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Archive for the 'Tenants' Category
Keep Tenants On Your Holiday Shopping List
December 21st, 2009 categories: Tenants
With just three shopping days left until Christmas, it’s a good time to remember that small gestures, like including your tenants in your gift giving, can go a long way toward keeping your rental units occupied.
Times are tough for everyone, and our natural instincts are to cut back. However, as we discussed last year, small gestures like a gift card to a grocery store, iTunes or Targetcan be a way to differentiate yourself from other landlords.
And while $10 of downloadable music may not ultimately prevent anyone from moving out, it nonetheless fosters good will for the duration of a tenant’s stay, which may help keep rent payments on time.
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How To Avoid Minneapolis Duplex Repair Phone Calls
December 10th, 2009 categories: Tenants
One of the fears many duplex investors express to me is of a middle-of-the-night phone call about something breaking.
Of course, while there are always plumbers and repair people happy to correct the problem for a fee, one strategy many landlords here in the Twin Cities take is to require, in their lease, that tenants carry a Centerpoint Energy Service Plus insurance plan.
While there are a wide range of coverages available, the basic plan, which runs about $17 a month covers repairs to a gas furnace or boiler, gas or electric clothes dryer, water heater or range.
Coverage for all appliances, as well as the central air conditioner, may be purchased for just under $38 a month.
Once they have the repair plan, tenants can then call Centerpoint directly for repairs. This not only relieves some of your stress, but helps you reduce your own property maintenance expenses as well.
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Can A Vacancy Help You Sell Your Minneapolis Duplex?
December 7th, 2009 categories: Selling A Duplex, Tenants
The other day a seller received notice one of his tenants is moving out. As his property is on the market, he asked whether it was more advantageous to a sale for the unit to be vacant or full.
The answer is full.
But isn’t it easier to show the property with no one in it? Doesn’t it show better?
Yes.
However, the benefits of it being occupied far outweigh the consequences of a vacancy.
First, mortgage payments, taxes, insurance and utilities are all due whether the property is available for sale or not. As a result, it’s important the owner continue to generate revenue to cover those expenses.
Next, prospective buyers want to know not only that a property is appealing enough to attract tenants, but what the market value of that appeal is. If the rents are healthy, the property is a more desirable investment. The rents that are reflected on the MLS are therefore actual, not a fantasy concocted by the listing agent and seller.
Many buyers also like to know they are going to have a revenue-generating property the minute they take ownership. A 100 percent vacant duplex means a new owner has to scurry to fill two vacancies before the first mortgage payment comes due a month later.
What if a prospective owner wants to live in a tenant occupied unit? This takes some forethought, but if there’s a possibility you many sell your duplex some time in the future, it’s a good idea to have a clause in your lease stating the tenant agrees to vacate the property for an owner occupant provided they are given appropriate notice.
Of course, if your lease doesn’t have such a clause, you may need to visit with the residents to see if there’s an incentive that would entice them to move.
If they choose not to, the lease is a legally binding contract that both the seller and new buyer must honor.
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Kindness Counts In Minneapolis Duplex Vacancy Rates
November 12th, 2009 categories: Tenants
With national vacancy rates at their highest levels in 23 years, Minneapolis duplex owners are having to resort to innovative strategies to attract and keep tenants.
While a fresh coat of paint, new carpet and a move-in incentive like one month free can help attract new tenants, what about keeping the ones you already have?
According to a recent article in the Wall Street Journal, more landlords are finding themselves in a position of having to negotiate. The Journal reports that in a recent survey conducted by the National Association of Independent Landlords, more than two thirds of independent landlords will reduce rent in order to keep a tenant, while almost one-third of them already have in the last 18 months.
At first glance, this study is frightening. If all tenants want to renegotiate the terms of their lease, won’t we be unable to pay our bills?
Consider this. A vacancy caused by an unwillingness to either establish a payment plan for a delinquent tenant or offer, say, a five percent discount to one who is struggling economically can cost you far more than the initial concession.
Turning a unit for a new tenant not only often costs you paint, cleaning, and repairs caused by normal wear and tear on a unit, but the lost revenue during the vacancy as well. In other words, potentially thousands of dollars vs. say, a discount of 5 percent as an incentive for a tenant to say.
Of course, you can’t be a doormat either. Some people in life will mistake your kindness for weakness, and exploit it accordingly.
But offering understanding to the tenants who’ve proven themselves, can be a a great way for you both to survive.
| Discussion: 1 Comment »
Let Your Minneapolis Duplex Go To The Dogs
October 16th, 2009 categories: Tenants
You would think with all the foreclosures on the market and in the works, it would be tough to find a vacant duplex anywhere.
And yet, recent media reports cite the highest national vacancy rates in over 20 years. Where did all those people tenants go? Some foreclosure victims are renting. Others have moved in with friends or family to weather the storm. And many prospective tenants, like recent college graduates, simply haven’t left home.
So in the midst of this economic downturn, how can you make sure you don’t go months without rent?
Well, in addition to cosmetic improvements, one of the most effective ways is to allow pets.
Finding a place to live if you’re a dog owner can be nearly impossible. And duplexes with yards are especially appealing to someone with pets.
In my experience, it’s as important to “interview” the dog as it is the prospective tenant. Well trained and behaved dogs, for example, tend to make better tenants than those who jump all over you, as it speaks to the owner’s commitment to the dog.
By en large, pet owners are appreciative of finding a place that welcomes them and go to great lengths to insure they don’t endanger their living situation.
However, there are exceptions to every rule, and to protect yourself from the additional damage pets can inflict on a property, you should ask for a pet deposit in addition to the regular security deposit you take when you have them sign the lease.
A word of caution, however. It’s important to check with your insurance company before you decide you’re willing to rent to pet owners. Many have clauses in their policies limiting their responsibility if specific breeds of dogs are on the premises.
| Discussion: 1 Comment »
Why Minneapolis Duplex Tenants Forego Granite
October 8th, 2009 categories: Tenants
In all our focus on buying and selling duplexes, and what constitutes a good value, it’s easy to lose sight of a key component to any successful duplex investment: tenants.
The nation’s economic downturn has not only adversely impacted housing values and unemployment rates, it has also influenced the amenities tenants are attracted to when looking for a place to live.
According to a recent Associated Press article, like landlords, tenants are concerned about their budgets and employment. As a result, tenants are looking for value in a place to live.
The article cites a recent ApartmentGuide.com study which notes the top amenities prospective renters searched for the first two-thirds of this year were paid utilities and washers and dryers in units.
What’s more, an effort to keep their units occupied, some landlords are including clauses wherby tenants can terminate their lease or stay for a reduced rent in the event they are laid off from their jobs.
According to the article, granite counter tops and stainless appliances no longer hold the power they once did either. Instead, tenants are looking for places with energy efficient appliances and windows that are in good working order.
Of particular interest to Minneapolis duplex owners was the observation that new tenants who are renting as a result of losing their homes to foreclosures still value home-like amemities. These include yards for pets, dishwashers, and washers and dryers in the units.
| Discussion: 1 Comment »
Minneapolis Encourages Duplex Tenants To Get Married
August 13th, 2009 categories: Legal Stuff, Tenants
Sometimes government rules and regulations just don’t make sense.
Take, for example, the city of Minneapolis’ rule on the number of unrelated people who can occupy a rental unit.
If a property has a zoning designation of R 1-3 (residential 1- 3 units), a maximum of three unrelated people can live in each of the units.
The number of bedrooms or amount of square footage in each is irrelevant. In other words, if you own a duplex with a five bedroom unit, you can only have three unrelated people living in it.
If the multi-family property is zoned R 4-6, however, you can have up to five unrelated people in each unit; even if there’s only one bedroom in each apartment.
Of course, if the other people occupying a unit are related by blood, marriage, or adoption, an R 1-3 property can house the family plus two unrelated people.
In a R 4-6 zoned multi-family building, a family can have up to four unrelated people living with them; again, regardless of the number of bedrooms in the apartment.
What happens if the city discovers there are more residents than allowed in a duplex? The landlord can lose his rental license.
So if you have a Minneapolis duplex, say, by the U of M or in Uptown with a couple of four bedroom units, how can you make sure you’re in compliance?
Get your tenants to marry or adopt each other.
| Discussion: 3 Comments »
Minneapolis Duplex Owners Should Head For The Basement
July 23rd, 2009 categories: Tenants
The Minnesota Multi-Housing Association should hire Belinda Jensen.
I don’t think she knows a thing about renting or owning duplexes. But I think a storm’s a comin’, and somebody needs to forecast it.
So I will.
There’s a tornado on the horizon for Minneapolis/St Paul duplex owners and landlords.
It’s a great big, dark, ominous-looking vacancy rate resulting from the $8000 first time home buyer tax credit.
I can’t even tell you how many people I’ve spoken with in open houses and general conversations who a) are planning on taking advantage of the tax credit and b) are on month-to-month leases.
As the tax credit expires November 30, 2009, how many move-out notices do you think landlords will receive on October 30?
I’m guessing about 17 inches worth.
While it’s always wise to keep your tenant’s leases current, it is especially important to make sure you have them under contract now.
If you don’t, I’m predicting a long, cold winter.
| Discussion: No Comments »
Can A Tenant Keep You From Getting the Tax Credit On Your Minneapolis Tax Credit?
June 11th, 2009 categories: Buying A Duplex, Tenants
A reader recently asked a terrific question regarding the $8000 first time home buyer tax credit:
I have been recently considering a duplex as an option for my first home purchase. From I understand, the $8000 tax credit can be used for the part of the primary residence. For instance, a two-unit duplex at cost of $160k would yield the $8000 credit if I used one unit as the primary residence. What I have yet find an answer to is this: Let’s say the duplex is fully leased. You cannot force one tenant to move so in order to occupy one unit you would have to not renew one lease. If this is true and both tenants are leased through 2009 (and say until March of 2010) would you still qualify for the credit even though at the end of the tax year you would not be occupying the residence?
To be sure I had the correct I answer, I contacted Melanie Schlomann, a CPA with the firm of Abdo, Eich and Meyers. “The home must be the taxpayers primary residence before December 1, 2009 to be eligible for the first time home buyer tax credit,” she said.
“In this case, the individual would not qualify unless they can manage to make the duplex their primary residence by that time.”
Whether you intend to owner occupy a duplex or simply purchase it as in investment, existing leases are an important consideration when you buy.
In order to address the afore-mentioned possibility, many duplex owners considering a potential sale of their property make sure to put a buy-out clause in their leases. This clause states that for a pre-determined fee, the tenant will agree to move if asked to do so as part of the sale of the property. Of course, it’s important to consult with an attorney for the appropriate language to use in the lease.
While negotiating a purchase, it may be worth asking whether or not the tenant is interested or willing to leave before the lease comes to an end. If he knows he has to relocate in the not too distant future anyway, perhaps a win can be negotiated for all involved.
A buyer and her Realtor should also explore whether or not the city or state involved has any laws or ordinances pertaining to exactly this scenario.
While I don’t know of any Minnesota municipalities where this is the case (and would love to know if there are), the city of West Hollywood, California, for example, has a tenant relocation “through no fault of their own for owner or relative occupancy” ordinance, with a pre-determined set of move-out compensation for the dislocated tenant.
Great question!
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Let Oprah Help You Become A Better Landlord
January 5th, 2009 categories: Tenants
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