Happy Thanksgiving from Goldenwest Management

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At Goldenwest Management, we have many things for which to be thankful.  Aside from the natural gifts in nature, this great country, and our families, we are so very thankful for our wonderful clients and the great communities that we serve.  On behalf of all the staff here at GWM, we wish you a blessed holiday.

 

Happy Thanksgiving to you and yours!!!

*Note that our offices will be closed for the holiday weekend, but will respond to emergencies.

Rental Backed Securities and How it affects Landlords and Tenants

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The Nation recently came out with a report about rental backed securities.  If you’re a property owner or renter in Phoenix, this is something that you need to know.  The Private Equity firm Blackstone is now a property manager under the name of Invitation Homes.  They’ve now created an investment product that is basically a collection of rental homes.  They own groups of homes in Atlanta, Chicago, Jacksonville, Charlotte, and Phoenix.

Why should we be concerned about this?  These rental backed securities are similar to the mortgage backed securities that sparked the last housing crisis and economic recession.  There have been reports of improper evictions  as well as poor property management practices.  Most concerning about this trend is the economic impact on the rest of us.  Home prices are increasing without the demand, and home ownership rates are dropping.  Some experts worry that this could create another housing bubble in the future.

Does this concern you?  Let us know your thoughts.

How to Evict a Tenant in Phoenix

We previously wrote guidelines on evicting a problem tenant.  However, one of the most important things to consider is that the eviction process has a legal procedure, which is typically governed by local laws.  Phoenix will have slightly different rules than Las Vegas or San Diego.  Because of that, we’re providing some more localized information on the topic.  The following presents some useful links to use when you want to evict a tenant in Phoenix.

1 – Serve Notice

As mentioned in our guidelines for eviction, always serve a notice of eviction as your first step.  Do this by posting in a visible location on the property AND by certified mail (make sure to get a receipt and request for confirmation in your delivery).  Clearly state in the notice how to correct the issue, as well as the time frame for leaving the property.  Note that time frames vary depending on the offense.  Below are a few examples:

  • A 5 day notice for failing to pay rent
  • A 10 day notice is required for a breach of the lease agreement

2 – File with the Courts

If the tenant still doesn’t comply, file a detainer with the courts to force a hearing on the matter

3 – Get Served

Make sure to immediately serve the tenant with the summons to appear in court.  Do so with ample time (at least two days notice)

4 – Show up for Court

Attend the hearing, and bring your paperwork.  It’s best to bring your file on the property complete with the lease agreements, proof that the tenant failed to comply with whatever the case may be, and all those receipts we mentioned above.

5 – Get a Writ of Restitution

This is the officially way to physically remove the tenant.  The sheriff or other legal authority (constable) will come to the property to escort the tenant away.  Note that you must hold onto the tenants possessions for a period of time,allowing them to reclaim them after this happens.

There, you’ve evicted a tenant, congratulations, or more likely condolences.  This isn’t a fun process that we hope you won’t have to deal with in the future.  If you don’t like the sound of this, give us a call.  Hiring a property manager like Goldenwest Management means that you won’t have to personally deal with the headache of an eviction.  Good managers have a process that streamlines evictions to make life easier on everyone.

Sources: wikihow, maricopa.gov

The Best Way to Handle a Problem Tenant

This article continues the series What to look for in a Property Manager.  Today we highlight the concept of tenant management, and focus in on how to handle problem tenants.

What is the Best Way to Handle a Problem Tenant?

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According to BiggerPockets.com, a proactive approach to tenant screening is the best defense against tenant issues, “the first opportunity to enforce your agenda with your tenant screening and selection process.” The best way to have “your pick” of prospects is to price your home at the more “Conservative” end of the price range. You may leave $50 on the table, but you will have so many prospects wanting your home, you will have a wide selection of applicants from which to choose.  Sometimes, however, problem tenants get past the screening process, no matter how diligent you are.  In these cases, the follow outlines some ideas for preparing yourself for them.

Strictly enforce payment deadlines – There are various laws in place to protect tenants from unfair landlord policies.  The trend in recent legal cases demonstrates that the courts will be a little bit tenant-friendly in disputes with landlords.  Due to this legal climate, GWM’s advice is to give the tenants a larger grace period (say 5 days after the 1st of the month) but then have a large late fee (10 – 15%).  Also, stay away from exotic “tiered” fees and keep it simple (or be prepared for the judge to throw out all those extra fees above and beyond the late fee).  Ultimately, enforce the policies in place, but make them crystal clear to the tenant.

Handle maintenance issues promptly and according to your lease – Don’t let a maintenance cause you to be in default of your own contract.  Clearly state how you will handle maintenance issues, and then honor your contract. Most states give you 48 hours to address any issue from the time it is reported, and, minus a holiday, there is no reason why you shouldn’t be able to get a contractor to give you a short term fix while you, as the landlord, figure out a long term solution.  Regardless, don’t be bullied by tenants who make outrageous demands (“come out today or I am going to fix this on my own and deduct it from the rent”) without giving you, as the landlord, a reasonable amount of time to tackle the repair.

Get insured (and get your tenants insured) – Prepare yourself for the worst case scenario.  Assume that one day you’ll have a maintenance issue that you won’t be able to handle.  Prime Location lists insurance factors that you should consider.  Also, landlords, demand that your TENANTS carry insurance.  At least make sure they pay for a year policy up front before you give them the keys…most policies are no more than $125 for a year of basic coverage.

Keep detailed records – As we’ve stated in our Repairs and Inspections post, take lots of pictures before and after tenants move in/out.  Use email to correspond, use voicemail recording technology like that of Google Voice to capture voice messages.  Even interview neighbors, if necessary.  Organize everything away into a file.  Chances are you won’t often need the records, but when you do you’ll really need them.

Monitor your property – Interior inspections are critical.  Write them into your contracts and so you can perform interior inspections, at a minimum, every 6 months.  Use drive by inspections throughout the rest of the year to keep an eye on the exterior. An unkempt exterior will give you a good idea of what is happening inside.

Be professional – This is very important.  Always conduct yourself professionally.  Be matter of fact, and firm, but always keep it professional.  Don’t give a problem tenant any reason to flip the tables on you in a dispute.

Use a professional – We never recommend you manage the property on your own. Quite simply, every tenant will bank on the fact that you don’t know the Landlord-Tenant law and depending on what state you are in, that could cost you a lot of time, energy and money later on.  Think about the fact that (3) hours of work by an attorney will probably cost you $1000.  You can have a professional management company looking after your home for an entire year for that much money.  In addition, tenants won’t be so bold to play games with a management company that has probably seen more games than Milton Bradley.  Plus – do you really want your tenant knowing your phone number, your address and your email?

There are lots of things that, as a landlord, could cause you headaches.  Hopefully, you’ll prepare yourself accordingly to mitigate the risks.  If you have any more questions, please let us know!

Who Died in Your House?

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Whether you’re looking for a property to purchase, or just a rental for a short term stay, the idea of a death on a property freaks most people out.  No one wants to live with the thought of ghosts or bad karma within their walls.  Now you can ensure that you don’t accidentally end up in a haunted house with a new website.  A recent article from ABC News pointed out this website, recently, and it seems rather interesting.  DiedinHouse runs a search with a proprietary algorithm  to scour news and legal outlets for information on property deaths.  It even gives out certifications to publicize that a property is death free.  This service comes with a fee, however.  $11.99 gives you a single search, and there’s a variety of pricing options for larger search packages.  The price tag is reasonable enough to try out for a real purchase, or just for fun on the property in which you currently live.