American Apartment Owners Association

Landlord Quick Tip

Kim — Mon, 14 May 2012 22:54:59 +0000

Tip#160: Who’s in Charge?

A tenant in San Francisco made the news this week by complaining that the landlord pulled the plug on his electric car.

Charging an electric car overnight is the easiest solution for drivers. However, if that driver lives in a rental property, things get more complicated. Who pays for the power? Who is liable if a tenant is injured during charging, or if a battery or car get stolen? How do you keep strangers from pirating the power? What if more and more tenants want to charge their cars, too?

Some municipalities are requiring that new construction be equipped with car chargers, anticipating that these vehicles will gain in popularity. There are few, if any, similar requirements that landlords provide car charging stations in older buildings.

But it’s still a good idea to think about how you will handle the situation if it comes up. For instance, what if the tenant lists an electric vehicle on the rental application?

At some point, you may have to decide whether to add chargers to your list of amenities, or whether you will prohibit car charging at your rental properties.

Advance notice of your policies on charging is your best bet for avoiding disputes down the road.

See last week’s Landlord Quick Tip.

American Apartment Owners Association offers discounts on products and services for landlords related to your rental housing investment, including rental forms, tenant debt collection, tenant background checks, insurance and financing. Find out more at www.joinaaoa.org.

Landlord Sued Over Waiting List

Kim — Mon, 14 May 2012 22:34:15 +0000

A landlord in Nebraska discriminated against a tenant with a disability by passing her over for a chance at a more accessible apartment.

The landlord agreed to pay the woman $22,000 to settle the claim.

The tenant, who uses a wheelchair and walker, had been living in an upstairs unit. She claims the management agreed to waitlist her for the first available ground-floor unit. The resident also claimed that the apartment management denied her requests for a parking space and a ramp to ease her access to her unit.

The tenant claims that when a ground-floor unit became available, the manager leased it to a staff person who had requested the unit after the resident did. While remaining in the inaccessible unit, the resident says that she suffered significant injuries on the stair to her bedroom and bathroom. Months later, the resident transferred to a unit on the ground floor bedroom, but she claims that the management continued to refuse her repeated requests for a ramp to ease access to her unit, a parking space for her handicapped-accessible van, and an accessible route from the parking lot to her unit.

“Persons with disabilities aren’t asking for special treatment when they request reasonable accommodations,” said John Trasviña, HUD Assistant Secretary for Fair Housing and Equal Opportunity. “Ground-floor rooms, designated parking spaces, and ramps may be necessary for persons with disabilities to conduct everyday activities and gain independence in their daily living.”

In addition to paying the resident $22,000, the landlord agreed to revise leasing policies, redesign an accessible unit located on an accessible route, and leading to an accessible parking space in order to meet Uniform Federal Accessibility Standards requirements, alter the complex’s seven designated accessible parking spaces to include curb cuts, and post signage marking the spaces. In addition, the owner, management agents, and staff will receive two hours of training on the Fair Housing Act and Section 504 of the Rehabilitation Act of 1973.

With AAOA, landlords have resources at their fingertips. Check out our Landlord Forms page.

Do’s and Don’ts of Renters Insurance

Kim — Mon, 14 May 2012 22:27:41 +0000

Renters experience apartment theft 50 percent more than homeowners, yet nearly 70 percent of renters live without renters insurance, according to an Apartments.com national survey.

Apartments and home rentals are a great option for residents not ready to make the leap toward home ownership, but taking the appropriate steps to protect their belongings is just as important for renters as signing their lease. That’s why Columbus, Ohio-based Grange Insurance stresses the importance of renters insurance and why every renting tenant should be covered by an insurance policy.

“Although many landlords require renters insurance coverage from their tenants, there are some that make it optional,” says John Ammendola, president of personal lines for Grange. “Because of the high percentage of burglaries and the risk of damage due to other tenants’ actions, having renters insurance is a great safety net for tenants.”

Renters insurance typically covers furniture, appliances, televisions and clothing — all of which are identified as a person’s personal property inside the rental unit. If the items inside the unit are damaged due to fire, smoke or water damage, they’re covered under the renters insurance policy. Tenants should also consider policies that provide coverage for vandalism, malicious mischief and falling objects.

“Since tenants have no control over their neighbors’ actions, it is very important that their policy protects against the unexpected, including objects falling from patios above and any type of vandalism,” Ammendola said.

While looking for renters insurance, tenants should also confirm coverage includes personal liability. A crucial part of renters insurance, personal liability provides coverage for compensatory damages if a tenant is legally liable for another person’s bodily injury or property damage as a result of an accident.

“Accidents can happen when we least expect them,” Ammendola said. “Medical bills from bodily injuries can be expensive, but with proper renters insurance, a tenant’s finances are covered.”

Grange Insurance offers comprehensive coverage under its renters insurance policy to protect the items most important to tenants. Established in 1935, the company and its affiliates serve policyholders in Georgia, Illinois, Indiana, Iowa, Kentucky, Michigan, Minnesota, Ohio, Pennsylvania, South Carolina, Tennessee, Virginia and Wisconsin. For more information, visit http://www.grangeinsurance.com.

With AAOA, landlords have resources at their fingertips. Check out our Landlord Forms page.

Rent’s Late: Now What?

Kim — Mon, 14 May 2012 22:22:18 +0000

Late rent payments may be one of the most common — and troublesome aspects of being a landlord.

Unfortunately, your bills won’t wait for a tenant who’s slow to pay.

Strategies for Avoiding Late Payments

Make sure your lease provides a specific due date. If your standard lease allows some wiggle room — a “grace” period, you may actually be encouraging late payments. Also, if you have a policy of adding on late charges, the tenant may choose to be late and plan to pay the fee.

The reason this happens is that late fees are so heavily regulated, it’s nearly impossible to charge enough of a penalty to serve as a deterrent.

Gone are the days when tenants place the rent as the first priority. They are more likely to pay the cell phone bill on time then their rent. Why? Because they know the phone company will cut them off. Invoice the tenant regularly to reinforce the schedule. Tenants who have a bill in front of them near payday are more likely to pay on time.

Use electronic payment methods and take the date of payment out of the tenants’ hands.

Deposit rent checks as soon as they are received. Tenants who watch their accounts take note of any delays, and that encourages them to pay late. Also, being slow to deposit the checks can hurt when enforcing late fees in the courts — it’s hard to prove you needed the money by the 3rd or 5th of the month if you didn”t deposit the checks until the 30th.

Get on the tenant for late payments immediately. If they don’t feel the pain, they may try to do it again.

Know Your Options Once Rent is Late

You must act quickly and decisively once the rent is late. Undoubtedly you have the right to evict for nonpayment. Hopefully, your lease doesn’t make it hard to determine at what point the rent is late.

Review ahead of time what the procedure is for eviction in your area. Be prepared to serve notice on the late-paying tenant.

Many landlords and property managers take the approach that the eviction papework should be served immediately, before any negotiations take place over payment of the rent. This keeps the landlord in the driver’s seat, and gives tenants the incentive to work it out.

Some landlords opt for a strategy of getting the late-paying tenant out of the property voluntarily as quickly as possible, before they disappear entirely, or cause property damage.

Usually, lack of money is the reason behind the late payment, although sometimes the tenant is away on vacation or forgets. If the tenant needs help coming up with the rent, they must do it on their own. If need be, they can borrow the money from some other source and pay the rent in full. Accepting partial payments usually ends in disaster for the landlord.

With AAOA, landlords have resources at their fingertips. Check out our Landlord Forms page.

4 Must-Have Lease Provisions

Kim — Thu, 10 May 2012 19:13:10 +0000

While landlord tenant laws vary from state to state, one thing rings true for virtually all landlords: when it comes to disputes, judges often see the tenant as the “little guy” who needs protecting.

Take the case of a lease dispute. Because the landlord is the one who drafted the lease, they will have to live with it — for better or for worse.

Unfortunately, some leasing errors occur simply because the landlord omits or modifies paragraphs in the “boiler plate”– those seemingly unimportant provisions at the end of most lease forms that no one ever reads.

But by making changes to the fine print, a landlord could change the inevitable outcome of a lease dispute. Here are a few things to watch out for:

Contract? What Contract?

Your signature on the lease is not the one that matters. Unless you can show the tenant’s signature on the lease, it is not a lease.

Be especially careful when using fax or email, or online lease services. If the signature gets lost, the same is true of your legal options.

Make sure you can access a hard copy original if you have to.

This mistake is easy to make when you use form leases because the signature lines are often omitted, or not set for multiple or corporate signatures.

But, You Said You’d Let it Slide!

Landlords don’t always catch tenants breaking the rules. But if the landlord sees a problem and does nothing, that can have legal consequences.

Now, you’ve opened the door to the tenant saying that the lease is no longer binding.

One important safeguard is to provide in your lease that any modifications of the terms must be in writing, with signatures, to be valid.

Buried in the fine print, the modification clause restricts verbal modifications. If your tenant gets the wrong impression that you have changed the lease, with the modification clause in place, chances are they can’t bring up that argument.

Try to Keep it Together!

Often times a lease is more than one document. There are add-ons, like house rules, a no-smoking policy, pet addendum, or disclosure pages. An integration clause is a piece of fine print that serves as a legal paper clip, tying all those documents together. At the same time, the clause prohibits the tenant from slipping in other forms that they claim were a part of the lease agreement. Look for language that provides that the lease being signed — and all attached pages, make up the full and final agreement between the parties.

Cutting Your Losses

A severability clause states that if one provision of the lease is deemed illegal, the rest of it can stand. While this seems like legal mumbo jumbo, this clause can save the day in a situation where an inadvertent illegality is not central to the lease. Without it, the entire lease could be unenforceable.

Adding Up the Charges

Many lease forms place the all-important remedies provisions of the lease in the fine print. This can create the impression that these terms do not have to be modified for your property.

Don’t assume that you can charge interest, or add attorney’s fees and the costs of a dispute to the claim against a tenant, without first checking your local laws for any restrictions. Those terms must be included in writing, but at the same time, they cannot contradict the law. If they do, hope that you have a severability clause!

With AAOA, landlords have resources at their fingertips. Check out our Landlord Forms page.

Where Do I Get The Money I Need To Get Started?

Kim — Thu, 10 May 2012 16:09:17 +0000

by Russ Whitney

Believe it or not, when I first got started in real estate I only needed $1,000. You don’t need much more than that even today. And yes, I was able to turn that $1,000 into millions in just several years. Try getting that kind of return in the stock market or in just about any other investment!

Getting Started In Real Estate Investing
It’s a common misconception that you need to have money to make money. Or you need tens of thousands of dollars to invest in real estate. That would be nice. And if you have it great! But if you don’t that’s fine too. Keep in mind, our goal is to generate cash flow quickly. So you don’t need a lot of money to get started. Do you have $1? Seriously, that’s all you may need.

In other cases, you may need more than just a dollar. If you have a home, credit cards, banking relationships – you have access to money. If you were to buy a car, where would you go to get financing? If you were to fix up your house and you need financing where would you go?

Sometimes we make this much more complicated than it really is. Home equity lines of credit, 2nd and 3rd mortgages and advances on credit cards are some of the more common methods to get access to start-up capital. May be not the first choice, but definitely viable options.

Need Financing – Forget Traditional Banks!
Don’t rely on the bank. Remember, we’re looking for run-down, distressed properties and most banks won’t even touch these types of properties. That’s fine.

In many cases, you can use seller financing. This is a favorite strategy of mine in which I put down just 10% or less of the purchase price and seller would hold the financing.

You can also use land contracts, assignments, wrap-around contracts and many other strategies that don’t require you to come up with ALL the money to purchase a property. The key is to understand the circumstances of the seller as well as the market and apply the financing strategy that best fits the deal.

In the meantime, you’re looking for financing, right? No problem. Even though traditional banks may not be lending as much anymore, there are plenty of hard money lenders who are looking to fund deals. Just check with your local Real Estate Investment Association for a listing or google “hard money lenders” for a list.

In just about all markets – even smaller markets – there are plenty of private lenders available who are looking to get a return on their money. Doctors and lawyers are some of the best sources for private money right now. Offer them a percentage of the profits and show them how you can generate a 20% or 30% return on their investment in a short period of time. They can’t get that same return anywhere else right now!

Need Financing – Build Relatonships!
Another terrific way to find capital is to go to your local real estate investment club or association meetings and ask other investors who finances their deals. Find out who the title companies are using to finance their deals. Call the phone numbers on the “bandit signs” on the street corners that advertise “”We Buy Houses”. Ask them who they use to finance their deals.

There’s a ton of cash out there right now. Most of the foreclosures in our area in Florida, for example, are being bought by cash buyers. So there are many people who have the funds available, it’s simply a matter of finding them.

A great place to find those buyers is in the courthouse records. By law, buyers of foreclosures must be listed in the public records kept on file in the county or city courthouse. Since many of them are cash buyers, they may be willing to finance your deals – especially if they don’t have to do any work.

Show Me The Money!
Here are some of the best sources of funding we’re finding right now that are perfect for investors who are just starting out:

—–> Hard money lenders
—–> Home equity loans or lines of credit
—–> Private money lenders
—–> 401(k) plans
—–> CDs
—–> Credit cards
—–> Savings
—–> Friends
—–> Family

Russ Whitney, a pioneer in real estate investing and training, became one of the youngest self-made millionaires at just 27. From his humble beginnings as a high school dropout and a $5 an hour slaughterhouse worker, Russ began his investing career at age 21. Within a few short years, he achieved financial independence thanks to a unique system he developed that virtually eliminates the risk in real estate investing and creates cash flow for investors to achieve their financial goals.

A countless number of investors have come to rely on Russ’ books, home study courses as well as his coaching and personal mentoring programs with up to 60,000 people being trained every month. Today, Russ continues to share his passion for investing and training by teaching beginners as well as experienced investors how to create wealth for themselves and their families in real estate.

Russ Whitney, is the bestselling author of Building Wealth, Millionaire Real Estate Mentor, and The Millionaire Real Estate Mindset and is also the author of some of the world’s most popular home study courses including Starting from Zero and the Building Wealth System.

Yet, Russ has never forgotten how difficult life can be and strives to share his good fortune with others. He’s worked with correctional institutions in helping inmates receive a second chance at a productive life. He’s provided safe, clean housing for the elderly. And he continues to support the youth in his community with his time and money.

Russ Whitney is a living proof that anyone can achieve the American dream.

This post provided by REIClub.com for creative real estate investors. Copyright 2002-2011 All Rights Reserved. Published with Permission of Author. No part of this publication may be copied or reprinted without the express written permission of the Author and/or REIClub.com.

With AAOA, landlords have resources at their fingertips. Check out our Landlord Forms page.

Fannie Mae and Freddie Mac to Streamline Short Sales

Kim — Thu, 10 May 2012 16:05:08 +0000

New Timelines Take Effect in June

The Federal Housing Finance Agency (FHFA) has directed Fannie Mae and Freddie Mac to develop enhanced and aligned strategies for facilitating short sales, deeds-in-lieu and deeds-for-lease in order to help more homeowners avoid foreclosure. The effort will come in stages with the first taking place this June.

The new, aligned timelines include the requirement that mortgage servicers review and respond to requests for short sales within 30 calendar days from receipt of a short sale offer.

“FHFA and the Enterprises are committed to enhancing the short sales and deeds-in-lieu process as additional tools to prevent foreclosure, keep homes occupied and help maintain stable communities,” said FHFA Acting Director Edward J. DeMarco. “These timeline and borrower communication announcements set minimum standards and provide clear expectations regarding these important foreclosure alternatives.”

With the alignment, servicers will be required to:

Review and respond to requests for short sales within 30 calendar days from receipt of a short sale offer and a complete borrower response package;

Provide weekly status updates to the borrower if the short sale offer is still under review after 30 calendar days;

Make and communicate final decisions to the borrower within 60 calendar days of receipt of the offer and complete borrower response package.

By the end of 2012, Fannie Mae and Freddie Mac will announce additional enhancements addressing borrower eligibility and evaluation, documentation simplification, property valuation, fraud mitigation, payments to subordinate lien holders, and mortgage insurance.

With AAOA, landlords have resources at their fingertips. Check out our Landlord Forms page.

Landlord Quick Tip

Kim — Mon, 07 May 2012 16:03:55 +0000

Tip 159: Time for HVAC Check

Lack of use over the winter months can allow debris to settle and that can cause clogs in air conditioning hoses and drain traps once the units are up and running again.

Having an air conditioning unit fail during the heat of summer can be catastrophic for landlords and tenants alike.

Record heat may place the units back in service earlier than usual this year. Take a few minutes to inspect your unit as soon as it is back in use this spring or summer, and look for leaks.

Because all air conditioning units, whether central air or window units dispel water, there a system to divert that water to the appropriate drain and away from the house. Water spots on concrete or indoor flooring are not normal.

Left unchecked, these leaks can damage the furnace, may damage furnishings and flooring, and can spawn a mold outbreak. There have been reports of dangerous bacteria growing in these pools.

Be sure to instruct your tenants to let you know if they see any signs of a leak.

Often the repair is as simple as unclogging the drain pipe or trap using the typical plumbing methods and a how-to video found online.

Other problems require an HVAC tech. These techs will be in high demand this summer, so be sure to get in line early to avoid tenant complaints.

See last weeks Landlord Quick Tip.

Landlords – Quick Ways to Reduce Rental Vacancy

Kim — Mon, 07 May 2012 15:18:37 +0000

by Brian Davis

Vacant rental properties can certainly be compared to a migraine headache. A pounding headache that will only be cured by one remedy- a paying tenant.

Hazard insurance, mortgage payments, property taxes, utilities, break-ins, vandalism, maintenance, and landscaping are many of the costs associated with vacant rental properties.

Reducing your vacancy rates to a bare minimum is extremely important, if you intend to have a successful real estate investing career.

Here are Eight Essential Steps for Landlords and Property Mangers to utilize to avoid or reduce their rental property vacancies:

Step 1: Before You Invest – Research

Obviously certain areas are better for investing then others for a variety of reasons; research the neighborhoods you are considering investment.

Speak with local realtors, fellow investors, property managers and anyone else who is knowledgeable about the area. You must find out if the neighborhood has a high or low vacancy rate, if there are
currently an oversupply of other rentals nearby, and what current market rents are in the area.

Step 2: Location, Location, Location (and Visibility)

Rental properties located in areas where there happens to be a lot of foot traffic are often easier to rent then that of a hidden property. A crucial element in keeping your rental occupied is that of visibility and location.

If your tenant plans to move, and your property is located in an area where it’s highly noticeable, often prospective tenants will see the “For Rent” sign and call to inquire without any further advertising required.

Additionally, these applicants are already familiar with the area and exterior of the property, and like them both enough to call you.

Step 3: Act Immediately

The day your tenants vacate is the very same day your handyman/contractors should assess repairs and then begin refreshing your rental property. Every day that passes while your contractor “gets around to it” will cost you money; the clock is ticking and the bills piling up on your vacant investment.

Step 4: Step 4: Price Right

Pricing your rental unit properly is key; “guesstimating” what the market will bear is not advised. You must know exactly how to price your investment so that you are maximizing on both your return and maintaining a competitive price.

We suggest not only researching similar local rents, but touring other rental properties in your direct area and speaking with local property experts.

Step 5: Advertising for Your Rental Area

When advertising your rental property you must think outside the box, and outside of the advertising that reaches you. You must consider where your rental is located and what types of editorials/media outlets your possible tenants may read.

For example, the internet – you use it, but your potential tenants may not even have a computer. If your rental property is located in an area where English may not be the first language, consider using another.

As a final note, it’s worth mentioning that the Fair Housing Act places some limitations on rental advertising. (www.hud.gov)

Step 6: On Site Management

Larger, multi-unit properties statistically fill vacancies quicker with on site property management. This is something you should certainly consider, as you may even be able to compensate the property manager with subsidized or free rent instead of paying them
out of pocket.

Step 7: Long Term Lease Agreements

Longer term rentals will be vacant less often, as their turnover rate is inherently lower. Additionally, the longer tenants reside in a property, the deeper their roots grow.

Incentives can work wonders: for example, offering a reduced rate for a two year rental or lowered utility bills, possibly free cable.

Remember, maintaining filled rental units is the goal, and it tends cost far less to offer an incentive than it does to carry a vacant rental unit month after month; incentives work!

Step 8: Rent-to-Own

There are many advantages to marketing your rental property as rent- to -own. As home ownership is ideal for many, and offering this option will most likely attract a higher caliber tenant.

Additionally, your rent-to-own tenants will have a very high incentive to pay the rent on time- maintaining their credit score and the eligibility to purchase. Rent-to-own tenants are more invested in the rental and will treat the property with respect.

And last but not least, you can sell the property without paying a real estate agent’s commission!

Fill Your Rental Vacancies Immediately
Start advertising, print out a stack of rental applications, and remember the big picture: minimize vacancies and maximize the quality of your tenants, and you’ll be well on your way towards a profitable rental business!

Brian Davis is a seasoned landlord and marketing professional. As Vice President of online company EZLandlordForms, Brian Davis works to empower landlords and property managers across the United States with valuable information and documents to support their work.

Brian, with over a dozen rental properties of his own, understands what it takes to be an effective landlord through first-hand experience.

Mr. Brian Davis graduated cum laude from University of Delaware’s Honors Program, with a degree in Psychology and a degree in Criminal Justice. From 2003-2006 he managed the Real Estate Department for Bay Capital Corporation, a national mortgage lender. From 2006-2008 he served as an account executive and property inspector, overseeing the renovation of dozens of properties for a private lending company. He joined EZLandlordForms in 2008.

This post provided by REIClub.com for real estate investors. Copyright 2002-2011 All Rights Reserved. Published with Permission of Author. No part of this publication may be copied or reprinted without the express written permission of the Author and/or REIClub.com.

With AAOA, landlords have resources at their fingertips. Check out our Landlord Forms page.

Ordinance to Limit Online Rent Payments

Kim — Mon, 07 May 2012 15:13:28 +0000

Landlords and property managers in Los Angeles who have adopted online rent payment procedures soon will be required to offer an alternative method of payment. Last week, LA City Council voted to adopt a measure that:

Directs the City Attorney to draft an ordinance that requires all landlords and property managers in the city to provide an alternative means of paying rent and any associated rental fees if they adopt an online rent payment system, and

Allows the means by which the Los Angeles Housing Department can take enforcement action against landlords or property managers who fail to provide an alternative method that tenants may use to pay rent.

The measure came after protests levied by tenants who claim that online payments discriminate against seniors and low income renters, who they say often do not have access to the Internet.

Presumably, these tenants would be allowed to pay by mail, or by delivering the rent to the landlord or leasing office. Landlords and property managers may have to revise their lease agreements to reflect these changes once the law is passed.

With AAOA, landlords have resources at their fingertips. Check out our Landlord Forms page.