Property Management Blog - Tips, Articles and Advice from RentingYourHome.com

Just got back from this year's Greenbuild conference, an absolutely HUGE annual builder's conference, this year in Boston, MA. There were probably 1,000 vendors selling everything from flooring, to rain barrels, to reusable shingles, concrete, desks, automated homes…you name it.

For a bunch of stuff, my wife turned to me and said, "Is that really eco-friendly?" Probably not.

Which boils down to one thing: call something "Eco" or "Green" and it selsl.

So this year, I'm becoming the first "Green, Eco-friendly Landlord". Just ask me what I've done to go green and I'll get into the weeds about the flyash content of my cinder blocks. I'll talk about the eco-friendly asbestos and plaster I use. Will you buy it?

Apparently most people would.

I like reading a wide spectrum of news sources, some of which are heavily slanted in their coverage. I like to think that it's good. Helps keep the mind open to new ideas and different perspectives.

In this month's issue of The American, a right-leaning publication that covers politics, ethics, and the economy, they ran an interesting poll…What are the most prestigious occupations?

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We're in the middle of some tough times. I got a call last night from another good friend who's just been laid off. That makes a total of about 30% of my graduating class at Babson College MBAs who are still looking for a job or who've been laid off. That's not encouraging.

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Generally, you should advertise wherever potential renters in your area are likely to see the ads. For example, if you live in a college town, put up flyers ($) at the college bookstore, Laundromats, and coffee shops. There are also numerous free online advertising sites like www.Craigslist.com, www.Oodle.com, and many others. Additionally, you may choose to pay for advertising in the local newspaper ($$$$) or online pay sites like www.Apartments.com ($$$). Finally, consider offering referrals (if allowed) to friends, family, and your current tenants.

The three issues you'll want to consider are:

1. How much time do I want to spend advertising?
2. How much money do I want to spend?
3. How much "Flake Factor" am I willing to tolerate?

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Check out this report from last week, courtesy of Urban Land Institute's brain trust. If everyone's scrambling because of dropping home prices, it's probably time to buy.

I've also been reading more lately, comments from "experts" who say the market is going to drop again next year by 20%-30%. My problem with that is this: Those are the same experts who predicted in 2005 that prices would continue to rise steadily through 2010.

Take a look around you. In some Boston areas, home prices have dropped 40% in the past two years. That's the evidence that property is cheaper now than before. The big question is, do you think prices have dropped back to what you would consider "fair value" based on the economic conditions in your area? Are they at a place where a reasonable family on an average income (for your area) can afford a place to live? Or, have prices dropped below "fair value" in your estimation? These are the questions we should be using to decide whether or not to buy today. The "experts" forecasting…future guessing…crystal ball using…that's what got the country into this mess.

House Resolution H.R. 7126, proposed in September by Congressman Bill Richardson, would put a few new restrictions on landlords buying or selling homes in foreclosure.

Among the provisions are:

1. Landlord must notify the tenant that the property is going into foreclosure.
2. Tenant retains right to serve out the rest of their lease, even if that extends beyond the foreclosure date.
3. It also appears that the tenant cannot be evicted for a 6-month period beginning upon the foreclosure of the mortgage.

What does this mean for you? So far, it looks like Congress is putting reasonable restrictions on landlords who face foreclosure. If you're looking to buy up foreclosures to add to the number of rentals you own, this bill would require that you keep the existing tenants, which may not be such a bad thing.

Most foreclosed homes haven't gotten "tender love and care" in a while and need your cash for improvements. By retaining the old tenants but putting money into improvements, tenants see their homes getting better. This is a good way to retain good tenants. It's also a good justification to bump up the rents to market value if they leave.

So far, the bill is stuck in the House. But I'll keep an eye out.

The best answer is to look at what other rentals that are comparable to yours (comps) are being rented at. If you own a modern two-bedroom two-bath condo near public transportation with assigned parking, find comps in your neighborhood and see what they are renting for. Websites like www.Rentometer.com can provide general guidance, but a better technique would be to visit 2-3 comps in your area and take a look inside. A good rule of thumb is not to be the highest priced rental on the market. It's better to charge a moderate price and have it rent quickly to a high quality tenant than to overprice a unit and have it sit vacant or only get 1-2 tenants to choose from.

Statistically, 4-5 percent of all rent payments are made late for a variety of reasons. Sometimes the payment is only late a day or two; other times it never comes in. You can greatly reduce these numbers by putting tenants on automatic recurring rent payments, either through their bank, or through a rent payment program. Tenants no longer have to remember to mail the rent in and it comes every month, on time. No more "Lost in the Mail" excuses. That means fewer headaches and more golf!

Inman News reported recently that 10 million homes are "updside down", meaning that they owe more on their mortgages than those homes are worth.

While that number certainly seems scary, it's helpful to put that number into context. There are about 100 million homes in America. There are 34 million rental units. So, about 1 in 10 homes is "upside down".

What does this mean for landlords? It certainly means there are a lot more "accidental" landlords…people who just can't sell their primary home and end up renting it out. Maybe there's been a job transfer, a divorce, death, or change in lifestyle. Any of these situations can put the typical homeowner into a financial squeeze where they simply cannot sell so they rent their home out instead.

Time will tell how much web-based property management succeeds as an industry. But, we're proud to be here, at this specific point in history. We were designed to help exactly the person who needs us most today…the accidental landlord.

The best way to deny an applicant is to be short, sweet, and to the point. If the decision was based in part or in whole on their credit score, then you are required to provide them with the recourse to obtain a free copy of their credit report. Prepare a standard letter or find someone who can provide one to you. You are only required to information them:

1. Their rental application has been denied,
2. A notice that the decision was in part, or in whole, made based on their credit score,
3. As such, they are entitled to a free credit report, and
4. The contact information for the credit agency used.

This protects your legal liability, establishes clear and appropriate records, and effectively resolves your problem.

You should never get into a protracted conversation with someone about why they were denied. Nothing good will come from having a detailed discussion about why you think they are not good enough. Denied tenants can be defensive, aggressive, and difficult. If you do have a discussion with the denied tenant, and they feel your decision was based upon discrimination, they'll get ready help from the local tenant advocacy groups. Your only defense in court will be documentation proving that the decision was made on non-discriminatory grounds, and the only reliable proof of that is your letter stating the decision was made in part, or in whole, because of their credit! And your decision is ALWAYS based at least partly on credit…

After all, I wouldn't rent to an obviously dangerous crack cocaine dealer even if they had a 700 credit score…my threshold for dangerous criminals is an absolute perfect 800 credit score and no lower! So, it's always in part, or in whole, about their credit score.