Maintenance. How to manage it.

The reality of owning an investment property is that you are going to receive emails from tenants letting you know that something is broken, leaking, or just not up to their standards. Your job as the landlord is to be attentive, listen, and take action.

You’re going to have to take each request, and then reach out to the tenants and let them know that it is under review. This is sort of like triage at the emergency room. If there is an issue regarding a broken cabinet, and another issue for a leaking roof, the reality is, you fix the roof first. You can reach out to tenants and let them know the process, it may look like this:

Hello X,

I would like to thank you for reaching out regarding the broken cabinet in your unit.

We have reviewed the request, and are pleased to let you know that it will fixed in 3-4 weeks.

Should you have any questions, please do not hesitate to reach out.

Management

A short yet simple email that lets them know you’ve acknowledged their request, and have an action plan to resolve it.

Now comes the real deal, the resolution.

You’re going to have to find a professional to help with, let’s say, that leaky roof. You can hunt on Facebook, or your local classifieds service. You will want to look for reviews, you want to see what people are saying. Your gut will tell you who is the best to work with, however here are a few pointers:

  • Find someone who is willing to work WITH you. This means if you want to operate on a paper based change order system, find someone who will.
  • Get multiple quotes. Do not assume that the first company, is the best.
  • Stick to your guns. Contractors have gone too long with being bullies in the industry. You are paying their bills. If they do something that you didn’t ask for, you tell them.
  • NEVER put more than 50% down as a deposit.

I am known to have been “ghosted” by 2 contractors within 6 months. I will admit, I am extremely intense. I will go to the end of the earth to protect my investment. If that means I send someone an email once a day, for a month, then so be it.

Basically what I am saying is, don’t let anyone, in any industry, dictate your business, your investment. Don’t let someone sign your cheque for you.

Once you have laid out the terms of the project, and you make it known your serious, you have to follow through. You need to be on site, daily. You need to meet the crew, learn how they operate. They are in your property, as much as they may not want the owner coming around, too bad. Be there. Be present, and make it known that you expect quality.

Alert your tenants that contractors will be on-site, and explain any procedures that they may need to take to ensure they remain safe, and feel at home during any construction.

Now you’re set up for success. See this project out until completion. Thank your contractors. Pay your final invoice, ONLY after a walk-through and thorough inspection with the lead contractor or project lead.

I want to make one thing clear, this is not a post about how you should go around yelling at contractors. This is a post to ensure you are firm, and act with confidence. You’re in the shoes you are in, because you have the guts to take risks, and stand up for yourself. Again, don’t yell, however an invested intensity in your property, is exactly what you need.

Report back to your tenants that the issue was resolved, and apologize for any inconvenience that it may have caused. Ask them to report back periodically to ensure that the repairs are holding up. Note that if they aren’t holding up, that’s where your intensity kicks in, and you reach out ASAP, and explain what is happening, and determine a resolution plan.

There you have it, you’ve taken the bull by the horns, and you’ve really proved to your tenants that you are serious about providing them a quality apartment.

I sure hope this was insightful, and sparked a little intensity in yourself. As always, subscribe to the blog, like our Facebook page, and share the heck out of this. This is real, this is coming from my life. This is what you need to know.

Digitally yours,
Dalton Parker

Tenant Screening

Tenant screening. Likely one of the most important factors in renting. You want to ensure that you are selecting the best people to occupy your property. This is a process that takes time, and that needs to be approached in a very legal matter, as you can get into some legal hot water, if you start discriminating.

How do I screen my tenants?

There are many resources available to you, however some do rank better than others. Personally, my organization uses Naborly Inc. which is a Canadian tool, for landlords. They handle the entire process, from the application, to processing the applicants credit and criminal background checks, and providing you with a comprehensive report, to allow you to make a proper decision. I forgot to mention, this is entirely free.

You of course can opt for a more traditional process, of a manual application, reaching out to credit bureaus, contacting past landlords, and reaching out to the RCMP for background checks. Ensure you check the validity of the applicants rental references.

What to look for in an applicant?

There are a few key factors that you want to look for when analyzing all the information you’ve gained on the applicant:

  • Debt to Income ratio (their ability to pay you)
  • Bankruptcies, or other claims
  • Past evictions, property damage, length of tenancies

These are just a few, but it comes down to a simple formula, ensuring they’ll pay you, the don’t have tendencies to miss payments, and that they have respected their previous rentals.

Making a choice.

This can be the toughest part, and this is where you may feel guilt, or like you’ve made the wrong choice. However, if you’ve done your research, and you know as much as you can, you have to go with your gut. Ensure you treat all parties with respect, as nobody wants to hear that they have been rejected for an apartment. Feel free to explain why, however you are by no means required to go into detail, it can look like this:

Dear X,

I want to thank you for considering COMPANY NAME, however at this time, we have elected to proceed with a different applicant.

Should you have any questions, or require further explanation, please don’t hesitate to reach out.

Regards,

Management

While this is just an example, it is a good boiler plate email. Of course, now you get to congratulate your successful applicant – I’ll leave that email to you, as that should be something special you craft, to build the bond between your tenants.

There you have it, a quick run down of what tenant screening and selection can look like. Now get out there, and build your empire!

As always, subscribe to the blog, like our Facebook page, and share the heck out of this. This is real, this is coming from my life. This is what you need to know.

Digitally yours,
Dalton Parker

Want to be a landlord? What’s involved? Part 2

I’m of the mindset, “cut the crap, and get to the chase”. So that is exactly what I’ll do. We are going to pick right up on step 5!

Step 5: Property Acquisition

So, by now you should have conversations with all of your team members. You have a good idea of how much money you can spend, what it repayment of that debt will look like, and the area in which you want to invest. Now its time, this is where it becomes real. Over the next days, weeks, or months, you will be going to showings, looking at the current properties for sale, and looking for some key points:

  • What sort of shape is the property in?;
  • What sort of people would want to live in this property?;
  • Most important, would you live in this property (after potential renovations)?

All three of those points are crucial. But I am going to focus on the 3rd. The reason being, you are not just getting into the landlord business. This is a real estate, investment, hospitality, and PEOPLE business. Without people, you make NO MONEY. So you need to ensure that if you had to live in this property, you would be comfortable and happy, because that is how you need your tenants to feel. What good is it to take money from hard working individuals, just to let them live in warn down, cold, and empty apartments. You are providing people with homes. As much as tenants need to respect your investment, you need to respect their time, money, and happiness.

Once you are satisfied with all three of the above points, you and your real estate advisor will go about putting an offer in, and going through the nitty gritty of making your dream property, yours. This will include inspections, multiple meetings, and stress. But don’t let that scare you. If this was easy, you wouldn’t have a job, because people would be buying the property for themselves. Now, the fun really begins!

Step 6: Get Tenant Ready

So now you have a property, and your swinging the key ring around like a true landlord. Congrats. This is a huge deal! But don’t wait too long. The harsh reality is, the bank doesn’t care that you have to find tenants, they will demand mortgage payments. So lets go over a couple scenarios you may be:

  • You purchased a property, that requires little, to no work to be ready for move-in.
  • You purchased a property, that does require work, be it, flooring, demolition, or full painting.

Both of the above scenarios are an amazing spot to be in, one is no better than the other! So lets fast-forward to when you are satisfied with the property, you are ready to start leasing! Here are somethings you need to do before you start looking for tenants:

  • Ensure all locks are functional, and you have at least 5 keys.
  • Sign up for consumer credit reporting services, in Canada, I use Naborly. This way I can see credit, and criminal history of all potential tenants.
  • Sign up for property management software, I use TenantCloud to manage tenants, maintenance, and leases.
  • Find a lease template. In Nova Scotia, our provincial government provides a template.

Once you’ve got these in place, you’re ready for the next step!

Step 7: Tenant Acquisition

This can be an intimidating step, but it doesn’t have to be. There are many resources available to market your apartment. For example, in Canada, we often use Kijiji and Facebook Marketplace. However the best bet is to source out a leasing agent / property management company, like us! What that means is, we would take care of listing, marketing, and finding you a tenant. You can even keep as part of your awesome team, to manage your apartment and tenants.

With that being said, I won’t blame you if you want to take this part on yourself, it can be fun for some. Just remember to use those handy tools I suggested in Step 6.

Now, we are both business minded, that’s why we are in these shoes. With that being said, I can’t tell you everything to do, otherwise I might put myself out. But I can say there are some key points you want to see in potential tenants:

  • Income (how much money do they make)
  • Debt (how much money do they owe)
    • Will they have enough to pay you?
  • Criminal history
  • Rental history
  • Overall attitudes

Now that last point is what I’ll call, “Risky”. Meaning, you can’t judge a book by its cover, someone may be having a bad day. It’s also no reason to deny someone. So be careful, as you can get yourself into some legal trouble if you discriminate.

Once you have decided on a tenant, you will build up a lease, I usually operate on a 12 month, fixed lease. Ensure you specify everything that you, and the tenant are responsible for, so there is never any question.

Set a move in date, and congratulate your tenant. You’re both going to be taking a journey together, this is an exciting time.

Make it special for your tenant, be there on move-in day, greet them, ask them if they need anything. A nice touch is a congrats card, with perhaps a grocery store gift card. They can help a lot when moving, and it is a tax write off.

Step 8: Managing the Property and Tenancy

At this point you are by no means coasting. There are many things that you need to think of everyday, here are some:

  • Ensuring rent is paid;
  • Ensuring all your bills are paid;
  • Tenant is happy and doing okay;
  • Are there any maintenance requests?;

Congrats! You’re a landlord!

What an amazing accomplishment! You have gone from dreaming, to planning, to DOING! Now make sure you stay involved, stay curious, and don’t get cocky. This business requires stern compassion. Be there for tenants when they need you, but don’t go broke doing it.

This of course was not a conclusive guide to this business, but it’s the closest I can get, while providing a readable overview, that is raw, real, and honest.

Things will come up, and you wont know what to do. It happens to me all the time. Luckily there are resources, including us. We can help with all your property management, tenancy and leasing needs! Sorry for the shameless plug, someone had to do it!

Again I thank you all for taking the time to read, and perhaps even learn a little bit. As always I invite you to like our Facebook page, and subscribe to our blog!

Digitally yours,
Dalton Parker

Want to be a Landlord? What’s Involved?

By now I’m sure you’ve researched online, you’ve found popular real estate tutorials, or vlogs, and they have recapped the big picture, like; purchase property cheap, rent high, keep the difference. That is the furthest from reality in this industry.

I’m going to section this blog off into the steps I feel are least talked about in becoming a landlord.

Step 1: Build a team

Not in the conventional sense, meaning you don’t need start adding people to payroll, however, you wan’t solid individuals on your side, perhaps even on retainer. I will include a list of people that I have on my team, and note, some of them do charge monthly or annually for their services. This may differ depending what you need them to do, and how much business you’re doing.

  • Financial Advisor (daily banking, investing, credit cards, loans and lines of credit)
  • Real Estate Advisor/Agent
  • Mortgage Broker
  • Accountant (monthly reconciliation, tax filing and planning, can aid in financial advising)

All of the above are very crucial to your businesses success. I communicate almost daily with both my Financial Advisor, and Accountant, while ensuring that my Mortgage Broker, and Real Estate agent stay informed, as they go hand in hand.

Step 2: Meet with your Mortgage Broker and Real Estate Agent

Now that you have all these awesome people in place, start talking with your team, explain your goals. There are certain things that you are going to want to discuss with your Mortgage Broker:

  • What is the max value I can borrow;
  • What is the current rate;
  • What is an appropriate down payment;

These are just a few questions, however very important for your next chats with your Real Estate Agent. Here are some questions you should be asking your Real Estate Agent:

  • What neighbourhoods should I be looking in;
  • What is the trend in that area;
  • What are tenancy, crime, and other relevant rates to that area;

This will give you a better idea of what your business will look like when you are operating. It will give you an idea of what sort of tenant to expect, and the growth or potential decline in that area. Remember, this is an investment, and there is risk associated with that. We will chat about risk next.

Step 3: Incorporation

This is a very important step in operating a real estate business. The reality of your life as a real estate investor is that you operate with huge risk. You will be borrowing 100’s of thousands of dollars, which is why you need the protection of a holding company. This is a separate legal entity from your self, passing the liability from yourself and your assets, to the corporation. This will save you in the following scenarios:

  • The rental market crashes, and you can’t make mortgage payments;
  • A sinkhole opens on your land, destroying the property, and an insurance issue arises;
  • A tenant is injured on your property;

In all of the above cases, you personally are not liable, however your corporation is. This means your money, assets, etc. can not be touched to pay of a mortgage gone bad, or a tenant who has taken you to court.

There are several ways to incorporate:

  • Using a lawyer;
  • Using an online incorporation tool;
  • Your accountant may also be able to help, mine did.

Step 4: Analyze Financials

Some people will tell you that buying property is the smartest decision of your life. They are not wrong. However, they are not telling you the whole story. I am going to include a list of expenses that you need to take into consideration before signing anything:

  • What is the land transfer tax?
  • What is the estimated property tax?
  • What kind of utilities are there? How much are they?
    • Will your tenant being paying some, none or all of them?
  • What will insurance cost? How big is the deductible?
  • Will you need to hire landscapers?
  • Will you need to complete any repairs before tenants move in?
  • What is your strategy if something goes bad, like really bad?
    • Do you have savings, or a line of credit? What is your line of credit interest rate?
    • Can you see why incorporating is important? If something goes really bad, and you can’t afford it, that means you are on the road to bankruptcy, or taking out more loans. That is where your financial advisor will come into play.
    • Corporate bankruptcy has no affect on your personal credit or assets.

I know that this section sounds like I only highlighted the bad, but that is all I need to. You know the good in this business, that is finding a tenant who pays their rent and respects your investment. If you don’t talk about the bad, learn about it, learn how to manage and overcome it, you will be stuck with your pants down if it happens to you.

I think that I have covered a fair amount in this post, but don’t think I’m done. This is just the beginning of being a landlord. You will learn so much more in the next one!

As always, subscribe to the blog, like our Facebook page, and share the heck out of this. This is real, this is coming from my life. This is what you need to know.

Digitally yours,
Dalton Parker

Me. Dalton Parker.

Hello! My name is Dalton Parker, Owner and Founder of ParkCity Leasing Specialists; and I’m 20 years old.

Normally not an important factor, however, that is the entire reason I am starting this blog. To publish my views, my strategies, and the way I operate a real estate business, being almost half the age of most real estate professionals.

I want to show other young entrepreneurs what it takes, and that not going with the “norm”, is perfectly acceptable. I also want to spark conversation, with other industry professionals, regardless of age. Though I have my techniques and practices, I always want to learn more, and perhaps adopt some new ideologies.

Now to answer some very important questions.

  • What will I be blogging about?
    • Everything related to real estate investing, renting, property management, and being a successful landlord.
  • Who am I trying to connect with?
    • Anybody in this industry, wanting to join this industry, and more importantly, young entrepreneurs.
  • What will this blog be in a year?
    • In a years time, I hope this is a trusted source, for all. You come here to see what is new, learn something, and build valuable connections. Perhaps other real estate professionals will join in, and write some inspiring work.

I invite you all to subscribe, and like our Facebook page. The goal is for a Monday and Friday post.

Digitally yours, 

Dalton Parker

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