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October 8-14 is National Fire Prevention Week, and being that many of our relatives are firefighters, we thought we would honor their employment by offering up tips to keep them from having to work too hard! But seriously, for landlords, this guide to fire safety is essential to follow ANYTIME when managing their rental properties.
Many elements can potentially cause fires in any home. Still, when it comes to rental properties, these potential fire hazards likely occur from tenants just not thinking thoroughly about their surroundings. As a rental property owner, it is your responsibility to do periodic inspections. We do ours twice yearly in spring and fall. Ensure there are no maintenance issues to be fixed, no lease violations you need to address, and absolutely no fire hazards that the tenant needs to remedy.
Below you will find our landlord tips to guide you when inspecting fire safety in your rental properties.
Know Your Local and State Fire and Building Codes
Codes differ from state to state, but many are just plain common sense. Please know you may not be covered by insurance if you violate fire codes. Some items you will find addressed in these codes are:
How many persons can live in the unit? In California, a single-family home rental is capped at six separate tenants. In apartments, our state goes by the two-plus 1 rule. This rule allows two persons per bedroom and one additional for the household. It is important to remember that these are guidelines, and should no health or safety issue be present, we cannot discriminate on familial status.
What is the requirement for fire extinguishers based on square feet of living space? This code may differ for single-family homes vs. multi-family complexes, but the theory is the same. You need to provide fire extinguishers for the tenants to use in the event of a fire. More on how we handle that below.
What kind of fire escapes or ladders do you need to provide for rentals with more than one story?
Where do I need to post escape plans?
Do I need to install sprinklers in my rental property?
How many smoke detectors do I need in each unit?
Can I have a locked gate at the entrance of the property? If so, how will fire and police access the property in the event of an emergency? Does said locked gate need to swing outward to allow easy and quick escape for my tenants?
To find general information on the fire code for your county or region, visit the National Fire Protection Agency Code Finder Page.
Install Smoke Detectors
OK, so this one is obvious, but there are some things you should know about the type of detector you provide and where the placement should be. You can choose to provide standard smoke detectors with 9v or newer ones with 10-year batteries. As they are new, we have had several units fail and find some kinks the companies need to work through.
There are newer smoke detectors that are wireless/battery operated but interconnect to communicate with the other sensors in the home. For example, if a fire starts in the living room, that detector will trigger the hallway one and continue until all sensors signal a fire warning for the tenants. You have on average less than three minutes from the time you hear a smoke alarm to escape a fire. The sooner you hear an alarm, the sooner you can get out safely. Smoke alarms that link together so that when one goes off, they all go off, are called interconnected alarms. These alarms provide more warnings in more places, giving your family more time to escape a house fire. Houses built after 1993 are required by building codes to have interconnected alarms that are wired into their electrical system.
We use this wireless interconnecting smoke detector in our 100-year-old single-family home rental. For under $30, you really can’t beat the price considering the advanced safety you receive.
If you’d like to add an interconnecting smoke and carbon dioxide combo unit, this is the one we recommend.
How many smoke detectors do you need to provide?
Every six months, we spend an entire day at our six-plex doing inspections and routine maintenance. However, when checking on our single-family rental homes, it only takes 1-2 hours at most. Inspections may seem like an invasion on the tenant, but it is standard procedure for most business-minded landlords. Keep reading to understand why landlord inspections are an essential element to operating your rental property successfully.
We do our inspections and routine maintenance every six months, regardless of when the tenant entered the rental unit. But, of course, if it’s only been a few weeks, we do pass on that unit.
We like to structure the inspections to be completed in the fall and spring months, usually November and April, respectively. Working in these gentler weather months allows us to prep for the most impactful winter and summer seasons. For efficiency, we inspect all units in the building on the same day.
When we say routine maintenance, we are referring to items within the units themselves. We do not perform exterior maintenance these days, which occurs more often and does not impede on the tenants or their units.
Behind the Scenes
Before we discuss the actual tasks performed, it is important to note two items.
- Make sure it is written in your lease that you are allowed to do periodic inspections. Do not say quarterly or semi-annual. Use the word periodic. Why? Leave yourself open to do checks more often if you suspect the tenant is violating lease terms. This terminology is not a hall pass to enter the unit weekly. That is harassment. It also allows you some grace if you cannot perform the inspections as often as you’d like. Life happens. Build yourself some leeway in case you need it.
- YOU MUST GIVE AMPLE NOTICE to the tenant before the inspection. For most states, at minimum, you must give 24-hour notice. However, we opt for at least 48-hours, usually more. Ample warning allows the tenant time to tidy up the unit (hopefully) and be ready for you to spend an hour or so working in there.
Notice can be via email or text. Our advice is to make sure it is in writing, as all correspondence with tenants should be. Explain in the notice precisely what you will be doing during that inspection and maintenance visit. Ask the tenant to let you know if there are any issues they have noticed that need to be addressed. This is a perfect opportunity for your tenant to let you know that the window won’t close all the way or if the toilet is running. Now you can have parts ready to repair the issue or schedule the appliance repair person to fix the screeching noise on the washing machine.
If you give them more than 48 hours’ notice, send a reminder email the day before, letting them know the approximate time you will be in the unit. We usually will give a 2-hour window. If they want to be present, they can make arrangements to be home when you are there. Conversely, if they prefer to be out or need to change the window time due to a remote meeting, you can work around them.
Still with us? Keep reading to see why inspections are so essential to a landlord’s success.
The Inspection: Use Your Team Members
When we schedule the inspection date, we also hire our contractor to join us that day and assist us with it. We pay him his hourly wage, and he will take part of the list and check the items he can repair right there on the spot. Most common repairs will be a running toilet, leaky faucet, loose handles on cabinets or drawers, closet doors that have come off the track, and loose door handles.
It is also why we ask our tenants in advance about any issues they are noticing. Then, we can make sure our contractor has all the necessary parts to repair those issues right there on the spot. If necessary, we can plan for a specific repair person to be present if needed as well. Often, we will need to have our appliance repairman out during that day to check on a refrigerator or a washing machine.
Our contractor inspects the unit before the tenant moves in, so he is acutely aware of the level of wear and tear and how easy or rough a tenant may be treating the unit as he does this semi-annual inspection along with us.
What To Inspect:
Being a self-managing landlord is not difficult if you have proper organization, written policies and procedures, and the right business mindset. Check out our top 10 business operating tips we recommend for all DIY landlords.
1. Operate your rental property as a business
Owning rental property and being a self-managing landlord means you must operate professionally and be customer service-oriented. Tenants are your customers, and to generate income, you need to treat them properly. There are processes to follow to ensure you select great tenants, laws to avoid legal action against you, and efforts to properly maintain the rental property to minimize tenant requests for unit repairs.
For those renting out a personal home you recently moved out of, leave your emotions at the door. That property is no longer your home, so getting upset over a junky car in the driveway, cluttered rooms, or dirty appliances will not help your stress level. Instead, control what you legally can and let the rest go. By the way, properly vetting a tenant can help avoid these issues. Check out our FREE 6-page guide: The Residential Landlords Guide to Placing Their Ideal Tenant Every Single Time.
Know all the laws for rental properties
Know your state AND local landlord-tenant laws and ordinances. You can find this information by searching “Landlord-Tenant Laws in ____ (insert your state or county).”
There are national-level laws for Fair Housing as well. Please get to know these as much as possible as they can be easy to violate unknowingly. For instance, you cannot ask a potential tenant where they work. It is discriminatory to assume they have to have a job to qualify to rent your unit. They may be a voucher household or have income from a private source like a trust fund. Another common violation is to ask an applicant if they have children and what their ages are. Although you are just being friendly, this question is discriminatory against familial status. You can only inquire about age if you rent out age-specific residences like a senior living facility. To read about HUD’s Fair Housing Laws, check out their website here.
2. Properly screen a potential tenant
The saying “no tenant is better than a bad tenant” is very accurate. If it takes you two weeks or a month to find the right tenant, then so be it. The frustration of having a tenant who does not pay on time, is destructive to the property, or does not follow the criteria set out in the lease can be stressful and costly to remove. Create standards for your approval process, so you avoid violating Fair Housing laws. If you don’t want smokers to rent the property, make sure your list that in the ad. Do you require a specific FICA score or minimum rent to income ratio? Better list it in the marketing for all to see.
Prescreening Applicants
Prescreen potential tenants before meeting them and accepting an application. Prescreening is a simple short interview to make sure they have read the criteria in the marketing or advertisement. Often, potential tenants will only look at the photos attached to the ad and not read the written criteria required to qualify. They then show up at the unit asking questions CLEARLY indicated in the ad, only to find out they do not qualify. This oversight has wasted your time traveling, opening the property, and getting it ready to show. Time is money! Download our Top 5 Prescreening Questions We ALWAYS Ask to get you started.
The Application
Have a thorough application. It should include these areas to complete:
- Their current address
- Date of birth
- Social security number
- Driver’s license or government ID information
- At least three past rental history locations
- Employer information or source of income
- Three personal references
- An emergency contact
- Roommate information
- Pet information
- Felony conviction information
- A signature authorizing you to pull credit and inquire with employer and references
Again, state and local ordinances may apply to what you can or cannot ask of a potential tenant on the rental application. Check with legal counsel or find a state-specific application from another landlord or a state/local rental housing association.
CHECK EVERYTHING ON THE APPLICATION! First, get a copy of their government ID, the last two pay stubs, and a bank statement for their primary account. Next, call the employer, ALL past landlords, and references. This procedure takes time for everyone to get back to you. We tell applicants it takes a minimum of 48 hours to gather this information and evaluate it. If they are in a hurry, then move on. If any advice sticks with you, remember, you do not want to rush the process because you are anxious to place a tenant.
Learning anything with these top 10 tips for DIY landlords? Keep reading!
3. Create a comprehensive lease
The term “cover your assets” could not be more accurate here. Our lease is 33 pages long! In California, we must include information about specific laws in place (Rent Control, Bed Bugs, and Lead-based paint). Therefore, it is essential to seek legal counsel to create a state-specific lease to ensure compliance. Addendums are your fail-safes; Use them. We use them for everything from no-smoking policies to requiring additional deposits for the use of satellite dishes. Use blank addendums to document specific criteria required, like who is responsible for lawn care, snow removal, or repairs on non-essential appliances.
If you are not aware of what you need to include in a lease, talk to other landlords to see what they suggest, meet with a lawyer, or join a local or state rental housing association. They usually provide leases for free with a membership or you can purchase state specific leases through EZ Landlord Forms. Use code: STACIE15 for 15% any new form or membership!
4. Collect a sizable security deposit
Your state may mandate a maximum amount allowed to collect for a security deposit, so again, know the laws and ordinances around security deposits. In California, we can only obtain a security deposit up to two times the rental rate for an unfurnished unit and three times for a furnished unit. If you do not collect enough for the security deposit, you may have to go after a tenant in small claims court should the damages exceed the amount you hold for them.
Understand normal wear and tear versus damage. For example, holes in the wall for a few photos are wear and tear where thousands of staple holes from a tenant putting up noise insulation foam are damage. A dirt trail on the carpet around the area of the bed is wear and tear. Large stains or holes in the carpet are damage. A small dent in the refrigerator is wear and tear. The handle missing from the dishwasher door is damage.
For more information on security deposits, check out our blog post: Security Deposits, 5 Tips Landlords Should Know.
5. Inspect units every six months
Your lease should state that you have the right to enter the unit for inspections periodically. We inspect every six months, usually in the fall and spring months. You could choose to inspect six months into each lease, but that means multiple trips for inspections for multi-unit properties. We inspect units in our multi-unit properties all on the same day, twice per year.
During the inspection, we check for leaks, mold, and lease violations. We also check to ensure the smoke/carbon dioxide detectors, door locks, and cabinet doors are functioning correctly. As well as change batteries if needed.
Doing this inspection allows us the opportunity to be proactive with maintenance issues. For example, we can resolve the problem before dry rot or mold occurs if we find a water leak. It also gives us a pretty good idea of how the tenant treats the unit and, should the lease not be renewed, what cleaning and damage repairs we can expect.
Ok, we are halfway through our Top 10 operating tips for DIY Landlords! Keep reading to learn more about the behind-the-scenes business practices that are just as important as tips 1-5.
6. Create a solid team to support you
We cannot stress this part of DIY landlording enough. The people you call on for all needs when running a business can make or break your experience. You know your strengths and weaknesses and find others to serve those functions you cannot do yourself.
Find yourself a reputable contractor to call for maintenance issues you cannot remedy yourself. Our contractor can handle almost any maintenance request, and because he is licensed, insured, and bonded, we can trust him in units without us having to be present. He is also willing to be on call when we are traveling. Our contractor has saved us so much stress and anxiety when on vacation!
Other significant team members would be a CPA or tax advisor, real estate lawyer or legal counsel, your bank, pest control company, landscaper, appliance repairman, painter, or a cleaning crew. For our top 5 team members and how we found them, check out our blog Landlording: A Team Sport.
7. Have substantial cash reserves
If 2020-2021 has taught us anything, it should be the importance of cash reserves for the unknown. I know some real estate professionals disagree, but we are of the mindset of “it’s better to be safe than sorry.”
Included in our financial planning for our rental property business is the goal to set aside 10% of earnings each month. We save for vacancies, nonpaying tenants, repairs and maintenance, roof, driveway, appliance replacement, and property upgrades as needed to remain competitive in the market. These funds are your “oh crap, what now” savings account. If we did not have a substantial cash reserve, we would have borrowed money to get through the pandemic. We would have been fine but, the reassurance and confidence we have knowing we are financially secure is an enormous stress reliever.
To learn more about cash reserves, read Cash Reserves for Rental Properties: How Much is Enough.
8. Keep your documents, photos, and records organized
Part of owning a business is keeping your paperwork in order. For rental properties, it is imperative to know where every document is at all times. It does not matter if you prefer paper trail or electronic files.
For each unit, have a file for every tenant. This file should include all correspondence with the tenant and their application, lease, unit photos, and move-out paperwork.
For each property, have files for receipts, warranties, rent roll, maintenance logs, information for machines, and backup keys for units, mailboxes, gates, garages, etc. Also, a copy of the declarations page for your liability insurance.
For the business, you should have operations and policy and procedures manuals. The operation manual will describe all of the essential day-to-day practices for operating your rental property business. This manual is vital should you become incapacitated, so another person can step in and run your business on your behalf.
The policy and procedure manual contains all of the criteria you require to rent one of your units. This manual will state such policies as pet, smoking, financial requirements, what you repair vs. tenant responsibility, etc. It is essential to have these written (and check for legal compliance) if you find yourself in court over a discrimination lawsuit.
To learn more about organizing your landlord documents, check out our blog: Keeping Rental Property Documents Organized.
9. Properly account for your finances
There can be a lot of coming and going of funds when owning a rental property business. You must educate yourself on tax laws and know how to account for your income and expenses. There are a lot of ways to save money on rental income. Having a CPA with knowledge about rental properties to advise you is key.
Stay on top of your bookkeeping. You should know from month to month where you stand financially. If you only work on your financials every three months, you could miss out on potential financial growth opportunities.
Always know the value of your properties and what market rents are. Then, should the opportunity to refinance the property come along, having your finances in order can expedite your loan process, enabling you to use the extra cash to purchase your next rental property.
10. Make sure you are adequately insured
Liability insurance policies depend on the type and size of your rental property. Single-family homes, condominiums, and apartment buildings all have different types of policies and coverage. For example, apartment buildings with more than five units are considered commercial property and have additional coverage that a 4-unit building may not include.
If you own a single-family home and rent only a room or two, you will need to take out rental property insurance to cover the liability, contents, and loss of rent coverage.
Single-family homes and condominiums usually do not include comprehensive liability insurance, just general liability coverage.
Whether you hold your rental properties in an LLC or not, consider getting umbrella insurance for additional liability coverage.
Each insurance company has different levels of coverage, so it is a good idea to have a conversation with your insurance broker to assure yourself the coverage you have is satisfactory.
Lastly, we require our tenants to hold a renter’s insurance policy. There are many reasons why we enforce this policy. Read why in our blog: Why Landlords Should Require Renter’s Insurance.
Love these top 10 operating tips for DIY landlords? Check out our other blogs to guide you on your self-management journey as a landlord:
The Who, What, When, and Why of Residential Vacancy Insurance
Offering Tenants Incentives Upon Lease Renewal
Make It a Family Affair: How Landlords Can Employ Children for Tax Breaks
Marketing Your Rental Property, Get to Know the Neighborhood
Tips for Taking Great Rental Property Photos
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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.
Tenants, termites, and tenting, OH MY! A few years ago, we had the unfortunate situation of termites in our six-unit apartment complex. This blog covers how to navigate the process of termites in your rental property. We cover how we discovered them, the tenting and fumigation process, communication and method of guiding our tenants, and all the nuts and bolts that came along with this experience.
Discovery
Our termite story begins with a tenant informing us that she noticed a few tiny pinholes around her front door frame and molding. On the floor directly underneath, she saw fine dust. Under the advice of our pest control company, she was asked to place blue painters’ tape over the holes. If the hole appears through the tape again, we have termites. Indeed, holes were there a few days later. Ugggh! How could we have termites in our rental property?!
After picking our stomachs up off the ground, we immediately scheduled our pest company out for a complete pest inspection. The apartment in question is in the front of our six-unit building. After investigating the basement, the inspector confirmed there was a small infestation of dry wood termites. Dry wood termites, unlike subterranean termites, live inside the wood, making soil treatment pretty much useless.
We were given two options:
Back when I started as a landlord, I had no idea what I was doing. My brother was my partner and was a general contractor so, he handled all of the maintenance responsibilities. I had to learn how to market our vacancies, process applications, price the rents, account for the income and expenses, and most importantly, have good customer service to our clients, the tenants. When my brother became injured and could no longer work in the family business, I needed to learn the importance of an excellent team to call upon when needed. I quickly learned that landlording is similar to a team sport.
For clarification, a team member does not necessarily mean an employee. These are tradesmen, legal counsel, bank/loan companies, real estate professionals, CPAs, cleaning companies, appliance repairpersons, landscapers, etc. Essentially, a team member is ANYONE who can make your life easier by completing the tasks they know and do best.
Our Top Five Team Members
Choosing the five most critical team members is like only picking two of my three children to go in a lifeboat. Where Kevin and I can handle many jobs, every person on our team is crucial to our success.
Maintenance
We have our general contractor on speed dial. We were lucky enough to find a contractor that does not do large projects. He worked for years on large jobs and, as he has gotten a bit older, decided that smaller jobs have fewer headaches and likely more income for him. In addition, he lives in the same area of our units (we live 2 hours from our rental properties), so he can quickly head over when a maintenance issue arises.
He does not mind being on call when we are on vacation, and he is very protective of our properties. He is insured and bonded because he is a licensed contractor, so we have no trust concerns with him being in occupied units. For the most part, he will do almost anything except new electrical. For that, we hire his electrician.
How did we meet him? He was referred to us by the painter. You will find that referrals are the easiest way to secure a team member, so do not be shy about asking fellow landlords for direction when in need.
Legal Counsel
As a landlord, we cannot express enough the importance of an excellent real estate lawyer. We have called upon our real estate attorney multiple times for
Differing Opinions
Offering our tenants some incentive upon lease renewal has become a more explored policy in the last few years. However, landlords sit on both sides of the fence on this policy. Some landlords who see themselves to be fair, responsible, and kind to their tenants believe that offering an incentive to tenants as a bonus upon renewing the lease is a waste of time and money. Instead, they feel the tenant should appreciate their relationship and be grateful they are not dealing with a nightmare landlord. They even will go so far as to believe that if the tenant were to move out, it would be an opportunity for them to raise the rent higher. That certainly can be true in rent-controlled areas, but a view of “take it or leave it” is not uncommon for many landlords.
The other school of thought on incentives in exchange for lease renewals is that landlords will do what they can to retain a good tenant instead of losing income due to a vacancy. Their issue is the time it takes to flip a unit to get it ready for a new tenant. Meeting for the pre-move-out inspection, after move-out inspection, dealing with accounting for security deposit returns or losses the security deposit must cover are seen as a pain. These items do not even consider ALL the other typical maintenance issues: replacing/cleaning carpet, painting the unit, repairing broken blinds, replacing run-down appliances, marketing the property, and then going through all the rigamarole of the application process to place the new tenant.
The adage that time is money runs very true for our family. We have hectic lives and honestly will do what we can to avoid a vacancy.
Our Reasoning and How We Offer Incentives
As landlords we often can use an extra hand around our rental properties so why not employ your children or grandchildren to get some of those items off your To-Do list? I suggest you speak with your CPA to validate if the following statements will work for your business. As a landlord, you should consider making your business a family affair and employ your children/grandchildren to benefit from the many different tax breaks available to you.
Landlording Jobs Children Can Do
First, lets talk about what kind of tasks your children can do to assist in your landlording business. This depends on their age. Younger kids (under age 14) can do such tasks as sweeping walkways, clearing snow, watering plants, raking leaves, filing papers in the office, etc. Older children (ages 14-18) can do such tasks as washing windows, painting during a vacancy, cleaning a unit, power wash the exterior of the property, cleaning the leaves from the gutters, gardening and mowing lawns, and even handle some light office work like sorting papers for bookkeeping. If your older aged children are proficient on the computer, they can create forms for the business. Consider personalizing forms like Move IN/OUT Itemized Statements or Maintenance and Repair Logs to keep in your files when work has been completed on a unit.
It may be a stretch, but I believe your child or grandchild can be paid for modeling in your marketing as well. Marketing is not only for when you have a vacancy, you can pay modeling fees for websites and flyers as well.
Tax Benefits of Employing Your Children
Tax benefits of employing your child come about in a couple different ways. By paying your child, you reduce your self-employment taxable income when it comes time to file your income taxes. Along those same lines, you are exempt from paying payroll taxes (Social Security, FICA, & FUTA) for your child, just so long as that child is under the age of 18.
When it comes to residential income property, there are many criteria that can lead to very expensive mistakes if you do not handle your decisions properly. Let’s start out by stating this: security deposits are not the landlord’s money until after the tenant has moved out and the landlord has proven what damages they need the funds for. Security Deposits are the tenant’s funds which they are allowing you to hold for them. Most states require security deposits be held in a separate bank account; Not the primary bank account used for income and expenses. You may not commingle these funds with other money not designated as a security deposit. It should come as no surprise that security deposits are in the top three incidents that landlords and tenants find themselves fighting over in small claims court, so here’s our top 5 tips every residential landlords should know:
1️⃣ Do Not Designate Specific Deposits
2️⃣ Have Thorough Records Of All Correspondence With The Tenant Including:
3️⃣Take Photos Of Every Angle Of Every Room Before Move In.
The 3rd of the 5 tips is important for security deposits that landlords should know; Implement this tip with your next tenant flip! Photos from phones and digital cameras have a date stamp and can prove that dent was not in the dishwasher before they moved in. In the same manner, landlords should take the exact same photos at move out. Do not take videos, many small claims courts will not allow video, only photos. Keep these in the tenant file or have it noted which electronic folder the photos are located in so you can find them easily. It can take months for the tenant to act on a legal action against a landlord. By then, hopefully, a new tenant is in place but you have no recourse to prove the damage occurred during their stay if you don’t have proof dated within their lease terms.
4️⃣Know Your City Ordinances.
5️⃣Know How Many Days You Have to Return or Estimate The Security Deposit Held After Move Out
Business cash reserves are a basically an emergency savings account. If you treat your rental property as a business, you should be putting a little aside each month for the unknown. You know, like a pandemic. So how much cash reserves are enough for your rental property? We’ll get to that in a moment.
Why Do Landlords Need Cash Reserves?
- Unexpected vacancies or turnover that takes longer than expected.
- To carry a good tenant facing sudden health issues.
- To cover expenses and missed rent in the event of a fire or flood, or God forbid another pandemic.
- For replacement costs for damaged windows, doors, carpet, or appliances like water heaters, air conditioners, or refrigerators.
- Those unexpected repairs to damaged floors, heating systems, or issues caused by mold or pest infestations, or dry rot.
- Costly capital improvements like a new roof, fence, kitchen, bath, or painting the exterior of your rental property.
As you can see from the examples above, capital reserves carry you through many different circumstances. Had we not had a sizable reserve, we would have been in a very different situation during the pandemic.
How much cash reserves do you need for your rental property?
The basic rule of thumb is much like you should have for your personal reserves, six months of income and expenses in the event you are incapacitated and your income stalls. So that would be six months total of:
- Total income earned by your rental property. This includes monthly rent and income derived from any other sources like washer/dryer coins, additional storage income, parking space income, and concierge services offered to tenants.
- PMI: Property taxes, mortgage, and insurance fees.
- Maintenance and Utilities you provide: Water, gas/electric, trash, landscaper, and/or property manager.
- Expenses you run through your business: Car payments, gas allowances, health insurance, employees, etc.
Two approaches on to how to reach your goal reserve:
Additional Notes
Location, location, location, the official mantra of anything real estate. Whether investing, buying, or renting, the importance of that phrase cannot be overstated. Make sure you include facts about the neighborhood when marketing your rental property.
As investment property owners, knowing about your neighborhood is vital when marketing your unit. Prospective tenants want to be close to work, restaurants, shopping, parks and walking trails, good schools, entertainment venues, etc. An ideal location can have a significant impact on your revenue. Often tenants focus on an area that fits the lifestyle they desire for themselves and their family. They may be willing to pay a little more and might overlook some rental unit shortcomings if the property is in a great neighborhood.
When you purchased your investment property, I am sure location played a pivotal factor in moving ahead. Along with cash flow, appreciation, ROI, etc., you probably toured the surrounding neighborhood or looked online to see the proximity of good schools, shopping, and so on.
But to properly market your rental property to prospective tenants, take it a step further and treat the neighborhood as your own. Spend time in the area as if you lived there or become a tourist for a day or two. I had one English teacher who recommended one should “write what you know.” By getting to know your rental property neighborhood, you can better relate to its positive aspects, whether through your marketing ad copy or when answering questions your prospective tenants might have.
Quick Story
A few years ago, my wife and I had some work being done at our apartment complex in midtown Sacramento (2 hours from our home), which required us to spend the night.