Posted by & filed under Rental Housing.

With housing shortages, rising rent prices, unemployment due to COVID-19, and other issues, rent control has become a hot topic this election year. As a refresher, rent control (also called rent stabilization) caps a tenant’s rent at a specific dollar amount or limits the percentage the rent can be increased by after the tenant’s lease is up. While rent control has been utilized across the country for decades, there’s been a notable increase in states’ implementation of rent regulation measures over the past few years.

Rent Laws

Currently, 6 states have some form of rent control laws. Likewise, many states either have no form of rent control or preempt it entirely. Here’s a look at how each state currently handles rent control laws; please note that this is intended for informational purposes only. We recommend further research into your state and local laws to better understand how they affect your rental properties and policies, as well as discussing changes to your policies with legal counsel.

State-Wide Rent Control

  • California
    California is the most recent state to enact rent control, and only the second state to make the laws applicable state-wide. The AB 1482 bill was passed on September 11, 2019, and went into effect on January 1, 2020. This bill placed a 5% cap per year (plus inflation) on rent increases within the state. The cap doesn’t apply to properties that have been issued a certificate of occupancy within the previous 15 years. It also doesn’t place limits on the powers of local authorities, so local governments may choose to enact more aggressive rent control legislation.

  • Oregon
    Oregon was the first state to implement state-wide rent control measures, with Governor Kate Brown signing SB 608 into law in February 2019. This placed an annual limit of 7% (plus inflation) on rent increases in the state. Properties granted a certificate of occupancy within the past 15 years are exempt, as well as landlords who provide reduced rent to tenants as part of a federal or local program, or subsidy.

States With Rent Control Legislation

  • New Jersey
    New Jersey doesn’t have state-wide rent control laws, but local legislators have had the authority to implement them since the 1970s. Currently, over 100 municipalities in New Jersey have some form of rent control. The caps and exemptions for these laws vary from city to city.

  • New York
    New York utilizes two different systems for rent regulation: rent control and rent stabilization. Rent control typically applies to buildings built before 1947, while rent stabilization applies to buildings built between 1947 and 1974. For areas that are outside New York City, rent control may also be referred to as the Emergency Tenant Protection Act (ETPA). Although rent control measures aren’t state-wide, most cities and communities in New York state have some type of rent regulation measure in place.

    In New York City, Nassau, Westchester, and Rockland, The Rent Guideline Boards set the rates for increases in rent-stabilized apartments. These rates are evaluated annually and are applied from October 1st to September 30 each year.

    For rent-controlled apartments, New York City uses the “Maximum Base Rate System” (MBR). This method establishes a maximum base rent for each apartment and adjusts the amount every two years based on operating costs. Landlords may raise the rent by either:

    – the lesser of either the average of the five most recent Rent Guidelines Board annual rent increases for one-year renewals, or
    – 7.5% each year until they reach the MBR

    Rent increases are prohibited from exceeding the rates determined by the Rent Guidelines Board, and tenants have the right to challenge any proposed increases. For areas outside of NYC, the New York State Division of Housing and Community Renewal regulates the maximum allowable rates for rent-controlled apartment increases. Rents are prohibited from exceeding these rates.

    Also important to note: in June 2019, the Housing Stability and Tenant Protection Act was passed, which made rent stabilization a permanent fixture of the state’s housing code and closed loopholes used by some landlords to skirt around rent regulation laws. These include things like an end to “vacancy bonuses,” decreasing the percentage a landlord can raise the rent for property improvements, capping the number of family units to one per building, and ending high-income deregulation.

  • Maryland
    Only the city of Takoma Park currently has rent stabilization regulations. This applies to all individual condos and multi-family rentals. Single-family homes, accessory apartments, and duplexes where one of the units occupied by the owner as their primary residence, are exempt. The rent stabilization allowance is re-valuated annually by the city and has been set at 0.4% for the year, from July 2020 to June 2021. All landlords with properties under rent stabilization are required to give at least a two-month written notice of a rent increase and are prohibited from an increase that exceeds the approved allowance.

  • Washington D.C.
    Washington D.C. passed the Rental Housing Act in 1985, which set the annual limit on rent increases based on the Consumer Price Index, plus 2% (with a maximum of up to 10%). For properties with tenants who are 62 or older or disabled, the maximum increase is capped at the Consumer Price Index only, with a maximum of up to 5%.

    Rental units that were built after 1975, federally or district subsidized units, and rentals units that were vacant when the act went into effect are exempt. Despite attempts by local lawmakers to extend the current rent control program to 2030, the program is set to expire on December 31, 2020.

States the Preempt Rent Control

While a number of states have rent control regulations, a greater number of them preempt local governments from enacting rent regulation laws on private rental properties. These include:

  • Alabama
  • Arkansas
  • Colorado
  • Connecticut
  • Florida
  • Georgia
  • Idaho
  • Illinois
  • Iowa
  • Kentucky
  • Louisiana
  • Massachusetts
  • Michigan
  • Minnesota
  • Mississippi
  • Missouri
  • New Mexico
  • North Carolina
  • North Dakota
  • Oklahoma
  • South Carolina
  • South Dakota
  • Texas
  • Utah
  • Washington

States That Preempt Mandatory Exclusion Zoning and Rent Control

Exclusionary zoning was introduced in the early 1900s and has been used in the past to keep families with lower socioeconomic means from being able to find affordable housing in middle and upper-class neighborhoods. Six states preempt local governments from enacting mandatory exclusion zoning or rent control, including:

  • Arizona
  • Kansas
  • Indiana
  • Tennessee
  • Wisconsin

States Without Rent Control or
Preemptions

Seven states have no rent control regulations in place or preemptions:

  • Delaware
  • Maine
  • Montana
  • Nebraska
  • Ohio
  • Rhode Island
  • Wyoming
  • Hawaii

Dillon States Without Rent Control or Preemptions

In addition to states that lack any form of rent control, there are also several Dillon states that don’t have rent control laws or preemptions. Dillon state rules essentially mean that local governments are only allowed to exercise powers that are expressly granted by the state. Unless the state allows local governments to pass rent control laws, the laws must be passed by the state or not at all. The Dillon states include:

  • Alaska
  • Nevada
  • New Hampshire
  • Pennsylvania
  • Vermont
  • Virginia
  • West Virginia

Will we see more states and local governments enact rent control laws in the future? Given the trend over the past decade and the increasing concerns over affordable housing, it’s very likely. As always, we recommend keeping a close eye on proposed laws and bills passed in your area to make sure you’re aware if there any changes made to existing laws that could affect your property.

Posted by & filed under Property Management.

Eviction is one of the worst-case scenarios for many landlords. It can be a long, taxing process that slowly eats away at your time and money – not to mention the impact it has on an emotional or mental health level. Needless to say, eviction is a situation that most landlords want to avoid whenever possible.

What To Do When Your Tenant Files for Bankruptcy

Unfortunately, eviction isn’t the only situation landlords should be cautious about. Since the pandemic, the economy has been in a state of flux. Not only does this mean instability for investors, but also the job market, leading many citizens to be in worse financial standing than they were a year ago. This increases the chances you may have a tenant file for bankruptcy. If this happens, what actions can you take – and how can you prevent it from happening again?

What is bankruptcy?

Bankruptcy is a legal process that enables someone who cannot repay their debts to gain debt relief assistance while ensuring some form of repayment to creditors. Bankruptcy can include things like the liquidation of assets or other changes to a person’s financial or material wealth to reach a repayment agreement. While bankruptcy allows for a “fresh start” with debt, it can make it more difficult to borrow in the future.

If you encounter bankruptcy with a tenant, there’s a chance you’ll know it’s coming (if you and your tenant keep communication open) but it will more likely come as a surprise. In some cases, your tenant may be paying rent on time, while their other debts grow beyond their means. There are a few specific types of bankruptcy you should be aware of to be able to handle them appropriately. The two most common ones that affect landlords are Chapter 7 and Chapter 13.

Chapter 7

Chapter 7 bankruptcy involved the liquidation of an individual’s assets to pay off debts. The debtor must give all their assets to a trustee, who then administers the assets in a way that satisfies creditors. If the tenant’s rent is paid and up to date, they can continue their lease. If they’re behind on rent, they’ll likely need to move.

Chapter 7 bankruptcy is also known as “straight bankruptcy” because it’s the most direct type. Chapter 7 is typically used for people who have a lot of unsecured debt, like medical bills, utility bills, and credit card debt.

Chapter 13

Chapter 13 bankruptcy is based on creating a debt repayment plan and can be seen more as a type of financial reorganization rather than a fresh start. When someone files for Chapter 13, their debts are reorganized into a payment plan that repays creditors over 3 – 5 years. This type of bankruptcy is typically utilized to resolve short-term financial setbacks, like an illness or job loss.

What Should I do if my Tenant Files Chapter 7?

If your tenant files for bankruptcy, the court will grant an automatic stay, which means all creditors are required to stop debt collection attempts until the case has made its way through the court system. Tenants who are renting will have to assume (continue with their lease and making rent payments) or reject their current lease. Tenants will only be able to assume the lease if they can pay past-due rent quickly, as well as provide assurances that they’ll continue to pay rent on time. They’ll typically have 60 days to make this decision.

The court doesn’t have a strict definition of how quickly back payments must be made, but it’s typically required to be paid back within a year. Your tenant will also be required to show some proof of income to show that they’ll be able to make timely payments without falling behind on their regular rent payments.

If your tenant rejects the lease, the lease becomes part of the assets that are liquidated or put onto a payment plan. Rejection of the lease is considered voluntary termination, so the tenant will be expected to leave the property and will no longer be bound by the terms of the lease.

Once the tenant’s assets and debts have been cataloged, a judge will decide if the bankruptcy can continue and if so, how best to use the assets fairly to pay off creditors. Once the judgment has been made, you’ll be notified of how you can expect to be paid for any back rent that’s owed to you. You’ll also be told what to expect with the remainder of the time the tenant will be at your property. If you find the decision to be unfair, it is possible to challenge the decision.

If the court does order the tenant to make payments through a repayment plan, you’ll eventually get the money owed to you. In some cases, however, the court may not require the tenant to pay you back at all. While this can feel like a huge blow, the best way to handle it is to move on and put your focus into finding a reliable tenant to fill the vacancy.

Steps to take once your tenant files for bankruptcy

Once your tenant has filed for bankruptcy, you’ll need to start making some plans to protect yourself financially. This isn’t to say that you can’t be sympathetic to your tenant – but rather that you should make sure that you’ll be able to sustain your financial wellbeing. Here are a few ways you can be sure that you’re included when it comes time to divvy out creditor repayments:

  • The Automatic Stay:

As previously mentioned, when a tenant is granted an automatic stay, creditors can no longer collect or attempt to collect debts until a ruling has been made for the case. This includes you, as the landlord; you won’t be allowed to collect past-due rent. You also won’t be able to file for eviction, unless it’s an ongoing case that has been ruled on or is allowed to continue. New eviction filings are allowed if the tenant has done something illegal or is endangering your property in some way.

If you have a guarantor named under the lease, you can still pursue and collect back rent from them, even while the tenant is in bankruptcy. In most cases, however, there likely won’t be a guarantor, so as soon as your tenant files for Chapter 7 or Chapter 13, stop trying to collect rent and keep track of what you’re owed for the court proceedings.

The automatic stay only pauses debt and past-due rent collection; your tenant is still legally required to continue paying rent for as long as their lease is active. It doesn’t change anything regarding the amount you’re owed or the date rent is due. If your tenant stops paying their rent on time, you can request the court to begin eviction proceedings and they will decide whether that’s a viable option.

  • Claiming Debt

If your tenant owes you any money for past due rent, you should create a claim outlining how much they owe you and why. This document will be filed with the bankruptcy court if you’d like the debt to be included in the court-decided payment plan or liquidation of assets. It’s recommended that you always file a claim if there’s a bankruptcy case. This ensures you won’t lose out on any money, especially if the tenant decides to reject the lease. If they do reject the lease, your claim can include:

  • Past-due payments and associated damages
  • Unpaid rent or fees caused by the bankruptcy filing
  • Damages from the lease rejection, which can be up to one year’s worth of rent

To make sure you’re getting back as much as possible, it’s recommended to consult with a bankruptcy professional.

Other Actions You Can Take

If you’d prefer not to wait through the bankruptcy process, you can try some alternative options. Although not all these may be possible, they could save you some time and money.

  • Pre-bankruptcy

Depending on your tenant’s financial situation, you may have some warning signs that they may be thinking about bankruptcy. Or, they may have even told you they were considering it. In either case, you may be able to set up a pre-bankruptcy resolution with your tenant before they actually file. Here are some considerations:

  • Are there any changes you could make to the lease that would make it easier for your tenant to continue paying rent?
  • Is there a way you could amicably terminate the lease before the tenant files for bankruptcy?
  • Can you forgive some of their debt or arrange for it to be repaid via early lease termination?

While your tenant may not agree to these options, there’s no harm in exploring them – and in many cases, coming to a pre-bankruptcy agreement will reduce stress for you and your tenant.

  • Bankruptcy history

Do you happen to know that your tenant has a history of filing for bankruptcy? If so, this is something you should bring to the judge’s attention. Make sure you’re only doing this if you don’t believe the bankruptcy was filed in good faith, for example, if the tenant only filed to avoid paying you past-due rent.

No one wants to deal with a bankruptcy filing but if you do encounter one, stay calm and keep organized. Start by trying to set up a pre-bankruptcy resolution. If that isn’t a viable option, file your claim for any debts as soon as possible once the bankruptcy is filed. While you’re waiting for the verdict, be sure to keep track of any additional missed payments. Once the case has a ruling, follow the court-ordered solution.

Preventing Future Issues

Bankruptcy filings, like evictions, can be stressful and time-consuming. Although there’s no way to completely guard against a tenant filing for bankruptcy, you can take an important step in eliminating some of the risk through tenant screening. By running a credit and background check, you can get a better understanding of how an applicant handles their finances, whether they’ve had previous bankruptcies and their overall level of debt and financial wellness.

We recommend our RentalConnect program to help you select the right tenants for your property. You can choose from three different report packages, making it easy to find one that will fit your rental criteria. With RentalConnect, there are no on-site visits, sign-ups, or membership fees, and the cost of the reports is deferred to the applicant. Order yours today or reach out to us for more details!

Posted by & filed under Property Management.

Do you have a good relationship with your tenants? Or do you find yourself keeping them at a distance as much as possible? Many landlords underestimate the importance of their relationship with their tenants, not realizing that improving relations can make their job easier and bring greater success. While the tenant/landlord relationship is a professional one, it doesn’t mean that you can’t have a good, solid working relationship too! Here are 10 tips to help you improve your interactions and foster a relationship built on mutual respect:

Be Empathetic

Tenant Landlord Talks

If you’re like most landlords and are renting out to the general public, your tenants could be from very different backgrounds than you. This means they may have different values; what’s important to you may not be important to your tenants. Something that irks you, like an overgrown yard, may seem like a dereliction of duty on the part of your tenant, but it may just be an oversight.

Another thing to consider is that we all hit rough patches now and again. Late rent doesn’t necessarily mean they’re irresponsible or signal a red flag – they could be in a temporarily difficult financial situation. It’s important to realize that your tenant is human and unfortunately, things happen! However, this doesn’t mean you should let late rent payments or other types of irresponsible behavior become a habit. Be understanding when it’s warranted, but don’t allow tenants to take advantage of your good nature.

Make Your Relationship a Priority

You might feel like you should only contact your tenant about rental-related issues, but it’s important to check in with them every once in a while to establish more of a rapport. You might have heard about a new restaurant opening near the property or know about an event coming up that they might be interested in.

Keeping an eye on the events and happenings in the neighborhood and acting as a pseudo-concierge can help your tenants feel more connected to you and their community. Not only does this bring more value to your relationship, but it also encourages tenants to engage with their neighborhood and put down roots – which is beneficial to both of you! They’re more likely to enjoy where they live and you have better odds of them renting your property long-term.

Share Responsibilities

Regardless of your standard policies, try to share responsibilities with your tenant when it’s warranted. For example, if your tenant is having a problem with pests and you’ve determined it’s not caused by a cleanliness or sanitation issue, offer to pay for the first round of extermination services. The cost is low and it benefits your property – but beyond that, your tenant will appreciate the gesture.

You should also ensure that the standard of living at the property is up to your personal standards. Would you want to have a cracked toilet seat or other types of cosmetic damage in your own house? Small improvements can go a long way in making your property feel like home.

Encourage Tenants to Get Involved in the Community

As the property owner, you’ll likely know a lot about the community due to neighborhood events and local associations. Since renters aren’t typically invited to these things, consider inviting them yourself. This encourages a buy-in into the neighborhood and helps your tenants establish a feeling of belonging.

Remember: It Can be Hard to Find Good Tenants!

If you have great tenants, it’s important to keep them – and the easiest way to do that is by keeping them happy. The cost of finding new tenants or having your property vacant for periods of time are often greater than the cost of small, thoughtful gestures like sending a card during the holidays. You can also offer larger (but still relatively low cost) things, like having the property deep-cleaned every six months. This will make your tenants feel appreciated and valued for taking good care of your property.

Think About Customer Service

Your tenants are essentially your customers; you’re providing a service, and technically, a product. One of the most important considerations in customer service is keeping your customers happy. Unhappy tenants will ultimately end up looking for a new place to live. So, make sure that they enjoy living there! Keep up on repairs, even if they’re out of sight. If your tenant makes a complaint about something being broken, don’t wait to address the issue. You should also check in with them on occasion to see how things are going at the rental and to see if anything is needed. Some tenants may not want to bother you for something minor; checking in is a great way to get the conversation started.

Be Flexible

Life is full of unexpected circumstances, but being flexible is a good way to gain value among your tenants. If your tenant loses their job, for example, consider offering them a two-week grace period for rent. If your tenant moves out and the property is in excellent shape beyond a minor repair, consider waiving the repair fee as a way of showing your appreciation for taking care of it.

Be Responsive

If you’re planning to go on a trip, let your tenants know. No one is ever upset about over-communication, but your tenants might get upset if they try to contact you and you don’t respond in the normal time frame. Keep lines of communication open with your tenants so they understand that you’re available when they need you. Give them several options for communication, including text or email.

If your tenant contacts you about an issue, like a broken garbage disposal, don’t wait to schedule repairs. Even if there’s no immediate solution to the problem, respond to them as soon as possible. Let them know that you’re working on resolving the situation and will keep in contact with them until the problem is solved.

Be Consistent and Reliable

Keep your communication consistent and make sure that you’re available by phone, text, or email regularly. You may even want to consider designating an emergency contact in case you’re not available. Reliability is one factor that can make or break your relationship with your tenants – so make sure they can consistently depend on you.

Offer Online Rent Payment

Lost checks and money orders are a headache for everyone involved, so you may want to consider making rent payments as easy as possible for you and your tenant. Online payments are easy, convenient, and ensure you receive rent on time. You can offer it through apps like Venmo or even banking applications.

Conclusion

Once you’ve screened your applicants and found the perfect tenants for your property, make sure to keep them! Good tenants can be hard to find. By putting in the work to foster a positive relationship, you’ll find your job is easier and your tenants are far more likely to rent from you long-term.

Posted by & filed under Tenant Screening.

Credit Score Selection

Credit scores are one of the best ways for rental housing professionals to gauge an applicant’s financial competency and reliability. As you probably know, the closer the score is to 850, the easier it is to secure loans, lock in lower interest rates, and find housing. That’s all from a consumer standpoint, but what about the differences between credit-scoring models? Which one should you choose when screening applicants?

Credit Risk Scoring Models

First, it’s important to understand that there are many credit risk scoring models, but the ones that are most commonly used are FICO and VantageScore. Both of these models use the credit card information pulled from Experian, TransUnion, and Equifax (the top 3 credit bureaus) and analyze it to determine a credit score.

The formula used by each model can differ based on the reason the report is being run. So, the formula used to calculate the credit score for a car loan might be different than the formula used to determine the credit score for housing. While the differences are generally small, it is important to note that a consumer’s credit score can be slightly different based on what they’re applying for.

You could work with other scoring models, but FICO and VantageScore are the most trusted in the industry – and considered the gold-standard for tenant screening. Other scoring models may skew the score in favor of the applicant or in favor of whoever is ordering the report. Some even disregard sending over the actual numbers, giving you smiley faces or checkmarks as a grading system instead. To make sure you’re getting the most accurate information possible, it’s important to make sure you’re working with a reputable screening service.

FICO vs. VantageScore

Here’s a look at how the two major credit scoring models differ:

FICO was developed by Fair Isaac and Company in 1989 and is one of the oldest credit scoring models used today. The company has revised the model several times since it was first developed, and the most recent version is FICO Score 8. Some of the benefits of using FICO are:

  • – It’s widely recognized and used by lenders, making it the standard for many industries including rental housing. This also means many applicants are familiar with the credit range of 300 – 850 and know their previous FICO score.

  • – The model is constantly being updated to accommodate a wide range of industry standards. Since FICO is the oldest model and has been around for decades, Fair Isaac and Company have plenty of experience with making adjustments to make the model fit given the current financial climate.

  • – FICO offers a base scoring model, as well as industry-specific scores.

VantageScore was developed by Experian, TransUnion, and Equifax (the three major credit bureaus) in 2006. While FICO is an independent credit scoring company, VantageScore gets its information directly sourced from the bureaus’ data. Some of the benefits of VantageScore include:

  • – Since VantageScore pulls information directly from the credit bureaus, millions of consumers who didn’t have enough credit built up to meet the minimum scoring requirements (also known as “credit thin”) in the past now have a credit score. To generate a score, FICO requires consumers to have a credit account that’s at least 6 months old. In addition, that account must have had activity within those 6 months. VantageScore makes it possible for credit thin applicants to receive a score as long as they have one credit account. The account can also be less than 6 months old. This means that if you’re screening a young applicant or someone who just has a limited credit history, you’re more likely to get a report that includes a credit score.

  • – It doesn’t make a difference which of the three main credit bureau you request the report from – the information on it will be the same. This can reduce confusion for your applicants. With FICO reports, the model is tailored to be bureau-specific, so you may receive one score from Experian and a different score from Equifax.

If you’re screening an applicant, it’s important to note that the differences between the two scoring models only affect the credit score. The rest of the information on a credit check will be based on the data, rather than a calculated model. The information below will be the same, regardless of whether you choose FICO or VantageScore:

  • – A summary of the applicant’s positive and negative credit accounts
  • – Payment history
  • – Prior credit inquiries and the dates they were made
  • – Total estimated past due and monthly debts
  • – A breakdown of their accounts

How will COVID-19 affect credit scores?

It’s not completely clear how COVID-19 will affect credit scores yet. Every consumer has a different credit situation, coupled with the fact that the models rank certain financial situations differently. Currently, the Coronavirus Aid, Relief, and Economic Security Act (CARES) prevents financial data reported from lenders to lower consumer’s credit scores. VantageScore is also working on making adjustments to their model to minimize the negative impacts of things like forbearance and deferment. Experian, TransUnion, and Equifax are also providing free weekly consumer credit reports for one year.

Which should credit scoring model should I choose?

When it comes to choosing which credit model to go with, think about what works best for you and your properties. Is your rental in a college town, with many young applicants who are likely credit thin? If so, VantageScore may be the better option. Do you feel safer going with the score that’s preferred by lenders and has a long history? You may want to choose FICO.

By understanding the differences in scoring, you’ll be able to assess whether a tenant might be impacted by one model than another. This is also one reason why supplementing your credit check with additional screenings, like a background check or tenant verification is so valuable. Regardless of which score you choose you’ll have additional information to base your decision on. Our RentalConnect service is a great option for landlords, as there are several levels of reporting available to choose from, all while deferring the cost of the screening onto your applicants. It’s easy, convenient, and available online 24/7. If you have any questions about RentalConnect or any of our other screening services, feel free to contact us.

Posted by & filed under Rentals.

You may not realize it but when you decide to rent out a room in your house, you’re more than just a roommate; you effectively become a landlord. While the rules and regulations regarding roommates can vary based on your location, it’s important to know the details of being a landlord in order to make your roommate situation as successful as possible. Without completely understanding your role, you could find yourself facing legal trouble.

Many of the lessons, tips, and procedures that work for professional landlords can be used in your own situation to make sure that you and your roommate are working together fairly and legally.

Things To Consider When Renting Out A Room

If you have unused or extra space in your home, renting out a room can be a great way to make some extra money. Whether you’re planning to rent an actual bedroom or an in-law unit, it’s important to remember that you’ll be sharing the property with another person – which may be problematic or frustrating from time to time.

Renting a room is different from subletting. Subletting is when you are a tenant at a property you don’t own and you rent some of the space out to someone else. With subletting, you’re still responsible for paying rent to a landlord. If you’re renting out a room in a property you own, your relationship is one of a landlord/tenant, rather than co-tenants.

Legally Renting Your Room Out

Even if you own the property, there can be conditions that affect whether you’re allowed to rent out a room. For example, if your property has a homeowner’s associations, they may prohibit additional occupants. Another thing to consider is that your city may have zoning laws that prevent you from renting out a room without a license or permit. Or, there could be restrictions on the number of unrelated occupants you can have at your property.

In some cases, there could even be certain conditions you’ll need to fulfill to be able to rent to someone else, such as independent outdoor access to the rental space or inspections. Be sure to check your local zoning laws, as well as state laws, city ordinances, and homeowner’s association bylaws, if applicable.

Renting Out a Room In Your Primary Residence

Once you know you can legally rent a room in your home, the next steps are preparing it for a roommate and marketing it. Here are some steps to take to take:

  • Prepare the room
    Ideally, the room or unit you’re renting will already be habitable, with electricity, heating, and accessible plumbing. If you have more than one bathroom, make sure to decide which one will be assigned to the tenant. Tenants have a legal right to privacy, so you may also want to think about installing a lock on their bedroom door so they can feel secure about their belongings when they’re not home. Doing these things will help you stay compliant with landlord-tenant laws.

    Many renters are interested in finding a room that’s already furnished; if you decide to offer furnishings, make sure to take an inventory of what belongs to you. You’ll also want to complete a walkthrough inspection with the tenant before they sign the lease. One easy way to inventory your items is to take photos of everything. This will also help to document the condition of the room before the tenant moves in.
  • Marketing your room
    Before you begin marketing your room, think about who would be your ideal roommate. Are you interested in living with a student? A retiree? Someone who’s a fellow animal lover? Come up with a list of criteria you’re looking for, but do make sure to be aware of Fair Housing Laws.

    Federal Fair Housing Laws do allow some exceptions to traditional protected classes when it pertains to choosing a roommate. The laws state that you’re not allowed to use discriminatory language in your rental advertisement, which would typically include gender. However, it’s fine to include a gender preference in your ad, as long as no other qualifiers are added. This means if you’re a female and would like a female roommate, you can state this, but you’re not allowed to specify race, religion, sexual orientation, etc.

    In 2012, the 9th Circuit Court ruled that applying a nondiscrimination requirement to homeowners or a tenant’s roommate selection would be an invasion of privacy; therefore, the anti-discrimination provisions of the laws don’t apply. This is because choosing a roommate increases your personal risk and affects your quality of life.

Listing your room for rent

After you’ve made sure the rental space is ready and decided what type of roommate you’re looking for, you can start advertising your room. There may be places that renters might not look, so it’s best to have your listing in several locations.

If you’re considering a single person looking for a room, you may want to put flyers up near a college campus or a senior center. Think about where your target tenants may be spending time, rather than casting a wider net. You can also ask your friends or family if they know of anyone looking for housing. This gives you the added benefit of finding someone who’s essentially in your network and not a complete stranger.

Regardless of how you find your roommate, you should always conduct some form of tenant screening, such as a credit check and background check. This can save you a lot of time and hassle down the road! It also gives you the added assurance that the person you’ve chosen is likely to be a responsible, stable renter. In combination with screening, be sure to also ask the applicant for references from past roommates. References from landlords work too, but talking to someone who actually lived with the person will give you a much better idea of how they will be to live with.

Screening your roommate

If you’re sharing your home with someone, it’s very important to choose someone who will be a good renter. Not only so you can feel confident they’ll pay their rent, but also because issues of any kind can become amplified when you’re living with other people. To protect yourself legally, and conduct screening properly, you should have a compliant rental application that grants you, as the landlord, permission to conduct screening and contact their references. Once they’ve filled this out and agreed to the terms, you run your background and credit checks. Our RentalConnect service is a great option, as it allows you to defer the cost of the screenings onto the applicant.

Writing your lease agreement

Before you select an applicant, you should also make sure to create a lease agreement. Although it may not seem necessary, having a lease agreement in place will give you added protection and outline the expectations of both the tenant and you as the landlord. Some states accept oral rental agreements, however, you should always have everything in writing, with a signature from both parties. A lease agreement will help you both navigate what to do if any issues arise. Learn more about how to write an iron-clad lease here.

In addition to the terms on a typical lease agreement, here are a few things to include for roommate situations:

  • The length of time the occupancy will cover. Most lease agreements are typically one year, but if you’re renting to a student you may want to consider a 9 to 10-month period to correlate with the school year.

  • Define the common areas. Shared spaces can often lead to conflict, especially if no guidelines are provided in the beginning. Unless they’re going to live in an in-law unit, your tenant will need to have access to parts of your home, like the kitchen, living room, and laundry room. Parking and the use of the backyard also fall into common areas, so make sure to clearly specify your usage rules and whether any areas are off-limits.

  • Utilities. Another thing you’ll need to decide is how to split utilities, which should also be clearly outlined on the lease. For convenience, you may want to add their portion of the utilities into the cost of rent or simply split the costs of utilities down the middle. Another option is to have the tenant be solely responsible for a single utility.

  • House rules. Clearly state your expectations for your tenant’s behavior, especially regarding things like noise, overnight guests, pets, vacations, smoking, and household chores. This will help to eliminate any gray areas or issues that can pop up over time. Give your tenant a copy of the rules so they can refer to it over time.

  • Rent and deposit. Have your rent rate, due date, and security deposit clearly stated in the lease, as well as the penalty for late rent. If you do end up having an issue with the tenant not paying their rent, keep in mind that you can evict them as you would if you were renting a separate property to them. However, you’re also required to follow rules and regulations about official rental notices, maintenance, and security deposits.

Tax considerations

Keep in mind that any money you receive from rent is considered taxable income, although you will be able to claim expenses and deductions that wouldn’t be applicable without a roommate. This includes things like replacing old carpet in the rented room or painting it.

If you’re renting a room in your house, the best practice is to determine the square footage of it and the percentage of your house it takes up. So, if you have 2,500 sq. foot home and the rented room is 500 sq. feet, the room would be 20% of your total square footage. This means your tenant would be responsible for 1/5 of mortgage interest, utilities, or real estate taxes.

Treat it like a business

Ultimately, the best way to ensure success when renting out your room is to treat it like a business. Even though you’re not a rental housing professional, you should still make use of all the rental tools and processes available to you. Things like written lease agreements, inspections, maintenance, dealing with money, and evictions are a part of being a landlord, regardless of whether you’re renting a room of your own home or renting a separate property. By following these guidelines, you’ll be prepared to rent out your room as successfully as possible.

Posted by & filed under Uncategorized.

Like most of the country, California has seen significant economic impact due to COVID-19. The executive orders from Governor Newsom have required many businesses to close or reduce their operations. Many citizens are still out of work; as of July 2020, the state unemployment rate was 13.3% – down from 16.4% in April. In addition, the orders on moratoriums and foreclosures have affected the normal rights and actions for leases and rental arrangements. These orders are set to expire on September 2, unless the state government can come to some form of agreement. With so much uncertainty in the air for California, and other states as well, landlords and tenants are left with many questions.

Here are a few ways you can navigate these uncertain times, as well as some solutions that have been adopted in other areas around the country.

Landlord considerations

Rent Concessions During Covid-19

Stay in communication with your tenants and continue talking to them about their situation. You should encourage them to apply for aid, when applicable, such as insurance claims, Small Business Administration Emergency Disaster Fund Loans, or the Paycheck Protection Program. You may also want to direct tenants to local assistance programs run by cities or regional foundations.

If tenants ask for rent concession, evaluate each tenant independently. Here are some factors you should keep in consideration:

  • – Is this tenant likely to rent from you long term?

  • – Does the tenant’s credit, current financial situation, and prior years’ financials demonstrate an impact due to COVID-19?

  • – Does the tenant have a history of consistently paying their rent on time?

  • – How much time is there left on the lease?

  • – Can the existing lease terms be modified in exchange for a rent concession? Some examples of modifications include the addition of a relocation clause, the elimination of a right-of-first-refusal, right-of-first-offer, expense caps, or similar provisions.

  • – Would a personal guaranty increase the tenant’s creditworthiness?

  • – What are your cash flow needs?

You should also review your insurance policies, as well as your contractual obligations to lenders and other tenants. Although many insurance policies contain exclusions for situations like pandemics, it’s worthwhile to look into whether your insurer is providing some form of emergency coverage. In terms of loans, many agreements require minimum levels of rent or occupancy or require you to provide a 12-month trailing statement on your rent numbers. To get a loan, you’ll generally need to show that you have a minimal level of cash reserve and cash flow. However, many lenders would prefer to work with you to prevent defaults, so it’s definitely worth communicating with them.

Another thing you should consider is consulting your attorney and accountant. They can evaluate abatement and deferral requests to ensure they’re structured in a way that maximizes the benefits for you and your tenants. Some leases have co-tenancy requirements or require anchor tenants, so you should also think about whether your existing tenants will be impacted if your property no longer meets those lease stipulations. Lastly, what are the long-term market implications for your property? Here are a few things to factor in:

  • – The cash flow of the property

  • – Occupancy rates

  • – Loans or leverages you have on the property

  • – How much is the lender willing to work with you? Are they willing to offer a deferral or waiver, payment restructuring, or interest-only payments?

  • – Do you have rental interruption or other insurance that doesn’t include a pandemic or epidemic exclusion?

If your tenant owns a business, you may also want to consider factors like their financial health, their credit history, and if they have a guarantor. How much cash does the tenant’s business have on hand? How robust were sales before the pandemic? If their business was already struggling or just breaking even prior to COVID-19, you may be in a position to support them through this time.

These are all questions that you’ll need to consider for each individual and property. If you choose not to provide some form of rent relief, you should also account for the potential vacancy loss and the costs associated with finding a replacement tenant. Keep in mind that the economic downturn could mean fewer renters searching for new housing – and longer vacancy times for your properties.

Some current solutions for landlords

Here are some solutions that have been successful for other landlords and their tenants:

  1. Apply the security deposit to rent.
  2. Collect maintenance charges on common areas, but defer the base price of rent.
  3. Reduce, defer, or abate rent for an agreed-upon period of time, with no repayment. This can be in exchange for more favorable lease terms, such as:
    • Extending the term of the lease
    • Terminating options
    • Rights of refusal/first offer
    • Eliminating exclusive or restrictive use provisions
  4. Reduce or defer rent payments for a set period of time, with payments spread out over the remaining term. If there is less than a year left to the lease and the rent amount is high, draw up a promissory note and have it secured by a personal guaranty until after the term ends.
  5. Reduce or defer payments for a set period of time, but add on the term to the end of the lease.
  6. Reduce the rent payment to a percentage rent based on the gross income of the tenant.
  7. Suspend late fees and/or interest.
  8. Suspend defaults for continuous operation, co-tenancy, and operating hours.
  9. Offer rent deferral or abatement for the length of the shutdown; resume rent once the pandemic ends. To avoid problems that could arise with this, add in an end date or cap to the rent deferral or abatement in case the shutdown is extended.
  10. Consider prohibiting “double-dipping.” This means if a tenant is receiving relief from another source, they aren’t eligible to receive relief from you as well. This allows you to provide relief to tenants who may be in greater need.
  11. Consider adding confidentiality requirements to any lease modifications you make. This allows you to adjust the terms for each tenant based on their individual circumstances while prohibiting tenants from comparing the terms of their leases.

Tenant Considerations

If you’re thinking about asking for a rent concession, be prepared to provide documentation that proves you need it. This could include bank statements, balance sheets, prior financial statements, evidence of loss of work or business, or other supporting documents. You may also need to show that you’ve applied for financial assistance through disaster relief programs or that you’ve explored insurance coverage.

It’s important to understand that landlords have many fixed costs they’re required to pay, regardless of whether they have money coming in. This includes things like debts services, property taxes, and insurance. Some costs, like security for the property, could even cost more during the pandemic. Check the section for landlords above and evaluate whether a rent concession would be beneficial to you and your landlord.

What happens if you’re not able to reach an agreement? In some states, eviction moratoriums still stand. As of August 25, these include:

  • Arizona – extended until October 31, 2020
  • California – set to expire September 2, 2020
  • Connecticut – extended until October 1, 2020
  • District of Columbia – evictions are banned until the state of emergency is officially declared over
  • Florida – set to expire September 1, 2020
  • Hawaii – set to expire September 30, 2020
  • Illinois – set to expire September 19, 2020
  • Kansas – set to expire September 15, 2020
  • Maryland – evictions are banned until the state of emergency is officially declared over, however, the Maryland Court of Appeals’ hold on eviction proceedings ended July 25
  • Massachusetts – set to expire October 17, 2020
  • Minnesota – set to expire September 11, 2020
  • Montana – evictions are banned temporarily during the pandemic but tenants must meet specific criteria to avoid being evicted
  • Nevada – has been phased out since July 31, but is set to expire August 31
  • New Jersey – set to expire October 15, 2020
  • New Mexico – evictions are banned temporarily during the pandemic but tenants must provide the court with evidence of their inability to pay rent during their eviction petition
  • New York – set to expire October 1, 2020
  • Oregon – set to expire September 30, 2020
  • Pennsylvania – set to expire August 31, 2020
  • Virginia – set to expire September 7, 2020
  • Washington – set to expire October 15, 2020
  • Seattle, Washington – set to expire December 31, 2020

There’s still uncertainty surrounding what will happen after these moratoriums expire, but for the moment, landlords cannot pursue evictions. Although you can’t be evicted, the rent is still due, payable, and will accrue. Once the eviction ban is lifted, your landlord may pursue every legal option to remedy the situation, including eviction. However, with cooperation and understanding, most landlords and tenants should be able to find a mutually beneficial solution.

Posted by & filed under Property Management.

As states have begun to lift stay at home orders, online searches for terms like “apartments for rent” have started to increase. With many renters now on the hunt for new housing, there are a few things you should start doing to prepare.

Tips For Adjusting Your Operations As States Lift Covid 19 orders

First, it’s strongly recommended that you read through the Centers for Disease Control’s (CDC) guidelines for shared and congregate housing. This goes over how you can safely resume normal operations, like showing vacant units to new applicants. You should also make sure you’re following all recommendations release by your local health and city officials.

Once you’ve reviewed all your policies and operations to make sure they’re in line with the latest recommendations, you can begin to focus on your marketing, leasing, management, and revenue processes.

Marketing

Don’t wait to run paid ads!

  • Now that many states have removed some of their COVID-19 restrictions, renters are starting to resume their hunt for housing. This makes your digital advertisements more important than ever. Although renters may be moving in slower volumes right now, the start of the school year is a historically slow time for most markets. There’s no way to know what autumn will hold in terms of the pandemic, either, so it’s best to start your marketing now in case things slow down even more.

Adjust your ad spend

  • As the demand for housing increases, you may also have more turn-over with your existing tenants. A good way to drive more traffic to your website (and showcase your vacancies) is by increasing your ad spend.

Re-evaluate the ways you market

  • While you’re taking a look at your paid ads, take note of which channels are successful, and which ones aren’t. You may need to reallocate your marketing dollars to channels that are actually converting into leads.

Emphasize visual content

  • Many people are still trying to reduce their in-person meetings and gatherings, so give your potential tenants a way to see your community without actually going there. This can be done using virtual tours, photos, floor-plans, and videos. Pushing your visual content is a great way to advertise your community and aid renters in their search.

Leasing

Offer virtual tours

  • Although states are starting to reopen, the CDC guidelines still recommend limiting any unnecessary exposure in enclosed spaces. So even though you may be tempted to start offering in-person tours, many renters may be uncomfortable with the idea. Virtual tours are the next best option. You can offer tours through video conferencing apps like Zoom or Skype, or use online tools to create virtual tours using online tools. Get some tips on how to offer virtual tours and best practices for them here.

Increase your hold time

  • Do you currently have a lot of vacancies, or expect to have some in the near future? If so, you may want to increase the amount of time you’ll hold a vacant unit for prospective tenants. You can compare your RVO to your Target RVO to help you determine how much time you should hold your units.

Here’s a quick guide to determine your maximum vacancy hold period:

RVO vs. Target RVOMaximum hold period
RVO ≥ Target RVO4 weeks
RVO ≥ Target RVO -1%5 weeks
RVO ≥ Target RVO -2%6 weeks
RVO ≥ Target RVO -3%7 weeks
RVO ≥ Target RVO -4%8 weeks
RVO ≤ Target RVO -4%9+ weeks

Management

Sanitize!

  • You’ve likely already changed up your cleaning routines and hours of operation for your community’s common areas, but if you haven’t, now is the time. Make sure you have enough supplies on hand to keep everything properly sanitized. You may also want to set up hand washing stations, areas with hand sanitizer, and similar precautions.
  • Another thing you may want to keep in mind is that your current tenants may not be happy about paying for amenities they can’t use or feel safe using. If you decide to open common areas like your gym or pool, ensure that you’re doing everything you can to keep them as clean as possible.

Speed up your tenant turnovers

  • Now that so many people are beginning to search for housing, it’s important to clean and prepare your vacant units for new tenants as quickly as possible. A good timeframe for this would be within seven days. Spend extra time making sure your vacant units are immaculate so new tenants can see the community they’re moving to is clean, safe, and well-maintained.

Increase your resident retention

  • Although the country has started to reopen, many people are still wary about returning to their normal routines. Pay close attention to any residents who may have a lease due soon. Is there anything you can offer them to entice them to stay?
  • You may need to get a bit creative with your renewals, like finding ways to make their unit more comfortable. You could offer free carpet cleanings or let them paint their walls. Smart amenities, like Nest thermostats, are the perfect blend of comfort and convenience, plus they can cut energy costs. Think about offering amenities that will benefit your current tenants as well as attract future ones.

Offer unique amenities

  • An important aspect of marketing for any industry is to set yourself apart from the competition. As a landlord or property manager, one way to do this is to offer amenities renters can’t find anywhere else. For example, you could offer electronic fitness items, like Peloton bikes or Tonal lifting machines. Try sending out a survey to your tenants with some different amenities you’d be willing to offer to see what would be most attractive. The more unique amenities you offer, the more likely you’ll keep your existing tenants and attract new ones.

Revenue

Price discounts

One way to attract more residents to your community is to offer discounts on rent. This is a good tactic for when your RVO is below your Target RVO. Here’s a guide to help you figure out which types of discounts would be feasible:

RVO vs. Target RVODiscount
RVO ≥ Target RVONone
RVO ≥ Target RVO -1%1-2% off monthly rent or 1/2 off first month’s rent
RVO ≥ Target RVO -2%3-4% off monthly rent or 1/2 off first month’s rent
RVO ≥ Target RVO -3%5-6% off monthly rent or 3/4 off first month’s rent
RVO ≥ Target RVO -4%7-8% off monthly rent or first month rent-free
RVO ≤ Target RVO -4%9%+ off monthly rent or 1+ months rent-free

You can also apply discounts to specific rentals that have remained vacant throughout the pandemic. For example:

Unit Vacancy DurationDiscount
30 daysNone
>30 days1-2% off monthly rent or 1/2 off first month’s rent
>45 days3-4% off monthly rent or 1/2 off first month’s rent
>60 days5-6% off monthly rent or 3/4 off first month’s rent
>75 days7-8% off monthly rent or first month rent-free
>90 days9%+ off monthly rent or 1+ months rent-free

Lower your lease renewal rates

  • One way to keep your lease renewals and occupancies high is to keep your renewal rates at or below the market rates. If you’ve chosen to lower your rates for new residents, you may also want to consider lowering the rent price on renewals to help retain those tenants.
  • COVID-19 has changed regulations, operations, and processes for the rental housing industry. The goals you once had for your community have most likely have changed as well. Communities that are willing and able to adapt quickly are most likely to see the greatest success as the country reopens and begins to embrace the new normal.

Posted by & filed under Rental Housing.

For many Americans, roommates are a necessity. High costs of living coupled with low wages and debt have made it difficult for people to meet all their financial responsibilities in many areas of the country. Unfortunately, this trend shows no sign of slowing; if anything, it’s likely to increase with the economic fallout from job loss due to COVID-19 – and the anticipated wave of evictions expected to follow. As a landlord or property manager, this means you may see an increase in tenant questions or requests regarding roommates. As a renter, you may be considering a roommate yourself.

Regardless of whether you’re a renter or a rental housing professional, the goal is ultimately the same when it comes to roommates: find someone who is reliable, responsible, and who will treat the property with care. Just as no landlord wants to deal with a troublesome tenant, no renter wants to deal with a troublesome roommate. This guide is designed to help both renters and rental housing professionals navigate the roommate situation with results that are mutually beneficial to both parties.

Renters: How to find a good roommate

Roomates A Guide For Rental Housing Professionals and Renters

The best way to prevent problems with your roommate is to find the right one from the beginning. Even though it might sound fun to live with your best friend, they may not be a responsible, reliable roommate – and that could cause trouble with your friendship. Here are a few ways you can make sure you’re finding the right fit:

  1. Ask your friends and family
    Living with a friend may be risky, but you may not feel comfortable living with a complete stranger, either. One way to solve this issue is to ask people you know and trust if they know anyone who’s looking for a roommate. Once you begin asking around, you may find you have a large pool of potential roommates to choose from. Although you won’t know them personally, you’ll be able to trust the recommendations of your friends and family members.
  1. Conduct multiple interviews
    It’s always recommended that you do multiple interviews before offering someone a room. Talk to different candidates, and then have a second meeting with the ones that seem the most trustworthy. It’s best to meet the candidates you’re considering in person, so you can get to know them a bit better and develop a rapport – or spot red flags.
  1. Ask the right questions
    When interviewing candidates, you’ll want to get to know them a bit to make sure you’ll be compatible roommates. Knowing about their likes, dislikes, and lifestyle can tell you a lot! However, you should also ask the following questions to get a fuller picture of the type of roommate they would be:
  • What do you do for a living? If they’ve had a consistent job, they’re likely fairly reliable. If they dodge the question, have switched jobs a lot, or don’t seem like they have one, this could be a red flag. If they’re a student it’s not necessarily a red flag, but it’s important to make sure they have some form of income to pay for the rent and bills.

  • Tell me about your recent living situation. Why are you looking for a new place to live? Find out whether they had roommates before and whether they got along with them. Maybe they’re searching for new housing now because their lease is up, or they could have conflicts with another roommate. Pay attention to their answers – and your intuition – to decide whether they’re giving you honest answers.
  1. Be upfront about costs
    Part of finding a good roommate depends on whether they’ll be able to pay for rent and bills consistently – so be upfront with costs so candidates know what they’re signing up for. Create an estimate of what they can expect to pay monthly and let them know what your expectations are in terms of splitting bills or food costs.
  1. Ask for references
    Landlords and property managers ask for references, and so should you. Ask if you can talk with their previous landlord or roommate. If the person seems reluctant or unwilling to give you a reference to contact, this is a red flag that there could have been problems with their last living situation.
  1. Get everything in writing
    No matter how trustworthy your future roommate seems, it’s important to make sure they’re on the lease agreement. That way, they are legally responsible if they can’t pay rent, cause damage to the property, or violate other terms of the lease.

Landlords and Property Managers: Renting to roommates

Renting to co-tenants can be confusing territory. How do you handle leases, security deposits, rent collection, and screening? Here are some tips for best practices when managing co-tenants:

  1. Make roommates jointly liable on the lease
    One of your first questions may be whether or not to allow subletting. To protect yourself and your property, subletting isn’t recommended. This is because subletters don’t actually sign the lease, so they aren’t legally jointly liable for rent or upholding the stipulations of the lease agreement.

    For this reason, you should have all tenants’ names on the lease and have each party sign it. Make sure your lease states that tenants are “jointly and severally liable.” This essentially treats all the tenants like one person, so if one of your tenants violates the lease, the other roommates share equal responsibility. Although it may not seem fair from the standpoint of the tenants, it’s a standard provision that gives everyone greater incentive to follow the terms of the lease.
  1. Screen co-tenants
    All tenants should be screened with a credit check and background check before taking up residence at your property, regardless of whether they’re the original tenant or co-tenant. RentalConnect may be a good option for you, as it allows you to defer the cost of the screenings onto the tenant.
  1. Don’t divide security deposits
    Security deposits should only be returned when all the occupants have moved out and you have the chance to fully inspect the property for damage. Co-tenants should work out between themselves how they’d like to handle the security deposit if one of them moves out. One suggestion you could offer is to have the new tenant pay the original tenant their share of the security deposit. If the co-tenant moves out before the original tenant, the original tenant can return the security deposit to them. If the original tenant decides to move, they can keep the co-tenant’s share, and you can return the full security deposit to the co-tenant after they move.
  1. One check for the full amount of rent
    In being consistent with treating all tenants like one person, you should request that the rent be paid in full with a single check. This makes it less likely that you’ll be drawn into any financial issues between the tenants and it will limit your involvement with individual tenants. If one of the tenants is having difficulty coming up with rent money, it’s something they will have to work out with their roommate.
  1. Suggest a co-tenancy agreement
    A co-tenancy agreement is only between co-tenants, but it sets clear expectations on each tenant’s responsibility. They typically include things like who will be responsible for writing the rent check, how much rent will be, how bills will be divided, household responsibilities, noise, overnight guests, and move-out obligations.
  1. Ask for a tenant representative
    Ask your tenants to designate one person to be your point of contact. The tenant representative will be responsible for communicating with you on all issues related to the property. This eliminates separate conversations with individual tenants, which will save you time and simplifies things like scheduling maintenance and repairs.

Keep in mind that state and local laws differ; it’s always recommended you check the rules in your area before making any changes to your lease. Hopefully, this guide has made how to handle roommate situations clearer from both a renter and rental housing professional perspective!

Posted by & filed under Rentals.

Virtual tours have grown in popularity over the years; thanks to the development of smartphone capability and apps, property managers and landlords can show off their rental properties to many prospective tenants at the same time. Renters also benefit, as they can search for housing and view the properties they’re interested in without ever leaving their homes.

Streamline Your Rental Tours With The Best Virtual Tour Apps

As a rental housing professional, virtual tours can boost your business – especially now, with COVID-19 concerns. Listings with virtual home tours consistently garner more interest and views than listings without them, in part because they give applicants more time to get a feel for the property. If you’ve been considering offering virtual tours but weren’t sure where to start, here’s a look at some great apps that can get you up and running.

Realync

Realync is a cloud-based app that allows for real-time, immersive interactions between you and prospective tenants. You can respond to their questions and showcase all the features of your properties through real-time tours or pre-recorded videos. All videos can be saved on the cloud for future use. Another great feature is the ability to host a live virtual open house that you can invite prospective renters to attend from anywhere in the world. The app also has fairly extensive (but easy-to-understand) analytics that allow you to determine what’s working for you and what isn’t, as well as the ability to capture contact data from open houses.

Rently

Rently aims to make property tours easier for you and prospective renters with self-touring technology. The company provides a lockbox device for each vacant property, which costs $30/month for unlimited leads and users. This device connects to the renters’ smartphone app, granting them access to the property without the need for you or your staff to be there. Prospective renters can register for a self-tour online; once they’re approved, they will receive a one-time entry code giving them access to the vacant unit. This app can be used for both single-family homes and multifamily communities.

Abodo

Abodo is a web-based multiple-listing site that allows renters to search for housing in more than 300 cities nationwide. The app makes it easy for renters to browse, filter, and tour properties that interest them. Listings are free for property managers, and you can easily reach out and communicate with interested parties. Although Abodo is open to everyone, its target market tends to be college students looking for affordable housing.

Tour24

Tour24 is another web-based platform that allows you to offer self-guided tours whenever it’s most convenient for you. You can­­ choose when renters are allowed to tour the property, as well as when to switch tours off. Renters schedule a tour through the app, which conducts identity verification before the appointment is approved. Like Rently, Tour24 uses the prospective tenant’s smartphone as the key to the property. Once the renter is at the property, their phone essentially becomes the onsite tour guide, generating pop-ups that highlight points of interest around the home.

AnyoneHome

AnyoneHome isn’t a virtual tour app but it does allow you to offer a fully immersive contact center through a well-developed CRM platform. Renters can schedule tours online, conducted either through an onsite manager or a self-guided tour. The app aims to optimize your leasing process with 24/7 availability, plus it integrates with a variety of helpful apps and self-guided tour hardware, including Tour24.

Video Conferencing Tools

In addition to the above apps, you can also use video conferencing tools to conduct virtual tours. Some of the most popular and easy-to-use ones include Zoom, GoogleMeet, and Facetime.

Additional Considerations

As you look into these apps, you may want to make a priority list to help you decide which ones would be most beneficial to you. Think about the following factors:

  • What’s your budget?

  • How many renters would you like to be able to give virtual tours at once?

  • Are you thinking about producing a single video tour that you can share with interested parties? Or would you prefer to offer personalized tours?

  • Do you need the ability to schedule virtual tours? You may also want to read through our blog on tips and best practices for virtual tours to get more ideas on how you’d like to conduct them.

Posted by & filed under Property Management.

How to Prepare For A Potential Wave Of Evictions

Earlier this year, states rushed to put a halt to evictions in response to COVID-19. As some states have now begun the process of reopening, the multifamily housing industry may be at a crossroads with evictions. Eviction moratoriums are set to be lifted in several states, with courts scheduled to begin hearing eviction cases later in the month. However, some areas are considering extending eviction moratoriums due to the increase in COVID cases.

Regardless of when courts reopen, the nation will likely see a flood of evictions in the future. If this happens, there will be an influx of rental applicants, so it’s essential to think about how this could affect your rental policies.

In only a matter of months, the rental housing industry has had to make some quick adaptations, including social distancing, eviction court closures, and missed rental payments. If you haven’t revised your written rental criteria since the pandemic started, now is the time. The landscape of the industry is rapidly changing, and your policy should be able to keep up.

In the past, it’s been best to avoid blanket standards on your rental policies to avoid liabilities. These are overly broad statements like, “no evictions” or “no felonies.” Stating “no evictions” has normally been problematic, as it doesn’t factor in differences between state, federal, and county-level laws. In many cases, it can be perceived as anti-renter behavior. This policy is especially important to avoid now, with potentially large numbers of COVID-19 related evictions on the horizon. Here are some reasons why:

It doesn’t look good from a legal perspective

Even if you’ve always had “no evictions” as part of your rental policy, you could be running into legal trouble for denying an applicant based on a COVID-19 eviction. Not to mention, it could damage your property’s reputation. It’s also likely that some states will implement legislation aimed at restricting the use of COVID eviction records for housing.

COVID-19 evictions won’t show you accurate risk

Many applicants who lost their jobs during the pandemic haven’t been able to pay rent. If they end up getting evicted, that doesn’t make them a bad or risky renter. They’re more a victim of circumstances beyond their control. A single eviction caused by missed payments during COVID-19 isn’t an accurate depiction of their rental history, especially if they have a previously perfect record. As long as they meet your income requirements, it’s not likely you’ll need to worry about them being a repeat offender. Using eviction data responsibly

Knowing how to navigate eviction data can be tricky, but here are several things you can start to incorporate into your leasing process right now:     

  • If you have a blanket statement like “no evictions,” replace it with a specific date-based restriction, such as “no monetary evictions within the past 3 years (with the exception of COVID-19-related evictions).”
  • Keep an eye on changes to data restrictions and laws. Over the past few years, many state and local governments have begun restricting the use of eviction and criminal data for housing decisions. You should make sure you’re familiar with the latest laws when reviewing background checks to avoid liability.
  • Apply your rental policies equally, every time, to avoid potential claims of discrimination. Arrange consistent training for your staff on your most current rental criteria, as well as how they should uphold it. This could include legal updates and restrictions, policy changes, and other important items.

There’s no way to know for sure when the pandemic will end or how it will continue to reshape the industry, but it’s important to be empathetic right now – and not only to applicants and tenants. Take care to also show empathy for others in the industry, such as staff and peers. These are difficult times; caring for one another is essential. We’ll continue to assist you with your tenant screening needs and keep you posted with the latest industry updates.