Archive for the 'Tenants' Category

Don’t Let Your Tenants Suffer Burnout

said on April 19th, 2010 categorized under: Tenants

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burned buildingWe’re living in economically challenging times.

As a result, most of us are cutting back on “extras”.  For some, that means opting to stay home and watch cable rather than going out.  To others, that may mean choosing to make a peanut buttersandwich  rather than bologna.

Unfortunately, for some tenants, that also means going without renter’s insurance.

First, if you’re a landlord and your lease doesn’t include language clearly stating that it’s your tenant’s responsibility to get insurance for her belongings, it should.

The reason is your owner’s insurance policy doesn’t cover the contents of your duplex.

In other words, if a fire, tornado, hurricane or earthquake topples your property, your losses may be covered, but your tenants belongings.

Most major insurance companies, like Allstate, Geico and State Farm offer some form of renter’s insurance.

While you must tell your tenant of their obligation to buy coverage, it’s a good idea to require them to provide you with proof they’ve done so.

After all, times may be hard but they’d be tougher still if you lost absolutely everything and didn’t have insurance.

Let Your Tenants Fill Your Vacancy

said on April 1st, 2010 categorized under: Tenants

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CSL011In today’s affordable housing market, many Twin Cities duplex owners are getting THAT call from tenants.

You know the one. It starts with, “I bought a house and am moving out”.

Somehow, those tenants often forget they signed a lease, which may still have time left to run.

At that point, the landlord should remind the residents they are legally obligated to pay the rent on the balance of their lease.

In all likelihood, this won’t have any impact.

The tenants leave, and the only option the duplex owner has is to pursue legal recourse, which tends to cost money.

However, what would happen if during the telephone conversation, the landlord suggested the tenants might remedy the situation by subletting or assigning the apartment.

What’s a sublet? Well, it’s a transfer of rights to the unit for a limited period of time. During that stretch, the original tenant is still responsible for the lease, rent payments, and may reserve the right to return.

How does that differ from assignment? In assigning the lease, the tenant turns over the responsibilities of the lease to the new resident, and absolves herself from any responsibility for or interest in the unit.

How does the landlord protect herself against the risks of an unknown tenant?

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Minneapolis Duplex Owners Get The Lead Out

said on March 15th, 2010 categorized under: Tenants

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lead pamphletMost duplex lovers swoon over the old buildings.

You know the ones. They may have stained or leaded glass windows, hardwood floors, and even a built-in buffet.

Some have a Jetsons-like feel to them, with two sided fireplaces in the living rooms and stone shelves jutting out from the just above the mantle.

Whether it’s a Craftsman era duplex or a mid-century modern, most of us love old architecture.

But when we go to repaint or sand anything, it’s important to remember one thing about the past; if the building was constructed prior to 1978, odds are good that one of the existing layers of paint in the house contains lead.

If ingested or inhaled, dust or paint chips from lead paint can lead to some pretty serious health issues, including nervous system and kidney damage, high blood pressure, nerve disorders, and poor muscle coordination.

Federal law requires that anyone about to buy, rent or renovate a property that is old enough to potentially contain lead paint receive the pamphlet “Protect Your Family From Lead In Your Home”. If you’re buying a property, your Realtor should provide you with this information.

If you’re a landlord, the law also requires that you provide prospective tenants with this information, as well as disclose the potential risk in your leases.

If you need the pamphlet, or a lease with the proper language for lead disclosure, you can purchase them at MHA.

It is only lead based paint in cracked or peeling condition that poses a risk. Paint that is in good condition is perfectly safe.

Keep Tenants On Your Holiday Shopping List

said on December 21st, 2009 categorized under: Tenants

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itunesWith 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.

How To Avoid Minneapolis Duplex Repair Phone Calls

said on December 10th, 2009 categorized under: Tenants

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wrenchOne 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.

Can A Vacancy Help You Sell Your Minneapolis Duplex?

said on December 7th, 2009 categorized under: Selling A Duplex, Tenants

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Sunlight in dining livingThe 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.

Kindness Counts In Minneapolis Duplex Vacancy Rates

said on November 12th, 2009 categorized under: Tenants

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A Helping HandWith 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.

Let Your Minneapolis Duplex Go To The Dogs

said on October 16th, 2009 categorized under: Tenants

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KivaYou 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.

Why Minneapolis Duplex Tenants Forego Granite

said on October 8th, 2009 categorized under: Tenants

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wise.ac-9 still life pearIn 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.

Minneapolis Encourages Duplex Tenants To Get Married

said on August 13th, 2009 categorized under: Legal Stuff, Tenants

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wedding ringsSometimes 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.