The eviction moratorium yo-yo continues, but there is a bigger concern the media fails to mention. July home sales in CT come up short of 2020 market. Is the real estate market finally cooling?
August 2021 Edition
Published by:
FEATURED ARTICLES Page: News & Views From The Capitol - New Targeted Eviction Moratorium Impacts CT Landlords, Tenants
Realtor Report - July Home Sales In CT Come Up Short Of 2020 Market
Insurance Insights - Top 5 Tips For Buying Renters Insurance
Property Managements Tools, Tips & Techniques - Top 10 Fall Maintenance Tips For Landlords and Property Managers
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Page: Financially Speaking - Eight Landlord Tips To Save Money This Year
Get Energy Efficient - 10 Ways To Make Your Rental Property Energy Efficient
The Legal Corner - 10 Tips for Landlords and Rental Property Owners
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Publisher’s Message
“Helping Property Owners Since 1994” - Bob De Cosmo, President
The Eviction Moratorium Yo-Yo Continues.. but there is bigger concern the media fails to mention! It’s on, it’s extended, it’s expired, it’s over, it’s back on again, it’s heading to Court, it’s legal, it’s unconstitutional. There is one thing for sure, the moratorium has been confusing and controversial.
Bob DeCosmo began purchasing and managing rental real estate in 1982 and is a strong advocate for private property ownership right's in Connecticut.
Published by CTPOA Our goals; Educate our members on “Best Practices” for maximum efficiency. Increase profitability by lowering operating expenses via vendor discounts. Provide access to “Core Services” needed to better manage and maintain properties.
Our Team: Carmine DeCosmo Melissa DeCosmo Paul Jenney
At CTPOA we have a growing concern that there are many victims of the moratorium that hardly draw a mention in the media and they are; local mom and pop landlords losing their property. We’re hearing many are behind on their mortgages and some have tenants that will fail to qualify for the eviction prevention funds for a variety of reasons and others that simply stopped paying rent because they couldn’t be evicted. Yes, some owners may have been granted deferred mortgage payments, but not deferments for taxes, insurance, utilities, site-maintenance and repairs. These operating expenditures without any income for an extended period can quickly bury a small landlord. Trying to outlast the moratorium has caused many owners to extend their credit to the limit and exhaust personal savings while being forced to house non-paying tenants without any avenue for relief.
The Federal government provided funding to help people stay in their homes, but some delinquent tenants will fail to qualify for the program. In Connecticut the Department of Housing created the UniteCT Program and that is now a big asset to the rental housing community. We at CTPOA have been hosting webinars on this relief package as we need those program dollars on the street. Most larger landlords have been minimally impacted by Covid as they screen tenant applicants, verify references, verify employment and don’t just hand over the keys - they run their properties as a business. For the newer owners, those that are less sophisticated, or even just very compassionate and don’t run background checks, if they didn’t follow the best business practices when renting their apartments; they have gotten hurt badly. CTPOA suggest that the housing community begin advocating for financial help for local mom and pop owners that could be forced to sell their units once the FORECLOSURE MORATORIUM expires. We know there is help for owner-occupied multi-family owners, but we really don’t like the thought of trading local property ownership for out-of-state investors. We like to suggest to the Lamont administration to establish a program to keep local control of our small multi’s in the hands of those that live in the community. Local property owners are the backbone of our neighborhoods. With the courts closed and an eviction moratorium in place, they were unable to help themselves as their only recourse; evictions to a non-paying tenant taken away. 4
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New Targeted Eviction Moratorium Impacts CT Landlords, Tenants From: wfsb.com
CONNECTICUT. (WFSB) - The new, targeted eviction moratorium requires tenants to meet certain requirements and file a declaration with their landlord. Michael Sullivan is a landlord in East Hartford. "I’m in debt to the tune of $34,000 in back rent and it’s been 99 days," said Sullivan. He stated that he has been waiting for rental assistance through the state's Unite CT program, which assists tenants and landlords with back rent. Sullivan said he thinks the targeted eviction moratorium could be another hurdle for landlords who are trying to recover. The CDC extended the moratorium to counties where the risk of COVID transmission is substantial or higher. Mass evictions could exacerbate transmission.
Another landlord, David Haberfeld, stated he hopes the governor does not reinstate the state moratorium. "When the governor did not extend the Connecticut moratorium, I think landlords were pleasantly surprised and I hope he continues to stay on that path." He continued, stating he believes the money lost from the moratorium will never be paid back. The CDC order states that someone that filed a declaration under a previous order does not need to file a new one. 8
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July Home Sales In CT Come Up Short Of 2020 Market From: ctpost.com
A historic run on Connecticut real estate could be at an end, after July sales sank 11 percent from boommarket totals of a year ago, when New York City owners and renters sought an exit during the COVID-19 pandemic.
from the equivalent home sold in the first seven months of 2020.
Sales maintained momentum in pockets of Fairfield County, led by Greenwich where sales were up twothirds from July 2020 to more than 160 units sold. It was a record total for any About 5,200 homes statewide sold in July, according to Berkshire Hathaway month according to Mark Pruner, a Berkshire Hathaway agent in HomeServices New England Greenwich who tracks the market on Properties, which did not record an increase in any one Connecticut county his Greenwich Streets blog. Pruner said many buyers expect to have to go into compared to a year ago. Home sales remain up 20 percent on the year with the office on an intermittent basis only for the duration of the pandemic — and 30,200 units changing hands. perhaps longer, with the rapid adoption The pandemic gave many Connecticut of online conferencing. homeowners an opportunity to cash “What really drove things in 2020 was out after years of listings in their tiny apartments with people in them neighborhoods failing to command pricing power. But the rapid escalation 24/7 in New York City ... with no backyard and no ability to get out,” in prices squeezed out many buyers Pruner said. “What really drove sales ready to move in the spring and (this spring) was this whole work-life summer of last year, only to see their balance, which is a once-in-a-century offers fall short of competing bids. change. ... The question is, how is that Connecticut’s median-priced home this going to play out in the next couple of year sold for $317,500, up 17.6 percent months? Have the people who wanted to move done so, or do we have a
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bigger wave coming?” The COVID-19 delta variant remains the wild card, with its rapid spread possibly nudging people off the fence who had felt initial confidence in the protection of available vaccines. Stamford led the state with more than 200 units sold in July, up nearly 30 percent, with New Canaan seeing a 25 percent gain.
far more limited selection of houses for buyers to consider. Sales were down slightly in Bridgeport, Danbury and Norwalk from July 2020. Most New Haven County towns saw sales flatten or decline, with the exception of the city of New Haven where transactions were up 17 percent from a year ago. Paul Breunich, CEO of William Pitt Sotheby’s International Realty based in Stamford, said he believes there are still many buyers that have been waiting for listing prices to flatten or decline before taking up the search anew. He said July’s sales figures remain elevated in the context of summer months prior to 2020, indicating sustained interest in Connecticut real estate.
“When inventory comes on, it’s being But with mammoth gains in sales the sold,” Breunich said. “The demand is norm statewide for much of the past still very strong — there’s no question in year, those municipalities are now the my mind. It’s not as strong as it was outliers. Only in Monroe and Darien did last July which is understandable, but sales increase from July 2020, and only it’s still at historical levels.” barely in the case of the latter town. In Westport, where many lightning deals got done in the early days of the pandemic, sales were off 31 percent. In its own monthly report, William Pitt Sotheby’s International Realty noted that Fairfield County sales were still 7 percent higher than in July 2019, with
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Top 5 Tips For Buying Renters Insurance From: smartasset.com Thanks to tighter lending restrictions and rising home prices, more people than ever are choosing to rent rather than buy. According to the National Multifamily Housing Council, renters account for more than one third of all U.S. households. Renting can be less expensive than buying since you’re not shelling out money for things like maintenance, repairs, property taxes or homeowner’s insurance. The downside is that if something happens to your rental property, your landlord isn’t responsible if your personal possessions are damaged or lost. Having renters insurance gives you the protection you need but there are a few things you to keep in mind when buying a policy.
1. Choose the Right Coverage Amount Renters insurance is designed to cover the cost of replacing your belongings in the event of an accident, theft or natural disaster. According to State Farm, the average renter has over $35,000 worth of belongings but the amount of coverage you’ll actually need depends on several factors.
idea of what you need. Make note of what the item is, when you bought, what you paid for it and how much you think it’s worth now. Once you’re done adding it all up you should have a good estimate of how much coverage to get. Keep in mind that renters insurance doesn’t just cover your personal property. Your policy should also include liability coverage, which protects you if someone is injured or their property is damaged while they’re at your home. The limits range from $100,000 to $500,000 so you’ll have to decide what amount of coverage you’re comfortable with.
2. Know What Isn’t Covered Generally, renters insurance covers a wide range of circumstances but there are certain situations where you may be out of luck if you need to file a claim. Some policies, for instance, don’t include coverage for damage caused by earthquakes or floods.
You may have the option of purchasing a separate policy to cover these events, depending on your insurer. When you’re shopping around for quotes, be sure to ask for When you’re trying to decide on a policy a complete explanation of what is and isn’t amount, creating a complete inventory of your covered before making your final choice. possessions can give you a more accurate
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3. Understand the Different Coverage Types When you’re buying renters insurance, you need to decide whether to get an Actual Cash Value policy or a Replacement Value policy. An Actual Cash Value policy takes into account things like depreciation and everyday use when determining the value of damaged property. Your premiums are usually much lower with this type of policy but you won’t get as much bang for your buck if you need to file a claim. With a Replacement Value policy, depreciation and wear and tear aren’t a factor in determining an item’s worth. The insurance company pays the claim based on what it would cost you to buy a similar item at current market value. You’ll pay more for this type of policy but it may be worth it if you have something pricey that needs to be replaced.
could save anywhere from 10 to 20 percent off the cost if your insurer offers a discount for bundling services.
5. Opt for a Higher Deductible A deductible is the amount you have to pay out-of-pocket before your insurance company picks up the tab. Depending on your insurance company, deductible options for a renters policy may range anywhere from $200 to $1000. It may be tempting to go with a lower deductible since you won’t have to fork over as much cash when you file a claim but it’s not always the right move. Choosing a higher deductible means that you’ll have to pay more upfront if something happens to your stuff but your monthly premiums will be lower. In the long run, the money you save on premiums could be enough to offset the expense if you do end up having to file a claim. Just make sure you have $1,000 in an emergency fund in case you need it for a deductible.
4. Bundle Your Renters Insurance Policy Bundling your renters insurance with your other insurance policies can be an easy way to save on the cost of coverage. Check with your car insurance company to see if they offer renters insurance and what the rates are. You
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Top 10 Fall Maintenance Tips For Landlords and Property Managers From: apartments.com In many parts of the country, when temperatures cool and the leaves start to fall, deep freezes and piles of snow aren’t far behind. To prepare for winter’s annual assault on roofs, siding, and walkways, do these 10 fall maintenance tasks to get your rental property ready, and ensure your tenants stay warm, dry, and happy.
1. Clean the roof and gutters Gutter cleaning may not be a fun job, but it’s something you need to do every year. While you’re at it, use a rake and leaf blower to get the leaves off the roof. Clogged gutters and piles of leaves and twigs in roof valleys are the main reasons ice dams and icicles form. Besides creating extra weight for the roof to support, these freezing weather hazards eventually melt to form pools of standing water that cause leaks. Consider getting gutter guards, but choose wisely. Installing gutter guards can keep out leaves and debris, but be wary of wire mesh guards. They may keep out large debris, but the pine needles and small leaves they allow to pass can block water flow. Mesh guards prevent you from reaching into the gutters, which complicates the task of cleaning. Alternatives include micromesh guards, which keep out pine needles and even shingle grit, and hinged guards that you can lift out of the way when cleaning.
2. Trim overhanging branches Ice storms happen, and iced-over branches that overhang the roof can snap off and damage the roof. Even if that doesn’t occur, overhanging branches are sources of roof debris that can cause ice dams, and they provide a bridge for rats, squirrels, ants, and other 14
pests onto the roof and into the attic. Getting rid of them is an important part of fall maintenance. Branches that can potentially interfere with power lines should be the first to go. Working around power lines is hazardous, so this is probably a job for a pro. While you’re cleaning up the branches, don’t forget to prune back ivy and other creeping vines that have reached roof height.
3. Rake the leaves Autumn wouldn’t be as beautiful without falling leaves, and raking them up is a fall maintenance job that every property owner should do. If you haven’t already assigned this job to your renters in the lease, you might want to offer them a nominal rent reduction so you won’t need to do it yourself. You might also consider hiring a landscaping contractor or a local teenage entrepreneur. Removing and properly disposing of leaves protects the lawn and garden, prevents slipping hazards when the rains start, and keeps the homeowner’s association and neighbors happy.
4. Check weatherstripping and insulation Drafts coming through unsealed doors and windows drive up the heating bill and can make tenants uncomfortable and even unhealthy. Foam weatherstripping lasts from five to 10 years, depending on quality, and should be replaced when it cracks or shrinks. The best time to do this is in the fall, after the days of harsh, foam-degrading summer sunlight are over and before the cold winds blow. You can control drafts coming through window and door casings by removing the casings and spraying foam insulation in the gap between the window or door frame and the studs. It will probably take a pro about a day to do this to all the doors and windows. If you pay the heating bills, you’ll recover the expense by saving 10 to 15 percent in energy costs over the course of the winter.
5. Clean or replace HVAC filters Cleaning and replacing HVAC filters is a routine task that you should do every year, and ideally it should be part of your fall maintenance regimen. Central heating systems work 24/7 during the cold months, and they run more efficiently when the filters are clean. Replace all the return air filters as well as any filters on the heater housing itself. 15
6. Patch holes Small animals see your basement, attic, and the insulation in your walls as refuges from the cold winter winds. Some critters can get in through holes as small as 1/4 inch in diameter. Patch smaller holes with caulk or foam spray, and use wire mesh, sheet metal, or plywood to cover the larger ones. Be sure to check the attic vents for holes or frayed edges. Do you have rot in the eaves or foundation? Dig it out and fill it with epoxy filler to prevent rodents from eating their way into your property.
7. Drain exterior faucets Burst pipes are a perennial winter hazard, and they often occur in pipes feeding hose bibs on the side of the house or in the garden. Prevent burst pipes by turning off the valve to these faucets, then opening each one to allow water to drain out. It’s a good idea to leave the faucets slightly open to ensure that any ice that does happen to form in the pipes has room to expand.
8. Turn off and drain the sprinkler system Most sprinkler systems have a drain valve located at the lowest point in the system; if you can’t find this valve, you may need to get one installed. To use this valve effectively, you first need to turn off the main water supply, then open the valve for each zone while the drain valve is open. This allows the water backed up behind each 16
zone valve to flow out through the drain.
9. Check and clean the chimney If your property has a wood stove or a fireplace, yearly chimney maintenance is a must. Creosote builds up quickly. Not many landlords or property managers are equipped with chimney cleaning equipment, so this is another job for a pro. Don’t forget to check the damper and clean the spark arrestor.
10. Do a fall maintenance safety inspection Loose decking boards and rotted stair treads are irritating in the summer, but they become hazardous in the winter when buried in ice and snow. When you’re replacing popped nails or rotted boards, pay special attention to the railings, especially on outdoor staircases. You want to make sure they can support someone who loses their footing. Applying a non-slip coating to the treads may prevent that slip from occurring in the first place. Preparing your rental for winter protects your investment and minimizes the chances of getting emergency calls in the dead of winter. It reduces the chances of an accident on your property. You’ll sleep better at night, and so will your renters.
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Eight Landlord Tips To Save Money This Year From: forbes.com No matter what your goals are in 2020 personally or as an independent landlord, a few DIY tips and hacks can help your rental properties and business save money this year. You should always look for ways to maximize your profitability, and to get the best ROI on your property investment, you need to be sure to invest in trustworthy and reliable tenants, organization and education. Starting these habits in the first quarter of the year will allow you to look back at the end and see the progress and dollars saved. Without further ado, here are my top eight tips landlords can use to save money:
1. Screen your tenants.
This cannot be stressed enough — protecting your properties, and therefore saving money in the future, starts with finding the right tenant. You don't want to cut corners on the screening process because it can cost you in the long run with evictions, vacancies and damage to your property. Make sure you've checked the applicant's credit history, criminal background and eviction history to know who will be living in your properties.
2. Always fill out condition reports.
Filling out condition reports when a tenant moves in and moves out will ensure you know the full status of your rental property before and after their time there. Schedule walk-throughs with your new tenants and even complete the condition report with them present so there are no surprises at move-out. The reports and walk-throughs will help you back up any security deposit deductions.
3. Keep up with small maintenance.
Small maintenance tasks should be taken care of as soon as possible to maintain safety in rental properties and protect you from liability. It will also save you from things turning into more significant, more expensive problems later on. For example, fixing loose gutters, broken or falling tree branches, stains in the carpet or loose drawers are all easy fixes to help.
4. Conduct routine inspections of the property.
Conducting routine inspections of your rental property enables you to keep up on small issues or things that need to be fixed. You can also see how your tenant is treating your property and if they are violating anything in the lease. You don't want to be overbearing, so inspections every six months are recommended.
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5. Include landscaping costs in rent.
This is especially important for houses as landscaping is a part of the whole package to help fill vacancies. Don't leave the landscaping to the tenants who might neglect the yard, but instead, build the costs for landscaping into the rent to either hire professional help or complete tasks like mowing or gardening on your own.
6. Know your tax advantages.
With tax season rolling around soon, don't miss out on any of the deductions for landlords. When you maximize the deductions you qualify for, you can increase profits for the year and ease your tax burden. Stay educated on what you qualify for and make sure you know how to handle your taxes and rental properties properly.
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8. Utilize technology.
Technology can be your best friend as a landlord. It will keep you more organized and help streamline your rental process. Having piles of paperwork that include applications, forms and leases can cost money and be a liability if there is sensitive information on certain documents. Marketing costs, such as flyers, can also be a hassle, so moving the entire process online will save you time and money while also making your life easier.
It's never too late or too early to adopt a Extended leases are an excellent option for saving mentality. By incorporating any or all reducing turnover. If you screen your tenants of these tips, your landlord business will beforehand, you will have no problem finding thrive in no time. and keeping the perfect one for your property, and once you do, extending the lease is a great way to keep them in your rental and reduce turnover costs.
Consider extended leases.
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From: walkerreid.com Concern for the environment and sustainability have become commonplace these days. While it seems that homeowners have the advantage when it comes to “going green,” there are things that landlords can do too. It’s true that you don’t want to spend much on a rental property, but you can help to improve your building’s overall energy efficiency.
1. Install A Programmable Thermostat Finding a sustainable rental property to live in is difficult. However, one of the best ways to allow tenants to save on their energy consumption is to install a programmable thermostat. The heating and cooling costs are the biggest energy hogs in a unit. You should know that Walker filtration are a quality brand to consider. Programmable thermostats are under $50 and can really save energy. With these thermostats, your tenant can: 1. Reduce Monthly Bills 2. Turn the Unit on and Off When No One Is Home 3. Reduce Energy Consumption 4. Reduce Carbon Footprint
2. Seal Outlets and Switches The insulation in your walls protects from the elements. However, when a light switch or outlet is installed, the insulation must be removed from that section. If you feel any air coming through your outlets or switches, then you need to put gaskets behind them to shield you from the air. This will prevent any unnecessary heat loss or air infiltration. Installing these gaskets will: 1. Stop Air Leaks 2. Prevent Air Infiltration 3. Reduce Energy Costs 20
3. Caulk and Seal Windows and Doors If you are getting your home renovated then getting your Velux ball bearing windows repaired can be your best bet at getting optimum service for reasonable price, but if you just have a small gap issue then Caulking is one of the best materials you can get for energy efficiency, and it also has an inexpensive price tag. If you own an older apartment building or a rental home, then you probably have old or missing caulking around your windows. You may even be missing a windowpane. Air leaks through these older-style windows with ease. It’s common to find air leaks in the sashes, door panels, and window frames. Putting up plastic sheets may help during the winter, but they are unattractive and make the windows unusable. Rather, you can seal off those cracks with caulking. Caulking has many benefits, including: 1. Raising the Unit’s Temperature by Stopping Drafts 2. Stopping Air Leaks from Windows, Doors, and Sashes 3. Can Even Seal and Prevent Water Damage Around Tubs and Sinks Too
4. Pull the Plug on Phantom Energy Charges Is your building an energy hog? Do you have computers, tablets, televisions, and other small appliances going all the time? You need to use a power strip. These strips will help to turn off phantom energy. When your electronics are not in use, they can still pull current. Basically, you are paying for electricity you are not using. The best way to stop paying for unused electric is to buy a smart energy strip. They are very inexpensive, but they will pay for themselves in no time. A power strip can: 1. Protect Your Electronics from Power Surges/Lightning 2. Reduce Your Electric Bill by Removing Phantom Charges 3. Reduce Overall Consumption Costs
5. Change the Hot Water Heater Settings A sustainable rental property will have a tankless unit. However, most properties have traditional water heaters. The hot water heater is a huge energy hog. Have you ever experienced scalding hot water coming out of the tap? There are a couple of things to consider on a water heater. First, you need to check the temperature setting. The default setting for these heaters is 140 degrees. However, you can safely turn it down to 120 degrees to save energy. You cannot set your tank below 110 degrees, or bacteria can grow. Even at 120 degrees, some say the water feels more tepid than hot. An older tank may not be well insulated, and it may have problems keeping an ideal temperature. An insulating jacket is a great way to reduce costs and help keep the unit toasty warm. Hot water temperature reduction can: 1. Reduce Electricity or Gas Utility Bills 2. Reduce Risk of Scalding Children or Elderly 3. Save Big Money Over the Course of a Year
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6. Replacing the Furnace Filter A furnace filter should be changed between one and three months. Each unit has different specifications. Also, the filter type used can make a big difference in the frequency of changing needed. A clean filter will help ensure that there is clean air moving through the home, and it will also ensure that the furnace is running efficiently. A filter is inexpensive to purchase, and anybody can change it. A fresh furnace filter will: 1. Ensure That Clean Air Is Being Distributed Throughout the Home 2. Keep the HVAC Unit Running at Optimal Levels 3. Will Reduce Utility Costs by Allowing the HVAC Unit to Run More Efficiently
7. Switch to Energy-Efficient Bulbs One thing you will always see in an energy-efficient building is LED or CFL light bulbs. The prices have significantly dropped to make them affordable for everyone. Though the costs may be a bit higher up front, you will reap the savings all year long. You don’t have to replace them all at once; rather, just change the bulbs to the new type one at a time as they burn out. The light bulb wars have a clear winner, and the energy-efficient bulbs are the smart choice. These energy-saving bulbs will: 1. Last Significantly Longer Than Traditional Bulbs 2. Reduce Electric Bills 3. Give You Peace of Mind Knowing That You’re Reducing Your Carbon Footprint
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8. Use Window Shades If you think that blinds and curtains are all about décor, you are missing out on one important feature. These shields help to protect from heat loss and gain. Heavy curtains are great in the winter. They will stop heat loss through the windows. In the summer months, they will help to shield the heat from getting inside. The blinds are not just for privacy. They, too, work with the curtains to help keep the elements at bay. The sun can do a great deal of damage over time and according to Impressive Knoxville Carpet Cleaning Experts it can bleach out carpeting and floors as well as raising the temperature of a room. Blinds and curtains can: 1. Shield the Home from the Sun 2. Keep the Home’s Temperature More Stable 3. Reduce Glare in the Home
9. Purchase A Humidifier A humidifier keeps your apartment building’s humidity levels constant. There is an assortment of different humidifiers. Not only is a humidifier good in the winter months, it is also good for your health. Because they keep the temperature feeling warmer than dry air, this means you can turn your thermostat down and save even more money. Some HVAC units have a built-in humidifier. If you are not lucky enough to have one of the newer units with this attachment, you can add a portable one for a great price. A humidifier can: 1. Lower the Heat Setting on Your HVAC Unit 2. Add Humidity to the Air and Improve Health 3. Make the Ambient Air Temperature Feel Warmer
10. Clean Refrigerator Coils Most landlords don’t put top-of-the-line appliances in rentals. However, you can tweak the units you have for better savings. The coils on the back of the fridge can get corroded with dust and debris. The refrigerator is one of the biggest energy hogs in a home. Cleaning these coils will help a great deal. Cleaning your coils will: 1. Reduce Energy Consumption Used by the Refrigerator 2. Allow the Unit to Operate More Quietly 3. Extend the Longevity of the Unit
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10 Tips for Landlords and Rental Property Owners From: allbusiness.com
Rental property can be a great investment, but can also be a disaster if your knowledge of the process is inadequate. Follow these tips in order to turn a good profit.
1. Acquire smart investment properties The first piece of advice for success in real estate investment is choosing the right properties. Which will attract the best tenants? Multi-family units are efficient to manage, but single family homes may attract more stable renters. A good real estate professional will help you sort through neighborhood data, search for appropriate properties, and calculate return on potential investments.
2. Make sure you understand landlord-tenant law Study landlord-tenant law in your state and follow it to the letter. You will find it online or through your state’s real estate commission. Landlord-tenant law covers issues such as maintenance, notice, security deposits, and eviction procedures. Likewise, become familiar with federal and state fair housing regulations for landlords. Establish documented, fair procedures for dealing with tenants so that you won’t be accused of discriminating on the basis of race, color, religion, sex, disability, familial status, national origin, or any other status protected in your state. Fines for federal fair housing violations can run up to $10,000, with incarceration up to 10 years. Federal laws apply to all landlords except those renting units in a property they occupy themselves, as long as that property contains no more than four units.
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Federal legislation also mandates that landlords provide information and disclosures regarding lead-based paint for tenants renting properties built prior to 1978. Penalties for noncompliance are hefty. You will find details and forms online at the HUD housing website.
3. Screen your tenants Require potential tenants to provide copies of their credit reports and search state court databases for charges that may have been brought against them. You may also find fee-based local services that will do this screening for you. You don’t have to accept the first tenant who applies. Take applications until a certain date and then use an objective scoring system to determine the best applicant. Maintain records of your screening procedures. If you set rents at or slightly under market, you will attract more applicants, and with a bigger pool you will be more likely to find good tenants.
4. Get everything in writing Oral lease agreements of less than a year may be legally valid, but they’re not a wise idea. For each tenant, you should have a completed application, including references, employers, contact information, and nearest relative. You should also have a signed agreement spelling out the terms of the lease. Many landlords prefer month-to-month arrangements because giving notice is easier than with a periodic lease. At the time of occupancy, complete a written property inventory. Include a list of appliances and other removable items as well as notes on the condition of walls, floors, doors, windows, and such. It’s a good idea to have your attorney review the forms you plan to use.
5. Be fair (but firm) with your tenants Keeping good tenants minimizes problems. Keep your properties in good condition and perform regular maintenance. Respond to tenant complaints and concerns in a timely and fair manner. When tenant-initiated problems arise, talk with your renters about the legal consequences of their actions. For instance, if the rent is late, remind them of the late fee and advise them that if it’s not paid by a given date, you will be giving a written eviction notice per state law. Follow up with a letter summarizing what you’ve said.
6. Be sensible about property improvements Keep properties clean, comfortable, light, and bright. A good rule of thumb is to maintain properties to the standard you would expect for your own family. Survey properties for potential hazards like missing guardrails and unsafe dryer venting. Replace flooring and paint when needed, but don’t overimprove.
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7. Budget for problems Rental properties require more of your involvement than other investments. As you acquire properties, make sure you have enough time and money set aside to deal with potential problems like vacancies, maintenance, and damage. Depending on vacancy rates in your area, you may need to reserve up to 25% of rents to deal with these issues.
8. Follow your instincts If you have concerns about a tenant, give notice (subject to applicable law). Don’t allow fear of vacancies to impact your decision.
Don’t let potential tenants talk you into unreasonable terms like stretching a deposit over several months or holding a unit for more than a week or two without payment.
9. Distinguish fact from fiction Don’t manage your rentals based on information you have picked up from potentially uninformed sources; there’s plenty of misinformation out there. For instance, landlords can’t technically evict tenants. Eviction is a legal process that can only be carried out by the proper authorities.
10. Protect your interests Consider umbrella insurance to cover damages from tenant lawsuits.
An investment analysis by a real estate professional will help you determine when return on a particular property begins to diminish, so you will know when it’s time to sell. Life circumstances sometimes force landlords out of the market. If you’ve maintained your property well and can show good cash flow, you should be able to sell even if the market is sluggish.
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me a CTPOA Member Visit: https://ctpoa.com/
cut Property Owners Alliance is composed property managers, REALTORS and landlords to improve the business conditions for rental property owners.
llow CTPOA: https://www.facebook.com/CTPOA/
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