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Investing in real estate is one of the best ways to grow your wealth, and one of the most lucrative investment strategies is investing in rental properties. However, while owning a rental property is a great way to earn extra income, being a landlord comes with its challenges.

The stress of being a landlord can be overwhelming if you have never owned a rental property before. Being a DIY landlord involves many responsibilities. As a new landlord, it’s important to create useful habits that can help you with your venture. 

The tips included in this blog can help you with your rental property business, as well as build habits that can make you a successful landlord.

Set a Budget for Renovation and Stick to It

Before you rent out your property, you must ensure it’s ready for occupancy. Often, you will need to renovate or improve the property so you can compete in the market. Home renovations and improvements are necessary if you want to increase the value of your investment asset and attract quality tenants.

However, many new property owners make the mistake of over-investing in their renovations. To meet your financial goals, it’s crucial to set a budget for renovations and stick to it. Only renovate what is needed, and make improvements that can add value to your property.

An example of a renovation to consider is changing your carpeted floors into hardwood. Hardwood flooring is easier to clean and maintain. It’s also durable and won’t get stained or damaged easily. Investing in hardwood floors can be a big selling point, and you can justify a higher rental rate too.

Know the Landlord-Tenant Law in Your Area

You have to understand that there are legal rules involved with operating a rental business. Here are a few things that you should find out:

• Security deposit: Find out what is the maximum limit of security deposit you can charge is. Also, learn the allowable deductions and when you should return the security deposit after the tenant moves out.
• Lease termination: In some cases, tenants may be allowed to terminate the lease before the term ends without penalty. Find out the permitted reasons for early termination.
• Landlord responsibilities: Landlords are expected to provide a habitable dwelling place. To do this, landlords should address repairs within a reasonable timeframe and keep up with routine inspections.
• Eviction: Landlords have the right to evict tenants who violate the terms of the lease agreement. Find out the legal grounds for eviction and the right procedure for this.
• Fair Housing Act: This law prohibits landlords from discriminating against tenants on the basis of color, race, nationality, sex, religion, family status, and disability. Learn whether your local jurisdiction has additional protections for classes not mentioned.

Get Your Property Insured

Your rental property is not just your business—it’s your investment. You have to protect it by getting the right insurance. Aside from a regular homeowners insurance policy, you also need a landlord’s insurance to protect against damages, lost rental income, and liability. It’s also best to advise tenants to get renter’s insurance so their personal belongings are also protected.

Screen Tenants Thoroughly

Tenants are your customers, and they will be the major source of your income. That being said, you should not say yes to the first person who wants to rent your property. If you end up with a bad tenant, you’ll not only experience a high amount of stress but possibly monetary losses too.

Screening tenants properly before allowing them to sign a lease is crucial if you don’t want to deal with problematic renters. Check their past tenancies, as well as their financial capabilities, general background, and credit history.

Take Before and After Photos

Before you let a tenant move in, make sure to take photos of your rental property with detailed descriptions of its condition. Give a copy to your tenants so they can have a reference when maintaining and cleaning the property. 

At the end of tenancy, take photos of how the property. Any damage that is not part of normal wear and tear should be covered by the tenant’s security deposit. Having photos can help you with any complaints from tenants who refuse to pay for the damages they may have caused.

Prepare for Vacancies

You will experience vacancies from time to time. That is a normal part of owning a rental unit. When your rental is vacant, you won’t generate cash flows that can help you pay for your expenses. Make sure to prepare for vacancies and have available cash to cover the mortgage and other expenses that you need to pay, including insurance and taxes. 

You also want to establish a solid marketing plan to reduce vacancy periods and spread the word about your available units. 

Consider Hiring a Property Manager

As a first-time landlord, getting started with all these tasks can get too overwhelming. In fact, even seasoned rental property owners need help managing their rental investments. It’s recommended to work with a trusted professional property management company that is knowledgeable about the local rental market you are in.

Property managers will take care of your rentals, including marketing the property, screening tenants, responding to tenants’ requests, handling repairs and inspections, collecting rent, and preparing for taxes. 

Bottom Line

If you’re a first-time landlord, following the tips listed above can help your rental operation run more smoothly. You can also hire a property management company. Consider partnering with the team at Home Choice Property Management. 

With us as your property manager, you won’t need to worry about every small detail related to your rental business because you can rest assured that we’ve it all well taken care of. Contact us today to learn about our services! 

There are times when a tenant stays at a property after the official tenancy has concluded. These tenants are known as holdout tenants. Removing them from the property can be a delicate and complicated process. 

Keep reading to learn about holdout tenants and your options if you’re dealing with one that refuses to vacate after their contract runs out.

What Does Holdover Tenant Refer To?

Without the owner’s express permission to stay past their lease term, a tenant is considered a holdover. Normally, this tenant stays in the house, provided the owner doesn’t take any action. In the real estate industry, holdover tenants are a common problem, but due to modifications in legal requirements, addressing the issue can differ from state to state.

What’s more, tenants often have a legal right to stay in the rental until a landlord takes action to have them removed from the premises. 

How Does the Issue of a Holdover Tenant Arise?

You could wind up with lingering tenants if a lease expires without your tenants signing a new one or indicating their desire to move. If the tenant continues to pay rent during that time, the tenancy will effectively turn into a month-to-month agreement. Most tenants, however, appreciate this since it enables them to live in the housing despite not entering a formal lease.

In the absence of an ongoing agreement outlining the tenancy’s terms, tenants could easily pose complications.

Problems Associated with a Holdover Tenant

If you wish to have the tenant removed from the property, you need to consult with a local attorney or property management firm that has extensive knowledge of the state’s rental laws. This is because the standard eviction process may not always apply to holdover tenants. 

What’s more, because of the difficulties associated with removing such a tenant, you won’t have control over re-renting the property so filling vacancies and marketing could become challenging. In addition to this, planning for property maintenance or renovations could be a challenge with the holdover tenant residing in the rental. 

What to Do About a Holdover Tenant

Having a holdover tenant can make it difficult to know what to do. It’s essential to be conscious of every choice available to you as the property owner and respond quickly to prevent unwittingly placing yourself in a more difficult situation. Consider these three options if a tenant doesn’t depart after a lease:

 1. Let the Tenant Remain in the Rental

The first thing you may do is to let a tenant stay at the rental after their term has ended. Receiving their rent constitutes your agreement to their tenancy.

Because the implicit contract does not have a clear termination clause, this arrangement may be considered a periodic tenancy or month-to-month lease depending on the terms of your initial lease and local laws. If your previous lease lacked these clauses, it might be in your best interest to sign a new one rather than risk remaining in a precarious situation. Note that when doing this, you won’t be able to evict them on the basis of being a holdover tenant.

2. Remove the Holdover Tenant

If the tenant is still present, but you don’t want them to remain at the property, it’s time to think about a holdover tenant eviction. Under this type of eviction, this tenant is approached as a trespasser while the eviction process is completed.

However, as previously stated, it will be harder to carry out the eviction if you receive rent from tenants who dwell longer than you anticipate. In this case, issue a 30-day notice to vacate for nonpayment.

After that, you should carry out the eviction in conformity with the guidelines established by local and state authorities. If you are awarded a positive eviction ruling, the renters may be removed from your rented home.

3. Get the Lease Agreement Dissolved

Even if the lease or local laws allow for some stay, you should legally terminate the contract if the tenant is past the end of the lease term. In most states, you can accomplish this by providing notice equal to the interval between rent payments.

Following the receipt of the notice, the renter has a specific timeframe to leave the property. If they resist leaving after the tenancy has been properly canceled, you must petition for eviction to regain the property’s control.

Avoiding Holdover Tenants

You must provide your renter notice that the contract ends at least sixty days before the lease’s end date. Even better, when the expiration draws near, send them an additional notification to ensure they understand the terms of moving out.

If the tenant stays in the property after the completion of the lease period, don’t collect any rental income from them. Remember that after you receive rent, the tenancy changes to a month-to-month arrangement, and you cannot consider the tenant a trespasser making the removal process more complicated.

Closing Thoughts

The most common issue for most landlords dealing with a holdover tenant is that they are unaware of what to do. You may successfully deal with this issue if you ensure that your actions are rational and in compliance with the correct state and location regulations for holdout renters. That said, it may in your best interest to partner with a property management company.

At Home Choice Property Management, we strive to maximize the financial potential of our client’s investment properties. With over 10 years of property management expertise, Home Choice Property Management offers a wealth of knowledge for property owners in the area. Contact us today to learn more about our services!

Property owners constantly seek fresh and original approaches to attract prospective renters. Due to the internet, property owners now have a simpler way to market their properties.

In addition to using property photographs as a marketing strategy, you can also employ rental video tours.

When you create a video tour of your rental, you might increase the number of requests you receive from potential tenants. A property tour is a powerful tool for promoting real estate if you have both the high-quality tools and the know-how.

Here at Home Choice Property Management, we’ll share our best advice on how to use a video tour to highlight and advertise your property’s best aspects.

Pay Attention to the Lighting

The quality of your lighting is crucial for videos, just as it is for taking images. The video should ideally be shot in the late afternoon.

Keep in mind that the windows may let in powerful sun rays, which make your video appear overexposed. Consider drawing your shades a little bit closer if you happen to record the video during intense sunlight.

You should be mindful of backlighting in addition to sunlight. Backlighting will happen when you aim your camera straight at the light source. We recommend you film with the sun on your back rather than on your face for best results.

You should also make a few minor modifications to the video’s natural lighting. Additionally, avoid turning on the built-in light on your smartphone, as natural light provides an incomparable quality.

Have a Strategy in Mind

Every successful outcome begins with a strategy. Ensure you have a shot list, so you know what you want to film and in what order before you start recording anything. This will guarantee that your transitions from one region to the next are seamless and steady.

Planning your filming route should take a few things into account for the best outcomes. You should make sure that your property looks its finest to start with. So, before the filming, you might wish to stage your house.

Next, you should consider how appealing the exterior of your property is. You should ensure the home’s exterior is beautiful, as you’ll probably begin there.

Additionally, you should focus on the distinctive characteristics of your house. Write out the distinctive qualities of your property, and then make sure to include them in the video.

Make Sure the Area Is Tidy and Clean

Creating a video tour is not so different from showing or staging a house. When you show a house personally, you’ll make sure that the property is in its best condition possible. All grime or dirt should be scrubbed clean from your property. The same standards should apply when doing a video tour.

This applies to your exterior as well. A great video tour will also capture the curb appeal and landscaping on the front and back yards. If you don’t have the time, resources, or expertise, consider paying somebody to put in the work.

A clean and tidy home will make your property stand out and make it alluring to potential renters looking to move into the area.

Map Out the Ideal Route

You need to choose the path for the video tour before pulling out the camera. The video tour has the same function as a property display.

It must include a complete overview of the entire rental property as well as the surrounding area. The video should also provide a seamless and perfect viewing experience. Planning in great detail is necessary.

Walk through the entire property after opening all the doors. Consider that you are showing the unit to a prospective tenant while they are standing beside you. Normally, you would begin by entering from the outside.

Pick out the aspects of each area or place you want to emphasize for the prospect. Having a notebook on hand will make it easier to record these details.

Create an Impactful Title

What impression do you want your rental property to leave on your target audience? Your target audience should be taken into consideration when creating your titles. You might include the number of bedrooms your house has in the video title if your target audience is large families.

On the other hand, you can also include that precise information in the title of the video if the property is close to the business district and you want to draw in young professionals.

It is also wise to give the audience more significant information by including a brief description after the title.

Record an Intro and an Outro

To complete this how-to guide on video tours, note that your video may appear more polished, professional, and narrative-driven if it has both an intro and an outro. A few seconds should suffice. Keep them as brief as possible.

You can also include your website and professional email address information in the outro. Additionally, make use of your professional contact details to protect your privacy. You can use this to establish boundaries between your personal life and your rental business.

Remember to incorporate a call to action for both your intro and outro. This is to ensure that you provide them with information on how prospective renters can contact you if they’re interested.

Conclusion

It takes planning to create a fantastic video tour. Take your time to create a quality video and concentrate on making it straightforward and impactful. Instead of adding extra sequences, choose to cut.

Make the scenes brief and focus on the greatest elements that will make an impression on your target audience. However, if you don’t have the time or expertise to do so, consider hiring a professional property management business.

At Home Choice Property Management, we have over a decade of experience providing property management services. We’re a full-service property management firm committed to providing our customers with high-quality services. For more information about our services, get in touch with us today!

Have you just bought an investment property and are thinking of managing it on your own? This can be a very rewarding endeavor!

Keep in mind that managing a rental property is no small feat. From finding tenants and screening tenants to responding to maintenance complaints and dealing with tenant issues, managing a property can be stressful and time-consuming. That said, you can still manage it successfully if you implement the right strategies. In today’s article, we’ll share with you 7 mistakes to avoid as a new landlord. 

1. Not Requiring Tenants to Sign a Lease

This can be a grave mistake. A rental agreement is a legally binding contract between a landlord and a tenant. It highlights the rights and obligations each party has for the duration of the leasing period. It also outlines important policies that both parties must abide by.

Without having a written legal contract with your tenant, it’d be nearly impossible to enforce any rules. You’ll want to for instance include policies on rent collection and what happens if a payment is late or missed. Create a lease agreement that clearly states your expectations of the tenant. This will go a long way in minimizing potential conflicts and misunderstandings during the tenancy.

2. Not Inspecting the Property Periodically 

Even after finding a tenant, your property’s habitability is still your responsibility. While tenants have certain maintenance responsibilities including reporting issues, you, as the landlord, must ensure that the property meets building, health, and safety codes.

Routine rental inspections will help you know whether or not your property is in great shape. You’ll also know whether or not your tenant is caring for it as required in the lease agreement. What’s more, with frequent inspections you’ll be able to spot issues early before they become more costly. Keeping up with the property’s maintenance and inspections will result in significantly fewer calls and a happier tenant. 

3. Not Beginning the Marketing Process Early 

Vacancies are profit killers. Every day your property sits vacant, its money down the drain. As a savvy landlord, your goal should be to keep vacancy periods between tenants as minimal as possible. Usually, tenants must provide notice prior to moving out. In the state of California, for instance, month-to-month tenants must provide their landlords with a 30-day advance notice prior to moving out. 

Once your tenant serves you such a notice, begin making plans on how you’re going to find a replacement tenant. Create a rental ad and advertise it extensively. Then, begin the tenant screening process to choose a qualified long-term tenant. This will ensure you have an as little downtime as possible, thereby minimizing potential losses resulting from vacancies. 

4. Not Evicting a Tenant According to the Law

The California landlord-tenant law is clear on this matter. The only way to evict a tenant from your rental property is through a court order. 

You cannot try to evict a tenant in any other way, such as trying to remove them by:

• Shutting down their utilities 
• Locking them out 
• Removing their personal belongings from the unit 

To start eviction proceedings against a tenant, you must first and foremost have a valid reason such as nonpayment of rent or violation of the terms of the lease agreement. Next, you must serve them a proper eviction notice. Depending on how they answer the eviction notice, you can choose either to continue or stop further eviction actions. 

5. Not Screening Prospective Tenants 

As a landlord, your ultimate goal is to see a steady return on your investment. But, you are only going to achieve this if you’re able to get the right tenant. The following are the qualities of a great tenant: 

• Pays rent on time
• Cares for the unit
• Notifies you when maintenance issues occur 
• Honor all terms of the lease agreement

To land such a tenant, you need to have all prospective tenants undergo a meticulous tenant screening process. Among other things, do credit and background checks to ascertain whether a tenant is going to be reliable. 

6. Not Responding to Maintenance Issues on Time

As previously mentioned, you are responsible for providing your tenant with a habitable rental property. In California, the following are a couple of things that make a property habitable:

• Running cold and hot water 
• A working HVAC system 
• Properly operating windows and doors 
• Adequate garbage receptacles
• Proper stairs and railings 
• Fire exits, alarms, and smoke detectors

You must also respond to maintenance requests from your tenant within a “reasonable” amount of time. Failure to do so gives your tenant the option to withhold rent payments or make the repairs themselves and then deduct the cost from future rent payments. 

7. Not Providing Your Tenant with the Required Disclosures 

Landlords are required by both federal and state law to provide their tenants with certain disclosures prior to them moving into the property. In California, the following are just some of the disclosures you’re obligated to provide a tenant:

• Disclosure on the use of lead-based paint. This is required of landlords who rent out properties built prior to 1978
• Disclosure on bed bugs. Be sure to follow the specific language as specified under state law as well
• Documentation about any known mold
• Disclosure of knowledge of asbestos 
• Disclosure of how utility fees are going to be applied and how they will be divided up
• Failure to provide these disclosures could result in financial and/or legal repercussions. 

Bottom Line

Becoming a successful landlord is based on skill, experience, market knowledge, and hard work. If you find it daunting, the team at Home Choice Property Management can help. We help property owners in Southern California take care of their investments in a worry-free way thanks to our ten years of experience and quality rental management services. Get in touch to get started today!  

The furnishings you’ve purchased when your property is new are bound to deteriorate over the years. “Normal wear and tear” or “reasonable wear and tear” are terms used to describe rentals that have depreciated when a renter is occupying your rental space. This damage does not occur out of a renter’s abuse or neglect.

Landlords must be aware that damage stems from “normal wear and tear” which is their responsibility to address. If a renter caused property damage, then a landlord can deduct the repair cost from the tenant’s security deposit. It’s important to keep receipts for the repairs as proof as this can reduce conflicts when returning the deposit after the tenancy.

It can be confusing initially to determine if the damage was caused by wear and tear or neglect or abuse. Differentiating between the two is essential for a landlord to learn. If you would like to learn how to identify issues of normal deterioration versus neglect, keep on reading!

Wear and Tear in Comparison to Other Damages

Although “wear and tear” are defined in varying degrees by different states, in general, it points to the expected decline of the property over time due to its continual use. This covers the furniture and fixtures inside the property as well. 

When one lives on a property, some areas begin to deteriorate as a result of everyday and ordinary use. Take, for example, flooring that appears new during the first year of construction. It won’t have the same spotless look in a few years. Given that renters continually walk on these floors, you can’t expect it to be scratch-free. It will also begin to look dull if it’s not well-maintained.

This decline is a normal outcome and happens from regular occupancy by the renters. You must also accept that the longer you have tenants living in your property, the more wear and tear it’ll be facing. 

Now when we talk about unexpected property damage, it can be a world different from wear and tear. You can see that it destroys the functionality of an object and decreases the value of the rental. It has an effect on the rental’s usefulness and stems from abuse and neglect. In other words, it goes beyond ordinary living in the unit. 

For instance, it’s unacceptable to find a huge hole in your rental’s wall. It may be a result of an accident but this does not occur normally in the course of a tenancy. It could also be done on purpose by a renter or caused by neglect.

Ultimately, if the damage was caused by the renter then it’s appropriate to use the security deposit. If it resulted from normal wear and tear, then the landlord must pay for it.

Defining Wear and Tear

Since renters are occupying your unit, you can expect there to be a small amount of deterioration. The value of the items around the rental can also decline. Examples of normal wear and tear are:

• Faded or cracked paint on your walls
• Dull floors
• Sticky doors and windows 
• Minimal carpet stains
• Worn enamel from sinks or old toilets
• Loose grouting on the tiles

Defining Unexpected Damage

When we talk about unexpected damage, this refers to deterioration that one can avoid. It didn’t occur from normal everyday use of the property or the typical use of an item. It can result from an accident or neglect. The action leading to the damage can also be intentional.

Examples of unexpected damage include:

• Unapproved wallpaper or paint colors in the unit
• Stains or burns on the carpet
• Chipped flooring 
• A door off its hinges
• Large scratches on the windows
• Chipped enamel on sinks or the bathtub 
• Clogged toilets

Often, renters are blamed for property damages. However, this isn’t always the case since some damages occur out of the landlords’ neglect of performing their maintenance responsibilities. For example, a renter may have reported a leak but it was ignored until heavy rains came and flooded the unit. The water damage could have been prevented in this situation.

Here are some other examples of unexpected damage due to landlord neglect:

• Flooding that resulted from having unmaintained pipes
• Repairs that should have been performed but were postponed 
• Structural damage that must be fixed such as sloping floors

Issues that come from these damages could have been prevented if the landlord addressed the initial situation. Landlords are mandated to keep their rental properties habitable under state law. The rental property must be free from health and safety hazards and abide by building codes. It should also be maintained properly.

Using Security Deposits for Repairs

Landlords can ask for a security deposit from a tenant but it can’t be used at random. If you’re going to use the deposit, you must prove that the tenant was at fault for the damage.

A lot of conflicts can occur between tenants and landlords in this event. The definition of what constitutes damage may be disputed by both. It can even result in a legal battle. To avoid disagreements and keep the situation from escalating, a landlord can make use of a few of the following methods:

Documenting Property Damage Through Photos

A landlord can conduct a move-out and move-in inspection. Doing a property walkthrough allows you to explain what wear and tear and unexpected damages look like to the tenants. If you clearly define and agree on its definition then disputes will be minimal later on.

You can also record the present condition with photos to show the renter later if there are damages. It will make it easy to compare the before and after state of the property. Existing damage will also be captured in the photos, making it easier to assign repair costs.

Conducting Tenant Screening To Prevent Property Damage 

Landlords can also intensify their tenant screening procedure to ensure that only responsible tenants with no history of property damage will be welcomed in their rental units.

Bottom Line

Knowing that wear and tear is versus property damage will help you keep your rental in good condition and reduce conflicts with tenants. That said, maintaining a rental property can be a lot of work so it’s best to hire a property manager. 

Contact the experts at Home Choice Property Management today. We can help keep your renters happy while maximizing your ROI!