John Adams Money 99 - Smart Landlording Requires Constant Attention to Detail

Latest Information

Lead Based Paint Information Radio Broadcasts John Adams on Fox 5 Q & A Radio Show Gallery Video

Latest News

Your Cart

Show Cart
Your Cart is currently empty.

Login

Smart Landlording Requires Constant Attention to Detail - 2008-11-09

Take This Landlord Quiz to See How You Are Doing

Being a property manager is an important responsibility. Not only is the owner of the property counting on you, but so is the resident. It requires constant attention to detail.

I recently visited with a group of beginner landlords, and it became apparent that they were neglecting to perform some of their appointed duties.

Here are some of the questions I asked that sparked discussion:

* When was the last time you raised your rent?

Some property managers make the mistake of setting a rent, then forgetting it for the duration of that tenancy. That policy is, in my opinion, a disservice to the owner, the property itself, and even to the resident.

Reconsideration of the rental rate should be an annual event, even if you just raise the rent by a few dollars. Almost without fail, it costs you more each year you own the house, and the tenant should understand that there is a direct relationship between what it costs you to own and what he pays to stay.

If the resident comes to the conclusion that you are not raising the rent every year, he will resent it when you finally do raise the rent. Furthermore, because you have put it off so long, you will now need to make such an increase that the new rent may drive your tenant to move.

My advice is to always require some annual rental rate change, even if it is just a few dollars. The adjustment should be made a part of your annual lease renewal procedure.

Making sure the rental rate is competitive allows the owner the needed revenue to pay for repairs and make improvements in a timely manner. It also allows the resident to link cost with consumption.

By the way, most rental tenants won't go to the considerable expense of packing up and moving just to avoid a small increase in the annual rent. Make sure they know when they first move in that your rates typically increase every year along with other costs of living.

* Are all your leases current and in force?

While we are talking about leases, let's focus on those expiration dates.

Many property managers fall into the habit of letting an expired lease slide. Put the rent in the bank and forget about it. Maybe you even called the tenant, and maybe he said he wants to stay, but you just never got around to signing an extension.

In the event of an expired lease, most rental agreements require that the terms of the lease remain in force, but that the term goes to a month-to-month basis. In other words, either you or the resident can notify the other of their intention to terminate the tenancy in 30 or 60 days. Yes, your resident is still bound by a written agreement, but you have lost control of your leasing cycle.

One of the important purposes of the written lease is to emotionally and legally commit both the tenant and the owner to a rental relationship for another 12 months. Remember that turnover is perhaps your greatest expenditure, and the longer you can get your tenants to remain in their home, the more profit you can expect from that property.

* Is this property appropriate for rental in the first place?

By that I mean, are you renting a house you shouldn't be renting simply because it is convenient to do so? Many people fall into that trap when they buy another house, then fail to sell their old house. Why not just rent?

The answer is simple, and it has to do with the concept of "return on investment."

My rule of thumb for rentals in Atlanta is that a landlord should try to get a target rent of about 1 percent of the market value of any property.

So, if the house would sell for about a hundred thousand dollars, then the rent needs to be around $995. If the house would sell for two hundred grand, then you should be getting around $1995 in rent. That sounds good in theory.

But in practice, it's extremely difficult to get more than $2000 per month as rent in the metro Atlanta market. Therefore, if your property is valued at much more than $200,000, you might be better off getting that property out of the rental market and doing what it takes to get it sold.

I know this is a tough time to sell, but the flip side is that it's a great time to find a bargain, so you can replace that overpriced rental with two more appropriately priced rentals, and get a better "rent to value" ratio in the deal.

Comments or questions? Send e-mail to This e-mail address is being protected from spam bots, you need JavaScript enabled to view it

< Prev		Next >

[ Back ]

Upcoming Events

John Adams Presents

LANDLORD SURVIVAL TRAINING
with John Adams
Tuesday, February 28th

Being a landlord can be a rewarding experience. It can also be a difficult one if you don't have the knowledge and understanding of what the process requires.

Few schools offer degrees in property management, so most landlords learn "on-the-job" through acquired knowledge and on-the-job experience, essentially re-inventing the wheel. This is an expensive and depressing way to learn anything.

Whether you're a full-time landlord or just getting ready to purchase your first rental property, whether you are a licensed Georgia real estate professional or an accidental landlord, this seminar will help you improve your property's value, increase your cash flow and decrease your expenses, from attracting (and retaining) good tenants to maintaining your property to understanding your rights and obligations under the law.

For more details and to register click HERE

PROPERTY TAX REDUCTION WORKSHOP
with John Adams
Tuesday, March 27th

One of the significant annual expenses faced by any Georgia property owner is ad valorem property tax. Depending on where you live, it can be as high as three percent of the property's fair market value, and it must be paid year after year after year.

As a result, efforts to minimize this expense are not only worthwhile, they are encouraged by Georgia law. The phrase "ad valorem" means that each property is taxed based only on its value, and no one is required to pay a penny more than the minimum the law demands.

At the Property Tax Reduction Workshop, real estate expert John Adams will review the system he has used for over thirty years to reduce valuations and assessments in Georgia counties and municipalities, saving himself literally hundreds of thousands of dollars over the years.

In this 3 hour information packed seminar, John will teach you how to:

1. Understand the legal process of Property Tax Assessment
2. Meet the newly uniform Tax Deadlines
3. File your own Property Tax Return with a realistic valuation
4. Document your PT-50R with facts to support your case
5. Proactively meet with your Appraiser to reach an agreement
6. Protest your Notice of Assessment in an Intelligent manner
7. Give the Assessor an Opportunity to Save Face
8. Appeal to your Board of Equalization, in person or by mail
9. Make Your Case to the BOE
10. Take Your Case to Superior Court if necessary

If you are not doing all these steps now, you are likely costing yourself hundreds or thousands of dollars a year. If you own just one house, you could easily save over a thousand dollars over the next three years. If you own properties valued collectively over a million dollars, you are literally throwing away your profits year after year.

For more details and to register click HERE

Supported by 3by400.com, a Dahlonega north Georgia web design team using Joomla