5 Important Steps Not To Forget After Locking In Your Rental Tenant (With Extra Credit)
I finally did it! I found a tenant! Now good times are here! I can just sit back and spend the rent money. Oh yeah!
(Landlord reaction after placing a tenant into her rental home)
It is a good feeling getting your rental home filled! The house preparation, the marketing, the showings, the rental screening, the deposit collection… it’s exhausting, but usually means that you are in the clear from doing it again for at least a year. That’s something to celebrate!
Great tenant placement is about 75% of the heavy lifting good property managers do. Getting past this hurdle is a great accomplishment! If high standards were kept throughout the screening process, a fruitful, peaceful tenancy is extremely likely.
But after the bubbly has been consumed, the noise makers silenced, and the euphoric feelings have subsided, a question sometimes starts to gnaw at your innards:
What have I forgotten to do?
This is a perfectly normal reaction. And, fortunately, it has a very easy answer. Here are 5 important steps not to forget after you’ve locked in your rental tenant (with ways to earn extra credit):
- Make sure the new tenants know where, to whom, and when to send the rent checks. Priority #1!!
Extra Credit: Send a reminder 7-10 days prior to the due date every month (I like e-mail).
- Call your insurance company and let them know you need to change your policy from a home owner to a landlord. I haven’t seen any price changes personally from doing this. Extra Credit: Make sure your tenant has a renter’s insurance policy.
- Make sure all utilities are scheduled for shut off when the tenant moves in.
Extra Credit: Allow 3-5 days after the tenant’s move-in date to schedule the shut-off. It’s tough to live without utilities and moving time is busy. It’s perfectly decent to be thoughtful!
- Cut off the lawn service after the tenant moves in.
Extra Credit: Have the lawn mowed the day before tenant move-in. It’s a nice gesture and sets a precedent on how the lawn should be kept.
- Exhale and put your feet up! You’ve done it! Never miss an opportunity to celebrate!
Extra Credit: Head to your nearest Caribbean island ASAP.
Brett Furniss is the head property manager 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 Thoughts to Determine Viable Tenant Repair Requests
“Honey, before you go out golfing today, there are a few things I’d like you to take care of around the house. The air conditioning is out upstairs, the front door squeaks, the gutters needs to be cleaned, the back latch is sticking, the front bushes need to be trimmed…”
(Cutting his wife off while rushing out the door) “Can’t you just put it in an e-mail and send it to the landlord? I assume that’s why we pay rent around here!?!? That nonsensical interruption may have just cost me a few practices hits with my new driver!”
I wish things worked for me like that. Something in my house breaks? Send an e-mail to the landlord and wait for the repairs to be addressed at no cost. And now that there is Wi-Fi on the golf course and the pool, this whole delegating thing would be even easier! Renting would really trump owning, that’s for sure.
I refer to this as “genie property management.” Get the lamp out, rub it a few times, and get countless free repair requests.
But much like a genie, this is (or should be) fiction. Landlords are not genies. With that being said, my three thoughts to determine viable tenant repair requests are:
- The landlord needs to keep the house at code. The major systems that worked (including appliances) should continue to work throughout the tenancy. That’s written into most leases to protect the tenant. Stay on the right side of the law! Plus, it’s the right thing to do.
- Myth: When renting a home, a tenant will never have to pay anything outside of rent and utilities for the house. That is very false. This expectation should be expressed explicitly during the lease signing. Both parties have responsibilities to each other. As it has been said, it takes two to tango.
- A good maintenance addendum to the lease is paramount to ward off even the scent of genie property management. Tenant repair and maintenance responsibilities should be spelled out explicitly so everyone is on the same page.
So that brings up the inevitable question: so (ha ha ha), you’re a proponent of “slumlord management”, are ye? Hardly! When tenants move into a home, every major system should work! If there was ever an expectation that something major wasn’t going to work, the tenant should know about it before signing the lease. And if one of the major systems breaks due to normal wear and tear during the lease, landlords should address it at their expense immediately. I would want that done for me if I was renting.
But what I’m not a proponent of is “slumlord tenancy” (ha ha ha?). Houses are expensive and need to be maintained. If a home inspection uncovers that the air filters have never been changed, the yard is unkempt, leaves are spilling out of the gutters, all light bulbs are burned out, etc. this is an issue! These are not landlord responsibilities. On-time rent is great (thanks!) but it doesn’t give a tenant license to ignore the other responsibilities in the lease and maintenance addendum. And if something breaks due to misuse (pouring hot oil down the garbage disposal, anyone?), I don’t think it is fair to expect the landlord to pay for it. That’s not normal wear and tear and it seems unreasonable for the responsible party to expect the landlord to pay the bill for that.
Yes, if I was renting, I would wish my landlord was a genie! But having Santa around to bring my family gifts in December each year would be a nice thing too.
Alas, all is not lost. It still can feel like Christmas year round. When each party does their part, the house stays maintained, things work well, and the Christmas spirit will abound for all!
BTW, the e-mail response to the tenants from their repair request:
Dear Valued Tenant,
Thank you for your e-mail sharing your repair issues. I’m sorry to hear about them. See my notes below:
- The AC upstairs- we will send someone out to fix it ASAP. Can the technician call you on the 5641 phone number we have on file?
- The front and back door: please try some WD-40 and spray the locks. That usually does the trick!
- The clogged gutters and front bushes: per the maintenance addendum signed with the lease, this is a tenant responsibility. Can you make sure they are taken care of ASAP? If you could e-mail us a few pictures after they are done, that would be great. The owner appreciates you taking care of the home and we need to make sure we are no one is fined by the HOA for non-compliance.
Thanks & have a great weekend!
Brett Furniss is the head property manager 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 MoreFighting With Tenants: Are the Colorful Stories Worth It?
“Don’t knock the weather. If it didn’t change once in a while, nine out of ten people couldn’t start a conversation.” (Kim Hubbard)
I sometimes feel that the same could be said of landlords about their rental tenants. Landlords love to tell stories about how they outsmarted their tenants in their latest dispute. And, conversely, renters love to do the same.
Example:
Landlord: So my tenants say they want to paint a room… they can’t even change a light bulb without calling me, and they want me to trust them to paint my house? Yeah, right!
Envious Landlord Friend #1: (excitedly) So what did you say to them?
Landlord: I told them I would graciously allow them to paint (self-congratulatory pause), but would need to see their handiwork afterwards; if it’s not up to snuff (and, as you know, I have high standards!), I would reserve the right to fix their painting and take the cost from their security deposit. And if a drop of paint even hits the carpet, I let them know I’d add some new carpet and padding to their tab. (smug laugh)
EL Friend: Wow! You really laid down the law!
Landlord: In cases like this, you don’t have a choice; business instinct just takes over. I mean, the last time I was inspecting the house, I saw the tenant’s daughter coloring a picture… her crayon scrawls were completely outside the lines! I hope this isn’t passed down in the genes!
EL Friend: Ha, ha! I can’t wait to get a rental property so I can have clever stories to tell at parties like you!
And from the tenant perspective:
Tenant: My landlord is crazy! I want to paint a room and she is giving me the 3rd degree!
Tenant’s Non-Envious Friend: Well, two can play that game; call her about changing a light bulb again the next time she goes on vacation…
Tenant (laughing): Right! And I have a feeling my toilet may be stopped up around midnight sometime this week…
TNE Friend: Too funny! But are you sure you want her back in the house after the weird way she kept staring at your daughter last time?
The landlord-tenant relationship is like any other relationship. If the landlord chooses to be vindictive and disrespectful, it will usually become a two-way street producing unnecessary stress and anger. And, sadly, it is usually a more expensive venue to take as house maintenance is then often ignored by the tenant and leases are not renewed.
But what if landlords choose peace and harmony? It’s certainly more profitable! But I know it’s not as sexy and it can make landlord party stories sort of boring:
Landlord: I sent my tenants a Ruby Tuesday gift card for renewing their lease again!
Non-Envious Landlord Friend: Hmmm… that’s great, really great.
And
Tenant: A gift card! How thoughtful of her! I need to remember to pick up air filters on our way to Ruby Tuesday’s tomorrow because it’s about time to install new ones.
Envious Tenant Friend: I wish my landlord showed that he appreciated me…
There’s a reward for being nice! Unfortunately, it’s not payable by great stories. But all is not lost! The weather changes all the time so there’s always something to talk about at parties.
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 MoreTenants with Pets: 5 Steps to Protect Your Rental Home
As a property management company in Charlotte, we sometimes get the most touching letters from owner clients. I’d like to share one of them entitled, “Pets in My Home Please!”
Dear BDF Realty,
Thank you for agreeing to manage our property; we’ve worked really hard to make sure our property is upgraded and clean for the new renter. The new paint and carpet really makes it show well! We know you’ll do a great job with it (BDF side note: thanks!).
We do have one small request. We are huuuuuge pet lovers. Could you make sure that you rent to a family that has as many pets as possible? The bigger the animals, the better! It wouldn’t seem right to have a nice, big house without housing as many of God’s creatures as possible. We’d consider reducing the rent for tenants who can prove they have a large and varied brood of animals. Thanks!
Regards,
Pet Lover
P.S. Not to be too picky, but we’d also like to give preferential treatment to those prospective tenants who have unneutered pets. The thought of them giving birth to a litter in our rental home just sends shivers of joy down my spine!
P.S.S. Think Noah’s Ark on land!
OK, this letter isn’t real. I’ve never had any owner clients who said they liked the idea of having pets in their rental homes. But if that’s the case, then why do almost all of them wind up accepting pets?
It’s simply because most tenants (easily over 50% in my experience) have pets. And most pets do not damage homes.
Let’s take a moment to acknowledge our fears with the following scenario. A nefarious and unkempt tenant has been breeding an even more nefarious and unkempt dog, with the scary moniker of “Gargoyle” (Gargoyle is a great student who has far exceeded his master’s nefariousness and unkemptness). They move into your rental home. Unfortunately, Gargoyle sometimes doesn’t allow himself to be walked and winds up doing his business in the house. Gargoyle is also crazily aggressive and enjoys chewing on all door beams and scratches the paint off the walls. After a year of making your home his lair, Gargoyle and the tenant move out to destroy another rental home…
What happens? After move-out, you (or your property manager) does a walk-through. The damage is clearly above normal wear and tear. Some walls need to be repainted, the carpet either needs to be professionally steam-cleaned or replaced, and some door beams need to be replaced. All of this is taken out the security deposit. In worst case scenarios, the damage is above the security deposit, and the tenant is sent a bill for the balance. And when you have a tenant who is known for his nefariousity, he may not pay it. Then court action to collect the balance would be necessary. It’s not ideal, but not catastrophic.
Fortunately, this is very rare. 99% of the time, if there are any pet issues, they can be taken care of with carpet steam cleaning and a professional cleaning, which usually need to be done after a tenant moves out anyway.
But how do you protect yourself from a Gargoyle experience? Try these five tactics:
- Collect a high pet fee upfront for the right to have a pet on the property
- Collect additional security deposit monies
- Screen the tenant thoroughly upfront. What kind of pet do they have? How big? Is it an aggressive breed? What did their past landlords say about them after they moved out? Was the property left in good shape or was it torn up?
- Put a clause in the lease that if any pet issues arise, the tenant can be asked to remove it within 48 hours
- Inspect the property early in the tenancy to see if the pet is doing any damage
For the most part, pet owners are responsible and will not adversely affect the rental home. Tenants have friends and family over to the house (like you) and would be embarrassed if their house was unsightly and reeked of pet.
Don’t let visions of Gargoyle mess with your head! Take the aforementioned steps to protect yourself and your pet issues should be minimal.
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 More
“When To Evict Or Not To Evict”, That Is The Question
“I’ll gladly pay you Tuesday for a hamburger today…”
Wimpy
“I will have the rent for you next week- guaranteed!”
Late Tenants
As a property manager in Charlotte, collecting rent is obviously one of our main functions (in my opinion, the most important function!). Our primary job is to create the most favorable ROI for our clients; we need to be taking rent in for this to be a reality. When we are collecting rent on time and in full, all things are typically good with our owner clients. If a tenant is not paying, things aren’t so grand. And we like things to be grand with our clients!
When a tenant doesn’t pay, eviction is always a last resort. It’s costly, time-consuming, and stressful. And, to boot, the tenant will usually tell you they are going to have the money for you next week! The mind games begin. You can surely hold out until next week to get paid!
But then next week comes and there is a new excuse. “My paycheck was shorted!” That’s one when you don’t feel that badly about going the eviction route. But when the tenants pull out the big guns like, “My mother is dying and I had to use the money for the rent to fly out to see her one last time (the last time I saw her 2 years ago, we said things we both regret- I couldn’t leave it like that). I had no choice… But I get a bonus next week from work and will pay you then!” That’s tougher.
We get calls from home owners who have tenants who haven’t paid for 6 months. Once they get that behind, they’re never going to get caught up.
So what’s the answer? At what point should eviction be filed?
First of all, bad things occur and many tenants are going paycheck to paycheck. When a big expense (aka major car repair) happens, the money just isn’t there for that and the rent.
But most people get paid twice a month (the 1st and the 15th). Filing for eviction prior to the 16th day of the month doesn’t allow you to get those funds. So I believe filing for eviction on the 16th is the earliest point in which it makes sense to do so.
If they aren’t able to make good by the 16th, the next factor to look at is the tenant’s income from when you did the original tenant screening. How much money do they make? Is it even possible for them to come back from being a month overdue (their next paycheck)? For some people, it’s just not possible.
Note: This is something I would strongly recommend paying strong attention to in the tenant screening process. Watch the income to rent ratio- when it is too high, it makes you highly susceptible to negative events happening in a tenant’s life. You ideally need to be less than 33% (examples: $3,000 monthly income and $1,000/month rent = 33% ratio. $4,000 monthly income and $1,000/month rent = 25% ratio. 25% ratio would be much better!)
If their income is too low, eviction should be filed right away. However, if they make enough money to pay the rent by the 1st of the following month and then get caught up sometime later that month (and express an earnest willingness to do so), then I’d wait. It could be worth the gamble.
But set hard, no-excuse deadlines at this point. If you don’t have all of the money by the 1st, you need to file for eviction to protect yourself. After a month goes by with no rent, you can’t wait any longer (no matter how good the excuse is).
If the tenant really is going to have the money in another week like they claim, they can bring it to court and stop the eviction. If not, you need to move on and take the loss. There is really no excuse to go multiple months without full rental payments.
Timing evictions for maximum ROI is a judgment call. But going past 30 days is a dangerous and usually unfruitful proposition!
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 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 MoreCharlotte Property Management Monthly: Don’t Return Your Tenant’s Security Deposit Just Yet
As a Charlotte property manager, I am a big proponent of returning as much of the tenant’s security deposit to them as possible. If the tenant took time to care for the property, did what they were supposed to do during their lease period, and paid all of their rent, they certainly deserve it back! There is a reason property managers are required to put the security deposit into an escrow account; it is a reminder that the security deposit is not the landlord’s money, it belongs to the tenants.
However, that being said, I’m also a proponent of the “slow return.” By NC law, the security deposit does not need to be returned to the tenant for 30 days. And also according to the law, if the landlord is still figuring out repair costs and won’t make the 30-day deadline, they just need to notify the tenant that the payment will be delayed in writing and let them know the approximate cost of the repairs at that point in time.
Why would landlords delay the tenant’s security deposit return? The most popular question asked (by far) when a tenant moves out is, “when can I expect the security deposit back?” If you want to be a “cool” landlord, shouldn’t you just give it back after the walk-through? You already know how much the repairs are going to cost (if there are any) and the tenant could use the money back. You certainly want to be good to the tenants who were good to you, right?
Well, yes, but not exactly. I recommend keeping the security deposit as long as possible. Once it is given back, you really need to consider the tenant gone and their account closed. You need to assume that you will never get any money from them again.
So? They moved out already, right?
Yes, but… Walk-throughs are an inexact science and sometimes things are missed. Think about home inspectors; they are professionals that take hours doing a walk-through to write a comprehensive damage report and they still miss issues with the home. I guarantee that landlords are not close to conducting several hour walk-throughs at the level of detail that they are (nor should they be). Things get missed and that’s life.
However, you can provide yourself some extra time so missed things can get caught before it’s too late and you have to pay for it! It may be one of the handymen working on your home that alerts you to new repair issues. It may be a Realtor or marketing person who wonders why something looks off. Or (usually) it’s the next tenant who moves in afterwards that lets you know what’s not up to par (and by the way, they want the issues fixed on your dime!).
Let tenants pay for damages they are responsible for. And, unfortunately, the delay in returning the security deposit to them is a good way to ensure this happens.
Brett Furniss is the President & Owner of BDF Realty (Charlotte Property Management) which works with Charlotte real estate investors and homeowners and Rent-To-Sell Realty (“When You Need a New Solution to Sell Your Home”) which specialize in rent-to-own (lease options) and rent-to-sell homes. His newest book, A Real Estate Agent’s Complete Guide to Representing Rent-To-Own (Lease Option) Tenants (Delight Clients, Fill Vacant Homes, and Earn $2,250* Upfront! (*Minimum!)
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