We all know that owning investment property comes with risk. There’s always a good chance that investors could fail. Sometimes, it’s not the investor’s fault at all, simply a condition of market trends or the industry in general. In Portland, there are a few specific reasons that investors fail. Many investors who can’t succeed end up getting out of real estate altogether. We want to prevent that from happening to you.
There is a really common pattern in Portland, and maybe it’s true outside of Portland as well, in which investors feel that they can and must do everything on their own.If you don’t want to fail with your real estate investment, you need to operate with a view of the long term. This is true whether you’re investing in Portland real estate, investing in stocks, or starting a business. Lots of people read success stories about business people becoming multi-millionaires overnight. It does happen once in a while perhaps, but a lot of time investors get rich slowly and steadily over time. Be prepared to put in the work for months and years.Investors often get excited by buying their first investment property, and they will try to self-manage that property without realizing how much time it takes and how much knowledge is required. It’s very easy to think that it doesn’t take much, and they can do everything that needs to be done on their own.But, this isn’t always true.Maybe an investor will have a bad experience with their resident or find out the requirements of the Portland rental rule book is way more complicated than they originally thought. The rules and regulations in Portland are so complex that the time, energy, and frustration is too much for most investors. It’s easy to forget something or misunderstand something, and then you’ve made a mistake that has the potential to be very expensive.Landlords who are trying to do the maintenance on their rental properties themselves will find that it’s very easy to fail as well. Not only are they losing their evenings and their weekends, they’re probably not doing as good a job as what a professional and licensed vendor or contractor could do. They may not be responding as quickly as they would if they were working with a Portland property management company, and that upsets the residents.When rental property owners try to do everything on their own, they’ll likely get burned out within three to five years. Ultimately, they’ll decide that real estate investing is not for them, and they’ll decide to sell their assets and stop dealing with it. This is a shame because if they had simply worked with partners and property managers, they could have kept the property for the long term and earned a lot more money.
If an investor buys multiple properties, the stakes are even higher. If you own 30 rental properties throughout Portland or even in a single building, scaling those assets will bring you huge successes. But, if you get out of the real estate investment game because you’re frustrated with how things work, you need to take a look at where your process went wrong. Were you trying to do too much?Investors who fail often fail because they don’t run their properties like businesses. Anytime you want to run a business and you go to the bank, the bank will want to see a business plan. If you were to ask an investor if they had a business plan, 99 percent of them would say no. They know that their property is a business and they know there are laws and regulations and expenses. But, they are not putting it all together and understanding that they need an actual business plan as well.A business plan is going to help you understand your strengths and weaknesses. It will help you leverage the expertise of other people. Don’t let your ego mislead you into thinking you have to do everything yourself. It’s not your job to lay tile or put up dry wall.When you have a Portland property management company, you are leveraging their staff. You have access to accountants and maintenance personnel. You have qualified people to lease the property.Most people do not buy real estate to have a second or third job.
There is not a rulebook that tells you how to run your rental property.So, it’s a huge mistake to try to do everything on your own. There’s actually a standardized way of doing most things, and best practices that have been perfected over the years. Normally, your professional property managers will know how to handle every situation that’s encountered. They’ll operate within policies and procedures and effectively run your property like the business it is.There are a lot of laws and regulations in place here in Portland, and most of those are favorable to your residents. That’s going to make things more complicated in this business.Don’t let yourself fail as a real estate investor in Portland. It’s very easy to succeed when you think in the long term, surround yourselves with experts, and remember to run your property like a business. Contact us at Mynd Property Management to learn how to succeed with your Portland investment property.You can also visit our Facebook group of investors, which is called Master Mynd. It’s a real estate investors’ club, where you can exchange ideas with other owners. Check out our weekly podcast as well, called The Myndful Investor. We invite leaders in real estate and property management to talk about their success and, more importantly, their failures. There’s a lot to learn from this relatable content.
When investors purchase a rental property, they expect that routine and preventative maintenance will be part of what they need to do to protect the condition of their investment and to meet the needs of their residents.Emergency maintenance is something else entirely. It seems to always happen overnight or on a weekend, and it requires you to be prepared, have a team of vendors and contractors ready to respond, and a maintenance budget that can absorb the costs.Emergencies are difficult. They are difficult on you, your tenants, and your vendors. It’s important that you have a good relationship with your residents when you have to respond to emergency maintenance. You’ll need to communicate well and stay professional. Remember – you’re running a business, and you’re responding to a business need when an emergency occurs.Today, we’re focusing on how to prepare for and respond to emergency maintenance situations at a Portland rental property.What do investors need to know?
One of the biggest fears that real estate investors often have is: what am I going to do when I get a phone call from my resident at 2:00 in the morning because there’s a leak or a toilet isn’t working or the heat won’t turn on?The answer is this: you have to set up policies and procedures, and you have to manage expectations.Educate your residents on what is an emergency and what isn’t. Fires and large water leaks are obviously big emergencies. Anything that puts your residents in danger or puts your property in danger should be considered an emergency.Everyone can agree that a fire or a flood is an emergency. But, beyond that you should make sure your residents are on the same page as you in terms of what requires a phone call in the middle of the night. You need to educate your residents and you need to be open to communicating with them. Before they even move in, have a conversation about the procedures that you expect them to follow when a repair is needed. This is the perfect opportunity to discuss what an emergency is and what a routine repair is.This will help residents understand that 99 percent of the things they may have considered to be an emergency are in fact not emergencies at all. You should be thinking from a legal standpoint when it comes to identifying and explaining emergencies. Does it make the home uninhabitable?Educating your residents through an orientation process at the move-in point is a great way to avoid any misunderstandings about emergencies. They want to be aware. You can put something in writing so they can refer to it if they’re not sure whether what they’re experiencing is an emergency. You can also give them some helpful tips and training. For example, when they’re moving in, show your residents where the water shut-off valve is. When you do this, you put a lot of power into the hands of your residents. If there is a water leak, they know how to shut off the water before calling you.Residents can be trusted to handle the first steps of an emergency. And, they should always understand what an emergency isn’t.
Emergency maintenance is one of the best reasons to hire a professional Portland property management company. It takes this headache and hassle of your plate entirely.When you work with an experienced property manager, you get a 24-hour emergency maintenance line. Obviously, as an individual landlord, you might not be able to get a contractor out there to your rental property at 2:00 in the morning or on Christmas Eve. But, when you work with a property management company, you know you’re getting a team of vendors who are committed to their best clients. Your property will be first in line, and someone will be at the property when the sun comes up. This is more than peace of mind; it’s also a higher standard of workmanship and better pricing. Your relationship with a property manager will make handling emergency maintenance issues much easier.More importantly, you want to make sure you are protecting your residents. Obviously, an emergency response is important to the protection of your investment’s condition. But, taking care of your resident’s safety and security is your primary responsibility. You don’t want to leave your residents in an unsafe or uninhabitable situation.Legal trouble can find you down the road if you don’t respond right away to residents who don’t have water or heat. Educate yourself and your residents on what emergencies really are, but never put them in danger. You don’t need the lawsuits or the claims. Even if you cannot respond to the problem right away, you can do whatever is possible to prevent the problem from getting worse.At Mynd Property Management, we have a structured response to any emergency maintenance situation. We work with some of the best vendors and contractors in Portland, and we work closely with our residents to make sure we are all working together to take care of the property. You won’t have to worry about getting a phone call in the middle of the night or trying to find a vendor at the last minute who is willing to help you. Contact us at Mynd Property Management for more information.You can also visit our Facebook group of investors, which is called Master Mynd. It’s a real estate investors’ club, where you can exchange ideas with other owners. Check out our weekly podcast as well, called The Myndful Investor. We invite leaders in real estate and property management to talk about their success and, more importantly, their failures. There’s a lot to learn from this relatable content.
Many Portland, OR investors have worked with property management companies before, and they know what to expect. But, if you’re a new investor or you’re thinking about investing or you’ve been a landlord for just a little while and you’re thinking about handing over the duties to a professional, you might want a little more information about what exactly a property manager can do for you.Today, we’re explaining what a property management company in Portland does, and why it can help you have a better investment experience.
Property management companies actually do a whole lot for the owners and the residents they serve.Some of the tasks that come with professional property management are fairly obvious. You probably know that your property manager will handle marketing your vacant property. We’ll take care of all the online advertising and we’ll help you establish a rental value that’s both competitive and profitable.We will work with prospective residents on the application process and screen everyone who applies. When we’re ready to place a resident, we’ll handle all of the leasing and the collection of security deposits and move-in funds.The leasing process is only the beginning. Once a tenant is placed, your property manager will take care of all the accounting that pertains to your rental property. This includes rent collection and tracking all the income and expenses associated with your property. We produce statements, reports, and tax forms.Relationships are also part of a property manager’s job description. We’ll take care of the resident relationship and we’ll also use our vendor relationships to keep your property well-maintained.We treat our residents as customers and that contributes to better relationships, increased communication, and higher retention rates. The average resident will have 3.8 maintenance requests a year, and we’re available for all of them. Property managers should answer the phone 24 hours a day and 7 days a week. You don’t have to worry about tracking down plumbers or gathering quotes for roofing work. Your property manager will identify the maintenance issues that are required and get the repairs scheduled and taken care of for the resident.
A good property management company will provide more than day to day operational support. We are also, more importantly, here to help you have a better and more profitable investment experience. We will treat your asset like an investment and make decisions based on your bottom line and your earnings. You wouldn’t give $400,000 to a stockbroker without knowing they are going to be very hands-on with that investment. Property managers have the same attention to your real estate investments. We’ll stay focused on your property or your portfolio. We will treat them like they’re our own investments, and we’ll make sure they are earning you as much money as possible.We will preserve the condition of your asset by maintaining it and protecting it against tenant damage, vacancy costs, and liabilities. We’ll keep an eye on preventative maintenance and make plans for long term upgrades and updates so we can help you maximize your rents over time and attract well-qualified residents.One of the most important services your Portland property manager will provide is help with the local market and the rental values. The amount of rent you’re able to earn on your property will really depend on the location. The same house might earn one rent in one neighborhood and something completely different in another neighborhood. Your property manager should understand the nuances of each neighborhood and help you approach the pricing, marketing, and screening appropriately.
Something that’s often overlooked when we talk about the benefits of professional property management is that we really become the firewall between you and your resident. As an investor, you don’t want to make decisions based on emotions and what you think you should do. Your property management company will have a completely unemotional approach to managing your home and working with your residents.The decisions that are made will be based on the law and the lease agreement. We keep it that simple.Property managers will always treat your rental property like a business that’s designed to make you money. Without a good resident in place, that business doesn’t earn anything. So, you need the property management company to put up a firewall and protect you from the emotions and the personal relationships that can sometimes plague investors who manage their own homes. If you’re new to the industry, you may not understand how difficult it can be to manage residents. Figuring it all out once you already have a resident in place is difficult and dangerous. That’s where the property management company really comes into play and becomes so vital to your success and the success of your investment.If you have any more questions about what you can expect your property management company to do for you, please contact us at Mynd Property Management. We can tell you all about our own services and what you should expect when you have someone professionally managing your Portland rental home. It’s an important relationship, and one you should take seriously. Let us know how we can help you make more and worry less when it comes to your investments.You can also visit our Facebook group of investors, which is called Master Mynd. It’s a real estate investors’ club, where you can exchange ideas with other owners. Check out our weekly podcast as well, called The Myndful Investor. We invite leaders in real estate and property management to talk about their success and, more importantly, their failures. There’s a lot to learn from this relatable content.
If you’ve decided to hire a professional property management company in Portland, Oregon, you’ve made a smart choice. Good investors know that their success depends on the team they surround themselves with, and they don’t waste time trying to manage their own rental homes.You want to make sure you’re hiring the best possible fit for your investment goals and your portfolio of properties. So we’re talking today about what kinds of things you should look for when you endeavor to hire the best property management company in Portland.There are a lot of choices. How do you know which property management company to pick?You have to ask some questions, and we have some suggestions.
We have spent more than 30 years in the property management industry, and one of the things we have learned is that sophistication can work in your favor and make you more money.When you begin looking for property management services, you’ll find many well-meaning but very small mom-and-pop businesses. The effort is there, and they clearly love what they do. But, the sophistication level is lower than it should be, and their follow through is rarely where it needs to be.So, you end up having a property management firm that tends to be very reactive rather than proactive. It’s not that their intentions are bad, it’s more like they don’t have the capacity to meet your needs. Some of the smaller management firms are running around playing whack-a-mole, just putting out fires. They can’t be strategic and they can’t deliver the sophisticated services you need.You want a property management company that is proactive. Look for an innovative company that’s modern and on the cutting edge of everything that’s happening in property management and real estate investments. You need a company that’s willing to invest in technology so that they can proactively take care of the things you need.Here’s an example of how a proactive property management company operates. They might suggest to you that the furnaces in your rental properties get tuned up in the off-season because it’s less expensive to have a heating specialist out in the middle of summer. Having those furnaces inspected and serviced will save you money in December because you won’t have a more expensive repair and your residents won’t be calling because the heat doesn’t work.That is being proactive. This type of sophistication and forward-thinking saves you money and in some cases, it can save you a lot of money.
You also want to make sure you are using a property management firm that only uses licensed, insured, and bonded maintenance companies. Sometimes you might feel like you’re paying more for these professionals, but these are companies that will warranty their work. They have a good, strong reputation in the marketplace and value your business. They will take care of you and your residents and treat you like valued customers.When it comes to maintenance, cheaper is not necessarily cheaper, and it’s definitely not better. You’ll end up spending more than you think you are saving. We have learned this first-hand. There is a cost of doing business and there is a cost of getting things fixed and doing it right.In Steve’s early days as an investor, he thought he was saving money, but when maintenance provider had to go out to a property three times, he actually ended up spending more to get the work done right. And, he found himself with frustrated residents. It’s hard to deal with an issue like that and to continue spending money on the same problem. If he had hired a licensed and insured professional to fix the problem the first time, it would have not only saved money but stress as well. Get the right person in there. Get the job done and do it right and move on.
And when we talk about the level of sophistication a property management company needs, you need to be sure to ask the right questions.You want to know how quickly they respond to tenants. And you will want to know how quickly maintenance issues are resolved. Ask a potential property manager if they have any preventative maintenance programs. At Mynd, we strive to respond to everyone within 24 hours and to have all maintenance requests closed within seven days. A lot of times we actually do better than that. If you can run a business like that, your residents are going to be very happy. It will increase retention and allow for healthier rent increases.
When you are looking for a management company, make sure they are in alignment with your goals and your strategy. Make sure they can help you get there. You don’t want to choose a company just because they’re the cheapest company on the block. They could very easily lead you in the wrong direction. There could be mental frustrations and lawsuits that come with that.Make sure that whatever company you choose, they are in line with what you want for your investment property.We would be happy to answer any questions you have about how to find a Portland property management company or what we can offer you that other managers can’t. Contact us at Mynd Property Management for more information.You can also visit our Facebook group of investors, which is called Master Mynd. It’s a real estate investors’ club, where you can exchange ideas with other owners. Check out our weekly podcast as well, called The Myndful Investor. We invite leaders in real estate and property management to talk about their success and, more importantly, their failures. There’s a lot to learn from this relatable content.
Today’s topic is one that’s becoming more and more popular in multiple areas of the country, and that’s rent control. Recently, the whole state of Oregon passed rent control laws, and now some revisions are being made in several cities.We asked Scott to give us an idea of what’s happening with rent control in Portland and throughout Oregon.
Portland is very progressive and not the only region with rent control laws. The trend recently has been for states to shift the rulebooks more towards resident protections. Understanding the local Portland economics is important because when you are talking about rent controls, there is always a driving force behind why rent control is being implemented.Portland has been one of the hottest investment markets in the nation for quite a long time. It’s also had an acute housing shortage. This has created expensive rents, and many residents are struggling to pay for housing. So, Senate Bill 608 was passed in February of 2017.
There are two main parts of this bill.The first is an actual cap on rents. There are a lot of exceptions. For example, if a home is 15 years old or newer, it’s fully exempt because they want to keep driving the development and construction of new homes. But, if the home is more than 15 years old, landlords are limited to a seven percent rental increase, plus the CPI or Consumer Price Index. Over the last two years, it has resulted in a rent increase that can go no higher than 10 percent.This is pretty reasonable and not terribly limited. As long as you are staying close to market rents, a 10 percent increase is not going to limit your profitability or returns in Oregon.The second part of this bill addressed no-cause evictions.Most people associate the word eviction with being forced out for nonpayment of rent. That might be true but there is also a no-cause eviction, and that typically means a landlord is not renewing a lease. The big change in Oregon is that if the resident has been in the property for more than one year, landlords cannot do a no-cause eviction or ask for the property back with a 30-day notice period.This is significant. It applies to month-to-month residents as well if they’ve been living in the home for more than a year. This, combined with the law that says you can only increase rents once a year means that you have a bizarre leasing situation. If you have a vacancy on February 1 and you want to fill it, you might do a five or six-month lease so you’re at the point where the next vacancy is in the summer. But in Portland, the new laws mean your lease end date and the date you increase your rent are likely to be two different dates.The problem for landlords is that this provides a much shorter window of time to determine whether this is a resident you’d like to keep. Waiting out a full year before you decide whether you want to renew the lease is no longer possible. It gets you in trouble because it doesn’t allow you to do a no-cause eviction, in which you simply decide to look for a new resident or do something else with your property.We’re now recommending an 11-month lease instead of a full year lease. This is the only way to maintain leverage when it comes to removing residents we’d rather not work with. In the past, you could remove a resident with a 30-day notice and get your property back. Now, you need to have a documented reason to evict the resident, such as nonpayment of rent, lease violations, or criminal activity. That’s not possible anymore.
Understanding these laws is critical, and many investors aren’t even aware of them. When you read the legislation, you can either trust your own ability to interpret the laws or you need to hire a really good real estate attorney. You can also hire a good Portland property management firm that will know the rule book and handle the legal issues for you.Rent control and eviction laws are different depending where you are in Oregon. With the housing shortage, Portland has a stricter rulebook than the rest of the state. There are additional new rules on security deposits and accounting restrictions.You’re running a business when you invest in a property and rent it out in Portland. Businesses have laws, and it is your responsibility to abide by these laws and regulations. You have to take this seriously because the government takes this seriously and they are going to hold you accountable.Don’t try and figure out all the different laws on your own. As we said earlier, laws are always changing. They’re always being updated depending on the market and the people who are in power. And the trend both nationally and in Portland is to move closer to a tenant-friendly set of laws and regulations. This means you have to know exactly how the laws affect your properties and your investments.If you have any questions about rent control in Portland, Oregon, please contact us at Mynd Property Management. We have processes in place to protect our owners and investors against the problems that can be encountered with rent control and evictions.You can also visit our Facebook group of investors, which is called Master Mynd. It’s a real estate investors’ club, where you can exchange ideas with other owners. Check out our weekly podcast as well, called The Myndful Investor. We invite leaders in real estate and property management to talk about their success and, more importantly, their failures. There’s a lot to learn from this relatable content.
There’s a lot going on in the Portland real estate market, and many investors have arrived to buy properties and rent them out. Many of these investors do really well and they are making their success look easy. But, we all know investors who struggle. They aren’t doing as well, and success seems impossible.With that in mind, today we’re talking about the best strategy for investors to employ in order to enjoy long term investment success in the Portland real estate market.
Regardless of the geographic region you are investing in, there are some commonalities and traits that successful rental property owners all incorporate. They know how to identify opportunities, what sort of leverage to use, and how to put together a stellar team of professionals who will help them succeed. They spend time getting to know the industry and their market, and they stay informed.
If we are talking about the Portland market and real estate in the Portland metro area specifically, successful investors really have to understand the political landscape and the laws that are both in place now and under consideration. Portland is a bit unique when it comes to that. You have to understand the economics of the city, and why things operate the way they do.Investors who want to succeed in Portland need to be able to think about the long term.Here is an important example. Portland, Oregon has an urban growth boundary. What this means is that building and development is limited because the people living here prefer density, and we don’t want sprawl.This has created a scenario over the last 40 years in Portland where we cannot keep up with the demand for housing. In fact, for every 100 units that we need to build in Portland to keep up with demand, we can only build 90.After three or four decades of this policy, you end up with a pretty incredible housing shortage. More people want to live in Portland, but we don’t have the housing to support the increase in population and interest. But instead of correcting this problem and reducing the regulations that are causing it or encouraging more building and development, additional laws have been put into place to further squeeze the existing housing market.This just happens to be aligned with the culture and the climate here in Portland. A successful investor, therefore, needs to understand that Portland would rather have a housing shortage than sprawl.
To invest successfully in Portland real estate, you also have to understand the city’s commitment to affordable housing. In 2017, a law was passed that required all new development for multi-family properties with 15 units or greater had to dedicate 20 percent of the units to affordable housing rentals.This means that if you’re building a 100-unit apartment complex, 20 of those units are going to rent for between 20 and 30 percent less than the other 80 units.The value of real estate as future cash flow has greatly depressed the future value. Before this law was passed, a lot of applications were filed to build new housing. A good, successful Portland investor is deciding that despite this blip, the surge of supply coming onto the market will continue to drive prices up. This blip will end in about three years, or in 2021. We’ll have this three to five year gap with no new supply coming onto the market. Once the law was implemented, applications for building permits fell right off a cliff. So, the long term investor is planning. A smart and successful investor will know that in the first three to five years, growth may be slower, but by looking five to 10 years out, it will be easy to see that these rules will not impede growth or profit. Rental property owners will only do better.
In the long term, Portland investors need to wait for the market to evolve. If you’re buying a rental property now, you know that over time you are going to earn quite a premium because of simple supply and demand.Portland is implementing a lot of rules and regulations that will do everything possible to limit and deter investors from building more housing. However, the consistent migration into Portland, Oregon and the demand to live in the city is just getting stronger and stronger. Population growth in Portland is projected to be on the top of national trends. It’s going to experience robust growth in the years to come. Investors who see that these restrictive policies will only increase a strong demand with a shrinking supply will do well with their investment properties.If you can think about a long term investment strategy and hang in on the market for three, five, 10 years, or even longer, you’re going to do well in Portland. There’s a lot going on in this city, and you need to be prepared, educated, and focused on the stability of your portfolio.Investors who are interested in learning more about Portland real estate can contact us at Mynd Property Management. We’d love to discuss this topic with you further. Investing in Portland is something we’re passionate about, and we’d love to hear and talk about your personal investment goals.You can also visit our Facebook group of investors, which is called Master Mynd. It’s a real estate investors’ club, where you can exchange ideas with other owners. Check out our weekly podcast as well, called The Myndful Investor. We invite leaders in real estate and property management to talk about their success and, more importantly, their failures. There’s a lot to learn from this relatable content.
Investors are always talking amongst themselves about whether they should manage their own rental properties or if they should hire a property manager. Today, we’re talking about why you need a professional property management company in the Portland metro area. This information should help you make the decision easily and understand why it’s a bad idea – and even dangerous – to try and manage your own investment properties.
In a lot of states, there are new laws coming out including rent control laws, and city and state governments are changing the rulebooks. This has a big impact on investors, especially investors who don’t have the time and the resources to keep up with every new law.Time has always been a problem for real estate investors. Not having enough time to maintain the rental property on your own or market it when it’s vacant or show it to tenants has always been an issue. You have a full time job of your own and maybe you have family responsibilities and other passions you’d like to pursue. Getting your time back is a great reason to hire a property management company.But, the political landscape has changed, and now you don’t just want a property manager to save you time. You want a property manager to save you from expensive legal mistakes and potential lawsuits.Landlords are facing much heavier restrictions and requirements. More important than the laws themselves are the penalties. The amount you’ll have to pay for a mistake or a misstep is much bigger than it once was. So, if you’re hoping to self-manage, make sure you have a plan to understand and stay up to date on all the political changes that are happening. If you do not have that time, then you really need to get a professional Portland property management firm to help you. The stakes are too high, and managing properties legally and in compliance with new regulations is only going to grow more complicated.Laws evolve and change, and the government that makes these laws will expect you to keep up. Just because one law comes out this year doesn’t mean that it stays static. That law may shift next year, and you won’t necessarily know it’s happened. You might not find out what was actually required of you until it’s too late and you’re in legal trouble.No one gets into real estate investing to have a second or third job. When you try to self-manage, that’s exactly what happens. You find yourself having to juggle your first job with your new jobs. It takes away your time and it sets you up for mistakes.So, ask yourself what’s more important to you: time or money? You can always make more money. But, it’s pretty much impossible to make more time. So, paying for professional property management is probably in your best interests. Do you really want to commit yourself to understand the ever changing laws all the time? Acting as your own landlord is an excellent way to set yourself up for failure.
Another good reason to hire a professional Portland property manager is the market trends. Unless you have the time, expertise, and resources to stay up to date with everything going on in the local market, you need someone with the experience and the connections to know what properties are renting for and what residents are demanding in rental homes.This is part of the pattern, and it all goes back to the lack of time. Investors have a hard time staying afloat of the actual market value of rents. So, a common mistake that self-managing landlords make is that they get a resident in place, and then they never raise the rent. Or, they don’t conduct annual inspections. Maybe they don’t do a good job with preventative maintenance or they’re unresponsive to any type of maintenance. Before you know it, three to five years have gone by and a lot of money has been left behind. The property may be renting for $200 to $300 under market. Over the course of a few years, thousands of dollars are lost.Maybe you thought you had great residents in place because you never heard from them and they never bothered you with maintenance requests. Then, those residents move out and you find a lot of deferred maintenance and unreported repairs. These costs are going to be much higher than they would have been when they were first noticed.Many owners often think they’re saving money by not hiring a property manager. But, you are probably losing money on the things that aren’t getting the attention they need.When you own a rental property, you own a business. To be successful, all the pieces of that business need to fit into place. It’s like a pilot needing an airplane. That’s a pretty important piece to make the whole thing work. When you own a piece of property, having a property manager that operates the business is a key part of your success. You have to understand what the rents are and what the laws are and what is best for the business.We’d love to tell you more about Portland property management and how we can help. Contact us at Mynd Property Management for more information.You can also visit our Facebook group of investors, which is called Master Mynd. It’s a real estate investors’ club, where you can exchange ideas with other owners. Check out our weekly podcast as well, called The Myndful Investor. We invite leaders in real estate and property management to talk about their success and, more importantly, their failures. There’s a lot to learn from this relatable content.
When you invest in Portland rental property, you know that repairs and maintenance will be a cost. It’s a mistake not to plan for them. Today, we’re talking about what some of the most common expenses are with properties in this market. As an investor, you’ll want to be aware of these common costs.
Every geographic region has their own set of challenges that are often related to climate and geography. Here in the Pacific Northwest, we deal with a lot of water. Water management is a huge issue, and contributes to a lot of preventative, routine, and emergency maintenance costs.Portland real estate investors will have to be prepared for everything that comes with heavy rains in the winter. During the wet season, we can get up to 36 inches of rain. Nothing damages a property more than moisture. So, you’ll need to make sure you have your gutters cleaned. Make sure this is scheduled for every year. You’ll want to ensure that the water is going away from your house. If the gutters get clogged, then you have a big risk that water is getting into your foundation.If your basement starts taking in water, you end up with a leaky basement.Even worse than a leaky basement is what results. A byproduct of water in Portland is mold. Mold removal can be very, very expensive and can cause legal issues with the residents you have in your rental property.
Are you doing everything you can to prevent and manage mold?With 36 inches of rain falling almost every winter, there’s obviously going to be a lot of moisture and some very wet areas, especially in the basements. When you build a house, developers can take some precautions to prevent the growth and spreading of mold. But, when you buy a rental property that’s already been constructed, you’ll have to constantly work to keep water and mold out of the property.When it comes to preventative measures, there are actually a combination of things you can do.Part of it is paperwork and resident education. A couple things we do at Mynd Property Management is to make sure tenants understand that after they take a shower, they need to run the vent for 20 minutes and open up doors. This is a good way to prevent mold from growing in the bathrooms and behind the walls. Things get wet, but as long as they dry, mold doesn’t grow. You need to give those surfaces an opportunity to dry out.We provide our residents with a mold prevention packet, and we walk through that with them to make sure they are aware of it and understand the expectations we have.Attics are also important, and you want to make sure your attics are breathing. This is just routine maintenance. You’ll need to pay the same attention to your property’s crawl spaces. If you have water sitting in the crawl space, not only could that develop into mold but it can also attract rodents. So you want to make sure if there is water getting in there, you find out where that water is coming from. Fix the problem and let things dry out.
To avoid some of the most expensive rental property repair costs in Portland, the best thing a landlord can do is be preventative. Make sure this is a joint effort with you and your residents. Do not keep things closed up or leave things moist and wet. It makes sense to air things out, whether it’s a shower or an attic or your gutters. If you do discover mold or your resident reports that mold has been found, there are plenty of mold remediation companies that will come out and rectify the problem and then re-certify the home as being free of mold.That is always available to you, but the process of cleaning and removing mold is very expensive. At Mynd Property Management, our goal is always prevent the need for mold remediation at all costs. It’s much better to prevent the mold than to remove it.And of course, it’s not just mold that can be a problem that results from moisture. If you have an air conditioner and you put it in the window, then that condensation can create moisture which can create siding damage. Or, if your windows are not properly sealed, you can also run into expensive problems.We highly recommend that you implement a weatherization program with your rental property in Portland. Before the winter and the rains arrive, make sure that the gutters are cleaned and any cracks throughout the home are caulked so moisture doesn’t penetrate. You are proactively creating your moisture barriers this way, and then you are okay during the season. If things get wet, your home’s interior will still stay dry.Water, moisture, and the problems that result from these things are absolutely the most expensive maintenance costs in Portland. Make sure you’re prepared for them before you invest in a rental property and after you’ve moved in residents. If you have any questions about how to protect your property from this type of damage, please contact us at Mynd Property Management. We’d be happy to serve as your Portland property management resource.You can also visit our Facebook group of investors, which is called Master Mynd. It’s a real estate investors’ club, where you can exchange ideas with other owners. Check out our weekly podcast as well, called The Myndful Investor. We invite leaders in real estate and property management to talk about their success and, more importantly, their failures. There’s a lot to learn from this relatable content.
We have some breaking news on the Portland real estate market. There are some new laws that went into effect just recently, on March 1, 2020. These laws are included in the Fair Access in Renting, or F.A.I.R. Ordinance. They cover resident screening and advertising, as well as security deposit management.Today, we’re elaborating on some new things you need to do as a landlord when you’re screening your potential residents.The recent F.A.I.R. Act was just passed on February 1, and is now being implemented with fewer than 20 business days for rental property owners to adjust. It’s complex, and it’s a real burden to place on owners and landlords. We aren’t attorneys at Mynd, but we are experts in Portland property management, so we want to share what we know and offer some pointers for how to avoid falling out of compliance with these new laws.
Portland rental property owners now have two options when it comes to screening applicants.There’s a low barrier option, which has requirements that aren’t very strict and are more open to residents of all financial and criminal backgrounds.There is also an option for you to set up your own screening criteria if you choose not to use the low barrier option. Even when you screen your own criteria, however, you have to comply with some regulations and barriers put into place by the City of Portland.In some cases, landlords will have to allow for a 72-hour waiting period before approving an application to identify the unit as accessible for people with disabilities. You’ll now need to allow your prospective residents to disclose whether they have a disability. In some circumstances, applicants with a disability will have an opportunity to rent your unit before others can even apply. Their applications must move to the front of the stack, and they’re entitled to be screened before other residents.That’s a huge delay for property owners, and it may drag out the leasing period, leaving you with extra days where your property is not occupied and rent is not coming in.
Another part of the F.A.I.R. Act is a restriction on what you can require for a rent to income ratio. We’ll talk about this further in another blog, but you need to know that you cannot arbitrarily impose your own requirements on how much income an applicant earns before being approved for your property.Depending on whether you’re following the low barrier requirements or your own standards for approval, you’ll only be able to look for income that’s equal to two or two-and-a-half times the monthly rent. You are no longer allowed to deny residents if they don’t meet your higher income standards. If you were previously only renting to individuals who earned three times the monthly rent, you cannot do that anymore.This is a heavy burden to put on property owners and it really increases your risk when you’re renting out your property. It may be more difficult to find a truly qualified tenant with these laws in place. You may also face a longer screening and leasing process in general.
But wait, there’s more.In addition to all of these new requirements, there is also an appeals process that’s been put into place. If you have an applicant who wants to rent your home but doesn’t meet the criteria and gets denied, that applicant can appeal your denial. This process can take 30 days. If, within that timeframe, you have rented the original property to someone else and the applicant wins the appeal, you have to allow them to rent another unit for which they will qualify. Applicants who can submit documentation that refutes your reasons for denial will ultimately be granted permission to move into one of your units.As a landlord, this creates a lot of extra work and requires a lot of extra time on the screening process. It could slow down your entire approval process for other applicants.
A lot of Portland landlords are going to be worried about making a mistake. If you’re wondering what will happen if you do make an error, your question is valid. These rules are so new that we aren’t sure what the ultimate penalty will be. But, you can probably count on having to pay two times the security deposit at least. Then, there may be additional punitive damages that result in a $250 charge for each error along the way. Potentially, you could be responsible for the applicant’s legal costs as well.So, depending on the number of errors you make and the types of mistakes they happen to be, you could be looking at penalties that reach thousands of dollars.As we’ve said, this is a new law, and the laws here are always changing. Surely there will be revisions, and we can expect court battles moving forward.If this does nothing else, it should show you the importance of hiring experts. Treat your property like a business and protect that business. If you’re self-managing, make sure you understand these laws and you’re prepared to follow them.We’ll be talking about this more in the future. Until then, contact us at Mynd Property Management if you have any questions or if you’re a Portland rental property owner who needs help coming into compliance with this law.You can also visit our Facebook group of investors, which is called Master Mynd. It’s a real estate investors’ club, where you can exchange ideas with other owners. Check out our weekly podcast as well, called The Myndful Investor. We invite leaders in real estate and property management to talk about their success and, more importantly, their failures. There’s a lot to learn from this relatable content.
Laws are always changing when it comes to real estate, and in Portland, the new Fair Access In Renting () Act has just been implements, and the new laws that are included in that ordinance have some very serious implications.These are important things you need to know if you’re renting out a property in Portland. While we aren’t attorneys at Mynd, we are experts in Portland property management. Talk to a lawyer if you need real legal advice, and if you’d like to hear more about what this means for your rental property, we’re giving you a summary of what’s going on.Today, we’re focused on security deposits and all the things that have changed since March 1 in how landlords can collect, hold, and return deposits. Let’s look at a quick overview of some new requirements.
Landlords are now required to disclose the financial institution and address where a resident’s security deposit is being held. It’s probably easiest to include this information in your lease agreement. You have it in writing, and tenants can access it.You also have to disclose if the account that’s holding the money is an interest bearing account or not. If you’re earning interest, the rules imposed are onerous. You’ll need to do some detailed accounting that’s so difficult, you may want to reconsider using an account that earns interest. We aren’t saying you shouldn’t; but, for all practical purposes, we would recommend you hold your resident’s security deposit in a non-interest bearing account. This takes away the ability of a landlord to use security deposit as working capital.
This law also imposes a limit on the amount that can be charged in a security deposit. There’s a ceiling that’s equivalent to one month of rent. This is fairly common, and if you’re renting to a high-risk resident, you can go up to a security deposit that’s equal to one-and-a-half month’s rent. It still puts a lot of risk on landlords.
The biggest implication of this new law as it pertains to security deposits is that owners now have to prepare a mandatory condition report. Not only that, the ongoing maintenance has to be included in the condition report throughout the tenancy. This basically turns property managers and landlords into accountants who have to track deprecation on all assets in a rental property.When your resident moves into your property, it’s normal to have a move-in condition report that reflects the condition of the property before your resident takes possession. It’s an opportunity to walk around and identify any imperfections that aren’t normal wear and tear.This requirement expands on that practice.Now, landlords must identify all the appliances in the rental property. You have to list what’s included, such as the washer and dryer, the dishwasher, the microwave, the stove, the fridge, and any other appliances that are provided. You’ll need to identify those appliances and disclose the actual age of the appliance and the estimated value.The City of Portland has provided some rules on how to depreciate these appliances.Appliances must be assumed to depreciate over 15 years. I don’t know how many of you get 15 years out of a dishwasher, but that’s the standard that now has to be used. So, you’re identifying the age of each appliance and the value. You have to support that information as well. You can’t just say that your dishwasher is seven years old and that you spent $500 on it. You’ll need documentation.Assuming you can prove that your dishwasher is seven years old and was purchased for $500, you’ll have to divide by 15 to get the value today. Then, going forward, there’s an ongoing recordkeeping requirement for any maintenance that’s performed on that dishwasher. If there’s a repair or damage to the dishwasher, you’ll have to document it and add the information to your condition report so you can adjust the depreciation schedule.There may be damage to that dishwasher when your residents are moving out. Maybe a child jumped on the dishwasher door when it was open and bent it. You can’t just make a random deduction for the cost of that door. You have to calculate the exact depreciation and value.There now needs to be an effort throughout the tenancy to document and depreciate each appliance in your rental property. Condition reports aren’t just for move-in and move-out anymore.If it seems like this new legislation is making it impossible to self-manage, you’re right. If you’re a landlord with a career of your own and a family to take care of, finding the time to manage your property and stay up to date with the laws is nearly impossible. You should be very nervous about how these laws will affect what you do and how you manage.The risk is too high, especially when you consider the amount of money that’s at stake. Your investments are your financial stability, and you don’t want to bring any extra liability onto yourself. Remember – your rental homes are small businesses, and you need to protect them.If you need some help talking through these complex issues, contact us at Mynd Property Management. We’re happy to help you manage these new legal burdens and talk to you about the new normal in Portland property management.You can also visit our Facebook group of investors, which is called Master Mynd. It’s a real estate investors’ club, where you can exchange ideas with other owners. Check out our weekly podcast as well, called The Myndful Investor. We invite leaders in real estate and property management to talk about their success and, more importantly, their failures. There’s a lot to learn from this relatable content.