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Landlord Property Management Tips

Real Estate Investing: 4 Tips for Successful Rental Properties

Before beginning real estate investing, it’s important to consider these four tips for successfully investing and renting rental properties. Here’s what to know.

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Many new investors get carried away with the excitement of real estate investing and the possibility of making passive income. Just the idea of it all can have these newbies making big plans for the future.

 

Important Tips for Real Estate Investing

Ready for some truth?

There is no guarantee in real estate. You may invest in a multi-family rental property and find that you can retire 10 years sooner than you ever thought possible. Or, you may invest everything you have into one bad investment and find it nearly impossible to recover.

There are books out there claiming to tell you everything you need to know about real estate investing. And while there are many pros who have gone before you and have offered up their advice, there is no one guidebook that can tell you everything based on your set of circumstances. Sure, it can absolutely point you in the right direction of building and diversifying your portfolio, but it doesn’t give you step-by-step directions that fit every scenario.

Just as your teachers will teach you concepts and you have to learn the application in life. The best thing you can do is to learn the tips and tricks of the trade — and then learn how to apply them to your personal situation.

 

1. Look for Profitable Rental Properties

Just because a property is on the market for a great price does not mean that it is suitable for real estate investing. Some properties may be listed at such a low cost because they don’t have many profitable qualities. It helps to know what to look for when it comes to purchasing properties that can increase your profits.

Here are a few qualities to keep your eye on:

— The Neighborhood

Look around the neighborhood. Are there a lot of rentals available or a lot of homes for sale? Is there a certain type of most common home in the area? Is there a large homeless population? Is the walkability factor high? Quality tenants are going to look for a rental in a neighborhood that feels like home. Pay attention to the feeling you get while in the area.

— The Schools

Good schools are on the top of nearly every parent’s must-have list. Take a look at the ratings of the schools in the area to determine whether or not they are going to be satisfactory to potential new tenants.

— The Job Market

Having a job market that is thriving without the long commutes is going to be a bonus for every potential rental property investor. It ensures that tenants will have access to employment and will be able to pay their rent. This is the most important factor when considering a purchase of a rental property. You must have the jobs available for people to earn enough income to pay rent!

— The Crime Rate

Unless someone is involved in criminal activity, it is highly unlikely that they’d jump at the opportunity to place themselves in the middle of it in a rental. This may lead to high vacancy rates. In addition, high crime means a high chance of damage or vandalism at your rental property that could end up costing you money. We strongly suggest looking up the crime rate, and sex offender list for the area.

— The Property Taxes

Some areas will have higher property taxes than others. While it should definitely not be an end-all factor in purchasing a rental property, it is something to consider. If your higher taxes are due to an ideal location, those extra dollars are probably worth it. If not, you may want to look a little more closely at your options.

— The Amenities

When looking into real estate investing, consider the surrounding amenities. What are the things in the neighborhood and close surrounding area that will make someone want to live there? Are there local parks? Dog parks? Nearby dining? Grocery stores? Medical facilities? Movie theaters and other methods of entertainment? The more amenities you encounter, the better.

— The Outlook for the Future

Does the area look like one that will see future development? Does it seem like you are coming in at a good time when the market rates may increase and development picks up? Or does the area seem doomed? Are businesses closing? Are there a lot of vacant properties?

— Average Rental Rates and Current Rental Market

One of the most important aspects of real estate investing is understanding the rental market. Gain an understanding of the rental market in the area of the property. Compare it to others to determine the rent level. Is there a demand for rental properties? What does the average vacancy rate look like?

 

2. Consider Single-Family Rental Properties

Single-family properties are one type of rental property that most investors start with. They are always greatly sought options for renters – especially when they come with some of the qualities listed above. For new investors, it allows you to handle one tenant at a time while getting your feet wet.

 

3. Consider Multi-Family Rental Properties

Investing in multi-family rental properties means being able to grow your portfolio in less time. You don’t have to purchase multiple properties,  but rather just one — and then you can have income from multiple tenants. One loan, multiple units. This avoids many frustrations and a boatload of paperwork. Though, it is important to note that for someone who is just starting out, taking on a multifamily property could be overwhelming unless you have help from a multifamily property management company.

 

4. Always Hire a Property Manager

Property managers are great at handling rental properties, whether you have one or a hundred and one in your portfolio. They are able to handle everything from the advertising of the property and tenant screening to rent collection, maintenance and repair, as well as eviction if necessary. This not only reduces the headaches for you but also frees up your time so that you can continue to focus on real estate investing without having to worry about actively managing your rental properties.

When you look for a property manager, be sure that you find someone like Real Property Management Evolve that:

  • Is experienced in both single-family rentals and multi-property rentals (even if you don’t have both now)
  • Has a network of vendors and professionals in the community that can handle any needs of your property.
  • Has a thorough tenant screening process to find only the highest-quality tenants.
  • Knows and practices all the fair housing laws locally and federally.

Regardless of how new you are to real estate investing, following these tips for successfully finding the right rental properties can get you started in the right direction.

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Landlord Property Management Tips

What to Do If Your Tenant Is Not Paying Rent (and What Not to Do)

As a landlord or property owner, there may be times when you struggle with rent collection. Here is what to do if your tenant is not paying rent (and what not to do).

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You prefer high-quality tenants that you can count on to pay their rent on time and care for your rental property as if it were their own. What landlord wouldn’t want this ideal situation? Unfortunately, no matter how thoroughly you screen and vet your new tenants, sometimes things just happen.

If you find yourself in a situation where your tenant is not paying rent, you need to know what to do – and what not to do – to protect yourself and your property.

 

Double-Check Your Records

As a landlord, you have a lot of documents to manage. And, if you have more than one property, you have a lot of documents and financial records to manage, as well. While you generally know that your tenant is not paying rent or is behind on payments, you still want to double-check your records before you take any further steps. After all, there are few things worse than erroneously accusing someone of owing you money.

You may want to take a look at the lease your tenant signed. It is common for you to assume you know what the lease says, but just in case it has changed or something was discussed and adjusted at the lease signing, etc., then it is good to confirm the details of grace periods, late fees, and such before you approach your tenants about their outstanding rent.

 

Send a Notice to the Tenant

A late rate notice should be sent out to your tenant, either by mail or by personally delivering it to the residence. Some landlords even choose to tape the notice on the front door so that there is no chance that it will be missed.

This notice is not legally required, but it does serve a purpose on multiple levels. First, it acts as proof that you did give written notice to the tenant of all past-due fees, including a breakdown. This can benefit you should you have to pursue legal action in the future. Keep a record of these notices if your tenants are late more than once.

Next, these notices can also help jog the memory of the tenant. Maybe he or she knows that they are behind in rent and are trying to get their funds together. Or, perhaps they have been dealing with a family emergency of some sort and didn’t even realize it was time for rent. Life can get busy and distracting. It can also send changes when you least expect it. Because you don’t know what your tenant is truly dealing with, providing this late rent notice is a good place to start.

 

Reach Out to Your Tenant

You have confirmed that your tenants are late with their rent – and you have sent them a notice of all amounts that are due. Your next step should be to reach out to the tenant via telephone (though this can absolutely be done before sending the notice). Good landlord tenant relationships are essential, and opening the lines of communication is always important. Reach out and see if you can find out what is going on with the outstanding rent.

Do not call continuously or try to accuse your tenants of withholding their rent. This could be considered harassment. Simply call once to speak to the tenant. If you don’t reach the tenant, leave a general message. If the tenant calls you back, great but if not, let it go. Do not call again.

 

Send a 5-Day Notice

This notice to terminate the lease is generally considered one of the first steps of the eviction process. It lets your tenant know that you are serious about collecting past-due money and you will pursue legal actions to do so.

The laws will vary based on your state, but in Arizona, once the tenant has broken the lease terms, the landlord has the legal authority to move forward with an eviction. This notice serves as your intent to do so. It gives the tenant five days to pay the outstanding amount due in full. On the 6th day, or after, an eviction can be filed with the court. Ensure that you are following proper Arizona eviction laws during this time.

Many times this notice pushes the tenants even harder to gather up that rent and get it to you.

 

File for an Eviction

If you have done all of the above and your tenant has still not come through with the outstanding rent payment, perhaps it is time to file for an eviction.

This is not something anyone ever wants to do – especially because it takes money and time to do. But when a tenant is not paying rent, you need to remind yourself that this is your business – your livelihood – and you need to protect it.

Consider having an inspection at this time so you can document any damage and include it in the fees sought as part of the eviction process.

Remember, this is a legal situation that will take time. Do not try to remove your tenants from the property, change the locks, turn off utilities, or remove their belongings until the eviction process within the court is 100% complete.

 

Tips and Other Important Things to Note if Your Tenant Is Not Paying Rent

When handling your tenants and rent collection, there are a few things you can do that may make life a bit easier when it comes to tenants who don’t pay their rent. Based on experience, we have put together a few things that you ought to consider.

  • Enforce your lease terms consistently and promptly. Dragging your feet to give tenants extra time or letting things slide may cause your tenants to push the limits in the future.
  • Partial rent payments may void any legal actions you have (depending on your laws). Focus on only accepting full rent payments.
  • Follow the laws that govern you. Don’t try to make things up as you go, make assumptions, or ignore certain steps. This could potentially land you in a lot of hot water.
  • All tenants should be listed and addressed on every notice and legal document.
  • Always document if you and your tenant have a discussion about rent, create a payment arrangement, or the like — follow it up in writing and keep record of it.

If all of this sounds to be too much to handle, hire an experienced property manager – such as Real Property Management Evolve. This will save you from all the steps of trying to collect money and place it in the hands of the professionals.

 

    GET A FREE RENTAL PROPERTY ANALYSIS TODAY    

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Landlord Property Management Tips

Landlord Responsibilities: 9 Things You Need to Know As A Homeowner

There are many landlord responsibilities to be aware of when deciding to rent out rental properties – here is what you should know. 

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Many people choose to invest in a rental property and become landlords with the idea of earning income without actually having to work. So you buy a rental property, let tenants move in, and sit back collecting rent. Simple, right? Wrong.

While the idea sounds fantastic, the actuality of it is not. The truth is that there are a handful of landlord responsibilities – and they take on a lot of work. It does not take much time for those new to the industry to feel overwhelmed and stressed.

Understanding Your Landlord Responsibilities

If you are considering investing in a rental property or you are currently a landlord who is feeling the struggle, putting a few practices in place can help you tremendously. When it comes to landlord responsibilities, here are nine things you should know.

1. Perfect the Art of Tenant Screening 

Before new tenants move into your rental property, they need to be properly screened. You are looking for high-quality tenants with steady employment, a positive rental history, and a good credit score. Of course, the specifics of what you require will vary on your own preferences or the tenant’s personal situation. The idea is to thoroughly screen your tenants to weed through those that may cause problems or not be able to afford the rent. Watching out for scammers is essential, too.

Having a screening process in place helps reduce risk and brings you peace of mind.

2. Maintain Open Communication with Your Tenants

Communication is key when it comes to your landlord-tenant relationship. They need to know that they can count on you to respond when they reach out – and you need to know the same. You must be available for your tenants and share your preferred method of communication. Knowing they can count on you increases the chance that they will properly care for your property.

3. Address Repair Requests ASAP

As a landlord, you do not want to hear that a repair is needed at one of your properties. It is just one more thing you have to take care of. However, you must address these repair requests as soon as possible. Not only does it mean they will call you next time something else breaks, but it also keeps you from facing major repair bills.

Minor repairs, such as a leaky faucet, can be an easy fix. However, if left alone, this small plumbing issue could turn into a major, more expensive repair down the road. Not to mention, this lack of action may be disheartening to the tenants – who may not call you the next time a repair is needed – which can cost you big time. 

4. Keep Yourself Organized

With so many responsibilities, landlords need to be organized. This is even more important if you have multiple properties. Tenant applications, signed lease agreements, repair orders, move-in / move-out reports, rent payments and receipt, and so on all need to be maintained and organized for each tenant at each property.

It may be overwhelming at first, but finding a system of organization will help ease the burden a bit.

5. Make Sure Your Lease is Legal, Effective, and Thorough

Many new landlords jump online and print off a generic lease agreement. If you want to protect yourself and your rental property, you want to make sure you have a well-written, thorough, and legal lease. Consider speaking to an attorney or a professional within the field who can guide you with this process.

Your lease is a contractual agreement between you and the person(s) living in your rental – and it is there to protect you.

6. Be Proactive with Property Maintenance

Maintaining your properties regularly can help reduce the need for major repairs. And it can help you stay focused without having to worry about additional issues arising. Have a set schedule throughout the year when preventative and/or routine inspections is to be performed.

7. Stay on Top of Market Trends

You are a landlord, but you are also an investor. Therefore, you need to stay on top of market trends to ensure that your property is set at the right rental amount to reduce vacancy while also keeping you from selling yourself short.

8. Have a Clear Understanding of Applicable Laws 

There are laws that landlords are to know and have a clear understanding of, such as fair housing laws and landlord-tenant laws. Unless you want to find yourself in hot water, do your due diligence and know the law as it applies to you at the federal, state, and local levels. This also includes understanding eviction laws, as well as when and how to use them.

9. Be Respectful and Courteous

Most importantly, tenants want a landlord who is respectful and courteous. They are renting a property from you, but they do not need to be made to feel less than you. Speak kindly. In addition, respect your tenant’s right to privacy while residing in your property.

How a Property Manager Can Help

Renting properties is a lot of work with many landlord responsibilities. Even the most well-seasoned landlords can get overwhelmed with the stress that owning rental property brings.

The best solution? Hiring a property manager. After attempting to handle everything independently for a while, many landlords decide that hiring a property manager can bring a sense of relief.

A property management team professionally handles rental properties, which means they have everything down to a science. Thorough tenant screening, repairs and routine maintenance, rent collection, an effective lease agreement, and more follow and tried-and-true process to gain and keep high-quality tenants – while keeping landlords happy and free.

At Real Property Management Evolve, we are the best property management team in the greater Phoenix area. We make it our job to know the laws, the current market and strive to reach nothing but the best for your rental properties.

If you are a landlord who is new to the arena or find yourself feeling overwhelmed from all of your landlord responsibilities, a property manager can help. It is what we do.

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Landlord Property Management Tips

5 Warning Signs That May Appear On Your Tenant Screening Report

Tenant screening is an important aspect of finding the perfect residents for your rental home. Here are 5 warning signs that may appear on your tenant screening report, and what you should do if you see them.

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Your rental properties are an investment – which is exactly why you do not want to let just anyone sign the lease agreement. You are looking for high-quality tenants that you can count on to be respectful, communicative, and on-time with the rent. This is precisely why a thorough tenant screening report is crucial.

Sadly, tenant scams are becoming a major issue in the rental world. And certain past behaviors can predict future behaviors. Before you rent out your investment to a new tenant, be sure to carefully review the screening. Taking precautions rather than accepting the report at face value may save you a huge headache and a lot of money down the road.

Here are 5 warning signs to look out for in a tenant screening report.

1. Employment History And Verifiable Income

You should always review a tenant’s employment history. After all, a tenant with a steady work history shows reliability and responsibility. There is a good chance this tenant will pay rent on time. But, what about the tenant who changes jobs frequently? This is a red flag. If he or she does not often maintain regular employment, how can you be assured rent will be paid?

Another thing to consider is double-checking employment. Tenants often try to scam landlords by putting down a friend or family member as a supervisor – even giving a personal number as a business contact. Do your due diligence by looking up the company’s info online and calling the number listed on the website to confirm employment.

COVID-19 added another important layer of employment verification. At Real Property Management we require potential tenants to provide proof of income. We verify the ability to pay rent by requiring a minimum of two pay check stubs from the employer. Unfortunately, those who were hit hardest with COVID were those making cash tips. Often, cash tips are not reported through pay check stubs and are not considered verifiable income. This is important to require and review from potential tenants in order to reduce the risk of non-payment due to COVID-19 hardships.

2. Credit Checks

Nearly everyone has some debt. Things like student loans, car loans, credit cards, and even medical bills are quite common. Too much debt – and too many open accounts – may mean there will be a lot of people out looking for money from your tenant. Will your rent get paid?

While reviewing the credit report, look at negative marks, such as late payments, foreclosures, and auto repossessions. These are warning signs that could form a picture of the tenant and his or her ability (or lack thereof) to be financially responsible.

3. Criminal History

A tenant with a criminal history should not always be an automatic no. A history of minor incidents years ago in the past may not be worth denying someone who otherwise seems like a perfect fit. Those early adulthood years were a struggle for many high-functioning adults today. However, the red flags on a tenant screening report that you should pay attention to are whether there is a consistent pattern of crimes over time – or whether there is a serious crime listed on the report.

Use your judgment and determine whether the crime committed could potentially leave you, your property, or other tenants in a vulnerable situation.

4. Rental History

On the tenant screening report, the applicant will have to list prior addresses with landlord references. Depending on your procedure, it may go back any number of years. Look at the most recent landlord/s and follow up to discuss the renter.

You will want to know if payments were made on time, if notice was given before leaving, if the property was well-cared for, and so forth. Consider asking the landlord if he or she would rent to the tenant again in the future.

5. Blanks on the Application

When the tenant filled out his or her application, were there any blanks? Not only could this interfere with a thorough tenant screening process, but it could also mean that something is being hidden. Never assume that a blank is a simple oversight.

Your tenant screening report could be missing information if it was not included on the application – so be sure it is completed in its entirety so that you can have a solid report.

What to Do if You See Red Flags on Your Tenant Screening Report

To find new, long-term tenants, you need to make sure your screening process is exhaustive. However, you also need to take into consideration that your gut has a lot to say. Sometimes you can learn more from talking to and interacting with the tenants than you would with just a formal application.

For instance, you should see a red flag flying high if you encounter any of the following:

  • A tenant who needs to move in right now. He or she does not care what the property looks like or which unit you have available. The amenities or terms of the lease are not a concern at all. This should prompt you to wonder why are they so hurried?
  • A tenant who is trying to talk themselves up. They will talk about all their good traits and the kind acts they have done. They will compliment you and even agree with everything you have to say. Your gut may tell you that they are wanting you to see all the good in hopes it may counteract the bad you may find on the tenant screening report.
  • Does the tenant stumble over words? When you ask a question, an honest answer should easily follow. If it is not the truth, though, sometimes words can get a little jumbled and stories may begin to not line up.

When you meet with the tenant, always ask to see ID. Make sure that it matches the person you are talking to – and make sure it is a legitimate ID. Too many fake ID’s are circulating and that can lead to an entirely different situation that you would be better off avoiding.

Hiring a Property Manager

Are you feeling a little overwhelmed right about now? It is understandable. As careful as you would like to be with your tenant screening, sometimes you just don’t have it in you the discernment to find high-quality tenants. Or, perhaps you have better, more effective ways of using your time.

Hiring a property manager means hiring experts familiar with a tenant screening report. You can rest easy knowing that your investment is being filled by excellent tenants who have gone through a rigorous background check by those who know all the ins and outs of the business. Of course, it also means you have more time to do what you do best – invest!

Do not risk your leaving your property in the wrong hands. Look for the warning signs, trust your gut, or simply hire a property manager.

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Landlord Property Management Tips

How To Spot Fake Landlord References

When you are looking over tenant applications for your rental property, you hope that the applicants have provided real and honest answers. You care about the property that you are lending out, and you don’t want just anyone living there. However, sometimes people will use their friends or family as references because of one reason or another. So, here are a few tips on how to spot fake landlord references on an application:

Ask the references about available properties
One thing that most fake references do not think about is anything other than the “approval call.” Fake references are simply looking to help their friend and move on. However, a good way to test the waters is to call and ask the reference if they have any available properties. If they act confused or seem like they don’t know what’s going on, these are red flags. A real landlord will simply give a “yes” or a “no.” However, you can also avoid any awkward confrontation by just looking them up online. Most landlord names are listed on their property management websites. If the name isn’t connected to anything property management related, you know that the reference might be fake.

Ask for specifics.
Ask simple but specific questions relevant to tenant payment history and property condition. If they cannot give you specific information related to your questions, they may not be legit.

Turn to Facebook
If you notice that the “landlord” is tagged with the potential tenant, the reference is probably not valid. Most landlords are not hanging out with their tenants. You can also cross-reference the provided phone number for more info. You can either google the phone number to find the attached website and property management name, or check the address the tenant listed, and see if the numbers match up.

In some situations, you just can’t be sure, especially with landlords who only managed a few tenants. However, you can get a good idea of what’s going on by putting in a little work.

If you want to take the guesswork out of tenant screening, contact RPMEvolve today and find out why we are the #1 most trusted property management company in Phoenix. We only place highly qualified tenants in our rental properties. Every application receives careful screening, with background & financial checks. Contact us online or call (602) 368-5730 today!