How Landlords Can Save on Utility Costs
Go Through your Rental Property and Change the Lightbulbs
One of the quickest and easiest ways to lower your operating costs is going through the entire rental property and replacing all of the current light bulbs with new, energy-efficient bulbs.
Instead of the traditional 40 or 60 watt lightbulb, one of the property management tips you should stick to is stocking your rental property with light-emitting diodes (LEDs) lightbulbs or compact fluorescent lamps (CFLs) lightbulbs. Yes, the lightbulbs cost a little more when you purchase them, but since you can expect to save about $37 each year per lightbulb, you’ll enjoy a quick return on your investment. There’s nothing like a little instant gratification to get you excited about embarking on even more money-saving projects.
Don’t stop once you’ve replaced the lightbulbs in the rental property. Once the interior lightbulbs are changed, it’s time to go to work changing the exterior lightbulbs.
Invest in a Programmable Thermostat for your Rental Property
Now that you’ve updated all of the lightbulbs in the property you manage, it’s time to make another trip to your favorite DIY store and pick up a programmable thermostat. The great thing about a programmable thermostat is that not only does it keep your tenants happy and comfortable, but it also reduces your monthly heating and cooling bills.
Once you’ve installed the programmable thermostat, you want to feed it the information needed so that it keeps the rental property comfortable while people are home, and reduces the amount of energy used to heat/cool the space when no one is there. The times will be different for each property, so plan on spending a little time talking to each tenant so you know their schedule well enough to properly program the thermostat.
Making the change to a programmable thermostat can help you reduce your annual heating/cooling costs by as much as 10% per rental unit.
Replace Old Water Heaters and Appliances
The next step you need to take as a property manager who wants to reduce utility bills is replacing older water heaters and appliances. While replacing water heaters and appliances does lower the amount of money it takes to keep your rental properties comfortable, you don’t want to run out and purchase brand new units right away.
When it comes to water heaters, most energy experts recommend holding off on purchasing a new one until the current water heater is between 10 and 13 years old. At this point, there will likely be a considerably more energy-efficient model on the market that can reduce your yearly utility bill by as much as 10%, but you’ll also save yourself additional money that you would have spent trying to keep the old water heater operational.
A desire to lower your utility bills isn’t enough to prompt you to rush out and purchase new appliances. Like your water heater, the age and condition of the appliance dictates whether you need to replace each appliance.
The best time to replace the different appliances varies from one type of appliance to the next.
- Refrigerators should be replaced every 13 years
- Washing machines should be replaced every 10 years
- Dryers should be replaced every 13 years
- Air conditioners should be replaced every 15 years
- Furnaces should be replaced every 15 years
- Dish washers should be replaced every 9 years
The amount your utility bill decreases after you replace the appliances depends on how much power the old appliances use and the type of appliance you replace it with. Make sure you choose the most energy efficient appliances you can find.
Why Landlords Reduce Costs and Work Hard to Keep Monthly Utilities Low
If you're the property manager of rental properties who is responsible for paying the monthly utility bills, the reason for being proactive about saving as much money on utilities is obvious. However, even if the tenants are responsible for the cost of utilities it's still in your best interest to do all you can to save on utility costs.
The average renter is hyper-aware of the cost of living and will usually request information about the average cost of the various utilities for the rental unit they are considering. Showing them a reasonable monthly bill and also explaining what you do to keep the costs low is often the difference between them signing a contract with you instead of looking for additional landlords who reduce costs by striving to lower utility bills.
The sooner you take the steps need to lower your rental property's utility bills, the sooner you can use these changes to attract your ideal tenant.
Coast & Valley Property Management: Proudly Serving Property Owners in Soledad, CA
Surrounded by Silicon Valley tech giants and miles of stunning Monterey Bay coastlines, Soledad offers an ideal place for peaceful living, business pursuits, and outdoor adventure. The city, which is known as the country’s “Salad Bowl,” features fertile land that attracts large-scale produce growers as well as backyard gardeners. If you’re blessed enough to own property in this temperate agricultural center, you’ll want to get the most out of your real estate investment with a professional Soledad property management service. When comparing the costs and advantages of hiring property management services in Soledad, consider these solid benefits for your home or business.
#1 Professional Tenant Screening
One of the most important aspects of being a successful landlord is securing the right tenants. Placing the wrong tenant into your home or business property could result in thousands of dollars of property damage and lost rent. Many Soledad residential property management professionals will tell you that it’s best to leave a property vacant until it’s matched to a quality tenant. Don’t sign a contract with a tenant who’ll damage your place.
Property management companies conduct thorough background checks on rental applicants. These checks uncover relevant information about the person’s rental history, source of income, and financial stability. Professional property managers also ask tenants targeted, yet lawful, questions to make sure that you get renters who’ll take care of your investment.
#2 Shorter Vacancy Periods
Matching your property to the right tenant takes time. When you use a professional property management company, you’ll get quicker results. Property management companies such as Coast & Valley Properties are well-known sources of rental units in the region. When you partner with Coast & Valley, you gain the advantage of its established name and marketing resources to get your property rented quickly.
While there are some people who choose to rent properties in Soledad during their retirement years, many newcomers to the area come to the region to work. Corporations that offer relocation packages often trust property management companies to handle housing for their valued employees. A professional property management company would have more access to these high-quality tenants than a landlord who is marketing his or her property solo.
#3 Efficient Rent Collection
Gone are the days of mailing rent checks to an office and waiting to deposit them into a trust account for disbursement. Today’s tenants want the convenience of paying rent online from their desktop or mobile devices. Landlords want timely payments without having to send out notices manually. Modern property management companies such as Coast & Valley Properties meet the demands of both tenants and landlords with enterprise property management software.
Property managers who use rental management software such as Apffolio allow tenants to pay rental fees online on a 24-hour basis. Tenants can opt for automatic rent payments to be deducted from their accounts each month. They can also set up email notifications to remind themselves of their monthly rental bill. With this type of enterprise property management software, landlords get rental proceeds deposited directly into their bank accounts.
#4 Fewer Legal Hurdles
Renting property in California is rife with legal checks and balances. If you’re not familiar with the processes, you leave yourself exposed to lawsuits, lost rental fees, and property damage. Most landlords aren’t prepared to craft rental contracts that protect their real estate against uncompensated damage, late rental payments, and early lease terminations. However, professional property managers have extensive experience drafting lease agreements that offer the maximum protection for their clients.
Everyone has seen those local news reports about landlords who refuse to do critical repairs to their buildings. Injured tenants are interviewed, litigation follows, and business reputations are ruined. Experienced property managers understand the legal obligations of landlords to maintain their real estate to state and local building standards. They assess properties and make sure buildings are repaired quickly to avoid safety hazards for tenants and embarrassment for landlords. These activities are especially important for commercial property management in Soledad that impacts both business tenants and their customers.
#5 Helpful Resources for Tenants
You’ll find that most people who are looking for residential or commercial property in Soledad are time strapped. Professional property management services are loved by these tenants and corporate relocation specialists because they make moving easier. Besides offering electronic contracts and digital payment processing, property management companies such as Coast & Valley Properties provide tenants with the needed information to turn on the following services:
Water
Electric
Gas
Internet
Waste management
It’s the little details that your tenants will remember. Coast & Valley Properties cares about landlords and tenants. It offers tenants informational resources about moisture control to stop the overgrowth of harmful mold and mildew. The company’s website also offers landlords downloadable literature about using licensed lead paint abatement contractors to repair and maintain homes that have lead paint. Lead paint is a common element of homes that were built before 1978.
*Bonus* More Time to Do the Things You Love
Weekends are made to be enjoyed. In Soledad, you have options. Drive to the mountains for winter skiing and snowboarding or cruise to Carmel for sightseeing and shopping. Your schedule is free for work and play when you hire a reliable Soledad rental management company to care for your real estate investment. Property management companies such as Coast & Valley Properties handle everything from walk-through tours with tenants to emergency maintenance requests. Coast & Valley pairs state-of-the-art technology with old-fashioned customer care to improve the rental experience for both landlords and tenants in Soledad, CA.
Why Coast & Valley for Soledad Property Management?
Coast & Valley Properties is a full-spectrum property management company for residential and commercial properties in and around Soledad, CA. Its talented team of real estate professionals brings property owners unparalleled industry knowledge, marketing expertise, and negotiation skills. With decades of collective experience, Coast & Valley real estate professionals deliver worry-free management services to Soledad property owners and tenants. You'll find more information about the company's services at the Coast & Valley Properties website. Call today to schedule a consultation for customized property management services.
Top Amenities to Attract Renters
The modern renter's main concern when looking at properties is not typically size anymore. Instead, they want to find a property that offers them the widest range of services available. Property management services are starting to notice this trend, so they are moving to offer all sorts of perks to renters. If you want to remain competitive in the modern real estate market, you need to make sure your rental property includes at least one of these amenities.
Appliances
The biggest amenity most renters request is simply practical items that make their home life easier. Things like air conditioning, in-unit laundry, dishwashers, and central heat are some of the most essential things that property management services should offer. Though they are not offered by law, many renters will think twice about picking a place without any of these amenities. Installing most of these appliances is fairly cheap, and renters are willing to pay a premium to cut back on chores and increase comfort at home. Though technically amenities, many of these are still considered necessities instead of a nice bonus. If possible, aim for matching amenities in a stainless steel or neutral color finish, since these give the place a modern touch.
Outdoor Space
Most renters fear getting stuck with a place where there is absolutely no room to go outside. Even a small balcony greatly boosts the appeal of a property, and an entire yard is a huge bonus for renters. Just having outdoor space is great, but remember that you are more likely to generate interest when you can help potential renters imagine how they would use the space. Installing fire pits, grills, or sports courts encourages people viewing the property to picture themselves relaxing outside. Adding some bright flowers, privacy shrubs, and other landscaping for a rental outdoor space can further enhance an outdoor space.
Secure Rental Property Options
Surprisingly, gated access was the top amenity in Apartment Guide's survey of what renters want. Modern renters are mostly practical, and they want to feel safe in their own home. The biggest way to do this is to ensure your property is in a gated community. Some other common security amenities that people desire are automatic locking doors in resident-only buildings and security cameras in parking areas. Being able to offer high-tech options like apps that control door locks is a bonus, but not always a requirement.
Convenient Mail Retrieval
The big trend of modern shopping has greatly changed how renters feel about their home's mail system. Most renters agree they dislike the idea of having to travel a long distance to get a package or have to wait for business hours to retrieve a package from their rental management office. Having a secure and easily accessible mailbox makes things far more convenient for tenants. Consider adding a package locker nearby to make online purchase receiving even easier.
Pet Friendly Spaces
More and more renters have pets these days. They can be a big hassle for property management, but making spaces friendly for pets is still advisable. Those wanting to cut back on damage may want to consider only allowing animals under a certain weight and charging a hefty pet deposit. Just allowing pets makes a rental property far more appealing to renters, but an even bigger perk is actively making the space pet friendly. Offer a fenced in area where dogs can run around to make dog owners fight over your property. Select floors like tile or wood-look vinyl that is easy to clean, so you and the owners do not have to worry about pets making a mess.
Built In Storage
Most renters are looking for convenience and comfort, and built-in storage space is a big bonus. Things like walk-in closets, adequate kitchen cabinetry, and big bathroom vanities are always a plus. They allow renters to tidily store away belongings without having to purchase bulky wardrobes and credenzas that are a pain to move in and out of areas. If you do not currently have this type of storage, consider adding it. Most renters would prefer slightly smaller bedrooms in exchange for additional storage room. It can easily be added without having to make structural changes, so it is definitely worth considering this alteration.
Regular Maintenance and Fast Repairs
Good service from you or a property management provider is the final key amenity that renters want. People want to feel like they are getting a functional, well-maintained home for their rent payment, so be sure to fix everything up before showing it to renters. Being courteous and replying to renters as promptly as possible also helps give the impression that you will be prompt about dealing with repairs. No renter wants to get stuck in a lease for a property where things break down and are never fixed. Having a repair policy in place that ensures repairs are handled in a timely manner will help reassure renters.
By offering these amenities, you can make sure that your rental property stands out and attracts the best possible renters. In addition to helping you find good renters for your property, amenities can also justify a higher rent or explain a rent increase , providing you with a better profit. If you still are not sure of what amenities your property could use, consider consulting with a property management company for more help.
Top 11 Tips for Buying your First Rental Property
Buying your first rental property can seem exciting and nerve racking all at the same time. It’s easy to become overwhelmed as you think about issues such as setting goals, down payments, property management and cash flow. Let’s take a look at 11 important tips that will help you meet your objectives when buying your first rental property.
1. Understand Your Ultimate Goal
It’s important that you have a firm understanding of your end goal. Make sure to set goals based on overall investment strategy, realistic expectations and your financial situation. You should also answer these questions:
- Do you already have sources of retirement in place?
- When is your retirement date and how much income will you need?
- Do you need cash flow immediately?
- How much money do you plan to invest with rental properties?
- Is it necessary to diversify your portfolio in order to reduce taxes or lower your risk?
2. Ask For Advice
Take time to talk to other landlords and get advice from people who have been there before. Remember that each person you talk to will have slightly different goals, experiences and buying strategies than you do. Finding out about any challenges someone else has gone through will help you make better decisions when it comes to overall strategy, selecting from the pool of available property managers or securing your loan.
3. Save Your Down Payment Money
You need to know how much money is needed for the down payment. It’s likely that you’ll need 20-30% of the total investment amount set aside in order to apply for pre-approval and start looking for your first investment property. Here are five quick tips that help when saving for the down payment:
- Reduce your own rent or mortgage
- Pay off all other debt
- Set up an automatic savings deposit
- Cut down on any unnecessary bills
4. Calculate All Rental Property Expenses
Every rental property comes with a certain amount of expenses that need to be covered. These might include property taxes and expected repairs. Certain towns, counties and states charge higher property taxes than other locations. This is an important distinction when making a decision on your first rental property.
Set aside money for repairs because there are always unexpected situations that come up in this area. A good rule of thumb is to have six months of emergency cash set aside to help with repairs or even an unexpected vacancy period.
5. Get Pre-Qualified For a Loan
Taking the time to get pre-qualified allows you to know which rental properties you are able to afford. Here are some basic qualification factors to be aware of:
- The best credit score is 740, but 680 will probably suffice
- You’ll need to prove whether you’re a stable risk if you’re a self-employed person. If you’re an employee, then proving that you’ve worked at your job for two years or more is good enough.
- Prove six months of expenses have been saved
- Show that you have the down payment money available
- Prove a low debt-to-income ratio
6. Do Your Research
Do plenty of research before purchasing any property. Look at important buying factors such as job growth, population growth and city revitalization.
Are there any companies that have moved in and are providing more job opportunities? You might be buying in a good market if your research uncovers that the area is experiencing a large amount of new people moving into it. If the area you’re looking at is experiencing revitalization, then that’s a good sign.
7. Talk to a Local Property Management Company
Investigate local companies that provide property management services and ask them questions. Good questions to ask a property manager include:
- What is the area’s average property rental pricing?
- How often does the firm conduct maintenance checks?
- How they handle tenant screening, rent collection. Do they have an electronic system to handle this?
8. Hire a Home Inspector
You can expect to pay somewhere around $300 or $450 to get a home inspection done. It’s worth every dollar to have this work completed. There are many potential problems that are hard to identify via a walk through of the property. Your home inspector will find any issues that might help you negotiate a lower price, force the current owner to fix items or even back out of a bad deal.
9. Analyze Cash Flow Projections
Take time out to analyze cash flow projections for the property you might buy. This is technically called studying the Pro Forma. These projections help you understand:
- Potential monthly cash flow
- Expenses
- Expected ROI (Return on Investment)
10. Get the Home Appraised
Your lender won’t let you purchase without an appraisal. Your bank wants to see whether the appraisal price comes in close to the negotiated purchase price. For example, you won’t be able to secure a loan of $500,000 if the appraisal comes in at only $400,000.
11. Purchase Homeowners Insurance
Speak with a few local insurance agents and compare their packages, coverages and prices. You don’t want to leave your home unprotected when it comes to accidents. You should also take out an umbrella policy that provides a second layer of insurance protection. It will come in very handy if you’re ever facing a lawsuit from an angry, evicted tenant, for example.
You will become well prepared in purchasing your first rental home if you follow the above tips. It will make buying your first rental property a positive and rewarding experience and set you on the path for success.
The Difference Between a Tenant and a Guest
Sometimes, you as the landlord will be placed in the situation of learning that there are unexpected people living inside of your rental property. Therefore, it's important for you to understand the difference between how to handle guests, and how to handle your legal tenant.
Rental Guest and Rental Tenant: A Difference in Terms
A legal resident is someone who has the legal right to set up residence inside of your rental property.
They have filled out the paper rental application. You have performed a credit check and a criminal background check on them, and they've passed both. They have rendered payment, such as the first month's rent, and usually, a deposit that at least equals the first month's rental fee. Finally, you have legally assigned keys to the residents.
A rental guest is a legal resident of your rental property. They aren't associated with any legal paperwork that would give them the right to take up residence inside of your rental. In most cases, the guest has no desire to take up long-term residence at your rental.
They are simply visiting the legal resident for a very short period of time. They have a home base where they reside, and they are happy to go home after they've completed their visit with your legal residents.
Do Rental Guests Get to Enjoy Legal Rights?
Because the rental guest or guests have no legal paperwork in place with you, they don't have the legal rights that your renters enjoy. They can't exercise their right to stay inside of the property. They can't leave personal property on the exterior of the rental property, such as cars, trucks, or boats. They aren't entitled to keys to your rental property.
In short, they don't get to enjoy the same legal rights as your rental residents.
What are the Scenarios That Would Describe a Guest?
A residential guest could be described as the following:
- They are friends who decide to either stay the night or over the weekend with the legal residence. They are usually crashing after a long night out, or they are visiting in from out of town. They have every intention of going home after their short visit.
- They are family members who have planned a short-term visit. They enjoy their visit, and then they pack their belongings in order to drive home. Again, they have no intention of staying and setting up home inside of your rental property. They have every intention of going home after their visit with their family members.
- They are domestic helpers who have previously arranged to stay over a night or two. But as is the case in the previous examples, they have a home to go back to. They have no intention of setting up shop at your rental property.
What are the Scenarios That Describe a Legal Tenant?
For clarity sake, below are scenarios that would describe legal residents of your rental property:
- They are an individual or a family who has passed your credit and background check. They have signed the paperwork, and have rendered money in order to establish the payment of rent. They have agreed to abide by your rules.
- These are residents who have every intention of calling your rental property home for an extended period of time, according to the length of time specified with your lease.
- The residents have agreed to take excellent care of your rental property. They won't trash it, and they'll notify you immediately if major maintenance needs to happen. They also agree to abide by local ordinances such as fire codes, trash disposal, etc.
- These are people who understand that they don't own the property, and they can't maintain residence on your property without renewal of your lease contract. If they violate the terms of your lease, then you have the right to exercise all legal prescriptions for dealing with them, up to and including the legal eviction process.
When Your Guest Illegally Becomes a Resident
With all of this in mind, it should be crystal clear to all parties involved what their roles are in a residential rental situation. However, there are times when one or more of the parties involved pretend as if they don't understand what their roles and responsibilities are.
For example, this could take place when legal rental property tenants allow their guests to overstay their welcome. The guest might decide that they'd rather live with the legal residents, and they refuse to go home when the time arises. Another instance is if the guest (for some reason) loses access to their permanent home, and then they decide to stay with the people who have actually signed the lease.
If scenarios like this take place, then you have what is commonly referred to as a squatting situation. A squatter is a person (or people) who have illegally taken up residence in a home. In short, squatters don't sign lease contracts.
They don't pay money to stay at your residence. They often do things to claim dominion such as turn on utilities, park vehicles on your property, and enjoy life as if they've performed all of their legal responsibilities, although they haven't.
When a Loophole Turns Into Legal Rights
Here's where things can become tricky for property owners:
If the squatter offers you, the property owner money or services in kind in exchange for room and board, and if you accept their money, then you've legally made them a resident of your property. You can't force them to leave without going through the lengthy and costly court eviction process.
Therefore, it's crucial that you never accept money or services in kind in exchange for their rooming on your property. Another thing that allows guests to overstay the lease contract is the acceptance of their mail on your property. If they are receiving mail, especially if it's been more than 30 days, then they are legally entitled to stay, and you'll be forced to legally evict them.
How to Avoid Headaches and Evictions
It's crucial that you as the owner completely understand what's going on inside of your rental. You'll need to take a hands-on approach by visiting the property on a regular basis. While you don't want to seem as if you're harassing your residents, you'll need to look for signs that they aren't allowing guests to become long-term residents who aren't included in your lease contract.
And if you're not able to personally keep an eye on your property, then contract with a property management company that can. Property management companies can handle issues such as property rental pricing, and common property management services.
The Friendly Rent Increase Letter
Should you wish to add a rent increase for the next rental period, this must be fully communicated in writing. One of the most important aspects of property management is the ability to retain tenants from lease period to lease period. Learning that faithful tenants wish to renew their lease is usually music to the ears, as having to re-list rental units takes time and money.
Rent Increase
Tenants often base their decision on whether to stay or move based on projected rent increases. This is why it's crucial to deliver a letter that is both friendly and informative. In addition, you need to make sure these increases exist fairly within local regulations. Usually, increases occur in a range of 3 to 5%, but up to 10% may be legal in some jurisdictions.
Property rental pricing guidelines
There are several key elements to let your tenants know that a rent increase is imminent. Generally, it is customary to give each rental unit a minimum of thirty days’ notice.
While your area may not limit the amount you can raise the rent, it is advisable that you make your request both fair and equitable. If you frighten or alienate your tenant, this may drive them away for good. As well, regulations in your area may prevent raising rents to drive undesirable tenants out.
Rent Control or Rent Stabilization
As stated before, always check regulations in your given
locale. If your rental property falls under rent control limitations, future
rent additions must be bound by the following:
- Whether it is legal to raise the rent for units in your building or development
- The frequency between rent changes; be it yearly or after a lesser lease period
- If local rent control laws allow for increases during the lease period
- The percentage of increase allowed, including any monthly, quarterly or yearly fees
- How far in advance a rent increase must be issued in a number of days, weeks or months
Create a professional letter that is friendly in tone
The letter you write serves as a permanent record of formal communication with your individual tenant, family or group of tenants; as in roommate situations. Make sure your request is to the point, professional, but polite in nature. For this reason, a formal letter and not a text, telephone call or voice mail message is proper form.
What to write?
If writing letters and notices don't come naturally to you, feel free to use an already established template. These can be found online and come in a variety of styles. Always make it clear that tenants should contact you with any questions, concerns or pressing scenarios. These might include a change in the names of the tenants or a short extension of the current lease to meet with their moving date.
Using stationery from your property management company,
address the letter to the tenant or tenants named on the lease. Avoid a generic
opening like “Dear Tenant” or “To Whom it May Concern.”
The subject of the letter should be at the top of the page as a heading that immediately lets the reader understand the importance of your communication. A simple but effective heading is “Change in Rent Amount” or “Rent Change Notice.” Whenever possible, center your header and emphasize it with bold lettering and/or underline.
While your letter should reflect a formal request, it should
never read like a demand letter. Remember that it helps to give your tenant a
short explanation as to why an increase in rent is necessary at this time.
Perhaps you've made improvements to the property or plan to do so in the near
future. At all times you want your tenant to understand that this increase is
neither arbitrary nor greedy, but in the very best interest of the property
they reside in.
The following needs to be included either in paragraph
format or in the form of a running list:
- The legal name of tenant or tenants (Do not use nicknames or casual names.)
- List the address of the property, including the unit number
- The name of the landlord or property management team
- A postal address, email address and phone number where you can be reached
- The date that the letter is written, which should be at or near the date of delivery
- When the increase in rent is to take effect and for how long
- The current rent and the exact amount of increase including allowable fees
Keep your letter short, easy to read and right to the point.
Always let them know that you appreciate your long-time tenants. This alone
goes a long way to add warmth to any landlord to tenant letter. After all of
the pertinent information has been listed, sign off with “Thank you” and then
“Very truly yours” or “I look forward to hearing from you at your earliest
convenience.”
To make sure you hear from the tenant in a timely manner,
you would be wise to add a form for the tenant to return to you. It needs to
have an area where they can sign their name(s) in agreement to the change in
rent or let you know that they will be moving when their lease has expired.
Either way, their reply to you should be kept on file so that you can prove
that they were properly served notice.
How should you send this letter?
The letter should always be enclosed in a sealed envelope and never just shoved under their door. Hand deliver it or send it through the postal service using a return receipt for your records. The date of certified delivery should begin the number of days’ notice given. Because many tenants communicate solely through digital means or may be traveling, following up via email is also an excellent idea.
Does Your Tenant Want to Terminate the Lease Early?
You often expect that when your new tenant signs their lease that they'll honor it through the end of the term of their stay on your property. However, there will be instances when a renter wants to terminate their lease earlier than what they agreed to on their contract.
Sometimes ending a lease early can't be helped, but there are other instances when a property renter needs to be held accountable for ending their lease. Below are examples of why a tenant ends a lease early, along with what you can do if you're faced with the issue.
When a tenant's need to leave is beyond their control
One of the most common reasons why your tenant might need to break their lease is due to military deployment. Although it's true that they need to honor your contract, their contract to the federal government is their first priority.
In fact, the Service Members Civil Relief Act protects service members who currently face active duty, reserve, or wartime deployment. It's illegal to hold the tenant to the terms of your lease if they are being called to military duty or deployment. Although it will be a bit of a pain to find new tenants while marketing your empty property, you really have no legal recourse except to allow the renter to serve their country in peace.
Another reason why tenants terminate their lease early is due to law that offers abuse victims protection. Specifically, if the renter can show proof that they are being physically or sexually violated, or if they are being harassed or stalked, they have the right to protect their safety by moving.
If you're unsure if your state protects renters in these scenarios, then it's best to seek legal advice. But you always have the option as the property owner to allow the renter to seek new shelter, without retribution.
Gray-area issues
There are what you might view as gray-area instances when your renter wants to leave, but they're not protected by laws that allow them to leave without penalty. For instance, there's the instance of job loss. Clearly, if your renter loses their main source of income due to job loss, then they won't be able to afford meeting the responsibilities of their contract.
You have the legal right to hold them responsible for honoring their lease by referring the issue to a collections agency. However, while you'll be able to damage the renter's credit report, there's a very good chance that you won't be able to collect any outstanding money, so you'll still be faced with taking a loss.
Ask yourself if seeking financial retribution is worth it or if it's just best to let things go, and quickly find a new renter for your property. The same line of reasoning holds true for tenants who experience major life issues such as illness or divorce. Sometimes things happen that are beyond anyone's control. You have the legal right to force the issue of payment, but in some instances, it might not be worth it for you to pursue these issues.
Clear instances of early lease termination and violation
Clear instances of a renter violating and terminating your lease include vacating the property without notice and before the lease term ends, causing serious damage to the property, breaking the law, or leaving early with notice.
If any of these take place, then you are protected to the fullest extent of the law to pursue financial damages from the previous renter. Keep in mind you also have the responsibility to find a new leasee as quickly as possible. You also can't charge the old tenant for rent they owe while you're also collecting rent on your property from the new renter.
One method of finding a middle ground between you and your outgoing renter is to include an early termination clause in the body of your rental lease. An early termination clause typically states that if your renter gives you a set period of time for notice of vacating the property, then you'll release them from financial penalties after they buy their way out of their current lease.
Typically, property managers and landlords across the country ask for two months rent at market value, plus a reletting fee. You can ask for anywhere between 60 days and one day notice of vacating the property. In all instances, the renter must inform you of their intent to leave in writing, and you must sign off on the acknowledgment of receiving the letter and agreeing to the letter.
Finally, keep in mind that the security deposit that you collected in the beginning is not a substitute for outstanding rental fees. If the property has been left in reasonable condition that wouldn't require serious cleaning or repair to the property, then the outgoing renter has the right to expect a return of their security deposit.
Renting Your Property to College Students
The college rental market can be lucrative. Landlords that live in or near college towns know that opportunities abound to rent out their units. They also know that college students represent different risks than other adult tenants. Deciding if it is worth it takes a balancing test, where you consider all the factors and then decide how much weight to give each of them. Below are some points to keep in mind when contemplating renting your property to college students.
High Renting Demand
Landlords want money. They rent out their acquired properties to increase their wealth. There's no better place to do this than in a college town. Every year, there are needy students who must find places to live.
This is a landlord's dream: high demand. For some owners, high demand means higher rents. When this happens, many other landlords may follow suit. The ones that decide not to raise their rents still enjoy a regular stream of money.
Money from college students can be a secure source of income. In many instances, students get their money from employment, parents, student aid, or a combination of all of the above. These are all great and verifiable sources of income.
High Tenant Turnover
College towns are all about high turnover rates. Most students don't stay in their college towns after they graduate. As a landlord in this market, expect new tenants on a regular basis and not just every four years. It's fairly common for students to change residences yearly until they graduate.
This high turnover can work well for landlords. It can work out to be an easy way for the landlord to get rid of bad tenants. Most tenants, bad or good, leave when they graduate or before.
That being said, with high tenant turnover comes more work. Time, money, and energy are all required to advertise, process applications, schedule interviews, and clean when an apartment is vacated.
In addition, with higher turnover comes less of a feeling of ownership by the tenant. If a tenant knows they will be leaving a place soon, they tend to ignore the house or apartment and mistreat it. Some are even destructive.
When a tenant has a sense of ownership of a place, then they will do things to beautify the property and keep it maintained as if it were their own. This sense of ownership is difficult to achieve when there is a high turnover rate.
Zero Credit or Rental History
If you want to do business in this market, you'll have to accept the fact that most of your tenants will have very little to no credit or rental history. The only property many of them have ever lived in is their parents’ home. This does not mean they will be awful tenants. It simply means you have to overlook their background if you want to find tenants in a college town.
The way to put your worries to rest about the lack of credit is through a cosigner. If a prospective tenant's cosigner has adequate credit, then you are covered financially. If you are still concerned about the lack of rental history, you can ask for recommendation letters from the student. Anything that attests to his or her responsible nature should be good enough.
Inexperienced Decision Making
Youth can do nothing about their inexperience except letting them gain experience through mistakes. Student renters are inexperienced when it comes to taking care of a property. For older adults, basic property upkeep is intuitive and leads most of them to either handle problems themselves or call someone who can.
Some college students have this instinct already, due to the household education they grew up in. Their parents made sure they knew how to keep a property from falling apart. They know what to do or who to call when most common household problems occur.
As a landlord to college students, you will find that many of them have absolutely no knowledge of how to maintain a house or apartment or what to do if and when something goes wrong, such as a broken water valve. If you have tenants like this, you can expect to be doing a lot of extra work when little to nothing goes wrong.
No Higher-End Finishes
College rental properties don't have higher-end finishes anywhere and for good reason.
College students are generally kids trying to grow up. They still have that physical and social awkwardness that plagues all young adults. In other words, these college-age renters would probably damage higher-end furnishings.
This is a plus for you because it means lower cost furniture, appliances, and other household necessities. It also means less complaining. A student tenant is unlikely going to call his landlord because the bathtub isn't up to par or there's a chip in the kitchen counter.
Due to many of the considerations listed above, many landlords choose to raise the rent. For them, the higher price reflects the risky nature of this rental market. It is a tactic similar to giving a person a credit card at a higher interest rate because they have low or negative credit. Another way to hedge these risks is to increase the security deposit to a number that makes you comfortable.
Whether or not you decide to rent to college students will depend on how you feel about the challenges and perks their market brings. Whatever your decision, it is a viable market in many places and can be successfully navigated by a willing landlord.
Low Maintenance Landscaping for Your Rental Property
Many people think that owning rental property is easy money. But any landlord knows that a lot of work and expense goes into marketing, filling, and maintaining a rental property.
In addition to keeping the house attractive and functional, a property owner or manager has laws to comply with and taxes to pay. And if the rental agreement includes extras such as yard maintenance, it takes time or money or both to provide those as well.
One of the smartest things a rental property owner can do is to learn how to streamline the property maintenance effort.
Thoughtful yard design can play a big role in that. Reducing the amount of necessary upkeep means a landlord can spend less time on the property and more time doing other things. It means less money need be spent on the property, which means a reasonable profit for the owner and a more affordable cost for the renter. Fewer yard maintenance visits mean more privacy for the renter. And an appealing outdoor space helps a rental property attract and retain tenants.
Here are some design tips for a low-maintenance yard.
Minimize the Lawn
The grass feels good underfoot, but it takes a lot of elbow grease to keep it lush and green. At a minimum, it needs regular cutting, but it may also require frequent watering, fertilizing, or even weeding. In areas with a lot of foot traffic, it can wear down to patches of soil and require reseeding.
Many property owners are moving away from lawn entirely, replacing grass with a combination of other natural materials. But there is middle ground. Simply reducing the size of the lawn on a property can ensure that tenants can still enjoy a place to spread a picnic blanket, run around barefoot, or watch the stars, but keep expense and environmental impacts to a minimum.
Many of the ideas that follow can reduce the square footage devoted to grass.
Install A Patio, Terrace, or Sitting Area
Creating a patio out of sturdy paving stones or similar materials brings multiple benefits:
- It’s an easy (and even fun) project that results in an attractive and useful property feature.
- It reduces the amount of square footage that needs regular maintenance.
- It’s easy to replace individual stones if needed.
Using materials that are durable and don’t require upkeep is key. Paving stones are a great choice. They’re relatively inexpensive; they don’t break easily; they don’t need any kind of routine maintenance. It’s easy to replace any that do break with another, without worrying about lining things up exactly or finding perfect matches in color and size.
If paving stones aren’t desirable, there are many other options. Recycled rubber pavers are extremely durable and not very expensive. Bricks are an attractive choice, although they are a little less forgiving. And perhaps the easiest option of all would be to cover an area with pebbles or crushed stone.
Install Pathways
Whether made of rocks, paving stones, brick, wood decking or even asphalt, installing a walkway along well-traveled paths on a property increases the curb appeal and reduces the labor in constantly reseeding or otherwise trying to mitigate the wear on a lawn.
Install Raised Garden Beds
The one-time expense of building raised beds pays off over time. A little investment in wood or pre-fab borders and some topsoil provides areas where landlord or tenants can easily grow flowers or vegetables, and where weeding is rarely a concern.
Mulch Generously
Using mulch along walkways and fences, bordering shrubs or around the footprints of trees pays off. It looks and smells great. It reduces the need to carefully mow tricky areas around roots. And it helps eliminate unsightly weeds or unwanted growth. It’s easy to install – just toss a little more onto the area every year or two, and little else should be needed in the interim.
Plant Ground Cover
There is a multitude of easy-to-grow spreading plants that are suitable for use along walkways or across whole expanses of yards. Many varieties are even hardy enough to withstand foot traffic. The tiny purple flowers of thyme leaf speedwell or delicate-looking white snow-in-summer are just a couple of examples.
Design Efficiently
One way to reduce the time spent on maintenance is to make it easy to do so. One large rectangular lawn is easier and faster to mow than several smaller triangles interrupted by pathways. Making it easy to get the right equipment – mowers, weed whackers, hoses – to the right spots is also important.
Straight lines or gentle curves will usually also be the most economical choice for initial materials purchase. Making use of available knowledge and tools is also important in landscape design.
Use the Right Plants
It saves time and energy when a plant is right for a specific location, not just for a grow zone. Matching a plant to the amount of sun and moisture a specific location receives should allow for optimal growth with minimal intervention.
Find the Right Help with Your Rental Property
Landlords with just a few properties may be tempted to do maintenance work themselves. That's certainly a reasonable option, but it may not be the best way to grow your business. Property owners can pour more time into acquiring new properties or marketing existing ones if they contract the help of specialists to provide services such as lawn care.
As a bonus, these jobs can often be completed faster and more efficiently by specialists than by property owners themselves. Professional property management companies can assist with performing or contracting yard maintenance (or almost any other chore imaginable).
Preparing your House for Sale
Do you want to sell your home this summer? You may have found a better property at your dream location or are just starting out as a property developer.
Whatever the reasons for selling, you have to prep the house before you list it. This is because you only get one chance to make an impression on a potential buyer. If your home looks untidy and unkempt, the buyer is not going to make you an offer. You have to do the following if you want to prepare your house for sale:
Tips on Preparing your House for Sale
1. Work on your Landscaping
In most cases, buyers will see your yard before they enter the house. You have to take care of it so that you can improve the curb appeal. Put on your gloves and get your gardening tools. Start by picking any stones and sweeping away any dry leaves or debris that may have fallen on the garden.
Then, slowly handpick any weeds that may have grown in the yard. Take your time and don’t try to rush it. You may be tempted to skip this part because weeds are also green. However, home buyers tend to notice even the littlest of things. If they see weeds, they will assume that you have poor property management skills.
You should also mow the lawn and keep the grass level. The mistake that some people make is forgetting to mow the outside of the lawn. You can start with the outside, and then slowly move inside.
If you are planning to hold an open house within a couple of months, you can plant seasonal flowers that will bloom during the open day period.
2. Get Rid of Any Dirt outside the House
After you have prepared the yard, it’s time to move on to the actual house. Start by cleaning the porch. You should brush and mop it so that is spotless. Clean the gutters and outside cladding. You should also clean the main door and windows from the outside. This is because dust tends to settle on such areas.
When your house is spotless on the outside, it gives off the impression that the inside is also the same. As a result, the buyer will be eager to embark on an interior tour of the house.
3. Get Rid of Any Personalized Items in the Interior
The first piece of advice that most property management companies will give you is that you have to get rid of any personal items before you put up your house for sale. First and foremost, you have to accept the fact that the house is no longer yours - it’s an item that you want to sell. Disassociate yourself from the house.
After you’ve gotten rid of any emotional connection that you may have towards the house, it’s time to get rid of your family pictures. You should also get rid of any personal paintings. You want your buyer to imagine their pictures and paintings hanging on the walls. They can’t do that if your family picture is still on the wall.
4. Declutter
You will be surprised at how much junk you have collected over the years after you begin the decluttering process. Go through all the rooms and identify things that you don’t necessarily use. You may realize that you have extra mugs or clothes that you have never worn.
5. Deep Clean the Interior
After you have removed the unwanted junk, it’s time to do some thorough cleaning. You can call some friends over to help you out with this task. Divide yourselves into groups of two for every room.
Make sure that floors are mopped, the walls are cleaned of any stains, and the ceiling and light fixtures are wiped. The windows and doors should also be cleaned. Pay attention to the kitchen and bathroom areas. Make sure that the sinks, faucets, and cabinets are spotless. The furniture should also be dust free.
6. Sort Out Things in the Closets, Drawers, and Cabinets
Your buyers are likely to open the closets, cabinets, and drawers as they examine the house. They may do so out of curiosity or because they want to see how much space is available. This is why everything has to be neat. You have to properly hang the shirts in the closets or sheets in the drawers.
Even though it’s advisable to get rid of any personal items, sometimes you may have to leave some things in the closets and drawers so that the house can feel warmer and inviting.
7. Replace your Favorite Items
One of the biggest problems for firms that offer property management services is a buyer-seller dispute over an item that was removed after the open house. Perhaps the buyer saw a nice antique chandelier and thought that it came with the house. However, after purchasing the house, they discover that the item is missing. The buyer may demand a partial refund or sue you.
If you want to avoid such drama, make sure that you remove your favorite items from display before the actual open house.
8. Make the Necessary Repairs
Perhaps there is a leak on the roof or piping system. Make sure that you call professionals to deal with any repairs before the buyer sees the house. Any problems with the house can turn off the buyer or make you receive a lower offer on the house.
Final Thoughts
Use the above strategies if you want to prepare your house for sale and get it off the market as quickly as possible. You should also go for a simplistic furniture arrangement and use neutral colors on the interior.
In case, you want to know how you can set the property rental pricing as you wait for potential buyers, you can visit the Coast and Valley website.