Security Deposit Dispersion: Should You Treat Long-Term and Short-Term Tenants Differently?
Scenario #1: Melissa has been in your rental home almost as long as you’ve owned it. And it’s been a good ride! It started out as a standard tenant-landlord relationship with formal calls for repairs and rent checks sent solitarily in the envelope. But over the years, Melissa (now “Mel”) has really grown on you and vice-versa.
It started when she had some tough financial times and asked for you to allow some late payments. You assented and wound up having some deep conversations after the initial rental payment was discussed. A few years later, the water pipe blew and ruined many of her things. You promised to make it right; Mel paid her rent diligently and never complained about all the workmen coming in and out of the house for a few weeks. She really could have!
Over the years, Mel started sending some pictures of her kids having major life events in with her rent check every few months. Oh, how you looked forward to seeing what had become of her family. You were so proud of them! But now, with Michael, Jr. graduating at the end of the summer, Mel has told you that she needs to downsize. And that means she’s moving out.
Mel has been a tenant for 12 years. And you have to admit that your stomach has been in knots since that phone call. On one level, you knew this day was inevitable. On another, it’s almost like losing a family member.
Scenario #2: Wally moved into your Uptown Charlotte rental condo right after his internship at Goldman Sachs ended in Manhattan so he could take a job with Bank of America. You knew Wally would never be Mel. This condo was clearly a stepping stone for him to get used to the area and figure out where he wanted to live in Charlotte (or elsewhere in the world).
Wally was very cordial and business-like when you met him to sign the 1-year lease. “You’ll probably never hear from me!” he joked. And he was right. He set up his on-line bill pay and his rent checks showed up on time every month (sans any other correspondence). And, expectedly, about 40 days prior to his lease expiration, you got an e-mail from him giving you his 30-day notice to let you know he was moving out.
Two of your tenants are leaving and you’ll have to do two walk-throughs so you can disburse the security deposits. Personal feelings aside, do you treat these 2 tenants differently from each other?
Tenants should be charged for any damages beyond normal wear and tear. The amount of normal wear and tear for someone who lived in a rental unit for 1-year versus 12 years is substantial.
Fix-up expectations for a 12-year rental:
- Probable repainting of entire home
- Probable carpet replacement
- Professional cleaning
- Replacing miscellaneous worn out items throughout house
Likely charge to tenant: $0.00
If a tenant lives in your property for 12 years, that’s a lot of normal wear and tear. It would be difficult to justify charging them anything (short of them detonating a bomb in your home prior to move-out).
Fix-up expectations for 1-year rental:
- Minor touch-up paint
- Carpet steam-cleaning (hopefully already performed by tenant prior to move-out)
- Professional cleaning
- Any damages beyond light wear and tear
Likely charge to tenant: That depends typically on how dinged up the walls and flooring are and if there are any major items of damage. Tolerance for rental unit abuse is low.
Sorry, Wally, but you need to be really careful to keep things nice if you’re only sticking around a year. But, Mel, you don’t need to worry so much and thanks for staying so long (I’ll miss you!); just because you moved away doesn’t mean you can’t keep in touch!
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!
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How Much Should I Fix Up My Rental Home for the Next Tenant?
The perfect scenario:
You are lounging on a sunny, deserted beach with your loving wife by your side. You have a cold drink in your hand as you marvel at the solitude and beauty of your surroundings. The only sounds you hear are the waves gently crashing in front of you and the occasional fluttering of a seagull’s wings. The sun subtly warms your skin before a timely breeze arrives to refresh you. You grasp your wife’s hand as she lovingly reciprocates. And you just filled your last rental property with a tenant. Life is perfect.
But, wait… is that your cell phone ringing in your beach bag? Who could be calling you? As you reach for the phone, your wife aggressively removes her hand from yours. “You better not answer that! We haven’t been away together since Eli was born and I’m not going to have our vacation ruined by work calls!” As your eyes refocus to the numbers on the phone, you realize it is the new tenant. “I’ve got to get this,” you mutter as your wife disgustedly begins to turn her beach chair away from you. You feign an enthusiastic greeting of “Hey Herb, what’s up? How’s the place?” as your eyes plead forgiveness to your now emotionally-estranged wife.
Herb begins his 10-minute rant, “This place is a dump! The whole house is filthy! The cabinets and appliances are especially gross and the entire trim needs to be repainted. The landscaping has been completely neglected and the yard is mostly weeds. My wife and I have spent our first 48 hours here on our hands and knees scrubbing and aren’t even close to being done! The air conditioning doesn’t even blow cold air. How could anyone live in this place??”
“Multiple tenants have managed to survive the experience in past 12 years I’ve rented it out,” you want to retort and then think better of it. You turn your head to see your wife disgustedly heading back towards the resort while pounding feverishly on her iPhone, undoubtedly spewing Facebook hate (Subject: You).
Herb is irate and you hear his wife trying to get into the action in the background. Once Herb says his piece, you tell him you’re very sorry, you’ll have someone over to look at the air conditioning, and will send the cleaners back (“No need! If they think the condition they left it in was clean, I don’t care to entertain their second act!”).
So this is bad. You thought you had the rental home in good shape and the tenants are ripping it apart. You look up at the resort and see your wife talking to the pool boy as she uncharacteristically is downing cocktails at 9 AM. This was supposed to be a relaxing, loving vacation and things are going very wrong.
What could have been done to avoid this tenant situation? Honestly, nothing. No matter how clean a house is left, some tenants will say it is filthy. Cleanliness is subjective.
There is a relatively predictable spectrum of responses from tenants after they move-in:
- 10% will be happy with whatever condition the home is in when they move-in
- 10% will be unhappy with whatever condition the home is in when they move-in
- 80% will be happy if the home is reasonably clean and touched-up when they move-in
So if things are reasonably clean, all major systems are working, and the house has been touched up, 90% of tenants will be happy. And everyone likes happy tenants.
And what about the unhappy 10%? It’s not a desirable situation, but there is a silver lining. You will take heat on the front end from them; that is for sure. And you won’t like it. But there are 2 positive takeaways:
- There was nothing you could have done to avoid their unhappiness. If you fixed your home up to such a pristine condition, it would crush the ROI on your investment property. And if you are going to pay to fix it up that much, do it only once and sell it for top dollar. Don’t do it every year. The objective (I’m told) is to make money on investments.
- When the initially unhappy tenants vacate, they will probably leave your home in move-in condition for the next tenant! This allows you to take the pain now to experience joy later.
So, to sum it up:
1. Fix-up your home in a reasonable manner between tenants. This means all systems working, touch-up paint (don’t repaint the house), steam cleaned carpet (don’t replace the flooring), and professional cleaning.
2. Hire a property manager so you don’t have to answer the phone on vacation.
3. Go get your wife!
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 More3 Tips for Effective Rental Home Inspections
What’s going on in my rental home and how does it look?
Typical Landlord Query
You do want to know, but you don’t want to know. It’s one of those paradoxes in life.
If you do want to know, it’s important to have some type of methodology. Here are 3 tips to making the most of your rental home inspections:
- Spot checks won’t lead to lease extensions. And, in the South, they may get you shot. Being that I usually don’t prefer it when people show up unexpectedly at my door (even people I really like!), most tenants are not going to like it if a property manager shows up unannounced (they might not even like the property manager- I’ve heard this happens sometimes…). Prior to tenant move-in, let the tenants know what type of inspection schedule you are likely to keep (annually, bi-annually, quarterly, monthly (gasp!)) so expectations are set in advance. Don’t feel the need to schedule the inspection when they have company in town; it can be a good idea to give the tenants at least a week notice of your visit. And the tenants don’t need to be there, but make sure they muzzle their pets. Don’t undervalue injury-free inspections!
- If you ask for nothing, don’t be upset when you get it (and you usually will!). Smart property managers want the tenants to know exactly what they plan to look at. But isn’t that like giving students the answers to the test beforehand? Yes!! Having the home in good condition is the desired test effect (even if they have to cram for the test). We send them the exact checklist we are going to fill out a week before we visit. This checklist lets them know we’re looking out for unapproved animals, dirty air filters, smoke smells in the house, cleanliness, lawn care, that our keys work, functional smoke & CO detectors on each home level, and any other things that really stick out (we provide ourselves a little latitude to comment on items not on our checklist). Then we snap 4+ pictures (no bedrooms) and e-mail the filled-out checklist and pictures to the owner.
- If no one is keeping score, no one cares. Sharing the inspection results with the tenants is paramount. They need to know that the property manager is paying attention and cares how they treat and maintain the home. We send them the exact, filled-out checklist we had used on their home. We let them know what corrective actions need to be taken and ask them to get back to us when they do correct any issues. However, the first thing we do is compliment them on the items that are correct. We want the tenants to know we appreciate the things they are doing right, prior to asking them to correct the items they could be doing better.
In short, schedule courteously, announce beforehand what will be inspected, share the results, and praise/correct accordingly. Rental home inspections, when thought out well, can be a positive experience for both the property manager and tenant (and the home itself!).
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 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 MoreCharlotte Property Management Monthly: 5 Crucial Expectations to Set Verbally With Your Tenants at Lease Signing
I’m a big believer in setting expectations in relationships; it seems to make things go more smoothly. If you know clearly what you’re supposed to do and I know what I’m supposed to do, there is less opportunity for hurt feelings and animosity. A beautiful, life-long relationship can blossom! (Cue the romantic music…)
This is why many married couples say the first year of marriage is the hardest. There is no book of set expectations for each partner; it’s created on the fly. The idyllic vision of married life begins to fade quickly when real life is thrust upon them. Who pays the bills? How many days are you staying out late with your buddies? You want me to iron the clothes? These fun questions need to be addressed and expectations of conduct need to be negotiated so both spouses are (mostly) satisfied. There is no marriage contract that explicitly spells this out.
Fortunately, a landlord-tenant relationship is governed by a set of rules known as “the lease”; this should theoretically make things easy! A lease is a perfect way to express your expectations to your tenant. That sounds good, but how come there often seems to be hurt feelings and bickering in leasing relationships? From the landlord’s perspective, the tenant should read the contract and follow it to the letter, right? If the tenants did everything the lease said, there would be no issues. So, of course, the issue lies with bad, rebellious tenants.
Wrong. The problem is a society who doesn’t have the time to read anymore. You are in the minority that you have made it past the Twitter-restricted 180 characters and are on to the fourth paragraph of this blog. Congrats! Pat yourself on the back!
And the standard lease is not exactly a page turner! It is legal jargon with no cool pictures or diagrams that goes on for page after long page…
If you want your tenant to know what you want them to do, you must verbally tell them. They will remember what you say and will usually act accordingly. Your leasing relationship will be the better for it! Guaranteed.
Tell the tenants what you expect (the Cliff Notes version please!) and what you are going to do for them (and won’t do for them!). The five most important things I make sure I cover with tenants in our lease signings:
1. The date the rent is due (the 1st of the month), the day it is late (it must be RECEIVED by the 5th of the month), and the day eviction is filed (the 16th) if we don’t hear from them and work something out. I also mention the late, bad check, and eviction fees that would be due in each scenario.
2. Where their security deposit is, what it is for, when it will be returned (within 30 days after move-out), and under what conditions some of it may be withheld.
3. Explaining that aesthetically the home is “as is”. When things stop working (HVAC, plumbing, etc.), what the repair process is and how it is handled.
4. I explain the 3 keys to a good tenancy: paying your rent on time, getting along with your neighbors, and keeping the home in good shape (including standard maintenance).
5. How early lease terminations are handled. Life happens and this is how you can get out of your lease and keep your credit intact. (Note: We ask that a 30-day notice be given along with 2 months of rent as a lease termination fee, in addition to the rent due up to the vacancy date)
6. Bonus item message to give for property managers: “We are not the owner of this home. We are the messenger. We don’t always like being the messenger, because messengers get shot sometimes. You don’t need to shoot us. We’d actually really appreciate it if you didn’t.”
This isn’t a comprehensive list, but it is important to remember that attention spans are not endless. These five points should be helpful in having a great relationship with your tenant!
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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Charlotte 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!)
Learn MoreCharlotte Property Management Monthly: Stick It Out or Play the Field? Long Term Vs. Short Term Leases
In property management, one of the things we discuss with new clients is their goals. Are they planning on keeping the property long term or are they looking to sell it at the first opportunity? Do they want to move back into it at some point? How much flexibility do they need? What is their risk tolerance?
We want to make sure that we are enacting strategies that fit what clients are trying to achieve. They aren’t all in the same life situations.
It’s the same thing in the dating world. Some are looking to get hitched. They want to be seriously dating in an exclusive relationship on the way to marriage. They want someone on a long term basis who they will be with through the thick and the thin. This type of dating allows for greater security and a lasting partnership. However, it is a difficult one to leave without very hurt feelings and does not always allow you to see the best that the partner has to offer.
Other people are looking for “fun”. They want to meet as many people as possible and continually upgrade who they are going out with. This is a strategy that entails a lot of dates, work, and stress. The swinging singles would also argue that it also includes a lot of excitement, the ability to always see the best of the other person, with little actual commitment from their end; when something better comes along (or any other reason, including none at all), it is understood that they are gone.
Leases are the same. Some owners want to have the security of a payment coming in every month. They are willing to sign a multi-year lease for the current market rent, with no rent escalators built in. They want their tenants to be there for a while and be happy. To this end, they often will make home improvements for the tenants. They know they will be holding on to the property long term and are willing to make some sacrifices to keep tenants for the same time period.
Some owners like flexibility and the ability to always get the market rent (or more) for their home. They entertain weekly or monthly leases where they know they can demand a premium for the short lease period. Sometimes there are big events (like the upcoming Democratic National Convention inCharlotte) that they know they could get the equivalent of several months rental payments for renting out for only one week! They also have family and friends that come into town often and they like to have an open place for them to stay.
There are certainly downsides to short term leasing! There are no recurring rental payments guaranteed to come in every month, which is a financial risk. There are many opportunities for the bevy of new tenants that go in and out to damage the place. There are also increased payments to the property manager for fixing up, marketing, and procuring tenants so often. These need to be covered by the excess rent that is hopefully commanded.
Long term versus short term leases is much like the old argument of risk versus reward. Short term leases provide higher highs and lower lows, while long term leases are a moderate investment path that should provide consistent, average returns. The question is what the owners’ goals and needs are and this can certainly change many times during the relationship with the property manager.
For most property owners, the long term leases are the most economical option for their investment homes. However, one size does not always fit all and short term leases can provide a nice bump in income!
Brett Furniss is the President & Owner of BDF Realty (“Charlotte’s Most Innovative Property Management & Investment Company”), 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!)
Learn MoreCharlotte Property Management Monthly: Property Management Going Mobile: Mobile Websites and Apps “Must-Haves” Now?
I was out to dinner the other night in Uptown Charlotte and saw the typical 21st century young, urban couple. They were dressed stylishly, moved with grace, were good-looking, and barely talked or looked at each other the entire time I saw them at the restaurant. Were they:
A. In a fight?
B. Shy mutes?
C. Engrossed with their mobile phones?
Of course, and sadly, the most probable answer in today’s world is C. I have a difficult time with this! I want to say, “Buddy, wake up! You’re with a good-looking woman; I can’t believe I have to tell you to look up and talk to her, instead of texting your friend, Chuck! What’s wrong with you?”
So, being a grown man, I had to decide whether to cry about this newer phenomenon or accept it. After some internal wrangling, I’m happy to report that my righteous indignation has passed and I’ve accepted this digitally-inspired apathy towards fellow humans as the “new normal”. So what does this consumer love affair with mobile phones mean to property managers?
It means we better get in the game in the mobile realm. Regular websites have worked really well for a while, but change has come again. New renters are going to want to use their smart phones to search for rentals near them (aided by GPS), fill out rental applications, pay application fees, and put down deposits. They want the whole rental process available from their mobile phones.
What specifically does this mean? It means we better have mobile websites that allow them to do this; the mobile websites need to include only succinct information potential renters would want when on the go. It also means we need a mobile application (a custom company “app”) that customers can put on their devices so we own some real estate on their phones. Trends show that home internet connections are on the way of landline phones; the new battleground is the mobile phone. We need to be on as many as possible.
A mobile website is critical when consumers search for property management companies from their smart phones. Will yours come up? If it does, can consumers easily find rental homes, contact you (even text you!), and do everything you want them to do (like they can when you see them in your office or when they are in front of their home computer?)
An app is critical to sealing the relationship with customers. How can they remember you when they are on their mobile phones? Your app (with your company logo) sitting with the rest of the apps they use everyday is a good start. This is a good way to build mindshare and also to make it easy for your customers to contact you and refer you to their friends. Not an apps believer? Apps are set to be a $36B business by 2015- a lot of people use them and will be using them!
Change is hard, but the mobile revolution is not going away. If making a property management company last long term is the goal, mobile websites and apps are now “must-haves”!
Brett Furniss is the President & Owner of BDF Realty (“Charlotte’s Most Innovative Property Management & Investment Company”), 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!)
Learn MoreRenting Out Your Home Is Not For The Timid? 4 Reasons Not To Believe The Neighbors
Due to the tough home sales market, some home owners have been thrust into being “accidental landlords”. Their homes won’t sell for the prices they need, they have to move, and they can’t afford to keep them empty indefinitely. So, left with little choice, they will (reluctantly) start the process of renting their homes out.
They start with strong intentions, but then fear takes over! After research which includes talking to neighbors (who all have friends and long lost relatives in the “rental know”) and watching multiple episodes of “The Wire”, they are not sure they can go through with it. There’s so much uncertainty! And risk!
After many web searches, their definition of a “tenant” morphs into:
“A class of unruly persons, usually insatiable smokers, who have extensively studied the art of home destruction and rental payment evasion; commonly known as ‘slackers’ and ‘apathetic deadbeats’, renters have been known to spill drinks and never clean them up, loosen automobile oil pans so driveways become marked for life, and run surreptitious animal compounds (without signing a stringent pet policy disclosure).”
That’s scary!
So, what should fearful home owners do? I’d recommend a few deep breaths for starters. Then let’s look at some facts:
1. Roughly 35% of the population rents currently. Many of the nice places we go to regularly are rentals. I can confidently tell you that a third of theUSpopulation is not bent on home destruction. If you believe they are, sell everything you have and buy stock in Home Depot and Lowes.
2. You have lived in a rental at least once in your life (and probably work in one!) and you consider yourself a good, responsible person.
3. Everyone has a “bad renter” story because the “good renter” stories are boring. It’s like how no one talks about all the airplanes that take off safely everyday, everywhere in the world thousands of times; you only hear about the rare occasion when one plane doesn’t.
Example:
Jim: Hey, my tenant paid on-time and in-full yesterday.
John: That’s great (yawn).
4. Being in the business, I can tell you that most people have pride in their homes. They don’t want to be dodging evictions- they feel embarrassed when they can’t provide for their families. They want their home to look nicely- it’s embarrassing when guests and family come over and their place looks disgusting. That includes smoking indoors (people don’t like visiting homes where there is a smoke smell indoors and most parents want their kids to have healthy air to breathe as well) and out-of-control pets (will most self-respecting people accept living in pet filth?).
Are some tenants more meticulous than others? Of course! But the large majority of tenants are fine people who pay on-time and treat their rental homes with respect (this is especially true after professional tenant screening checks!). The tenants just want to live their lives in peace and have home repair issues addressed in a timely manner from time to time. Their lives are not about getting one over on the owners of the rental homes they live in; it’s just a place where they live for the time being.
Don’t believe the hype. And breathe. Even the timid can safely rent out their homes no matter what stories your neighbors tell you!
Brett Furniss is the President & Owner of BDF Realty (“Charlotte’s Most Innovative Property Management & Investment Company”), 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!)
Learn More