What’s The Most Important Resident Screening Criteria?
When it comes to screen applicants, each property manager has their own set of criteria that potential resident(s) must meet. These principals are applied to each prospective tenant (s). The same criteria must be applied to every applicant that walks in the door. Establishing a consistent screening process when renting an apartment or a house drastically reduces the threat of discrimination lawsuits.
So what’s important to you? While there are always exceptions to this, a good credit score is a great first indicator that applicants may be reliable residents. However, it’s important to note not everyone with a high credit score is a good resident risk, and that not everyone with a low credit score is a high risk.
Another key indicator is job history. In fact, the prospective tenants’ job history may be more important than their good credit score. Applicants’ stable job history usually indicates they are responsible, reliable, and dependable. Outstanding applicants are the ones with a stable job history rather than just a high credit score.
Good rental references are other solid indicator of an applicants’ level of risk. Along with a stable job history, good rental references indicate that the applicants will pay their rent reliably, will likely not destroy the property, and will leave it in good shape when they move out. What more could a property manager want?
Criminal background is another area that needs to be looked at. While at times, this can be a judgment call, violent crime or drug convictions should immediately raise a red flag in the approval process.
We know that some property managers and leasing agents who base a large part of their decision on appearance. However, this can be a major mistake in many ways. Dress is much more casual these days, and dressed-down applicants do not indicate that they are unable to pay the rent. More importantly, neatly dressed individuals provide no guarantee that their rent will be paid on time. However, personal poor grooming or an unclean appearance could be reflection of a potential lack of care of your property
While a lot of property managers have developed a sixth sense of sorts when evaluating applicants, it’s important to make sure that your rental decisions are based on facts and documented for your records. Careful attention to the criteria you set will ensure that your good applicants turn into good residents.
Homeowners Insurance: How to Choose the Right One for You
Buying a home is more than just walking into a house. Not only you want to make sure that you have the right investments set in place, but you also want to make sure that you have the right safeguards to protect you in case of an unfortunate event or occurrence .
Having homeowners insurance is an important part of investing in real estate and living in a home. With most lenders, it is required that you have homeowners insurance. This is because the lender has a vested interest in the safeguard of your property.
Most homeowners insurance is chosen prior to the final closing of your home. This insurance protects not only the physical property (actual structure of the house), but also your home's contents as well. In addition, homeowners insurance can protect against accidents, liability issues and natural disasters.
Homeowners insurance is divided into a variety of categories, all beneficial to different situations. The best way to decide on homeowners insurance is to determine the value of your physical property and the value of its contents. You want to be sure you cover as much as its value as it is affordable.
What Does Homeowners Insurance Provide?
Each homeowner insurance policy is different, but standard policies usually provide:
- Broad coverage for damage to your house and any permanent structures on your property -unless the cause of the damage is specifically excluded in your policy;
- Personal property coverage due personal items in your home that may be damaged or destroyed and are specified in your policy;
- Limited coverage which is available for items such as stolen jewelry;
- Additional home coverage for valuable items which can be purchased through endorsements to your homeowners’ policy.
- Coverage for hurricane and flood are usually separate policies and may require and/or advice.
Note: Coverage amounts vary depending on your state of residence. Choosing a deductible is a very important decision which will impact the cost of the policy versus its coverage.
Property Management 1099 Cheat Sheet
Even though the IRS has a thorough set of instructions available for 1099 processing, manypeople still find themselves unsure of who should receive a 1099 and what the minimum amount is. Others are unclear about when they need to mail the 1099’s by, or when they need to be filed with the IRS.
For the record, contractors, service companies, and property owners should all receive a 1099. General speaking, $600.00 needs to be paid out to that individual or service company before a 1099 will need to be processed. 1099’s generally do not need to be processed for corporations, although there are some exceptions. I’ve made a list of suggestions that you can use as a cheat sheet, or as a reminder of the basic rules you should know to make 1099 processing quick and painless.
- Run a preliminary report. Review closely and make sure that you have the appropriate TIN (Tax I.D. Number) or Social Security number prior to processing. At this time, you’ll also want to make sure that you have specified what type of payments you are reporting (rents, other income, non-employee compensation) so that the totals will appear in the correct box.
- If your system does not track 1099 information and eligibility, be sure to investigate one of the 1099 processing programs that allow you to enter contractor/company information and payment totals separately from your accounting software. You do not want to process 1099’s manually. Take my word for it.
- If you typically make rental payments to owners electronically, be sure to check contact information prior to processing the 1099. This way, returned mail can be kept to a minimum.
- Don’t forget about contractors or other service people you’ve paid throughout the year. This includes cleaning services, carpet cleaners, electricians and painters. If you’ve paid them over $600.00, they will need to receive a 1099 as well.
- Attorney fees paid will require a 1099 regardless of whether they are a corporation or not.
1099’s must be in recipients hands no later than January 31st of the current tax year.The IRS requires that you file all 1099 information with their agency by March 31st. Be sure to promptly follow up on any subsequent IRS notices after filing, such as an incorrect TIN and update your own records accordingly.
Is the Section 8 Program Good for Landlords?
About two years ago, I was signing a lease with Charlotte, a Section 8 Housing Assistant Program tenant (Low - and - moderate income housing subsidized by the Federal Department of Housing and Urban Development). I asked her if she would like the Section 8 Program. She smiled and said, "Yeah, it's a pretty good deal". I laughed and added, "If the government is willing to pay some (or all) of your rent, I guess to my tough question, you would answer the smart way!".
Definitely, Section 8 Program is a definitely good deal for tenants. But, is it a good deal for landlords?
Here are the most pertinent and succinct pieces of advice I would offer to landlords to determine whether allowing Section 8 tenants to rent properties or not:
- If your property is higher-end, Section 8 Program has limits on how much Public Housing Agencies (PHAs) are willing to pay based on the amount of bedrooms and whether utilities are included. This leads into item #2.
- The rental rates aren't that high. To see if allowing Section 8 tenants to rent your home is beneficial, the cash-flow needs to be computed on a property-by-property basis. On some properties, the cash-flow is good and should be recommended as a viable rental source. On others, it is not advisable.
- The property will need to meet many government requirements and will be inspected to make sure it is up to snuff. If the house is newer and kept up, it will usually pass. If it is older, there are usually costs incurred to meeting these requirements; the question is if incurring these costs is worth it.
- The process could be slower as Section 8 Program is a government program which always means two things: it isn't fast and features many, many documents to sign.
- Payment is guaranteed, but when mistakes are made (aka missing or incorrect payments), getting them corrected is usually arduous. See point #4.
And as a bonus, here is an answer to our most FAQ by far:
Q: If I allow Section 8 Program tenants to rent my house, am I just asking for my property to be torn up?
A: I haven't seen this be the case. There is actually additional protection against a Section 8 Program tenant damaging a home, when compared to a regular tenant. Let me explain. The Section 8 Program has a huge tenant waiting list (no surprise there!). If a Section 8 Program tenant damages the home (or does anything that violates the lease), there is an implied understanding that he/she can be reported and removed from the program. Obviously, the tenant cannot afford for this to happen!
Section 8 Program can be a great option for the right house. Our advice: Use it wisely and selectively!
Why use a porfesional property manager?
Top Reasons for Using Property Management:
As a landlord, you want to make sure that you get your rent on time and that your property is preserved in good condition. This is what a professional property manager can do for you.Property management brings you a wide range of benefits that you should definitely consider having.
With professional property management, you are guaranteed to find reliable tenants because the company you hire will run credit and reference checks on all potential tenants.
Rent Payments
Rent payments will be fully managed by the company you hire. When using professional services, the company will arrange a fast and secure way for payments to be made by tenants and then transferred to you. Furthermore, in case your tenant is late with a payment or fails to make it, you will receive a report immediately while the manager will work to resolve the issues. It is certainly beneficial to have a peace of mind that any financial issues will be handled professionally on your behalf.
Maintenance
Regular maintenance and timely repairs are other superb benefits you will get from hiring a company to manage your property. You will not get disturbing calls in the middle of the night from tenants saying their AC system is not working. The company you have hired will be there to ensure that this will not happen. In case an accident occurs, they will handle the problem and fix it, while you will get a report for what has happened on your property.
A property management company will become the main contact for the residents. They will handle the day to day concerns, maintenance needs, and/or an emergency that may arise. These can include issues concerning rent, plumbing issues, appliances issues or any other concerns. Handling maintenance issues can be demanding and stressful. Management companies can make sure that issues with plumbing, lawn care and other concerns are resolved quickly and professionally.
Filling Vacancies
Assuring that vacant apartments or properties are filled quickly is extremely important to any property owner. Many property management services specialize in filling vacancies fast and applying best practices for renters. In your behalf you can count on the sister Real Estate Broker’s company (Albo Realty Group) which will look after the fast rent of your asset, and will safe you the broker fee you usually pay (5% of the commission you pay to Real Estate Agents)
Maintaining and Increasing Property Values
Professional property management preserves and increases the value of your property while being a cost-effective solution. You can save money by having and expert handle all property and tenant issues. More importantly, as your rental property is well maintained, its market value will certainly grow over the years.
These are just some of the possible concerns that a professional property management company can handle. As the point of contact, you can rely on the professional property manager to resolve issues that may overwhelm you when it comes to your property.