March Madness: How to Pick a Great Bracket & Great Rental Tenants
Everybody loves March Madness. Even property managers! Chances are the only repair calls will go to the cable television companies if their television screens start to flicker.
But now the hard part starts; trying to predict who will win each game of the NCAA tournament. Picking a perfect bracket is tough; no one did it last year after millions of entries. The odds are seriously stacked against getting them all right. And, inexplicably, it’s even tougher if you’re a serious college basketball fan! The men’s college basketball fanatics, who watch all the games year round and know that Duke should absolutely kill Mercer, wind up picking the wrong team to win. Meanwhile, the clueless non-fans who turn on Mercer Street to go to work everyday and choose Mercer to win, wind up getting the pick right. Go figure!
To make good picks, fans rely on statistics and past performance versus other opponents. And then they look at other, intangible signs. Are their players healthy? Are they experienced or are the teams filled with unproven freshmen who might wilt in the big game? How did they do against big teams during the year? How about fast teams that like to run? How well are they playing now?
Much like fans, property managers are tasked to pick the best tenants when they get many applications for the same rental property. Some, like Kentucky this year, seem to fall in the “no-brainer” category. Great credit scores, great landlord history, make plenty of money to afford the rent, and stay away from trouble with the law. They don’t seem to have any weaknesses and look to be a shoo-in for application approval.
But what about if Kentucky’s starting center gets hurt and can’t play? Or in the rental game, you read about a company starting layoffs in the department where your “no-brainer” tenant has worked for the last 10 years. Is that a cause for concern? Yes, but how much so?
That’s a judgment call. Kentucky has enough other talent to steamroll most teams on most nights even without their center. And the prospective tenant could be just fine as she has plenty of cash reserves and a robust Rolodex where she could get hired anywhere in town with a quick phone call. Or she might be in real trouble as she was living paycheck-to-paycheck and hasn’t updated her resume since college.
The other prospective tenants aren’t as polished (lower credit scores and income), but have dual incomes in disparate industries. Would they be better bets? How does a property manager know who to give the approval to?
There is no right answer. Much like picking a bracket, some of it comes down to raw data and past landlord performance. But some of it comes down to the experience of selecting tenants for many years. I wish I had it down to a perfect science and could put it in a training manual (that I could sell for millions of dollars…). But no matter how good a property manager is, no one can get them right all the time. As my 3rd grade teacher said emphatically, “that’s why pencils have erasers!”
So, what to do? The right answer is closer to reviewing the raw data thoroughly and then looking for other signs. Do they have a pattern of paying people on time? Did their past landlords have good things to say? Do they make enough money to afford the property with some excess funds still available if their car breaks down or they face unemployment? Have they recently attempted to hurt anyone seriously (I’m half-kidding on this one)?
As for other signs… how did they sound on the phone? Did they get the application materials back to us in a timely manner? Are they pleasant to talk to? Were they forthcoming and truthful with everything asked in their application? Did they return our calls in a timely fashion? Were they evasive in any way? There’s a certain feel involved.
The other signs are tough to quantify. But that is when picking good tenants turns from a science into an art form. And that’s when the experienced know in their gut that Lehigh has a chance to take down Duke, even though they are a huge underdog. And that North Carolina, despite an up-and-down season, seems to be peaking and can take it all this year.
Picking tenants and the NCAA brackets isn’t as easy as picking all the favorites. Experience counts.
Good luck with both and enjoy the tournament!
Brett Furniss is the President & Owner of 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, condos, and town homes in the Charlotte-Metro Area. Contact Us Today!
Learn MoreTenants Love Rental Showings?
Continuing with the theme from our last blog, below is another letter (this time from a tenant) entitled, “I’m Lonely, Please Send More Visitors.”
Dear BDF Realty,
I was disappointed to give my 30-day notice to vacate the other day. You guys are the greatest property managers (BDF side note: Wow! Thanks!) and it will be depressing to leave the rental home. I mean really depressing.
But much to my joy and amazement, I started getting calls from your showing service saying that people wanted to come to MY house to see it! Here I am, bored at home with no reason to get out of the house, and I start getting call after call with people who want to set appointments to come over!
I mean here was my typical schedule before I gave my notice to vacate:
8 AM – 8 PM: bored at home-nothing to do
8 PM – 10 PM: “Arrow” comes on TV, followed by “The Flash” (Wednesday’s only)
BUT…after giving my notice:
7:40 AM: need to clean home before a Realtor showing
8 AM: leave home while Realtor shows property
8:15 AM: return home
8:45 AM: leave home for showing
9:00 AM: return
11:30 AM: leave home
11:45 AM: return
And that’s just the first morning! I can’t wait to see how many people wind up stopping in when all is said and done. I feel like the President!
Thanks again!
Lonely
Okay, I’ve yet to get a letter like this and never expect to. Tenants dislike rental showings for good reason. Who wants strangers trudging through their homes? Then having the expectation to keep the home clean while packing up boxes to move? And then being asked to leave the home during the showings (that they are paying to live in, nonetheless!)? I wouldn’t!
So why would tenants be asked to do this?
For several reasons:
- Usually it is a condition of occupancy that they sign on for in a proper lease
- It allows other renters to find a home for their families too. The tenants were probably looking at some inhabited rentals during their rental home search. This could be viewed as renter common courtesy.
- Being a team player for the owner with a slight mix of sympathy/empathy. Vacancy costs money. The less time the rental home sits vacant, the less financial and emotional strain on the owner. Maybe they are renting out their house in another state and can empathize?
Of course, to make it work for everyone, there are common courtesies that should be exercised. A 24-hour notice should be honored. If there are guests visiting or a child is sick, there should be leniency in allowing the tenant to cancel showings. And I believe in giving the tenant final approval on scheduling showings; “It’s not a good day” is a valid excuse on occasion, though this shouldn’t be abused. And no one should EVER just show up on the doorstep expecting to get in.
We’re all people and no one really likes allowing strangers into their home. However, if done respectfully, all parties (tenants, owners, and property managers) should be able to live with them.
Most tenants won’t “feel like the President” when dealing with multiple showings at their house, but even President Obama has to deal with things he’d rather not sometimes. It’s a necessary evil in the rental game.
Brett Furniss is the President & Owner of 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, condos, and town homes in the Charlotte-Metro Area. Contact Us Today!
Learn MoreRenting My Home Out? What To Do, What Stays, What Goes, & the Lawn
As a property management company in Charlotte, we’ve fielded many different questions from homeowners who are contemplating renting their homes out to the public for the first time. Below are a few popular questions from them in our proverbial mailbag:
- What should I do to get my house ready for the rental market?
Make it look good.
Okay, that was the succinct answer for our busy clients; but it’s accurate. I visited a property recently that had sat on the rental market for months. When approaching the property, the lawn was not mowed, half the front shrubs were trimmed (and half were not), and a window was broken. Really, the sale was lost before any prospective tenants even set foot into the home.
So, make the house look good. But don’t go for broke doing it. Touch-up paint, normal yard maintenance, carpet steam cleaning, and a professional cleaning should be almost all that is needed in most cases.
- I’m moving out of my house and want to leave some things behind. Do I need to worry about the incoming tenant messing with my stuff?
Yes.
And I don’t mean to make tenants out to be bad people here. Chances are, 99.99% of tenants don’t care what is in the boxes in your attic and will never check. But Murphy’s Law dictates that the owners who decide to leave their original Picasso in the garage storage closet will find it missing when their tenants move out. Or the tenant’s kid’s name scrawled in crayon all over the canvas.
So, the rule of thumb is, if you care about something, don’t leave it in the house. Somehow, someway, it will be taken or defiled and you’ll kick yourself. If you don’t really care about the stuff, you can leave things (within reason) in the attic or another inconspicuous storage area. After all, it’s still your house.
- I LOVE my lawn. I work on it all the time and my neighbors fawn over how GREAT my landscaping is. The Charlotte Observer takes pictures of my house because their gardening reporter says my lawn “gives him hope in a dark world.” But, alas, I need to move out of town. If I leave detailed instructions, will the tenant take care of the lawn like I ask?
No.
And, please, sell the house instead so you (and the gardening reporter) are not rudely confronted with what a disinterested tenant will allow your meticulously manicured lawn to morph into.
However, if selling is not in the cards, then the advice to keep your sanity:
- Set very low expectations for your lawn’s upkeep (aka the lawn will be mowed approximately every 2 weeks- that’s it. And the gentle, mineral water feedings are over; pray for rain.) Unfortunately, there’s really not much a property management company can legally do if the lawn is kept at city code and doesn’t violate any HOA covenants. As a landscaping aficionado like you knows, we’re talking bare bones upkeep.
OR
- Start a landscape contract for a gardener to visit your home every 10 days and keep it to your specifications. You can try to include this (lawn care included!) as a selling feature in the rental ad (and increase the rent accordingly); however, it is typically tough to sell the value of included lawn care because few people read the rental ad copy in its entirety and then go a step farther to do the actual math to see if it’s a good financial deal versus other slightly less expensive rentals. You’ll probably take a small financial loss versus not offering lawn care, but will gain valuable piece of mind that your lawn is not suffering a slow, gruesome death.
And that’s all from the mailbag this time. Good luck!
Brett Furniss is the President & Owner of 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, condos, and town homes in the Charlotte-Metro Area. Contact Us Today!
Learn MoreWhat is the Key to Marriage & Great Property Management?
I was in a marriage communication class this past Sunday at my church. And the leader began the class by loudly exhorting:
Who wants to have a GREAT marriage???
Everyone enthusiastically cheered and nodded assent. I quietly commented to my wife that a great marriage did, in fact, seem better than the alternative.
As I felt a sharp elbow in my rib cage, the class leader seized the building momentum with a slide showing a breakdown of a person’s average communication:
7% Verbal
55% Non-verbal (ex. aforementioned elbow to ribcage)
38% (the dreaded and infamous) Tone
So, how does this marriage advice fit into performing great property management? The keys is effective communication via verbal, non-verbal, and tone to your tenants.
To break it down:
- Verbal: Present the important points of the lease to the tenant in person. For me, the Big 3 items to communicate are:
- Pay rent on time and in full every month
- Maintain the property (cleaning, changing air filters, etc.)
- Get along with your neighbors
- Non-verbal: Make sure all important points are fully written out. The writing should be clear and concise; it should include a good lease and other things you care about (lawn care, handling repairs, etc.). If there is confusion with a tenant about anything in writing, re-write it so it doesn’t confuse the next tenants. Each cumulative year in the property management business should see a corresponding decrease of tenant/property manager misunderstandings (lack of properly communicated expectations is the root cause of most disputes).
- Tone (wasn’t this the subject of a Seinfeld episode?): Be nice. At the end of the day, it is a people business. As the Bible says, “If you live by the sword, you’ll die by the sword.” Though there are many advantages to taking the emotion out of the business and using a Draconian decision tree approach to management (ex: if they don’t pay by the 16th, we file for eviction every time), I personally feel that’s a poor methodology (both operationally and from a ROI standpoint). Emotion matters. Parents being able to provide a home for their families matter. Most people don’t take being removed from their homes through court order lightly; they just need some occasional compassion to get through rough patches. Be nice, to a point.
By using a confluence of verbal, non-verbal, and tone communication, you can manage your property well and have a great marriage to boot!
Brett Furniss is the President & Owner of 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, condos, and town homes in the Charlotte-Metro Area. Contact Us Today!
Learn MoreShould I Sell My Rental Home?
From the mail bag… (aka a question I may have made up to write about)
Q: I have a few occupied rental homes and wonder if I should sell one of them now that the market seems to be improving. What are your thoughts?
- Oh, this is a surprising question from left field! And a great one! Kudos to you, mighty thinker!
It is a tough decision on whether to unload a rental property. If you decide it may be time to do so, the first thing is to establish whether you can by asking 4 questions:
- What is the realistic value of my property? Have your trusted real estate advisor run sales comparables and put your home’s value at the low end of the range for estimating purposes.
- How much will it cost to get my property in sales shape? In my opinion, there is a difference between getting a home in rental shape and sales shape. With a rental, you may get away with steam cleaning the carpet and touching-up the paint; with sales, there is a lower threshold for cosmetic issues which may mean replacing the carpet and repainting the house.
- Do I have the money to cover the mortgage and utilities while the rental home potentially sits vacant for months? Generally-speaking, showing a home effectively with tenants in it is tough.
- Do you have the money to pay the selling costs (Realtor fees, closing costs, less than full market offer, etc.)?
So, the math looks like:
Answer #1 – Answers #2, 3, and 4 = $$ (hopefully a BIG, positive number)
Then the question is: Is $$ above worth selling the property for?
If so, do it. If not, continue to hold the rental until the market and your mortgage balance improves further.
However, there is a scenario that skews the math and lets you skip cost items #2 (home cosmetic fix-up) and #3 (home vacancy costs), and eliminate or reduce #4 (selling costs in terms of Realtor fees)…
- OK, I’ll bite. What is the scenario?
- When the tenants in your rental home want to buy it for themselves.
This is the #1 question to ask if you think you may want to sell your rental homes. ALWAYS ask the tenants first. If they do want to buy it, get them in touch with a mortgage broker and see if they qualify.
If they qualify, this is a win-win exit strategy. The tenants get to start building equity in a home that they already love. And you, the owner, get to avoid much of the costs and uncertainty of selling your rental home.
And what if the tenants proactively ask you if you are willing to sell your rental home to them when you’re not quite sure you are ready? You want to think REALLY long and hard about it. These opportunities don’t come up that often and you need to make sure that it is something you really don’t want to do.
Cash is king and the purpose of investments is to make money. Two well-worn adages come to mind:
A bird in the hand is worth two in the bush.
AND
Buy low, sell high!
Happy investing!
Brett Furniss is the President & Owner of 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, condos, and town homes in the Charlotte-Metro Area. Contact Us Today!
Learn More3 “Insider Tips” When Buying Your First Rental Home
I got a call from a friend of mine from college, “Rich”, a few weeks ago. After the prerequisite ribbing was completed (Do you have any hair left? Is your Linked-In profile photo from your high school yearbook? Are you still awful at basketball?), Rich got down to business:
“I’m thinking of buying my first rental home for investment. Got any advice?”
Me: “Ummm… have you looked at the blog I’ve been writing for the past 5 years entitled ‘Charlotte Property Management?’ It seems like all I do is spout out advice on this stuff.”
Rich: “Sure… I read it all the time, sometimes to my kids at night. I meant any other advice for the special people in your life.” (wink, wink)
Me: “Oh, the “insider tips”? Of course! It will cost you, though!
I suppose “insider tips” means the advice from people that have been burned (or are getting singed monthly) on investing errors. They now know better.
My top 3 insider tips for first time investors:
- Don’t buy in low-priced areas (aka places where you are buying the house for under $75K in Charlotte).
Common retort: “But I can get the house for $15K. There is a tenant paying $400/month. And I could buy 10 of them just like this one. The cash flow would be insane!”
My response: Can you stomach getting calls that say any of the following:
- I just saw someone get shot in my driveway!
- The air conditioning unit got stolen again. Should we order you another?
- I think my flooring is caving in.
Sadly, I’ve gotten these calls. I (and my checkbook) didn’t enjoy taking them.
- Hire a great property manager. I know I’m biased, so I won’t expound on this. Suffice to say, you don’t know what you don’t know. And you may enjoy cost savings from not paying a property manager for years; then you make one mistake that wipes out all of the savings and you wonder why you were taking tenant clogged toilet calls at midnight for no long term financial benefit.
And my top tip…
- Don’t get a mortgage; wait until you have the funds and then pay for the house with cash. Or at least pay more than 50% with cash.
It’s a drain on cash flow when you need everything to go right to make money every month (or to break even). Because things break (sometimes major things), tenants don’t always pay (but you better pay your bank!), and you will find yourself losing money. Yes, your accountant will tell you that it’s great for your taxes, but it stinks in real life. The purpose of investments is to make money. Locking into an investment that consistently saps your cash flow is no fun.
Example: $1,000 rent – $850 mortgage payment – $100 property management fees – $250 HVAC repair = $200 loss (bad feeling)
Or
$1,000 rent – $0 mortgage payment (you paid with cash!) – $100 property management fees – $250 HVAC repair = $650 gain (good feeling!)
So, Rich, my insider advice in a nutshell is… Set yourself up in a wise, peaceful manner so you can enjoy and make money on your real estate investments! Be disciplined now so your assets don’t become financial and emotional liabilities… And don’t crack on my hoops game!
Brett Furniss is the President & Owner of 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, condos, and town homes in the Charlotte-Metro Area. Contact Us Today!
Learn MoreWhat Rental Home Repairs Should A Landlord Pay For?
Oh, home repairs… One of the aspects of rental home investing that can really eat into a landlord’s financial return. Landlords and tenants both want to have a perfect home, but debate on who should pay for it.
In 10 years of practicing property management in Charlotte, I’ve found that the responses of who should pay for what repairs are unanimous (depending on what faction of people you ask):
Q: Who should pay for broken stuff at the rental house?
A. The owners!! (results tallied from 100% of the tenants)
Supporting testimony: “This house is a piece of garbage! They are lucky I’m a great tenant and renting it. I pay on-time every month; the least the owner can do is make some needed repairs around here. I guess Ebenezer is too busy counting his money to remember the little guy living in one of the houses in his vast real estate empire.”
Contradictory facts: House was lived in by owner prior to tenant move-in. Everything worked fine. Actual real estate holdings of owner are 2 houses.
B. The tenants!! (results tallied from 100% of the owners)
Supporting Testimony: “The house was in perfect condition when the tenant moved in. I lived there for 5 years and everything worked. Now they want every little thing fixed? Who cares if the screen door has a little rip in it? It didn’t kill my family, but the tenant can’t live with a flea once in a while? Please! He doesn’t even have children!”
Contradictory facts: “Little rip” in screen would allow full grown vulture entry. Perfectly conditioned homes would be violently offended at this owner’s shoddy home being placed in the same category as them.
And this is why property management can be challenging at times.
“To pay to repair or not to repair”, that is the question. And it is one that has no clear-cut answer. But, with that being said, there should be some methodology applied to make fair decisions.
My take on some parameters:
1. The house must be kept at code. Major systems (plumbing, heat, electricity, appliances) need to work properly. This includes working air conditioning nowadays (I know the old-school hardliners just stopped reading). I’m aware it used to be a luxury item, but that was a long, long time ago.
2. If it worked when they moved in, it should work throughout their tenancy (some exceptions apply on really high-cost or not-being-manufactured-anymore items). Example: a home was rented with a working gas fireplace. The fireplace stopped working in the middle of the tenancy. The manufacturer went out of business for the parts that were needed to fix it. In my opinion, the owner is not responsible to pay $3K for a replacement fireplace for home that rents for $1K a month.
3. If tenant negligence clearly causes something to break (example: a bottle cap found blocking a garbage disposal from working), the tenant should be billed back for the repair. But a tie goes to the tenant. Think of this as more of a criminal trial (where the tenant is innocent until proven guilty) than a civil trial (only requires a preponderance of evidence). There is a higher standard of evidence required before a tenant can be billed back for a repair (it must be really obvious).
4. Operational items need to be repaired; aesthetic items (aka how the house looks) do not. It should be made clear to the tenant during the lease signing that the home looks the way it looks now and nothing will be done by the owner about it.
5. Just because the tenant is renting the house, it does not mean that they will never spend money on the house. Maintenance items are required (air filters, light bulbs, lawn care, etc.) and are not paid by the owner.
This is obviously not a comprehensive repair policy, but it is a good start. Good luck!
Brett Furniss is the President & Owner of 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 (including Rent-To-Sell) for single-family homes, condos, and town homes in the Charlotte-Metro Area. Contact Us Today!
Learn MoreDoes It Matter If Your Property Manager Personally Owns Rental Properties?
When assessing property managers, does it matter if they personally own rental properties? This question is on the same line of thought as:
1. Are sports coaches better suited to coach if they were former players?
2. Is it preferable to have a nanny who is a mother care for your children?
3. Is it better to have former addicts speak at rehab clinics than clean-cut drug counselors?
You may be saying, “Whoa, Brett… could you come up with a better example in #2 above? What percentage of your property management blog readership has gone through the thought process of having nannies taking care of their children?”
Fair enough.
So, in short, the question is whether actual experience matters. I would argue that it does in most cases.
As a Charlotte property manager who owns personal rental properties, I have several things that concern me from painful experience. These may not have the same resonance with a property manager who has never personally dealt with the repercussions (aka writing big checks to other people) for the following:
1. Vandalism/Damage: Is the house in a good enough area that it can sit vacant without being broken into? Do I need to let the police know and put “No Trespassing” signs up? Can I let some of the neighbors I know around the house keep an eye on it? Nothing is worse than fixing broken windows continually when trying to show it for new renters.
2. Utilities: Am I going to be stuck with big utility bills when the house is vacant? I’ve received large water bills (from running toilets) and huge electric bills (from prospective tenants turning the air conditioning down to 40 degrees when visiting the property) from empty houses. In the back of my mind I’m weighing whether I need to keep the utilities on (based on the time of the year) or checking the home during showings to make sure things are kosher.
3. Tenant Wear & Tear: After screening a tenant and talking to their former landlords, it seems like he/she would be a good payer. On the other hand, it seems like he/she is careless and the house is going to need major cleaning and touch-up after he/she moves out in a year or two; this is going to cost big bucks and be a headache then. I know the short-term expediency of having a tenant move-in right away is going to turn into pain later after they move-out. I’ve written painful checks for these repair bills before. My stomach churns thinking about it.
4. On-Time Rental Payments: I’ve got mortgages to pay on the properties every month. I need to get the funds on time and in full so I can pay the bank. It’s not acceptable to not actively collect late rent; late fees must be enforced to dissuade late payments and tenants need to be encouraged to be on time. Unpaid days do matter!
These are just a few of the things that I think would be difficult to understand if a property manager doesn’t own rental properties. It’s one thing to read what not to do in a property management handbook and another to have to clean up messes with your own money. Experience is a very good teacher… and a harsh one.
As a learned man once said, “It’s not that bad to die in a video game. Just don’t try it in real life.”
Brett Furniss is the President & Owner of BDF Realty (Charlotte Residential Property Management), the trusted real estate advisor for Charlotte landlords. BDF Realty utilizes their innovative Pod System for exceptional customer service in residential property management, home repairs, and home sales (including Rent-To-Sell) for single-family homes, condos, and town homes in the Charlotte-Metro Area. Contact Us Today!
Learn MoreThe #1 Question Tenants Ask When Vacating: Give Them the #1 Answer
“When will I get my (full) security deposit back?”
This is the #1 Question property managers get asked when tenants vacate. And this is the #1 opportunity to get the house back in the condition you want. Make sure you take it!
Note: This is not a full-proof plan! Some tenants have a completely different view of “clean” after they move out. As in, “Though the carpets are stained now and the walls are marked up, it is in better condition then when we moved in.” I get it: people can be temporarily delusional to further their own interests. As in, “I didn’t know that the McDonald’s coffee would be hot because it didn’t have a warning on the cup, I swear.”
When I hear the #1 Question through property manager ears, it really sounds like they are asking, “What do I need to do to get my full security deposit back as quickly as possible?” Fortunately, that is precisely the question we want them to be asking!
Getting a house back from the tenant in great condition is a win-win-win for all involved:
1. Tenants: They get all of their security deposit back- yeah! I root for all of our tenants to do this.
2. Owners: They get a property that can immediately go back to market and requires minimal cleaning/fix-up costs.
3. Property managers: They don’t have to take a lot of pictures, document repairs, compute repair costs, and then explain the damage costs to the tenants and owners.
So how is getting a house back in great condition facilitated? The bottom line: You get what you ask for! Ask the tenants (in specific terms) what you want them to do so you can give them their full security deposit back. Examples include:
1. Steam clean the carpets after vacating and leave the receipt as proof
2. Put clean air filters in all the vents
3. Clean out all the appliances, drawers, and cabinets
4. Don’t leave any personal items in the house
5. Put new batteries in the CO and smoke detectors
6. Leave all copies of the keys, garage door openers, HOA passes, etc.
7. Fill in wall holes and touch-up paint where appropriate
8. Make sure the landscaping has been trimmed and the grass cut
If expectations are set, then (at least some of) the tenants will follow them. And this will save some of the “I can’t believe how the tenant left the house!” laments. And also cushion the tenant protests if some of their security deposit is held back.
We can’t expect the tenants to leave a home in “good condition”, when we don’t define what “good condition” means to us. It’s a subjective term.
When tenants ask the #1 Question, they are listening very hard to your response. Give them the #1 Answer. Take this opportunity to detail how you want the property left (and providing a check-off sheet in writing is even better!) while they are focused. Then add, “… so depending on how the property is left and how many repair quotes we need, it could take up to 30 days. If it is left in great shape, you could get it in a few days!”
The #1 Question is good; it shows the tenants care. Make sure you volley back the #1 Answer while you have their full attention!
Brett Furniss is the President & Owner of BDF Realty (Charlotte Residential Property Management), the trusted real estate advisor for Charlotte landlords. BDF Realty utilizes their innovative Pod System for exceptional customer service in residential property management, home repairs, and home sales (including Rent-To-Sell) for single-family homes, condos, and town homes in the Charlotte-Metro Area. Contact Us Today!
Learn More#1 Way to Fill Rental Homes Quickly
Concerned rental home owners are wondering how to best fill their rental properties quickly. So are property managers.
“Everyday my house is empty costs me money! Besides the mortgage payment, it’s the other things that are absolutely killing me- utilities with this unusually cold and snowy winter, HOA dues rising, you name it. I need someone renting (or buying) my home!” is a common lament from homeowners with a vacant home on the market.
As a real estate investor and property manager in Charlotte, I feel your pain. I don’t like vacancies anymore than you. But there is a simple way to make your home attractive. And it addresses the most heard complaint, by far, that I hear about houses and why prospective tenants pass on them. And just what is this revelatory nugget?
Cleanliness. That’s it. Houses are typically not clean. Actually, it’s not that they are not clean technically. It’s that they are not clean enough. Prospective tenants want to see sparkle. They want to see their unblemished reflections coming off of stainless steel. They want to be able to eat off the floors. They want to lap cool spring water out of the toilets (well, I may be pushing it now…). The point is that they really like the houses to be much cleaner than they would normally keep them.
Recently, we switched to a different cleaning service that was more expensive. I would never think of adding expenses to our owner clients (especially in this economy), but I felt that our homes were not standing out as the rental market continued to get more and more crowded.
And it worked. I noticed our rate of conversions of visits to completed applications went up dramatically. This has gone on for months. Thorough, deep-cleaning was more effective than lowering the rental price. This has been especially effective for our rent-to-sell program where people want to fall in love with the house they are potentially buying.
I would challenge you to give it a try. When a house has been on the market for a while and has been getting visits (but no completed applications), resist the urge to lower the price and just pay the dollars to give the rental home a thorough scrubbing (or do it yourself, though I recommend professionals). See if it works!
Cleanliness is next to godliness, the saying goes. Reap the benefits of a shorter courting period with prospective tenants!
Brett Furniss is the President & Owner of BDF Realty (Charlotte Residential Property Management), the trusted real estate advisor for Charlotte landlords. BDF Realty utilizes their innovative Pod System for exceptional customer service in residential property management, home repairs, and home sales (including Rent-To-Sell) for single-family homes, condos, and town homes in the Charlotte-Metro Area. Contact Us Today!
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