12 Steps to Successfully Manage Your Rental Home

By Tanya | November 11, 2020

Who Am I?

My name is Tanya Jensen, I am a Property Manager and owner of Envy Property Management in South Ogden, Utah. At EPM we manage single-family homes, commercial, and multi-family up to small apartments in Davis and Weber Counties. I am a fellow DIY Landlord and I grew up in a small town in southeast Idaho, helping my grandparents and parents manage their duplexes since I was very young. I’ve been managing my own investment properties for over 15 years and I’m currently invested in over 130 doors in several states. I am obsessed with processes, procedures, and checklists.

Who Are You?

You are 1 of thousands of Landlords who own a rental home(s).
You are an investor.
You likely have another job or interests you need to budget time for.
You might be overwhelmed with all the tasks involved with proper rental management, or even unaware of all the tasks that need to be done.
You most likely have received little if any training on how to efficiently manage a rental property.

Step 1 – PRESENTATION

Presentation of your rental home begins with rehab, tenants want a clean presentable home to live in!

Present a Property That is at Least Slightly Above Average, consider rehabbing the following:

Paint
Flooring
Lights
Countertops
Appliances
Fixtures
Bathroom vanity
Shower/Tub
Yards/Landscaping

3 Reasons Why Rehab Matters:

For every $1 invested in rehab, you’ll get back $1.50-$2.00 in increased rents
You will add value back into your property
You will attract a higher quality tenant

*A Great Home Attracts a Great Tenant*

Adding Value Back With Rehab:

We recently remodeled a 2 bed, 1 bath duplex built in 1963:

Condition: Original cabinets, tile flooring
Project: Kitchen Remodel, Bathroom Remodel, New Flooring, New Paint, New Plumbing Fixtures, New Exterior Doors, New Light Fixtures, Added a Dishwasher
Rent Before Remodel: $650 per unit
Rent After Remodel: $1,060 per unit (63% increase)
Additional $9,840 in rent per year

Presentation of Your Property During Tenant Move-in:

Use a Tenant Move-in Checklist
- We use a checklist with over 25 Items Including items such as:
  - Rekeying of Locks
  - Checking all appliances
  - Replacing burned out lightbulbs
  - If you are interested in ours, email tanya@envypm.com and we will email you a free copy.
  - Include a Welcome Bag!

Step 2 – PROMOTE IT WELL

Use professional photographs
Consider a 3-D Tour
Have a strategic ad
Promote your property on all of the popular websites
Consider a yard sign
Consider a referral incentive to the current tenant

Step 3 – PRICE STRATEGICALLY

Start with a rental analysis, gather information on what similar properties in your area are renting for
Base your price on “Actual” not “Asking” comps (7-10% less)
Adjust your price based on your home’s condition and amenities
Adjust your price based on the season
Consider using “$90” as the last 2 digits
Price it 3% below fair market price
Adjust price $25 every 7 days

REMEMBER – Your rental has NOTHING to do with:

Your mortgage
Your expenses
The appreciation of your home
What you hear from a neighbor or friend

It has EVERYTHING to do with multiple comps and actual leases.

Step 4 – PET NEGOTIABLE

Greater Pool of Applicants
More Profit
Longer Tenancy
Set Limits on Size of Pet
Includes a Pet Agreement
Happier Tenant

Step 5 – SCREEN, SCREEN, SCREEN!

Make sure you are looking at things like:

Credit Score
Income
Criminal Background
Rental History
Number of People
Intended Length of Stay
Meet Face to Face
OBEY FAIR HOUSING!

10 Most Common Lawsuits Against Landlords

Improper Tenant Screening
Improper Denying of a Tenant
Improper Handling of Service Animals
Improper Handling of Smoke/CO2 Detectors
Improper Handling of Bedbugs
Improper Handling of Mold Issues
Improper Service of Rent Increase
Improper Entry Into Home
Improper Move-out Procedure
Improper Security Deposit Returns

Step 6 – PUT EVERYTHING IN WRITING – HAVE A GOOD LEASE

12-18 Months
Landlord vs.Tenant Responsibilities
Include a Yard Care Addendum
Renters AND Tenant Liability Insurance Required
Use correct Addendums (Mold, Bed Bugs, Lead Paint)
Damage Addendum
Pet Lease + Pet Identification Form
Tenant Handbook
Go Over Lease Face to Face

Step 7 – SECURITY DEPOSITS

Require to be Paid Within 24 Hours AFTER Approval
One Month’s Rent
Credit Issues – 2x Rent
Pet Deposit
Do NOT Use the Security Deposit for the Last Months Rent

Step 8 – MAINTENANCE REQUESTS

Determine Who is Responsible According to the Lease
Help Over the Phone
Have a PDF You Can Email to Have Them Solve Common Issues
Schedule Vendor Promptly
Vendor Agreement
Never Defer Maintenance to the Tenant
Set Aside One Months Rent Each Year for Maintenance, Rehab, Repairs, etc.

Step 9 – REGULAR PROPERTY EVALUATIONS

Move-in Inspection – Landlord AND Tenant
Quarterly is Recommended but Minimum Annually
Have Evaluations Written into Lease
Detectors – Smoke & CO2
Unauthorized Pets
Unauthorized Roommates
Air Filter
Deferred Maintenance
Move-Out Inspection

Step 10 – PROTECT YOURSELF

Landlord Policy
Umbrella Policy (minimum $1,000,000)
Renters Insurance
Tenant Liability Insurance
Convert Ownership to an LLC

Advertising Violations of Fair Housing

Safe
Walk to Schools
Master Bedroom
Family Community
Mother-in-Law Suite
Walk-in Closet
Near Church
Private Community
Exclusive
Bachelor Apartment

FIRST TIME FAIR HOUSING VIOLATION FINE AVERAGES $16,000 with a $10,000 MINIMUM PENALTY IN UTAH IF SUED IN COURT

Step 11 – PROFIT

Consult your tax professional but some possible tax deductions are:

Repairs
Insurance
Management Fees
Travel Expenses
Utilities
HOA Fees
Depreciation
Property Taxes
Mortgage Interest
Landscaping – Yard Care
Advertising
Legal
Home Office

Why it Might Make Sense to Consider Selling

Geographically Undesirable
Owned With Siblings or Partners
No Depreciation Left
You Want to Increase the Size of Your Rental Holdings
The Cap Rate For Your Area is 2-2.5% While Cap Rates Outside of Your Area Can Be 6-7%
You Sense a Prolonged Flat Period

Remember: Your Property is the Goose, What Really Matters are the Golden Eggs!

“Live where you want to live, but invest where the numbers make sense!”

Landlord Real Estate:

Envy PM has our very own expert in landlord real estate, Nick Jensen:

Broker
Landlord – Invested in over 130 doors
Wealth Strategist
Understands Tenants
Former Contractor – Understands Rehab – Especially the Do’s and Don’ts For Rentals
Can Help Identify “EXCHANGE” Properties With Higher Cap Rates
Is a Landlord Himself (only 5% of Realtors own rental property)

Consider a 1031 Exchange:

You aren’t stuck forever with a rental property under-performing, difficult to manage, or geographically undesirable
You can increase your portfolio’s value
You can defer taxes….(about 33%) – FOREVER

Step 12 – CONSIDER PROPERTY MANAGEMENT

A Property Manager…… MAKES You Money!

A professionally managed home will ALWAYS make you more gross profit in the long run than managing yourself
Optimum rent
Fewer Vacancies
Best Vendors
Less Risk
Simplify Your Life
Let’s Meet!

BONUS! COVID-19 – How to Mitigate Risk

As we settle into the new normal, it’s important to streamline communication and take advantage of technology
Virtual showings
Electronic payment options
Residents are now spending more time at home and increasing their usage of kitchen, electrical, and plumbing systems
New York Times has reported that now that people are staying home and using plumbing systems more frequently, septic emergencies, more drainage emergencies, more opportunity for things to start to break down. Before COVID, this was happening more at job sites but now with people staying home, it’s happening more in the home setting.
Make sure your property is well protected
- Maintenance – How to make sure things aren’t falling through the cracks
- Are your tenants aware of what is considered an “Emergency”
Now is a good time to think about your maintenance and risk mitigation strategies
Do your tenants have insurance?
Is it time for a periodic evaluation of the home?

Thank you for watching today, my name is Tanya with Envy Property Management, make sure you subscribe to receive more valuable information about your investment properties or call us today to see how we can help you increase your return on your investment. Our number is 801-337-4337, or visit our website at www.envypm.com.