Some might think this is an obvious yes you should show tenants the house before they decide if they want to rent it but there are a lot more factors that go into planning than you might think. For an example the first thing people think are “lets put a for rent sign so we get a lot of inquiries on the property” This is not always a good idea depending on the are the house is for rent because if its not in a particularly good area you run the risk of break ins and possibly teens hanging out there cause they know its vacant (believe me I’ve seen it all) Other factors are it could be time consuming if you are renting it yourself and have to go by every time someone wants to see it. If you are using a realtor it could be quit expensive having to pay them to show it, usually they will require the first months rent as payment. Here are some strategies I’ve used that have helped me save money and time.
Have an open house, this is a really good effective way to show a lot of people at one time and only having to designate one visit. I usually have this day in the ad when I post it for rent. You also avoid the phone calls of people asking when they can see and asking questions this way they save everything for when they come. If you didn’t want to do it yourself you can pay a friend or family member to save costs its much cheaper that way.
Secondly and this is very discretionary I will leave the key in a lock box on the door and give them the code to go look. Of course this wouldn’t be my first option but seeing I feel really good about the person I would first request a copy of their photo ID and would have absolutely nothing in the house that is worth any value to steal would I take this route. Ive personally done it before using these steps and have never had an issue. I found both these methods to be very effective in saving time and money while still not missing out on the opportunity to find a renter.
Written by Scott Esmail
I get asked this question all the time “what is a better investment for my rental property monthly cash flow or appreciation?” The best answer I can honestly give is both, but sometimes thats not always an option so here is a little insight from my experience on both sides
Cash Flow in my option is always great! If you can find a way to do this with enough properties you can steadily increase your income and even replace it, in a lot of cases people end up giving up a job they may have been not to fond of and living off the monthly income. These types of properties are generally lower cost homes to purchase and can be more challenging to maintain. For example if you were to purchase a cash flow home it is most likely going to be in a lower income area, not necessarily a bad area but the higher the cash flow usually the worse the area will be. I tend to stick in the middle decent range. This will obviously cost some time in managing or paying for management as well as maintenance from having a tenant live there. These home however do tend to appreciate as well just not always as quickly but at the end of the month you should see a 8-10% return on your money.
Appreciation is also another great avenue to consider when buying a rental property. You won’t necessarily see any money right away and would have to wait until you sold the property but if you buy in the right area the price can drastically increase within a reasonable amount of time. One thing to remember when renting seeing what you paid for the home your monthly rent may not cover the mortgage or you might be just breaking even. Once you sell you should recover all the money you put in and more. The key to doing it this way is to buy in the right area at the right price.
Written by Scott Esmail
A 15 day notice is a notice you can give to tenants if they are not in a lease contract and are on a month to month tenancy. The purpose of this notice to be given is if you no longer wish to rent to the current tenants. You would need to check with your State or County to make sure this notice is applicable where you live, but this is what applies in the State of Florida.
Here is some information listed that can be found on the notice instructions “15 Day Notice – If the landlord needs possess of this property and it is not for any of the previous reasons and the rent is paid on a month to month basis, this form would be used giving the tenant a fifteen day written notice to vacate the premises. This notice should be given fifteen days prior to the rent being due. If the tenant does not vacate, the landlord would file his complaint for eviction. If a written lease agreement has been entered into, this section does not apply.”
Along with this you would have to complete and fill out the required information which would include the date of vacancy which would be counted from 15 days after the notice is served ( do not include the day it was issued count from the following day). The date it was issued must be included as well as how the notice was served, whether the be posting on the premises (which is the best way in my option) hand deliver, or certify mail which you need to make sure any previous agreement that you may have had that has expired prohibits this.
Written by Scott Esmail
I get asked this all the time by tenants ” There are some thing I believe need to be done in this house, I’m a contractor and I can fix it myself if you can discount the rent?” The answer I give every person is the same “NO” Absolutely not should you allow a tenant to do this and here are the reasons why.
My first encounter with this situation I was a new landlord and I bought a house that needed a lot more work than I thought. I had tenants go by and which point I told them how everything would be by the time they moved in. They suggested that they would be happy to do all the work in exchange for the first month rent and security deposit. Based off my calculations that was a great deal for me seeing the quotes I had previously received were significantly higher so silly me decided to go for it. I gave them a 1 month deadline and when the second month rolled around no work was even started an in fact they didn’t even pay their rent. To make a long story short I ended up having to evict them lost all that money I could have got in rent and could have had the house completed. Lesson learned so I thought
The next time this question came around I decided “no way” but the situation was a bit different so I took the chance. The tenant was already living there and was regularly paying rent on time and had a small issue which they assured me they could fix no problem and the cost would have been the same if I had to call someone in so I went for it. Everything went fine they fixed it no problem and sent me the receipt for parts and I deducted it from the rent. The following month they had called with another issue, again it was small but a bit bigger than the last one, since everything went well the first time I agreed they again sent me the receipt for parts and I deducted it from rent. The next month came around and I got the same call? Now Im like whats going on here, there were never any issues for the first 6 moths now 3 months in a row and ironically this happens every time rent is due? I decided this time “no” I’m going to send my people in to look at this now third issue in a row. According to the plumber the toilet looked like the part had been tampered with. This is when I realized because I let them get away with it the one time this had been an on going issue they had been trying to create to get a deduction in rent. This was the last time under any circumstance when I let a tenant repair anything for exchange in rent. Now I just say “NO”
Written by Scott Esmail
When it comes to ac units, it is important to be able to calculate the size of the unit required on your own. Generally HVAC contractors measure and decide the size of the unit, however you can’t just go by what they say they may try to get your business by offering th cheapest quote and under sizing the unit in order to be the best price, so I also like to do the calculation myself. I have had several houses that I have managed where the HVAC contractor took improper calculations based on sq ft size for example there was an addition added and wasn’t recorded on city records, or a HVAC contract just outright installed the wrong sized unit.
Why is this important ? Well to start if the unit is undersized then it may not be able to keep the house cool enough especially in the hot months of July and August. The a/c may be running constantly but not be able to get the house cool enough to a reasonable level. This can cause two problems for your tenants, the first major issue his the house is too hot and won’t reach a temperature that they set on the thermostat, and second the a/c constantly running may have their electric bill gets high.
Why should you care? It’s simple if there good tenant either one of these issue or both may cause the tenant to leave after their lease is done. You may think ” I’ll just will get someone else in who’s just as good and replace them”. The problem with that is the new tenants will no doubt have the same issues and this can lead to a high turnover and never-ending complaints.
What do it suggest? First when getting the a/c installed, calculate the square footage yourself, look at each room to see if that room is has central air vents to correctly get the square footage, if there is no vents like most garages, there is no need to include that in your calculations. Additions to houses can vary sometime they have the vents and others don’t.
Rule of thumb, for every 500 sq ft of vented area requires 1 tun unit, for example if you have 2000 sq ft of vented area you will require a 4 tun unit. What I personally like to do is have an extra half ton installed, just so that I am sure the cooling will be done extra well to avoid any future issues with the house not cooling well. Usually it’s just an extra $100-$200 in price and the labor price stays the same.
Written by Scott Esmail
When buying a rental property this is what I tend to look at when doing my walk through of a potential rental to gauge what it may cost me to get the house rent ready. These are some major costs your should consider when purchasing a new rental. First if you see that the property only has cosmetic items like paint, light fixtures, a major cleaning and other minor repairs that are not too costly, this is ideally what you want. The major cost come in when you’re looking at some of the following, the roof replacement, furnace and ac unit replacement, windows replacement, flooring replacement and foundation/structural.
Most of the items are going to cost a minimum of $3000 or more. An example is the cost for a new ac inside and outdoor ac unit for a 1200 sq ft house is approx $3000 plus taxes installed. The smaller the house the more inexpensive, the larger the more it will cost because there is more square footage. Also the cost can depend on the type of finishes or quality of materials you install. Personally I don’t like to install the cheapest product available, I tend to go up 1-2 levels from the lowest quality, the cost for the labor will be the same and sometime the difference in material cost isn’t that much for a nicer product and usually the materials will last longer. Not to mention you might be able to get a bit better quality of tenant. I also don’t go for the top finishes mostly because tenants seem to be hard on rentals. For example you can do your best to qualify a tenant but once they move in they might sneak in 3 dogs that can do a number on your floors. It’s happened to me a few times already and by the time you notice the damage has been done. My suggestion is once you’re in contract on a property hire a licensed home inspector who can identify the life left on this stuf, also many of them can give a rough estimate on the cost to replace. I have found that they tend to be a bit low on their costs and its usually about 20-30 percent more on top of their rough estimate. If the house is vacant the inspector will request that you have the utilities activated so that he can check everything.
After factoring the total costs for everything, if the property still looks like a good deal and your going to buy it, I would put aside an addition couple thousand just incase something come up or I go over budget which can often happen.
Written by Scott Esmail Professional Property Manager