8 Mistakes for Rookie Landlords to Avoid

frustrated landlordAre you a new investor or landlord who has purchased your first rental property? This read is for you! We have compiled a list of the 8 most common missteps rookie landlords make to help you prevent expensive slips and save you many headaches.

1) Overextending Finances

We have seen it many times; in the current real estate market it is easy to overpay for a property. Eager property investors can easily pay more for a property than the feasible monthly rent can generate in return or that the property is even worth if they do not do their research in advance. Often times new investors do not know what market rent would be for a property when purchasing and therefore may miscalculate their budget when searching for the right rental property.

It is important that if you are not generating enough monthly rent to cover your mortgage, property taxes, insurance, repairs, and other expenses, that you have money set aside to cover these costs. Prepare yourself financially for a surprise vacancy, delinquent tenant, or if a major repair is necessary. We typically suggest to leave yourself at least 3 month’s rent aside to cover any unforeseen costs during the tenancy. Leaving yourself without this buffer puts you at risk of not being able to make the mortgage payment if an unforeseen expense does arise and could be dangerous going forward.

2) Listing the Rental Vacancy Off-Season

When you are searching for your perfect rental property, the timing is also important. In the rental market in general, there are peek rental seasons and off-peek seasons. Typically, we suggest to avoid a tenancy beginning December or January as this is an extremely slow period in the rental market with the holidays set around this time and you take a risk of having your property sit vacant for a number of months. In most rental markets, peek season is set in the summer months (May-September) which would make the ideal closing day on a new property late spring to allow yourself time to attract the widest breadth of tenants.

3) Not Screening Applicants

Once you have purchased your investment property, the next step is to find tenants to rent the unit(s). Rookie landlords tend to not know what to screen for when filtering through applications for vacancies. If you do not screen the potential tenants properly, you risk accepting a tenant with payment history issues, risk of unemployment, or possibly an illegal tenancy all together.

Make sure you have a strong application put in place for potential tenants to complete. We suggest screening applicants for proof of employment/income, landlord reference check, credit history check and identification confirmation. Take all of these items into consideration when making your decision to ensure you select a qualified tenant for your rental.

4) Not Preparing a Lease

All too many times we have seen an investor come to us without a lease agreement in place. This is probably the biggest mistake you could possibly make as a landlord. It is important to have a professional lease agreement that has been signed by both the tenant and the landlord to set out the term of tenancy, monthly rent rate and terms/conditions for the tenants & the landlord. The lease is a binding legal document, it is important to make sure you have this set in place and that each party has a copy for their records.

5) Being Too Lenient

“My car broke down and I didn’t have a way to get to you”, “My son is sick today, I can come in another day to pay”, “I don’t have the money right now but I get paid next week”. Seasoned landlords can often times see through these excuses, especially when there is a new excuse every month, but rookie landlords may give in to these tenants and allow an extension on the rent payment without issuing any legal notices to back them up in case the tenant doesn’t pay. That being said, situations do come up and a tenant may miss a payment. We suggest cutting the tenant some slack if that tenant has already proven him or herself as a trustworthy tenant. However, if a rookie landlord is too lenient early on in the tenancy, this can set the expectation that you are flexible in the future and your tenant may take advantage of this by paying late regularly going forward.

6) Inadequate Insurance

Many new landlords may believe that regular homeowner’s insurance will be sufficient coverage. That is not the case. If you continue with the standard homeowner’s insurance and the insurance agency finds out that you have been operating the unit as a rental property, they will not cover you if you need to submit a claim. To protect your financial interests, you need to obtain landlord insurance and ensure you have adequate coverage.

7) Lack of Inspections & Photos

Inspections are the number one method to ensure the property is being well maintained and protecting your investment. Tenants will complain about issues that are inconvenient to them (for example, a plumbing leak or the dryer not operating correct) but you cannot rely on them to notify you if there is a crack in the concreate foundation or the gutters need to be cleared out or other upkeep issues that they may not consider necessary.

Conducting regular inspections is highly recommended. This will allow you to address any maintenance items that the tenant may not have caught, check on the state of the property and address any cleanliness or damage concerns you have at that time. It is highly recommended to take photos at the time of your inspection and to keep these on file. This will allow you to refer to these photos in case there is ever a question about damage or unit condition at your next inspection or at turnover and you will have the sufficient documentation to hold the tenant responsible for these damages.

8) Reluctant to Spend Money

If you are an investor and not prepared to invest back into your property, this can be a huge mistake. It is inevitable, there are going to be repairs that are required with a rental property — or any property for that matter. Rookie investors may think they can get away with not repairing certain items in their rental property when something breaks down. You should always repair maintenance items in a timely manner from being notified or noticing the issue. This can prevent bigger issues down the line and help you save money in the long run. The small leak in the roof may not seem like a priority right now, but the next time it rains this small leak may turn into a larger leak and begin to damage the walls or the flooring in your property, ending up costing you double or triple what the original repair may have cost.

Another mistake that rookie landlords will make is hiring a contractor based on the price they quote you rather than the quality of work or experience in the industry. It is always worth hiring a contractor who will do the job correctly rather than to hire someone who is less expensive but will do a mediocre with cheap materials or perform quick fixes, causing you to have to pay to redo the work in a few months or a year. Continuing to invest in your property will help you protect the property value and could even increase the value of your investment for the future.

Some rookie landlords may be over their heads and reluctant to spend the money to hire a professional property management company to manage the rental on their behalf, thinking they can do the work themselves and save the money. We can assure you that if you find yourself not having the time to manage the unit correctly or to learn the rental market in the area, this money will be well-spent on hiring a professional and can save you many headaches in the day to day operations of your investment(s). This could be the smartest decision you make to protect your investment.

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7 Common Complaints from Student Renters & How to Prepare as a Landlord

studentsonphoneCongratulations, you survived the craziness that is May 1st in the City of Guelph! Whether this is the first time you are operating a student rental home or you are a veteran by now, it is always important to prepare for the tenancy ahead and any challenges you may face.

Student tenants tend to have specific expectations about the condition of the property and their experience with the landlord as well as common issues that present themselves during their tenancy. We have compiled a list of the 7 most common problems that student tenants will complain about in order to help you prepare and provide some insight on how to effectively handle these issues or challenges going forward.

NUMBER ONE: The unit hasn’t been cleaned upon possession.

Some landlords simply rely on their previous tenants to clean the property upon vacating and will allow the new tenants to move in immediately afterwards taking the unit “as is”. Although some students may be okay with this and plan for 4-5 hours of cleaning of their own prior to moving in, most student tenants are expecting the unit to be perfectly cleaned prior to getting possession of the unit and do not plan for additional time or do not believe they should have to clean the unit themselves.

The most common complaint that a landlord can expect to receive from student renters is that the previous renters left furniture/items at the property that needs to be removed or that the cleanliness of the unit is not in line with their expectations for move in.

In order to avoid this, we would suggest landlords to keep communication open with their vacating tenants — especially during the last month of tenancy — to remind them to clean the unit prior to vacating and to remove all their belongings from the unit on or before their last date of tenancy. We would highly recommend as a landlord to stop by the property the day of move out to ensure that they are removing all garbage, furniture, etc. from the unit and that nothing is left at the unit unless otherwise agreed upon. You can then also monitor the cleanliness that the unit has been left in and either clean the unit yourself, or even better, hire a professional cleaning company to go through the unit. If your unit has carpet and if the previous occupants had any pets, we always recommend to steam-clean the carpets prior to the new tenants taking possession.

Although it is true that everyone has different standards when it comes to cleanliness and some students may complain even after a professional cleaner has been through the unit, this is the best option to ensure that your new tenants begin their tenancy on the right foot and to leave a lasting, positive first impression about your standards for the property. When a tenant takes possession of a unit that has been cleaned, this will set the bar for how they are to leave the property upon vacating as well.

As an investor of a rental unit, specifically a student rental unit, you should expect to spend money each turnover you have on cleaning costs. Ensuring that the unit is cleaned between each tenancy helps preserve/protect your investment and will pay off in the long run for you.

NUMBER TWO: The landlord takes too long to address maintenance items.

Let’s face it, student renters are part of a generation that expect instant results and satisfaction. This holds true when it comes to maintenance at a rental property, which should come as no surprise. One of the most common complaints from student renters is the length of time that it takes for maintenance items to be addressed at a rental property by their landlord or maintenance team. \

The majority of student renters expect items to be addressed within the same day of providing notice. Although this may be impossible to achieve completing the repair this quickly, we suggest for landlords to respond to their tenants within 6-8 hours of receiving the notice. Ensure you have provided your student tenants with the best email address and phone number in order to reach you, that is checked daily to ensure your tenants are able to successfully reach you and inform you if something does go wrong at the property in regards to maintenance.

In some cases, a complaint that an item is taking too long to repair will come in when the landlord has already planned for the items to be addressed but has not communicated this back to the tenant. The solution to this is very simple, keep communication open with the student renters and always be honest. Ensure the tenants are informed of the dates and times you or your maintenance person plan to enter the property to conduct repairs and if there is a delay with a maintenance item, be honest with the tenants and keep them updated as you receive additional information on when they can expect work to be done. For example, if you or your contractor had to order a part to address the repair of an appliance that may take 1-2 weeks to come in, ensure to relay this to the tenants so they know to expect this delay and can plan accordingly.

NUMBER THREE: I’m having issues with my roommates.

Let’s face it, students will not always get along with their roommates. For many students, this may be the first time living away from home and the adjustment to living away from their parents and with roommates is difficult for some tenants. Personalities may begin to clash or living habits may become intolerable for some roommates. This is a fairly common complaint that can often times negatively impact the tenancy. If student tenants are experiencing conflict, they often times will not renew their tenancy and this can also impact their experience with you as the landlord or your rental company. As much as landlord may not care to get involved, it can sometimes pay off if you try to mediate the situation.

Depending on the conflict, sometimes this even exceeds what the landlord can assist with and sometimes police authorities should be involved. However, for less severe situations, often times the landlord may be able to provide a solution to quickly deflate an issue. We suggest to speak with each roommate when a conflict is brought to your attention and try to come up with a fair solution for each party.

In some cases, allowing one of the roommates to leave and approving a replacement tenant to take over (who is also approved by the remaining roommates) is the best option for everyone when the issue cannot be resolved.

NUMBER FOUR: I’m having issues with my neighbors.

This complaint could be popular if your student rental is part of a duplex, a townhome complex or a student apartment building, typically with units that share walls or floors with their neighbors.

Depending on the circumstance, the landlord may not have any control in the situation. For example, if the neighbors live in a property that you (the landlord) do not own or manage, there may be little that you can do. At the very least, the landlord can attempt to contact the neighboring owner to address the complaint or contact City Bylaw to put forth a complaint (for example a noise violation).

Sometimes if the property is part of a condominium corporation or student building, there will be a Condo Manager who handles the property. The landlord can put forward a formal complaint to the Condo Manager who can then issue a formal complaint to the neighboring residents to stop the behavior.

Best case scenario, you also own or manage the neighboring unit and can discuss the complaint directly with your tenants to dissolve the situation.

Regardless of the circumstances, it is important to list to your tenants and help them come up with a solution to this issue.

NUMBER FIVE: I need more privacy. My roommates are entering my room without permission.

Student renters will spend the majority of their time at the property in their bedrooms whether it be sleeping, studying, eating, or many other purposes. This is their sanctuary and their quiet space to accomplish what they need to throughout the day. As a result, the tenants may complain that they need more privacy from their roommates and may request having a lock installed on their bedroom to ensure none of their roommates enter this space while they are away or even while they are home.

We suggest allowing tenants to install their own locks on bedroom doors if they desire. As a landlord, you are legally entitled to be provided with a copy of each bedroom door key in case of emergencies for access so ensure that you do request this from your tenant. We also suggest having the tenant keep the old bedroom door knob at the property and to reinstall the original knob upon vacating for the next set of tenants. It should also be noted to your tenant that they are responsible for any damages to the door that this may cause when removing the old knob and installing the new locked handle. To avoid any damage, you may even request to complete this installation yourself or have your maintenance contractor complete this work.

NUMBER SIX: My unit is too hot or too cold.

Many students request to have utility costs included in their monthly rent. This provides an easier means of budgeting as they will always know their monthly rental for duration of their tenancy.

If you can avoid having utilities included in the rent, this is the best option for you as a landlord to have your tenants pay for their own utility bills. However, in some cases this is a deal breaker for student renters and if you want to secure a good group of students, you may have to be flexible and allow utilities to be included in the monthly rent.

Some landlords try to control the temperature settings in their student units by installing a lock on the thermostat to prevent tenants from tampering with the controls and ensuring utility costs stay low. Although this may be a good idea in theory, this will almost always lead to complaints about the temperate inside a unit.

We suggest allowing student tenants to control their thermostat at the property to ensure the tenants are comfortable with the temperate inside and to minimize any complaints. An alternative you may wish to explore is to have a clause written into the lease agreement providing the group with a reasonable monthly cap that the landlord will pay for utility usage. This clause can state that any usage above this cap can be collected back by the landlord. This will ensure the tenants are not taking advantage of the inclusive rents and stay cautious about their utility usage habits.

NUMBER SEVEN: Our (insert home appliance/fixture) isn’t working.

Almost every phone call or email pertaining to maintenance that a landlord will receive from their student tenants will include the above mentioned words.

In some cases, the item will not be operating correctly. In other cases, the tenant may not understand how to properly use the item and will assume it is broken. Before you spend the money to send out a technician, we suggest for the landlord to visit the property and investigate themselves.

This may be the first time your tenant is renting a property and is responsible for using a specific appliances or fixture and may not understand how these items around the property work. It is highly recommended to walk through the property at the time of possession and explain to these students how to use a water softener, how to replace the furnace filter, how to turn on the A/C, how to operate the dishwasher, laundry machines, and the list can go on and on. Trust us, this will save you a lot of headaches down the line and will ensure that items do not break that could have been prevented if the tenants understood how the item works.

Throughout Guelph, hundreds of students have moved into their rental units this week and this is just the beginning. It is important for landlords to know what will be expected of their student tenants and to be prepared for these situations that may arise.

Guelph Named 3rd Best Canadian City to Raise a Family

familypicReader’s Digest has named Guelph the third best city for raising a family in the country. This does not come as a surprise to us, as we whole-heartedly agree! Many factors can contribute to your decision to move your family to a new City, including the cost of living, school rankings, crime rates and family care.

They ranked the family-friendliness of our provincial capitals and cities with a population of more than 80,000 to come up with the countdown of the best Canadian cities to raise a family. The rankings were determined by considering 11 of the most important factors to Canadian families.

Although there are plenty of influences worth considering when choosing where to start a home for your growing family, Reader’s Digest felt the following factors were the most popular/important for our country’s families:

  • Transit: With kids in tow, parents need to get around with minimum hassle.
  • Median age: A young population is one measure of a kid-friendly city.
  • Infant mortality: The best benchmark for the overall health of a region.
  • Mat leave: An extra couple of weeks can make a difference to a new mom.
  • Daycare: Parents want easy access to child care providers.
  • Cost of food: Getting healthy food into the mouths of children is a parent priority.
  • Mom groups: The more clubs and support groups for moms, the more welcoming the area for kids.
  • Intimate-partner violence: High rates of domestic abuse have far-reaching societal consequences.
  • Child and youth victims of crime: How dangerous will the streets be for your kids?
  • Libraries: Libraries are a good place to connect with others; and the closer by, the better.
  • Park space: Playing and picnics mean quality time for families.

We are very excited to share that Guelph was named the 3rd best place to raise a family in Canada, and truly believe that the City offers many benefits to families. Whether you are looking to purchase your home or rent a property, there are many options for you and your family within any budget. If you are considering a move for your family, the City of Guelph is worth considering.

For a complete list of the top cities in Canada to raise a family, visit: http://www.readersdigest.ca/health/relationships/best-canadian-cities-raise-family/11/

Your 10 Item Unit Walk-Through Checklist

Handing over of final business contractWhen viewing a rental unit, it is easy to be swept up in the excitement of the unit and all of the bells and whistles the unit may offer. Often times, once a tenant secures a unit and visits the rental property for a second time, the unit looks completely different than they remember. Maybe that pantry magically appeared in the kitchen or a bedroom is suddenly carpeted a different colour. Did those changes actually occur or were you distracted by something else within the property that prevented you from digesting these features of the home during your initial walk through? Most likely it is the latter.

The same can be true regarding maintenance items. Most likely you didn’t notice a loose kitchen faucet or a leaky dishwasher at the time of your initial showing. Typically, we will suggest to tenants to make notes and take photos of anything they notice upon their move in and make the landlord aware of anything of concern immediately. Having these items recorded upon move in can help prevent tenants from being held responsible for items that were present upon their move in and make the landlord aware of some items that may have been missed during the landlord’s inspection. The landlord should then address the problem items within a timely manner and keep notes of any other less concerning items (i.e. chipped cabinet door, small stain in carpet) for their records to ensure the new tenants are not held responsible for previous tenant damage.

We have compiled a list of 10 items you should pay attention to during your walk through once possession of the rental is provided to you as a tenant.

  1. Windows and Screens – Check that all windows can open and close with minimal effort and there are no cracks in the glass. Screens should be attached to any windows that open and should not have any rips or holes present.
  2. Faucets and Drains – Ensure that all faucets are secure and check for any pipe leakage. If you see any major water stains present, this is important to bring to the landlord’s attention immediately. Run the water in your bathroom and kitchen sinks to see how easily they are draining. If these are slow to drain, there may be a build in the piping.
  3. Appliances – Check any appliances that have been included in your rental to ensure they are properly operating. This could include your stove, fridge, dishwasher, microwave, washer, dryer, etc.
  4. Locks – Ensure that all locks work smoothly without issues. If they do not, you can request for these to be lubricated or replaced. Double check that the keys provided to you work for all the corresponding doors. Double check your patio door latch and your window locks are all operational and inform your landlord if they are not.
  5. Doors – Open and close the doors within the unit and make note of any that do not close properly or appear to be off their hinges. Ensure all closet doors and patio doors are secure on their tracks and can open and close with minimal effort.
  6. Floors – If your flooring is carpeted, ensure to note any stains that are present. Take pictures to properly document these stains to make certain you are not held responsible. If your flooring is wood, document any discolouring, chips and scratches with photos and send to your landlord for their records.
  7. Ceilings – Check all ceilings within the unit for any water damage and discolouration. If water sports are present, this could mean something is leaking and your landlord should be notified immediately.
  8. Walls – Check all walls for any present holes, scrapes and marks. This is an important step as often times landlords will make tenants responsible for major holes and marks if patching and painting is required upon move out. Be diligent, take many pictures and write down notes. You do not want to be held responsible for any necessary painting after you vacate due to damage caused by a previous renter.
  9. Outlets and Breakers – Test all outlets throughout the unit to ensure they are all working. This is one of the most common aspects that are overlooked during a walk through and often times tenants notice an outlet isn’t working only when they need it most. Double check where the breaker box is to ensure if the breakers ever shut off, you know where to turn these back on.
  10. Heating and Cooling – Turn on your heating or cooling, depending on the time of year and ensure that there is hot or cold hair blowing from the vents. Check the thermostat and ensure it does not say low battery. If there is a low battery notification, make sure the battery is replaced. If your unit has baseboard heating, turn these on no matter what the time of year is. You will hear a creaking or clicking noise coming from the heaters as the metal starts to expand. This means they are functioning properly. If you do not hear this, notify your landlord and this will provide time to get these fixed in a timely manner.

Tenants do not want to be held financially responsible for someone else’s damage, so it is imperative to protect yourself. It is important to take the time upon move in to go through this check list and document anything that is necessary to help save you time and headaches throughout your tenancy.

WEBCON 2016/Rental Marketing Awards, Niagara Falls ON

Our company (Property Link Management Services) was fortunate enough to be invited to attend WEBCON 2016 in Niagara Falls, Ontario on May 9th and 10th.IMG_1555 WEBCON is a Marketing, Operations and Technology Conference for the Rental Housing Industry. Landlords, Property Managers and Service Providers were invited from across Canada and the United States.

Attendees were able to listen to inspiring key note speakers and sit in on mini sessions tailored to the rental industry throughout the two-day event. The conference was perfect for a company like ours, interested in the latest marketing trends and operational strategies, wanting to expand our knowledge in these areas.

The most exciting event at WEBCON 2016 was the Rental Marketing Awards (RMA’s) hosted by Landlord Web Solutions on the evening of May 9th. IMG_1572This year’s theme was “The Great Gatsby” and LWS was able to pull off this theme flawlessly throughout the entire evening, from the décor to the live band/music to the outfits.

Our Property Link Management Team is very proud of our two awards won at the RMA’s on Monday night. The first award was for “Best Corporate Website Managing Under 2500 Units” for our company’s website www.propertylinkms.com and the second award was for “Best Website for Single Building” for our student purpose-built complex Gordon Terrace’s website www.gordonterrace.ca.IMG_1569 It was an honour to be recognized by experts in the industry across the country for the work we have put in to these two websites to make these as interactive, informative and user-friendly as possible.

Day two of WEBCON provided a great networking opportunity for us to connect with local and international companies/experts in the rental marketing field both throughout more sessions and the keynote speakers. Throughout the day, there was a tradeshow for many of the service suppliers to set up booths to inform and attract the industry attendees to the latest technology, services and trends. This was a great opportunity to make new connections and prepare for the future of the rental industry.

Overall, this was a wonderful team-building opportunity and inspirational experience for our company to grow in marketing, operations and technology. We are excited to implement many items we have learned from the conference this year and are looking forward to WEBCON 2017.

 

Family Day in Guelph

familyFamily Day is this Monday (February 15th). Most of us will get the day off to spend quality time with our loved ones.

Are you looking for ideas to spend your Family Day in Guelph?

If  you are in need of some Family Day inspiration, visit the City of Guelph’s website below offering a wide range of events happening around town.

http://guelph.ca/seasonal/family-day-fun/?platform=hootsuite

We wish you and yours a wonderful Family Day long weekend!

Guelph’s Student Rental Market Seminar

Attention Investors

Do you have questions about Guelph’s student rental market and how this is changing?

Join our President, Mark Roberts, along with 5 additional local experts to get your answers on Tuesday, January 12th @ 7 pm.

Event is FREE but seating is limited. Register at http://www.guelphinvest.com/srs2016/