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Marketing Your Vacant Property

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A Vacant Property Is A Problem Property

When you have a vacant property, you have multiple problems.

  • You’re losing income
  • You’re paying out of your pocket to support the property
  • You insurance may go up if it’s vacant more than 30-60 days (did you realize you often need to report extended vacancies to your insurance company or your insurance is void?)
  • No one is looking after your property (other than you)
  • Vacant properties chew up your personal time (showings, inspections, phone calls)

None of these are fun and often they lead to resentment of being a property owner, an investor and a landlord as it suddenly has become work. Costly work!

Filling A Vacant Property Takes Work

I’m not going to lie to you, filling vacant properties does take work, but if you do the majority up front it can save a ton of costly work involved with extended vacancies!

One piece of that work is effective marketing. Or as it’s commonly called selling!

Yep, you need to be able to sell your property to prospective tenants. Because if you’re not, someone else down the line will and you’ll lose out on a potential great tenant.

Here’s my secret tip (it’s really not that secret, but I’m amazed how surprised many landlords are when they hear it), write an awesome ad for your property and use it over and over and over!

For each of my units I have an ad that I’ve written up that I have saved as a Word document. That original ad may have taken two or three hours of writing and research, but I use it over and over again so over the lifetime of a property that extra work in the beginning pays off multiple times over.

Often I will have two or three variations of the ad that I’ll have saved in that Word document so I have different versions for a vacancy in the spring, int he summer or perhaps the winter.

Sometimes I create a new version by cutting and pasting from my original versions as times and circumstances change or as I find more effective ways to attract tenants.

Selling Your Property in Conversation

But it doesn’t stop with the ad. The ad is just to get someone to call or email or text me.

Now that I’ve got a live person showing at least a bit of interest it’s time to start selling my property!

This does get into some crossover at this point though. There’s no sense selling someone on your property if you’re not going to be renting it to them which is why it’s important to start asking some screening questions right away as well. (You were aware I have a screening course that helps you with this?, You can order it here, How To Screen Tenants Like an Educated Landlord)

Questions like when will you be needing it? If they are just looking or it’s three months down the road you may not be interested in marketing as hard. If it’s in the next several weeks, well time to tighten that sales hat up a notch or two.

During those screening interview stages you need to be able to promote the important parts that will add value for the tenant and put your property int he best light.

This could involve finding out your tenant works only a few blocks away, look at the money they will save on the commute! Or if you accept pets and they have a dog knowing that the dog park is just down the street increase the value and the importance of your property.

They have two elementary age kids? Well, were they aware one of the best schools in the district is only two blocks away? (Obviously you need to be aware whether the school is one of the better ones, but that’s part of your original homework, don’t be “that” landlord or “that” salesperson who makes up stuff just to get the deal closed!).

Selling Your Property In Person

You need to sell your potential tenants on your vacant propertyOnce you’ve confirmed the potential tenant is a qualified applicant, you need to get them to the property, and sell in person.

Now, if you’ve got a great property it should sell itself. Although it may still require you pointing out what’s so great about it.

If you have a “less great” property, you may want to step back and consider what you can do to change that.

When I’m showing my property to possible tenants I often ask them how long they’ve been looking for a place and what they are finding out there. You know what comes back?

Comments like “Everything I’ve looked at so far has been a dump”, “The last place we looked at hadn’t had a good cleaning in years” and “There was half an inch of dust on the baseboards, I wouldn’t let my pet live there”. If your property resembles any of these remarks you have an uphill battle when it comes to filling that vacant property.

95% of my tenants stay with me over a year. The majority are closer to three, so every time a tenant vacates a property and they have been there over a year, we repaint. We can do it quickly as I’ve shared multiple times in my How Painting Can Save You Time article,

We also typically bring in professional cleaners after painting and any repairs are done.

Just by doing these two strategies we end up getting comments like “The place is so much cleaner than everything else I’ve seen” and “Is this newly painted, it looks so nice!”

That’s the type of feedback that gets your vacant property rented quickly. And we all want to rent our property quickly when it’s vacant right?

Marketing Recap

Are we in agreement that having a vacant property is costing you money?

If so, then you need to take some steps to remedy that and let’s recap what we’ve talked about.

  1. You need a good ad!
  2. You need to sell to prospects when they contact you and
  3. You need to sell the benefits of your property when they see your property.

Can you do all that?

If you can’t, tell me in the comments below what the problem is. Just to spice it up, maybe include part of your ad if that’s your problem. And maybe, just maybe (ok I probably will), if I get enough responses I will help someone fix that ad up a bit.

If it’s an issue with how your property shows, explain it below and we’ll see who needs my help the most!

Oh and don’t forget, if you have other landlords who could use any of my information, share this stuff! If it’s helping you it will probably help them too!

Why Is My Property Not Renting?

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Property not renting? Does it look like this?
Don’t use images like this to market your property…

When You Can’t Get Your Property Rented

Why is my property not renting seems to come up quite often when I talk to landlords.

Well it usually comes down to a few minor problems. Your property not renting may look like the one in the image here, that could be a real problem, but hopefully it’s not your problem.

The biggest one typically is your rent is too high.

OverPriced Properties

If you’re not paying attention to the local market, you might have a misrepresented value of what your property should be renting for monthly. Especially in a tough market!

Even if you have a property management company in place, you need to understand what the local market rents are for properties similar to yours.

It’s your property, you need to know what’s going on.

Now if your rental pricing is right, but you’re simply not getting any calls, that might be symptomatic of your next problem, your marketing.

Lack of Marketing

In my last article I explained why vacancies are a landlords silent killer.. Because of that you need to put some effort in to market the heck out of that vacancy!

One ad on a free rental site won’t cut it.

A two paragraph massively abbreviated ad like we used to see in newspapers isn’t good enough.

Not bothering to include quality pictures can take you out of consideration.

And the list goes on.

You need to be everywhere, run ads in three four or more places, post signs in the property window, show up on Facebook and other areas. You need to write out an informative enticing ad that draws people in and reminds them they NEED to see your property as they don’t want to miss it. You need good pictures that highlight your properties best features.

You need all that and maybe more, like basic staging, perhaps new paint, renovations and professional cleaners going through so it looks perfect.

It seems like a lot of work, but if it saves you one additional month of vacancy that little bit of extra work has likely saved you a thousand dollars or more.

The last challenge you may have is you have a bad property.

It’s An Ugly House Dude!

If you’ve been involved in Real Estate for any length of time, you’ve seen these properties.

Maybe it’s the one where the landlord let the previous tenants paint, and they were very fond of black and purple… Surprise most tenants don’t want to move into a dark and depressing place, so paint it .

Perhaps it’s the property that people cross the street to avoid walking in front of? Sure dandelions are a pretty yellow, but having the front yard covered with them might indicate to potential tenants you don’t care about the property, or perhaps the overgrown bushes and scrubs are just too scary for even you to venture onto the property?

There are also the simply rundown places that look worn and tired. These are the properties where the owner gets plenty of calls and books many showings, but strangely enough people never show up for the viewings. Here’s a bulletin, if the house looks ugly or scary from the outside they probably just kept on driving and didn’t stop.

Now I know none of the people reading this have ugly houses (or at least I hope not), but it’s worth taking a serious look at your property from the street to really see what kind of first impression it’s leaving.

There could be some minor fixups that would change the appeal drastically, so do yourself a favour and go take a street side look.

Property Not Renting? It’s Not That Hard To Fill, With Some Education

property not renting? Fix it up!Here’s the after we renovated image. Compare it to the image at the top of the page, which one would you rent? Which one would you not even bother visiting?

Filling vacant properties isn’t that hard, it can be tougher in slow markets, but even where I’m located where we are currently going through 8-12% vacancy rates if you systematically attack it, you can get your property rented in a reasonable amount of time.

 

You do know your local vacancy rate don’t you? Knowing this is pretty darn important so as part of your homework after reading this I need you to go figure it out.

Then post in the comments below where you’re located (not the actual address, but City, province or state) and by sharing your info other landlords can get a better appreciation of what’s out there and what’s going on!

One more thing, if this is helping you please share it with other people on Facebook, Twitter, LinkedIn or simply just forwarding the email! Thee are some handy share buttons below to make that even easier!

What’s The Best Way To Screen Tenants?

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Is There A Best Way To Screen Tenants?

Best way to screen tenantsMany first time visitors here are looking for the best way to screen tenants. The problem is, there is no single best way.

It really requires a multitude of strategies to ensure you’re screening as well as possible.

There is no single question you can ask, a certain number they need to have for a credit score or a the ultimate reference. It’s a combination of all of these plus a bit of your gut.

The real challenge that comes with this is that it’s also a matter of consistency.

If you have a multitude of requirements and a broad range of questions, hoops and steps that take you from a vacant property to a fully rented property it becomes incredibly important to create a process.

A process you can repeat to ensure you’re using the best way to screen tenants possible rather than a haphazard approach where you could miss steps.

How I Can Help You Screen Tenants

Fortunately I can help a little in that department, or a lot depending on your needs.

best ways to screen tenantsAt the very least I’d suggest you grab my list of 7 interview questions you need to ask prospective tenants. That will help you a little by providing several basic questions that you can consistently ask tenants during the phone interview stage of your vacancy.

By asking these questions before you even show your vacant unit you’ll save yourself an excessive amount of potentially wasted time by weeding out tenants who will never qualify for your property. Or who are simply testing the waters and aren’t even serious.

On top of that by creating a systematic process that you repeat over and over as a best way to screen tenants for your landlord business, you’ll be able to protect yourself from potential discrimination complaints.

Would You Like A System For Screening Tenants?

Of course the 7 Questions are just the beginning. They make up just one of the 7 steps required to properly screen a tenant.

These steps include

  1. screening with a good rental advertisement
  2. screening with an initial phone interview (using the 7 questions)
  3. screening with an in person interview at the property
  4. using a solid application form
  5. calling of work references
  6. calling of landlord references
  7. and finally a credit/criminal check

Then capping all of this off with how you feel about the tenant. After all if you’re in the business of creating good solid homes for tenants long term you do want to rent to someone you like don’t you?

I feel using these steps are the best way to screen tenants and to screen them consistently so that you get the best possible people for your property.

You’re more than welcome to build your own system using this set of steps and off of my original 7 questions.

What If I Built You The System?

Now many astute landlords will look at that information and realize it could take many many hours to create their own system. And it would be a lot of work.

Wouldn’t it be far easier to have it already done for me? In a format where I could download the steps, maybe learn the best way to write my ads so they can do soem screening for me?

Maybe even providing additional best practices and questions to ask references and former landlords?

How about if it also showed you where and how to get credit checks and criminal checks and then even told you how to read them?

How much time would that save you and how much easier would it make your life?

Well tada, I’ve done this for you!

It’s part of my How To Screen Tenants Like An Educated Landlord Course and I feel the information it contains should be mandatory for landlords to know.

It’s based on the actual systems and processes I’ve used over my career as a successful landlord and includes the best way to screen tenants that I know of.

The art of screening tenants is one of the important skills a landlord can possibly have. Choosing the wrong tenant can range from being a minor headache to costing you months of lost rent and excessive legal fees in order to evict a bad tenant.

With the average eviction costing a landlord over $3,000 in lost rent, lost time and vacancies this $47 investment saves you money the first time you use it.

How To Purchase The Educated Landlord Screening Course

If you’re interested in the course so you too can avoid choosing the wrong tenants or simply tenants who will be a poor fit for your property you can purchase this online training through the following link.

How To Screen Tenants Like an Educated Landlord

If you’re still not convinced you need this course, let me ask you a few questions.

What would learning how to write an ad that fills your property faster saving you extended vacancies be worth to you? With average rents around $1,000 one month of additional vacancy costs you at least $1,000 not including any utilities you cover out of pocket along with other costs. That’s why I include ad writing as part 1 of the course.

How much does your time cost if you go to show your vacant unit to someone who will never take it? With an average showing taking 30 minutes to show the property plus driving time every “wasted showing” costs you an hour of time. What’s your hour worth? What if this happens three or four times or even more? That’s why lesson two goes into detail about the 7 Questions and how you can use them to avoid showing the property to time wasters saving you multiple hours of your precious time.

Do you know the most common scam tenants use to get good references handed out? I do, which is why in lesson four I explain what to do to avoid those scams, how to verify their information and why their current landlord may be the worst reference possible! Knowing this can help you avoid soem of the worst possible tenants, the professional tenants who use their knowledge of the systems and laws to get into your property for months at a time without having to pay any rent.

What do you do if you can’t find a qualified tenant? The wrong answer is to settle and the second wrong answer is to tell the applicants who didn’t qualify that they aren’t qualified! In section five I break down what to do if you don’t find qualified tenants and how to let the unsuccessful applicants down easy and so they don’t come after you for discrimination charges which is extremely important!

Finally, do you know where to get credit or criminal checks done and how to read them? Many landlords don’t know where to start with this and then even if they do they have no idea how to read or understand the reports once they get them. I explain a couple places to get credit checks done along with explaining what to look for and how to read them.

The best way to screen tenants - the Educated Landlord Screening Course

If you’d like to learn all the right steps to screen tenants along with what to watch out for to avoid the wrong tenants you’ll want to sign up today and get educated.

Again here’s that link, How To Screen Tenants Like an Educated Landlord

Remember, it’s all online with multiple downloads you even if you’re fully rented right now you can sign up, take the course at your own pace and be ready and primed for your next vacancy. You’ll even have all the skills to pre-write your ad for your next vacancy!

 

Know other landlords who have recently had problem tenants? Forward this article to them so they can avoid future problems!

Landlord Lessons

Caveats When Buying A Turnkey Rental Property

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Does a turnkey rental property work?It seems perfect. The nice little turnkey rental property that the current landlord is selling comes complete with tenants. A puzzle perfectly coming together

You’ll buy the property, you won’t have the headaches of doing your own searching for and then screening of tenants. You’ll be ahead of the game from the start and you’ll be making money from day one! What could go wrong?

Well, let me count the ways…

Why Landlords Sell A Tenanted Turnkey Rental Property

There are usually only a few reasons someone sells a turnkey rental property that is ready to go and comes complete with tenants in place.

Some are good, some not so good, and in a few cases downright bad, so let’s run through them.

Reason 1 To Sell A Tenanted Property

Sometimes they’ve reached their goals, they’re ready to retire or move on from being a property investor and now is the time for them to sell. They’ve had great tenants in place and want to make sure they aren’t disrupted and forced to move on.

If that’s the case great this may be a fantastic opportunity. Of course you’ll still need to run all your numbers, base your purchase on it being a smart business decision and not the fact that it’s turnkey.

Remember, just because it’s being sold as a turnkey rental property doesn’t mean it’s actually a turnkey business decision.

It may work for the current owners due to their purchasing it many years prior and buying it at a much lower price point which means lower carrying costs. It may have worked for them as they put down a much larger deposit so the property would cash flow better or they may have even inherited the property and have no mortgage expense.

You don’t always know the entire story and even if you do, you still need to do your diligence to ensure it works for you. With current prices and bigger mortgages the value proposition may have faded turning this perfect property into a potential moneypit.

Reason 2 To Sell A Tenanted Property

With reason 2 we’re starting to get to the potential landmines, so pay close attention.

Often landlords sell their properties complete with tenants because they’re losing money or the property simply isn’t working. These properties may either be a nightmare, or a huge opportunity for an educated landlord!

Many landlords, especially those who jumped into the game without enough knowledge or education, simply don’t understand the business.

They may have underpriced their units, under renovated them so they weren’t getting good rents or they possibly didn’t do the “real math” that experienced Real Estate investors complete to evaluate a property.

Years ago I wrote an article that explained “actual cashflow” versus what rookie landlords often see as cashflow. If you’re not familiar with it you can find it here, Do You Really Understand Cashflow?

The monthly cash flow and returns they anticipated simply evaporate as their inexperience with screening and managing tenants and their ongoing maintenance costs eat all their expected cash flow up.

These types of properties can provide a great opportunity for the smart investor willing to sink a bit of additional time and money to turn a property around. So you can’t count them out entirely.

Of course these also end up being not quite as turnkey as advertised so you need to balance that out as well!

Reason 3 To Sell a Tenanted Property

Now we’re moving to the danger zone. Sometimes a landlord ends up selling a tenanted “turnkey rental property” because the tenant (or the property) is a nightmare and the turnkey opportunity isn’t quite as advertised.

They’re just trying to get out and pass the problem on to someone else.  Don’t let it be you!

Some of the warning signs with this could be simple items like paperwork that can’t be tracked down (like missing or non-existent leases or lack of validated expenses ), not being able to talk to the current tenants (owner doesn’t want you to hear the real story) or a list of excuses about the condition of the property (lack of funds for repairs due to lack of payment?).

As in reason 2, there may still be an opportunity to turn this property around and turn it into a profitable solid long term rental property investment. It will simply require more diligence and/or immediate gains.

For a quick gain, you’d simply want to be compensated in some manner in order to assume or negate the previous landlords problems. This could be a better price, rephrased terms where you get the property vacant or other options.

For your diligence you’ll want all the possible paperwork and in the case of any suited properties all documentation verifying the legality of the unit.

There’s nothing more exciting for a landlord than assuming the property is legally suited to find out the reason the landlord is selling is due to the city inspecting the property and shutting down the second rental unit you were counting on.

Maybe exciting is the wrong word, frustrating perhaps?

It’s Not All Bad

Now, it may appear I’m saying never buy a turnkey rental property, but that’s not exactly true.

What I’m trying to point out is it’s important to get all the details, not just what the current property owner tells you.

It’s important to get all the documentation available, like leases, tenant walk throughs, amendments to the leases or special exceptions (allowed to sublet, pets, agreements for late rent payments or other allowances outside the actual lease).  You’ll also want copies of receipts of any security deposits.

You’ll want to meet with the tenants to make sure thee aren’t any problems or issues and obviously you’ll want a thorough property inspection. You just can’t leave anything to chance!

So, should you buy a property that comes with tenants? Well that comes down to what you find out with all your diligence!

What are your thoughts?
Have you bought a turnkey rental property? And did it work for you? Leave me a comment below and let me know.

Your First Rental Property

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It’s not uncommon that your first rental property is your worst rental property.Lessons learned from your first rental property

After all, it’s where you cut your teeth and learned from your mistakes.

Sometimes you learned you picked the wrong area, or perhaps the wrong type of property, or maybe it was where you evicted your first tenant out of.

Whatever you learned, that first rental property is what can make or break you.

You see often the first one is what discourages investors and landlords from carrying on. they learned that “all tenants are bad”, “you can’t make money in Real Estate” or simply that “landlording is too hard”.

On the other hand for many rental property investors, that first rental property is a stepping stone to a second, third and even more properties.

So what’s the difference?

How You Deal With The Experiences Learned In Your First Rental Property Is Key

It’s simply how you deal with it. At your first sign of problems is it fight or flight? Is it learn to do it right or get out while the going’s good?

How you react from the challenges you run into, what you take away from those challenges and how you correct them can make all the difference in succeeding or quitting before the race has really begun.

Like anything, being a landlord comes with a learning curve, you can’t be expected to now it all your first day. You need to go in eyes wide open, learn from any problems that come up and adapt so you avoid similar problems in the future.

Think of it as perspective.

With the right perspective you understand it may not necessarily be easy at first, but it does get easier. And hopefully with the resources on this site or that I share on our Facebook page (if you haven’t liked us yet on FaceBook, what’s holding you back? find me here, https://www.facebook.com/TheEducatedLandlord/ ) you’ll be learning even faster what it takes to be an Educated Landlord!

I see many landlords who simply give up when they face the adversity of a bad tenant or a rental property challenge, don’t be that landlord. Be the successful one who fights through the adversity.

7 Lessons From Selling 9 Rental Properties in 18 Months

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It’s amazing what you can learn from selling nine of your rental properties in a fairly quick time frame.

selling rental properties lessons

But before I get into those lessons, some background on why I sold so many properties.

Dealing with a ton of rental properties can be overwhelming at times and when many of them are rooming houses with individual rooms rented on a weekly basis you can find your schedule no longer belongs to you.

That’s part of the reason my wife and I decided it was time to divest a bunch of properties. We also had a plan to potentially sell everything and move to a tropical Central American country, but kids hoping to finish high school, other projects that weren’t going to get finalized anytime soon and aging parents has put that on hold.

Yet we still needed to free up that time and we had a few items all coming together. We had several partners that wanted out, the market was reasonably stable (at least when we started selling, it started to drop shortly after we put plans in motion which was another reason to hang onto the remaining properties) and frankly the rooming houses were burning me out.

With over 30 weekly rental units at the time and a string of stressful problems all at once ( a fire, two evictions, a criminal and several deadbeats) my time was never my own and my mood would bounce all over the place depending on which problem or challenge I was dealing with.

In the grand scheme of things, I still love rooming houses. They are a fantastic way to amp up your monthly cash flow, you’re able to help a ton of people who may not necessarily have other options and it’s an empowering experience to be able to help so many people.

But as I also say, try to limit your operations to five to seven years to preserve your sanity, I was at 13, almost double what I warned others about!!

So the decision was made to cull the wheat from the chaff (we decided to sell the worst first…or at least the ones with mortgages coming due, the ones that caused too many headaches or had partners who needed out).

If you’re contemplating selling any rental properties yourself you might want to also check out this article to help you make an informed decision, How to Decide When to Sell an Investment Property.

There’s the background, now for the lessons!

Lesson One

Time your sales around mortgage due dates.

mortgage renewal dates and rental propertiesNow depending on where you live there may not be penalties for breaking mortgages early, but in most places if you break that mortgage contract you could be on the hook for a few months interest payments or the entire potential interest rate differential the lender is losing out on which can be significant if it’s early in a mortgage.

I’ve previously paid as much as $17,000 in penalties for a $500,000 mortgage with over a year remaining and trust me, it’s painful!

Again, know what penalties you may be stuck with for your particular financing before you move forward with starting to sell, it may mean the difference between profiting or losing money.

Or if you’re aware you’ll be selling in a year or two, either time your renewal to coincide with that timeline by shortening the term (one, two or three year term) or utilizing a mortgage with a lower or zero penalty (variable or adjustable rate mortgage often have smaller penalties or open mortgages have no penalties but trade that privilege for higher interest rates).

Lesson Two

Get your rental property into top notch shape before you sell it.

Painting Tools for LandlordsThis is basically the same advice you would follow before you fill a vacant property. You want to get it painted, patched and cleaned so it shows well and it sells faster.

If you’re emptying the property of tenants the longer it sits empty the more money comes directly out of your pocket, so why not put that money right into the property to sell it faster, and typically for more.

People don’t want to buy someone else’s problems, unless they can get a significant discount, so leaving marks on the wall or having a dirty home will only cost you money. Lot’s of money!!

If there are obvious deficiencies get them fixed and use it as a selling point. Hopefully you’ve made money over the time you’ve owned the property and hopefully you’ve set a portion of that aside for just this day. Especially if you’ve been planning on selling it in advance!

We’ve replaced decks, replaced roofs, redone bathrooms and kitchen counters to update properties. We also repainted almost every property we sold (more on the ones we didn’t in Lesson Four) to make them brighter and shinier!

We’ve replaced screens, hand rails, kitchen handles, we’ve brought in lawn maintenance to upkeep the property and to eradicate weeds and we’ve hired cleaners to get the properties spic and span. While hard to measure the direct impact we’re positive it is why  almost all of our properties we sold were gone within 45 days of listing them (one took 70 days as the initial purchasers had their financing fall through and we had to re-list and our most expensive property took longer due to the market conditions).

The impact became most obvious when we watched similar nearby properties languish on the market well past our close date even though they were listed well before ours!

Lesson Three

Do your own pricing homework!

selling rental property do your pricing homeworkIf you know you’re selling shortly start watching the market, especially for similar properties in the same area.

It’s very easy to have your Realtor set up an automated update system for you where you get notified of all the listings and sales for equivalent properties around you. I even have my Realtor automatically send me listings for similar properties to my personal residence and remaining rental properties so I can understand what’s happening with prices for those properties.

When it comes time to list you should know exactly what you should be able to sell the property for rather than depending on a Realtor to inform you of it’s value. If you’re really investing in Real Estate you should have a good idea anyway and this just helps you avoid getting led down the garden path by someone telling you about unrealistic selling prices just to get a listing.

Now I’m not saying all Realtors will inflate the potential selling price to get the listing, but it’s a common tactic of some just so they can get that prized listing. You simply need to be smart and not get caught in that trap.

If the Realtor has to lower the price a couple months later it only affects their commission by a few hundred dollars but it’s cost you multiple thousands in carrying costs. You have the most skin in the game when it comes to selling this property so make sure you know your numbers.

Some additional caveats that you also need to be aware of is to check your emotions at the door.

This is more typical of people selling their personal homes, but even investors can get emotional about their rental properties and this can cause them to artificially inflate the asking price above what it should be. And this can work both ways as you may see it as “just a rental”.

If your Realtor comes back with a price much lower or much higher than what you came up with, be sure to get all the facts from them as to why they believe this and balance it against your homework. Maybe you’re missing something important because you’re simply to close to the property.

Lesson Four

Let everyone know you’re selling your rental property!

It's important to tell people when selling rental propertiesWhy would you keep it a secret? Tell other investors, tell your friends, tell everyone!

Who knows which of your contacts, or even contacts of theirs, might be looking at rental properties or that possibly have a friend looking for a home in that area?

In lesson two I talked about updating and renovating your rental properties and I mentioned I didn’t do that with some. That’s because I sold them directly to other investors as turnkey properties.

They were looking for rentals and mine fit their needs so voila. I may have taken a slightly lower price as there wasn’t Realtors involved, but it went quick and easy and provided a great solution for both parties! So word of mouth does work!

At a recent seminar I attended the presenter asked us if we knew what people who invest in Real Estate secretly are. His answer was broke and it was because they miss out on the best deals as no one tells them!

The message from that was don’t keep it a secret and let everyone know.

Lesson Five

Leverage your strengths.

StrengthsThis one can be tricky, as everyone’s strengths are different, but in my case one of my strengths is marketing. So I wrote all the ads for the properties listed on the MLS.

If you’ve owned your property for any length of time and have been writing your own successful ads to fill vacancies you should be able to provide input that can help position your property to it’s best.

If your tenants all rave about the beautiful views from the deck or the nearby schools or the proximity to amenities the sales copy you or your Realtor provide should include that as well.

Simply leverage the positives and the benefits of your property to the best possible results in order to help sell that property for you as quickly as possible.

And it doesn’t end with marketing (well that depends on who you talk to as many people will tell you everything revolves on who you market). If you and your wife love gardening leverage your abilities to beautify the curb appeal.

If you have an eye for design (my wife’s an interior designer by training) leverage those abilities and skills.

Simply use your talents to benefit yourself and to help expedite the sale of your property.

Lesson Six

Ditch the emotions.

I touched on this in lesson three when referring to pricing your property, but you also have to take this into account when negotiating.

Someone will try to low ball you at some time. Don’t take it personally. Either move on or counter with something more reasonable and with a response that you won’t continue to negotiate unless they move up substantially.

Many investors often start with a lowball offer in order to negotiate down halfway between the listing price and their low offer, don’t get caught in that negotiating trap. If you’ve done your homework properly, understand your market, fixed up your property and are basing everything off business decisions versus emotional decisions someone will likely appear willing to offer you a fair price versus a discount price.

It can help to establish ahead of time what your lowest possible price will be and any timelines you have to work within. Perhaps you’ll take a slightly lower price if they close in 30 days, but if it looks like 90 days you’ll be stuck with several extra payments so you need a higher price.

If you know these numbers ahead of time you’ll be able to position yourself for a win during negotiations versus a disappointment.

Lesson Seven

Have a plan.

selling rental properties by planning aheadOnce you start down the course of planning on selling your investment property, what’s your plan? Are you putting the money in a new investment? Will the loss of cash flow affect you going forward and/or will you be able to replace it or survive without it?

In our situation we used the profits to get rid of a bunch of debt. We paid down some other mortgages, paid out some second mortgages, bought partners out and repositioned ourselves to be in a better equity position going forward. Plus I freed up a ton of time allowing me to focus more on articles like these and other ventures!

Depending on your unique situation will the sale trigger tax implications? If so, what are your options?

If you’re in the US if you reinvest back into more rental properties you can defer any tax (please confirm this with your accountant as your specific situation could differ from my experience), if you’re elsewhere do you have deductions to offset the taxes?

Sure it’s great walking away with a $200,000 check from closing, but if you have to give $100,000 back to the government for taxes it takes a lot of the thrill out of it. If you’re not sure how it will affect your tax situation talk to a tax accountant to make sure you take the necessary steps to pay the least amount of tax you’re legally responsible for.

Bonus Lesson

Empty your property of tenants.

Should you get rid of tenants when selling a rental property?But I’ll be losing out on rent each month and I’ll have to pay the expenses out of my pocket while it’s vacant!!! That’s the typical response I get from people when I tell them to vacate the property and it’s true.

The problem is if the tenant isn’t too excited about the opportunity to move once the property is sold or they want to sabotage the sale they have numerous different ways to turn your cost saving strategy into a nightmare.

This could range from little measures like leaving the place a mess which can reduce the dollar amount of any offers. They can make it difficult to show the property by blocking or denying showings for various reasons.

But those aren’t the worst. Perhaps the most devious tactic is stalling their move out and blackmailing the landlord in order to move out on time. If the buyers are expecting vacant possession and the tenant is still there you could be in brach of the sales contract at worst or you could end up with a delayed closing costing you more money.

It’s simply better to take this type of situation out of the equation. Especially if you’re not selling the property as an investment property and it’s likely the new owners will be living there.

Much like timing your mortgage coming due if this is your plan you’ll want to make sure your leases line up for this strategy as well. It may also help if you understand the local rules for terminating leases and what reasons you can use to terminate such a the sale of a property.

If it is being sold as an investment you may be able to keep the tenants in place, but you’ll want to be upfront with them and make them aware you’re hoping to keep them in the property in order for an easy transition and if they help with showings it will go a long way to letting them stay.

Of course if I was buying someone else’s rental properties I’d be wondering why they were getting rid of them. So you better have a valid reason, you’ll want to have all the necessary documentation like rental agreements, walk throughs and even tenant files that you can provide to pacify potential investors.

As a side note, just because it’s vacant doesn’t mean you shouldn’t do some minor staging. A few hand towels in the bathroom along with hand soap, vases, knick knacks and ornamental items on the kitchen counters and even some small furniture pieces can all help fill empty space in a property and make it more appealing. 

Selling Your Rental Properties Fast Is Key

We should all be aware extended vacancies are the fastest way to fail as a landlord, the same can be said about extended listing periods.

You’re stuck with all the expenses and none of the benefits once they’re vacant so why would you want to drag it out? Selling your listed rental properties as quickly as possible can solve that problem, but as I’ve gone over in the above lessons, there is work involved on your behalf.

The best and the most successful Real Estate investors with the best rental properties are also the most prepared so use my lessons to help prepare your self and make the future sale of any of your rental properties an easier proposition!

To wrap it up, what are your thoughts? Do you agree with this, disagree or better yet have something to add that I may have missed.

Take a minute and share your thoughts by leaving a comment below to help out the landlord community and if you found it helpful be sure to share it on Facebook, Twitter LinkedIn and more using the handy social media sharing buttons below.

You Really Need A Written Lease For Your Rentals

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Why A Written Lease?

Written leaseIt’s astounding how many landlords I talk to that don’t have a written lease. They’ve either inherited tenants with a property and the previous owners never had a lease, or they simply haven’t bothered getting one as verbal is so much easier.

Now, guess when I usually end up talking to these landlords?

If you guessed when they are having problems with a tenant you win a prize.

Here’s why you need a written lease. It takes away the gray areas!!

Verbal agreements are open for interpretation. Written agreements (unless they are poorly worded) close up the gray areas and lay out the rules, the resolutions and the repercussions that accompany the agreement.

Payments, Pets and Pot

Late payments, pets that tenants “acquire” and marijuana smoking seem to be the three big issues that landlords talk to me about. Having specific clauses or sections within your lease that explain these can make a huge difference in how these issues play out versus a vague verbal agreement.

For rent payments you should have specifics about when rent is due, possibly methods it can be paid via (cash, e-transfer, post dated check) and any repercussions if rent is paid late. This could range from fines or penalties to warning notices all the way to evictions.

Different jurisdictions require different wordings for fines and penalties. Some areas don’t allow penalties, some have prescribed penalty amounts for late payments and others leave it wide open. The important part is YOU need to know what your local rules allow and then you need to make sure your written lease includes the correct wording allowing you to enforce and collect any penalties or fines!!

For pets, depending on your policies and local rules, you need to include specifics about what is or isn’t allowed. If you’re rental unit is part of a Home Owner’s Association or Condo Association there may be restrictions on size or type of pet that you have to carry over to your lease.

You may have personal restrictions for a suited property due to allergies of current or future tenants (once you become pet friendly it is an expensive proposition to remove pet dander and fur to return it to a state that a person with allergies can comfortably live in).

You may have had bad experiences in the past that you simply wish to avoid repeating. Whatever your personal situation with your rental, your lease needs to reflect this as well and have it explained thoroughly!

Again, rules and regulations vary widely. Some regions don’t allow landlords to dictate pet polices and others have strict definitions. You need to be familiar with local legislation or you need to have a lease designed specifically for your area.

Pot, or marijuana oh my.

This has become a huge topic of controversy with landlords on one side of the debate and pot enthusiasts on the other. and unfortunately since it is a moving target right now there is no one answer anywhere it seems.

My personal thoughts are if marijuana helps you with pain, sleeping or other health concerns then all the power to you. I do draw the line though if it affects me and my property by adding risk or costs to my life. If you own your own property go for it. If you are renting, you need to fit in the guidelines established by the landlord, or you need to find a landlord that will work with you.

These risks or costs I’m referring to involve potential insurance issues with tenants legally allowed to grow their own product, renovation costs to repaint or repair burns that seem to accompany smoking of any products.

If you’ve been following The Educated Landlord on FaceBook I’ve posted several articles about marijuana, insurance issues and legislation changes recently along with other landlord articles from other sites on a nearly daily basis. If you haven’t liked us on FaceBook yet and want to keep up visit us at https://www.facebook.com/TheEducatedLandlord/ 

Marijuana legislation will be a moving target so it’s important you keep up with the regional rules and changes to rules that come into play as the rules become more relaxed federally, statewide and provincially depending on where you live.

The important message to take away from this is you may have to add additional wording to reinforce non-smoking policies in your property. If it specifies cigarette smoking isn’t allowed it may require a simple rewording not allowing smoking of any kind in the rental property. And if it’s written and follows your local Residential Tenancy rules it can be enforceable.

Where To Find A Written Lease

Depending on where you live there can be multiple different places or resources you can find to acquire a proper written lease for your rental property.

One of the first resources I recommend to landlords are local landlord or rental property associations. Many organizations, either as part of their membership or for a reasonable cost, can provide appropriate rental forms that are usually well used, well tested and that stand up to the local rules.

They often have additional forms you can use as well such as move in/move out checklists, applications and more that can be handy.

Another resource is your lawyer. If you already have a lawyer who you use and who has a good understanding of the rental laws for your area they can create (or acquire from other lawyers they know) a good dependable and legally binding rental agreement.

The caveats here are not all lawyers are created equal and not all properties are the same. By this I mean that some lawyers rarely deal in rental laws and they may be poorly suited to create a quality lease for you. Residential Tenancy Acts often have subtleties and loopholes in them that someone experienced with the specifics can tailor to work best for you and your property.

This can also vary with the property. Most specifically when it comes to condo boards and rules within leases as often condo or home owner association rules take precedence over Residential Tenancy rules. A proper lease must take both sets of rules into consideration and may need to be very specialized for you and for a specific property.

This can involve additional costs, but the long term protection it provides you are well worth that cost especially when you factor it over multiple years which should be your goal with a rental property anyway.

Another option, which I don’t really endorse, is off the shelf rental packages you can pick up in stationary stores. While far better than verbal agreements they are often very generic and if you’re new to rental properties they often end up lacking in several key areas (like smoking, pets and pot as mentioned earlier).

You can typically take these leases and use them as a starting point, but you may want to take it to your lawyer to get it tuned up so it works best for you rather than the generic masses. And if you’re doing this, why didn’t you just start with a a lawyer?

The final resource I’ll mention are the online legal document resources. These would would be through a company such as LegalNature who provide a wide range of legal documents that include not just leases, but everything from Wills to incorporation documents to bankruptcy forms..

To be entirely transparent I will receive a referral fee if you use one of the links in this article to register with them or to purchase a Residential Lease Agreement or other landlord document. If you’re vehemently opposed to me doing that, but still want documents you can simply Google them to go directly there.

I’ve talked to several of the guys over there and they have a very thorough and in-depth system in place that allows you to create a custom lease (or other various Real Estate forms) that you can save for future use (with their ongoing membership program) or download and use (with their one time purchase program).

Their leases are US based only currently and are customized depending on the state with the most current information regarding Residential Tenancy Laws for the particular state and region you’re creating the document for. They are also quite long as they cover so many details!!!

In my conversations with Ben and Trevor of LegalNature, their default Residential Lease Agreement will run between 14-18 pages which isn’t an issue you should regard as overwhelming, but rather as details that will protect you as much as possible!

Some landlords believe simpler leases are better, yet given the choice having a detailed lease covering almost every situation will benefit you much more over the long run.

Rules and laws regarding landlord, tenants and rental properties often change or evolve over time. If you’ve been using the same lease for more than a few years it may well be worth  research to determine if any information in your older lease is outdated, un-enforceable or simply in need of updating.

Your Requirements For A Written Lease

You need a written leaseBig picture, it doesn’t matter where you get your lease from, you simply need to make sure it protects you and your rights as a landlord and property owner, that it includes any particular wording or phrasing required under local rules to make it legal and that you understand it.

You need to understand it as you will likely need to explain it to future tenants as part of the lease signing process.

You can expedite part of this by emailing the lease in advance to your prospective tenants, once you’ve narrowed it down to one set of tenants, so they can review it and have any questions prepared in advance. However you’ll still want to go through any and all important sections in person with them during the signing though, just to reinforce their understanding and to ensure there is no miscommunication.

What may be abundantly clear to you (No pets, Landlords permission required for renovations and many other items that seemed clear to you), may not come across clearly unless you point it out during that lease review!!

As I mentioned right near the start of this article, you want to remove the gray areas, you want to avoid gaps in understanding and you want to have the most control possible with your documents so make sure you get a written lease that works for you.

If you’re still using an old lease or worse yet a verbal lease take note of the information in this resource so you can get that remedied and put some control back in your life as a landlord. I know I continually harp on this, but only because it’s important. You need to treat your landlording like a business, so make a smart business decision and get a solid written lease in your pocket!