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April 25, 2007

Landlords: Set rules about decorating for your tenants

If you’re a landlord or property manager, your lease agreements should include a clear description of what sort of decorating and alterations your tenants are allowed to do.

A recent survey by Apartments.com revealed that 90 percent of renters of will decorate when moving to a new apartment. (Click here to read the news release about the survey from Apartments.com.) It’s likely that a good portion of this decorating will be concentrated on the tenants’ own furnishings, but it might include paint, wallpaper, wall hangings, and other changes to the unit that may or may not meet your approval.

You’ll avoid problems if you’re clear on the rules upfront. You may, for example, allow paint with color approval first. Or you may allow hanging art or even small appliances in the kitchen on the walls with the understanding that tenants must fill the holes on moving (or pay a fee if they don’t). In multi-unit buildings, you might want to stipulate that window coverings must present a uniform look from the exterior.

The rules are up to you—the key is to make sure everyone knows what they are.


April 24, 2007

Is your property near a dog park?

Recently I saw a news item that said dog parks are becoming a very popular amenity when it comes to attracting renters and/or buyers and that properties near dog parks are selling faster. Most of the evidence appears to be anecdotal rather than documented, but it makes sense that dog lovers would look for a property close to a dog park. So if you’ve got a property for sale or rent and a dog park is nearby, be sure to mention that in your marketing materials.


April 20, 2007

The Business Owner’s Playbook from The Hartford

Regardless of how much—or how little—investment property you own, as a real estate investor, you’re in business. Whether your business is new or established, you can get some great information from the Business’ Owners Playbook, published by The Hartford Financial Services Group, Inc. Click here to order a printed copy or download a pdf file.


April 17, 2007

Are you getting a refund?

Today is the deadline for filing your personal income tax return (unless you’re in one of the areas that was granted an extra two days due to bad weather). Are you getting a refund? If so, you may want to consider adjusting your withholding.

Cash windfalls are always nice, but large tax refunds are costing you money. Consider that every $1,200 you receive as a tax refund is $100 a month that you could have been getting and using—or even just saving in an interest-bearing account. Instead, the government was able to use your money absolutely interest-free for a year. If you want to loan the government money, consider savings bonds because at least that way you'll be getting interest.

A qualified tax advisor can help you plan your withholding (and your estimated tax payments on income not subject to withholding) so that your tax refund (or payment) is nominal.


April 11, 2007

Should you accept credit cards?

Getting a credit card merchant account can be a hassle and there are costs involved, but if you have a significant number of rental units, you may want to consider it.

You could set your tenants up on an automatic charge for their rent payments—although you would have to set your rents at a rate that would cover the credit card fee. What’s more useful is to use a credit card to assure on-time payments by doing this:

When a new tenant signs a lease, get a valid credit card number from him (or her). As part of your lease terms, stipulate that the rent is due on the first and considered late on the third. If the rent is not paid by the third, you will assess a late fee and charge the amount of the rent plus the late fee to the tenant’s credit card.

This won’t work for every landlord, particular those with a small number of units. But it’s something to consider if late rent payments are an issue for you.


April 06, 2007

Make your ambitions your own

I’ve mentioned before that I like to read the newspaper comics—mostly for the humor but occasionally for the wisdom. In today’s “Hi & Lois” strip, son Chip says to Hi, “My ambition is to be a millionaire by the time I’m 25.” Hi answers, “Be realistic, Chip … I’m over 25 and I’m not a millionaire.” The next panel shows Chip walking away, saying, “It’s not my fault you’re not ambitious.”

Don’t measure your own ambitions by the performance of anyone else. There is nothing wrong with not wanting to be wealthy—but nor is there anything wrong with a desire for riches. You may love and admire people who have not reached the goals you have set for yourself, and that’s fine. Just don’t let the fact that they have chosen a different path stop you from achieving your dreams.

You love and admire people for who they are and you set your goals based on what you want. I have dear friends who are missionaries; they live a life far more modest than I choose, but that doesn’t stop our mutual affection (nor does it stop me from contributing to the funding their work).

So make your ambitions your own and let others take ownership of their goals and circumstances.


April 04, 2007

Landlord tip: Silence is not always golden

Recently a friend sent me something that’s probably floating around the internet. The subject line was: “Got beer? A landlord’s worst nightmare.”

The e-mail told the story of a single man who lived for eight years in a townhouse in Ogden, Utah. The landlord thought the guy was a great tenant because he never called, never complained, and was never late with the rent.

When the man moved out, there was no dust, scattered clothing, or dirty dishes anywhere. There was, however, an estimated 70,000 empty beer cans in the townhouse. The cans were everywhere, and the tenant had made tunnels between the bedroom, bathroom and kitchen. Do the math – this tenant consumed an average of 24 cans of beer a day during the eight years he lived there. Of course, it was “light” beer, so perhaps he was concerned about his health.

The point of sharing this story is this: Even when you have what appears to be the perfect tenant, you need to periodically do a physical check of all your properties. Certainly respect your tenants’ privacy, but at the same time, protect your investment. Some landlords combine checking their units with performing some type of regular maintenance so the inspection doesn’t seem intrusive. Or when it comes time to renew the lease, suggest doing it at the rental unit.

If you’ve got some tips for doing subtle, non-intrusive property checks of occupied units, let me know and we’ll share them.