Property Management Kit For Dummies

by Griswold, Robert S.

• ISBN13: 9781119835783
• ISBN10: 111983578X
• Edition: 4th
• Format: Paperback
• Copyright: 2021-12-21
• Publisher: For Dummies

Summary

Before you put that FOR RENT sign in the yard, read this 

Hello there, future landlord. You’ve found what you’re looking for—a complete package of information and resources to teach you what you need to know and make your life (and your tenants’ lives) easier. With Property Management Kit For Dummies, you can learn how to manage single-family homes, large apartment buildings, treehouses, dollhouses… okay, there’s not much info here on managing dollhouses, but everything else is definitely covered. Find good tenants, move them in, and keep them happy and paying rent on time. When it comes time for a change, learn how to move tenants out and turn over the property, easy as pie.  

This book makes it simple to understand tax and insurance requirements, building maintenance concerns, and financial record keeping. Plus, the updated edition reflects the current rental property boom, new technologies, changes to the law, and the inside scoop on the latest Fair Housing issues to keep you out of court. Emotional support animals? Rent control? Bed bugs? Eviction? It’s all in here. 

• Find out whether property management is right for you, learn what you need to get started, and be successful as your residential rental property portfolio grows 
• Get your ducks in a row—develop solid marketing and advertising strategies and resources, build up-to-date rental contracts, figure out the legal side of things, and minimize your income and property tax bills 
• Make sure you’re renting to responsible people, and deal with the occasional problem tenant without major drama 
• Maximize your cash flow by keeping your rents at market prices, efficiently handling maintenance, and ensuring your property has great curb appeal with the features and benefits sought by today’s tenants 

Become a top-notch property manager with this one-and-done reference, plus online bonus materials. 

 

Author Biography

Robert Griswold is a veteran real estate investor and hands-on property manager of a portfolio of residential and commercial properties. He is also the co-author of Landlord’s Legal Kit For Dummies and Real Estate Investing For Dummies, 4th Edition.

Table of Contents

Introduction 1

About This Book 1

Foolish Assumptions 2

Icons Used in This Book 3

Beyond the Book 4

Where to Go from Here 4

Part 1: So You Want To Be A Landlord? 5

Chapter 1: Residential Property Management 101 7

Understanding Property Management 8

Considering the benefits 8

Confronting the icky parts 9

Examining Types of Real Estate 11

Renting Your Property 12

Preparing the property 12

Knowing how much to charge 13

Capturing prospects’ interest 14

Turning interest into property visits 15

Picking your tenants and signing the deal 15

Getting Your Hands Dirty: Managing the Property 16

Moving tenants in and out 16

Collecting rent 16

Keeping the good tenants 17

Dealing with troublesome tenants 17

Maintaining the property 18

Protecting your investment 18

Chapter 2: Do You Have What It Takes to Manage Your Own Rental Property? 19

Understanding That Managing Residential Rental Property Is a People Business 20

Identifying the Types of Real Estate Owners 20

The inadvertent rental property owner 21

The buy, fix, and flip or refinance owner 21

The long-term investment rental property owner 22

Recognizing the Advantages of Owning Rental Property 24

Eyeing the Unique Characteristics of a Good Manager 26

Realizing that good management makes a difference 27

Separating your personal style from sound management 27

Managing your time 28

Delegating management activities 29

Knowing that your style is unique 30

Being Honest with Yourself about Your Skills and Experience 31

Chapter 3: Managing Your Residential Property Yourself or Hiring a Pro 35

Managing Your Rental Yourself 36

The advantages 36

The drawbacks 37

The distance factor 38

Exploring Professional Management 38

Eyeing the pros and cons of using a pro 39

Understanding what a good property manager does 41

Telling the good from the bad 42

Compensating your property manager 46

Making sense of management agreements 48

Being aware of the tax consequences 50

Chapter 4: Taking Over the Property 53

Knowing What to Get Up Front 54

A comprehensive list of personal property included in the sale 55

A copy of the entire tenant file of each current tenant 55

A seller-verified rent roll and list of all tenant security deposits 56

A copy of all required governmental licenses and permits 57

A copy of all the latest utility bills 57

A copy of every service agreement or contract 58

A copy of the current insurance policy and loss history 58

Working with the Current Tenants During the Transition 60

Meeting the tenants in person 60

Inspecting the property 61

Inspecting the rental unit 61

Using a new lease or rental agreement 62

Evaluating the current rent 63

Part 2: Renting Your Property 65

Chapter 5: Getting Your Residential Rental Property Ready for Prospective Tenants 67

Viewing Your Rental Property from a Prospective Tenant’s Shoes 68

Paying attention to the exterior and common areas 68

Making sure that the interior is up to snuff 69

Preparing Your Rental Unit the Right Way 73

General cleaning 74

Maintenance 74

Painting 80

Final cleaning 82

Carpet or floor-covering cleaning 83

Using Outside Contractors 84

Chapter 6: The Big Three of Property Management: Rent, Security Deposits, and Rental Contracts 85

Setting the Rent 86

Examining the return on your investment 86

Conducting a market analysis of rents in your area 88

Coming Up with a Fair Security Deposit 94

Figuring what you can legally charge 95

Keeping security deposits separate from your other funds 96

Avoiding nonrefundable deposits 97

Paying interest on security deposits 98

Increasing (or decreasing) deposits 99

Considering security deposit alternatives 99

Choosing the Type of Rental Contract You Want 101

Contemplating a lease 101

Eyeing a periodic rental agreement 102

Getting your contract in writing 104

Chapter 7: Formulating a Marketing Plan 107

Developing a Successful Marketing Plan 107

Determining your target market 108

Thinking about what your renters stand to gain from your property 109

Understanding the Importance of Good Advertising 110

Eyeing the different approaches 111

Knowing which approach gives you the most bang for your buck 112

Getting your property to rent itself 113

Being Aware of Fair-Housing Laws 114

Chapter 8: For Rent: Effectively Using Advertising to Generate Interest 117

Analyzing Your Advertising Options 118

Talking the talk: Word-of-mouth referrals 118

Showcasing your site: Property signs 120

Broadening your horizons: The Internet 122

Reading all about it: Newspapers 129

Papering the neighborhood: Flyers 134

Creating chat: Community bulletin boards 136

Going where the jobs are: Local employers 137

Meandering through other tactics to try 138

Chapter 9: Handling Prospects When They Come A-Calling 141

Understanding Why First Impressions Are Important 142

Standing out from the crowd 142

Being professional and well organized 143

Valuing Phone Conversations 146

Preparing for Rental Inquiry Phone Calls 148

Being prepared with basic phone techniques 148

Answering the phone 153

Providing and obtaining the basic info 155

Selling the prospect on your property 157

Prequalifying the prospect over the phone 158

Handling phone objections 160

Converting phone calls to rental showings 162

Planning for Open Houses and Walk-Throughs 163

Holding an open house 164

Scheduling individual appointments 165

Providing directions to the property 165

Chapter 10: Strutting Your Stuff: Making Your Property Memorable 167

Showing Your Rental Unit 167

Showing a vacant rental 168

Showing an occupied rental 170

Taking the First Steps to Get the Renter Interested 171

Prequalifying your prospect during the rental showing 172

Resolving your prospect’s objections 173

Convincing your prospect 173

Inviting your prospect to sign on 174

Having your prospect complete a rental application 175

Holding your prospect’s deposit 176

Developing priority waiting lists 177

Handling Mandatory Disclosures and Environmental Issues 178

Lead-based paint 179

Asbestos 181

Radon 185

Sexual offenders 187

Chapter 11: Eenie, Meenie, Miney, Mo: Selecting Your Tenants 189

Understanding the Importance of Screening 190

Establishing Tenant Selection Criteria 191

Why having criteria is important 191

How to create your criteria 192

Verifying Rental Applications 194

Confirming identity 194

Going over occupancy guidelines 195

Investigating rental history 196

Validating income sources 197

Reviewing credit history 199

Checking criminal history 203

Talking with all personal references 205

Dealing with cosigners 205

Making your final decision 206

Notifying the Applicant of Your Decision 208

Avoiding Housing Discrimination Complaints 209

The ins and outs of fair housing 210

Steering and chilling 212

Children 213

Reasonable accommodations 214

Reasonable modifications 215

Companion or service animals 216

Americans with Disabilities Act 217

Sexual harassment 218

Part 3: The Brass Tacks Of Managing Rentals 219

Chapter 12: Moving In the Tenants 221

Establishing the Move-In Date 222

Meeting with a Tenant Before Move-In 223

Covering the rules with your new tenant 223

Reviewing and signing documents 226

Collecting the money from your tenant 232

Inspecting the property with your tenant 233

Giving your tenant an informational letter 237

Distributing the keys to your tenant 239

Setting Up the Tenant File 241

Preparing a Welcome Package for Your New Tenant 242

Chapter 13: Collecting and Increasing Rent 243

Creating a Written Rent Collection Policy 244

When rent is due 244

Where rent is paid 247

How rent is paid 248

Dealing with Rent Collection Problems 251

Collecting late rent 251

Charging late fees 253

Handling returned rent payments 255

Dealing with partial rent payments 256

Serving legal notices 257

Raising the Rent without Sending Your Tenants Running 258

Figuring out how to raise the rent 258

Keeping your tenants (relatively) happy 259

Chapter 14: Keeping the Good Tenants (And Your Sanity) 261

Knowing What Tenants Want 262

Timely and effective communication 263

Quick responses to maintenance requests 263

Consistent respect for privacy 264

Equal enforcement of house rules 265

Fair rental rates and increases 265

Recognizing the Ins and Outs of Renewing Leases 266

Reducing your turnover 266

Offering incentives for tenants to stay 270

Following up with tenants after move-out 272

Chapter 15: Dealing with Problem Tenants 273

Recognizing and Responding to Common Tenant Problems 274

Late or unpaid rent 274

Additional occupants 276

Inappropriate noise level 277

Unsupervised children 278

Exploring Alternatives to Eviction 279

Negotiating a voluntary move-out 279

Using mediation or arbitration services 280

Taking your tenant to court 280

Giving ’Em the Boot: Evicting a Tenant 281

Serving legal notices 281

Filing a formal eviction action 282

Following the do’s and don’ts of the eviction process 284

Collecting judgments 285

Handling Unusual Tenant Situations 286

Bankruptcies 286

Illegal holdovers 287

Broken rental contracts 287

Assignments or subleases 288

Departing roommates 289

Domestic problems 289

Tenant deaths 290

Chapter 16: Moving Out the Tenants 291

Requiring Written Notice of Your Tenants’ Move-Out Plans 292

Providing Your Tenant a Move-Out Information Letter 293

Walking Through the Unit at Move-Out 295

Getting the 411 on the walk-through 295

Paying the security deposit — or not 296

Defining ordinary wear and tear 298

Using a security deposit itemization form 298

Keeping receipts for repairs and cleaning 301

Deducting from the security deposit 301

Dealing with Special Situations 303

Forking out the dough: When damage and unpaid rent exceed the security deposit 304

Having your facts straight: When disputes arise about the security deposit 304

Reclaiming what’s yours: When the rental is abandoned 305

Part 4: Techniques And Tools For Managing Your Residential Property 307

Chapter 17: Working with Employees and Contractors 309

Surveying the Ins and Outs of Bringing Employees Onboard .310

Establishing job functions, work schedule, and compensation 310

Screening employees 311

Knowing your responsibilities 314

Working with your manager 315

Staying on the alert for danger signs 317

Firing an employee 317

Building Your Contractor and Vendor Dream Team 319

Recognizing what to look for 320

Avoiding common pitfalls 321

Chapter 18: Maintaining the Property 325

Recognizing the Importance of a Maintenance Plan 326

Being Prepared for Maintenance Issues 327

Emergency maintenance 328

Preventive maintenance 329

Corrective maintenance 330

Custodial maintenance 331

Cosmetic maintenance 332

Handling Rental Property Maintenance 332

Responding to tenant maintenance requests 333

Keeping tenants from doing repairs 335

Tracking the life span of your appliances 337

Purchasing parts and supplies 340

Chapter 19: Keeping Safety and Crime Prevention in Mind 341

Tackling Crime in and around Your Rental Property 342

Turning to crime-prevention programs 342

Paying attention to tenant questions and complaints about safety-related issues 344

Responding to crimes when they occur 345

Taking Necessary Crime-Deterrent Precautions 346

Keys and access-control systems 346

Lighting 348

Security services 349

Prioritizing Tenant Safety 351

With tempered glass 351

With safe cords (or no cords) for window coverings 352

With anti-tip brackets for free-standing ranges 353

With appropriate enclosures and signage for swimming pools, spas, and hot tubs 353

Addressing Environmental Issues 354

Fire safety 354

Carbon monoxide 356

Electromagnetic fields 357

Mother Nature’s wrath 358

Mold 358

Bedbugs 359

Part 5: Money, Money, Money! 365

Chapter 20: Two Necessities of Property Management: Insurance and Taxes 367

Developing a Risk-Management Plan 367

Cover Me, I’m Going In: Making Sure You Have the Insurance You Need 370

Telling the difference among types of insurance coverage 371

Determining the right deductible 375

Talking with Tenants about Renter’s Insurance 376

Understanding the Tax Angles 377

Sheltering income with depreciation 378

Minimizing income taxes 379

Grasping (and appealing) property taxes 387

Chapter 21: Financial Management and Record-Keeping 389

Organizing Your Files 389

Maintaining Property Records 392

Taking Care of Business: Accounting 393

Creating a budget and managing your cash flow 394

Doing your accounting manually 395

Using software for accounting 396

Chapter 22: Finding New Ways to Increase Your Cash Flow 403

Considering Nonrent Revenue 404

Earning some cash with the wash: Laundry machines 404

Stowing some dough: Storage 405

Selling your space: Parking 406

Converting the World Wide Web to cash: Internet access 406

Cashing in on the ol’ dining room set: Furnished rentals 407

Putting Lease Options to Work for You 408

Taking Advantage of Government Programs 410

The scoop on rental subsidy programs 411

The lowdown on the Housing Choice Voucher program 411

The 411 on rehabilitation loans 416

Working in Niche Markets 417

Taking another look at your pet policy 418

Renting to students 419

Catering to senior citizens 421

Designating your rental units smoke-free 422

Part 6: The Part Of Tens 425

Chapter 23: Ten Reasons to Become a Residential Rental Property Owner 427

You Can Diversify Your Investments 427

You Don’t Need Much Money to Start 428

It Can Be a Second Income 428

You Gain Tax Advantages 428

Real Estate Holds Its Value 429

You Get Leverage .429

It Beats Inflation 430

You Can Shelter Your Income 430

You Get a Positive Cash Flow 431

It Can Help You Retire 431

Chapter 24: Ten Ways to Rent Your Vacant Rental Unit 433

Maintain Curb Appeal 433

Keep the Unit in Rent-Ready Condition 434

Establish a Competitive Rent 434

Offer Prospects a Rate Guarantee 435

Provide Wireless Internet Access 435

Offer Referral Fees 436

Accept Pets 436

Offer Move-In Gifts or Upgrades 436

Contact Corporate Relocation Services 437

Accept HUD’s Housing Choice Vouchers 437

Appendix: About The Online Kit Materials 439

Index 443