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Fall Home Maintenance Tips

Fall Home Maintenance Tips

Winter in Colorado can be the most damaging time of year for your property.  Low temperatures, Snow, Sleet, constant freezing and thawing are a recipe for disaster. Get ready for the harsh conditions of winter now to avoid bigger problems and expenses later!

fall-home-maintenance

CHECKLIST

  1. Disconnect all Garden Hoses

Remove garden hoses from outdoor faucets. Leaving hoses attached can cause water to back up in the faucets and in the plumbing pipes just inside your exterior walls. When freezing temps hit, that water can freeze, expand, and crack the faucet or pipes. This damage can cause small drips or flooded basements. Make this an early fall priority so a sudden cold snap doesn’t sneak up and cause damage. Turn off any shutoff valves on water supply lines that lead to exterior faucets. While you’re at it, drain garden hoses and store them in a shed or garage.

  1. Sprinkler Winterization

Time to drain your sprinkler system – Hire an irrigation pro to blow out the systems pipes with compressed air. A pro is worth the $50-100 charge to make sure the job is done right, and to reduce the likelihood you don’t have busted pipes and sprinkler head repairs to make in the spring.

  1. Seal it up

Grab a couple of tubes of color-matched exterior caulk ($5 for a 12-ounce tube) and make a journey around  your home’s exterior, sealing up cracks between trim and siding, around window and door frames, and where pipes and wires enter your house. Preventing moisture from getting inside your walls is one of the least expensive — and most important — of your fall maintenance jobs. You’ll also seal air leaks that waste energy.   Pick a nice day when temps are above 50 degrees so caulk flows easily.

  1. Gutter Cleanout

Clogged rain gutters can cause ice dams, which can lead to expensive repairs to your roof, soffits and facia and even can find its way to the interior of the home.  After the leaves have fallen, clean your gutters to remove leaves, twigs, and gunk. Make sure gutters aren’t sagging and trapping water; tighten gutter hangers and downspout brackets. Replace any worn or damaged gutters and downspouts.  Your downspouts should extend at least 5 feet away from your house to prevent foundation problems. If they don’t, add downspout extensions; $10 to $20 each.

  1. Trim your Trees

Late fall is the best time to prune plants and trees — when the summer growth cycle is over. Your goal is to keep limbs and branches at least 3 feet from your house so moisture won’t drip onto roofing and siding, and to prevent damage to your house exterior during high winds. Also remember to do a final cleanup of fall leaves in your lawn to avoid damage as they decompose over the winter.

 

HVAC Inspection

  1. Check Your Furnace

Schedule an appointment with a heating and cooling pro to get your heating system checked and tuned up for the coming heating season. You’ll pay $50 to $100 for a checkup – take advantage of early bird specials in September and Early October.  We’re seeing more and more Owners take advantage of annual maintenance contracts to ensure they are at the top of the list for checks and can shave 20% off the cost of a single visit.

Change your furnace filters, too. This is a job you should do every two months anyway, but if you haven’t, now’s the time. If your HVAC includes a built-in humidifier, make sure the contractor replaces that filter.

  1. Fireplace Maintenance

To make sure your fireplace is safe, grab a flashlight and look up inside your fireplace flue to make sure the damper opens and closes properly. Open the damper and look up into the flue to make sure it’s free of birds’ nests, branches and leaves, or other obstructions. You should see daylight at the top of the chimney.   If you have any doubts, order a professional chimney sweep to inspect and clean your flue to avoid further damage or risk of house fire.

As a Landlord, do not assume these items will be taken care of by your tenants. Some tasks may be a requirement of the lease… others may not, but proactive maintenance management is the best policy in protecting your Investment.

TENANT MOVE OUT PROCESS DONE RIGHT

TENANT MOVE OUT PROCESS DONE RIGHT

When it comes time for your tenants to vacate the property, you want the process to go as smoothly as possible. A great move out process means that the tenants will adhere to the contract and leave you with as little to do as possible. The quicker this process happens, the faster you can get new renters in the property and see income rolling in.

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However, that’s not always possible. You can’t control everything, including your tenants, and if they aren’t taking the proper move out steps, it can put you in a bind, especially if you have tenants moving in right away. Furthermore, if you forget to follow one procedure when you check out your tenants, you could end up with lost revenue or a messy legal situation.

The best way to perfect a seamless move-out process is to have a plan, and stick to it for all of your tenant vacancies. This will help you get everything in order for the next tenant and give your current tenant a little nudge if they need it. Use this guide to streamline the move-out process every time.

Follow the Rules

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There are, unfortunately, many legalities associated with renting a property, and if you want to avoid trouble and stay organized, you’ll recognize and follow these regulations from the get-go. Here are a few important things to remember when helping a tenant vacate a property.

  • The tenant must give adequate notice. The lease agreement should specify exactly how many days before move-out that a tenant must give notice. Make sure that your tenant knows that they are responsible to give that notice and pay rent during that time. If for any reason the tenant must break the lease early, ensure that they are following the proper guidelines for doing so.
  • Confirm the move out dates with the tenant as soon as possible. Your state or your lease agreement might mandate that the tenant vacate the property by a certain date or time, such as the last day of the lease at noon. If that’s the case, make sure that your tenants know it, and that if they need to make other arrangements, they must clear it with you first. Be available on the move-out day to answer questions or collect keys.
  • Review the contract. It might have been awhile since you last looked at it, and the refresher can be very helpful in reminding you of obligations. Do everything in your power to keep your side of the agreement, and offer friendly reminders regarding the tenant’s responsibility, as stated in the lease.
  • Collect relevant information from the tenant. It’s always a good idea to at least ask for a forwarding address from departing tenants so that you can send them mail and their refunded security deposit if applicable. It might be nice to have other relevant personal information on file as well, just in case you need to contact them or if another landlord needs to contact you to get a reference. Try to collect their phone number, address, and email
  • Inspect the property. This is the step you’ll take right before the tenant leaves. With a copy of the contract or a maintenance checklist in hand, walk through the property with the tenant and note any damages or cleaning charges that will come out of the tenant’s security deposit. It’s always a good idea to take photo evidence. That way you have a picture of what the damages looked like before your new tenant moves in and your old tenant will have a difficult time disputing the claims.
  • Get the security deposit in order. Based on your assessment of the property upon move out, you’ll be able to calculate just how much they’ll get back. It’s also a good idea to get a self-addressed and stamped envelope so that you can mail the tenant a check if you don’t handle the deposit online.
  • Collect the keys. It’s amazing how easy it is to forget to do this when your tenant leaves, but it’s one of the most important steps.

Create a Tenant Checklist

One of the best ways to make the move-out process easy on the tenant is to create a tenant checklist. This will remind them of their particular responsibilities and help them help you leave the property in good order. Though your checklist will be specific to your lease agreement and property, here are a few things you might want to add to your own tenant checklist.

  • Submit all damages in writing.
  • Schedule a pre-checkout inspection.
  • Clear away all personal items, including unwanted items, from the property by the designated move out day.
  • Remove all trash. Trash left on the curb will result in a deduction from the deposit.
  • Personal furnishings and belongings outside the property must be removed.
  • Replace burnt out light bulbs.
  • Return all keys, including mail and gate keys.
  • Lock all windows and doors before leaving the property.
  • Pay all utility bills up until the move out date.

It’s also a good idea to notify the tenant of their legal obligations, and then inform them in writing that you as the landlord have the right to advertise the property from the moment the tenant gives their leave of notice.

Let Invested Property Management Take Care of It For You

Each of these steps is necessary to perfecting a simple move-out process, but that doesn’t make the individual steps easy. It takes time and dedication to create a process that not only works smoothly, but also keeps you out of major legal or financial trouble down the road.

The great news is that if you rely on a great property management company like Invested PM, this process is easy. With our team of experts at your side, you’ll be equipped with the tools and knowledge necessary to help your tenant vacate the property without a hitch. We can walk you through the important steps of the process, and then come to your rescue if the tenant doesn’t leave everything in good condition. If you’re looking for a stress-free move-out situation, contact us today!

Rental Property Spring Maintenance Tips

Rental Property Spring Maintenance Tips – Protect Your Property and Save Money

Spring has arrived. With the warming temperatures comes the perfect time to complete a few simple property maintenance tasks critical to preserving the value of your home and rental properties.

Regular maintenance is a relatively low-cost way to avoid problems that could damage your home later and rack up big repair bills.

For rental property owners, preventive maintenance has the added bonus of decreasing the likelihood of emergency repair calls. No landlord wants a call about flooding or an air conditioner that fails when temperatures soar and repair companies are swamped.

Now is the time to consult with your property management company or find professional contractors to have the following five maintenance services completed:

  1. Inspect and Service HVAC systems— Sweltering hot days are on the way. Make sure your air conditioner is up for the job. Have a service person give any HVAC units a checkup to ensure they are in good working order. Typical spring maintenance will include checking electrical connections and controls, cleaning evaporator and condenser coils, cleaning and adjusting the blower, and inspecting and clearing the condensate drain, according to Energy Star.
  2. Inspect Water Heater— Maintaining your water heater can help prolong its life and improve its efficiency. The National Association of Realtors’ Houselogic site recommends draining it to clear sediment, testing the temperature-pressure release valve and inspecting the anode rod, which prevents tank corrosion. Tanks that are more than 10 years old or are leaking should be replaced to avoid unit failure and flooding. Replacing an older unit before it fails can save you $1,000’s in emergency preservation expenses.
  3. Sprinkler System Start Ups – As the temperatures warm and the lawn and garden begins to thaw, there is no better time than springtime to make sure your automatic sprinkler system is ready for another season of efficient lawn and garden watering. Rainbird recommends checking the control system, un-obstructing water flow, repairing/replacing broken heads and nozzles, inspecting valves and turning the system on slowly and testing methodically.
  4. Clean the Gutters— Clogged gutters are the leading cause of window leaks in single-family homes. April showers are upon us, so now is the time to prevent all that water from ending up in your home. Make sure to clean out any gunk, leaves, branches, etc. that have built up over the winter. Check for leaks and ensure downspouts are clear, firmly attached and placed to direct water away from the foundation. Add flexible extenders, widely available at hardware stores, if necessary.
  5. Inspect the Roof— Most experts recommend inspecting roofs at least annually for damaged shingles, flashing and other signs of failure that can cause leaks and damage. This is a job that is generally best left to professionals, who know what to look for and can safely assess the condition from the roof.

In addition, spring is the time to take stock of other problems that developed during the harsh winter and make repairs before the harsh summer sun and temperatures make them worse.

Start by inspecting your home or rental property. Walk around the perimeter of the home and note anything in disrepair, including rot, peeling paint, debris buildup, or possible water intrusion. Check each interior room, too. Dealing with these problems promptly helps minimize future damage, costs and hassles.

At Invested Property Management we inspect our rental properties regularly to look for safety concerns, property maintenance items and preservation opportunities. We’ll actively work with our owners, tenants, contractors to add another layer of protection for your home. A good property manager will save you in the long run in many ways.

 

How to Find a Good Rental Property by the Numbers

Rental Property

“How do I find a profitable rental property? What is a good deal for a rental investment? What costs should I plan for? How much will it rent for?” There are many items to consider and several steps to take when determining if a property will ultimately make a good rental property. Above all else you should always know the numbers first. If the numbers do not work, walk away. Save yourself some time and emotional stress by running the numbers before you even see the property. Numbers, Numbers, Numbers. Sound fun? Let’s get started.

Step 1. Monthly Income: Typically this is going to be the rental amount received on a monthly basis. However, there are other potential income sources associated with certain properties that should also be factored into this calculation (parking, vending etc.). Determine what a reasonable and obtainable rental rate is for the rental property. Do this by taking into consideration available comparable properties actively being marketed in the immediate area and dial in the ability to compete and attract quality renters. When in doubt, ask an experienced property manager for a price opinion.

Step 2. Monthly Expenses: Mortgage Payment, Property Taxes, Insurance, Property Management Fees, HOA Fees, Utilities, Anticipated Vacancy, Maintenance & Repairs. Keep in mind that some of these expenses may not be applicable for your rental property type or financing approach. 

  • Mortgage Payment– Talk to your lender to confirm your payment based on purchase price, down payment and interest rate.
  • Property Taxes– An annual number typically provided with the listing information, divide by 12 for the monthly number.
  • Insurance– Get a quote from an insurance provider.
  • Property Management Fees– Contact us and we’ll explain why our pricing is highly competitive and worth every penny.
  • HOA Fees– A monthly number, typically found with the listing information – ask your agent if you are not sure.
  • Utilities- An owner may elect to provide all, some or none of the utilities as part of the rent. Check comps to see what is being offered by other landlords in the area. Keep in mind that certain utilities may “run with the property” (depending on location/jurisdiction). This means the owner can ultimately be held responsible for delinquent accounts not paid by the tenant.
  • Maintenance & Repairs– A good rule of thumb is to take 1% of the value on an annual basis. Example: If the property is worth $200,000 – estimated repairs would be $2,000 per year or $166 a month. Adjust accordingly for the condition of the home and critical infrastructure. Even if you do not spend 1% in a given year you may consider saving the balance for larger repairs that will undoubtedly be required down the road (roof, furnace etc.).
  • Anticipated Vacancy– This is perhaps the most challenging category to estimate. We generally recommend a reserve of 5% of Monthly Income. However, a good Property Manager can drastically reduce vacancy periods by ensuring you are priced appropriately for the current market, attracting the largest possible number of potential renter and effectively managing the move out and move in periods between tenants.

Step 3. Calculate Monthly Net Income (Monthly Income MINUS Monthly Expenses) and Annual Cash Flow.  

Is your Monthly Net Income number positive? Good start. If the number is negative, delete the rental property from your memory banks and move on.  Multiply Monthly Net Income by 12 to get the Annual Cash Flow.

Step 4. Calculate Annual Net Operating Income- Annual Net Operating Income (NOI) is simply your Annual Income (Monthly Income x 12) MINUS Annual Operating Expenses. Annual Operating Expenses can be calculated by taking the Monthly Income figure from above, removing any Mortgage payments and then multiplying it by 12.

Step 5. Time to calculate your Return on Investment (ROI)- Cap Rate and Cash-on-Cash Return are two great calculations to determine if a rental property is a “good deal” and what type of relative return on investment you can expect. 

Cap Rate = Annual Net Operating Income / Purchase Price (Asset Value)

The minimum Cap Rate to consider is certainly debatable and will be different for different markets. Many will say that anything lower than 6-8%  may not be worth the time or risk. A higher Cap Rate means a higher return. However, Cap Rate is often based on risk or at least “perceived risk”. Just because a property has a high Cap Rate does not necessarily mean it is great deal for your particular situation. You must also take into account factors such as market conditions, neighborhood characteristics, area developments, etc. Ultimately you must determine your threshold for risk and the associated return when talking about Cap Rate. (NOTE: For purposes of Cap Rate, DO NOT use the Mortgage payment in the Income calculation. You should be using Annual Net Operating Income which excludes any Mortgage payments).

Cash-on-Cash Return = Annual Cash Flow/ Total Cash Invested

This number is used to determine how much return you are getting on the actual money you invest. If you pay all cash for a rental property, this number will be the same as the Cap Rate. If you are financing, this number is the most accurate way to see the actual return you are getting on the cash you invested. (NOTE: For purposes of Cash-on-Cash Return, DO use the Mortgage payment in the Income calculation. You should be using Annual Cash Flow).

Do you understand  the difference of these two formulas?  In review, use the Cap Rate to determine the quality of deal you are getting based on the purchase price. Use Cash-on-cash Return to calculate the estimated return on your money invested. They are the same for an all-cash purchase but can be very different for a leveraged/loan purchase.

Rental Property

Deciding between paying cash or getting a loan?  Compare the Cash-on-Cash Returns of each option. You will quickly see the benefit of leveraging can give you more bang for your buck! 

Do not forget these formulas do not include expenses for rehab or any work that may have to be put into a rental property once you purchase it (Capital Improvements). These expenses should be added to the purchase price number for your calculations. Do your best to conservatively estimate these expenses from your experience (or from your agent’s).

Conclusion:

The numbers should not be the only determining factor in finding a successful rental property but the numbers are the crucial first step. If the numbers do not work, move on and find a rental property where they do.

Having fun yet? Practice. Practice. Practice. Go put your new number knowledge to work and compare the properties you’ve been considering. You may just be surprised at the results!

Top 10 Reasons to use a Property Manager

 

Keys in Hand

Top 10 Reasons to use a Property Manager

Many property owners are hesitant to hire a property manager because of the costs involved. However, we firmly believe that hiring a good property management company will actually make the owner more money in the long term. Additionally, we can dramatically reduce the stress and headaches often associated with being a landlord. How much is your sanity and time worth?

Here is how we do it:

  1. Maximizing rents: We will conduct a thorough market analysis to ensure we are striking the perfect balance between maximizing your monthly income while avoiding lengthy vacancy periods. Our expert staff is trained to remain nimble and can quickly adapt to changing market conditions.
  2. Timely handling of rental payments: We will collect and promptly disburse all rental proceeds. Our firm utilizes cutting edge technology that allows us to efficiently track, collect and disburse funds. This includes options for online ACH transactions on both the landlord and tenant(s) side of the transaction. Furthermore, you will receive a detailed statement each month and an annual statement for tax purposes.
  3. Placing the best possible tenants: We know how to find the best possible tenants for your property and can screen out potential tenants with bad history. Our online application process makes the screening process smooth and reliable. We will conduct a thorough background and credit check while verifying rental history and income.
  4. Maximum marketing exposure: We are able to attract a larger pool of applicants due to our extensive marketing/advertising and technological advantages. Many tenants actually prefer and will seek out properties that are professionally managed. Tenants are attracted to our online portal because it allows them to pay their rent with ease and make online maintenance requests.
  5. Increased care of the property: Our staff is available to handle maintenance or repairs issues 24/7. We perform regular “drive by” inspections and will inspect the interior of each property at least one time per year. Based on these inspections we will recommend certain proactive repairs to avoid more costly repairs down the road.
  6. Tenant Management: Our firm will serve as a buffer between owners and tenants. This allows owners to keep a professional distance from their tenants. Getting too personally involved can result in being too lenient or too defensive. We are accustomed to handling all types of situations and personality types.
  7. Vendor Management: We have an extensive database of reliable vendors that have been vetted for both quality and cost. Our firm will oversee any necessary repairs to ensure timely completion.
  8. Ensuring compliance with housing laws: We know the law and can help owners avoid legal hassles. Our firm also has working relationships with various housing authorities for owners that would like to open up their investment to affordable housing programs.
  9. Allowing owners to invest across markets and territories: Our firm can allow you to invest in markets that you wouldn’t otherwise consider due to the distance from your personal residence.
  10. Maximizing your time: We will free up your time allowing you to spend more time doing what you like. This could include spending more time identifying additional investment opportunities!