Monthly Archives: April 2014


Tenants and Their Pets

dogs-and-catsOne of the things that may surprise you about your Chico tenants is that they will not tell you everything. They may not tell you when something in their apartment breaks or stops working. Tenants may also bring in roommates that you do not know about. Finally, tenants may not tell you that they own a pet.

Pets on the Property

Let’s face facts: You probably scared your new tenant right at the beginning of your landlord/tenant relationship into hiding the fact that he owns a dog and will be bringing it with him when he moves into your Chico apartment complex or property. You most likely require a higher security deposit for pet owners because pets can cause costly repairs and maintenance.

It is your right as a property owner to mitigate your risk of costly repairs that arise from pets.

If a tenant hides the fact that he has a pet and you later find out (and you always do), you have every right to terminate the rental agreement because the tenant breached the contract (by not telling you about his pet). Evictions, however, are costly proceedings and you will want to avoid them as much as possible.

If you find that a tenant has brought in a pet, you can certainly approach him and collect a bigger security deposit. You can also write up a new lease with the newly-discovered pet issue contained therein. In short, you always want to minimize the risk of expensive repairs and maintenance.

Protect Your Investment

Pets can cause a lot of damage. Everything from ripped draperies to soiled carpets to chewed doors and door frames can be attributed to out-of-control pets. It is better for both the tenant and landlord to address these potential pitfalls from the beginning. If you aren’t diligent about matters of this nature, you will find that managing your property will be more difficult than it needs to be.

Removing carpet stains of urine from a pet or multiple pets can be extremely expensive.  Often, entire carpets must be ripped out and replaced before a new tenant can occupy a rental unit.

Between tenancies is when you will most likely discover that your former tenant had a pet that he did not disclose to you.  At this point, obviously, you cannot terminate the rental agreement and must turn to the security deposit to recoup some of your expenses for repairs.

Higher Security Deposits for Pets

A higher security deposit for pets allows you to cover all extra cleaning and repairs necessitated by virtue of the tenant owning a pet or in the event he is keeping it on the premises without your knowledge. You may find, however, that the security deposit will not cover all of the necessary repairs. This is why it is vitally important to find out whether your tenants have pets before they move in.

Of course, if your new tenant fails to tell you about his 100 gallon fish tank and you find out later that the tank broke and flooded not only his apartment but the apartment downstairs, too, you will be faced with expensive and extensive damages.

Of course, if you had known about the aquarium, you could have not only collected a higher security deposit but you could have required that the tenant purchase rental insurance, which likely would have covered any necessary repairs.

As you can see, pets present unique challenges to landlords and property managers. Always be on the lookout for violations of your pet policy, as finding out sooner—rather than later—is always preferable and is often far less costly.

At the end of the day, studies show that you will make more renting to tenants with pets, than without, but just make sure you do it cautiously.


Investing in Student Housing

56436258.Chico_State_jan03In the last decade, student housing has risen the ranks of investment popularity from necessary evil to attractive opportunity. Overcrowding in university dorms and expensive on-campus living costs have helped boost demand for off-campus housing options in Chico. Student housing development has caught the attention of investors and developers because despite the high turnover, student housing is resilient, as it proved during the economic downturn.


Succeeding in student housing, however, takes work. The demographic has distinctly different wants and needs, but the stable increase in demand makes it a worthwhile investment. Here are some things to keep in mind as you navigate the world of student housing.

Not all students can afford Class A properties. 

While the Chico students who can afford it will shop for units with cool amenities, there are also plenty of students who choose off-campus housing as an alternative to expensive on-campus living. In general, the Chico student housing pipeline leans towards luxury Class A properties, but don’t forget about the students on a budget. Affordable, basic units address the needs of middle and lower socioeconomic students, an important demographic – especially as tuition costs rise.

It’s all about location.

Even the largest, most luxurious apartment community located a mile from campus won’t have the leverage to charge as much – and have as low of a vacancy rate – as a class B property located right across the street from campus. In the student housing market, location is the king. Remember that many Chico students don’t have cars and get around by walking or biking. A great location insulates you from potential overheating in the market, and will also give you a leg up over the competition 

Join the amenities race.

Chico student renters are tech-savvy and environmentally conscious. While you don’t need to go the extra mile and offer lazy river pools and movie theaters, students will prioritize units that have amenities like access to high-speed Internet, bicycle storage, and parking. Basic green features like recycling and energy efficient appliances can also align your community with students’ preferences.

Every campus is different.

Before you invest, get an understanding of the student housing market in the area. Is the market oversaturated? Is the university’s student body growing fast enough to absorb new inventory? Take a look at the vacancy rates in the area, ask local real estate professionals about the demand for housing, look into planned student housing projects in the area, and see if the size of the school’s student body has been expanding. Many large, public universities currently lack the funding to build the residence halls they need, setting the perfect stage for investment success. The last thing you want to do is invest in an overbuilt market that doesn’t have sustainable demand.



Landlord Tips on How to Accept Electronic Rent Payments

A commonly asked question by both new and seasoned Chico landlords is “How should I accept rental payments?” The days of writing a check have become outdated when there are many newHanding-Over-Credit-Card options to take into account.

Many Chico landlords are arranging direct rent deposits by their tenants. This is accomplished either by arranging the following:

-Automatic withdrawals from tenants’ bank accounts, or

-Direct deposit by tenants into landlords’ accounts.

These can be an invaluable strategy, especially for out-of-town landlords who have no local property management. They are not without risks, however.

Automatic Withdrawals:

With automatic withdrawals, there is little risk to the landlord, other than the tenant having insufficient funds in his account or insufficient credit on his credit card. The convenience and reduction in administrative costs make this option especially attractive. Landlords should double-check their bank’s fee structure for making automated withdrawals, particularly in the event of insufficient funds or if a credit card is involved.

Direct Deposits: 

When a landlord gives their tenant his/her banking information, however, there are significant risks. First, a person he/she doesn’t know and has no reason to trust has access to their banking information. With the rampant fraud in today’s digital age, extraordinary care should be taken to limit tenants’ actual access. Check with your bank on how best to keep your banking information secure.

Second, and perhaps most significant, is the problem of the defaulting tenant. If the tenant is in arrears, he controls when he pays and how much he pays. If the landlord has commenced eviction, some states will invalidate the eviction upon receipt of any rent – even partial rent. Having to restart your eviction upon receipt of a direct deposit of $20 can be costly and frustrating; check with your attorney to see if this applies in your state, county and city.

You can address this problem by careful drafting: add a fee to your leases for creating and serving any eviction notices. Paying a fee may not be sufficient disincentive to the crafty tenant, however.

PayPal Rent Payments:

One of the pioneers of web-based electronic payments, PayPal remains secure and trusted to this day. Additionally, landlords do not need to disclose their banking details to their tenants in order to receive rent payments through PayPal, they need only give the tenants their email address. PayPal is available to anyone with a checking account and an internet connection, and offers instant electronic payments over the internet.

That said, PayPal has its own drawbacks:

Users need to select that the payment is “personal” in order to avoid a transaction fee.

There is usually a delay when PayPal users go to transfer funds from their PayPal account to their checking or savings account.

In giving the tenant control over when and how much rent payment they send, landlords and property managers risk invalidating a pending eviction case, although because the rental payment can be rejected and refunded in PayPal, it’s less clear whether the payment has been “accepted” for legal purposes.


There may be local legal requirements for segregating and accounting for rent received. There are some states, for example, where rents and security deposits cannot even be held in the same account. Be sure to thoroughly review our State Assist information when creating lease agreements, and consult an attorney to determine whether you need to keep a separate account for direct deposit or automatic withdrawal rent collection.

Direct Deposit/Automatic Withdrawal Exclusively:

There are industries where automatic withdrawal from checking or credit card are the only option for tenants: storage units, for example. There are, however, different issues in play when it comes to residential housing. Local or state government may and sometimes do enact restrictions on limiting how a tenant may pay for housing. Check with your attorney to determine what the rules are where you own rental real estate.

The easy availability and convenience of internet banking, electronic transfers, automatic withdrawal and the like open up new avenues to landlords for streamlining their rent collection and accounting. While there are risks, those risks can be minimized by careful planning and understanding of state (and local) laws.

4 Common Tricks Used by Desperate Rental Applicants

untitledAs a Chico landlord, you’re always on the lookout for the best tenant out of your pool of rental applicants. When you haven’t been a landlord for long, it’s important to be aware of some common tricks that desperate applicants try to pull on naïve landlords. These scams are designed to put you off guard and convince you to skip doing a thorough background check on the applicant. Usually, it’s because the applicant has something to hide.

While you should always strictly adhere to the Federal Fair Housing Guidelines and your own standards of tenant screening, there are a few red flags that may alert to you if an applicant who is trying to scam you.

Here are four common cons that you should be aware of that may tip you off about the applicant’s ability to pay and how they will treat your property:


Trick #1: The Immediate Cash Offer

An applicant may approach you with an offer that he or she will pay the first month’s rent and the security deposit in cash if you can rush the move-in date to right away. This can seem very attractive—after all, you don’t have the property sitting vacant for very long and you’ll save time on tenant screening all the other applicants.

Another seeming advantage is that with cash, you won’t have to worry about bad checks or the tenant’s inability to pay.

While there can definitely be instances where paying cash and a speedy move-in request are legitimate, it may also signal that the applicant has been asked to leave a previous rental or is being evicted. You may be lulled into a false sense of security by an enthusiastic tenant waving cash and rushing to sign a lease, only to find out that they are running from a bad rental situation.


Trick #2: Challenging the Tenant Screening Process

Whether they complain about all the rental application fees, leave blanks on the application or act hurt that you want to investigate their background, applicants who question your tenant screening process may actually have something to hide. They may even act offended that you don’t trust them or that you are questioning their integrity. A naïve landlord might agree to waive fees or skip the tenant screening process to make up for hurting someone’s feelings.

While this could just signal inexperience in renting, it can also alert you to the possibility that the applicant hasn’t been through any legitimate screening process before or that money is tight because they are worried about the fee. An experienced tenant understands that the background check, employment and landlord verification and the rest of the process takes time and money. They won’t

mind waiting because they understand and appreciate what it takes to get good tenants and probably feel confident that their application will look good.


Trick #3: One of Multiple Adult Tenants

When an applicant offers to be the only one on the lease agreement, despite the fact that other adults will be living in the house, it can signal that the applicant may be the only one with a clean background. It’s always wise to run checks on everyone over the age of 18 who will be living in the Chico rental unit, but especially if the applicant is persistent about leaving someone out of the screening process.

Applicants who raise questions about the other adults in the home filling out forms and submitting information for screening may be trying to cover up the fact that someone won’t pass the background check, whether it’s for a previous poor rental history, criminal history or unemployment. Applicants with nothing to hide will have no problem with every adult undergoing screening.


Trick #4: Currently Living With Family

Some applicants will reveal that they are currently living with family members and have no landlord references. While of course this can be a legitimate situation based on personal circumstances, it’s not uncommon for people with poor rental histories or current financial difficulties to stay with family members when they have nowhere else to go.

The applicant may be reluctant to provide contact information for a past landlord or claim that it was long ago and they can’t remember. Without contacting past landlords, you won’t get a neutral reference on what kind of tenant the applicant is. Diligence in contacting a previous landlord is important, and the results will be worth it to get a clearer understanding of what kind of tenant this person was in the past and how that may impact your decision to accept the applicant.

Hopefully a few of these tips will help you avoid having the wrong tenants in your Chico property. Remember to always treat possible tenants with respect but too also keep your guard up in order to preserve the integrity of your business.


It’s Spring Cleaning Time!!

house-cleaningDespite the chill that still lingers in the air, spring is here! The infamous “Spring Cleaning” time is upon us!

Spring cleaning is no small task, though. In fact, it can often turn into a huge beast of a project that some of us may give up on. To make your spring cleaning adventure a little less painful, here a few tips to help you tackle that dusty house or apartment.

Make a List of What Needs to be cleaned in Each Room

Making lists will help you stay organized – especially if there’s a huge project, like spring cleaning, on your plate. Before get started, walk through each room and write down what needs to get done. Writing a list out also helps make sure you have all the cleaning materials you need before getting started, saving tons of time later. It’s a pain in the butt when you have to stop everything to run out and buy more carpet cleaning solution, this way you have all the tools you need to start and finish your spring cleaning!

Make Your Playlist

Having a cleaning playlist that includes all your favorite music will get you pumped and bring a little fun into your cleaning! Listening to music while cleaning just seems to make things go by faster. Of course, you don’t have to make a playlist; you could always just turn the radio on to your favorite station. Get your groove on!

Get a Trash and Donate Box/Bag

As you go through each room, make sure to de-clutter. Throw away old magazines and papers from the previous year. Put items you no longer use or need, like that book you bought 10 years ago but never read, in the donate box. Once you’re done cleaning your whole house, itemize your donate pile because you may be able to deduct those donations on your taxes. You can also make a trip to Walmart to Target and pick up a few cheap organizing boxes to store those annoying loose papers or random things around your house. Having organizer boxes:

  1. Is a super fun way to bring in your creativity and personal touch to your place
  2. Will help you find what you are looking for faster
  3. Will help you de-clutter in a fashionable and classy way
  4. Will make you feel better when everything is in its place!

Work on One Room at a Time

It’s easy to get overwhelmed when you want to clean your entire home all at once. Try writing down all the rooms in your home on a piece of paper and checking each one off as you go. If you can work on at least two or three rooms each weekend, you’ll get a lot more done and still have free time on the side.

Set an Amount of Time to Work on Each Room.

It’s easy to get distracted: you might find yourself looking at items that have been forgotten or old photographs, and before you know it you’ve spent the entire day cleaning just one single room. Set a timer so you don’t fall into this trap. You can also use the timer to give yourself a little break here and there. Much like a list, it can help keep you on track.

Recruit People to Help You

What’s makes cleaning more fun? When you don’t have to do it alone! Recruit your kids, significant other or roommates to help you out. Recruiting people to help clean takes about half the amount of time than doing it yourself; plus then you get to have a dance partner!

Start From the Top and Work Your Way Down

This is just the law of gravity – clean from the top of the ceiling to the floor. Knock all the dusty cobwebs from the corner, wash the curtains, clean the windows, dust the furniture, vacuum the furniture and finally vacuum the floor.

Use Natural Cleaners

Many chemical-based cleaners emit hazardous fumes. Some cleaners when mixed together can even emit toxic fumes that can seriously hurt you. Vinegar is a great substitute to use in your bathroom or kitchen and as a general household cleaning solution.

Be Patient

It’s the golden rule to work smarter, not harder. Take your time and let grimy surfaces, like the ones in your bathroom and kitchen, soak in your cleaning solution. Work on something else on your list while your cleaner does the hard work.

Reward Yourself at The End

Having something to look forward to at the end of a long day of cleaning sure makes things go a lot faster. Plus, you worked hard and deserve it. Treat yourself!

OK, so these ideas won’t make all the dirt magically disappear, but the tips above can make the process a little less agonizing. Just remember to pace yourself. You don’t have to do everything in one day.


How to Stop Your Chico Rental Property from Becoming Party Central

downloadWe are all aware that Chico is a College town, therefore- every apartment or house near the college and downtown is a prime location for student parties, and is also at risk of damage to the property due to alcohol induced behavior. One of the most frustrating parts of being a landlord is dealing with out of control tenants and their out of control guests. There is no more significant event that highlights this frustration than when a tenant decides to throw a party. Let’s be honest, summer is quickly approaching, which is the “golden hour” for parties with tenants planning to stay over summer; especially if they are just moving in.

When there’s a “kegger” on your property, the likelihood for damage, noise complaints and injury increase dramatically. In this article we’ll explain what you can do to keep your Chico rental property from becoming party central and drastically reduce the risk of damage and liability.

1. Restricting Drinking on the Rental Property

Drinking parties can lead to rowdy, destructive behavior, and violations of noise ordinances. A smart Chico landlord will make sure there are restrictions in place and the tenant knows them before moving in. As long as the lease agreement clearly states that the Chico rental property is a no-party zone, the tenant must comply or face eviction for failure to comply.

While you may not care if the tenant drinks responsibly in the privacy of the rental unit, you must be clear that full-fledged parties that serve alcohol are simply not allowed. Especially in college towns such as Chico, landlords should make sure that parties and “keggers” happen elsewhere, not on their property. Besides the potential for damaged property, underage drinking can be a concern and it is possible that a landlord can be held liable for it.

2. Use Specific Wording in the Lease Agreement

For Chico landlords that feel strongly about controlling large-scale drinking in their rental units, the lease agreement is the best way to keep things under control. Take steps to keep the environment quiet and friendly before it’s too late by including strong wording in the lease agreement

Wording in the lease agreement should address a limit on the number of guests on the property to a certain number (say no more than 10 without permission from the landlord). It should also stress that illegal activity, such as underage drinking or disorderly conduct, will result in immediate eviction proceedings.

Don’t be afraid to use specific language in the lease agreement that clarifies that use and possession of alcohol is permitted in the privacy of the rental property. Specify that “keggers” and parties involving large amounts of alcoholic beverages and include large numbers of people and an excessive amount of noise are strictly prohibited.

3. Follow Through on Lease Violations

When you discover that a large party has taken place on your Chico property or is currently in
progress, you can take action to ensure that the tenant will reap the consequences.

If the party is going on at the moment, you can call the police and they will come and take care of the situation. If there is any underage drinking going on or other illegal activity, the police can put an end to it and you can start eviction proceedings. Make sure you document the events, from the first phone call complaining about noise to what the police officer tells you.

If you decide to handle it yourself, make sure your tenant knows that you will call the police immediately if they and their guests do not stop immediately and leave the premises. Let the tenant know that this is an official warning and if it happens again you have no choice but to start the eviction process. Write up a few paragraphs of what happened and what you did about it and put it in the tenant’s file as a warning.

When you’ve decided that your tenant has violated the lease agreement, you can create an official notice for the tenant to vacate the property due to violation the lease agreement. Post the notice on the tenant’s door and also mail it to the tenant’s address. Begin the eviction process through the proper legal channels.

Using leverage of legitimate written threats of police action or eviction, you’ll send a message to partying tenants that you are serious about maintaining the quiet enjoyment of the property for neighbors and other tenants. You also show that you are interested in protecting your property from potential damage due to excessive partying.