Renting vs Owning

One of the most difficult decisions you may have to make is weather to rent a home or own a home.  Check out these resources on Renters vs Owners:

Budget Planner – Mint.com

You can also check out these resources too:

http://www.moolanomy.com/infographic-the-true-cost-of-homeownership/

http://www.smartonmoney.com/wp-content/uploads/2010/11/homeaffordability.jpg

Should an Eviction Always Disqualify an Applicant?

What is the Rental ‘Shadow Market?’

By Jennifer from Rentals.com

The rental market is certainly changing as an increasing number of people look for rentals and an increasing number of homes formerly for sale become rental properties. How will the surplus ‘shadow market’ of homes and condos affect traditional apartment rentals, and how can you benefit as a property owner?

What is the shadow market?

Though it sounds nefarious, “shadow market” actually refers to the inventory of unsold condos and houses competing with apartments to be filled by renters. The growing volume of these single-family rentals is cutting into the demand for traditional apartments, some experts say.

Quoting from Census Bureau data, the Web site Calculated Risk states that, since 2004, there are 3.6 million homes built for sale that are being utilized as rental properties. And as homes for sale continue to move slowly and owners look for a way to avoid foreclosure, those numbers will surely grow.

Why do single-family rental homes look attractive?

In some cases, owners of single-family rentals are not driven by profit as much as the desperate need to cover the costs of an unsold property that may have been on the market for months or years. Since rent prices for these homes will be extremely competitive, a family looking to rent will likely get the most square footage for the money by leasing a single-family home. And in many places, there are plenty of these properties to choose between.

As the renting of unsold homes and condos likely will continue to increase as income and overall home ownership levels fluctuate with the economy, it is important, as a rental professional, to be aware of this dynamic to help you cultivate prospects for your properties.

What is the impact on apartment rentals?
Any prediction of the overall impact shadow inventory will have on apartment rentals needs to take into account variables such as geographic location and the demographic mix in any given area. The two property types are not perfect substitutes for everyone. A young professional, for instance, who might like the idea of low rent for the square footage of a single-family dwelling may not be as interested in the other aspects of such a rental, opting instead for the convenience and amenities of apartment living. He may not want to care for a yard, for instance.

The lifestyle preference of the renter, then, could still determine the type of property he’ll choose.  But for those tenants who are open-minded to different rental choices than what they may have originally envisioned, the surplus of shadow inventory and its competitive rents will definitely capture their attention and continue to impact the apartment vacancy rate.

Other factors creating an inventory of apartment units is the doubling up that many families have done to stretch their declining dollars: children moving back in with parents, parents moving in with children, and other combinations of friends and relations sharing housing.

How you can benefit
Consider that exposure on sites like Rentals.com can introduce your properties to a whole new community of qualified renters who are looking to replace the housing they lost in a foreclosure or to move to a larger rental with their newly “doubled-up” family. Those property managers who continue to invest in their properties with proper maintenance and landscaping will reap the rewards of eager renters who can no longer afford or see the advantages in owning that home themselves.

Checking References can SAVE you Money!

The references you get from the applicant are as important as any other information you can get. There are certain references you must have.

First, and most obvious and foremost, is landlord references. Previous landlords will tell you most about what kind of tenant the applicant was. Even though many are hesitant to say anything bad about a tenant for fear of lawsuits, you can still find out an amazing amount of information simply be asking leading questions. Two questions you want to make sure you ask are “Did you know the tenant is moving?” and “Why are they moving?” or “Why did they move?”

Second, employer references can provide information about what kind of person the applicant is. You can also ask questions of the employer you might not be able to ask legally on the application, such as number of children, etc.

Third, personal references are always going to be friends or relatives of the applicant. If they are hesitant about saying something nice about your prospective tenant, you have a definite reason to suspect that the applicant will not be a good tenant. Also, check the addresses and phone numbers of the personal references to see if they are the same as any of those of the landlord references or employer references. Some bad tenants would be stupid enough to do that.

Use the phone book and/or directory assistance to verify that all the names, addresses and phone numbers on the application match — that’s for landlords, personal references, employers, etc. I cannot stress the importance of doing this too much. Professional bad tenants will have their friends pretend they are landlords and employers. If one thing doesn’t match, they’d better have a good explanation. If more than one thing doesn’t match, reject them.

If you want to make sure that you are talking to the real landlord, call the customer service department of a title company or the county tax assessor’s office. Just give them the address of the property, they’ll tell you the name and address of the owner of the property. Then make sure the name you get is the same as that of the landlord reference. In addition, many counties’ tax records are online. You can find out the owner of the tenant’s previous residence by checking there and avoid having to go through voice mail hell with the county.

If the prospective tenant has just sold his house, ask for the name of the real estate agent who sold it for him. If he doesn’t remember, that might make you suspicious. If he sold the property himself, ask for the name and phone number of the buyer.

When you call the real estate agent or buyer, ask about the condition of the property, the sales price, the amount of equity in the property, and anything else you think is pertinent. Ask who the lender on his home was. Call the loan officer, as well.

People who are moving from out of town are high risks (especially if they have no personal references). Find out why they are moving into the area.

You can check to see if their references’ names, addresses and phone numbers match by checking with directory assistance. “I would like the phone number of Jim Johnson who lives at 1234 Elm St. in San Diego, California.” And call all out of town references: the money will be well spent.

Check at the county court house for criminal record and/or eviction record. Or pay $20 (or less) and have a tenant screening service pull a public records report as well as a credit report for you. If they have either a felony conviction or an eviction, it could very well end up costing you big bucks to rent to them.

From the book Profitable Tenant Selection available from Cain Publications, Inc. For more information on this publication, go to Profitable Tenant Selection

Changes in and around Kirkland!

Important Information about Address Changes, Updates to
Drivers’ Licenses, Vehicle Registrations and Passports, and
Voter Registrations

Dear New Neighbor,
In response to inquiries about address changes, updates to drivers’ licenses, vehicle registrations and passports and voter registrations, we hope you find the following information helpful.

Address Changes
There are more than 12,700 addresses in the annexation area of Finn Hill, North Juanita and Kingsgate. About 2,700 of them were addressed as Bothell, WA 98011 and were changed on July 1, 2011 by the Postal Service to Kirkland, WA 98034.

For those former Bothell addressees, you should have received a notice around June 1 from the U.S. Postal Service about the change to your City and Zip Code. The USPS requests that you do not submit a Change of Address with the Post Office. However you will need to submit address changes to companies that send you invoices, statements, legal documents, etc. Although most of your mail will be forwarded by the Postal Service (up to one year), you should let your friends, family and other personal contacts know about the change to City and Zip Code. Any costs associated with making address changes is an individual responsibility.

If your mortgage company or bank is requiring proof of your address change, please contact Mr. OnFat Choi, USPS Address Management Division, Acting Manager at 206-442-6295 or onfat.choi@usps.gov.

You mail is now being processed by the Kirkland Post Office, 721 4th Avenue, Kirkland, WA 98033. For mail service questions, visit www.usps.com or contact Kathy Dela Cruz, Kirkland Postmaster at 425-739-6727 or kathy.t.delacruz@usps.gov.

Driver’s License
Many questions have been received about whether residents with former Bothell addressees have to update their driver’s license. The answer is yes. State law requires that you update your address with the Washington State Department of Licensing (DOL) within 10 days of the change of address (which would have been July 10, 2011).

You have two ways to update your address on your driver’s license with DOL:

1. Download the Change of Address Form online and mail it in
· Get the form online and mail it to any DOL licensing office.
· There is no fee to obtain or submit the form.
· You will not receive a new license.
· Using permanent ink, you can write your correct address on the back of your license.
· When you renew or need to replace your license, it will be issued with the correct address.

2. If you want a new license, visit a licensing office in person
· Click here to find a license office.
· You will receive an updated license; therefore you’ll need to pay a $10 fee.

Washington State Department of Licensing
WEB: www.dol.wa.gov
PHONE: 360-902-3900
EMAIL: drivers@dol.wa.gov

Vehicle Registration
For those affected by the address change, you’ll also need to update your Vehicle Registration. Changing your address on one vehicle doesn’t automatically change it on your other vehicles, driver license, or boat.

You have two ways to update your vehicle registration:

1. Submit your change online

2. Visit a licensing office in person
· Click here to find a license office

Washington State Department of Licensing
WEB: www.dol.wa.gov
PHONE: 360-902-3770
EMAIL: titles@dol.wa.gov

Passport
Passports are issued by the U.S. Department of State. Passports do not contain addresses and therefore do not need to be updated for that purpose. Should you have a passport, you can make the address change at the time of renewal.

If you need to get a passport, the City of Kirkland is an authorized Passport Acceptance Facility. Passport acceptance hours at Kirkland City Hall are Wednesday and Thursday, 10 a.m. to 3:30 p.m. and Friday, 8 a.m. to 1 p.m. and 2 p.m. to 4:30 p.m.

Voter Registration
The King County Elections Office says former Bothell addressees will automatically receive an updated voter registration card in the mail by the end of July 2011.
If you’re not currently registered, you can register to vote online by visiting the Secretary of State’s web site. You can obtain the voter registration form online from King County Elections (various languages available), from the Elections Office (Seattle), and public libraries and schools.

To be eligible to vote, you must be registered to vote at least 29 days in advance of an election. If registering by mail, your application must be postmarked by the 29-day cutoff or it will not become effective until after the election. Visit the King County Elections website for registration deadlines.

As a voter, the residential address you provide determines the issues and candidates that you can vote on. However, you can receive your elections mail at any valid mailing location you choose: a post office box, personal mailbox, college mailbox, or a military or out of state/country address. All elections-related materials, including your ballot, will be sent to the mailing address you provide.

King County Elections Office
WEB: www.kingcounty.gov/elections
PHONE: 206-296-8683
EMAIL: elections@kingcounty.gov

How to Deal with an Unapproved Pet in your Rental Before it Happens

We allow pets, but they are always subject to approval by the owner and tenants are required to pay a deposit. I have frequently found that tenants will either lie about having a pet when filling out their application, or conveniently forget to mention when they get a pet during their tenancy. To avoid this problem, I have all tenants fill out a pet agreement clause when signing their lease. The pet agreement states all the rules about pets, but also includes a clause regarding the proper protocol when a tenant plans to get a pet after signing the lease. It is stated that all animals are subject to approval before living on the property and they must pay a deposit. It is also stated that any violation of the lease agreement is cause for eviction. This way, tenants know up front what the rules are about pets and what the requirements are when obtaining a pet. This makes them less likely to feel comfortable lying about having pets. Then, every 3-6 months, I send a letter to all the tenants stating that any tenants in violation of the lease agreement regarding the issue of pets need to report their pet and pay the deposit or they will be considered for eviction. Every time I have sent this letter, I have had at least a couple tenants call immediately to pay the deposit and receive approval for their pet. Having a pet deposit is extremely important for protecting your investment. Also, knowing what animals are residing on your property is important for liability purposes.

–Rachel Dillingham

Smart Ideas to Keep Your residents Happy (and Renting!)

Smart Ideas to Keep Your Residents Happy (and Renting!)
By Jennifer from Rent.com

You know the basics of keeping your renters happy: respond to their needs and concerns in a timely fashion, don’t promise actions you can’t perform, and always follow through on what you say will you do for them. Sometimes, in addition to these standards, however, offering the smallest of kind gestures can go a long way toward retaining your residents — and spreading the word for new ones! Read on for some simple yet memorable ways to wow your renters.
Amp up your professionalism

Tenants, like any customer, like to know that they’re being taken care of by people who know what they’re doing. Make up photo ID tags for member of your team, from property managers to repairmen. Make sure they all have a unified look with the name or logo of your business. That way, when a member of your team comes to their home, tenants feel more comfortable about who they’re dealing with. Also, be sure to have members of your team leave a business card with the tenant, whether they came for a service call or to discuss any other issue.

Practice clever courtesies

For new residents, leaving behind a personally-signed welcome card with takeout menus from local restaurants for their first night starts your tenant relationship off on a very positive note.

A long-standing and successful habit that property owners have used is to leave a bag of microwaveable popcorn on the kitchen counter after a service call with a sticker on it that says, “Just popped in to fix the problem.”

You can also make moving in a little easier by placing sticky notes on areas that a newcomer might have trouble with. You might post instructions on how to operate the microwave, for instance. Anticipating tenants’ questions shows them that you are tuned in to their needs and comforts.

Think about the kids

Doing something for families with kids will always be appreciated. Let the thoughtfulness start in your office. Subscribe to kids’ magazines to keep prospects’ youngsters happy and entertained. You can promote your own properties with floor plan coloring pages that kids will be happy to take home.

When it comes to communications with your tenant, try to include a small toy or game. A deck of cards or other little token is a nice gesture not only to the kids, but also to their parents.

Remember silly holidays

There are as many silly “official” holidays and month-long observances for obscure reasons than you can imagine. You could make use of them by creating gestures around occasions like Triple Ice Cream Scoop Day with a small gift card to a local ice cream shop. June, alone, has National Yo-Yo Day, Upsy-Daisy Day and Eat an Oreo Day. What could be easier? Leaving a card with any one of these small items attached will give your tenant a smile and a warm feeling that someone (you) thought about them.

Say ‘thank you’!
No one likes to be taken for granted—neither landlord nor tenant. Ideally, most all of your tenants are good ones. Be sure to let them know it. No matter what method you employ, be sure to include a ‘thank you for being a tenant’ message in your communications. Nothing creates loyalty like knowing that you are appreciated.

Working hard to get a good tenant doesn’t stop once they’ve signed the lease. To encourage tenants to stay, create a plan to make the small gestures above, or ones that you think of, on a regular basis. Your reward will be a happy, long-term renter who thinks you’re the best landlord they’ve ever had!

Don’t forget the MOVE IN – MOVE OUT process when leasing your investment property!

Move In:

Lease it the way you want it returned!

Does the property need another quick clean? It’s summer… has the lawn started to grow a bit? You may be ready to close, but you need to make sure the house is. We always tell our landlords, let’s lease it up the way you want it returned! Hire a cleaning service or local kid to mow the lawn. Fix those loose cabinets, replace burnt out bulbs and touch up the paint if need be. Get it in a condition you want it returned.

Engage them to take pride in the property!

We always tell tenants, don’t call the landlord for every little thing that may be wrong. Fix it! Take care of the property as if it were your own. Take pride in this home, we want you to feel comfortable and stay a long time. (Of course, we want proper notice if anything is not working properly or needs a professional to assist with.)

No…changes without Landlord approval!

No! You cannot paint an accent wall or build a deck! Well, not without approval, that is. Sometimes you will rent to a handy man, artist or someone who wants to improve your property. Keep an open mind, but never give the impression that anything goes! Make sure you have all negotiations in writing. You may get busy and forget that you said ok to the RED kitchen and TEAL bathroom.

Leave an Incentive!

We always make the security deposit, pet deposit and cleaning fees refundable. Why? Because we want them to work as hard as possible to get every dime back from you. They hire the carpet cleaners, they scour the tubs and mow the lawns. If they don’t, it comes out of the deposits. If they do and you have a clean property, it means less vacant days on market. That’s what we want YOU cash flowing, fast!

Sign, Sealed & Delivered!

You can take your time and sign the lease contract well before you move them in. But, when it’s time for the move in inspection, be ready to wrap up the transaction. Time is money! If it’s clean and ready to go this process shouldn’t take long. Bring your RHA Inventory Inspection Checklist and mark it up accordingly. Address any missed items or blemishes that the tenant should not be held responsible for. Give them the keys (ALWAYS followed up with a high-five) and you are good to go!

Move Out:

Start talking early – Listen to their response!

Hopefully, you have kept in touch with your tenants and the fact that they are moving is not a shock to you. Start asking them questions such as “When exactly is your last day?” “Have you already scheduled the carpet cleaners?” “Don’t forget that the lawn needs to be returned the way you rented it!” Go ahead and plant the seeds of your expectations. Right away you will get honest feedback such as, “What! I have to do that?” or “Yep! It’s all lined up and ready to go.”

Bring your original Move in/out Inspection form.

Surface inspection is one thing, but did they get the crumbs out of the drawers? Soap from the bathtubs (ewe)! Your next tenant may catch these things, so take a look and be prepared, unless you personally like cleaning other people’s hair from under a cabinet. If it’s not in the condition you leased it, talk about it and come up with a solution. Do it themselves, hire a professional or forfeit the money!

Be ready to complete within 14 days, it’s the law!

You are required by law to inspect, deduct and refund any monies within 14 days of move-out and inspection. If you are too busy or just don’t want to deal with it, it doesn’t matter. Be fair, come up with solutions and refund the difference. Period.

Hire a Pro!

Hate dealing with timing, scheduling, cleaners, contractors, negotiating or possible confrontation? Simply hire a pro. That’s what they do day in and day out. Property management companies or independent consultants are standing by!

Good to Know…Quick Tip!

Always contact your applicant’s previous landlord in addition to their current one. They will be more forthcoming of problem tenants as they are not worrying about getting them out of their unit.

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.