Did you Look Out for These in your Investment Property?

When you are buying an investment property, you know to look at the numbers. You take the heart out of it, and it all comes down to the dollars and cents. Which is the way it's supposed to be. You look at a the local stats for the area, look at any developments that may be happening on the books and look at the neighborhood. Is there anything else you should be looking at?

Well yes - there always seems to be something else to consider. These are some things that experienced investors look for that may not be top of mind initially, but can make a big difference down the road.

Evictions aren't Fun, but Sometimes Necessary.

The last thing anyone wants to deal with is an eviction. In the best situation, you have great tenants who pay their rent on time, and respect you and your property. What is not acceptable are those tenants, who don't pay their rent, trash the property, are disrespectful to you and their neighbours. So what do you do? 

Well they have to go. 

Timeless Tips for Property Investors

After many years in the business, there are some things that don't change when it comes to choosing the right investment property. I'm hoping that you've seen these all before, and this is just a reminder list for you.

1. Buying in the same area you live in is often preferable, especially for a new investor, as it is easier to keep an eye on the property. Driving past the property regularly will help you stay on top of any potential problems, and relieve any new-investor anxiety.
2. Three or four bedroom homes are usually easier to rent and normally have a quicker chance of re-sale should you need to sell any time in the future.
3. Low maintenance cladding materials on the exterior of the home will help to reduce ongoing maintenance costs. Maintenance is not something you should take lightly.
4. Double income properties, for example homes with a granny flat, often offer excellent rental yields. If you lease these at different times, then you won't be down double income if both are vacant.

Are you a Good Landlord?

Good landlords are brilliant. They are kind, caring people who make the world a better place while providing a valuable product to people who need it. We don't often hear about the good ones because the bad ones hog all the attention. The bad ones are certainly more interesting to read about.

But lets talk about you, the good landlord! At True Property Management we always assume that you are one of the 'good guys', and if not, then we will try our best to guide you in that direction.

I can't remember where I came across this this is a great simile: "A good landlord is like a bartender!" (A GOOD bartender that is.) Which is so true, they are not hounding you when you don't need a drink. But when you do need one, they are quick at providing you with great service and a great product. 

So what makes a great bartender landlord?

What is your price block?

When tenants look for property, they go online and do a search. They have items in mind of what they are looking for, location, number of beds etc. Read this post that I wrote recently, talking specifically about these items. 

But by far and away the key item that will get prospective tenants considering your property is price. This is especially true in this day and age when people are becoming more and more fiscally responsible. People look for property in 'price blocks', they have a budget in mind and due to website design, prospective tenants will key in search values  for price such as between  $300 - $400 per week. So where does your property sit? What is the average rent in your city? In the suburb your rental property is located? Does the rent on your property fall within a predictable 'price block'?

Creative Ways to Weed Out Bad Tenants and Avoid Evictions

We've talked a lot over the years about how to weed out bad tenants. No one wants to deal with an eviction. So here's a slightly more creative tenant selection process that some landlords might enjoy.

If you enjoy games and are good at silence then this might be a fun way to go through a fairly stressful and laborious process.

When you meet prospective tenants at an open home, make sure to ask some questions. This is especially important when things look great on paper, but something feels little 'off'. These techniques might get an applicant to open up and tell you things that they had no intention of saying.

Silence:
Employed by therapists and interrogators alike, silence is a great way to get people talking. This is because people tend to become very uncomfortable when people are silent. So once you have asked a question, stay silent, no matter how much you want to jump in. If the prospective tenant is not forthcoming with an answer, don't try and fill the gaps. Then, once they offer an answer, wait a few more seconds -  they may tell you something they didn't intend to.

Open Ended Questions:
It's impossible to answer with a Yes or No answer to questions that start with: Who, What, When, Where, Why and How.

If your prospective tenant does answer Yes or No, then you know they either aren't listening, they are hiding something or a boost to their IQ is in order.

Some ideas:

• What was something you DID like about your last landlord?
• What kind of electronics do you own? (Do they have a huge stereo system (!!) or do they have iPads?)
• When was the last time you had dinner with your previous neighbours?
• When did you decide to move?
• Why did you decide to move from the property before the most recent one?
• Who has been your favourite landlord and why?
• What is the longest that you have managed to keep a plant alive?

Interviewing prospective tenants doesn't have to be painful, you can make it fun if you want to.

What has been the best question that you have asked prospective tenants?

Deal to the Rats and Mice

It's that frustrating time of year, when the rats, mice come looking for nice warm spot to spend the winter and your place looks just right!

So how do you get them out of your rental property? I'm sure you've had experience with your tenants ringing in a state of panic, after they have spotted a mouse or two. 

So how do you deal with these uninvited guests? The ones who can slip through the smallest of spaces? In fact, a mouse can often fit through a hole the size of a pencil! That's due to their flexible bones, they can flatten their ribcage to fit through cracks. So before you get your tenants start calling in a panic, take a trip to your rental property and take some preemptive action. Although it's probably a little on the late side, since rats and mice have already started coming indoors. During the summer months is a good time to have a look, but it's better to do something a little late, than not at all.

Inspect Your Rental Property, WITH your Property Manager.

You have rental properties that are managed by a property manager. Fantastic! I would suggest rather than a set it and forget it approach you have an active relationship with your property manager.

It is important to develop and maintain a good working relationship property manager. Don't do all the hard work in the beginning of finding one that you connect with and then stop there. Yes, you will get the rent in your account each month and you will get your reports on the condition of the house etc, but you need more than that. If you just leave your property in the hands of your property manager, then you run the risk of things falling through the cracks.

Yes your property manager is being paid to adequately look after your property, but it behooves you to be involved and one of the best ways to do this is attend property inspections for a couple of very good reasons.

1 - You see how your property manager interacts with your tenants (if they are there): Does there appear to be a good relationship with your tenants? Do they go the extra mile in some way or another?
2 - How thorough are they?: Are you happy with what the property manager sees during the inspection?  
3 - You can see with your own eyes the condition of your property: If you have multiple properties you may not want to attend every single property inspection, but attend at least 1 a year for each of your properties.

You attending an inspection and showing your attention to detail can be the difference - consciously or not - for the tenants to really take care of the property. A property manager is a 'middle man', and is easier for the tenants to downplay their comments.

Also keep in mind that what your property manager finds acceptable, may be totally unacceptable to you. It is easier for you to be clear with what your expectations are for the property if you are there with your property manager once in a while.

Always keep in mind that an investment property is not something that you should put to the back of your mind. Your property manager is no doubt a hard-working ethical person, but they are still your employee. You are their boss, the property manager will manage the property, but you as the landlord need to manage expected standards. It is important  that you do not micro-manage your property manager and to respect their expertise. If you argue every issue and repair that the property manager raises, you might find that they just stop telling you what the problems are. This means that the only time you find out the true condition of the property, is  when you want to sell it! There is nothing worse thinking that you are sitting on a gold mine when in reality you are sitting on a  'renovator's delight'. 

So the moral of the story is 'stay involved' - there is nothing like a dose of reality to get you motivated to perform maintenance!

What is your relationship with your property manager like?  

How to Resolve Landlord/Tenant Disputes

How good are you are resolving disputes? If you are not all that good then being a landlord might become quite a headache. Chances are that you are going to be faced with quarrels that you need iron out. So here are a few ideas that might help you figure things out with your tenants.

Expect the best, prepare for the worst

Expect that you have good and fair tenants. If you expect that your tenants are going to be irresponsible and unpleasant then you are likely to create issues with them. If you have done your job right and have hand selected great tenants then you may in fact have an easy run with them. If not, have a few tricks up your sleeve to help things a long.