Cash Bloodletting from Rental Home Subletting

A house on my street is a rental home.  The owner had a long term tenant who always paid on time and was an agreeable guy.  It seemed like a good situation.

However, every few months I would see moving trucks parked in front.  I wondered if the tenant was moving out, but sure enough, days later I would still see his human size dog running out his front door (as I would shield my 2-year old son from his “affections”).  The tenant hadn’t gone anywhere.

So what was going on? 

The tenant was a serial subletter.  He would rent out rooms to strangers.  It seemed like a good way to make extra cash being that he travelled a lot for work and lived alone (besides the aforementioned gigantic dog). 

But something went really wrong recently.  The tenant didn’t click with the newest subletter and they got in a physical altercation due to undone housework.  His dog attacked the subletter (poor guy!) protecting his owner and the subletter needed an ambulance.

An ambulance, several police officers and animal control showed up at the house and the subletter wound up getting a restraining order against the tenant.  Now the tenant was not allowed to go to his rental home.  I had a new neighbor, and not one who was actually on a lease.  However, due to the legal system, he had rights to the house and the tenant was essentially homeless because of the restraining order. 

It was a mess for the owner.  The subletter had to be evicted (which took a month or two) and it left the owner out thousands of dollars. 

So, is subletting evil?

Generally-speaking, yes, I wouldn’t recommend it.  However, if done properly, it can work well to keep a house occupied.

The two ways to avoid subletting bloodletting:

1. Be involved.  If a tenant wants a subletter (and this is applicable for any new home occupant), a rental application needs to be run.  Owners need to know exactly who is going to be living in their rental home.
2. The new occupant needs to be on a lease and the security deposit situation needs to be addressed (who has rights to it now?).

As a landlord, it’s easier to just let tenants do their thing as long as rent is coming in (like in this instance where it happened for years without incident), however it can come back to bite (pun intended).

As a Charlotte property manager for many years, we’ve picked up many good tenants from allowing tenants to add additional occupants to their lease.  However, we’ve never budged on the two criteria above.

Don’t let subletting turn into a mess.  Control the situation, run a rental application, and (if approved) get them on a lease!

Happy Landlording!

Brett Furniss is a property manager at BDF Realty (Charlotte Residential Property Management), the trusted real estate advisor for Charlotte landlords & Home of $100 Flat Fee Property Management.   BDF Realty utilizes their innovative Pod System for exceptional customer service in residential property management, home repairs, and home sales for single-family homes, Uptown condos, and town homes in the Charlotte-Metro Area.  Contact Us Today!

Love, Kindness & Gratitude: Setting the Tone in Property Management

^“Beloved, let us love one another, for love is from God, and whoever loves has been born of God and knows God. Anyone who does not love does not know God, because God is love."  I John 4:7-8

Man, it’s nice when people are nice.

 

We have a tenant, Monica, who just goes out of her way to be easy to work with.  If we need her to do something for us, she does it.  There is no complaining, back biting, or procrastination.  Communication with her is a joy.  And she is soooo nice and gracious.  When we perform repairs (aka our job), she is so gracious and thankful.  Her rent is always on time.  She and her family go out of their way to perform maintenance to the house.  And at the end of her positive and funny e-mails, she always includes the Bible verse above.

 

We have another client, Mike, who goes out of his way to compliment us for working on his home; once again, for just doing our job.  Small things don’t escape his notice.  His level of graciousness is astounding.  Truthfully, we should be thanking Mike much more than he thanks us.  We made a good amount of money working for Mike: we helped him buy houses, repair them, manage them, and finally, sell them.  These are all things we collect fees for.  But he would let us know how much he appreciated our efforts, even if the work was imperfect at times.

 

I think back to how our relationships started.  It would be easy to say that they were “good folks” and that they get along with everyone (they probably do!).  But why? 

 

They set a positive tone with us early.  Early conversations were easy, paperwork was complete and accurate, and meetings were punctual.  They were easy going about details as we got to know each other.  They got the things they needed from us, but their requests were made in a graceful and kind manner. 

 

Property management can be a difficult business.  At the face of it, a property manager is the middle man between two parties with divergent interests, the owners and tenants.  Both would prefer that the other party pay for anything that breaks.  The owners want the rules of the lease followed precisely to protect their investments, while the tenants want to use the house as they see fit.   The property manager is hired by owners and is tasked with protecting their investments, but can’t get it done well without tenant involvement and buy-in.  It’s a balancing act that produces many colorful (and costly) stories of when the relationship breaks down.

 

But Monica and Mike also show that it can be a rewarding business with warm relationships. 

 

As the property manager, our job is to always set the tone early with kindness, love, and gratitude.  The tenants need to feel this from us, their point of contact, from the moment of their first inquiry.  Even if we wind up having to reject a tenant application, we can do it kindly.  But if we wait for the clients to set the tone, it might not happen.  And it needs to.

 

So set the tone early!  This will allow landlords to reap the benefits of a mutually fulfilling partnership and make property management a joy.

 

Thank you to our clients (Monica, Mike & many others) who make coming to work a pleasure.

 

Happy Landlording!

 

Brett Furniss is a property manager at BDF Realty (Charlotte Residential Property Management), the trusted real estate advisor for Charlotte landlords & Home of $100 Flat Fee Property Management.   BDF Realty utilizes their innovative Pod System for exceptional customer service in residential property management, home repairs, and home sales for single-family homes, Uptown condos, and town homes in the Charlotte-Metro Area.  Contact Us Today!

Being a Duke Hoops Recruit & Landlording: YDKWYDK

As much as I hate to admit it (being a UNC guy), Duke University is a worthy rival on the basketball court.  A big part of that is their ability to recruit great high school players.  They go after the best of them and have been very successful in landing them in Durham.  Many of them were so good that they only played one year at Duke and then left early to play in the NBA for millions of dollars. 

But, for others, it didn’t work out that way.

Point guard Derryck Thornton was one of those Duke recruits.  He was an esteemed 5-star recruit who was finishing his junior year of high school in 2015.  Duke was thin at point guard for the upcoming season and they convinced Thornton to “reclassify”; this allowed him to graduate early from high school and join the Blue Devils for the 2015 season. 

It was a great honor.  The defending national champions needed him to come early and play.  He was only 17 years old!  So he said “yes”, enrolled at Duke early, and was starting at point guard.  It seemed like he had the world at his fingertips!

But, YDKWYDK (You Don’t Know What You Don’t Know).  A year later (when he originally should have been starting school at Duke), Thornton was transferring out to play basketball for the USC Trojans.  It was allegedly a combination of factors he could not have seen coming: his freshman year didn’t go as well as they had hoped, certain Duke players inexplicably didn’t go pro (that would have made more playing time available to him), and other more heralded recruits joined the 2016 team.  He went from being really needed to being really expendable.  So he was gone.

YDKWYDK.  By definition, it’s hard to protect yourself against the unknown.  This is especially true in property management when there are so many variables; renters (people) are complicated and they are all so different!  It’s best to have someone who might know what you don’t know because they’ve been there before.  Experience counts! 

I know I’m biased towards using a property manager, but I understand the self-management side of it as well; I’m all for saving money!   It’s cheaper if I fix the sink, as opposed to my plumber, but what about if I miss something and it causes a leak behind my wall?  Then I’ve got a bigger, much costlier problem.  YDKWYDK

And if property management is merely a hobby, it’s really tough to know what decisions can be costly down the road:

“My friend/co-worker wants to rent the property.  He seems like a good guy.  Should I rent it to him?”

“Should I allow any pets in my rental home?  If so, which ones are okay?”

“Is it important to do credit checks?  If their score is low/high, is that an instant denial/approval?”

“Do I need to do home inspections?  If so, what am I checking for?”

If Thornton had been told in 2015 that he would be transferring to another college after his freshman year at Duke, he probably would have had a good laugh.  But it happened.  The same can be said of many decisions being made today by landlords who dabble in property management; the unforeseen long-term costs of seemingly innocuous choices might make the expense of having a property manager seem very reasonable!

YDKWYDK.  Happy Landlording!

Brett Furniss is a property manager at BDF Realty (Charlotte Residential Property Management), the trusted real estate advisor for Charlotte landlords & Home of $100 Flat Fee Property Management.   BDF Realty utilizes their innovative Pod System for exceptional customer service in residential property management, home repairs, and home sales for single-family homes, Uptown condos, and town homes in the Charlotte-Metro Area.  Contact Us Today!

Wesley Snipes’ IRS Case for Rental Home Inspections

Wesley Snipes is a great actor.  Watching him in White Men Can’t Jump, Major League, and other films is some good theater. 

But Wesley got some bad advice at tax time in the late 90’s.  His accountants told him there was a loophole that would allow him to avoid $7M in taxes; in fact, he didn’t even have to file tax returns.  He thought that sounded pretty good.  And besides, everybody knows the IRS isn’t really paying close attention with the sheer amount of returns they have to log every year. 

 

Well, the IRS was paying attention.  And they got Wesley’s attention with a 3-year prison sentence that ended in 2013.

 

It was sad for everyone: his many fans, his accountants (who received even stiffer jail sentences), the IRS who had to use limited resources to prosecute his case, and especially for Wesley (who had reputedly earned over $40M from 1999-2004).

 

There were a lot of questions in Wesley’s case, but one almost undeniable certainty- Wesley’s tax returns now are the most truthful and timely documents he files every year. 

 

This logic spills over into residential property management and periodic home inspections.  If landlords can show tenants that they are paying attention to what is going on in the house and whether maintenance is being done, they will undoubtedly get a better conditioned house when the tenant eventually vacates.

So, yes, this means going over to and inside the rental house.  I’d highly recommend giving the tenant a week or so notice of when the home inspection is and letting them know what you are specifically planning on looking at (e-mailing them a list is helpful).

 

17. What should a landlord include in their home inspections? 

1. Anything they care about. 

 

Some general things I care about:
 

1. Do the keys still work?
2. Is the lawn and landscaping being kept up?
3. Are the air filters being changed?
4. Are the fire and CO detectors still there on each level of the house and are they functional (aka is the tenant changing the batteries when they die?)
5. Is the home clean?
6. Does it smell like smoke?
7. Is there evidence of a pet if there isn’t supposed to be one?
8. Does anything look weird?

Feel free to add anything else of interest.  I also think conducting the home inspections twice a year (roughly on month 3 and month 9 of the lease) works well.  Paying attention is good, stalking is bad.

 

Wesley has some well-maintained tax returns now and periodic home inspections should lead to some well-maintained rental homes.

 

Happy Landlording!

Brett Furniss is a property manager at BDF Realty (Charlotte Residential Property Management), the trusted real estate advisor for Charlotte landlords & Home of $100 Flat Fee Property Management.   BDF Realty utilizes their innovative Pod System for exceptional customer service in residential property management, home repairs, and home sales for single-family homes, Uptown condos, and town homes in the Charlotte-Metro Area.  Contact Us Today!

Rental Lessons Learned from Britney Spears’s Management Team

On New Years Day 2004, Britney Spears’s management team was just waking up to a wonderful, wonderful, and more superbly wonderful morning.  They had one of the hottest singers on the planet, she was making them tons of money, and her momentum was strong. 

 

Everyone was happy and content. 

 

Or should I say everyone with the exception of Britney, but she had enacted a quick plan to change that.

 

In the spur of the moment, she flew her childhood friend, Jason Alexander (not the rich one from Seinfeld), from Louisiana to Nevada.  Then after a night of partying, she proposed they get married.  Jason was down and they found one of those quickie Las Vegas chapels to hitch them up.  They were now married and well on to their way to marital bliss.  They just had to break the news to their families, and Britney to her management team.

 

I imagine Britney’s conversation with her management team went something like this:

 

Britney: I married Jason Alexander last night!  It was…

 

Management Team (interrupting): The one from Seinfeld?

 

Britney (laughing): No!  Let me tell you the story!  Jason looked me in the eye and I knew it was meant to be and we drove right to the chapel and…

 

Management Team (interrupting): Whoa!  Hold on.  I think you skipped the most important part of the story, the part where you stopped by an attorney’s office and had a prenup drawn up before you made it to the chapel, right?  Right????

 

Britney (pausing): Not ‘zactly.  You’re sort of killing my buzz right now.

 

Britney’s management team started formulating the equation in their minds:

 

 Short term courtship + booze + no prenuptial agreement + gross income equality (gazillions versus $20.00) + contractual lifetime commitment = Britney financial disaster and the eventual termination of our employment

 

This didn’t add up well for them.

 

Property managers are often put in similar situations with rental applications.  Potential tenants walk into a rental home and fall in love with it.  The owners are anxious to have it occupied.  It’s a boozy, quick courtship that seems destined to consummate.  Is it a match made in Heaven?

 

Maybe.  But an experienced (property) management team can step in and start asking the tough questions about the tenants before anything is signed: 

 

How much money do they make?

 

Did you see they have 2 monthly car and student loan payments as well?

 

What happened with that past eviction?

 

Isn’t the tenant’s dog uninsurable because it’s an aggressive breed?

 

A tenant that seemed like a good idea at the time may become less desirable under more vetting.  To avoid something like the Jason Alexander nuptials, it’s usually better to have some unattached, impartial party give some input on important coupling decisions before tying the knot.

 

While Britney’s management team was able to forge an annulment and put down the marriage in less than 55 hours, it can actually take a few months to part ways with a less than ideal tenant.  So make sure the vetting is done before anyone gets too excited!

 

Happy Landlording!

 

Brett Furniss is a property manager at BDF Realty (Charlotte Residential Property Management), the trusted real estate advisor for Charlotte landlords & Home of $100 Flat Fee Property Management.   BDF Realty utilizes their innovative Pod System for exceptional customer service in residential property management, home repairs, and home sales for single-family homes, Uptown condos, and town homes in the Charlotte-Metro Area.  Contact Us Today!

Replace the Butter with Margarine and Nix the Washer & Dryer Please

Americans demand to have their food made-to-order.  We no longer live in a culture where you eat what’s put in front of you; rather if you don’t like an ingredient and would prefer to have other ingredients instead, it is deemed socially acceptable to make the food preparer bend to your individual whims.  Burger King based a multi-million dollar advertising campaign on (and trademarked the phrase) “Have It Your Way,” and now every restaurant does the same.  I feel for the workers in the restaurant industry who have to put up with all of us creating our own menus.

I read an article about how the French chefs despise American tourists even more now.  We walk into their 5-star restaurants, look at the menus (which we expect to be written in English), and have conversations like this:

American Tourist: How’s the escargot?

French Waiter: Magnifique!

Tourist: What are the snails cooked in?

Waiter: Excusez-moi?

Tourist: I mean, I’m trying to cut down on butter, so I’d prefer the chef uses low-fat margarine… butter is bad for the heart, you know.  And garlic gives me gas, so let’s cut that out too if it’s in there…  Try to keep the salt to a minimum.  And were these snails bred and treated humanely before bring cooked?

Waiter: Sacre bleu!

This thinking has permeated into real estate as well.  At BDF Realty, we were selling a house for one of our Charlotte property management clients.  An investor came on to the scene who loved the house and wrote a contract to buy it.  It was a great offer and we wound up accepting it with minimal negotiation.  However, the investor did have one demand that caught me off guard and was not negotiable- the washer & dryer needed to be out before closing.

Now, if the washer & dryer were on their last legs, I’d understand.  But our client had bought these about a year ago; it was a nice set that worked perfectly.  But the investor was adamant that they needed to go.  So, it made me ponder: why wouldn’t the investor want these as an asset for his future tenants?

I thought about the prospective Charlotte tenants who contact us to rent our houses.  Not many of them ask about a washer & dryer.  I don’t think we’ve ever had a deal fall through because a house didn’t have them.  We’ve had conversations with prospective tenants about the issue of moving the washer & dryer that was already in the house so they could use their own that they were bringing (that’s a pain!).  And having a washer & dryer in the house didn’t allow us to charge more rent.

Furthermore, I recall the repair requests we get from tenants who have washer & dryers our owners provide.  We send out appliance repair people that, at times, have cost our owners hundreds of dollars.  Sometimes the washer & dryers are not repairable and have to be replaced which costs our owners even more money and drains their ROI. 

So, if tenants don’t act like they want washers & dryers and it costs our owners money to have and maintain them, maybe this investor was on to something?  He makes a compelling case to get washer & dryers out of rental homes and let the tenants fend for themselves. 

Maybe it is smart to “have it your way” when you’re buying.  Experts do say that too much butter is bad for the heart!

Happy Landlording!

Brett Furniss is the head property manager of BDF Realty (Charlotte Residential Property Management), the trusted real estate advisor for Charlotte landlords & Home of $100 Flat Fee Property Management.   BDF Realty utilizes their innovative Pod System for exceptional customer service in residential property management, home repairs, and home sales for single-family homes, Uptown condos, and town homes in the Charlotte-Metro Area.  Contact Us Today!

Long Term Real Estate Planning is (Politically) Correct!

If you knew you were running for president someday, you’d probably do many things differently.  You may rethink all your controversial letters to the Charlotte Observer loudly demeaning the local politicians (those idiots!!); you may need their help someday campaigning on your behalf.  That Election Day when you were in the throes of a “House of Cards” marathon, scarfing down Jet’s Pizza, and didn’t quite feel like driving to the polls?  Better get up, wipe the sauce of your mouth, punch your chad, and make it look like you care about the political process!  The video your friend made of you acting like a fool with the pool boy on that cruise a few years back?  Better make sure that doesn’t find its way to Facebook because Glenn Beck will have a field day with it during the primaries.

This whole accountability thing can be scary!  But if you know what you want to do in the future, you can plot your moves (and non-moves) and optimize your future plans.

Real estate works the same way and requires taking a long term planning view.  What do you want your real estate to accomplish for you?  And over what time period?

From being a Charlotte property manager for over a decade, we’ve had clients who have had many differing reasons why they are holding real estate.  We try to put together a strategy to cater to these needs individually.  Here are a few examples:

1. “I have a house that I don’t have enough equity to sell right now.  I want to rent it out until the market turns up again.”

With that in mind, we want to minimize fix-up costs (touch-up paint & carpet steam clean when turning over the property between tenants) before we see the market improve.  Once it does, we’ll look to replace the carpet and give the home a full paint job to sell at the top of the market.

2. “These houses are my retirement.  I want to keep them forever and live off the residual income.”

We’d look to find long-term tenants on the private market (multi-year lease only) or Section 8 tenants (who now, after 18 months of vacancy in one house, cannot move until they leave the program).  We’d also look to more actively make optional repairs to maximize the enjoyment of the tenant.

3. “I want to have the option to stay in or get out depending on market conditions!”

We’ll keep you apprised of the market sales and rental prices 60-75 days prior to the current lease expiration.  Then you can let us know which way you want to go, rental or sale.  We’ll also let you know when an opportunity comes up when one of our investors is looking to buy an investment home with a tenant already in place to create a win-win for both of you.

The best way to get the outcome you want tomorrow is to wisely plot your moves (and non-moves) today.  There are very few people who are politically incorrect, like Donald Trump, to whom this (apparently) doesn’t apply!  But, in real estate, long term planning will save you both time & money.

Happy Landlording!

Brett Furniss is the head property manager of BDF Realty (Charlotte Residential Property Management), the trusted real estate advisor for Charlotte landlords & Home of $100 Flat Fee Property Management.   BDF Realty utilizes their innovative Pod System for exceptional customer service in residential property management, home repairs, and home sales for single-family homes, Uptown condos, and town homes in the Charlotte-Metro Area.  Contact Us Today!

Section 8 Program Worth Revisiting? A Definite Maybe

No one really liked Janie.  And there were a lot of reasons why.  For a teenager, she was pretty much a know-at-all.  Stubbornly obnoxious.  She would not let you get a word in edgewise.  Always right.  Rude.  Cocky.  Maladjusted.  And that was just her award-losing personality.  And physically?  Her scrawny frame, big glasses, and overflowing braces (often full of food scraps) made her equally unappealing.

 

Now fast forward 5 years in the life of Janie.  After years of dejection, she has softened a bit.  Instead of looking completely past you before beginning her monologue on her life’s recent happenings, she’ll toss a few platitudes your way that make you feel a small connection.  “How are you doing?”  “How’s your brother?  “You get that mole taken off your back yet?”  She’ll still take the last doughnut off the plate in front of both of you, but now she’ll pause and feign a glance your way for approval.  She still texts constantly when you talk, but now raises her head for momentary eye contact when you bring up your mother’s cancer treatments.  And her scrawny body has filled out, she started wearing contact lenses, and has a nice straight smile now; some may say she isn’t bad to look at, relatively attractive even.

 

But Janie’s not for everyone.  Maybe not for most people.  But some people “get her” and even go out of their way to be around her.  Some of your friends have even dated her.   

 

Ever know anyone like that?

 

The Section 8 program is like Janie in a way.  Several years ago, I wrote how we needed to get our landlords out of the Section 8 business because it was impossible to get a good ROI for our owner clients.  As a Charlotte property manager, we couldn’t cost justify the lower rents, costly repair items, poor communication, and overall effort needed to recommend the program.  And I still get a little queasy thinking about it.

 

As a footnote, we do have clients that have kept their homes in the Section 8 program.  The owners allowed the tenants to keep renewing their leases (most at significantly below market rates) and the Section 8 tenants chose to do so.  The advantages to our owners are continued rental payments and not having to fix-up their properties to get them market-ready for new tenants.  The negatives are that as Charlotte rental rates have been going up 5-10% annually, Section 8 has capped their permitted rental increases (if approved) to 2% annually (in real numbers: $900 monthly rent = $18.00 rent increase- not much to get excited about).  Section 8 also conducts annual inspections which almost always lead to an owner repair bill; some of the items would never have to be repaired if the house didn’t have to meet many government regulations (re: peeling paint on ceiling, etc.).

 

However, in the past 6 months, Section 8 has enacted 2 changes that I thought were very landlord friendly:

 

1. Locking a tenant into a property if they have lived there for 18 months.  The owner has the option of not renewing the lease, but the tenant does not have the option of moving if they want to stay in the Section 8 program.
2. Changing house inspections from annually to biannually.  So, now the repairs only have to be made every 2 years (which is a huge deal for landlords who have gone through the nightmare of rent abatement for multiple inspection failures).

 

This still doesn’t make Section 8 work for everyone, but it might start making sense for some people.  And as responsible property managers, it is something we will need to consider recommending again for certain owners (risk averse) and certain properties (difficult to fill, long term investment holds, areas of historically low rent appreciation).  While the private rental market might be compared to the stock market (higher yields, more volatility), the Section 8 market might now be compared to the bond market (lower yields, steadier income).

 

So… your best buddy saw Janie the other day and said she was looking good and they had a nice chat.  He said she asked about you.  Your stomach still churns when thinking about your past dealings with her, but since she’s interested, maybe she’s worth meeting up for coffee?  Maybe she’s changed?

 

Anyway, it’s something to think about- a definite maybe.  Happy landlording! 

 

Brett Furniss is the head property manager of BDF Realty (Charlotte Residential Property Management), the trusted real estate advisor for Charlotte landlords & Home of $100 Flat Fee Property Management.   BDF Realty utilizes their innovative Pod System for exceptional customer service in residential property management, home repairs, and home sales for single-family homes, Uptown condos, and town homes in the Charlotte-Metro Area.  Contact Us Today!

Talk to Your Tenant: Win-Win is Better Than Lose-Lose, Right?

Years ago, there was a small, remote island that was relatively non-descript and unnoteworthy.  Then two multi-billion dollar pharmaceutical companies decided their business’s future hinged on acquiring it.

 

Why?  Its climate and soil composition was ideal to grow a certain tree that had revolutionary medicinal value.  The pharmaceutical companies needed to harvest and grow and lot of these trees and this was the only place where they could find the perfect conditions to do so. 

 

So what happened?  These heavyweight industry titans went after each other to procure this island resulting in a bidding war (hundreds of millions for dollars over a nominal asking price), lawsuits, threats, and tons of bad blood.  After millions had been spent and not one tree had been harvested after a year, a level-headed senior executive suggested the use of a mediator.  People had their doubts because the companies were so tight-lipped about trade secrets; they wouldn’t divulge anything about their intended use of the trees.

 

As the story goes, the mediator ironed out a deal within an hour.  All lawsuits were dropped, conversations turned from sharply bitter to excitedly collaborative, and the rivals eagerly bought the island together in joint ownership.   They were both in production within 6 months.

 

What happened?  Both pharmaceutical companies still needed the trees, but the first only needed the leaves the other only needed the bark.  Once this was discovered, both pharmaceutical companies were in business!  Adversaries became profitable allies.

 

It was a pretty simple solution, right?

 

Communication is important, especially in the property management business.  And, conversely, non-communication can be very expensive and time consuming!

 

A rental relationship can thrive with good communication and turn seemingly lose-lose arrangements like a tenant needing to get out of his lease into win-win situations.  Here are a few examples:

 

A tenant wanted to get out of his lease early due to a job loss during the spring and the owner wanted to sell.  This turned out well as the tenant paid an extra month of rent to terminate their lease and the owner had a vacant month paid for while the home was being fixed-up during an active spring/summer sales market.

 

Or a tenant was a landscaper and needed an extra month to vacate.  The owner wanted to sell immediately, but allowed for an extra month of renting.  For this negotiation, the tenant landscaped the yard for free before vacating.  This gave the tenant the time they needed, while saving the owner money for fixing up the yard.

 

These types of win-win negotiations are only possible when landlords and tenants talk and find out the best path forward together.  A good property manager makes sure that these issues are fleshed out and potential solutions are vetted thoroughly.

 

Anyone can take a hard line on a lease and impose their will legally.  But this is rarely the best and most profitable path.

 

As a postscript to the initial story, the big loser was the owner of the island.  Through incomplete information, the island owner almost achieved a huge, unnecessary payday.  In the property management sphere, the island owner is usually the lawyers who are paid to enforce the lease.

 

So talk to your tenant!  Good things can happen and can turn seemingly lose-lose scenarios into win-win.

 

Happy landlording! 

 

Brett Furniss is the head property manager of BDF Realty (Charlotte Residential Property Management), the trusted real estate advisor for Charlotte landlords & Home of $100 Flat Fee Property Management.   BDF Realty utilizes their innovative Pod System for exceptional customer service in residential property management, home repairs, and home sales for single-family homes, Uptown condos, and town homes in the Charlotte-Metro Area.  Contact Us Today!

Do Your Rental Home Repair People Care? 2 Lessons Learned

“People don’t care how much you know until they know how much you care.”

Theodore Roosevelt

 

“We have met the enemy and he is us.”

Walt Kelly (Pogo)

 

When you’re in the property management business, many different things in houses will break.  It’s a sad reality, but it is also the reality that keeps property managers in business (so we keep our complaints to a minimum!).

 

Contrary to popular thought in Charlotte, we really don’t know everything (please laugh!).  So like most property management companies, we employ repair professionals to work on things that break (plumbing, roofs, appliances, HVAC, painting, etc.).  They are, in effect, an extension of us at BDF Realty.

 

So how do we know if the repair people we use are any good?  The simple answer is if things are fixed and tenants are not calling us to say their issue did not stay resolved.  And if the issue recurs (which happens to the best of them), how does the repair person handle it?  Do we get charged for another visit to the house?  Do these recurring issues happen often?  How long does it take for them to get back to do the repair again?

 

So skill-wise, we can figure out if a repair person is any good in a reasonable amount of time.  Let’s call those the hard skills.  But what about the soft skills?  Are they kind?  Conscientious?

 

Do they care?

 

That’s tougher.  We can’t go on every service call with our repair people.  And if they can’t at least fake being nice and caring during those calls, they weren’t going to last anyway.  So how can you tell if they care?

 

I’ve learned 2 lessons over the years:

 

1.  If any tenants call to complain about a repair person, there is probably something wrong with the repair person.  Two calls and there is definitely something wrong.

 

It takes time and effort to locate the property manager’s information, call them, and detail your experience without sounding like a whiner.  Most tenants don’t care enough unless something is really off.

 

Several years ago, I used a really nice, reasonably priced handyman to work on many of our homes.  When I would see him in person, he was sharp as a tack and would bend over backward to resolve issues.  But I started getting a few tenant calls about chronic lateness and “shady” people he was bringing with him to work on jobs.  We had to sever ties with him.  He’s still a nice guy, but he just didn’t care enough to show up on time and be professional.

 

2.  If the repair person is treating us poorly, chances are they are doing the same to the tenants.

 

Recently, we had a repair person work on an issue at a vacant home for us.  We gave him the lockbox code so he could get in and do the work.  The next day we were at the property and found the house key in the lockbox, broken in half.  We called the repair person and he said he had broken the key in the lock and forgotten to call us about it.

 

To me, that’s sort of a big deal, but not the key breaking per se.  I will be the first to tell you that things happen.  As Charles Swindoll said, “Life is 10% of what happens to me and 90% of how I react to it.”  I’m not going to give someone a hard time over things breaking; truthfully the lock was tough and anyone could have broken a key in it.  But not thinking it was important enough to let me know immediately about?  I have to ask, “Does he care?”

 

Having repair people that care matters.  Being a property manager who cares is important too.  And the two are exactly the same to the tenants we serve.

 

Happy Landlording!

 

Brett Furniss is the head property manager of BDF Realty (Charlotte Residential Property Management), the trusted real estate advisor for Charlotte landlords & Home of $100 Flat Fee Property Management.   BDF Realty utilizes their innovative Pod System for exceptional customer service in residential property management, home repairs, and home sales for single-family homes, Uptown condos, and town homes in the Charlotte-Metro Area.  Contact Us Today!

Who Pays Incidentals When Things Break? A Rental Home Dilemma

The Situation:

The tenant (Mitch) has received higher-than-average water bills for the past two months.  He calls his Charlotte property manager who sends out a plumber to investigate.  The plumber says there is a pipe cracked underneath the driveway that will cost $2,500.00 to fix. 

 

Mitch’s take on the situation:

“I just rent here.  My water bill is usually $60.00/month.  The last 2 months it’s been $150.00/month.  So, I’m out an extra $180.00 at no fault of my own.  I pay my rent on time every month and don’t have the budget to afford this.  If you ask me, the owner is lucky to have a tenant like myself that doesn’t cause any problems.”

 

Bottom line: Mitch requests a $180.00 reimbursement from the owner for excessive water expenses.

 

The owner’s take on the situation:

“$2,500????  The rent on this place is $1,050.00/month, so I’m looking at 2.5 months of rent down the drain.  How does a pipe crack happen under a concrete driveway??  And the tenant wants an additional $180.00?  Please let Mitch know that I didn’t burrow under his driveway a few months ago with a hammer and smash the pipe.  Let me get back to you on where I’m going to get the money to pay the mortgage and for this pipe leak.  I think there is assumption that because I’m the landlord, I have millions of dollars sitting around for this type of stuff.  Not true!”

 

Bottom line: The owner does not look at Mitch’s request (or the entire situation) favorably.

 

So who pays the incidental water expense? 

 

First of all, this is a bad situation for everyone, with the exception of the plumber.  The tenant has higher water bills at no fault of his own.  The owner has a broken pipe at his house (and an unhappy tenant) at no fault of his own.   

 

In life, things break.  And things sometimes break with no one at fault.  We’re in a society that expects 100% uptime on everything, but that is a fallacy in a world where things wear and rust out.  And when things break, there is cost and (usually) a mess to clean up.  And everyone expects some other party to pay for it (not me!!). 

 

So we have to go to the lease for guidance.  Most standard leases that I’ve seen say that unless there is “willful or wanton negligence” on behalf of the landlord, landlords are not responsible for incidental damage from things breaking.  (Note: I’m not a lawyer and don’t even play one on TV)

 

If the landlord sent someone to fix an issue in a reasonable amount of time, he should be in the clear from having to pay additional costs beyond the repair.  That’s not to say there may not be additional factors involved that may compel the owner (or tenant!) to offset the other’s financial outlay.  But, normally speaking, the lease seems to offer this protection to the landlord.

 

So, if you are the tenant, what to do?  If Mitch has renters insurance (which is a requirement of our leases), he has another venue to ask for relief from.

 

We’ve had other similar examples: a hot water heater leaking on to a laptop, food being ruined from a refrigerator breaking down, and others.  To the tenant, it is a loss of a computer or replacing spoiled food; to the landlord, it is buying or repairing a hot water heater or refrigerator.  Ugh!

 

Bottom line: When things break, it is not a good situation for anyone.  But realize that it is a part of life that is 100% guaranteed to happen to you many times.  Try to be civil and understanding when it does.  Neither party likes it!

 

Happy Landlording! 

 

Brett Furniss is the head property manager of BDF Realty (Charlotte Residential Property Management), the trusted real estate advisor for Charlotte landlords & Home of $100 Flat Fee Property Management.   BDF Realty utilizes their innovative Pod System for exceptional customer service in residential property management, home repairs, and home sales for single-family homes, Uptown condos, and town homes in the Charlotte-Metro Area.  Contact Us Today!

Satellite Dish Installation on Rental Homes: An Innocent Request?

There is a potential danger lurking in your rental home.  It may seem innocuous, but it can bring lots of shady characters and dangerous ideas into your tenants’ lives.  It never sleeps, relentlessly pushing its own agenda and standards on to its unsuspecting victims.

 

It’s satellite TV.  And the same moral danger exists to all of us.

 

But, alas, we live in a democracy and can’t really control what people choose to watch. 

 

However, I do want to talk about the hardware- satellite dishes.  We get relatively innocent requests from tenants:

 

Tenant: Hey Brett, we mailed the rent check today.

 

Me: OK.  Cool.  Thanks!

 

Tenant: And there was something else.  I’m really getting into FanDuel fantasy football and want to get the NFL package from my satellite provider, so I need you to sign a form that gives me permission to put a dish on the roof.

 

Me: OK.  But I’m pretty sure there is already a dish up there.

 

Tenant: Yeah, but it’s not the right one.  We need one from this other carrier.

 

Me: OK. But are they taking down the other dish and making sure that the one they are putting up is coming off too after you vacate?

 

Tenant: I don’t think so…

 

Me: OK.  I’m pretty sure dishes aren’t like flowers; they don’t look that great and involve drilling into the roof and stuff.   I’m not sure we really want to be collecting dishes up there?             

 

Tenant: You’re saying “OK” a lot, but have not yet said “OK” to the dish…

 

Every landlord wants tenants to (legally) enjoy their rental homes.  But what about these dish installation requests?

 

As Charlotte property managers, we typically recommend saying “OK”.  But we also add the following caveats that need to be agreed to in writing:

 

1.  The tenants are responsible for any damage the dish causes

 

2.  The tenants are responsible for having the dish and all the wiring taken down when they vacate

 

We’ve taken over management of rental homes that have had 4(!) dishes installed on them.  It’s not pretty.

 

So, we’re not trying to tell anyone what they can watch, but we are making sure the venue they are watching their NFL package in is protected.

 

And good luck in FanDuel!  But please don’t bet the rent money on your line up, OK? 

 

Brett Furniss is the head property manager of BDF Realty (Charlotte Residential Property Management), the trusted real estate advisor for Charlotte landlords & Home of $100 Flat Fee Property Management.   BDF Realty utilizes their innovative Pod System for exceptional customer service in residential property management, home repairs, and home sales for single-family homes, Uptown condos, and town homes in the Charlotte-Metro Area.  Contact Us Today!