When you’re dealing with an eviction process, you’re experiencing one of the most stressful periods involved in owning rental property. This is your Myndful Minute, where we’ll remind you of some key truths that you need to prepare for when evicting a resident.
One of the things you have to realize is that when you own a rental property and your resident is not paying rent, you have an obligation to enforce your rental contract when you begin the eviction process. You don’t have the option to pick and choose which date you send the Notice to Pay or Quit, and you can’t arbitrarily decide when you’re going to go to the courthouse to file the eviction or go through with removing the resident based on what that resident is promising.Your lease agreement is a rental contract that’s signed by you and your resident. Make sure you always refer to your lease agreement when you’re evicting. If your resident doesn’t pay rent as agreed, you need to act in accordance with that lease. Treat your rental property like a business, and make the eviction process a consistent part of your policies and procedures.
Remember that when you are involved in an eviction, you should never take partial payments. Once you file that eviction in court, you’re evicting for a certain amount of overdue rent and fees. A partial payment means you’re no longer evicting for the same amount filed in court.Make a policy not to accept partial payments. Once the process has started and the documents have been filed in court, a resident will have to pay everything in full. That includes the overdue rent, the court costs, the legal fees, and the filing fees. You cannot play favorites and allow one tenant but not another tenant to make a partial payment. It looks like discrimination, and you can be charged with a fair housing violation. Be consistent and don’t accept partial payments. The only way your resident can call off the eviction is with a full payment that includes all applicable fees.
Evictions are emotionally stressful. It feels like your resident is taking advantage of you. But, you have to avoid taking it personally and getting emotional. This is a business, and you don’t want to make business decisions based on how you’re feeling. Nothing good ever comes from emotional, knee-jerk reactions.The consequences of an emotional reaction can be more devastating than the eviction itself. You might find yourself in an argument or served with a restraining order. Worse things can happen if the situation escalates just because someone owes you money. Your rental property is a business, and you need to treat it that way. Take all actions through the court if your resident isn’t paying rent. Follow the law and the established court procedures. Don’t go to the property and try to handle it yourself. That’s not you’re job, and it’s not the business you’re in.Thanks for joining us for this Myndful Minute. If you have any eviction-related questions, contact us at Mynd Property Management.
Being a landlord is no easy task and yes, you can fail. This is your Myndful Minute, where we’ll talk about some key truths that you need to prepare for when you decide to own a rental property.
One of the first things to understand is that owning a rental property is not an easy thing to do. You will encounter a lot of laws and regulations. The residents you’re placing in your property are protected by local, state, and federal government laws.The lease agreement you sign with your resident is a bilateral contract. You cannot pick and choose when you’re going to enforce the lease and when you’re going to ignore it. Running a rental property based on emotions and feelings will not work. You must adhere to your rental contract at all times.
When you own rental property, you are running a business. There’s no place for emotional decisions when you’re running a business. Don’t let your feelings get in the way. Remember that you have to follow what’s legal and correct; not what you think is right.Residents have a lot of rights, so you can’t just do and say whatever you want. Sometimes, landlords will try to make deals with residents. When you come to an agreement with a resident over late rent or some other dispute and then the resident doesn’t do what they promised to do, it’s natural to get upset. Many owners feel taken advantage of by the residents they were trying to help. Avoid emotional reactions and stick to business decisions. You have to establish some policies and procedures, and you have to be careful not to deviate from them.
When you buy a rental property, you need to have an end goal and a strategy in mind. Many investors are anxious to buy an investment property, but they don’t know why they’re buying or what their end goal might be. You have to know how a potential rental property fits into your strategy and gets you closer to meeting your goals.
Don’t take the last step first. Many investors who have done this the wrong way will tell you from personal experience that it’s no fun at all.Thanks for joining us for this Myndful Minute. If you have any questions about buying or renting out investment properties, contact us at Mynd Property Management.
When you own a rental property, there’s a chance you’ll find yourself in a lawsuit. This is your Myndful Minute, where we are talking about how to avoid and manage lawsuits.
The number one reason landlords find themselves in lawsuits is the security deposit. You have to set some established rules and expectations with your residents. We recommend you do this before your resident moves in so you have clear guidelines to follow at the end of the lease term when that resident is moving out. You and your resident both have to understand each other’s expectations.You need to know the laws pertaining to how many days you have to return a security deposit to your residents. Make sure you include a detailed description of what’s being returned and what’s being charged. Communicate with your residents throughout the process so they understand that you’re acting in accordance with your rental agreement and your policies.
Residents living in your rental property are protected by many governing agencies. You have to be current on all the laws and property codes that pertain to your property. This is the responsibility of every landlord; you cannot use the fact that you didn’t know the law as an excuse when you’re in court or facing a claim.The penalties can be severe. If you come up against a federal laws, you may find your ability to ever own property again seriously inhibited. You have to know what you’re doing. You have to adhere to the laws, and you have to have policies and procedures in place to avoid and mitigate any lawsuits.
As a landlord, you need to know that there are seven federally protected classes of people. The main complaint that federal agencies deal with is on behalf of people with disabilities. Make sure you understand that when a resident is applying for your property or living in your property, it’s critical to comply with all federal, state, and local laws. You are the liable party if those laws are violated.The last thing any landlord wants is to get sued by a resident. There are dozens of agencies you can talk to and websites you can visit to ensure you’re up to date on all the latest laws and requirements. These laws evolve. You don’t want to make the mistake of thinking or assuming you know something. Just because the law said one thing in the past doesn’t mean that’s the current standard today. Know the laws. Follow the changes. Verify everything.Thanks for joining us for this Myndful Minute. If you have any questions about lawsuits and how to avoid them, we welcome you to contact us at Mynd Property Management.
When you have a vacant property and you’re trying to get it rented as quickly as possible, not allowing pets can cost you time and money. This is your Myndful Minute, where we’ll talk about why allowing pets into your property can be beneficial.
Landlords need to understand that 80 percent of residents in the United States have at least one pet. That means they want to move in with a hamster, gerbil, fish, cat, or dog. When they’re searching online for rental properties, the search engine results are only going to deliver the properties that don’t limit pets. So, when you advertise no pets at your property, you won’t be able to access that 80 percent of the potential resident pool.We recommend you allow pets on a case-by-case basis. Then, when you have people applying for your home, you can also screen the pets and decide whether you will accept the animal. You don’t want to lose 80 percent of the tenant population by saying no pets allowed.
Statistically speaking, pet owners are good residents. Animals actually do a lot less damage than people when they’re living in a property. You probably know some people who take better care of their pets than their children.When you have strict policies on how pets have to be handled and treated and you collect a pet deposit or a pet fee, you can count on your residents taking good care of your pet and your property. Put some parameters in place to protect the property, and be clear about your standards and procedures. You’ll find you’ll have better residents taking better care of your property because they know not everyone rents to pets.
Vacancies are expensive, and you can avoid them by allowing pets. You can also earn more money when you rent out a pet-friendly property. Landlords can charge a pet deposit or a pet security fee. Pet rent can be charged every month and you can charge a pet administration fee. Residents understand that there’s time involved in processing an animal, and they’re willing to pay for pet friendly properties. That’s beneficial to you because you can generate extra streams of income for your rental property.Thanks for joining us for this Myndful Minute. If you have any pet-related questions, contact us at Mynd Property Management.
When you want to invest in a rental property, there are five reasons that will tell you why you should or shouldn’t buy a specific home. This is your Myndful Minute, where we’ll talk about why an acquisition will make sense or not make sense to a real estate investor.
The first reason to consider whether you should buy a property is its potential for cash flow. That’s the difference between debt servicing, which is your mortgage, tax payments, and insurance, minus the rent you collect. The difference between the two is your cash flow.New investors will often make this the entire point of investing. It’s a good thing to consider, but it’s not always necessary to cash flow a property right away. But, cash flow should factor into your decision about whether to make an investment purchase or not.
Equity capture is another thing to consider when you’re evaluating a potential investment. There’s the market value of the property and what you ultimate buy that home for. If the property is worth $100,000, and you buy it for $80,000, you have an equity capture of $20,000. That’s not money in your pocket, but it is an unrealized capital gain, and it counts as money you have in the property. Equity capture isn’t the only factor contributing to your decision, but it’s a piece of the puzzle that tells you if this deal matches your investment strategy.
When you have a rental property that’s occupied, your resident is paying rent. That rent goes towards your mortgage, which means your resident is paying off your home loan. We call this debt pay down. If you own a property for 30 years and you have a resident that whole time, your resident will essentially pay for the cost of your property.Statistically, there will be vacancies throughout the course of your investment process. But in theory, you should definitely buy a rental property if you think you can enjoy a high debt pay down benefit.
Depreciation is another factor. The government allows you to depreciate your rental property, and the standard is currently 27.5 years. Talk to your CPA or professional bookkeeper about what this means for you, and make sure you can legally and effectively depreciate the property.As investors, we call this a phantom loss, and it allows you to offset any rental income that you earn on your property. This helps you with your tax liability, and it should contribute to your decision about buying a rental property.
The biggest driver of your decision to invest in a property should be appreciation. This is a huge reason to think about owning rental real estate. Over time, your property will increase in value. Historically, on the East Coast and the West Coast, property values double every seven to nine years. In the Midwest, values double every 12 to 15 years.So, even if you buy a property in the middle of the U.S., the value of your property should double twice in the 30 years you may own it. When it comes to deciding whether to invest, this beats out cash flow. A big reason investors are successful with rental properties is that their investments appreciate. If you’re planning to hold your real estate investment for the long term, this is an important factor.Thanks for joining us for this Myndful Minute. If you have any questions about purchasing and renting out real estate, contact us at Mynd Property Management.
Picking the right resident can be the most important part of owning rental real estate. This is your Myndful Minute, where we’ll talk about what you need to consider when you’re placing a resident in your rental property.
When you are picking a resident, the first and most important thing to do is establish qualifications and policies that direct how you will accept or deny residents. Be consistent. Stick to your rental criteria when you’re screening and always disclose who you will or will not accept before any potential residents decide to apply for your property.
When you’re selecting a resident, you have to use the data that you gather to make your decisions. Never use your emotions. Feelings are not useful when you’re running a business. This rental property you own is a business, and you have to think of it that way.If you deny one applicant and then later accept another applicant who has the same qualifications as that first applicant, you’re going to find yourself on a bad path. Your decision can be seen as discriminatory. Use the data you collect, and don’t use your emotions or your personal beliefs when you’re selecting a resident for your property.
Verify all of the information you’re presented with in the application. We like to recommend that owners trust but verify what they’re told by applicants. You have a responsibility to make sure the information provided is true and correct.You don’t want to find out later that the resident lied about key pieces of information in order to get approved for your property. If you don’t do a proper background check before placing a resident, you could find yourself trying to remove that resident because rent isn’t coming in or the lease is being violated. Double check everything on the application and make sure you’re putting the right resident in your property.Thanks for joining us for this Myndful Minute. If you have any questions about screening and placing a good resident in your rental home, contact us at Mynd Property Management.