E-Renter News

Seems like the words “Mad Men," "Oprah" and “Lindsay Lohan” are everywhere these days—even if you’re not the type to follow the gossip magazines! And true to that sort of sensationalized journalism, plenty of folks know that just using those names in an advertisement will attract plenty of eyeballs.

When you’re trying to come up with ways to make your rental property ads more appealing, why not borrow from the headlines that everyone is reading or talking about?

Creative ad headlines can be as close as a search on the entertainment section of Google. Who’s making news? How can you turn a name into a headline?

It’s easy! For example, instead of your typical, boring ad like this:

• FOR RENT 3 BR, 2 BA apartment in a great complex. No pets, non-smoking, near the mall.

Try writing one of these creative, attention-grabbing ads:

• The Real Housewives Would Love it Here! 3BR, 2BA in a great complex. No pets, non-smoking, close to the mall and plenty of restaurants.
• Live like Lohan: High-security building now renting 2 and 3 BR apartments!
• Just Like Congress, We Won’t Back Down! We’ll work with you to get you into the apartment of your dreams. 1, 2, 3 BR now renting!
• Oprah’s Dogs Are Welcome Here! Pet-friendly single family 3BR, 2BA home, close to parks and trails.
• Live like a “Mad Man!” 2 BR condo for rent, luxurious amenities and the view you’ve been looking for!

Try jazzing up your For Rent ads—it can’t hurt to stand out from the crowd!

A recent study conducted by the National Association of Home Builders showed significant improvement in the 2nd quarter of 2010 in both current and expected rental apartment demand. Compared to the 1st quarter of 2010, current demand increased more than 15 points to the highest level since 2007. Expectations for future demand increased to similar levels.

The NAHB measures builders’ expectations of conditions over the coming months, as well as their opinions about current production and occupancy. Most builders surveyed viewed conditions getting stronger in the foreseeable future.

The NAHB’s Chief Economist, David Crowe, said that as supplies of new apartment units decline due to lenders’ unwillingness to provide funding, improvements in the labor market will cause increased demand for traditional rental apartments. “It is possible that the supply of new units will not arrive in time…and some shortages will occur in some markets,” he continued.

Consumer spending is also on the rise, according to the Commerce Department. A slight increase occurred up in July and it is expected to grow at a 2% annual rate in the third quarter. And while 15 million Americans are still unemployed, experts see signs of sustainable growth.

Keeping an eye on national reports like this one by the NAHB can help rental property owners make good investment decisions. And, these indicators give income property investors reasons to remain hopeful.

As a landlord, you probably do your best to keep your properties safe. But what if you overlook a loose railing and a tenant’s child falls down the stairs? How about the visitor who trips on the sidewalk leading to your building? Or the mail carrier who is bitten by a tenant’s dog? In each of these cases, it could be determined that the landlord is partially or fully responsible for injuries.

Before you decide whether or not you need liability insurance, ask yourself a few questions:

• How will my kids go to college if their college funds are wiped out?
• How will I tell my family we have to sell our home?
• Will I be able to retire if my retirement funds are depleted overnight?
• How much of my assets am I willing to risk?

If these questions make you nervous, then liability insurance could bring you peace of mind. Every day, landlords are sued for damages—and if an injured party thinks you have assets they can go after, they might file suit even more quickly.

On the other hand, if you have nothing to lose, you could continue without liability insurance. But remember, your rental property is an asset, especially if you own it outright or have a great deal of equity. So even if your bank accounts are low, consider the pain of losing your property in a lawsuit.

In some instances, forming an LLC is a way to protect yourself. Holding income property in the name of the LLC keeps them completely separate from your personal assets. It’s best to consult your attorney for specific information about your personal situation.

After you talk to your attorney, call your insurance agent and explore your options for landlord liability insurance. It might not cost as much as you think to obtain a great deal of protection—and peace of mind!

Landlords need to collect confidential information from their tenants in order to determine whether or not they qualify for a lease. A tenant’s employer, bank account numbers, credit history, social security number and previous addresses are all valuable to identity thieves.

In addition to credit information, landlords often know a great deal of personal information about their tenants—often, more than they really need to, including marital status, job situation, housekeeping habits and sexual orientation. It might seem like a no-brainer, but it’s a landlord’s responsibility to keep every tenant’s personal and credit information protected.

In most states, in fact, it is illegal for landlords to release any financial information about a tenant or prospective tenant to a third party without written consent. And as it becomes more prevalent, a landlord should take extra precautions to protect tenants from identity theft.

How to Keep Tenant Information Confidential

• Keep all tenant records under lock and key. If you have a property manager, decide whether they need access to confidential tenant information.
• Protect computerized tenant files as closely as you protect your online banking sites. If you don’t have a password on your computer, you should at least have confidential files password-protected. Change your passwords often.
• Don’t talk about tenants to other tenants. It’s too easy to fall into the habit of gossiping, and before you know it—you’ve disclosed confidential information. Talking about tenants is unprofessional and could land you in hot water.
• If your office is accessible to others, take care when working on tenant files. Don’t leave lease applications or credit reports where they can be seen by anyone.
• When transporting files from one place to another, consider a locking briefcase. It’s one more layer of protection for sensitive information.

Remember, as a landlord, you are privy to personal—and potentially harmful—information about your tenants. It’s a big responsibility to keep it safe and to maintain confidentiality—but it’s part of your job.

Whether you’ve purchased a property solely as an investment or have been forced into renting a home you couldn’t sell, the basics remain the same. Three important aspects of owning rental property begin with M, so they’re easy to remember: Maintenance, Marketing and Making a Profit.

Maintenance: Keeping a rental property in tip-top shape can be a huge burden—especially when you let things go longer than you should. Regular maintenance and upkeep can make this chore much easier. If you’re a do-it-yourselfer, it’s a good idea to keep a tool and maintenance kit in your vehicle so you can stay ahead of maintenance issues before they become big problems. Tightening up a railing before it breaks and injures a tenant can save you thousands. Gluing down a loose floor tile can prevent it from breaking completely—or causing someone to trip on it. And trimming the shrubs in front of windows can help keep your tenants safer. If you live a distance from your rental property, hiring a handyman to take care of it might be one of the best investments you can make.

Marketing: It’s not enough these days to put a “For Rent”sign  in the window of your rental property. If you want to keep vacancy high, you’ll need to be more marketing savvy than that! Most renters look online for their next home or apartment. And if your property is not listed online, you’re reducing the number of potential tenants by a huge number. It’s easy to take digital photos and create a compelling ad. Craigslist, Apartments.com, HousesForRent.com and Rent.com are all great places to list your rental property. Check them out determine which fits your needs best. Remember that when taking photos of your rental property, open the blinds, turn on lights, and be sure to include closets and other storage areas. Your ads should highlight not only the basics (number of bedrooms and bathrooms), but also the features renters want—like wood floors, decks or patios, appliances, walkability of the neighborhood, and nearby parks and trails.

Making a Profit: It’s easy to forget that a rental property business is indeed a business. If you’re not clearing a profit each and every month, you must take stock and determine why. Simply put, you’re either not bringing in enough income or you’re spending too much on expenses. If you can raise rents without hurting your vacancy rate, you should consider it. Check the market rents in your area to be sure you’re not pricing your property out of the range people are willing to pay. If your expenses are too high, analyze where you can cut them. Are you paying a rental property manager? Do you have an expensive landscaping company? Can you start taking care of the lawn and minor repairs yourself? Or are you allowing tenants to slide by or pay the rent late every month? Cash flow will keep your rental business healthy—and a lack of it can sink it very quickly.

New York City landlords and property managers must now provide potential tenants with a new disclosure form that reveals whether bed bugs have been reported in a rental apartment or anywhere else in the building. Similar to mold and termite disclosures used in home sale documents, the form is signed by both landlord and tenant.

The idea is to give tenants an out before signing a lease. Bedbugs have been found increasingly in New York and are spreading across the country, as we reported in a recent blog post. And as more tenants become aware of the problem, more are inquiring about the presence of bedbugs in the apartment they’re about to move into.

Some landlords are not happy about the form, saying through a lawyer that the language is too broad and there is no distinction made between the appearance and treatment of a couple of bedbugs and “incredible infestations.” On the form, landlords are required to state whether bedbugs had been found in the previous year and whether or not an attempt to eradicate them was made.

One broker reports that about half of all apartment-seekers mentioned bedbugs. Bu the city says the number of bedbug reports to the 311 hotline fell by 13% so far this year. That could be good news, although without a sure means of controlling the blood-sucking bugs, it’s not likely they will be going away for some time to come.

While bedbugs are enough to scare some renters away from a building, the vacancy rate in Manhattan is at 1%-–so they fact remains that renters there don’t have a lot of choice.

Whether bedbugs have come to your city or not, it’s good to know what’s happening in other rental markets. Start planning your bedbug battle strategy before they hit!

The National Fair Housing Alliance was founded in 1988 as the nation’s only organization dedicated solely to ending housing discrimination. Their annual report for 2009 was published this spring, and it contains several interesting findings.

Here are a few of the report’s highlights:

• A total of 30,213 housing discrimination complaints were filed in 2009, which was down from 2008, but significantly higher than previous years. Still, the number represents “a drop in the bucket” according to the Alliance, which estimates 4 million law violations each year. This includes rental housing, mortgage lending and real estate transactions.
• Private fair housing groups deal with the most complaints—66% of the total. The rest were processed by state and local government agencies or the federal Housing and Urban Development department.
• The decrease in the number of cases in 2009 may have been due to lack of resources to process claims.
• Persons with disabilities were the protected class that filed the highest percentage of complaints with 37.3%, followed by complaints based on race, 19.2%; family status, 15.1%; national origin, 9.5%; and sex, 5%. Other complaints were filed based on retaliation, military status, age, sexual orientation, and several other categories.
• More than 54 million people in the U.S. have a disability; as baby boomers age, those numbers will only increase.
• The rental market garnered the most complaints, with 23,744, followed by mortgage lending with 1,880 and home sales with 1,702. There were 1,221 complaints of harassment, including abusive language or behavior against a tenant or home seeker.

Landlords must be sensitive to both the needs of protected classes and the laws that protect them.

The economy has people all across America rethinking much of what passed as common opinion just a few years ago:

• A home is the best investment you can make
• Being a manager in a stable financial institution means a secure career
• College is worth the tuition investment
• Working hard and playing by the rules pays off

These ideas seem almost laughable now. After what the U.S. economy's been through, you'd be hard-pressed to find anyone who'd agree.

For income property investors, the writing has been on the wall for some time. Landlords know that  investing wisely, not taking on a lot of debt and being in control of your own financial future is a better way to go.

And that thinking is becoming more popular. Owning a home is not the path to financial freedom it was thought to be. And renting is in.

Economic advisors and pundits agree that “people shouldn’t look at a home as a way to make money because it won’t.” That quote is from Dean Baker, co-director of the Center for Economic and Policy research. He estimates it will take 20 years for Americans to gain back $6 trillion losses in housing wealth.

The generations that came before saw buying a house as a way to have stability—not as a way to get rich quickly. Housing values rose slowly and steadily over longer periods of time. Experts maintain that prices will again rise—but not like they did from the late 1970s to the late 1990s. “The experience … was an aberration,” says Barry Ritholtz, of Fusion IQ, an equity research firm.

The new reality is that home values can go down. People can become trapped in a house they cannot sell. And the rate of homeownership is declining. That means renting will be on the increase for some time to come.

And that’s good news for the landlords who’ve been thoughtfully investing in rental housing all these years!

News articles and television series frequently feature people with a disorder known as compulsive hoarding. It is defined as the acquisition of and failure to discard a large number of seemingly useless possessions to decrease stress and anxiety. Compulsive hoarding and cluttering are features of depression, attention-deficit disorder, obsessive-compulsive disorder or other mental illnesses, according to the experts.

The Dangers of Tenant Hoarding
Landlords typically learn about tenant hoarding through routine inspections or complaints from tenants. While many mental disabilities do not affect other tenants, hoarding is an exception. Piles of clutter can prevent any attempts to keep a clean rental unit. Spoiled food attracts bugs and rodents, with the health hazards they go with them. Boxes and papers are fire hazards. Odors emanating from a hoarder’s residence can affect quality of life for other residents.

A Hoarding Tenant’s Rights
Landlords must be aware that certain disabilities qualify for reasonable accommodations under the Americans with Disabilities Act (ADA). Depression, head injuries or strokes can lead to conditions where a tenant cannot physically dispose of possessions, cannot decide what to keep or what to throw away, or cannot remember where things are kept. After a time, things begin to pile up until you cannot open the door or walk through the room. Before damage is done to the rental property, a landlord can require the tenant to take care of the situation. Under the ADA, a disabled tenant can ask for reasonable accommodation—which does not include leaving the situation as it is. A reasonable accommodation would be to give a tenant a certain amount of time to dispose of the items making the unit unsafe. Landlords may ask tenants for a physician’s documentation verifying the disability.

A Landlord’s Rights
If the hoarding tenant does not clean up the property, it is generally within a landlord’s rights to start eviction proceedings. Check with your legal advisor for the regulations in your state.

More and more rental property owners are allowing pets in their residences. For some, it’s a matter of keeping rental units filled. Saying “yes” to pets gives properties a leg up on their competition. For others, allowing tenants to have pets is a humanitarian act. Since pet shelters nationwide are reporting increases in pets abandoned due to the U.S. foreclosure crisis, landlords who allow pets are helping to keep additional animals out of shelters and with the families who love them.

Screening pets is sort of like screening tenants—except it’s perfectly acceptable to discriminate against certain types of pets, like reptiles; certain dog breeds, like Doberman Pinchers; or certain traits, like aggressiveness. When you're the landlord, you can establish any guidelines—even prohibitions—that you choose.

Here's how to screen pets for rental housing:

Don’t rent to a pet you haven't met: You can tell a great deal about the pet owner by observing the pet. A well-groomed and well-behaved animal is a reflection of the person who cares for it. Conversely, a tenant with a dirty, matted and ill-behaved dog is not a responsible pet owner—and might not be a responsible tenant, either.

Interview the pet owner: Don’t just have them fill out a pet application—although that’s an important part of the process. Ask questions and listen carefully to how the prospective tenant answers them. Make sure you ask:

• Does the pet have any behavior problems? If so, how does the tenant deal with them?
• Has the dog been through training class?
• Does the cat use its litter box?
• Has the animal been spayed or neutered? This is important because unneutered male animals can be more aggressive and unsprayed females will attract unneutered males from miles around—both can be real problems in rental housing.

Check references: Ask for health certificates from the animal’s vet. Responsible pet owners take their pets to the vet for regular checkups, so producing vaccination records should be no problem. Ask about the pet’s behavior at previous residences when you conduct your due diligence on the tenant.

Require flea and tick treatment: Ask the prospective tenant how often the animal is treated for fleas and ticks, and include a provision in the lease where they agree to regular treatment.

Schedule an inspection for two weeks, one month, and two months after the tenant and pet move in. A responsible pet owner will not mind regular inspections—it’s worth it to be able to keep their beloved pet.

Many landlords find that responsible pet owners make some of the best tenants. So don't be afraid to start allowing pets in your rental housing--with proper pet screening, of course!