Hiring Management Help: Yes or No?
A property manager can be responsible for all operations of a property, including marketing, tenant selection, rent collection, tenant relations, maintenance, and accounting. Many beginning real estate investors do all the work themselves — painting, cleaning, making repairs, collecting rent, paying bills, advertising, and showing the rental units. However, after a while, most investors delegate jobs that they aren’t suited for or don’t enjoy. Some new owners, of course, do just fine managing their own rental units. But others discover firsthand that on-the-job property management training can backfire with some costly lessons.
Evaluating your situation and the possibility of self-management
If you have the right traits for managing property, have the time, and live close to your property, consider doing it yourself. Among the advantages of self-management are
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You save the monthly property management fee. Property managers’ fees can be significant, so a potential advantage for the do-it-yourself approach is that you can save yourself a good deal of money. However, as we discuss in a moment, you must examine the bigger picture of the value of your time and realistically assess how much of your time property management takes up. You could also cost yourself a lot more than you save if you inadvertently make a serious mistake, such as violating a fair housing law.
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You can save on maintenance costs. By keeping direct control of the management, you decide who does the repair work and mows the lawn. If you’re qualified and have the time, doing your own maintenance or yard work is usually a good idea; if you hire someone else to do it for you, the cost can devour your monthly cash flow in a hurry — especially in the early years of ownership when cash flow is often tight. Develop a list of reliable fix-it and landscape personnel who are licensed, do good work, and charge fair rates. However, a property management company may get volume pricing or discounts that an individual managing just a few rental units won’t.
Some owners who self-manage can tell you exactly how much money they “saved” by not hiring a property manager, but the one factor that many real estate investors overlook is the value of their own time in dealing with management issues.
If you earn your living regularly from something other than managing rentals, managing your investment property may not be worth your valuable time. If you’re a higher-income, full-time professional, getting frequent calls from prospective renters or getting a midday emergency call and rushing off on weekdays to handle some minor crisis at your rental unit isn’t only impractical, it may be downright damaging to your career. Receiving emergency calls in the middle of the night can make you too tired to go to your job the next day. If your property isn’t in the safest area of town, doing a repair or collecting rent in the evening may actually be dangerous.
As a jobholder, look at your annual income and figure out approximately what you earn per hour. Do the same for the cash savings you generate by managing your own property. Unless your management efforts produce significant cash savings compared to your job, you may be better off hiring a property manager for your rental units.
The same guidelines hold true even if you’re an independent business owner or self-employed. Your schedule may be more flexible than that of a nine-to-five employee. But if you’re earning $50 an hour, it doesn’t make sense to devote hours of your productive work time to managing rental units, which may only amount to cash savings of $25 an hour.
Property management is truly a 24/7/365 commitment. Carving out time when you’re completely free from the unexpected interruption can be difficult. Your rental prospects and paying tenants will expect an immediate response to even their most routine inquiries. Property managers can respond quickly in today’s society and get the best tenants because they’re the ones who appreciate a professional and responsive relationship with their landlord. If you aren’t as responsive as residents expect, they could refuse to pay rent and defend your efforts at eviction by claiming that you breached the implied warranty of habitability.
Assessing your skills and interests
To fill the position, you have to possess the corresponding basic skills and interests. Use the following questions to examine your own personality and skills to see whether you’re cut out to be your own property manager:
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Are you a people person? Serving as a landlord is a labor of love. You must enjoy people and solving problems — while often being unappreciated yourself.
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Do you have the temperament to handle problems? Responding to complaints and service requests in a positive and rational manner is key, even if the resident is angry and hostile.
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Are you comfortable with numbers and basic accounting skills? And are you meticulous, timely, and accurate with paperwork?
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Do you have maintenance and repair abilities? If you’re handy and take on electrical or plumbing jobs, what if something goes wrong and the resident argues that the job should have been done by a professional? Do you have insurance to cover any property damage or personal injury that results from a mistake you make? Being able to work with your hands goes a long way, but if you’re adept at finding and managing good contractors and vendors, you’re still in the game.
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Are you willing to work and take phone calls/emails/text messages in the evenings and on weekends? Who needs a weekend, right?
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Do you have sales and negotiation skills? You need to sell the space, but know your competition so you can close the deal but not give away the store.
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Are you willing to commit the time and effort? Other important tasks, such as determining the right rent and becoming and staying familiar with property management laws that are constantly changing, will take even more time.
If you’re shy or impatient, or prefer to avoid any conflict or are easily manipulated, you aren’t suited to being a property manager. You need to convey a professional demeanor to your tenants. They must see you as someone who will take responsibility for the condition of the property and operational systems of the unit. You must also insist that tenants live up to their part of the bargain, pay their rent regularly, and refrain from causing unreasonable damage to your property.
A rental property manager must be fair, firm, and friendly to all rental prospects and tenants. You need to treat everyone impartially and remain patient and calm under stress. You must be determined and unemotional in enforcing rent collection and your policies and rules. And you must maintain a positive attitude through it all. Not as simple as it looks, is it?
When you manage a rental property, you don’t just have to deal with your current tenants. You also have to interact with rental prospects, contractors, suppliers, neighbors, and government employees. People, not the property, generally create most rental management problems. Be prepared to be flexible and learn from your property management experiences. The really good property managers may have credentials, but they have also graduated from the school of hard knocks. Practice makes perfect.
Finding and Hiring Pros
Management companies accept the responsibility for all property. The right property manager can make a big difference in the cash flow your rental unit generates by finding good replacement tenants quickly and making sure that maintenance is done in a timely manner without breaking your budget. You need a property manager who is committed to helping you get the optimum results from your rentals. Try to find property managers familiar with your kind of investment property and knowledgeable about the local rental market. With a little research, you can find the right fit for your property.
A poor management company can cut into your profits, not only with their fees but also by providing improper maintenance and leasing to poor-quality tenants who may run your property into the ground. A bad property manager can leave you in worse shape than if you had managed the property yourself.
Doing the research
Visit the office of your management company and spend time interviewing the specific property manager that will have hands-on management of your rental property. Make a few extra phone calls to check references and don’t sign a management contract until you feel confident that the company you hire has a sound track record. Checking with the property management company’s chosen referrals isn’t enough. Ask for a list of all their clients and contact the ones with rental properties similar in size and type to your own. Make sure the rental owners you contact have been with the property management company long enough to have a meaningful opinion.
You specifically want references for the property manager that will handle the day-to-day management of your property. Some companies have you meet initially with their most qualified and competent manager and then hand you off to a newbie who may not even know as much as you do about property management. Of course, having very experienced and credentialed senior property managers or owners can be a great resource, but you just need to make sure who exactly will be servicing your property.
Make sure that the firm you hire manages property exclusively, particularly when selecting a management company for a single-family home, condo, or small commercial, or residential rental property. Many real estate sales offices (as opposed to property management firms) offer property management services; however, this service is often more about obtaining the listing to sell the property later on. Many property managers in real estate sales offices don’t have the same credentials, experience, and expertise that an employee of a property management firm has. The skills required to represent clients in selling property are quite different than the skills required to manage property. Go with the best property management company and then select the most competent sales agent when you look to buy or sell your income property.
Also, be sure to investigate these issues:
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Licenses: Most states require property managers to have either a real estate license or a property manager’s license or both. Call or use the Internet to verify that the property manager and the management company have a current license in good standing. Specifically ask about any pending or recent complaints or audits and the outcome during your vetting process because licensing disciplinary actions can take many months or even years before they appear online.
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Credentials: Also examine the property manager’s credentials. The Institute of Real Estate Management (IREM), an organization of professional property managers, provides professional designations, including the Certified Property Manager (CPM) and Accredited Residential Manager (ARM) designations. A select group of management firms have earned the Accredited Management Organization (AMO) designation. Check
www.irem.org to see if your manager is currently IREM-approved because some sneaky individuals or companies earn credentials and claim to hold them, but actually fail to meet the minimum ongoing requirements to maintain the credential or stay current with an ever-changing real estate management industry.
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Insurance: The company should carry insurance for general liability, automobile liability, worker’s compensation, and professional liability (errors and omissions). The management company is your agent and will be collecting your rents and security deposits, so they should also have a large fidelity bond to protect you in case an employee embezzles or mishandles your money. Remember that they have multiple clients so the amount of the fidelity bond needs to cover much more than the average funds in the trust account just for your properties.
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Accounting: Look for a management company that offers you a separate federally insured trust depository account along with the ability to provide separate accounting for each client or property managed rather than a master trust account where multiple clients’ funds are commingled.
Talking money
In most management contracts, property management companies have the ability and right to perform emergency repairs without advance approval from the owner. Of course, this arrangement allows the property management company to take care of problems that occur unexpectedly. Most management contracts contain clauses that allow property managers to undertake repairs up to a specified dollar amount without the owner’s advance approval. The limit should be commensurate with the type and size of the property. Commercial properties and larger residential properties may have a $2,500 limit, whereas a small duplex may have a limit of $250.
When you’re in the early stages of working with a new management company, make sure you closely monitor their expenses. Even though they may have the legal right to use funds up to a certain amount, they should always keep you informed. Many management companies have in-house maintenance crews, and keeping these workers busy making repairs at properties they manage can be a lucrative profit center. They may offer low management fees knowing that they can make it up by markups on (often unnecessary) repairs. Although legal, if properly disclosed, some management firms routinely receive and keep discounts that they negotiate with contractors, vendors, and suppliers, and the disclosure is likely buried in the contract’s fine print. Be sure to inquire specifically before you sign the management contract because this practice is becoming common and accounts for misleadingly low management fee quotes from some firms. Look for a property management firm that doesn’t mark up materials, supplies, or maintenance labor.
Typically, management companies receive a percentage of the collected income for managing a property; some management firms offer a flat fee per month or a dollar amount per unit per month for the entire property. Try to find a company that has a management fee that is a percentage of the collected income; this kind of fee is a strong motivator to the management company to ensure that the rents are collected and kept at market rate. Generally, the larger the rental property, the lower the management fee percentage. Management fees for single-family homes, condos, and small rental properties typically run 9 to 10 percent; medium size properties 6 to 8 percent; and large residential properties of 200 or more units around 3 to 5 percent. Fees for commercial-type properties have a similar scale.
Additional fees for the leasing of vacant space are often justified, because the most time-intensive portion of property management is tenant turnover. When one tenant leaves, the rental unit or the commercial, industrial, or retail suite must be made rent-ready; then the property manager must show the property and screen the tenants. Leasing fees or charges for residential rentals can vary but are often either a flat fee of a few hundred dollars or a percentage of the rent, such as half of the monthly rental rate. Leasing commissions for commercial, industrial, or retail properties are almost always a percentage of the gross rent with a declining scale where the longer the lease, the lower the percentage in the later years.
Working with Existing Tenants Upon Property Acquisition
If you’re like most investment property owners, you’re acquiring property that’s already occupied. Tenants are typically full of apprehension when their rental unit ownership is changing, so it’s extremely important to begin your relationship with your tenants on a positive note.
Meeting tenants and inspecting units
When you first acquire a residential rental property, contact your tenants and reassure them that you intend to treat them with respect and have a cordial yet businesslike relationship. Deal with tenants’ questions honestly and directly. The most common concerns usually include the following:
- Potential for a rent increase
- Status of their security deposit
- Proper maintenance or condition of their rental unit
- Continuation of certain policies, such as allowing pets
Just as you’re evaluating your tenant, your tenant is evaluating you during these initial contacts. Be open and honest. Failing to do so can result in a loss of credibility should you later implement changes that you didn’t acknowledge up front. And don’t make any promises that you won’t keep. Unlike in politics, renters have plenty of choices and will move along if you lie to, deceive, or otherwise disappoint them.
If you’re investing in commercial investment properties, you should also meet with your tenants and listen to their concerns about the property. Although they typically aren’t as concerned about sudden rent increases (because they’re likely on a long-term lease), they’re interested in hearing about your plans to maintain and upgrade the property or make any other improvements that may increase their business. Also, it’s never too soon to begin courting your commercial tenants for a lease renewal.
Provide your tenants with a letter of introduction during this brief in-person meeting. This letter provides your tenant with your contact information, explains your rent collection policies, the status of their security deposit, and the proper procedures for requesting maintenance.
Although you most likely had a brief chance to view the interior of the rental unit or suite during the due diligence period before escrow closed, walking through again with the tenant now that you’re the owner can be helpful. Pay special attention to the proper use of the space, particularly for commercial tenants where illegal activities such as the use or storage of hazardous materials may be a serious liability issue.
Don’t just knock on the door and expect to walk through your tenant’s rental unit or suite. But if you’re at your investment property delivering the letter of introduction, you can schedule a mutually convenient time to meet. Some tenants will be glad to meet with you right then, but others won’t. Giving your tenants time to think about any issues that they want to discuss is beneficial for both of you. In most states, tenants don’t have to let you enter their rental unit unless you have a legal reason and have given proper advance notice.
The former owner of the investment property may have had a policy of documenting the condition of the rental unit or suite at the time the tenant took possession. If so, compare the noted condition when you actually walk through the rental unit or suite. If proper documentation of the move-in condition wasn’t made, consider preparing such information during your walk-through. This practice allows you to establish some sort of baseline for the condition of the unit to use upon the tenant’s move-out, which can help you determine the amount of the security deposit to be returned to the tenant.
Entering into a new rental agreement
Although you may want to make some changes in the terms or policies, when you acquire an occupied rental property, your legal and business relationship is already established by whatever agreement the tenants had with the former owner. Therefore, you need to wait until the expiration of the lease to change the terms — or provide a month-to-month tenant with proper written notice of proposed changes as required by state or local law.
Most new owners convert existing tenants to their own lease or rental agreement as soon as possible.
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Single-family home, condo, or a small residential rental property: Implementing your own rental agreement as soon as legally allowed is relatively easy and can be done upon the lease’s expiration or upon 30 days’ written notice if the tenant is on a month-to-month rental agreement.
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Larger residential rental properties: You may want to gradually transition to a new agreement upon tenant turnover rather than require current tenants to sign a new lease. It’s quite a significant project at a larger property to generate all the new leases and then meet with each tenant one-by-one to go over the new lease. If they sign a new lease voluntarily, you can enforce it. Otherwise, you’ll need to wait until the current lease expires. Of course, if the tenancy is month-to-month, management can serve the appropriate notice of change of terms of tenancy along with the new month-to-month agreement.
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Commercial properties: Unless the parties agree to a voluntary change of lease terms, you really have no choice but to implement new leases upon tenant lease renewal or turnover as the existing leases are valid and binding until their expiration.
Consider the potential impact of making significant changes in the rental rates or policies immediately after you acquire the property. For example, although you may have strong feelings against allowing pets on your residential rental property, your new tenants may have pets already. Although you legally have the right to implement a no-pet policy upon lease renewal or upon giving proper legal notice, you’re almost guaranteed a vacant rental unit if you do so. Impose your policies over a reasonable time frame, but be sure you’re aware of the potential financial consequences in the short run.
For residential investment properties, the tenant information the seller provided you during escrow (see Chapter 14) may be outdated. One quick way to update your records is to have the tenants voluntarily complete your rental application form. In many states, you may not have a strong legal argument for requiring existing tenants to provide this information; however, many tenants may understand your reasoning and not mind. Other tenants may be reluctant to complete an entirely new rental application, in which case you may not require them to complete all sections of the form. However, even if you receive initial resistance, seek this updated information prior to renewing any lease. You need to assess the financial qualifications of your tenants, particularly if you anticipate future rent increases.
Increasing rents
When you acquire an investment property, part of your research is to establish the fair market rental value of your new property. If the tenant’s current rent is below market value and he’s on a month-to-month rental agreement, one of your toughest decisions as the new owner of a rental property is how to handle rent increases.
As the new owner, you likely have much higher mortgage payments and expenses to make necessary repairs and upgrades to the property than the last owner did. Some tenants will be upset and antagonistic about rent increases, however, and there is little you can to do to appease them.
The majority of tenants reluctantly accept a rent increase as long as the rent isn’t raised beyond the current market rent for a comparable rental unit or suite in the area and you’re willing to make needed repairs or upgrades to their rental units or suites. Providing the tenants with information on comparable rentals in your area should support the reason for your increased rent request.
Finding Stable, Trustworthy Tenants
Vacant rental units or suites don’t generate rental income, so efficiently fill your vacancies with good, stable, rent-paying tenants. To ensure that you do so, follow some precautionary measures on your own before beginning to assess potential tenants.
Setting up a systematic screening process is particularly critical if you only own a single-family rental, rental condo, or a small, multiunit rental property. Deadbeat tenants who go from property to property causing damage and not paying rent are experienced and shrewd. They know that the novice property owner is more likely to be fooled and that the large, professionally managed properties have screening procedures to verify every single item on their rental applications.
Sometimes the mere mention of the tenant screening process is enough to make the rental prospect fidget and then shift into the classic “I’m just looking” mode. Don’t rush or allow a prospect to hurry you through the tenant screening and selection process. The wrong decision can be financially devastating, particularly if you own just one or two rental units or a small commercial investment property.
More than 90 percent of your residential rental applicants will be good tenants, pay their rent on time, take good care of their homes, and treat you and their neighbors with respect. You just need to carefully guard against those few bad apples; don’t hesitate to deny prospects who can’t meet your standards. Verifying information on prospective tenants’ rental applications takes a while, but it’s time well spent. Relying on your instincts is inaccurate, arbitrary, and illegal.
Establishing tenant selection criteria
In order to increase your chances of finding a long-term, stable tenant — and avoiding charges of discrimination — your tenant selection criteria and screening process should be clear, systematic, and objective. Tenant selection criteria are written standards that you use to evaluate each prospective tenant’s qualifications as a tenant for your property. Determine your minimum qualifications and adhere to them, applying them consistently and fairly to all rental applicants. Of course, your written criteria can’t be discriminatory or violate any federal, state, or local fair housing laws.
In order to establish your selection criteria, review what you’re looking for in a tenant. At a minimum, we suggest that you seek tenants who are financially responsible, pay their rent on time, and are likely to renew their leases, treat rental property with care, and be good neighbors. With commercial properties, you’re also looking for tenants with complementary businesses that enhance rather than compete with your current tenants.
You aren’t required to provide your rental prospects with a copy of your written tenant selection criteria, but there are potential benefits to doing so. Although you must offer all prospects a rental application and process each one received, there is an advantage to prospects making their own decision not to apply for your rental based on the criteria you’ve set up. The key is to follow the criteria without exception and have the information available if you’re challenged. Decide when you’re most comfortable discussing the criteria — from the first inquiry call, when you actually receive the application, and so on — and once again, be consistent.
Always be thorough when you screen all applicants. You run the risk of a charge of illegal discrimination if you deviate from your written standards for certain applicants. There are many legally acceptable reasons to deny a rental application. Be sure that your requirements are clearly understood and followed.
The fact that you carefully prescreen all prospects is a positive factor not only for you but also for your rental applicants, your current tenants, and even the neighbors. In fact, you have a responsibility to your current tenants to weed out the unqualified tenants with a track record of disrupting neighbors. The good rental prospects will appreciate the fact that their neighbors had to meet your high standards, too.
If you’re in the rental housing business for long, you hear about six-figure or larger legal awards against rental property owners for violating fair housing laws. Problems often arise when investment property owners are unaware that their policies or practices are discriminatory. Families, children, and folks with disabilities often suffer from this lack of knowledge. Federal and state laws prohibit discrimination, and these laws impact your advertising, tenant screening, and selection process.
The federal Fair Housing Act prohibits discrimination on the basis of race, color, religion, national origin, sex, familial status, and handicap (referred to as disability in many states). Check the state and local fair housing laws in your area; some additional state and local protected classes include age, sexual orientation, gender identity, occupation, source of income (government assistance, Section 8), educational status, medical status, and even physical body size.
Discrimination is a major issue for investment property owners and has serious legal consequences. If you don’t know the law, you may be guilty of various forms of discrimination and not even realize it until you’ve been charged with discrimination. That’s why knowing the law is so important.
With residential rental properties, another form of illegal discrimination is steering — guiding a rental applicant toward living where you think he should live based on race, color, religion, national origin, sex, familial status, handicap, or any other protected class. Not showing or renting certain living units to a person because of their protected class status is one form of steering; however, so is the assigning of any person to a particular section or floor of a building, because of any of those bases. Advertising or promotion that indicates or implies a preference is also discriminatory.
All commercial and residential rental applicants should receive information on the full range of vacant space or rental units available and be able to decide which suites or units they want to see.
Residential rental property owners often have good intentions when they suggest that a rental prospect with children see only rental units on the ground floor or near the playground. However, such practices are a violation of current federal fair housing laws as they restrict housing options and can be used by some unscrupulous landlords as an excuse or justification to cover up their intentional discriminatory actions.
Being fair to families and children
All residential rental properties must be offered to all applicants, including those with children, as federal and state legislation has virtually eliminated “adult only” residential housing. The only exception to equal opportunities for families is for those residential communities operated in strict accordance with the rules applicable to senior housing, either 55 and older or 62 and older. However, because there’s less regulation of nonresidential properties, some commercial property owners may be within their legal rights to use their business judgment to refuse or discourage an applicant with plans to use the leased space as a daycare or other business that caters to children.
Some rental property owners are concerned about renting to families with children because of hazards on the property that may be dangerous for kids. For example, the property may not have any safe areas for the children to play. Although you may truly only have children’s best interests in mind, it’s the parent’s right to decide whether the property is safe for their children. Of course, you do need to take reasonable steps to make your property safe.
Charging rental applicants with children higher rents or higher security deposits than applicants without children may be found to be discriminatory as is offering different rental terms, such as shorter lease terms, fewer unit amenities, or different payment options. The property facilities must also be fully available for all tenants, regardless of age, unless there is a clear safety issue involved. For example, some states have laws allowing a policy that an adult must accompany children under 14 when using the swimming pool.
As a rental property owner, you should welcome renters with children. Families tend to be more stable, and they look for safe, crime-free, and drug-free environments in which to raise their kids. Along with responsible pet owners, who also have difficulty finding suitable rental properties, families with children can be excellent, long-term renters. And typically, the longer your tenants stay, the better your cash flow. Give families an equal opportunity; however, don’t show a preference toward them.
Dealing with tenants with disabilities
The federal fair housing regulations state that property owners must
- Make reasonable accommodations at the owner’s expense for tenants with disabilities, so they can enjoy the rental property on an equal basis. A common example would be providing a wider and more convenient parking space when practical, or assigning a space to a resident with a disability when there are otherwise no assigned spaces.
- Make reasonable adjustments to their rules, procedures, or services upon request.
- Allow tenants with disabilities the right to modify their living space at their own expense, under the following conditions:
- The modifications can only extend to what is necessary to make the space useful and comfortable based on disability-related need.
- The modifications don’t make the unit unacceptable to the next tenant, or if they do, the tenant agrees to return the rental unit to its original condition upon vacating the property.
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The tenant must obtain your prior approval and ensure that the work will be done in a workmanlike manner, including obtaining any necessary government approvals or permits.
- In some limited circumstances, the tenants must pay the funds necessary to perform the needed restoration into an interest-bearing escrow account to ensure that the work is actually completed and there will be no liens against the property.
Note:
In housing projects that receive federal funding and are subject to section 504 of the Rehabilitation Act of 1973, landlords will be expected to do necessary physical modification of the premises to the extent that doing so isn’t an undue financial or administrative burden.
Discrimination against people with disabilities in residential housing is covered in the federal Fair Housing Act. However, in July 1990, Congress passed the Americans with Disabilities Act (ADA), which has far-reaching impact on most commercial and retail real estate. The ADA has limited requirements for many rental property owners, because it applies only to the public areas and not the private or common areas of residential properties.
Under the ADA, all areas of a property to which the public is invited must be accessible by individuals with disabilities. For example, a rental property with an on-site office, model units (and other amenities if they’re allowed to be used by the public, like a clubhouse used for a polling place, or a pool used for YMCA swim meets) must be accessible to persons with disabilities. The removal of existing physical barriers at the rental property owner’s expense is required whenever it’s “readily achievable and technically feasible.” The ADA also establishes parking requirements if the residential property provides public parking, such as prospective resident spaces.
The ADA applies to all commercial properties and to the public part (if any) of a residential property. The ADA rather than fair housing law controls any parking for prospective residents or an on-site office. If the public uses other parts of the property (versus the common areas used only by residents and their guests), those areas are always subject to the ADA. The ADA doesn’t include a grandfather clause. Owners are required to remove barriers to accessibility, but they aren’t required to make changes if they aren’t reasonably achievable or technically feasible. Professional complainants seek out ADA violations in both residential and commercial rental properties, so know what accessibility requirements apply to your property.
Many local municipalities work closely with HUD to investigate ADA complaints and handle enforcement. Also, local jurisdictions oversee and enforce handicapped parking requirements for multiunit rental properties. Check with your local building and code enforcement office for details.
Residential properties built for first occupancy on or after March 13, 1991, also must have been built in compliance with fair housing construction accessibility guidelines. Those guidelines apply to the common areas and the dwelling units. Older properties that were built in compliance with the building codes at that time of construction need not make those areas accessible unless as part of a renovation project. If changes need to be made to allow residents accessibility, fair housing law requires that landlords allow the individual disabled resident to modify the property as needed.
If you have a no pets policy, keep in mind that fair housing law requires rental property owners to make reasonable accommodations in the form of exceptions to their pet rules if necessary. One specific common accommodation is not having any limitations or not discouraging occupancy by tenants who need a support animal. Companion or service animals that assist tenants with daily life activities aren’t pets; they’re exempt animals and must be allowed in all rental properties, regardless of any “no pet” policies. Fair housing laws also prohibit you from requiring an animal or pet deposit, or increasing the tenant’s security deposit because he has a support animal. Further, you can’t make any rules limiting the types or breeds of animals (for example, allowing German shepherds only) or an unreasonable size restriction. You can, however, establish reasonable rules of conduct for the animals and should note that the tenant is still responsible for any damages done by the animal. Some tenants seek the accommodation of a companion animal based on their need for comfort or companionship, and federal law requires owners and managers to grant the request if the tenant’s claim is verified and reasonable.
Advertising for tenants
Advertising is how you let people know that you have a vacant rental property available. Money intelligently spent on advertising is money extremely well spent. But when it’s done poorly, advertising can be another black hole for your precious resources.
Determine the most desirable features of your rental property for your target market by asking your current renters what they like about where they live or work. You can also ask people who look at your property — whether or not they agree to rent — what aspects of your property they found of interest. Incorporate these selling points into your marketing efforts.
The best advertisement for your rental property is curb appeal — the exterior appearance. Properties that have well-kept grounds with green grass, trimmed shrubs, beautiful flowers, and fresh paint are much more appealing to your rental prospects. A well-maintained property often attracts a tenant who will pay more rent and treat your rental property with care.
Creating interest in your rental property used to be as simple as putting up a sign or placing an ad in the local newspaper. Although these tried-and-true methods of informing potential renters still often work, other options are available for you to consider. The target market for your rental property has a lot to do with which method of advertising works best for your rental unit. Referrals and property signs often give you good exposure to renters in your local area, whereas newspaper ads and real estate agents may let people or businesses relocating to your area know about your rental property as well. The Internet has become a powerful tool in reaching all segments of your target market.
Showing your rental
One of the most time-consuming aspects of owning and managing rental property is the time spent filling vacancies. Real estate investors with commercial properties often use professional leasing brokers, and owners of large residential properties have onsite managers and leasing agents. But residential rental property owners with small properties usually take this on individually, and it can be a huge time trap.
Efficiently scheduling showings
The most efficient approach to showing your small residential rental is to hold an open house — which enables you to show your property to several interested rental prospects within a couple of hours. Select a two to three hour period for your open house that is convenient for you and most working people (preferably during daylight hours). Combining a weekday early evening open house with one on the weekend enables virtually all prospects to fit the rental showing into their busy schedules.
Another benefit of an open house is that many folks feel more comfortable touring a rental property when other prospects are around. They don’t have to be concerned about meeting someone they don’t know in a vacant rental property. This approach also aids your own personal safety.
A newspaper ad simply indicating the time of your open house isn’t a good idea, because you may end up with many unqualified renters walking through your property. But an open house where you invite all qualified prospects whom you have spoken with in response to your advertising is a good way to create a sense of urgency and competition, which often generates multiple applicants for your rental.
In a depressed rental market, or if you find that you need to fill a vacancy during the holidays, you may not be able to generate enough interest for an open house for multiple prospects. If you have to schedule individual appointments, keep these points in mind:
- Be prepared to show your rental units in the evenings and on weekends, when most of your prospects are available.
- Try to consolidate your appointments to a certain time frame, but don’t push this too far. Asking prospects to conform to your schedule may turn them off.
- Call each person to verify the rental showing before making a special trip to the property. By calling, you’re also reassuring the prospect that you’ll be there and aren’t going to be delayed. Exchanging cell phone numbers can be helpful here.
Showing vacant versus occupied rentals
When showing a vacant residential rental, be a tour guide but don’t be too controlling. Allow the prospects to view the rental in the manner that suits them. Some prospects go right to a certain room, which gives you a clue about the importance that they place on that aspect of your property. If the prospects hesitate or are reluctant to tour on their own, casually guide them through the rental property.
As you begin to show the interior of your residential rental, avoid making obvious statements such as “This is the living room” or “Here’s the bathroom!” Instead, listen and observe the body language and expressions of your prospects as they walk through the property. Don’t oversell if they seem pleased, but feel free to point out the benefits of your rental.
Commercial properties are typically shown vacant after the prior tenant has vacated, although you may be able to obtain the cooperation of the vacating tenant to show prospects through the suite while occupied. Because commercial tenants almost always require some specialized tenant improvements, it can be more useful to work off of drawings of the space — rather than conduct a physical tour — and have a space planner show the prospect how the space will meet their needs. If you do show an occupied commercial space, just be sure not to disrupt the tenant’s business activities.
In most states, if the current residential tenants are at the end of their lease or have given a notice to vacate, the owner is specifically allowed to enter the unit to show it to a prospective tenant. Of course, you must comply with state laws that require you to give tenants advance written notice of entry prior to showing the rental unit. Your tenant may agree to waive this requirement, but make sure that you have that agreement in writing.
Cooperate with the current tenants when scheduling mutually convenient times to show the rental — and respect their privacy by avoiding excessive intrusions. Although the current tenant may legally be required to allow you and your prospects to enter the rental unit for a showing, he doesn’t have to make any efforts to ensure that the property is clean and neat.
Showing a vacant rental unit is generally much easier, but touring your prospect through an occupied rental property does have some advantages. Your current tenants can be a real asset if they’re friendly and cooperative and take care of the property. The rental prospects may want to ask the current tenant questions about their living experience at your property.
If you can, get copies of recent utility bills from your current tenant, in case your prospective renters have any questions about utility costs. Utility expenses for electric, natural gas, water and sewer, and trash are becoming significant items in the budgets of many renters. You don’t want your tenants to be unable to financially handle the typical monthly utility costs, because that may impact their ability to pay your rent. Plus, you may also be able to use low utility costs as a marketing tool.
If your current residential tenant is being evicted, isn’t leaving on good terms, or has an antagonistic attitude for any reason, don’t show the rental unit until the property is vacated. Also consider this strategy if your current tenants haven’t taken care of the rental property or if their lifestyle or furnishings may be objectionable to some rental prospects.
Selling prospects
After you’ve qualified your residential rental prospect (see the “Establishing tenant selection criteria” section earlier in the chapter), persuade him that you have the best rental unit available. People want more than just a place to live. Tenants want to feel they can communicate with you if a problem arises. They also appreciate it when someone shows an interest in their lives. By showing an interest, you set yourself apart from other property managers. Some prospects will take a rental unit that isn’t exactly what they’re looking for if they have a positive feeling about the rental property owner.
No matter how closely your rental unit meets the stated needs and wants of your prospects, they often hesitate and doubt their own judgment. Don’t be pushy, but convince the prospects that your property is right for them. After you succeed in this regard, you have to close the sale. This is one area where many rental property owners and managers suddenly get cold feet. They may do a great job handling the initial telephone rental inquiry, the preparation and showing of the rental property, and even objections, but become shy to ask the prospect to sign and commit money.
Your goal at the end of the showing is to receive a commitment from the prospect to rent by having him complete your rental application and pay the credit screening fee, first month’s rent, and security deposit. But don’t forget that you still need to thoroughly screen the prospect and confirm that he meets your rental criteria before you sign a lease or rental agreement.
If, despite your best efforts, the prospect is still undecided, make sure that he gives you a holding deposit. Remind him that you may make a deal with the next prospect and he’ll be out of luck. If you have a lot of demand for your rental units or suites, you should develop a waiting list. (Note:
Receiving a large number of applicants may be an indication that you set your rent too low.)
Accepting applications and deposits
You must offer every interested prospect (age 18 and older) the opportunity to complete a written rental application. You want to avoid having a prospect accuse you of discriminating against him by not permitting him to fill out the rental application. And information provided on the application enables you to begin the screening process and select the best tenant for your rental property, using objective criteria and your rental requirements.
Rental property owners are legally allowed to choose among rental applicants as long as their decisions comply with all fair-housing laws and are based on legitimate business criteria. However, if you screen applications in the order that you receive them and approve the first application that meets your qualifications, you avoid any argument about preference.
Prior to accepting the rental application, carefully review the entire form to make sure that each prospective tenant has legibly provided all requested information. Pay particular attention to all names and addresses, source of income information, photo identification numbers, and emergency contacts. Make sure that the prospect has signed the rental application authorizing you to verify the provided information and to run a credit report. Finally, ask each prospective tenant to show you her current driver’s license or other government-issued photo identification so that you can confirm that she provided you with her correct name and current address.
If you go over the application with the prospect, only ask questions that are part of the form. Don’t ask the rental applicant about his birthplace, religion, marital status, children, or about a physical or mental condition — such questions may lead to accusations of discrimination. You can ask him if he has ever been convicted of a crime and whether he’s at least 18 years old or an emancipated minor. Not all criminal convictions may justify denial of an applicant. For more details on the details of how to run and properly use criminal background checks, consult Landlord’s Legal Kit For Dummies by Robert and attorney Laurence Harmon (John Wiley & Sons, Inc.).
After you approve the rental prospect, you should have him sign the rental agreement. If the prospect still insists he needs additional time, he should agree to pay the daily rental rate or you should refund his holding deposit and continue your leasing efforts.
If you use a holding deposit, you must have a written agreement or you’re likely to encounter a misunderstanding or even legal action. State laws regarding holding deposits vary throughout the country, yet they’re almost uniformly vague and can easily lead to disputes.
Verifying rental applications
Keep copies of all rental applications and corresponding verification forms, credit reports, and all other documents for both accepted and rejected applicants for at least three years. That way, if anyone ever makes a claim that you discriminated against him, your best defense will be your own records, which will clearly indicate that you consistently applied legal rental criteria. Here are the key items to review on renters’ applications.
Adults’ identity
Require each prospective adult tenant to show you his or her current driver’s license or other similar (and official) photo ID so that you can confirm that the applicant is providing you with his correct name and current address. Advise each rental applicant that if his application is approved, you’ll need a photocopy of his ID to be kept in his tenant file.
Ask about any discrepancies between the application and the ID provided. Even if the explanation seems reasonable, be sure to write down the new information. Maybe an old address appears on the photo ID, which you can check out further through a credit-reporting agency. Having a photocopy of the ID for each adult tenant is vital if a dispute about the tenant’s identity arises in the future. In these situations, you need to be able to clearly show that you positively identified the tenant at move-in.
Rental history
When you first contact the rental applicant’s current landlord, listen to his initial reaction and let him tell you about the applicant. Some landlords welcome the opportunity to tell you all about your rental applicant, but some current and prior landlords may be
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Dishonest: A landlord may be upset with the tenant for leaving his property or unwilling to say anything bad about a problem tenant so that he can get the tenant out of his property and into yours.
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Unforthcoming: Some landlords are concerned that they may have liability if they provide any negative or subjective information. Pose the questions in writing and ask for a written response. Then you’ll have documentary proof of what was said and what wasn’t.
When a current or prior landlord isn’t overly cooperative, try to gain his confidence by providing him with some information about yourself and your rental property. If you’re still unable to build rapport, try to get him to at least answer the most important question of all: “Would you rent to this applicant again?” He can simply give you a yes or a no without any details. Even better, we suggest that you ask specific fact-based questions that can be answered honestly, such as “Did you have an noise complaints or police calls to the unit?” or “Did they pay the full rent on-time each month?” Of course, silence can also tell you everything that you need to know.
Some applicants provide you with letters of reference from their prior landlords or even copies of their credit reports. Verify the authenticity of any documents provided by the rental applicant. Another useful screening tool is to request all tenants to provide copies of their water and utility bills for the past year. These documents can verify the tenant’s prior address and also give you an idea whether they pay their bills on time.
Employment and income
Independently verify the company information and phone number the applicant puts on her application if you have any doubts about the authenticity of it. You also need to be careful that you confirm the sensitive compensation and stability of employment questions only with an appropriate representative of the employer. Be prepared to send letters requesting the pertinent information and include a self-addressed, stamped envelope. Be sure to tell your rental prospect that you may have a delay in providing her with the results of your tenant screening process.
In addition to the results of your verification calls, the applicant should provide you with proof of her employment income such as recent pay stubs. But no matter how strong the information is, verify it directly with the employer. Also verify other sources of income. For prospective commercial tenants, a copy of the most recent tax return is your best method of verifying income.
Credit history
Obtain a credit report on each applicant. A credit report shows all current and previous credit cards and loans, timeliness of making payments when due, plus all public record entries such as bankruptcy and judgment. You can figure out whether an applicant has been late or delinquent in paying his rent or other living expenses. The three major credit reporting agencies are Experian (www.experian.com; 888-397-3742), Equifax (www.equifax.com; 800-997-2493), and TransUnion (www.transunion.com; 800-888-4213). Credit information for commercial tenants can be found in the D&B database (www.dnb.com; 800-234-3867).
Carefully compare the addresses contained on the credit report to the information provided on the rental application. If there is an inconsistency, ask the rental prospect for an explanation. Maybe the person was temporarily staying with a family member or simply forgot about one of her residences. Of course, be sure to contact prior landlords and ask all the questions on the rental application verification form just to make sure that the applicant didn’t neglect to tell you about that residence for a reason.
Information obtained in credit reports must be kept strictly confidential and can’t be given to any third parties. In some states, the rental applicant is entitled to a copy of his own credit report upon request, and federal law allows anyone denied credit or housing on the basis of his credit report to obtain a free copy of the report.
Make sure that you’re reviewing the credit report of your actual applicant. People with poor credit or tenant histories have been known to steal the identity of others — particularly their own children — by using the child’s Social Security number. Many landlords no longer even ask for Social Security numbers, but if you do, one solution is to make sure that your credit reporting service provides a Social Security search, which clearly indicates whether there are any inconsistencies in the use of the number provided. You may not always be able to verify a Social Security number, and you don’t want to be accused of discriminatory effect based on national origin, so talk to your applicant screening service about having an alternative screening method in these situations.
All personal references
You will occasionally find someone who tells you that the rental applicant is her best friend but goes on to candidly tell you she would never loan the applicant money or let him borrow her car. Plus, if you call the references given and find that the information is bogus, you can use this information as part of your overall screening and rejection of the applicant.
Dealing with rental cosigners
If your rental prospect doesn’t meet the criteria outlined in your statement of rental policy, you may consider approving his application if he provides a cosigner or guarantor. A guarantor must be financially qualified and screened or the guarantee is worthless.
Require your guarantor to complete a rental application, pay the application fee, and go through the credit screening process (previous rental history isn’t relevant for a co-signer because it’s with the applicant). Keep in mind that the guarantor won’t actually be occupying the commercial suite or living at your rental unit and thus will have his own housing costs. To ensure that the guarantor can meet all of his own obligations and cover your tenant’s rent in case of a default, deduct the guarantor’s cost of housing from his income before comparing it to your income requirements.
Although a lease guarantor can be very important and can give you the extra resources in the event of a rent default by your tenant, out-of-state lease guarantors aren’t as valuable as in-state ones. Enforcing the lease guarantee against an out-of-state party can be difficult or even financially unfeasible.
Notifying applicants of your decision
Regardless of whether your rental applicant is accepted or rejected, be sure to notify the applicant promptly when the decision is made. If you have approved the applicant, contact him and arrange for a meeting and a walk-through of the rental unit prior to the move-in date.
Don’t notify the other qualified applicants that you have already rented the rental property until all legal documents have been signed and all funds due upon move-in have been collected in full.
One of the most difficult tasks for the rental property owner is informing a rental applicant that you’ve denied his application. You obviously want to avoid an argument over the rejection, but even more importantly, you want to avoid a fair-housing complaint based on the applicant’s misunderstanding about the reasons for the denial.
Notify your denied rental applicant in writing, and keep a copy of all rejection letters for at least three years. If you notify the applicant only by phone, you may have difficulty giving all of the details and required disclosures. The written notice-of-denial-to-rent form avoids a situation in which the applicant may form the opinion that you’re denying his application in a discriminatory manner, in which case he may file a complaint with HUD or a state or local fair-housing agency.
Using a notice-of-denial-to-rent form to inform the applicant in writing of your decision as well as outline the valid reasons is an excellent idea. This form helps you to document the various legal reasons for your rejection of the applicant. It’s a simple checklist that also allows you to provide the applicant with the required information per the federal Fair Credit Reporting Act.
If you reject an applicant based on his credit report, you’re required by the federal Fair Credit Reporting Act to notify the applicant of his rights. Provide the denied applicant with a letter containing the mandatory disclosures so that you have proof that you complied with the law. You must also provide this information even if you have approved the applicant but have required him to pay a higher security deposit, higher rent, or provide a cosigner.
If your denial is based on something other than credit, then a written notice isn’t required, but it’s still advisable to send a letter or at least tell the applicant that he can send you a written request asking for a reason.
Reviewing and signing documents
Tenants and property owners alike are usually aware of all the legal paperwork involved in renting a property. And although sifting through all that legalese isn’t fun for anyone, it’s important. Rental property owners and tenants each have specific legal rights and responsibilities that are outlined in these documents, and being aware of what you’re agreeing to — and being sure that your tenants know what they’re agreeing to — is crucial.
After you approve the rental prospect, you should have her sign the rental agreement. If the prospect still insists she needs additional time, she should agree to pay the daily rental rate or you should refund her holding deposit and continue your leasing efforts.
Be sure that your tenant understands that when he signs your rental agreement, he’s entering into a business contract that has significant rights and responsibilities for both parties. Be sure to have all adult occupants review and sign all documents — including any lease or rental agreement addenda — before taking possession of the rental unit. After the tenant has been given the keys and taken possession of the rental property, getting him to sign your required legal documents can be difficult, and regaining possession of your rental unit can be a long and expensive process. (Even if the tenant failed to sign the lease or rental agreement, an oral tenant/landlord relationship is established when you give the tenant the keys, but oral agreements often foster disagreements, so avoid the situation altogether.)
Collecting the money
In your meeting prior to move-in, be sure to collect the first month’s rent and the security deposit before you give the tenants the keys to the rental unit. Payment may be in the form of cash, a cashier’s check, or a money order. But don’t accept a personal check (because you have no way of knowing whether the check will clear). Provide a receipt for the payments.
Accept cash for the move-in or the monthly rent payment only when absolutely necessary and when you’re sure that it’s legal, because some states don’t allow you to require cash. Regularly collecting cash for your rents can make you a crime target. Most convenience stores offer money orders for a nominal cost and are open at all hours, so let your tenant take the risk of carrying the cash to the bank or convenience store to get a money order. Tell your new tenant that your policy is to accept only a bank cashier’s check or money order upon move-in. Also, let him know whether your rent collection policy allows him to pay his future monthly rent payments with a personal check.
Prior to giving the keys to your new tenant and allowing him to take possession, insist on having the payment in hand through good funds (as opposed to insufficient funds, where a person writes a check and doesn’t have the money to cover it). Most owners do this by requiring cash, a bank cashier’s check, or a money order. But many rental owners aren’t aware that both bank cashier’s checks and money orders can be stopped because they can be lost or stolen. However, the bank cashier’s check and money orders are superior to personal checks because they do represent good funds and at least won’t be returned to you because there was no money to cover them.
If, despite our strong advice, you accept a personal check, at least don’t give the tenant access to the property until you’ve called and verified with the tenant’s bank that the check will be honored. Your best bet is to physically take the check to the tenant’s bank and cash it or at least have it certified. If the bank certifies the check, it’s guaranteeing that there are sufficient funds available and that it will actually put a hold on the funds. Of course, cashing the check is the only sure way to collect your funds, because a devious tenant can always stop payment on even a certified personal check.
Inspecting the property with your tenant
The number one source of residential tenant/landlord disputes is the disposition of the tenant’s security deposit. Many of these potential problems can be resolved with proper procedures before the tenant takes possession of the rental unit by using a move-in/move-out inspection checklist.
When properly completed, the inspection form clearly documents the condition of the rental property upon move-in by the tenants and serves as a baseline for the entire tenancy. If the tenant withholds rent or tries to break the lease claiming the unit needs substantial repairs, you may need to be able to prove the condition of the rental unit upon move-in. When the tenants move out, you’ll be able to clearly note the items that they damaged or left unclean.
Complete the inspection form with the tenants prior to or at the time of move-in. Walk through the premises with the tenants and agree that all items are clean and undamaged before they move in their stuff. Note the condition of the carpets and floor coverings — one of the most common areas of dispute upon move-out. Although tenants shouldn’t be charged for ordinary wear and tear, if they destroy the carpet, they should pay for the damage. Indicate the age of the carpet and whether it has been professionally cleaned as part of your rental turnover process. You can also take photos or videotape the unit before the tenant moves in for additional material to refresh the tenant’s memory or show the court if the matter ends up there.
Renovating and Upgrading to Add Value
For residential properties, almost every rental unit has the potential for renovation or upgrades. Often this area is where the real value can be created in rental units: When you have a rental unit that is dated, you can renovate it and increase the rent. Pay particular attention to those items that would be quick, easy, and inexpensive to replace but that can really improve the overall look of your rental unit.
If you have an older investment property, renovating or making tenant improvements may be more difficult due to some of the hazardous materials used in your building’s original construction. Asbestos and lead-based paint were commonly used in construction of many older properties, and these materials can be quite costly to remove. Often, you’re better off just leaving them in place as long as they haven’t been disturbed. Consult with experts in these issues before doing any work. Also, check with your local building, code enforcement, or health department for its requirements regarding the proper handling and disposal of hazardous materials.
Again, if your chosen investment properties are residential, keep in mind what features and strengths your prospective renters can find in competitive rental units. For example, if most of your competition offers dishwashers but your unit doesn’t have one, you may want to install a dishwasher so that you remain competitive. Another simple upgrade is to replace your old electrical switches and outlets to create a more modern look.
Enhancing external appearances
Make sure that your rental prospects’ first impression of your residential or commercial rental property is a positive one, because if it isn’t, they’ll most likely never take the time to see the interior. Start at the street and carefully critique your property as if you were entering a contest for the best-looking property in your area.
To attract tenants who will treat your property well and stay for a long time, be sure that your grounds and exterior areas are sparkling clean and the landscaping is well maintained. Renovating the grounds by removing trash, junk, and weeds is an inexpensive task. A nice green lawn, healthy shrubs, and shade trees enhance any investment property. Make sure that the building structure is presentable and inviting. Some specific exterior improvements to consider are ground level or hanging planters, brass or brushed nickel address numbers, awnings, fresh paint, landscaping, and cleanup.
First impressions are critical and one of the key areas seen by all prospective tenants is the front entry. Ensure the entryway is clean, well kept, and well lighted. The entry door should be cleaned or freshly painted or stained. Buy a new welcome mat. Remove or replace a broken screen door.
Improving what’s inside
The most qualified renters always have choices. You’re in competition for these excellent tenants, and you need to ensure that your rental stands out from the rest. The positive first impression of your rental property’s exterior won’t matter if the rental unit’s interior is poorly maintained.
Don’t show your rental until it’s completely rent-ready. Although you may lose a couple of potential showing days by taking the time to get the unit ready, you benefit in the long run with a more conscientious tenant. Here’s a list of things to check:
- All plumbing and appliances are operating properly.
- Locks have been changed and are operational. Pay attention to all latches and catches, doorknobs and pulls, doorstops, and sliding doors.
- Windows, window locks, screens, and window coverings should be clean, unbroken, secure, and operating properly.
- Paint and/or wall coverings should provide proper coverage, without holes, cuts, scratches, nails, or bad seams.
- Floor coverings should be clean and in good condition.
- Thoroughly clean the toilet, tub, shower, sink, mirrors, and cabinets.
- Check all closets and storage areas. Rods, closet dowels, hooks, shelves, lights, floors, and walls should be clean.
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Counters, cabinets, doors, molding, thresholds, and metal strips should be clean and fully operational, presenting no hazards.
- Check smoke, radon, and carbon monoxide detectors, all lighting, and electrical outlets, including ground-fault circuit-interrupters (GFCI) and circuit breakers for proper operation.
- Patios, balconies, and entryways should be clean and the railings secure.
- Check the heating and air-conditioning for proper operation. Be sure the thermostat, filters, vents, and registers are all in working order.
Using contractors
Particular maintenance and improvements are best handled by outside contractors. Use outside contractors for those trades that require specialized licensing or training. For example, it would be unwise for you to act as an exterminator or a contractor dealing with environmental hazards, or to attempt to recharge the coolant in an air-conditioning unit. Specific regulations are in place and unique knowledge is required in these areas.
Your skill level, time constraints, and opportunity cost may help determine whether you do some chores yourself or hire a pro. For example, cleaning, painting, and light maintenance may be items that you feel qualified to handle and can complete promptly.
Every day your residential rental unit sits vacant is costing you rental income that you can never recover. If you decide to paint your own rental unit, it may take you six days working in the evenings and on weekends to completely paint a single-family rental home. If the rental market is strong and the daily rental rate is $50 per day, you’re actually losing money if you could have had the rental home professionally painted in one day for $200.
Regardless of how much work you choose to handle yourself, have on hand a list of competent and competitively priced service companies and suppliers for those times when you need a quick response. Your local affiliate of the National Apartment Association (NAA), the Institute of Real Estate Management (IREM), or the Building and Owners Managers Association (BOMA) can often provide names of service companies. Carefully check the references and the status of any bonds or licenses with the appropriate governmental agency, and ensure that they have the proper insurance in place before you allow them to commence any work on your property.
Deciding between a property manager and managing yourself