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.”
We were surprised to find how landlords varied on this opinion! The season you lease your rental property can make a big difference on your bottom line. Below we discuss the different schools of thought on the best time of year to market your rental property.
November through April
It’s no secret that once Thanksgiving hits, people tend to be busier with holiday gatherings, shopping, celebrations, and vacations. It seems the farthest from the best time to market rentals is in December, as most people prefer not to move during the holiday season. Add in the cold weather and trying to load/unload a moving van in sub 40 degrees, snowy, icy, weather and you’ve got most tenants opting to wait for spring to think about moving.
The upside to marketing your rental in the late fall, winter, and early spring? Generally speaking, more tenants are looking for units than units available, and a landlord can have the upper hand when setting their market rate. The challenge is finding the tenant that fits your criteria.
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.
Effective September 2018, California enacted Senate Bill 721, the Deck and Balcony Law. This law came about after six college students died from a dry rotted balcony collapse in Berkley, California. The following information pertains specifically to California rental property owners. However, deaths and injuries from unsafe decks and balconies are happening everywhere and ALL landlords should be aware of the standards and how the Calif. deck and balcony laws affects your rental property, regardless of what state it resides in.
California Landlords Whom This Law Pertains To
The holiday season is upon us! Where this is a busy time of year, it’s always nice to remember those who rent from you. Isn’t the true meaning of the holiday season to share the spirit of community and humanity? Whether you have one single family home rental or several multi-family units, here are 5 ways to show your tenants kindness during the holidays:
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Remind them about options for package delivery
Between Black Friday and Cyber Monday your tenants may be getting a lot of packages delivered. If you have a leasing office and packages are delivered there, have your staff create a quick email/text template to let tenants know their package has arrived and is waiting for them to pick up.
If packages are delivered straight to their doorstep, maybe send an email prior to the holidays reminding them that theft is on the rise and to consider asking a neighbor to grab them if they will not be home soon, sending them to a friend or someone with a secure doorstep who will be able to bring them in to safety on their behalf. Another option is to recommend them using a shipping locker that is available at most grocery stores. The company sends them a code to scan when they pick it up and the locker opens up with your package safe and sound.
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Maintain icy walkways and parking lots
With increased package delivery and guests visiting this holiday season, consider providing your property with a service or the tenant with the proper tools to remove ice where someone can slip and injure themselves. If using a de-icing product, choose pet and environmentally friendly options. This shows them you care and let them know they have nothing to worry about should they have a 4-legged friend living with them.