“ The ultimate property management guide for do-it-yourself landlords who own a single-family house, condo, or duplex.” DOITYOURSELF.COM 2ND EDITION Every Landlord’s Guide to Managing Property • Get and keep good tenants • Stay on top of repairs, maintenance, & tax deductions • Avoid vacancies and cash flow problems Best Practices, From Move-In to Move-Out Attorney Michael Boyer Practical advice for managing and growing a successful rental property business Praise for Every Landlord’s Guide to Managing Property “Every Landlord’s Guide to Managing Property: Best Practices From Move-In to Move-Out, by Michael Boyer is a MUST HAVE for anyone who is currently a landlord or even thinking about becoming a landlord The author, Michael Boyer, is obviously a seasoned professional and landlord who has taken the time to pass on his secrets to success so that you can avoid the many mistakes that (all too often) do-it-yourself landlords make It is well written and takes the mystery out of why some landlords are ultra successful and have great relationships with their tenants, while others have nothing but nightmare experiences that lead them to lose money, sell their rental property, and seek financial shelter in other (often less profitable) investments This book also provides detailed and practical advice on how to acquire and perfect technical skills involving property management (from property and tenant selection to when to work yourself and when to call in a professional); people skills involving tenants (including how to attract and keep great tenants and how to work well with them once you have them); along with general management skills involving everything from short- and long-term planning to basic financial management The advice and examples in this book will enhance the desirability of owning your existing rental property or help you select a new rental property, decrease the stress level and long term cost associated with being a landlord, and ultimately increase the success of your property investment business I cannot recommend this book more highly.” —Gary Ransone, Esq. General Contractor, Real Estate Broker, Property Manager, and Author of The Contractor’s Legal Kit “ The ultimate property management guide for do-it-yourself landlords who own a single-family house, condo, or duplex The best do-it-yourself landlording book on the market, packed with tips every DIY’er will love.” —DoItYourself.com “ The rental market continues to grow even as the for-sale market recovers Rents are rising and inventory is dropping, and the gap is being filled increasingly by small landlords with just one or two properties Michael Boyer’s Every Landlord’s Guide to Managing Property is a must-have survival guide for newcomers to the market.” —Alan J Heavens Residential Real Estate Columnist, Philadelphia Inquirer This Book Comes With Lots of FREE Online Resources Nolo’s award-winning website has a page dedicated just to this book Here you can: KEEP UP TO DATE When there are important changes to the information in this book, we’ll post updates And that’s not all Nolo.com contains thousands of articles on everyday legal and business issues, plus GET DISCOUNTS ON NOLO PRODUCTS Get a plain-English law discounts on hundreds of books, forms, and dictionary, all written by software Nolo experts and available READ BLOGS Get the latest info from Nolo for free You’ll also find authors’ blogs more useful books, LISTEN TO PODCASTS Listen to authors discuss timely issues on topics that interest you WATCH VIDEOS Get a quick introduction to a software, online apps, downloadable forms, plus a lawyer directory legal topic with our short videos Get updates and more at LAW for ALL www.nolo.com/back-of-book/PROP.html The Trusted Name (but don’t take our word for it) “ In Nolo you can trust.” THE NEW YORK TIMES “ Nolo is always there in a jam as the nation’s premier publisher of do-it-yourself legal books.” NEWSWEEK “ Nolo publications…guide people simply through the how, when, where and why of the law.” THE WASHINGTON POST “ [Nolo’s]…material is developed by experienced attorneys who have a knack for making complicated material accessible.” LIBRARY JOURNAL “ When it comes to self-help legal stuff, nobody does a better job than Nolo…” USA TODAY “ The most prominent U.S publisher of self-help legal aids.” TIME MAGAZINE “ Nolo is a pioneer in both consumer and business self-help books and software.” LOS ANGELES TIMES 2nd Edition Every Landlord’s Guide to Managing Property Best Practices, From Move-In to Move-Out Attorney Michael Boyer LAW for ALL SECOND EDITION JANUARY 2018 Editors MARCIA STEWART ILONA BRAY Book Design SUSAN PUTNEY Proofreading IRENE BARNARD Index JULIE SHAWVAN Printing BANG PRINTING Names: Boyer, Michael (Property manager), author Title: Every landlord’s guide to managing property : best practices, from move-in to move-out / Michael Boyer Description: 2nd Edition | Berkeley, CA : Nolo, [2017] | Revised edition of the author’s Every landlord’s guide to managing property, [2015] | Includes index Identifiers: LCCN 2017026691 (print) | LCCN 2017031145 (ebook) | ISBN 9781413324228 (ebook) | ISBN 9781413324211 (pbk.) Subjects: LCSH: Real estate management Classification: LCC HD1394 (ebook) | LCC HD1394 B69 2017 (print) | DDC 333.5068 dc23 LC record available at https://lccn.loc.gov/2017026691 This book covers only United States law, unless it specifically states otherwise Copyright © 2015 and 2017 by Nolo All rights reserved The NOLO trademark is registered in the U.S Patent and Trademark Office Printed in the U.S.A No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise without prior written permission Reproduction prohibitions not apply to the forms contained in this product when reproduced for personal use For information on bulk purchases or corporate premium sales, please contact the Special Sales Department Call 800-955-4775 or write to Nolo, 950 Parker Street, Berkeley, California 94710 Please note We believe accurate, plain-English legal information should help you solve many of your own legal problems But this text is not a substitute for personalized advice from a knowledgeable lawyer If you want the help of a trained professional—and we’ll always point out situations in which we think that’s a good idea—consult an attorney licensed to practice in your state Acknowledgments Special thanks to Marcia Stewart and Ilona Bray for stellar editing and helping make this book a readable reality This book is dedicated to small-time landlords everywhere, the men and women who roll up their sleeves to make a big-time difference through housing others About the Author Michael Boyer is a part-time landlord, college professor, and attorney He has graduate degrees in management and law, plus over a decade of experience as a successful do-it-yourself landlord He has been on both sides of the landlord-tenant equation, as a landlord and as a volunteer attorney representing low-income tenants Boyer is the author of numerous articles and chapters, and has served on many boards, including several condominium association boards This is his first book and it is a culmination of years of collecting notes, tips, and day-to-day observations about what practices really work for the small-time landlord (especially one with a day job) Table of Contents Part-Time Residential Landlords: The Superheroes of Rental Housing Filling a Gap in the Landlord Literature .3 The Long-Term Landlord How Skills You Currently Have or Can Easily Acquire) Will Contribute to Your Success Why I Like Being a Landlord 10 What You Won’t Find in This Book 15 Your Competitive Edge? 19 What’s Get to Know Your Market and Where Your Rental Fits Within It 21 Differentiate Your Units From the Competition 22 Offer Lower-Priced Units by Focusing on Keeping Long-Term Tenants 25 Make Strategic Decisions About Your Own Approach to Renting Property 26 Consider Whether an LLC Is Right for You 30 What’s Next? 31 Rental Properties 33 Selecting Location, Location, Location 35 What Type of Rental Property Is Best for You? 38 Single-Family House 39 Duplex, Triplex, and Fourplex 41 Condominium 44 Accessory Apartment (or In-Law) .49 The Rental Market and Your Target Tenant 50 Choosing the Right Property: Don’t Leave It to Chance 53 How to Make Sure the Rental Property Pencils Out 54 Finding Out All You Can About a Prospective Property 61 426 | EVERY LANDLORD’S GUIDE TO MANAGING PROPERTY records Missing one large receipt or figure can stop the progress of doing your taxes completely (until you track it down) or mean you miss a deduction Which Is Which? Prevent Multiple Property Confusion With Good Records Tracking which expenses apply to which property is important if you have multiple properties The Schedule E is organized by property (not units, so a duplex is one property), and you need to connect expenses with each property where they occur If you have one property, this is easy—all the business expenses apply to that property But if you have three, six, or nine properties and you buy a gallon of paint during the year, you may not remember which property it was used on nine months later when you your taxes (or give them to your accountant) Don’t end the year with a thick file of receipts wondering which expenses apply to which rentals Keep track of them as you make purchases If you just have one rental (be it a condo or fourplex) it will be fairly easy to just put all your business expenses in one “business expense file,” but if you have two or three, have a file for each property and even write down on the receipt the address for each item as soon as possible Of course, some products will be used on multiple rentals (like a box of nails or bottle of cleaner), so your best to allocate the expense across rentals where it is used If you have a larger property portfolio, you could create separate files for each property Inside each of those files, you could create separate categories that mirror the Schedule E expense categories If you have several multiplexes, you are going to be producing more and more paperwork, which will be harder to sort at tax time if you haven’t organized them well throughout the year You might wish to take advantage of technology, perhaps by using Excel to record every receipt, or expense program like QuickBooks, or Quicken’s Rental Property Manager, which integrates your personal and rental property finances Commercial property management CHAPTER 12 | TRACKING LANDLORD INCOME AND EXPENSES FOR TAX TIME | 427 software programs are also available (like Yardi, Buildium, Appfolio Property Manager, Propertyware, and others), which help track and account for expenses and rents (but are geared more toward landlords with many properties or apartment complexes) Once your system is set up, the important thing will be to develop a habit of using it Drop your receipts in the same place every time, all the time They should go into your wallet or purse at the store or rental As soon as you walk through your front door, drop receipts in the proper file If you don’t this, you’ll be endlessly frustrated trying to “gather all the bills” at tax time TIP Couples should sync up their filing habits If you are colandlording with a spouse or partner, and both are paying bills or making purchases, beware of situations where a receipt can go astray because you’re not implementing the same filing habits If it doesn’t go in the file, it likely won’t get deducted How Long Should You Keep Your Receipts? You don’t need to keep your receipts and records forever—but don’t throw them out when you’re done with your taxes, either The IRS lists some “Periods of Limitations,” and notes that business owners should keep the relevant record till this period runs out (You can still be audited years later!) Seven years is a safe time frame for most tax situations You may want to save your records for even longer, for your own, nontax reasons For example, you may want to remember when you replaced a faucet or door a decade later Also, keep in mind that if you sell your rentals in 20 years or so, you will need to account for depreciation or capital improvements Also, note there is no time limit on the IRS screening you for a fraudulent return or taking action because you failed to file a return 428 | EVERY LANDLORD’S GUIDE TO MANAGING PROPERTY What’s Next? Being a part-time landlord isn’t for everyone, but it can be manageable for almost anyone with the right attitude and knowledge It can even be a fulfilling way to play a useful role in society (in addition to your day job) It may even make you some money over the long term Everyone needs a place to live, and affordable, well-managed housing is often in short supply in many areas By providing such housing, the part-time residential landlord can make a difference in the everyday lives of others Even though this is the last chapter, keep reading, and learning all you can about landlording topics (many are cited throughout this book), including the valuable lessons your tenants and properties will teach you I hope this book helps you in that mission and on your journey as a landlord, whether it is just beginning or coming to a close l Index A Abandoned property, 365–366, 367, 372 Access of landlord to rental property, 142, 144, 317 Accessory (in-law) apartments, 49–50 Accountants fee structures of, 394 finding, 393–394, 395 situations calling for, 391–392 tax-deductible fees of, 418 working with, 394–395 Adverse action letter, 261–262 Advertisement or posting choice of media for, 211–212 communication methods for handling inquiries, 213 including photos in, 219–220 including street address in, 219 initial contact based on, 220–224 sample of, 214–218 scams based on, 223 separate email address for, 221 tailored for maximum impact, 212–213 See also Tenant selection Advertising expenses, tax-deductible, 414 Air conditioner, cleaning condenser unit of, 156 Antidiscrimination laws, 207–208 See also Discrimination, illegal Appliances, 122–127 environmental impact of, 126 explaining to new tenant, 287 life span of, 125 repairing or replacing, 124–126 testing, 123 Appreciation of rental property, 5, 58, 60, 423 multiplex and, 43 Arbitration of dispute with contractor, 194, 382–383 of landlord-tenant conflict, 360 Area rugs, 119 thick on upper-level hard floors, 354 Asbestos, 53, 173, 198 Assistance animals See Service animals Attic insulation of, 154 ventilation of, 101 Attorneys See Lawyers Auto and travel expenses, tax-deductible, 414–416 B Back rent, of tenant with no money, 382 Baking soda, for carpet odors, 121 Bankers, 401–402 Barking dog, 238, 253, 254, 310, 318, 353, 354 Bathrooms in turnaround of rental unit, 128–129 in walkthrough with new tenant, 287 See also Drains; Toilet troubleshooting Bid, 189 See also Fixed-price agreement Brooms, 79, 83 Building codes, 170 See also Permits Buying a rental property See Closing, real estate; Financing; Selecting a rental property C Cabinets painting, 85 refinishing unpainted wooden surfaces, 84–85 in turnaround of rental unit, 123, 128 Capital expenditures (CAP EX) schedule, 58–61 Capital gains taxes, 28, 29 Carbon monoxide detectors, 131, 288 Carpeting, 116–117 older, suitable for pets, 122 with thick pad in upstairs unit, 354 Carpet odors, 119–122 Cash flow, 53, 54 example for single-family house, 54–58 including reserves in, 56–57, 59 informed buying decision and, 71 Cash reserve in case rents are late, 270 See also Reserves for major repairs Casual day laborers, 184 Caulk, 80, 82, 86 Caulking, 78, 92–94 in kitchen and bathroom, 128 before painting, 88, 116, 158 practicing, 105 CC&Rs (covenants, conditions, and restrictions), 25, 45 Ceiling paint, 88 430 | EVERY LANDLORD’S GUIDE TO MANAGING PROPERTY Ceilings, 83, 88, 89, 115–116 Certified Public Accountant (CPA), 393, 395 Change orders, 179–180, 193–194 Circuit breaker box, 287 Cleaning described in move-out letter, 367 for rental turnarounds, 113–115 resources on, 114 safe techniques in, 114 tax-deductible expenses for, 416–417 Cleaning and repair checklist, 115 Cleaning supplies, 80 left by departing tenant, 373 TSP (trisodium phosphate), 80, 83, 84, 88, 116 Closets, 129–131 Closing, real estate contingent on vacant unit, 73 negotiated repairs and, 68 Clothes dryers, moisture from, 101 Clothing for maintenance work, 135 Clutter, of tenant’s possessions, 349–350 College students cosigners for, 283–285 older and more mature, 285 Commercial financing, 6, 30, 39 Common areas, permitted use of, 278, 287 Communication with tenants about adding roommate, 337–340 about breaking the lease, 340, 341, 344–346 about clutter, 349–350 about contractor’s project, 196–198 about delays in rent, 320–330 about impractical requests, 352 about leaking car oil, 351 about maintenance and repairs, 316–318 about pets, 352–354 about unauthorized occupants, 332–333 annual maintenance/safety checklist, 145, 148–149, 161, 319 best practices for, 302–315 better than the competition, 24, 309, 318 common examples of, 315–320 to handle conflicts, 355–360 interpersonal skills for, legal notices for, 307–310 level of technology for, 213 move-in letter, 294–296 move-out letter, 366–367 promptness of, 318–319 reminders about policies, 319 thank you note and gift card, 320 with unresponsive tenant, 351–352 “we” instead of “you” or “I” in, 350 Competition better communication with tenants and, 24, 309, 318 differentiating your units from, 20–25, 209 Condominium cash flow from renting, 44, 47, 54, 56 CC&Rs of, 25, 45 choosing to own, 44–48 clutter left outside of, 350, 374 extra insurance coverage for, 399 hiring contractor for repairs on, 173–174 limited flexibility with, 25 monthly dues of, tax-deductible, 44, 54, 56, 418, 419 owner-occupant percentages and, 45–46 policies toward renting of, 45–46 showing at, 234–235, 238, 239 Condominium associations exterior work by owner and, 45, 175 financial reserves of, 47 getting involved with, 48 giving tenant all information about, 279 informed about repairs, 174 noise problems and, 238 pets and, 273–274, 354 politics of, 47 property discarded by departing tenant and, 374 property left outside of unit and, 350 rules of, included in your lease, 279 screening tenants for conformity to rules of, 252 special assessments for capital projects, 47, 418, 419 Conflict resolution, formal in contractor dispute, 382–383 in landlord-tenant dispute, 359–360 Conflicts fact finding about, 355–356 interpersonal skills and, issue-based vs personal, 357–359 positive change derived from, 356–357 See also Communication with tenants INDEX | 431 Contractors bids and estimates from, 189–194 change order for, 179–180, 193–194 choosing, 178–183 definition of, 166 dispute resolution with, 194, 382–383 homeowners’ insurance policy and, 195 incorporated, 417 key terms related to, 190–194 landlord’s role during work of, 196–201 landlord’s tasks to help with, 198–200 lawyer’s help in dispute with, 382–383 legal liability for work done by, 167 license, bonding, and insurance of, 182–183 retaining great tenants and, 201 scope of work for, 179–180, 190 signing a contract with, 194–195 situations that call for hiring, 166–178 state regulations on, 178–179, 182–183 watching and learning from, 197 See also Independent contractors Corporation, taxes of, 411 Cosigners, 281, 283–285 Cost of living, in the area, 52 Cost-plus arrangement, 189, 191–192, 193, 194 concealed condition and, 193 Counters, kitchen, 128 Court records, in screening prospective tenants, 255 Covenants, conditions, and restrictions (CC&Rs), 25, 45 CPA (Certified Public Accountant), 393, 395 Crawl space, 101, 160 Credit reports, 251, 254–255 adverse action letter and, 261–262 Crime, property with history of, 64 Criminal record of prospective tenant, 251, 255, 258 Curb appeal, 58, 103, 158, 234, 349 D Damage to rental unit covered by your insurance, 195 during move-out, 365 by tenant with no money, 382 Day laborers, 184 Dehumidifiers, 102 Delegating, 8, 28 Demographics of community, 51–52 Depreciation, 421–422 accessory apartment and, 49 doing your own taxes and, 389, 390, 391 improvements on condo and, 419 on vehicle, 415 Disability antidiscrimination laws and, 207–208 evicting tenant with, 381 steering away person with, 216 See also Service animals Disclosures by seller of residential property, 66–67 to tenants, 279 Discrimination, illegal addiction status and, 207, 208, 252 conformity to your rental policies and, 252 as defense to eviction, 361, 381 familial status and, 335 neutral screening criteria and, 242 overview of laws against, 207–208 against person with disability, 207–208, 216 against Section tenant, 249 source of income and, 207, 249, 257 Dishwashers, 127 Disinfectant spray, 80 for carpet odors, 120 Dog waste, 310, 353 Domestic violence, 328, 341, 359 Door locks, 132, 287 Doormats, 119 Doors, 129–131 gaps around, 160 Downsizing and renting larger home, 14 Drains slow or clogged, 94, 128 in turnaround of kitchen, 128 Drilling, 91–92 Driveway, 133 Drought-resistant landscapes, 159 Drug or alcohol use antidiscrimination laws and, 207, 208, 252 delays in rent and, 328 Dryers, moisture from, 101 Dumpster clearing snow and ice around, 154–155 explaining to new tenant, 287–288 overuse by tenant moving out, 366, 374 432 | EVERY LANDLORD’S GUIDE TO MANAGING PROPERTY Duplex See Multiplex Dust masks, 114 E Economic data on communities, 52 Electrical outlets, 129 Email for inquiries from prospective tenants, 206, 213, 221 for sending rental application, 225 for tenant communications, 145, 196, 314, 316 Emergencies, sending tenants information about, 317 Employment history of prospective tenant, 250 Energy efficiency, 288 Environmental considerations green drain cleaner, 94 moving out with minimal waste, 371–374 in painting, 90 in repairing or replacing appliances, 126 in selecting rental property, 64 See also Hazardous materials Equipment rental, 168–169 Estimated tax, 423 Estimate from contractor, 189 See also Cost-plus arrangement Eviction making future rentals impossible for tenant, 328 representing yourself or hiring an attorney, 360–361, 381–382 of tenant and unauthorized occupant, 335, 336–337 of tenants inherited from previous owner, 381 warning tenant of likelihood, 329–330 Expenses, on IRS Schedule E, 413–422 Exterminator, 133, 169 Eye protection, 114 F Fall maintenance, 158–161 Familial status discrimination, 335 Fans, bath and kitchen, 101, 129 Fertilizing plants and grasses, 157 Filing system See Record keeping Financial skills of landlord, 10 Financing requiring owner occupancy, 72–73, 266 residential vs commercial, 5–6, 30–31, 39 Fire extinguishers, 131, 288 Fixed-price agreement, 189, 191, 192, 193, 194 Fixed-term leases, 266 Flipping, 16, 29 Floor mats, 119 Floors and floor coverings, 116–119 See also Carpeting; Carpet odors Flowers, potted or hanging, 157, 158 Form 1099-MISC, 185, 188, 417 “For Rent” signs, 211, 212 Fourplex See Multiplex Front door, 131 Furniture, 111–112 G Garbage cans See Trash containers Garbage disposals, 127 General contractor, 165–166 See also Contractors Gloves, disposable, 114 Guest policy, 267–268 See also Unauthorized occupants Guide dogs See Service animals Gutters, cleaning, 159 H Habitability of rental unit, 141–142, 168 Handyperson, 138, 166, 183–184 Hazardous materials disposal by tenant moving out, 366, 373 hiring contractors to deal with, 198 safety in use of, 114 See also Environmental considerations Heating systems, servicing of, 158 Holding deposit, 260 Homeowners’ associations activities prohibited by, 257 open house showing and, 235 pet policies and, 274 property left outside of unit and, 350 rules of, included in your lease, 279 tax-deductible management fee of, 418 See also Condominium associations Homeowners’ insurance, contractor paid by, 195 Hot water heater, 125, 287 Housing codes, 141 Housing stock, exploring data on, 52 I Ice melt, spreading, 147, 153, 155 Improvements, distinguished from repairs, 419–420 Income of prospective tenant, 244, 257 INDEX | 433 Independent contractors, 166, 185–188 criteria for classification as, 186 legal and tax rules on, 188 See also Contractors In-law apartments, 49–50 Insects See Pests Inspection, professional, 67–70 limits of, 69 resources on, 65, 68–69 specialized, 70 Inspection by landlord, in move-out process, 366–367 Insulation, checking, 154, 160 Insurance contractor for project covered by, 195 contractor’s coverage by, 183 dangerous dog breeds and, 257, 273, 274 managing risk and, 396 permits, licenses, and inspections required for, 169 personal injury or property damage claim and, 382 renters’ insurance, 277, 400 specialized terminology of, 401 tax-deductible expenses for, 417 umbrella policy, 398, 399 unfair treatment over claim and, 400 unique aspects for landlords, 397–400 Insurance brokers, 395–397 Interest, tax-deductible, 418 Interpersonal skills, See also Communication with tenants IRS publications useful to small-time landlords, 390 publication useful for record-keeping, 424 rules on independent contractors, 188 safe harbors for landlords, 420, 421 website of, 390 IRS Form 1099-MISC, 185, 188, 417 IRS Schedule E, 410–422 entering total on Form 1040, 422 expenses on, 413–422 landlords who won’t use, 411 overview of, 410–413 rents entered on, 413 K Keys, 287 Kitchen counters, 128 Kitchens preparing for next tenant, 122–128 See also Cabinets Kneepads, 172 L Ladders, 82 Laminate flooring, 117, 119 Landlording, small-time accommodating life changes, 14 benefits of, 10–15 cycle of tasks involved in, 375 deciding on your own strategy for, 26–29 exiting from, 30, 406–408 while living in one of the units, 42, 49, 72–73 See also Rental properties Landlord-Tenant Agreement to Terminate Lease, 335–336 Landlord-Tenant Checklist, 289–294 furnishings described in, 112 Large-scale property management, 15 Late fees, 270–272 Late rent, 320–330 absent-minded tenant, 323 picking up to avoid lateness, 321 strategies for serious situations of, 326–330 tenant short on cash, 322–323 tenant who can’t afford rent, 324–325 tenant who is rarely late, 321–322 tenant who pays partial rent, 323 Lawn care, 132, 150, 157, 160 Lawn mower, 79, 82, 158 Laws, landlord-tenant, 18 See also Antidiscrimination laws; State laws and regulations Lawyers, 378–387 billing practices of, 387 common situations calling for, 380–383 confirming scope of representation by, 386–387 duties and rules applying to, 387 finding specialist for your issue, 383–386 insurance specialists, 400 legal issues that may not require, 378–380 tax-deductible fees of, 418 tax specialists, 393–394 Lead, 53, 70, 173, 198 federal disclosure rule, 279 Leaking car oil, 351 434 | EVERY LANDLORD’S GUIDE TO MANAGING PROPERTY Leaks See Water leaks Lease break by tenant, 340–348 communication about, 340, 341, 344–346 documenting rerent efforts and, 347–348, 371 landlord’s legal obligations in, 341, 346, 347 reasons for, 341–343 security deposit and, 344–346, 371 standard move-out procedures and, 346–347 See also Moving tenants out Lease or rental agreement consulting lawyer about change to, 380 cosigners on, 281, 283–285 forms for, 280 month-to-month vs fixed-term, 265–266 renewal of, 26 signing, 281–283, 286 terminating to add an occupant, 335–336 translation of, 282 violated by unauthorized occupant, 331 Lease or rental agreement terms, 264–279 additional common terms, 277–278 additional rules incorporated by reference, 278–279 condo rules included, 279 flexible, 24–25 guest policy, 267–268 late fees, 270–272 number of occupants, 266–267 pet policy, 273–274 rent amount and payment, 268–269 security deposits, 275–277 state laws regulating, 265 term of tenancy, 265–266 Lenders, 401–402 Light fixtures, 129 Lighting, outdoor, 154, 288 Limited liability company (LLC), 30–31 Schedule E for tax filing of, 411 Linoleum, 117 Living in one of the units, 42, 49, 72–73 Local laws rent control ordinances, 268, 381 screening prospective tenants and, 257 on security deposits, 275–276 on snow removal, 151, 152 Local taxes, deductible on Schedule E, 420 Locks, 132, 287 Long-term tenants, value of, 5, 24–26, 217, 266, 273 Loss, in first years of renting, 58, 423–424 Lost-key charges, 278 Lump sum agreement, 189 See also Fixed-price agreement Luxury vinyl tile (LVT), 119 M Mailboxes clearing snow and ice around, 154–155 explaining to new tenant, 288, 295 painting, 226 Maintenance annual or semiannual tenant form for, 145, 148–149, 161, 319 basic skills for, 6–7, 77–78 basic supplies for, 79–83 basic tools for, 78–79, 81–83 clothing for, 135 communicating with tenants about, 316–318 at condominium, 45, 175 doing routine jobs yourself, 143–144 enlisting tenants’ reports of need for, 144–145 as a habit, 147, 150 helping to keep an eye on the property, 143–144 knowing which projects can wait, 143 legal responsibilities for, 141–142 online companies for tracking, 297 on-site near rent due date, 323 record keeping for, 161–162 resources for improving skills in, 102–105 responsiveness to tenant concerns about, 147 seasonal routine for, 150–161 tax-deductible expenses for, 416–417, 421 tenant satisfaction and, 140–141 See also Contractors; Repairs; Turnaround of rental unit Management skills, 8–10, 23 Mats, 119 Mechanic’s lien, 383 Median home prices, 52 Mediation of dispute with contractor, 194, 382 of landlord-tenant conflict, 359 Meth labs, 64 Military service, and lawful termination of lease, 342 Moisture, 100–102 in crawl space, 101, 160 See also Water leaks INDEX | 435 Mold crawl space and, 160 moisture problems and, 100 professional help with, 102, 173, 198 on window sills, 132 Month-to-month rental agreement, 265–266 Mortgage, coordinating with rent payments, 321, 322 Mortgage brokers, 401–402 Mortgage interest, tax-deductible, 418 Mother-in-law apartments, 49–50 Move-in checklist, 289–294 furnishings described in, 112 Move-in letter, 294–296 Move-out letter, 320, 366–367 Moving into one of the units, 42, 49, 72–73 Moving tenants out, 364–375 with broken lease, 346–347 four major pitfalls in, 365–366 with minimal waste, 371–374 with notice or expiration of lease, 364 preparing for next move-in during, 375 See also Security deposit Multiplex, 41–44 adding or decreasing number of units in, 43 benefits of, 41–42 drawbacks of, 43 with landlord living in one of the units, 42, 49, 72–73 N Negotiation of conflict with tenant, 359 of dispute with contractor, 383 Neighbors accessory apartments and, 50 prospective tenants’ questions about, 237–238 Networking, 405 Noise complaints about, 310, 356, 357 lease term referring to, 277 during move-out, 366 prospective tenants’ questions about, 237–238 Notice for access to rental property, 142, 277, 317 Notice to end a tenancy, 364 O Occupancy limit, 256–257, 266–267 See also Unauthorized occupants Occupied unit, buying, 71–73 Odors, 119–122 in showing to prospective tenants, 137, 227 Oil leaks, in parking spot, 351 Onboarding process, 286–296 information-rich, 316 move-in checklist, 112, 289–294 move-in letter, 294–296 tenant walkthrough, 286–289 Online posting of rental See Advertisement or posting Online rental management solutions, 297 Open house, 230, 234–236 Option contract to hold a unit, 260 Orientation of tenant See Onboarding process Ovens, 126 Owner financing, 383, 408 P Paint, 87–88 Painter’s tape, blue, 81, 86, 89, 118 Painting, 85–91 of cabinets, 85 of ceiling, 88, 89 cleaning up after, 91 environmental considerations in, 90 exterior, 88, 89, 90–91, 158, 196–197 materials for, 86–87 planning for drying time, 121 prep for, 83, 88–89, 157 procedure after prep, 89–91 respirator use during, 114 supplies for, 86–87 by tenant, 146 in turnaround of rental unit, 115–116 of walls, 87–91, 115–116 Parking in garage, 288 mentioned in advertising, 217 rules about, 278, 288 by tenant in wrong place, 310, 319 Parking areas oil leaks in, 351 repairing surface of, 133 Partnership, owning rental property through, 391, 411 People skills, See also Communication with tenants 436 | EVERY LANDLORD’S GUIDE TO MANAGING PROPERTY Permits for planned repairs and upgrades, 169–170 prior work done without obtaining, 64 researching properties and, 52, 64 Personal injury claim, 382 nonpermitted work and, 64 Pests, 133, 157, 160, 172 Pet deposit, 275 Pet odors, 119–122 Pets added by existing tenant, 354 on approval, 22, 252, 273 communication about, 352–354 compatibility of roommates’ pets, 339 condominium association policies and, 273–274, 354 policies on, 273–274, 278, 288 during repairs to a unit, 318 restrictions on breed of dog, 257, 273, 274 screening for, 252–253 service animals, 253, 273, 275 in unit with older carpet, 122 Photographs during contracted project, 200–201 at move-in time, 220 Population demographics, 51–52 Porch, 131 Power play, avoiding, 305–306 Power shutoff, 316–317 Premises liability insurance, 399 Preparing for new tenants, 112–113 See also Turnaround of rental unit Privacy of tenant, 142, 144 Properties See Rental properties Property damage claim against landlord, 382 Property managers, 402–404, 406 tax-deductible fees of, 418 Property taxes, deductible, 420 Q Quads, 41 See also Multiplex Quiet hours, 278 R Ranges, 126 Real estate investment, 4–5, 16, 29 Real estate professionals, 402 Real estate transactions, legal advice for, 383 Receipts, 424, 425–427 Record keeping on income and expenses, 424–427 on maintenance, 161–162 tenant files, 298 time limit for keeping records, 427 Recycling reminding departing tenant about, 374 rules about, 278 Recycling containers, clearing snow and ice around, 154–155 References of prospective tenant, 250–251 Refinishing wooden cabinets, 84–85 Refrigerators, 126–127 Rejecting applicants for rental unit, 260–262 Remodeling excessive for your market, 109–110 minor remodel, 136–137 Renewal of leases, tickler system for, 26 Rent amount listed in lease, 268 communicating about delays in, 320–330 on IRS Schedule E, 413 late fees, 270–272 online payment processing solutions, 297 payment procedure in lease, 269 records of, 425 returned (bounced) check for, 269 slightly below market, 20, 25–26 withheld by tenant if repairs not made, 142, 171, 319 Rental application, 243–244 emailing, 225 guidelines for evaluating, 256–258 requiring completeness of, 258 sample form for, 245–248 See also Screening prospective tenants Rental market differentiating your units in, 20–25 educating yourself about, 21 fair rental condition for, 109–110 selecting a rental property and, 50–52 Rental properties appreciation of, 5, 43, 58, 60, 423 duplicate tools and supplies kept at, 82–83 length of ownership, 28–30 planning for help with, 28 strategic fit of, 27 timing of buying, 60 INDEX | 437 types of, 38–50 See also Landlording, small-time; Residential properties; Selecting a rental property; Selling your rental property; Turnaround of rental unit Rent control ordinances, 268 eviction and, 381 Renters’ insurance, 277, 400 Repairs basic skills for, 77–78 basic supplies for, 79–83 basic tools for, 78–79, 81–83 clothing for, 135 communicating with tenants about, 316–318 landlord’s access for, 142, 317 legal responsibilities for, 141–142 resources for improving skills in, 102–105 tax-deductible expenses for, 419–420 urgent requests from tenant for, 319 See also Contractors; Maintenance Reserve in case rents are late, 270 Reserves for major repairs in cash flow estimate, 56–57 estimating with CAP EX schedule, 58–61 Residential properties advantageous financing of, 5–6, 30–31, 39 defined as one to four units, See also Rental properties Respirator, 114, 120 Retirement, 14 Returned (bounced) rent check, 269 Rodents See Pests Roommates denying tenant’s bad choice, 340 ensuring compatibility between, 339–340 equal rights between, 339 requests to add, 337–339 terminating old lease in order to add, 335–336 Rugs, 119 thick on upper-level hard floors, 354 Rules and regulations for tenants, 278–279 enforced from the beginning, 319 going over at move-in, 288–289 S Safe Harbor for Small Taxpayers (SHST), 421 Safety to avoid insurance claims, 396 in cleaning procedures, 114 hiring a contractor for sake of, 171–173 of landlord during showing of unit, 229–230 of rental property location, 36 semiannual or annual checklist for tenants and, 145, 148–149, 161, 319 stress on landlord’s health and, 171–173 See also Hazardous materials Safety First Checklist, 173 Schedule E See IRS Schedule E School district, 38 Scope of work by contractor, 179–180, 190 Screening prospective tenants, 240–258 to add roommate, 338–339 to add unauthorized occupant, 333–335 adopting accepted standards for, 256–257 antidiscrimination laws and, 207–208 for conformity to condo rules and policies, 252 credit checks in, 251, 254–255 criteria for, 244, 250–252, 256–258 online companies for help with, 297 pets and, 252–253 plan for, 206–207 procedures for, 241–243 rejecting applicants, 260–262 rental application in, 225, 243–244, 245–248, 256–258 state court records in, 255 when to start, 240–241 See also Showing to prospective tenants; Tenant selection Second home, 14 Section 8, 249–250, 255 evicting tenant who is renting under, 381 Security deposit deductions explained in move-out letter, 367 guidelines on returning of, 368–371 lease-breaking tenant and, 344–346, 371 policy on, 275–277 state laws on, 275–276, 346, 364–365, 368, 369 Selecting a rental property fee services for analyzing returns, 71 finding out all you can, 61–70 information from the owners and, 65–66 informed decision in, 70–71 location and, 35–38 professional inspection and, 65, 67–70 rental market and, 50–52 required seller disclosures and, 66–67 searching public records and, 63–64 438 | EVERY LANDLORD’S GUIDE TO MANAGING PROPERTY strategic fit for your goals, 27–30 target tenant and, 51–52 types of properties, 38–50 your own observations and, 61–63 See also Rental properties Selling your rental property, 30, 406–408 making higher-end repairs for, 177, 407 multiunit property, 43, 266, 407 Semiannual Safety and Maintenance Update, 145, 148–149 Service animals, 253, 273 pet deposit and, 275 Servicemembers Civil Relief Act (SCRA), 342 Short-term ownership strategy, 16, 29–30 Shovels, 82 Shower curtain, 129 Showing to prospective tenants avoiding an occupied unit, 228–229 common questions during, 237–238 at condominium, 234–235, 238, 239 icebreakers at, 239–240 with individual appointments, 230 no-shows and drive-bys in, 233–234 with open house, 230, 234–236 pointing out property’s flaws, 238 preparing rental unit for, 226–230 safety of landlord during, 229–230 sales pitch during, 236–240 with staggered showings, 230–233 what to cover during, 239 See also Screening prospective tenants Sidewalks, 133 Single-family house, 39–41 Sinks, 128 Slip-and-fall injuries premises liability insurance for, 399 preventing in winter, 153, 155 Small claims court for conflict with tenant, 360 for dispute with contractor, 194 Smoke detectors, 131, 288 Smoking, 257, 278 Snow removal, 151–153, 154–156, 161 Spouses co-owning rental property coordinating filing systems of, 427 using Schedule E, 411 Spring maintenance, 156–157 State laws and regulations on abandoned property, 372 allowing tenant to break lease, 341 on contractors, 178–179, 182–183 on disclosures to tenants, 279 domestic violence and, 359 habitability of housing and, 141–142 handyperson and, 183–184 on independent contractors, 188 on landlord’s access to rental property, 142, 317 on late fees, 270, 271, 272 lease terms regulated by, 265 on legal notice to pay rent or quit, 327 on move-out inspection, 367 on notice to end a tenancy, 364 on rerenting after broken lease, 347 on responding to repair issues, 170–171 on security deposits, 275–276, 346, 364–365, 368, 369 on snow removal, 151, 152 on translation of lease, 282 State taxes, 392 deductible on federal Schedule E, 420 independent contractors and, 188 Steps, for porches and second-story rentals, 154 Storage for tenant, 278, 287 Stoves, 126 Subletting, prohibition against, 277 Summer maintenance, 158 Supplies for basic repairs and maintenance, 79–80 containers for, 135 duplicates at rental unit, 83 for painting, 86–87 storing, 81–82 tax-deductible, 420 in turnaround of rental unit, 134–136 Support animals See Service animals SWOT (Strengths, Weaknesses, Opportunities, and Threats), 26–27 T Tarps, 118 Tax deductions, 29, 413–421 Taxes accessory apartments and, 49 doing your own, 388–391 lawyers specializing in, 393–394 situations calling for accountant, 391–392 INDEX | 439 Tax loss, 423–424 Tax shelter, 29 Tenants buying a unit occupied by, 71–73, 381 demographic data on, 51–52 files of records on, 298 living in same building as, 42, 49, 72–73 location fitting the needs of, 37–38 long-term, 5, 24–26, 217, 266, 273 Tenant selection advertisement or posting for, 211–220 antidiscrimination laws and, 207–208 if parents call for son or daughter, 224 making initial contact in, 220–224 making the offer, 259 managing first impressions and, 209–210 plan for, 206–207 refusing request to hold a unit, 260 See also Screening prospective tenants; Showing to prospective tenants Tenants in place, 71–73 removing, 381 Tenant walkthrough, 286–289 Tenant Walkthrough Checklist, 287, 289 Term of tenancy, 265–266 Thank you note and gift card, 320 Tile flooring, 117, 119 Time and materials, 189 See also Cost-plus arrangement Tobacco odors, 119–122 Toilet seat, 129 Toilet troubleshooting, 94–100 explaining at initial walkthrough, 287 leak from base, 96 replacing parts or whole toilet, 97–99 running toilet, 95–96 talking tenants through clog, 99–100 weak flush, 96 Tools for basic repair and maintenance, 78–79 duplicates at rental unit, 82–83 for painting, 86–87 storing, 81–82 in turnaround of rental unit, 134–136 Trash containers clearing snow and ice around, 154–155 explaining to new tenant, 287–288 overuse by tenant moving out, 366, 374 Tree limbs, cutting back, 160 Triplex See Multiplex Trust between landlord and tenant, 210, 302–304 TSP (trisodium phosphate), 80, 83, 84, 88, 116 Turnaround of rental unit bathrooms, 128–129 cleaning and repair checklist for, 115 cleaning and repair routine for, 113–115 closets, 129–131 clothing for, 135 continuing up until showings, 137 doors and windows, 129, 131–132 fair condition for your market and, 109–110 floors and floor coverings, 116–119 hiring help for, 138 how long it takes, 112–113 importance of, 109 kitchen and appliances, 122–128 light fixtures and outlets, 129 materials and supplies for, 134–136 needing minor remodel, 136 odors in, 119–122 perimeter and outside, 131–133 pest control, 133 smoke detectors and related items, 131 tax-deductible items used for, 417 walls and ceilings, 115–116 workflow of, 121 See also Maintenance U Umbrella insurance policy, 398, 399 Unauthorized occupants, 330–337 avoiding familial status discrimination with, 335 discovering, 331–332 evicting tenants for, 335, 336–337 problems presented by, 330–331 screening to become tenants, 333–335 script for dealing with, 333 telling main tenant to get them out, 334–335, 337 terminating old lease in order to add, 335–336 three main categories of, 330 two options for, 333 Utilities responsibility for paying, 277 tax-deductible, 420–421 Utility shutoffs, 316–317 440 | EVERY LANDLORD’S GUIDE TO MANAGING PROPERTY V Vacancy rates, 50–51 Vehicles of landlord, tax-deductible expenses for, 414–416 Vehicles of tenants condo rules on, 252 keeping updated information on, 332 leaking oil, 351 See also Parking Ventilation of crawl space, 160 during painting or cleaning, 114 to remove carpet odors, 120 to remove moisture, 101 Vinyl floors, 119 W Walkability, 37 Walkthrough with tenant when moving in, 286–289 when moving out, 366 Walls odors coming from, 121–122 painting of, 87–91, 115–116 preparing for rental turnaround, 115–116 washing painted walls, 83 Warranty of habitability, 168 Water bill, spiked by running toilet, 96 Water heater, 125, 287 Water leaks from base of toilet, 96 from dryer outlet, 101 under kitchen sink, 128 in wall or crawlspace, 101, 160 Water shutoff, 287, 316–317 Wear and tear during move-out, 365 security deposit and, 368 Weather, sending tenants information about, 317 Website resources adverse action requirements, 262 analyzing returns on rental property, 71 appliance manuals, 124 caulking, 94 Certified Public Accountants, 393 cleaning, 114 concrete repair, 133 demographic, economic, and housing data, 52 drilling advice, 92 fair housing rules, 207 home inspectors’ organizations, 68, 69 ice melt reviews, 153 insurance company ratings, 396 insurance language, 401 landlord networking, 405 Landlords section of www.nolo.com, 142 lawyer directories and information, 385–386 lead paint disclosure, 279 lease or rental agreement forms, 280 locks and keys, 132 mold problems, 102 painting advice, 91 painting kitchen cabinets, 85 pest management, 133 pet policies, 274 realtor credentials, 402 rental management solutions, 297 repairs and maintenance, 103 sample contracts for contractors, 191 Section 8, 249 shopping for rental properties, 38 state contractor regulations, 179 state home inspector requirements, 68 taxes, 390 toilet parts, 95, 97 vehicle mileage tracking, 416 ventilation, 102 VOCs found in paints, 90 walkability ratings, 37 Weed wacker, 82, 83 Windows gaps around, 160 showing to new tenant, 287 spring cleaning of, 156 in turnaround of rental unit, 129, 132 Winter maintenance, 151–156 Withholding on employment income, 423 Wood floors, 117 X Xeriscaping, 159 Y Yard, 132, 278 Z Zoning for accessory apartment, 50 multiplexes and, 43 l ...Praise for Every Landlord’s Guide to Managing Property Every Landlord’s Guide to Managing Property: Best Practices From Move- In to Move- Out, by Michael Boyer is a MUST HAVE... Proofreading IRENE BARNARD Index JULIE SHAWVAN Printing BANG PRINTING Names: Boyer, Michael (Property manager), author Title: Every landlord’s guide to managing property : best practices, from move- in. .. ANGELES TIMES 2nd Edition Every Landlord’s Guide to Managing Property Best Practices, From Move- In to Move- Out Attorney Michael Boyer LAW for ALL SECOND EDITION JANUARY 2018 Editors MARCIA STEWART