How to get your landlord’s approval to sublet

Written by Laura Agadoni on . Posted in edited, For Renters, paid, Rent & Expenses, Rental Advertising, Screening, Security Deposits

Permission to subletYou just found out you need to be away from home for an extended time. But you’re still in the middle of your lease period. Subletting your rental would be the perfect solution … but what will your landlord think?

Related: A renter’s guide to subletting your apartment

When you sublet, although you’re still a tenant, you act as a landlord by leasing your rental unit to someone else—a subtenant. Whether you’re allowed to sublet your rental is usually addressed in the lease, and you typically have one of three options:

  1. You are not allowed to sublet—game over, end of story. Don’t do it!
  2. You are allowed to sublet. Go for it—you have free rein!
  3. The norm—You are allowed to sublet only after obtaining written consent of the landlord. (Landlords typically want to screen subtenants.

But what if the lease doesn’t say anything about subletting?

A rarity, but if your lease is silent on the issue, check to see whether your state has any laws on the books about subleases. And more important, just ask your landlord.

Keep in mind that your landlord can refuse your request to sublet your rental, particularly if they have a good reason. With that said, there are ways to help ensure you get your landlord’s approval to sublet.

1. Find a suitable subtenant

It’s best to ask someone you know and trust. A dependable person you can rely on both reassures the landlord and gives you peace of mind that this person will uphold their end of the bargain—paying the rent on time, taking care of the property, and following all other lease terms.

If you don’t know anyone who wants to sublet, you can still find a suitable subtenant.

  • Tell everyone you know that you’re looking.
  • Post on social media and Craigslist.
  • Ask if your roommates will do the same—they’re the ones who’ll be living with this person, so it benefits them to find someone.

If you do post the unit online, make sure you list the benefits (basically whatever it is that you like about it). Also include photos, and of course, your contact information.

If you’re having a hard time finding someone, lower the rent or offer to pay utilities. Even if you need to subsidize part of the subtenant’s rent, it will be cheaper than paying all the rent and probably cheaper than breaking the lease.

2. Screen potential subtenants

You can sign up with Cozy as a landlord and have your subtenants apply. (If you are already signed up with Cozy as a tenant, you’ll need to use a different email address.) Request that applicants allow a credit and background check. This lets you know whether they have a criminal record and how they handle finances.

Ask for references, and call them. Ideally, you will speak with their employer and their current landlord.

3. Get your roommates on board

If you have roommates, make sure they’re okay with your subtenant. You don’t want to cause any drama before you leave by surprising your roommates with a stranger suddenly living with them. If your roommates approve your subtenant, have them sign a form stating so.

4. Draw up a lease between you and the subtenant

A written lease makes everything clear, protects both parties, and eliminates your-word-against-theirs types of scenarios.

Here are some must-haves to put in the lease:

  • The dates the subtenant will be renting the unit from you
  • The amount of rent they will pay
  • Whether they will pay the rent to you or directly to the landlord
  • Who will pay for utilities

Also provide your subtenant with a copy of your lease so they will know all the particulars of your rental situation.

A note about rent: You can continue to pay the rent to your landlord even if you have a subtenant, and your subtenant would pay you. This way, you know that rent is being paid. You can also choose to let your subtenant pay the landlord directly. But if your subtenant doesn’t pay, the landlord could evict you (unless you pay rent pronto plus any late fees).

It’s a good idea to ask your subtenant for a security deposit. A usual amount is half or a full month’s rent.

5. Put in a written request to your landlord

Let your landlord know that you are taking this matter seriously by mailing (or at least emailing) them about your sublease proposition at least 30 days in advance.

Here’s what to put in the letter:

  • Your reason for needing to sublet
  • The start and end dates of the sublease period
  • The proposed subtenant’s name and current address
  • Your address (or a way of contacting you) during the sublease period
  • A copy of the sublease agreement and any roommate approval form

6. Wait for your landlord’s response

If your landlord doesn’t respond in a week or so, follow up. If your landlord won’t respond or refuses your sublease proposal for no good reason, you may need to contact an attorney or legal aid.

7. Understand what you’re getting into

You are ultimately responsible for your rental unit.

If you choose a subtenant who is irresponsible and skips out on rent, damages the rental unit, or becomes a nuisance to the point of violating the lease terms, your landlord can come after you for the money.

Make sure you have a clause in your lease with your subtenant that states they will be responsible for unpaid rent or damages they caused. That way, if your landlord sues you or keeps your security deposit to pay what’s owed, you can then come after your subtenant or keep part or all the security deposit if you requested one.

Note that the expectation is to return your subtenant’s security deposit. If you do keep all or part of their security deposit, you need to provide a reason.

A subtenant could save you from paying rent for a place you won’t be living in or from having to break your lease. If done correctly, the arrangement could work out well for all parties involved: your subtenant, your landlord, and you.

If you have tips for subleasing, please share them in the comments!

How to spot fake pay stubs and credit reports

Written by Laura Agadoni on . Posted in edited, For Landlords, paid, Screening, Step 6 - Applications & Screening

Fake credit reportsAs a landlord, you need to make sure you rent to tenants who can afford to pay the rent and who actually pay their bills, so you naturally check pay stubs and credit reports. You are doing that, right?

The problem is that some people aren’t completely honest when trying to rent a property. They might pretend they make more money than they really do by giving you a fake pay stub. Or they might try to give you a doctored credit report to make them appear creditworthy when they really aren’t. So how can you make sure what you’re learning about potential applicants is true?

Look at more than just the pay stub

People can simply go on the internet and use a template to make their own paycheck stub. And these paycheck stub generator sites are super easy to find.

The result?

The pay stubs look official, and people can enter any information they like. You won’t be able to tell just by looking at this type of fake pay stub whether it’s the real deal or not. Here are four better ways to verify income:

  1. Request a W-2 form. Employers prepare this form, which shows an employee’s gross earnings, deductions, and taxes. It’s possible to fake W-2 forms, too. But it’s a much harder process and involves an entire criminal enterprise of tricking payroll personnel. W-2 forms are a more accurate way to verify income than pay stubs are. You are far more likely to get fake pay stubs than you are fake W-2 forms.
  2. Look at your applicant’s bank account. Check to see whether the deposits match what they say their income is.
  3. Call their employer. First, find out whether they work where they say they do. Then ask whether the employer can verify that the applicant earns what they say they do. Not all employers will verify salary, but they can at least let you know whether the applicant works there.
  4. Request form 4506 from the IRS. With this form, you can see a transcript of a prospective tenant’s federal tax record.

Always run your own credit check

If a tenant offers to give you a copy of their credit report to “save” you from doing this step yourself or because they say they don’t want to ding their credit with a credit inquiry from you, politely decline. Why? It’s easy to fake a credit report, too.

The remedy is simple: you need to request a credit report yourself. I use Cozy for this service, and it works out great. The credit reports come from Experian, one of the three credit bureaus. If you use Cozy for your tenant applications, you can request that Cozy require all applicants to agree (and pay for) a credit check and a background check.

And bonus: Just letting applicants know that you use a screening service is itself a way of screening tenants. Applicants who can’t afford your place will probably move on or will be upfront with you about anything negative you might find.

Related: 6 Ways to Handle Applicants with Bad Credit

Bottom line

It would be nice to be able to instantly spot fake pay stubs and credit reports. But that just isn’t possible in many cases. You need to verify information by crosschecking and, ideally, using a screening service such as Cozy.

Should I increase rental rates every year?

Written by Laura Agadoni on . Posted in edited, For Landlords, Income Ideas, paid, Rent & Expenses, Step 1 - Perform Research

Raise the RentI know a landlord who charges less than any other rental around, never raises the rent, and is happy about it. He rarely has tenant turnover, but he isn’t making any money, either.

Then again, I know a renter who wanted to stay in her rental at least another year, but the management company informed her of a $200 rent increase to renew. She left that place so fast the property managers didn’t know what hit them. A vacancy, that’s what.

There’s an art to striking the right balance between making money on your rental properties and alienating good renters. We’re here to help you hone your art.

Related: How to Raise the Rent in 4 easy Steps [Free Template]

Why rent increases are a part of life

When expenses for owning property go up, raising the rent is necessary to just maintain the bottom line in your rental business. We’re talking expenses for which you have no control:

  • Property taxes
  • HOA fees
  • Mortgage payments with an ARM
  • Utilities
  • Landlord insurance
  • Property management fees

Add in expenses for which you have some control but are still expenses nonetheless:

  • Maintenance (lawn care, pest control, gutter cleaning, etc.)
  • Repairs (appliance repair or replacement, plumbing issues, tree removal, etc.)
  • Vacancies

If you don’t raise the rent when your expenses go up, it’s like taking a pay decrease. Not too many people do that. If the thought of raising the rent at lease renewal time makes you queasy, just run the numbers to determine whether you must increase rent just to maintain your cash flow.

Your expenses don’t determine rent

Higher expenses might be the reason you need to increase rent. But the market ultimately decides how much rent you can charge. If you need to charge more for rent than what comparable units in your area charge, you probably won’t get it. If that’s the case, you should reevaluate whether it makes sense holding onto that property.

You are allowed to make money

You can raise the rent even if your expenses have not gone up or—by some miracle—have decreased. Being a landlord is a business, and the purpose of being in business is to make money. If your rents are lower than area rents, and your property is in comparable shape to those higher-priced rentals around you, go ahead and raise the rent to be on par with the other rentals.

How much of a rent increase is good?

Remember my friend who left her rental and found another place to rent because of the astronomical rent increase? Don’t be that landlord. The $200 increase represented 16.67 percent of her rent. A better yearly rental increase that most people can handle is in the range of 3 to 5 percent, or in this case, a rent increase somewhere between $36 and $60. Most renters probably won’t leave if the rent increase is slight.

When you can’t raise the rent

If your rental property is rent controlled, or if your jurisdiction has a statute limiting rent increases, you must comply with the law. You might not be able to raise the rent as much as you like—or at all.

You also cannot raise the rent on a fixed-term lease during the lease term, so if your lease agreement is for two years, for example, you cannot raise the rent after one year. You must wait until lease renewal time to raise the rent. On a month-to-month tenancy, you need to give proper notice per your state law before you raise the rent. This is usually 30 days, but check your state law first.

If you really can’t bear to raise the rent

If you are like that landlord I know who charges less rent to decrease turnover, that’s fine if you’re happy with the arrangement. But as soon as that tenant moves out, consider getting the market rate for your rental property.

Cozy rent estimate

If you want to find out the rent prices in your area, I recommend using the Cozy rent estimate tool. There’s a slight fee involved, but if you find out that you can get more for rent than what you were planning to charge, this cost pays for itself many times over. Or you might find that you’ve been asking too much; hence, the difficulty finding tenants.

Here’s how the Cozy rent estimate works. Note: the whole process is complete in a minute or two.

  1. You fill out the particulars about your property. (If you already have your property stored in Cozy, this information auto fills for you.)
  2. You pay.
  3. You immediately get your rent estimate for your property.

You can then view the six-page report for a detailed analysis of how Cozy arrived at your rent estimate. Here are some highlights of what you’ll see:

  • High and low rents for your ZIP code
  • Days on market vs. vacancy for your county
  • Addresses of comparable homes and the rent other landlords charge (my favorite section)
  • Rent trends

View a sample Cozy Rent Estimate report.

Bottom line

If you know what comparable rental rates are for your area, you can feel confident in what you charge for rent. There are no rules (except if your property falls under rent control) on how much you should charge or whether you should raise the rent each year. But it’s always easier for renters to handle a slight rent increase each year than a one-time ginormous rent increase.

When can you withhold rent?

Written by Sarah Block on . Posted in edited, For Landlords, For Renters, Leases & Legal, paid, Step 10 - Repair & Maintain

communicationWhen a tenant withholds rent, it’s the last resort in a situation where they feel out of control. In this case, tenants do the only thing they can control: withhold pay.

But this can be a very risky move for tenants: it can result in eviction. There are better alternatives for dealing with a landlord who is ignoring complaints and not making fixes.

Here are the steps tenants can take to deal with a landlord who isn’t doing their job.

1. Make a list

Walk through your unit and make a list of all needed repairs. Break this down into two lists: legally required repairs and other. Legally required repairs would be anything that affects the structural integrity or habitability of the home. For instance, a leaky roof or broken heater affects the habitability. While an off-track closet door—not so much. Send your list to your landlord by mail, email, or text.

Landlord’s perspective:  As a landlord, I require all tenants to conduct their own pre-move-in inspection with pictures. They share the inspection and pictures with me. Now, we both know and agree on the condition of the unit upon move-in, and I become aware of any issues that may have gone unnoticed before.

Related: Record a video of the move-in/move-out inspection

2. Notify the landlord of the repairs needed

Inform your landlord in writing of the needed repairs. If legal action is needed, the first written notice begins the process. In your notice, tell the landlord what repairs are needed and why.

If you have previously asked for the repairs to be done verbally, make sure to note in writing each time you have discussed those repairs. If the needed repairs are cause for concern and make the property uninhabitable, be sure to note this in the letter. Tenants have the right to live in a habitable, safe, and healthy space.

Landlord’s Perspective: Welcome this process. It is best to fix the repairs as quickly as possible (they are also tax deductible). By receiving a list of needed repairs, you can fix them before they become unmanageable. Consider speeding up this process by using Cozy’s maintenance request app.

3.  Review your tenant’s rights by state

Every state has different laws regarding tenants and landlords. Make sure to review your state’s law to legally deal with the situation. Here are two examples:

California: Tenants are legally entitled to housing that is safe, healthy, and structurally sound. Housing also needs to be in good repair. Tenants can legally withhold rent, make repairs themselves and deduct from their rent, call the building inspector, sue the landlord, or move out without notice.

Texas: Tenants only have the option of “repair and deduct.” However, before a tenant can use the “repair and deduct” method they need to review the local laws. Most repairs do not qualify.

Local tenant’s laws also provide information on how long to wait before you can move to the next step.

California: Landlords have 30 days to make the repair (unless it poses danger).

Texas: The tenant needs to wait seven days after the written request before moving to the next step.

Landlord’s perspective: Know landlord/tenant law in your city and state well. This helps you maintain a proper tenant/landlord relationship and ensures you’re running your business legally.

Related: 2 basic renter’s rights included in every lease

4. Review your lease

Your lease might provide you with the information you need. Determine what repairs your landlord is required to make and what they are not.

Tenants should be aware that in most states, withholding rent will result in their eviction. A landlord is not required to make all repairs. What they are required to do is provide a habitable home. If the repair needed makes the home uninhabitable, and the landlord is refusing to fix it, the best course of action is to sue.

Landlord’s perspective: Make sure your lease covers all situations and is legal, using your local landlord/tenant laws. While your lease is there to protect you, it is also there to protect your tenant.

In conclusion

Withholding rent is a last-ditch effort to regain control in a situation where you may feel powerless, where you are living in a home that is not up to par. However, withholding rent is illegal in most states and difficult to walk away from without an eviction and mark on your credit score.

The best course of action is to follow these steps and know your rights. The always-legal option, in lieu of withholding rent, is to sue your landlord for not following through on their obligation: providing a safe, healthy, and habitable house.

Cleaning and repair rules when you move out

Written by Kathy Adams on . Posted in edited, For Renters, Maintenance & Renovations, Move-in/Move-out, move-out, paid, Security Deposits, Step 10 - Repair & Maintain

communicationThe last thing you probably feel like doing as you move out of a rental is cleaning the place. Like it or not, though, you’re expected to leave it just as nice as it was when you moved in.

If you leave a dirty place for your landlord, they can hold back the cost to clean up from your security deposit. After all, it is your mess. But the security deposit is your money. You want as much of it back as possible, right? So just what are your responsibilities?

Related: How to get your security deposit back

Read your lease

Besides typical cleanup duties such as washing the floor or vacuuming the carpet, the landlord expects you to do a thorough job of getting that rental back into shape. Move-out expectations vary, so check your rental agreement or lease to see what the landlord wants you to do.

Common cleanup duties

Common cleaning requests include wiping down baseboards, doorknobs, and light switches; dusting ceiling fixtures; washing the windows; and thoroughly cleaning appliances. Some landlords may expect a professional carpet cleaning as well. It’s definitely worth your time to read every move-out detail in your agreement, as some landlords levy extra fees if you don’t take care of an item on the list or if you don’t do it within the specified time frame.

Repair damages

Even minor damage to the rental must be repaired before you hand over the keys. A couple of nail holes may not seem like much to you, but if you don’t repair them, the landlord has to. That means they can bill you in the form of a deduction from your security deposit. Here’s a checklist of things to do:

  • Patch nail and tack holes with a small amount of spackle.
  • Erase scuff marks on walls and floors with a melamine foam eraser, aka a Magic Eraser.
  • Rub a walnut over scratches in wood floors, or fill them in with a wood marker that matches the floor color.
  • Replace anything you may have temporarily removed, such as cabinet hardware you swapped out for something that suits your own style.
  • Go through each room and closet, replacing any light bulbs that no longer illuminate.

Cleaning not your thing? Hire someone

If you choose not to clean and repair everything on the move-out list, there’s still hope. Hire a cleaning company to tackle your checklist. Just make sure you’re available to inspect the space afterwards to make sure they took care of everything. The same goes for repairs. If you broke a handrail off in a stairwell, for instance, and don’t have time to repair it, hire a handyman or contractor to take care of the problem.

Tell your landlord about any damages

Inform the landlord of specific items you can’t fix on your own, such as a broken handrail. Your landlord may ask to see the damage and assess whether they can repair it easily. If so, you may be off the hook. If not, expect a repair bill.

Informing the landlord of potential damage or cleaning concerns is always better than just skipping out and leaving the work for your landlord. If you completely bail on your responsibilities, you’ll probably not get some—or all—your security deposit back.

You might be charged extra for damages

If the damage is beyond minimal, such as missing floor tiles, mold on the shower surround, or massive stains on the carpet, the landlord could charge you more than the amount of your deposit. For instance, if your security deposit is $900 and it will cost $1,200 to repair everything in your unit, you may owe $300 to cover the difference.

Rules for holding back a security deposit

Whenever a landlord withholds any money from your security deposit (including charging you extra), you are entitled to a detailed breakdown of charges. Check your state laws to ensure the charges are legitimate. Common sense also applies; for instance, a $250 charge to fill in three small nail holes is extreme and likely would not hold up in court.

Related: What to do if your landlord wrongfully kept your security deposit

All in all, taking care of a minor aggravation—cleaning your old place—is well worth your time. Besides, you agree to do it when you sign your rental contract. Once you’ve refreshed your old abode, you’ll get your deposit money back, as well as peace of mind, knowing you’re leaving on good terms with your former landlord. On to a fresh start!

Be an ethical landlord

Written by Chris Deziel on . Posted in edited, ethics, For Landlords, landlord, Landlord Tips, paid, Step 10 - Repair & Maintain

communicationWhen a landlord has high standards, renters enjoy peace of mind. They know their comfort, safety, and happiness are important.

In return, an ethical landlord enjoys the benefits of happy renters who are more likely to treat the property with care and respect…and stay longer. And that’s good for business.

An ethical landlord has a mission: to supply comfortable and safe housing for a fair price. Here are the traits and practices you should adopt if you want to take this mission seriously.

1. Be accessible and responsive

Whether it’s noisy neighbors, a plumbing leak, or a fallen tree, problems happen. When one arises, renters need to know whom to call. And when they make the call, someone should answer. An ethical landlord will rarely have renters say, “I’ve been trying to get hold of the landlord, but no luck.” Even if it’s a problem you can’t fix immediately, such as rude neighbors, make it clear that you’ve heard your renters’ concerns, and you’ll take appropriate action.

Related:

3 must-learn landlord communication lessons

How to handle noise complaints from neighbors

Noisy neighbors drive me crazy. Now what?

2. Do maintenance right away

When things go wrong, renters’ lives are affected until those problems are fixed. An ethical landlord takes care of problems, whether they are leaks or toilet clogs, as soon as possible. If you can’t respond yourself, have a professional relationship with a local maintenance contractor who can respond on your behalf. It’s not a bad idea to develop a network of tradespeople to ensure that one contractor’s full schedule doesn’t prevent repairs from happening quickly.

Related: How to build a little black book of contractors

3. Set clear boundaries, but be flexible

Tenants have the right to enjoy your property, but they should never lose sight of the fact that it’s yours. The best place to assert this is in the lease, where you spell out your preferences and any rules you want tenants to follow. They’ll appreciate learning these rules before they sign the document, rather than after they’ve become settled.

An ethical landlord recognizes that life is unpredictable and can bend the rules when the situation calls for it. As the saying goes, “stuff happens.”

Related:

Compassion after the storm: Four ways to be there for tenants

7 extraordinary lease clauses I can’t live without

4. Be fair with money

You’re trying to run a business, but don’t gouge people. Besides, if your rents are too high, you’ll probably have difficulty renting your place. Research rental prices so you know what your property is worth on the rental market. A great tool for doing this is a Cozy Rent Estimate report. Set prices in a way that keeps you in the black without creating hardships for your renters.

Charge a security deposit—that’s standard practice—and return it in a timely manner to renters who fulfill the requirements for getting it back. If you need to keep some or all of it, give tenants’ an itemized list of charges.

Related: How to set the perfect rent price for your rental properties

5. Keep good records

When disputes arise over the condition of appliances or structural issues, you’ll be on firmer ground if you have clear records. Those records should include the dates when appliances were bought or serviced, dated statements from property inspectors, and invoices from maintenance and repair pros. When in doubt about whether damage is due to normal wear and tear or to renters’ negligence, those records can help avoid “your word against theirs” scenarios and keep you on the moral high ground. Besides maintenance history, your records should include a move-in checklist.

Related: 10 documents every landlord should keep on file

6. Keep renters in the loop

Good communication involves more than just being responsive. You should also be proactive when you become aware of issues that will affect renters in the future. Whether it’s a hike in the gas bill or the rent or an impending improvement project, renters appreciate knowing about it as far in advance as possible so they can be prepared.

7. Respect privacy

An ethical landlord doesn’t place property ownership above respect for privacy. Local laws may allow you to enter a renter’s home to perform inspections or repairs, but you should never do so unannounced. Make an appointment. That way, renters can be prepared for you, and they won’t feel violated.

Related: Can a landlord enter the property whenever they want?

8. Be careful with private information

When renters sign the lease, they entrust you with sensitive information, such as Social Security numbers. Abusing this information or losing it through carelessness is a violation of privacy, even though you may do it inadvertently. Taking care of that information by storing it safely, and using it only when necessary, shows your respect for privacy. If you keep the information on a computer, make sure the files are protected by a firewall. Better yet, store sensitive files on an external drive.

In a nutshell

When landlords maintain high ethical standards, it’s a win-win-win for landlords, renters, and the community at large. Not to mention it’s also good for business.

3 ways to stay up-to-date on rental prices

Written by Samantha Clark on . Posted in edited, For Landlords, paid, Rent & Expenses

communicationEvery landlord needs to know how to price their rental property. Listing the rent too high or too low can result in money lost, but finding the right balance between the two is tricky.

You don’t want to charge too much and risk the unit staying vacant, but you also don’t want to cheat yourself by not charging enough. Fortunately, when you stay up-to-date on rental prices, you’ll know what to charge appropriately every time.

No matter how big or small your business, it’s always a good idea to stay up-to-date on rental prices. Knowing the rental market ensures you’re earning maximum profit with the least amount of stress.

As you determine the right rental price, you might find that you need to raise the rent. Doing so can be stressful if you’re worried about your tenants fighting the price increase. The good news is raising rent is easier than you think as long as you give your tenants enough notice and gradually increase the rent at each lease renewal period.

Related: How to raise the rent in 4 easy steps

If your research suggests that you should possibly decrease rent, only do so if you’re having trouble renting out the unit or if your tenants don’t usually renew their lease. Here are three ways to stay up-to-date on rental prices.

1. Get a Cozy Rent Estimate report

Cozy’s Rent Estimate reports give you a detailed estimate on how much to charge for rent, which takes away the guesswork. Instead of spending a few hours doing the research yourself, these reports give you a recommended rent price so you can stay competitive with other properties.

Rent Estimate reports calculate the recommended rent price by comparing actual rents charged in your rental’s area, and you get that info in the report. The Rent reports also include other key info about your rental, including localized vacancy rates, county rent trends, and other investor metrics. These data points will help you ake informed decisions about pricing and marketing your rental.

2. Join your local landlord’s association

Your local landlord’s association is an organization within your town or city made up of other landlords, property owners, and investors. Joining can be beneficial to your business in a number of ways. You can network with landlords, stay updated on new eviction procedures, and get information on properties for sale. You’ll also get access to resources like tenant screening services, rent collection services, and credit reporting services.

Being a member of your local landlord’s association is a great way to stay up-to-date on rental prices. You can reach out to other landlords within the association who have properties in your neighborhood and get advice on how much to charge. Asking around will give you most of the information you need for rental prices, and you’ll build relationships in the process.

If you’re not sure how to find your local landlord’s association, Landlordology has a search tool that finds one for you. In case there isn’t a landlord’s association in your area, there are other resources out there. Another alternative is joining online landlord forums to answer your questions and get information about rental prices.

3. Conduct research

It’s simple to do a little research around your neighborhood without leaving your desk. You can start by calling other apartment building managers or landlords of other rental homes nearby and asking what their rates are. Also, sites like Craigslist and Apartments.com can give you a good idea of what rent is going for with properties similar to yours. Pay attention to what prices are going for in your neighborhood compared to what landlords are asking (and hoping!) to get.

But keep in mind, just because landlords are asking for a certain price doesn’t mean tenants are willing to pay that much. Sometimes landlords list a higher rent as a test to see if people are interested. So take caution when you are researching, and make sure to find at least three other properties that are similar to yours to compare to. Looking at three other properties instead of just one gives you an average of what your property is renting for.

With these tips, staying updated on rental prices doesn’t have to be difficult. Some people don’t do any research at all and end up losing money, even though there are simple resources out there. Take the right steps, and you can avoid missing out on the best possible rent price.

Spring maintenance checklist for landlords

Written by Chris Deziel on . Posted in edited, For Landlords, Maintenance & Renovations, paid, rental maintenance, spring, Step 10 - Repair & Maintain

communicationWhen March goes out like a lamb, it’s time for landlords and tenants to look at property matters that developed during winter’s deep freeze.

Spring maintenance items that affect habitability are most important, but it’s also the best time to address small defects that could turn into big ones, if they’re left unaddressed. Summer is coming, the best season to make repairs.

Warming temperatures create a good opportunity for landlords and property managers to inspect rental units and make a plan for spring maintenance. Tenants could handle some of the maintenance—especially in the yard or garden—but leaks, burst pipes, and other problems that affect habitability most likely need professional attention.

Related: 8 home repair tasks every landlord should learn how to do

Exterior inspection

Walk around the property to see the extent of winter damage. On this walk, try to do the following:

  • Check the roof and siding for deterioration. You don’t have to get on a ladder to see roof damage. Missing or broken shingles are usually visible from the ground.
  • Look for gutter leaks. Ice and snow are hard on gutters, and any leak you see should be repaired as soon as possible to prevent damage to the siding or erosion around the foundation.
  • Test the outdoor faucets. If water froze in the pipes, they may leak.
  • Inspect the walkways and driveway for cracks. This could happen from earth movements during freezing weather. These cracks need to be repaired or water will seep through them and cause further erosion.
  • Note any rot. Look on wood siding, trim, fences, or decking. A small amount of rot isn’t an urgent problem, but if the rot is extensive, now is the time to deal with it.
  • Pay attention to the condition of the lawn, garden, and surrounding foliage. Spring is the best time to prune back any branches that threaten to block windows or overhang the roof later in the summer.

Related: How to easily track maintenance requests and repairs

Interior inspection

If winter weather has caused any interior damage, tenants will probably know about it, but they might not let you know. It’s a good idea for a landlord or property manager to do a quick walkthrough to check a few things:

  • Assess the damage caused by roof or siding leaks. This could range from soggy drywall and mold to warped flooring or compromised electrical fixtures.
  • Note the condition of the floors and carpet. People tend to track salt-laden snow through the house on cold winter days.
  • Turn on the air conditioners. You want to make sure they work. Now is a good time to replace the filters.
  • Check for pests. Look for termites, cockroaches, and rodents. Critters tend to hunker down in the walls during winter, and they’ll still be there when spring comes.

Related: Ask Lucas 030: How do you perform an annual property inspection?

Handling spring maintenance

When it comes to repairs that affect habitability, such as major leaks and resultant water damage, it’s the landlord’s responsibility to do them or hire someone to do them.

The responsibility isn’t as clear-cut when it comes to defects that only affect the tenant’s enjoyment of the property. Peeling paint and displaced walkway pavers may be unsightly, for example, but they don’t stop life from going on. It may make sense to give tenants the option to make some of these repairs themselves. To avoid confusion over the issue of who’s going to pay, include a lease clause or amendment that covers it.

Lawn and garden maintenance is one area that the lease should cover. Many tenants like landscaping and may even consider a green light to do it themselves a perk of living on the property. But other tenants prefer this job be done for them. Landlords might consider charging more per month if they need to provide landscaping services.

General indoor cleaning is another lease topic for areas such as hardwood floors (that can suffer damage from salt and water), an unfinished basement, and the fireplace or wood stove. Whether it’s spring maintenance or year-round maintenance, it helps to clarify responsibilities in writing.

Related: Should a tenant be paid for doing yard work?

Get your game on

Once you’ve made your game plan, itemize the repairs you need to make with some urgency, and take care of those as soon as possible. Leave the others for later, but keep the list as a reminder. Priorities tend to change as the weather warms up and summer arrives, but winter will come again, and problems you don’t handle this year will be there next year. And they’ll be that much bigger.

 

How to rent your former home

Written by Laura Agadoni on . Posted in edited, For Landlords, paid, Rental Advertising, Step 2 - Find & Buy a Property

communicationRenting your former home will be easy, right? You know all there is to know about the house, so showing it to renters should be a snap. But something could get in the way of your success …

Your emotions.

That’s right. If you spent any amount of time living in your home, you probably have an emotional connection with it.

But if you plan to rent your former residence, even though you’ll still own the home, you’ll need to emotionally detach from it. It may still be your house, but it’s not your home anymore. And there’s a big difference between the two.

What used to be your residence—your home—is now your investment (rental) property. Here’s how to transition from a home you loved to a house that’s strictly for business.

1. Hold onto memories

You probably have some fond memories of your home—family gatherings, growing a backyard garden, hosting dinner parties, etc. You will always have your remembrances, and you should cherish them.

Appreciate that you have feelings for the home. That’s huge, so just sit with that for a bit. Understanding and getting in touch with your feelings should help you achieve your goal, which is renting the property.

To successfully rent your home, however, you need to get into the right mindset, and let go of your home. Otherwise, you might subconsciously sabotage your efforts of renting the place.

How? Here’s one way: Since it’s your home, you likely think it’s worth more than it really is. So you might ask too much for rent. By doing so, you might have a difficult time finding a renter.

Tip: Use a Cozy Rent Estimate report to help you determine the right amount to charge for rent.

Related: How to set the rent price for your rental properties

2. Set a numeric goal

Run the numbers to see the potential for making money from your former home. Being able to count on clearing an extra $500 or $1,000 a month, for example, should make it easier to help you view your former home as a business.

3. Picture what it will be like

Visualize renters living in what used to be your home to get used to the idea. Don’t be territorial. As soon as you get a signed lease or a month-to-month commitment—and first month’s rent and security deposit, of course—get comfortable with the idea that you no longer have access to the home as you once did. Let your tenants live in peace. This is the law, by the way. It’s called giving your tenants “quiet enjoyment” of the premises.

Note: You should always be able to enter your house. You, therefore, need a key to get in. It’s wise to change the locks before a tenant moves in and to keep a key for yourself.

Related: Lock lock, who’s there? The rules for changing locks

You can show up at the property for the following reasons:

  • Emergency situations (no notice needed)
  • To make regular maintenance and safety checks (with notice)
  • To show the property for sale or rent (with notice)
  • To make repairs (with notice)
  • To check on the property if the tenant will be away for an extended time

Make sure you have a section in your lease that lists the times you can enter.

4. Neutralize the home

You probably have personal touches around the home, what people on HGTV refer to as “putting on their stamp.” That red dining room or bright blue child’s room might have made you happy, but you must move on if you want to rent the place. Neutralize your home, and remove your “stamp.”

Why? Two reasons:

  1. Neutralizing the home helps you detach from it. It will seem less like your home and more like a home.
  2. You make the house show ready by neutralizing it.

Here’s how:

  • Remove all your personal belongings and furnishings
  • Clean it
  • Paint neutral colors
  • Repair all the quirky stuff you became used to (leaky faucets, doors that don’t close all the way, stuck drawers, dated light fixtures)

5. Advertise the house for rent

Once you’re emotionally ready and the house is physically ready to show, advertise it. I use Cozy, Apartments.com, and Craigslist to get this done. Once you start receiving interest, set up some showings. Be sure to screen tenants by requiring a credit and background check. (I use Cozy to get that done.) Then interview people who meet your criteria.

6. Stay away after you have a renter

No matter how tempted you may be to stop by the house and let yourself in, don’t do it. Once you’ve accepted money from someone, you no longer have the right to come into your house whenever you please. There are times when you will need to come over, but make sure you do this the right way.

This article explains how: Can a landlord enter the property whenever they want?

The bottom line

It can be difficult to turn what was once your home into an investment property. But after the initial difficulties, you will appreciate that extra money your house brings in and learn to let go of your former home.

3 signs it’s time to sell your investment property

Written by Sarah Block on . Posted in edited, For Landlords, Income Ideas, paid

communicationI had to make a tough decision. Was it time to sell my investment property?

As I’m writing this, my condo—and very first real estate investment—just went on the market. I had to say bye to that memory-filled investment to say hello to a new investment: one that is actually profitable. (Who buys a property in a real estate bubble? Me.)

What made me make the decision? How did I choose to say so-long to my always-rented property? The process started when I became a writer for Landlordology. I realized that while my condo’s always rented, and someone else was making the mortgage payments, the property wasn’t checking all the boxes for a good real estate investment.

What makes a good real estate investment?

While it’s easy to get carried away in the fun of starting a real estate business, it is important to pay close attention to know that your investment is a good one. Sometimes the signs are not so obvious that the property is a bad fit. So, what makes a good investment?

1. Your rental property is cash positive each month.  

The first thing you want to do when choosing a rental property is to determine the potential cash flow. To do this, use sites like Apartment.com, Redfin, WalkScore, and—of course—Cozy, to research the rental price. Now, look at the principal, interest, property tax, and insurance (PITI) per month. Subtract your rental estimate from your PITI. Is there positive cash flow? This is the first factor in a good investment.

2.  It’s in a high-demand rental community.

Location, location, location. We’ve all heard it, and it’s true. Renters flock to areas that are desirable. Look for properties that are walkable, have public transportation, shopping, beach, or are near popular destinations. For example, my rental properties are near Northwestern University with public transit to Chicago, the beach, and shopping. Universities with a high graduate population have great potential for rental properties. While the tenant turnover will be higher than other areas, there is always demand. Last, look at areas that will be hot soon. Certain areas price people out of the market, so renters move to another location that is nearby.

3.  You can easily manage the property.

If you are a Dave Ramsey fan, you know he always says to stay close to your rental properties. This makes managing your rental property easy. However, if your property is not so close, it gets tricky. A good real estate investment is close to where you live, low maintenance, and offers an easy system for managing your property and tenants. For example, let’s say you have a single-family home you rent out that is 10 years old and 10 miles from your home. The property management can be simple. Hire a lawn care service, a maintenance person, and use Cozy for collecting rent online and communicating with your tenants about maintenance requests. Now, if the property is high maintenance or hard to rent—that’s another story.

Related: When to sell your rental property

When should I sell my real estate investment?

While you should think of real estate investments like the stock market (buy and hold), sometimes the signs are there that it’s time to sell and reinvest or get out of the real estate game completely. Whatever makes you happy. Here are the surefire signs that it’s time to sell.

 1. Cash flow is consistently negative.

The No. 1 reason to choose a property to invest in is positive cash flow each month. When it’s negative, it’s time to sell. My first rental property was an accident. We bought a new house and couldn’t sell the old one. Because of this, checking the cap rate and PITI was not part of our “strategy” (read:  there was no strategy) for choosing an investment property. We fell into it, and from that first month, August of 2011, it has had negative cash flow. Negative cash flow is the first sign your rental property may not be meant to be. Consider moving back into it or selling it.

2. You’re a remote landlord.

When I began my landlord journey, I was only a few blocks from one rental property and lived in the other (a three-flat). Managing my property was easy. However, I sold the property I lived in, and now live 35 miles from my other property. I no longer had a relationship with my tenants. Showings were impossible. I felt panicked about maintenance requests. It wasn’t easy. If you’re moving away from your rental property, think about selling it and buying local. The property will be easier to manage, and you’ll have more control over your investment.

3. The cap rate has changed.

A cap rate is the income-expenses/value. The goal is to keep the cap rate between 5% and 10%. Generally, property investors determine the cap rate when choosing an investment property. However, if you are on the fence about whether to keep or sell a rental property, you should revisit this equation. Several changes can occur during the life of ownership that can turn a good cap rate bad. Did property taxes go up? Did the rental market in the area go down? Is maintenance more than expected? Are the utilities higher than you originally thought? Add up your monthly expenses over the year, and subtract that from your annual income from the property. Divide this number by the current value. If the percentage is less than 5%, you may want to consider selling.

Real estate investing can be lucrative, and the buy-and-hold strategy is typically best. However, sometimes you need to take a hard look at your investments and ask yourself, “Does this investment still make sense?” That’s what I did, and in the end, it didn’t make sense for me own my property anymore. Once you let go of a property that isn’t working for you, you can move onto the next property investment!

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