Month: April 2016

How Much Notice Do You Have To Give Your Landlord?


Matthew Whitaker - Friday, April 29, 2016

We Are Moving written on the wipe board

How Much Notice Do You Have To Give Your Landlord?

Serving your landlord notice is the first step in your move out process. Knowing how to properly serve notice to your landlord will ensure you follow the appropriate steps towards getting back your full security deposit.

A quick story first.

Jenny was a great tenant. She paid her rent on time and kept an immaculate home. Any landlord would have killed to have her as a tenant in their home. Her lease end date was the end of June. When the end of June approached, she began packing and preparing to move. She had a new place lined up and due to start paying rent on July 1st.

Finally June 30th rolled around and her moving truck, along with a few friend came and packed her home and moved her to her new place. She was so excited. Her last business with her old landlord was to drop off the keys. Her landlord’s office was closed because it was the weekend so she dropped the keys in the box. She sighed because she had so much unpacking to do.

Monday afternoon she was back at work feeling accomplished given she had moved all her belongings into her new place over the weekend. When she sat down at her desk after lunch she noticed she had an email from her previous landlord. “That was quick,” she thought as she opened it up.

When she read her email her heart sunk, it appears the landlord was going to charge her for one MORE month’s rent because she had not served a 30 day notice.

How do you keep this from happening to you?

Let’s look at two simple steps to help you avoid this type of situation . . .

1. What does your lease say? Your lease is the most important document in your relationship with your landlord. It defines, or should define, the entire relationship and the move out notice is typically addressed in it. Most leases require a minimum of a 30 day notice before moving. However, I have seen some as high as 45 days or 60 days. Verify what your lease says about a move out notice and abide by it. Keep in mind it is the agreement that you already made.

Sometimes I get the question, “Even though it is a 30-day notice, may I submit my notice earlier than 30 days?” The answer to this is “yes.” You need to make sure that you keep a copy of the notice you submitted in case the landlord doesn’t keep good records.

2. What does Landlord Tenant Law say? There are certain cases where the Landlord and Tenant law of a State defines proper move out notice and regardless of what your lease says, both sides (landlord and tenant) have to abide by this law. This is in very rare cases, but if you think your notice provision in your lease looks a little fishy, then it maybe worth looking into.

So the two questions you need to be asking yourself when you consider submitting your move out notice are, “What does my lease say?” And “What does the Landlord Tenant Law say?”

Good luck with your move!

4 Things That Change When You Rent Your House


Matthew Whitaker - Tuesday, April 26, 2016

4 Things That Are Going To Change When You Rent Your House

4 Things That Are Going To Change When You Rent Your Home

 

Renting has become a popular option for some people not necessarily interested in selling their house. For the homeowner who’s considering renting your house, here are four things that will change whe…

Hey, I’m Matthew Whitaker with gkhouses, and today I want to talk to you about the four things that are going to change when you rent your house.

So maybe you’ve decided to move to another city and you need to rent your home, or you’ve even bought another house in the same city, but you’ve decided to rent your home instead of selling it. You need to know these four things that are going to change.

So let’s take a look at them.

1. Taxes – The first thing that’s going to change are taxes. You need to be mindful of the way the government treats a rental home versus a home that you live in. This has to do with your homestead exemption. Sometimes taxes as much as double. In areas where we manage, taxes as much as double when you rent your house versus living in it. So once that homestead exemption’s removed, you’re going to pay a whole lot more in taxes. You can check with your local county to find out exactly how that’s going to affect you.

2. Insurance – The second thing to be mindful of is how insurance companies will treat a rental house versus a home you live in. Insurance companies see homes that you live in as much less risky than homes a renter lives in. Now, this doesn’t mean that insurance is going to double, like some taxes do, but it will increase. I would expect to spend an extra 15 to 20% on insurance when you move from a house that you live in to turning it into a rental house.

3. Repairs – The third thing you need to be mindful of is you’ll have a heightened sense of repairs. I always think of this as you’re willing to step over the dead bodies in your house much more than a tenant’s willing to. So, I always take a kitchen cabinet drawer. Think of a kitchen cabinet drawer that wouldn’t close. Maybe you were willing to live with that repair, but a tenant is not necessarily willing to live with that repair not being made.

So you’ll also be more cognitive of the money that gets spent. Let’s say your air goes out. You’re living in the house and your air goes out on July fourth. You will pay whatever it costs to get your air conditioner fixed. Well, if a tenant’s air goes out on July fourth, you’re not directly affected by that. So you’re much more mindful of the fact that you’re spending money, whereas in one case you had an emotional attachment to it. In the other case, you’re just very mindful of the actual dollars that get spent. So that’s the third thing you need to be mindful of, is just a heightened sense of repairs.

4. Access – The fourth thing you need to be mindful of is your access to the home is going to change. Now, it may be weird that you’ve lived in a home for years, and now, all the sudden, you can’t necessarily just walk through the home and open the door and walk in the house because of landlord/tenant laws. Landlord/tenant laws require that, for you to walk through the home, you serve some sort of notice.

We even had owners that thought they could keep the storage building in the back and keep their stuff in it. Well, the tenant, when they rent that home, is going to want full access to the house. That includes storage units, basement. The whole house is theirs. So you need to be very mindful of the fact that your access to the home is going to change.

I hope this video has been very helpful to you in knowing the four things that are going to change. If you have any questions, I hope you’ll give us a call, and we’d love to answer them.

Results of the 2016 Owner Survey


Matthew Whitaker - Tuesday, April 19, 2016

Results of the 2016 Owner Survey

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Each year we send a survey to all of our owners so that we can learn what we’re doing well…and what we need to improve on. This year’s survey didn’t disappoint. Below you can read a letter Matthew wrote to all of our owners as well as a link to an infographic that will walk you through a summary of the survey.

See the results of the 2016 Owner Survey Here.

Here is the letter from Matthew:

Thank you to everyone who participated in the survey. We received a lot of good feedback, both positive and in areas where we need to improve.

We are particularly excited about the honest feedback highlighting improvement opportunities, because we have the overarching goal of building an insanely great property management company.

Sometimes we get so focused “managing the day to day operations” that we lose the ability to see the flaws in what we are doing; and once a year, you remind us that we are overlooking areas where we can improve and that is very healthy for us as an organization.

We think success in property management is pretty simple. New owners come to us worried about three things:

How quickly can you rent my home?

How do you keep from leasing my home to a bad tenant? And,

How much is this going to cost me?

But, as soon as their home leases, it sometimes converts to the fear. . .

“Can I trust my manager?”

Knowing this allows us to focus on a simple message internally of Trust and Communication. Interestingly, we have found that Trust and Communication are not mutually exclusive. We believe that these attributes are actually the same thing, only that one . . . Communication; precedes the other . . . Trust, in our relationship with you.

We feel these are so important, we have highlighted them in two of our three differentiators that we focus on that make us “different” from other managers – we call them Communication and Uncomfortable Transparency.

As we take a step back and review this year’s Owner Survey, we are reminded of these overarching themes. What does gk do well? We communicate. What does gk need to improve upon? Communication.

We’ve come a long way in communication. Originally it was Bryan and me on our cell phones working for Golden Key. Some of you even expressed a nostalgia for these good ole days.

These “good ole days” had several benefits, but also many negatives that became increasingly apparent as we grew. We’ve taken many steps forward in communication which, unfortunately, have caused a few of the small boutique management conveniences to be replaced with more dependable systems (although, we still are trying to figure out how to re-establish or keep as many of these “boutique conveniences” as we grow).

All in all, I think we’ve come a long way and have grown to have an entire department devoted to Owner and Tenant communication.

While the communication is better, it’s not yet “insanely great”. . . as we would like it to be. You’ve reminded us of this fact, again, through this survey. Almost 50% of the respondents highlighted some form of communication improvement as their area that they’d like to see us improve. Knowing this, we’d like to highlight some changes we will be making over the course of 2016 to improve our communication with you.

1. The first thing we will begin doing is including more pictures and focusing on better descriptions in our maintenance bills to you. I reminded the team that you don’t have the luxury of getting to look over their shoulder, or even feel the pain of something in the home not working. Nobody feels good about spending hundreds, perhaps thousands of dollars on a repair; but it makes it much worse when you have no clue what you paid to have done.

Providing you as much detail as possible as to the cause and solution is our new goal for “insanely great” maintenance communication. As a first version of this, before and after pictures and descriptions will appear on a report that will follow the invoice (if you have one) when you receive your owner’s packet every month.

2. Secondly, we are going to focus on making it abundantly clear who is emailing you through the support email. We’ve found when we use the “support” email, you feel like it is going into a black hole. We assure you that it is not and this form of communication allows us to ensure that the issue is handled quickly and efficiently. Our ultimate goal will be that you have confidence that your issues and questions are being received in a timely manner and who is responsible for handling it.

As a quick side note, now is also a good time to clarify why we use the “support” email address. Our hope is that clarification will reduce some of the source of your frustration. We receive many requests from both Owners and Tenants here at gk and it is extremely important to accurately answer, accurately document and accurately calculate the response time of every request. A lot of the questions require two or three people collectively to answer.

For example – An owner calls our Owner’s line about a heating and air repair. Depending on the nature of the question, this may require the collective “heads” of the heating and air tech, a property manager and our maintenance coordinator to accurately answer.

We believe, having a dedicated available person (the operations coordinator), who gathers the information and responds to you, is the most efficient solution to these types of situations. We think of this team member’s role at gk as a communication hub or an air traffic controller who can see the bigger picture, is always available and can obtain the answer quickly.

Many owners are very interested in having one point of contact for all communication. The operations coordinator position solves this too, by creating one point of contact for all your properties.

When you email or call into our communications department, your request is assigned a ticket, which starts a timer and the system forces us to resolve the issue before we close out the ticket and stop the timer. We record the amount of time it takes to get you a response. If it is something that can be handled by another department, the communications department will simply assign it to that department. That is why you will receive emails from the property managers or other departments from time to time.

If it is a situation like the one above, where it requires multiple people to answer, the communications department will call or meet with everyone, come up with the answer and deliver the answer back to you. This does mean that there will be times where you call in and the operations coordinator doesn’t immediately have an answer for you. From our experience, we still believe this to be a better solution than the alternative method of connecting you directly with the property manager, who is frequently unavailable and may appear slow to respond, which is more frustrating.

3. A third item you highlighted in the Owner Survey was the fear of a bad tenant, resulting in non-payment of rent, an eviction and a trashed house. I think it is important to note that we are constantly updating our underwriting guidelines to make sure this doesn’t happen.

Unfortunately, we are not 100% perfect and it does happen from time to time. As a result of those few who slip through, we are currently working on a program that will allow us to “guarantee” your rent in the event of an eviction. This will offer a solution to those of you who have identified this as a fear.

The cost and what it is going to cover, have not been decided upon yet; but we are hoping to have an element of coverage for both the tenant not paying and the damage they typically do when they don’t pay. If I had to guess, this program would be launched sometime this year, and we will notify you when it is available.

I very much appreciate those of you who scored us a 9 or 10. Obviously, as the owner of the business, I wish/want it to be everyone. Those of you who scored us a 6 or below highlighted some of the deficiencies I spoke about above as the reasons for the lower scores – and I appreciate your honest opinion so we can improve. I’m hoping we continue to work, you see the difference and we are able to turn you from a 6 to a 10 next year. I know we have a lot of work to do.

Recently, we opened a gkhouses.com office in Nashville. If you own properties or know someone who owns properties in this area, I hope you will let them know we are there. Real estate is a very local business, but we are hoping to be able to learn some more ideas in a new market that will improve the way we handle management in Birmingham.

We see our Nashville office as a benefit to our Birmingham owners – from both the learning standpoint and our increased marketing dollars driving more tenant traffic from awareness, resulting in better tenants in the homes. We hope you see it that way too.

We always value your feedback, even when it is hard to digest. When someone tells you your baby is ugly, it can hurt, but you have to appreciate them for their honesty and willingness to tell you the truth.

Keep the ideas and improvements coming. If you’d like to see something or see a better way for us to do something, please let us know. We don’t feel like we have it all figured out.

I hope the last 3 quarters of 2016 is awesome! Thank you again for participating in the survey.

-Matthew

See the results of the 2016 Owner Survey Here.

3 Reasons Baby Boomers Will Rent vs Buy


Matthew Whitaker - Monday, April 18, 2016

3 Reason Baby Boomers Will Rent vs Buy

Renting is becoming a lot more popular these days. But not just among millennials…even the baby boomers are getting in on the action. Watch this video as Matthew gives you 3 reasons baby boomers will rent vs. buy.

3 Reasons Baby Boomers Will Rent vs. Buy In The Future

 

This video is about 3 Reasons Baby Boomers Will Rent vs. Buy In the Future

Hey, everybody. I’m Matthew Whitaker with GK Houses, and today I want to talk to you about the three reasons I believe that baby boomers are going to choose renting over buying a house.

I know this sounds like crazy because baby boomers have always been known as people that have owned assets, bought houses, created wealth by owning a house for a long time. But I think some of their…The way they see the world is changing as they get older, and I think that’s going to affect the fact that they’re going to start choosing renting over buying.

So let’s take a look at the first thing.

1. The first thing is simply repairs and maintenance. Baby Boomers, as they get older, don’t want to be doing repairs and maintenance. In the past, when the garage door is broken, or the kitchen cabinet’s broken, they’ve gone out and fixed it themselves. Now, they maybe can’t physically do it anymore, or they’ve decided they just don’t want to do it anymore. With a rental house, they simply just call up a number and someone comes out and fixes it for them. And this is starting to fit in a little more with their lifestyle.

2. The second thing is preventative maintenance, things like landscaping, cleaning the gutters. There are items that they’re no longer willing to do, again, or no longer capable of doing. And so, I really believe that property management companies, like us, are going to start actually doing those types of services and offering those types of services to the Baby Boomer generation. And they’ll start literally paying one fee, rent, and have the whole house taken care of for them.

3. The third thing is flexibility. As Baby Boomers get older, they want to go out and see their grandkids. They want to be able to leave on the weekends, see their grandkids. Or they don’t want to leave their house as a burden for their family to sell. So they’re going to choose renting the house, where they’ll have the flexibility to move, to follow their grandkids. They’ll have the flexibility to move into some sort of senior living facility without having the burden of the house to sell.

So that’s it. I know that was quick, but those are the three reasons I see Baby Boomers renting versus owning a home in the future.

Insider Rental Tips Every Landlord Needs To Know


Matthew Whitaker - Friday, April 15, 2016

Insider Rental Tips Every Landlord Needs To Know

In the landlord world, there are a few tips that can help you stay sane and improve your rental house ROI. In this short video, Matthew Whitaker walks you through the four insider rental tips every landlord needs to know.

You can also read the transcript of 4 Insider Rental Tips Every Landlord Needs To Know below:

4 Insider Rental Tips Every Landlord Needs To Know

 

This video is about 4 Insider Rental Tips Every Landlord Needs To Know

3 Questions to ask a property manager…before you hire them

 

Before you hire a property manager, you should know that trust and communication are the foundation for a healthy relationship. In order to understand the right fit for your needs, be sure and ask you…

Hey, I’m Matthew Whitaker with gkhouses, and I want to talk to you today about the four insider rental tips every landlord needs to know.

When we first started our company, we tried to take the habits of property management down to as few habits as possible. What were the things that we needed to do to make sure that managing our properties were successful?

So, we were able to get those down to four tips or strategies, and those are the four tips for landlords that I’m going to share with you today.

1. Find the right tenant.

I think if you had any of the four that you had to get right, this is absolutely the one you need to get right. Finding the right tenant is the most important thing you can do for your rental house.

The right tenant will take care of the home, the right tenant will pay the rent on time, and the right tenant will obey all the rules. Now, how do you find the right tenant? That’s the most important question you ought to be asking. We look at five things when we’re looking at underwriting a tenant.

  • We look at their credit score
  • Their criminal background check
  • We do an ability-to-pay, which means how much money do they make relative to the amount of monthly rent
  • We do a landlord verification
  • We also verify that they still have a job

So these are the five things that we look at to make sure that we get the right tenant in the house. This first rental tip for landlords will save you an enormous amount of time and pain.

2. Once you find the right tenant, don’t let them leave.

We have a saying here at gkhouses called, “celebrate the tenant” and we want to make sure that we’re celebrating the tenants that are doing the right things.

So once you find that great tenant, you need to do everything within your power to make sure they don’t leave. That means making sure maintenance requests are taken care of in a timely fashion. It also means rewarding them in certain situations when they’re doing things right. This might mean a 10% discount on rent once they’ve paid rent on time for 12 months.

When you screw something up, it’s about being transparent with them and making them whole in that situation. That’s called “celebrating the tenant!” Making sure that a tenant doesn’t leave is number two on our list of rental tips every landlord needs to know.

3. Prepare for repairs and maintenance.

I have never seen a rental home that did not have some sort of repairs and maintenance.

So, how can you budget for the right type of repairs and maintenance? I have a little bit of an insider tip for you one this one. One of the things we found is that the age of the home and how hard the tenant is on it are the two things that affect the number of repairs. So you can imagine a house that was built in the 1930s or a house that was built in the 1940s is going to be a whole lot more repairs than a house that was built in the early 2000s.

Also, the tenant has a lot to do with that. So certain tenants can actually be harder on a house. Now, that’s not something you can necessarily see. I’ve heard of a lot of landlords actually doing a drive-by of the former house that a tenant lives in. That may be something you might look at doing, to see how hard they’ve lived in their previous home. But you absolutely need to plan on repairs and maintenance to be a factor in rental housing.

4. The last of our rental tips every landlord needs to know is to manage by systems and processes, and not by the urgent.

One of the biggest things I see where rental house landlords go wrong is when they manage by the urgent. In other words, they only fix a problem when the tenant’s calling and screaming. Or they only go after the rent when the rent’s two or three months behind. This is the cause of burnout because you’re letting your rental property dictate your actions instead of your actions dictating your rental property.

That’s why we’ve set up systems and processes to make sure that we’re constantly collecting the rent. We’re constantly staying on top of maintenance and repairs. That’s the goal, is that you are building the correct habits around repairs and maintenance, the correct habits around collections, managing by systems and processes instead of managing by the urgent.

So that’s it. I hope you’ve enjoyed these four insider rental tips for landlords. If you have any questions, I hope you’ll give us a shout. We’d love to help you get started in landlord renting.

My Tenant Is Not Paying Rent…and 5 Other Top Reasons You Should Evict


Matthew Whitaker - Thursday, April 14, 2016

My Tenant is not Paying Rent . . . and the 5 Other Top Reasons to Evict a Tenant.

It is very stressful when you’ve done all you can do to live up to an agreement you made and the other person seems bent on not living up to the agreement and making your life miserable. If you are a landlord long enough, this is something that is bound to happen with regard to a tenant not complying with your lease.

This blogpost will look into the top ways tenants don’t comply with the lease and give you a few ideas about what to do prior to and eviction and when to pull the trigger on evicting.

The biggest reason for eviction . . .

The number one reason we evict tenants at gkhouses is when they don’t pay the rent. I would say at least 80% of the evictions fall into this category. The reasons tenants don’t pay rent range from circumstantial reasons, all the way down to malicious reasons. When you are in the middle of someone not paying, it all feels malicious.

The most common circumstantial reason is if a tenant loses a job or has an unforeseen expense. Some examples of an unforeseen expenses we’ve experienced are a death in the family, car breaking down and health expenses. There is also a category of “should have foreseen expenses”, because some tenants don’t plan very well for certain seasons of the year where they spend more money. . . mainly Christmas and when kids go back to school. Either way, whether they plan on it or not, they don’t have the money to pay you on time and that becomes your problem.

There are also some malicious tenants that spend their life going around taking advantage of people. They typically prey on the new landlord and are well versed in how to live in a home for long periods of time rent free through lies and an incredible knowledge of the landlord tenant laws. But, they are usually in the small minority. This article will not cover how to handle them and will look more into how to handle the circumstantial issues.

The next 5 . . .

So what are some other reasons you would evict your tenant? Let’s take a look at those before we begin to address how to handle them . . .

screen-shot-2016-04-14-at-10-53-10-am
1. They are destroying your property – While a distant 2nd place, this one is solidly in 2nd place for the most common reason to evict a tenant….and sometimes happens in conjunction with your tenant not paying rent.

This type of tenant comes in an within a month has already wreaked havoc on your home. After you have spent so much money on the home getting it ready, to walk in and see what these tenants have done to your home is sickening and (unless you are a saint) makes you want to physically hurt them – which we don’t condone.

2. Drugs – Tenants selling or using drugs are also a reason to evict. One of the cool facts about the Uniform Alabama Landlord Tenant Act is that this “breach” of the lease is not curable. Meaning, unlike rent or tearing up your house, these tenants can’t “fix” the problem and stay in the house. You are immediately allowed to evict them . . . period.

3. People not on the lease are living in the home – A violation of the occupants of the home is also a lease violation where it may make sense to evict a tenant. We’ve had this happen before where a person on the Sex Offender Registry rented a house through his girlfriend. When the notice went out to the neighbors about his new address we heard about it and immediately moved to evict.

4. Their wild parties are disrupting the neighbors (also see photo above!) – As annoying as some neighbors can be, the last thing you want is for your tenant to be the annoying neighbor. Late night parties that consistently keep the neighborhood awake will make them and you the most hated people in the city.
Green Grass On colorful background, close up

5. They aren’t cutting the yard – Usually you find out about this from the city or the HOA. The tenant refuses to get off their rear end and cut the yard on a Saturday or Sunday. This type of laziness usually also works its way into the interior of the home. What the yard looks like on the outside is what your home looks like on the inside. And we think it’s worth noting here that if you (the landlord) aren’t taking care of the house, prospective tenants perceive that you won’t take care of it when they’re living there either.

What to do about it . . .

So you find yourself in the unenviable position of one of the above categories. Here is what we suggest doing about it . . .

1. Communicate – Your first step is to communicate to the tenant that they are in violation of the agreement. If you want to work fast, you can put a 7 day notice on the door. We always like to assume they are trying to do the best they can do and that the violation may be an oversight. We like to communicate to them in writing first. For instance, if we receive a notice from an HOA about the yard, we may send a copy of the violation to the tenant via email and nicely remind them in the email that they need to do the whole neighborhood a favor and keep the yard looking good. I highly suggest that the communication come in writing. If you decide you want to give them a call, make sure the call is professional (remove the emotion) and follow up with an email or letter that outlines what you discussed and the resolution.

2. Expect Communication Back – The first sign that things aren’t going to go well is that the Tenant is not communicating back to you. If you email, mail or call and you aren’t getting any response this is a huge red flag. When the tenant communicates with you, they should provide you the following:

  • It ought to be obvious that they understand the severity of the situation.
  • They need to communicate how they are going to solve it.
  • They need to communicate a date it will be solved by.

3. Expect them to do what they say they are going to do – This is typically where I see the most breakdown by the Landlord/Owner. Out of human nature, you give 2nd and 3rd chances. No 2nd chances. You have already allowed them a 2nd chance. They broke the lease, you gave them a way out. Now the way out has changed and you can’t give them another try.

4. Get them to leave amicably – Now you know you want them out and you need to do the best you can to avoid losing tons of money in the process – which an eviction is a long and costly process. The best way we’ve found to do this is to give them a date they need to be out by and promise them something in return for being out by that date. This is typically hard to do after they’ve basically drug you through the mud, but promise me it is in your best interest for them to leave amicably. I’ve seen people promise to forgive all the back rent if they are gone, promise not to pursue them in collections and even give them “cash for keys”. Whatever you decide, it will be cheaper than a 90 day eviction, plus attorney’s fees and courts costs.

5. If steps 1-4 fail, evict fast – Pulling the trigger on an eviction is really a sad day. Recognizing that this is the only way of getting the tenant out is a realization that you will have to come to if you are in this business long enough and rent enough houses. A few quick suggestions about evictions:

  • Follow the eviction process perfectly – There is a process to evicting tenants, and I highly suggest you follow it. Getting to the end and having a judge throw it out on a technicality would be a bad thing. This would require you to start over again.
  • Drive by the house regularly – The majority of tenants that start the eviction process leave during the middle of it. Frequent drive bys will make certain you can get in the house as quickly as possible and get it back on the rental market and making you money.

For more on evictions , I highly suggest this recent article written to walk you through the process.

This is the worst part of being a landlord and owning rental property. We do everything we can do on the front end to make certain this type of thing isn’t going to happen, but it does.

My last bit of advice is to remember that whether you own one house or 100 you are in business and you have to treat it like business. The best thing to do is to remove the emotion from the situation (some tenants are great at inserting emotion) and doing what is in the best interest for you financially. If you have a hard time doing that, you either need to hire a professional or aren’t’ cut out for owning rental property.

5 Things You Didn’t Know About the Uniform Residential Landlord Tenant Law


Matthew Whitaker - Tuesday, April 12, 2016

Scales of Justice background - legal law concept

5 Things You Didn’t Know About the Uniform Residential Landlord Tenant Law

I love it when I get a call from someone’s attorney.

Most people are scared when they call. I actually appreciate it when they call, because they typically are non-emotional (unlike an angry tenant), they are reasonable and they know VERY little about the Uniform Residential Landlord and Tenant Act of Alabama (URLTA).

This brings to mind a letter I received from an attorney representing a tenant who had just moved out.

We had just sent him his accounting of his security deposit and the tenant was NOT happy about it. The guy had lived there for over 4 years, but had been very hard on the home. So we hit his security deposit for everything he was responsible for paying.

Instead of arguing the items, which I went ahead and provided pictures of for the attorney’s reviewing pleasure, the brilliant attorney attempted to hang us up on the fact that we had exceeded the 35 days required by the URLTA to return his client’s security deposit. He even quoted the section of the URLTA to me in an effort to make his case and demanded the URLTA allowed 3 times his the original security deposit for his client . . . or he would sue us.

Little did the attorney’s Google search reveal, but the URLTA was updated in 2011 and allowed for 60 days to return the tenant’s deposit. LOL. I love these types of situations.

I sent him the UPDATED sections and at least the attorney was nice enough to call and apologize for wasting my time. Which I appreciated. But for wasting my time, he gets to be a story I can use over and over as an example of knowing the law and not being afraid to use it.

Even though I’m knowledgeable about the law (I even told my to-be wife I was going to be an attorney…talk about bait and switch), I’m not one and suggest you seek legal advice regarding this subject from a competent one.

Let me warn you though, there are only a few competent ones (on this subject) in Birmingham, so seek wisely.

Most people were not aware that you have 60 days now to return a deposit, which you now know. So that one was a freebie.

Let’s look at the five things I bet you didn’t know about the URLTA:

1. If a tenant submits a work order, they are giving you permission to enter the home. That’s right! You don’t have to let them know and you can use your keys to just walk right in and fix it. We attempt to do our best to coordinate this with the tenant. They would prefer that. But, there are many times when we can’t coordinate with the tenant (perhaps they are being difficult) and we complete the work order.

2. If a tenant doesn’t cash their security deposit refund for 180 days, you get to keep it. This is one of the craziest ones I found in the law. How often does this happen? Not usually. But it does happen.

3. If a tenant leaves property in your house for 14 days after the termination of the lease, you have no duty to store it and can throw it away. Most people worry about this one because they don’t want to pay for a bunch of random crap. I’m mad it takes 14 days before you can set it at the street. Bottom line, if it goes 14 days, put anything you don’t want out and let the trashman have it.

4. If a tenant stays in a home without your permission when the lease is over, it is considered a “holdover”. In these cases, you are entitled to actual damages or up to 3 times the monthly rent, whichever is GREATER. This is something else that happens very rarely. But, if it does, you need to make sure you understand exactly what you are due. Even if it is just one day.

5. If you accept money from a tenant who is being evicted, it nullifies everything you’ve done and you must start over. There are some good and some bad things. I think this is a bad law. My opinion is that the money is owed, why can’t you just take it? That’s not what the law says, so we must comply. Don’t make a “mistake” and cash it. Judges don’t look fondly on this one.

In conclusion:

I always suggest before you get into this business, particularly if you are planning on self managing, that you read the whole law. It is not that long and would be great if you can’t sleep one night.

It is best to know exactly what your rights and responsibilities are under the Uniform Residential Landlord Tenant Act of Alabama. Doing so, will make sure you don’t end up on the wrong side of an attorney’s letter.

How To Stay Safe While Showing Rental Houses


Spencer Sutton - Monday, April 11, 2016

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If you own rental property and interact with prospective tenants, you need to know how to stay safe while showing your rental houses.

Safety is important.

It’s important in all aspects of life. We grow up hearing it from our parents and we teach it to our children…especially when it comes to strangers.

Think about all the great advice our parents gave us about strangers:

  • Don’t talk to strangers
  • Don’t get in a car with strangers
  • Don’t take candy from strangers

The list could go on…

And if your parents knew you were meeting a stranger at an empty rental house…well, they may be pretty upset!

It’s impossible to predict situations you might encounter but with a little time preparation and awareness, you can help make your mom happy by staying SAFE!

Most of the tips I’ll share with you today are common sense but it’s interesting how much common sense can leave us in stressful situations. That’s why it’s important to review your “plan of escape/defense” and always be prepared.

Key Safety Tips

1. Be prepared – Before you step out of the office or house to show a property, you need to be prepared. Let someone reliable know your schedule…especially when you should be back from showing property.

2. Dress for rental success – As much as we want to look nice and professional when we’re meeting new people, it is best to dress down when showing properties to potential tenants. Wear modest clothing, shoes for escape, if needed, and avoid flashy jewelry. Understated is always the best route to go.

3.Develop a Code – Another way to prepare is to develop a code with a trusted contact to call when police or help needs to come but you aren’t in a position to call. An example call might be to call your contact and say “Hey, this is (CODE NAME) I’m at (address of your rental property) and I’m supposed to meet Mr. /Mrs. (Use the sex of the individual with you) Brown, White, Green (with corresponding race that you have predetermined with your contact) in 15 minutes and it looks like I’m going to be late. Will you call them and let them know?”

This gives your contact the information they need to call authorities to get help to you with your location and a general description of who you are uncomfortable with. Many times this can diffuse a potential situation because then the suspicious person knows others are aware of your location.

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3. Secret Weapons – Another option that has recently been introduced to the Real Estate market are pieces of jewelry, necklaces and bracelets that are programmed by you to contact certain chosen people of your location, some of these will also call 911. These pieces of jewelry can be activated very discreetly…kind of like James Bond.

Building a good working relationship with local police is also a good idea. In some less than desirable neighborhoods police will patrol more often if they know you and know when you’re normally in their neighborhood.

4. Get to know the neighbors – Most times agents don’t live in the neighborhood so meeting and greeting neighbors can make residents less nervous when you go to show the properties. Assure them that you are working hard to get them the best neighbors possible. Gain their trust and they will watch out for you and your properties.

5. Be aware – When arriving at properties BE AWARE. Learn to be a good judge of your surroundings and always trust your gut. Have an escape plan in mind each and every time you enter a neighborhood, street or house. Never block your way out both in the house and the driveway. Before getting out of your car go ahead and put in the address of your next destination. Always be ready to leave.

6. Have your getaway vehicle ready at all times – Keep plenty of fuel in your car, battery maintained, tires correctly inflated, water and general vehicle maintenance performed regularly. This one it is always reliable and you lessen the chance of being stranded.

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7. You might want to pack some heat – Some agents carry guns with them to ensure their safety. In my personal experience the self-knowledge that I have that protection available has given me peace that I can protect myself in most situations.

If carrying a gun is not something you want to do, other options would be mace, taser guns, or off the wall weapons. Off the wall weapons can be as simple as putting your keys between your knuckles, wasp spray, and a broom to “sweep” can become a club. Off the wall weapons are only limited to your imagination!

8. A simple safety kit – Having a good preparedness kit is a must. Items to include are: flashlight, batteries, water, paper towels, broom, umbrella, work shoes, rain gear, hand sanitizer, a change of clothes, duct tape, hammer, and the list can be what you think you might need.

In conclusion it boils down to a few key points – Be Prepared, Always be Aware, Be Confident

And if you see something unusual or illegal say something, the life you save might be your own.

Top 5 Reasons NOT to Rent Your Home


Matthew Whitaker - Wednesday, April 6, 2016

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Seems weird that a guy who spends all his day trying to talk you into renting your home would write about the top 5 reasons NOT to rent your home.

You’re probably as skeptical as I would be reading this article and think I’ll come up with some fluffy reasons that really lead you back to renting your house. I hope you skeptics will read on, because I’m not going to hold any punches.

My mom recently sold her rental home. She’s owned it for years. I’ve even written about some problem tenants she had who I had to help her evict.

As you know when your mom asks a question you have to give some objective advice that is in her best interest and not always mine. So even though our company would stand to make money on her renting her home (yes, I charged my Mom), I told her it was best she sold the home.

Let’s take a quick look at 5 reasons you would want to follow in her footsteps and sell. . .

Businessman with cardboard box on his head showing a crying sad expression concept for headache, depression, sadness, heartache or frustration

1. The rental return doesn’t justify the headache. This was my mom’s reason I told her to sell the house. After doing the math, I figured she was making about a 2-3% return on the home based on TODAY’s market value.

It is important to judge the investment on today’s value and not what you have invested in the home (or your basis). For a 3% return, she can invest her money somewhere that has very little headache and requires her to answer very few questions.

2. You have an emotional attachment (that can’t be broken) to the home. Everyone who lives in a home has some emotional attachment to it. It is the place you had Thanksgiving dinners, July 4th celebrations, and brought your first baby home.

However, when you lease your home, you are getting into a business deal. The new tenants, even if they are great ones, are going to have ordinary wear and tear on the home. The home will not look EXACTLY like it did when you left.

What people in this situation fail to see is that the home today, since they’ve been living in it, doesn’t look exactly like it did one year ago. It kind of like when someone says “your kids are getting so big” and, because you see them every day, you never noticed. The same principal holds true here. I’ve even seen people complain about the “tenant caused damage” only to realize later that it was like that when they moved from the home!

3. You may need to move into the home within the next year. We get calls like this all the time. When someone is moving away for 6 months and wants to rent the house for a brief period of time. Moving is just too much of a hassle to ask a tenant to move in and move out in 6 months and there are very few tenants who are willing to rent the home.

On the other hand, it may make perfect sense to rent your home if you plan on moving away for over a year and want to move back into your house at some point.

4. You can’t afford to pay your mortgage if the house has some repairs. I’m not saying that the money isn’t important to receive. I’m simply saying that if the water heater goes out and you can’t afford to fix it because your mortgage is due, you are in the wrong business (remember, it’s a business!).

You should have an adequate cushion of available funds in reserve to lease your home. Even if we lease it in the first 30 days, you probably won’t get a deposit for almost 60 days. You just need to be prepared for this and understand how the cash flow works. If you are cutting it tight, we suggest not doing it.

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5. You have a family member or friend who is going to rent it. As I mentioned twice before, this is becomes a business deal when you decide to rent it. I’ve heard of some horrible family feuds because of how members treated each other’s homes.

We have had home owners come to us with their house because they just couldn’t evict their relatives…but they were OK with us walking through the process with their family member.

You’ve always heard not to do business with a family member and the same principal applies here.

Keep these thoughts in mind when you are deciding whether to rent your home. Sometimes the best client for us is the one who decides not to rent. Make sure you understand what you are getting into when you decide to rent your home and carefully consider various scenarios you may find yourself in down the road.