Monthly Archives: March 2017

Real Estate Know-Hows

Who’s Responsible for Furnace and HVAC Maintenance?

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HVAC is an acronym to which landlords need to pay particular attention. It refers to heating, ventilation, and air conditioning—systems which have to be in good working order.

Keeping a rental unit warm in winter and cool in summer obviously benefits your tenants, but it also benefits the HVAC unit itself, which can suffer damage from extremely high or low temperatures as well as from moisture buildup caused by a lack of ventilation.

Definitions

1. “H” is for “Heat”

The implied warrant of habitability requires landlords to supply some method of heat, and some communities get pretty specific about heating requirements. For example, New York City requires heating units to maintain a minimum temperature of 55 degrees Fahrenheit from October 31 to May 31, and San Francisco requires a minimum temperature of 68 degrees between the hours of 5 a.m. to 11 a.m. and from 3 p.m. to 10 p.m. all year.

Don’t give your tenants the cold shoulder! State laws define what temperature your rentals need to conform to.

Most states set heating requirements. Maine, for example, requires a minimum indoor temperature of 68 degrees when the outside temperature falls below 20 degrees. It’s important to be familiar with requirements established by your state as well as your community.

2. “V” is for Ventilation

The “V” in HVAC” doesn’t always get the attention it deserves. Central heating and cooling systems provide automatic air circulation, but rentals that rely on room heaters and lack air circulation systems may suffer the effects the stale air. These include paint deterioration, wood rot, pest infestations, and mold.

Ceiling fans and room fans can provide the circulation needed to control moisture and keep tenants comfortable. You also need to maintain them unless otherwise specified in the lease agreement.

3. “AC” is for Air Conditioning

Landlords generally don’t have the same responsibility to provide air conditioning. If you rent a unit with air conditioning, though, there’s a contractual responsibility for you to maintain it. If you don’t, your tenant may be entitled to a rent reduction or some other consideration.

Common HVAC Maintenance Issues

Whether the heat in a rental unit comes from a forced air furnace, a heat pump, or a radiant heat system, there are usually two main maintenance concerns. One is the heating unit itself—which includes the heat source and the blowers—and the other is the control network. An air conditioning system, which is essentially a refrigeration system, also has a control network, and it’s often the same one that controls the heating system.

The Thermostat

Blowers, burners, heating elements, and refrigeration coils can all malfunction, and when they do, the landlord has to repair or replace them. Many HVAC problems, however, result from the thermostat, which can easily be maintained by tenants.

  • Programming
    Failure to program the thermostat properly is such a common occurrence that many appliance repair specialists address it first. Is the thermostat switch properly selected for heating or cooling? Is the target temperature properly selected? Is the unit even on? Tenants should have a copy of the manual so they can check the settings themselves before calling for help.
  • Batteries
    If the batteries in the thermostat are weak, the heating/cooling system won’t get the message to turn on. Batteries are easy to replace, and the tenants can do that themselves, especially if they have the manual.
  • Cleaning
    Thermostat leads can get dusty, and all it takes is a blast of compressed air to clean them. Accessing the leads means removing the cover, which tenants can do if they have the manual to guide them.
  • Location
    Persistent failure of the central air system to maintain the target temperature could be caused by a poor thermostat location. It may be in the sun, behind a bookshelf, or in the path of a draft. Moving the thermostat, as well as replacing worn wires, is usually a major job.

Filters

The heating and cooling system connects to the living space via a network of metal ducts, and if you’ve ever looked inside one of these ducts, you’ll appreciate the need for filters. When dust enters the ducts and gets drawn into the central system, it can block gas orifices, hinder fan rotation, reduce heating and cooling efficiency, and even potentially create a fire hazard.

Many HVAC pros offer duct cleaning services, but you generally need these only if you’re renovating; if animals, mold, or contaminants got sucked into the ducts; or if someone in the house has become ill. In most cases, however, you just need to service the filters.

The MERV Rating

Changing the filters at least once a year, which is the best way to maintain system efficiency, is another job that tenants can do, especially if you supply the filters. Filters are classified according to their MERV rating, which is an acronym that means Minimum Efficiency Reporting Value. The higher the MERV rating, the more efficient the filter.

Filters with high MERV ratings can filter out contaminants as small as bacteria, but they also restrict air flow, so it’s best to stick with a filter with a rating in the range of 5 to 8. Ratings go as high as 16, so this is on the low side of average.

Two Ways to Approach Maintenance

The HVAC system, like the rental unit itself, belongs to the landlord who has a vested interest in maintaining it in good condition. As the beneficiary of clean, conditioned air from a properly functioning system, however, the tenant also has an interest in keeping things in working order. You can retain full responsibility for maintaining the system or can share that responsibility with your tenant.

  • Landlord Controlled and Maintained
    The landlord assumes full responsibility for maintenance. The lease usually specifies standard hours for maintenance, such as from 8 p.m. to 6 p.m. Monday to Friday. If maintenance is required at other times, there is usually an extra charge. This arrangement is typical in multi-unit dwellings.
  • Landlord Controlled/Tenant Maintained
    The tenant pays for filters and minor service calls, such as cleaning and minor malfunctions, while you pay for major service. The tenant also typically pays the utility bills. This can be a good arrangement for sensitive tenants who require enhanced air filtration or who require temperatures outside normal ranges.

Hang Onto Repair Records

Minor HVAC maintenance responsibilities are seldom overwhelming, so it’s usually in your best interest to maintain your property’s HVAC system. That way, you ensure that proper repairs are made and that all servicing conforms to acceptable standards.

Whether you opt to share the maintenance responsibilities with your tenants or not, keep all the maintenance records in a safe place to ensure faster resolution to problems when they do arise.

Credit to Chris Deziel

Chris has owned and managed 4 rental properties in Santa Cruz, CA, and Salida, CO. He is a DIY handyman expert for popular sites like Pro Referral.

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Real Estate Know-Hows

Help First-Time Sellers Through the Sale

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Like rookie buyers, clients who are new to selling need extra hand-holding through the sales process.

Even the most steely-eyed sellers can get emotional when it’s time to list their home. It’s the place where they raised their children, gathered friends for annual holiday parties, or painstakingly executed their design vision over many years. The longer they have stayed in a home, the greater the challenges they may face getting up-to-date on the rules and regulations governing transactions. Those who have never before sold are, indeed, in uncharted territory. Here are suggestions for working with first-time sellers who may find the financial and legal complexities, as well as the emotional terrain, especially daunting.

First-time sellers who have never contended with buyer demands may not initially understand how neutralizing their home or adding small upgrades can make their property more competitive on the market. Using data to highlight comparable nearby homes and what they’re selling for is a good place to start, but make sure to explain how the data supports your argument. Andy Werner, abr, e-pro, associate broker at RE/MAX Realty Group in Gaithersburg, Md., says many first-time sellers don’t realize how minor repairs can elevate their property’s market value. Buyers typically expect a home to be in move-in condition, so sellers who choose not to upgrade could face a $10,000 to $15,000 price reduction, he says.

“I tell buyers that if you don’t fix up your house, the buyer will go around the corner and buy from someone who did—and they’ll pay $5,000 more,” Werner says. Such an explanation demonstrates market fundamentals to your clients and keeps them on track toward the closing table. The costs of modest repairs, such as repainting, installing carpet, and refinishing or replacing kitchen cabinetry, are often recouped at resale, Werner adds.

Selling After Decades of Owning

Some common seller issues become more difficult simply because of how long a first-time seller has lived in a home. Decluttering, for example, can be hard enough for someone who’s been in their home only five years. Imagine how challenging it is for sellers who have lived in a home for their entire adult life.

It’s not just emotional resistance they’re experiencing. First-timers may simply not be aware of how clearing out personal items improves the odds of a sale. Alice Chin, psa, a broker with Keller Williams Infinity in Naperville, Ill., recommends that sellers who have never dramatically decluttered their homes before do it in stages, clearing one room at a time. Slowing down the pace can ease the mental and emotional pressure involved in getting rid of personal items, she says, and once sellers see the results in one room, it can encourage them to continue working on the rest of the house. If your client needs more convincing, ask a professional home stager to weigh in, Chin says.

Patience Is a Virtue

All sellers benefit from practicing patience while waiting for the right buyer, but this is doubly true for those who are listing a vacation home in resort areas for the first time. They face different market dynamics than if they were selling a primary residence, says McKee Macdonald, a broker with Coldwell Banker Carlson Real Estate in the ski resort town of Stowe, Vt. Many of his clients who are new to selling are shocked to learn how long it can take to sell—an average of 250 days in his market. Some properties have languished for as long as five years, he says.

Therefore, first-time sellers require a higher degree of communication so they can be prepared for the realities of a niche market, Macdonald says. He explains that traditional marketing tactics such as open houses aren’t always effective because the number of skiers (who are prospective buyers) in town on weekends is unpredictable. Instead, he advises his clients to consider renting out vacation properties while they wait for a buyer. After all, selling a second home often isn’t urgent, and a seller’s motivation can change. “Some sellers say, ‘Throw it out there. If we get the price we want, great. If not, I’m still using it,’” Macdonald says.

Experienced Sellers Can Be Rookies

Even seasoned sellers can feel like newbies when market conditions have changed markedly since their last sale. A client who sold one property during a downturn may be ill-prepared for today’s tight-inventory environment and the stress of handling multiple offers. Though it’s a nice problem to have, it can still be overwhelming.

Ashleigh Fredrickson, sales associate at 8Z Real Estate in Denver, says the biggest challenge for sellers of all experience levels is determining which offers stand the best chance of holding up. In a strong seller’s market, buyers can get swept up in the heat of the moment and bid 10 percent over list price only to realize later they won’t be able to qualify for financing, she says. So it’s important to counsel sellers—particularly those who have never been in such a situation—that the highest bid isn’t necessarily the best. “You want to make sure you’re getting the most qualified buyer so that you’re not back out on the market again,” Fredrickson says.

She suggests using a spreadsheet to help sellers analyze competing bids, taking special note of any contingencies. Your clients need to understand that a higher offer with more contingencies may not be in their best interest. “Maybe the timeline is paramount, so the seller will sacrifice a couple of thousand dollars to ensure the deal is done by a certain time,” Fredrickson says.

Above all, directness and thorough education are what every first-time seller needs, Macdonald adds. When a sale isn’t going the way a seller had imagined it would, “you need to look for strategies to offset the negatives.” But always “give sellers the honest truth, and don’t sugarcoat it,” he says.

Credit to Judith Crown
 Judith Crown is a Chicago-based freelance writer specializing in business, government, and education.
homes for rent, homes for sale,
homes for rent, homes for sale, newstarrealty.com

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Help First-Time Sellers Through the Sale

Leave a comment

Like rookie buyers, clients who are new to selling need extra hand-holding through the sales process.

Even the most steely-eyed sellers can get emotional when it’s time to list their home. It’s the place where they raised their children, gathered friends for annual holiday parties, or painstakingly executed their design vision over many years. The longer they have stayed in a home, the greater the challenges they may face getting up-to-date on the rules and regulations governing transactions. Those who have never before sold are, indeed, in uncharted territory. Here are suggestions for working with first-time sellers who may find the financial and legal complexities, as well as the emotional terrain, especially daunting.

First-time sellers who have never contended with buyer demands may not initially understand how neutralizing their home or adding small upgrades can make their property more competitive on the market. Using data to highlight comparable nearby homes and what they’re selling for is a good place to start, but make sure to explain how the data supports your argument. Andy Werner, abr, e-pro, associate broker at RE/MAX Realty Group in Gaithersburg, Md., says many first-time sellers don’t realize how minor repairs can elevate their property’s market value. Buyers typically expect a home to be in move-in condition, so sellers who choose not to upgrade could face a $10,000 to $15,000 price reduction, he says.

“I tell buyers that if you don’t fix up your house, the buyer will go around the corner and buy from someone who did—and they’ll pay $5,000 more,” Werner says. Such an explanation demonstrates market fundamentals to your clients and keeps them on track toward the closing table. The costs of modest repairs, such as repainting, installing carpet, and refinishing or replacing kitchen cabinetry, are often recouped at resale, Werner adds.

Selling After Decades of Owning

Some common seller issues become more difficult simply because of how long a first-time seller has lived in a home. Decluttering, for example, can be hard enough for someone who’s been in their home only five years. Imagine how challenging it is for sellers who have lived in a home for their entire adult life.

It’s not just emotional resistance they’re experiencing. First-timers may simply not be aware of how clearing out personal items improves the odds of a sale. Alice Chin, psa, a broker with Keller Williams Infinity in Naperville, Ill., recommends that sellers who have never dramatically decluttered their homes before do it in stages, clearing one room at a time. Slowing down the pace can ease the mental and emotional pressure involved in getting rid of personal items, she says, and once sellers see the results in one room, it can encourage them to continue working on the rest of the house. If your client needs more convincing, ask a professional home stager to weigh in, Chin says.

Patience Is a Virtue

All sellers benefit from practicing patience while waiting for the right buyer, but this is doubly true for those who are listing a vacation home in resort areas for the first time. They face different market dynamics than if they were selling a primary residence, says McKee Macdonald, a broker with Coldwell Banker Carlson Real Estate in the ski resort town of Stowe, Vt. Many of his clients who are new to selling are shocked to learn how long it can take to sell—an average of 250 days in his market. Some properties have languished for as long as five years, he says.

Therefore, first-time sellers require a higher degree of communication so they can be prepared for the realities of a niche market, Macdonald says. He explains that traditional marketing tactics such as open houses aren’t always effective because the number of skiers (who are prospective buyers) in town on weekends is unpredictable. Instead, he advises his clients to consider renting out vacation properties while they wait for a buyer. After all, selling a second home often isn’t urgent, and a seller’s motivation can change. “Some sellers say, ‘Throw it out there. If we get the price we want, great. If not, I’m still using it,’” Macdonald says.

Experienced Sellers Can Be Rookies

Even seasoned sellers can feel like newbies when market conditions have changed markedly since their last sale. A client who sold one property during a downturn may be ill-prepared for today’s tight-inventory environment and the stress of handling multiple offers. Though it’s a nice problem to have, it can still be overwhelming.

Ashleigh Fredrickson, sales associate at 8Z Real Estate in Denver, says the biggest challenge for sellers of all experience levels is determining which offers stand the best chance of holding up. In a strong seller’s market, buyers can get swept up in the heat of the moment and bid 10 percent over list price only to realize later they won’t be able to qualify for financing, she says. So it’s important to counsel sellers—particularly those who have never been in such a situation—that the highest bid isn’t necessarily the best. “You want to make sure you’re getting the most qualified buyer so that you’re not back out on the market again,” Fredrickson says.

She suggests using a spreadsheet to help sellers analyze competing bids, taking special note of any contingencies. Your clients need to understand that a higher offer with more contingencies may not be in their best interest. “Maybe the timeline is paramount, so the seller will sacrifice a couple of thousand dollars to ensure the deal is done by a certain time,” Fredrickson says.

Above all, directness and thorough education are what every first-time seller needs, Macdonald adds. When a sale isn’t going the way a seller had imagined it would, “you need to look for strategies to offset the negatives.” But always “give sellers the honest truth, and don’t sugarcoat it,” he says.

 

Credit to Judith Crown
Judith Crown is a Chicago-based freelance writer specializing in business, government, and education.

homes for rent, homes for sale,
homes for rent, homes for sale, newstarrealty.com
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Real Estate Know-Hows

Top 10 Amenities Renters Can’t Resist

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To be a successful landlord, you need to give your tenants what they want.

Think of it this way: You wouldn’t want to be in the surfboard business in the Midwest, but you might in a Southern California beach community.

It’s the same for the landlord business. Buying rental property is only one part of the equation for success. If your property is as appealing as that Midwestern surfboard, it’s not doing you much good.

To be successful, you need to provide a rental product that people want to rent, and to be really successful, they should want to stay in it for as long as possible. Here are 10 things renters can’t resist.

1. Walkability

A great location means different things to different people. But if your rental property has a high Walk Score, a measure of a location’s walkability, it’s a safe bet you’ve got a good location.

There’s a shift in this country toward moving to urban areas, but not necessarily the traditional ones, such as New York City and San Francisco. Renters just want to walk to restaurants, shops, schools, parks, and entertainment, no matter which city they’re in.

A Walk Score between 50 and 100 means some or most amenities are within walking distance, and a score between 0 and 50 means the property is car dependent.

2. A Well-Maintained Place

One of the big advantages to being a renter versus a homeowner is that renters don’t have to worry about maintenance and repairs. That’s the responsibility of the owner or management company. So when you’re showing a place, be sure there are no maintenance issues.

When you’re showing a place, make sure there are no maintenance issues.

And when a tenant moves in, conduct periodic inspections to ensure your rental unit remains in great shape. You or your management company also needs to be responsive when a repair needs to be done.

3. A Place to Park

Renters want off-street parking, and that’s a feature they don’t necessarily get in a building in an urban area. So if you have a single-family home with a garage, play up this feature. If you don’t, any off-street parking, such as a covered area or a driveway, is a great selling feature. In the suburbs, renters are fine with street parking since it’s typically easy to find parking in front of the property.

4. Storage Space/Walk-in Closets

If your rental unit has enormous walk-in closets, you’re sure to impress potential tenants. But if you don’t have this feature, you might want to consider having one built in. A bigger closet in a smaller bedroom is usually a bigger draw than a tiny closet in a spacious bedroom. And any additional storage space is always welcomed.

5. Washer/Dryer

Tenants want a washer/dryer in their rental unit. Although this is an extra amenity that you’re not required to offer, it makes your unit more desirable to renters if you do. Some renters have their own washer/dryer, or don’t mind getting their own, so if you have a laundry room or a place to hook up a washer/dryer, that’s better than nothing.

6. Air Conditioning

By air conditioning, we mean central air, not a window unit. But this amenity varies depending on where your rental property is located. In a hot, humid climate, central air is a must-have feature. Window units are not ideal in humid climates because they tend to sweat, adding even more moisture to the home. And the seal around the windows is not perfect when you have an AC installed in the window, which is not energy-efficient.

7. Flexible Pet Policies

Lots of people have pets, making a pet-friendly place desirable for many renters and a must-have feature for others. Sixty-five percent of people own a pet, according to the National Pet Owners Survey. The most popular pets are overwhelmingly dogs and cats. If you decide to allow pets, here’s some further reading on best practices:

  • The Definitive Guide to Renting to Tenants with Pets
  • Pet Deposits, Pet Fees and Pet Rent — What’s the Difference?

8. Security and Safety

At the very least, you should reassure renters that you always change the locks between tenants. And, of course, you can’t just say this — you have to actually follow through with it. Besides changing locks, make sure your property has proper outdoor lighting, a wooden dowel for the bottom of sliding glass doors, deadbolt locks, and either provide an alarm system or let your tenant add one if they want to.

9. Outdoor Spaces

Although many renters like amenities, such as a pool with a cabana and a fitness/yoga studio (like many apartment complexes have), what even more renters prefer is outdoor space — a fenced-in yard, patio, deck, or balcony are all desirable to renters. When it comes to outdoor spaces, something is better than nothing.

10. A “Smart” Home

This feature typically won’t be a deciding factor for most renters, but if you have smart features, it’s a bonus, especially for millennial renters who love technology. The Internet of Things (IoT) allows devices to “talk” with each other, which makes it possible for technology to work for us.

Temperature controls that allow homes to heat up before you come home, a place to plug in your electric car, and lights that go on as you enter the room are all examples of what smart devices can offer. Nest is the leading provider of smart thermostats, but there are others for less money.

Which features help rent your place? If you’re a renter, what features are your must-haves? Let us know in the comments!

Credit to Laura Agadoni

Laura Agadoni is a landlord and journalist whose articles appear in various publications such as Trulia, The Houston Chronicle, The Motley Fool, SFGate, Zacks, The Penny Hoarder and azcentral.

 

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