When your tenant moves out of your property, there will be turnover repairs and costs that are required before a new tenant can move in. As the property owner, you’ll be responsible for any of the costs associated with normal wear and tear.
Damage, however, is paid for with your tenant’s security deposit.
Mistaking wear and tear for damage is not something you want to do. The penalties for unlawfully charging a security deposit can be steep.
Sometimes, it’s hard to know whether you’re looking at wear and tear or damage. We’re sharing some of the things to look for when you’re deciding what you’re responsible for at the end of a lease term. (more…)
To protect your Santa Cruz rental property from tenant damage, you’ll want to screen potential tenants thoroughly, collect an adequate security deposit, and develop tenant relationships based on trust and respect.
Even with every precaution and outstanding tenants, renting out a property is a risky business. You may find yourself facing damages that are beyond what you’ve collected in security deposit funds.
This is rare, especially if you’re working with Santa Cruz property managers. But you do want to be prepared in case it happens to one of your properties. (more…)
Improving your rental property can help you attract well-qualified tenants quickly, which limits the amount of money you lose on vacancy. It can also help you increase the value of your investment, meaning you can possibly charge more in rent.
But, where do you invest your renovation funds?
It’s important to make cost-effective upgrades that will have an immediate impact on your rental value.
These are the five that give you the best chances of earning more on your Santa Cruz rental property. (more…)
Smart investors know that professional property management can help your rental properties perform better. You’re likely to earn more money, spend less on things like maintenance and vacancy, and have an overall better investment experience.
We can list hundreds of reasons to work with a Santa Cruz property management company. Today, however, we’re focusing on 5 important things that your management partner can do for you. (more…)
Every investor wants to earn as much Return on Investment (ROI) as possible, and understanding how to calculate your earnings is a necessary step in successful investing. Usually, you’ll find ROI expressed as a percentage or a ratio, and while it seems like it should be a matter of simple math to calculate what you’re earning on your investment property, there are several variables that can make analyzing your returns and profits a bit complicated.
When you want to keep it simple, you can divide the amount you’ve earned by the cost of acquiring your asset. That shows you the base ROI.
Earnings / Cost = ROI
The length of your mortgage loan will impact your ROI, as will your cash purchase. Today, we’re providing a high level overview of calculating your ROI, and we’re also sharing a couple of our best ideas for maximizing what you earn.
Remember that you’re investing in Santa Cruz, which is one of the most desirable places to live in the country. We have high rents but we also have high home prices. Your long term ROI is going to be the number you want to focus on rather than your immediate cash flow. (more…)
A lease agreement is signed by landlords and tenants to protect each party and the rental home itself. There are many different types of leases. Some property owners are comfortable with a two-page rental agreement and others want dozens and dozens of pages with ongoing addenda and attachments.
Most lease agreements are complex and customized to your specific property and your location. Every state has its own requirements.
As professional Santa Cruz property managers, we’ve had to take on lease agreements from owners who were managing by themselves or didn’t have great lease agreements in place. These are three common mistakes that we see. These errors can be costly and difficult, and you want to avoid them if you can.
1. Using a Lease Template that Isn’t State-Specific
If you’re not sure where to get a standard lease agreement when you’re ready to rent out a home to tenants, you might quickly go online to find one. This is understandable – we can find just about anything with a Google search. However, any lease agreement for your Santa Cruz rental property has to be specific to California. Otherwise, it’s not compliant with state laws and it’s not enforceable should you need to take your tenants to court.
Don’t download any lease template you find. Don’t borrow a lease agreement from a fellow landlord in Texas. Instead, talk to a Santa Cruz property manager or a real estate attorney so you can access a lease template that actually protects you here in California.
2. Leaving the Lease Term Open
You want to be clear about the terms of the lease. Your agreement must include a start date and an end date. What many property owners neglect to do is stipulate what happens at the end of the lease. Usually, you will offer your tenants one of these options:
- Renew the lease agreement for a specific period of time and for an identified amount of rent.
- Allow tenants to go month to month for a period of time, with a higher rental amount.
- Non-renewal and tenants move on after the lease period is over.
If you don’t clearly say what happens, there will be confusion at the end of the lease. Your tenants need to know how much notice to give if they plan to vacate. They need to know what to expect in terms of when you’ll be making a renewal offer. Don’t invite chaos and uncertainty into the end of your lease term.
3. Skipping the Rent Collection Policy
Most lease agreements state how much rent the tenant is to pay the landlord. However, a good lease will go beyond that. Not only do you want to include the rental amount, you also want to outline when it’s due, whether there’s a grace period, and what the consequences are (including late fees and eviction) if rent is paid late or not at all. Make sure you state how rent should be paid.
Including the full rent collection policy in your lease agreement will eliminate any confusion and provide support to you if your tenants pay late or claim they didn’t know how they were supposed to get you the rent.
There are other dangers that can pop up when you’re negotiating and signing the lease. If you’d like some help protecting you and your Santa Cruz investment property, please contact us at Real Estate Eight Three One.
In order for a rental property to be a lucrative investment, landlords must be able to manage themselves and their paperwork. Staying organized is not optional – it is essential. Not only do you need to protect yourself with proper documentation and careful accounting, you also need to have everything in order for tax purposes.
You should be able to easily access rental applications, maintenance invoices, leases, inspection checklists, and an accounting of what is earned and spent every month. This takes a lot of time and structure even if you’re renting out just one Santa Cruz investment property. If you have multiple units, things really need to have processes in place.
If you think you’re doing fine without a process and a lot of documentation, you could be putting your investments at risk.
Attracting, screening, and placing high-quality Santa Cruz tenants is an important part of the rental process. Retaining those tenants is even more important, especially when you’re thinking about the cost of turnover and the value of stable and consistent income.
Tenant retention plans often don’t get the attention that they deserve. It should be a priority, especially if you want to reduce vacancy. Avoid unnecessary vacancies and increase your retention rate with these simple tips.
Effective Santa Cruz property management relies on good communication. We are focused on communicating transparently and proactively with our owners, our tenants, our vendors, and all the other partners within our community that help us manage your property well.
Good communication requires excellent systems, innovative technology, and a willingness to be responsive and accessible.
Here’s what you can expect when you’re working with Santa Cruz property managers like us.
No one enjoys being part of a tenant dispute, and if you have tenants who are difficult during or after the lease term, you need to know how to resolve the situation without allowing it to escalate. While the courtroom is always the ultimate option when it comes to settling problems with your tenants, the legal system is really best avoided. California is notoriously tenant-friendly, and a lawsuit or a court hearing will only cost you time, money, and peace of mind.
Here are three things you need to do when you’re trying to settle a Santa Cruz tenant dispute. (more…)