Feature article Joy Peck IERA Executive Director Managing Nagging Landlord Problems Unless you have a property manager that handles most of the burdens of being a landlord, you shoulder all those duties yourself. Sometimes things go well; other times you wonder why you became a landlord! But there are some problems that recur in the life of a landlord, and some circumstances that most landlords might eventually encounter. These include vacancy problems, what to do about exasperating neighbors, really bothersome restrictions or neighborhood covenants, bookkeeping problems, and yard/gardening situations that seem out of control. Most of the following information is just common sense, but when landlords are short on time and have a limited cash flow, overlooking the obvious can happen. So just to remind you of things that will actually save you time, money and additional headaches, here are some important reminders. The Vacancy Problem As an owner of a rental house, you are already aware of the stress that having a vacancy causes, and the costs involved. Many landlords are in a hurry to get the unit rental and after a week or two, begin to skip the essentials. This often leads to disaster down the road, so don’t forget to have the tenant(s) screened!! But you also need to do more than hunt for new tenants to fill that vacancy. Take special precautions when showing your rental house. Unless you live next door or close by, the travel time to show the unit can begin to add up, not to mention the costs of gasoline and time away from your other obligations. Dropping whatever you are doing several times a day to meet prospective applicants is not the most efficient way to use your time, although there will always be occasions where this is necessary. Schedule showings at a particular time or on specific days and include this information in the listing of the vacancy and on any signs you post. It could ready “Open House Sat 9 am – 3 pm,” or “Open to show each evening 5-8 pm,” and so forth. Also, ask a cooperative neighbor to keep the keys and unlock the door for them. If they are willing to show the unit (a $10 incentive could work), have them take the people through and hand them an application which could be mailed to you or returned during one of the open showing times. Or, if they are truly interested and in a hurry, they can call you and set up the lease signing meeting. But by limiting your travel time and those inevitable no-shows, you can simplify your landlording. Safeguard your rental house. Take special pains to make sure your rental units are well looked after during the vacancy. It should be attractive to your prospective tenants and, if it is vacant over a month, you don’t want it begin to look as if it is deteriorating. If the utilities are not in your name, transfer them during the vacancy. This enables you to have utilities available while cleaning, repairing, painting and showing the house. It also saves you from potential breakdowns in gas-fired space and water heaters. They can be temperamental whey being lit after a period of inactivity. Make it look occupied. Keep the lawn watered and mowed. Empty the mailbox if it is located where the accumulation of advertisements and mail could be seen. Keep newspapers, litter, advertising and flyers picked up. Keep the window coverings on the windows; install a timer to a lamp switch (or two) and set them to different times, mimicking someone being in a living area, then later in a bedroom. Do everything you can to discourage the vandals, thieves, burglars and squatters that seem to have a sixth sense about finding houses that appear to be unoccupied for even a couple weeks. Be sure you are fully insured during extended vacancies. When a dwelling becomes totally uninhabited, it becomes more vulnerable to some of the calamities against which owners insure their property, and insurance companies know this. The risks of fire, burst pipes, and vandalism all increase when no one’s around to prevent or discover such damage. Check your policies to make sure that the policy does not exclude coverage during periods of vacancy. Look for clauses lurking in fine print or in paragraphs that you might not expect vacancy issues to be addressed. Or call your agent and ask for specifics. If you are supposed to contact the insurance company each time you have an extended vacancy so you can buy short-term coverage, do so. Neighbors can alert you to problems Some landlords make a point of not becoming involved with neighbors who live near their rental property so they either won’t be bothered by intrusive neighbors or because they don’t have to later “take sides” in any disagreements between their renters and the neighborhood. However, this approach may be short- sighted. Actually, the people who live close to your rental units are not a problem, they are a solution. One need not become overly friendly, but it is in your interest to establish a cordial relationship with them. Knock on their doors, tell them who you are and tell them a little about yourself. If they don’t understand that they have a stake in the situation, enlighten them. Most neighbors are ecstatic that a landlord takes an interest in the neighborhood. Let them know that even though you don’t live in the neighborhood, you are still concerned about keeping it up because the condition of your property affects the neighborhood and vice versa. Enlist their help and ask them if they know of any prospective new tenants, if there are any particular problems that you should know about or could help with (vandalism, graffiti, junk cars, etc). Be sure to give them your phone number, too. These neighbors can be your first alert system if something is going wrong in your rental. And also be aware of the closest C.O.P.S. or SCOPE office. Stop in once in a while, get to know the volunteers, and be sure you let them know you want to be contacted if there is an officer called to your rental. When the unit is vacant, ask the volunteers to add that address to their drive- by checkups on a daily basis. Handling the Restrictions Problem Before you ever rent out any dwelling , whether it’s a single family home, duplex, mobile home, or condominium, check to determine if there are any neighborhood covenants, rules, regulations, restrictions, conditions or bylaws. Whatever they are called, they are all restrictions of one kind or another. You may sometimes get away with paying scant attention to these restrictions (clotheslines, variations in outside paint colors, type of trash containers, number of cars, trampolines, above-ground pools, boats, and other things your renters might bring with them), but eventually you may have some real headaches if you run into a neighbor that is a stickler for the “rules.” Satellite dishes have become the most contested item lately. Tenants cannot be held liable if they do not know the restrictions, so make certain there is an addendum or informational flyer that details any such restrictions and make sure they read it thoroughly before they sign the lease. And also, always find out which person or group of persons are “in charge” of enforcement of the restrictions and let them know you have tenants occupying your property. They may need to know in order to extend a decal or permission for extra parking privileges, or other items. Bookkeeping Problems When it comes to bookkeeping, you have choices. Each house can be handled separately or they can be lumped together. By handling them separately, you would be able to determine exactly how well each house is contributing to your overall financial picture and decide whether to keep or sell it. Combining them all together into one account makes bookkeeping an easier task, using only one spreadsheet and getting totals for each category. However, with the newer landlord software programs, you may be able to have the best of both. These programs can separate one property out from all the others with a keystroke or two and still keep all the information “lumped” together. Shirley Wilcox, of Wilcox & Associates, specializes in landlord software, teaches classes about how to keep your records, and also provides individual training to landlords. (Check the Advertiser’s Directory on page 23 under the Accounting and Software categories for details about how to reach her). Many landlord bookkeepers and accountants highly that whatever system or software you use, recommend that you can lump together units in an apartment complex, quadraplex or duplex, but that you keep single family residences separate. If you use landlord software, once it is set up, there is no extra work at all, and setting up the program is relatively easy. If you are using accounting ledgers, there will be some extra hassle to begin with, but it gives you the numbers you need to analyze what’s happening with each individual house. This will be of immense and invaluable assistance when you decide to sell, if you apply for home improvement loans, and for tax purposes. However, you can still have only one bank account for all those houses and when you write a check that applies to a specific unit, merely add an identifier (such as the numerical address). You will be glad you went to the trouble of setting up your bookkeeping in this type of format later on. The information available at your fingertips will help you approach your landlording as a true professional. Those dreary yardwork/lawn problems Tenants tend to not want to mow the lawns. They think of the house as “their” house, but the yard belongs to the landlord. Illogical reasoning, but that’s the psychology out there in tenant-land. One way to handle this is to have a list of lawn care people you know will do the work for reasonable rates and hand this list to your tenants when they sign the lease. If they say they prefer to do the work themselves, remind them that the rent is “discounted with the understanding that you, the landlord will not have to care for the lawn.” If the yard is not mowed on a regular basis the cost of having someone to do that will be added to their rent, and make certain that this is spelled in the rental contract either by adding it to the face of the lease or in an addendum. A landlord can’t expect a tenant to take care of gardens, lots of bushes or pull large amounts of weeds. It is the most unusual of renters that will take on such time-consuming and energy-demanding tasks. Consider planting very low maintenance landscaping which is beautiful to look at, but requires little or no regular work. You might also provide on loan a few of the necessary items the tenant might need to keep the yard weeded, trimmed, or fertilized. If an automatic sprinkler is practical for you, give it some serious consideration and set it yourself, keeping the tenant’s schedule in mind. Otherwise, you may have to provide the hose and yard sprinkler yourself since very few renters purchase such equipment or keep them in working condition. If nothing else, find a high school or college student who will mow the grass on a regular, agreed upon schedule and also make certain the tenant remembers to water the yard. For just a few dollars a week, the weeding could be added to the list. As a last thought, if someone is driving down the street where your rental house is located, and can pick out your house as a rented one, then there is room for improvement. And also, the value of that property is probably declining rather than increasing. You want your house to be appreciating at the same rate as every other house in that neighborhood, so take stock and see what needs to be done. Keep looking for ways to be sure the line of communication with your tenants are open, that you know the neighbors around your rental property, and that you help instill a pride of tenantship in your tenants. In the long run, this helps put money into your own pocket.
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