In short, due diligence in real estate means “do your homework.”
This goes beyond looking for the “perfect” property, whether for your personal residence or an investment. Due diligence means conducting thorough research to ensure the home is a good investment before you sign on the dotted line.
Millions of homes on the market today don’t live up to their promised returns. Unless you do the work to discover property faults, clouds on the title, weak real estate cash
flow, or other reasons not to buy a property, you won’t discover them until it’s too late. If you want to avoid making a bad investment, learn how to do your due diligence.
So how do you do due diligence when buying a house? Keep all of the following in mind before shelling out hundreds of thousands on your next home or investment property.
What is Due Diligence in Real Estate?
You already know the basics of due diligence in real estate: bringing in experts to conduct the appraisal and home inspection. Both reports reveal crucial information about the home you need – its current market value and condition, respectively. If a home isn’t worth as much as you bid, it’s time to renegotiate the contract or walk away.
If the property comes with greater repair problems than you knew, you can of course also negotiate a lower home price, or pull out if you included a real estate offer contingency. In this case you also have a third option: ask the seller to pay for the repairs.
As long as you included a real estate offer contingency, your earnest money deposit is protected during the due diligence period. Wait beyond this period however, and you risk your earnest money.
But the home inspection and appraisal only represent the tip of the iceberg. There is much more to due diligence in property investing.
How Do You Do Due Diligence in Real Estate?
Due diligence is a broad term. It encompasses the vast amount of homework you have before buying a home. Here are the most common steps:
Research the Neighborhood
When you buy a home, you buy the neighborhood along with it.
Find out the local crime rates, the area’s noise level at all times of day, and the area’s demographics (young families, older couples, income levels, etc.). For rental properties, gauge the demand in the area by researching the vacancy rate.
Which will also help you calculate the property’s cash flow, if you’re buying a rental.
Calculate Cash Flow & Returns
Before making an offer, you should know the precise real estate cash flow you can expect to earn on the property.
That starts with pinpointing the market rent for the property. Research rental listings on websites like Craigslist, Trulia, and Zillow.
Then you can estimate expenses to calculate the rental property’s cash flow. These include, but aren’t limited to:
- Vacancy rate
- Property management costs (even if you plan to self-manage – they still represent labor costs!)
- Repairs & maintenance
- Property taxes
- Property insurance
- Rent default insurance
- Monthly mortgage payment
- Travel, bookkeeping, accounting, legal, and other miscellaneous expenses
Note that property taxes could jump up after you purchase, based on the new purchase price amount.
Review Property Loan Options
You may have many financing options when investing in real estate. Compare rental property loan terms here.
Determine the options at your disposal based on your credit score, down payment (LTV), and the programs available in the area. Finding proper financing is a large part of due diligence in property investing.
Financing directly impacts your rental cash flow and returns, so invest the time to develop relationships with several lenders.
Pay for a Home Inspection
This is one of the most important components of due diligence in real estate. A professional home inspector peers under the hood at every component in the property, including foundation issues, problems in the mechanical systems like HVAC and plumbing, inadequate roofing, and termite infestation/damage.
Also consider tests for lead paint, radon, asbestos, and mold if you have any reason to believe there’s a risk. You need to know before buying, not after.
As a final thought, attend the home inspection if you can. Ask probing questions and get a sense for the red flags the home inspector looks for, to improve your own eye for problems in the future.
Buy Title Insurance
A title search determines if there are any ownership defects in the chain of title. In other words, can someone come and claim ownership that you weren’t aware of when you buy the home? Undisclosed heirs, contested property lines, and easements on the property can all cost you enormous sums, headaches, and possibly heartache.
A title search also uncovers any unpaid contractor’s liens or other financial liabilities that transfer with the property. In other words, if you buy a home with a lien, the lien becomes your debt. You don’t want any surprises after buying, and to protect yourself spend the few hundred bucks to buy title insurance.
Get an Appraisal
If you need financing to buy the property, lenders require an appraisal. Even if you plan to buy with cash, pay for an appraisal. The inspector tells you in-depth what’s wrong with the home. He doesn’t discuss the home’s value – that’s the appraiser’s job.
An appraiser does a high-level property inspection. But he also looks at the property and lot size, location, and the home’s condition. The appraiser takes note of any upgrades and compares the home to the area’s most recently sold comparable homes. It helps ensure you don’t overpay for the property.
Evaluate the Homeowners Association
Whether the home purchase is for your primary use or an investment, know the HOA rules. Can you rent the property out? How many units can you own?
Also, evaluate what the HOA requires. Get into the nitty-gritty details. Can you paint the condo? How many cars may park at the condo? What property changes require HOA approval?
Finally, evaluate the HOA’s finances. Look closely at reserve funds, the association’s budget, and how often they assess special assessments. Is the association often subjected to litigation or do they have any pending litigation right now?
These fees can wreak havoc on your cash flow.
Confirm Flood Risk
Properties in a flood plain require special flood insurance, adding to your annual ownership costs.
If you take out a mortgage or rental property loan to buy the property, the lender will run a flood search, but you should know the answer before then. Ask the seller, and consider running your own flood search. Leave yourself a real estate contingency to renegotiate pricing if you discover the property needs flood insurance.
Price Out Insurance
Flood insurance isn’t your only potential insurance premium. You’ll need homeowner’s or landlord’s insurance to protect the property itself from fire, storm, and other types of damage.
If you’re buying a rental property, also consider buying rent default insurance. If the tenants stop paying, the insurance company pays the rent until you finish the eviction process and replace them with a paying tenant.
Insurance costs factor into your ROI, so evaluate it carefully.
These represent the basic (and most common due diligence steps). If there’s anything else that concerns you, of course, look into the situation before committing to buy the home.
Screen Inherited Tenants
When you buy a rental property already occupied by tenants, you need to screen them as if they were submitting a rental application for the first time.
Start by requesting copies of the rent roll to review their payment history. But keep in mind that unscrupulous sellers may not provide an accurate rent payment history, so return to the source and request copies of the original tenant screening reports.
Credit reports, eviction history reports, criminal background checks, identity verification, and personal references are all key factors in the tenant screening process. Even if potential tenants have excellent credit, that doesn’t mean they make great tenants. How do you know they’ll take care of the property, treat the neighbors with respect, or not leave you with a vacant and destroyed property?
The last place you want to find yourself is locked in a year-long legal battle trying to remove professional tenants, who may well damage the property out of sheer spite.
Tenant due diligence is an essential part of the real estate investment process, when you buy a property with inherited tenants.
Need a Lease Agreement?
A FREE account gets you access to over 200 free forms. Upgrade to a paid account (monthly, annually, or lifetime)
EZLandlord Forms Is Offering 15% 𝙊𝙛𝙛 For New Customers!
We cannot recommend these guys enough!
👉 State Specific Leases 👉 400 Forms to make your landlord-tenant relationship top notch 👉 200 FREE forms for those not ready to purchase 👉 4.8 Rating with over 5000 Reviews 👉 Pro Members get access to ALL leases and forms for $12 per month OR $75 if you purchase the annual membership 👉 YOU CAN BUY LIFETIME FORMS for $399
USE CODE 𝐒𝐓𝐀𝐂𝐈𝐄𝟏𝟓 to get 15% OFF ALL first-time purchases, EVEN THE LIFETIME FORMS!
Is a Turnkey Property Worth It?
In your search for real estate properties, you may come across several turnkey properties or rent-ready properties with no work necessary on your end.
Should you buy a property sight unseen? As with any property, do your due diligence in property investing first. Look at the basics – the home inspection, title report, and appraisal. Then consider the rental possibilities (financially and physically speaking). Don’t overlook the pros and cons of turnkey properties, especially any long-distance properties you may consider.
Can a Buyer Back out After the Due Diligence Period?
Each state has different due diligence periods. Know how long you get and if you need more time, don’t be afraid to negotiate with the seller. While the law is the law, there are ways you can ask for more time if something isn’t adding up or you ran out of time.
Once the period ends, you have limited options. Can you back out? Yes. But will you keep your earnest money? Probably not.
Unless you have contingencies in your real estate contract that give you more time to back out of the contract, you’re stuck. If you back out after the due diligence period and without a valid contingency, you give up your earnest money. The seller keeps the funds to make up for the time and money lost while taking the property off the market.
Doing Due Diligence in Property Investing Makes the BRRRR Process Possible
Are you a serious property investor? If so, you likely want to include the BRRRR process in your strategies – buy, renovate, rent, refinance, and repeat.
This tried-and-true real estate concept helps you grow your real estate portfolio quickly. Essentially, you get your down payment back quickly, which opens up the possibilities to buy another property and BRRRR all over again.
Due diligence in real estate is the smartest way to invest. With the right steps, you know all aspects of the property, its finances, and whether it’s a good investment. While no process is fool-proof and there’s always a ‘lemon’ in the group, using the right steps limits the bad investments and increases your chances of a profitable real estate investment.
Final Thoughts on Due Diligence in Real Estate
When you buy an asset worth hundreds of thousands of dollars, you can’t afford to make mistakes.
Do your homework before committing your hard-earned cash. Get it right, and you’ll never make a bad investment again.
Want to know more about how to handle inherited tenants? We did a podcast ALLLL about this subject! Click Image to listen👇
Thank you to Asbestos.com for providing this informative guide.
Homes built before the 1980s could expose homeowners, their families and others to asbestos. It may hide in cement, floor tiles, insulation, walls and pipes. Our Guide to Asbestos in the Home can help protect you and others from exposure.
If you’re doing work on your home, like taking down walls or replacing floor tiles, take caution. You could contaminate the air with toxic asbestos fibers.
Our Guide to Asbestos in the Home offers information about asbestos, its dangers, what to do if you suspect it’s in your home, the dos and don’ts when handling asbestos and other useful information to keep you, your family and others safe in your home.
Is Asbestos in Your House Dangerous?
When residential construction products made with asbestos, a mineral composed of thin fibers, are damaged, those fibers become airborne. Asbestos fibers pose a danger to anyone who inhales them.
After years of exposure to those fibers, people may develop a cancer known as mesothelioma, which forms tumors on the lining of the lungs, abdomen or heart.
Quick Fact
Most asbestos-related diseases are diagnosed at least 15 years after exposure.
Source: American Cancer Society
Where Can Asbestos Be Found in Your House?
If you have an older home, asbestos may be found in various building materials used in your house, such as paint, insulation and floor tiles. Many U.S. homes and public structures, such as schools, government housing and office buildings built before the 1980s, contain asbestos in:
- Cement asbestos board siding/undersheeting
- Asbestos roofing felt for shingles
- Asbestos insulation around steam pipes
- Some vinyl floor tiles
- Textured paint
- Asbestos-containing vermiculite insulation
While many residential uses for asbestos were phased out, it remains legal in the U.S. for more than a dozen applications.
Common Exposure Scenarios
Asbestos exposure in your home can occur in different ways: DIY renovation, drilling through drywall or replacing an old pipe. The following scenarios describe how homeowners can expose themselves to asbestos at home.
Attic Renovation
While remodeling the attic of his 1960s home, John found piles of brown pebble-like insulation. He decided to replace the existing insulation with new fiberglass insulation to save money in the winter months. He scooped the loose insulation into some garbage bags and installed the new material.
John had no idea that his attic was insulated with asbestos-containing vermiculite. By disturbing the material, he spread asbestos fibers in the air. John should have left the insulation alone and had it tested for asbestos before disturbing it.
Brake Dust in Home Garage
Ralph loves working on his 1965 Corvette Stingray. When his brakes started to squeal, Ralph wanted to replace them in his own garage. After removing the rear tires, he saw the brake drums were covered in dust. He banged the sides with a hammer and blew off the dust with an air compressor.
Because some brake components contain asbestos, spraying them with compressed air can release toxic fibers into the air. Ralph should have taken his car to the shop for service or wiped down the brake drums gently with a wet cloth.
Drilling into Asbestos in Drywall
Erica recently won a painting at a silent auction and couldn’t wait to bring it home and hang it in her living room. She measured carefully and used a drill to install drywall anchors to keep the painting in place. The painting wasn’t level, so she had to drill a few more holes before it hung perfectly.
She had no idea her home was built with asbestos-containing drywall. When she drilled through the wall to hang her painting, asbestos fibers from the drywall escaped into her living room. Erica should have known about the asbestos in her walls and left it alone.
Removing Vinyl Floor Tiles
Herman just purchased a 1950s fixer-upper in his home town, and his first project was upgrading the master bathroom. He decided to start by removing the vinyl floor tile. He removed the existing tiles with a scraper and installed the new tile.
Asbestos was a common ingredient in vinyl floor tiles in the 1950s. Using a scraper to remove the old flooring can release dangerous asbestos fibers. Herman should have installed the new tile over it.
Popcorn Ceiling Removal
Janine was tired of the popcorn texture on the ceilings in her home, so she decided to scrape it off and repaint with a smooth finish. After putting on eye protection and a dust mask, she grabbed her ladder and got to work. After lots of scraping, a little sanding and some careful painting, she was finally done.
Many textured ceiling finishes, including popcorn ceilings, have concealed asbestos. Scraping off the popcorn finish released microscopic asbestos fibers that easily passed through Janine’s dust mask. She should have hired a professional trained in safely removing asbestos hazards.
Although it is the safest option, hiring asbestos abatement professionals can be expensive. However, before removing the entire popcorn surface, homeowners can scrape off a sample and perform home testing with a store-bought kit. Removing even a small piece for testing still requires protection, such as eye protection and an N95 respirator.
Cutting Insulation on Pipes
When fixing up the basement of his late-1800s Victorian home, Brent noticed the insulation around some of the hot water pipes was starting to deteriorate. Not wanting to lose any heat efficiency, he cut the old insulation with a utility knife and replaced it with new fiberglass insulation.
Brent should have known that many older plumbing systems are wrapped in asbestos insulation. The insulation may have already posed an exposure risk before he started the project, but cutting the damaged material released even more fibers into the air. Brent should have hired an asbestos professional to seal the asbestos insulation.
What Can I Do About Asbestos in My Home?
The Environmental Protection Agency recommends testing your home for asbestos if the existing building materials are damaged or you plan on disturbing them. Situations where testing is recommended include having damaged drywall or insulation, or if you’re planning on remodeling.
Disturbing these building materials can release asbestos fibers into the air. Generally, you can’t tell which materials contain asbestos unless they’re labeled. If the building materials are in good condition or if you’re not planning a home remodel, testing is generally not required.
If you find something in your home that you suspect is asbestos, don’t touch it. Even if the material is in good condition, the best option is to leave it alone.
According to the U.S. Environmental Protection Agency, if the material appears damaged or future activities could disturb it, contact a trained and accredited asbestos professional. Limit access to the area until a professional can confirm the presence of asbestos.
The best way to avoid asbestos exposure is to be knowledgeable about the asbestos materials in your home, including their locations and current condition.
How Can I Tell if a Material in My House Is Asbestos?
It’s extremely difficult to identify asbestos just by looking at it, so you need to send samples to a lab for testing.
Homeowners can collect samples and have them tested, but it’s much safer for you and your family to hire a trained asbestos professional for the job.
Search for “asbestos inspection” online to find a licensed expert in your area. The U.S. Department of Commerce offers a list of accredited asbestos laboratories online.
What Does Asbestos Look Like?
Asbestos ore in its natural form may appear in a range of colors, including white, green, blue and brown. When asbestos is processed it breaks down into fluffy fibers.
While asbestos in household products is not easily identified by sight alone, sometimes it is possible to see asbestos fibers embedded in damaged asbestos-containing materials.
Tiny asbestos fibers often end up in household products when asbestos is mixed with other materials, such as plastic or cement. When these materials are damaged, small asbestos fibers that look like fuzzy pieces of fraying fabric may be visible. However, seeing fibers protruding from a product does not mean it contains asbestos. Only testing can confirm the presence of asbestos.
How Much Asbestos Exposure Is Harmful?
In general, it takes a lot of repeated exposure to asbestos for related conditions to develop. It is rare for someone to get sick from asbestos products in their home, but it is possible.
Most people who develop asbestos-related diseases were exposed to asbestos at work for years. About 20% of heavily exposed asbestos workers end up developing a related condition.
Still, heavy short-term asbestos exposures have been known to cause disease. According to a National Institute for Occupational Safety and Health report on asbestos, “No evidence of a threshold or safe level of exposure has been found.”
Asbestos Safety Dos and Don’ts
If you own an older home, take every precaution to avoid damaging materials that may contain asbestos.
Even if a repair seems minor, you should hire a professional when asbestos may be present. Improper handling of safely managed asbestos can create an exposure risk where there was none before.
Do’s
- Avoid any contact with dangerous asbestos materials.
- Take every precaution not to damage any materials that may contain asbestos.
- Talk to your home inspector or real estate agent about any known asbestos risks in your home.
- Only hire trained professionals for asbestos inspections, testing, repairs or removal.
- If you are planning on a demolition, contact the appropriate regulatory agency in your local or state government.
Don’ts
- Don’t saw, sand, scrape, drill or disturb materials that may contain asbestos.
- Don’t sweep, vacuum or dust debris that may contain asbestos.
- Don’t collect asbestos samples for testing without proper training.
- Don’t perform any work on or near asbestos materials unless you’re trained and certified.
- Don’t remove asbestos unless repair or concealment is impossible, and there’s a high risk for exposure.
- Don’t dispose of asbestos materials with normal household waste.
How Do I Get Tested for Possible Exposure to Asbestos?
If you are concerned that you were exposed to asbestos, start by talking to your primary care physician. There is no test to determine if you’ve been exposed to asbestos, but there are tests to detect asbestos-related diseases.
Your doctor can order imaging scans that reveal signs of asbestos-related disease.
Asbestos-related conditions are difficult to detect, and not all primary care doctors have the tools and experience to diagnose them.
If you know for certain that you were exposed to asbestos, it is a good idea to seek annual screenings from a qualified lung specialist such as an occupational pulmonologist.
Most asbestos-related diseases are diagnosed at least 15 years after exposure.
Quick Fact
Asbestos is the No. 1 cause of mesothelioma.
Source: National Cancer Institute
How Much Does Asbestos Testing Cost?
The most popular testing method, Polarized Light Microscopy (PLM), can range from $20 to $100 per sample. Some labs use Transmission Electron Microscopy (TEM), which is more expensive.
The cost of asbestos testing varies depending on the number of samples tested and the methods used.
DIY test kits require you to mail samples to an accredited lab, which may charge an additional fee that is typically around $40 for analysis.
However, if you collect samples, you can create exposure risks. It’s best to hire a certified professional. The total cost of labor can run between $350 and $600 — a small price to pay for peace of mind that the job will be safely completed.
What Happens if I Violate Asbestos Laws?
Any activity involving asbestos must follow U.S. Environmental Protection Agency regulations as well as any state asbestos laws. Some asbestos violations result in written warnings.
Others can bring criminal charges, prison time or daily civil penalties as high as $25,000 for each violation, depending on the severity of the infraction.
WRITTEN BY
Michelle Whitmer, Asbestos Expert and Writer
(888) 382-0020 OR [email protected]
Michelle Whitmer has covered science and medicine for Asbestos.com for more than 15 years. She has been featured in multiplatform media, including The New York Times and KYW Newsradio. Whitmer is pursuing American Medical Writers Association certification, has completed OSHA Asbestos Standard for the Construction Industry training and is CDC certified in Health Literacy.
- Expertise: Asbestos and talc, asbestos in makeup
- Certified in OSHA Asbestos Standard, AHERA Asbestos in Schools and CDC Health Literacy
- Member of the American Medical Writers Association, National Association of Science Writers and the Academy of Integrative Health & Medicine
Subscribe to our FREE newsletter, Landlord Weekly!
▪️Landlord Tips ▪️ Early Access to Our Blogs ▪️ Landlord Specific Articles by Other Industry Pro’s ▪️ Podcast Links
Click Below to see what you are missing!
A multi-family property can be a great addition to your real estate investment portfolio, but it’s important to look for any red flags before making a commitment. From the obvious things like pests and water damage to information that needs a bit more research, taking the time to examine the property can help you make an informed decision.
Low Current Interest in the Property
One of the first things investors should look for is the number of inquiries the property has been receiving. If the number is very low, it could indicate that something wrong with the property is turning away potential buyers.
Another thing to look for is how quickly current tenants are vacating the property. If tenants leave quickly and in large numbers, that could indicate serious problems. Don’t forget to look at the reviews of the property – these can be very valuable in determining whether investing is a good idea.
Investors can also look at the rental rates the property is charging. If the rates are significantly lower than other properties in the area, it could be a sign that the property isn’t well-maintained or in a desirable location. If the rates are higher than other properties, it could be a sign that the property is overvalued.
Signs of Water Damage
The damage caused by water can quickly become expensive and difficult to repair, so look carefully before investing in a property. Signs of water damage include:
- Stained ceilings, walls, and floors
- Peeling paint or wallpaper
- Discolored or warped tiles
- Cracks or bulges in the walls
- Musty odors
- Unexpectedly high humidity
- Evidence of mold growth
- Rotting wood
These should be taken seriously, as they can indicate a much larger underlying issue. It’s important to thoroughly investigate any potential signs of water damage—or even indications that it could be imminent, as a widespread issue could very well fall under the maintenance the property owner is responsible for, as opposed to tenants.
A Busy Sales History
A review of the sales history of a property can tell potential investors a lot. If there have been multiple sales in a short time, this could be a sign of instability or a lack of investor confidence in the property. It could also be a sign of a problem with the building or the neighborhood that could cause difficulty in maintaining or increasing the value of the property.
In addition to looking at how often the property was sold, try to find out why it was sold, if any changes were made, and how the property has been managed. Investors might be able to find out some of this by speaking with any previous buyers or sellers. These conversations can provide additional insight into the area and the building.
A landlords one stop shop for tenant management…for FREE
You can’t beat free and the only time you pay is if you want to purchase a lease or have expedited rent deposits. Most everything else costs zip, zero, zilch.
Signs of Pests
Pests are often a sign of a poorly maintained property. Look for signs of common household pests, such as rats, mice, roaches, or bed bugs. Signs of an infestation may include the presence of droppings, gnaw marks, and nests. Be sure to ask the current owner about any previous pest issues and take note of anything suspicious. Investors may want to call in a pest control professional to inspect the property and advise on any necessary treatments.
It’s important to also consider the risk of future pest problems. Look for any potential entry points that pests may use to enter the property, such as cracks in the walls and holes in the foundation. Additionally, check the surrounding area for any potential sources of food or shelter that may attract unwanted critters. Be sure to take preventive measures to reduce the risk of future infestations, as tenants might not be happy about being asked to help with pest control.
Work Done Without Permits
Another potential red flag for investors is work done on the property without the appropriate permits. This can be a major issue and should be investigated thoroughly before committing to the purchase of a multi-family property. A lack of permits can indicate that:
- The work was not completed to code: This can be extremely dangerous and costly, as it may require significant repairs or upgrades to bring it up to code.
- The owner is trying to hide something: This could mean hidden water damage or other potential issues that can be costly to repair or replace.
Investors familiarize yourself with the local government. That’s where you go to check if the property has the required permits for any renovations that have been done. If not, they should determine why the permits were not obtained and if the work was done correctly. In some cases, the investor may need to hire an inspector to check the work.
Don’t Ignore Red Flags When Investing
Investing in a multi-family property can be a great financial investment, but it’s not without risk. Maximize your chances of success. Keep an eye out for warning signs such as a busy sales history and unpermitted work. Doing research and having an experienced real estate professional inspect the property can help ensure that the property is a good investment.
Want to read more about what to do when buying your next rental investment? Check out our blog Buying Rental Property? Make Sure You Evaluate These Structural Items!
If you are a landlord or a property owner, at some point you may have to deal with squatters setting up camp in or on your property. Squatters may inhabit your land or property and refuse to budge. It can be frustrating to encounter squatters on your property, but there are steps to take to address the situation. What are squatter’s rights?
Squatting, also called adverse possession, refers to a person intentionally entering a property that they do not own or have permission from the legal owner to reside in or on, with the intention of acquiring that property.
“The phrase ‘squatters rights’ is really misleading, because, as a general rule, they are merely trespassers, and don’t have any rights,” says Teri A. Walter, civil trial lawyer, founder and managing partner at Walter Law Firm in Texas, which specializes in business litigation. “The phrase comes out of the adverse possession laws. Adverse possession is a legal theory of gaining ownership of property without actually purchasing it.”
This “right” can be converted to title to the property over a period of time by adverse possession, depending on a state’s law. Attorney Natela Shenon of Shenon Law Group in California, which specializes in business law, says certain elements have to be met in order for it to be effective.
For example, in California she says the possession has to be hostile, notorious and continuous, without any interruption for the statutory period, which in that state is five years.
“Another requirement in California is that the squatter has to be paying property taxes for the statutory period for the piece of land he or she is occupying,” says Shenon.
Each state has different laws regarding squatter rights, so experts recommend checking local and state laws to ensure landlords retain legal protection of their property and know their rights.
What To Do If You Have a Squatter
There is a legal process landlords and property owners should follow should they encounter a squatter on their property.
“Once it is discovered that there is an unauthorized person in a vacant property, an owner needs to serve a Notice to Vacate/Surrender Possession that includes language to the effect that the persons in possession are squatters and have no legal right to be in possession of the property, that the owner does not consent to the occupant’s possession of the property,” says attorney Eileen M. Kendall, Kendall Law in California, which specializes in real estate law and business law.
She says if the squatters do not vacate, the owner can then file the unlawful detainer complaint in the superior court to get a writ of possession that can be executed by the sheriff to remove the squatter.
When dealing with squatters, there are some things landlords and property owners should not do. Shenon says a landlord or a property owner should not abandon their property and not stop paying property taxes on the property.
“They also should not allow anyone to use or be on their property for an extended period of time without a written agreement that specifically gives permission for use by the owner—remember adverse possession has to be hostile and without permission—for only a limited period of time,” says Shenon.
Shenon says other terms can be added to the agreement to avoid any confusion as to ownership and to prevent any claims to adverse possession in the future.
Collect Rent Online → Report Rent for Free
Now, not only do landlords enjoy the convenience of collecting rent online, but by doing so, your tenants can build credit by reporting rent payments to TransUnion for free.
How Do You Avoid Getting a Squatter?
There may be potential warning signs that a property is being occupied by a squatter. Walter says these include higher than expected bills for power and water or having those bills suddenly terminated. She says squatters typically will not bother to set up utilities in their own name but may if they plan to make a claim of ownership of the property.
“Seeing unexpected cars in the driveway, locks changed, changes to the landscaping or exterior look of the property, or maintenance of the house or yard that you did not arrange,” says Walter.
Walter says there are several things landlords and property owners can do to avoid having a squatter and protect their property.
“Many of these actions are the same kinds of things you’d want to do in order to avoid burglaries,” says Walter.
One important thing to do is to not allow a property to remain vacant for long, and when it must be vacant, to leave the electricity and water on and to leave lights on inside and around the property to give the appearance of being occupied, says Walter. She says to not allow mail to pile up, make sure to keep drapes drawn so people cannot see inside, to drive by periodically to pick up mail or trash and check to make sure the property is still secure.
“Be in touch with your neighbors, and make sure they know how to contact you if they see something that looks suspicious,” says Walter. “If the property is a vacant lot, fence it off, keep it mowed and trash removed and post a ‘No Trespassing’ sign.”
Squatter Rights FAQ
What are Squatter Rights?
Squatter rights, also known as adverse possession laws, refer to laws that allow a squatter to live in another person’s property if the lawful owner does not evict or take action against the squatter.
What do you do if you have a squatter on your property?
If a squatter is on or in your property and they refuse to leave, call the police. However, if a squatter claims to be a tenant, an eviction is the best method to remove them. But, if the “tenant” actually claims ownership, then file a suit against them to confirm title in your name.
Why do squatters have rights?
Rights are only valid as long as squatters fulfill all adverse possession requirements, which vary by state.
Which states have squatter rights?
Squatter rights exist in all 50 states. But, how and when the enforcement happens varies widely by state, city, and municipality.
Krista Reuther
Krista is the Senior Content Marketing Writer at TurboTenant where she writes data-driven, actionable articles to help landlords and renters alike. With decades of writing and editing experience, she produces top-quality content across various industries, including real estate, SaaS, and survey design/implementation.
Have you listened to the Your Landlord Resource podcast?
Check out our 3-part series where we break down our 37 page lease and its addendums! It’s like a mini masterclass where we discuss the importance of each section, paragraph by paragraph. Definitely something you don’t want to miss!
By Phil Schaller
A strong support system for your tenants can translate to a more profitable rental property. Here at RentalRiff, we believe in providing a great experience for tenants. To us, rental properties are not a commodity; they are someone’s home. Our focus on the tenant experience and how we’ve structured our service may be our biggest differentiator.
There are many benefits to creating a fantastic tenant experience. Aside from the human elements (and we think these are the most important), there is tremendous value to be captured as a landlord and rental property owner.
As we’ve discussed in other blog posts, there are certain things you can control as a landlord and certain things you can’t. Tenants moving to a new city is out of your control, as is a tenant purchasing a home of their own. Tenants moving out because of poor maintenance support or a general lack of communication is definitely in your control. If you can optimize the elements of your rental business that are within your control, you will be better off for it.
Here are some of the main benefits to creating a great customer experience:
No. 1 – Higher tenant-retention rates
This one’s a bit of a no-brainer.
If your tenants like renting from you and feel supported they are more likely to renew their lease, plain and simple. J Turner Research did a large study on residents recently and found that 35 percent of tenants that felt unsupported and underserved moved out. With vacancy rates in the Seattle area currently sitting around 7.5 percent, this can mean thousands of dollars lost.
No. 2 – Better treatment of your property
Not only are unsupported tenants more likely to move out, they’re also more likely to treat the property poorly.
Security deposits exist for a reason, but tenants will treat the property better if they don’t feel neglected by their landlord. Obviously, this means less wear and tear on the property and fewer large, avoidable repairs needed down the road.
No. 3 – Tenants are more accepting of higher rents
Increasing rents at a steady clip is an important part of running a successful rental property business.
Another important element is retaining good tenants. When you’ve created a strong support system for your tenants you can both increase rents and retain good tenants. Again, this goes back to controlling what you can control, but if the tenants feel taken care of they are more likely to accept the higher rent and stick with your property.
No. 4 – Higher likelihood of collecting rent on time
There are many property management tools out there that automate the rent-collection process (we definitely recommend using these tools) but, again, happy tenants are more inclined to make their rent on time. Tenants will want to stay and be more proactive in keeping up their side of the bargain.
There are many important components that go into running a successful rental property, and maintenance and tenant support are just two of those. They can be major pain points for landlords, and it’s easy for the property-level needs of your tenants to slip through the cracks. If you can optimize your processes and create a positive environment for your tenants, in the long run, you’ll have more success as a rental owner.
Happy landlording!
About the author:
Phil Schaller is an experienced landlord and the founder/CEO of RentalRiff – an alternative service to traditional property management that provides ongoing oversight and upkeep of rental properties, while serving as the main point of contact for tenants. If you are interested in learning more about RentalRiff’s rental property maintenance service you can reach him at 541-600-3200. Maintenance and repair costs are included and property specialists are licensed/insured. Phil is a Pacific Northwest native, father of two, and fly-fishing addict.
By David Crown, Chief Executive Officer, Los Angeles Property Management Group
I once knew someone who ignored a termite report, thinking the problem couldn’t really be that bad. They then had to completely reframe a four-unit building, replacing every single piece of wood in two of the units. Who was the foolish owner in that scenario? That was me. I was relatively lucky—it only ended up costing me about $50,000 to fix that quadruplex in Silverlake, but that’s still an expensive lesson, and believe me, I learned it. I’ve been in property management for three decades now, and in that time, I’ve seen the best and the worst of what this industry has to offer, ranging from impressive workmanship to a few tragic mistakes.
I’ve written about preventative maintenance before, but it’s a subject I couldn’t possibly exhaust in one article—or ten. Nor can I overstate its importance to this industry. It might be the best thing we do for rental property owners, maybe even the best case for property managers to exist at all. Preventative maintenance isn’t just about cautionary tales. You’re not just averting disaster by taking these measures; you’re shrewdly pushing your property to the highest level of its potential profits. It’s better to go out of your way to do something smart than it is to just avoid doing something dumb.
To that end, here are three preventative maintenance “hacks” that will significantly impact the “health” of your building in the long term.
Read more: Three Simple Maintenance “Hacks” to Keep Your Building Healthy
Enjoying this article?
This is an example of what is included on our FREE weekly newsletter, Landlord Weekly.
Subscribers get access to our free forms, email templates, and guides! As well as…
▪️Landlord Tips ▪️ Early Access to Our Blogs ▪️ Landlord Specific Articles by Other Industry Pro’s ▪️ Podcast Links
Click below to view a one of our newsletters!
Main Line Cleaning
This service scrubs out your main line of any debris or blockages. It will extend the life of your building’s sewer main by many, many years. It’s one of the most effective but neglected maintenance hacks out there. Don’t assume your current management has already thought to have it done—this is something to ask about. The cost of a new main line is far higher than the cost of getting a main line cleaned. This actually serves as a fairly reliable measure of capable managers. If your management company can tell you the last time they scrubbed out your main, you’re probably in good hands.
Gutter and Downspout Cleaning
Sounds stupid simple, but a lot of people never have it done. It’s crucially important to help water drain from the roof. Especially in a year like the one we’ve had, with record rainfall, it goes a long way in keeping your property safe and leak-proof. Anybody who’s ever had to deal with a mold remediation situation can attest to the importance of keeping unwanted moisture out of a rental property, and the astronomical costs that can come with failure to do so. I walked through a prospective client’s building a week ago that had three apartment units stacked on top of each other, and all of them were entirely ruined by one leak.
Strategic Hiring
The third “hack” wears boots! That’s right, it’s a team that keeps a careful calendar and performs all of the above and more maintenance actions on a regularly scheduled basis. Once, I was walking a property to inspect it when my colleague and I found a lit pilot light that was burning yellow, which meant it was emitting carbon monoxide. Thankfully we took action and immediately fixed the issue, but we might not have had the chance if we hadn’t been there in the first place conducting our inspection. So if you own apartments, I recommend hiring a management company with a dedicated maintenance team that runs on a strict schedule, visiting properties often and inspecting them thoroughly.
Sometimes, the simple fixes are the most impactful, and if you overlook them, you risk winding up in one of my many cautionary tales. But none of this is rocket science or requires cutting-edge technology. I didn’t get my Ph.D from Harvard in Property Management. (I did get my BA in English from Northridge. Go Matadors). Apply these maintenance hacks to keep your property healthy.
David Crown is the Chief Executive Officer of Los Angeles Property Management Group and has over thirty years of experience managing all types of income properties. Mr. Crown has been asked to serve as an expert witness in property management matters, and currently serves on the Forbes Real Estate Council. He can be reached directly at (323) 433-5254.
Provided by Bigger Pockets
For a real estate investor, knowing how to find a real estate agent who is investor-friendly is the key to successful real estate investments.
Finding the right property to create rental income takes time, energy, and patience; real estate agents can do the work for you, but you must find the right one.
The downside is that not all real estate agents understand how investment properties work well enough, so you must find investor-friendly agents to ensure you make the desired profits.
Here’s how a real estate investor can find the best deals with the right real estate agent for your investment property business.
What Is an Investor-Friendly Real Estate Agent?
Read more: 5 Ways to Find an Investor-Friendly Real Estate AgentNot all real estate agents know the features investors need when purchasing rental properties. Some real estate agents work primarily with buyers looking for a primary residence.
These buyers have many different needs than real estate investors. Primary residence real estate agents focus on features primary homebuyers need for their family versus considering after-repair value, the local rental market, or renovation costs.
An investor-friendly agent understands the business side of purchasing rental properties and will help investors find properties that not only meet their budget but also help them achieve their investment goals.
You need a real estate agent with the pulse on everything real estate-related, including off-market properties, rental income, demand, renovation, the local market, and overall costs.
Finding a good rental property requires a lot of help from many professionals to make it work. It takes a village to invest in real estate.
TurboTenant is a great option for landlords with just a few doors or for those who may be new to using rental property software.
For the most part, TurboTenant’s software is free to use so they are perfect for those on a tight budget.
With a very minimal monthly fee, landlords can upgrade to have such items as all landlord forms, leases, and addendums included as well as accelerated marketing, rent deposits, and customer service assistance on TurboTenant.
The Best Ways to Find Investor-Friendly Agents
You probably wonder how you can find an investor-friendly real estate agent, since they all seem to do the same thing: help people buy and sell houses.
Most real estate agents focus on primary residence purchases and sales, so it’s important to know how to find the right agent, including what to ask them and how to choose between multiple agents if you have several leads.
Here are the best ways to find the right real estate agents for a rental property investor.
1. BiggerPockets Agent Finder
If you want to skip the legwork and find an agent that suits your real estate investment needs quickly, try BiggerPockets Agent Finder.
This network of investor-friendly real estate agents helps you quickly connect with professionals who can help you find the best real estate property to build your portfolio.
BiggerPockets Agent Finder is great for new and experienced investors. It provides access to real estate agents in all real estate investment areas with expertise in fix-and-flips, rental properties, and all the necessary decisions real estate investors must make.
2. Real estate investing groups
These groups, including those on social media, can connect you with the right professionals.
Not only will you network with other investors to get ideas, but you may also network with investor-friendly agents who understand real estate investing and the nuances investors must follow.
You can find real estate investing groups online, on social media, and in your local market to meet in person.
3. Property management companies
Since property managers have firsthand experience with real estate agents, they can give you advice to determine if they’d be a good fit for your real estate business. Like any referral, do your due diligence to ensure the agent meets your needs.
4. Social media
You may not think of social media as a way to find investor-friendly agents, but word of mouth is key in the real estate industry.
You can share what you do on social media and see what connections your friends and family have that may help.
You can also join real estate-focused groups that may connect you with an agent who works with real estate investors. Sometimes, you may get connections not even through something you post, but through a post someone else makes that helps you find the right professionals.
5. Referrals
Referrals are the highest compliment any real estate agent can receive, and they can help you find the best investor-friendly agent.
You can get referrals from other real estate investment industry professionals, such as other investors, local lenders, contractors, and even friends or family.
When you receive a referral, ask fellow investors questions about the type of transaction they conducted, the experience the referral had, and any pointers they might provide to help you make the most of your transaction.
What to Look For in an Investor-Friendly Real Estate Agent
When learning how to find an investor-friendly real estate agent, it’s important to understand what qualities they should possess.
Just like when you buy a home for your primary residence, you want an agent who understands the real estate market, cash flow, rental income, and net operating income.
Here are the key characteristics to consider.
Works as a full-time agent
As of 2020, a many as 22% of agents work real estate on the side or as a part-time gig. This may work for agents helping buyers and sellers of primary residences, but real estate investors need someone much more involved in the real estate industry.
Investment properties can sell quickly, especially in a competitive market. Time is of the essence, and having a part-time real estate agent may not fit the bill because you could miss out on great rental property opportunities.
The right real estate agent will work full time and fully immerse themselves into the real estate investment property market trends to help you build your real estate portfolio.
Invests in real estate for themselves
You can’t beat firsthand knowledge of the investment property industry.
A real estate agent who owns investment properties understands the factors investors must consider when choosing properties. These factors include cash flow, rental home demand, costs, and capital gains.
Of course, working with an agent who is also a real estate investor has a downside, since they can be a competitor. When interviewing real estate agents, ask if they have real estate investments, if they are in the market to keep growing their business, and what strategies they use.
You may find an investor-friendly real estate agent who invests but with a different strategy than you, ensuring there isn’t a conflict of interest in the relationship.
Understands real estate investing terms
Real estate investing requires many more terms than a traditional real estate transaction. Homebuyers purchasing a home for their primary use don’t throw around investor lingo like cap rate, net operating income, gross rent multiplier, and internal rate of return.
Working with the right agent who understands these terms and how to use them when helping you find the right rental property is the key to successfully investing in real estate.
The last thing you want is a real estate agent who doesn’t understand these terms and sells you a property that doesn’t have investment potential.
Knows how to spot good real estate investment deals
A knowledgeable real estate agent who understands investment opportunities can look at a rental property deal and know if it’s a good fit.
They won’t look simply at the gross rent and compare it to your potential mortgage payment and deem it a good deal (or not).
Instead, they will understand all the factors in a real estate investment deal, including repairs, maintenance, capital expenditures, and vacancies.
Access to off-market properties
Traditional real estate agents focus only on MLS listings. However, there are often many more opportunities available off market.
Knowing about these properties first can allow you to find your next investment property quickly and for a better deal.
This is often the case with distressed properties.
So if you’re a fix-and-flip investor, you want someone with eyes and ears in the local market, locating properties you can buy before they become a short sale or foreclosure.
Works with (or is) a property manager
Some real estate agents are also property managers or work closely with them. This close access may give you access to more off-market listings.
Property managers have direct contact with landlords and usually are the first to know when an owner wants to sell a property.
You don’t have to use the real estate agent as your property manager if you aren’t comfortable with the conflict of interest. However, the close connection with potential real estate investments could help you make more profitable investments.
Knows the neighborhoods and communities well
A deep knowledge of the local market is crucial for successful investors. A good investor-friendly agent knows the area as a whole and has intimate knowledge of certain neighborhoods and communities.
The knowledge such agents possess can help you make more informed decisions.
For example, you’ll get to know details about things like local school districts; commuter trends; local amenities such as retail shops, churches, and other community needs; and zoning. Each of these details plays a role in your decisions when investing.
For example, if you’re buying a larger rental property, your target market is probably families with kids. This market will care greatly about school districts. If the school district isn’t highly rated, you may have more vacancies than you hoped.
Has great connections
A real estate agent with a strong understanding of the real estate market should also have connections throughout the industry.
Real estate investing requires access to many professionals, such as appraisers, contractors, real estate lawyers, lenders, title companies, and insurance agents. A real estate investment is much easier to accomplish when you have a team of experts to help you.
Finding these experts yourself can be time-consuming, and you may not always choose the best professionals. Relying on the network of an experienced real estate professional can help you achieve your real estate goals.
Responds in a timely manner
Even if you think you’ve found the perfect real estate agent for investment property purchases, they may not be a good fit if they don’t respond in a timely manner.
When talking to real estate agents, ask how they conduct their business. Do they communicate via phone, email, or another way? How often do they check in with investors?
Determine if a real estate agent contacts clients immediately upon finding a property, especially off-market properties, or if they consolidate their communications, causing you to potentially miss a good opportunity.
You can test the waters by paying attention to whether the agent returns your calls or messages within the time promised and if they have the required answers.
Also, pay attention to whether the agent always arrives on time for scheduled showings or meetings. An agent who is perpetually late likely won’t help you move forward with your business.
How to Interview a Prospective Agent for Investment Properties
Finding who you think is the best investor-friendly agent may not be the case once you dig a little deeper. The first step is reading their qualifications online or talking to other real estate professionals about them.
Next, interview them to ensure they are a good fit for your real estate investing needs. You should hear firsthand the answers to your questions, as you may have different needs or concerns than other professionals.
Here are some common questions to ask an investor-friendly agent:
- How long have you worked with real estate investors?
- What types of properties do you help real estate investors buy or sell?
- What areas do you primarily work in, and how long have you worked there?
- Do you have investment properties that you own and manage?
- Do you work with a property management company?
- Are you able to find off-market or pocket listings?
- Do you have a network of real estate professionals you work with and can refer to me when I find a property?
- Can I contact previous clients to see how the process went with them?
Best Practices in Finding Investor-Friendly Real Estate Agents
Knowing how to find an investor-friendly real estate agent is the key to successfully running a real estate business.
Even though buyers don’t pay commissions to real estate agents, the wrong information or missing an off-market deal could cost you thousands of dollars.
Before using a real estate agent for your next investment property purchase, consider finding an investor-friendly real estate agent. You can use BiggerPockets Agent Finder or local resources to help you reach your goals.
Article provided by Shelby Bartz, Precision Air and Plumbing. See contact information below.
If you are planning to buy or sell a property, or if you are simply being proactive before a heatwave hits next summer, you might want to pay attention to the air conditioning system. A well-functioning AC unit can make a big difference in the comfort and value of your home. But how can you spot hidden AC issues during a property inspection?
In this blog, we will share some tips and tricks to help you identify common AC problems and how to prevent them. Whether you have a duct, vent, mini-split, or any other type of AC system, you will learn how to check the airflow, temperature, cleanliness, and efficiency of your unit. It will help you avoid costly air conditioning repairs and replacements in the future. So, let’s get started!
How to Find Air Conditioner Issues When Inspecting a Property
Read more: How to Spot Hidden AC Issues During Property InspectionsWhile it’s impossible to diagnose all AC problems without a professional inspection, there are some key things you can look for to uncover hidden issues. Here are a few tips:
- Check the airflow. Place your hand near a vent to feel the airflow. If the airflow is weak or inconsistent, it could be a sign of a dirty air filter, clogged vents, or a faulty blower motor.
- Listen for unusual noises. A well-maintained AC system should operate quietly. If you hear any strange noises, such as grinding, squealing, or rattling, it could be a sign of a problem with the compressor or other internal components.
- Look for signs of moisture. Water leaks around the indoor or outdoor unit can indicate a refrigerant leak or other serious issue.
- Inspect the ductwork. If the ductwork is damaged or leaky, it can reduce the efficiency of your AC system and lead to poor airflow.
- Check for mold growth. Mold can grow in damp, dark places, such as inside the AC unit or ductwork. If you see any mold growth, it’s important to have it professionally cleaned and remediated.
Look for Signs of Refrigerant Leaks
Refrigerant is a chemical compound that circulates through the AC system to absorb heat from the indoor air and release it outdoors. Without refrigerant, your AC unit would not be able to cool your home.
Here are some tips for detecting refrigerant leaks during a property inspection:
- Inspect the AC unit for any signs of physical damage. A crack or hole in the AC unit can cause a refrigerant leak.
- Listen for any hissing sounds coming from the AC unit.
- Check the evaporator coils for any ice accumulation.
- Compare your current energy bills to previous bills to see if there has been a sudden increase.
Check for Proper Airflow in Your Air Conditioning System
Airflow is essential for efficient and effective cooling. Here are some steps to check the airflow in your air conditioning system:
- Turn on your air conditioner and set it to the desired temperature.
- Check the vents in each room to make sure that they are open and unobstructed.
- Put your hand up to each vent to feel the airflow. The airflow should be strong and consistent. If you don’t feel any air or if there is low airflow, there may be a problem with your system.
Check the Thermostat
An accurately calibrated thermostat is essential for efficient home cooling. When the thermostat is calibrated correctly, it ensures that your AC unit turns on and off at the right times to maintain a comfortable temperature in your home. It can save you money on your energy bills and help to extend the lifespan of your AC system.
Here are some tips for checking the thermostat during a property inspection:
- Check the thermostat’s location. The thermostat should be located in a central location in your home, away from direct sunlight and drafts.
- Check the thermostat’s settings. Make sure that the thermostat is set to the correct cooling mode and temperature.
- The thermostat does not turn on or off at the correct times. It could be a sign of a faulty thermostat or a problem with your AC system.
- The thermostat does not accurately reflect the temperature in your home. It could be due to an inaccurate calibration or a problem with the thermostat itself.
- The thermostat turns on and off frequently. It could be a sign of a problem with your AC system, such as a low refrigerant charge or leaky ducts.
- The thermostat’s display is dim or difficult to read. It could be a sign of a faulty thermostat or low batteries.
Want a sneak peak at our FREE weekly newsletter?
Enjoying this article? This is an example of what is included on our FREE weekly newsletter, Landlord Weekly.
Subscribers get access to our free forms, email templates, and guides! As well as…
▪️Landlord Tips ▪️ Early Access to Our Blogs ▪️ Landlord Specific Articles by Other Industry Pro’s ▪️ Podcast Links
Click below to view a one of our newsletters!
Assess the Evaporator Coil for Issues
The evaporator coil is a critical component of your AC system. It is responsible for absorbing heat from the indoor air and transferring it to the refrigerant. The refrigerant then circulates to the condenser coil, where the heat is released to the outdoors.
Tips for inspecting the evaporator coil during a property inspection:
- Remove the access panel to the evaporator coil. It is usually located on the indoor unit of your AC system.
- Inspect the evaporator coil for any signs of dirt, dust, or debris. If the coil is dirty, it can be cleaned with a coil brush and vacuum cleaner.
- Check for any signs of ice accumulation on the evaporator coil. If there is ice on the coil, it is a sign of a problem with your AC system. You should call a qualified HVAC technician to inspect the system.
Additional Tips:
- You can also use a mirror to inspect the evaporator coil if you cannot see it directly.
- If the evaporator coil is heavily clogged, it may need to be professionally cleaned.
- A dirty evaporator coil can also reduce indoor air quality. The dirt and dust on the coil can trap allergens and other pollutants, which can be circulated throughout your home.
The Importance of HVAC Experts for Thorough AC Inspections
The significance of involving HVAC professionals for thorough AC inspections during property assessments cannot be overstated. When your air conditioner is experiencing common problems such as weak airflow, cold air turning warm, or inadequate cooling inside your home, it’s time to call in the experts from Precision Air and Plumbing.
HVAC companies like them possess the expertise to troubleshoot and identify issues within your AC system, whether it’s related to the compressor, fan, refrigerant levels, or the air handler. Professional service ensures that your system is working correctly, covering everything from checking electrical connections to evaluating the amount of refrigerant and airflow. Don’t hesitate to engage HVAC professionals to get to the bottom of any air conditioner problems and maintain an energy-saving, optimally functioning system.
Identifying AC Issues: A Crucial Aspect of Property Inspection
When it comes to property inspections, the importance of a well-functioning air conditioning system cannot be overstated. Ensuring the air conditioner’s system is working correctly is not only for your comfort level but also for energy-saving purposes.
Be proactive in identifying and addressing these concerns to keep the air conditioner running in your prospective property.
About the author:
Shelby Bartz is the new Content Editor of Precision Air & Plumbing, a full-service HVAC, plumbing, and home performance contractor operating in Chandler, Arizona. Shelby is a devoted bookworm but when she isn’t reading, you’ll find her cruising around town with her beloved ginger husky, Maxxy.
Company Information:
Precision Air & Plumbing
Feel free to contact us any time at 480-680-9791 for immediate assistance.
Fair housing testing is an essential tool for ensuring that property owners and managers comply with fair housing laws. The practice involves sending testers, who pose as potential renters, to assess whether landlords and property managers are engaging in discriminatory practices. As a landlord or property manager, it’s crucial to be prepared for when a tester comes to call. In this article, we’ll explore who can be a tester and the common methods they employ. We’ll also share tips to help ensure that you don’t fail your fair housing test.
Who Can Be a Tester and Where Can They Test?
Testers can come from various backgrounds and organizations. They can work for state fair housing departments, private fair housing advocacy groups, or the Department of Justice. Regardless of who they work for, their goal is to ascertain whether landlords and property managers are following the law and are fair housing compliant.
Testers use leading questions to target known trouble spots within the industry. Vague or leading questions should immediately set off warning bells in your mind that you are talking to a tester. You need to be sure that you are not saying or doing anything that could be interpreted as a violation.
Where might you come across a tester? Essentially, any place a potential renter would cross paths with a leasing agent can be a testing ground. Testers employ all forms of contact, including phone, email, social media outlets, and on-site visits. By far, though, the phone is the most widely used as it is the most cost- and time-efficient. Let’s consider two common topics used by telephone testers.
What Are Your Pet Policies?
One of the most common topics used in testing is about animals or pets. Testers will give just enough information to see how you or your staff respond. For example, a person calls in and says they are interested in your property but want to make sure their dog would be allowed, and the dog is a German Shepherd. It’s essential to note that the person said “their dog,” not “their pet.”
By assuming that the dog is a pet and wouldn’t pass your breed restriction policy, you could be setting yourself up for a fair housing complaint. Best practices dictate that pet policies can be discussed as long as assistance-animal policies are also shared. Along with that, it is always a good policy to encourage the person to come in and fill out an application, as that is what will genuinely determine eligibility.
Is Your Property Accessible?
Another common question during fair housing testing is about accessibility. Consider this scenario, a person calls in and asks if the property is accessible because they require the use of mobility aids. It’s crucial to note that even if a property is not very accessible, and you have the best of intentions, you should never disclose this information and should avoid recommending more accessible properties. This can appear as discrimination and steering, which are violations of fair housing laws.
The correct response is to encourage them to visit the property’s website to see more images and arrange for a tour if they wish. You should never discourage a potential renter from coming in to take a tour or fill out an application under any circumstances.
Tips to Help Ensure You Pass Your Fair Housing Test
Educate yourself and your team: Proper training is key to ensuring fair housing compliance. It’s essential to educate yourself and your team on fair housing laws, including federal, state, and local laws. Make sure you are familiar with protected classes and any exemptions that may apply to your property.
Have clear policies and procedures: Develop clear policies and procedures for renting your property, including pet policies and assistance-animal policies. Make sure they are easily accessible to anyone who needs them.
Document everything: Document everything, including conversations with potential renters and any decisions you make regarding their eligibility. This documentation can be helpful in case of a fair complaint.
These are just a few topics that can come up during a fair housing test, but anything related to fair housing can be utilized. Regardless of whether you agree with testing and the tactics testers are legally allowed to use, fair housing training is key to ensuring fair housing compliance.
We have teamed up with The Fair Housing Institute to get our readers 15% OFF all courses. We get nothing for it, so just enjoy the perk and use code YLR2023 at checkout!
👉Listen to our most recent pocasts HERE
👉Want early access to our blogs? Sign up for our FREE newsletter, Landlord Weekly. It comes out each Tuesday and contains our blogs as well as other landlord specific articles written by other industry pros, a deep dive into our tips, links to the products we love and use everyday in our rental property business, and links to our new podcast!
👉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
Marketing Your Property: Get to Know the Neighborhood
Tips for Taking Great Rental Property Photos
10 Things Tenants Need To Know From Landlords When They Move In
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.
Hoarding disorder is a complex mental health condition that can have significant implications for both the individual and the surrounding community. By understanding the unique challenges faced by hoarders and implementing appropriate strategies, landlords can create safe and habitable living environments while upholding the principles of fair housing.