Jason Cohen Pittsburgh - Best Practices for Landlords

Best Practices for Landlords

No landlord wants to keep a flaky client. Every investment property owner counts on their tenants to pay their rent in full and on time – otherwise, they have no way of making a profit off of owning and renting out the building. A landlord’s choice of tenant matters; no property owner wants to risk bringing on a tenant that will trash place and skip out on rent. Likewise, they can’t afford to lose responsible and reliable tenants as a result of poor communication or subpar landlord-tenant relationships. In order to find and maintain responsible and reliable tenant, landlords must take stock of their own actions and strategies to establish a productive rapport with those living in their investment properties. In this piece, Jason Cohen Pittsburgh provides a few best practices for landlords who want to cultivate mutually-beneficial, long-term relationships with responsible tenants.

Creating the Lease

Standard lease forms are readily available and cover rent, security deposit fees and legal rights. From there, add pet restriction policies, late payment fees, maintenance responsibilities and expected behavior. A detailed lease explaining a landlord’s expectations and requirements reduces the likelihood of misunderstandings in the future.

Be Welcoming

New tenants are often new to the area. As such, landlords might consider creating a printed map that provides directions to frequently visited locations that may include grocery stores, medical clinics, pharmacies, restaurants and perhaps nearby attractions. Leave a welcome card in the residence to start the relationship on a positive note.

Friendly but Professional

Make a good first impression by dressing appropriately. By appearing clean and properly put together, you convey that you expect your tenants to maintain their residence. Follow the guidelines clearly established in the lease to prevent misunderstandings. Go over the lease with them before they move. You can always amend trivial matters along the way if you choose. If a disagreement should arise, it is important that the landlord always remain calm and professional.

Availability

In the event that a problem occurs, tenants must be able to contact the landlord. Supply one or more phone numbers and perhaps an email address. Emails also reduce the number of after hour calls while providing documentation of an issue. Consider tenants as customers. In order to keep customers, property owners must respond as quickly as possible when contacted. When a problem arises, set a time to visit and inspect the problem. Remedy the problem or have the repair completed as quickly as possible.

Respect Their Privacy

Tenants have the right to privacy. Some states require that landlords provide notice before entering the property. Landlords should also schedule visits to business hours or at a time that is convenient for the tenant.

*Originally posted on JasonCohenPittsburgh.net

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jason cohen pittsburgh - rent or buy

Should You Rent or Buy? Pros and Cons

Owning a home has long stood as a milestone for success. Real estate agents and individuals alike encourage young families and individuals to take on the challenge of finding and buying a home as a way to mark their entry into professional and social maturity. Renting, in contrast, seems like a stopgap housing measure: suitable enough for now, but certainly not a permanent option. But while young adults (i.e., those under 35 years of age) remain the most likely demographic to rent, our homeowner-goal culture has taken a hit over the past decade. According to a Pew Research data analysis conducted in 2017, rental rates among both the under-35 and 35-44 demographics have risen significantly in the course of the last couple years. Currently, more households are led by renters than have been reported since 1965. Renting can’t be considered merely as a stopgap measure for younger households anymore – but should you turn away from home ownership entirely?  Here, Jason Cohen Pittsburgh considers the pros and cons of renting a home.

PROS

Flexibility

Renting can be great for those who can’t or don’t like to be tied down. Students, temporary workers, and those with jobs that require them to move are better-suited to renting because they only need to be in a certain town or city for a short period of time. After their leases end, they can easily pack up and take off for their next opportunity – and leave the landlord to find a new tenant. Renting also provides greater flexibility to those who want to live in neighborhoods outside of their purchase price range.

Simplicity

Renters don’t have to worry about the nagging details of property management. When a problem with the hot water heater or electrical system arises, all they need to do is reach out to the landlord and wait for her to solve the issue at hand. Homeowners, in contrast, need to arrange for trash removal, sewer, water, and insurance costs on their own time and dime.

CONS

Limitations

Don’t like an apartment’s lime-green walls? Want to adopt a dog? You might be out of luck on both fronts. Tenants have limited control over what they can do with the property without the owner’s express permission. Before you sign a lease, make sure to read it thoroughly to understand a landlord’s restrictions. Otherwise, you may find yourself facing a hefty fine – or even an eviction notice.

Instability

A landlord can choose to sell their property at any time they please, leaving their unsuspected tenants in the lurch. Unlike homeowners, renters don’t have the security of knowing that they have a place to live months or even years down the line – or that they’ll continue paying what they are if they choose to stay. Even well-behaved tenants have no guarantee that the housing market won’t demand a rent hike or that their lease will be renewed.

Ultimately, the choice between renting and buying will come down to individual circumstance. Figure out what your situation and budget allows before making a decision!

*Originally posted on JasonCohenPittsburgh.net

Strategies to Determine Fair Rental Rates for an Investment Property

 

Fair Rental Rates pic

Fair Rental Rates
Image: investopedia.com

Jason Cohen of Jason Cohen Pittsburgh has his headquarters in Pittsburgh and has acquired multiple real estate investments in less than a decade’s time. An expert on real estate strategies, Mr. Cohen currently serves as the principal of Jason Cohen Pittsburgh, which provides expertise in a broad area of real estate investments that range from evaluating the potential profitability of a property to setting fair rental prices.

When setting rental prices for an investment property, fair rental prices should be listed to encourage long-term renters and avoid the cost of turnover. The use of comps is one strategy often used to determine fair rental prices.

A comp, also known as comparables or comparable sales, is an analysis of recent, nearby sales or rentals gathered to valuate real estate property. Individuals who look at comps are implementing a sales comparison approach (SCA). When identifying properties with this approach, they should possess similar qualities such as square footage and the number of bedrooms and bathrooms. This approach allows rental prices to be set competitively with other landlords and also attract tenants.

Be a Landlord or Hire a Property Management Company: What to Do with an Investment Property

So, you have an investment property. You’ve done the research. You calculated your return on investment. You’ve gone through all the fun of the loan process. You’ve met with banks and financed the real estate, or you paid in cash. You’ve done all the steps in which you’d wear a suit.

Now you have this house. Say it has several bedrooms. It’s in the city limits, in an in-demand neighborhood composed mostly of rental units — the part of town where people sacrifice spacious living quarters for proximity to shopping and nightlife.

At Jason Cohen Pittsburgh, we’d say that this investment property is probably best used as a multifamily rental. Sure, dividing the home into several units will cost more upfront, but you’ll earn more in monthly rent payments from multiple tenants than a single family. However, six kitchens can require more maintenance than one. The more stuff you put into your investment property, the more that can go wrong. Is this too much for you to handle? Can you afford to spend the time fielding calls from tenants when there’s a plumbing backup? Can you fix the pipes yourself? If not, do you know who to call to do so? Can you drop everything and get to the property in time to fix the issue and keep your tenants satisfied?

investment property

Every property owner has a different situation. Some, like Jason Cohen Pittsburgh, are full-time investors. To others, an investment property is a side income source. Ask yourself: Do you have the time, knowledge, and resources to be a landlord? Or should you outsource the day-to-day maintenance of your investment property to a management company?

Time: Do you have time in your schedule to be called away from your other obligations to maintain your investment property? Is your rental property close to your home or work? Do you have several rental units? If you have other obligations, it may be a good idea to hire a property management company. Too much can go wrong at an investment property and it may be difficult to anticipate.

Of course, it’s a good idea to troubleshoot by fixing the potential problems with an investment property before putting the rental units on the market. You’ve already thoroughly researched and minimized risk when investing in the property.

Even if you’ve done as much preventative maintenance as possible and your investment property is pristine — the pipes and ducts are clear, the appliances are brand new, the windows are sturdy — there is always the human factor. Your tenants are people and, as the saying goes, even “the best laid plans of mice and men oft go astray.” Things will break. Do you have time to fix them?

Knowledge: Is your primary career and skill set related to your investment? Are you a master plumber or electrician? Or are you just a dude with an investment property? Think about the quality of repairs that you’d be able to make. When it comes to investment properties, minimizing guesswork is a great way to minimize risk. You don’t want to be asking yourself where to put the blue wire when fixing an electrical issue. A landlord is never expected to be a master at everything involved in the home, so it is important to have a network of people who are. If you have standing relationships with general handymen or expert maintenance professionals, you could easily field phone calls from tenants and outsource the hands-dirtying work to these contractors. If you have not forged these relationships, it may be a better idea to hire a property management company that has.

Resources: Whichever direction you choose to go in with your investment property, make sure that you’ve budgeted accordingly. Give yourself an hourly rate. Estimate how much time you’d have to spend dealing with tenants, collecting rent, and making repairs. Is it more cost-effective to outsource those duties to an external vendor even if you have to give them 10% of the monthly rental fees? How much would this investment property cut into the time you’ve already budgeted for other things? And would the quality of your repairs lead to subsequent repairs? Would you simply feel more comfortable having others perform these tasks?

Know your capabilities. Be aware of your limitations in terms of time, money, and expertise when deciding how to manage your investment property. At Jason Cohen Pittsburgh, we urge you to approach management with the same cautious rationale that you used when researching the investment property in the first place.

Then decide if you want to do it yourself or hire a property management company.