At AHRN.com, we’re bringing you the tools and resources you need to successfully manage rental properties serving our military communities. On August 7th, we brought you the Military Rental Market Update webinar to address the changes the market is currently experiencing. Since we weren’t able to get to each one of your questions, we invited our presenters to take things to the blog!
To start off our Q & A, Brian Davis has over eleven years in the real estate investing industry, with experience as a lender, inspector, renovation investor, landlord and for the last six years as the Vice President of EZLandlordForms. He has served as a rental industry expert on programs ranging from CBS Radio to The Wall Street Business Network to WebTalkRadio, and in his spare time he loves hiking, tennis, brewing beer and time spent outdoors.
Any recommendations on marketing?
Depending on the target demographic, there are some small things you can do to make the property more appealing. For example, if a younger, tech-happy demographic is targeted, there are some smart-home gadgets that aren’t necessarily expensive but can differentiate your property (e.g. smartphone-controlled door locks, about $200). Tasteful bathrooms and kitchens are appreciated by everybody, especially with attention paid to details. For example, in a property of mine, there’s a first-floor half bathroom, which has sand-colored ceramic tiles on the floor, and the sink happens to be seashell-shaped. I painted the walls a light blue, added seashell-shaped cabinet handles to the vanity cabinets, and hung a little wooden sign saying “Gone to Cape May”, and it has a quirky, beachy vibe that people notice and get a kick out of, but I only spent about $75.
I require meeting my tenants, because of the risk of scams how do you balance that when you are dealing with military personnel?
I don’t like managing rentals long-distance; I would recommend hiring a local property manager. In the case of military personnel, you might consider requiring both a letter signed by a commanding officer and a phone call with him/her, to ask penetrating questions about that service member’s record, personality, likelihood of continued employment, etc. Credit and criminal background checks are also a must – we offer them on our website, but there are other providers of course too.
Is there a rent formula for furnished apartments vs unfurnished?
No, but I would be very careful to only rent furnished units in higher-end neighborhoods, to exceptionally responsible tenants. People are hard on furniture, especially children and young adults. Start by asking more rent than you think you can get, and drop it down after a few weeks if you don’t get any calls.
Is it better to reduce rent to have it filled?
If necessary, yes. If you accept $100 less per month, but the tenants are good and you think they want to stay long-term, you can always raise the rent later.
IRS says I am undercharging based on market value. Local property mgr says I am charging about right. I think I will not be able to continue using Schedule E. Should I get something written from property mgr to send IRS?
Doesn’t hurt to get more documentation, whenever the IRS is concerned.
What is the best approach when dealing with rent not paid on time or non-compliance with community rules? Our current military residents are not returning calls and are very hard to get to speak with them because they are always busy!
There aren’t many legal options available to landlords when the tenant owes money. You can file against them in small claims court, get a judgment and hand it over to a collection agency. I like a service called NPS Rent Assurance (http://www.npsrentassurance.com/) that pulls rent from the tenant’s paycheck, and you can collect additional money for utilities, etc and maintain an extra balance for the tenant.
We currently have a website but we only have an application that you can download and scan back in. What is the easiest way, where should we go, or how do we set up an online application on our website?
Well, I just so happen to know of a website that has a e-signable rental application, and we will be building out a free online rental application later this year with full integration with tenant credit/criminal reports, and one-click lease building.
If we manage rental home in FL but live in NC, how can we show the house when prospective tenants need to see dwelling? We used to have a family member nearby who did this, but they have moved. Is a Lock-Box safe option?
You should consider hiring a local property manager, but that aside, there are some options available. Lockboxes are one, although I don’t recommend them in bad neighborhoods, as they alert the neighbors that the property is vacant and available for break-ins and theft. There are smartphone controlled locks nowadays (roughly $200), that you can use to temporarily grant access to the property to people such as contractors, prospective tenants, etc. But there is no substitute for a good local property manager, who can keep an eye on the property, deal with repairs, etc.