A rental agreement is a binding contract that you sign with your residents, agreeing to the terms and conditions of the tenancy. It’s designed to protect you, your resident, and your property in case there are disputes or questions about responsibilities and requirements.
Lease agreements are all different and typically reflect the property that’s being rented and the unique rules and expectations that the owner has for the residents and the tenancy. What’s important is that you’re using a strong rental agreement that’s legally compliant in California. Don’t pick a random template that you find on the internet because it may not cover all of the disclosures and addenda that California requires.
Your lease should be detailed and specific. We’re sharing some of the most basic and pertinent pieces of information that must always be included.
Contact and Identifying Information
The lease agreement should start with identifying information. You need the names, addresses, phone numbers, and email addresses for all residents, owners, and if applicable – Sacramento property managers. Any dependents who are living in the home but not listed as financially responsible parties on the lease should also be included. You should also describe the property that’s being rented out. List whether it’s a single-family home or an apartment, if it’s furnished, and which appliances are included.
Rent Collection Policy and Lease Term
The lease agreement also needs to reflect the term of the lease. It needs a start date and an end date, and then it needs to reflect what happens at the end of the lease period. Your lease should state whether it automatically renews, or if it moves to a month-to-month lease.
Make sure to include your rent collection policy. This ought to reflect how much rent is due, when it should be paid, and how it should be paid. You’ll need to include information on grace periods and late fees as well as the amount of the security deposit that was collected. You now need to indicate whether your property falls under the statewide rent control act or whether it’s exempt.
Establish Landlord and Resident Responsibilities
Make sure your lease reflects who is responsible for what. Address the utilities and lawn care and pool care and who pays for those services. You’ll want residents to reference how maintenance should be reported if there’s a repair issue. A good lease tells residents what they’re responsible for during the lease period.
Rules and Requirements
The lease needs to identify what is allowed and what isn’t allowed in your property. If you don’t want any smoking, make sure the lease prohibits it. If you don’t want more than one car per resident parked outside, the lease should say that. If you want guests to stay no longer than three days, make sure that language is in the lease.
When you’re renting out a property in an HOA, you’ll also need to provide the resident with a complete copy of HOA rules and regulations. You should indicate in your list that the resident will be responsible for any fines or penalties incurred as a result of their behavior.
Amendments and Addenda in Rental Agreements
There are a number of addenda that need to be included in a California lease agreement, specifically information on lead based paint and mold disclosures. Your lease must advise residents about the registered sexual offender database in case they want to look at data for the neighborhood and it must also address chemicals and pesticides used in any pest control measures that are taken against things such as bed bugs and termites.
Extra Considerations with Your Sacramento Lease Agreement
Make sure your lease is clear and concise. Use a font that’s large enough for a reasonable person to read. In fact, when it comes to referencing rent control, there are specifics about the font that needs to be used. The verbiage must be in 12-point font. Make sure you pay attention to this; you don’t want your lease thrown out in court because the font you chose was too small.
We spend a lot of time writing rental agreements and we work closely with legal experts. If you need help with your rental agreement or anything pertaining to our leasing and management services, please contact us at Sacramento Delta Property Management.
Pet policies are often easy to come up with when you’re renting out a Sacramento property. Either you’re going to accept them or you’re not. If you do provide a pet-friendly policy, you can place any restrictions you want on size, age, and breed.
Companion animals and service animals are a little different, however, and they can cause some confusion and mistakes among landlords and property owners who don’t understand the law and protections for people with disabilities.
Today, we’re sharing some of the things you need to know to avoid making some expensive legal mistakes.
Companion and Service Animals are Not Pets
Service animals and companion animals or emotional support animals are not pets. According to federal and state law, they are accommodations that you must make for residents and applicants who have disabilities.
This means that you cannot deny an application or a resident's request to have a service animal or a companion animal if they are legally entitled to one. If you say no or explain that you’re a pet-free property, you will find yourself in violation of numerous fair housing and discrimination laws.
You are also prohibited from charging a pet deposit, pet rent, or a pet fee when a resident has a companion or service animal.
Understanding the Role of Service Animals
Service animals are protected by the Americans with Disabilities Act (ADA). They are trained to do work or perform tasks for the benefit of an individual with a disability. That disability could be a physical, sensory, psychiatric, or intellectual. Examples of a service animal would be a Seeing Eye Dog or a Seizure Response Dog. These animals often come with credentials and are easily identified. They can be any breed, age, or size.
Understanding Companion Animals
Companion animals are also referred to as emotional support animals or therapy animals. These animals are usually part of a prescribed treatment plan administered by a medical professional. They provide companionship and often treat depression and anxiety. Unlike a service animal, they don’t have any special training. However, they do qualify as accommodations under the Fair Housing Act. Just like with service animals, you must allow them because they are not considered pets.
With service animals, you are not permitted to ask for documentation or certification. However, with a companion animal, you can ask to see the written treatment plan from a certified medical or healthcare professional. You have the authority to talk to the doctor or therapist and review that professional’s credentials.
Protecting your Sacramento Rental Property from Damage
Many landlords don’t allow pets in their homes because they worry about property damage.
While this concern is understandable, you will face damages that are more expensive and punitive by violating the ADA or the Fair Housing Act. You must allow otherwise qualified residents to move in with their service animals or their companion animals, otherwise you will be out of compliance with some very serious housing laws.
The resident is still responsible for the animal, and must clean up after it and ensure it behaves and isn’t a nuisance.
If you have any questions about how to navigate the area of companion animals and service animals, please contact us at Sacramento Delta Property Management. We’d be more than happy to help.
The housing laws in California have been changing dramatically, and with medical marijuana legal in the state, there’s a lot of confusion about what is and is not permitted in your Sacramento rental property. If your property is a non-smoking home, you aren’t required to allow your residents to smoke marijuana – even if it’s prescribed for medical reasons.
Having a strong lease agreement is important. Understanding the scope of the law is also important. If you’re uncertain about how to handle this, reach out to a local Sacramento property management company that can help.
Marijuana is Illegal Under Federal Law
Medical marijuana is legal in 33 states, including California, but it’s still an illegal substance in all forms and for all reasons under federal law. If you have residents who need medical marijuana, they are required to register with the state and obtain a medical marijuana card. This will require them to provide the state with documentation from a physician.
In 2016, recreational marijuana was declared legal in California. However, there are still restrictions on where, how, and when it can be used.
Marijuana and Your Sacramento Rental Property
There are many ways for medicinal marijuana to be consumed. Some people take it in an edible form and others use oils. Many users also vape or smoke it, and that’s where you have the most freedom in placing restrictions on how marijuana is used in your rental home.
You are permitted to keep your rental properties smoke-free. This means that residents and their guests are not allowed to smoke anything in your house or at your property. The smoking restriction would include cigarettes and marijuana. There’s no legal protection that allows for smoking when you prohibit smoking at your property.
Smoking Policies and Your Lease Agreement
The best way to protect yourself and your property is by including a non-smoking policy in your lease agreement.
Everything that happens at your rental property starts with your lease agreement. You need a strong lease with specific expectations and responsibilities for your residents. Don’t be vague; you don’t want to simply include a “no-smoking” phrase. Be specific about what isn’t allowed. List everything from tobacco to marijuana to vaping products.
Communicate with Your Residents
Have a conversation with all of your new residents before they move into the property. While most of your lease signing and communication may be electronic, you want to make sure that you’re clearly establishing the rules of living in your property. Explain that you are renting that property to the residents with the expectation that there will be no smoking of any substance.
Set clear standards and consistent boundaries. When you have done this in writing and in person, there is no excuse for your residents to violate the lease agreement or to smoke marijuana in the property, even if it’s medicinal. They cannot claim they didn’t know it wasn’t allowed. If you discover something that violates your no smoking policy, address it immediately.
If you’re wondering how the laws pertain to your specific investment, contact us at Sacramento Delta Property Management. We’d be happy to tell you more about this and talk about any of your property management questions.
It is imperative that you inspect your property at least one time every year. This is important to do even if the tenants are paying rent on time, you’ve had no complaints and you think they are really wonderful people. You have to walk through your rental home and do an inspection annually. Not only do you want to check out the general living conditions, you also want to look for neglected maintenance issues.
A lot of times, great tenants aren’t going to want to bother you with too many repair requests. Or, they’re worried that you’ll raise the rent if they call with maintenance concerns. That’s not a good thing, because as you know, small problems can often lead to big problems that are more expensive to fix. So do your inspections. Check under the kitchen sink to make sure there isn’t anything leaking. Lots of people store their household cleaners there, but they often don’t think about checking the pipes and the floor under the sink. Take a look at the windows and the window sills. Check the HVAC filter as well as the sprinkler systems and sprinkler valves. Turn the faucets on and off, and make sure you don’t have an inefficient toilet.
These are the things that can save you and your tenant a lot of money and also protect your investment. Make sure any neglected maintenance you find doesn’t continue. The inspection is a great opportunity to address any concerns your tenants might have. Let them know you won’t raise the rent due to calls for maintenance and repairs.
We always recommend that you take a lot of pictures to go with your inspection paperwork. This is important because it documents your property. Take pictures of everything, including what looks good. You don’t want to photograph the problem areas only. When you document everything, it will help you in the long run. Maybe the tenant will dispute the disposition of the security deposit, and you’ll need to prove how the home looked during the last inspection. Or, perhaps an insurance issue will arise. You might have a roof leak and maybe the insurance company will try to claim that it looks like an ongoing issue. You’ll have pictures from six or 12 months ago that show there was no leak, and it’s not an ongoing issue.
If you have questions about inspections or how a property manager can help you conduct them, please contact us at Sacramento Delta, and we’d be happy to help you.
When you want to maximize the income potential on your rental property, the first and most important thing you can do is minimize vacancy. It’s well known that the longer your property is vacant, the more money you are going to lose. When you work towards keeping those vacancy periods to a minimum, there are a couple of things to consider.
First, a lot of owners like to do their own repairs. This is certainly understandable – why pay a vendor to do what you can do yourself? Doing your own repairs can save you money as long as you do them right away. If you don’t have the time to make those repairs quickly, your home is going to stay vacant longer. Maybe you only have weekends to do the work or one day per week. If that’s the case, it will actually save you money in the long run to have a vendor do the necessary work. It’s a deterrent during showings when there are repairs that need to be made. Every day your property is vacant, you’re losing that rental income.
You also have to set the correct rental price. Sometimes, just a difference of $50 will leave your property vacant longer. We tell owners that it’s okay to set your rental price at $50 or $100 above the market for one week. However, if you don’t get any hits from qualified tenants, you want to bring it back down to what the rent should be according to the market, and it will rent much quicker.
When you get your applications in from interested tenants, it’s imperative to screen them properly. This will save you time and money in the long run and it will also save you from damage to your property. Stick to your guns on your qualification requirements and you’ll have great, high quality tenants.
Owners often ask if they’ll get more rent by changing the counters in the kitchen to granite or by remodeling the entire home. Typically, the answer is no. If the property looks clean and it really shines, it won’t matter if you have tile from the 1980s. As long as it’s clean and it looks good, you’ll get a good tenant. You won’t get that money back that you spend on an expensive remodel and granite countertops aren’t going to bring you $10,000 in extra rent.
If you have any questions on maximizing your rental income, or you’d like to discuss these tips in greater detail, please contact us at Sacramento Delta.
Screening and processing applications requires a lot of time and attention, especially if you want to get good residents into your property who are going to take care of the home and pay rent on time. As property managers, we know that a lot of evictions can be prevented with extra precautions during the screening process. Here’s what we do at Sacramento Delta Property Management to ensure we are putting the best possible renters into our properties.
- Run a credit check
It’s important to read through the entire credit report. This will tell you whether an applicant’s credit history is acceptable for our standards. You want to be careful about renting to people who have a hard time managing money and credit or who demonstrate a history of not paying their bills.
- Verify income
You want to find out how much money an applicant makes, and then you want to see documentation that proves what the applicant says is earned. You can do this by talking to the employer or reviewing pay stubs and tax forms. We require a renter to make at least three times the amount of monthly rent. Make sure the applicant earns enough money to pay rent every month.
- Verify rental history
Whether the applicant was a renter or a homeowner previously, you need an idea of how that person treated the properties he or she has lived in. For renters, we always contact the applicant’s current landlord as well as one previous landlord. It’s important to get a rental history that is actual and factual. If the applicant was a homeowner, we check county records to ensure they did own the home listed on the application.
- Look for red flags
Always pay attention to any red flags that come up during the screening process. These will tell you if the person wanting to rent your home is truthful. You want them to be honest, and you also want them to be reliable. Take red flags seriously.
If you have any questions on tenant screening, or you’d like information on how to handle the application process, please contact us at Sacramento Delta.
State of California and City of Sacramento Ban Evictions Due to COVID-19 Financial Hardship & State of Emergency
Governor Newsom issued an executive order effective immediately (3/16/2020) that prohibits the eviction of residents who are unable to pay rent because of a substantial decrease in income. This order protects residents who are subject to a layoff, reduction in work hours, or significant out-of-pocket medical expenses as a direct result of Covid-19.
Moratorium on Bank Foreclosures
Also, the executive order requests financial institutions to implement an immediate moratorium on foreclosures, which may provide relief to rental owners who are unable to collect rent from their residents. This executive order expires May 31, 2020 unless extended by Governor Newsom.
Sacramento Issues Emergency Ordinance
The Sacramento City Council also implemented an emergency ordinance (also effective immediately) that places a moratorium on evictions due to non-payment of rent if residents demonstrate that the inability to pay rent is due to COVID-19. Residents must notify their landlord or Sacramento property manager in writing before rent is due, provide verifiable documentation of the reason, and pay the portion of rent that there are able to pay.
Unlike the statewide executive order, the moratorium on evictions passed by the Sacramento City Council only applies to rental properties within the city and will remain in effect until the termination of the local public health emergency is declared by the Sacramento County Public Health Officer. Once the public health emergency is over, residents have 120 days to pay all unpaid rent. The moratorium on evictions will end after this 120-day period.
Click here for the full text of Governor Newsom's executive order.
For more information about how to handle non-payment of rent during this pandemic or anything else related to Sacramento property management, please contact us at Sacramento Delta; we'd be happy to help.
At Sacramento Delta, we are property management experts who know a lot about insurance. But when it comes to insurance matters, we want you to hear directly from an expert in insurance. So, we’ve invited Kurt Bullock with Bullock Insurance to talk to us about what it means to add your property manager as an additional insured to your policy. It can be difficult for a lot of our new clients to understand, especially if they’ve never heard of it before.
Liability Coverage for Owners and Property Managers
If you have an income property and you hire a property manager, you’ll usually end up signing a management agreement. In that management agreement, there is usually an indemnity clause. When you add your property management company to your landlord policy as an additional insured, you’re protecting everyone who deals with the property and the tenants.
For example, if a tenant had a party and a guest was injured and there was a lawsuit, both the landlord and the property owner would be named in the lawsuit. So, when that lawsuit gets turned over to your insurance company for representation, you want all parties to be protected from liability. This is called premises liability. A few carriers will include this for you without any charge, and it’s the best way to protect your property.
Property owners have a laundry list of policies available to them when they’re buying insurance to protect their investment property. As property managers, we provide our owners with eviction protection. We don’t cover the loss of rent because there’s an insurance rider for that. When you have lost rents, you can recover that money through your policy.
Serving Tenants Better as an Additional Insured
During the fires in Paradise and the floods in Houston, we also found out that property managers who were listed as an additional insured on the owners’ policies were able to get help for their tenants faster. We have a lot of investors who don’t live in California, and getting to the site of a disaster right away is impossible. When the property manager is an additional insured, we can act on your behalf immediately. That’s an added benefit that we didn’t know existed until we saw our fellow NARPM members go through it. It’s another good reason to add your property manager as an additional insured.
Additional Insured versus Additional Interest
Sometimes, a landlord insurance policy will add a property management company as an additional interest. That is different than additional insured. They kind of sound the same but additional insured means the property manager is covered under the liability section of the policy. Additional interest simply means that when the policy experiences a change, such as a renewal or cancelation notice, the property manager will get a copy of that notice. It does not offer any liability protection at all. There is no protection when a management company is named as additional interest. It’s a huge difference, and you want to make sure you’re adding the company as an additional insured.
If you have any questions about this, please reach out to us at Sacramento Delta Property Management, and we’d be happy to share more information.
Rental property maintenance requires responsiveness, budgeting, and a great network of professional vendors and contractors. All of us work at Sacramento Delta Property Management to ensure the properties we manage are well-maintained. Today, we’re talking a bit about our process as a professional property management company.
Working with Trusted Vendors
You need to always be on the lookout for good vendors. In our industry, if someone hears about a great vendor, everyone tries to get to them and they get booked up quickly. We’re constantly looking for competitive rates with our vendors, and we do work with some awesome long-term vendors. Many of our maintenance partners have even been with us for over 35 years. Some will only work with Sacramento Delta and smaller companies. This makes it easier to keep the rates low. They don’t have to advertise or market themselves because they get enough business from us.
Maintenance costs are always on the rise. We do our best to keep costs contained, but there is always inflation, and repairs and parts are not going to cost what they did five years ago. Many of our owners benefit from our discounted pricing negotiations with our best vendors. When you work with us, you get a much better price than you would if you were self-managing or getting your management services elsewhere.
Invoicing transparency is important to property managers. As an owner, you’ll receive the original invoice with the exact information from the vendor. There is no hiding anything and we don’t have any hidden costs or upcharges. The owner gets the exact original invoice and we only keep a copy of it for our records. Transparency is important and so is documentation. We like for each property to have a detailed record of exactly when and how things were repaired.
Comparing Maintenance Prices
We also have a long list of licensed and insured contractors to choose from for our bigger ticket items. We will always get second or third opinions when necessary. These vendors are insured and licensed and bonded, so if something is not done completely or correctly, we can always go back to them and have it handled. They are liable for the work that they do, and a lot of times we won’t even pay an invoice until we get a clear photo of the completed work.
For larger projects, we keep things as cost-effective for our owners as possible. We are always looking for ways to save money for our clients because at the end of the day, we want the best-case scenario.
It’s not uncommon for our clients to send one of their own vendors out to get an estimate after we have provided our own estimates. Usually, our vendors are more affordable.
Gathering competing quotes isn’t always possible. If it’s an emergency and a new furnace or HVAC system needs to be repaired immediately, we get it done because it’s a habitability issue. We can’t have tenants without a place to live.
In-House Maintenance is not Always Best
In-house maintenance is always an interesting process for repairs, and it has both benefits and drawbacks. There can be some pretty high bills when companies use their own maintenance teams. Having a neutral third party take care of these repairs will provide more accountability. And, it reduces liability.
The main goal is to get the item fixed, not to make additional money off our owners. Upcharges and additional fees just for coordinating maintenance is not something we agree with as a company. This is included in your management fee and should not be charged additionally.
We are very transparent, and we are never going to throw in hidden fees, especially for maintenance. Our clients also appreciate getting to know our vendors. They know our HVAC guy or our plumbing guy and they know they can trust the work.
At Sacramento Delta, we have a motto that deals with the four “F-s”. Those F-s are:
- Be Friendly
- Be Flexible
- Follow Up
- Fix the problem
If you’d like to know more about our maintenance process, please contact us at Sacramento Delta Property Management.
**Please see our newest blog about changes to this information during the Coronavirus Pandemic.
As professional property managers, we have some strategies for when tenants don’t pay rent. Sometimes, landlords want to jump straight to eviction. But, you really want to avoid eviction if you can. It’s costly and time-consuming.
Today, we’re talking about how we handle tenants who aren’t paying on time.
Property Management and Eviction
Eviction is always available to us, but we like to take steps to avoid that. Everyone has different circumstances that come up in their lives, and I think you do need to take that into consideration. You also want to stay compliant with fair housing laws.
A professional property management company understands the importance of treating all tenants equally. We work hard to communicate and maintain a positive relationship with all our tenants so that if rent doesn’t come in, we can call them and see what’s going on. It could have been an accounting error or something with the mail, but whatever the situation is, always give them an option to respond and at least rectify the situation.
Make sure all late fees are paid along with the rent if it is indeed late. If the tenants aren’t going to have rent for another two weeks, we always call the owner to figure out how that is going to affect their own finances. If you’re relying on that rent payment to make your mortgage payment, you may have a strong opinion on what we do next.
Three Day Notice and Payment Plans
There’s always an option to immediately serve the Three Day Notice to Pay or Quit and move forward with an eviction. However, sometimes it’s better to talk to the tenants and come up with a plan. It provides accountability to the tenants while avoiding eviction. Keeping a good tenant in place for the long term is always the best option for your investment. Some of our tenants have been with us for 10 years, and we don’t want to lose them over one month of late rent. When you evict, you have to pay eviction costs and worry about a vacant property. Tenants who run into temporary financial trouble appreciate when we’re willing to work with them to avoid the eviction process.
Another thing is if it is just a tenant that is delinquent on a regular basis and they are not ever going to be able to catch up, you may need to give them a change of terms. Give them a longer notice so they have time to prepare if they cannot rectify it instead of jumping right to the attorney. Unfortunately, this is also contributing to the housing crisis. But we do want to make sure our owners are getting paid and that tenants are held accountable to their lease terms.
Fair Housing Act
Always be fair and work with your resident. Try to understand their situation and where they are coming from before jumping right into the eviction process. We think you should always treat your tenant the way you would want to be treated.
The most thing that we stress is that the Fair Housing Act is important and cannot be violated. We can’t offer a payment plan to one tenant but not another. It’s the same with late fees; you cannot waive them for one tenant but enforce them for another. It sets up a presumption of discrimination.
Fairness is appreciated by everyone. So, set your standards and stick to them. Then, there are no questions asked. You have a happy owner and a happy tenant.
Choosing a property management company is an important part of your investment success. You want to work with a property manager who understands your goals and your needs as well as the unique needs of your rental property. Today, we’re sharing some things you should look for when you’re finding a Sacramento property management company.
Property Management and Property Type
You want a property manager who has experience working with properties like yours. Multi-family and single-family homes require different types of management. Every one of our California property managers does hold a license to sell real estate if we want to. But, instead of looking for a real estate agent, look for a property management company that understands your home and can help you execute effective rental management.
Transparency and Property Managers
Transparency is a big thing. Property managers and owners should always be 100 percent transparent with each other. You don’t want upcharges or invoices and statements that don’t make sense. Owners don’t want to see hidden fees or surprises. Communication is important in a property manager.
Legal Knowledge and Expertise
You also always want to make sure the different property managers that you are considering are all up to date on the current local, state, and federal laws. That will protect you from liability and lawsuits.
At Sacramento Delta Property Management, many of our team members hold board positions with our local NARPM chapter. This puts us in an excellent position for staying up to date on the current legislation. We know a little bit more than those around us.
With a position as the education chair on the board, we can collect and share all the available information regarding laws that have an impact on how we do our job for our clients. We also get to educate others on property management and the industry’s best practices. When you’re looking for a property management company, make sure they’re involved in NARPM and make sure they understand the laws.
These requirements change on an annual basis. A couple years ago, smoke detectors were required in all the bedrooms and the year before that we had carbon monoxide detectors required in the hallways. Now, we have to be careful not to use mini blinds with strings. There are constant changes within the market, and property managers who deal with that on a regular basis are always going to be in the know. So being up to date on education and actually having an agent that looks into your best interests as far as longevity for your property and the legal rights of their tenants is really important.
We always start the rental process by giving the owners and the tenants a document that informs them of what their rights are.
Check the Rental Agreement
When choosing a property management company, you also want to make sure that they have a flawless rental agreement. This is especially important if you already have a tenant in place and you are just choosing a property manager to take over. Update your rental agreement because there are new clauses that get added yearly.
Look for a Certified Residential Management Company, or a CRMC. Property managers who gain this certification have to go through audits and complete extra training to be given that distinction. It is a highly coveted honor and there are only a handful across the country who have this. We’re proud to be one of those companies.
Education is important with our team. You need to look for a property manager who never stops learning.
If you’d like more information about choosing a property manager, please contact us at Sacramento Delta Property Management.
Security deposit disputes can be quite common, especially if there’s a lack of communication and expectations are not discussed ahead of the tenancy and the move-out process.
Today, we’re talking about how landlords can avoid security deposit disputes with their tenants and how a property management company can help with documentation and distinguishing damage from wear and tear.
Treat every move-in process like you are going to end up in court.
In that head space, you are documenting everything as if it’s going to be presented to a judge. Photographs are always the biggest benefit you can offer when it comes to move-in inspections. You want to thoroughly document how the property looked before move-in so you can compare it to how things look at move-out. Open cabinets and drawers and take pictures showing that everything was thoroughly cleaned prior to the tenant taking possession. Really note every little thing. If it does not say it was cleaned on the move-in inspection report, then how do we really know it was?
Document everything no matter how big or small.
Wear and Tear and Life Expectancy
Property managers are good at taking into consideration the life expectancy of the household items that are worn down during a tenancy. If there is a hole in the door that the tenant caused but the hole is on an original door from when the home was built in 1950, the price of that door is probably $20 minus depreciation. When it comes to carpets, if the tenant was there for three years and had a pet that ruined the carpet, you technically can only charge them for the time remaining with the carpet since the life expectancy for the actual carpet is really only seven years.
Owners need to be aware of what they can actually charge the tenant for versus what is considered wear and tear. Fairness is important, and you have to know what you’re responsible for as a landlord and what tenants can reasonably be charged for after moving out of a property.
Re-Evaluate any Tenant Dispute
If the tenant is disputing some of the charges against them, you do need to re-evaluate. You should never just automatically assume you are right and try to nickel and dime the tenant. Always re-look at things and decide if the life expectancy of the items you are charging the tenant for has passed or if there is room to negotiate.
At the end of the day, our owners decide what should be charged, but as property managers we work hard to educate our owners. You need to know whether a dispute is really worth the $100 you’re arguing over.
Strong Lease Agreements are Critical
It is also important to have a really good rental agreement in place. This will tell you what you can charge the tenant for throughout the tenancy. Just yesterday, we had to refund a tenant a full deposit because there was no move-in inspection report from a previous management company. We couldn’t charge them for anything because nothing was documented upon move-in.
Conduct an interior inspection from time to time, especially if you have a tenant that has been in place for five years. Things may have gone wrong, and documenting them on an annual basis gives you a timeline to refer to so you know when things broke or needed repairs. It’s easier to distinguish wear from damage. Having accurate records of when things were repaired and replaced can always help when a dispute is present in regards to the security deposit.
If you have any questions or need some help with a security deposit, please contact the property managers at Sacramento Delta Property Management.
Vacancies are extremely expensive for landlords, and if you’re working with a great property management company, you can count on some strategies to keep your vacancy rate low.
Today, we’re discussing how we prevent and reduce vacancies in the properties we manage at Sacramento Delta Property Management.
Tenant Relations and Retention
Keeping tenants in place is an excellent way to reduce vacancy. This is why we are quick to build a strong relationship with our residents. Property owners and tenants have a partnership, and as property managers, we negotiate and facilitate that partnership. We are here to make sure things go smoothly and to take care of things inside the home. If we can accommodate your needs as an owner as well as the needs of your residents, we’ll reduce your vacancy. People undervalue their tenants sometimes, and that’s a huge mistake. These residents are paying part of your mortgage and helping you keep expenses down on your investment.
Provide a Rent-Ready and Well-Maintained Home
We always conduct an inspection before placing the property on the market so we’re sure it’s ready for great tenants.
The current condition has to be excellent. We look at cleaning, paint, flooring, etc. You don’t want to offer a home that isn’t move-in ready because a potential tenant is looking for their home. They want to be able to picture their family there or their friends there. They want to imagine their possessions inside that home immediately.
Make sure the home is rent-ready. Some people do not think having fresh paint on the walls is a big deal because new tenants will just hang things over the wall anyway. But, tenants notice the paint. Everyone has their own level of cleanliness, but you want to be able to eat off the floor when preparing for new tenants. You should walk into a bathroom and see the toilet sparkle and shine. Let prospective tenants envision themselves in that space. This will reduce your vacancy period.
Always have the place repaired and prepared. A tenant will not want to be told that the fence will be fixed before they move in or the walls will be painted. They might have heard that before from other landlords, and they won’t trust it. A property will sit on the market longer if the fence isn’t fixed and the walls aren’t painted.
The expectations are set from the beginning when getting a home rent-ready. You are setting a standard for the tenants when you provide a well-maintained home. If you provide a home that has clean carpets, fresh paint, etc., you are really going to have a tenant that values the time and energy you put into getting it ready for them. Cleaning is a one-time charge for the owner. After a tenant moves out, if they have not cleaned the home, they will be charged because cleaning is not a wear and tear item. So, having high cleanliness standards really pays off and the tenants will appreciate it.
We screen for the most highly qualified tenants. So, we want to provide a property that those tenants will want to live in. This keeps vacancy rates low.
Pay Attention to Property Pricing
Make sure the property is not overpriced. This can definitely cause long vacancy periods.
If the property has been on the market a few days and you haven’t heard anything or gotten any potential leads, get with your property manager about your price. We have had several properties in the same neighborhood just lingering out there for a while. They may all have different prices but sometimes there’s just no interest. So, we’ll adjust the price as necessary to try and get good tenants interested. Lowering the price will actually save you money because you’ll have a shorter vacancy period. A vacant home earns you no money.
If you’d like some help avoiding vacancy, please contact us at Sacramento Delta Property Management.
Achieving a great return on investment, or ROI, is the goal of every rental property investor. We’ve invited Bob, a real estate agent with Keller Williams, to talk to us about ROI on today’s blog. We will often have people buying rental property ask us about whether a particular property will provide a good return. We’ve asked Bob to shed some light on what that means and how to increase your own ROI.
Understanding What Factors Impact ROI
Whether you’re buying an investment property or selling one you currently own, you’ll want to know what kind of value it holds on the market. Rental projections are important numbers, and so are numbers like what the property could rent for and how long it may remain vacant before you earn any money on it. Those are two key factors.
Other areas to look at when figuring out the ROI would be the costs to remodel or clean up the home before it’s ready for the rental market. You would have all of that answered after the property inspection or the home inspection was performed. Other items on the list that may impact your ROI include property tax including assessment taxes, management and maintenance fees, and insurance expenses. Once all that is put together on a spreadsheet, you should review it and maybe take it to an accountant or a CPA. The amount of ROI you can expect often depends on your financial situation at the time.
Working Together with Real Estate and Management Partners
At Sacramento Delta Property Management, we do not sell real estate. At Keller Williams, Bob helps people buy and sell homes. When you’re planning to buy a rental property and you need to know what you’ll have to spend and what you can expect in terms of rent and ROI, it’s important to talk to both of us. We each do different things every day, and you’ll need a lot of expertise in order to make the right decision and have a successful investment experience.
Keeping the buying and selling part of your transaction separate from the property management portion of your investment will help you gain as much expertise and as many resources as possible during this process. I love referring clients to Realtors when they want to buy something, because they really are experts at what they do. Bob knows how to buy and sell solid real estate property and he knows how to deal with non-owner occupied properties. He definitely gives us a lot of support on the investment side, which is great.
Property management that’s professional and experienced allows you to earn more on your rental property. We keep your tenants happy and paying rent. The last thing we want are hostile tenants. We want to get a good understanding of how they feel. Tenants are just as much a part of earning more ROI as your rental value and your vacancy rate.
We’d love to tell you more about how to earn a better return on your Sacramento investment property. Please contact us at Sacramento Delta Property Management.
Prospective owners we talk to want to know what will get top dollar for a rental property. That’s an important question, and if you want to earn as much as you can, your property has to be rent ready. This is different than what you would do to get the property ready for the sales market. With a rental, someone will be moving in and living there. A renter needs to have an idea of what living there will feel like.
Give the Property Fresh Paint
A fresh coat of paint looks clean and nice, and the color should be neutral. It’s hard for tenants to picture themselves living there if taste-specific colors are on the walls. So, neutrals like soft whites go a long way. If one room is purple and another one is orange, prospective tenants will have to visualize their children and their guests in those rooms. It can be hard to determine whether their own furniture and décor will match. Neutrals are always better.
Eliminate Personal Clutter from the Home
Take away any personal items. You don’t want to have mail on the counter or a ton of pictures on the walls and picture frames all over the surfaces. Remove personal items in the bathroom, and make sure that beds are made. When someone is coming through the property or you’re doing showings, less is more. Many times, owners will stay in the property until a tenant moves in. Edit out what you can, because it’s hard for people to picture how they will live there if all of your stuff is there.
Pay Attention to Kitchens and Bathrooms
Kitchens and bathrooms are the biggest items that prospective tenants look at, especially when you have people who love to cook. You want good appliances and rooms that are clean, updated, nice, and in neutral colors. Cabinetry and cupboards should look good. This doesn’t mean you have to do a whole kitchen remodel. But, if the varnish on the cabinets is off and they don’t look clean, you’ll want to paint or replace them. The $200 you’ll spend to paint cabinets will make a huge difference.
We also have vendors who do wonderful things with linseed oil. Your cabinets will look brand new. You can also update hardware and replace faucets. A new microwave, fresh paint in the bathroom, and a new toilet seat cover are all inexpensive updates that tenants will notice.
Manageable Yards and Landscaping
You might think you’ll be able to charge more rent because you have a huge yard and some lovely fruit trees. This might be great if someone is buying your house, but renters are not interested in taking care of fruit trees. Your large yard will only mean higher costs for you because you may need to hire a gardener. These things need to be maintained during a tenancy. So, something that you might see as a plus – a big yard – might be narrowing your tenant pool to large families only.
Market for the Season
In the summer, when it’s 100 degrees, having a pool is a plus. It can generate more money. Tenants find it’s a lot more fun to rent a house with a pool than it is to own a house with a pool. It’s attractive to renters because they don’t have to worry about the maintenance. In the winters, we’ll shift to promoting your fireplaces and your garages.
Another good way to make your home attractive to potential renters is by advertising your energy efficient appliances. If you have solar, that’s great too. Like you, renters don’t want to pay huge electric bills.
This is a good reason to have a property manager. We know what people are looking for, and we know how to market your property according to the season.
Properties Must Sparkle and Shine
Finally, cleanliness is the most important thing to consider when you’re getting your house ready for the rental market. Think of it as a hotel room. When you walk into a hotel room, you notice if it’s clean. You don’t want to feel like you’re staying in a place that someone else just stayed in. It should be airy, open, and neutral. It has to sparkle and shine.
We offer complimentary tours of your property that can help you prepare it for the rental market. If you have any questions, please don’t hesitate to schedule a tour or contact us at Sacramento Delta Property Management.
At some point, you may realize that one or both of your parents cannot stay in their property. We get a lot of calls from people who need help, and at Sacramento Delta, we have been personally involved in our own parents’ decisions to downsize. Maybe your parent is moving into a nursing home or moving in with one of their children. It’s better to make these decisions when your parents feel involved and supported.
Renting Out a Parent’s Home
Maybe you and your siblings cannot decide what to do with your parent’s home. It’s overwhelming enough to come up with a plan to take care of a person – your parent. They might feel like moving out of the home is very final. That can be scary, and saying goodbye to a house is hard. When you choose to hold onto the property and rent it out, the situation can seem more hopeful for your parent. We have dealt with this in the past, and it gives parents and their adult children more peace of mind.
Professional Property Management for Your Parent’s Home
Sometimes, the adult children live in New York or across the country, and they are already stressed because they know it will be hard to take care of their parent. Moving mom or dad out of a place they have lived in for 40 or 50 years is difficult. You’ll need someone who can effectively manage the property, and keep it in good shape. A good property manager can even generate some income that can help pay for your parent’s care. Sometimes, you’ll need to use the rental income to pay for assisted living and nursing home care.
Put Off Difficult Decisions
There are many benefits to renting the property out, and one of the major benefits is that it puts off some big decisions. You don’t want to squabble with family members or leave your parents feeling like they don’t have a say. Renting the house out allows you to revisit decisions later and focus on caring for your mom or your dad.
This is something we want you to think about because we are emotionally connected to this topic, and we understand your desperation and your concerns.
If you have any questions about what to do or how to move forward, please contact us at Sacramento Delta Property Management. We know what it’s like to be overwhelmed, and we can help you start this conversation.
When investors are making decisions, they will ask about rental value. They need to know how much rent their property will earn. There’s a benefit to having a professional property manager look at your property. That’s far more reliable than just running the numbers.
Start by Checking Rental Websites
Agents at Sacramento Delta specialize in specific neighborhoods and territories. So, right off the bat, we know the local market. Then, we look at websites to get an idea of what properties are renting for. We have a lot of information on our database too, because we manage over 2,000 properties. That’s a lot of resources to help us provide a rental value.
Visiting a Property to Assess Value
Sacramento Delta offers complimentary appointments, where our agents go out and look at your property. This is something you should take advantage of as a property owner. Those websites don’t tell the whole story, and being in the field helps us to more accurately price your property. A three bedroom, two bathroom house in the same neighborhood won’t always have the same rental value. One may be a 1950s home and one might be a brand new home. It’s hard to compare one to the other. The property’s condition has a huge impact on the rental price, and so do amenities like pools and fireplaces and new paint.
All these factors play a role. Having an agent specific to that territory working on your rental comp will ensure you get an organized, accurate, and detailed estimate. Often, our agents live in the neighborhoods they serve. So when something pops up, we know what’s trending. We can easily see the competition.
It’s really important to make that complimentary appointment so we can give you a good rental analysis. We want the full picture, and it benefits your bottom line.
Take advantage of our expertise!
If you have any questions or you’d like to schedule a complimentary analysis, please contact us at Sacramento Delta Property Management.
Today, we’re sharing a few of the reasons that Sacramento Delta Property Management is the right company to manage your rental home. We are rated Number One in the residential single-family property management category by the Sacramento Business Journal, and here’s why:
We have been in business since 1983, and some of our first customers are still with us today.
Property Management Sacramento: Leasing
One of the most important services we provided is placing a qualified resident in your property. Our website connects to hundreds of online rental marketing companies. We are one of the strictest property management companies around today, providing firm qualifying standards and guidelines for potential renters.
We guarantee our placements with an eviction protection program. Our team is sure to place qualified residents who can pay rent on time and take good care of your property.
Property Management Companies near Me: Sacramento Offices
We have seen it all, and we are well-staffed to handle any situation. We have two offices in specific Sacramento neighborhoods and the contiguous counties. Each of our property managers has an office-based assistant, so there is always someone to take your call, even when your property manager is out marketing properties, doing showings, or meeting with inspectors and conducting property surveys.
Property Management Sacramento: Communication and Education
Communication is our top priority. We are available by phone, text, and email. Property owners change management companies most often because of poor communication. We are aware of that, and we make it easy to reach us.
Another reason to choose us is our continuing education. Ted White, our owner and broker, focuses on making his staff the most knowledgeable in the area and the industry. There are many property management companies statewide. But, we are one of only 20 companies in California that hold the designation of Certified Residential Management Company by the National Association of Residential Property Managers (NARPM). We have successfully completed a rigorous audit of policies, procedures, and business methodology.
We continue to be involved in the new laws and legislation affecting you each year. We maintain positions on the local Sacramento board of NARPM.
What Your Sacramento Property Management Company Should Do for You
When you’re looking for a property management company to take care of your single family residence in Sacramento, you should pay attention to three particular things; price, communication and education.
There is no standard cost for the management of single family homes in Sacramento. Some companies will work by charging you a percentage of the rent and others will have a flat fee. What you need to know is what you’re getting for the cost. Find out what kinds of services are included in what you’re paying. For example, does your property management fee include the payment of utility bills and property taxes? Find out if maintenance bills are paid, and if there is a surcharge. Some property management companies offer eviction protection and that’s important, because you want to know if the company stands behind the tenants they select for your property. Find out if they are willing to pay for evictions, or if you’ll be left to pay it yourself.
The way your property manager communicates should be very important to you. The most difficult thing in our field is that many property managers are out of the office half the time. They are inspecting properties and showing properties and meeting with owners and residents and vendors. You still need to get your questions answered, however. Make sure you work with a property manager who has a staff of people who can help you while the property manager is unavailable. There should be a written policy in place for responding to your emails and phone calls. You want to know your property manager is going to get back to you within a particular amount of time.
Education and Experience
A property manager will guide you through the local, state and federal laws involved in rental properties. Therefore, you want a property manager with a lot of experience and a lot of ongoing education. Find out how long a property manager has been in business. Always choose someone who is affiliated with the National Association of Residential Property Managers (NARPM). Your best bet is to get a property manager who is designated and certified by that organization. This is a group of professionals who spend hundreds of hours staying current in every issue pertaining to property management. They are dedicated and committed managers.
If you have any questions about what your property manager should be doing for you, please contact us at Sacramento Delta Property Management.
Sacramento Tenant Stops Paying Rent?
How to Handle Eviction
Today, we are going over the basic steps that may lead up to an eviction when a tenant stops paying rent. There are a couple of things you need to do right away to minimize any expense that comes along with the eviction process.
First, contact the tenant. If you don’t receive rent and you have no explanation, make a phone call to find out what’s going on. Sometimes, it’s a simple error that can be easily fixed. Maybe the rent was mailed in, and it got lost. Or, perhaps the resident simply forgot to pay. When the issue is an easy one to fix, you should go ahead and take the time to do that so you don’t have to go through with the eviction.
If your phone calls go unanswered and you still have no explanation for why rent has not been paid, you serve a Three Day Notice to Pay or Quit. As we have discussed in a previous blog, it’s never a good idea to include late fees or other charges in your Three Day Notice. That will only confuse the issue. Your Notice should require rent only, and it should give the resident three days to catch up.
If the Three Day Notice doesn’t work and time is up, you will need to move forward with the eviction. At this point, we recommend you refer the problem to an attorney who is experienced in evictions and knows the procedure well. Evictions can be complicated and even the slightest error can have consequences for you, so get an attorney.
Some property management companies will cover attorney fees when you have to file for eviction. When you begin working with a property manager, find out what kind of protection is included against the costs of an eviction process.
If you have any questions about eviction, or you’d like more information on how a property manager can help you handle it, please contact us at Sacramento Delta Property Management.
Landlord Tenant Laws and Regulations Explained by a Sacramento Property Manager
When you are renting a property out to tenants, you need to be aware of the laws and regulations involved in rental properties. A specific area we’re talking about today is serving notices. There are a few common situations in which you would serve a notice on a resident living in your property.
When you aren’t receiving rent, a common notice to serve is the Three Day Notice to Pay or Quit. This gives your resident three days to come up with the overdue rent, or leave the property. Something to remember on this notice is that you should only demand the amount of rent. Don’t include the late fees or any other charges. If the resident only has to come up with the rental amount, you have a better chance of collecting that money. Keep it simple and easy so there are not any hang ups if the situation does escalate to an eviction and you find yourself in court.
Another notice you might service is the Three Day Notice to Perform Covenant or Quit. In this situation, you might have a resident who is causing damage to the house or not abiding by the lease that you both signed at the beginning of the tenancy. The idea here is to give your residents notice that they are violating the contract. You are allowing them some time to fix whatever issue needs attention, and you’ll prevent further problems.
Finally, there is the common 30 Day Notice or 60 Day Notice to Quit the Lease. This is pretty standard and you will serve that at the end of the lease when you don’t plan to offer a renewal to your tenants. The length of time with this notice depends on how long the resident has been living in your property. If the resident has been there for over a year, you have to give 60 days’ notice. If the resident has been there less than a year, or the lease will terminate after one year, you can provide 30 days.
Always serve a notice correctly. Check with your attorney or a professional property manager on the correct way to get a notice served so it works and you don’t find yourself repeating the process. If you have any questions about notices and how to serve them, please contact us at Sacramento Delta, and we’d be happy to help you.
Handling Security Deposits and Normal Wear and Tear for Your Sacramento Home
As rental property owners, all of us want our homes to come back to us in the same great condition that they were in when we rented them out. Unfortunately, that does not always happen. There will always be something that needs attention; maybe the cleaning wasn’t done properly, or light bulbs weren’t changed. You may have miscellaneous items that need to be deducted from the security deposit.
When you handle the security deposit, you have to be aware of the law. In California, you have 21 days to return a security deposit to a resident. If you don’t, that resident can sue you for up to two times the amount of the deposit that was given. That’s not a situation you want to be in.
After a resident moves out, you’ll need to walk through the property to assess the condition. A check in sheet is a great tool that can help you determine what you should and should not charge the security deposit for. You can complete this on your own or with the tenant at the time of move in. It will tell you the state of the home when the resident moves in, and you’ll be able to compare it to the state of the home when that same resident moves out.
Remember that you must allow for normal wear and tear. It’s not always easy to determine the difference between damage and wear and tear. This is one reason why hiring a professional property manager can be useful. Generally speaking, paint has an expected life of three years and carpet has a six year life span. If your resident moves into a freshly painted home and then moves out after a year, you might notice some areas on the wall that need touch up paint, or maybe nail holes need to be filled in. It’s natural to want to charge the tenant for the entire amount because they got a freshly painted home when they moved in. However, you are required to give them their one year wear and tear credit.
Deciphering what portion of the paint bill should be charged to the tenant can be complicated, and this is what we do on a daily basis as property managers. In the end, most security deposits will have some deductions on them, and you have to do it right. For example, if you keep more than $125 of the deposit, you must provide the residents with receipts for the work that was done. We think it’s a great idea to include those receipts no matter what the amount. It eliminates confusion and enhances communication.
If you have any questions on how to return a security deposit or distinguish between damage and wear and tear, please contact us at Sacramento Delta Property Management.
Sacramento Maintenance 101 – Preventative, Emergency and How to Budget
Managing the maintenance on your rental home requires you to be prepared for both preventative repairs and emergency issues. You also need to have a budget in place so you can pay for the necessary repairs and replacements.
Your regular preventative maintenance routine should include things like caulking. Caulk around the toilet and the tub to avoid leaks. Pay attention to your gutters. You should only have to clean out the gutters once every year, and it will save you a lot of money on larger repairs that can become necessary if your gutters aren’t regularly cleaned. Another thing you should do annually is to have your heating and air conditioning systems serviced. To ensure those systems continue to work well, leave your tenants with a supply of filters and instruct them to change those filters every 30 days. You will save on repairs and it will be a longer time before you have to replace that system completely.
It is crucial to have someone available 24 hours a day for emergencies. Your tenants cannot wait until the next business day to call someone about a plumbing crisis, a break-in, falling trees or collapsed fences. When you have someone available 24 hours a day, it means someone is always looking out for your house. Your emergency availability will save you from having to make more expensive repairs that can happen when additional damage is caused to the home.
When you take preventative measures and you provide 24 hour emergency service, you are protecting your home and yourself against expensive repairs. However, we all know that things still happen. Appliances break, water heaters leak and fences fall down during storms. Heaters and air conditioning systems get old. You have to be prepared for these things, so have a budget in place. It helps to keep track of when you purchase these items and how much maintenance has been done on them. You’ll know what to expect and when to prepare to buy new things.
If you have any questions on managing the maintenance on your rental home, please contact us at Sacramento Delta. We deal with these issues every day, and we’d be happy to help you.
Talk to a Property Manager Before Buying a Sacramento Rental Property
When you’re searching for the best investment property in the Sacramento area, there are a few specific things to consider. We always recommend that you talk to a property manager before you buy so you know you’re buying a property that people are going to want to rent.
Knowing the rental value of a home is really important. A property manager can give you sound advice about what a particular property will rent for in the existing market. You’ll need to get comparables of actual rentals in the area. This requires a lot more detail than what you’ll find on Craigslist or other sites online. Property managers have firsthand knowledge of actual rents, and that information is far more accurate than what you’ll find online or from a sales agent.
Price is really important to potential renters. They are looking for a fair price, and they’re willing to pay it. They will not even consider looking at your home if it’s priced above the market. Therefore, you really need to consider the rental rate before you buy an investment home. Be willing to take advice from your property manager and negotiate.
Remember that there’s a rental loss associated with your property when it sits on the market. You don’t want to buy it and then leave it vacant for months and months because you’re not going to be able to get the rental price you had hoped for. The market does not care about your mortgage. This can be a hard thing for an owner to accept.
It’s important to understand what is important to a potential renter who is well qualified. You want to buy an investment property that will appeal to a great tenant. They want a property that is safe, clean and well maintained. It should smell good and be inviting. They want to be proud to call that property their home. This is the kind of renter you want.
Finally, you have to consider a home’s features before you buy it. Important features are square footage, number of bedrooms, the size of those bedrooms and whether there is central heat and air. In Sacramento, we have summers that see temperatures over 100 degrees. Location is important as well. Some families will pay a premium if the property is located in a preferred school district.
If you have any questions about how to find an ideal investment property in Sacramento, please contact us at Sacramento Delta Property Management. We have specialists in all areas of the city and we can help you set and reach your property investment goals.
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