Should a Landlord allow a Daycare in their Rental Property?

You need to be extremely careful, think hard, and get good legal advice before you allow a tenant to run a daycare business in your rental property.. In suit-happy America anything that goes awry results in a lawsuit against the person most able to pay, not necessarily the one who was at fault. In this case it will be you, the owner of the property, not the tenant.

Accidents are your biggest concern. Houses that care for children need to be retrofitted to avoid them. You would almost need to inspect the house yourself to be sure that there are no accidents waiting to happen. Even then you might not have spotted them all. Check the internet to see if there’s information about setting up day care and preschools. One site that could provide the information you need is www.startadaycare.net.

You also need to get information about what, if any, businesses are allowed in residences and what permits are required. Check with the city attorney or building department. The failure of your tenant to have the right licenses and permits would geometrically increase your liability should a problem arise or a child be injured in the business.

Third, your tenant needs to have complete liability insurance, possibly with you named as a loss payee, in the event there was any suit against you.

Fourth, make sure you have a large umbrella policy to cover your liability. Ask you insurance agent for some ideas on how much you need to have.

Your first duty is to yourself, not the tenant. Err on the side of over-caution. You need to take the responsibility to see that the property is free from hazards. Most important, if you don’t feel completely at ease having your tenant run a daycare business out of your rental property, don’t allow it.

Cain Publications, Inc. and Real Property Management, LLC.

You Get What You Pay For!

By Robert L. Cain, Copyright 2011 Cain Publications, Inc.

Do you see what they see? Do you see the dirty front walk? How about
the untrimmed yard? What about the trash-strewn front entrance? Or are
you so focused on why you are at your properties and what you need to
do that the rest is just a blur? If it’s all a blur, the next time you
go by, over or around, spend a few seconds looking at what prospective
tenants see.

The US Census Bureau asked tenants why they chose the home they are
living in. One in eight, 12 percent, admitted that his or her choice
was based on exterior appearance in some respect or other. That was
the main reason. Still more cited exterior appearance as a
contributing reason for their selections. On the flip side, many
prospective tenants rejected homes because their exterior appearance
didn’t meet their standards for one reason or another.

But just being conservative, are you willing to lose one out of every
eight of your prospective customers just because your property looks
sloppy, unkempt, unpainted or ill-maintained?

Many times we aren’t much of a judge of how one of our properties
looks. After all, we’ve seen them so many times that we don’t think
much about it. If you believe it couldn’t hurt to run a quick test,
here’s a trick to show your properties to you in an entirely different
light. Take a picture.

Actually, take several pictures. Take two or three from across the
street so you see the first thing a prospective tenant sees. Now get
out of your car and take pictures as you walk up to the property.

Next, find on your digital camera where you can change the pictures to
black and white. Look at the pictures you took in color, and then
change them to black and white. Is your first response, “Oh, no!”? If
so, maybe it’s time to make your properties more marketable.

It just makes good marketing sense. When you walk into a grocery store
and look up the aisles, are they neat and tidy? Is the floor mopped
and shiny? Look at the items on the shelves. They are all different
colors and designs. Do you know why?

Manufacturers spend millions of dollars marketing their products. Part
of the marketing goes to designing their packaging so it is most
appealing to their prospective customers. They study people’s buying
habits, why they buy, and what attracts them psychologically to a
package. As landlords, we don’t need to spend several thousand dollars
to have some marketing magician tell us how to make our properties’
packaging look appealing. We already know what qualities attract the
best tenants: neat, tidy and clean.

A good tenant will run for her life when she drives up in front of a
property that shows little or no pride of ownership. Possibly it is
too bad that many landlords simply don’t pay much attention to how
their properties look. Or maybe not. That gives an edge to the
landlords who do pay attention, but that’s a story for another day.

My point is this. We all need to be constantly marketing our
properties to prospective tenants even if we don’t have any vacancies
now. You see, we also market to our current tenants by showing pride
of ownership and making their homes look the way that encourages them
to continue to live there. People do judge a property by its cover,
even the ones currently living inside that cover.

Do you see what they see? Get your camera out and drive by a property
or two. Take pictures. Does what your photos show make you beam with
pride? If so, great. You have done an important part of your marketing
and that one tenant out of eight who chose her current home because of
its exterior appearance might well be your next phone call.

“Robert Cain is a nationally-recognized speaker and writer on property

management and real estate issues. For a free sample copy of the
Rental Property Reporter call 800-654-5456 or visit the web site
www.rentalprop.com <http://rentalprop.com>
.

What is WEAR & TEAR when a tenant moves out?

A hole in a plaster wall, a broken window, crayon marks on the ceiling, cabinet doors torn off their hinges–those are obviously above and beyond normal wear and tear. But how about a worn place in the carpet, what about tiles on the kitchen floor cracked or missing? That is where the tenant can claim that he doesn’t owe a dime of the security deposit, because that was just normal wear and tear and you can’t charge him for that.

What follows is a list of common things you will find around the house that a tenant might have some affect on and a range of life expectancy. For vinyl and wall-to-wall carpets you should get a pretty good idea of the life expectancy when you buy it, but for other items you may not.

A rule of thumb to follow, whenever there is a question about who should pay for damage, is that the landlord should pay. In this article, however, I will attempt to remove some of the question and possibly enable you to get an better idea of when you should deduct money from the security or cleaning deposits.

The first step in determining wear and tear is good record keeping. You need records, as complete as possible, of when you purchased items and/or when you installed them. If you don’t have a starting point, you certainly will have no way of knowing with any accuracy how long they should be expected to last.

If the fixtures or appliances were in place when you bought the property, try to find out from the seller their history. Many times the previous owner will have all the warranty and product information, including manuals.

The other vitally important thing to have is the tenant move-in checklist, signed by the tenant. Without that, the tenant can claim, often successfully, that whatever the damage was, it was there when he or she moved in.

In addition to that, some damage is the fault of the landlord for not checking the property regularly. As you well know, you cannot expect a tenant to take care of a property the way the owner does. Tenants just don’t notice things that can do major damage to a building.

For example, few tenants would think anything about earth to wood contact. They will shove dirt up against the side of a house and not even notice when the wood on the side of the house starts to rot. That is the fault of the landlord. A tenant will probably not notice a bad roof until it leaks, despite the fact that it shows all the signs of being on its last legs.

There is simply no way you could collect damages from a tenant for dry rot due to earth-to-wood contact: you should have seen it. Once you have noticed that a tenant is piling dirt against a building, though, it is up to you to tell him not to do it anymore. Once you do, and you have left a paper trail proving that you have, then the tenant would have some responsibility. Even so, it is up to the landlord to take care of his investments.

When a tenant moves in, make it clear to him or her that you want to be notified of damage and that you don’t want things let go.

How tenants damage things

Dishwashers–they use the dial to run them through their cycle. This will strip the timing mechanism. Dishwashers should be allowed to run through their cycles fully, not set to rinse again or dry again. Since a dishwasher should last between five and twelve years, if the control knob breaks before that, it is above and beyond ordinary wear and tear.

Water heaters–do not wrap them in an insulating blanket, no matter what the environmentalists claim. Doing so voids their warranties and the Underwriter’s Laboratory certification. The insulating blanket makes them too hot and can overheat the wiring. If a tenant wraps a water heater, thinking they are saving energy, and the water heater goes out, that is beyond ordinary wear and tear. Tenants will sometimes drain an electric water heater without turning the electricity off. That will burn out the elements.

Water heaters last from eight to twelve years. Burnt out wiring or elements are beyond ordinary wear and tear.

Ranges–gas ranges will last indefinitely. About the only thing a tenant can do to damage one is break a knob, and it happens. But accidents happen, and it is probably ordinary wear and tear.

Electric ranges, on the other hand, do not last as long, about 15-20 years. Tenants will remove elements to clean and not put them back in properly, shorting out either the element or the entire wiring on the stove.

Furnaces–It is important to change the furnace filter once a month. Leave a dirty filter in and risk ruining the fan motor. If necessary, get the tenant a supply of filters with the instruction to change it the first of every month, whether he thinks it needs it or not.

Storm doors–tenants remove the wind spring and the door flies open, breaking the glass, springing the hinges, or whatever. With no mistreatment, storm doors will last until they are too ugly to leave up. If a tenant breaks one, it is above and beyond ordinary wear and tear.

Driveways–Concrete is damaged by something known as “point loading.” That happens when a heavy vehicle is parked on the same spot for a long period of time or over and over. Eventually that weakens the concrete in that spot and it cracks. The cracks radiate out from the spot of the point load. If your tenant has a heavy vehicle,, ask that he park it in different places on the driveway. Point load damage could be considered above and beyond ordinary wear and tear.

Cabinets–most tenants will not pick up a screwdriver and tighten a screw that is coming loose. Many don’t know what a screwdriver is. Then, when the door comes loose from one hinge, they will let it hang from the other one. Cabinets should last for 20 to 30 years. If they are damaged from tenant neglect such as that, it is above and beyond ordinary wear and tear. It doesn’t cost a tenant anything to tighten a screw. At the same time, though, a periodic inspection would probably have discovered a loose cabinet door.

Floors, hardwood, tile, vinyl–You know what the life expectancy is when you buy the flooring, and it varies by quality. If you buy cheap vinyl, and a tenant’s high heel pokes a hole in it, you got what you paid for. But if a tenant drags something sharp across the floor and scratches or cuts the flooring, that is above and beyond ordinary wear and tear.

Doors (hinged)–tenants have been compared to teenagers: if something doesn’t work the first time, force it. Things get caught in doors, such as broom handles on the hinge side of the door, and then the door gets sprung. Screw holes are stripped and hinges get bent. Doors last indefinitely, if used properly. Damage to them is above and beyond ordinary wear and tear.

Doors (sliding)–These come off their tracks, and despite the fact that it is easy and costs nothing, tenants don’t put them back on their tracks. Then they come loose and get banged around, damaging the tracks so they have to be replaced. Take the cost of damage out of the security deposit.

You can’t be there all the time to watch to see that a tenant doesn’t do anything stupid or destructive. Previous landlords can often give you some insight on how well a tenant took care of a property. Some tenants are simply unconscious: they don’t mean to do any harm, they just have no way to connect what they have done with the damage. One of the mysteries of life.

Deciding whether damage is beyond ordinary wear and tear often boils down to a landlord basic, deciding if something was used in a way it wasn’t designed for. If it wasn’t, it is damage which should be paid by the tenant.

Thanks to Don Crawford of Crawford Home Inspection Service for much of the information contained in this article.

“Robert Cain is a nationally-recognized speaker and writer on property management and real estate issues. For a free sample copy of the Rental Property Reporter call 800-654-5456 or visit their web site at www.rentalprop.com.”

Property Concierges can Help!

By Whitney

Before you can list your rental home, you will need to consider how much work will go into A good preparing, renting and maintaining it. Although you can certainly handle the responsibilities on your own, you may consider outsourcing some of the effort. Here are some of the professionals you may consider hiring:

• Property Manager (PM) – Whether to hire a PM depends on how much interaction you want to have with inquirers and tenants, as well as how much responsibility you want to have for property operations and maintenance. A property manager can field calls and emails from prospective renters, show the property, collect the rent and handle repairs, upkeep and emergencies. Of course, PMs don’t work for free. A typical fee for a property manager is 8-10 percent of the monthly rent and 80-100 percent of one month’s rent to find a tenant for your property. Rates can vary, though, if you prefer to let the PM handle only part of the responsibility.

• Lawyer – You can find forms and leases online (and if you utilize a property management company, a solid one will be provided), but if you have any special concerns or want to make the lease iron tight, you may consider consulting an attorney. Although attorneys can be pricey, having a reliable one from the beginning may be useful should you need to confront or evict a tenant.

• Maintenance Worker – You may consider an on-call handy man, depending on how comfortable you are with repairs and upkeep. Additionally, establishing a relationship with a maintenance worker may help in an emergency situation where fixes need to be made as quickly as possible. However, if your property is new or in great condition, you may not need one yet.

• Cleaning Service – If you are considering selling the home at a later date or simply want to keep it in excellent condition, you may want to hire a service and include a bi-weekly or monthly cleaning in the rent.

• Lawn Service – Like with a cleaning service, you may want to keep your lawn looking exquisite. If so, consider hiring a service to do the job exactly to your specifications and add it to your monthly rent.

Even if you decide not to hire any of these professionals, you may want to have names and/or numbers on hand should you need them down the road.

Courtesy of www.rentals.com

Basic House Hunting Tips

Basic House Hunting Tips

Allow Plenty of Time – While it may be tempting to try and visit as many properties as possible on a single day, “overbooking” won’t give you enough time to linger and fully tour each individual home. If you find a house you truly like, you will probably spend more time reviewing each room in greater detail. Assume that each house you view will hold your interest enough for a lengthy exploration.

Dress Comfortably – House hunting isn’t a job interview, so dress casually and comfortably for the season. Wear slip-on shoes and adequate socks – homes with new carpet or flooring will often include “please remove shoes” signs. You will be doing a lot of walking and taking trips up and down stairs, so supportive footwear is a must. Clothing should fit comfortably enough to accommodate reaching up or bending/crouching down to examine cupboards both high and low.

Carpool – Taking just one car is particularly convenient when viewing multiple properties on the same day. A one vehicle approach ensures that no one gets separated or lost. Also, by moving over to the passenger seat you’re free to consider the merits of each last house and pay attention to the neighborhood near each property, rather than focus your energy on squinting at street signs.

Pay Attention to the Surroundings – Speaking of the neighborhood; make sure you pay attention to the area close by each home on the way in. What kind of shopping opportunities and facilities are within a short distance? Are there appealing destinations within walking distance? What are the schools like nearby? How far will your commute be? Are many other homes for sale in the immediate area?

The idea is to have some feeling of whether or not the neighborhood is right for you before you ever set foot in the actual home. If you’re lucky enough to fall in love with the house itself, knowing the lay of the land ahead of time can give you the confidence to make an immediate offer.

Use Your Nose – Generally speaking, a bad (or unidentifiable) smell inside or outside the home is not a good sign. Likewise, be somewhat suspicious if the home is overpowered by the smell of potpourri or intense candles in every room, as this can be an attempt by the seller to mask problematic odors. Mildew and mold smells indicate much larger problems – mold removal can cost thousands of dollars, and locating/fixing moisture leaks can be a difficult task. Pet smells or smoke smells can be minimized with cleaning, but will likely take time to fully dissipate. If you are interested in a home with a strong smell, hire a qualified and experienced home inspector who will unmask the cause of the odor.

Happy Independence Day – Build your Legacy

As we celebrate this Independence Day with our family and friends, remember to thank the troops that fight for our freedom. Remember to celebrate our communities standing tall. Remember to share our successes with the people around us. It is a time of change for most Americans. It is a time to live in the present, not in the past. Remember, real estate is a cycle. But, even if it’s always up and down, the long-term trend is up. It’s time to build your legacy.

The Tax Credit Dance…to be continued

Senate approves home tax credit extension

By ANDREW TAYLOR (AP) 19 hours ago

WASHINGTON The Senate on Wednesday approved a plan to give homebuyers an extra three months to finish qualifying for federal tax incentives that boosted home sales this spring. The move by Senate Majority Leader Harry Reid would give buyers until September 30 to complete their purchases and qualify for tax credits of up to $8,000. Under the current terms, buyers had until April 30 to get a signed sales contract and until June 30 to complete the sale.

 The proposal, approved by a 60-37 vote, would only allow people who already have signed contracts to finish at the later date. About 180,000 homebuyers who already signed purchase agreements would otherwise miss the deadline.

 Reid, D-Nev., added the proposal to a bill extending jobless benefits through the end of November. Nevada has the nation’s highest foreclosure rate, and Reid is facing a tough re-election campaign.

 The Realtors group has been pushing hard in Congress for the extension. Mortgage lenders, the trade group says, have been swamped with borrowers trying to get approved by the end of the month. Many potential borrowers are unlikely to make the deadline.

“If Congress fails to act promptly, then prospective homebuyers might not get the benefit of the homebuyer tax credit, even though they have completed contracts,” the Realtors said a a letter to lawmakers.

 First-time buyers were eligible for a tax credit of up to $8,000. Current owners who bought and moved into another home could qualify for a credit of up to $6,500.

 The $140 million cost of the measure would be financed by denying businesses the ability to deduct from their taxes punitive damages paid when losing lawsuits or judgments.

Protecting the World from Rental Scams (via Rentmarketer’s Blog)

If it’s too good to be true, follow your gut! By the way, renters and lease option candidates should be screening the landlords and investors as much as they do you. Know who you are getting into bed with (so to speak)!

Rental Scams hit the rental market in alarming numbers every single day.  To help stop these rental scammers, we released an informative blog called RentalScams.org. This free resource is meant to help educate and protect the World from rental scammers.  Their mission is below: Our mission is to educate renters, property managers, agents and owners on the many different types of rental scams that are on the internet today. The only way to defeat … Read More

via Rentmarketer's Blog

Inspiration

One of the greatest gifts you can give to yourself or anyone else is inspiration.  Inspiration to get in touch with your dreams.  Inspiration to seek out your deepest passions.  Inspiration to make a difference in the world, a difference that only you can make.  It’s not about success, it’s about significance.  It’s not about making a living; its about making a life.  It’s not about fame or acclaim; it’s about contribution and service.  -www.live-inspired.com

“The 7 attributes of an Extraordinary Human Being”

From the Landmark Group:

1. Integrity: Honor your word.  That is, do what you said you would do
by when you said you would do it.  And when you don’t clean it up,
make new promises and keep them.

2. Give up being right.

3. Being Powerful: Be straight in your communication and take what you get.

4. Being Courageous: Acknowledge your fear and then act (one of my favorites)

5. Being Peaceful: Give up the interpretation “there is something
wrong here” (another favorite of mine)

6. Being Charismatic: Give up “in order to” and trying to get
somewhere (be present)

7. Being Enrolling: Share your new possibilities in such a way that
others are touched, moved, and inspired by that possibility.

Hope you get some value out of these

–
Demitri V