As spring ends, temperatures begin to rise throughout the states. Laws regarding temperature minimums for rental properties have long been in place, and new regulations for maximum temps during warmer months are now on the table in many states. In other words, you must provide a method for tenants to stay warm in the winter, and soon you may be required to provide air conditioning to your rental properties to cool the inside temperatures during the summer months. Here’s some information on how landlords can help tenants stay cool during a heatwave that you may be better off managing now and not waiting until it gets too hot to handle.
In our neck of the woods of California, the temps near our rental properties are rising, so we reach out to prepare our tenants for the multi-day 109* heatwave that is sure to occur in the coming months.
Regardless of timing, the tips and suggestions below can be used any time during summer for any home (not just for rentals).
How to cope with sweltering weather:
Air Conditioner Tips
For air conditioning units, it is essential to know the greatest AC unit will cool your home about 20 degrees less than the current temperature outside. When the outside temperature is 90 degrees or higher, it is best not to turn up or lower the temp too low as it puts your air conditioner in an uphill fight trying to cool down your unit. Set your thermostat between 75-78 degrees (or higher) and try to cope with a bit of heat. Read below for air conditioning maintenance tips.
When to Open, When to Close Windows and Blinds
Keep blinds closed in all rooms to create an extra layer to keep the heat out. Then, in the late evening, when the weather cools to around the same temp the air conditioner is set at, turn off your AC. Next, open the blinds and windows and, if present, use the breeze outside to cool the rooms. This method works best with cross ventilation, where you have windows opened on both sides of the home so the air can flow through and out of the unit.
Install and turn on ceiling fans to cool the tenants
The circulating air will help by drying perspiration and making one feel cooler. One can tolerate the thermostat setting a little higher when you feel cooler. This is a nice, low cost way to keep tenants cool during a heatwave.
Appliance Use
Do not use appliances OR, if one must, do so early in the day or later at night. The heat from operating an oven, dishwasher, or washer and dryer will significantly contribute to the discomfort in the home.
Maintenance Tip
Replace air filters. The cleaner the filter, the easier the air will circulate through the unit. It also keeps the air conditioning unit itself running better. It won’t have to work as hard and decreases the chance of failure when the filter is clear of dust, etc.
Stay Healthy
Stay hydrated and be aware. Symptoms of heat exhaustion are:
- Feeling faint or dizzy
- Excessive sweating
- Cool, pale, clammy skin
- Muscle cramps
Treat these symptoms by drinking water and cooling your body with a fan or AC or by placing an ice/gel pack on the back of your neck.
Heat Stroke symptoms are more serious such as:
- Throbbing headache
- No sweating
- Red, hot, dry skin
- Rapid, strong pulse
- Loss of consciousness
Experiencing any of these symptoms, one should call 9-1-1 or seek medical attention right away.
Helping your tenants stay cool during a heatwave is good customer service and in your best interest to help them maintain the unit and their health. The more they spend on running the AC each month, the harder it is for them to make rent.
Maintenance Tips for Air Conditioning Units
If your units include window air conditioners, you can increase efficiency by ensuring the seal between the window and the air conditioner is not leaking. Over time moisture can damage the seal, causing it to leak.
Make sure nothing is blocking the unit’s air flow like bushes or fallen leaves (this applies to a full home/independent unit).
If your unit contains a filter, advise your tenant to clean or replace it for increased airflow.
For single-family homes, closing off unused areas (and air vents) during the hottest part of the day will help concentrate the cool air and make the home more enjoyable and efficient.
Ensure maintenance on your air conditioning units is done each spring to maintain maximum efficiency. Hire a specialist to check the unit for refrigerant, evaluate the condensing unit, check the ductwork for leaks, and general age and efficiency of the unit. Air conditioners are like cars; the older they are, the less efficient they become, and sometimes they just need to be replaced.
For homes near the seashore, the salt can corrode the aluminum coils causing the unit to fail when needed most. If you’ve ever tried to contact an air conditioning tech to service a failed unit during a heatwave, then you know you will likely be waiting days, if not weeks, for that maintenance call to arrive.
Want to email these tips to your tenants?
Below we have included the verbiage used when we email our tenants. All our units have central AC, so our email content may differ, but feel free to use ours as a template and personalize it where needed. It’s a nice added touch to let your tenants know you care and that you are interested in keeping them cool during a heatwave.
Click the link below to access a FREE PDF copy of the email we send to our tenants at the beginning of each summer season.
Coping With Heat Wave Email Template
We hope these tips have helped you create a way to communicate with your tenant in a caring manner.
Wishing you all cooler days ahead with zero maintenance calls for air conditioning units!
Please leave us a comment letting us know what you think of our blogs! Questions? Contact us at Stacie@YourLandlordResource.com OR Kevin@YourLandlordResource.com.
Check out our other blogs to guide you on your self-management journey as a landlord:
Why Landlord Inspections Are Essential
Who is Responsible for Which Repairs at Your Rental Property
We are here to tell you that there is no right or wrong way to approach this; there is only YOUR way. Do what is best for you and your rental property business. Of course, this can differ depending on the type of property. We will discuss the pros and cons to help you decide who is responsible for which repairs at your rental property.
Repairs and Maintenance
Depending on a few factors, the responsibility for repairs and maintenance (R&M) can vary. For instance, a single-family home or duplex likely has different needs than a 4-plex. Often R&M on single-family homes is left to the tenant. For example, maintaining landscaping and replacing air filters often fall to the tenant’s responsibility, while for a multi-unit, it would be that of the owner.
How you write your lease is also a factor. Many states have laws stating who is responsible for what, so if using state-approved leases, it may already note who needs to take care of what on a rental property. For example, heating, electrical, and plumbing are prime areas where states require the landlord to ensure these areas are functioning, maintained, and repaired timely.
Common Repairs and Maintenance and Who Is Typically Responsible
Changing light bulbs are typically the responsibility of the tenant. However, if you have installed retrofitted LED recessed cans, that may not be so simple for the tenant to replace. Brands differ by light output and color. The cost commonly associated with replacing a light bulb is much less expensive than a recessed retrofit. This task would need to be explicitly stated within the lease to define its responsibility depending on the type of lighting product installed.
Landscaping
Often in single-family homes, the property owner will place the responsibility of keeping up landscaping on the tenant. They can mow the lawn, trim trees, and keep the garden bed full of flowers themselves or hire someone to handle that at their own expense. The owner often cares for duplexes’ front yard(s), and the tenants tend to their back yards. For larger multifamily, the owner typically is responsible for all areas, including along pathways.
Appliances
Refrigerator/Oven/Range
Many states require that a landlord provide a refrigerator and an oven/range at a minimum, so repairs generally fall to the owner. The one exception might be if the fridge comes with an automatic ice maker or water dispenser. Those accessories are not considered necessary, and often, landlords will pass responsibility for repair to the tenant. If you do not want to cover unnecessary add-ons like ice makers, do yourself a favor and add an addendum to your lease defining precisely what is covered.
Dishwasher/Microwave
Appliances such as dishwashers and microwaves are not a necessity and can fall to either the tenant or the landlord, depending on the lease’s details. If not expressed one way or the other, a good landlord should take care of the repair or replacement, especially if they are built-in units. If a previous tenant leaves behind their microwave, and you don’t mind leaving it there for the next tenant to use, add an addendum stating that it is there for their use. Additionally, should the unit fail, the tenant is responsible for replacement if they want to replace it. That new unit would become theirs to take once the lease is over.
Garbage Disposal
Garbage disposals are a big issue when they stop working. If the tenant has done something to cause the disposal to break or jam, then it would fall to the tenant to pay for the repair or replacement. Think artichoke leaves, bottle caps, utensils, and plastic from takeout containers that the blades can’t break down. In each rental unit, we provide a garbage disposal wrench for the tenant to use if the disposal becomes jammed. In addition, we send them this video to have the tenant attempt to resolve the issue themselves before we send our contractor or repairman out.
Often, garbage disposals will rust at the bottom and start leaking. Many contribute this issue to age, but this happens because the disposal is not being put to use often enough! When one rinses dishes, the small tidbits of food, be it a few grains of rice or small pieces of meat or pasta, fall into the cavity of the disposal and sit there. They do not break down and eventually turn to mush, which builds up and keeps the unit wet, and that moisture causes it to rust through and leak under the kitchen sink. So, where technically it would seem this is the tenant’s responsibility, it would fall to the property owner because there is NO WAY you will be able to prove they did or did not run the disposal with every use.
One more tip:
When you or a tenant run the garbage disposal, use cold water, not hot. This is because the hot water makes the disposal motor hotter, causing it to burn out faster. Whereas cold water cools the motor, allowing it to not overheat with every use, thus extending its lifespan.
Smoke and carbon detectors
This one is rather simple. Units = landlord, batteries = tenant. However, we change out our units every five years. The ten-year life units tend to last around 7-8 years, so as preventative maintenance, we replace them at five years to avoid issues. Here are the units we prefer to use: insert photo and link
HVAC
Heating is the responsibility of the landlord. Often states have mandated that a landlord must provide a heat source for the tenant. However, air conditioning is not considered a necessity in many areas and can often fall to the tenant for repair, especially the window-mounted ones. One way to keep the heating and (central AC) units running efficiently is to change the air filters twice a year.
Whose responsibility is this? Usually, the tenant should be changing the filters unless there is no access to the unit. For instance, the heaters are all located in the basement of our multifamily units. This is our private area where we keep our supplies; we do not permit tenants access. For units with central heat and air, often the filter is located in the ceiling or wall inside of the rental unit, aka the air return, making it easy for the tenant to replace it.
Repairs and maintenance fall to the landlord. As heaters already are, AC units are quickly becoming deemed an essential feature for rental properties. For maintenance, we service both every other year. Typically we check heaters in the fall and the AC units in the spring. This task ensures the HVAC units should work fine once the temps cool or heat up, depending on the season.
Ceiling fans
So many landlords call us crazy for providing ceiling fans! Our properties are rated level B to C+, and we find the tenants we place are relatively responsible. We like ceiling fans because it helps our tenants with their electric bill during extreme temperatures. Circulating the air allows the heater and AC units not to work as often. This amenity is often quite appreciated for the low cost of providing it.
Because we install the unit and electricity is involved, landlords should handle all maintenance and repairs. Ensure the lease notes that if damage occurs from misuse, the tenant will have to cover all expenses incurred.
Tip: If not already installed and you want to hang a ceiling fan, make sure you or your contractor install a fan brace or bracket where the old junction box was. This reinforcement ensures the fan (often heavier than a light fixture) will be more stable, and there is a low chance of falling.
Washing Machine/Dryer
Washers and dryers are other amenities not considered essential but are ones tenants seek after. We go by this rule: The landlord should provide repairs and maintenance if the washer and dryer are built into the wall. For instance, in our multifamily, we took the linen closet out and installed built in, stackable washer/dryer units in each unit. Because we deem these OUR washers and dryers, we will maintain and repair them. If there were coin-operated or multiple units available in a common area, that is the landlord’s responsibility.
Many landlords will require the tenant to repair and maintain them for non-built-in units, like ones located side by side in the mud, utility, or laundry room of a single-family home. In this case, the washer and dryer should be considered available for your use, but if they fail, it is up to the tenant to repair or replace them on their own. Of course, when they move out, they would take the units with them if they chose to. The landlord provides the hookups but not the units in this situation. Don’t assume this is the norm. Make sure you notate this on an addendum to the lease.
Garage door openers
You do not see automatic garage door openers in rental properties that often. Many landlords will only supply a manual roll-up door for safety reasons. However, if the landlord provides automatic doors, they are considered a built-in amenity; that responsibility generally falls to the landlord unless otherwise stated in the lease.
Plumbing/Septic
Plumbing issues are where being VERY specific on your lease is essential. Sometimes plumbing backs up due to old pipes collapsing or tree roots penetrating the lines, not allowing sewage to pass through. Of course, these issues, along with dripping faucets, water leaks under sinks, or running toilets, all fall into the landlord’s responsibility.
Clogged toilets from flushing paper towels, baby wipes, toys, kitty litter (YEP!), feminine hygiene products, etc., fall to the tenant ONLY IF THE LEASE SPECIFICALLY STATES such items cannot flush down a toilet.
Clogged water drains due to long hair, grease, lint from laundry, etc., are hard to prove and should fall to the landlord.
Septic systems come with specific instructions and should be included as an addendum to the lease stating who is responsible for maintenance and repairs.
Electrical
For the most part, you will find that the worst problems you should see are breakers and GFI plugs that keep popping. Inspect what they service to make sure they are not overloaded. These two items go out from time to time and need replacement. For the most part, any electrical issue should be inspected and remedied by a professional. There is just too much risk of fire hazards to DIY it.
Gutters and downspouts
These areas come down to the type of rental property you own. For example, you can require single-family and duplex tenants to maintain and clean their gutters each year. Still, you must also understand you are asking someone who possibly lacks the experience to climb a ladder and do maintenance on YOUR property. Should they fall and get injured, it could cost you way more than if you just went out and did it yourself or hired someone.
For multifamily, tri-plex, and up, it is the responsibility of the landlord to clean gutters and make sure the downspouts are clear of debris.
Roof
100% the responsibility of the property owner. Have the roof checked every five years or so by a professional. They can give you an idea of how much life is left. This timeline will help you determine your capital expenditure funds to make sure you are covered when the time comes.
Window screens/coverings
In California, by law, landlords must provide window coverings. Often window blinds are the best choice as they are simple to clean and do not infringe on a tenant’s décor. Regardless, replacement falls to the tenant if window coverings or screens become damaged due to misuse. If the cord on the blinds breaks or the screen rips because it is old and deteriorated, the landlord should be responsible for remedying those issues.
Painting the unit
We are not a fan of allowing tenants to paint their units. We completely understand people want to personalize their space. However, if they paint the wall a dark color, drop paint on the floors, or don’t tape off trim well, you are looking at a mess to clean up when they move out. Can you demand they paint it back to the original color at move-out? You sure can, but if they don’t use proper primer or do a messy job painting, you’re stuck making it all right again.
Painting the unit or one room of the rental unit is one of the items we offer as an incentive with a lease renewal. We generally offer this to those who have been residents for several years, and the unit needs some sprucing up.
Please read our blog for more information on offering incentives to tenants upon lease renewal.
Allowing Tenants to Make Repairs or Do Maintenance
Our policy is not to allow tenants to make repairs or do maintenance on our behalf in exchange for rent discounts. However, we will consider granting permission to a tenant who specializes in a trade, but only if they invoice us and we pay them directly for their time.
You see, deducting a tenant’s expense from your rental amount lowers your rental income. Yes, it reduces your income, but your actual rental rate is off if you decide you want to sell the property. Should you desire to take out a loan or HELOC, your income is inaccurate. Maybe you do this once or twice, but perhaps you own several complexes in a town, and you give a 50% discount on rent to a landscaper to maintain all of the properties each month. That deduction is a big hit to the bottom line.
Additionally, if you allow a tenant to fix something and, down the line, the problem reoccurs, or you find out the quality of workmanship did not match the discount given, you have no recourse.
You can, however, allow the tenant to pay someone to have repairs done and then deduct that invoice amount from the rent AS LONG AS there is an invoice to accompany that deduction. This invoice allows you to deduct the repair as an expense. Also, the work completed comes with a warranty. If there is a problem three months after the tenant moved out, YOU have recourse with that repair person.
Furnished units
Unless otherwise noted, if you provide a furnished unit, you are responsible for the repair or replacement should such furniture fail. For instance, the pulls on a dresser keep falling off, and they can’t get the drawer to open easily. That’s on the landlord. If they have children that bounce up and down on the bed and the bed collapses, then the repair or replacement expense falls to the tenant.
It is common sense, BUT the landlord still needs to explicitly state in an addendum that “damage due to negligence, overuse, or carelessness is cause for repair at the tenant’s expense.” If not, any of the above items become a he said/she said situation, and you’ll have to prove you told them or that they should have known.
Wear and Tear Defined
Normal wear and tear is the expected decline in the condition of a property due to normal everyday use. It is deterioration that occurs in the course of living in a property. The cause does not happen by abuse or neglect.
Normal wear and tear might include minor stains on carpet, scrapes or dings on hardwood floors, dirty grout, or carpet fading due to sunlight.
Wear and tear can be defined further as deterioration that one can reasonably expect to occur. For example, it is normal for some scuffs in the paint after a tenant moves out of the unit.
Damage is not naturally occurring. Instead, it is harm that affects the property’s value, usefulness, or normal function. Tenants can commit damage on purpose or through neglect.
Damage could be carpets destroyed by a pet, a hole in a door, broken cabinet doors, or a cracked window.
The bottom line is if, as a landlord, you provide anything of convenience or necessity to your tenant, and that product needs repair or maintenance, it falls to you to repair and maintain it. UNLESS you specifically state where the responsibility lies within the verbiage of your lease. So, ask yourself, when was the last time you reviewed your lease? It may be time for an update.
Please leave us a comment letting us know what you think of our blogs! Questions? Contact us at Stacie@YourLandlordResource.com OR Kevin@YourLandlordResource.com.
Check out our other blogs to guide you on your self-management journey as a landlord:
Beyond the FICO Score, How to Read an Applicants Credit Report
What’s the Best Time of Year to Market Your Rental Property
Why Landlord Inspections Are Essential
Meet Stacie & Kevin, Your Landlord Resource
Let’s be social! Follow us on Instagram, Facebook, Twitter, or Pinterest!
Looking for a community of DIY landlords you can ask questions and bounce ideas off? Join the Your Landlord Resource Facebook Group, a discussion group for support, tips, and guidance to help create successful landlord-tenant relationships.
For some landlords, this is a sensitive subject. For others, it’s a no-brainer. Below you will find why it’s OK to raise rents and how often we do so, why to keep rents slightly below market rate, and the exact wording we use when communicating a rental increase to our tenants. You’ll find yourself feeling more secure by following these tips on why and how to raise rents without sacrificing tenants.
How Often Should Rent Increases Occur?
If you have tenants who have signed a lease for one year or more, you should increase the rent with every lease renewal OR write annual increases into a long-term lease. Why? The longer you go without raising rent, the harder it is to do any increase that makes a difference on your bottom line. For month-to-month renters, aim to raise rents at least once a year. Even monthly rental agreements have an end date (or should), so do an increase at the end of that contract period when you offer the renewal.
Additionally, smaller increases each year are easier for the tenant to stomach over one colossal jump in rent after a long period of time. Consistent incremental increases prepare the tenant to expect their rent to go up with each lease renewal. If they do not know any different, your chance of them exiting diminishes greatly whereas, if their rent remains the same for several years and then BAM! You slap a $400 raise in rent, leaving the tenant scrambling to decide if they can or want to afford that new payment each month. Psychologically, you might have guilty feelings for not doing any increases for several years and then being “selfish” enough to demand one out of nowhere. Get over that. You’ll be happy you did. Here’s what happened to us:
We fell victim to this guilt and are still paying for it to this day.
We have a tenant in a two-bedroom apartment who’s perfect (and still is). He pays rent on time, handles most issues on his own, addresses and reports issues promptly when we need to manage them, and is a great neighbor to all the other tenants in the building. He has been a tenant for over nine years, and we had only given him minor increases ($25-$40) each year.
Here’s how that came to bite us in the butt: In 2020, the state of California passed a low-level law of rent control called AB1482. This law states landlords of multifamily units not newly constructed in the last 15 years cannot increase rent more than 5% + CPI (or 10%) twice annually(overall increase cannot exceed 10% in a twelve month period). In addition, California landlords cannot evict unless there is just cause like a severe lease violation or a family member were to move into the unit.
Because rents had significantly increased in our area, our rate for that one unit was nearly $350 below the market rate. Luckily, we are on top of the rents in all other units. However, we did begin raising rents annually and will continue to do so (with lease renewals) for the maximum allowed to get closer to the market rate.
Why does this story matter?
Even if you live in a pro-landlord state and rent control may never be an issue, having rents severely behind market rate can kill your bottom line in the event of lost rent on other units. What if you have a long eviction process and go months without earning rent on one rental? Can your other rental properties make up the difference and keep you afloat? What if you have a severe flood from a broken water line or fire damage to several units? Oh, you have Cap Ex savings? Great! But those funds only go so far. The pandemic is a perfect example!
It’s disturbing to look back now and realize how much money we had lost those last five years by not giving proper increases. Those funds could have made a difference when all the appliances decided to start going out at the same time around June 2020. Had we learned how to raise rent without sacrificing that tenant, we would be in a much better financial position right now.
Times are changing, and so are property and income taxes, insurance rates, and laws/ordinances around owning rental properties. By staying on top of rental increases for all your units, you can cushion your bottom line and have the confidence to cover any increased cost of living and unexpected additional expenses that come your way.
Final Thoughts On Why Increasing Rents Is A Good Thing For Tenants
Should you be very financially secure on your property, you can use the funds to add or improve upgrades. A few years ago, we had a very plain back patio behind our multi-family complex. One season we added some new patio furniture so the tenants had private outdoor space to sit alone or with others. Once we saw that the space was being used, we decided to add lighting so the space could be enjoyed at night. The next year we added a dining table and chairs. This addition was very helpful during the pandemic as the tenants had outdoor space to work at. Finally, last year we added an electric grill (no fire hazard since no flames). The tenants use this grill more than anything else! You see, tenants likely won’t see their increases as a problem when you are improving their living experience by adding amenities.
Why We Keep Rents Just Below Market Rate
When we determine the rent for either a renewal or when marketing to a vacant unit, we generally keep our rates around 3% below the market rate. Our reasoning is twofold:
- When we renew a lease, we know that our tenants are likely to search the area to see if they can find a better place for similar rent. They likely will not be able to. We know that our units are clean, well taken care of, and offer amenities many other rentals in our area do not. Other apartments or homes are much older and do not offer an in-unit washer and dryer or central air conditioning. Brand new units which do have better amenities charge hundreds if not thousands more than we do. So, by keeping our rates competitive, it lowers the chance of a tenant moving out.
- What if you need to sell your rental property? Having rents way below the market rate can severely affect your sales price. Investors who want turnkey properties will pass on your building because making the numbers work will be too much effort for them. Those who are willing to do the work likely submit a lowball offer to your sales price. We see this as a significant issue in many rent-controlled areas. We will see a 4-plex that comes up a third to 50% less than all the others around it and wonder what’s wrong with it? Oh, the rental rates are the same as those from 1995!
How We Address Our Tenants When Renewing A Lease (and Raising Rent)
Sixty days before each lease renewal, we will email either offering to renew their lease under specific terms or not renew their lease and state why (usually unit refurbishment or lease violations). It’s rare when we do not renew a lease.
For renewals, the email will read like this:
Hi “tenant name”,
We are contacting you today to let you know your lease is expiring in 60 days. However, we are happy to renew your lease under these terms:
Renew one year lease $xxxx
Switch to a month to month rental agreement: $xxxx (usually slightly higher rate)
The comps in the area for an x bed and x bath unit (which include an in-unit washer/dryer and central AC) come in between $xxxx and $xxxx.
We tend to keep our rents just slightly below the market rate to remain competitive.
Where rent increases are disappointing, we must stay ahead of increasing costs like insurance and property taxes as business owners.
Be assured that we are consistently evaluating how we can use these increases to maintain the unit and offer better amenities to improve your living experience.
Moving can be costly and time-consuming, so please consider that when contemplating our increase.
We enjoy having you as a tenant and hope that you decide to stay.
If not, please give us the required 30-day notice by (date).
Fondly,
Your Landlord
As you can see, we keep it short and professional. We acknowledge we’d like the tenant to stay and do not show any emotion. Remind them of amenities they have (and may have trouble finding in other units in the area), so they remember to look for those when searching for comps. We also make sure to note what a hassle it is to move. They will need to weigh the trouble of coming up with another security deposit before receiving yours back, the time to pack and move all their belongings, clean your unit, and return it to the shape it was delivered to them in. Often, for the increased rent per month, it is not worth it.
If you really want to entice them to stay, check out our blog post Offering Tenants Incentives Upon Lease Renewal.
A Landlords Mindset
If you’re a landlord with an attitude of:
- “I prefer my tenants leave me alone.”
OR
- “I choose not to renew my leases, rather just let them fall into a month-to-month rental agreement and hope for the best.”
You need to change your way of thinking or stop being a self-managing landlord. Landlords need to manage their rentals with a proactive mindset. Those were days when a 2-page lease that stated the rental rate, when it was due, and where to send it sufficed. However, with laws and ordinances changing often, it is essential to ensure your lease is clear, concise, and updated with every renewal.
Need a state specific lease? Check out EZ Landlord Forms for all your lease and landlord forms needs! For a limited time, use our special code for 15% OFF YOUR FIRST FORM OR A LIFETIME SUBSCRIPTION! This includes their lifetime forms offer! Enter code: STACIE15 at checkout.
Additional Thoughts
While having non-bothersome tenants is a dream, consider if you will, they may just be throwing a bucket under the sink to avoid calling you about a leak, fearsome their rent will go up. My aunt used to try to fix everything herself because her belief was “if I have as little interaction with the landlord as possible, they will not increase my rent.” Back in 1980, she was right!
Nowadays, THAT tenant who does repairs on their own and the landlord who does not inspect semi-annually is just a disaster waiting to happen. Unless that tenant is an appliance repair person or has adequate knowledge to repair plumbing, request they leave it to the professionals. Let them know upon move-in that you WANT them to notify you about issues that occur. This demand shows them you are a responsible landlord who cares about your unit and their living experience. Also, advise them of their responsibilities to handle on their own like burnt-out light bulbs, batteries in smoke detectors, etc. If you do not want to do these tasks, question if being a self-managing landlord is for you. You may be better off hiring a property manager. Click here to download our 6-Page Periodic Inspection Checklist for a single family home.
Consider This…
A 5% increase per unit over 5 years can mean additional thousands of dollars in your pocket each year. Let’s say you have 5 units renting at $1,000 per month. If you raise each unit 5% that’s an additional $50 per unit, or $250 per month. Now take that out a year and you just earned an additional $3,000. If you continued to add that same 5% increase without adding any new properties, after 5 years you will have earned roughly $48,000 additional income. That 5% continues to compound year after year. We are talking real money here!
One thing that landlords need to remember is, if you are a responsible and respectable landlord who takes the necessary time to select great tenants, they will likely stay with you until they have a significant change in their life. In our experience, most tenants move out due to job relocation, moving in with a significant other (and need more space), or buying their own home. Good tenants will find value in your unit if you run your rental property business properly. You will rarely have an issue with a tenant if you are firm but fair and kind while providing a positive living experience for them.
We hope you find this guide on how to raise rents without sacrificing a good tenant helpful in your landlord journey. We started Your Landlord Resource for this reason!
Check out our other blogs to guide you on your self-management journey as a landlord:
A Landlord’s Guide To Fire Safety In Rental Properties
Landlord Inspections are Essential
Security Deposits: 5 Tips Landlords Should Know
Marketing Your Rental Property, Get to Know the Neighborhood
Tips for Taking Great Rental Property Photos
Let’s be social! Follow us on Instagram, Facebook, Twitter, or Pinterest!
Looking for a community of DIY landlords you can ask questions and bounce ideas off of? Join the Your Landlord Resource Facebook Group, a discussion group for support, tips, and guidance to help create successful landlord-tenant relationships.
When it comes to home repairs, owning a rental property is not much different than owning your personal residence. The main difference is that by law you must make the necessary repairs for your tenants “right to peaceful enjoyment” of the unit they are renting from you. Here are our Top 10 Most Common Rental Unit Repairs, along with how we handle them when they pop up and the best ways to be proactive to minimize them happening in the first place.
1. Garbage Disposal Issues
Either they got something jammed in there or the bottom rusted out and it’s leaking. We do periodic inspections twice a year. Each time we go in, we check the bottom of the disposal for rust. To deter rust from happening in the first place, encourage your tenants to run the disposal each time they rinse dishes. The smallest of particles don’t go down the drain and that wet muck sits in bottom of the disposal, eventually causing it to rust out. The life of a disposal can last 3 times longer when tenants do this one task.
We also check to make sure the garbage disposal wrench that came with the disposal is still under the sink. We tape it to the inside of the cabinet under the sink. Don’t have one? You can order one here. Check out our “FIX IT” tip on YouTube on how best to fix a jammed disposal. Save and send this video to your tenant when they call complaining their disposal won’t turn on or blades are jammed. We tell them to watch the video and use the tool we left under the sink. Every. Single. Time. The tenant comes back with “WOW, IT WORKED”!
2. Toilet Repairs
From a running toilet or broken handle to a leaking tank, toilets are definitely a common rental repair.
Finding and purchasing a rental property is stressful! Consider now that it often comes with current tenants already in place, otherwise known as “inherited tenants.” These tenants can make that purchase either really great or seriously disruptive. While ideally, you would love to start with tenants you have screened and vetted yourself, unfortunately, you must honor the terms of their existing lease with the previous owner until expiration. So how do you handle the inherited tenants that came with your new rental property?
This guide will help you evaluate these inherited tenants before placing an offer, during due diligence, and know what’s important to do with these new tenants after the purchase.
Before You Put An Offer On the Property
Typically, upon request, a seller or their broker representative will provide a disclosure package to prospective buyers to show the basic information that will help determine if the property is worth moving forward with an offer.
The month of April and the Spring season is right around the corner! But for rental property owners, this time of year means being proactive and performing inspections and maintenance tasks. To assist with this task, we have compiled 5 Spring maintenance items landlords should do to their rental property.
We perform inspections on our properties (both inside and out) twice a year. For more information on exactly what we look for on those inspections, read Why Landlord Inspections Are Essential. The following items are above and beyond those semi-annual inspections.
1. EXTERIOR INSPECTIONS
Winter can wreak havoc on properties in severe (even not so harsh) weather climates. Start with the exterior and inspect the following areas to make sure water or ice has not caused damage:
Roof
It seems obvious, but wind can loosen shingles, allowing rain and insects to get underneath. Loose shingles can cause a buildup of moss, nests, and water damage to the interior. Often these issues cannot be seen from ground level, so grab your ladder and take a looksee. If you’re not comfortable with this task, hire a professional to inspect it.
Driveways/Walkways
It’s no secret that being a landlord can be trying. When you have a vacancy and the prospects are few and far between, you must evaluate the applicants in front of you. We stand firm that a landlord should never depend on their gut or emotions when deciding on whether to rent to an applicant or not. But when the best applicant you have doesn’t qualify, then what is a landlord to do? That landlord should require a lease guarantor.
What is a lease guarantor or cosigner, and when would you require one?
A guarantor does not reside in the rental but legally agrees to guarantee the tenant will follow all terms of the lease. Primarily this is used for income purposes, but a guarantor also is financially responsible for the condition, and any damages that may occur should the tenant violate the lease.
Typically, a landlord would require additional protection or a lease guarantor when an applicant cannot qualify on their own. This situation is common for those who do not have a good credit history or have never rented before. We find this often with younger tenants who are moving out on their own for the first time. It is common practice for parents to co-sign or guarantee a lease for a college student, as we have several times with our boys.
It is important to note that the applicant must have adequate proof of income, positive personal referrals (yes, we check those for every applicant), and a solid reason for wanting to move to the area of your rental. For example, new employment or moving back near family after living away at school are valid reasons.
How Does a Lease Guarantee Work?
Just as you do the applicant, you would also vet the guarantor. For example, a landlord scrutinizes the guarantor just as they would any applicant.
Most applications have a dual purpose for either the applicant or the cosigner. First, require the guarantor to fill out and sign the application, pay an application fee, and do a full background check. Look to make sure they have a stable income, own their home or property (in the same country as the rental), have a very clean and positive credit report, and have positive references.
The keyword here is stable. The income the guarantor generates would need to be enough to cover the rent should the tenant stop paying. We require 2 X’s rent over and above their personal expenses. So, Grandma with only $1500 in social security as her only income, would not be considered a safe bet as a guarantor.
Why Does the Guarantor Need to Own Their Own Home?
Every landlord needs to insure their property. However, the type of insurance can get confusing, but have no fear. Your Landlord Resource has put together a guide to help you understand all the different aspects of rental property insurance.
Let’s start with the differences between a homeowner’s policy and landlord or rental dwelling policies.
Homeowners VS Dwelling Policies
Suppose you own and reside in a single-family home or a condo. In that case, you likely are insured with a homeowners (HO) policy with coverage for liability, fire, water damage, and personal contents. For instance, in the unfortunate event an electrical fire destroys your home and all your personal belongings from your TV and appliances to your clothing and laptop, your homeowner’s insurance policy will likely cover the replacement of these items, along with the structure of the home. It will also provide you with another home to live in while you are displaced for repairs. Often, if you live in a flood, earthquake, or wildfire zone, you would have to add this coverage in the form of an endorsement to your homeowner’s policy. Your HO coverage has different levels of coverage.
Because we are focused on covering landlords and their insurance, I will not discuss the variety of HO policies offered. For additional information, please read this article: HO3 Vs HO6 Home Insurance Policy //What’s The Difference In 2022?
Converting Your Home Into a Rental
Now let’s say you are moving from your first home into a nicer, bigger house in a new neighborhood, but you are holding your first home to use as a rental. Once you convert a home into a rental (which you no longer reside in), it typically is no longer covered under a homeowners policy. Instead, the home is deemed a business, and due to the increased risk of liability, insurance companies will require you to take out a “dwelling policy.”
Landlords tend to have firm opinions on this subject! However, not all rentals are alike. When deciding if they want to manage long-term vs shorter termed leases, these are some factors Landlords need to consider:
- Rental Housing Type: single-family homes vs. multi-family units.
- Location: Downtown living is much different than living in the burbs.
- Financial Outlook: Is this rental a long-term hold?
- Time to Manage: Another 9-5 job, age, and team dependability are factors.
Let’s take a deeper look into each of the above points.
Rental Housing Type
The Single Family House
Single-family homes seem to be a common first step for entering the real estate investment market. The upside to owning a single-family home is that when renters move in, they are likely to stay put until they save enough for a home of their own or need to move out of the area. The idea of having a garage for the hot-rod and a yard for the kids and dog to run around in is appealing. As landlords, you can also usually require a longer lease upon entry, typically two years. Note: if you select this option, do yourself a favor and build an automatic rent increase of at least 5% (or max rent control allows) after the first year.
The downside is that once you sign them into a long-term lease, it is challenging to get them out. Now, this will depend on if your rental is in a tenant-friendly state, how well you vetted their application, and how detailed your lease is. Let’s look at the following scenario:
Tina the Tenant
This tenant applies to rent your single-family rental. Tina makes plenty of money to cover the rent, has a concrete reason for wanting to live in your neighborhood, has excellent credit, and positive previous landlord referrals. You don’t even mind that she says she has a sweet little chihuahua. It should be a slam dunk, so you approve her application for a two-year lease because you are anxious to get the income flowing in.
As landlords, we know it is impossible to keep our best tenants forever, but it’s certainly worth trying! Some tenants only stay a short while. Be it new to the area and not sure what part of town suits them best, a recent change in relationship, or maybe they are saving to purchase a home of their own, but some tenants prefer to rent for the long haul. Below are some landlord tips on how to improve tenant retention in your rental property.
Tenants come and go, but if we treat them well, they might think twice before deciding to move on. Along with having a solid lease and doing regular inspections, we recommend the following tips to create a professionally run rental property business that makes tenants feel secure and confident about living in your property long term.