Management One Property Management

11 Best Practices for Purchasing an Income Property: Great Deals vs Money pits

By Steve Hembree

So, you’re looking for an income property, maybe your first rental, or adding to your holdings.

Good for you!

Not only can you make a monthly income on a rental, but you will also find, particularly right now, that the market is very much your friend.

While you’re off living life, doing your thing, your rental income property is also out there doing its thing: accruing value.

income property

The property market fluctuates

As you are aware, it isn’t 2008/2009 anymore. The market isn’t bottoming out, and great deals are much harder to find, now versus then.

However, that is not an entirely fair statement. In 2008/9 it was sort of like being an early gold rush prospector in 1849 at Sutter’s Mill, where just walking down the street one could almost pick up chunks of gold at random. And like gold, now one must work harder to find the deal, the rich vein, but they are most certainly out there.

Your goal ought to be not buying a lemon, a house that will sink you as fast as you can say, “money pit.”

How to avoid bad deals on income properties

Remember the old saying? If common sense is so common, why do so few people possess it? Well, common sense is your first defense.
I used to think about this quite a bit back when I performed broker and insurance inspections: How can a house, any house regardless of age, be left to deteriorate so very badly? And what does this do to the overall value?

income property

Rule #1- Follow the Rule of Cars

If a house looks like a pile of junk, it is a pile of junk. Why would you by a 1963 VW Beetle rust bucket? You wouldn’t unless it’s a steal, and you know, going in, exactly what the problems are, the cost to fix, and what your risk tolerance is.

How much are you willing to put into it to make it nice again? If that amount is not enough to take it completely out of the “junk” column, move on. There are other deals.

Also, never, EVER waive the home inspection.

income property

Rule #2- Check the plumbing

Does the home have galvanized pipes?

See this article:
Galvanized Pipes in Homes

Depending on the age of the home, you may be in danger of water leaks due to galvanized pipes. If the home has 40-year-old pipes, maybe you’re looking at a flip rather than a rental if you cannot tolerate the cost of re-piping.

Hey, it’s still an income property.

Galvanized Pipes

Rule #3- Check the roof

Worn out roof? Or a shake/wood shingle roof?

Yikes! This can be a very expensive fix, and “half-waying” it really is a poor way to go. Sure, with asphalt, you can have 2, even 3 layers of roofing, saving you money, but in the long run, you’re penny-wise and pound foolish.

An additional layer of roofing atop an existing one is a band-aid at best and will wear faster. On a shake and wood shingle roof, replacing it is almost always the best answer, and know you are going to spend a lot to replace it.

deferred maintenance

Rule #4- Check the Neighborhood Out

Does it have nightmare neighbors?

Visit the potential income property in the early morning, mid-day, and at night, and I suggest several visits, weekdays and weekends.

I was lucky enough, years ago, to visit a house I really wanted only to find that on every Friday night the neighbor across the street had his buddies over for garage band practice. Had they been good, rather than just loud, maybe it wouldn’t have been a deal breaker. But they were pretty bad. That and the right-side neighbor’s aggressive pit bull killed that deal. I realized I would either need a block between the properties or would have to commit to replacing the wood fence section regularly.
Your renter will likely have the same issues, and you will be paying for the fence and will suffer from the depressed market due to the bad neighbors.

income property

Rule#5- Check out the curb appeal

What to look for outside? What sort of landscaping does it have? How’s the first impression?

This is maybe the easiest fix of all, but what you will see, other will see too. If the biggest problem with the property is a dead yard, hallelujah! That is an easy fix: seed and cover, and water the heck out of it, and boom, instant curb appeal.

Run the sprinklers; are there major issues there? If so, you will almost never run over $700 to straighten out a front yard. Remember, your first impression will be everybody’s first impression, or worse.
Palm trees need trimming. Just do it! That is an easy fix too!
Consider desertscape, it looks good, requires little care, but can be pricey.

Generally speaking though, a grass yard will give your property the needed warmth, adding curb appeal, and at a lower cost than just about any other groundcover.
Trim the shrubs, or remove them if they block the view of a front door.

Siding makes a big difference

“Siding? You mean, like, wood?”

Nope, I mean whatever covers the sides of the house. This is the second most important part of your investment’s envelope, that which protects the interior from the elements. The first is the roof.
With stucco, small seismic cracks are not a big deal; however, chunks missing is. Look at it all!

Another thing that people never look for is sagging siding, be it wood, stucco, whatever. It can be hard to see, but sagging will almost always occur at the bottoms of exterior walls. Sagging stucco, which sort of looks like a full diaper, (that their wall is carrying a load!) doesn’t happen a lot, but if your potential income property has it, you probably have had an interior wall leak that was not addressed. The insulation has been saturated and settled at the bottom within the wall. You will have to address this, and it’s going to be fairly expensive, with opening the wall, re-stuccoing, paint, etc.

 

Wood rot on siding? Even if you have Masonite type siding, you can have rot. Call it wood rot, weather rot, whatever, it will need addressing, and while it can be addressed in a cost-effective manner, it is still going to cost you money. Be aware that there are styles of Masonite that you just cannot get any more. In that case, think outside the box. Sometimes a creative fix can work wonders; more on that later.

House Color

What is your first impression when pulling up to the property? As I said above, that same emotion will be echoed by everyone who comes to see the house.
First, make sure that you are not hindered by HOA rules regarding colors, and if so, find out what those color rules entail.

Is the house blue or green? Plan on losing that paint! Blue, in particular, is liked by only about 5% of the population as a house color. Beige/brown is far and away more popular! This will help you when renting or flipping. Plan on spending about $1 a square foot of the house (and attached garage) into your rehab budget.

income property

Rule#6- Check out the walkways

Uneven walkways – Uneven walking surfaces

What? That’s a thing? Uneven walking surfaces? Yes, yes it is. This is a concern to you in two ways: Do you like getting sued because somebody fell? I didn’t think so.

But wait, there’s more.

Your insurance company knows this, and your premiums will rise.
The nomenclature of this item is:

  • Minor concern
  • Major concern (or Actionable)

Minor concern

A minor concern is concrete lifted less than 3 inches, (or an uneven walking surface of any kind, such as improperly installed pavers, uneven slabs) which can result in a trip and fall but is not so likely.

It is in the same risk category as having a fire pit in the backyard or missing a window screen. This usually also covers patio straps left behind from a past patio cover. These covers are usually removed because there was no permit pulled for them, but sometimes when pouring a rear patio slab the owner will have the foresight to have the straps put in then. This is detrimental when the posts are never installed, and someone trips and takes an eye out. You know, three straps can be cut and ground for about $150, isn’t that a small price to pay rather than losing everything you own?

Major concern

A major concern is concrete lifted greater than 3 inches, and is likely to result in a fall which will generate an injury, and/or a lawsuit. This is in the same risk category as one having a vicious pit bull in the backyard, or having an unfenced pool, or having 50-year-old galvanized piping, as viewed by an insurance underwriter.

One other thing I have seen in the past is the random pipe sticking out of the ground for no good reason. You can see it, you can avoid it, after all, at just a few inches in heath, it is visible, right? Not at night. It’s all fun and games until someone loses an eye. Yep, I’m back to the eye thing.

income property

Rule#7- Check the water heater

How old is the water heater?

If it’s older than 10 years, just replace it. Simple enough. “Maybe I can coax another 5 years out of it.” No, replace it and be done with it, you’ll be 10 years worry free.

income property

Rule#8- Check the electrical panel

Is it old? Are the breakers cracked?

“Why would I do that?”

Well, regardless of an income property or your own personal dwelling, you may have a serious issue there.

Federal Republic Electric (FRE) Stablock panels are infamous for being fire hazards. Short story, they don’t always properly kick off when the amperage rating is exceeded. This causes resistance in the home’s wire, which creates heat, which causes fires. Plan to replace this, and know you’re looking at a cost of about $3500 or more.
Another no-no panel has many names because they were bought out several times. Zinsco, Sylvania Zinsco, and GTE-Sylvania Zinsco are the trade names, and they have the same flaws as the FRE Stablock. Another downside to these is, you think you have the power off, start doing some work only to be electrocuted.

Final words on this: You may be surprised at how often I have opened an electrical panel to inspect it and found no backplate, or large gaps between the breakers. This is a huge hazard. Imagine this, little Billy comes along, sees these cool shiny copper wires, and touches them. No more little Billy.

income property

Rule#9- Look long and hard at the kitchen

Ugh, the kitchen is abominable

Ah, now we’re into the meat of the house, so to speak. The kitchen is vital when selling a house, often it’s what makes or breaks a sale. This can be to your advantage in negotiations; however, you will probably want to address it.

There is an upside here. A $20k renovation of a kitchen can increase the home’s value by $25 to $30k. Now the question is, how is the rest of the house and how is the rest of the renovation cost looking? There are a good many things you can do to spruce up a kitchen.

New stainless-steel appliances can make a big difference, at a cost of $2,000 or less.

If the counters are ugly, you can replace them, but if the cabinets are also ugly, do not put $2,000 worth of granite on those ugly old cabinets! You are defeating the purpose! You are far better off doing both; however, there are cost-effective solutions we utilize that take a kitchen from “ick” to “yessss.” Like..

Faux granite glaze

Say you have an 80’s era wood butcher block laminate counter. Nothing quite says “ick” than that. We have a method of transforming this material for about $650, and it looks so good, and so far, it’s proven to be pretty durable. On an income property (as in this case) simply spruce up the old cabinets, maybe paint or stain in and out, and use the granite glaze on the countertops. Below are actual photos, before and after.

Oh, and stainless steel sinks are WAY better for your property than porcelain. Porcelain will chip and wear, but stainless steel is nearly forever, and costs between about $250 and $400 installed, depending on whether or not tile work is needed.

Flooring

How’s that flooring look? Torn up, stained, burned ? That’s not doing you any favors. If buying a distressed property, it is a sure-fire bet that if there is carpet, it needs replacing. You can view this expense as a downer or an opportunity. I recommend the latter.
However, carpet may not be the best way to go this time. Depending on your finances and level of forward thinking, you may mind a good laminate or tile, or mix, is a better way to go.

A decent carpet with padding and the old stuff removed and hauled away, you ought to pay just over $16 a yard, or for comparison purposes, $1.80 a square foot.

For tile or laminate, expect about 3.2 times more. What do you get for that 3.2 times more? If renting out your income property (you know, for income) you stand a better chance of landing a good resident on your income property, one who will care for the home. If flipping, you stand a far better chance of selling it quickly and at the best price, depending on the entirety of the rehab.

property management vendors

Paint

What to look for inside:

  • Poor patches and gouges
  • Inconsistent texturing on the drywall
  • Walls that are not straight and true

Poor patches and gouges partly have to do with your rehab expenses. You will need to have them redone, properly. Patching and texturing one large gouge can easily cost you $50, smaller ones $25 each.

Patches can also indicate plumbing issues addressed in the past. But were they repaired, right? And was water damage, such as the “M” word, addressed? Your home inspector, and possibly the seller, can help a lot on this.

Keep in mind this is an income property, so don’t go crazy on paint! For a rental, multiple wacky colors are unnecessary. Accent walls are not necessary. Keep it simple, and neutral, and use semi-gloss paint, which will make the walls washable.

Flat paint: completely forget it exists, except for ceilings. If flipping a property, then yes, you may go wild, but still, keep it neutral.

property management vendors

Rule#10- Inspect the interior footprint

Interior changes

Does your income property flow? Maybe removing a wall will help if it does not. Maybe a cutout in a wall makes it flow. Don’t fear thinking outside the box, it’s fun there, I promise!

The light fixtures: are they holdovers from the big-haired rock band days? Replacement fixtures in halls, baths, and kitchens are not as expensive as you may think. Expect under $100 each.

Do the toilets flush properly? Are the tubs and sinks attractive? How about the fixtures in the baths and kitchen? These cost so little and bring great value back to you.

income property

Rule#11- Know your costs

Realtor Costs

This is largely overlooked, and if you’re buying, it’s not so relevant. But if you’re selling, it can equate to a fair chunk of change. You can hire one of those Help U Sell firms, which will cost you about 3% or so, but you will be doing most of the work yourself. You can hire a realtor and pay 5% to 6%, again, a good chunk of change. Or we at Management One can recommend a realtor who will save you quite a bit, still, give you A+ service, and has a cadre of investors always looking for buys.

income property

At the end of the day

Nothing in this world is worth any more than one is willing to pay for it. Bear this in mind throughout, but with the goal of maximizing your earnings. Before you buy your rental property, see how much it will rent for to maximize your return on your investment. We are happy to provide a FREE Rental Analysis to you whether you use our services or not.

Property Management Services

Call 951-924-4315 OR

How to Get a Home Move-In Ready: DIY vs Contractor vs Property Management

By Steve Hembree

Do you have a rental property that you want to have move-in ready for your next renter? Or maybe you’re moving into a recently purchased house? Perhaps you’re selling a house, and you want it move-in ready. Anyway you slice it, there’s work to be done, and it best be done quickly, and done right, the first time.

Do you attempt a DIY (Do It Yourself) project, or hire a contractor? If you’re with a quality property management company, they may have contractors, as Management One does, who can do the rehab for you, and have the property move in ready quickly. Let’s look at the known aspects of this, as well as the not so well-known aspects.

A companion piece can also be found here:
http://www.managementone.com/news/diy-home-repairs-vs-property-management-vendors

homes for rent

What is a move-in ready home?

What does that mean? I have seen over time so many examples of what people think it means to have a house move-in ready, and it is almost never the same thing from one case to another. There are similarities between one home (and the eyes that check it over) and the next, however, the concept and expectations of the phrase “ready to move into” varies. In short, one person’s “sparkling clean” is rarely the next person’s version.

Yes, the floors are usually pretty clean, at first glance, but once you start really looking, into the corners, or at the grout, the baseboards, that’s where the differences start.

The appliances are usually pretty clean but lift the stove top deck to access the stove’s under-burner area, and there is a strong likelihood that you will find crud here.

A house which is move-in ready means…

  • Everything is clean.
  • Everything works.
  • Anything that needs paint has been painted.
  • Items that need replacing have been replaced.
  • The house can now be somebody’s home.

It does not mean…

  • Just wiping down walls that need paint because paint is expensive. Do you know what is expensive? A short-term resident is expensive. A dis-satisfied renter is expensive.
    Bear in mind that once a renter begins picking apart a rehabbed home, they won’t stop, and every minor thing will become a major thing, if only in their minds.
  • Disregarding that stove that leaks gas, because, you know, it hasn’t exploded yet, so why spend money on a stove, that’s expensive. NO, being sued into oblivion is expensive.
  • Leaving behind a filthy carpet, perhaps with holes in it because, you know, that’s expensive. No, having a home sit on the market for too long, now that is expensive. What is too long? 14 days from vacant borders on too long and a month ought to have a property owner nearly hyperventilating.
home for rent

I have been there

When my mother passed away, I had to rehab her house. This was not as a rental (although I did consider it) but for sale. The broker I hired told me time and again, hire someone to do the work. “It will cost money, but the work will be done right, and it will be done quickly.” He had me (shaking my head) at “Cost Money.”

I did the rehab myself, all the painting, repairs, everything except replacing carpet. It took me two months to get the work done. It took longer than that to sell the house. If this were a rental rehab, I would have cost the estate maybe two months of rent, and then some.

home for rent

Looking at the real cost of having a rental house move-in ready

Let’s take an average house size of 1700 square feet.

Flooring

There be a kitchen, about 200 square feet, and probably two bathrooms, maybe 150 square feet between them, that’s 350 square feet of hard flooring. By the way, if you put carpet in any bathroom, you’re doing yourself a disservice. One toilet overflow and you have a potential for mold growth, not to mention a foul-smelling area, and guaranteed expenses replacing it in the future.

Hard Flooring

Hard flooring can be vinyl or tile, be it ceramic or porcelain, all of which minimizes the potential for water damage. Have you ever laid any of these? If not, hire a pro. And never, ever lay one floor over another, such as new vinyl over old, or tile over vinyl. Take the time and expense to do it right!

Expect a total cost of vinyl flooring @350 square feet to come in at about $18 a square yard, or $700 in vinyl. Expect the cost to be between $5 and $6 a square foot in tile or roughly just under three times the cost of vinyl. What do you get for that three times cost? A floor that will last, and look good for many years longer than any other.

Carpeting and Hybrid

Leftover is the carpet if that is your choice of floor covering. If it can be cleaned, you’re looking at a cost of about $50 a room. If a DIY project, good luck with that. Renting a Rug Doctor machine will set you back about $30 a day, and depending on how much work is involved, you could easily be two days going over, and over, the flooring. What is your time worth to you?
Oh, and the professionals, do they arrive bearing Rug Doctors? No, they don’t.

However, to replace the carpet, expect a cost of about $1.80 to $3.00 a square foot or more, installed. That’s $16.20 to $27 per yard. The remaining 1350 square feet of this 1700 sq ft house will cost at least $2424, with removal, new padding, new carpet, and installation. Or you could change things up, keep the carpet in the bedrooms, and install laminate everywhere else but the baths and kitchen. That whole water thing again.

A 1700 sq ft house is likely a three bedroom so you can take about 488 square feet and carpet that for a little over $875. That leaves you 862 square feet to put laminate into. That is just under $5000 with the removal of the old flooring, and professional installation of an excellent quality (12mm) laminate flooring. Sure, you could buy cheaper laminate, but it will probably cost you more in the long run.

Paint

A lot of people think they are good painters. They aren’t. I have even seen “professionals” goof up paint. It actually is harder than it looks. And have you priced paint? I remember when it was dirt cheap, but these days a gallon of semi-gloss can set you back $22 to $32 a gallon, and more.

Now you need the rollers, the brushes, the tarps, the painter’s tape, etc. Add this cost, then decide if you’re a good enough painter to justify the cost.

Odds are you’re like me, good enough that I’m pleased with the work, but never want to do that again. So once again, I ask, what is your time worth?

A skilled professional will charge you under $30 a wall, that’s time and materials. That 1700 sq ft house? Expect a professional to charge you less than $1350 to completely paint it, minus cabinets and ceilings.

home for rent

Bric-a-brac

The lesser items, the miscellaneous stuff.

  • Door stoppers
  • Closet rollers
  • Floor guides
  • Re-screening screens or replacing them
  • Toilet wax rings and flanges, re-building commodes.
  • Stripping caulk and re-caulking kitchens and bathrooms.
  • Properly installing towel bars.
  • Replacing light bulbs.

What is your plan for this? I do recommend planning this out to the letter, and crossing the items off your list as you go. Otherwise, it is guaranteed you’ll forget things. Did you know there are more than 3,000 items that make up a home?

Cleaning

Cleaning is the single largest tripping point, and the single most often cited item in preventing a rental from being move-in ready. As I said above, one person’s sparkling clean is another person’s “it’s okay,” or even, “are you kidding me?”, as in, not clean. In other words, it’s all relative.

That 1700 square foot house? Plan to spend about $500 to have it professionally cleaned. That does not in any way absolve you from having to check the cleaning, far from it. If the cleaning isn’t right, and complete, it isn’t move-in ready.

cleaning home for rent

Here I need to tell you a couple stories.

Renter moved out, left the keys with a nationally franchised cleaning service that rhymes with Golly Shades. The renter left it all up to them for an average clean, it was pretty good, but was the home as clean as when the renter moved in? No, it wasn’t. The cleaning service had one definition of clean, but that was not a deep cleaning. Light bulbs and fixtures were dirty. Bath ceiling vent fans were dirty. Window runs were dirty. the renter did not follow up, and the cleaners did what they would basically do on their weekly service.
Cleaners rarely look up. Ours do, because we do.

Story 2

My daughter moved into a really nice rental house. The owner lives in Hawaii, and makes a deal with each successive renter: “Clean the house when you move out.” She called me up and asked me to come over to look for any obvious problems. I found just a couple bulbs out, while the cleaning seemed pretty good. At first. The deeper I got into the house from the front door, the worse the cleaning got. Entry, great, living/dining, really good, kitchen, okay, hall, okay, bedrooms 1, 2, and 3, meh, bath 1, nope. Bath 2, really? Obviously, the prior folks ran out of steam, or time, or both.

Blinds, have you ever cleaned a whole house full to perfect? Windows, screens, have you ever cleaned those to perfectly clean? Even at your everyday house, it is a lot of work.

cleaning home for rent

Wrapping it up…

Unless you’re a contractor who has done rehabs, and/or have a crew you can bring in, you just may find the prospect of doing a DIY rehab overwhelming. Getting a house move-in ready is a large challenge, and way more often than not I find DIY’ers struggling.

Example:
An average rehab is done by a professional in about 5 to 10 days. A DIY rehab often takes over a month, and I have seen two-month long rehabs happen. That’s lost rents, lost opportunities to rent, and often the work will not be done very well. This leaves the new renter dubious about the quality of the rental, and for good reason: if the details were not attended to, the trivial things, what of the important things?

Most property management companies have rehab folks who do a bang-up job. At Management One, we work hard to hire great contractors, committed to fixed pricing, get jobs done timely, and correctly. If you don’t want the headache of completing a rehab of your rental property then call us today.

Property Management Services

Call 951-924-4315 OR

Top 3 Landscaping Companies in Riverside County, CA (Reviews/Ratings)

By Michael Varrati

 

To provide a landscaper or not to provide, that is the question! This is a question that I have been asked hundreds of times by landlords just like you over the last 10 years of being in property management.

Landscaping can be a nightmare to a lot of people. Most people don’t know when to fertilize, what fertilizer to use, how much water the yard needs, just to name a few… I for one love to take care of my lawn, but it can be overwhelming.  Why not leave that up to the professionals?  One less thing to worry about.

When you go on a vacation for a week or two, you will have no worries that your lawn is taken care of.  The same idea applies to owning a rental property. After 31 years in property management and conducting thousands of monthly exterior inspections, we have seen most residents don’t really know the ends and outs of maintaining a yard. They don’t know when to fertilize, what fertilizer to use, how much water is needed and believe it or not, most don’t know how to program sprinkler timers.

landscaping companies

Should you hire a landscaping company for your rental property?

Our best answer is, it really is up to you.

You must weigh out the pros and cons of providing a landscaper. Some residents LOVE taking care of the yard and will ask to take care of the yard even if a landscaper is provided, while others loathe yard work and would gladly pay a bit more in rent to ensure someone else maintains the yard.

Below I have laid out some positives and negatives that we have found over the years.

Positives of providing a landscaper:

  • Slightly more in rent. Residents are willing to pay a little more for them to not have the stress of taking care of the lawn.
  • You can be at ease knowing your lawn is taken care of by a professional, not your resident.
  • Most landscapers will fertilize twice a year, keeping the curb appeal up on your home.
  • Provides an extra set of “eyes” on the property, typically on a weekly basis. They will notify the property management company if there is an issue at the home.
  • It might reach out to different type a resident. The resident can think, “wow, this owner really cares about his home and will keep up on the maintenance of the home.”
  • If the resident is happy, you may get a long-term resident for your home.
landscaping companies

Problems from not providing a landscaper:

  • We find from experience that there are a lot of residents that don’t take care of the lawn like they should. This leads to violations to the resident, and they get upset because of the fines that they may get.
  • Bushes are trimmed incorrectly or not all. Plants are not fertilized or maintained as most residents don’t know how to take care of them.
  • Sprinkler timers are not adjusted with the seasons thus the yard is either overwatered or underwatered.
landscape

Over the last 31 years, we have worked with many different gardening and landscaping companies.  They are sometimes a diamond in the rough. Anybody can purchase a lawnmower, weed eater, and a couple of bags of fertilizer and call themselves a gardener, heck little Timmy down the street does it! However, finding someone that really knows about landscaping from what types of fertilizer works best when, to feed your roses bushes the right food, to when is the perfect time to trim that overgrown tree in the front yard can be a little tricky.

We developed a checklist when hiring contractors including landscapers. We personally drive by the properties serviced by these landscapers, we even call the homeowners during a reference check. This has proven the best way to “weed” out the good from the bad.

landscaping

Below is a List of our Top Picks for Landscaping Companies in Inland Empire.

 

Zornes Landscaping:

 

Sean Zornes is a one-man band and has been one of our gardeners for about eight years.  He does a fabulous job on his lawns.  Sean is accountable for all the work he does, and  he takes pride in the work he does.  Zornes landscaping has turned a lawn from nothing to a lawn that looks like it ought to be out on a golf course.

If you want timely service and a plush lawn, Sean is your guy.  I’ have experience working with Sean since he has been with us; and every time I call him, he has no complaints and does what he says he is going to do.

He takes care of one of our commercial properties.  The owner of the complex wanted a lot of work done.  I called Sean, he met me the next day, we went over the plans, and it was done two days later.  It was a big job to go for two days, but he did a fabulous job.

Sean currently doesn’t have a website, but here is the link to Yelp to see all of his business’ reviews https://www.yelp.com/biz/zornes-landscape-maintenance-riverside.

,landscaper
landscpaing

Associated Landscape

Dan Simmons is the owner of Associated Landscape.  He has a couple of different teams that he sends out into the field.   I have the pleasure of working with Dan for about three years.  He covers our Corona and Riverside areas.  Dan is another gardener that does a remarkable job.   Associated Landscape gives great timely service.   They really care and put a lot of pride into their work.  They feel that is an image or a branding of their company.  That is what we look for in our vendors.  We want them to be accountable for the work they do.  It is an image of us as a management company.  We are currently trying to expand the route for Dan and Associated Landscape.  At this current time, they don’t have a website.  But vendors like this are hard to find. I am glad Dan is a part of our team.

landscaping companies
landscaping companies

DLT Landscape

DLT Landscape is owned and operated by Jaime DeLaTorre and his family. Jamie and his team have been in business for nearly thirty years in the Inland Empire. He has serviced Management One’s properties for fifteen years. Jamie and his team handle everything from tree trimming to designing the backyard of your dreams without breaking the bank account.

Jamie’s is a wealth of knowledge when it comes to keeping your lawn green year around to making sure your rose bushes look amazing at all times.

landscaping
landscaping

Weeding out the good and the bad

Over the years we have experienced the good and the bad when it comes to landscaping companies. Some companies really don’t know what it takes to make lawns look great. While others are at the top of the class when it comes to landscaping knowledge. Here at Management One, we take pride in hiring top-notch contractors knowing that they are an extension of our company. The contractors featured in this article have longevity with our company and take pride in their workmanship. They have proven their knowledge in taking care landscaping and providing great customer service.

 

So, if you are looking to rent out your home or just need a reference for a great landscaping company, call us Today!

Property Management Services

Call 951-924-4315 OR

Why Does Rent Go Up? 7 Things You Should Know about Rent Increase

By Steve Hembree

Over the years I have spoken with so many people who own rentals, and so many people who rent homes, and the possibility of rent increases is always on both sets minds, for several reasons. So, let’s look into this topic, one that ought to be fairly straightforward, but for whatever reason is not.

rent increases

Don’t Fix Anything – I’m Afraid of Rent Increases

Well, I have some bad news for you, regardless of whether things are repaired or not, your rent is probably going to go up no matter. If the owner likes to eat and pay their bills, such as the property mortgage, or if there is a good property management company working for the owner, rental rates and subsequent rent increases will be governed more by market forces than any other single thing.

rental increase

There Is No Grand Design

Owners and property managers do not sit around and plot, “Oh, let’s get some more money out of this guy because we can and we are greedy.” It does not work like that. Most enjoy having a good resident who pays on time and does not have a gazillion maintenance requests but often the over-riding factor is supply and demand. 10,000 people, 9,000 units, the price goes up.

What is at play in the background is the fact the housing is a finite commodity, and when the demand is higher than the supply, rates rise.

Not fixing things simply means that you’re paying more rent AND have items that do not work.

Here is an example from another post I wrote:
“Insurance case a few years back, exterior only, Banning, <1000 square foot rental house, near a rural area, the house is approximately 55 years old. 
 The resident tells me he has lived at the house for about 15 years. The owner is VERY absentee, so much so that the occupant NEVER calls the owner for anything. In fact, he hasn’t seen the owner for nearly 10 years.
The occupant is on public assistance. He cannot afford his rent to go up, so “that wall that fell apart inside due to water damage, why, I rebuilt it myself, at my own cost. Added another wall too, made a bedroom into two bedrooms while I was at it. And the fence, well shoot, I’ve replaced that 3 times in 5 years. I may be cheap (spit, ding) but I ain’t no carpenter.”

This is a case of owner mismanagement, plain and simple, and it is more widespread than you may guess.

rental increase

Sometimes Repairs DO prompt Rent Increases

Go right ahead, make a silly request, repeatedly, to a property owner or property management company, I double dog dare ya.

Example:

Renter: “I don’t like the color of the ceilings, white is so…yesterday. I want them painted orange, or I’m going to move.”
Owner: Okay, see ya.
Renter: Doesn’t move.

Next month, repeat the pattern.

Tell me, what do you think will happen?

The owner will evaluate the comparables for the given area, house size, and amenities, if they are savvy, or have a good property management company. And guess which side of the spread they will be inclined to price the property at? The high end.

rental increases

Let me explain Comparables, aka Comps.

Comps, like in real estate sales, are used to determine the relative value of a property, for sale or rent. Done right, comps will clearly reveal, in hard numbers, what a property ought to be priced at, whether for sale or rent. Rent increases are determined with this and extraneous, and sometimes intuitive, information. I’ll explain that later.
If there are 3 identical houses in a mile or so, same lot size, house size, number of bedrooms and bathrooms, and they range from $1500 a month to $1700 a month, and you are paying $1400 a month, the $1500 to $1700 spread will be the basis of the decision on a possible rent increase. It’s just numbers, and not running the comps and being compensated accordingly is a poor idea.

Related Article: How to Determine Rental Increase Rates for Lease Renewals

 

You see, gas goes up in price, groceries go up, insurance goes up, name it, money devaluates and prices rise, property taxes rise yearly. Why should an owner lose money on a property they pay for? They only want what’s right, a fair market value.

 

Intuitive information explained. House is next to a school. School is out for summer, and summer is prime moving time. The upper range of the comparables may be more appealing to the owner at this time, as they are perhaps more likely to get their price than they would in the middle of the school year.

Upkeep and Curb Appeal Also Matters

This may seem counterintuitive to some folks, and I mean that from the point of view of someone who has inspected literally thousands of homes over the years, rented and owner occupied.

If the exterior of a house is not kept up, meaning the structure and the landscaping, there is a much higher likelihood that the interior is being abused, damaged.

“Oh, come on, Mr.-Smarty-Pants-Inspector-Guy-Who-Writes-Stuff, you cannot know that.”

Actually, yes, I can, I have seen the correlation so many times, not always, mind you, but maybe greater than 85% of the time it rings true. The yard is trashed, the house is trashed. There are exceptions, but very few, and this includes rental, and owner-occupied properties.

 

So, when an owner drives past and the yard is dead, and shrubs are overgrown, do you think the owner is going to default to the high or low comps? Oh, I’m sorry, the answer we were looking for is high. High.

rental increase

The Owner’s Expenses Didn’t Go Up THAT Much…

…so my rent should not go up?
Well, okay, maybe, maybe not. I know my property taxes rise every year. My monthly payment rises. I know my property insurance goes up yearly, so…. Yeah, just as an owner has no idea of a renter’s personal travails, a renter cannot know an owner’s either. No matter, as I said before, it’s the market.

rent increases

If It Needs Fixing, Call It In

Your water heater is leaking. Do you just let it go, or do you call it into the property management company, or owner, to repair? The latter. Why? What’s worse than an expense for a water heater replacement? An expense for repair of extensive water damage AND a water heater.
“But my rent will go up!”
Not likely. If an owner does not realize that expenses come part and parcel with owning a property, then I got news for them. It does. Some things are unavoidable. However, if a renter has a habit of throwing things through windows, that renter will be buying some windows or is probably going to see a large rental increase in the future.

rental increase

Wrapping it all up

Rental increases are on the minds of both homeowners and residents alike. At the end of the day, both sides know a rental increase is more than likely coming down the pipe, but finding the balance between what the owner wants in rent, what the comps are showing, and what residents can afford is a delicate process. A process that Management One has worked hard at perfecting over the last 30 years.

We don’t take a “haphazard” approach to rental increases, going with whatever, the owner wants, or going on our “gut”.   We run new rental comps for every lease renewal to verify what the true rent rates are. We take all the items mentioned into consideration as well before we make our recommendation to the owners of the property.

So they next time you are looking for a home to rent, consider using Management One!

Find Your Next Home with Us!

Call 951-924-4315 OR

HOA Information – Here’s What You Need to Know about HOA’s

By Steve Hombree

 

What can an HOA do for you? Here is HOA info, with general information such as fees, rules that are fairly commonplace, and expectations.

I decided to write HOA info per an editor request after writing a prior article that mentioned HOA’s. I’m not an expert on HOA’s, so if you’re expecting pie graphs and tiny details, you best keep burning up the Google. However, if you want basic HOA information, then you have arrived at the right place.
Mostly what I have to say on the topic of HOA info is my opinion, and you know what they say about opinions: “Every now and again one must trot it out into the light of day.” Ha, you thought I was going to say something else, didn’t you? However, my opinion is based on hundreds of property inspections over the last 5 years, in HOA communities and those outside of HOA communities.

HOA Info

What is an HOA?

HOA is shorthand for homeowners’ association. In basic of terms, an HOA is partly like an exclusive club that only residents of a building, complex, or community can, and must, belong to. You will pay monthly dues to be a member and must stay current on these dues.  HOAs also have additional rules and regulations set by the residents of the said “club.” So, in a way, the members of the club pay money to an entity and said entity pretty much tells the member, the homeowners, what they can, and cannot, do.
Does it sound like I’m not a fan of homeowner associations? While I don’t love them, I certainly understand the benefits of being in an HOA, as well as why I would not own a house in an HOA.

HOA Info

What are CC&R’s?

Most HOA info is contained in the HOA’s published CC&R’s, which is short for Covenants, Conditions, and Restrictions. Much of the time you can find information about specific HOA’s CC&R’s online. CC&R’s generally cover things such as the colors you can paint your house, the rules and regulations regarding the amenities that the building, complex, or subdivision offers. This can include work out facilities, pool and spas, tennis courts and the like.

 

Additionally, you will find rules regarding parking, how your yard must look, guests, and pets.

HOA Info

Advantages of HOAs

  • No weird paint schemes
  • Cars parked on yards, oils stains on driveways are no-nos
  • No dead yards
  • You belong, strangers do not

I have driven into many a neighborhood where all the houses looked great, the color schemes complement each other, then BAM, there’s a lime green house. Next door is a dead lawn. Across the street, a car parked on the grass. Down the way a bit, there is a house painted orange. My only thoughts on this are, “What were they thinking?!?”
You will not find this sort of thing happening in an HOA, and if you do, you can bet it will be corrected toot sweet. That means fast, for you young’uns out there.
Dead yards? Nope. Out of control landscaping? Nuh uh. Oil stains on driveways? Not gonna happen. Strangers driving from out of the area, milling about, using the amenities? Sayonara strangers. Everyone belongs to a property or is a guest of a property.
There definitely is a plus side to homeowners’ associations, especially HOAs that take their community CC&Rs seriously, as most do.
Property values in homeowners’ associations are enhanced, or guarded against falling, by the HOA board, generally speaking. In theory, at least.

HOA Info

Disadvantages of HOAs

There are negative about HOAs too, but this does not necessarily pertain to all HOAs.

  • Cost
  • Politics
  • Less freedom to do things like painting your house in pink stripes and purple polka dots.
  • HOA abuse
HOA Info

How Much Do HOAs Cost?

I did some reading earlier to confirm my thoughts on HOA monthly costs, as I have had limited interactions with homeowners’ associations. My folks paid about $77 a month for theirs, however, there were not many amenities, and it was a retirement community. There was a pool, but to the best of my knowledge, they never used it. More on this HOA later.

I do know of some HOAs with extraordinary monthly fees. Back when I was doing inspections for brokers/banks, it was not out of the ordinary to find homeowners’ associations with monthly fees from ranging $300 to $700. A MONTH! This is in addition to the PITI, aka Principal, Interest, Taxes, and Insurance payment. In other words, one’s monthly bank payment.

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Politics and the Rest

I dislike politics of any sort, be it office, election, or neighborhood. In fact, I especially dislike neighborhood politics. “You better butter me up with a compliment, because I sit on the HOA board.” Oh please, shove off.

 

I dislike politics of any sort, be it office, election, or neighborhood. In fact, especially neighborhood politics. “You better butter me up with a compliment, because I sit on the HOA board.” Oh please, shove off.

 

If you’ve read my articles, you know that at some point I have a (true) story to tell.
When my mother passed away, I had to take on the task of selling her house. It was in an HOA. A lady down the way was a retired real estate broker. Her son ran her agency, and she happened to sit on the HOA board.
I set about getting the house ready for sale, using the list of items my broker wrote up for me as a guide. The front wrought iron fence/gate was one item, it had some small areas of rust, so I set about matching the paint and spraying it with primer, then paint to make it look like new.

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The HOA Speaks

Ms. Broker/Board member dropped by as I finished up.
“So, why did you not list the house for sale with me? I own an agency, you know. I knew your mother well. (Lie). She would have wanted you to sell through me.” (Another lie, mom disliked this lady).
I responded with, “I chose whom I chose because they represented themselves well, and besides, they are selling a lot more of the places in this town, right now, then your agency is.”
“Well, you know, I do not think I like the color you painted that fence” she came back with, “it just may be contrary to the homeowners’ association color guidelines.”
“I don’t know how that can be, it has been the same color since my folks bought the house new, which was, if I’m not mistaken, before you moved here,” I said.
“Yes,” she replied, “but you sprayed the paint on. You will be getting a notice to repaint it with a brush,” at which point she spun on her heels and walked away, turning back only to say, ‘Pity you didn’t list with me, all would have been well with the board.”
This is why I have no love of HOAs.

HOA Info

Final Words and Last HOA Info

If you are a “Go along To Get along” type of laid back person, and don’t mind spending a little extra every month to have symmetry, order, and consistency, a home in a homeowners’ association HOA may be for you. However, if you have misgivings about people wielding minor authority as if they were the Pope, then maybe you ought to steer clear of HOAs.

 

My neighborhood does not have an HOA, and there are times I wish we did. The guy across the street repainted his tan/brown house brown with white trim. It was shocking, at first, but I grew to accept it soon enough.
Shortly after, a neighbor the next street up painted their house sort of a Tijuana Gold color, which is off-putting, mostly because it is the only house of the couple hundred in my development this color.
Then there’s the Blue/Hershey Chocolate house caddy-corner from me. The house is blue, and the trim, shutters, and garage door are all chocolate brown. As a matter of fact, the garage door looks like a giant Hershey bar, with the rectangular impressions in the metal.
None of this would happen in an HOA.

HOA Info

Post Script about HOAs

Another case I dealt with is with one of our multi-property owners. When there is an HOA violation, I get a copy of it from him attached to an email that simply says, “Take care of this.”

The HOA stated that the resident stained the driveway in the condo complex washing his car. Curious how water could stain asphalt and concrete, I drove over there later in the day to have a look. Yes, there were some marks on the asphalt near the garage car door, just as there were at every other garage door I could see. I took a couple photos and sent them to the owner, and let him know that I saw nothing there that was not present everywhere.

About a month later I get another email, 2nd violation. Okay, I’m going to have to look again, and closer.When I arrived later that day, I noted no changes at all, anywhere, except that at present there was a group of teenagers riding their skate boards around the garage doors, each carrying Big Gulp cups of soda while skating. One skater spilled his soda right

When I arrived later that day, I noted no changes at all, anywhere, except that at present there was a group of teenagers riding their skate boards around the garage doors, each carrying Big Gulp cups of soda while skating. One skater spilled his soda right in an area where this looked to happen a lot, I happened to capture a picture of this to supplement my growing collection of images at this place. Funny, after sending these photos to the HOA themselves, I never heard anything back.

We at Management One manage properties inside of, and outside of HOAs, in the Inland Empire and Orange County.  We know how to work with them to keep the property in compliance, and when the HOA is wrong, we will politely fight back. Contact us today about our services!

HOA Info

Property Management Services

Call 951-924-4315 OR

Landlord’s Guide to The Eviction Process: What You Need to Know

By Melissa Astudillo

Your renter didn’t pay this month, or maybe it has been a couple of months, what do you do now!? No need to panic, with this detailed guideline you’ll be prepared to navigate the eviction process and plan for the attorney fees incurred in an unlawful detainer case.

Over the last 30 years, Management One has filed over 2,000 evictions. Not much surprises us anymore during an eviction. I hope you find this information useful and eases any anxiety you might be having.

eviction process

Starting the Eviction Process:

Did you post the notice?

After the rent is due and the grace period has expired, the eviction process starts. You will need to post a 3-day notice to pay or quit the premises. This notice is the basis for your eviction process. To file the case, make sure all information is accurate to avoid delays in your eviction process.  (see article “Eviction Notice: What every property manager needs to know“, it explains the 3-day notice process in detail). 

Avoid residents filing an Arrieta claim, make sure to file for all unknown occupants to avoid further delays in the eviction process. Click here to ensure you are filling out the 3-Day Notice correctly.

eviction notice

Waiting Period

After the 3-day notice is given to the resident, there is a waiting period.  Actually, there is quite a bit of waiting around in the eviction process. Be prepared financially for an eviction process of at least 45 days after the initial notice was served, that is for an uncontested unlawful detainer (more details to come).

Like mentioned in the article dedicated exclusively to eviction notices, there are different ways to serve someone with the 3-day pay or quit notice and each of them has a different waiting period.

Here are some examples:

  1. Personal Service: 3 days
  2. Posting on the door: 10 days

After the waiting period has expired you…

eviction process

File unlawful detainer with the court

You might choose to retain an attorney to help you get all the right paperwork filed, any mistake can translate into extra time without the income of your rental. An attorney’s start rate for an unlawful detainer lawsuit is about $700-$800 in the Inland Empire.

If you decide to do it yourself, you will need the following documents to file an unlawful detainer case:

  1. Copy of the lease agreement
  2. Copy of the 3-day notice that served to the tenant
  3. Proof of service signed by the person that served the resident with the notice to pay or quit.
  4. Completed UD100 form
eviction process

I filed, now what?

You will need to serve your tenant with the eviction paperwork. In California, you are not allowed to personally serve them.

Therefore, you might elect to hire someone to do it for you. This person will need to sign a proof of service form which will need to be filed with the court. Professional process servers cost anywhere from $50-100.

There is usually a 1-2-week period where your process server will try to serve the tenant with the unlawful detainer paperwork. If the tenant evades service then a request for a postal order will need to be requested from the judge.

eviction notice

Posting order

This is requested when a tenant evades service for up to 2 weeks. To keep the case going you must request the judge to approve for you to serve them via postal mail. Once the request is filed with the court it will take a couple of days to get back the signed approval from the judge.

Second Waiting period

Once your tenant has been served with the unlawful detainer paperwork either personally or by mail, he or she has 5 days to file an answer with the court.

eviction process

Caveat

They might file for a demurrer in this time period.

According to Wikipedia “A demurrer is a pleading in a lawsuit that objects to or challenges a pleading filed by an opposing party. The word demur means “to object”; a demurrer is the document that makes the objection”

(California Code, Code of Civil Procedure – CCP § 430.10) 

Once the demurrer is filed, a court date will be scheduled in which where the judge will decide if the unlawful detainer lawsuit needs to be thrown out or not.

If the demurrer is denied to the tenant you go back to the answering period and the tenant has another 5 days to file an answer to the unlawful detainer case with the court.

eviction process

Crossroad:

Court proceedings or Sheriff Lockout

Whether the resident filed an answer with the court or not will have an impact on how long your case takes to complete.

Contested: filed answer with court

If the tenant filed a response with the court, a trial date will be scheduled, usually within 15 days (with the Riverside, CA courts).

Uncontested: DID NOT file answer with the court

If the tenant DID NOT file a response with the court, a writ of possession package will need to be filed with the court. Once the judge signs the approval, the file is sent to the Sheriff’s office and they schedule a date and time to escort the tenant out of the property.

The Sheriff’s office posts a 5-day notice to vacate the property and provides you with a lockout date. Make sure to take a locksmith to the lockout date so that locks are changed and your tenant can’t access the home again in the future. The case up until this point usually takes about 45 days (with the Riverside, CA courts).

eviction process

Trial is scheduled now what?

Make sure to check on the tenants’ response which was filed with the court so that you are prepared for your court date.

Organize your paperwork and make sure to bring all pertinent data.

Trial checklist

Bring copies of all these documents:

  1. Any written notes, emails, or letters that detail any conversations or agreements between you and your tenant
  2. Written rental/lease agreement
  3. Any written modifications made to the rental/lease agreement
  4. 3-day notice to pay or quit
  5. Tenant’s payment record
  6. Invoices for work that has been completed in the home and for which the resident may be making claims in their answer with the court.
  7. Print any pictures or documentation that may be relevant to the case.

See sample eviction trial checklist here: Download Now

eviction process

Court appearance

Upon arrival to court, you will need to identify your court case on the sheet posted at the entrance. Then, check in with the court clerk.  If you have an attorney, he/she will do that for you. Take a seat and wait for your case to be called.

The going rate for an attorney appearing in court for you is between $150-$200.

eviction process

Bankruptcy

Bankruptcy is often used as a legal tactic to delay the eviction process. Tenants who know how to work the system often file bankruptcy as a stall tactic in these proceedings.

In this case, you will need to file a motion in bankruptcy court to get the eviction “vacated” or removed from the bankruptcy filing. A court date will be set for this and might take about 15-25 days.

There is a hefty cost to file this motion, it runs about $600-$800.

Once you get the eviction case removed from the bankruptcy you can return to the eviction process.

eviction process

More waiting…

Once the eviction process resumes and you are given a new court date you may resume with finalizing the eviction process.

eviction process

Final court date (if Arrieta claim avoided)

Make sure to bring all of the previously mentioned paperwork in the eviction trial checklist.

You may choose to reach an agreement with the tenant before going in front of the judge. If you make an arrangement and present it to the clerk it will be given to the judge.  Not only might you get to go home sooner, but it might help if you have reservations about how strong your case is.

Judges usually go in order of complexity leaving the cases that must be heard for the end. Therefore, if you are able to reach an agreement and get it in front of the judge you might be leaving earlier.

If you are not able to reach a settlement with the tenant before your case is called, you will present your case to the judge.

In your presentation, be sure to be concise and to the point. Use the KISS method:

  1. Keep
  2. It
  3. Short and
  4. Sweet

The judge will review the claims you stated on the unlawful detainer (UD-100) form you filed with the court.

The judge will ask if you have anything to add and verify the information with you. Then, the tenant will have an opportunity to explain their part of the story and why they have a right to remain on the premises. Based on the information provided the judge will make a ruling.

If the judge rules in your favor he will give a deadline for the lockout to occur, usually they grant lockout in about 15 days from the court date. (Riverside courts) The judge will issue the writ of possession and it gets sent to the Sheriff’s office to schedule the lockout date.

eviction process

Final Thoughts

After it is all said and done; you will be buried in paperwork, court appearances, and motions; months would have gone by. Therefore, it is important to pay attention to detail and make sure to strictly follow the legal guidelines to avoid unnecessary added time to the eviction process.

As it is, an unlawful detainer case can take anywhere from 45 days for an uncontested case to 4-6 months for a contested case.

Like I mentioned before, it all depends on what legal motions are used by you and the tenant in the eviction process.

Sound too complicated, and you have a full-time job and a family? Let Management One handle it! It is worth your time and peace of mind knowing that it will be handled correctly and no further time will be added to the eviction process.

 

Download our exclusive Eviction Map. This map will guide you through the process of an eviction.

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6 Common Property Management Mistakes and How to Avoid Them

By Dante Walker

 

Recently, I found myself in a unique situation. I am a Licensed Real Estate Agent, and I work in Property Management. I purchased a rental property of my own, and thought, “how hard can managing my own property really be?” Surely, my years of working in Real Estate and Property Management taught me something, I got this!

property managment

Mistake #1: Qualifications in Property Management

 

Now, I know that properly qualifying a tenant is the foundation to ensuring a good tenant is placed in the property. It is important to have set qualifying guidelines such as debt to income ratio, credit score, employment history, etc.

 

Normally I pull credit and verify employment and current residency. But this time I allowed my uncle and cousin to refer this person. So, I sat down and had a meeting with the tenant.  I still ran the credit, but before I pulled it, I did ask the qualifying questions:

 

How long have you been at your current resident?

How’s your credit?

Have you ever been evicted?

 

I tend to not worry if a person has a short sale or a foreclosure since many people took out bad loans and this has caused them to now become a renter.  This has never come back to burn me, so I wasn’t concerned about it this time. Give people the benefit of the doubt! Ha, little did I know how hot the fire was going to be this time.

property management

Mistake #2-Listening to others

 

I pulled the tenant’s credit, and yes, there was a red flag on their credit.  I overlooked it and felt like it was okay because this person was referred by two of my family members. These family members knew this individual well, knew the back story and convinced me to give the tenant a 2nd chance. After all, my family members have good credit and have been in their homes for over 20 years. Surely, they wouldn’t recommend someone that would burn me, right? Wrong…

property management

Mistake #3-Business is Business

 

I broke my #1 rule that my mother and grandparents always taught me that business is business. Guess mama knows best!  My first clue that there was a problem occurred when my tenant stopped paying rent on the 1st of the month and started paying on the 7th of the month. I gave 10-day grace period before applying late fees, really who does that? I know better, 5-day grace is enough, it’s not like I am made of money and can float the mortgage on my back. Once again, she was referred by family, so I cut the tenant more slack than I normally would have.

property management

Mistake #4-Proper Notice

 

The end of the lease was approaching, and boy, was I glad to see this mess come to an end. Just give the tenant notice to move out. In California, if a tenant has lived in the property for less than a year, a 30-day notice to vacate is proper notice. Had the lease gone longer than one year I would have to provide a 60-day notice to vacate.

 

Once again, I was the “nice guy” forgetting my number 1 rule business is business. On April 10th, I gave her a 60-day notice to move out. I wanted to give the tenant time to find a new home and not just “kick the tenant out.” Crash and burn…the tenant didn’t pay rent on May 1st.

 

To ensure the tenant received the notice, I sent a certified letter informing them they were to move out in 60-Days. The tenant confirmed receipt of both the personal posting and the certified mail.

 

No more mister nice guy. This has gone on for far too long. I posted a 3-day Notice to Pay or Quit. I tried to serve the tenant directly but would not answer the door and looked at me through the window. I took a photo of the notice and her in the window. I followed up with a certified letter.

 

Once again, the tenant confirmed via text message receipt of the notice on the door.

property management

Mistake #5- Selling the Property

 

Carrying this mortgage and my personal mortgage is EXPENSIVE and breaking the bank account. I have used all my savings just floating this property. Time to Sell.

 

Not so fast, this is a bad idea, and I know this. If a client of Management One called and said they wanted to sell and we were facing an eviction, I would recommend waiting to put the house on the market until after the eviction. Why would I not follow my own advice? Desperation, pure desperation.

 

Clearly, the tenant is not going to cooperate with showing the property. In fact, the tenant missed several showing appointments, costing me the potential sale of the property. And to make matters worse, the water heater went out.

 

After several text messages back and forth, the tenant believed she didn’t have to pay rent since I was selling the house.  I hear this all the time in Property Management, somehow the owner placing the property on the market indicates “free rent.” While this might be a negotiation token used by owners to encourage tenants to show the property, it is not an automatic thing.

property management

Mistake #6- Eviction

 

Working in property management, I have been through the eviction process many times. Most of the evictions go off without a hitch, so when it came time to file the eviction, I was confident that I could handle it myself. Really, it’s just a matter of going to Downtown Los Angeles, filing the paperwork, and paying the fees to start the eviction. I got this! Wrong, again.

 

The eviction was filed on May 26th in Downtown Los Angeles.  Now, I live roughly 50 miles away. If you know anything about traffic in Southern California, that equates to a 2-hour drive on a good day. Most days it could take 2.5 to 3 hours. All this driving back and forth, trying to come to a resolution, cost me nearly $500 in gas, wages lost, parking fees.

 

This time I took the train to avoid the traffic and high parking fees. The cost was roughly around $300 to file the paperwork myself. By filing the paperwork, myself, I saved about $500 in attorney fees. But here is the real kicker….my court date is not until November 13th, yes, you read that correctly, 6-months after filing the paperwork. The court encouraged me to work it out with my tenant. Really, what do you think I have been doing? I would not be here filing paperwork for an Eviction if my tenant was willing to “work it out.”

 

Hind sight is 20-20. I decided to call an eviction attorney. I was advised that if I had used an attorney, I would have received a court date about 20-days after submitting the paperwork. So, that $500 I saved by filing my owner paperwork is really costing me $12,000 in lost rent alone. That is a semester of College for my daughter. This is an expensive lesson.

property management eviction

Moral of the Story

Here is my advice to anyone who thinks they know what they are doing….stick to what you know. I thought I knew “property management”, boy was I wrong. What I know is the concept of property management, not realizing the process we do day in and day out has a true purpose in the big picture of property management.

  1. Do not break your own rules because you feel sorry for a person. Even if they are willing to pay a higher security deposit.
  1. Document everything.
  1. Get an attorney to handle your eviction because your time is much more valuable than dealing with this yourself.
  1. Hire a professional management company to take all this stress off you.

 

This experience has taught me to appreciate the processes and systems that I use every day working at Management One. I have a greater appreciation for our qualification process and sticking to our guns, not placing a “square peg in a round hole”. You will most likely get burned if you deviate from your pre-determined qualifications.

 

Stay Tuned to find out how the story ends….in November 2017!

 

Don’t want to go it alone, call Management One today for your property management needs.

 

 

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Property Manager’s Guide to Eviction Notices: What you need to know

By Melissa Astudillo

 

It’s that time again…the busiest time in a property management company…the first of the month. Rent is due! The constant flow of traffic of residents paying rent, the phone ringing off the hook with promises to pay. The accounting department is on their toes making sure deposits are balanced, landlords receive their money and the dreaded…filing evictions on those that have not paid.

eviction notice

Eviction notices are at the core of property management since undoubtedly there will be lease violation of some kind at one point or another. The laws vary by state; therefore, it is important to be acquainted with the local laws for the successful posting of an eviction notice.

 

In 30 years of property management, we filed 100’s of evictions. Over the course of time, we have created a system to streamline the process of filling evictions on residents.

eviction notice

So, what is an eviction notice?

An eviction notice is a legal tool you use as a landlord to end the lease with the current residents and gain back possession of your property. There are several types of notices which are explained in more detail below.

 

What are some eviction notice time requirements?

  1. If you want to terminate a lease for a resident that has been in the home less than one year, a 30-day notice to vacate is sufficient.

 

  1. If you want to terminate a month to month contract for a resident that has been in the home for over a year, a 60-day notice would apply. The same applies to not renew a lease for someone who has been living in the home for over a year.

 

These timelines are essential to giving proper notice to a resident because an improper notice can derail the time you expect them to be out.

eviction notice

What information do I need to include in the eviction notice?

  1. The full names of your residents
  2. The address of your residents
  3. The date the demand was served to them
  4. Information regarding what the notice is for.
eviction notice

What types of Eviction Notices are there?

  1. There is a 3-day notice to pay or quit: This is used when residents do not pay their rent on the agreed date and are past the grace period. The serving of this notice will be the basis of an eviction case due to nonpayment of rent. Therefore, it is imperative that the notice is thorough in instructions, and contains accurate information.

 

  1. There is a 30- day notice to vacate: This would be used for residents who have been living in the home for less than one year and you wish to end the vacancy at the end of the lease. In this case, you would post/serve the eviction notice 30 days before the end of the lease agreement.

 

  1. There is a 60-day notice to vacate: This notice is used for residents who have been living in the home for over one year and you wish to end the vacancy. It is the same for one-year leases or those with a month to month contract.

 

  1. 3-Day Covenant: This notice would be used in case of a breach of contract. In this case, you are giving your resident 3 days to correct the issue and if no action is taken then you can proceed with the eviction.
eviction notice

Posting the eviction notice:

In most states, the landlord is allowed to personally serve the eviction papers, make sure to check your state guidelines. If your state does not allow it, you can check with the Sheriff’s office or seek a private service to assist you with this.

  

Types of postings:

  1. Personal Service: this means you “personally” hand the paperwork to them. (If allowed by your state). This guarantees that there are no misunderstandings you know they received it straight from your hands.

 

  1. Posting Service: this means the notice would be posted on their door. You can use an envelope to make the delivery more conspicuous if you’d like. For those that avoid being served, this would be a convenient way of posting the notice.

 

  1. Mail: this means you mail out the notice to them using regular mailing services, you can also request tracking and require a signature on the documents to confirm they have received it. Use certified mail with return receipt to confirm service.  You may use USPS.

 

  1. Private server: depending on your state laws you might not be able to use the previous, therefore, the use of a private server would be needed. Most attorneys employ private serving services, you can request a referral from them or by calling the court.
eviction notice

What’s next?

Make sure to follow up on the notice to make sure it has been received. While the time is running on the notice make sure to get acquainted with the documents that need to be filed with the courts. You can do this online or by physically going to the court and getting this documentation. You will also need to know how long to wait after the notice has been served.

 

Once the notice has expired, if no action on behalf of the resident, you are ready to start an eviction case against your resident with the court.

 

Management One offers an “Eviction Guarantee.” We will pay for a basic eviction of any tenant that we placed in your home. We post all notices, file all forms needed, use an Eviction Attorney to carry out the eviction process. We show up for lockouts with the Sheriff and complete all inspections.  We eliminate all your headaches!

 

Related Articles:

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Summertime Rental Living-Pool Fun and More

By Steve Hembree

 

Keeping Cool, Pools and More is the theme of this article, Summertime Rental Living.

 

Here we are, in the midst of another hot summer, and of course, this topic, Summertime Rental Living, comes to mind. A question came in today, one I had never fielded before. I was asked about above ground pool sizes, depth in particular. That got me to thinking about summer in general, and specifically about ways of staying cool and still having a blast.

Summertime Rental living

Above Ground Pools

 

I don’t know of any rental homes that do not allow above ground pools, particularly if the resident is footing the water bill. If any of them do, shame on them! Except…

  • An above ground pool kills the grass.
  • If the property owner or landlord pays the water bill, filling it is kind of rude
  • A pool 36″ or greater in height creates a risk raising the property owner’s insurance premium significantly. It might even get the policy canceled. For real.

 

If the landlord is okay with your having an above ground pool, and there is grass, be courteous enough when you’re done with the pool to a) drain any chlorinated water (or salt water for that type of pool) away from the grass, and re-seed the yard.

 

In cases where you don’t pay the water bill, check with the landlord first. If they say no, then it’s no.

 

The last one is important knowledge.
At 36 inches or more at the sides, you have a pool ladder. If you have a pool ladder the steps MUST fold up and LOCK in place to keep strangers and children, especially, from climbing up and inadvertently falling in. Should an insurance inspector pop by, and they do, I know, I used to be one, Bad Things Will Happen. Under 36 inches, it does not matter.
By the way, the 36-inch rule/fold-able/lockable steps are in place even if you have locks on the gates entering the back yard or pool area, which differs from in ground pools.

Summertime Rental living

In Ground Pools

Remember the old video saying, “Be Kind, Rewind!”? Try this on: “Be Cool, Take Care of the Pool!” Or how about, “Don’t Wait, Lock That Gate!”

 

Use that pool. Use the heck out of it. Swim until you’re down right prune looking, however,

  • Keep it clean, do all the normal maintenance stuff if there’s not a pool service provided.
  • Owners, provide a pool service because the likelihood of the above not happening is high.
  • Keep the gates to the yard, or the pool, padlocked.

Keeping up on this is imperative, otherwise, you risk water borne illness and a damaged pool. If you don’t know what you’re doing, LEARN! Remember: “A Green Pool is Bad for the Gene Pool”
If the owner provides a pool service, it is very important to rat the pool service out if they are not doing their job. It’s your job to let the owner know the pool folks aren’t cutting the mustard. You could very well be saving your own health.
Insurance companies have rules which they expect to be followed, a there is a real chance of a rate hike to the owner’s insurance, or cancellation if they aren’t followed. Keep the gates to the rear yard locked. Provide whoever needs access, like the pool service or the gardener, with a combination or a key. You see, a random inebriated person could wander in the yard, fall in the pool kin the dark, and drown. Or a wayward child. Sounds unlikely, even silly, right? It happens.

Summertime Rental living

Don’t Let a Failing AC Unit Ruin your Summertime Rental Living

Check your air conditioning system before the summer heat is upon you. A good time is tax day, April 15th. Listen to the unit spool up, feel the temperature coming out of the vents. It’s easy at times to spot, or hear, a problem before it’s a problem but isn’t an exact science.

 

Check it

 

Unusual vibrations in the area where the blower resides? The blower wheel could have debris in it, lost a weight and is now unbalanced. The blower Squeals when it starts up? A bad bearing is likely. The compressor sputters on start up? Bad capacitor, or a compressor beginning to go.

 

Do you need to know all this? No, you just need to call for service if you note something really not right with the system. Do know, renting or owning, it can take days upon days to get service of an inoperable AC system when it is hot out, however, it’s not that people don’t care, it’s just the demand is much higher than the supply when temperatures rise.
Also, do note that except in very specific cases, an air conditioner that is not working is not an emergency situation, and it’s not a habitability issue. Provided the owner, or landlord, or rental company is working on getting it fixed, they are doing their job, just know that sometimes it takes time.

Summertime Rental living

Spas/Hot Tubs – Adding one

Don’t Do It! Especially without the property owner’s permission! Of all large things left behind by people moving away, Hot Tubs heads the list, and it isn’t fair for the property owner to have to pay to get rid of it! “But the next people will use it.” Nope, they probably won’t, any more than you did. Would you have left it if you used it? According to our studio audience, the answer is no.

Summertime Rental living

Slip and Slides

 

These hazardous contraptions are still around, saw some local kids using one the other day. It made me hurt just watching.  When you are done using it, put it away, or the grass will burn.

 

Running Through Sprinklers.

 

Yep, I grew up looking like some goofy spaz, running through the sprinklers. In the front yard. What a dweeb. You know, it’s a lot of fun, until you step on a rock or a sprinkler. Just be aware of where sprinklers are so no one gets hurt, and if you break one, fix it.

Summertime Rental living

Last Thoughts on Summertime Rental Living

 

Stay cool, laugh a lot, have fun, don’t take things so seriously, chill with good people, eat watermelon on the back stoop, stay safe, and enjoy.

 

Oh, and by the way, I’m going to try to follow that advice too.

 

Do check the Management One Blogs frequently, we always have good stuff popping up on there, and if you need management services or a great home to live in, check us there too!

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Home Warranty for a Rental Property: A Worthwhile Investment Or Not?

By Dante Walker

 

Property owners believe that having a home warranty for a rental property is a great idea and is more cost effective.  Well, let me tell you that, this is far from the truth. What Management One has seen, over the last 30-years of property management, is that home warranties are more of a nightmare than a benefit to homeowners and tenants. Home warranties work well for your personal property or newer homes but are bad news for rental properties and the tenants living in them.

home warranty

Home Warranty Inclusions

Most of the home warranty policies will include Heating and Air, Plumbing, Minor electrical, dishwashers. However, you can upgrade to a premium policy. This will include appliances, pool pumps, roof repairs, sprinkler systems and spa tub motors. Your typical home warranty range in price from $350-$800 per year which breaks down to approx. $30 – 70 per month.

Now, most warranties have a deductible or service trade fees of $69 per item to $125 per item on top of the yearly price. Say you have a dishwasher that breaks down and a backed up sink you will have to pay two deductible fees, making the minimum fee for the contractor to come out $138. Most likely this will not include the cost of parts, that gets tacked on as well.

home warranty

Home Warranty Denials and Exclusion

The home warranty company has a slew of exclusions that tend to leave the door open for a denial of the claim. Based off of what we have seen, we have compiled a small list of items that a home warranty has the right to deny a claim for a repair.

  • Pre-existing problems
  • Outdated HVAC system
  • Code violation
  • Lack of maintenance
  • Incorrect installation
  • Poor maintenance

This list can go on and on for what they will/can deny coverage on, rendering your policy useless in getting repairs completed on your rental property.

When it comes to plumbing, the warranty will cover the repair but will not cover any drywall opening or concrete opening. Let’s say you live in an area with severe weather condition and your pipes freeze, this too is not covered under your home warranty policy.

home warranty

Unnecessary Hurdles to Overcome

Residents expect repairs to be done right away and could care less about the home warranty holding up the repair. With a home warranty company, there are many layers to getting a repair done. Resident calls into management company – Management company calls home warranty – Home Warranty company issues work orders out to repairman – Repairman calls a resident to get it scheduled. This outline can delay a repair for up to 2 days which causes the resident to become irritated.  If it is a pricey repair, the home warranty company will want a 2nd opinion. Here lies another delay on the repair.

While it is true, you can place a request online with a Home Warranty company; this is not feasible for a tenant to handle or a property management company.

Then there is the issue with paying the deductible. Most Home Warranty Companies require payment for services rendered before even going out to the property. I don’t know about you, but paying for a service that is not yet completed, makes me a little nervous. Making this yet another hurdle to overcome just to get a simple repair completed.

home warranty

Resident Dissatisfaction with Home Warranty Companies

As the management company, it puts us in a sticky situation because we have no control over repairs. We don’t know who is doing the repair, no accountability for the repair to be done timely and correct. This hurts management company with low satisfaction rating from the resident.

Satisfaction is #1 priority for most management companies as the customers (owners and residents) happiness is important to us. With poor maintenance, many residents will not renew their lease. When a resident doesn’t renew their lease owners, in turn, elect to cancel their management contract with us. This is why having the right people in place to take care of maintenance is key to any management company survival.

home warranty

Game Changer

Here at Management One, we have created a unique process for handling repair requests. The resident can go online and place a maintenance request at their convenience. We receive the work order and process it quickly, assigning it to the vendor that is licensed to handle the repair. Take that same broken dishwasher and backed up sink example, it would be assigned to one plumber that can handle both repairs, resulting in only one trip charge.

 

Contractors are required to contact the resident within 4 hours of receiving the work order; they must take before and after pictures proving the repairs are completed; payment is rendered after we have verified the work is completed.

 

Satisfaction guaranteed- we survey every resident that submitted a work order. We want to make sure the contractor was on time, dressed for the job, completed the repair, and cleaned up afterward. If there is an issue with the repair or service, we handle internally promptly.  On the flip side, if the work was done right, on time, etc. we recognize the contractor for doing a great job.

 

These things add up to increased tenant satisfaction, in turn, they stay longer in your home. Decreasing vacancies, saving you money on needless deductibles for repairs that will most likely get denied, and ensuring repairs are actually completed.  For more information on Management One and the services we have to offer contact us today.

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