Fresh articles from Article Listedhttp://www.articlelisted.com/Fri, 10 Sep 2010 22:50:47 UTCarticlelisted.com http://www.articlelisted.com/Art/14820/237/Rental-Agreement-Investing-Securing-Long-Term-Tenants.html
There are few things as devastating to a landlord's return on investment than vacant rental properties; just look at the costs that come directly out of the landlord's pocket Between paying the mortgage, real estate taxes, hazard insurance, repairs and cleanup between tenants, advertising costs to find a new tenant, property management or realtor fees if they find the tenant for you in short, one of the secrets to rental agreement investing is to maintain the absolute lowest rental vacancy rate possible

Most landlords know that long term tenants are the most reliable, as they have proven that they can and will pay their rent, and they take better care of the property because they're more vested in it But short of buying a rental property with a long term rental agreement and tenant already in place, how do you find and keep long term tenants?

First, consider that certain demographics are more likely to settle in somewhere for the long haul In particular, young families who know how many children they want, and empty-nesters who are downsizing, are both groups that aren't interested in moving around every year, and want somewhere stable where they can settle in for at least five years Most families will live in only two houses between when they move into their "family-size" house and when their children move out, which makes young families a good bet for long term tenants Couple whose grown children have moved out generally look for a smaller and more manageable home, and one they can happily occupy for many years to come (signing a new rental agreement every year is a young couple's game, not an older couple's idea of fun)

Which brings us to people who are not likely to sign a long term rental agreement or stick around for much longer than their first year Young couples, groups of unrelated roommates, and single people are probably only looking for temporary housing, and usually just want a fun place to live for a year or two

Areas that attract families tend to be extremely safe, suburban, with a strong local job market, and a strong public school system Families generally want a yard for their children to play in, and a community with (surprise!) a lot of other families with young children So, if you want to attract young families to sign on the dotted line of your rental agreement, look for neighborhoods with these features Local parks and family recreation areas are an added bonus

Empty-nesters and older couples are drawn to different experiences, and some never leave the family home even after their children leave Others want to be near arts and entertainment establishments, and move to more urban areas that attract young professionals and the arts communities Older couples tend to be less crime-tolerant than their younger counterparts, and appreciate amenities such as off-street parking and high-visibility local security

Aside from the demographics most likely to stay for a long tenancy, you can offer persuasive incentives to try and keep good tenants for the long term First, you can try to induce them to sign a long term rental agreement, by offering two different rents: the "normal" rent for a standard one-year rental agreement, or a discounted rent for longer term rental agreement Alternatively, you might require a higher security deposit for a one year rental agreement, and offer to reduce it to a single month's rent for a longer term rental agreement

After the tenants have moved in, and the expiration date on the rental agreement draws near, consider ways to encourage them to stay and sign another rental agreement Stay in touch with them to keep your finger on the pulse of how they're leaning (stay or move), and if you get the sense that they're leaning towards moving, consider offering them some kind of incentive, such as sending a cleaning service over twice each month as a signing bonus for a new rental agreement

The bottom line is to attract and keep long term tenants, which is worth a certain amount of initial investment in time and money Find the right tenants for your rental agreement the first time, maintain a good relationship with them, and keep them for as long as possible, and you'll find that being a landlord is not nearly as difficult as many real estate investors make it out to be

Kevin Kiene manages EZ Landlord Forms, an online resource for landlords that offers customizable, state-specific rental agreement forms, along with tenant disclosures, eviction notices, online software, and educational articles.]]> http://www.articlelisted.com/Art/14820/237/Rental-Agreement-Investing-Securing-Long-Term-Tenants.html http://www.articlelisted.com/Art/8572/237/Why-New-Landlords-Fail-and-How-to-Beat-the-Odds.html
Unfortunately, most new landlords fail within the first eighteen months, usually from a series of common mistakes that are easy to avoid Being a landlord does require some hard work, which most new landlords fail to invest, and it requires a strong cash reserve for unexpected expenses

Most often, becoming a landlord is something that people do in addition to a full time job, which means they generally don't have a lot of time to spend on holding open houses, showing rental properties, sifting through rental application after rental application, doing employment verifications, responding to maintenance and repair issues, etc It's work, and it's an investment that's required to avoid having to evict a bad tenant later on, which is extremely expensive Far too often, new landlords simply take the first rental application that comes along, and assume they'll pay their rent on time each month, not trash the rental property, and generally be conscientious and responsible

For this reason, it's highly recommended that new landlords hire an experienced and professional property management company to screen tenants, field phone calls at 3 AM about flooded basements, handle evictions, go to rent court, etc It typically costs 7-10% of gross rent collected, and it's worth every penny, particularly for landlords who have their own full time jobs that occupy their time

An even more common problem that plagues inexperienced landlords is undercapitalization New landlords simply assume that rent money will come in every month, and anything over and above their mortgage payment is reliable income This is not the case, as unexpected expenses WILL arise, and more often than new landlords predict

To illustrate just how important it is to maintain a strong cash reserve as a landlord, here's a common problem that landlords experience all the time: A tenant pays their $1,000 rent on time for the first few months, then suddenly stop paying After a month or two of excuses from the tenant, the landlord realizes they have to file for eviction, so they give the tenant the required notice in their state, which gives the tenant even more time to bring their rent current When the tenant STILL hasn't paid, the landlord files for eviction, which has to go through the long and tedious eviction court process, have a hearing, schedule an eviction date, etc By the time of the actual eviction, the landlord has lost $4,000 in unpaid rent and $500 in eviction costs

Well, the tenant didn't like being evicted very much, so they left the property in bad shape After a month and another $1,500 in clean-out and repairs, the rental property is ready to be shown to new tenants So the landlord spends $300 on advertising, and starts accepting rental application forms, in hopes of signing a new rental agreement as quickly as possible After a few weeks of advertising and showing the rental property, and another week or so in reviewing rental application and doing background checks, the landlord signs a new rental agreement, and finally start collecting rent again By now, they've lost six months worth of rent, paid the mortgage, taxes, insurance, and utilities for those six months, paid for eviction fees and clean-out and advertising, and have lost $8,800 in the process

Landlords need cash available to weather these storms, if they are to survive Aside from keeping cash on hand, landlords are well advised to borrow only a minimal mortgage, if any at all, in order to maximize cash flow and keep a cash reserve available A good rule of thumb when calculating your projected rental cash flow is to only use 75% of your rental agreement amount, to allow 25% for unexpected expenses, and then subtracting your predictable monthly expenses (mortgage, real estate taxes, rental insurance, entity maintenance, etc) from that

For landlords willing to invest the time, and able to keep enough money in reserve for unexpected expenses, the rewards include strong monthly cash flow and an appreciating asset Landlords are immune to fluctuations in the real estate market, as they can simply sign a rental agreement and wait for the perfect time to sell It's a great business, if you have the discipline to succeed in it, and it can eventually free you from the grind of 9-5 if you achieve a high enough cash flow

Kevin Kiene manages a website for landlords that offers customizable, state-specific rental agreement forms, along with eviction notices and a free rental application form.]]> http://www.articlelisted.com/Art/8572/237/Why-New-Landlords-Fail-and-How-to-Beat-the-Odds.html http://www.articlelisted.com/Art/6367/237/Giving-Eviction-Notice-and-a-Typical-Eviction.html
No landlord enjoys going through the eviction process with their tenants; it's expensive, time-consuming, and generally far more confusing and complicated than it should be Each state has their own eviction laws, which only adds to the confusion, but there are certain common threads between all states A typical eviction in most states looks something like this:

Step 1: Serving the Tenant with a Notice
Tenant Joe owes Landlord Adam $800 on the first, but has a ten day grace period On Day 11, Landlord Adam serves Tenant Joe with a notice, informing him that he has X (usually 3-14, depending on the state) days to pay the rent, or Landlord Adam will file for eviction in court Please note that each state usually requires specific legal language in these eviction notice forms, so make sure you use a state-specific eviction notice

Sometimes it's not rent money that's the problem, but some other violation In this case, there's usually a different eviction notice that must be served on Tenant Joe, that lists the specific rental agreement violations Tenant Joe will have a period of time in which he can correct the rental agreement violation (just like with the late rent eviction notice), after which time Landlord Adam can file for eviction if the violation hasn't been fixed

Step 2: File in Rent Court for Eviction
Tenant Joe still hasn't shaped up, so Landlord Adam now needs to file an official eviction complaint with the local courthouse Beware: each state has a different eviction complaint form, and sometimes different counties or municipalities have THEIR own forms, so make sure you use the right forms Finally, some states require you to send copies of the eviction complaints to the tenant as well

Step 3: Eviction Hearing in Rent Court
Now, Tenant Joe has a chance to speak up in court, and deny Landlord Adam's claims against him The court will set a hearing date, which Landlord Adam (or his attorney, or his agent) must attend, and explain why he wants to evict Tenant Joe

Step 4: The Eviction Date
Assuming the judge ruled in favor of Landlord Adam, the case is referred to the sheriff's office, and the sheriff will set an eviction date When the eviction takes place, the sheriff, Landlord Adam (or his agent), and any contractors or laborers hired by Landlord Adam will show up and enter the property Hopefully, Tenant Joe has either brought the rent current or has vacated the property by this point, but if his belongings are not out, they are removed, and Landlord Adam changes the locks Be forewarned, though, that some states restrict what Landlord Adam can do with Tenant Joe's leftover belongings (some states even require landlords to rent a storage locker for them!), so make sure you know what your state's laws are regarding leftover personal property

From there, it's all clean-out, repairs, screening new tenants, and signing a new rental agreement If you choose to file the eviction yourself instead of hiring an agent, be very careful to follow your state's eviction laws, and see the resource box below for some information about state-specific eviction notice laws and forms

Kevin Kiene manages a website for landlords that offers customizable, state-specific rental agreement forms, along with state-specific eviction instructions and eviction notice forms.]]> http://www.articlelisted.com/Art/6367/237/Giving-Eviction-Notice-and-a-Typical-Eviction.html