McWhorter Property Management Blog

Top 5 Tips for Rental Success

Kevin Chatham - Sunday, May 7, 2017

You have a great investment property, taken good photos and written up an impressive description of your property and you’re ready to open the doors to renters and collect that steady stream of income. As the saying goes, the devil is in the details and your next steps might determine whether you end up with a profitable and stress-free experience or an expensive headache.

These 5 tips can help you maximize your rental success.

  1. Price your rental correctly

    One of the biggest mistakes we see is when a landlord lists the property too high. Sure, you may think your property is worth $2,500/mo., but if the market is only demanding $2,300/mo. you may have a vacant property for far too long. I always like to ask the question, “Would you rather have $2,500/mo. or $0/mo.?” A slight drop in your rental price may be the difference between leasing your property in a week or having it sit for months on end. Look at comparable rentals in your neighborhood or surrounding areas to ensure you’re competitively priced. Another option is to check some rental pricing tools online through, Rent Zestimate or others. The best option, of course, is to hire a professional property manager who is familiar with the market and can use their knowledge to set the price right.

    In contrast, asking too little can leave money on the table and reduce your cash flow.

  2. Use a solid lease agreement

    Your lease agreement can make or break you. You should ensure that you have a solid lease agreement for your tenants and include your policies in detail. One of the biggest problems that we see as a property manager are landlords that have been using a generic lease agreement from Office Depot or agreements that are available online. Specific states have certain rules about what can and cannot be included in the lease, so be sure to consult with an attorney or a local property manager that has experience.

    It is imperative that anything ambiguous is clearly stated. For example, “no smoking” is ambiguous because it doesn’t clearly specify whether this prohibits smoking inside the property or anywhere on the property. Be as detailed as possible so nothing is open to interpretation and make sure you review the lease with the tenant in person to ensure they understand the rules and expectations.

  3. Screen, screen, screen

    As a property manager, I cannot emphasize this enough. When I first started investing in properties at 23 years old, I had a generic paper application that included some basic information, but I didn’t take the time to screen the tenants carefully. I had a mortgage payment and I needed someone to cover that payment…and quickly! So, I trusted the applicant’s word too many times. Let’s just say that I learned how to file evictions very early in my investing career. Screening should always include, at a minimum, pulling a tenant’s credit report, verifying employment and confirming their rental history. Be sure that you apply the same screening criteria to all prospective renters to avoid fair housing violations. As a property manager, I also recommend performing a criminal background check.

  4. Perform move in/out inspections and document the condition of the property

    Another very important aspect of being a landlord is ensuring that you perform a walk through with the tenants prior to their occupancy. Walk through the entire unit, inside and out, with the tenant. Use a move-in/move-out checklist to the note the condition of every room, appliances, carpet, windows and so forth. Discuss each item and ensure that all parties are in agreement with the assessment and have them sign the document.

    Take plenty of photos of the inside and out. You may even consider recording a video of your walk through. Upon move-out, you will have a record of the original condition of the property. When you perform your move-out inspection, bring the checklist and any photos and/or videos you may have. This should leave little room for the tenant to dispute damages above normal wear and tear during the course of their tenancy. As a property manager, our firm performs all of this work electronically with a patented software that captures pictures, notes and other pertinent information. Tenants can then sign electronically right there onsite and a copy is generated and sent to them for their records.

    Another good idea is to perform regular inspections, whether that is monthly or quarterly. This will help prevent any surprises at the end of their lease when you perform the move-out inspection. This also shows the tenant that you care about the condition of the property and will be keeping a watch on it. The tenant may be less inclined to have an unauthorized pet, treat the property poorly, etc.

  5. Stick to your policies

    Even if you have a great lease, it’s not useful if it’s not enforced. If you say you’ll charge a $50 late fee if rent isn’t paid on time, charge the fee. If the lease names one occupant and your tenant has moved in their significant other, insist that they leave or sign a new lease naming both occupants.

    Always be sure to treat your rental like a business and hold your tenants accountable. For the renters that refuse to abide by your policies, enforcing penalties as stated in the lease can encourage them to clean up their act or make them uncomfortable enough that they choose not to renew. Of course, there is always the topic of eviction, but we will save that for a later time!

    We hope the above tips are helpful if you choose to become a landlord and manage your property. Of course, we always suggest hiring a professional property management company to take all of the headaches away so you can maximize cash flow and keep it stress-free!

5 Home Safety Tips for Winter

Kevin Chatham - Sunday, December 18, 2016

As an investor or tenant, the winter months are an important time of the year to take into consideration some basic home safety tips. As the year draws to a close, keep these five tips in mind and share them with others to ensure a safe and happy holiday season for you and your family.

  1. Be Prepared
    First and foremost, be prepared. In the event that the power goes out, use flashlights for lighting. Never use candles. You and your family should know where the flashlights are stored so they can be accessed easily. It is always a good idea to have extra batteries on hand in case you need them.
  2. Protect your pipes
    To help prevent frozen water pipes during colder weather, open cabinet doors to let warm air circulate around water pipes. Let cold water drip from the faucet served by exposed pipes. This will help prevent pipes from freezing.
  3. Fireplace safety
    When using a fireplace, maintain the proper precautions. Always use a glass or metal screen around the fireplace and never leave a fire unattended. It is also important to inspect the fireplace and determine if it requires gas logs or if it is a wood burning fireplace. Use extreme caution when using gas fireplaces and abide by all safety procedures recommended for their use.
  4. Space heaters
    If you use a space heater, ensure you are using it correctly by following the manufacturer’s safety and usage instructions. Keep children and pets away from the space heater during use. Never use it to dry wet clothing. Do not leave it on when you leave the room or when you go to sleep.
  5. Check your smoke alarms
    At least once per month, check that your smoke alarms are in good working condition by pressing the “test” button. Replace the batteries immediately when needed.

If you are ever in doubt about any of the items listed above, be sure to contact your property manager. Visit the American Red Cross website for more winter safety tips.

5 Winter Maintenance Tips for Landlords

Kevin Chatham - Sunday, November 13, 2016

As an investor, preventative maintenance is essential to keeping your investment property in good condition and generating a positive cash flow. Your tenants will not stay on top of the home repair and maintenance tasks, so there are several tips that will save you money in the long-term and keep your tenants happy as well. If you’re going to own an investment property, it is imperative that maintenance issues – both preventative and reactive – are handled expeditiously. Here are a few of our recommendations:

  1. HVAC System
    Regardless if your investment property is in a cold climate or a warmer part of the country, it is important to ensure that the HVAC system is working efficiently. Before entering into the winter season, it is always a good idea to schedule an HVAC cleaning and tune-up, change or clean the filter and check the condition of the insulation in the crawlspace and attic. The insulation in the crawlspace and attic will help keep the heat inside the living space and prevent warm air from escaping. One of the most costly repairs we see are related to the HVAC system, whether it be in the summer or winter, extreme temperatures can cause the system to fail if it is not in good working condition. In addition, you owe it to your tenants (legally and morally) to provide them with heating and air conditioning for the enjoyment of the property.
  2. Prevent Frozen Pipes
    Although we don’t necessarily have to worry about this issue here in the south as much as some areas around the country, it is important to avoid frozen pipes, and the extreme damage this can cause. It is a preventable condition that will save you a lot of money by adhering to some common sense rules. Exterior faucets and hoses should be drained and shut off. Tenants should also be educated about what actions they need to take during the winter months, such as leaving a trickle of water overnight and keeping the thermostat at a consistent temperature. Our firm sends annual reminders to tenants when winter approaches.
  3. Roof inspections
    Regular inspections of the roof are important and even more so in colder months. Ice dams can form which can compromise your roof and cause water leakage. Close any crawlspace vents in the foundation and seal any cracks that could allow critters to burrow in. Ensure that gutters are cleaned out. Check downspouts to ensure they drain away from the foundation. Putting this work off can result in water damage, clogs and a much bigger and more expensive issue by spring.
  4. Test Safety Devices
    Smoke detectors and carbon monoxide detectors need to be checked regularly, not only during the winter when tenants are using their fireplaces. It is of the utmost importance to ensure the safety of all occupants by testing these devices regularly, but especially during the colder months when fireplaces and gas is being used more frequently.
  5. Inspect the deck
    Wood is susceptible to deterioration in any climate. Repair or replace damaged or missing fence pickets and make sure posts are secure to prevent wind from knocking these items down. A non-slip paint or epoxy can be used on the deck, porch and stairs to prevent slips and falls during wet or icy conditions.

It’s easy as an investor or landlord to forget about these items or to simply ignore them due to the extra costs. As I always say, it is better to spend $100 now rather than $1,000 later maintain your investment property. It’s easy to put maintenance off, especially if the tenant(s) are not complaining. However, you will thank yourself later if you provide maintenance on a regular schedule and avoid any surprises down the road. Maintaining your investment is important in any climate, but a rental property may be more susceptible to certain issues during more extreme temperatures.

The Top 10 Mistakes Made by Rookie Landlords

Kevin Chatham - Sunday, October 16, 2016

People make the decision to become a landlord for various reasons. Perhaps, your job has transferred you and while you need to move, you’re upside down on your house and can’t sell without a financial loss. Maybe you want to start earning a passive income on the side and decide to rent your primary residence. Or, perhaps you want to upgrade to a bigger house and decide to keep your smaller one as an investment property. Whatever the reason(s) you may have, you’re probably thinking, how hard can it really be as a landlord? We’ve all be rookies at some point in our lives, whether it was a new job, sport, or even as a landlord.

Over the years, I’ve met many a rookie landlord. Generally these discussions arise due to some sort of problem the rookie has encountered and they are now seeking advice to resolve it. As a property manager, I tend to see the same rookie mistakes over and over.

The following are the top mistakes I see from rookie landlords. If you can avoid these, you’ll have a much higher chance of success!

1. Failing to Properly Screen Tenants

This is likely the most important aspect of being a landlord. Too often, rookie landlords fail to properly screen tenants. Instead, they simply take them for their word. A credit and background check are imperative, but many rookies fail to perform these. Also, are you sure the previous landlord they listed on their application is not Uncle Bob giving them a five star review? “They always paid on time!”

In addition, social media is a great (and free) way to conduct a bit of investigative work as a landlord. Be sure that you’re properly screening your tenants. They can make or break you!

2. Accepting the Sob Story

Susie was late on rent last month, but her car recently broke down and she had to spend money unexpectedly so she’s going to be late again this month. Your instinct is to take her word and allow her to pay late again this month. Everyone has financial woes from time to time and after all, you don’t want to be an insensitive jerk, right? Wrong! Rent is due per the terms of the lease agreement that they chose to sign. Does your credit card company let you slide when you’re having car trouble? Will your mortgage company? No! This does not mean that you cannot make arrangements with your tenants when exceptional circumstances arise, but do not buy the sob story.

3. Having an Inadequate Lease Agreement

I’ve seen many instances where a rookie landlord simply goes to Office Depot and purchases a “standard” lease agreement. In some cases, I’ve even seen some rookies rent a property on a handshake. Both of these can lend themselves to huge headaches and may not provide the legal protection you need should a dispute arise. Ensure that you are utilizing a lease agreement that protects you and your property. And remember, always get everything in writing!

4. Lack of Understanding the Law

Some rookie landlords think that since it’s their property, they can simply change the locks and turn off the utilities when a tenant doesn’t pay. There are landlord tenant laws that protect both parties from these types of situations. Be sure that you research the law and consult with an attorney that is familiar with real estate law. Making assumptions about the law can end up costing you a lot of time, money and aggravation.

5. Failing to Get Everything in Writing

Rookie landlords will often do a deal with a verbal agreement and a handshake. Many times these verbal deals lend themselves to a tenant having a memory lapse. Often, you will get burned later with the “I thought you said rent was this much?” Insist on having everything in writing.

6. Not Understanding the Costs of Investment Properties

As long as my mortgage is covered, I should be fine, right? No! How much does it cost to rehab a property when a tenant moves out? What if their pet destroys the carpet? Who is doing the taxes each year? I thought the tenants had to clean the gutters? If you do not understand the costs of owning an investment property, you are setting yourself up for failure. Ensure you have a reserve set aside to manage unexpected costs. Investments can generate a great cash flow, but you have to be ready to cover your expenses.

7. Renting to Friends and Family

I’ve seen this go bad really quick. You think that renting to your friend you went to school with will be great because he will always pay on time and keep your property tidy, right? Wrong. Rookies often think these scenarios will work out well. When money is involved between friends and family, trust me when I tell you that too often it ends in disaster. Be cautious and do not rent to friends and family.

8. Failing to Perform Regular Inspections

Many rookie landlords tend to collect their rent money, but forget about the property itself only to show up 12 months later to a nightmare. Once the damage is done, it’s done. Be sure to perform inspections at your property. I typically recommend performing quarterly inspections, but at the very least be sure to check out the property every 4-6 months.

9. Not Treating Investment Properties as a Business

This is one of the worst ideas as a landlord. An investment property is a business and should be treated as such. I’ve seen many rookie landlords co-mingle funds, lose receipts, allow tenants to walk all over them and generally keep things unorganized. Landlording is not a hobby. If you want to make money as a landlord, treat it like a business.

10. Not Starting the Eviction Process

As a landlord, it is important to know when to file for eviction. As a standard, if one of my tenants does not pay rent on or before the due date (generally on the 1st of each month), the rent is late. Period. If a tenant has not paid me by the 5th, they’re issued a written notice to terminate the tenancy. I’ve seen many rookie landlords who simply feel bad about filing an eviction and want to continue giving the tenant multiple chances to fulfill their obligation to pay rent. Keep in mind that you did not force them to sign your lease agreement. This was a voluntary act on the tenant’s part and they agreed to pay you on the due date stated in the lease agreement. If they do not pay, they do not stay. It’s really that simple. Familiarize yourself with the eviction process and the legal requirements in your state. It is important that you remove a non-paying tenant as quickly as possible or you will continue to lose money.

What would you add to the list of rookie mistakes? How many of these mistakes did you make when you were a rookie? If you want to avoid these costly mistakes, ensure that you avoid the above items or better yet, hire a professional property manager.

Contact Us

McWhorter Property Management
27 Freeman Street
Cartersville, GA 30120

Phone: (770) 607.4001
Fax: (770) 387.3188

Copyright © 2022 McWhorter Property Management. All Rights Reserved.
Property Management Website powered by Free Rental Site | Sitemap