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Spring Maintenance Checklist

In spring, focus on freshening up your rental property and protecting the dwelling against the season’s strong winds and rains.  Use this time of the year to thoroughly clean and care for the home’s interior.

Outdoor Tasks:

Clean gutters and downspouts.
Inspect roof and chimney for cracks and damage.
Wash the exterior of all windows.
Install missing screens on windows and doors. Repair as needed.
Fertilize the lawn.
Check decks for loose boards, railings, or stairs.
Professionally service heating and cooling units.
Check the foundation for cracking as well as for insect damage.
Remove foundation vent covers and spigot covers.

 

Indoor Tasks:

Test all smoke and carbon monoxide detectors
If the basement has a sump pump, test it by dumping a large bucket of water into the basin of the sump pump. This should activate the sump pump. If it does not switch on or if it’s not pumping water, it may need to be serviced by a professional. Also, check for and remove any debris and make sure there are no leaks.
Assess the need for blind repair, cleaning or replacement.
Repair or replace broken or missing kitchen cupboard hardware.
Check the attic for signs of moisture and water stains.
Check walls for condensation and mildew.
Check electrical panel for rust, make sure circuit breakers are operating correctly.
Clean dryer vents.
Clean or replace furnace filters.
Check clothes washer hoses for cracks or swelling.
Check all faucets for leaks or slow drips.  Detach and flush aerators.
Maintain clean drains by pouring one-half-cup baking soda followed by one-half-cup white vinegar into each.  After 10 minutes, flush with boiling water.

 

Katie Poole–Hussa is a Licensed Property Manager, Continuing Education Provider, Chair of the Education Committee for the RHA Oregon, and General Manager of the Portland Oregon branch of Acorn Property Management, LLC. She can be reached with questions or comments at Katie@AcornPM.net.

Inspections: Take the time now to save you $ later

By Katie Poole-Hussa, Acorn Property Management

Inspection reports are often used to prove the condition of the property when a tenant moves in and when the tenant moves out. Even though completing these inspections when the property is vacant is ideal, conducting an inspection on at least an annual basis while the unit is occupied is just as important when making your case. Don’t think of interim inspections as an invasion of privacy: think of it as protecting your investment by ensuring that the tenant is taking care of your property.

Try to encourage your tenants to attend the interim inspections with you. Best practice is to work with the tenant when scheduling the inspection by offering two separate times for the inspection. This not only shows the tenant that they matter to you and that their time is valuable, but it helps build a rapport with the tenant which will be vital in future dealings with them. However, if you propose two separate times for the inspection to take place and the tenant doesn’t agree to attend, the landlord can and should still complete the inspection without the tenant with proper, legal notice: just be sure to note if the tenant was present for the inspection.

Always keep records. In Oregon, landlords are required to keep all documentation including inspection reports for six years after a tenancy has ended. When in doubt think of it this way: if it wasn’t written, it probably cannot be proven. When the landlord chooses not to carry out an inspection either before or after the tenancy, the landlord will have a difficult time proving why they deducted anything from the security deposit for physical damage to the property that goes beyond normal wear-and-tear. If a landlord makes a deduction from the security deposit without adequate proof, the tenant can take legal action to get their security deposit back. That is stress and money you could have saved simply by keeping better records.

Helpful Tips for Completing the Inspection of an Occupied Unit:

  • Try to arrange your inspection during a weekday.
  • Be thorough: open drawers, cabinets, pantries, and closets; get on the floor and look under sinks; inspect the seals, the wear and tear, cleanliness, and overall condition in the refrigerator and the stove.
  • Inspection reports can also include pictures – consider taking a camera or your phone so that you can take pictures or a video. Offer to share the reports, pictures, and videos with the tenants for best practice.
  • Ask your tenants to point out anything that could be considered damage and make sure it gets written down. If the tenant will not be present for the inspection, ask them to leave a note on the kitchen counter listing anything they’d like you to look at or document.
  • Is the housekeeping good? We all know that poor housekeeping will attract bugs and sometimes vermin so you want the home to be clean and tidy.
  • Are there any signs of unauthorized occupants or unauthorized pets?
  • Check for plumbing maintenance needs as well. See if the lint trap in the dryer is kept clean and be sure to take a look at the washing machine hoses. A frayed hose could indicate a potential leak. Inspect the toilet tanks. Check the flapper valve and make sure it seals properly and does not need to be replaced. If the landlord is paying a water bill, there is not always a lot of motivation for the tenant to report a slight leak in that flapper valve. Even if the tenant is responsible for water, it does not take a lot of money or effort to replace a flapper valve.

Think of interim inspection reports as evidence to support a future case. Of course no landlord ever wishes to be part of a legal battle justifying charges against a tenant for damages but it happens all the time. Good record-keeping, proof, and evidence will be your saving grace if you find yourself in that situation.

Your local landlord organization can sell standard inspection forms for purchase by landlords. These forms provide a complete list of important property items so that issues don’t go undetected during your inspections.

Katie Poole–Hussa is a Licensed Property Manager in the State of Oregon, a Continuing Education Provider, Chair of the Education Committee for the RHA Oregon, and General Manager of the Portland Oregon branch of Acorn Property Management, LLC. She can be reached with questions or comments at 971-352-6760 or email Katie@AcornPM.net.

How To Effectively Market Your Rental Property

By Jim Straub, Acorn Property Management

Curb Appeal. I’ve said it before and I’ll say it again. It’s all about curb appeal. If you are using your time effectively, you are having applicants drive by your unit first before meeting them. The outside of the unit and the yard are all they see at first – make sure you’re putting your best foot forward.

The outside of your unit should be clean and presentable. The yard should be well mowed and the flower beds weeded. Inexpensive color spots work wonders to spruce up a dull yard. And I can’t stress this one enough – take the time to clean the windows inside and out. Don’t make the inside of your unit look uninviting by making applicants peer through dirty windows. It undoes everything you’ve done to make the inside clean and inviting! Another tip is to keep an eye on the windows during the whole process of showing your unit. After several sets of people have peered through the windows, they may have left fingerprints on them, so you may have to clean the windows more than once while your unit is vacant and being shown.

While your unit is vacant, leave the blinds open and at least two lights on inside the unit. Then, leave the interior doors open so that the whole unit can be seen by looking through the windows. Your ideal tenant is employed and is most likely working daytime hours, so as it starts to get dark early, you’ll need the lights on so the applicants can see inside. Finally, once you do meet with the applicant to show them the inside, be sure it has been recently cleaned. Scent is an important consideration. It doesn’t matter if the unit is a little dated as long as it smells clean. I sometimes use a carpet freshening agent to give the scent of my unit a little boost. Nothing too fragrant, as you don’t want to set off anyone’s allergies. Just one of the cleaning agents that will give a nice fresh scent.

Advertising. Craigslist.com is king. In the last six months, I’ve only used print advertising once. It’s just too expensive, doesn’t reach as many people, and good quality tenants are focusing their attention on Craigslist now. Craigslist is free and easy to use. You should use the same approach with Craigslist as you have in the past with other outlets. Be concise and to the point. Be careful of Fair Housing laws in your word choice. The beauty of Craigslist over print ads, though, is the addition of photos. You should include one photo of the front, shot at an angle so it includes the front of the house and the yard, one photo of the backyard and a few of the inside. If you’ve not used Craigslist before, I think you’ll be amazed with the amount of response you receive for just a small amount of effort.

Availability. Renting your unit is a horse race. Tenants want the best unit available for the price they can pay, and they will often rent the first unit that seems to fit that description. You’ve got to have a quick response to all inquiries from applicants and get to them first. Even if you have a full time job, renting your unit should be your priority while it’s vacant. Every day your unit sits empty costs you money. So be sure to check your voicemail during breaks and lunch and return calls then. Don’t lose an opportunity to rent your unit by being slow to respond. I can guarantee you that another landlord will get there first if you do. The way to avoid getting burned out during the rental process is to be sure to have the applicants drive by the unit first. Be sure they like the unit and the neighborhood before you spend your valuable time meeting them. That way, you’re sure to meet only those applicants who you know like the unit.

Price. I always price my unit a little higher than I think it might rent for at the start. This is because the market will always tell you what the right price is. If I rented my unit for $1000 two years ago, how do I know that’s the right price now? The market fluctuates, and I want to be sure to capitalize on that. If I don’t have any response to my ad, I know I’m a little high and can reduce the price a little. Better to be a little high at first, though, than too low and cheat myself out of good income.

Also be careful not to price your unit too low. I’ve seen this over and over again. Landlords think they can rent the unit quickly and to quality tenants by marketing it at a super low price. Many times that backfires. It’s all about perceived value. If I’ve been looking at units in the $1000 range and suddenly I see something comparable for $750, my first thought isn’t ‘what a great deal.’ My first thought is ‘what’s wrong with this property.’ Make sure you’re pricing your unit at what the market will bear and you won’t go wrong.

Selecting A Contractor

 

As renovation season approaches, you may be planning projects for your rental properties. How can you know you’re hiring an honest, competent person who is capable of performing an effective repair or upgrade at a reasonable price in a timely manner? Many people hire contractors without fully screening them and pay the price in poor quality work, high prices, and projects that go on far beyond the promised end date.

One of the best ways to locate a good contractor is a referral from someone you know and trust. Ask around, and read the endorsements in the ROA bulletin. Of course, you can always ask prospective contractors for referrals from past clients. Even though they will only give you the good ones, you can gain useful information if you ask the right questions. Did the contractor begin the job when promised, or were there excuses? Was their bid accurate, or did costs get added on and if so, were they reasonable? Did they clean up after themselves daily and when the job was complete? Was the job completed to their satisfaction? Did they finish on time?

When you seek bids from contractors, the more detailed the bid, the better. This is the preliminary outline of your contract for services and will become very important if there ends up being a dispute about the job. Bids should include everything you can think of, including specifics about exactly what materials will be used, down to the thickness and brand of plywood, to the size of nails, screws, etc. Remember the Chinese sheetrock used in many construction projects a while back? Turns out it was toxic. These details are very important, and if they aren’t spelled out can result in problems for you with no recourse against them, so get it all in writing. Also, who will actually be doing the work? Who will be supervising? Who will be obtaining permits and paying the costs of those?

Timelines are one of the biggest sources of conflict between contractors and their customers. To be a successful contractor requires juggling multiple clients and multiple jobs. You are just one client and while they are trying to keep you happy, they are also working to keep their other clients happy. You will likely maintain a good relationship with your contractor if you accept some flexibility in the timeline, but hold them to their commitment. The squeaky wheel does get the grease.

A more positive way to hold contractors accountable (and keep you from having to nag them) is by adding time incentives or penalties. That’s what government agencies do and it can help keep a project on track. For instance, the contractor may get a bonus of X number of dollars for finishing on time, but the bill is reduced by X number of dollars for each day the project runs over the contracted end date. Another useful tool in this regard is to divide their payments into thirds. One third at the beginning of the job so that they can purchase materials and get going; another third at some specified mid-point of completion; and the final third only when every single part of the entire job is complete.

When my daughter accidentally set her bedroom on fire, that’s the deal I struck with the restoration company and it came in very handy when they delayed completion, but still wanted to get paid in full. I received a bill that had late fees on it and I very politely called the contractor to inquire (and then his supervisor, when he failed to return my three phone calls). I reiterated the agreement and made it clear once again, that they would not get any part of the final payment until every last part of the job was done and they had failed to finish the trim work on the siding. Gosh darn, they finished up right away! Always keep that final payment on hold, or you will lose your leverage.

A word of caution: While you as an owner are allowed to be an unlicensed individual while performing most repairs on your properties, this is not the case with hired help, nor is it the case when dealing with hazardous materials such as asbestos or lead-based paint. And ignorance of the law is no excuse! Make sure that if you are dealing with hazardous materials that your contractor has the proper certifications, such as lead-based paint certification if they are disturbing more than two square feet of paint on a property built before 1978, or are hiring a qualified company to dispose of asbestos. Because in the end it’s not only the contractor can be held liable, but you as well. Fines can run into the tens of thousands of dollars. Think hiring a contractor with the proper certifications is expensive? Not hiring one can cost even more. Please refer to the Environmental Protection Agency website for more complete information about hazardous materials in renovations. www.epa.gov

The Construction Contractors Board is the agency that oversees licensed contractors. On their website, you can find information on all licensed contractors in the state of Oregon, including whether or not they are licensed (Go figure, but some folks actually lie about this.); the kind of license they hold; how long they have operated under a specific license; and whether there have ever been complaints lodged against them and/or any punitive damage awards against their company or their bond. Take a few moments and save yourself a lot of time, trouble, and money.
https://ccbed.ccb.state.or.us/ccb_frames/consumer_info/ccb_index.htm

 

This column offers general suggestions only and is no substitute for professional legal advice. Please consult an attorney for advice related to your specific situation.

Damages, Depreciation, and Normal Wear & Tear

Assessing charges to a tenant’s deposit is fraught with peril for many landlords. What are damages? How do you calculate depreciated damages? What is normal wear & tear? These questions are common to our business as landlords and I hope that the following will help guide you in assessing fair and reasonable charges you are owed, without ending up losing a court battle because you assessed improper charges.

Damages in the context of landlord-tenant relationships are related to actual failure of the tenant to take ordinary care; accidental or intentional acts of violence to the premises by tenants or guests; or unpaid tenant charges related to the tenancy, such as rent, fees, and unpaid bills. Damage charges can also encompass items which a landlord chooses not to repair, loss of use of the rental dwelling during repairs (as long as repairs are performed in a “timely fashion”), and depreciated value of the rental dwelling as a result of tenant destruction. So, for example, say your tenant punched a hole in one of the walls. You can patch it so that it is useful for another tenant, but your property has suffered depreciated damage as the wall will never be the same unless you take a large section down to the studs and repair it properly. You may charge the full repair cost for this damage even if you choose not to fully repair it at this time. I had a tenant who moved in to a unit with brand new linoleum, and when she moved out a year later, we discovered a large crescent-shaped burn in the new flooring. The owner chose not to replace the linoleum as it still had a lot of wear left in it, but we did fairly charge her as though we had replaced it. A tenant can also be financially responsible for failing to disclose repair issues that result in ongoing damage to the property from things like leaks; however, landlords can also bear at least partial responsibility if they fail to perform reasonable inspections during which damages could be noted and mitigated. So, if your tenant lived in your property for eight years and you never inspected, but discover a leak on move out that has completely rotted the kitchen floor, how is it reasonable to charge the tenant 100%? What is reasonable in a case like this is a difficult question to answer, but I always say that you should imagine explaining yourself to a judge in court, which usually clarifies the issue to some extent.

Depreciation is an honest attempt to assess charges for damages to a tenant while considering the age and prior condition of the damaged item. So, in one case, I had tenants who left two damaged items in the house they rented: the kitchen counter and the living room carpet. The counter was brand new on move in and absolutely perfect on move out except for a large circular burn adjacent to the cooktop where apparently the tenant set a hot pan. As this was a laminate counter, there was no way to effect a repair and the entire counter needed to be replaced at a cost to the tenant of 100% using comparable materials. The living room carpet had been burned when hot coals had popped out of the fireplace. There was no way to repair it; however, the carpet was six years old and had a lifespan of ten years under normal wear conditions. In this case, we charged the tenants 40% of the replacement cost of comparable carpet. You may not use a tenant’s responsibility for damage to upgrade your home at their expense. So, if we had decided to replace the living room carpet with a high-end wool carpet, for example, we would have gotten a bid for replacement of the normal carpet, charged that amount and the owner would have absorbed the rest. If you’re not sure what a fair charge is for a specific repair, contact an experienced contractor for advice.

Normal wear and tear first of all, depends on the length of the tenancy. In a tenancy of 10 years, there will be much more wear and tear than there would be with a tenancy of only one year. Other factors would include the number of residents or animals living in a unit, the quality of the materials used in the property, the condition prior to move in, and the age of things like carpet and paint. A good interior paint job can be expected to last 5-7 years, with some minor touch ups between tenancies. The lifespan of flooring depends on its quality as well. Your average carpet can be expected to last between 7-10 years (or more for high quality carpet) of normal usage. Hard flooring can have a lifespan of 7-25 years, again depending on quality.

Normal Wear & Tear – Includes, but is not limited to…

  • Minor scuffs on floors or trim
  • Nicks on corners of walls
  • One or two pictures holes on walls
  • Minor scratches around knobs or handles
  • Wear patterns in flooring in high-traffic areas
  • Dingy paint (depending on lifespan of paint & tenancy)
  • Cupboard finish deteriorating
  • Caulking
  • Broken window seals
  • Aged fixtures
  • Replacement seals on appliance doors
  • Mold/mildew/peeling paint related to failure of housing components such as fans, leaky window, leaky roof
  • Damage to floors, counters, etc., from poor caulking

Damages – Includes, but is not limited to…

  • Filth, grime, staining, trash inside or out
  • Gouges/scratches/burns/stains on floors, trim, counters, appliances, cupboards, walls, ceilings, etc.
  • Chunks of drywall broken off
  • Multiple or extra large holes in walls, ceilings, or trim
  • Bent or missing hardware
  • Dented metal doors
  • Ripped, gouged, stained or frayed flooring
  • Unauthorized tenant “improvements”
  • Urine/feces
  • Unkempt yard
  • Broken globes or wrong wattage bulb in fixture that causes it to fail
  • Broken shelves, door guards, drawers on appliances
  • Mold/mildew related to tenant lifestyle (lack of ventilation, heat, circulation)

Figuring out what is fair for each situation is at best an imperfect science. So, be reasonable and act in good faith and you should avoid many troubles. Please call the Helpline if you need assistance with a specific situation.

This column offers general suggestions only and is no substitute for professional legal assistance. Please consult an attorney for advice related to your specific situation.

Renters’ Insurance

Tips for Better Rental Management

(Many thanks to Brooks Hayes Insurance for fact-checking services for this article.)

I am often asked by rental owners how their tenant’s renter’s insurance can help them, or how it helps their residents. While there is some variation in policy coverage, two of the best reasons to require or encourage your residents to obtain it are: accidents and liability coverage.

Accidents happen. I had a tenant last year who accidentally started a kitchen fire. The damage claim exceeded $70,000 for damage to the home and her belongings. Without renter’s insurance, my owner’s insurance would have kicked in, but the resident would have been potentially liable for the deductible and any premium increase associated with the accident. Also, the owner’s insurance company likely would have sought to subrogate the claim to her. Instead, the home was restored and her damaged belongings replaced.

During a recent windstorm, a large tree fell on one of our resident’s homes. The owner’s insurance is covering the cost of repairing the damage to the home, but not damage to the resident’s belongings or car. Fortunately, the resident had insurance and will be made financially whole.

One of my co-workers lived in a rental that burned up while they were away on a trip. It was a tragic event and they lost their beloved family dog as well as irreplaceable family mementos, but her family could have lost much more if they did not have renter’s insurance. Their insurance company paid for their hotel and temporary housing while they located a new home, and gave them money to purchase replacement clothing and household goods. Without renter’s insurance their distress would have been compounded exponentially.

A former owner-client had their insurance attached by a claim from a neighbor. Their tenants’ dog had previously been considered friendly, but one day a neighbor girl who had interacted with the dog many times without incident, leaned down to pet the dog, and without warning it bit her in the face. She required extensive medical attention and plastic surgery. The residents had no renter’s insurance so the entire claim went against the owners’ insurance resulting in a huge premium increase. If the residents had renter’s insurance their policy would have been attached first, possibly eliminating any involvement of the owners’ insurance company. While the insurance company tried to subrogate to the tenants, they were very low income so there was nothing to go after.

Rental owners may require their residents to have renter’s insurance, but may not lawfully require a tenant to obtain renter’s insurance if their combined household income is equal to or more than 50% of the HUD median for that area. Visit www.hud.gov to determine what the income threshold is for your location. Although owners may not require insurance in some cases, nothing says we can’t still strongly recommend it. Many times when I explain to a tenant why they should have it, they choose to get it anyway to protect themselves. And it’s cheap – $7 to $20 per month on average added to an auto policy. Stand-alone policies may also be purchased.

Another benefit to tenants is the theft coverage that comes with a renter’s insurance policy. My daughter’s renter’s insurance had lapsed for a short time, when her laptop was stolen out of her boyfriend’s car. His auto insurance did not cover that, but her renter’s insurance would have. Thefts from the dwelling unit itself may also be covered.

One of my own tenants made a claim on her renter’s insurance policy when there was an electrical problem with my rental that caused the power to surge dramatically, frying out her computer and the control panel for her washing machine. For some reason the utility company reimbursed me for the electrical repair to the home caused by their faulty transformer, but not my tenant’s damaged goods. She wasn’t interested in a legal battle with them and instead received reimbursement from her renter’s insurance policy.

Kids throw baseballs through windows, people think their car is in reverse when it’s it drive, tenants forget to lock doors, previously friendly dogs bite people, candles set houses on fire – life is decidedly unpredictable, that’s why we should all be insured and why residents should be too.

What is required to mandate renter’s insurance?

  • If you own your property free and clear and have chosen to not be insured, you may not require that your residents be insured.
  • If you do plan to require your qualifying tenants to have renter’s insurance, that requirement must be disclosed in writing during the application process (and the instances when it would not be legal to require it summarized in writing also), or with existing month-to-month tenancies send a Notice of Change in Terms.
  • For a fixed-term lease where you had not required it at the outset, you must wait to implement your requirement until the expiration of the lease; however, you can and should send the notice of change in terms before the lease expires so that you may lawfully require it upon expiration or prior to signing a new lease.
  • You may require your tenant to name you as an “Interested Party” on the policy for the purposes of notification in failure to maintain the policy, reduction in coverage, or removal of you as an interested party.
  • You may require that residents maintain a minimum of $100,000 in liability coverage as part of that policy.
  • Requiring renter’s insurance when it would be illegal to do so may incur a penalty of the tenant’s actual damages or $250, whichever is greater.

This column offers general suggestions only and is no substitute for professional assistance. Please contact your own insurance agent for advice related to your specific situation.

Setting Healthy Boundaries

Do you have problems? I do. My life isn’t perfect, and I suspect yours isn’t either. Illness, injury, death, divorce, job loss, these things touch everyone’s lives. We either muddle through or give up. No one escapes life unscathed. So, when you have challenges in your personal life, do you go to your tenants for say, a loan? Not likely. That would be inappropriate, right? And so it is in reverse.

Many problems that arise between landlords and tenants come from a failure to set proper boundaries, and the burden for setting those boundaries falls mainly to the landlord. Some rental owners have trouble knowing how to do that, and end up too involved in their tenants’ lives. But inappropriate levels of assistance and involvement creates a dependency that actually prevents a healthy relationship with your tenants.

Many of those who come to me for help with a bad situation with a tenant have been manipulated, lied to, and cheated out of time, life and money. But they have only themselves to blame. By giving in time and again to accommodate a tenant’s problems, the dynamic of the relationship changes from ‘Housing Provider and Customer’, to ‘Benefactor and Beholden One.’ This creates a power imbalance between landlord and tenant that starts with gratitude, but leads to resentment. And with some tenants the problems never end. It starts with the repeated offering and accepting of excuses and is often accompanied by charm and attempts to get friendly. Month after month it’s something else, some new story, some new problem. In the end, the landlord’s supportive, kind actions end up fostering in their tenant either a sense of entitlement or of inferiority, and the bad behavior escalates to intimidation, threats and abusive, uncaring actions to the property.

What leads to such dysfunctional outcomes? Mostly, misplaced compassion and fear of confrontation. While the slur of ‘slumlord’ is often cast upon housing providers, the stereotype of the greedy, uncaring landlord is rare in my experience. Most often, I see people with big hearts giving marginal tenants chance after chance, until they finally realize they have failed to help the object of their charity in any meaningful way, and are left with a damaged home and financial losses running into the thousands of dollars.

One of the strongest indicators of success in life is the ability to solve problems. When people intervene and solve other people’s problems for them, they stop the learning process. And while appropriate intervention, such as entering into a one-time late payment agreement or some other one-time accommodation can be helpful to solve a short-term problem, rental owners should beware of creating dependency in the relationship. People make choices, choices have consequences, painful outcomes lead to personal growth. Don’t be an impediment to someone else’s schooling in life management.

Landlords are not tenants’ social workers, financial counselors, or friends (usually). They are business associates who are exchanging a commodity for reasonable compensation. Successful landlords keep the relationship professional and business-like. They aren’t afraid to initiate the tough conversations, and take action, but treat their customers with consideration and respect.  In a way, managing property requires acting like a sheriff, keeping the peace and telling other people what they can and cannot do, and in some ways how they can live their lives. People will not always be pleased with this intervention and will make their displeasure clear. That’s a tough thing and some people find they can’t bring themselves to endure it.

How can a rental owner act compassionately within the landlord-tenant relationship while maintaining healthy boundaries? By being friendly but not familiar; sympathetic, but proactive. Remember that you are running a business, not a charity. I once evicted a client’s tenant for non-payment of rent. We had reached out to her on multiple occasions with no success and so went forward with the court process. Once it was complete, I finally heard from the tenant’s daughter, who angrily informed me that her grandfather had died and her mother had been away dealing with his arrangements, forgot about the rent, and how dare I evict her mother. I calmly told her that I was sorry for the loss of her grandfather, and that I didn’t mean to sound unsympathetic, but when my mother died I didn’t forget to pay my mortgage. I gently reminded her that we all have bad things happen to us and we all have to take care of our responsibilities anyway. She paused for a moment, took a deep breath, and quietly replied, “You’re right, I’m sorry.” We then went on to discuss ways her mom could redeem the situation.

Really terrible tragedies will happen to residents: the death of a spouse, the loss of a job, a cancer diagnosis. These are all horrible events that can derail a formerly smooth tenancy and especially bring out the guilt in caring rental owners. Help if you wish in whatever way makes sense to you, but I recommend a one-time gift as opposed to say an ongoing rent reduction, as these types of concessions sometimes lead down a slippery slope to a tenant requesting more and more assistance.

Sometimes you are able to offer relief or want to show appreciation to a long-term tenant. I manage a property where a tenant had been in place for 19 years. He was married when he moved into the home, but after many years got divorced and started absorbing the full cost of the rent. He subsequently lost his job, muddled through a couple of months, and finally hit a month where he couldn’t make it work. He had been a great loyal tenant for a very long time, and fortunately had compassionate, generous landlords who forgave a month’s rent. When I told him about their gift, he got tears in his eyes and was so grateful. He found another job and we moved him to a cheaper place. But he had earned that kind of assistance through many years of great history. Joyful exceptions that are rewards for good behavior are the best way to get the feel-good while rewarding positive histories and relationships.

What creates healthy boundaries? Consideration, respect, reciprocity, honesty, and mutual accountability.  I currently violate the rule against renting to family or friends and have my niece and her daughter living in one of my rentals. But, I set clear boundaries in advance, establishing separate relationships: niece/auntie and landlord/tenant. I hold her to the same standards and offer her the same responsiveness that I do to any tenant. She understands that if she doesn’t pay the rent, she will have to move out or be evicted. She knows I love her to bits, but will not be manipulated into taking action contrary to my best interest. We haven’t had a problem, largely due to her being a stand-up person, but also from clear boundaries set in advance. You should be so lucky. In these situations, it is the exception not the rule that these things work out to be mutually beneficial.

The point is that you need to set and defend clear boundaries in your relationships with your tenants, and when you choose to make exceptions, make sure that you are doing the choosing, and that the exception is made with intelligent forethought. Don’t let yourself be pressured, cajoled or manipulated into contradicting your best sense. There’s lots of great people out there who can be your renters, don’t settle for the bad ones. And if one sneaks in, take action to protect yourself sooner rather than later.

 This column offers general suggestions only and is no substitute for professional legal assistance. Consult an attorney for advice related to your specific situation.

The ABC’s of Property Management

A landlord attorney on speed dial is a great idea.

Be the landlord that you would want.

Collect large security deposits, in guaranteed funds, PRIOR to handing over keys.

Determine rents by researching comparable properties in the same area.

Emotions should play a very small role in the management of your properties.

Familiarize yourself with the terms of the rental agreement and addendums.

Guaranteed funds are the most ideal funds.

Hire only licensed and bonded contractors to do the repairs at your properties.

Issue termination and warning notices timely and correctly.

Join a landlord association.

Keep up with the frequent law changes.

Label your income and expense accounts to optimize potential returns at tax time.

Maintain your rentals as if they are your primary residence.

Neighbors can play an important role in the management of your property.

Operate as a lawful business. Be professional and ethical in your practices.

Post the emergency locations of water shutoff, etc. for the residents, JUST-IN-CASE.

Quickly respond to maintenance requests.

Rent is rent; not security deposit, late fees, or some combination thereof.

Screen. Screen. Screen.

Tenants are our clients too.

Use state-specific forms, agreements, and addendums.

Verify ALL of the information on the rental applications that you process.

When turnover happens, devote to the process the time that it deserves.

Xtra attention spent on Fair Housing laws can potentially save you thousands.

Yearly inspection of the property is an easy way to look after your investment.

Zap your headache and hire a property manager if the above is too daunting.

Katie Poole–Hussa is a Licensed Property Manager, Continuing Education Provider, Chair of the Education Committee for the RHA Oregon, and General Manager of the Portland Oregon branch of Acorn Property Management, LLC. She can be reached with questions or comments at Katie@AcornPM.net.

This column offers general suggestions only and is no substitute for professional legal assistance. Please consult an attorney for advice related to your specific situation.

Winter Maintenance Checklist

By Katie Poole-Hussa, Property Manager, Acorn Property Management

In winter, your tenants can enjoy energy-efficient warmth and the fruits of your maintenance labors while you take a few precautionary measures on the outside.

Outdoor Tasks:

  • Walk around the property’s exterior and make sure the foundation vents are closed or covered.
  • Protect the central air conditioning unit with a cover. Remove and store window air conditioners.
  • Winterize sprinkler systems.
  • Rake last of leaves and remove storm debris as needed.
  • Check gutters and downspouts and clean them out if needed.
  • Send freezing weather reminders to tenants.
  • Insulate or wrap all exposed plumbing pipes.

Katie Poole–Hussa is a Licensed Property Manager, Continuing Education Provider, Chair of the Education Committee for the RHA Oregon, and General Manager of the Portland Oregon branch of Acorn Property Management, LLC. She can be reached with questions or comments at Katie@AcornPM.net.

This column offers general suggestions only and is no substitute for professional legal assistance. Please consult an attorney for advice related to your specific situation.

Love Being A Landlord!

By Katie Poole-Hussa, Acorn Property Management

I’m going to bet that you probably haven’t heard many people say that they love being a landlord. If anything, you’ve heard the cons, hatred, and horrific stories of doing such. But in a world where there is so much emphasis on negativity, I’d like to bring our attention for a second to some of the positives of the property management industry. So whether you’ve chosen to be a landlord as a career, or have been lucky enough to have inherited the job of managing rentals, there are many benefits that go along with being in this business.

First and probably most obvious, being a property manager creates wealth. There is no denying that owning and managing property over the long term is a great money earner. There will always be a demand for housing. However, the earning potential will fluctuate with the state of the economic market. In good credit conditions, there will be a higher rate of owner occupation and increasing capital values. In more constrained times, there will be more renters with higher rents. Real estate investments are arguably the most stable and secure types of investments you can make. As property owners, you are able to use tenants’ money to pay your mortgage and build your equity so that you can increase the cash flow to buy greater properties and/or create a stream of retirement income. As a property manager, you can increase rents regularly to match current market rent rates and your management fee based on gross rents will increase simultaneously with your client’s income. It really can be a win-win situation.

Secondly, real estate is real. Managing rentals forces you to become more knowledgeable about property upkeep and home repairs. No matter how involved you may be in caring for the actual residence, when you rent to others, you will have to understand something about repairs and maintenance, even if you hire out the work to be done by others. So whether you’re lining up the contractors, or putting in your own elbow grease, you’ll notice that you are more diligent about ensuring a good job is done. Fixing up an older property, or turning over a rental that had been trashed or damaged by past tenants, can instill a true sense of accomplishment.

Which brings me to the third reason of why I love what I do, and that’s the people. I like my tenants. I would be lying if I said that over the years I’ve like all of my tenants. But if you get the right ones initially then working with them during their tenancy can be quite a pleasure. Some of my tenants have even become friends as well as business acquaintances. Providing nice, well-kept homes at affordable rates is powerful. I’ve had the pleasure of supplying homes to some who otherwise wouldn’t be able to rent anywhere else based on their circumstances. Experiencing their joy of having a place to call home fueled my passion and purpose of being a landlord. I have been able to enjoy watching many families grow together through marriage, children and other life accomplishments. And let’s not forget the hundreds of encounters with some very interesting people who have either inquired about a property or the many contractors that I employed to perform maintenance duties. Many of whom I would have never been able to meet if I were not a property manager.

These are only a couple of reasons why I love being a landlord. I encourage you all to take the time to step back from the weight of the job, and ask yourself, “why am I a landlord?” We all know that being a landlord is complex. But I believe that if you’re able to outline the positives of the industry for yourself, then when the negatives arise, which they will, you will be able to make decisions based on love and not hate.

 

Katie Poole–Hussa is a Licensed Property Manager, Continuing Education Provider, Chair of the Education Committee for the RHA Oregon, and General Manager of the Portland Oregon branch of Acorn Property Management, LLC. She can be reached with questions or comments at Katie@AcornPM.net.

This column offers general suggestions only and is no substitute for professional legal assistance. Please consult an attorney for advice related to your specific situation.

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