Monthly Archives: May 2014

Why Hire a Property Management Company?

business meetingProperty management involves many tasks like collecting rents, doing maintenance and repairs, and finding the best tenants. Chico homeowners who handle property management on their own spend most of their valuable time handling all these aspects. Such homeowners need someone to help them with managing their Chico property. In such situations, property management is ideal.

What does a property management company do?

-A property management company directly deals with tenants saving you time and worry over marketing your rentals.

-They help you find ideal tenants and negotiate on your behalf for rental agreement.

-They collect rent, handle all maintenance and repair issues.

-They respond to tenant’s complaints, and even pursue evictions.

-They are aware of the federal, state and local property management laws and deal with legal issues.

-They have specialized property management strategies and years of experience for reaching potential customers. Whether your property is a single family or a commercial complex, they can market it to get maximum income.

-Hiring a property management company makes sense because it can save you time and effort. As they are well versed with different techniques of property management, they can earn the highest possible returns on your investment.

 

Choosing the right property management company is also very important. Ask the following questions while interviewing a property management company:

-Ask how they can help you keep down the costs

-Ask them whether they can provide any references

-Ask them about their fee structure

-Ask how they handle emergency client requirements and maintenance issues

-Ask how they deal with legal issues

-Ask how long it will take to find tenants

5 Tips for Keeping Good Tenants

The investment value of your rental property is only as sound as the tenants you have in it.

Good tenants wgood tenantill take care of your property, keep you up to date with any maintenance issues and provide a reliable source of income. Bad tenants can disrupt your cash flow, prematurely age your property and will end up costing you more in property management fees.

Don’t underestimate the value of tenant retention. Each time you lose a tenant, you’re losing valuable cash while your property sits vacant.

Here are five tips for getting and keeping the right tenants.

1-      Don’t set rents too high

While slugging tenants with the highest possible rental rates might seem like the best way to squeeze cash from your investment, the practice may actually harm your tenant retention rate, costing you more money in the long run.

If Chico tenants are too pressed for cash or see something more affordable pop up on the market, they may move on, leaving your property empty while you search for new renters. Just because one tenant can afford to pay extra for now, that doesn’t mean that others will do the same once that renter moves on. Landlords should consider keeping rents slightly below the market rate to retain a great tenant.

If you set rent at $590 per week rather than $600, it will cost you (and save your tenant) $520 a year – less than a single week on the market will cost you should they vacate.

Setting your rents too high will also scare off good tenants. Beware of prospective renters that are willing to pay well above and beyond market prices – they may be desperate because they have poor rental histories.

2-      Don’t set rents too low

Setting rents too low may leave you vulnerable when you decide it’s time make an increase, with a big jump in the rent likely to scare away your tenants. Gradual adjustments to market value over a long period of time are more likely to go down well with your tenants than a leap at the six month mark. Be cautious about setting your rent too low to attract tenants. If your tenant is living in your property only because it is affordable, rather than desirable, they may not take good care of the property.

Remember, you probably won’t hold your investment property forever. When it comes time to sell, buyers will enquire about your rental yield – and will be turned off if it is well below market value.

3-      Keep up with maintenance

Although rental markets in certain capital cities are tight, don’t underestimate your tenants’ need for quality housing.

As a Chico landlord, it is your responsibility to provide safe, clean and well maintained housing to your tenant. Don’t be fooled into thinking you hold on the cards because you are the property’s owner – they are paying you money in exchange for the provision of a service. If you want to maintain a good relationship with your tenants and your source of income, maintain your property. Don’t dodge calls from your property manager, don’t be stingy when it comes to required repairs and if you’re choosing to maintain the property yourself, make sure you show up on time.

Properties all see inevitable wear and tear, regardless of the tenant. But when renters see that you are on top of the necessary repairs, they will be more likely to take good care of your property.

4-      Have a good relationship with your property manager

Property managers are there for every step of the tenancy process, from sourcing good tenants to keeping them happy and finally guiding them out of the home when the time comes.

Your property manager should be on good terms with your tenants and work hard to keep them happy. They should be on top of any necessary maintenance issues and quick to let you know if any issues arise. Don’t have unrealistic expectations of your property manager, but do make sure that you are in regular contact.

Unfortunately, not all property managers were created equal. Some will be easier to get into contact with than others, who never seem to be within answering distance of a phone. Make sure you choose a good property manager when you purchase your investment property, and don’t be afraid to change property managers if you need to.

5-      Let the bad ones go

Don’t think that you have to put up with bad tenants. If your tenant is failing to pay rent or causes damage to your property, you are able to take action.

Depending on the state, you may be able to immediately evict a tenant if they are causing malicious damage to your property or after two weeks if they are late on rental payments. You may also be able to evict a tenant before the end of their lease if they are using your property for illegal activities, putting their neighbors in danger or keeping other tenants in the property without your knowledge.

Being a good Chico landlord isn’t just the right thing to do, but will end up making you more money in the long run. If you are a reliable landlord who takes care of your property, you can retain reliable tenants who do the same.

Frequently Asked Questions About Security Deposits and California Law

security_depositMost Chico residential leases and rental agreements in California require a security deposit. This is a dollar amount, usually one month’s rent, that’s intended to cover damage to the premises beyond normal wear and tear, and to cushion the financial blow if a tenant skips out early on the lease without paying. Here’s a summary of California landlord-tenant laws that cover the use and return of security deposits.

Q: Does California law limit how much a landlord can charge a tenant for a security deposit?

A: Yes. Under California landlord-tenant laws, a landlord may charge a renter the equivalent of two months’ rent for the security deposit if the residence is unfurnished, and three months’ rent if the residence is furnished. California landlords can also add an extra one-half month’s rent if the tenant has a waterbed. Landlords may not charge nonrefundable fees in California.

Q: What about when a renter moves out? What is the deadline in California for returning a security deposit?

A: Under California law, a landlord must return the renter’s security deposit, with an itemized statement of deductions, within 21 days after the renter has surrendered the rental property to the landlord (that is, returned the keys and vacated the property).

Q: Is there additional information that California landlords must provide to renters when it comes to security deposits in California?

A: Yes. In addition to complying with California laws on security deposit limits and how (and when) the deposit must be returned to tenants, landlords in California must provide renters with advance notice before taking any deductions out of the security deposit, such as for the cost of repairs for damage to the property.

Q: Where can I look up California law on security deposits?

A: If you want to go right to the source and look up the California laws on security deposits — or if you’re writing a letter to your landlord or tenant and want to cite the applicable law — the relevant statute(s) can be found at California Civil Code  1950.5 and 1940.5(g). Your city or county might have different landlord-tenant and security deposit laws than those at the state level in California, especially if your rental property is covered by rent control.

Check out our blog on repair costs and security deposits for more information!

 

Water Preservation and Lawn Upkeep for Summer Months

garden-hoseChico summers tend to bring with them high temperatures and ample humidity—both of which can take their toll, not just on homeowners but on their lawns and gardens, to say nothing of their utility bills. In fact, many homeowners throughout the country find that their water bills increase significantly over the summer months, especially if irrigation systems are in use to keep lawns lush and green. However there are some simple yet effective steps homeowners can take to reduce water waste.

One way to conserve water during the hot summer months is to implement the correct lawn and garden tools. For instance, a standard hose and nozzle will lead to copious amounts of wasted water—including water that’s lost as mist or as runoff. Instead, homeowners should water their grass and their plants with a soaker hose or a sprinkler wand.

Of course, overwatering is another cause of wasted water. Generally speaking, lawns need about an inch of water each week to survive, though in Chico a full two inches might be more appropriate. The best rule of thumb is to keep the soil lightly moist, and also to keep eyes open for signs of wilting—but to avoid simply watering the lawn past the point of necessity. A related tip is to avoid soaking the plant’s leaves or watering past its root zone; this is simply a waste, and does little or nothing to help the plant stay hydrated.

Mulching is encouraged, as it helps plants to retain moisture—homeowners should regularly inspect mulch for crusting-over, breaking up these crusts with a rake. Crusted mulch actually prevents moisture from reaching the soil, which can in turn lead to wasted water.

A final tip for homeowners eager to keep their lawn and garden water waste to a minimum: Water in the mornings. Watering when it is still relatively cool outside prevents there being too much water lost to evaporation. Watering in the evenings or at night is also acceptable, but runs the risk of fungus formation.

10 Ways to Make Your Chico Apartment Handicap Accessible

Wheelchair-ProgramsMillions of people in the United States have disabilities and often find that traditional housing options don’t meet their needs. Chico landlords can attract these potential tenants by converting their Chico apartments into handicap accessible apartments that are comfortable and friendly to those with special needs.

Wheelchair accessible and handicap accessible apartments are not very common, therefore disabled or elderly tenants are an underserved market. With a few modifications and changes, you could attract these potential tenants and keep your Chico rental property from sitting vacant.

What is a Handicap Apartment?

Modifying an apartment to be accessible for elderly or disabled residents simply means making some changes to fit someone who uses a wheelchair, scooter or walker or has limited mobility. Everything from doorways to counter tops can pose an obstacle for someone in a wheelchair, for example.

Converting an apartment to accommodate the prospective tenant with physical limitations makes it more accessible and therefore boosting his or her quality of life. Handicap apartments are often hard to find, so many disabled and elderly residents cannot find what they need.

10 Ways to Convert to Handicap Apartments

There are some basic changes you can make to an existing Chico apartment that would turn it into a handicap apartment and therefore more friendly toward the elderly or the disabled. Other approaches to convert traditional units to handicap apartments require more extensive remodeling.

Here’s a list of 10 ways to modify an existing apartment to cater to those with physical limitations:

1. Entrances to the apartment should not have stairs, but be replaced or covered with a wheelchair ramp. These can be made of wood, aluminum or even poured concrete. Check with your local building codes for ramp angles and other important specifications to ensure you are compliant.

2. Doorways must be wide enough to accommodate a standard wheelchair. From the entrance to the interior doors, this width needs to be at least 32 inches wide. Consider changing the hinge system on the doors to the swing-away style, allowing doors to open even wider to allow the chair to pass all the way through without hitting it.

3. Thresholds must be flat, not raised, in order to give residents with scooters, wheelchairs and walkers a smooth path all the way throughout the apartment. A ½-inch threshold can become a big deal to a disabled tenant who doesn’t have much mobility.

4. Faucets in an accessible Chico apartment should be changed out to single lever style. These are easier for people to grip and maneuver if they don’t have full mobility in their hands, arms or upper body. Single lever faucets are simply raised up to turn on, pushed down to turn off and moved right or left to control temperature.

5. Sinks are hard for people to access when they are in a wheelchair because of low vanity cabinets prevent the user from getting close enough. Consider installing pedestal sinks, wall mounted sinks or removing the cabinets altogether.

6. Moving from a wheelchair or scooter to the toilet is a challenge, but an accessible apartment should have a raised toilet in the bathroom. Installing sturdy hand bars by the toilet is another way to ensure that the disabled resident can safely and securely maneuver around when he or she needs to use the toilet.

7. Bathing and showering is a real challenge for residents who are wheelchair-bound or cannot lower themselves into a tub or stand for long periods of time in a shower. It helps greatly when landlords install a handicapped accessible tub/shower unit. This is a tall, deep tub with a door on the side that opens to reveal a seat inside. The tenant can sit on the seat and either bathe or shower. The tenant has no high tub wall to go over, and no slippery shower floor to worry about. These specialized units can easily be installed into existing tub/shower units.

8. Standard kitchen and bathroom counter tops are often too high for someone in a wheelchair or scooter—usually 36 inches for standard height. Lowering countertops to 30 inches makes all the difference and lets a disabled person reach all the way back, utilizing more of the surface space.

9. Floor level cabinets in the kitchen can hinder the maneuverability of a resident in a wheelchair, so take out some of the floor cabinets, leaving empty space, to allow them to get up close to the counter tops.

10. Many landlords who cater to elderly or disabled tenants install a personal alarm system inside the apartment. This is an electronic device that the resident carries around and can activate to summon help if they are sick, hurt or injured and cannot reach the phone. Some alarms simply make a loud sound, while others are linked to a medical services call center. Providing this as part of an accessible apartment will make it even more attractive to prospective tenants who are elderly or disabled.

7 Tips for Writing a Rental Reference Letter

letter writingA tenant may ask you to write a rental reference letter in order to help them rent another place down the road. Writing a rental reference letter doesn’t take much time, but some landlords may get confused about what to say.

As a Chico landlord, you appreciate an honest and thorough rental reference on prospective tenants, but are you extending the same professional courtesy to your former tenant’s new landlord? When a tenant requests a rental reference letter, deliver the information honestly and succinctly.

Writing a rental reference letter doesn’t have to take a long time, especially if you have your tenant’s file in front of you for reference. Keep the file by your computer, and follow these 7 steps to writing a rental reference letter:

1. Put the date at the top of the letter, and then address the letter “To whom it may concern.”

2. Provide the tenancy information by including the tenant’s full name, the address of the rental property and the dates of occupancy.

3. Share whether or not the tenant paid rent on time, and if there were any instances of late rent, you can note how the issue was resolved.

4. Reveal the care and condition of the property while the tenant lived there and use several accurate descriptive words.

5. Give information about the tenant’s behavior and interactions with you and with other tenants.

6. Summarize the landlord/tenant relationship by stating whether you would rent to the tenant again, if given the opportunity.

7. Provide your contact information and invite the reader to contact you with any questions.

 

A rental reference letter should only relate the facts as they relate to the tenancy—never about personal feelings. You should never go overboard in revealing any personal information about the tenant either, such as gossip or stereotypes. The reference letter should be factual and end with a simple endorsement. When the future landlord has the chance to evaluate all the facts, he or she can make the call on whether to rent to the tenant or not.

 

Rental Reference Letter Sample

Sometimes it’s easiest to see what a rental reference letter should include by an example:

 

July 15, 2011

To whom it may concern,

I have been asked to write a rental reference letter on behalf of John Doe, who rented an apartment from me at 2202 Orange Street from June 1, 2010 through June 30, 2011.

During the 1-year lease, John always paid the rent on time except for once, when he contacted me in advance about a family emergency and made arrangements to pay in full by the 15th of the month plus late fees. He fulfilled that agreement.

John kept the apartment in good condition and always alerted me to any maintenance issues in a timely manner. At the move-out inspection, there were only 2 very minor charges for damages. I have no complaints about him on file from other residents and found him to be a quiet and respectful tenant.

If given the opportunity, I would definitely rent to John again. Please contact me with any questions about his tenancy at 777-8888.

Sincerely,

Ms. Landlord

 

Remember that it is not your responsibility to share every detail of your tenant’s file with the world. Instead, let the facts speak for themselves and do your duty as a landlord in creating a simple, informational letter for your tenant to use.