Keeping the Tricks out of Halloween and Your Properties

Pumpkins line porches, fake spiderwebs adorn door frames, and soon little princesses and superheroes will be milling about looking for tricks or treats.

As a property manager and/or landlord of multi-family housing, you don’t want to be this Halloween’s scrooge, but you also don’t want to personally invite every pumpkin smasher, toilet paperer, and Halloween trickster into your apartment building or complex.

There are some things you can do to foster the Halloween cheer without fearing for your property.

  • Have a patio/front porch decorating contest. Nothing is more fun than a little friendly competition. It’ll get the kids and the “kids-at-heart” involved and excited. You can offer multiple awards such as scariest, funniest, most creative, etc to get even more people excited. Little activities like this can really bring a community together.
  • “Halloween-proof” your apartment building or complexes. Make sure all lighting is working and all trash is cleared away. You may even enlist a staff member to “patrol” the area to make sure no unwanted mischief happens—there’s no need to have to file an insurance claim if you’re prepared. Parent tenants will thank for keeping the area safe for their little trick-or-treaters.
  • Decide if you’re going to allow trick-or-treaters into your building or not. In some areas, it may not be a good idea to participate, or you may want to set some rules (such as trick-or-treating hours). But if you choose not to, make sure you have some substitute for the poor little kids who live in your apartment complex, such as passing out your own candy at the front office or lobby.
  • Do an apartment tenants only trick-or-treating event. This can be a safe alternative to traditional trick-or-treating. On Halloween either pass out a list or have residents indicate on their door if they would like to participate—that way those who do not wish to participate can enjoy their evening in peace.
  • If you’re feeling especially ambitious, have a community family-friendly Halloween costume party. Everyone needs an excuse to dress up—even adults, otherwise Halloween is just another day. Host the party early in the evening or on another evening, so it doesn’t get in the way or trick-or-treating. Ask tenants to bring refreshments, and you can provide the drinks. Remember—the staff needs to dress up also!

Remember the goal is to get the tenants to know each other and enjoy each others company. If your tenants like each other, they are less likely to complain about that “noisy” neighbor, and create a more harmonious atmosphere. There’s no reason why you can’t mix work and fun during the holidays.

Meth Crime for Landlords Part 3: Meth Lab Clean Up

In our last article, we talked about Meth Lab Detection in a rental property.

Did you know  that for every pound of meth, six pounds of hazardous, toxic waste is created? The toxic waste seeps into the carpet, walls, ceiling, HVAC system, and our bodies.

Because of the toxicity and criminal nature, landlords should not enter the property once they suspect or have proof of a meth lab, instead they should notify police immediately. Once the property is vacant you’ll want to contact your insurance company. And while most insurance companies don’t foot the bill for damages from meth labs, you should still work closely with your insurance company during the cleanup process. They will also help you select a certified hazardous waste cleanup crew.

The trained professionals will secure the site for police investigation, which could take awhile. Once the police give the go-ahead, the crew will remove all chemicals and equipment and start the following cleanup process.

  1. Air Out Property: The chemicals will lose some of their potency and smell once aired out properly.
  2. Rip Out and Remove: Any and all contaminated property will be demolished and removed. This could extend as far as furniture, carpet, wallpaper, sinks, toilets, tubs, and even pipes. Anything that absorbed the chemicals or been contaminated by the chemicals. Prepare yourself for some major repair costs. Most likely, the property will have to be gutted.
  3. Washing: The crew will wash all surfaces such as ceilings, walls, and countertops with chemicals. However, in really bad cases, these may also need to be replaced.
  4. Clean Vents: The ductwork and surfaces of the ventilation system will have to be thoroughly washed as well. All air filters will have to be replaced.
  5. Clean Plumbing System: The plumbing system will have to be flushed with a chemical cleaner. However, in extreme cases the plumbing may have to be replaced.

These steps are not all-inclusive; it all depends on how severe the contamination is. But as you can see, the longer the contamination, the more extensive the demolition and repairs will be and the more it will cost you.

Once the cleanup is completed, the crew will test the property to make sure it is fit for habitation. Each state has its own standards for what is deemed safe.

Once you have the clean bill of health, you can rent out the property again. Not only have you spent thousands on the cleanup, but the property has been vacant for months, and its reputation will make it difficult to find new tenants. (State law varies on what you must disclose to future tenants.) Even though your property is now safe, many applicants may be turned off by its history.

We have touched lightly on all of the hazards of a meth lab, but the threat and harm is real, and it is a growing problem in rental properties. What are some of the steps you’ve taken to prevent or deter tenants from starting a meth lab on your property?

Meth Crime for Landlords Part 2: Meth Lab Detection

As discussed in our previous article “Prevent Meth Labs from Overtaking Your Rentals”, meth labs are a disaster for landlords and property managers. Unfortunately, once there’s been even the slightest bit of meth manufacture you need to go through the entire cleanup process. Of course, the sooner you catch it, the less extensive the demolition and repairs will have to be. (There is also the risk that a meth lab could explode—they are extremely volatile—which would lead to a whole new set of problems.)

Telltale Signs of a Meth Lab

Many normal, household chemicals are used to make meth, but watch for excessive amounts of the following:

  • Used coffee filters that are stained red or have a white, powdery residue
  • Empty over-the-counter cold and allergy pill boxes (pseudoephedrine or ephedrine)
  • Empty containers of antifreeze, starting fluids, white gas, ether, acetone, paint thinner, ammonia, propane tanks, lye, and more.
  • Bottles with holes in them with rubber tubing attached

Look for These Unusual Behaviors

  • Hauling trash away in the middle of the night
  • Tenants keeping very late and unusual hours
  • Unusual collection of broken items
  • Smoking outside, even if property allows smoking. (A spark from a cigarette could cause an explosion in a meth lab.)
  • Ventilation systems rerouted through windows or into the ground
  • Grass or plants that suddenly die—as if sprayed with weed killer, or stained soil

Neighbors and community members may see or experience other symptoms of a meth lab. Meth is extremely toxic and can cause a wide range of health concerns from either short or long term exposure. The toxins can be inhaled or absorbed through the skin. Common health problems are headaches, fatigue, skin burns, nausea, chest pain, respiratory problems, kidney damage, cancer, and in extreme cases death.

Although taking steps to prevent the creation of meth labs on your properties is the only way to avoid this problem, the sooner you detect a problem the better off you’ll be in terms of damage cost. If you can’t prevent, early detection is key.

Look for another article discussing the details of meth lab clean up.

Meth Crime for Landlords Part 1: Prevent Meth Labs from Overtaking Your Rental Properties

Among the worries of landlords, a new but very real concern is a tenant setting up a meth lab on your property.

Meth labs are not only a crime, but create hazardous waste and are incredibly expensive to clean (insurance companies usually do not cover meth clean up costs). As the use of methamphetamine rises across the country, so does the makeshift meth labs. Unfortunately, the ingredients to make meth are pretty inexpensive and accessible, meaning that just about anyone can set up shop and make a pretty penny.

Meth labs are popping up everywhere, and rental properties tend to be a favorite location. Once a meth lab is established, there’s not much you can do, you’ll still have to go through the whole cleaning and legal process before you can start renting again. Your only defense against a meth lab is prevention.

  1. Strict Tenant Screening System: Meth labs tend to pop up in rentals that are rented by a landlord who self manages his properties. These landlords usually only own a few properties and may not have a fixed system in place for screening tenants. Hire a property management company to screen tenants for you, or step up your game.
  1. Call Employment References: Most landlords don’t call your employer, but this can be a great way to find out what kind of person the applicant is and to verify their income. Also, if your tenant ever starts paying strictly in cash, you’ll want to double check their employment.
  1. Contact Previous Landlords: Previous landlords can tell you what kind of tenant they have been in the past. Verify that the contact is an actual landlord, not a friend pretending.
  1. Perform Regular Inspections: The landlords who inspect their properties every month have the least problems. If a tenant knows that you’re going to inspect frequently, they’ll be deterred from engaging in any activity that would raise red flags. Inform applicants how frequently you inspect before you rent to them, and you may have a candidate bow out because they don’t want a cautious landlord.
  1. Talk to the Neighbors: Get to know the neighbors and ask them to report any suspicious behavior to yourself or your property manager. Once they know that you are concerned with keeping the property and neighborhood nice, they’ll be happy to keep you informed.

Of course sometimes things are unpreventable, but if you follow these steps at least you’ll know that you did everything you could. Stay tuned for another article discussing meth lab detection and clean up.

Senior Citizens and the Renting Demographic

Even though a large majority of seniors own a home rather than rent, the number of seniors who rent is growing thanks to the aging baby boomer population.

In 2011 there were approximately 5.5 million renters aged 65 and older, but it is expected to grow to least 7.7 million in the next ten years. The total expected rental growth is anticipated to be 4 million, meaning that new senior renters will make up over half of the rental growth.

What does this mean?

This means there is a huge business opportunity for landlords if they start preparing for it now. Don’t be that guy who laments missing out on a lucrative business venture—the growth is expected, the return on your investment is sure, so don’t delay or you’ll be missing out.

How is senior housing different than regular housing?

Seniors have a unique set of needs, varying in need from total independence to total dependence. Seniors spend several years in the in-between zone where they need some help and assistance, but generally live on their own like a normal renter. Unfortunately, there is a shortage of housing for seniors who fall into this category. Many are forced to move in with relatives or go to live at a full-service retirement home early.

Integrate Seniors into Public Housing

If you already own public apartment housing complex, you can take some steps to make it more senior-friendly, while still remaining open to renters of all ages. (These changes could even lower your commercial insurance.)

There are some changes that you can make to help seniors stay in their homes longer, and attract more renters:

  • Bigger bathrooms and wider hallways: As people age, they need more room to move around in, especially if they end up needing a walker or wheelchair.
  • Easy to open windows and doors: Arthritis and other debilitating illnesses make it difficult to open tricky doors or windows. Invest in some easy to open windows and doors.
  • Handrails: Hand rails are only required by code in certain instances, but installing them where they aren’t necessarily required, such as long hallways and in bathrooms will assist seniors.
  • Host community activities for all ages: Host activities that would interest all ages, as well as activities catered to different age groups. Seniors, in particular seek companionship and need activities to go to. If you host activities just for them, you’ll attract other senior renters.

You’ll have to make some decisions on what direction you want your housing to go, but one thing is for sure those who adapt and try to accommodate seniors while in the semi-independent stage will see growth.

Are Landlords Allowed to Limit Your Right to Bear Arms?

Landlords are allowed to prohibit pets, smoking, and how many guests you have, but are they allowed to ban you from keeping firearms in your home?

Fortunately, or unfortunately—however you look at it—yes they are.

You may think this violates your Second Amendment right to “bear arms.” But the Second Amendment only bars the government from limiting your right to own weapons, not private citizens or businesses. A citizen or business has every right to decide whether or not they will allow firearms on their property—one of the cons of renting.

The second most common retort is that limiting gun ownership is discrimination against gun owners. However, unlike members of a religion, race, gender, ethnicity, and etc, gun owners are not a protected group. However, if a landlord were to target members of a specific race and prohibit them from keeping guns on the property—that would definitely be classified as discrimination. It must be an all or nothing rule, as with any other stipulations in a lease.

If landlords have no problem with renters owning and keeping firearms in their rental properties they should encourage tenants to purchase renters insurance. Firearms and other valuables are often a target of theft.

If a landlord does choose to prohibit firearms on their rental properties, they must wait until a lease expires and include the ban in the new lease. At that time tenants can either chose to comply or find other housing.

However, landlords should be aware that enforcing a ban on firearms is extremely difficult. If you think it’s tricky to catch a tenant with an unwelcome pet, it’s ten times harder to catch a tenant with firearms. If you do have proof of a violation, you can take steps towards an eviction.

Tenants should be sure to read the entire lease to make sure there isn’t a ban on firearms. If you’re a gun enthusiast at all, such a housing situation wouldn’t work for you. Additionally landlords should also double check their state’s law concerning prohibiting firearms. For example Minnesota actually has a law prohibiting landlords from banning tenants from having firearms.

3 Tips to Combating Wear and Tear for Property Managers

As a property manager you’ve learned that wear and tear is just going to happen. But learning to distinguish between wear and tear and damages can be tricky. The hardest part may be accepting that carpet stains, walls get dinged, linoleum scratches, and appliances break. These things happen and you can’t nickel and dime your tenants for every little sign of wear. No rental property no matter how nice and shiny won’t stay nice and shiny forever.

But there are some steps you can take to keep wear and tear to a minimum.

  1. Frequent Inspections: The best way to see how the property is being maintained is by frequently inspecting the apartment. Most property managers inspect at move-in and move-out, but to really stay on top of issues you’ll want to inspect at least twice a year and as much as four times a year. If you frequently inspect and document your visits with photos or video footage, you’ll be able to distinguish normal wear and tear from blatant damage. Inspecting frequently will also help deter tenants from totally trashing the place, because they’ll know they have another inspecting coming up soon.
  1. Preventative maintenance: Schedule routine maintenance for roofs, water heaters, air conditioning—anything that could potentially break causing more expensive repairs. If you invest in ePremium’s IRIS program, the program will remind when you need to schedule these checkups. Also ask your tenants to alert you to any problems quickly, no matter how minor—doing so can help prevent disasters and trains your tenants to watch for problems.
  1. Make maintenance reporting easy: Have an easy-to-use system in place for reporting maintenance issues. Many tenants find online reporting to be the easiest and most convenient way to report a maintenance issue. The easier it is, the faster and more often your tenants will alert you to necessary repairs. Let your tenants know that they will not be charged for normal wear and tear (as defined in lease).

If you quickly attend to maintenance repairs and are understanding about wear and tear, you will have a long and happy relationship with your tenants.

2 Additional Considerations when Renting Out a Foreclosure

The other day we talked about risks a property manager may be taking when buying a foreclosure with the intent to rent the unit out.

What are your thoughts on the matter?

Have you seen this happen?

Two other reasons buying a foreclosure to rent may not be the best idea

Consider the neighborhood: Foreclosures are sometimes clumped together in an area. You may want to avoid purchasing a foreclosure in an area where there is a high concentration of foreclosures. A high concentration will bring down the value of the house and you might not be able to ask for as much rent as you had intended. You can use Realtytrack.com to see where other foreclosures are in your area. Foreclosures also tend to sit unoccupied for a long time; no one wants to rent in an area with empty, uncared for, unmaintained homes that can attract squatters and vandalism.

Current Tenants: Tenant leases do not break when a house forecloses, so you may end up with a rental that already has tenants. This can be either a good or bad thing, it entirely depends on how good of tenants they’ve been. But, either way you’ll be stuck with them until their lease runs out or they violate the lease in some way –allowing you to evict. But starting out with renters you aren’t happy with is not a good way to start. If the home has current tenants, you may want to pass.

Based on these considerations, you’ll have to revisit how much money the foreclosure will actually cost you with repairs, decreased value, and closing costs in consideration. If it looks like it will still be a good investment, then don’t hesitate to go forward. And if you happen to find a foreclosure in good condition and in a good neighborhood, you’ll know it’s a hidden gem that’ll want to snatch up.

But do make sure you consider the four factors suggested.

Two of Four Important Things to Consider When Buying a Foreclosure as a Rental Property

Some landlords are eager to purchase foreclosed homes for the natural purpose of taking advantage of a low price and hoping to turn a large profit by renting out the home.

But there are several factors you should consider before you jump the gun. Unfortunately, just because a home is a foreclosure and listed at a low price, does not mean it is a good investment.

Dealing with a bank verses a homeowner: When buying a foreclosure, you must realize that the buying process will be different. Instead of dealing with a motivated seller who is willing to negotiate, you’ll be dealing with a company who has no reason to neither negotiate nor resolve things quickly. You’ll rarely talk with the same person twice, drawing out the process even longer. A bank will also not likely pay for closing costs, whereas with a homeowner you can usually get them to pay all or part of the closing costs. So when you consider a foreclosure you’ll need to take these costs and delays into account.

The condition of the home: Foreclosures are sold “as is.” Meaning, that the bank will not make any repairs or changes to the home, no matter what problems an inspection turns up. When purchasing from an individual seller, you can often negotiate for a new carpet allowance, necessary repairs fixed, and even a lower price based on what the inspection turns up. Also remember, that foreclosures are often in a consider state of disrepair. When an owner realizes that they’ll lose the house, they often lose their desire to maintain the property and may even blatantly damage it out of spite. So, chances are you’ll need to make major repairs such as replacing carpets, refinishing food floors, replacing appliances, painting the whole house, etc. Not to mention, foreclosures are often harder to insure. Take these added repairs into account. Based on your time and resources, you may not want to even venture down this path.

Read our next post to find out more.

Why It’s an Ideal Time to Rent out Your Properties

It may have taken some time, but the real estate market has started to recover from the 2008 Recession. Most states reported a rise in home prices in 2013. According to the REALTORS Confidence Index Report, the U.S. can expect to see an overall price increase of approximately 4%.

People, overall are starting to recover from their own personal loses and have started to buy houses again. This sudden increase in potential buyers has driven up the prices because there are not enough houses on the market for the number of buyers. First time home buyers are finding that they are in stiff competition. And the demand is only going to further increase prices.

What does the increase mean for renters and landlords?

It means that would-be buyers are opting to rent instead, driving up rent prices as well. This means it is an ideal time for homeowners to enter the real estate world. Homeowners who have outgrow their homes and are looking to purchase something larger and nicer, have the opportunity to rent their current home instead of selling it. Their homes have increased in value, meaning they can ask for a higher rent, but are still paying a lower mortgage. If it is financially feasible for you and your family, it is certainly something to look into. Owning rental properties is a great way to save for retirement and to create an independent income. (If you’re new to renting out properties, you’ll need to look into switching out your home owner’s insurance for commercial property insurance.)

This is also a great thing for current landlords, they can increase rent as renters move out, creating a larger bottom line. The one downside is that is more expensive to buy properties, but that doesn’t mean that renting isn’t a great source of income. But it is definitely the most beneficial for those who already own real estate.