend has been building and is now commonplace. I think a real estate agent provides limited value being on rental showings. Renters don’t need to be sold into making a decision. At the end of the day, they are taking time to look at rentals because they either want to or have to move; I don’t see a lot of rental home tire-kickers. They want to like the property and get it done with, as opposed to new home buyers who sometimes look for perfect.
However, there obviously needs to be some controls in place (avoiding the “open-barn” theory). It’s important to know who is going into the house and have some concrete, confirmed contact information that can be given to the police if something goes awry. Done properly and moderately, self-showings are efficient and allow renters to view homes on their own schedule. It can work really well.
- Video Virtual Tours for Rentals: I’m still not on the bandwagon on this one. I really want people to visit the rental in-person so they can make sure it is right for them. If someone wants to buy a home from across the country sight unseen, that is fine with me (we live in America, right?); they can spend their money anyway they choose to. But if they wind up disliking the home after purchase, they have no one to complain to. With rentals, they can complain to their landlord for a year or more. No thanks!
I want to provide enough information for people to decide if they want to see the property (pictures, accurate property information, price, etc.). But I’m still not convinced that videos can replicate being there. I also want to be cautious abut adding an expense to our owners to get a tenant we may wind up in a forced bad relationship with (“I don’t like the neighborhood”, “The building is too loud”, or “You purposely videoed away from the wall in the dining room to hide the scuff marks.”).
- Virtual Lease Signings (E-signing Documents): I like this trend, to a point. We’ve used it for a few years for lease extensions with existing tenants and paperwork for our owner clients who needed to add properties. Since COVID, we have even started to e-sign the lease documents prior to meeting the tenants at the property to give them the keys as a precaution.
However, I think this trend has gone too far. It seems like it is a ready excuse not to talk or meet. I like to meet with the tenants and review the lease in-person. There is value to attaching a person with a (masked) face. If we’re going to the property to get our sign and lockbox anyway, why not (safely) say “hello”?
Anyway, in property management and in life, change isn’t always good or always bad- and it often does not need to be wholesale! Treading moderately with new technologies can be the best path forward.
So I think that means I can still wear the sweatshirt and wooly as long as I mix in some new pieces of clothes occasionally, right?
Happy Landlording in 2021!
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COVID-19 Rent Collections: OK to Say “I Don’t Know”?
“Dewey Defeats Truman”
Chicago Daily Tribune headline on 11/3/48
“Even fools are thought wise if they keep silent, and discerning if they hold their tongues.”
Proverbs 17:28
My 6-year old son is tasked with completing school assessment tests this week on the computer. It’s a stressful time for him! Not only does he have to deal with new questions about numbers and words, he has to figure out how to use a mouse for the first time. It’s a lot for a new, aspirant student.
My wife thinks some of the questions may be out of the scope of a Kindergarten-educated child. “Three-digit subtraction questions? Scandalous! How could he know such things at this point?”
So he’s tackling an assessment question like:
Q. What is 100 – 80?
- 35
- 20
- I don’t know!
- I really don’t know! (Can I watch TV now?)
The truthful answers for him are clearly 3 or 4 (with a hard lean on 4). But for us educated folk who have been taking tests all our lives, we know at minimum we need to answer 1 or 2. Nobody gets any points for offering “I don’t know” on a test! We only get points for knowing (or acting like we know and guessing correctly). But we really should know stuff, right?
Or maybe that’s the limitation with tests when we implement this methodology in real life. With tests, there’s always one right answer that is evident if the data is studied and understood. But reality can be very different.
For example, take this COVID-19 situation for property managers. We’re asked questions from clients like, “Do you expect tenants to pay rent next month?” Or, more directly, “Will my tenants pay rent next month?” As someone in the property management field for the past 16 years, I should be able to answer that question, right?
Well, I read the same articles that everyone else did with statistics from large apartment provider associations saying 33% of tenants didn’t expect to be able to make their rental payments this summer. Wow! 1 in 3, that’s bad. Then I received calls from a few of our tenants telling me about their job losses and wondering if any of our owner-clients would be offering “Free Rent” until things were back to normal. Data was not promising, both empirically and anecdotally.
All of this must have meant that we were going to experience some rough times with the rental properties we manage in the Charlotte-Metro area, right? So I jotted off letters every month this summer to our owner-clients telling them to expect some rental disruption. I thought I knew what was going to happen and then I relayed this to our clients.
So what happened? Everyone this entire summer paid (with the exception of literally 1 tenant who is moving out). And the number of late paying tenants was half of what we usually have.
What do I know?
What is 100 – 80? Fortunately, I can help with that one. But are tenants going to continue paying on time and in full next month? I really don’t know. (But I hope so!)
Happy Landlording!
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Tenant Management: Be Nice Until…
“A brother wronged is more unyielding than a fortified city; disputes are like the barred gates of a citadel.”
Proverbs 18:19
“I want you to be nice… Until it’s time not to be nice.”
Patrick Swayze to the other bouncers in Road House
There’s a danger of showing your age when quoting lines from the classic movie, Road House. Younger people have no idea what you’re talking about. It’s not as bad as making a “Rosebud” reference from Citizen Kane (1941), but it can make you feel like you’re in the same ballpark sometimes.
For the uninitiated, Road House is about a bouncer (Patrick Swayze) who is hired to go to a small, backwoods town in Missouri where some local ruffians are ruining a local bar by making it a warzone for fights. His job is to restore peace by training the staff to deescalate the increasing violence.
His first training session with the bouncers starts with him giving them the advice of “be nice”. No matter what bar patrons say to them, they shouldn’t take it personally. It’s a job. He instructs them not to retaliate, but walk offenders out of the bar, nicely. They should be nice, until it’s time not to be nice.
The inevitable question he gets after this speech is “how do we know when it’s time not to be nice?” He answers succinctly, “You don’t. I’ll let you know.”
As a Charlotte property manager, we often run into the same question. This may come as news, but tenants don’t always follow the lease to the T. They want to do what they want to do, regardless of what they signed their name to. This can be frustrating. And it can lead to the impulse to escalate situations quickly by invoking phrases like “throw you out on the street”, “it’s eviction time”, and “you’ll never live indoors again when your next potential landlords ask me for a reference”.
That’s not nice. And it’s usually foolish.
In my experience, nicely asking tenants to do something differently is effective. For example, if they are leaving the trash cans out for days which elicit HOA complaints, we may ask, “Would you mind trying to get the trash cans in a little earlier so we can be compliant with the HOA rules? I wouldn’t want them to start sending fines.” Or “can you try to make your rental payment a little earlier? The owner needs to be able to pay his mortgage on time and it would also save you from donating late fees to us every month. You’re usually only off by a few days.”
Most tenants are reasonable and respond well to landlords who ask for things nicely. I feel as a property manager, one of our most important jobs is to establish a respectful relationship with the tenants who rent from us. We both need things from each other and it’s much better for all involved when the relationship is cordial.
However, when a landlord is repeatedly ignored or there are egregious violations, it may be time not to be nice. This is when court action may be necessary, but it rarely leads to a happy ending. Remember, the tenant and his/her family are losing the place where they live and sleep; in Charlotte, at least, it’s going to be difficult for them to find another house easily due to the lack of available housing and a recent eviction on their credit. They are in a really bad situation that they will probably blame the landlord for.
At this point, the relationship in most cases is irrevocably broken. The chances of receiving additional rent are low and the house is usually returned in horrible shape. It’s a true “lose-lose” transaction.
It’s actually the same ending as in Road House. When it was time for Swayze and his fellow bouncers not to be nice, it infuriated the bad guys and a civil war broke out in the town. A lot of people got hurt (including Swayze’s best buddy, Sam Elliot, who was killed) and a lot of property was destroyed. In the end, Swayze got his Pyrrhic victory which, outside of movie logic, would only be considered a complete disaster.
So, be nice and try to keep things nice as long as it depends on you! It’s much better than having to turn to the alternative.
Happy Landlording!
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Where to Invest in Real Estate in Charlotte?
As a property manager in Charlotte with investor clients, we are often asked where the best places are to buy local investment properties.
When I was a young real estate investor in 2004, I bought my first two investment properties on the same day from HUD. Both were relatively cheap and I figured they’d be easy to cash flow. I admittedly did not really know what I was doing.
One was a condo in a relatively contained area. The other was a house in what could be labeled a “war zone”.
I hated this house. If I was smarter, I would have outsourced the property management. One of the main issues is that it would just get broken into a lot. So every time it was vacant, I was praying that I didn’t have to have the windows and doors repaired again. The house was really old and somehow the utility bills were really high, which added to the vacancy pain.
One day I was stopping by the house and noticed a man with a shopping cart full of old window screens walking in the neighborhood. I didn’t give it much thought (like I said, it wasn’t a great area) until I reached the house and noticed something a little off about the (formerly) screened-in porch. I ran back to my car to find the guy with my screens.
He was still on the street. I pulled up behind him in my car and he kept walking. I got out and walked quickly to catch up to him.
“Excuse me, sir? I think you may have something that belongs to me.”
No response. He kept walking away at his measured pace.
“Yeah, I’m sure of it- those seem to be the window screens from my house up the block. Mind if I take those back?”
He stopped, turned around, grunted, and then lunged at me with a knife. Fortunately, he missed due to my cat-like reflexes (OK, not true) and the fact that he was drunk and slow (thank God!). He then kept walking away.
I followed him in my car and called the police. He smartly cut across a field and was never seen again.
As I left the scene with my tail between my legs, there was nothing left to do but go back to the house and re-shoot the front porch pictures. Then I logged into my computer and changed the rental ad copy from “Awesome House with Screened-In Porch!” to “Awesome House with Open-Air Porch!”.
Oh, how I hate(d) that house!
Fast forward approximately 13 years… the Charlotte press started fawning over this “new” area of Charlotte that was having all of this awesome new development. Price values were skyrocketing; it was the next big thing. As I clicked through to read further, the area they were referring to was very familiar… No way… The smart money wanted to be in the vicinity of “that house”.
A popular calculation is that 66 people are moving to Charlotte every day. The Charlotte-Metro population is set to go up 50% in the next ten years. And all of these newcomers need a place to live.
As a real estate investor, the short-term prognosis on where to buy in Charlotte is a crapshoot; an efficient market should have already built this into the current prices. However, due to population forecasts, the long-term prognosis of where to invest is much surer. “That house” (or any house in the city of Charlotte) will probably be a good investment you’ll love if it’s held long enough.
Happy Landlording!
Learn MoreLavar Ball’s Bluster Won’t Sell Your Rental Home
“Ex-UCLA freshman LiAngelo Ball has no chance that he’ll be drafted in June — and that was true before his shoplifting incident in China. ‘He’s not on any of our scouting lists — even the extended lists,’ one GM told ESPN.”
Adrian Wojnarowski (ESPN Senior NBA Insider)
“Gelo is the best two-guard in the draft on the fact that he can shoot better than anybody in the draft. He’s stronger than anybody in the draft.”
Lavar Ball (father of LiAngelo Ball prior to the NBA Draft where LiAngelo was bypassed by all 30 NBA teams in both rounds of the draft)
Sometimes fathers get carried away with how good their sons really are at sports. And based on how outspoken Lavar Ball is, it is no surprise how bullish he was on his second son’s, LiAngelo’s, ability on the basketball court.
Many people dislike Lavar Ball because he is brash and speaks his mind. He said he could beat potentially the greatest player in the history of the NBA, Michael Jordan, in a one-on-one game in his prime. He is an unabashed, vocal supporter of himself and his sons. And his sons definitely have basketball ability, though at differing degrees.
His first son, Lonzo Ball, was the second overall pick in the NBA Draft by the Los Angeles Lakers last year. He proved to be the real deal. He excelled in college for his one year at UCLA and had a promising rookie year in the NBA. Some NBA scouts thought he was the best prospect coming into draft- an elite passer and competitor.
LiAngelo followed his older brother and also enrolled at UCLA on a basketball scholarship. Unfortunately, he was arrested in China during a preseason trip with his UCLA teammates, and was suspended. He later dropped out of school when the suspension did not go away. He never played in a college game.
Lavar thought it was still a mistake that all the NBA teams passed on the chance to sign LiAngelo. And he blasted them. But the NBA scouts really have one job- to find the best players they can to help their organization win games. And they unanimously agreed LiAngelo just wasn’t good enough.
Sometimes this type of scenario pervades rental home sales, especially rental homes that have been tenant-occupied for many years. Landlords see other homes that sell near their rental homes and immediately slot theirs at the highest sales price.
Sometimes it’s justified. However, often it is not. The rental home is just sometimes not comparable. Tenants have lived there and may not have taken care of the home. The landlord might not have made any improvements to the home since it had become a rental and now it is dated with older parts (appliances, flooring, paint, etc.). This is when the dearth of ongoing home investment can catch up.
And that’s fine. I get it. No one wants to spend money. We hope that the house is good enough to sell “as is” too.
But buyers know what they like. And when they enter a home that is priced at the top of the market and doesn’t compare to the updated and lovingly cared for homes also for sale, they will pass without making an offer. And the home will sit on the market- unsigned like LiAngelo.
Despite Lavar’s bluster, the proof is in the pudding. Is LiAngelo a good enough basketball player to compete and star in “The League”? Is the rental home in good enough condition to catch buyers’ eyes and make them want to make the biggest investment in their lives for it? Is there a “WOW” factor or is everything just plain?
We all want quick, high-priced sales. But if the rental house can’t pass like Lonzo, it’s time to either lower price expectations (YMCA league?) or pay the money to make improvements to get to league standard.
Can your rental home walk the talk?
Happy Landlording!
Learn MoreNew York City Living & Landlording: Count the Cost
“Suppose one of you wants to build a tower. Won’t you first sit down and count the cost to see if you have enough money to complete it?”
Jesus Christ (Luke 14:28)
Shortly after I graduated college, I moved to New York City (NYC- aka the “Big Apple”). “If I could make it there, I could make it anywhere.” Wow! It was definitely an experience.
Honestly, I was a little scared. All the television shows and movies that had criminals crushing the common folk were in NYC. I grew up in NJ, but my parents really never took me into the big city so I wasn’t sure what to expect. The mafia and gangs could just be waiting for fresh meat to show up so they could take my lunch money every day. Who knew?
Fortunately, my physical safety was never really threatened. My issues were more on the economic side. I wasn’t making much money; I was in a sales job and wasn’t selling anything. My manager nicknamed me “rowboat”… because I had no sales (get it?). The lack of cash inflow was tough.
And the cash outflow required was excruciating. It was the $3.50 for a small apple at the corner bodega. Then buying a round of 5 drinks after work that ran $90.00 (without tip). I used to joke that it cost me $20.00 to cross the street. Geez, it was an expensive place to live!
Good deals were hard to come by. And breakfast at the food cart on the corner of my street was one of them. $2.00 got you a large coffee (with milk and sugar) and a huge cinnamon raisin bagel with butter. It was my go-to meal every morning that I’d take on the subway into work.
One morning, there was a couple in front of me in line at the food cart. I could make out parts of their conversation; it was apparent that they were visiting from the Midwest somewhere. When the man was placing his order I could see him getting agitated. Then he said something that I’ll never forget:
“$1.00 for a cup of coffee??? I’ve NEVER paid $1.00 for a cup of coffee in my life!”
That’s when I knew that he was going to absolutely hate this trip to the big city. I almost felt obligated to get him in a cab (and pay for it) so he could immediately return back home. If $1.00 for a cup of Joe was cause for righteous price indignation, he was due for a heart attack later that day.
He did not count the cost of what visiting New York City was going to do to him.
Unfortunately, the same can be said of being a Charlotte landlord.
The investment real estate gurus preach that you will be a millionaire through rental homes! Buy as many properties as you can! This is the way that you build residual income that will last a lifetime for you and your children’s children!
They just don’t tell you that it is a cash-poor business. All of the above can be true, but the trick is the ability to stay solvent for year upon year as things break and wear out. All the financial models go out the window when a messy eviction happens or your HVAC unit needs to be replaced (just happened to me this month- the dreaded $5K phone call…).
Carpet will not last forever and will need to be replaced. The entire house will need to be repainted at some point. Appliances only last so long. The roof too…
Long term real estate investment can be a wonderful, profitable endeavor (you’ll love your net worth!), but don’t let anyone fool you- it can and will cost you money. So before diving in too far, count the cost. A few miserable days in NYC can be remedied with an early flight home to your 25 cent coffee vendor. Several broken-down rental homes saddled with mortgages in a buyer’s market is a little tougher to navigate out of.
Happy Landlording!
Learn MoreLandlords & Lease Renewals: Don’t be Like Spectrum!
First of all, this is not a blog of a Spectrum (formerly Time Warner Cable) hater. I actually don’t have strong feelings either way about them. I was a user of their internet and basic cable and was relatively happy. The service worked decently and the price was reasonable. I put my bill on auto-pay and lived my life.
Then about 6 months ago, I saw a change in my $20.00 basic cable bill (aka the cheapest plan where I get about 10 channels). They started billing me $4.00/digital adapter (I have 2) for some cable boxes they made mandatory for me to use a year or two ago. While $8.00 isn’t life-changing, I brushed up on my middle school math and computed it was a 40% increase. That’s substantial in percentage terms.
Still, changing services is a pain. I could eat a 40% increase ($8 is still $8, no matter how alarmingly you dress it up). I was not pushing the panic button (thank you, hot Charlotte real estate market).
But when that happened, I actually started looking at my Spectrum bill each month. A few months later in the “Spectrum News” section on the front page of it (I didn’t previously know there was a “news” section I could be enjoying each month!), I see the following verbatim:
Your current promotion is ending, but your savings will continue. As a valued customer, we have automatically extended your preferred rate.
(good so far…)
Important Billing Update:
Effective for your next billing statement, pricing will be adjusted for:
- Starter TV Service from $20.00 to $23.89
- Broadcast TV Surcharge from $7.50 to $8.85. This reflects costs incurred from local Broadcast TV stations.
- Digital Adapters from $4.00 to $4.99
Not good.
We’re up roughly another $4.00 on 10-channel TV, not to mention another $5.00 for internet service (not previously affected). I don’t even need to do the percentage math anymore. We’re above a 50% increase in less than 6 months on my lame cable TV plan.
Now, on general principle, I’m trying to leave Spectrum cable TV service due to a large increase which appears to be largely meritless. So I fish out some $10-$20 antennas I bought from Amazon a year or two ago and see if I can make them work. Viola! They work like a charm after I put in a little more effort in this go-round.
I call Spectrum and cancel my starter cable TV service. I won’t lie; it feels good. Injustice was made right! Then they tell me that my internet service is not only going up $5.00 next month, but because it’s not bundled with TV anymore, it is going up another $20.00. Touché Spectrum! I have to have internet service, so they may have won this battle. But I am not a Spectrum cable TV customer any longer.
Unfortunately, now my resolve to rid myself of Spectrum in its entirety has built. I wrack my brain for a solution. Wait! Who was digging up my front lawn 6 months ago to my son’s delight? Google Fiber! They’re boasting $50/month internet service! So my dream of a “Spectrumless” home may become a reality next week.
But… my true thoughts on my mini-“SpectrumGate” are how sad and unnecessary it was. I was fine being a Spectrum customer. I paid my bill every month, they collected the money, and everyone was happy. It just seemed to me that they got greedy were trying to stick it to me.
To be fair, I don’t know Spectrum’s economics. They may be losing money on customers like me and it’s better for them to lose me than to keep me at a lower monthly fee. Fair enough. That’s business.
The purpose of this story is I see landlords use similar tactics on tenants during lease renewals. The tenants pay their rent on time every month and take care of minor repairs on the rental home. But when their lease is up, the landlords try to stick the tenants with a 10%+ increase and additional fees. The tenants feel betrayed and don’t renew their leases on principle. Both parties lose.
We’re in a rising real estate market, I get it. But the grass isn’t always greener on the other side. New tenants don’t always pay the rent on time and take care of the home. Plus the fix-up and other vacancy costs could more than devour any surplus a higher rental rate from a new tenant might offer.
If you have good tenants and are making money, keep any rent increases between lease renewals within reason. There is no reason to endanger the money flow. Most tenants understand that landlord costs go up a little bit every year too.
However, if you are losing money and need to stop the bleeding, I get that too. A rising market could finally bring a new tenant to get bring positive monthly cash flow back into play. Business is business.
Happy Landlording!
Learn MoreThe Rental Bachelorette: What is She Looking For?
“I would just want someone who is genuine and makes me laugh and is my best friend and ultimately someone who is going to love me as much as I love them.”
Former Bachelorette JoJo Fletcher
JoJo apparently found that “someone” in the arms of NFL quarterback Aaron Rodger’s brother, Jordan, in the last season of the Bachelorette (so says the cover of a tabloid magazine next to Harris Teeter’s cash register). Good for her!
Many people have differing ideas on what women want from prospective male suitors. I’ve seen some lists as short as:
- Rich
- Good-looking
This list is written for the rich, good-looking guys typically by the less rich, less good-looking, jaded guys.
And there are some deeper lists written for the less affluent, average-looking guys (who might buy magazines with articles like this). This “Top Ten” list is courtesy of www.topyaps.com:
- Not being desperate or clingy
- Being a friend first
- Manners & hygiene
- Respecting her space
- Chivalry
- Sincerity & loyalty
- The ability to protect
- Sense of humor
- Intelligence
- Honesty
Wow! That’s a much tougher list to mull over. At first glance, it seems like I’ve blown it in the past by actually following items #1 and #4 by “not caring” and “being distant.” But I digress…
As a Charlotte property manager, this is a question we get often from potential tenants:
“Before I spend $75.00 on a non-refundable rental application, what are you looking for?”
The three things we are looking for in potential tenants for our properties:
- Pay rent on time: #1 criteria
- Maintain the property: change air filters, mow the lawn, make reasonable repairs on your own, etc.
- Get along with the neighbors (and property manager!)
If tenants can do these 3 things, we will like them a lot and the tenancy should go very smoothly.
Tenants do not need to be rich or good-looking, but we’re always impressed with chivalry and a sense of humor.
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 MoreBeing a Duke Hoops Recruit & Landlording: YDKWYDK
As much as I hate to admit it (being a UNC guy), Duke University is a worthy rival on the basketball court. A big part of that is their ability to recruit great high school players. They go after the best of them and have been very successful in landing them in Durham. Many of them were so good that they only played one year at Duke and then left early to play in the NBA for millions of dollars.
But, for others, it didn’t work out that way.
Point guard Derryck Thornton was one of those Duke recruits. He was an esteemed 5-star recruit who was finishing his junior year of high school in 2015. Duke was thin at point guard for the upcoming season and they convinced Thornton to “reclassify”; this allowed him to graduate early from high school and join the Blue Devils for the 2015 season.
It was a great honor. The defending national champions needed him to come early and play. He was only 17 years old! So he said “yes”, enrolled at Duke early, and was starting at point guard. It seemed like he had the world at his fingertips!
But, YDKWYDK (You Don’t Know What You Don’t Know). A year later (when he originally should have been starting school at Duke), Thornton was transferring out to play basketball for the USC Trojans. It was allegedly a combination of factors he could not have seen coming: his freshman year didn’t go as well as they had hoped, certain Duke players inexplicably didn’t go pro (that would have made more playing time available to him), and other more heralded recruits joined the 2016 team. He went from being really needed to being really expendable. So he was gone.
YDKWYDK. By definition, it’s hard to protect yourself against the unknown. This is especially true in property management when there are so many variables; renters (people) are complicated and they are all so different! It’s best to have someone who might know what you don’t know because they’ve been there before. Experience counts!
I know I’m biased towards using a property manager, but I understand the self-management side of it as well; I’m all for saving money! It’s cheaper if I fix the sink, as opposed to my plumber, but what about if I miss something and it causes a leak behind my wall? Then I’ve got a bigger, much costlier problem. YDKWYDK
And if property management is merely a hobby, it’s really tough to know what decisions can be costly down the road:
“My friend/co-worker wants to rent the property. He seems like a good guy. Should I rent it to him?”
“Should I allow any pets in my rental home? If so, which ones are okay?”
“Is it important to do credit checks? If their score is low/high, is that an instant denial/approval?”
“Do I need to do home inspections? If so, what am I checking for?”
If Thornton had been told in 2015 that he would be transferring to another college after his freshman year at Duke, he probably would have had a good laugh. But it happened. The same can be said of many decisions being made today by landlords who dabble in property management; the unforeseen long-term costs of seemingly innocuous choices might make the expense of having a property manager seem very reasonable!
YDKWYDK. 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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