Shared post from AAOA | Source: wilmingtonbiz.com

A rental property can be a wonderful investment, if someone is renting it. The good news is that there are things you as a property owner can do to help your occupancy rate stay high and your rental income coming in.

We’ve already shared ways you can increase your rental’s curb appeal (and why that matters) and ways to make a good first impression with your rental property. But there are some very simple things you can do to beat the competition and have the property people want to rent.

Keep it clean. Be sure your rental property is spotless when potential tenants come. No one wants to move into a place that is dirty. Also, a clean home will signal to renters that the property is well-tended to and in good shape. When a home is dirty, renters assume that the property is neglected. Always hire a professional cleaning company. Treat your home as the business that it is. Would you stay in a hotel room that was not professionally cleaned? Why should a tenant move in to a property not handled by a professional?

Have good lighting. Renters want to see themselves living in the home. If they can’t see anything because the place is dark, they won’t feel inspired. Your property should have updated lighting, be well-lit and inviting. While you may not be able to increase the amount of natural light your property receives, you can certainly invest in good lighting solutions throughout the home. Features like larger lights in bathrooms, kitchen pendant lights and under-counter lighting are wonderful. Security lighting outside can be important, too.

Make it inviting. Even if you are not able to use the latest in home décor (granite or stainless steel), consider newer laminate kitchen counters, updated lighting, framed mirrors in bathrooms, replacing stained or damaged vinyl, replacing ceiling fans, or putting on new switch plates. These tasks can create a warm and inviting space that will encourage tenants to move in. These are easy and inexpensive fixes that go a long way.

Consider what helps with day-to-day living. Tenants can be won over by the little things. Updated anything, like newer counters (they don’t have to be granite) or ceiling fans, or spaces such as outside sheds or shelving in garages or floored attics, can leave a big impression. Privacy in the backyard and larger patio spaces also matter to tenants. To determine what things you can offer to set your property apart, think of what details make your life better on a day-to-day basis.

Control the temperature. Especially during a hot Wilmington summer, the temperature of a property can be crucial. Ensure that all of your heating and cooling systems are functional and in good condition. Make sure your thermostat is updated and working properly. Make sure your air filters are clean and the house smells good. The heat or the air should be on to avoid things like mold growth in your vents during a hot humid summer.

Of course, the main rule to follow is to make your property feel like a place where you would want to live. By doing this in big ways and little ways, you can increase your income property’s earnings and occupancy rate.

If you want help getting started, contact us today. With decades of experience managing properties in the area, we know what Cape Fear renters are looking for and can help you maximize your property’s potential.

For many landlords, noise complaints are all too common.

It is often difficult to monitor noise, and to determine if the particular type or level of noise violates the lease agreement.

Not all noise is from partying or loud music. Other common sources include children, dogs or a TV.

Here are some steps to follow to resolve a noise complaint at your rental property:

Knowledge of local laws is crucial. It’s no coincidence that noise levels often are described in local ordinances. Use those standards as your guide.

But sometimes noise concerns can happen in areas not covered by a noise ordinance. Just because tenants can legally play loud music all hours of the night doesn’t mean your other tenants want to hear it, and unresolved noise complaints will likely have other tenants thinking about how to break the lease and move out.

The next step is to include clear rules regarding noise in your lease agreement. For example, it is a very common practice for landlords to have quiet hours listed, perhaps from 10 p.m to 8 a.m, to avoid late night noise — the most common irritant.

But don’t assume that all tenants work 9-5 day jobs. You might have a tenant who works a graveyard shift and sleeps during the day. For them, quiet hours should look more like 10am-8pm, which is not practical.

Have a policy where tenants can report a problem without forcing tenants to go to one another.  Resolving an issue may not be as easy as just leaving a friendly note on the door. Renters are not always comfortable talking to one another about these situations. Avoid escalating disputes. You should expect to play mediator and investigator.

If you can’t mediate the dispute, then you may have to take the next step: 

You will have to figure out if a tenant’s complaint is warranted, or not. Some tenants might not like the sound of the neighbor’s children running and playing. Complaints involving families are tricky as it might be misconstrued as discrimination if you go after large family gatherings or tenants with children. For this reason, you should be dubious about forbidding tenants from having too many guests, because if the guests are related, it might be discrimination.

Speak to the accused culprit and let them tell their side. Also, talk to other tenants for collaboration. Maybe the complaint comes from someone who expects too much silence for an apartment building. You may have to explain to the complainer that you have done all you can.

If you are receiving complaints routinely, check for yourself how noise-proof your dwellings are.

Do the dwellings need more insulation from the outside noises, as well as in between units?

Many complaints are one-time events, perhaps from a tenant who wasn’t aware of their nocturnal neighbor. It is a good ideal to provide one warning to avoid evicting an otherwise good tenant. But for persistent complaints, you might have to give the offending tenant a “cure or quit notice” informing them that they are in violation of the lease agreement and can be evicted if the problem isn’t fixed.

Then, you have to be ready to make good on your promise and file an eviction. Otherwise, you are never going to hear the end of it!

American Apartment Owners Association | Company Website |  Rental property management can be very demanding. Our job is to make this day-to-day property management process smoother. AAOA provides a host of services ranging from tenant screening to landlord rental application forms and contractor directory to apartment financing.

Residents of an apartment complex in Iowa will be sharing a $2.45 million dollar settlement after a major bedbug outbreak occurred at the building.

According to a report , the class action lawsuit, which involves 300 current and former tenants, has been going through the courts for four years and eventually ended up in the Iowa Supreme Court. After years of legal wrangling, the case was settled before going to trial.

Three different entities will pay out the settlement: $2 million from the previous management company’s insurer, $350,000 from a development group which acquired the property in 2013 (even though the lawsuit was already filed in 2010), and the insurer of a pest control company which serviced the units is expected to pay $100,000. Individual tenants, many of whom were elderly or disabled, will receive from $200 to $6,000 each, according to the report.

The tenants’ attorney, Jeffrey Lipman, who specializes in bedbug lawsuits, says this case puts other landlords on notice that they can’t simply ignore the problem.

According to the report, the apartment complex became infamous due to the bedbug outbreak, and tenants told reporters that they suffered stigma in the community for living there.

This stigma can cause serious financial problems for rental property owners, especially when the information shows up on bedbug reporting websites, and comments or reviews on rental listing sites. Rental candidates may think twice before checking out a building that had bedbugs.

The best way to avoid losses from bedbugs is to be proactive:

Inspect for the pests on a regular basis, even if you haven’t received any complaints. Bedbugs remain dormant for long periods, which can be deceiving. Ask your pest management expert how often you should inspect.

Encourage tenants to report signs of bedbugs. The sooner the infestation is discovered, the better the chances of a full remediation.

Take complaints seriously. Tenants who feel they are getting nowhere with the landlord will look at other options.

Share tips with tenants on ways bedbugs spread — like used furniture, or in suitcases from travel. Teach tenants how to spot the signs so they can report problems.

Work with a professional pest control company. Don’t try to fix the problem on your own.

American Apartment Owners Association | Company Website | Rental property management can be very demanding. Our job is to make this day-to-day property management process smoother. AAOA provides a host of services ranging from tenant screening to landlord rental application forms and contractor directory to apartment financing.

Each April, HUD observes Fair Housing Month, in honor of the 1968 Fair Housing Act that prohibits housing discrimination based on race, color, national origin, religion, sex, disability, and family status.

This year, HUD is encouraging rental applicants and tenants to exercise their rights under the Act.

In addition to the legal protections provided under the Fair Housing Act prohibiting housing discrimination based on race, color, national origin, religion, sex, disability, and family status, approximately 20 states, the District of Columbia, and more than 150 cities, towns and counties across the nation also prohibit discrimination against lesbian, gay, bisexual, and transgender (LGBT) individuals and families.

In 2012, HUD published new regulations to ensure that the Department’s core housing programs are open to all eligible persons, regardless of their sexual orientation or gender identity.

Twelve states and the District of Columbia, as well as several counties and municipalities
protect persons against housing discrimination based on their source of income.

A review of recent prosecutions shows confirms that HUD is making good on its promise to
pursue cases where tenants with disabilities have been denied companion animals, and
families denied housing on occupancy limits. A new ruling also clarifies that, while a
policy may not be discriminatory on its face, a landlord may still be prosecuted if that
policy causes a more subtle, “disparate” impact.

Landlords should take the time to review leasing policies for possible discrimination.
Some common areas to avoid include:

Rental ads that discourage protected tenants from applying;
Steering a protected tenant towards or away from a particular property;
Occupancy limits based on 2-per bedroom have come under scrutiny — avoid turning away
families if the property has a “bonus” room, loft, office or den that could easily be converted into a sleeping area.
Denying companion animals for tenants with disabilities, or applying any pet policies in that situation.

American Apartment Owners Association | Company Website | Rental property management can be very demanding. Our job is to make this day-to-day property management process smoother. AAOA provides a host of services ranging from tenant screening to landlord rental application forms and contractor directory to apartment financing.

A Pittsburgh landlord recently was thrown in jail for six months because of his “nuisance” rental.

According to a news report, neighbors and police “suspected” the property was being used as a drug house. Police say they’ve been called to the house dozens of times over the past few years. Officers did find drug paraphernalia on at least one call, and have responded to drug overdoses in the area.

In response to complaints, a judge previously ordered the landlord to evict all of his tenants, pay a $10,000 fine to the city for the nuisance, and repair the house.

However, when the case was reviewed, the court found that the landlord had not fully complied with the order. Now, the landlord will serve a six month jail sentence for contempt of court — unless he complies with the order.

Meanwhile, police have boarded up the building, and city officials are considering demolishing the property, according to the report.

It is unclear in this case whether the tenants were charged with crimes, or if the complaints of neighbors — that tenants were awake and “active” at 5:00 am, or that tenants were “making money” at the property, would have been sufficient evidence to convict each of them of these alleged crimes.

A number of cities across the country have recently enacted similar “nuisance” laws requiring landlords to evict tenants for disruptive behavior or suspected criminal activity. Unfortunately, this can be a daunting task if there is no evidence of an individual tenant’s wrongdoing. Often, police do not charge individuals or issue tickets at the scene, choosing instead to pursue the landlord, who then may have to reconstruct the event and attempt to evict each of the tenants for cause. That places landlords in a no-win situation, especially when fines are being levied daily.

However, there are steps that landlords can take to avoid renting to nuisance tenants:

Be careful who you allow in the property; always screen each adult occupant, including a criminal background check.

Adopt a crime-free lease policy that tracks your local nuisance laws. Make sure you have the ability to evict a tenant who violates the policy, even if you can’t prove they violated the law. Local police may participate in landlord training programs that help reduce crime in the area.

Keep a close eye on the property by performing regular property inspections. If you suspect drugs or other dangerous activities, call the police rather than trying to solve the problem yourself.

Get to the know the neighboring property owners, or at the very least, make sure they have your phone number in case they see something suspicious going on at the rental. You don’t want to be the last to know.

American Apartment Owners Association | Company Website |  Rental property management can be very demanding. Our job is to make this day-to-day property management process smoother. AAOA provides a host of services ranging from tenant screening to landlord rental application forms and contractor directory to apartment financing.

Landlords all across the country are fed up with crime in rental properties, and all the associated costs. Many communities are now pushing landlords to adopt crime-free rental policies. Usually, this means landlords would go to training sessions hosted by the local police department, and allow in-depth inspections of their properties.

The goal in mind for landlords is attracting higher quality tenants who will help to maintain a higher quality rental property, which in turn keeps profits up. A crime-free property accomplishes that goal.

Landlords can learn how to prevent and identify crime directly from a crime prevention officer while completing a training session. It is very difficult for the untrained eye to spot signs of serious crimes like drug sales or manufacturing.

Local police departments are eager to assist landlords wishing to help lower crime in the neighborhood. For example the Salem, Oregon police department is actively registering property managers for its annual landlord training in April. This is a two-day intensive class focusing on local rental laws and crime prevention, with topics like drug recognition in and around rental properties. The cost of this two day workshop is about $70 per person.

This demonstrates a growing trend; landlords who care want advice on how to prevent crime in the rentals. Cities strive to provide that training.

The only downside is the fees.

In addition to tuition, property owners may have to pay an annual licensing fee for each unit, and inspection fees on an as-needed basis. It’s possible for a community to adopt a policy that forces all landlords to attend the training sessions, willing or not.

The alternative is self-education. A central focus on crime training is screening tenants. Most seasoned landlords already know the value of properly performed background checks — and how invaluable quality tenant screening can be. Focusing on who you allow into the rental property can greatly reduce the risk of criminal activity.

American Apartment Owners Association | Company Website |  Rental property management can be very demanding. Our job is to make this day-to-day property management process smoother. AAOA provides a host of services ranging from tenant screening to landlord rental application forms and contractor directory to apartment financing.

According to a report just released by the National Low Income Housing Coalition, a renter needs to earn $18.92 an hour to afford a two-bedroom rental unit at fair market. That’s two-and-a-half times more than the federal minimum wage, and 52% higher than what was required in 2000.

The report, entitled Out of Reach 2014, reveals the drastic difference between what renters need to earn to afford rent and what the average renter actually earns. In 2014, the average renter earns $14.64 an hour. While housing costs vary nationwide, the report shows that a full-time minimum wage worker can’t afford a one or two-bedroom rental unit anywhere in the U.S.

According to Out of Reach 2014, the top five most expensive states are:

Hawaii, where renters need a wage of $31.54 per hour for a two-bedroom;
District of Columbia, $28.25 per hour for a two-bedroom;
California, where a two-bedroom requires $26.04 per hour;
Maryland, $24.94 per hour for a two-bedroom; and,
New Jersey, where renters need to make $24.92 per hour for a two-bedroom.

New York, Massachusetts, Connecticut, Alaska, and Virginia finish out the list of top 10 most expensive states in 2014.

The most expensive metropolitan area in 2014 is San Francisco, where an individual needs to earn $37.62 an hour to afford a decent two-bedroom rental unit at market rate. At the current federal minimum wage of $7.25, Out of Reach 2014 calculated that it would take more than two people working full-time minimum wage jobs to afford a decent two-bedroom rental home for their family.

Even if the federal minimum wage was raised to $10.10 per hour, as proposed by the Fair Minimum Wage Act of 2013, it won’t help in everywhere — only in Arkansas, Kentucky, and Puerto Rico.

There were over 40 million renter households in the U.S. in 2012, making up 35% of all households nationwide. This is a 1.1 million increase over the previous year and double the rate of growth in previous decades. One in every four of these renter households are extremely low income, meaning they earn less than 30% of the area median income.

The population of extremely low income renters has risen to 10.2 million, and these are the households that experience the greatest housing instability and risk of homelessness. NLIHC calculates that there are just 31 affordable and available units for every 100 extremely low income renter households. However, NLIHC says that closing this gap is achievable through funding of the National Housing Trust Fund, which could provide communities with the money to build, preserve, and rehabilitate rental homes that are affordable for extremely and very low income households.

Extensive data for every state, metropolitan area, and county in the country are available online at www.nlihc.org/oor/2014.

American Apartment Owners Association | Company Website |  Rental property management can be very demanding. Our job is to make this day-to-day property management process smoother. AAOA provides a host of services ranging from tenant screening to landlord rental application forms and contractor directory to apartment financing.

Every landlord knows that the lease controls when it comes to managing properties and settling tenant disputes.

But did you know there are two hidden rules inherent to every lease agreement, even if these rules are not written in the lease?

Habitability

In every leasing situation, verbal or written, long-term or short, good or bad, a landlord has a duty to provide habitable premises. This is true if the lease is silent on the issue, and remains true even in cases where the landlord has shifted the responsibility to the tenant or attempted to limit this duty in some way.

While there may be language in a local statute and ordinance on habitability, this rule comes from simple contract law, and that makes it very flexible. The duty of habitability covers all the day-to-day necessities, including hot and cold running water, heat, and in some cases air conditioning, safe access, reasonable security from intruders, and compliance with zoning, building and fire codes.

The gray area: the tenant’s own actions. While the landlord has the duty to keep the property habitable at all times, a tenant may be liable for costs of repairs or remediation caused by their deliberate or negligent actions, including the actions of their guests.

Quiet Enjoyment

The biggest beef tenants have against landlords is intrusion on the right to quiet enjoyment, which exists whether or not it is mentioned in a lease agreement. Quiet enjoyment, the right to live without intrusion or nuisance, encompasses everything from excessive or unannounced landlord visits to noisy neighbors.

Despite the label, it’s not just noise that violates this covenant. Secondhand smoke is a common culprit.

Tenants’ Rights

When either of these hidden duties is violated, tenants have a number of possible remedies, including withholding rent (constructive eviction), or breaking the lease entirely, with no ramifications.

In a worst case scenario, the tenant can sue for damages that may go far beyond the actual rent paid under the lease agreement, so it’s important to keep these rules in mind when making property management decisions.

American Apartment Owners Association | Company Website |  Rental property management can be very demanding. Our job is to make this day-to-day property management process smoother. AAOA provides a host of services ranging from tenant screening to landlord rental application forms and contractor directory to apartment financing.

A mortgage broker, his wife, and their attorney have been sentenced for a fraud scheme involving foreclosed homes.

The Pennsylvania broker will serve five years in prison for the massive mortgage fraud scheme that resulted in at least 35 fraudulent mortgage loans worth more than $10 million, according to prosecutors. His wife was sentenced to home detention. Together, they are ordered to forfeit $400,000.

The couple’s attorney also faces prison.

According to prosecutors, the defendants targeted financially distressed homeowners facing foreclosure, falsely promised them help in saving their homes, engaged in real estate transactions with straw purchasers, and obtained dozens of fraudulent mortgages. The defendants took whatever equity the homeowner had left, funneled it through shell corporations they controlled, used some of it to pay the new mortgages, and put the rest of the equity into their own bank accounts.

The defendants promised financially distressed homeowners that they would find an “investor” who would help them save their home. The defendants would then either purchase the home themselves or arrange for a straw purchaser to obtain a fraudulent mortgage and then transfer title of the homeowner’s residence to the straw purchaser. They obtained the fraudulent mortgages by submitting false documents to mortgage lenders and making false claims about the purchasers’ finances.

The defendants also concealed from the lender the fact that the homeowner was going to continue to reside in the home and that the mortgage payments were going to continue to be made, in part, by the distressed homeowner and funneled through the straw purchaser.

The husband and wife brokers each acted as straw purchasers for 10 homes. They also recruited at least seven other persons to act as straw owners in order to obtain additional fraudulent mortgages.

An attorney was convicted of soliciting and referring distressed homeowners to the couple and using fraudulent bankruptcy filings for some of the distressed homeowners to delay foreclosure until the brokers had obtained an investor and a mortgage. Another defendant handled the closings for the real estate transfers, falsifying the settlement statements and manipulating the information provided to the lender in order to hide the nature of the scheme until after the loan was funded.

Charges came after the case was investigated by the FBI, and the Pennsylvania Department of Banking.

American Apartment Owners Association | Company Website |  Rental property management can be very demanding. Our job is to make this day-to-day property management process smoother. AAOA provides a host of services ranging from tenant screening to landlord rental application forms and contractor directory to apartment financing.

It’s often necessary to draft a list of rules and regulations for tenants to be used in conjunction with the lease agreement, especially in multi-unit rentals.

Otherwise, landlords and tenants are left to sort out the day-to-day management issues without any written standards. That can lead to conflicts, and claims of harassment or discrimination.

While the rules sheet is usually incorporated into the lease agreement, landlords who use a separate set of tenant rules often will reserve the right to change those rules from time to time. This is usually done by making a revised list, and then demanding tenants sign the new one.

But can a landlord change the rules mid-lease? Not surprisingly, the answer depends on the rule that is being changed.

The lease agreement is a contract, a bargained-for exchange where each side gets some things, but gives up some things in return. So, in order to determine whether a rule can be changed mid-lease, you need to decide whether the new rule changes the terms and conditions of the bargained-for rental agreement.

That means anything that materially changes the way the tenant lives day-to-day, or costs the tenant more money, may not be subject to change via the house rules.

The rules are a place for logistics, like acceptable conduct in common areas, a prohibition against leaving laundry unattended, or where to place the trash. The term ‘rules’ is a misnomer; they’re more like guidelines than actual rules.

More significant changes, like a smoking ban, or new parking fees probably require an amended lease, not just a rule change. That way, the tenant has the right to negotiate, and the change can only happen if they agree. That would be the case even if the lease allows the landlord to change the rules from time to time.

This practice is not only safer from a legal standpoint, but far more likely to bring about the tenant’s compliance, which is the ultimate goal anyway.

American Apartment Owners Association | Company Website |  Rental property management can be very demanding. Our job is to make this day-to-day property management process smoother. AAOA provides a host of services ranging from tenant screening to landlord rental application forms and contractor directory to apartment financing.