LANDLORDING : THE HIDDEN COSTS

 

Real estate concept.

The learning curve for new landlords can be steep.  There’s learning how to deal with tenants, maintenance and legal issues and of course, all the paperwork that goes with renting properties.

But that’s only part of the story.  If you are a novice landlord, you will also have to be prepared to cope with other costs that you may not have considered.

Increased insurance and tax costs

Rental properties can be more expensive to insure than regular properties.  For example, the premium for a rental home can run as much as 25% more than typical homeowner’s insurance.  Rent may help to cover increased costs – so long as it is occupied.  There may be times when it is not, such as the period between tenancies.

Unless you live on your rental property, you’ll likely be subject to an increased tax burden.  At the same time however, some expenses associated with renting the property may generate tax breaks.  Consulting with tax professionals can help clarify the possibilities inherent in your particular situation.

Administrative charges and legal fees

Landlords have to pay for administrative costs related to actually getting new tenants. This can include those associated with interviewing, checking credit histories and also references.  Additionally, many cities require that owners register rental homes, make them available for examination and absorb all costs associated with both.

Should a tenant need to be evicted or in the event of some other legal dispute, you’ll need to be prepared to pay for the services of a lawyer.  And sometimes the fees can be quite hefty, up to $200 per hour or more.

Maintenance costs

A landlord often has to spend money on upgrades to rental properties to attract suitable tenants.  And even after people do move in, he or she will usually be under some kind of contractual obligation to fix maintenance issues as they arise.  A security deposit can usually help offset these expenses – unless the tenant completely trashes the property, which does unfortunately happen.

With so many hidden costs, how can a new landlord get in the game and win it?

The experts at Herman Boswell can help you not only manage your investment properties, but enhance profitability.  Our dedicated professionals are among the most trusted names in property management in North Dallas.  For the peace of mind and security you deserve, contact us today!

The post LANDLORDING: THE HIDDEN COSTS appeared first on Herman Boswell Property Management.

Late fees are an important part of any property management business.  That’s why it’s important that you make it clear when rent due dates, grace periods and late fees are due in all rental agreements you draw up with your tenants.

Following are five strategies you can implement to ensure you receive the rent due on your investment properties in a timely manner:

1. Define payment terms

Every lease agreement should begin with clear rent payment terms.  Information should include the day rent is due each month, what the grace period is (this can range from 3 to 5 days) and when rent is considered late.

2. Determine late charges

The late charges you establish should be fair, reasonable and be in keeping with monthly rent and/or state regulations.  In general, the total amount you should charge should not be more than one quarter of the month’s rent.  They can be assessed as:

• a flat fee due immediately after the grace period ends
• a percentage of monthly rent (usually 4-6%) based on rent amount
• a daily late fee that accrues each day after the grace period

3. Contact tenants

If a renter misses a rent deadline, give him or her a reminder via email or the telephone. Mistakes happen, but sometimes one late payment may lead to more in the future.

4. Set precedents – and stick to them

As a landlord, you need to be consistent with your late fee policies.  Failing to communicate and impose fees could cause you problems later, especially if you have to evict a tenant.  Courts need evidence that you are abiding by rules in order for you to protect your legal rights as a landlord.

5. Amend rental agreements

If your current leases do not have clear rent payment terms, consider revising them as soon as possible.  Depending on the kind of agreements you have, you may not be able to do this until renewal time.  Contact a legal professional if you need help.

Collecting, and enforcing, rental policies are among the difficult tasks busy landlords face.  But Herman Boswell can help.  Our professionals have the skills and savvy that get results.  Let us show you an easier way to manage your investment properties: contact us today!

The post 5 EFFECTIVE LATE FEE STRATEGIES appeared first on Herman Boswell Property Management.

Disabled tenants present special challenges.  You can’t treat them differently from able-bodied renters.  At the same time, though, you may need to make special accommodations for them.

The first thing to clarify is who is considered disabled.  The federal Fair Housing Act and Fair Housing Amendments state that a person is disabled if he or she has a physical or mental disability that limits one or more major life activities.  These may include:

• mobility, visual and/or hearing impairments
• mental illness or retardation
• chronic alcoholism (if it is being addressed in a recovery program)
• HIV or AIDS

As a landlord, you cannot make decisions about where a disabled individual will live on a property.  For example, if you are renting two units, one on the ground floor and one the second floor, you must show both units to a disabled applicant, even if you believe the ground floor unit would be best for the person.

After a disabled tenant moves in, and at your own expense, you may also need to adjust rules, regulations and/or services to give that individual an equal opportunity to use and enjoy a rental.  For example, if you provide parking, you may need to offer a disabled tenant in a wheelchair a space that is spacious and close to where the person lives.

A disabled tenant also has the right to make reasonable accommodations at his or her own expense.  Special faucets or door handles or a wheelchair ramp are some of the accommodations such an individual could ask for.  You have the right to approve these changes and ask for proof that they will address the disabled tenant’s needs.

Handling tenants, especially those with special needs, can be one of the hardest things you’ll ever have to do.  The Herman Boswell team of real estate experts can make that task a little easier for you.  We have the experience and the know-how you need to help you get the job done right.  For property management you can count on, contact us today!

The post MANAGING TENANTS WITH DISABILITIES appeared first on Herman Boswell Property Management.

If you’re like many business people, you think and act globally. When it comes to landlording though, having investment property that’s not in the same city, or even the same state where you live, can be a challenge. But with a little strategic planning, it’s still possible to see a positive return on investment (ROI) on your rental property.

1. Have local connections

If you don’t have friends or family who live near your rental property, then you need to begin networking. Attend real estate events to meet local real estate agents or other rental professionals in the area. Such individuals can check up on a unit or help tenants who have locked themselves out when you can’t.

2. Stay in touch with your tenants

You want your tenants to feel comfortable talking with you and the only way you can do this is through ongoing communication. Give your tenants a call every few months or send an email. Since some renters won’t say anything unless asked, you’ll need to do check-ins to see how things are going to make sure they’re happy and that everything is working properly in the unit.

3. Visit your rental property regularly

You’ll need to visit your property at least two times a year to know for yourself what’s going on. Any inconvenience this may cause will be balanced by the fact that since your travel expenses are business-related, they are also tax deductible.

4. Hire a good property manager

If you know you won’t be around your property, hire a reputable property manager. The best individual for the job will have communication, sales and administrative expertise as well as solid technological skills.

You may think that such a hire may cut too deeply into your profits. But a good property manager may actually save you money. That’s because they may help you avoid damages, bad tenants and other expensive problems.

The real estate experts at Herman Boswell can provide long distance landlords like you with property managers with the expertise and reliability you need. Contact us today and let us show you a better way to manage your investment properties no matter where you are!

The post 4 Tips for Successful Long Distance Landlording appeared first on Herman Boswell Property Management.

It happens. Despite all your marketing and advertising efforts, you just can’t seem to find good tenants – or any tenants at all – for your rental home, apartment or condominium. And you have no idea how to fix the situation.

However desperate you may feel, don’t succumb to the temptation of loosening your screening requirements for new tenants. A bad renter – someone who pays rent late, damages the rental unit or disturbs other neighbors – is not worth the price of getting the unit occupied.

Instead of taking a chance on a risky tenant, ask yourself the following questions:

(1) Is the rental price I’m asking too high compared to similar properties?

If so, consider lowering the rent. Check rents of comparable rentals in your community on websites like Craigslist and visit a few properties that are similar to yours. You may discover that charging slightly less than what seems to be the going rate is a good way to find and keep great tenants.

(2) Does my rental house, apartment or condominium need repair work?

The condition of a rental unit may be affecting tenant interest. Simple things – like a paint job, new carpeting or window coverings – could make the difference between whether your unit gets rented or continues to remain untenanted.

(3) Is my print and/or online rental ad failing to draw in prospective clients?

Compare your ads to those you might find in similar venues. You may find that you’ll need to rewrite and/or repackage the contents of the ad to make it more appealing.

(4) Would I attract more prospective tenants if I allowed pets?

If you don’t allow pets, consider changing your policy. You may have more paperwork to deal with, but many landlords find that tenants who own pets are more responsible, appreciative and stable than those who don’t.

(5) Would tenant incentives – like a resident referral program – help me get new renters?

Some landlords have great success with programs in which they pay a premium to pre-existing tenants who refer other lease-signing renters to them. If you don’t have a lot of other tenants, consider offering new tenants things like:

• free rent for one month
• free parking
• free satellite service

If you do provide incentives, be sure to offer them in a way that is both fair and consistent to avoid charges of housing discrimination.

The experts at Herman Boswell can help you get your units rented without compromising your bottom line. That’s because we know the real estate market in North Texas like no one else. When you need help from experts who treat your real estate investments like their own, contact us!

The post WHEN YOU CAN’T RENT YOUR UNITS appeared first on Herman Boswell Property Management.

When it comes to ending a tenancy, you need to be as clear about your move-out terms as you are about move-in ones. Doing so will help you avoid expensive, time-consuming complications that could jeopardize your rental business.

1. Giving notice

Make it clear from the day your tenants sign their lease that they must give you written notice when they decide to move out. Following are some basic guidelines for the most common lease types:

• fixed-term: tenant occupancy ends after a pre-arranged period of time
• month-to-month: tenants should give 30 days’ notice
• year-to-year: tenants should give 60 to 90 days’ notice

2. Rental unit viewings

You should always give current tenants a courtesy notice of at least 24 hours that you plan to show the rental to others interested in taking over the unit. The only time when this does not apply is if the lease specifies that no notice is required, especially in the last month of occupancy.

3. Move-out specifications

Make sure your tenants know that they need to clean the rental and all provided items – especially stoves, refrigerators and dishwashers – to get their full security deposit back. You should also tell them to repair any damages to the apartment that go beyond normal wear and tear and take all belongings when they leave.

4. Final inspection

On move out day, both you and your tenants should do a final inspection of the rental unit. Use the inspection report that the tenants filled out on move in day to determine if anything has been damaged. Make careful note of any damage and then sign the report together.

5. Returning the security deposit

If your tenants have damaged the rental, left it unclean or neglected to pay rent or utilities, then you have a legal right to deduct whatever money is owed from the security deposit. Be sure to specify how much you are taking out (and for what) to the tenant.

Busy landlords like you often don’t have the time to deal with all the issues that come with ending a tenancy. That’s where the experts at Herman Boswell come in. Our team of real estate professionals can help you take care of your business so that your business takes care of you. Contact us today and let us show you a better way to manage your property investments.

The post 5 Steps to Ending a Tenancy the Right Way appeared first on Herman Boswell Property Management.

Should you let your tenants keep pets in the units they rent from you or not?

Allowing domesticated animals on your property can pose risks, such as possible property damage and tenant injuries. But you can effectively reduce the risks associated with being in charge of pet-friendly housing.

The first thing to do is include a pet agreement in rental unit leases. Make sure that all tenants read over and sign the pet agreement, even if they do not own a pet. That way, if they decide to get an animal pal later on, they will know what to expect if they want to continue renting from you.
Following are some provisions you may wish to include in your pet agreements:

I. Kinds of Pets Allowed

Be sure to be very specific about which types of pets are OK for the unit(s) you are renting. Some landlords only permit common domesticated animals such as dogs – be careful which ones – cats, guinea pigs, rabbits, hamsters, gerbils and small reptiles. You should also be clear on how many such pets you will allow.

It’s also good to ask your tenants about the pets they plan on keeping. Some possible questions might include:

• how long the tenant has had the pet
• whether the pet has caused any problems in the past
• who will look after the pet when the tenant is away

II. Requirements for identification, licenses and vaccinations
Tenants should know that all dogs and cats should wear ID collars or tags that include proof of current vaccinations. You should find out what your local ordinances require concerning regular pet vaccinations and licenses and insist that tenants give you proof – such as copy of a vet bill – that they are in compliance with those laws.

III. Tenant pet responsibility
Your tenants should agree to keep their animals under control at all times so that those pets don’t become a nuisance to other tenants. Make cleaning up after pets a requirement, especially in any common areas. Have an agreement in place that addresses where and how pets are to be supervised and consider asking pet-owning tenants to carry renters’ liability insurance.

IV. Pet fees
Some landlords find it helpful to levy a pet fee in addition to a security deposit (in Texas, this is legal, though not in other states). Should you do this, keep the amount reasonable, around $300 or so. If you do not and your tenant takes you to court, a judge may not enforce any pet fee provision you may have.

Be aware that you should never charge extra for service animals as they are not pets. They are “companions” that accommodate a disability.

The final thing to remember about your pet agreements is to make them easy for you to change. You can do this by stating that you have a right to amend all rules when you give tenants reasonable notice (this is usually 30 days).

In a dog-eat-dog world, it’s hard to stay on top of everything when you’re a landlord, especially one that’s open to pet-owning tenants. That’s why Herman Boswell exists: to help property owners on the go take care of the little things that can make a difference to a landlord’s success. When you need property management expertise, contact us!

The post PET AGREEMENT FOR RENTERS appeared first on Herman Boswell Property Management.

Most rental property owners worry about protecting their investment. From physical damage to the property to insurance claims to lawsuits brought by tenants, there are myriad ways that you can lose money. Fortunately, minimizing risks in a rental business doesn’t require a ton of money or a staff of experts. All you need to do is learn where you’re vulnerable and then take commonsense steps to minimize that vulnerability.

Here are five tips you can take to protect yourself against liability as a landlord. By acting now, you’ll enjoy a big payoff: reduced likelihood of lawsuits, harm to tenants and guests, damage to your property, and financial distress to your business.

#1: Get the Right Insurance for Your Property and Business
Don’t wait until a loss occurs before you determine whether you have the right insurance for your business and property. Review your current policy with your agent or broker, then discuss coverage options that fit your needs.

#2: Make Your Property Physically Sound
Keep your property safe so that people don’t get hurt. To do this, learn the basic legal requirements for repairing and maintaining your property, and then follow them.

Implied warranty of habitability. Virtually every landlord must comply with a legal rule known as the “implied warranty of habitability.” This means you must make sure your rentals are in a “fit” and “habitable” condition when tenants move in, and you must maintain this condition throughout the tenancy. Get familiar with your state and local health, building, and safety codes, and strive to keep your property compliant. (To learn how to find the laws that apply to your rental property, see Nolo’s Legal Research area.)

Take steps to prevent injuries and losses. In addition, take other reasonable steps to prevent injuries and other losses. For example, take all tenants’ repair requests seriously and fix problems promptly. Inspect your property yourself for hazards. If you can’t address a hazardous situation immediately, warn tenants and visitors about the danger. (For example, put traffic cones around a pothole, or post signs and safety tape near a spill on the floor.)

#3: Make Your Rental Property Accessible to Disabled Tenants
Make your property accessible to tenants with mobility impairments and other disabilities. Check whether structures on your property must follow the Fair Housing Act’s “design and construction” requirements. (Generally, multifamily buildings that were designed and constructed for first occupancy after March 13, 1991 must comply.)

Regardless of when your buildings were constructed, seriously consider all requests from a disabled prospect or tenant to modify your building in order to meet that person’s needs. Review each request on a case-by-case basis and grant it if it’s reasonable. For example, a prospect’s request to install grab bars in the bathroom or lower kitchen cabinets is probably a reasonable modification request.

#4: Remove Environmental Hazards from Your Property
Removing environmental hazards is often trickier than removing other physical hazards. Environmental hazards often can’t be seen, and they may not become apparent until they cause injury or property damage. For example, a landlord might not learn of lead paint dust on her property until a family gets their child’s blood test results showing elevated levels of lead. What’s more, in some cases environmental hazards remain invisible even once they’ve caused damage, as in the case of carbon monoxide or radon.

Do your best to address environmental hazards before they cause serious damage. Here are some ways to do so:

•  Require tenants to report all leaks and flooding to you promptly so that you can take quick action to prevent mold.
•  Maintain your heating systems and appliances, and install carbon monoxide detectors in order to prevent carbon monoxide build-up.
•  Comply with federal testing requirements when employees or contractors work on asbestos-containing building materials, such as sprayed-on ceilings. These tests will reveal to workers what’s in your building, and you can use this knowledge to protect your tenants, too.

#5: Prepare for and Handle Disasters and Emergencies
Take steps to safeguard your business and protect your property, tenants, and employees in an emergency. For example:
Back up your computer files and keep important documents (such as a mortgage, note, and management contract) in a secure and fire-proof off-site storage facility.

• Report suspicious objects, activities, and mail to the police, and take bomb threats seriously.
• Document the location of utility shut-off valves, a step that can save lives and minimize damage if a fire or other disaster occurs.
• Create an emergency procedures manual with an evacuation plan that’s tailored to your property.

The post 5 Tips for Reducing Your Risks as a Landlord appeared first on Herman Boswell Property Management.

You’ve just found out that renters at an apartment complex you own have just formed a tenants’ association. Don’t despair! You can stave off trouble and take charge of the situation if you can keep your cool and do these three things:

1. Dig for information
Talk to your tenants and try to find out what motivated them to form an association. Usually, renters won’t do this unless something significant – or an escalating pattern of smaller problems – has caused them to want to take action.

2. Make improvements
Defuse the situation that drove your tenants to band together by taking swift action to redress the problem(s). Then come up with a plan that shows you are a responsive landlord going forward. This will require that you take a careful look at your property and business practices and especially how you’ve been communicating – or not – to your tenants.

3. Go to association meetings
Offer to attend association meetings or send an employee on your behalf. Doing so will:

• keep you abreast of what’s going on;
• relieve some of the anxiety you may feel about the association’s existence; and
• show tenants that you care about your property and want them to be happy living there.

Know that association members are under no obligation to let you attend their meetings. If they are not willing to let you attend, let them know that you would at least like to meet with association leaders to discuss any issues the group may have.

You should also be aware that retaliation is a bad idea. It will damage your reputation, both as a landlord and a businessperson. Be fair in your dealings and treat a tenant association just like any other group at your property, so long as members abide by your rules.

If you still feel like you’re up against a wall, then it’s time to call the experienced property management professionals at Herman Boswell. We can help you not only deal with crisis but come out ahead. Contact us today and let us show you a better way to manage your properties!

The post 3 TIPS TO HELP YOU MANAGE A TENANT ASSOCIATION appeared first on Herman Boswell Property Management.

When dealing with tenants, putting things in writing is critical. One useful strategy is to give new renters a move-in letter on or before the day they move in to their new rental.

A move-in letter can include information about:

• your expectations regarding rental upkeep
• what to do about safety hazards
• repair and maintenance procedures
• how to get a security deposit back
• how to reach you, especially in emergencies
• trash disposal and recycling
• laundry facilities
• your policies regarding short and long-term guests
• inspections
• keys and locks and what to do if there is a problem with them

As a courtesy, you might also want to include any forms and/or information your new tenants may need for cable/Internet hookups and landline phone service. You can also include change of address cards, a map of the community and a list of local schools, post offices, stores and hospitals.

Move-in letters can also contain move-out information. Restate your policies regarding lease renewals and terminations. Also tell your tenants that you will inspect the apartment for overall cleanliness and damage. Encourage tenants to take an end-of-lease walk-through with you so that they know how much of their security deposit they can expect to receive.

Land-lording can be a paper chase, especially when you’re dealing with multiple tenants. This is where the real estate professionals at Herman Boswell can help. Our experts are here to simplify your record-keeping and deal with the other day-to-day responsibilities that go along with being a landlord. Contact us today and let us show you a better way to manage your real estate investments!

The post TENANT MOVE IN LETTER appeared first on Herman Boswell Property Management.