Tag Archives: rental properties

10 Steps Toward Low-Risk Landlording

Learn how to protect your rental property from common mishaps and risky situations.

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 ten steps 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.

Step #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.

Step #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.

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.)

Step #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.

Step #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.

Step #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.

Step #6: Lower the Risk of Crime at Your Property

In recent years, courts have increasingly found landlords partially responsible for crimes on their properties because they didn’t provide adequate security.

To prevent problems and keep your property and tenants safe, comply with state and local laws concerning security measures on rental properties. Screen your applicants and employees carefully — don’t just look for experience and know-how when it comes to filling a position on your staff. Adopt a smart key policy so that keys don’t fall into the wrong hands, and make sure your intercom system doesn’t link tenants to their apartment numbers. Answer prospects’ questions about security candidly, and deliver on any promise you make to increase security.

Step #7: Avoid Fair Housing Complaints When Choosing Tenants

If a prospective tenant believes you violated her civil rights, she may take legal action against you. Even if you win, defending yourself takes time, money, and energy.

To avoid problems, learn the basics of fair housing laws. The key to compliance is treating everyone the same. Some ways to do this include:

  • putting your screening criteria into a written tenant selection plan and giving a copy to applicants
  • rejecting applicants for legitimate business reasons, such as poor credit or negative references from prior landlords, and letting applicants know your reasons for rejecting them, and
  • keeping an updated log of apartment availability, and granting prospects’ requests for reasonable accommodations. For example, if you have a “no pets” policy and a prospect needs a guide dog to accommodate his disability, let him keep the dog as an accommodation.

Step #8: Adopt Careful and Consistent Business Practices

Many landlords create risks just by the way they go about their business. Be a careful and consistent landlord by using a written lease or rental agreement with tenants and by enforcing lease clauses consistently. Create house rules for tenants to follow (for example, regarding pets or children’s health and safety) and enforce them. Don’t let a friendship with a tenant interfere with your professional relationship. Also, to prevent identity theft, don’t use tenants’ Social Security numbers any more than needed.

Step #9: Avoid Problems When Hiring Help

Hiring help brings the promise of efficiency, savings, peace of mind, and profitability to your business — but it also brings risk. To lower your risk, determine whether you must classify a helper as an employee or an independent contractor.

For employees, be sure to withhold the appropriate payroll taxes and create a zero-tolerance policy against sexual harassment.

When using contractors, make sure they have insurance and sign a written contract with you.

If you’re considering hiring a management company or need to hire a lawyer, ask questions until you’re satisfied you’re choosing the right one.

Step #10: Taxes: Stay on Good Terms with Uncle Sam

Take steps to avoid a tax audit and to maximize your deductions. For example,

  • Establish a recordkeeping system for your business so that you keep track of every document that will substantiate your claimed income and expenses.
  • Understand how your choice of business structure and tax year affect your taxes.
  • Find out what deductions you’re entitled to claim, and then claim them.
  • Finally, hire the right type of tax pro for your business, and review your past returns for evidence of trends or problems.
Information obtained from nolo.com

For more help regarding these issues please visit:

https://helpforlandlords.com/landlord-state-guide-assistance/

Portland Oregon Landlord : Tenant destroyed rental as revenge!

PORTLAND – A tenant was believed to be responsible for destroying a home that he rented in SE Portland.  The landlord thinks it is retaliation for her trying to evict him for not paying rent.

Cindy Hiatt told NewsChannel 8 her tenant, William Olietti, wrecked every room of her home on SE Rhone Street.  “I just walked through the house and I was in shock,” she said.  “Every step I took I was in more shock.”

The kitchen cupboards were taken down and burned.  Trash was left in the sink and the faucet was broken.  It looked like Olietti took a jackhammer to the tile floor in the kitchen.

“It’s just like, you’re numb and in shock,” said Hiatt.

Olietti also smashed windows, broke holes in the wall, and trashed the backyard shed.

“I can’t think of anything horrible enough to happen to somebody who could do that,” said Hiatt.

An expert on landlord-tenant rights said there were a few things a landlord could do to avoid similar situations.

“The landlord can ask for references, can ask for a security deposit, can ask for a co-signer,” said clinical professor Mark Peterson.

Olietti was arrested and charged with criminal mischief.  Hiatt does not think the house will be available to prospective renters for several months.

“I can’t begin to think how much it’ll cost,” said Hiatt.  “It’s unbelievable.” 

From KGW.com
by Mike Benner

Find services to help you properly screen your tenant here.

Landlord Quick Tip!

Re-Key- Without the Fee!

 
Submitted by real estate expert Eleanor Trainor
Re-keying? It’s so expensive— but here’s an awesome new product:

Here in the City of Seattle, it is required that the locks be changed between tenants.

 
Our local locksmiths often charge at very least a $79 trip fee, plus $12-15 per cylinder to change the locks. Yikes! (My company, Rental Restoration, charges a flat $92.50.)

Kwikset has developed a new secure cylinder that anyone can change with the tool that comes with the cylinder.

 
This would be great for high-turnover units and multi-family buildings. More information is here: http://www.kwikset.com/SmartKey/
Very cool! 
 
Eleanor Trainer is with Rental Restoration, the only independent full-service maintenance contracting firm in Puget Sound that focuses solely on serving property managers and rental property owners. 

Bad Economy Turns Renters into Roommates

Recession Has Renters Tripling Up Instead of Doubling Up to Save Money
by Matt DiChiara

San Francisco, CA —Faced with uncertain economic times, renters around the nation are saving money on their monthly housing costs by opting to split a 3-bedroom apartment rather than living alone in more expensive 1-bedroom apartments.

MyNewPlace, one of the largest online apartment listing sites, recently conducted a survey of internal search data, which showed that the share of searches for 3-bedroom apartments made significant gains at the expense of 1-bedroom apartments since the beginning of 2008.
Based on a sample of nearly 10 million searches for 1-, 2-, and 3-bedroom apartments that took place on MyNewPlace.com between January 2008 and June 2009, the percentage of searches for 3-bedroom apartments consistently increased each quarter while searches for 1-bedroom apartments decreased. The share of searches for 2-bedroom apartments meanwhile stayed steady, suggesting that instead of ‘doubling up,’ renters are tripling up for even greater rent savings.

Since monthly rents are often lower per bedroom the more bedrooms an apartment has, the changing search patterns reflect an overall trend of renters looking for more economical housing options without sacrificing ideal locations and amenities.
Top Ten Cities for Roommates Looking to Save on Housing

Where are savvy renters saving money by moving in with roommates? Combining regional search data with average prices for apartments listed on MyNewPlace, MyNewPlace.com put together a list of the top ten cities where renters are saving:

· Washington, DC: Not surprisingly, the cities with the highest rents often offer the highest potential for savings. The share of 3-bedroom searches in the area around the nation’s capital has grown by 87%, with renters saving as much as $800/month by bunking up—nearly $10,000 per year.

· Philadelphia: Faced with high housing costs, renters in the City of Brotherly Love are getting friendlier than ever, with searches for 3-bedroom apartments more than doubling, with average savings of around $490 per month.

· Atlanta: Atlanta saw 1-bedroom searches decline by half and 3-bedroom searches more than double, as eager renters pursued $413/month savings by moving in with roommates.
· San Jose: Silicon Valley renters sought to mitigate the area’s notoriously expensive rents by finding roommates—at a savings of more than $600/month.

· Chicago: Windy City residents braced against the chilly economic climate by cozying up with roommates, doubling up their 3-bedroom searches, to the tune of $560/month savings.

· Denver: Renters are tripling up in the Mile High City at some of the highest rates in the country, and saving nearly $350/month in the process.

· Los Angeles: In the City of Angels, even the beautiful people are moving in together. Three beautiful people under one roof could save more than $525 each.

· Seattle: 3-bedroom search share increased 113% from January 2008 to June 2009, with savings of up to $500/month for each roommate. That’s a lot of cups of coffee.

· Las Vegas: Nevadans aren’t gambling when it comes to their housing costs. Las Vegas has among the highest growth in 3-bedroom searches nationwide, and each roommate could be saving $360/month.

· Boston & Cambridge: Renters in the Boston area aren’t tripling up at quite the rates of the rest of the cities on our list, but they should be—there’s up $880/month to be saved.

For a complete set of graphs, visit http://www.mynewplace.com/press-releases/bad-economy-turns-renters-into-roommates-recession-has-renters-tripling-up-instead-of-doubling-up-to-save-money/.

Matt DiChiara is with MyNewPlace.com is a dynamic online marketplace for apartment rentals, featuring a free-to-use apartment finder to search its database of over six million listings.

American Apartment Owners Association offers discounts on products and services for landlords related to your real estate investment including REAL ESTATE FORMS, tenant debt collection, tenant background checks, insurance and financing. Find out more at joinaaoa.