Know Fair Housing Laws

When landlords are new to the business, there are two things they need to learn right away. One is the value of using a professional tenant screening service to screen their applicants and give them crucial information on an applicant’s credit, employment, criminal record and rental history. The other is the importance of familiarizing themselves with the Fair Housing laws in their area and their state.

Fair Housing laws are in place to protect both tenant and landlord, but in order to be protected by the law, you have to know what that law is. Landlords can’t plead ignorance when it comes to Fair Housing issues, because it is their duty to learn and uphold the law when doing business.

In essence, fair housing laws are put in place to ensure there will be equal access to housing for all people. There can’t be any discrimination on the basis of race, color, religion, gender, national origin, ancestry, sexual orientation, age, familial status, children, marital status, veteran status or membership in the armed services, the receiving of public assistance, or physical or mental disability.

To learn more about the law, landlords should visit the U.S. Department of Housing and Urban Development (HUD) website. Also check your state’s Housing Department for state regulations and possible training classes on the law. You can also check with your county’s government seat for any local laws regarding Fair Housing issues. Remember that ignorance on this subject will not get you off the hook if you’re ever faced with a complaint or lawsuit accusing you of violating Fair Housing law.

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Rental Applications Can Have Pre-screening Warning Signs

Tenant screening is hands down the best way to tell whether a prospective tenant is qualified to rent your property or not. That way you will get detailed information on the person’s criminal record and employment history, obtain a credit report on the person, see if they have any previous evictions on their record, check their name against sex offender registries … the list goes on.

While the screening itself is invaluable and necessary in today’s world, there are some red flags on an actual rental application that could signal a problem tenant before the formal screening process begins.

First of all, check for incomplete information. If the tenant can’t think of three people they know who aren’t related to them and would give them a positive recommendation, chances are you might not find them to be recommendable either. Also look for mistakes on the application – phone numbers that don’t work when you try them, address numbers missing or inaccurate. Mistakes like that could be an intentional attempt to hide their past, could be a sign of identity theft or a troubled rental history.

Be wary of a tenant who doesn’t have a bank account. Nobody these days deals only with cash and money orders. Just about any responsible adult will have a checking account. Similarly, if they can’t verify a current address with a utility bill or phone bill, they might be hiding something. They might have a bad rental history and don’t want to disclose the name of their current landlord.

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Springtime Is the Right Time for Assessing Rental Property Grounds

The harshness of winter can wreak havoc on a home, and rental properties often fall into disrepair simply because nobody keeps up on regular annual outdoor maintenance. When both the tenants and the landlord think “It’s not my job to clean the gutters,” the result can be a flooded basement — a potentially much more expensive nuisance than cleaning leaves out of the gutters would have been in the first place.

Landlords should stop by their rental properties every spring to make a note of anything damaged on the building that needs to be repaired or replaced — gutters, siding, shutters, even lamp post light bulbs — and take a close look at the grounds for any hazards that should be dealt with immediately. A dead or diseased tree poses a risk, as do large branches and limbs that look like they could fall with the help of a stiff breeze. Look for holes in the ground from animals that may have burrowed in during the winter, and whether there are significant cracks in the sidewalk or driveway that should be fixed.

Check the gutters and downspouts for leaves and other debris that can clog the flow of water off the roof, and reattach gutters that have pulled away from the house. It’s also a good idea to clean siding with a pressure washer to keep mold from growing. Also check wood surfaces for signs of weathering, and repair, re-paint and re-stain when necessary.

A thorough inspection could also include checking the caulking, weather stripping around windowsills and doors, and cleaning and patching window screens. And even if it’s the tenant’s job to do yard work, the landlord should ensure the removal of any vegetation that’s touching the house.

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Make the Move-Out Process Smooth for Tenants — And You

Most tenants have good intentions when they give their landlord a move-out date. After all, they want as much of their security deposit as possible. But often tenants, especially ones who’ve lived in the same rental property for multiple years, grossly underestimate the amount of time, money and effort it takes to effectively move all of one’s belongings from one place to another. When time gets tight and energy runs low, the first thing to go is the tenant’s attention to the rental unit he’s leaving behind. Unwanted items are left piled in empty rooms, the kitchen and bathrooms are not cleaned properly, sometimes even the refrigerator isn’t totally emptied.

This leaves the landlord with a mess and a hassle – and if you’ve already got new tenants slated to move in right away, you could be left scrambling for a professional cleaning service to come at a moment’s notice and undo the damage done by the previous tenant.

The good news is there’s a simple way to help avoid all that. When a tenant gives his 30-day notice that he’ll be leaving the property, an effective landlord should be proactive and immediately give the tenant three things:

1. A copy of his signed rental agreement with any requirements for move-out and the return of the security deposit highlighted, as a memory refresher.
2. A copy of the move-in sheet that should have been filled out and signed by both tenant and landlord upon the tenant’s arrival. This should list, room by room, any damage or issues that were present when the tenant moved in. That will give the tenant a good guide when he’s getting ready to leave about what, if any, repairs he needs to make in order to leave the rental unit in the same shape he found it.
3. A move-out guide that gives a basic cleaning checklist for a tenant. Some tenants won’t remember to clean the oven or defrost and clean the freezer unless it’s written on a handy to-do list. 

Arm your tenant with all the information he needs to make a smooth exit and ensure he receives all, or at least most, of his security deposit.

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Tax Deductions Can Spell “REFUND” For Landlords

Tax time is stressful for everyone, and landlords are no exception. But there are several tax deductions many landlords don’t realize they can take. Don’t pay more than you have to on Tax Day this year. Here is a list of deductions for owners of small residential rental property.

1. Interest. This includes interest on credit cards used for goods and services having to do with the rental unit, and mortgage interest payments on loans used to acquire or improve rental property.
2. Repairs. The cost of repairs to your rental property is fully deductible for the year in which the repair was done.
3. Travel. Keep track of mileage when you drive to and from the rental property or anywhere else associated with the property management business. You can deduct the standard mileage rate (51 cents per mile for 2011), or you can deduct your actual expenses (including gas, maintenance, repairs). There are exceptions and qualifiers, so ask a certified public accountant or other tax adviser.
4. Employees and Contractors. When you hire anyone to perform services for your rental activity, whether it’s a carpet cleaning service or mold removal, you can deduct their wages as a rental business expense.
5. Home office. As a tax adviser whether you can deduct your home office expenses from your taxable income.
6. Legal and professional services. You can deduct fees paid to lawyers, property management services, tenant screening services and other professionals that assisted you with the rental property business that year.

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Worst NYC Landlords Called Out on New Website

There are a few negative landlord stereotypes out there — every landlord knows his or her reputation is built not just on one’s own actions and history with tenants, but on the public’s general perception of landlords being people who might want to cut corners on maintenance and repairs in favor of a better bottom line.

That stereotype is unfair for the vast majority of landlords, who conscientiously stay on top of needed repairs and treat their tenants with respect and honesty. But there are still bad landlords out there, muddying the rental waters for the good property managers. Now New York City’s public advocate is trying to change that, at least in his town. Thanks to an agreement with the online classified website Craigslist, tenants in New York City can find out more about a prospective landlord by clicking a link, “NYC’s worst landlords,” on the apartment search pages on Craigslist. The link takes renters to a page on public advocate Bill de Blasio’s website that lists dozens of landlords with the worst inspection records. Tenants can even click on the landlord’s name and be shown a map via Google Maps with the buildings that landlord owns.

The information is compiled by the New York City Department of Housing Preservation and Development, and the website also tells tenants how to file a complaint against their landlord. The list is revolutionary in giving tenants greater and easier access to information about landlords whose credentials and professional records are sub-par at best. Tenants often don’t have the luxury of performing a background check on their prospective landlord the way landlords do on their prospective tenants.

Beyond that, the list also is a wake-up call to landlords everywhere to make sure your reputation is solid, your record of housing violations is clean, and you are in good standing with your current tenants and the community at large.

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Landlords Should Heed Top Trends in Employment Screening

Employment Screening Resources (ESR) has announced its annual list of emerging and influential trends in employment background screening. Some of these 2011 trends have implications for the field of property management when it comes to tenant screening.

1. Controversy over whether it’s discriminatory for employers to use credit reports for employment increase. Because of unemployment, many would-be workers are stuck in a cycle of having bad credit because they can’t find work, and being unable to get a job because they have bad credit. In response, some states have passed laws or are considering laws to restrict the use of credit reports and employment and the U.S. Equal Employment Opportunity Commission (EEOC) is looking closely at this area and has filed lawsuits alleging discriminatory use.
2. Questions about criminal records of job applicants become more difficult for employers to ask. An employer who hires a person with a criminal record can be found liable for negligent hiring if the decision results in harm and could have been avoided by a criminal record check. The easiest way to avoid this is to perform a thorough background check on a job applicant, but the issue of whether employers can use a job application to ask about one’s criminal has become more complicated.
3. Employers discover fast and cheap online background checks using criminal databases not always accurate or legal. With the trend toward more thorough checking into the pasts of potential employees, many websites are springing up that promise cheap instant background checks using “national criminal databases.” But most of these sites aren’t legitimate or thorough. There is much truth to the saying “You get what you pay for.”
4. New accreditation standards help employers select background screening firms. Last year the National Association of Professional Background Screeners’ Background Screening Credentialing Council created the Background Screening Agency Accreditation Program to advance professionalism in the background screening industry. The program promotes best practices in the industry, awareness of legal compliance, and the development of standards to protect consumers.

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Rents Climb as Rental Market Gets Hotter

Have you noticed rents in your area creeping up in recent months? Have you been inundated with more applicants for a vacancy than usual? Have you thought about having to increase your rent, or have you upped it recently? If so you’re part of the national trend that’s responding to the fact that more people are renting than buying these days. The national vacancy rate for rental units is down to 9.4 percent — the lowest it’s been since 2003.

The markets for rented and purchased homes usually move in opposite directions. When more people are buying homes, rents tend to stay low or go down because of decreased demand for rental units. But when high interest rates or a weak economy cool the housing market, more people look to rent rather than buy. Since it takes awhile for builders to add more units, the supply-demand mismatch drives up rent prices.

And that pool of renters is growing by the day. Foreclosures have turned millions of one-time homeowners into renters. In response, Research firm REIS estimates that nationwide, rents will rise an average of 3.4 percent in 2011, which is more than inflation or incomes are likely to rise. In cities like San Jose, Calif., Washington, D.C., Seattle, and New York, rents will go up by more than average. And in a few select neighborhoods, rent increases could exceed 10 percent.

If you’re a landlord, be sure your rent price is staying competitive in your market. And if you’ve been thinking about getting into the business of property management, now is a great time to act on that dream!

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