Tips for Landlords
How to manage your property–and your tenants.
Commercial Giants See Prospects Improving
Commercial real estate is showing signs of renewed life in the form of stronger leasing volume, more property management work, and increased investment sales.
Lauralee Martin, chief operating and financial officer at Jones Lang LaSalle (JLL), remarks, “Once companies believe there is a bottom, they have confidence to make decisions.”
In the months to come, some firms will consolidate and optimize leased space after cutbacks — ideally in better buildings with lower rents. Other companies will buy or sell buildings.
Revenue at JLL and CB Richard Ellis Group suggests commercial property buyers, sellers, tenants, and owners are starting to make more decisions regarding their space. Revenue climbed 18 percent at the former and 23 percent at the latter during the second quarter compared to a year earlier. In addition, both firms rank high in share price gains within Investor’s Business Daily’s Real Estate Development/Operations group.
CB Richard Chief Executive Brett White concludes, “After the recovery gets going and the economy gets its steam, you move into a long-term expansion.” He adds that expansion is when “every quarter is positive in job growth and GDP.”
Source: Investor’s Business Daily, Marilyn Alva (09/24/10)
Questions To Ask Your Property Manager…
Always be sure to ask your Property Manager, what the ….
- Procedure is to be followed in filing a notice for paying rent.
- Notices are to be delivered to a tenant under the terms of a lease.
- Important legislation is looming on the horizon regarding debt collection.
- Maximum collectable security deposit is under Virginian law
- Rights to be exercised in situations where pets are involved on a property.
- Amenities are made available on the property.
- Updated fair credit reporting roles and requirements are.
- Federal and/or State laws that do govern fair housing.
- Permitted questions are to be asked on application.
- Law is for unclaimed personal property, then enforced on previous tenants.
If these questions aren’t answered in a prompt manner by your Property Manager, better think twice.
To ensure that all your questions are answered, doubts cleared and responsibilities met, where your well being and welfare is a part of our concern; Look for exceptional and up to date expertise from only Condo Alexandria.
photo credit: alexanderdrachman
Renting Unsold Property May Be a Good Move
Home owners who can’t or don’t want to sell their homes in today’s market but must move should consider renting out the property.
Obtaining a professional property manager is a good first step. Professional property managers charge 7 percent to 10 percent of the monthly rent in many areas. Two associations whose members manage small residential properties are National Association of Residential Property Managers and Institute of Real Estate Management.
Current rents may not be high enough to cover carrying charges, including mortgage, taxes, and insurance. Nevertheless, renting out the property may still make sense if property values rise in the next few years.
Offering a 12-month lease that converts to month-to-month is a good idea, if the owners are considering selling eventually. Include language in the lease that allows a real estate professional to show the home to potential buyers with 24 hours’ notice to tenants.
Source: Money Magazine, Amanda Gengler (07/28/2010)
Renting Can Be a Good Option for Sellers
Home owners who have been trying to sell their properties for a year or more might consider lease or a rent-to-own option.
A lease option agreement gives the tenant the option to buy at a predetermined price for a rent that is slightly higher than market. In a lease purchase, a buyer commits to buying the property. In exchange, the seller credits a percentage of each payment toward the purchase price.
Either arrangement is likely to attract serious renters who would like to buy the property if they can. In exchange, they’ll take good care of it.
Negotiating these agreements can be tricky, and the owner should always get help from a real estate attorney.
Source: The Wall Street Journal, June Fletcher (06/16/2010)
What Do Property Managers Do?
Property managers can come in the form of a person or a company. Either way, what they do can be simply summarized as: getting paid to oversee a real estate property on behalf of the owner.
The responsibilities of a property manager include (as applicable) dealing with the property’s tenants, facilitating repairs or improvements necessary for homes, assuring overall cleanliness and general maintenance of the property, landscaping, etc. This is, of course, in line with any arrangements the property manager has agreed upon with the owner.
It is possible for a property manager to handle multiple properties and interface with several owners. Services offered may also differ depending on the type of property and what was initially agreed upon with the owner. For example, in the case of vacation homes, which are only periodically occupied, greater security measures may have to be employed by the property manager. The property manager must also be certain that everything is in place and ready whenever the owner comes over for vacation.
There are also cases when the property manager is tasked to handle a commercial property, wherein one of the requirements is to operate the business (if the manager is qualified) as well as managing the property itself.
For a property manager to be effective, he or she must be able to maintain a good relationship not only with the owner of the property but also the tenants. This should be done on top of the core duty of maintaining, beautifying and keeping in order the real estate property.
With the right property manager, owners can rest assured that their properties are in good hands and tenants can enjoy the satisfaction of living in a secure, well-maintained and beautiful home.
Tenant Duties and Landlord Remedies
If you are considering renting an apartment from a landlord or condominium owner or if you are thinking about leasing your property for rent, it is important that you know both the law and the legal instruments that govern landlord tenant relationships in the Commonwealth of Virginia.
Leases:
First, consider the lease. A lease is the contract that governs a landlord-tenant relationship. In contrast, covenants within a lease are generally independent of the lease itself, where if one party breaches a covenant, the other party may still recover dam¬ages but cannot terminate the landlord-tenant relationship in its entirety. Although not covered herein, the doctrines of actual and constructive eviction and the implied warranty of habitability are exceptions to this general rule. In addition, many states including Virginia have created a statutory exception to this general rule which does allow, however, a landlord to terminate a lease for any nonpayment of rent. Below is a brief discussion of a tenant’s duty regarding the doctrine of waste and other considerations including ordinary wear and tear as they may or may not be contemplated in any given leasehold agreement.
Tenant’s Duty to Repair and the Doctrine of Waste:
A tenant has a duty not to damage (or commit waste on) a leased premises. There are three rules governing waste in a leasehold context, all of which a Landlord may recover for from the tenant in the form of damages should the tenant breach.
1) Voluntary (affirmative) waste results when the tenant intentionally or negligently damages the premises or exploits minerals on the property.
2) Permissive waste occurs when the tenant fails to take reasonable steps to protect the premises from damage from the elements. The tenant is liable for all ordinary repairs, excluding ordinary wear and tear. If the duty is shifted to the landlord (by lease or statute), the tenant has a duty to report deficiencies promptly, and the tenant can assume liability for such deficiencies if not reported in a timely manner pursuant to the lease agreement.
3) Ameliorative waste occurs when the tenant alters the leased property, thereby increasing its value. Generally, the tenant is liable for the cost of restoration. There is a modern exception to this rule, however, which permits a tenant to make this type of change if he is a long-term tenant and the change reflects changes in the neighborhood.
Finally, remember that in the absence of a specific reference to ordinary wear and tear, most repair covenants frequently exclude ordinary wear and tear whereby a Landlord usually remains obligated for certain structural and casualty destruction repairs except for damages caused by the tenant.
VA Property Managers and Real Estate Agents * Chip Dicks’s to UPDATE VRLTA!!!
Wallace S. Gibson, CPM * GIBSON MANAGEMENT GROUP, Ltd.
View our available rental homes online with photos and floor plans
“…to be a Virginian, either by Birth, Marriage, Adoption, or even on one’s Mother’s side, is an Introduction to any State in the Union, a Passport to any Foreign Country, and a Benediction from the Almighty God….” Anonymous
What if the tenant won’t sign the lease?
Pool
At Condo Alexandria we use the standard deed of lease as written by the Northern Virginia Association of Realtors. There’s not much in there that would surprise a tenant. It’s pretty straight-forward: if you pay you stay.
Every now so often we encounter a tenant who won’t sign the lease or who wants to renegotiate the terms of the lease. When this happens our policy is pretty simple: we go on to the next qualified tenant. Life’s much to short to deal with problem people. Problem tenants at the outset are invariably problem tenants later on.
When the rent check bounces …
At Condo Alexandria, we take very seriously our duties at property managers. One thing we do NOT play around with is rent checks. When a rent check bounces, we go into action taking the following actions as our discretion dictates:
- We hand deliver a letter and notice stating the check has bounced which includes a photocopy of the bounced check front and back. That notice includes a 3 day “pay or quit” notice.
- We give the tenant 72 hours to cover the check. The tenant must also pay all bank fee’s which we have been charged. Our notice makes clear that if the bad check is not covered within the time allotted, we will turn it over to the commonwealth attorney for prosecution.
- Payment must be make with either a money order or a cashier’s check. Cash or checks are not accepted.
- Condo Alexandria demand the payment be made personally. We will accept shipment only where a tracking number can verify where and when the check was sent and where it will arrive.
If the funds are not delivered in time, we take action immediately. We’ve been doing this too long and heard too many stories to let the matter linger. We can always call off an eviction, but we can never recoup lost days. We also inform the tenant that once the attorney is involved, the tenant will be responsible for those fees as well.
Will Nesbitt
Will Nesbitt is the Principal Broker of Condo Alexandria
Being a Landlord Can Be Increasingly Profitable
Despite falling rents and rising vacancies, the profitability of residential rental property is improving.
Investments in apartment complexes are generating annual returns of 7-8 percent immediately because purchase prices have declined.
Buying a rental property isn’t for everyone. It requires putting down at least 50 percent in cash because banks are reluctant to lend more. And buyers need to be able to hold the property for at least three to five years or more to give the investment time to gain value.
Local Market Monitor, which analyzes real estate investments, identifies these good and not-so-good markets for landlords:
Good Markets
- Columbus, Ohio
Olympus at Landmark
- Washington, D.C.
- Raleigh, N.C.
- Greenville, S.C.
- Columbia, S.C.
- Kansas City, Mo.
- Oklahoma City, Okla.
- Fort Worth, Texas
- El Paso, Texas
Bad Markets
- Detroit
- Cleveland
- Wilmington, Del.
- Dayton, Ohio
- Orlando
- Tampa-St. Petersburg
- Boise, Idaho
- Stockton, Calif.
- Las Vegas
- Phoenix
Source: The Wall Street Journal, M.P. McQueen (02/20/2010)
