Taking Over Grandfather’s Apartment Complex

Hi everyone! I’ve been presented with an opportunity of a lifetime today and need some advice from you amazing people!  My grandfather has been working out his will and apparently, I’m going to be the recipient of his 12-bedroom apartment complex. This is the opportunity of a lifetime but I’m a little nervous owning and managing this property at such a young age (22). The complex needs a lot of work, it’s currently on the lower end for rent for my area, $750 a month 2 bedroom 1 bath units.

I have a few questions and am looking for advise here on how to proceed. I’ve reviewed his lease (which is about 10 years outdated) and have noticed that a newly rewritten one will probably be the first action I take. It is located across the street from a private university, but no university student has ever stayed there. My goal is to turn it into more of a college student housing hopefully, but I know that opens up a whole other can of worms. The college has also presented an offer to buy the property so they can level it and build a parking lot there ($100,000).

I’ve just graduated college and selling the property would be a great short-term option, but my finance side is ready to take this head on and hang on for the long run. How do I manage a property? How do I proceed to meet all my tenants and know if they are good people?

How do I reinforce my soon to be written lease agreement? How do I evict people? How do I handle frequent late payments? If I wanted to get a whole new set of residents, how would I go about getting all the current residents out?
Should I sell now and not take on this project? I will be owning my family business within the next 10 years when my dad retires and I’m unsure how over worked I will be. Thank you all!

Response:

The value that the University offered for the property seems low to me. I know that you are young and probably feeling a bit overwhelmed but the reason you went to school is to learn how to think. I think you can manage this property and make money doing so. First of all, if you have some money available, I would have a contractor that your dad and trusts come and do an inspection of the property to find out what the problems are. Some common ones are old and leaky plumbing, asbestos in walls or in popcorn ceilings, mold, rotten wood in joist near bathrooms or kitchen, water leaking under the foundation, sinking or cracked foundation. Once you have that report you will have a better idea if this is something you want to take on.

Second, I am going to recommend that you invest in software for your property management. I own a property management software company, Smart Property Systems and know that we can help guide you all the way as well as provide affordable tools that will keep you on track to be successful.

Once you have done that, you can go to rentometer.com to compare your rents with the rents in the neighborhood that are similar units. Now review the tenant files to see who pays rent on time and who does not. Look at inspection reports to find out how they take care of the property. If there is no data, you will need to ask your grandfather.

Now schedule inspections for each unit. You are required to give notice before you inspect the units and I would recommend at least several days’ notice. Smart Property Systems customer service can provide you with a document to use for inspection. Be sure to fill it out as you go through and have the tenant sign and date it when you finish. You can then make a copy for them and give it to them when you speak to them next. Now you can make a decision about who will stay and who will have their tenancy terminated if month to month and not extended if on a lease.

 

Customer Service is an Important Part of Property Management

happy tenantsIf you work for a property management company you know the importance of maintaining good relationships with your owners and tenants.  And if you are self directing your own property management you probably know that tenants and landlords often clash.  But it does not have to be that way. You must stay on top of your management tasks, and let your tenants know that each one of them is important to you.

Our company has provided software for property management to over 20,000 subscribers since 2005.  We are recognized as one of the best property management software companies and, by the way, we have just rebuilt the software to be even easier to use thus making the communication with tenants even better.  The legacy software won a webby and the New Release has already won a Best In Business for software award. With all of this experience, there are some things that we know will help you get good tenants, keep your tenants happy and retain them longer.

Expect the Best from your Tenants

You are entering into a business contract with each tenant. You expect them to pay rent and care for your property in return for their access and right to occupy to a quality property in which to live or work if it is a commercial property.  Remember that it is a business relationship, not a friendship.  From the beginning treat the tenant with respect.  Once the lease is signed the tenant has agreed to pay rent on time.  Be sure that he/she does just that.  We recommend use of automated rent payments made through a tenant portal which contains all of the pertinent information that they need plus a way to make their rent payment in less than a minute. If they are late, do not offer to waive late fees. In the automated system, late fees are added automatically on the designated day.  Waiving late fees only encourages more late payments.  If you have a chronic late payer, make arrangements so that rent is due after they have received their wages or can reliably make the payment.  If that means you extend the grace days a few more days then that is a better way to resolve the issue than to waive late fees. You might also have them pay two times per month instead of once.Don’t worry, if they are using automated rent payments, the accounting is done for you when that payment is made. And remember that any changes to the original agreement need to be memorialized in writing and signed by both parties.

You Make the Rules

It is the responsibility of the landlord or property manager in conjunction with the owner to make the rules for tenants residing in the property.  Include those rules when they sign the lease.  We recommend a separate document stating policies and rules as well as vacating procedures.  The tenant signs that document and it becomes part of the lease.  Tenants need to know the rules before they move in, not when they have violated one.  Tenants need to know that they are responsible for  being cordial to neighbors and abide by the rules of the property.  It is always best to meet the tenant in a professional environment like an office.  Our SPS software offers esign for leases and notices so that an office is not required to look professional.  One other thing that is very important is good communication.  The SPS software has tenant portals through which the tenant can easily notify you of any issues or report maintenance items.

Get Repairs Done Quickly

Things happen to rental properties during normal wear and tear, and repairs need to be done to keep the property in good shape.  Occasionally there is also tenant caused damage, like a child flushing toys down the toilet or someone hitting the garage door with their car.  Both types of damage should be repaired by the landlord or property manager, not the tenant.  The most important thing that a landlord can do is get the repair done as soon as humanly possible.  The tenant can be billed for tenant caused damage or the security deposit can be used if they do not pay. We recommend billing first so that the security deposit remains in place for the future.  Always follow up after the repair with the tenant to be sure that the repair was done to the satisfaction of the tenant.  We recommend that you inspect the repair or at the very least have the contractor take pictures before and after the repair and send them to you.  Your tenant will know that you care about their comfort and you will retain them longer.  Maybe even more important is that you will be sure that your property is kept in top condition.

You Must Do Inspections

Inspections are part of the price of doing business.  Inspections done regularly will insure that there is no major damage being done to your valuable rental property.  With new tenants, you may want to do an inspection or visit the property in one month to see how the tenant is faring.  At the same time you can look around to see how they are caring for the property. If all is well you may schedule the next inspection visit for 3 months.  If things look dicey, give notice to clean it up and come back in a week to inspect again. This may seem like over kill but we have seen some tragic situations experienced by our subscribers when they do not use the inspection software available to them. One subscriber found three families living in a two bedroom house.  Only 4 people were on the lease.  Another found a herd of cats, none of whom were authorized by a pet agreement. In fact the pet agreement clearly said that no pets were allowed.  If these situations had not been discovered, you can only imagine the damage that would have been done to the property.  Inspections are an ounce of prevention against pounds of cure.

Develop Good Relationships

Always be cordial to your tenants.  They are supporting your business and even if you may not like them personally, you need to be pleasant.  Remember that your tenants are not your friends.  They have a business relationship with you.  That does not mean that you can’t send Holiday cards or throw parties for the multifamily community once in awhile.  But in the process of running your rental business, be firm and fair, attentive and respectful.

Smart Property Systems gives our subscribers the tools to be able to develop good relationships with tenants, members of associations, and owners of residential and commercial properties.  That is accomplished with automation of most repetitive tasks and by allowing all stakeholders in the business to easily communicate through the portals.  If you are not using software or are unhappy with your current software check out https://smartpropertysystems.com.

Submitted by: Timmi Ryerson
December 18 2015

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Engaging and Communicating with the Millennials: The Next Generation of Renters

cell phones

The next generation of renters is a tech savvy group who will use technology at its best to find their first or next perfect place to rent. That means that they will use tablets and cell phones to search for available listings, not print media and newspapers.  They will also want to be able to conduct the business of renting via their phones or computers. That means that rental housekeeping and tasks should be automated and able to be done over the internet.  Messaging and notifications including signing of leases and paying rents and deposits and other charges will be done via the internet as well.

 

First consider how the Millennial Generation will search for places to live.  They will use their cell phone or tablet, most likely.  Some will use a computer at work or home to search.  Rarely do your prospective tenants just walk up and rent a unit. So when a vacancy is advertised, it needs to have all of the relevant data present for the viewer’s information. The other most needed option is to have pictures and videos available for them to peruse at their convenience.  We suggest that our Smart Property Systems (SPS) subscribers give viewers enough pictorial evidence and data about each room that the prospective tenant can practically decide to rent by seeing the webflyer.

What is a webflyer? It is a template that our subscribers have to set up their internet advertising. That template allows the user to write a detailed description of the property, explain a bit about the neighborhood and amenities close by, the specifics about the rental unit, rent, date available, security deposit and more.

webflyer active.  SPS  recommends that you take a video of the property and post it to YouTube then connect that URL to the webflyer so that the prospective tenant can get a better idea of the flow of the property. Many of our subscribers have told us that the cost of a subscription is cheap compared to the cost of advertising the old fashioned way.  A subscription has all management tools needed to take professional care of your rental properties and includes the cost of advertising vacancies and for sale properties. It is a much better option than using print media and newspapers which do not  accept pictures and you are required to shorten descriptions to keep the cost down.

Of course offering a terrific property which is kept in top shape is your best bet at getting vacancies turned quickly. Being able to offer online rent collection and a way to pay a security deposit on line will be the future for fast turn-overs.  Smart Property Systems has a built in library which allows the user to attach esign to documents and send leases via email for signatures. This is also a huge time saver for those busy prospective tenants who want the convenience that technology offers.

Technology is a must in the present and future world of communicating with the Next Generation of renters.  Check out our Smart Property Systems software to see that it provides that technology which you need to meet the needs of your investment rental business future.

Timmi Ryerson
CEO
Smart Property Systems

Qualities of a Good Tenant

What are the Qualities of a Good Tenant?girl with halo
They say that you can’t judge a book by its cover. Well, that may be a fine saying when it comes to literature, but when you’re trying to find the right tenant to fill a vacancy, there’s a bit more at stake. After all, unless you want to deal with property damage, late rent payments, and time-consuming eviction processes, you should be doing everything in your power to determine exactly who will—and who will not—end up being the kind of renter you’re looking for. But what is it exactly that defines a good tenant? We’ve narrowed it down to seven specific qualities that you should look for when trying to select the right person to entrust with your property.

1. Job Stability
While almost anyone can scrounge enough money together to pay rent every now and again, those who are able to consistently get the check into your hands before the due-date are generally those who have stable employment. At the same time, the ability to hold onto a job for an extended period demonstrates commitment, reliability, and maturity. Be wary of any prospective tenants who have worked multiple jobs within the last few years, as they could end up being unreliable when it comes to their own responsibilities as renters.

2. Cleanliness
No tenant stays forever, and once a tenant leaves, you’re going to want your property back in the same condition that it was when you first rented it out. Well, in order for that to happen, you’ll need to have tenants who take personal responsibility for the condition of the property while they call it home. Tenants who are themselves clean and demonstrate good personal hygiene are more likely to translate that trait into good housekeeping and property management skills.

3. Honesty/Integrity
Your relationship with you tenant is defined by a contract, but there’s no way that that contract will be able to determine responsibility for every unique situation. Likewise, you’ll often have to rely on the tenant themselves when gathering information regarding issues and problems. A trustworthy renter will make things much easier on you by being honest and living up to their part of the rental agreement without looking for loopholes.

4. Lawfulness
You may think that as long as you get your rent check on time, it’s not any of your business how law-abiding your tenants are. However, the reality is that in addition to posing a danger to property, neighbors, and even themselves, criminals are often much more likely to try to take advantage of you and avoid their own responsibilities as renters. Additionally, as the owner, you may be held legally liable for criminal activity that occurs on your property. Suffice it to say that tenants who engage in illegal activities will cause you nothing but stress and expense in the long run.

5. Thoroughness/Attention to Detail
A rental agreement is a legally-binding contract. As such, it’s not something that should be entered into lightly. Prospective tenants who make a point to read and understand the lease—even if they have to ask questions along the way—show their own respect for the agreement. And, because they are willing to take the time to figure out what exactly is expected of them as a renter, they’ll be less likely to renege on the agreement.

6. Friendlyness

personalities

personalities

Human beings are social animals, which means that we tend to work best when we get along with each other. So, unless you’re renting out a piece of property that’s out in the middle of nowhere, you should consider just how friendly your potential renter is. When renters are unable to play nice with their neighbors, then invariably the end result is increased complaints, reduced renter satisfaction, and an all around cut in your profits. Try to make things easier on everyone involved, and find tenants who make good neighbors.

7. Low “Stress Quotient”
If you take the various traits displayed by your tenant and add them all together, you get something called the “stress quotient.” This is a general idea of the amount of stress that any one particular tenant might cause you. So, talk with the tenant, do background checks for criminal and credit history, ask for references from previous landlords, make note of the state of the car they drive, ask them directly about criminal activity and drug use, and yes, go ahead and judge that book by its cover (within the legal bounds of the Fair Housing Act, of course), because once the contract is signed, you’ll be stuck with each other for a while. If you can locate someone who demonstrates these seven traits, you’ll be much less likely to end up having to regret it.

So Why Do I have to Do Inspections

Well as a matter of fact, you don’t.  But we do not recommend that approach. This is a multifaceted topic for discussion and it will require us to discuss a full approach to property management.  If you have looked around our blog or our web site you have heard repeatedly that the most important job a property manager/owner does is tenant screening.  That screening should include a credit report and a criminal history along with identity verification as the very least.Furthermore, we recommend that you screen every person over 18 who will occupy your property. This should not be a cost to you.  You should charge an application fee which will at least cover the cost of the screening report.  Now that being said, you will certainly get a better quality tenant when you use the screening.  In fact what we see many times is that when you state that tenant screening is required of every applicant, those who know that you will find something  that will reflect badly, do not even apply.

Now that you have screened your tenant and they are signing the lease, be sure to tell them that you do regular inspections.  On our site it is part of the lease and the schedule is made at the time you create your lease.  But now it is time for me to tell you a story.

When I first bought my investment properties I had to do everything myself because software like we have available at SPS was not to be found then.  I actually lived in a different state from where my properties were located.  I had nice units which had tile bathrooms, granite counter tops, high grade vinyl in the kitchen and medium grade carpets in all other areas.  One of the tenants I had in a three bedroom 2 bath unit asked permission to have his adult daughters move in with him.  He had always paid his rent and every time I had been there the place looked well kept.  So I agreed.  My first mistake was not to do screening on these adult daughters.  That winter was particularly hard and I contracted with a local person to collect the rents for me.  When I returned the next Spring, I noticed that the yard of that unit where the daughters had moved into was very unkept.  The grass had not been mowed and there were tire marks all over the from lawn area.  So I filled out a notice to comply and posted it on the door.  They had 3 days to remedy the problem.  I came back three days later and nothing had been done.  I knocked on the door and there was no answer.  I posted a three day notice because their rent was now late. I also posted a notice to do an inspection in 24 hours.  I returned the next day.  No one was home.  Just then our friendly local gendarmes drove by.  I stopped him and he said that he had started doing daily drive by’s for MY property because of all of the neighborhood complaints. (I didn’t have time to ask him why I had not been notified). I immediately asked him if he would accompany me into the unit.  I had to show him my notices and he agreed.  We used my master key to enter and what I found was appalling.  I had never seen such filth and destruction. He told me to stay at the door and he actually pulled his gun to inspect the unit.  Then he called the hazardous materials team.  They found dead kittens in the kitchen cupboard.

Every inch of the place was ripped to pieces.  The garage was filled with torn out insulation.  We found unspeakable things throughout the house and in the back yard.  The upshot was the the girls had abandoned the place and others had come in and trashed everything.  I called the father and he pleaded innocencebecause he had moved out as soon as they moved in.  My cost to repair the unit was over $10,000 and we lost three weeks rebuilding the unit to make it habitable.  I filed a lawsuit against the father and he declared bankruptcy.  Because I had not had the daughters sign a lease agreement I had no recourse against them.  What a mess and what an expensive lesson.

But you can learn from my mistakes.  If I had done an inspection, this problem would have been discovered within a month.  The damage would not have been nearly as costly.  I could have demanded improvement or evicted them for failure to comply then.

So how frequently should you inspect your properties. The answer is “Well that depends”.  If your property is located contiguously with other properties which you own, your other tenants will always report problem behavior or suspicious goings on.  And as your tenant mix improves because you use tenant screening, you will come to rely on all tenants to assist in keeping the neighborhood safe and nice looking.  If you own properties which are not contiguous, then you will want to schedule monthly inspections for awhile.  As you see that a tenant is caring for your property as required and continues to live in the unit and pay rent, you can gradually space those inspections farther apart.  If you find a problem at any inspection you should notice the tenant immediately to remedy the problem.  Failure to do so at inspection, will not look good to a judge if you ever end up in court over damages.

In the SPS software we schedule the inspections at the time the lease is created and notices of inspections being due are sent to both the tenant and the manager 4 days before it is scheduled.  I love that about our system.  Remember to take your camera.  Dated and time stamped pictures can be taken and uploaded into the SPS platform for a complete record. Or you can keep a physical file on each tenant and the pictures should be kept for reference in that file.

So that is our take on why every property owner should do inspections.  Do you have stories to share about your experiences? Post them in the comment section.  Others can learn from your experience.

My new motto after that horrifying experience was ” Be proactive, not reactive in all aspects of property management.”

I have a very disturbing video for you to see.  These people were devastated by what they found at their precious and valuable rental property.  Watch at your own risk….it is really bad.

http://www.youtube.com/watch?v=MUseCJ7PhLQ&NR=1

Welcome to the Smart Property Systems Blog

Have you ever felt like this after a day working on your rentals?  Most of us have. This page has been created to offer ideas and solutions to common problems associated with managing investment properties of all kinds.  Why would we do this, you ask?  We are a company who has a subscription based software as a service, in the cloud for property management.  We work with our subscribers and tenants all day long and get much insight into what is happening in the world of investment real estate.  We want to share our ideas with you and get your feedback as well.  Of course we would love to have you visit our web site and would like even more to be your go to choice for property management software.  But our main focus on this page is to offer information.  We welcome your comments and wisdom as well.

Together with input from owners and managers like you, we should be able to compile a pretty good library of how to’s and best practices which will help owners/managers solve even the most difficult problem rental or rental problem.   There are a variety of subjects which will be discussed.  I will post interesting articles and we can all comment on them.  We can add topics as you wish.

Our goal will be to make everyone who participates here be able to have that same look of smug satisfaction as the young woman at the top of the page and not the one holding her head in her hands.  So welcome and let’s start sharing our solutions.

What Does Charisma Have to Do with It?

charisma

 

Are you a c property manager? Do you try to be everyone’s friend when they rent one of your properties? Most people think Charisma is vital to the relationship between landlord/manager and tenant. However the short term benefits of being everyone’s new best friend are often neutralized by the long-term consequences.

Charisma interferes with judgment. It is said that there are three ways to influence others. They are reason, force or charm. Charm is based on emotional manipulation whereas reason and force are not. (Even when we are forced to do something, we do it for good reason.)

It is important to consider what you want from your tenants and what they want from you. By being clear, concise and business like, you will establish that relationship from the beginning.

Meeting the tenant to show a unit is usually the first face to face contact you will have. Dress for success. Your first impression will set the relationship off to a good start if you show up as a professional. Remember that if this tenant wants the unit and passes tenant screening, that you could have a long term relationship developing. But it is business, strictly business. You will be collecting rents, and possibly utility and other payments every month. You want this tenant to respect and care for the property. You also want this tenant to abide by rules and be sensitive to other tenants and neighbors in the area. All of these details are certainly included in your lease, but when you have a charismatic relationship with your tenants, it is easier for them to smooze you on being able to pay rent late, Or they will tease you out of them not mowing the lawn often enough. You know what I am getting at here.

We suggest that you use our online rent collection so that everything about rent is automated. They cannot call the system and complain that they had a car repair and cannot pay rent on time. They know that the system will send the late notice and attach a late fee automatically. We also recommend that you use the message system to communicate regarding repairs and maintenance, etc. so that there is a record of all communications kept for that tenant. That way no one can ever come back to you and say “You never told me that.”

So the message is that you already have enough friends. Tenants can be acquaintenances, but you are not ever going to be their hero. Put some respectful distance between you and your tenant and you will enjoy your management experience much more

Stay On Top of your Costs for Maintenance

Painting a unit is one of the large costs of maintaining a property is top condition. I have found that unless you have specific language in your lease agreement, that you may get stuck with having to paint at your cost between every tenant.  So my first recommendation is that when you paint, it is
recorded in your maintenance record and you determine what the lifetime of that paint job should be, based upon the quality of paint you use.  Consider normal wear and tear and then set the timing.

Put that timing into your lease agreement.  For example, you have just painted an entire unit including the garage space.  You expect that paint job to last
for 6 years.  If the tenant stays for one year and some painting needs to be done after they move out, you can then prorate the cost of that painting against
a deposit based on the time line for painting you put in your lease. Then update your painting timeline again. If the tenant stays for 6 or 7 years and then moves out, you will pay for the cost of repainting yourself. But the benefit of not having a turnover in that period of time gives you more of a chance to be profitable.

How often do you paint the outside of your buildings, fences and carports etc.  This is another large expense and lifetime of that paint job on the outside is another important consideration.  If you have single family residences, this is a no-brainer.  Damage caused to the exterior of the building is the tenant’s responsibility.  But when you have multiple families in a building, it becomes harder to assign damage.  I had a situation once, where I had just repainted a group of 12 duplexes located in a culsdesac which meant that no one came into the area unless they lived there.  About two weeks later, I came to oversee
a repair and found graffiti on the buildings and some of the storage sheds.  It is hard to assess blame in that case, as there were no stated witnesses. So a letter went out to all residents regarding the damage.  All of them had the stated lifetime for painting as an addendum to their leases.  So all were going to
be assessed for the repair of the damage.  Amazingly in less that two days, the culprits were caught by the other residents and the mystery was solved. The only tenant charged was the family of the two boys whose parents had bought them spray paint cans.  Yes Ethyl, that is a true story.

Replacing carpeting and vinyl flooring is another large expense required to maintain a property.  Your estimated lifetime for a carpet and vinyl/wood etc. for flooring will depend upon the grade of product you purchase and install.  The decision regarding quality will depend on the type of property you are managing.
For example, you would not choose a $35 per yard carpet to put into a rental which catered to young families with pets.  But you would consider doing that
quality for high end apartments which drew 55+ year old tenants who were not likely to have unattended pets.  Flooring and carpets have lifetimes based on quality.  Again, these details need to be added to your lease.  If there is damage to flooring done and you have your lifetimes built into the lease, it is likely that you will have not problems collecting against deposits for damage done during that expected lifetime.  I always used the same carpet for each unit in multiple units and then stored the left over pieces so that they could be used for “coring” if a section of carpet was damaged beyond repair.  That way I could replace a section which was dye matched and would not have to replace the whole carpet.

Just a note about allowing pets.  Dogs and cats often use the carpets in a new home to”mark” their territory.  Another problem I found was that owners would leave their animals in the unit for hours at a time, especially if they worked.  Male cats have a tendency to “spray” when they are scared or upset, which also damages walls. Inevitably there was damage when pets were allowed on the lease, and these odors are very difficult to eradicate. There will also be other damage such as scratches on doors, broken screens, dirty walls from contact .   Because this was a very consistent problem,
I began to charge a hefty non refundable pet fee.  This additional fee helps when you have to rip out a whole carpet because of cat sprays,especially when the deposit will not cover the costs.  We found that almost every time this cat odor problem was present, we would have to seal the floor and a few inches up the walls with white shellac   It was the best alternative to ripping up the sub floor which is VERY expensive.   The white shellac seals the floor and helps to ameliorate the odor problem. Once it is thoroughly dry the new pad and carpet can be laid.  Wood flooring is creates a similar problem when damaged by pets.  If a tenant has had cats that don’t use the litter box or dogs who just can’t wait, the whole floor may need to be stripped,sections removed and the sub floor shellacked as well.

Water damage is a common problem with rentals.  It is caused by leaky faucets and drain pipes.  But the biggest problems are usually under the commode or around the shower.  Regular inspections will  reveal if a tenant is abusing the premises by not being careful about water.  One common problem is that the tenant does not have a shower curtain and says they “can’t afford” to buy one.  We fixed that problem by always supplying one.  It is very important that the bottom of the shower curtain be contained within the tub and along the front and back wall of the tub. Lack of  attention to these details will cause water to splash onto the bathroom floor. There are shower curtains which have small magnets in the edges and magnets which attach to the wall.  These work well to solve the problem of water splashing out of the tub or shower area.

If water is allowed to splash, eventually the vinyl or tile  floor will discolor and degrade.  Water can then get onto the sub floor and will cause rot over time. The same problem will occur around a toilet which is improperly seated, drain pipes which are clogged and leaking, lack of caulk around a tub and its fixtures. When rot is present, it must be removed as it will “travel”.  After the section of rotted wood is removed there are products available to coat the remaining structure so that the rotting process is stopped. (We used to call the product we used green slime) . You can then add a new section to the subfloor and redo the vinyl or tile on top. If these items are in good repair when a unit is rented, and you do regular inspections, this kind of damage can be prevented.

Appliance replacement is another major cost.  My experience is that it is worth buying appliances which are mid range, (not the cheapest and not the high end).  If you buy in groups, you will get better prices than if you buy onesie twosies.  Use the manufacturers recommend life to establish your timeline.  Stuff
happens and bulbs burn out, oven elements break.  But lack of care to appliances was big on my “charge the deposit” list. If I had a tenant move in to a sparkling clean kitchen where the range and refrigerator were pristine, and found them gummed and greasy dirty at inspections, I would inform them that the problem would be solved by them within two days or I would bring in a cleaning crew at their expense. If the burner pans were trashed, the tenant had to replace them immediately.  This practice stops the problem in its tracks because the tenant  bears the cost.  Lack of care to appliances caused abnormal wear and tear and will deplete the life expectancy of your equipment.  It is important to keep on top of this common problem through regular inspections.

Use timelines for the life your major maintenance items and do regular inspections.  It will save you time in the long run and make your business more profitable.

By: T.  Ryerson

 

Will the Problems with Property Taxes in the UK Come Home to the US with the Looming Cliff?

MONDAY, 03 DECEMBER 2012
UK Chancellor George Osborne is being urged not to tinker with property taxes when he makes his Autumn Statement later this week or in his 2013 Budget.In March 2011 stamp duty was increased to 5% for properties above £1 million, affecting many ‘ordinary’ family homes in London and the south east where property prices are much higher than the rest of the UK.

In March this year stamp duty was increased further to 7% for people buying properties over £2 million in their own name and 15% through corporate vehicles.

Both moves are regarded by many experts as having had a negative effect on the residential property markets. Last week, London Central Portfolio (LCP) reported a 53% decrease in Greater London transactions between £2 million and £5 million caused by the legislation changes.

Newly analysed data now reveals that this suppression extends to the whole of the country. According to HM Land Registry, sales between £2 million and £5 million across all of England and Wales have fallen by 30% in the third quarter of 2012 compared with the same period in 2011. Even the prime central London market has seen a reduction in sales of 9% across the board this quarter.

LCP points out that this has resulted in a massive loss in stamp duty to the exchequer. It puts this at £203 million. It also reckons that this has hit jobs and therefore the general economy.

‘Given the fragile state of the property market, stamp duty is unlikely be tampered with under the £250,000 mark where 75% of all of purchases take place. However, anyone with a property worth £250,000 upward should be on guard for higher charges at the next Budget and that means half of all the buyers in greater London,’ said Naomi Heaton, chief executive officer of LCP.

LCP has calculated that a fall in sales of 30% for all properties between £250,000 and £2 million on the back of a 1% increase in stamp duty would result in a further net loss of £297 million in tax receipts over one year.

‘Given the evident negative impact of higher taxes, in what is traditionally a buoyant quarter, and continuing uncertainty whilst buyers wait on tenterhooks to see where the next blow will fall, there is likely to be a further reduction in activity and associated economic fall out. Increased taxes do not always result in increased revenues and the tax losses due to SDLT changes are a clear example,’ added Heaton.