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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!

Five Signs You Might Be a Bad Landlord

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Are you a bad landlord?
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We can’t all be the perfect landlord (I know I’m not as much as I try!), but there are definitely a few sign that could indicate  you could be heading down the path of becoming a bad landlord.

If you recognize one of these signs, you should be ok. Just correct the problem and you should be able to ditch that bad landlord stigma.

If you recognize two or three of these signs in how you’re running your landlording you’re going to have to make a decision about where you’re heading. You can continue down the pathway towards being a bad landlord, or you can do a bit of a course correction and straighten yourself out.

Finally, if you see four or five of these traits showing up continually with your rentals, it’s time to sell. You’re giving the good landlords a bad name and it’s time for you to move on!

Are you ready to find out about these signs?

Sign #1 You Might Be a Bad Landlord

No Written Leases

Listen, you need a written lease and you need it signed by all the tenants residing in your property.

If you don’t have a written lease you’re leaving yourself open to misunderstandings, potential problems and a ton of ambiguity.

Your written lease should address potential issues before they become issues such as rules regarding smoking, pets and even subletting (where allowed, some areas the “rules” don’t let you dictate what is always allowed or not allowed).

It should break down responsibilities for snow removal, grass cutting and property maintenance where applicable. And it should include what the repercussions for transgressing those rules specifically are.

It should cover all those details that could be rather vague, unless they are pointed out and it needs to protect you as much as possible within the local laws that govern landlord and tenant rules.

By not having your lease signed it’s just as good as not having one and the big problem is situations without written leases become a situation of he said/she said. This ends up being a situation where there is no proof you originally told them it was non-smoking, or that they couldn’t start a rabbit breeding factory in the spare bedroom (no pet policy).

So if you’re serious about being a landlord and you don’t have leases in place, go find some.

It may involve spending a bit of money with a lawyer or it may involve buying them from a local landlord association. Whatever you spend will pay for itself time after time and year after year going forward by reducing problems, headaches and even evictions when things do go bad.

Sign #2 You Might Be a Bad Landlord

You Haven’t Inspected Your Property In Over A Year

visit your rentals every six monthsIdeally you’re visiting your property and doing at least a quick inspection every three to six months, but worst case you need to at least get in there yearly, even if they seem like great tenants!

A lot can go wrong in a year, heck a lot can go wrong in three months!

That beautifully renovated property with the new carpet and high end hardwood may need to be replaced if you find out your tenant has been rebuilding his leaking motorbike on it over the winter months.

The little leak underneath the kitchen sink that the tenant didn’t catch could require completely gutting the kitchen and replacing everything. And these are the obvious things you’ll notice just by visiting and taking a peek!

With quarterly or every six month visits you can replace furnace filters which will extend the life of your furnace, you can replace smoke detector batteries which could save lives and your property and you can even notice potential problems that could grow into huge problems if left un repaired.

If you haven’t visited a rental property of yours in the last six months stop reading now and start scheduling a visit before continue on! Don’t be a bad landlord or a landlord who suddenly has to deal with a very expensive repair in the near future!

Sign #3 You Might Be A Bad Landlord

You Refer To Your Property as “It’s Only A Rental”

If you’re referring to your rental property, your expensive investment, as “it’s only a rental property” you’re setting yourself up for failure.

If you’re creating a mental environment where you’re not thinking of your property as someone’s home, where you’re potentially allowing sub standard work, lower grade finishes and even ramshackle repairs to be done, you’re setting yourself up for failure. And that’s what happens if your property is just a rental.

When you start referring to your property as only a rental you’ve already established you don’t care about it and it’s not long before it starts to become neglected (refer to Sign #2).

It’s too much work to go inspect it, it’s too much expense to do proper repairs (after all it’s just a rental) and in no time flat you start seeing your tenant turnover sky rocket and your vacant periods increase.

Then after a year or two of losing money you become another one of those landlords who say Real Estate doesn’t work and sell off your potential asset.

It’s not just a rental it’s a long term investment that can reward you handsomely over time and with proper care and attention. Remember that, or save yourself time and start planning to get out now.

Sign #4 You Might Be a Bad Landlord

You Ignore Your Tenants

return tenant calls promptlyThere’s nothing as annoying as getting interrupted when you’re out having a nice evening out with a spouse or girlfriend or even your family. It’s worse when it’s your tenant calling about a problem with the furnace, in minus 20 degree weather.

At least until you realize that because you have that rental property you’re able to have a nice evening out, or that you have a few extra creature comforts, like heat, because you’re setting yourself up for long term success.

It’s freezing out and they don’t have heat so you need to get on that and not ignore it!

OK, that’s one of the worst case scenarios, but even if it’s something simple like a broken dishwasher, clogged sink or slow drain in the bath tub, they shouldn’t be ignored.

How you handle situations with your tenant can directly affect how long your tenant stays with you and if you keep them happy by dealing with issues in a timely manner they will stay much much longer!

If you can reduce tenant turnover to once every few years it will make a direct impact on your bottom line.

Tenant turnover leads to vacant months with no rental income, extra time spent on advertising and meeting prospective tenants and money flowing out of your pocket as you cover expenses related to the property like water, heat, insurance, taxes and mortgage payments with money out of your bank account.

Even if you don’t have an answer, don’t leave your tenants hanging. I currently have a tenant in a property about two hours from me with plumbing issues (not a water leak, but a shortage of hot water, probably a tank that simply needs flushing).
I don’t have an answer right now, but I’ve replied back to her that I should have an update later this afternoon. I’m keeping her in the loop, I’m acknowledging there is an issue and I’m addressing it and she knows I’m not ignoring her!

So don’t ignore your tenants. If you keep them happy and keep them satisfied you’re a good landlord, not a bad landlord who can’t be reached, you’ll be rewarded with longer term tenants and more cash flowing into your bank accounts!

Sign #5 You Might Be a Bad Landlord

You Don’t Treat It Like a Business

I bring this up a lot, mostly because it’s important, but also because failing to treat your landlording like a business can lead to you failing. And failing with property can be an expensive lesson.

The more you treat the entire rental business as exactly a business the more you’ll do to set up the proper practices to help you succeed.

This can involve moving from using a simple spreadsheet to track your income and expenses to moving to dedicated software of customized accounting systems that allow you to track and control much more of your business.

It involves moving from picking a tenant cause they seem nice to having a proper system in place to screen tenants, places to acquire credit and criminal reports as necessary and understanding the local laws regarding rentals and how they apply.

If you treat it haphazardly you make mistakes, or take shortcuts and those mistakes and shortcuts cost you dearly. I’ve seen landlords use free leases they found online that were invalid because they didn’t refer to local laws.

I had a landlord try and evict a tenant using an eviction form from the incorrect state (it gave the tenant another free month of rent as he had to resubmit the correct form after the fact).

These are the shortcuts that backfire on you and are another reason that can cause you to quit the rental business.

Set yourself up for success.

Don’t Take Shortcuts

Shortcuts are attractive because they may get you started in the direction you’re heading faster, but shortcuts don’t always provide the results long term you’re looking for.

If you’re serious about being a successful landlord,  become an educated landlord, learn to manage your properties as if it is a business and it will all become easier and simpler to either carry on as is, or to expand later. If you’re doing it right it gets easier.

And if you’re dropping a ton of money into Real Estate already what’s another little bit to make sure you’re doing it right.

Money spent on having the proper leases, money spent on getting the software to make your job as a landlord/property manager easier and time spent making sure you have systems in place all come back to reward you as you move along your rental property ownership path.

Lining up accountants and lawyers familiar with Real Estate make your life simpler and more controlled long term. These are all parts of your long  cut to long term financial wealth so try not to stray.

Is there any other additions I should have on this list that bit you in the butt as a landlord? I’d love to hear your feedback, leave me a comment below!

 

 

 

 

 

 

The Secrets of Self Managing Your Property?

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Self Managing Your Property,
Or Hand It Off?

self managing your propertyShould you be self managing your property or should you be paying a management company to deal with your property? It’s a question that comes up quite often around here and there really is no one answer that fits everyone.

Personally I manage all my properties, I save a ton of money by doing it myself and it works well for me. Of course I’ve been doing this for a while, and because of that I have some secrets I’ll share a bit later on in this article. Also, I don’t like sharing the money with a property manager when I know I can do as good, if not a better job at it than 99% of the PM’s out there.

Others I know have one or two properties, they pay property managers to deal with collecting rent, placing tenants and they simply sit back collecting the left overs. It takes the stress of management out of their hands and it works for them.

Some landlords I know have dozens and dozens of properties and are continuing to expand their holdings, so rather than burden themselves with property management, they understand they need to focus entirely on buying and only use property management. They don’t really make money managing properties, they make money buying and owning so they have different priorities.

Yet thousands (probably closer to millions actually) of landlords self manage their properties. So the question comes up, should they really manage their properties? Or should they hand it over to professionals?

The Challenges of Management

The more properties you have the more tenants you have. The more properties you have the more appliances that can break, the more tenants turnover and the more items you have to track. And the issues don’t grow in a straight line, they seem to grow exponentially.

For many people a single property can be overwhelming. imagine multiplying it by a second suite, a second property or more!! It could lead to complete failure and eventually push them out of the landlord business. For those folks the challenge is too much and it simply makes sense to hand the reins over to a property manager.

But property managers don’t work for free.

The main challenge of having someone else manage the property often ends up being the cost. Property managers are typically going to cost 8-12% of the monthly rent. For a property that generates $2,000 of gross income per month that works out to be $200 per month or $2,400 per year. That’s a good chunk of change!

cost of managing your propertyThrow in extra costs for signing in new tenants, possible showing fees, extra charges for coordinating repairmen and it doesn’t take too long for a low cash flowing property to suddenly start losing money.

Now I’m not saying it can’t work, or that all property managers will overwhelm you with additional costs. I am saying that you need to be aware of all the costs involved, you need to make sure they balance out appropriately and it should fit your goals or plans with your portfolio.

As I’ve talked about in previous articles your goals affect your strategies. If you don’t need cash flow now, a property manager may be perfect for you. If you drastically need cash flow, a property manager could be draining that cash.

The Secret of Successful Self Management

Since I’m a pretty big proponent of self management, maybe you’d be interested in learning some of the secrets of successful self managing your rental property?

Still here, good!!

Surprisingly to really find out how to be successful at managing your property or properties you really should start by looking at what property managers do. Or at least what successful ones do!

Not so surprisingly the biggest “secret” is another topic that I try to bring up repeatably and it involves systems.

No matter what property management company you look at, if they’re successful they have specific systems and processes in place that they have refined over time and they then replicate and use over and over on all their properties.

Sure you need some time management and some customer service skills, but if you have true systems in place that walk you through steps like advertising properties, screening tenants, even clean up and maintenance, it can make the job of managing your property so much easier and perhaps just as important, much more consistent.

You can expand on these systems to include processes for your accounting (if you haven’t read my article about a simple paperwork accounting system for rentals you might want to read this article, Accounting For Your Rental Property), processes for buying a new property and just about every recurring process involved with your investment.

Another Secret About Self Managing Your Rental Property

So what else can make your job self managing your property easier? Well how about an accounting system or a software system set up specifically for your rental business?

Many new investors often start out trying to track everything on spreadsheets or in notebooks and while it’s a great way to potentially store or analyze some information, you really do need to set yourself up properly to manage your properties and your tenants.

With the large number of transactions we go through on a monthly basis we ended up going with Quick Books Pro as the accounting package to track all of our income, expenses and even tenants.

While it’s not specifically designed to work with rental properties, we made the wise decision to bring in a bookkeeper to set it up properly for us right near the beginning.

To be fair we didn’t bring her in early enough, we thought we were smart enough to set it up how we needed it and it ended up costing several hours worth of re-entering data and adjustments once it was properly set up, but it was worth it. Lesson learned. Fortunately it was still fairly early in our business endeavor as it would take dozens of hours to convert now!

We also had the bookkeeper come in once a week and usually spend three or four hours a week doing data entry. This left us with reports and information at our fingertips and readily accessed if needed while taking some of the burden off us.

Since we first started there have been dozens of programs and applications that have been developed for both small and large portfolio property owners.

They track everything from rents to maintenance and all the particulars in between. Again I’m already neck deep in the systems we already have so it’s too late for an old dog like myself to pivot and start over, but if you’re looking for options why reinvent the wheel when there are new shiny ones available?

Property Management Software

software for self managing your propertyThe priorities you need to stay on top of are obviously going to be incomes and expenses, so at the very least any property management system requires the ability to track those.

Some of the software you can currently find out there goes far beyond that though. From the ability to store leases under tenant files via mobile camera apps to creating maintenance lists and even some marketing information.

Some are entirely mobile allowing you to run your business while you’re on the move while others are designed for desk top use. Some of them even allow you to accept online payments!

I’ve already stated I’m set up with a different system, so I can’t tell you many specifics about any of the various programs out there, but I do have something that may help.

Over the last several months I’ve tried to be much more active online with articles and it’s starting to pay off as more people are approaching me asking me to collaborate or share some information. Since I’m a tad protective of who I’ll work with and what I’ll forward on, many of them get refused outright, others I look a bit closer at and do share or collaborate with.

One of the groups that recently reached out to me was actually Reviews.com who review an extensive list of various products, items and services. In this case it’s rather timely as they had recently reviewed Property Management software.

I’ve read through their review and found it fairly informative, but since I’ve not actually used any of the software they reviewed or recommended it’s been a bit tough to confirm everything. Then, out of the blue I found out one of the landlords I’m coaching has started to use one of the software packages they recommend and he loves it!

Tada, now I have some verification!

The software he is using is TenantCloud which is a free cloud service application which allows him to use it on his mobile while he’s out and about. This makes it ideal for him as he’s managing a couple of rooming houses with a total of 20 rooms and this gives him tenant information right at his fingertips.

Plus it’s the top rated free software recommended by Reviews.com, so even more validation. To save you some time searching through their site, here’s the direct link for all the reviews of the property management software they looked at:

Property Management Software Reviews

Caveat About Self Management

I’ve shared some important information here, but I’d be remiss if I didn’t talk about one other important piece of the puzzle when it comes to self managing your property.

It’s actually the biggest benefit of having a property manager and the biggest negative about self management.

It’s having back up for when you need a break!

caveat about property managementIf you like to spend a couple weeks in the Caribbean during the winter months or perhaps you spend the summer at the cottage you still have tenants in place and a property to worry about if you self manage.

With property managers in place it’s one less item to worry about, but on your own you need some backup.

I understand I’m starting to sound like a broken record, but having systems in place and someone who can look after your property when you’re away (like another like minded landlord!) can relieve a ton of stress and guilt about zipping away for a well deserved getaway.

If you can find someone you can trust to help you out and in turn you can reciprocate, if you can set yourself up with systems to keep your business consistent and if you have something in place you can use to track your portfolio you are well on the way towards being able to self manage your property!

Now, if you’re already using some management software, you have some secrets about managing your own property, or you have some feedback about this article leave me a comment and tell me about it!

I always love to hear from you and while it’s great that people email me, by leaving a comment here it can help more landlords out there as they won’t see my email replies. And as always, if you find this helpful and you know other landlords who could benefit from it (or maybe you just want to warm them up to taking care of your property during your next getaway) be sure to share this via email or by using the handy social share buttons just below the article.

You can quickly share it too Facebook, Twitter or LinkedIn and show others you truly are an Educated Landlord!

I’m Just Your Typical Landlord Hypocrite

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This is probably where I need to say, do what the landlord says, not what he does!

I have to confess, I’m breaking my own rules. Now I guess in the big picture that’s not a huge issue, but when it comes to a tenant owing me a ton of money and me suddenly finding myself sucked into the Eviction Spiral, it gets a bit serious.

After all, I’m supposed to be the expert, yet I’m making the same mistake I tell you not too and I guess I better tell the entire tale. So let me take you down the garden path….

Landlord story, down the garden path with a tenant

 

This actually dates all the way back to December with one of my weekly rental tenants. He’s a very clean neat individual, but a) he doesn’t speak very much english and b) he owes me money.

As we zip back a few months to the beginning of December as typically happens to many of my rooming house tenants they vacate around mid month and head back to where their families are located. It’s typical as many of the construction projects close down early before Christmas and many of the workers get to enjoy a two or three week break and trades folks are who I cater too.

So this is something I tend to see every year, then in January they start coming back, rooms fill up and it’s business as usual. Now my nice clean non-english speaking fellow named Michel had no one to go home to. No family around, nothing, so he intended to stay at my property over the break. the only issue being, he had no income coming in to pay for the room. (This is where the hypocrite part comes into play!)

As I weigh my options I have a few things to consider a) he’s a good guy, b) he’s been good about paying in his past history and c) I have a bunch of vacancies anyway and if I kick him out or he leaves I still won’t be collecting rent for that room and I don’t know what the next guy will be like and how many weeks before there could be a next guy.

So I did the easy thing, I let him stay.

Fast Forward to January

calendarI just happen to live in an oil based economy region so as January rolls around many of the projects have moved to a hold status due to the uncertainty of oil prices and the viability of some of these projects going forward if oil stays low.

Instead of starting work at the beginning of January, it turns into mid January, then late January and finally the beginning of February before he finally lands a job. the good news is, he gets paid a lot per hour, so it own’t take too long to get caught up. (Now I don’t want you to read anything into this, but I’m talking about getting caught up in February and here it is March when I’m writing this…)

Anyway, according to my rules, I should have cut bait and recast already. instead I go with my gut and give him more time. This is the part where YOU need to do what I say and not what I’m currently doing with this guy.

Now Fast Forward to Late February

Now we’re in the last week of February and I get a text update from him (he uses French to English conversion to send me texts, sometimes it is very very confusing). This set of texts though is quite clear. He will have $2,000 for me on Saturday the 28th (yes, I let a weekly tenant rack up an outstanding balance of over $2,000, please find me a wall to bang my head on).

As you can imagine I’m pretty upbeat when I go to meet him Saturday, at least at first.

You see, he lost his bank card and couldn’t withdraw the money.

Is it time to panic yet?

Of course he can’t tell me this due to the lack of conversational English between us, but he has notes that someone obviously wrote out for him in English. So now I’m stuck in a tight spot. It’s the Eviction Spiral I referred to originally.

If I kick him out, I take a huge loss, so I have to take a stand.

His notes tell me he will go to the bank after work Monday get the cash and get a new card and will have the money for me Tuesday night. Experience tells me this is the perfect getaway for him.

If he has $2,000 that is enough for him to get into a new rental place, with the 1st being the next day, it’s an optimum time for him to skip out.

But I follow the hypocritical emotional road and lay down the line, Either I get paid Tuesday or he GETS OUT!!

Even in our lack of a mutual language I am quite sure I got my point across, now I play the waiting game.

My question for you, what would you have done?  Let me know your thoughts in the comments below and I’ll add an update Wednesday about what happened!

Update Friday

Just to make this worse, I’ve extended to tomorrow. The tenant paid $200 to buy a few more days, but tomorrow is the cutoff. I meant to update Wednesday, but it’s been one of those weeks that will likely be extending out for the entire month!

Poof, It’s Magic!

Yes, I’ve had another tenant disappear…

I was at the property Monday to get some work and cleaning done there (I rented a steam cleaner for the day, so I was bouncing from property to property to get the most bang for my rental dollar) and my tenant’s room was wide open, all his items were gone, the room was quite clean, his keys were on the dresser and he was gone.

Bottom line, I’m out a bunch of money, my faith in humanity is eaten away a bit more and in the end I can still sleep at night. I tried to help, deep down I knew it probably wasn’t going to work out for me, but as part of my nature I really do want to help people (hence this site!), just along the way I may have to take a little damage.

The hypocritical lesson to pass along is if things are really tight, you can’t take this chance. You need to clamp down immediately. I could probably rationalize some of the loss as I would have had a vacant room for multiple weeks anyway, but it’s still a loss. If you have more losses than wins, you eventually lose and in Real Estate, you lose big when you lose.

 

Hey Baby, It’s Cold Outside

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Can you evict tenants in the winter?Winter Evictions

If’ you’ve never heard the song “Hey Baby, It’s Cold Outside”, you’re missing out, it’s a classic. If you don’t know what the rules are about evicting a tenant in the winter where you live, you could be missing out on some cold hard cash, like several months worth of rent.

The rules are different everywhere and with the temperature hovering around -30 degrees Celcius (-22 Fahrenheit) with the wind chill as I start writing, I thought winter evictions might be a timely topic.

Can You Evict Tenants In The Winter?

I think the most common answer is yes, but it can depend. I know, not very definitive as far as an answer goes. Ask tenants and they will almost all answer no, but if you’re getting landlord advise from your tenants you may have a much bigger problem…

The problem is the rules vary from state to state and province to province and it would be unrealistic to know the specific answer for every city, town, state, province, district or country throughout the world. But that’s where the internet comes into play.

I did some quick research and actually couldn’t find any places that allowed tenants to stay, just because it was winter. I started by specifically looking at provinces and states that were known to be more tenant friendly and cold.  I looked at rules in New York state, Minnesota, Ontario, Quebec and Alaska to name a few and all seemed to be pretty specific.

Evictions can take place at any time of the year if tenants are in breach of the lease. Now to be fair, I didn’t check every state, province, city and town, so you’ll want to do some local research of your own just to be well educated about it!

Winter eviction of tenants

However, just because it isn’t illegal to evict them, there is not guarantee it can be done quickly. There is a ton of leniency built into the laws when it comes to issues like compassion, hard times and basically bad luck. Here it isn’t written anywhere how much time someone has to be out of the property when evicted.

This gives judges and hearing officers the ability to make decisions based on the evidence and this could mean a quick and effective eviction in more grievous situations. While in other cases they can be given 90 days or longer, but with specific conditions in place or it can accelerate the eviction timeline. These would typically be payment conditions, but depending on the scenario they can vary.

Have you evicted a tenant in the winter? If you have leave us a comment and let us know where you’re at! Maybe we can form a mini database of info right here!

To get it started, I’ve not just evicted tenants in the winter, I’ve also done it right before Christmas and no I’m not the grinch, I just play one on TV! Looking forward to your comments.

Is Your Rental Ad The Reason You Aren’t Getting Calls?

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Your Rental Ad Sells Your Rental For You

A good rental ad makes all the differenceI don’t think all landlords are lazy, but I’m constantly amazed by some of the rental ads I see online for rental properties. It’s like the writer took thirty seconds to put down a couple features of the property and thought they were done.

News flash, you’re not.

This is front and center for me right now as I have a vacancy at a property that is a two hour commute from me. I need to write an ad that attracts the type of tenants I want to rent to and that sells the property as I don’t want to make twenty or thirty trips up to meet people!

The good news is here is what my competition has in their ad (sorry if this belongs to you)

built in 2012, modern, includes washer, dryer, fridge, stove, dishwasher, microwave central vac. lots of parking, close to downtown, parks, hospital, highway 2a. lots of storage, basement area for extra room

It has five pictures and the main picture is an external shot of the townhouse complex with no indication of which unit it is and it actually looks very similar to the place I’m renting, but they didn’t put too much effort into selling it in my opinion.

It took me almost two hours to write my ad and although it’s not perfect, I’m pretty happy with it and I’m already getting a great response to it. Here’s how it reads.

Looking for a modern three bedrooms place to call home? This three bedroom two and a half bath property is going to make someone a beautiful home, so why not you!

The three good sized bedrooms upstairs are bright, have large closets and are perfect for a new family or someone who needs a little more space. With a full bath on the upper level and two linen closets, storage won’t be an issue, but even better is the ensuite off the master!

Yes, the master bedroom has it’s own full ensuite with tub and shower giving you the privacy and quiet place you need. Plus with the huge East facing windows in the room, you can wake up to the sun shining in every morning making it the favourite room of your house! What an incredible way to start your day.

The main floor is ideally set up with a welcoming living room as you come in the front door with plenty of room for entertaining or just a relaxing night at home after a busy day. Then as you walk through the main floor, first you’ll see the half bath on the main floor tucked away to the side, then further in is the wide open kitchen and dining area and the two french doors leading to the back deck that let summer in and provide you a quiet oasis to unwind on.

The secluded back space is shaded by several beautiful pine trees and helps make you feel like you are out in the country and away from the city. Plus, it provides a great place to BBQ and relax after a day’s work.

Finally, the lower basement level is ideal for storage. As an unfinished space it’s a large blank canvas for you to set up and organize as you wish and giving you roughly 700 square feet of storage. Of course you’ll want to leave a little room to take advantage of the washer and dryer that are included which means no more trips to the laundry mat and more home time for you.

Built in 2007, this modern townhouse is approximately 1,400 square feet and has everything you need. From the included washer and dryer to fridge, stove, built in microwave and even a dishwasher, all the conveniences to make this a home you love are here.

Being located along 55th street and beside 56th Ave, the location is ideal for a family. The High School is located just a few blocks West and the elementary and Catholic schools are located just a few blocks East of the property making walking to and from school quick an easy. Add in the several nearby park and fields and your kids will love the area.

The particulars. This is a non-smoking property and unfortunately we don’t allow pets. We are very particular and we do full credit and reference checks on tenants before a lease is ever signed. We are initially looking at a six month lease and at the end of the six month term will look at a yearly renewal.

Now for the numbers. Rent on this fantastic three bedroom two and a half bath home is $1,395 per month and we require a matching security deposit plus the first month’s rent before moving in. Utilities are extra and will need to be put in your name.

We are currently repainting the interior and expect this property to be available as early as the November 15th, but can also work with a December 1st occupancy.

We will be onsite again on Thursday November 13th from noon until 3, so if you are available to view it, you should email us right away, or you can call or text Bill at xxx-xxx-xxxx. Note this is a long distance call from Xxxxxxx, but if you text me I can return your call as soon as possible.

This highly desirable property in a great area will not last very long so if you are interested and would like to come for a viewing contact us ASAP.

So which property would you want to see? I have ten pictures (the max allowed) and my main image is the kitchen picture at the beginning of the article. Why the kitchen? Because the kitchen typically sells the property. The picture below is another image I used that gives an idea of the space.

Ads and images for your rental property help you rent faster

Painting A Picture

Part of my goal with my ad was to create a picture of a home that someone wanted to live in. I didn’t want to just tell them I had appliances and I was close to a few things. I wanted them to know what I was close to, how the property was laid out and to present an experience.

I believe I mostly achieved that, but when compared to the competition, it wasn’t hard. So the question for you is, which one would you want to go look at?

It was almost a year ago I received an email from a very nice lady down in Texas that was having problems filling their vacant rental property. She’d sent a copy of the ad and I made several suggestions to help her re-write the ad to make it more appealing.

In less than a week she sent the new ad and I wanted to go rent the place it was so well done! Their phone didn’t ring off the hook, but it definitely picked up (the area was pretty tough at the time for rentals), which goes to show the difference a good ad makes.

Now please don’t take this as an offer to send your ad in for help writing your ad!! My time is too limited and I’ve apparently set a bad precedent by being so available to everyone for questions and answers.

The important lesson from this article for you will be too hopefully learn a lesson about what you can do to help market your property to get more showings, get better tenants and get your vacancies filled faster.

Yes it requires going that extra mile, but the return is well worth it! And don’t forget to let me know which one you’d rather rent?

Bed Bugs – Pests In My Rental Property Part Two

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Bed Bugs – A Landlords Nightmare

Landlords and bed bugs - pests in my rental propertySo, here we are a week later and if you read my previous post where we first discovered we pests in my rental property (if you haven’t read it yet, please start here and then come back Bed Bugs Part 1), you’re probably curious to see how I dealt with them.

Well, I’m still actually dealing with these pests in my rental property, so it’s not over, but the good news is, our treatment is working after initially messing it up. Just to get you back up to speed, I initially had two options to get rid of them.

Bed Bug Treatment Options

Option one was spraying. This was going to require minimum three treatments and typically four or five. Each treatment costs around $600 and the overall effectiveness is around 90%. Part of the problem being where you catch the bugs during their life cycles.

If they are sprayed, haven’t died yet and then lay more eggs, you have to repeat with another spray and so on and so on, until you catch them at the right time. The downside being a) it’s not 100% effective, b) they become resistant to the pesticides over time requiring stronger and stronger chemicals and c) no one can be in the property during the spraying because of these chemicals for six hours. Then even after six hours, do you really want to be around the chemicals?

Option two is heat treatment. This works out to also require three treatments as the property has two upper levels and a finished basement. So one day in the basement, one day on the main floor and the third day on the upper level. The positive is this is 100% effective as they superheat the house to 120 degrees fahrenheit for several hours which kills the bugs themselves and I can only guess poaches the little eggs before they hatch rendering them inert.

This can be even more expensive though as it’s $1150 per day around here plus travel costs. Also, the tenants could stay for the first two treatments, although the house will be very warm, but on the third day I would have to put them up in hotels or find other alternatives, so it would easily be $4,000 for this approach.

Now fortunately, my pest fellow also introduced me to another option involving traps and dry ice. These involve small plastic containers with a center area where dry ice is placed and an outer ring that is covered in a fine talcum powder.

Bed Bug Traps

Using Dry Ice to Trap Bed Bugs - pests in my rental propertyUsing the dry ice traps was going to be considerably cheaper as the traps themselves cost about $120 for 24, plus the dry ice, which at the time I had no idea what the costs would be. It turns out for around 6 Kilos or 13 pounds, it’s just under $40 and I need that much each time I set up the traps.

The idea is you load up the traps, the dry ice which is CO2 evaporates and the bugs are attracted to the trap as the CO2 is what attracts them to people as they sleep. Once they climb over the outside wall of the container, they get trapped in the talcum area with the powder and can no longer climb out.

You simply go back the next day, empty the trap of all the bugs in the toilet and reload and repeat until there are no more bugs. Simple right? Well we really only learn from our mistakes…

Mistake number one, I picked up the traps on the Friday, went and bought my dry ice from one of the few local places that sell it, and proceeded to the property to set up the traps. I managed to roll this all into some other appointments that day and had all the traps set up by shortly after one in the afternoon and proceeded home to strip out of my clothes and set up a couple traps around my clothes in case I had brought visitors home with me.

Now it was waiting time! And learning time….

Apparently dry ice has a fairly short shelf life. So when I looked at my traps at home around nine that night, it was almost all evaporated, and by ten, completely gone. Since bed bugs are nocturnal, I wasn’t so sure how well this was going to work. My traps at home had nothing in them, which was good, I hoped, but the true test would be checking the property the next day.

The Next Day

So fast forward to checking the traps for bed bugs at the property and nothing. Absolutely nothing!! Just to complicate things even more, the dry ice place wasn’t open Saturday, Sunday or the Monday which was a holiday, so at this point I didn’t know if they simply didn’t work, if I set them too early, or if I really did have bed bugs!

Fast forward even more now to Tuesday. I’ve done some research and I’ve talked to my pest guy. He tells me that I should have caught something, even during the day if there was a huge infestation, maybe just maybe I only had a couple male bugs, and no females and I got lucky, but I’m best off trying again.

My research on dry ice helped me avoid a major catastrophe as I planned on buying more of it, taking it home and storing it in my freezer until that night when I would go out and re-set the traps. Apparently the extremely low temperatures of dry ice will cause freezers to shut down, instead you need to use coolers to slow down the evaporation and the coolers cannot be air tight as the gas needs to seep out. I was glad I did some research!

So picked up the ice, brought it home, put it in the cooler and off that night to set the traps around 7:30 and once again, I wait.

The Day After The Weekend After

So it’s Wednesday by now, time to see what if anything I’ve caught and lo and behold “Thar be bugs”! It looks like I’ve caught about 8 of them in the various traps spread around the rooms. All of them are very very tiny which indicates to my pest fellow that these are young bugs and I may have caught them fairly early in the cycle. That’s a good thing!

So Thursday night I repeat the process, I catch even more and here we are on Friday where I’m heading out this afternoon to buy a large order of dry ice which I’ll store over the weekend so I can make three more trips. I’ve been buying it in 6 Kilo batches, but for the weekend due to the decay of it, I’m going to pick up probably 30 Kilos so I still have some left over for Sunday.

The trick now is to stay on top of this every day until my traps remain empty. The positive is, it seems to be making a difference, none of the tenants are reporting any new bites and  the traps I set up at home haven’t caught anything which is making my wife very happy.

I’ve also found multiple other variants on dry ice traps explained out on the internet and I’m not sure if they will work better, worse, are easier to work with or would be harder, but this is working for me, so I will just carry on.

It does require cooperative tenants and they see that I am trying to help them which really helps, and hopefully by mid next week and for around $600 in total I should have this solved! Fingers crossed!

As always, love to hear your thoughts and any feedback you may have.