Real Property Management is the largest residential property management franchise organization in North America, managing tens of thousands of properties for individuals, investors and institutions throughout the country. We strive to provide comprehensive, reliable, trustworthy services for property owners to save them time and money.
Investing in real estate is a proven long-term wealth-building strategy. For this reason, buying residential rental properties requires that investors use a long-term outlook when assessing potential properties. Focusing too much on rental rates can distort a rental property’s long-term investment potential and unnecessarily limit your purchase options. To make the best possible residential real estate investments, it’s important to take a holistic view of each potential rental property within the context of the current (and future) real estate market.
Choosing a rental property involves making a number of important decisions and weighing all of the critical factors involved. It is especially important to avoid short-term thinking and look beyond simply comparing your anticipated rental rate to your mortgage payment. Industry experts say that there are as many as ten different things to consider when beginning your next property search. For example, the neighborhood in which the property is located, the local job market, and nearby amenities are all important elements to consider when choosing a rental property. The location of a property is important because it will determine what type of tenants you will be able to attract to the property and will greatly impact your vacancy rate. The local job market and proximity to amenities will also affect the type of tenants drawn to your rental, as well as impact your property values.
The value of the property, both present and future, can be an invaluable piece of information when choosing a rental to buy. The house’s potential for appreciation must be one of the long-term factors considered when making your decision, because even if the property isn’t valued highly at the present, it may be five or ten years down the road. Another related consideration is future development in the area. New construction can have a significant impact on property values, so it is important to gather as much information as you can about local or regional plans to develop or renovate nearby areas.
While assessing the market and local conditions are important, investors cannot afford to overlook things such as property taxes, the number of listings and vacancies in the area, and average rents. A detailed market analysis can provide rental property owners with a window into the near future and, when combined with the other information gathered, provide a solid base upon which to estimate future performance.
Knowing how much rent you can get right now for a rental property versus the mortgage payment and other costs is an important number to have while making a new investment. But taking a holistic view of each prospective property and evaluating all of the significant factors can help you make wise investments in properties that are likely to grow in value year after year. At Real Property Management, we can help you plan a long-term investment strategy designed to maximize your returns over the entire span of your property investments. Our professionals assist residential real estate investors through a range of quality services, applying industry best practices to ensure that each property you buy will help you meet your long-term financial goals.
Real estate investing offers both unlimited potential and inherent risk. But staying motivated while pursuing your investing goals can sometimes become difficult. This is particularly true when purchasing rental properties with cash. It may seem like a cash sale is the ideal way to buy rental properties, but this approach can actually have a negative impact on your personal motivation. Without the right amount of leverage in your real estate investments, you may struggle to maximize your earning potential.
Life coaches and motivational speakers often cite the importance of personal leverage for those seeking personal and financial success. The concept of personal leverage can be loosely defined as a process through which you attempt to understand what motivates you and then use that motivator to help you set and achieve important goals. Leadership gurus such as Tony Robbins and Jeremy Watkins have described the way that our culture places great emphasis on achievement and success without always connecting the win to the qualities that made success possible.
Personal motivators are different for each individual, and can vary widely. But in some ways they also often share a common quality: the fear of loss. It is also generally true that the higher the stakes of that loss, the greater your motivation to actively guard against it by doing things that contribute to your success. For example, many investors view buying a rental property as one step toward saving for retirement or growing personal wealth. This is a solid plan, and one that has been proven to offer returns that are higher than other types of investments.
For investors with the ability to pay cash for a rental property, they may think that once they hold title to the house that there is nothing else to do but wait for the property to appreciate. This mentality may work with low-risk – and low return – investments like bonds and savings accounts, and perhaps even when investing in the stock market. Such options typically offer returns equal to the amount of effort required to set them up, and often fail to meet expectations.
Growing personal wealth is not a passive activity, and neither is real estate investing. Having the right leverage is an important part of making sure that you reach your investing goals. Unlike completing individual cash sales, investing in multiple rental properties through the use of mortgages can be a powerful motivator to keep your investing on track. By placing demands on yourself, such as loan payments that must be met and different properties to maintain and improve, you can create the personal leverage you need to keep your real estate investing goals on track.
Personal leverage is an important part of success, in real estate investing and in life. When questions arise about how and whether to use leverage to help you achieve your goals, you need people on your investing team with real experience and expertise. The professionals at Real Property Management are ready to help. We work with property investors to build leveraged business strategies designed to grow personal wealth. No matter what your investing goals are, we can help by making owning quality rental homes a streamlined and profitable endeavor.
Knowing how to properly handle mail intended for a tenant, past or present, can help property owners and their future tenants avoid unwanted legal trouble. There are serious legal implications for mishandling a tenant’s mail. But sometimes, mail from former or even current tenants just keeps coming. In such situations, property owners must take appropriate steps to legally handle situations of excessive or unwanted mail.
When a tenant moves out or leaves the property for long periods of time, what to do with their mail can quickly become a time-consuming hassle. Some tenants move out without providing a forwarding address, or may go on vacation or travel for long periods of time without requesting an official hold from the local post office. When mail for an absent or former tenant is piling up, property owners must take action to prevent a small nuisance from becoming a big legal problem.
The United States government takes the matter of mail delivery very seriously. It is common knowledge that under our current postal system, a citizen’s mail is considered personal property. It is delivered to them by authorized mail carriers and is intended only for those to whom the mail is addressed. Under federal law, taking or moving mail from the intended delivery location is considered a felony offense. So is preventing delivery by withholding a tenant’s mail, as well as opening, throwing away, or destroying mail not addressed to you. Known as mail tampering, any of these acts may result in criminal charges, fines, and even jail time.
So what should a property owner do to curb the tide of unwanted mail and prevent future tenants from tampering with former tenant’s mail? Because mail falls under the definition of personal property, it must be handled carefully. For example, if a tenant has moved out, a property owner could instruct a current tenant to write “return to sender” on the envelope and place it back in the mailbox for collection. Property owners could also write a note to the mail carrier, informing them that the addressee is no longer at the address and request that mail delivery to them stop.
However, if the tenant is currently under a lease but simply absent from the property for a vacation or other reason, handling mail delivery can become a bit more difficult. The best way to handle mail delivery during an extended absence is for the addressee to contact their local post office themselves and request a hold. If a tenant has failed to do so, the mail will continue to pile up, creating a potential legal nightmare for property owners. If a property owner collects and keeps the mail for the tenant and that mail becomes lost or damaged, the tenant could potentially accuse an owner of mail tampering. In such circumstances, the best thing for a property owner to do is to contact the Postmaster of the local US Post Office and request that mail delivery be temporarily suspended. If they are unable to deliver mail, usually a post office will hold the person’s mail at the office until they come and pick it up in person.
Dealing with a hassle like mail delivery is not complicated, but it takes time. For property investors, time is one of your most valuable assets. Protect it by hiring Real Property Management to assist with tenant mail delivery problems and all other aspects of tenant relations. We can handle all of a property’s needs, which includes everything from the basic day-to-day tasks to the more unusual situations. With Real Property Management on the job, you can be confident that your tenants, and your property, are being professionally and legally cared for. For more information, please contact your nearest Real Property Management office.
Helping tenants understand the risks and consequences for setting off fireworks on or near your rental property – and including clear language about fireworks in your lease – are the best ways to avoid rental property damage. Although a popular part of many celebrations, fireworks have the potential to severely damage a rental property as well as injure tenants, their guests, and even nearby neighbors. The question of whether tenants will be allowed to include fireworks in their holiday celebrations is one that should be clearly addressed in a rental lease agreement.
Fireworks are a big part of many national holiday celebrations. In addition to large commercial or state-funded displays, the popularity of consumer fireworks has continued to increase. At the same time, the size and firepower of consumer fireworks have also grown, creating products that are both widely available and extremely dangerous. According to theNational Fire Protection Association (NFPA), fireworks start an average of 18,500 fires every year. Fireworks also result in thousands of injuries; in 2017 alone, 12,900 people were treated in hospital emergency rooms for burns and other injuries caused by fireworks. These statistics show that despite their popularity, fireworks have the potential to cause unintended damage and injury just about anywhere.
To reduce the chances that such a disaster will strike on one of your rental properties, it is important to make sure your tenants know the risks involved. For example, it is key to inform tenants of any local or state laws regulating the use of consumer fireworks on residential properties. It is also a good idea to educate them on the basics of fire safety, including recent data on fire-related accidents and injuries. Property owners should also insist that their tenant obtain renters insurance in the event that something unexpected does occur. Landlord insurance will cover most kinds of damage to the structure, but if the damage extends to the tenant’s personal property or the tenant injures themselves or others, they will need their own policy coverage.
In addition to providing tenants with information, one of the best ways property owners can minimize fireworks use on their rental properties is by including clear and specific language in the lease documents that detail their firework policy. No matter what state or local law allows, the property owner has the last word on whether fireworks will be permitted on their rental property. Making it clear to tenants that fireworks are not allowed in the lease can go a long way toward preventing property damage and give property owners a legal recourse in the event that tenants choose not to comply.
Maintaining good tenant relations while setting clear lease terms and consequences for ignoring safety precautions is important. It also takes up a lot of time and, as they say, time is money. Real Property Management can assist property owners with tenant relations, not to mention lease language and ensuring compliance. We take care of your property and your tenant for you, freeing you to spend your valuable time elsewhere. For more information, please contact your nearest Real Property Management office.
The best way to handle abandoned property left by a tenant and avoid legal problems is with a little common sense and following your state laws. While these laws differ from state to state, usually a property owner cannot simply take or keep personal property left behind by a former tenant, nor can they throw it away. Instead, a rental property owner must follow a series of important steps to document and control access to the items. When done according to local law, rental property owners can safely and confidently dispose of a former tenant’s abandoned property.
When a tenant moves out, they sometimes leave things behind. There are many stories about tenants who leave a rental home in poor condition, leaving trash and personal items for the property owner to clean up. But some tenants will also leave items such as furniture, unforwarded mail, personal items, and clothing.
Abandoned property can be a problem for property owners for several reasons. Beyond needing to clear out the rental home for the next tenant, abandoned property can lead to serious legal trouble if not handled properly. What often complicates the disposal of abandoned personal property is that the laws governing personal property left in rental homes not only differ from state to state, but also sometimes even from county to county. For property owners, it is critical to know the law that governs each of your rental properties and follow them to the best of your ability.
For most places, the proper handling of abandoned property begins with several common sense tasks. For example, a property owner should ensure that they have control over access to the former tenant’s personal property by recovering all keys and garage door openers, or by changing the rental home’s locks. Some states may allow personal property to be secured in a storage unit or require the items be left on the premises, each location will have different provisions. One of the worst things a property owner can do is allow a former tenant’s personal property to be stolen after the tenant has moved out. Civil and criminal charges may result, creating many unwanted legal problems.
Once secure, another important task is to document the abandoned property. This can be done in several ways, such as by making a detailed video recording of the items, taking photographs, or by making a detailed list. Taking photos and video accompanied by a detailed written list of items is the best way to document the property’s condition, in case questions about property damage arise later on.
Once you determine that you are legally able to move the abandoned items, it is a good idea to invite a neutral person to act as a witness as you do so. This will prevent any questions about theft or illegal handling of the tenant’s property, and provide confirmation that the property is being handled safely and appropriately. In most cases, holding property until terms of the lease are met will not be lawful, make sure you fully understand the tenant rights to reclaim their property in your area.
Another common sense step to take when dealing with abandoned property is to notify the former tenant in writing that property was left behind and what you have done with it to date. If the law allows, you could also include a statement informing the tenant that they have until a certain date to claim their items, and what you plan to do with their things after that date. Again, laws vary, but many places allow property owners to keep, sell, or otherwise dispose of abandoned property once all of the proper steps have been taken.
Even if things go smoothly, dealing with a former tenant’s abandoned personal property will take up valuable time and cost you money. The potential legal problems are real and can make the process complex. Instead of trying to navigate these murky circumstances yourself, consider how much better it would be to let Real Property Management do it for you. Our property management professionals have in-depth knowledge of local laws and can ensure that abandoned property is handled accordingly. We believe that the best defense against potential legal problems is communication and maintaining good tenant relations. With our help, you can avoid unpleasant tenant interactions and time-consuming hassles, leaving you free to allocate your time in more profitable ways. Please contact your nearest Real Property Management office for more information.
The decision to upgrade a rental home to central air conditioning is one that must be made on a case by case basis. Upgrades bring both pros and cons, and because each situation is different, the question of whether to upgrade or not depends on a number of factors. Location, cost, repair and replacement costs and the expected return on the investment must all be considered before deciding to upgrade.
Central air conditioning units are one of the largest ongoing costs for a rental property. For investors with limited cash flow, upgrading a rental property with central air will place a heavy burden on an investment budget. However, if your rental is located in an area where central air is a common and expected feature, deciding not to install it could severely impede your ability to attract quality, long-term tenants. Long vacancies and lower rental rates may result, potentially causing income losses in excess of the new unit’s upfront cost. For this reason, the decision to upgrade to central air must include a careful assessment of all of the costs involved.
In some parts of the country, central air conditioning is considered a luxury item. In areas with temperate summers, adding an expensive central air conditioning unit to a rental property may not always strengthen your rental property’s appeal. Tenants in these areas may not be willing to pay more for what they view as an unnecessary add-on. But in other locations, central air conditioning is not only expected but necessary. Certain climates, particularly those in the South, will make having an air conditioning unit in your rental property an essential part of attracting quality tenants. Few tenants in these areas will be willing to suffer through the heat in a rental home that cannot maintain a comfortable temperature.
Repair and Replacement
In many states, once you place an air conditioning unit you will be responsible for maintaining it in good working order for the entire tenancy of a renter. Many state laws and local health codes have this requirement in place, so if you are thinking of placing air conditioning as a trial, make sure you understand your local laws to see if these codes and requirements apply to your investment property.
Along with location, cost, and maintenance aspects, it is important to weigh the pros and cons of upgrading to central air in terms of the expected return. Central air conditioning units are a significant investment that require ongoing maintenance and repairs. Installing one may be expensive in the short term, but the increased property value and appeal, not to mention the ability to charge higher rent, may ensure that the upgrade pays for and sustains itself within a relatively short time. However, if the market doesn’t weigh heavily in favor of upgrading to central air, deciding to do so anyway could make it impossible to recoup the original cost of installation and ongoing maintenance.
Ultimately, the decision to upgrade your rental property with central air relies on carefully weighing the pros and cons, gathering good information, and gaining a solid understanding of your rental market. The professionals at Real Property Management have market expertise in over 300 locations in North America. We offer our property owners market evaluations for each property, a valuable service that can help you make the decisions that are right for your particular situation. Visit our Real Property Management office locator to find your nearest location.
Managing a rental property means taking on a variety of roles. Depending on how involved you are day to day, a property owner can act as a leasing agent a repairman, or a problem-solver at any given time. When issues arise between a tenant and a neighbor, property owners might wonder whether they should add mediator to the list. In an ideal situation, tenants and neighbors should be left to work out their differences themselves. But disputes can sometimes escalate beyond a quick solution, and in some cases, knowing when to get involved in a dispute between your tenant and their neighbors can help you make the decision to act, if and when the time comes, more confidently.
The first thing a property owner should do when a dispute first arises between a tenant and their neighbor is to learn as much as you can about the nature of the dispute. If the disagreement is related to the property itself or the behavior of a tenant, a landlord has an obligation to step in and take action. A property owner’s first line of defense against problems is a lease that clearly outlines what types of tenant behavior will not be tolerated. If a tenant is violating the lease and a neighbor has complained, a property owner must take the proper steps to deal with the problem right away.
If, on the other hand, the tenant is complaining about the neighbor, it’s a good idea to first check for a history of disputes. It is possible that the neighbor is an ongoing problem, or you could have a tenant who is unusually sensitive. Listening to a complaint and showing genuine concern can go a long way toward helping your tenant find a resolution. You might also consider speaking directly to the neighbor and give them a chance to air their grievances. In some cases, simply being heard can help calm a tense situation. Just be sure to stay calm yourself; becoming angry will cause irreparable damage to your relationship with the neighbor, something a successful rental property owner cannot afford.
If talking to the neighbor doesn’t resolve the issue, it’s important to understand that there is little you can do to modify the neighbor’s behavior. Issues like noise complaints, obstructing sidewalk or street access, or other issues might be addressed through an owner’s association, if available, or other local officials. But it may also be that the tenant and neighbor simply can’t get along. It’s entirely possible that a different tenant wouldn’t have the same issue and would get along just fine.
On the other hand, if the neighbor is engaging in behavior that violates a law, encourage your tenant to report it to the appropriate agency, police, code compliance or health department etc. This is especially important if threats are made, the property is damaged, or your tenant feels like their safety is at risk. As a landlord, you have an obligation to help your tenants stay safe and should work with your tenant and the local authorities to resolve any disputes of this kind. If you do nothing, and a dispute escalates into harassment or physical violence, you might wind up involved in a lawsuit or worse.
Knowing when and how to step into a tenant dispute with their neighbor can be a tricky part of the business. But Real Property Management can help. Our professionals can help mediate disputes, work with unhappy tenants, and take steps to encourage good relations with your neighbors.
Advancements in residential construction technologies have created a strong demand for energy-efficient homes. As more homeowners and rental property owners upgrade their homes to enhance energy efficiency, more renters are looking for properties with these kinds of features. As a rental property owner, there is a lot that you can do to improve the energy efficiency of your rental homes and attract quality tenants. But the first step toward an energy-efficient rental home is to conduct a comprehensive energy audit of the property.
An energy audit is a close assessment of the energy needs and efficiency of a home or property. It is possible to do an energy audit yourself, or to hire a professional to come in and do it for you. There are advantages and disadvantages to both options, but the end result should be the same: a detailed list of items that, if fixed or upgraded, will significantly increase the energy efficiency of a home.
For example, a detailed energy audit should include checking the entire property for air leaks. The more air that is leaking in or out, the harder your heating and cooling systems need to work to maintain a consistent interior temperature. Air can leak in many places, including around window frames, doors, and attic hatches. Air can also draft through fireplaces and around pipes and wires. Other common sources of air leaks are around electrical outlets, switch plates, and baseboards.
Other items in and around a rental property can be contributing to higher energy bills. Among these, old windows, aging appliances, and an outdated heating and cooling system can all use up far more energy than they should. For older rental homes, drafty or single-pane windows can make it difficult for tenants to maintain a comfortable temperature. Windows have come a long way in the last twenty years, making a window upgrade for older homes one important way to improve overall energy efficiency. Other culprits of high energy use are aging appliances and HVAC units. As appliances and HVAC units age, they can become a significant drain on a property’s efficiency. And new advances in appliances and HVAC systems mean that most newer models are designed with energy efficiency in mind.
Once you have a complete energy audit of your rental property in hand, it’s important to lay out a budget and timeline for renovation. Among the most important considerations are addressing the greatest losses of energy efficiency first, which items will offer the highest return for the cost, and how long you can wait before an upgrade becomes an emergency repair or replacement. Keep in mind that you may be able to qualify for certain tax or other incentives by upgrading your rental property, benefits that should be calculated into the overall cost of the improvements.
Regular energy audits are an important part of rental home maintenance. As technologies advance and renter demand changes, so too must the degree of energy efficiency a rental home has to offer. While it is possible to do an energy audit yourself, there is a risk that you might miss something important in the process. A professional will have the experience to check every last potential energy problem, which is why Real Property Management offers this service to our property owners. With industry experts on call, we can give you the information you need to make your rental homes snug and secure – and appealing to quality tenants – for many years to come.
We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the Nation. See Equal Housing Opportunity Statement for more information.
Choosing a water heater for a rental property can be a difficult process unless you have performed your research ahead of time. This is because there are many different types of water heaters to choose from, including natural gas, electric, and even solar. It’s also important to decide between buying a storage tank hot water heater and a tankless model. Each type of water heater offers many benefits, but each one also has some negative aspects, too.
A tankless hot water heater, also called an “on-demand” or “instantaneous” water heater, is different from storage tank models in one important way. Where a storage tank model will heat water and keep it hot whether it is being used or not, a tankless water heater only starts heating the water the moment a hot water tap is turned on. In a tankless water heater, the water is heated as it travels through a pipe and into the heating unit, creating a constant supply of hot water.
There are many benefits to installing a tankless water heater in a single-family rental home. Tankless heaters are ideal for small homes because they mount on a wall and take up a lot less room than a storage tank water heater. Tankless heaters are also energy efficient, since they only heat water when it is needed. They also will never run out of hot water, which may be important if you have a tenant who regularly uses more than a storage tank water heater can provide. They also rarely develops leaks and can last longer than those with a storage tank, sometimes up to 20 years or more.
Along with the benefits, however, tankless water heaters also have a few disadvantages when used in single-family rental homes. Perhaps one of the biggest downsides of buying a tankless heater for a rental home is the cost. Depending on the model, they can cost as much as three times more than storage tank water heaters, and that is just for the unit itself. They also require professional installation due to the complexity of their system. This is especially true if you buy an electric one, which may require an electrical system upgrade to handle the extra power the unit will use.
Other important considerations when choosing a water heater is the amount of ventilation available to the area where the unit will be installed and the amount of peak water demand. Tankless water heaters require a certain amount of ventilation to function properly, without property maintenance they may shut down – usually when the water is running. Tenants may not be pleased if their shower is interrupted due to ventilation problems. They are also limited in how much hot water they can produce at any one time. The more faucets or other appliances a tenant is using at once, the lower the water pressure will be. For large rental homes or rentals with more than one bathroom with frequent use, a single tankless heater may not be able to keep up with demand.
Which type of water heater you choose for your rental homes ultimately depends on your budget, the needs of your tenant, and whether the home is ready to support a tankless water heater system. Making decisions about major appliances can be difficult, but at Real Property Management we are here to help. We assess each rental property and make recommendations based on your unique situation, ensuring that whichever hot water heating system you choose, it is the right one for you.
For property investors with single-family rental homes, the question of how much to include with a property is an important consideration. Most renters will expect a rental house to include some appliances and perhaps blinds on the windows. But the bigger question is whether and how much a property investor should furnish their rental home. For short-term renters, a furnished house may be appealing, but long-term renters are different. Because they plan to stay for several years, they are looking for a place they can make feel like their own.
For single-family rentals, there are many reasons why furnishing the home is both unnecessary and impractical. Perhaps the biggest reason is that most of your renters probably will not like the furniture someone else buys for their rental. Personal taste varies widely, and few things are more personal than home furnishings. Prospective tenants may like the rental home, but ask whether the furnishing can be removed.
This can put a property owner in a difficult situation. Furnishing and then removing all furnishings from a rental house is a huge investment in both time and money. But by insisting that tenants live with the furnishings you buy for your rental property, you run the risk of significantly reducing your pool of possible tenants.
There are other disadvantages to furnishing a long-term rental home. For example, odds are high that even a conscientious renter will not treat your furniture as if it were their own. If the renter doesn’t like or want the furniture, that may further complicate things. They may not care for the furniture properly, or even abuse or damage things. They may try to move the furniture themselves to make room for their own, which may result in damage, improper storage, or even losing furnishings in the shuffle.
Furnishing a rental home adds another layer of difficulty for the owner due to the need to track and monitor furnishings in addition to the home itself. Doing so raises a number of important questions about how this will be done. In the event that your owner-provided furnishings are damaged, how would that damage be monitored and documented? How much damage constitutes normal wear and tear, and how much is negligence? It may be nearly impossible to keep track of every fabric tear, ding, scuff mark, and so on.
Another question furnishing a rental home raises is what happens if a piece of furniture or décor is damaged beyond repair or goes missing? Many renters will not report damage for fear of being charged for the item’s replacement, and so you may not even find out something has been damaged until they move out years down the road. And if they inadvertently lose one or more furnishings by shuffling them in and out of a garage or storage unit, you’ll not only need to deal with the item’s replacement, but with recouping the cost of the item from the tenant as well.
For short-term rentals, such as vacation or corporate rentals, offering them as partially or fully furnished is a necessary part of doing business. But for property investors who market their single-family homes to long-term renters, furnishing the property is not only unnecessary, it may also make renting and managing the property much harder than it needs to be. When questions of whether to furnish a rental home arise, the professionals at Real Property Management can help. We advise our property investors on solid business strategies and best practices that make renting and maintaining quality long-term rental homes a streamlined, profitable endeavor.
We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the Nation. See https://www.realpropertymgt.com/eho/ for more information.