For many real estate investors, it’s tough to make a profit. It’s not as easy as the TV shows make it seem. But with some basic best practices, you can make some serious money.
I’ve invested in rental property for over 10 years now, and I’ve learned some tough lessons. However, I’m more bullish on real estate investing than I ever have been. There has never been a better time to be a landlord in America.
Real estate doesn’t change much, as it can take decades for a property to appreciate. What can change rapidly is how you manage your properties.
Before modern technology, tenants would:
- Drive around and/or read the newspaper classifieds to find available rental properties.
- Call and schedule a tour of the property.
- Fill out a paper application.
- If accepted, they would meet you at the property, an office, or a coffee shop to sign the lease.
If you’ve used any kind of technology in the past five years (like a smartphone), you’re aware of the benefits.
Real estate is prime for disruption because many agents and investors are using technology from the 90’s.
If you like the idea of using technology to save time, here are some ways to make your real estate business more profitable:
1. Install A Programmable Thermostat
Housing is a commodity and isn’t, by itself, personal. However, people crave personalization and want to feel special. If you are targeting a particular demographic, think of how you can offer extra and personalized features to the property. One of my friends caters to senior citizens, for example. He makes sure his doors are 33 inches wide and that the properties have security systems.
I like to target energy-conscious tenants. Even if you don’t personally care much about the environment, you probably don’t like having a high utility bill. I suggest getting the first-generation Nest to save money.
Nest is a programmable thermostat. Although programmable thermostats have been around a long time, the Nest is different because of its simplicity of use. My wife installed ours in less than 10 minutes and had it integrated on her iPhone in fewer than five minutes. And best of all: The Nest learns your behavior and automatically adjusts its settings. A Nest pays for itself in about a year.
Another great item to personalize a property for your energy-conscious tenant is the Philips Hue lightbulb, a programmable, color-changing LED bulb that gives users flexibility over the color of light emitted. This allows you to set the mood for any occasion.
2. Install High-Tech Locks
What happens when one of your tenants gets locked out?
Many tenants live on their smartphones and enjoy the productivity benefits. So consider adding a smart lock that can open with a key or bluetooth. This is a benefit to tenants in case they need to let a friend in, and it’s a benefit to you as you can grant temporary access to maintenance workers.
3. Use Online Systems
Offline and paper-based transaction methods are time-consuming and costly.
The cost with using a paper-based system is with the extra time it takes to sort through paper-based applications, screen tenants manually, and process checks. This problem is exacerbated in my business, since I have a business partner and we like to share information.
To solve this, I use Cozy. With Cozy, all these processes are fast and easy because we have a company log-in that we both use.
4. Collect Rent Electronically
The number one complaint I hear from tenants is that their landlord doesn’t accept electronic payments. Making tenants write a check and mail it to you is not timely, efficient, or convenient. Other tenants want to pay in cash, which requires you to collect in person, which is also inefficient.
Cozy offers a way for tenants to pay their rent electronically.
- If your tenants set up an ACH transfer, payments are deposited within 3-5 days of the tenant initiating the payment, and it’s free for them.
- If your tenant pays with a credit card, they pay 2.75%. The money is deposited 1-2 days after they pay.
I encourage you to visit the “How Payments Work” section on Cozy’s website for more information.
5. Develop a Niche Brand
Branding your business by clearly communicating who you are to the public can be beneficial.
I’m a coffee fanatic, for example, and I make it a point to buy a coffee mug from every title company I have a closing with. Recently, a title company was trying to get my business, and they brought my team and me branded glasses. I told them this was unique. They responded with:
We know you have everybody else’s coffee mugs, so we thought you should get glasses.
I guess my brand is getting around!
Business cards are often thrown away, but coffee mugs with the name of your company and phone number are incredibly useful.
You can also offer a monthly giveaway for local products and services. The cost of this branding doesn’t have to be expensive, and the payoff from longer-leasing tenants and referrals can make this a huge return on investment.
6. Upgrade Your Computer’s Security
With wireless connectivity for several applications in your properties along with Wi-fi that is sometimes public, security will be the forefront of any conversation about technology advances.
As landlords, we collect a lot of information about our tenants: names, phone numbers, address, income, workplace, next of kin, references, etc. It’s not too farfetched to think of personalized services based on this information. However, what would happen if this data were stolen?
I recommend taking extra security precautions with internet-based tools such as using a password manager like 1Password, which saves all your PINs, passwords, and even credit card information in one place. When you need to sign into something, you just have to click once. 1Password information is encrypted, so you never have to worry about that information being hacked.
Credit to Jimmy Moncrief
Jimmy is a multifamily real estate investor and bank credit officer.
Simply understanding how to use a few key camera settings and pieces of equipment can make all the difference.
It can’t be stressed enough: Great photos help sell homes. The National Association of REALTORS®’ own research shows that well over 90 percent of home shoppers look online for at least a part of their search. For almost half of all buyers, accessing digital listings is the very first step in their process. And while there’s been much speculation as to the homebuying behaviors of millennials, this much is known for sure: Digital natives are much more comfortable with browsing home listings from mobile devices.
None of this is breaking news, but it does highlight just how important digital representation can be when you’re trying to show a home. One industry study found that when listings were accompanied by high-quality photos taken with professional equipment, they spent significantly less time on the market and fetched a premium of $3,400 on average.
Unfortunately, interior shots pose a variety of photographic challenges that are difficult for amateur photographers. Real estate pros shouldn’t be expected to transform overnight into professional camera wielders, but you can certainly benefit from a few tricks up your sleeve and some decent equipment.
Don’t Turn Toward the Light
This scenario might feel familiar: You want to show off the new windows in your client’s living room, but every time you snap a photo, the image is totally blown out. Photos with dark foregrounds and overexposed windows are a common problem that happens when ambient light from the outdoors tricks the camera’s light meter into overcompensating. A flash will balance out the lighting in the room, giving you a better shot. Alternatively, you can use your camera’s manual controls and settings. The right settings depend on the kind of equipment you have, however. For many point-and-shoot digital cameras, it’s mainly a matter of adjusting the ISO, although you may want to set the aperture to f/2.8 as well, if your camera offers that flexibility. For shots near a window, typically an ISO setting of around 400 to 800 works well, although you may want to go higher if you have particularly low light in the foreground. If you have full manual control of your camera, you can increase the shutter speed, which will allow less light into the camera sensor.
Try HDR Tonemapping
The main problem with photographing daylit interiors is that it’s difficult to balance between ambient daylight, artificial lighting, and dark shadows behind walls and in rooms away from the foreground. This situation presents a range of different exposures, and while the human eye automatically adjusts for the various levels, the camera will have a hard time making sense of it all. HDR, which is short for high dynamic range, is a common tool for handling such lighting situations. In essence, the photographer takes three or four photos in rapid succession, which are then combined into one image using specialized software like HDRSoft. Usually, one shot is at normal exposure, one is overexposed, and one underexposed. When those three exposures are combined into one, you’ll see all the details that the human eye can perceive. This results in photos with a vibrant, luminous quality.
Many point-and-shoot cameras have an exposure value meter, which can help you compose under- and overexposed shots. Generally, the meter reads a value of zero on the normal setting, +1 or +2 for overexposed shots, and —1 or —2 for underexposure. Use a tripod so you can play with different exposures while maintaining the same angle on each shot. You’ll also want to make sure automatic flash is turned off for this method. It takes time to perfect this technique, of course, but it can help you capture more detail in challenging settings.
Buy the Right Equipment
Unless you have a surgeon’s steady hands, you’re going to need a tripod in some situations. A tripod helps compose poised shots and avoid blurry photos, but it’s also incredibly important if you’re dabbling in HDR or mixing up shutter speeds. The longer your exposure time, the more likely it is that subtle movements will show up in the final product. You should use a tripod anytime you nudge the ISO to a higher range. Also, if you’re taking wide shots of the home’s exterior or enlarging your photos, even the tiniest shake will be a lot more obvious. In certain conditions, even the slightest breath can create a shaky shot. Avoid this dilemma with a lightweight foldable tripod.
You may also want to invest in a point-and-shoot with a wide-angle lens. When buyers are browsing through real estate listings, they really want to get a sense of the space. But that’s difficult to translate into photos unless you have a wide-angle option. This is important not just for exterior shots but for indoor compositions as well. A wider lens in the interior gives rooms a sense of luxury and space that you just can’t get with a regular shot. Point-and-shoot cameras that have a large range in their focal length specification are ideal; the lower the value at that end of the range, the wider the shot will be.
If you’re really interested in refining your shots, you’ll want a camera with manual controls that allow you to adjust shutter speeds on your own. Or it may be time to graduate to a digital single-lens reflex camera, especially if you want to experiment with wide-angle lenses (with focal lengths under 35mm, used for very wide shots). DSLRs have come down in price recently, especially since manufacturers like Canon and Nikon have introduced entry-level DSLRs aimed at beginner photographers. Usually these run for around $300 to $700, and they are available with bundled lens kits to get you started trading out lens lengths for sharper photos.
Get Rid of the Clutter
Staging photos ahead of time by cleaning off counters, tabletops, and floors can turn an ordinary listing into a real stunner. Clear your photography appointment with your client before you arrive, and tell them to clean, clean, clean. Even a detail as minute as a crooked picture frame or a rolled carpet edge can detract from your photos, so be sure to run over your shots with a fine-toothed comb. Decluttering means no power cords or vacuum cleaners in the shot—but it doesn’t mean completely sterile surfaces. A few welcoming touches like a stack of books, a vase of flowers, or a set of candles will make the space feel lived-in and homey. After all, that’s what you’re really selling anyway: a vision of buyers’ future lives in a new and welcoming abode.
Erin Vaughan is a blogger, gardener, and aspiring homeowner. She currently resides in Austin, TX where she writes full time for Modernize, with the goal of empowering homeowners with the expert guidance and educational tools they need to take on big home projects with confidence.
Problems happen. The dishwasher leaks, the heater doesn’t heat, or the air conditioner only makes noise. A maintenance request helps ensure that your landlord (or the building’s management company) does something about the issue in your rental unit.
To make sure the issue is addressed properly and in a timely fashion, your maintenance request should contain useful information and be thorough. The more helpful and specific the information, the more likely your maintenance request receives an appropriate resolution.
1. Call As Soon As Possible
Call your landlord or property manager shortly after you’ve noticed an issue. Read your rental agreement to ensure you call the right party. Calling an out-of-town landlord is far less efficient than calling a maintenance person or site manager within minutes of your rental.
If the situation is an emergency, such as a broken pipe causing a flooded bathroom, look for an emergency maintenance phone number on your rental agreement, and call it immediately.
If it’s not an emergency, let the landlord or site manager know whether the maintenance crew can enter your apartment while you’re away. If you prefer to be home when the work takes place, offer a block of several hours in which the work can take place.
2. Follow Up in Writing
If you request is addressed within two days (or within the time the landlord or manager said it would be handled) — great — your work is done!
If not, or if you left a message via voicemail and haven’t heard back within 24 hours, it’s time to put your request in writing. The Cleveland Tenants Organization offers a simple notice to correct conditions. A more formal request form is available through the Tenants Union of Washington State. Here’s what to do:
- Fill out all the required information and spell out in specific detail exactly what needs repaired in your apartment.
- Include written notice of when you first placed a call requesting repairs.
- Mail (or drop off) the notice to the landlord or property manager (whomever is indicated in your original rental agreement).
- Send the notice via certified mail, or take the letter to the post office and pay for postage directly with a postal clerk. That way, you can get a receipt that has tracking information. (A stamped letter dropped into a mailbox isn’t trackable. You’ll have no proof that the other party received the letter.)
- Have the person sign a piece of paper stating that they received the letter. This applies if you dropped the letter off directly to the person in charge of handling your request. (Prepare this in advance and take it, along with a pen.)
- Keep written records and proof of all maintenance requests and communications regarding the maintenance issue.
3. Wait the Proper Amount of Time
In many cases, maintenance issues are taken care of within 48 hours, but the legally required time frame varies by state. For instance, in Washington State, serious issues such as no hot water or electricity must be dealt with within 24 hours. But 72 hours is acceptable for a refrigerator or oven repair. If you’re concerned that repairs are not happening in a reasonable amount of time, look up your state’s laws here.
4. Consider Dealing With Minor Issues Yourself
Minor issues, such as a small hole in the carpet are not required to be fixed.
A landlord is legally required to keep the property in habitable condition. But minor repairs such as a dripping faucet or a small hole in the carpet are not required repairs, according to a tenant’s rights article on FindLaw. You may not be able to force the landlord to handle such repairs, but a well-written request pointing out the benefits of repair can greatly help your cause. For instance, spell out that a running toilet or dripping faucet wastes water, leading to an increasing water bill that wastes the landlord’s money.
Even if you have a great relationship with the property manager, a written request matters more than a verbal request. This is true even when renting from an individual that you see nearly every day, such as a duplex owner that lives in the other unit of the duplex. A written and dated maintenance request leaves proof of the issue in case the responsible party takes a while before doing anything about it.
No matter what your reason for submitting the request, be sure to make it look as professional as possible. Consider typing it out instead of writing it out by hand so there’s no question of legibility. If you do all these things and submit the request to the proper party (as spelled out in your rental agreement), your maintenance issue should soon be resolved.
Credit to Kathy Adams
Kathy is an award-winning investigative journalist, not to mention a writer, brand blogger, decor/DIY expert, renter, commercial landlord. She also writes for brands such as Behr, Kroger, Canon and Black+Decker on topics pertaining to home and apartment decorating and maintenance.
If you rent out a house in the middle of nowhere, you can rent to the noisiest tenants imaginable. Why? Because no one can hear them.
But if you rent to tenants who will live in close proximity to other people, you hope they’ll respect their neighbors’ right to quiet.
If you rent to noisy tenants, a few things might happen. You might receive a formal complaint from a building manager, a nasty email from the neighborhood HOA, or a nuisance complaint from the city if a neighbor complains to the police. If you don’t do anything about the complaints, you could receive fines until you do something.
So what should you do if you get complaints that your tenants are so loud they’re disruptive?
Determine Whether the Complaint Is Valid
Before you confront your tenant, find out the nature of the noise complaint. Your tenant could very well be causing a disturbance, but it’s just as likely that the complainant isn’t warranted. Tenants are allowed to live their lives, and sometimes that includes making noise.
Your job is to determine whether your tenant is crossing the line by being excessively noisy.
If your jurisdiction places a limit on noise decibel levels, then your tenants should not exceed this level. If your rental property is subject to noise laws and you receive a complaint, ask the department that issued the complaint to come out and measure the noise levels to determine whether there is a valid reason for the complaint.
If you don’t have regulations, you can use some common sense measures to evaluate whether your tenants are the problem or whether the complaining neighbor is just being fussy.
Here are some examples:
- Dinner Parties
Having people over for a get together that ends by 11 p.m. is not complaint-worthy, but regular loud parties that go late into the night are a problem.
- Noisy Feet
Tenants walking around their own apartment, no matter what time of day or night, is not complaint-worthy from a downstairs neighbor, but if your tenant is jumping rope or acting out their own WrestleMania session at midnight, that’s valid.
- Barking Dogs
A dog that barks occasionally is not complaint-worthy, but a dog that barks incessantly all day or night is.
- Loud Arguments
Disagreements between partners are bound to happen, and an occasional argument is not complaint-worthy, but a nightly screaming match is.
If the Noise Complaint Isn’t Valid
Let the complaining party know that you have researched the noise complaint. Tell them what you did to determine whether your tenant is guilty of a noise violation or not. If you found out your tenant didn’t do anything wrong, let the complainant know that you didn’t find any evidence to suggest the complaint was warranted.
If the Noise Complaint Is Valid
If you’ve received multiple complaints from a variety of sources, your tenant is probably being too noisy. You might also wish to witness for yourself whether the complaints are valid by driving by your rental property and seeing for yourself.
You need to address this issue with your tenant immediately. If your tenant is being too noisy and interfering with the neighbors’ peace and quiet, you should tell your tenant to keep the noise at acceptable levels. Explain the problem and what you expect your tenant to do to resolve the problem.
Sometimes the resolution is easy. If a downstairs neighbor complains about noise coming from upstairs, for example, put down area rugs. If your tenant listens and stops the noisy behavior, problem solved. If not, and the complaints continue, you may need to evict.
Have a Clause in Your Lease
You can protect yourself from noise problems by including a noise, or quiet hours, clause in your lease. That way, if your tenant violates the noise clause, you can act based on the lease terms, such as fining them if you receive a valid noise complaint.
Here’s a sample of a noise clause from a lease, courtesy of the University of Rhode Island.
PARTIES/DISTURBING NOISES/NUISANCE: The Tenant agrees that he/she/they will not breach the covenant of quiet enjoyment for the other tenants and/or neighbors. Tenant agrees not to make or permit any disturbing noises (e.g. hooting, yelling, shouting, singing, music inside a car). Lessee shall keep the volume of any guests, radio, stereo, television, CD, musical instrument, or any other piece of equipment which emits sound sufficiently reduced so as not to disturb nearby residents, in accordance with local noise ordinances. If the Tenant and/or Lessor receives a notice from the local police department that there has been a disturbance at the rental premises, which has caused a nuisance to the neighborhood, in violation of Rhode Island General Law §11-30-7, there will be a $50.00 penalty fee per Tenant for the first notification. At this point there will be a three month period which will be considered a probationary period. There will be no further penalty fee during the term of the lease if there are no further disturbances. If there is a second such notification, the rent will increase $100.00 per Tenant for the remaining term of the lease. If there is a third such notification, the rent will increase $150.00 per Tenant for the remaining term of the lease. Eviction can result from any nuisance/noise violation depending on severity. Tenants will receive written notice of eviction. Parents and/or cosignors may also be notified of any incidences. Any breach of Rhode Island General Laws relative to disturbing the enjoyment of the homes by the neighbors, or disturbing the peace of the neighborhood, will be considered a breach of this contract. No kegs are permitted on the property without the prior consent of the Lessor. Tenants are not allowed firearms on the premises at any time. Tenants agree to comply with the attached town rental ordinances which address ordinances for Public Nuisance, Noise Disturbance and Unlawful Possession and Consumption and any associated penalties. ABSOLUTELY NO FRATERNITY OR SORORITY ACTIVITIES MAY OCCUR IN HOUSE OR ON THE GROUNDS, UNLESS OTHERWISE AGREED TO BY THE PARTIES.
Note: This lease pertains to university students in the state of Rhode Island. You can, however, personalize your lease to meet your needs. Please consult a lawyer when preparing your lease.
The best way to ensure you’ll rent to tenants who won’t cause trouble is to screen them first. Run a background check and check references to determine whether potential tenants have a history of complaints against them. I use Cozy tenant screening, and I recommend it.
If you get complaints about a noisy tenant, you need to do something about it. Don’t rush to judgment by automatically blaming your tenant. But don’t ignore the complaints, either. It’s best to come up with a compromise that everyone can live with.
Now, peace out everyone.
Please let us know in the comments your experience with noise and how you handled it!
Credit to Laura Agadoni
Laura is a landlord, journalist, and author of New Home Journal: Record All the Repairs, Upgrades and Home Improvements During Your Years at…. Her articles appear in various publications such as Trulia, The Houston Chronicle, The Motley Fool, SFGate, Zacks, The Penny Hoarder, and loanDepot.
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.
Judith Crown is a Chicago-based freelance writer specializing in business, government, and education.