Uncategorized

Renting your unoccupied Washington residence or investment property is a great way to bring in extra income, but if you’re a novice landlord, there are some things you should take into consideration to ensure you're following laws regarding tenant rights.

We put together a guide of best practices for newer landlords. These are the things we wished we would’ve known when we first started. These tips are not only to protect you legally, but to ensure healthy long-term relationships for every tenant that comes through your property.

Tenant Rights in Washington State

Be very clear in your rental agreement what the term “Rent” really includes. Legal fees, late fees, utility bills and any other costs related to renting, maintenance or eviction should be clearly explained in the rental agreement. If you don’t classify these as “rent” in the agreement, you won’t be able to claim them as rent in the event of an eviction. If this isn’t defined, the tenant has the opportunity to claim money or fees and this could be a costly error on your part.

Do your research on what type of rental agreement you will provide. There are month-to-month agreements, fixed-term leases and one-way leases. Your tenant is allowed to obtain copies of all signed documents and request proof that you receive the documents that they sign. They can also request return receipts or ask for signatures upon delivery. Keeping everything in writing in this process will make communication easier and will allow both parties to refer to any rules and regulations should a dispute occur.

Keep clear records of your rental property before and after tenants move in/out. Before you enter into a housing agreement with a tenant, take plenty of pictures of the property. Be detailed in your documentation, making sure there are printed dates on the pictures. In addition, landlords are not required to complete move-out inspections, but tenants can request one, which means you will need to walk through the unit with the tenant and sign an inspection report.

Do your research on landlord-tenant laws in your city and state. City and states often have varying laws in regards to landlords and tenants, so the more research you do in this area, the more informed you will be when situations arise. This will reduce your chance of making expensive mistakes. You can read on Washington state’s landlord-tenant laws here.

Seek legal advice when appropriate. You may think you have everything covered, but in the event that a scenario arises that you aren’t sure of how to handle, don’t try to solve it yourself — seek professional legal advice. This is the best way to ensure there you don’t make costly long-term mistakes regarding tenant rights and so forth.

Remember, a successful landlord isn’t just someone who brings in good tenants, but who can retain long-term relationships. These tips can ensure that happens.

That said, you won’t always get good prospects for tenants. You need to have a sharp eye for quality tenants, and more importantly, what constitutes as a “red flag”.

But conducting your screening can be confusing. How do you determine who is a good tenant? How can you tell if they are being honest in their responses?

It is well worth the effort to spend the time identifying warning signs of a troublesome renter. Bad tenants are more than a nuisance: they waste your time, cost you money, and leave you with a mess to clean up.

Avoid these problems by keeping a lookout for these 7 red flags in a prospective tenant:

1. Does a Credit Check Make Them Nervous?

By law, you can’t run a credit check without the permission of your prospective tenant. But, what if they won’t give their consent? Savvy landlords know this often means they have something to hide, from a bad credit history to an eviction or a bankruptcy.

Let the person know that you won’t rent to them unless you first do a credit check.

2. Is Their Credit Score Low? Does It Show Bankruptcy?

When you do run the credit check, you might find a low credit score or a bankruptcy on their record. If the person has made poor financial decisions in the past, it is a good predictor of how he is still handling his bills.

Take it as a sign that he will be late paying his rent and find another renter.

3. Have They Been Evicted?

Any eviction is a major red flag. The main reason people are evicted is because they don’t pay their rent. It is probable that they had the chance to move out before getting evicted. Instead, they chose to stay until they were forced out with a formal eviction.

To avoid the drama and paperwork, move on to another applicant.

4. Have They Moved Yearly?

Though your tenants won’t stay in your building forever, it is easier on you as the landlord to rent to people who will stay at least two or three years.

It makes sense to contact previous landlords to find out how long the prospective tenant lived at their former addresses. If they move every year, you might want to pass them by.

5. What About the Criminal Background Check?

In some states you can turn down a prospective tenant if they have gone to jail. But in others, like California, you cannot discriminate against those who were convicted of specific nonviolent crimes.

Learn the rules in your area so you don’t violate the law yourself. Wherever you live, if the person was convicted of a sex crime or drug dealing, you are in a very strong position for turning down their application.

6. Are There Lies on the Application?

A smart landlord checks the information that the tenant supplies on his application. That means calling former landlords, checking employment, and verifying addresses and income.

You simply can’t rely on your tenant to tell the complete truth. If you encounter any lie, but especially ones about income, employment, and previous rent experiences, it is wise to reconsider renting to them.

7. Do They Seem Desperate? Evasive?

When you talk to the renter, does she seem desperate or evasive? This can mean a problem you don’t want to get involved in.

Trying to get away from an abusive situation can make anyone desperate. By renting to someone in this situation, you are helping her out of a difficult situation. In the process, you can end up with a loyal and stable tenant.

But, if you sense evasion and that something is just not quite right, trust your gut. Move on to the next application.

Other tips to make your life easier as a rental property manager:

As you’ve probably seen already, life as a property manager comes with plenty of things to keep in mind. We wouldn’t call these tips “shortcuts”, necessarily, just ways that can hopefully save you time, money and headaches. Again, things we wished we would have known before.

Get Everything in Writing, Especially when it Comes to Tenant Rights

Organization is key: a wise property manager will always keep updated and accurate ledgers of everything, including maintenance records, complaints, payments, residential inspection renderings, conversations (email, phone, or in person), etc. Having everything in writing insures you from misunderstandings.

Know the Most Common Issues Before They Happen

Understanding the common challenges that befall today’s most successful property managers is the key to preventative maintenance, especially when concerning tenant rights. To make your life easier as a property manager, be sure you set out clear rules for certain behaviors in the rental lease. For example, a tenant who is habitually late on rent should know from the beginning that certain penalties will result in their irresponsible behavior. That way, when the procrastinating tenant complains about you filing an eviction, they will have no feasible argument in court.

Use Technology to Make Things Simpler for Everybody

These days, it’s not exactly safe to take cash payments, nor is it ideal to physically travel to each location to receive rent from the hands on the tenants. Now, there are numerous online payment options available that allow for the immediate transfer of funds without the need for unnecessary interaction – a modern amenity that is usually pleasing to both tenants and property managers.

Keep Friends, Family, and Business Separated

For many, mixing of personal and professional life—especially when it comes to having friends as tenants—might not end pleasantly. Basically, we don’t recommend renting to people you know. Kindly refer them to another place and remain a happy property manager (and friend) for longer.

Maintain an Emergency Fund

Life happens, right? It’s crucial to be prepared for unforeseen repairs and other costs. How much, you might ask? In most cases, it’s a good idea to have at least three months worth of expenses saved for half of your properties. And if you make a withdrawal, be sure to replenish the account as soon as you can.

Keep Banking Accounts Separate

For one, the state of Washington requires you to keep separate bank accounts for different security deposits. Each unit should have its own individual account, and you should leave it there until the tenant moves out.

Get Active with Online Marketing

The web has become the new marketplace for rentals. People may still do business in the real world, but they are making their decisions online by checking out listings, clicking through websites and reading reviews. With all the competition that exists in the digital marketplace, and the ever shortening attention span of internet users, it can be tough to even be seen. Here are some quick tips for maintaining an active online presence:

• Create a Facebook page. If today’s renters are on Facebook every day, that’s where you want to be – telling your story, showcasing your listings and nurturing possible leads.
• Invest in SEO work. With so many websites around, it has become extremely difficult to rank near the top of search engine results for specific keywords.
• Go mobile. To appease busy browsers and attract today’s renters, it’s vital that your mobile site is quick and easy to navigate as the majority of users will abandon your site if they don’t find what they want right away.
• Start blogging. When renters and investors are searching for properties, it’s a good bet that they are reading up on market trends as well. Your blog will not only provide the valuable information that’s being searched for, but also highlight your expertise and possibly solidify a lead that was on the fence.
• Launch e-mail campaigns. A targeted email campaign will improve your chances of repeat business and inspire people to talk about your services. Even if they don’t even open or read your emails, seeing your name in their inbox will keep you at the front of their mind when their lease is up, or they are ready to invest.

5 Common Mistakes that are Costly for New Property Managers

We wanted to end our guide with some final pieces of information that can greatly ease your life as a property manager. These are things we hear from newer property managers that we’d love to prevent you from experiencing.

1. I don’t need to run credit checks on everyone – sometimes I can just ‘trust my gut’

When screening prospective tenants, you’ll be surprised to find how many nice looking, polite, and seemingly responsible renters have been previously evicted or haven’t been paying their bills. It is 100% worth it to look at every tenant’s rental history, credit report and background check.

2. If I rent to a new resident at a higher rate I will make more money than if I retain current residents.

Tenant retention is your number one goal. Each time a tenant chooses not to renew their lease, it could cost you an average of $3,900. This figure includes average income loss due to vacancy, costs for the maintenance team to make the unit ready for the new resident, costs to market and re-rent the unit, and, of course, your time. Even if you’re able to re-rent that property for $50 more per month, it would take six and a half years to recoup the initial loss.

3. Raising rent will make a resident want to move out. And, if I don’t raise rent they will stay longer.

Many landlords fear the conversation on raising rent and don’t want to encourage their residents to move out. But, most renters understand that rent control is a rare situation and will be willing to pay an increased rate as long as the property is being managed to their satisfaction. Likewise, keeping the rent low won’t always guarantee that tenants will stick around, especially if the property is being poorly managed, which has been cited as many tenants’ number one reason for vacating.

4. I don’t allow residents to have pets because they will destroy my properties.

Making your property strictly pet-free may cause your business more harm than the policy is worth – in many cases it’s actually a smarter business decision. More and more, pets are becoming cherished members of the family. According to a survey conducted by Apartments.com, 75 percent of the 1,100 renters they questioned own pets, which is a substantial increase from only 43 percent in 2012. Therefore, you could be missing out on a vast majority of today’s renters by saying no to their furry friends. Furthermore, residents don’t want to lose money on a deposit on account of their pets, so most tenants will be equally as inclined to keep damage to a minimum.

We understand that the early stages of renting out property can be rough, to say the least. We are always welcome to offer advice about tenant rights, or any issues that may arise during the renting process.

If you have any questions, you can contact us here or give us a call at (360) 696-3111.

There’s a problem at the rental, and as the landlord, it’s your job to fix it. With a property manager, you will be able to say goodbye to late-night emergencies. When a problem arises, the property manager will get the call and respond accordingly. Here are some more reasons you should consider hiring a property manager.

Becoming a landlord isn’t something you should do as a lark. It’s a serious decision that requires you to do a good amount of homework before jumping in with both feet. Some of the main points you should consider include the following:

1. You’re going to need adequate landlord’s insurance. You may have regular residential insurance, but it won’t apply if you have tenants living there without the knowledge of your insurer. When purchasing a landlord insurance policy, you should pay attention to possible clauses that might obligate you to conduct regular inspections of the property during periods when it isn’t occupied.

   Also, consider whether you need both building and content insurance. Building insurance on its own may not cover carpets, drapes and furniture if you’re renting a furnished apartment. In addition, you’ll want to make sure your policy covers you against damage or vandalism and – in case the place becomes uninhabitable due to a covered loss such as fire or flooding – loss of rent. Lastly, make sure you’re covered for liability in case a tenant is injured on your property.

2. 2. You need to get permission from your lender before you can rent a mortgaged property. This applies even to something as seemingly trivial as renting out a single room in your home. You’re risking repossession if you don’t. You’re also leaving your tenant in a precarious position if the property goes into foreclosure, because the lender will have no legal obligation to honor the tenancy.
3. 3. Keep in mind that you’re going to be responsible for maintenance and fixing things. So if you aren’t much of a handyman, you’re going to have to find an alternative. One possibility is to buy a home warranty which will cover appliances and major repairs. Another way to go is to hire a management company to deal with it, along with other bits of “dirty work” like collecting the rent.
4. 4. Carefully consider reasonable ground rules. For instance, a lot of landlords recommend limiting the number of occupants that can reside on your property. The rule of thumb may be “the more the merrier” when it comes to social events, but in terms of leasing a residence, it’s “the more the scarier.” That is, more noise to bother neighbors, and greater likelihood of difficulties and problems in general.
5. 5. Do some research and learn your state’s laws governing landlords and tenants. Just a few minutes online should reveal a lot of what you need to know.
6. 6. You’ll need to do background checks on prospective tenants. The cost is minimal – maybe $20 to $30 – and well worth it. Experienced landlords say they mainly want to know if the prospective renter has a history of evictions.

There are those who know how to play the system. By making excuses for not paying the rent, and then, when the landlord’s patience runs out and he files for eviction, sitting tight while the case works its way through court, it’s possible to live rent free for several months.

These days, short of childbirth, you can do pretty much everything online, via home computer, notebook or smart phone. People are now quite used to doing their shopping, making doctors’ appointments and doing their banking courtesy of modern technology.

If you aren’t already offering your tenants the possibility of paying their rent online, you can bet they’re wondering why you have yet to get with the times. It’s not only convenient for them, but for you as well, as it can reduce labor costs and keep revenues flowing on a consistent basis.

Good reasons to offer online payment include:

• It’s less risky. If tenants are paying online, you don’t have to worry about the risks attendant with keeping cash on hand, and that can also lead to less expensive insurance for you.
• An automatic payment set-up, whether by PayPal, credit card or eCheck will keep absent-minded tenants paying the rent on time. Less headaches for you and them.
• If you or your property management company aren’t chasing and/or processing rent checks, everyone’s time can be put to better use in terms of cultivating helpful, friendly relationships with tenants and promoting and marketing rental properties or closing leases.
• It reflects well on you, and you will have one more attractive feature to draw prospective residents. Surveys show folks take it for granted that quality properties are going to offer online payment as an option. The facts are that 90 percent of Americans now go online to check their bank account balances and various transactions, and 56 percent of Americans now pay at least one bill a month through online banking.
• Lower overhead means lower property management fees.
• You will be much better equipped to easily deal with payment problems and disputes. Let’s say a resident says they already made a payment that looks to be late. You are able to instantly verify whether or not the payment was actually made simply by going to your computer.
• Fewer people dropping by in person to hand over a rent check translates to fewer complaints or requests for repairs. Residents will likely let more frivolous issues slide and only contact you when they have real problems.
• Quite simply, it’s a nice acknowledgement that you care about convenience for your residents. They’ll have the ability to make payments 24 hours a day, which will be appreciated.

So, you’ve come across what looks like an excellent property investment and you’ve been considering taking up a gig as a landlord. As with any occupation, it’s one thing to take it on and have the wherewithal to perform the necessary duties. That aside, you should first ask yourself if you have the right temperament for the job. So, take an honest look at yourself and decide if the following traits and abilities are a part of who you are.

You have a head for business. Owning and managing a property isn’t something you go into because it seems like fun. It requires serious intent and good business sense. Businesses, in general, are all about knowing what it takes to be competitive, keeping realistic goals in mind and, ultimately, keeping an eye on the bottom line so you can turn a profit.

You have people skills. Being a landlord is akin to being in retail sales or any job in which you are obliged to deal with the public. Inevitably, there are going to be occasional problems and disputes. Complaints, legitimate or otherwise, will rear their ugly heads, and you need to be able to deal with unhappy tenants in a calm, respectful, levelheaded way. Tact and equanimity are key here. Even if you feel a resident is being unreasonable, it will only cause further problems if you let emotions get the better of you.

You are accountable. Following through from the point immediately above, a good landlord is a responsible, reliable landlord. You want your tenants to know they can rest assured you’ll take care of repairs and maintenance issues in a timely manner. They also have a reasonable expectation that you will enforce general rules of tenancy and any policies contained in the lease.

Feeling confidence. Quite simply, you need to feel certain you’re equipped to handle the job. That entails doing some research and learning all the ins and outs of managing a property. If you’re comfortable reaching out, you might even contact a landlord or two and ask if they can spare a few minutes of their time giving advice to a first-timer.

Online, you could join a professional real estate network and hob-nob with some old pros – the Real Estate Investment Association is a good place to start. Sure, it’s no substitute for actual experience, but preparation is a necessary prerequisite. Experience will come with time and will build your confidence. Initially, you may feel lacking in some of the traits we’ve discussed, but if you set out with good intentions and the determination to do a good job, you will acquire them!