We are often asked, “how long a lease should I have with my tenant?”. Some owners want a month-to-month because they can have possession of their property with a only a 30-day (if they have been there less than 12 months) or 60-day (more than 1 year) notice. Others think a 2 or 3 year contract is best because they don’t have to worry about a renewal or finding another tenant in a year. Here is our policy (even though everything is negotiable): we prefer contracts that are 9 to 15 months in length that expire February through September.
Proposition 64 legalized the recreational use of marijuana. As of January 1, 2017, people 21 years of age and older may possess, process, transport, purchase, obtain or give away up to 28.5 grams of non-concentrated cannabis. They may also plant, cultivate, harvest and process up to 6 living plants. Even though people have the right to store cannabis within their personal property, you as the owner has the right to prohibit the use, cultivation or possession in your rental unit.
As a matter of company policy, we run a criminal background check on all applicants. Once we have done due diligence on an applicant, we ask they either provide a criminal background check or pay for one through our website, so we can include this in our decision making. What type of criminal activity would raise a red flag and give us cause for concern?
When we execute a contract for our owners, we still leave their email information for the tenant to have, but we never provide their mailing address or their phone number. This is done intentionally. Owners hire us to be the buffer with their tenants and handle the day to day management. It would be tempting for tenants to go directly to owners with pleas of mercy if they can’t make the lease payment for that month, or requests of improvements to the unit which the owner is not obligated to make. They hire us, and pay us, to manage their property and free them from this worry. So why do we leave their email address?
Generally, self-managing owners keep the rent for their rental properties below market rents. The reason is either intentional, the owner keeps the rent low to retain the tenants, or unintentional, the owner is either friends with the tenant, or intimidated by them, and does not even try to keep up with market rents. If you don’t raise your rents to keep pace with the market, we find it has 2 consequences: the cost of goods and services increases, and you lose money; or the tenant gets used a fixed rent, and balks when you, or your property management company, finally increases the rent to the market value.
If you are looking for professional property management you may have experienced the confusing world of property management pricing. Unlike real estate, no two companies charge the same fees in the same manner. It can be time consuming and frustrating just to learn the facts about the fees. Why is that? The simple answer is, “It shouldn’t be that way.”, but I do have some guesses why it is:
Many owners want the tenant to obtain “renters insurance”. This type of insurance will generally insure two areas: the tenant’s personal property if it is stolen or destroyed, and provides liability insurance. Liability coverage protects a tenant if they are found legally responsible for injuries to other people or damage to the property. It may also cover for additional living expenses such as hotel bills and food should a tenant be unable to live in the property.
As you may be aware, a tenant is entitled to “normal wear and tear” or your rental. But the adjective “normal” can be problematic. What is normal to the tenant may be excessive to a property management company or owner. When deciding whether to deduct damages out of a tenant’s security deposit, here is what we consider:
It is difficult to make predictions because they are often wrong and if I knew what the future held I wouldn’t be typing this blog, I would be sipping mai tais poolside in Maui. But nothing ventured, nothing gained, so I will make some predictions for the coming year.
To most of the pundits’ surprise, Donald Trump won the presidential election and at least some of the policies and promises of his campaign will come to fruition. More importantly for California, the democrats have won a super majority in both the Assembly and Senate (along with holding the Governorship) and can pass any tax or ballot proposition without a single republican vote. What does this election mean for real estate and property management?